SEC Info℠

Home

Search

My Interests

Help

Sign In

Please Sign In

Forge Innovation Development Corp. – ‘10-Q’ for 9/30/23

On:  Tuesday, 11/14/23, at 4:05pm ET   ·   For:  9/30/23   ·   Accession #:  1493152-23-41058   ·   File #:  333-218248

Previous ‘10-Q’:  ‘10-Q’ on 8/14/23 for 6/30/23   ·   Latest ‘10-Q’:  This Filing

in

this entire Filing. an “Entity” Search.

Show

Documents searched

and

each “hit”. the 1st “hit”.

↓↑Hints

 Text Wildcards:  ? (any letter/digit),  * (many).  Search Logic:  for Documents:  & (and),  | (or);  for Text:  | (anywhere),  "(&)" (near).  Details... 

  As Of               Filer                 Filing    For·On·As Docs:Size             Issuer                      Filing Agent

11/14/23  Forge Innovation Dev Corp.        10-Q        9/30/23   47:3.1M                                   M2 Compliance LLC/FA

Document/Exhibit                   Description                      Pages   Size 

 1: 10-Q        Quarterly Report                                    HTML    523K 
 2: EX-31.1     Certification -- §302 - SOA'02                      HTML     19K 
 3: EX-31.2     Certification -- §302 - SOA'02                      HTML     19K 
 4: EX-32.1     Certification -- §906 - SOA'02                      HTML     16K 
10: R1          Cover                                               HTML     63K 
11: R2          Consolidated Balance Sheets                         HTML    139K 
12: R3          Consolidated Balance Sheets (Parenthetical)         HTML     35K 
13: R4          Consolidated Statements of Operations (Unaudited)   HTML    115K 
14: R5          Consolidated Statements of Cash Flows (Unaudited)   HTML    100K 
15: R6          Consolidated Statements of Changes in Equity        HTML     60K 
                (Deficit) (Unaudited)                                            
16: R7          Organization and Description of Business            HTML     27K 
17: R8          Summary of Significant Accounting Policies          HTML     31K 
18: R9          Going Concern                                       HTML     19K 
19: R10         Real Estate Investments                             HTML     28K 
20: R11         Income Taxes                                        HTML     22K 
21: R12         Related Party Transactions                          HTML     46K 
22: R13         Commercial and SBA Loans                            HTML     28K 
23: R14         Acquisition of Legend                               HTML     32K 
24: R15         Stockholders? Equity                                HTML     29K 
25: R16         Commitment and Contingencies                        HTML     23K 
26: R17         Subsequent Event                                    HTML     17K 
27: R18         Summary of Significant Accounting Policies          HTML     43K 
                (Policies)                                                       
28: R19         Real Estate Investments (Tables)                    HTML     23K 
29: R20         Related Party Transactions (Tables)                 HTML     28K 
30: R21         Acquisition of Legend (Tables)                      HTML     27K 
31: R22         Organization and Description of Business (Details   HTML     54K 
                Narrative)                                                       
32: R23         Going Concern (Details Narrative)                   HTML     18K 
33: R24         Schedule of Real Estate Investments (Details)       HTML     29K 
34: R25         Real Estate Investments (Details Narrative)         HTML     32K 
35: R26         Income Taxes (Details Narrative)                    HTML     29K 
36: R27         Schedule of Amounts Due to Related Parties          HTML     41K 
                (Details)                                                        
37: R28         Related Party Transactions (Details Narrative)      HTML     88K 
38: R29         Commercial and SBA Loans (Details Narrative)        HTML     51K 
39: R30         Schedule of Assets Acquired and Liabilities Fair    HTML     54K 
                Values (Details)                                                 
40: R31         Acquisition of Legend (Details Narrative)           HTML     52K 
41: R32         Stockholders? Equity (Details Narrative)            HTML     49K 
42: R33         Commitment and Contingencies (Details Narrative)    HTML     36K 
45: XML         IDEA XML File -- Filing Summary                      XML     76K 
43: XML         XBRL Instance -- form10-q_htm                        XML    564K 
44: EXCEL       IDEA Workbook of Financial Report Info              XLSX     74K 
 6: EX-101.CAL  XBRL Calculations -- fgnv-20230930_cal               XML    124K 
 7: EX-101.DEF  XBRL Definitions -- fgnv-20230930_def                XML    383K 
 8: EX-101.LAB  XBRL Labels -- fgnv-20230930_lab                     XML    641K 
 9: EX-101.PRE  XBRL Presentations -- fgnv-20230930_pre              XML    512K 
 5: EX-101.SCH  XBRL Schema -- fgnv-20230930                         XSD     84K 
46: JSON        XBRL Instance as JSON Data -- MetaLinks              285±   404K 
47: ZIP         XBRL Zipped Folder -- 0001493152-23-041058-xbrl      Zip    138K 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form  i 10-Q

(Mark One)

 i ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended  i September 30,  i 2023 / 

OR

 i ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______________ to ______________

Commission File No.  i 333-218248

 i FORGE INNOVATION DEVELOPMENT CORP.

(Exact name of small business issuer as specified in its charter)

 i 6280 Mission Blvd Unit 205

 i Jurupa Valley,  i CA  i 92509

(Address of principal executive offices)

 i (626)  i 986-4566

(Registrant’s telephone number, including area code)

N/A

( Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  i Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  i Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  i ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐  i No ☒

The number of shares of Common Stock, $0.0001 par value of the registrant outstanding on November 13, 2023, was  i 50,389,011.

FORGE INNOVATION DEVELOPMENT CORP.

QUARTERLY REPORT ON FORM 10-Q FOR THE PERIOD ENDED SEPTEMBER 30, 2023

TABLE OF CONTENTS

PART I

ITEM 1. FINANCIAL STATEMENTS

FORGE INNOVATION DEVELOPMENT CORP.

INDEX TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FORGE INNOVATION DEVELOPMENT CORP. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

The accompanying notes are an integral part of these unaudited condensed financial statements.

FORGE INNOVATION DEVELOPMENT CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

The accompanying notes are an integral part of these unaudited condensed financial statements.

FORGE INNOVATION DEVELOPMENT CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

The accompanying notes are an integral part of these unaudited condensed financial statements.

FORGE INNOVATION DEVELOPMENT CORP. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (DEFICIT)

The accompanying notes are an integral part of these unaudited condensed financial statements.

Forge Innovation Development Corp. and Subsidiary

Notes to the consolidated financial statements

Item 2. Management’s Discussion and Analysis and Plan of Operation

This 10−Q contains forward-looking statements. Our actual results could differ materially from those set forth as a result of general economic conditions and changes in the assumptions used in making such forward-looking statements. The following discussion and analysis of our financial condition and results of operations should be read together with the consolidated financial statements and accompanying notes and the other financial information appearing elsewhere in this report. The analysis set forth below is provided pursuant to applicable Securities and Exchange Commission regulations and is not intended to serve as a basis for projections of future events.

Overview

Forge Innovation Development Corp. is a development stage company and was incorporated in the State of Nevada in January 2016. The Company’s primary objective is commercial and residential land development, including the purchase and sale of real estate, targeting properties primarily in Southern California. We also intend to manage properties we own, and properties owned by unaffiliated third parties. Our activities will include securing acquisition rights to properties, obtaining zoning and other entitlements for the properties, securing financing for purchase of the properties, improving the properties’ infrastructure and amenities and selling the properties to homeowner and commercial owners for restaurants, offices and small businesses. Our first property acquisition was 29 acres in the city of Desert Hot Springs in Southern California. Due to problems with permits and adjacent landowners, rather than getting involved in protracted negotiations, the Company sold the property to an independent third party for a profit.

On August 17, 2020, the Company established a wholly owned subsidiary, Forge Network Inc, in the State of California. As of June 30, 2023, we have not generated any income from the subsidiary due to our business strategy adjustment.

On March 24, 2023, pursuant to an Asset Purchase Agreement between Forge Innovation Development Corp. (the “Company” or the “Buyer”) and Legend Investment Management, LLC (“Legend LLC” or the “Seller”), the Company acquired 77.3% of Legend LLC’s 66% ownership of Legend International Investment, LP (“Legend LP”). Legend LP owns 100% of Mission Marketplace; a grocery anchored shopping center (the “Property”) located at 6240 Mission Boulevard in Jurupa Valley, California. The Property contains two, one-story and one, two-story buildings containing 48,722 total square foot of gross leasable area situated on a 4.51acre site.

A relative of the President of the Company has significant influence of the Seller’s management, therefore the acquisition is being treated as a related party transaction. The Company acquired 51% interest of Legend LP from Legend LLC in exchanged for 1,967,143 common stocks of the Company, valued at $0.70 per share for a total purchase price of $1,377,000, which equals 51% of Legend LP’s approximate net value of $2,700,000 based on (1) the Property’s valuation appraisal report dated on February 20, 2023, (2) Legend LP’s net book value as of February 28, 2023, and (3) the loan agreement to Legend LP by a third-party lender effective on March 23, 2023. After the closing of the acquisition, the Company will own 51% of Legend LP and the Seller will own 15% of Legend LP.

Results of operation for the three months ended September 30, 2023

For the three months ended September 30, 2023, we had total revenue of $132,760, as compared to $37,000 for the three months ended September 30, 2022, an increase of $95,760 or 259%. The increase was mainly due to the acquisition of Legend LP in the first quarter of 2023 which generated rent income for the three months ended September 30, 2023.

For the three months ended September 30, 2023, we had property management income from related party, Legend LP, in the amount of $nil, as compared to $37,000 for the three months ended September 30, 2022, a decrease of $37,000. The decrease was mainly due to the acquisition of Legend LP, which eliminated to recognize property management income from Legend LP as intercompany transaction for the three months ended September 30, 2023.

For the three months ended September 30, 2023, the Company had total rent income generated by Legend LP of $132,760 as compared to $nil during the three months ended September 30, 2022, an increase of $132,760, or 100%. The increase was mainly resulted from the acquisition of Legend LP.

During the three months ended September 30, 2023 and 2022, the Company incurred general and administrative expenses of $50,499 and $26,629, respectively. During the same period of 2022 and 2023, the depreciation expense increased from $3,372 to $68,884, and property operating expense increased from $nil to $40,354. The increases in expenses are mainly due to the acquisition of Legend LP, which leads more depreciation expenses and property operating related expenses.

During the three months ended September 30, 2023 and 2022, the Company had interest expense of $128,520 and $nil occurred from the loans of Legend LP, respectively.

For the three months ended September 30, 2023 and 2022, the Company had share-based compensation of $494,027 and $nil. The increase is due to the adoption of 2023 Equity Incentive Plan and the issuance of 2,800,000 shares of common stocks under the plan to the Company’s 2023 Equity Incentive Plan.

Results of operation for the nine months ended September 30, 2023

For the nine months ended September 30, 2023, we had total revenue of $310,770, as compared to $82,863 for the nine months ended September 30, 2022, an increase of $227,907 or 275%. The increase was mainly due to the acquisition of Legend LP in the first quarter of 2023.

For the nine months ended September 30, 2023, we had property management income of $45,000, as compared to $82,863 for the nine months ended September 30, 2022, a decrease of $37,863. The decrease was mainly due to the acquisition of Legend LP, which eliminated to recognize property management income from Legend LP as intercompany transaction for the three months ended September 30, 2023.

For the nine months ended September 30, 2023, the Company had total rent income generated by Legend LP of $265,770 as compared to $nil during the nine months ended September 30, 2022, an increase of $265,770, or 100%. The increase was mainly resulted from the acquisition of Legend LP.

During the nine months ended September 30, 2023 and 2022, the Company incurred general and administrative expenses of $148,890 and $87,100 respectively. During the same period of 2022 and 2023, the depreciation expense increased from $11,745 to $190,731, and property operating expense increased from $nil to $92,364. The increases in expenses are mainly due to the acquisition of Legend LP, which leads more depreciation expenses and property operating related expenses.

During the nine months ended September 30, 2023 and 2022, the Company had interest expense of $333,283 and $nil occurred from the loans of Legend LP.

During the nine months ended September 30, 2023 and 2022, the Company had gain on bargain purchase of $487,688 and $nil on the acquisition of Legend LP.

For the nine months ended September 30, 2023 and 2022, the Company had share-based compensation of $536,896 and $nil. The increase is due to the adoption of 2023 Equity Incentive Plan and the issuance of 2,800,000 shares of common stocks under the plan to the Company’s 2023 Equity Incentive Plan.

Equity and Capital Resources

We have incurred losses since inception of our business in 2016, except for the first quarter of 2023, and as of September 30, 2023, we had an accumulated deficit of $1,912,844. As of September 30, 2023, we had cash of $10,686 and a working capital of $78,160, compared to cash of $11,734 and a negative working capital of $140,204 as of December 31, 2022. The change in the working capital was primarily due to cash used to pay for operating expenses, deferred compensation and acquired loans from Legend.

Going Concern Assessment

The Company demonstrates adverse conditions that raise substantial doubt about the Company’s ability to continue as a going concern. These adverse conditions are negative financial trends, specifically cash outflow from operating activities, operating losses, accumulated deficit and other adverse key financial ratios.

Management’s plan to alleviate the substantial doubt about the Company’s ability to continue as a going concern include attempting to improve its business profitability, its ability to generate sufficient cash flow from its operations and execute the business plan of the Company in order to meet its operating needs on a timely basis. However, there can be no assurance that these plans and arrangements will be sufficient to fund the Company’s ongoing capital expenditures and other requirements.

The consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classification of liabilities that might be necessary in the event that the Company cannot continue as a going concern.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to stockholders.

Critical Accounting Policies

The consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these consolidated financial statements requires making estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. The estimates are based on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis of making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

The critical accounting policies are discussed in further detail in the notes to the audited consolidated financial statements appearing elsewhere in this report. Management believes that the application of these policies on a consistent basis enables us to provide useful and reliable financial information about our operating results and financial condition.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

As a “small reporting company” we are not required to provide this information under this item pursuant to Regulation S-K.

Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

As of the end of the period covered by this report on Form 10-Q, our President (principal executive officer) and our Chief Financial Officer performed an evaluation of the effectiveness of and the operation of our disclosure controls and procedures as defined in Rule 13a-15(e) or Rule 15d-15(e) under the Exchange Act. Based on that evaluation, our President and Chief Financial Officer each concluded that as of the end of the period covered by this report on Form 10-Q, our disclosure controls and procedures were not effective in timely alerting them to material information relating to Forge Innovation Development Corp. required to be included in our Exchange Act filings.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Rule 13a-15 or Rule 15d-15 under the Exchange Act that occurred during the quarter ended September 30, 2023 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II — OTHER INFORMATION

Item 1. Legal Proceedings.

On December 8, 2017, the Company entered into a lease agreement with Puente Hills Business Center II, L.P. (“PHBC-II”) for a lease term of forty-eight months, and which was scheduled to expire on January 14, 2022, at monthly rent of $4,962, subject to increase. On or about September 29, 2020, the Company vacated the premises. On October 22, 2020, PHBC-II filed a lawsuit against the Company and its guarantor, Mr. Liang. The Company has retained legal counsel to address the matter and the Court has rescheduled the trial date from January 31, 2023 to April 18, 2023, and then again rescheduled to June 14, 2023. On July 14, 2023, the Company reached to a settlement with PHBC-II and agreed to pay rent of $100,000 and rent deposit of $13,953 became nonrefundable. During the nine months ended September 30, 2023, the Company recognized settlement loss of $30,883 in other income (expense), net on the consolidated statement of operations. As of September 30, 2023 and December 31, 2022, the Company had $85,294 and $83,070 rent payable toward the lease agreement, respectively.

Item 1A. Risk Factors.

As a “smaller reporting company”, we are not required to provide this information under this item pursuant to Regulation S-K.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

On June 26, 2023, the Company granted total 2,800,000 shares of common stock of the Company to four consultants, pursuant to the Company’s 2023 Equity Incentive Plan, the shares of which were registered with the SEC by filing of the Form S-8 dated on June 16, 2023. The fair value of the shares granted was valued in the amount of $1,960,000 at grant date. For the three and nine months ended September 30, 2023, the Company recognized share-based compensation in the amount of $494,027 and 536,986, respectively. As of September 30, 2023, the deferred share-based compensation totaled $1,423,014.

Item 3. Defaults Upon Senior Securities.

None

Item 4. Mine Safety Disclosures.