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As Of Filer Filing For·On·As Docs:Size Issuer Filing Agent 8/15/22 Forge Innovation Dev Corp. 10-Q 6/30/22 36:1.5M M2 Compliance LLC/FA |
Document/Exhibit Description Pages Size
1: 10-Q Quarterly Report HTML 298K
2: EX-31.1 Certification -- §302 - SOA'02 HTML 17K
3: EX-31.2 Certification -- §302 - SOA'02 HTML 17K
4: EX-32.1 Certification -- §906 - SOA'02 HTML 14K
10: R1 Cover HTML 61K
11: R2 Consolidated Balance Sheets HTML 104K
12: R3 Consolidated Balance Sheets (Parenthetical) HTML 30K
13: R4 Consolidated Statements of Operations (Unaudited) HTML 62K
14: R5 Consolidated Statements of Cash Flows (Unaudited) HTML 83K
15: R6 Consolidated Statements of Changes in HTML 31K
Shareholders' Equity (Unaudited)
16: R7 Organization and Description of Business HTML 16K
17: R8 Summary of Significant Accounting Policies HTML 23K
18: R9 Going Concern HTML 17K
19: R10 Income Taxes HTML 19K
20: R11 Related Party Transactions HTML 23K
21: R12 Leases HTML 17K
22: R13 PPP and SBA Loans HTML 24K
23: R14 Contingencies HTML 17K
24: R15 Subsequent Event HTML 15K
25: R16 Summary of Significant Accounting Policies HTML 27K
(Policies)
26: R17 Going Concern (Details Narrative) HTML 15K
27: R18 Income Taxes (Details Narrative) HTML 26K
28: R19 Related Party Transactions (Details Narrative) HTML 42K
29: R20 Leases (Details Narrative) HTML 21K
30: R21 PPP and SBA Loans (Details Narrative) HTML 37K
31: R22 Contingencies (Details Narrative) HTML 18K
34: XML IDEA XML File -- Filing Summary XML 54K
32: XML XBRL Instance -- form10-q_htm XML 215K
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(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 June 30, 2022
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 nevada | i 81-4635390 | |
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
(Address of principal executive offices)
(Registrant’s telephone number, including area code)
( Former name, former address and former fiscal year, if changed since last report)
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):
| Large accelerated filer ☐ | Accelerated filer ☐ |
| i Non-accelerated filer ☐ | Smaller reporting company i ☒ |
| Emerging growth company i ☒ |
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 ☐
Securities registered pursuant to Section 12(b) of the Act: None
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 at August 12, 2022, was .
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FORGE INNOVATION DEVELOPMENT CORP.
QUARTERLY REPORT ON FORM 10-Q FOR THE PERIOD ENDED JUNE 30, 2022
TABLE OF CONTENTS
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FRORGE INNOVATION DEVELOPMENT CORP.
INDEX TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
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FORGE INNOVATION DEVELOPMENT CORP. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
| June 30, | December 31, | |||||||
| 2022 | 2021 | |||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| CURRENT ASSETS | ||||||||
| Cash | $ | i 2,634 | $ | i 60,364 | ||||
| Account receivable | i 10,000 | i 9,000 | ||||||
| Prepaid expense and other current assets | i 5,645 | i 14,692 | ||||||
| Total Current Assets | i 18,279 | i 84,056 | ||||||
| NONCURRENT ASSETS | ||||||||
| Property and equipment, net | i 47,481 | i 47,314 | ||||||
| Rent deposit | i 13,953 | i 13,953 | ||||||
| Total Noncurrent Assets | i 61,434 | i 61,267 | ||||||
| TOTAL ASSETS | $ | i 79,713 | $ | i 145,323 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| CURRENT LIABILITIES: | ||||||||
| Other accrued liabilities | $ | i 3,047 | $ | i 19,203 | ||||
| Other payable - Related Parties | i 64,993 | i 70,591 | ||||||
| Rent payable | i 83,070 | i 83,070 | ||||||
| Loans, current | i 6,878 | i 6,878 | ||||||
| Total Current Liabilities | i 157,988 | i 179,742 | ||||||
| Long term portion of Chase auto loan | i 6,133 | i 9,478 | ||||||
| Long term portion of SBA loan | i 12,916 | i 13,330 | ||||||
| TOTAL LIABILITIES | i 177,037 | i 202,550 | ||||||
| COMMITMENTS AND CONTINGENCIES | ||||||||
| STOCKHOLDERS’ EQUITY: | ||||||||
| Preferred stock, $ par value, shares authorized; share issued and outstanding | - | - | ||||||
| Common stock, $ par value, shares authorized, shares issued and outstanding | i 4,562 | i 4,562 | ||||||
| Additional Paid-in Capital | i 1,469,678 | i 1,469,678 | ||||||
| Accumulated Deficit | ( i 1,571,564 | ) | ( i 1,531,467 | ) | ||||
| Total Stockholders’ Deficit | ( i 97,324 | ) | ( i 57,227 | ) | ||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT | $ | i 79,713 | $ | i 145,323 | ||||
The accompanying notes are an integral part of these unaudited condensed financial statements.
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FORGE INNOVATION DEVELOPMENT CORP. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
The accompanying notes are an integral part of these unaudited condensed financial statements.
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FORGE INNOVATION DEVELOPMENT CORP. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
| 2022 | 2021 | |||||||
For the six months ended | ||||||||
| 2022 | 2021 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||
| Net loss | $ | ( i 40,097 | ) | $ | ( i 135,689 | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Amortization of ROU | - | i 30,940 | ||||||
| Depreciation expense | i 14,275 | i 7,177 | ||||||
| Bad debt reserve | i 3,500 | |||||||
| Debt Settlement | ( i 3,284 | ) | - | |||||
| Forgiveness of PPP loan | - | ( i 19,400 | ) | |||||
| Change in operating assets and liabilities: | ||||||||
| Other current assets | - | ( i 12,990 | ) | |||||
| Account receivable | ( i 1,000 | ) | i 3,000 | |||||
| Prepaid expense and other current assets | i 5,547 | - | ||||||
| Other receivable-related party | - | ( i 111 | ) | |||||
| Other current liability - related parties | ( i 5,598 | ) | i 26,938 | |||||
| Other current liabilities | ( i 12,872 | ) | - | |||||
| Net cash used in operating activities | ( i 39,529 | ) | ( i 100,135 | ) | ||||
| CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||
| Purchase of property and equipment | ( i 17,975 | ) | - | |||||
| Net cash used in investing activities | ( i 17,975 | ) | - | |||||
| CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||
| Repayment of SBA loan | ( i 227 | ) | ( i 69 | ) | ||||
| Net cash used in financing activities | ( i 227 | ) | ( i 69 | ) | ||||
| Net decrease in Cash | ( i 57,731 | ) | ( i 100,204 | ) | ||||
| Cash at beginning of period: | i 60,364 | i 236,586 | ||||||
| Cash at end of period: | $ | i 2,633 | $ | i 136,382 | ||||
| SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFOR | ||||||||
| Interest paid | $ | - | $ | - | ||||
| Income taxes paid | $ | - | $ | i 800 | ||||
| NONCASH TRANSACTION OF INVESTING ACTIVITIES | ||||||||
| Loan carried through purchase of vehicle | $ | - | $ | i 22,861 | ||||
The accompanying notes are an integral part of these unaudited condensed financial statements.
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FORGE INNOVATION DEVELOPMENT CORP. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
Number of Shares | Common Shares | Additional Paid-in Capital | Accumulated Deficit | Total Shareholders’ Equity | ||||||||||||||||
| Balance, January 1, 2022 | i 45,621,868 | $ | i 4,562 | $ | i 1,469,678 | ( i 1,531,467 | ) | $ | ( i 57,227 | ) | ||||||||||
| Net loss | - | - | - | ( i 40,097 | ) | ( i 40,097 | ) | |||||||||||||
| Balance, June 30, 2022 (Unaudited) | i 45,621,868 | $ | i 4,562 | $ | i 1,469,678 | $ | ( i 1,571,564 | ) | $ | ( i 97,324 | ) | |||||||||
Number of Shares | Common Shares | Additional Paid-in Capital | Accumulated Deficit | Total Shareholders’ Equity | ||||||||||||||||
Balance, January 1, 2021 | i 45,621,868 | $ | i 4,562 | $ | i 1,469,678 | $ | ( i 1,269,033 | ) | $ | i 205,207 | ||||||||||
| Net loss | - | - | - | ( i 135,689 | ) | ( i 135,689 | ) | |||||||||||||
| Balance, June 30, 2021 (Unaudited) | i 45,621,868 | $ | i 4,562 | $ | i 1,469,678 | $ | ( i 1,404,722 | ) | $ | i 69,518 | ||||||||||
The accompanying notes are an integral part of these unaudited condensed financial statements.
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Forge Innovation Development Corp. and Subsidiary
Notes to the consolidated financial statements
i
Note 1 - Organization and Description of Business
Forge Innovation Development Corp. (individually “Forge” and collectively with its subsidiary, the “Company”), was initially incorporated in the State of Nevada on January 15, 2016 under the name of You-Go Enterprises, LLC (the “Company Predecessor”). On November 3, 2016, Forge amended its Articles of Incorporation in the State of Nevada to change the Company Predecessor’s name to Forge Innovation Development Corp. Our current principle executive office is located at 6280 Mission Blvd Unit 205, Jurupa Valley, CA 92509. The Company’s main business focuses on real estate development, land purchasing and selling and property management. The Company’s common stock is currently traded on OTCQB under the symbol “FGNV”.
On August 17, 2020, the Company established a wholly owned subsidiary, Forge Network Inc, in the State of California. As of June 30, 2022, we have not generated any income from the subsidiary due to our business strategy adjustment. Meanwhile, we are also looking for other business opportunities which could potentially increase the profits of Company in the year of 2022.
i
Note 2 - Summary of Significant Accounting Policies
The accompanying unaudited interim financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission, and should be read in conjunction with the audited financial statements and notes thereto contained in the Company’s most recent Annual Financial Statements filed with the SEC on Form 10-K. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim period presented have been reflected herein. The results of operations for the interim period are not necessarily indicative of the results to be expected for the full year. Notes to the financial statements which would substantially duplicate the disclosures contained in the audited financial statements for the most recent fiscal period, as reported in the Form 10-K, have been omitted.
i
The preparation of consolidated financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. In the opinion of management, all adjustments necessary in order to make the consolidated financial statements not misleading have been included. Actual results could differ from those estimates.
i
On January 1, 2018, the Company adopted ASU 2014-09, Revenue from Contracts with Customers, using the modified retrospective approach, which applies the new standard to contracts that are not completed as of the date of adoption. Under the new standard, revenue is recognized upon transfer of control of promised goods and services to customers in an amount that reflects the consideration the Company expects to receive in exchange for those goods and services.
Revenue streams that are scoped into ASU 2014-09 include:
Property management services: The Company deals directly with prospects and tenants for the owners of properties, which mainly includes marketing property, collecting rent, handling maintenance, repairing issues and responding to tenant complaints. The Company recognizes revenue as earned on a monthly basis and has concluded this is appropriate under the new standard.
Real estate sales: The Company accounts for the sale of real estate assets and any related gain recognition in accordance with the accounting guidance applicable to sales of real estate, which establishes standards for recognition of profit on all real estate sales transactions, other than retail land sales. The Company recognizes the sale, and associated gain or loss from the disposition, provided that the earnings process is complete, and the Company does not have significant continuing involvement. Subsequent to the adoption of the new standard, the Company may recognize a gain on a real estate disposition that previously did not qualify as a sale or for full profit recognition due to the timing of the transfer of control.
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i
Recently Issued Accounting Pronouncements Not Yet Adopted
In June 2016, the FASB issued ASU No. 2016-13, (FASB ASC Topic 326), Financial Instruments – Credit Losses: Measurement of Credit Losses on Financial Instruments which amends the current accounting guidance and requires the use of the new forward-looking “expected loss” model, which requires all expected losses to be determined based on historical experience, current conditions and reasonable and supportable forecasts, rather than the “incurred loss” model. This guidance amends the accounting for credit losses for most financial assets and certain other instruments including trade and other receivables, held-to-maturity debt securities, loans and other instruments. The effective date of ASU No. 2016-13 for smaller reporting companies is postponed to fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The Company believes the adoption of ASU No. 2016-13 will not have a material impact on its financial position and results of operations.
The management does not believe that other than disclosed above, the recently issued but not yet adopted accounting pronouncements will have a material impact on its financial position results of operations or cash flows.
/ i
The accompanying consolidated financial statements were prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of obligations in the normal course of business. However, the Company has suffered recurring losses from operations since inception, resulting in an accumulated deficit of $ i 1,571,564 as of June 30, 2022. These conditions raise substantial doubt about the ability of the Company to continue as a going concern.
In view of these matters, continuation as a going concern is dependent upon several factors, including the availability of debt or equity funding upon terms and conditions acceptable to the Company and ultimately achieving profitable operations. Management believes that the Company’s business plan provides it with an opportunity to continue as a going concern. However, management cannot provide assurance that the Company will meet its objectives and be able to continue in operation.
The consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the possible inability of Forge Innovation Development Corp. to continue as a going concern.
/ i
The Company has not recognized an income tax benefit for its operating losses generated based on uncertainties concerning its ability to generate taxable income in future periods. The tax benefit for the period presented is offset by a valuation allowance established against deferred tax assets arising from the net operating losses, the realization of which could not be considered more likely than not. In future periods, tax benefits and related deferred tax assets will be recognized when management considers realization of such amounts to be more likely than not.
For the six months ended June 30, 2022 and 2021, the Company has incurred a net loss before tax of $ i 40,097 and $ i 135,689, respectively. Net operation losses (“NOLs”) can be carried forever based on the 2017 Tax Cuts and Jobs Act. As of June 30, 2022 and December 31, 2021, deferred tax assets resulted from NOLs of approximately $ i 418,248 and $ i 430,783, which was fully off-set by valuation allowance reserved.
/ i
Note 5 - Related Party Transactions
During the six months ended June 30, 2022 and 2021, Mr. Liang, the Company’s CEO, paid operating expenses on behalf of the Company in the amount of $ i 4,809 and $ i 1,038, respectively. As of June 30, 2022 and December 31, 2021, the Company had payable balance to Mr. Liang in the amount of $ i 4,809 and $ i 284, respectively.
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On January 4, 2021, the Company purchased a vehicle from Patrick Liang, the President of the Company, for daily business operation, in the amount of $ i 22,861, which equaled to the remaining vehicle loan balance with i 7.11% interest rate annum for a period of i 41 months and monthly installment of $ i 558. As of June 30, 2022, $ i 6,691 will be due within the next 12 months, out of $ i 12,824 loan balance. The title of the car is under the process of transferring as of June 30, 2022.
During the six months ended June 30, 2022 and 2021, the Company incurred professional fee with Speedlight Consulting Services Inc. whose owner, Mr. Hengjiang Pang, is our director starting November 9, 2020, in the amount of $ i 19,600 and $ i 36,000, respectively. On June 30, 2022 and December 31, 2021, the Company had balance of due to Speedlight Consulting Services Inc in the amount of $ i 60,000 and $ i 63,000, respectively.
/ i
The Company leased an office space from a third party on December 2017 for four-year term with the expiration date on January 14, 2022. We determined the lease is an operating lease upon adoption of ASC 842 on January 1, 2019. Operating leases result in the recognition of ROU assets and lease liabilities on the balance sheet with i 5.5% incremental borrowing rate used. During the six months ended June 30, 2022 and 2021, the Company recorded $nil and $ i 32,214 rent expenses, respectively, and i i no / lease payments made during the quarters. As of June 30, 2022 and December 31, 2021, the Company had $ i i 83,070 / rent payable toward the lease agreement.
/ i
On April 16, 2020, the Company received a Promissory Note (the “Note”) in the amount of $ i 19,400 under the Paycheck Protection Program (the “PPP Loan”) through East West Bank (the “Lender”). The interest rate on this Note is a fixed rate of i 1.00% per annum. According to SBA’s PPP Loan description, the PPP loan will be fully forgiven if the funds are used for payroll costs, interest on mortgages, rent, and utilities (due to likely high subscription, i at least 75% of the forgiven amount must have been used for payroll). Forgiveness is based on the employer maintaining or quickly rehiring employees and maintaining salary levels. Forgiveness will be reduced if full-time headcount declines, or if salaries and wages decrease. The Company received the forgiveness letter from SBA on March 10, 2021 and the Company recognized under other income in the amount of $ i 19,400 for the six months ended June 30, 2021, accordingly.
On July 14, 2020, the Company entered into a loan agreement with the U.S. Small Business Administration (“SBA”), pursuant to which the Company obtained a loan in the amount of $ i 14,000 with the term of i 30 years and interest rate of i 3.75%, payable monthly including principal and interest in the amount $ i 69. As of June 30, 2022 and December 31, 2021, the outstanding loan balances were $ i 12,916 and $ i 13,330, respectively.
/ i
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 i forty-eight months, and which was expired on i January 14, 2022, at monthly rent of $ i 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 for default on rent payments. No judgment has been rendered as of June 30, 2022, and the case is in the pre-trial stage. The Company has retained legal counsel to address the matter and the Court has scheduled the trial date on January 31, 2023.
/ i
The Company has evaluated all other subsequent events through the date these consolidated financial statements were issued and determine that there were no other subsequent events or transactions that require recognition or disclosures in the consolidated financial statements.
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Item 2. Management’s Discussion and Analysis or 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 audited 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, 2022, we have not generated any income from the subsidiary due to our business strategy adjustment. Meanwhile, we are also looking for other business opportunities which could potentially increase the profits of Company in the year of 2022.
Results of Operation for the three months ended June 30, 2022 and 2021
For the three months ended June 30, 2022, we had total revenue of $30,259, as compared to $9,000 for the three months ended June 30, 2021, an increase of $21,259 or 236%. The increase in total revenue was attributable to the newly signed Property Management Agreement (the “PMA”) with Legend Investment International, LP (“Legend Investment”) on April 2, 2022. Pursuant to the PMA, the original monthly service charge was $5,000 which was amended to $10,000 per month in May 2022 due to Legend Investment required additional management services for their properties. In April 2022, we terminated the property management services with Bloomage Beverly Hills Investment Inc. due to the sales of the managed properties.
During the three months ended June 30, 2022 and 2021, the Company incurred general and administrative expenses of $42,083 and $90,127, respectively. The decrease was mainly due to the decrease in payroll expense and professional fees incurred during the three months ended June 30, 2022. For the three months ended June 30, 2022 and 2021, our net losses were $9,340 and $81,127, respectively The decrease in net loss was mainly due to the increase of revenue generated, and the decrease in general administrative expenses for the three months ended June 30, 2022, compared to the same period in last year.
Results of Operation for the six months ended June 30, 2022 and 2021
For the six months ended June 30, 2022, we had total revenue of $45,863, as compared to $18,000 for the six months ended June 30, 2021, an increase of $27,863 or 155%. The increase in total revenue was attributable to the newly signed Property Management Agreement (the “PMA”) with Legend Investment International, LP (“Legend Investment”) on April 2, 2022. Pursuant to the PMA, the original monthly service charge was $5,000 which was amended to $10,000 per month in May 2022 due to Legend Investment required additional management services for their properties. In April 2022, we terminated the property management services with Bloomage Beverly Hills Investment Inc. due to the sales of the managed properties.
During the six months ended June 30, 2022 and 2021, the Company incurred general and administrative expenses of $83,845 and $172,289, respectively. The decrease in general and administrative expenses was mainly due to the decrease in salary expense and professional expense. For the six months ended June 30, 2022 and 2021, our net loss was $40,097 and $135,689, respectively. The decrease in net loss was mainly due to the increase in revenue and decrease in general and administrative expenses for the six months ended June 30, 2022, compared to the same period in last year.
Equity and Capital Resources
We have incurred losses since inception of our business in 2016 and, as of June 30, 2022, we had an accumulated deficit of $1,571,564. As of June 30, 2022, we had cash of $2,634 and a negative working capital of $139,709, compared to cash of $60,364 and a negative working capital of $95,686 as of December 31, 2021. The decrease in the working capital was primarily due to cash used to pay for operating expenses.
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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 June 30, 2022 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
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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 expired 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 for default on rent payments. No judgment has been rendered as of June 30, 2022, and the case is in the pre-trial stage. The Company has retained legal counsel to address the matter and the Court has scheduled the trial date on January 31, 2023.
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.
None
Item 3. Defaults Upon Senior Securities.
None
Item 4. Mine Safety Disclosures.
Not applicable.
None
C:
| 11 |
(a) Exhibits.
| Exhibit | Item | |
| 31.1* | Certification of Chief Executive Officer pursuant to Section 302(a) of the Sarbanes-Oxley Act of 2002 | |
| 31.2* | Certification of Chief Financial Officer pursuant to Section 302(a) of the Sarbanes-Oxley Act of 2002 | |
| 32.1* | Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | |
| 101.INS | Inline XBRL Instance Document | |
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document | |
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | |
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | |
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
C:
| 12 |
In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| FORGE INNOVATION DEVELOPMENT CORP. | |
| Date: August 15, 2022 | /s/ Patrick Liang |
| Patrick Liang, President | |
| (Principal Executive Officer) | |
| Date: August 15, 2022 | /s/ Patrick Liang |
| Patrick Liang, Chief Financial Officer | |
| (Principal Financial and Accounting Officer) |
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| 13 |
| Exhibit | Item | |
| 31.1* | Certification of Chief Executive Officer pursuant to Section 302(a) of the Sarbanes-Oxley Act of 2002 | |
| 31.2* | Certification of Chief Financial Officer pursuant to Section 302(a) of the Sarbanes-Oxley Act of 2002 | |
| 32.1* | Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | |
| 101.INS | Inline XBRL Instance Document | |
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document | |
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | |
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | |
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
C:
| 14 |
C:
| This ‘10-Q’ Filing | Date | Other Filings | ||
|---|---|---|---|---|
 | ||||
| 1/31/23 | ||||
| 12/31/22 | ||||
| 12/15/22 | ||||
| Filed on: | 8/15/22 | |||
| 8/12/22 | ||||
| For Period end: | 6/30/22 | |||
| 4/2/22 | ||||
| 1/14/22 | ||||
| 1/1/22 | ||||
| 12/31/21 | 10-K | |||
| 6/30/21 | 10-Q | |||
| 3/10/21 | ||||
| 1/4/21 | ||||
| 1/1/21 | ||||
| 11/9/20 | 8-K | |||
| 10/22/20 | ||||
| 9/29/20 | ||||
| 8/17/20 | ||||
| 7/14/20 | ||||
| 4/16/20 | ||||
| 1/1/19 | ||||
| 1/1/18 | ||||
| 12/8/17 | ||||
| 11/3/16 | ||||
| 1/15/16 | ||||
| List all Filings | ||||