Quarterly report pursuant to Section 13 or 15(d)

GOING CONCERN AND MANAGEMENT'S LIQUIDITY PLANS

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GOING CONCERN AND MANAGEMENT'S LIQUIDITY PLANS
6 Months Ended
Jun. 30, 2020
GOING CONCERN AND MANAGEMENT'S LIQUIDITY PLANS  
NOTE 3 - GOING CONCERN AND MANAGEMENT'S LIQUIDITY PLANS

As of June 30, 2020, the Company had cash of $1,464,086 and working capital deficit of $860,484. During the six months ended June 30, 2020, the Company used net cash in operating activities of $1,214,766. The Company has not yet generated any significant revenues and has incurred net losses since inception. These conditions raise substantial doubt about the Company’s ability to continue as a going concern.

 

The Company’s primary source of operating funds since inception has been from proceeds from private placements of convertible and other debt and the sale of common stock. The Company intends to raise additional capital through private placements of debt and equity securities, but there can be no assurance that these funds will be available on terms acceptable to the Company, or will be sufficient to enable the Company to fully complete its development activities or sustain operations. If the Company is unable to raise sufficient additional funds, it will have to develop and implement a plan to further extend payables, reduce overhead, or scale back its current business plan until sufficient additional capital is raised to support further operations. There can be no assurance that such a plan will be successful.

 

In December 2019, a novel strain of coronavirus (COVID-19) surfaced. The spread of COVID-19 around the world in the first quarter of 2020 has caused significant volatility in U.S. and international markets. There is significant uncertainty around the breadth and duration of business disruptions related to COVID-19, as well as its impact on the U.S. and international economies and, as such, the Company is unable to determine if it will have a material impact to its operations.

 

On March 27, 2020, the Coronavirus Aid Relief, and Economic Security (CARES) Act was signed into law to provide economic relief in the early wake of the COVID-19 pandemic. The Company applied for both the Economic Injury Disaster Loan (the “EIDL”) and Paycheck Protection Program (the “PPP”), which were created under the CARES Act and administrated by the U.S. Small Business Administration (the “SBA”). On April 28, 2020, the Company received $5,000 from SBA as an advance on the EIDL. On May 22, 2020, the Company received a loan of $28,000 from Citizens Business Bank on the PPP. The Company believes that its current cash on hand will not be sufficient to fund its projected operating requirements for the next twelve months following the filing of this report.

 

Accordingly, the accompanying unaudited condensed consolidated financial statements have been prepared in conformity with GAAP, which contemplate continuation of the Company as a going concern and the realization of assets and satisfaction of liabilities in the normal course of business. The carrying amounts of assets and liabilities presented in the financial statements do not necessarily purport to represent realizable or settlement values. The unaudited condensed consolidated financial statements do not include any adjustment that might result from the outcome of this uncertainty.