LUBA GROU The following management's discussion and analysis should be read in conjunction
with our financial statements and the notes thereto and the other financial
information appearing elsewhere in this report. Our financial statements are
prepared in
Special Note Regarding Forward Looking Statements
In addition to historical information, this report contains forward-looking statements. We use words such as "believe," "expect," "anticipate," "project," "target," "plan," "optimistic," "intend," "aim," "will" or similar expressions which are intended to identify forward-looking statements. Forward-looking statements speak only as of the date they are made, are based on various underlying assumptions and current expectations about the future. Accordingly, such information should not be regarded as representations that the results or conditions described in such statements or that our objectives and plans will be achieved and we do not assume any responsibility for the accuracy or completeness of any of these forward-looking statements. You are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, as well as assumptions, which, if they were to ever materialize or prove incorrect, could cause our results to differ materially from those expressed or implied by such forward-looking statements.
Readers are urged to carefully review and consider the various disclosures made
by us in this report and our other filings with the
Overview
We were incorporated on
On
As a result of this transaction, we ceased to be a shell company and through our subsidiaries and affiliated entities, we are currently engaged in the business of e-commerce. We have officially launched our e-commerce platform, Ingtona (????), in the second half of 2019, but the active users are minimum. We have not yet commenced planned operations to any significant measure. Our operations to date have been devoted primarily to start-up, development and operational activities, which include:
1
? Development of our business plan;
? Research on marketing channels/strategies for our planned business; and
? The development of our franchise business.
The accompanying financial statements are presented on the basis that the Company is a going concern. The going concern assumption contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.
Since late January, the COVID-19 pandemic has significantly reduced customer visits and spending in our offline stores and delayed the full launch and normal operations of our e-commerce platform. Although the Chinese government has lifted quarantines and lockdowns since late March, various restrictions and the fear of new outbreaks continue to limit the recovery of our business and customer demand for our products and services.
The Company incurred net loss of
The ability to continue as a going concern is dependent upon the Company's profit generating operations in the future and/or obtaining the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they become due. Therefore, there is substantial doubt about the ability of the entity to continue as a going concern within one year after the date that the financial statements are issued. In light of management's efforts, there are no assurances that the Company will be successful in this or any of its endeavors or become financially viable and continue as a going concern. The Company expects to finance operations primarily through capital contributions from the shareholders. These consolidated financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.
Results of Operations
Comparison of Three Months Ended
The following table sets forth key components of our results of operations
during the three months ended
Three months ended Three months ended
September 30, 2020 September 30, 2019 Change
Revenue
Franchise revenue $ - $ - $ -
Sale of products - - -
Total revenue - - -
Cost of revenue:
Franchise expenses - - -
Cost of goods sold - - -
Total cost of revenue - - -
Gross profit - - -
Other (expenses)income 2,869 94 2,775
General and administrative
expense (47,033 ) (191,717 ) 144,684
Net loss (44,164 ) $ (191,623 ) $ 147,459
2
Revenue
We are developing our e-commerce platform which will serve consumers through our
retail website that enables third-party sellers to sell their products on the
online marketplace. Our platform was launched in the second half of 2019 and we
expect to start generating revenues from our e-commerce business during the 2020
fiscal year. However, we did not generate any revenues from our e-commerce
platform as we did not sell any products on the platform during the three months
period ended
Since late January, the COVID-19 pandemic has significantly reduced customer visits and spending in our offline stores and delayed the full launch and normal operations of our e-commerce platform. Although the Chinese government has lifted quarantines and lockdowns since late March, various restrictions and the fear of new outbreaks continue to limit the recovery of our business and customer demand for our products and services.
Cost of revenue
During the three months ended
Gross profit and gross margin
As a result of no revenue and cost of revenue being realized, gross profit was
$nil for the three months ended
General and administrative expense
Our general and administrative expense consists primarily of salary expense,
travelling expenses, as well as consultancy fees. Our general and administrative
expenses decreased to
Net loss
As a result of the cumulative effect of the factors described above, our net
loss decreased by
Comparison of Nine Months Ended
The following table sets forth key components of our results of operations
during the nine months ended
Nine months ended Nine months ended
September 30, 2020 September 30, 2019 Change
Revenue
Franchise revenue $ 6,913 $ - 6,913
Sale of products 1,030 - 1,030
Total revenue 7,943 - 7,943
Cost of revenue:
Franchise expenses (977 ) - (977 )
Cost of goods sold (515 ) - (515 )
Total cost of revenue (1,492 ) - (1,492 )
Gross profit 6,451 - $ 6,451
Other income 4,477 1,060 3,417
General and administrative
expense (238,842 ) (1,429,083 ) 1,190,241
Net loss $ (227,914 ) $ (1,428,023 ) $ 1,200,109
3
Revenue
We are developing our e-commerce platform which will serve consumers through our
retail website that enables third-party sellers to sell their products on the
online marketplace. Our platform was launched in the second half of 2019 and we
expect to start generating revenues from our e-commerce business during the 2020
fiscal year. However, we did not generate any revenues from our e-commerce
platform as we did not sell any products on the platform during the nine months
period ended
Since late January, the COVID-19 pandemic has significantly reduced customer visits and spending in our offline stores and delayed the full launch and normal operations of our e-commerce platform. Although the Chinese government has lifted quarantines and lockdowns since late March, various restrictions and the fear of new outbreaks continue to limit the recovery of our business and customer demand for our products and services.
Cost of revenue
Cost of revenue was
Gross profit and gross margin
Gross profit for the nine months ended
General and administrative expense
Our general and administrative expense consists primarily of salary expense,
travelling expenses, as well as consultancy fees. Our general and administrative
expenses decreased by
Net loss
As a result of the cumulative effect of the factors described above, our net
loss increased by
Liquidity and Capital Resources
Working capital: September 30, 2020 September 30, 2019 Total current assets $ 257,989 $ 556,923 Total current liabilities 1,439,833 1,306,106 Working capital deficiency $ (1,181,844 ) $ (749,183 ) 4
As of
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