The following discussion should be read in conjunction with our financial statements and notes to those financial statements, included elsewhere in this prospectus. This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results and the timing of selected events could differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under “Risk factors” and elsewhere in this prospectus.
FORWARD-LOOKING STATEMENTS:
Certain statements made in this Report may constitute “forward-looking statements on our current expectations and projections about future events.” These forward-looking statements involve known or unknown risks, uncertainties and other factors that may cause our actual results, performance, or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. In some cases you can identify forward-looking statements by some words such as “may,” “should,” “potential,” “continue,” “expects,” “anticipates,” “intends,” “plans,” “believes,” “estimates,” and similar expressions. These statements are based on our current beliefs, expectations, and assumptions and are subject to a number of risks and uncertainties. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. These forward-looking statements are made as of the date of this Report, and we assume no obligation to update these forward-looking statements whether as a result of new information, future events, or otherwise, other than as required by law. In light of these assumptions, risks, and uncertainties, the forward-looking events discussed in this Report might not occur and actual results and events may vary significantly from those discussed in the forward-looking statements.
Overview and Recent Developments
As a result of the Exchange, which was consummated January 23, 2023, we are no longer a shell company. However, for the fiscal year ended as of December 31, 2022, we were a shell company and did not generate any revenues.
The Report of our independent registered public accountants on our financial statements for the year ended December 31, 2022 states that these conditions, among others, raise substantial doubt about our ability to continue as a going concern.
On February 7, 2023, the Board and the holder of 121,343,700 shares of Common Stock, representing approximately 59.98% of the Company’s voting equity, approved by written consent, in accordance with the applicable provisions of Nevada law, the execution and filing of the Amendment with the Nevada Secretary of State, to effect the change of the Company’s name from “Joway Health Industries Group Inc.” to “Idaho Copper Corporation”. On March 9, 2023, the Company filed the Amendment with the Nevada Secretary of State, with immediate effect.
Results of Operations
Year Ended December 31, 2022 Compared to Year Ended December 31, 2021
Revenues. During the years ended December 31, 2022 and 2021, we did not realize any revenues from operations.
25
Operating expenses. For the year ended December 31, 2022, our total operating expenses were $74,708, a decrease by $47,080, or 39%, from $121,788 for the year ended December 31, 2021. This decrease was mainly due to reduction from the professional fees related to legal services. For the year ended December 31, 2021, our total operating expenses were $121,788, decreased by $100,819, or 45%, from $222,607 for the year ended December 31, 2020. This decrease was mainly due to disposal of operations in 2020 and becoming a shell company as of January 1, 2021.
Loss from operations. As a result of the foregoing, our loss from operations was $74,708 for the year ended December 31, 2022, compared to $121,788 for the year ended December 31, 2021. This decrease was mainly due to reduction from the professional fees related to legal services.
Income taxes. We did not incur income tax expenses for the years ended December 31, 2022 and 2021.
Net loss. For the year ended December 31, 2022, our net loss was $74,708 compared to $121,788 for the year ended December 31, 2021. The decreased loss was primarily due to the decreased operating expenses.
Liquidity and Capital Resources
As of December 31, 2022, we had current assets of $0, we had liabilities of $177,761, and our working capital deficit was $177,761. We anticipate that our current liquidity is not sufficient to meet the obligations associated with being a company that is fully reporting with the SEC.
During fiscal year ended December 31, 2022, we kept our monthly cash flow requirement low for two reasons. First, our sole officer did not draw a salary. Second, we were able to keep our operating expenses to a minimum by operating in space provided at no expense by our sole officer and director.
We currently have no external sources of liquidity such as arrangements with credit institutions or off-balance sheet arrangements that will have or are reasonably likely to have a current or future effect on our financial condition or immediate access to capital.
Our financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”), which contemplates our continuation as a going concern. We have not yet generated any revenue and have incurred losses to date of approximately $7,430,676. In addition, our current liabilities exceed our current assets by $177,761. These factors raise substantial doubt about our ability to continue operating as a going concern. Our ability to continue our operations as a going concern, realize the carrying value of our assets, and discharge our liabilities in the normal course of business is dependent upon our ability to raise capital sufficient to fund our commitments and ongoing losses, and ultimately generate profitable operations.
Cash Flows Operating Activities
For the year ended December 31, 2022, net cash used in operating activities was $0 and related to our net loss from continuing operations of $74,708, offset by an increase in other payables of $74,708.
For the year ended December 31, 2021, net cash used in operating activities was $70,079, related to our net loss of $121,788, reduced by an increase in other payables of $51,709.
Investing Activities
For the year ended December 31, 2022, we reported no cash provided by our investing activities. For the year ended December 31, 2021, we reported cash inflow of $119,070 from investing activities due to disposal of our operating subsidiaries.
Financing Activities
For the year ended December 31, 2022, we had no cash inflow from our financing activities. For the year ended December 31, 2021, we reported a cash outflow of $48,991 from our financing activities which was mainly due to distribution of $119,070 as a special dividend to our minority shareholders and a financial support of $70,079 received from our related party.
26 Critical Accounting Policies
Our financial statements and accompanying notes have been prepared in accordance with United States generally accepted accounting principles (“GAAP”) applied on a consistent basis. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods.
We regularly evaluate the accounting policies and estimates that we use to prepare our financial statements. A complete summary of these policies is included in the notes to our financial statements. In general, management’s estimates are based on historical experience, on information from third party professionals, and on various other assumptions that are believed to be reasonable under the facts and circumstances. Actual results could differ from those estimates made by management.
The financial statements have been prepared in conformity GAAP, which contemplates our continuation as a going concern. The Company has no revenue since January 1, 2020 and has incurred losses to date of approximately $7.4 million. In addition, the Company’s current liabilities exceed its current assets by $177,761. The Company intends on financing its future development activities and its working capital needs largely from the sale of public equity securities with some additional funding from other traditional financing sources, including term notes until such time that funds provided by operations are sufficient to fund working capital requirements. These factors raise substantial doubt about the Company’s ability to continue operating as a going concern. The Company’s ability to continue our operations as a going concern, realize the carrying value of our assets, and discharge our liabilities in the normal course of business is dependent upon our ability to raise capital sufficient to fund its commitments and ongoing losses, and ultimately generate profitable operations.
Contractual Obligations
We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information under this item.
27 Off Balance Sheet Items
Under SEC regulations, we are required to disclose off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, such as changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors. An off-balance sheet arrangement means a transaction, agreement or contractual arrangement to which any entity that is not consolidated with us is a party, under which we have:
? any obligation under certain guarantee contracts,
? any retained or contingent interest in assets transferred to an unconsolidated
entity or similar arrangement that serves as credit, liquidity or market risk
support to that entity for such assets,
? any obligation under a contract that would be accounted for as a derivative
instrument, except that it is both indexed to our stock and classified in
shareholder equity in our statement of financial position, and
? any obligation arising out of a material variable interest held by us in an
unconsolidated entity that provides financing, liquidity, market risk or
credit risk support to us, or engages in leasing, hedging or research and
development services with us.
We do not have any off-balance sheet arrangements that we are required to disclose pursuant to these regulations. In the ordinary course of business, we enter into operating lease commitments, purchase commitments and other contractual obligations. These transactions are recognized in our financial statements in accordance with generally accepted accounting principles in the United States.
Going Concern
We incurred net losses of approximately $74,708 for the year ended December 31, 2022. We had an accumulated deficit of approximately $7,430,676 and working capital deficiency of $177,761 as of December 31, 2022. These conditions raise substantial doubt about the Company’s ability to continue as a going concern.
The continuation of us as a going concern through the next twelve months is dependent upon the continued financial support from its stockholders or external financing. There can be neither no assurances to that effect, nor no assurance that we will be successful in securing sufficient funds to sustain the operations.
These financial statements do not include any adjustments to reflect the possible future effect on the recoverability and classification of assets or the amounts and classifications of liabilities that may result from the outcome of these uncertainties. We believe that the actions presently being taken to obtain additional funding and implement its strategic plan provides the opportunity for the Company to continue as a going concern.
28 Revenue Recognition
The Company recognizes revenue when control of promised goods or services is transferred to the company’s customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services.
Prior to the Merger Agreement as of December 31, 2020, with respect to sales of product to both franchisee and non-franchisee customers, the Company transfers control, invoices the customer and recognizes revenue upon shipment to the customer. Sales prices are based on fixed price lists that are different depending on whether the price list is for franchisee customers or for non-franchisee customers. Sales, value add and other taxes collected concurrent with revenue-producing activities are excluded from revenue.
After the consummation of the Merger as of December 31, 2020, the Company did not report any revenue for the year ended December 31, 2022 or December 31, 2021.
Recent Accounting Pronouncements
No accounting standards that have been issued or proposed by the FASB or other standards-setting bodies that require adoption until a future date are expected to have a material impact on the Company’s financial statements upon adoption.
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