ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION
Agro Capital Management Corp. (“Agro Capital” or the “Company”) formerly known as Guate Tourism Inc., was incorporated in the State of Nevada on November 12, 2013. Until September 11, 2015, the Company operated as an online tourist guide company in Guatemala helping public from all over the world to find the best accommodation/restaurant/tour/city/program etc. depending on their budget and interests. On September 11, 2015, the Company underwent a change of control, which was the result of the Company’s largest shareholder, Ms. Blanca Bamaca, resigning as an officer and director and selling in a private transaction 6 million shares of the Company’s common stock, which represented 82.8% of the Company’s issued and outstanding shares of common stock.
On December 31, 2015, the Company entered into a Share Exchange Agreement whereby it agreed to issue 30 million shares of its common stock in exchange for all of the issued and outstanding shares of Agro Capital Management Berhad, a Malaysian corporation (the “Agro Malay”). The Company closed its acquisition of the Agro Malay on April 30, 2016. Effective September 19, 2016, the Company rescinded the transactions under such Share Exchange Agreement. The Company and the owners of Agro Malay decided to unwind and rescind the transactions and share issuances pursuant to the Share Exchange Agreement due to, among other reasons, the lack of currently available information regarding Agro Malay necessary for the Company to complete a full financial audit of Agro Malay for the two (2) prior fiscal years. As a result, the acquisition held little to no value for the Company’s shareholders, including the owners of Agro Malay, who became shareholders of the Company as a result of such transaction. It therefore became mutually beneficial to all parties for the transactions to be rescinded and return each party to their former positions. In connection with the unwinding and rescission of the transactions under the Share Exchange Agreement, the shares of Agro Malay were returned to the owners and the Company’s 30 million shares were returned to treasury.
EMPLOYEES AND EMPLOYMENT AGREEMENTS
At present, we have no employees other than our officer and director. We presently do not have pension, health, annuity, insurance, stock options, profit sharing or similar benefit plans; however, we may adopt such plans in the future. There are presently no personal benefits available to any officers, directors or employees.
Results of Operation
Our financial statements have been prepared assuming that we will continue as a going concern and, accordingly, do not include adjustments relating to the recoverability and realization of assets and classification of liabilities that might be necessary should we be unable to continue in operation.
We expect we will require additional capital to meet our long term operating requirements. We expect to raise additional capital through, among other things, the sale of equity or debt securities.
Three Month Periods Ended September 30, 2016 and 2015 and Nine Month Periods Ended September 30, 2016 and 2015
Our net loss for the three month periods ended September 30, 2016 and 2015 were $15,084 and $1,780, respectively. Our net loss for the nine month periods ended September 30, 2016 and 2015 were $46,203 and $15,544, respectively. During these periods ended September 30, 2016 and 2015 we have not generated any revenue.
Liquidity and Capital Resources
Three Month Period Ended September 30, 2016
As at September 30, 2016, our total assets were $2,621, as compared to $15,445 as at December 31, 2015. As at September 30, 2016, our current liabilities were $83,982 and stockholders’ equity was $(81,361), compared to $50,603 and $(35,158) respectively as at December 31, 2015.
Cash Flows from Operating Activities
We have not generated positive cash flows from operating activities. For the nine month periods ended September 30, 2016 and 2015, net cash flows used in operating activities was $39,764 and $15,139, respectively.
Cash Flows from Investing Activities
For the nine month periods ended September 30, 2016 and 2015 we do not have any net cash flows provided by investing activities.
Cash Flows from Financing Activities
For the nine month periods ended September 30, 2016 and 2015 net cash flows provided by financing activities was $24,374 and $6,046, respectively.
Plan of Operation and Funding
We expect that working capital requirements will continue to be funded through a combination of our existing funds and further issuances of securities. Our working capital requirements are expected to increase in line with the growth of our business.
Existing working capital, further advances and debt instruments, and anticipated cash flow are expected to be adequate to fund our operations over the next three months. We have no lines of credit or other bank financing arrangements. Generally, we have financed operations to date through the proceeds of the private placement of equity and debt instruments. In connection with our business plan, management anticipates additional increases in operating expenses and capital expenditures relating to: (i) acquisition of inventory; (ii) developmental expenses associated with a start-up business; and (iii) marketing expenses. We intend to finance these expenses with further issuances of securities, and debt issuances. Thereafter, we expect we will need to raise additional capital and generate revenues to meet long-term operating requirements. Additional issuances of equity or convertible debt securities will result in dilution to our current shareholders. Further, such securities might have rights, preferences or privileges senior to our common stock. Additional financing may not be available upon acceptable terms, or at all. If adequate funds are not available or are not available on acceptable terms, we may not be able to take advantage of prospective new business endeavors or opportunities, which could significantly and materially restrict our business operations. We will have to raise additional funds in the next twelve months in order to sustain and expand our operations. We currently do not have a specific plan of how we will obtain such funding; however, we anticipate that additional funding will be in the form of equity financing from the sale of our common stock. We have and will continue to seek to obtain short-term loans from our directors, although no future arrangement for additional loans has been made. We do not have any agreements with our directors concerning these loans. We do not have any arrangements in place for any future equity financing.
Off-Balance Sheet Arrangements
As of the date of this Quarterly Report, we do not have any 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 are material to investors.
Going Concern
The independent auditors' review report accompanying our December 30, 2015 financial statements contained an explanatory paragraph expressing substantial doubt about our ability to continue as a going concern. The financial statements have been prepared "assuming that we will continue as a going concern," which contemplates that we will realize our assets and satisfy our liabilities and commitments in the ordinary course of business.