ITEM 2: MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS.
The following discussion and analysis should be read in conjunction
with, and is qualified in its entirety by, our financial statements (and notes related thereto) and other more detailed financial information
appearing elsewhere in this Quarterly Report on Form 10-Q. Consequently, you should read the following discussion and analysis of our
financial condition and results of operations together with such financial statements and other financial data included elsewhere in this
Quarterly Report on Form 10-Q. Some of the information contained in this discussion and analysis are set forth elsewhere in this prospectus,
including information with respect to our plans and strategy for our business, includes forward-looking statements that involve risks
and uncertainties. You should review the “Risk Factors” section of our Annual Report on Form 10-K for a discussion of important
factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements
contained in the following discussion and analysis.
Statements in this section and elsewhere in this Form 10-Q that are
not statements of historical or current fact constitute “forward-looking” statements.
OVERVIEW OF OUR PERFORMANCE AND OPERATIONS
Our Business and Recent Developments
Fuel Doctor Holdings, Inc. (the “Company”, formerly Silverhill
Management Services, Inc.) was incorporated in the State of Delaware on March 25, 2008 and established a fiscal year end of December 31. On
August 24, 2011 Silverhill Management Services, Inc.(SLHL) entered into an Agreement and Plan of Reorganization (the “Plan”)
by and among SLHL, Fuel Doctor, LLC, a California limited liability company (“FDLLC”), Emily Lussier, SLHL’s controlling
shareholder, and a certain member of FDLLC. At the completion of this merger on September 1, 2011, the company was renamed as Fuel Doctor
Holdings, Inc.to more accurately reflect the nature of our operations. At the time of the filing of our initial registration statement
on Form S-1 with the Securities & Exchange Commission (the “SEC” or “Commission”) on or about August 8, 2009
our primary business focus was to offer business support services to proprietors, entrepreneurs, and small business owners. By offering
a full suite of outsourced business processes including project management, database and information storage, document management services,
and finance and accounting services. The Company discontinued the development of its business support services on August 24, 2011
when the Company entered into an Agreement and Plan of Reorganization (the “Plan”) by and among the Company, Fuel Doctor,
LLC (“FDLLC”), Emily Lussier, the Company’s controlling shareholder, and certain members of FDLLC. Pursuant to the terms
of the Plan, 100% of the issued and outstanding membership interests of FDLLC were exchanged for 9,367,500 post-split shares of the Company’s
common stock, representing approximately 75% of our outstanding shares following the consummation of the transactions contemplated by
the Plan. A closing under the Plan was held on August 31, 2011.As a result of the Plan, FDLLC became our wholly owned subsidiary,
with FDLLC’s former interest holders acquiring a majority of the outstanding shares of our common stock. Fuel Doctor LLC was incorporated
in the State of California in June 2009 and remained our operating company.
On March 18, 2013, the Company defaulted with its first security holder
and entered into a proposal to accept collateral in complete satisfaction of its secured obligations and ceased existing operation with
the transfer of its subsidiaries. On March 26, 2013, the Company filed a 15-15D to terminate the Company’s reporting responsibilities
with the Securities Exchange Commission. During this time Company assets including subsidiaries were liquidated.
On April 23, 2019, Stanley Wilson was elected to the board of directors
and appointed Chairman and CEO with plans to direct the Company’s new business operations. On April 24, 2019, the Company filed
a Certificate of Revival with the State of Delaware.
On September 25, 2020, through a Security Purchase Agreement, there was
a Change of Control. On October 7, 2020 Stanley Wilson resigned as director and officer and Joseph Passalaqua was appointed CEO, CFO,
President, Secretary and Director. On October 30, 2020 Joseph Passalaqua resigned as director and officer and Deanna Johnson became CEO,
CFO, President, Secretary and Director as the sole officer of the Company
The Company has since been seeking a merger target and has been evaluating
various opportunities.
13
Our Business
The Company is currently attempting to locate and negotiate with eligible
portfolio companies to acquire an interest in them. In addition to acquiring an interest in them, the Company intends to assist these
portfolio companies with raising capital and offer them substantial managerial assistance needed to succeed.
Employees
We have no employees.
Results of Operations for the three months ended June 30, 2021 and
June 30, 2020
Revenues
We have generated revenues of $0 and $0 for the three months ended June
30, 2021 and June 30, 2020.
Operating and Administrative Expenses
Operating expenses for the three months ended June 30, 2021 were $3,023
compared with $677 for the six months ended June 30, 2020. The increase in operating expenses were attributable to an increase in
general and administrative expenses of $806, from $677 for the three months June 30, 2020 to $1,483 for the three months ended June 30,
2021 and an increase of professional fees of $1,540, from $0 for the three months ended June 30, 2020 to $1,540 for the three months ended
June 30, 2021
Loss from Operations
Operating Loss before income tax for the three months ended June 30, 2021
was $(3,023), an increase of $2,346 for the comparable period of June 30, 2020, of which the loss from operations was $(677). This increase
was primarily attributable to professional fees, that included accountant and auditor fees.
Net loss
The Net loss for the three months ended June 30, 2021 was $(3,023), compared
to a Net gain of $10,176 for the three months ended June 30, 2020. The net gain in 2020 was attributable to a forgiveness of $10,853 in
debt. The net loss in 2021 was primarily attributable to an increase in professional fees from operations.
Results of Operations for the six months ended June 30, 2021 and
June 30, 2020
Revenues
We have generated revenues of $0 and $0 for the six months ended June 30,
2021 and June 30, 2020.
Operating and Administrative Expenses
Operating expenses for the six months ended June 30, 2021 were $6,371 compared
with $916 for the six months ended June 30, 2020. The increase in operating expenses were attributable to an increase in general
and administrative expenses of $2,261, from $916 for the six months June 30, 2020 to $3,177 for the six months ended June 30, 2021 and
an increase of professional fees of $3,194, from $0 for the six months ended June 30, 2020 to $3,194 for the six months ended June 30,
2021
Loss from Operations
Operating Loss before income tax for the six months ended June 30, 2021
was $(6,371), an increase of $5,455 for the comparable period of June 30, 2020, of which the loss from operations was $(916). This increase
was primarily attributable to professional fees, that included accountant and auditor fees.
14
Net loss
The Net loss for the six months ended June 30, 2021 was $(6,371), compared
to a Net gain of $9,937 for the six months ended June 30, 2020. The net gain in 2020 was attributable to a forgiveness of $10,853 in debt.
The net loss in 2021 was primarily attributable to an increase in professional fees from operations.
Liquidity and Capital Resources
As of the year end December 31, 2020 and the six months ended June 30,
2021, the Company's cash balance was $0.
As of the year ended December 31, 2020 and the six months ended June 30,
2021, the Company's total assets were $0.
As of the last year ended, December 31, 2020, the Company had total liabilities
of $12,568 that consisted of $4,940 in Accounts Payable, $2,628 in Accounts Payable owed to a Related Party, Joseph Passalaqua and $5,000
in Note Payable owed to a Related Party, Garry McHenry. These amounts are non-interest bearing, payable upon demand and unsecured.
As of the six months ended June 30, 2021, the Company had total liabilities
of $18,939, that consisted of $2,191 in Accounts Payable, $11,748 in Accounts Payable owed to a Related Party, Lyboldt-Daly Inc. and Joseph
Passalaqua and $5,000 in Note Payable owed to a Related Party, Garry McHenry. These amounts are non-interest bearing, payable upon demand
and unsecured.
As of the last year ended December 31, 2020, the Company has a working
capital deficit of $12,568,
As of the six months ended June 30, 2021, the Company has a working capital
deficit of $18,939.
Working Capital and Cash Flows
Working Capital
|
|
June 30,
|
|
June 30,
|
|
|
2021
|
|
2020
|
|
|
|
|
|
Current Assets
|
|
$
|
—
|
|
|
$
|
—
|
|
Current Liabilities
|
|
|
18,939
|
|
|
|
8,395
|
|
Working Capital (Deficit)
|
|
$
|
(18,939
|
)
|
|
$
|
(8,395
|
)
|
|
|
|
|
|
|
|
|
|
Cash Flows
|
|
|
June 30,
|
|
|
|
June 30,
|
|
|
|
|
2021
|
|
|
|
2020
|
|
|
|
|
|
|
|
|
|
|
Cash Flows from (used in) Operating Activities
|
|
$
|
—
|
|
|
$
|
(5,677
|
)
|
Cash Flows from (used in) Financing Activities
|
|
|
—
|
|
|
|
5,677
|
)
|
Net Increase (decrease) in Cash During Period
|
|
$
|
—
|
|
|
$
|
—
|
|
Cashflows from Operating Activities
During the six months ended June 30, 2021 and June 30, 2020, the Company
had $0 and $5,677, respectively, in cash used for operating activities.
Cashflows from Financing Activities
During the six months June 30, 2021 and June 30, 2020, the Company had
$0 and $5,677, respectively, in cash received from financing activities.
15
Critical Accounting Policies
Going Concern
We have not attained profitable operations and are
dependent upon the continued financial support from our shareholders, the ability to raise equity or debt financing, and the attainment
of profitable operations from our future business. These factors raise substantial doubt regarding our ability to continue as a going
concern.
Our ability to continue as a going concern is dependent
upon our ability to generate future profitable operations and/or to obtain the necessary financing to meet our obligations and repay our
liabilities arising from normal business operations when they come due. Our ability to continue as a going concern is also dependent on
our ability to find a suitable target company and enter into a possible reverse merger with such company. Management’s plan includes
obtaining additional funds by equity financing through a reverse merger transaction and/or related party advances; however, there is no
assurance of additional funding being available.
The Company, as of the date of this filing had
approximately $0 in cash and has not earned any revenues from operations to date. For the last six months ending June 30, 2021, our operating
expenses were $6,371. In the previous two fiscal years our operating expenses were $10,357 and $5,089 in the years ended December 31,
2109 and December 31, 2020 respectively, consisting primarily of professional fees, administrative expenses and filing fees. The ongoing
expenses of the Company will be related to seeking out a suitable acquisition as well as mandatory filing requirements including our reporting
requirements under the Securities Exchange Act of 1934 upon effectiveness of this registration statement.
The Company
continues to rely on borrowings and financings either arranged by the Company’s President or through entities controlled by the
President. In the next 12 months we expect to incur expenses equal to approximately $20,000 related to legal, accounting, audit, and other
professional service fees incurred in relation to the Company’s Exchange Act filing requirements. The costs related to the acquisition
of a business combination target company vary widely and are dependent on a variety of factors including, but not limited to, the amount
of time it takes to complete a business combination, the location of the target company, the size and complexity of the business of the
target company, whether stockholders of the Company prior to the transaction will retain equity in the Company, the scope of the due diligence
investigation required, the involvement of the Company’s auditors in the transaction, possible changes in the Company’s capital
structure in connection with the transaction, and whether funds may be raised contemporaneously with the transaction. Therefore, we believe
such costs are unascertainable until the Company identifies a business combination target. These conditions raise substantial doubt about
our ability to continue as a going concern. The Company is currently devoting its efforts to locating merger candidates. The Company’s
ability to continue as a going concern is dependent upon our ability to develop additional sources of capital, locate and complete a merger
with another company, and ultimately, achieve profitable operations.
The Company may consider a business which has recently commenced operations,
is a developing company in need of additional funds for expansion into new products or markets, is seeking to develop a new product or
service, or is an established business which may be experiencing financial or operating difficulties and is in need of additional capital.
Our management believes that the public company status that results from a combination with the Company will provide such company greater
access to the capital markets, increase its visibility in the investment community, and offer the opportunity to utilize its stock to
make acquisitions. There is no assurance that we will in fact have access to additional capital or financing as a public company. In the
alternative, a business combination may involve the acquisition of, or merger with, a company which does not need substantial additional
capital, but which desires to establish a public trading market for its shares, while avoiding, among other things, the time delays, significant
expense, and loss of voting control which may occur in a public offering.
Our officers and directors have not had any preliminary contact or discussions
with any representative of any other entity regarding a business combination with us. Any target business that is selected may be a financially
unstable company or an entity in its early stages of development or growth, including entities without established records of sales or
earnings. In that event, we will be subject to numerous risks inherent in the business and operations of financially unstable and early
stage or potential emerging growth companies. In addition, we may effect a business combination with an entity in an industry characterized
by a high level of risk, and, although our management will endeavor to evaluate the risks inherent in a particular target business, there
can be no assurance that we will properly ascertain or assess all significant risks.
16
Our management anticipates that it will likely be able to
effect only one business combination, due primarily to our limited financing and the dilution of interest for present and prospective
stockholders, which is likely to occur as a result of our management’s plan to offer a controlling interest to a target business
in order to achieve a tax-free reorganization. This lack of diversification should be considered a substantial risk in investing in us,
because it will not permit us to offset potential losses from one venture against gains from another.
The Company anticipates that the selection of a business combination will be complex and extremely risky. While the Company is in a competitive market with a small number of business opportunities, through information obtained from industry professionals including attorneys, investment bankers, and other consultants with experience in the reverse merger industry, our management believes that there are opportunities for a business combination with firms seeking the perceived benefits of becoming a publicly traded corporation. Such perceived benefits of becoming a publicly traded corporation include, among other things, facilitating or improving the terms on which additional equity financing may be obtained, providing liquidity for the principals of and investors in a business, creating a means for providing incentive stock options or similar benefits to key employees, and offering greater flexibility in structuring acquisitions, joint ventures and the like through the issuance of stock. Potentially available business combinations may occur in many different industries and at various stages of development, all of which will make the task of comparative investigation and analysis of such business opportunities extremely difficult and complex.
|
We do not currently intend to retain any entity to act as a “finder”
to identify and analyze the merits of potential target businesses.
We have not established a specific timeline nor have we created a specific
plan to identify an acquisition target and consummate a business combination. We expect that our management and the Company, through its
various contacts and affiliations with other entities will locate a business combination target. We expect that funds in the amount of
approximately $20,000 will be required in order for the Company to satisfy its Exchange Act reporting requirements during the next 12
months, in addition to any other funds that will be required in order to complete a business combination. Such funds can only be estimated
upon identifying a business combination target. Our management and stockholders have indicated an intent to advance funds on behalf of
the Company as needed in order to accomplish its business plan and comply with its Exchange Act reporting requirements, however, there
are no agreements in effect between the Company and our management or stockholders specifically requiring they provide any funds to the
Company. Therefore, there are no assurances that the Company will be able to obtain the required financing as needed in order to consummate
a business combination transaction.
The effects of Covid -19 could impact our ability to operate under the
going concern and maintain sufficient liquidity to continue operations. The impact of COVID-19 on companies is evolving rapidly and its
future effects are uncertain. There are material uncertainties from Covid-19 that cast significant doubt on the company’s ability
to operate under the going concern. It is possible that our company will have issues relating to the current situation that will need
to be considered by management in the future. There will be a wide range of factors to take into account in going concern judgments and
financial projections including travel bans, restrictions, government assistance and potential sources of replacement financing, financial
health of suppliers and customers and their effect on expected profitability and other key financial performance ratios including information
that shows whether there will be sufficient liquidity to continue to meet obligations when they are due.
The Company filed a Registration Statement; Form-10 and is effective 60
days post filing. Management believes that this plan provides an opportunity for the Company to continue as a going concern. The ability
to continue as a going concern is dependent upon the Company generating profitable 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 come due. Management intends
to finance operating costs over the next twelve months with existing cash on hand and loans from directors and/or private placement of
common stock. The failure to achieve the necessary levels of profitability or obtaining additional funding would be detrimental to the
Company.
17
Off-Balance Sheet Arrangements
We have not entered into 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 and would be considered material to investors.
Default on Notes
There are currently no notes in default.
Other Contractual Obligations
As of the year ended December 31, 2020
and the six months ended June 30, 2021, we did not have any contractual obligations.
ITEM 4. CONTROLS AND PROCEDURES.
Evaluation of Disclosure Controls and Procedures.
We carried out an evaluation, under the supervision and with the participation
of our management, including Deanna Johnson, our principal executive officer and principal financial officer, of the effectiveness of
the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act.
Disclosure controls and procedures include, without limitation, means controls and other procedures that are designed to ensure that information
required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is (i) recorded, processed, summarized
and reported, within the time periods specified in the Commission's rules and forms and (ii) accumulated and communicated to the issuer's
management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate
to allow timely decisions regarding required disclosure. Based on this evaluation, because of the Company’s limited resources and
lack of employees, management, including Deanna Johnson, our principal executive officer and principal financial officer, concluded that
our disclosure controls and procedures were ineffective as of June 30, 2021 and as of the date of this filing, August 13, 2021.
Management has identified control deficiencies regarding inadequate accounting
resources, the lack of segregation of duties and the need for a stronger internal control environment. Management of the Company believes
that these material weaknesses are due to the small size of the Company’s accounting staff. The small size of the Company’s
accounting staff may prevent adequate controls in the future due to the cost/benefit of such remediation.
To mitigate the current limited resources and limited employees, we rely
heavily on direct management oversight of transactions, along with the use of external legal and accounting professionals. As we grow,
we expect to increase our number of employees, which will enable us to implement adequate segregation of duties within the internal control
framework.
These control deficiencies could result in a misstatement of account balances
that would result in a reasonable possibility that a material misstatement to our financial statements may not be prevented or detected
on a timely basis. In light of this material weakness, we performed additional analyses and procedures in order to conclude that our financial
statements for the quarter ended June 30, 2021 included in this Quarterly Report on Form 10-Q were fairly stated in accordance with US
GAAP. Accordingly, management believes that despite our material weaknesses, our financial statements for the quarter ended June 30, 2021
are fairly stated, in all material respects, in accordance with US GAAP.
Limitations on Effectiveness of Controls and Procedures
Our management, including our principal executive officer and principal
financial officer, does not expect that our disclosure controls and procedures or our internal controls will prevent all errors and all
fraud. Further, the design of a control system must reflect the fact that there are resource constraints and the benefits of controls
must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can
provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent
limitations include, but are not limited to, the realities that judgments in decision-making can be faulty and that breakdowns can occur
because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of
two or more people, or by management override of the control. The design of any system of controls also is based in part upon certain
assumptions about the likelihood of future events and there can be no assurance that any design will succeed in achieving its stated goals
under all potential future conditions. Over time, controls may become inadequate because of changes in conditions, or the degree of compliance
with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements
due to error or fraud may occur and not be detected.
Changes in Internal Control over Financial Reporting
No changes in the Company's internal control over financial reporting have
come to management's attention during the Company's last fiscal quarter that have materially affected, or are likely to materially affect,
the Company's internal control over financial reporting.
19