UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

Form 10-Q

 

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the Quarterly Period Ended September 30, 2018

 

OR

 

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from ______________ to ______________

 

Commission File No. 333-218248

 

FORGE INNOVATION DEVELOPMENT CORP.

(Exact name of small business issuer as specified in its charter)

 

NEVADA   6552   81-4635390

(State or other jurisdiction of

incorporation or organization)

 

(Primary Standard Industrial

Classification Code Number)

 

(I.R.S. Employer

Identification No.)

 

17800 Castleton Street, Suite 583

City of Industry, CA 91748

(Address of principal executive offices)

 

(626) 986-4566

(Registrant’s telephone number, including area code)

 

 

( Former name, former address and former fiscal year, if changed since last report)

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒  No ☐

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes  ☒   No ☐

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

 

Large accelerated filer ☐ Accelerated filer ☐
Non-accelerated filer ☐ Smaller reporting company ☒
  Emerging growth company ☒

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐  No ☒

 

The number of shares of Common Stock, $0.0001 par value, of the registrant outstanding at November 13, 2018, was 45,621,868.

 

 

 

     

 

    

FORGE INNOVATION DEVELOPMENT CORP.

 

QUARTERLY REPORT ON FORM 10-Q FOR THE PERIOD ENDED SEPTEMBER 30, 2018

 

TABLE OF CONTENTS

 

  PAGE
   
Part I. FINANCIAL INFORMATION:  
   
Item 1. Financial Statements: 1
   
Balance Sheets as of September 30, 2018 (unaudited) and December 31, 2017 2
   
Statements of Operations (unaudited) for the Nine Months and Three Months ended September 30, 2018 and 2017 3
   
Statements of Cash Flows (unaudited) for the Nine Months ended September 30, 2018 and 2017 4
   
Notes to Financial Statements (unaudited) 5
   
Item 2. Management’s Discussion and Analysis and Plan of Operation 8
   
Item 3. Quantitative and Qualitative Disclosures About Market Risk 10
   
Item 4. Controls and Procedures 10
   
Part II. OTHER INFORMATION:  
   
Item 1. Legal Proceedings 11
   
Item 1A. Risk Factors 11
   
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 11
   
Item 3. Defaults Upon Senior Securities 11
   
Item 4. Mine Safety Disclosures 11
   
Item 5. Other Information 11
   
Item 6. Exhibits 11
   
SIGNATURES 12
   
EXHIBIT INDEX 13

 

i

 

  

PART I

 

ITEM 1. FINANCIAL STATEMENTS

 

FORGE INNOVATION DEVELOPMENT CORP.

 

INDEX TO FINANCIAL STATEMENTS

 

Balance Sheets, September 30, 2018 (Unaudited) and December 31, 2017 2
   
Statements of Operations (unaudited), for the Nine Months and Three Months ended September 30, 2018 and 2017 3
   
Statements of Cash Flows (unaudited), for the Nine Months ended September 30, 2018 and 2017 4
   
Notes to Financial Statements (unaudited) 5

  

1

 

   

FORGE INNOVATION DEVELOPMENT CORP. 

 

BALANCE SHEETS

    

    September,     December 31,  
    2018     2017  
    (unaudited)        
ASSETS      
CURRENT ASSETS      
Cash   $ 625,586     $ 824,777  
Note receivable     210,000       200,000  
Prepaid expense     6,064       -  
Account receivable     3,000       -  
Total Current Assets     844,650       1,024,777  
                 
NONCURRENT ASSET                
Note receivable     -       110,000  
Rent deposit     13,953       -  
Other assets     4,285       -  
Property and equipment, net     30,958       -  
Total Non-Current Assets     49,196       110,000  
TOTAL ASSETS   $ 893,846     $ 1,134,777  
                 
LIABILITIES AND STOCKHOLDERS’ EQUITY                
CURRENT LIABILITIES:                
Accrued liability   $ 4,382     $ -  
Accrued liability – related party     4,722       -  
Accrued consulting expenses     -       300,000  
Total Current Liabilities     9,104       300,000  
                 
COMMITMENTS AND CONTINGENCIES                
                 
STOCKHOLDERS’ EQUITY:                
Preferred stock ($.0001 par value, 50,000,000 shares authorized; no share issued and outstanding as of September 30, 2018 and December 31, 2017)     -       -  
Common stock ($.0001 par value, 200,000,000 shares authorized, 45,621,868 and 57,621,868 shares issued and outstanding as of September 30, 2018 and December 31, 2017)     4,562       5,762  
Additional Paid in Capital     1,469,678       1,168,478  
Accumulated Deficit     (589,498 )     (339,463 )
Total Stockholders’ Equity     884,742       834,777  
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY   $ 893,846     $ 1,134,777  

 

The accompanying notes are an integral part of these unaudited condensed financial statements.

 

2

 

   

FORGE INNOVATION DEVELOPMENT CORP.

 

STATEMENTS OF OPERATIONS

(Unaudited)

 

    For the three months ended     For the nine months ended  
    September 30,
2018 		    September 30,
2017 		    September 30,
2018 		    September 30,
2017 		 
                         
Revenue   $ 9,000     $ 6,000     $ 27,000     $ 6,000  
Cost of revenue     -       -       -       -  
Gross Profit     9,000       6,000       27,000       6,000  
                                 
Operating Expenses                                
Consulting Expenses   $ 38,000     $ 64,750     $ 94,000     $ 247,250  
Other Selling, General and Administrative Expenses     79,700       23,116       186,685       44,831  
                                 
Total Operating Expenses     117,700       87,866       280,685       292,081  
                                 
Interest income     1,050       1,550       3,650       3,100  
                                 
Net loss   $ (107,650 )   $ (80,316 )   $ (250,035 )   $ (282,981 )
                                 
Net loss per common share, basic and diluted   $ (0.00 )   $ (0.00 )   $ (0.00 )   $ (0.00 )
                                 
Weighted average number of common shares outstanding, basic and diluted     45,621,868       57,771,868       53,871,868       57,632,088  

 

The accompanying notes are an integral part of these unaudited condensed financial statements.

 

3

 

 

FORGE INNOVATION DEVELOPMENT CORP.

 

STATEMENTS OF CASH FLOWS

(Unaudited)

 

    For the nine months ended
September 30, 		 
    2018     2017  
CASH FLOWS FROM OPERATING ACTIVITIES                
Net loss   $ (250,035 )   $ (282,981 )
Adjustments to reconcile net loss to net cash used in operating activities:                
Stock-based compensation     -       243,750  
Depreciation expense     3,865       -  
Change in operating assets and liabilities:                
Rent deposit     (13,953 )     -  
Prepaid expense     (6,064 )        
Other assets     (4,285 )     -  
Account receivable     (3,000 )     -  
Accrued liability     4,382       -  
Net cash used in operating activities     (269,090 )     (39,231 )
                 
CASH FLOWS FROM INVESTING ACTIVITIES                
Note receivable     100,000       -  
Purchase of property and equipment     (34,823 )     -  
Net cash provided by investing activities     65,177       -  
                 
CASH FLOWS FROM FINANCING ACTIVITIES                
Repayment to shareholder     -       (100 )
Process from related party borrowings     4,722       -  
Proceeds from issuance of common stock     -       260,098  
Net cash provided by financing activities     4,722       259,998  
                 
Net Increase in Cash     (199,191 )     220,767  
Cash at beginning of period:     824,777       655,170  
Cash at end of period:   $ 625,586     $ 875,937  
                 
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFOR                
Interest paid   $ -     $ -  
Income taxes paid   $ 800     $ -  
                 
NONCASH TRANSACTION                
Common stock issued to settle with the accrued consulting expenses     300,000       -  

 

The accompanying notes are an integral part of these unaudited condensed financial statements.

 

4

 

   

Forge Innovation Development Corp.

 

Notes to the unaudited financial statements

 

Note 1 - Organization and Description of Business

 

Forge Innovation Development Corp., or the “Company”, was initially incorporated in the State of Nevada on January 15, 2016 under the name of You-Go enterprises, LLC (the “Company Predecessor”). On November 3, 2016, the Company filed an amendment to its Articles of Incorporation in the State of Nevada to change the Company’s name to Forge Innovation Development Corp. Our current principle executive office is located at 17800 Castleton Street, Suite 583 City of Industry, CA 91748. Tel: 626-986-4566. The Company’s main business will be focus on real estate development, land purchasing and selling and property management. The Company’s common stock is currently traded on OTCQB under the symbol “FGNV”.

 

Development Stage Company  

 

The Company is considered to be in the development stage as defined in Statement of Financial Accounting Standards (SFAS) ASC 915, “Development Stage Entities”. The Company has devoted substantially all of its efforts to establishing a new business and for which either of the following conditions exists: planned principal operations have not commenced; or the planned principal operations have commenced, but there has been no significant revenue there from. The Company’s first sales activity was in March 2017 by the sale of real estate in Desert Springs, California. There were revenue from real estate management services during the nine months ended September 30, 2018. There is no assurance of any future revenues.

 

Note 2 - Summary of Significant Accounting Policies

 

Basis of Presentation   

 

The accompanying unaudited interim financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission, and should be read in conjunction with the audited financial statements and notes thereto contained in the Company’s most recent Annual Financial Statements filed with the SEC on Form 10-K. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim period presented have been reflected herein. The results of operations for the interim period are not necessarily indicative of the results to be expected for the full year. Notes to the financial statements which would substantially duplicate the disclosures contained in the audited financial statements for the most recent fiscal period, as reported in the Form 10-K, have been omitted. 

 

Property and equipment

  

Property and equipment are carried at cost and are depreciated on a straight-line basis (after taking into account their respective estimated residual value) over 5 years, the estimated useful lives of the assets. The cost of repairs and maintenance is expensed as incurred; major replacements and improvements are capitalized. When assets are retired or disposed of, the cost and accumulated depreciation are removed from the accounts, and any resulting gains or losses are included in income in the year of disposition. The Company examines the possibility of decreases in the value of fixed assets when events or changes in circumstances reflect the fact that their recorded value may not be recoverable.

 

During the nine months ended September 30, 2018 and 2017, the depreciation expense were $3,865 and $0, respectively.

 

Recently Issued Accounting Pronouncements

 

In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers (ASC 606)”. Under the new standard, revenue is recognized when a customer obtains control of promised goods or services and is recognized in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. The new standard was effective for us beginning January 1, 2018, with early adoption permitted. The Company elected to adopt the new standard effective January 1, 2018. The guidance permits two methods of adoption: retrospectively to each prior reporting period presented (full retrospective method), or retrospectively with the cumulative effect of initially applying the guidance recognized at the date of initial application (modified retrospective method). The Company elected adopting the standard using the modified retrospective method. The Company has identified its revenue streams and assessed each for the impacts. (See Note 3 for additional information)

 

In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842)”. Under the new guidance, lessees will be required to recognize all leases (with the exception of short-term leases) at the commencement date including a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis; and a right-of-use (ROU) asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. Lessees may not apply a full retrospective transition approach. The standard will be effective for us beginning January 1, 2019, with early adoption permitted. We plan to adopt the standard effective January 1, 2019. We anticipate this standard will have a material impact on our balance sheets. However, we do not expect adoption will have a material impact on our income statements. While we are continuing to assess potential impacts of the standard, we currently expect the most significant impact will be the recognition of ROU assets and lease liabilities for operating leases.

 

5

 

 

Note 3 - Revenue Recognition

 

On January 1, 2018, the Company adopted ASU 2014-09, Revenue from Contracts with Customers, using the modified retrospective approach, which applies the new standard to contracts that are not completed as of the date of adoption. Under the new standard, revenue is recognized upon transfer of control of promised goods and services to customers in an amount that reflects the consideration the Company expects to receive in exchange for those goods and services. The Company concluded that the adoption of the new standard requires an adjustment to increase the opening balance of retained earnings in an amount of $ 26,667 since control of real estate was transferred and profit on a real estate sale should be recognized under the new standard.

 

Revenue streams that are scoped into ASU 2014-09 include:

 

Property management services: The Company deals directly with prospects and tenants for the owners of properties, which mainly includes marketing property, collecting rent, handling maintenance, repairing issues and responding to tenant complaints. The Company recognizes revenue as earned on a monthly basis and has concluded this is appropriate under the new standard.

 

Real estate sales: The Company accounts for the sale of real estate assets and any related gain recognition in accordance with the accounting guidance applicable to sales of real estate, which establishes standards for recognition of profit on all real estate sales transactions, other than retail land sales. The Company recognizes the sale, and associated gain or loss from the disposition, provided that the earnings process is complete, and the Company does not have significant continuing involvement. Subsequent to the adoption of the new standard, the Company may recognize a gain on a real estate disposition that previously did not qualify as a sale or for full profit recognition due to the timing of the transfer of control.

 

Note 4 - Income Taxes

 

The Company has not recognized an income tax benefit for its operating losses generated based on uncertainties concerning its ability to generate taxable income in future periods. The tax benefit for the period presented is offset by a valuation allowance established against deferred tax assets arising from the net operating losses, the realization of which could not be considered more likely than not. In future periods, tax benefits and related deferred tax assets will be recognized when management considers realization of such amounts to be more likely than not.

 

As of September 30, 2018 and 2017, the Company has incurred a net loss of $250,035 and $282,981 which resulted in a net operating loss for income tax purposes. NOLs begin expiring in 2036. The loss results in a deferred tax asset of approximately $110,000 and $ 117,290 at the effective tax rate of 21% for the period ended September 30, 2018 and 34% for the period ended September 30, 2017, respectively. The deferred tax asset has been off-set by an equal valuation allowance.

 

6

 

   

Note 5 - Concentration of Risk

 

The Company maintains cash in one account within one local commercial bank located in Southern California. The standard insurance amount is $250,000 per depositors under the FDIC’s general deposit insurance rules. At September 30, 2018, uninsured cash balances in any domestic U.S. financial institution is $386,263. 

 

Note 6 - Related Party Transactions  

 

On February 1, 2017, the Company entered into a lease for office space (the “Office Lease”) with Glory Investment International Inc. (“Glory Investment”) whose CEO is an immediate family of the Company. Pursuant to the Office Lease, the Company subleased 200 square feet office from Glory Investment, and the monthly rent of $500 is due within first five business days of each month. The term of the Office Lease is renewable from year-to-year, and was terminated on March 31, 2018. We believe that the rent is at or below market for the space we are occupying. For the nine months ended and as of September 30, 2018 and 2017, rent expense was $250 and $4,000.

 

During the nine months ended on September 30, 2018 and 2017, Mr. Patrick Liang, the President of the Company, loaned to the Company in the amount of $4,722 and $0 respectively, which is due on demand and bears no interest.

 

Note 7 -Notes Receivable

 

On March 17, 2017, the Company entered into a Land Transaction Agreement with Steven Zhi Qin, a third party individual. Pursuant to the agreement, the Company sold the undeveloped land located in Desert Hot Spring with value of $283,333, to Steven Zhi Qin in exchange for a Promissory Note in the amount of $310,000. The Promissory Note is secured by a Deed of Trust to Chicago Title Company, a California corporation and an independent institution insuring the Company’s collection right, and was due on March 17, 2018, with interest at the rate of 2% per annum, payable in monthly installment of interest only, in the amount of $517. The Promissory Note also applies to Steven Zhi Qin’s personal property located at 1715 East Cortez Street, West Covina, CA 91791 as additional collateral, of which a lien will be recorded against said property. On March 6, 2018, the Company reached an agreement with Steven Zhi Qin, pursuant to which the Company agreed and approved the amendment of the Promissory Note to extend maturity date to March 17, 2019. Subsequently, the Company received payment of $100,000 and $100,000 on March 17 and October 30, 2018, respectively, and the remaining $110,000 will be due on March 17, 2019. For the nine months ended September 30, 2018 and 2017, total interest income was $3,650 and $3,100, respectively.

 

Note 8 - Commitments and Contingencies 

 

The Company follows ASC 450-20, Loss Contingencies, to report accounting for contingencies.  Liabilities for loss contingencies arising from claims, assessments, litigation, fines and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated.

 

Note 9 – Common Stock

 

On May 1, 2018, the Company was quoted on OTC Market with trading symbol FGNV. According to the Consulting Agreement with Speedlight Consulting Services Inc. dated on November 05, 2016, the Company issued 3,000,000 shares to Speedlight Consulting Services Inc. on May 9, 2018 to settle with the accrued consulting expenses.

 

In order to meet the new OTCQB standards regarding the public float which became effective on May 20, 2018, the Registrant’s CEO and principal shareholder returned 15,000,000 shares of the Registrant’s common stock (the “Shares”) to the Registrant on June 29, 2018. One of the new standards was that every company trading on the OTCQB that has a market value of less than $2 million must have a freely traded “Public Float” of at least 10% of the company’s total issued and outstanding common stock. The Registrant does not have a market value of $2 million and prior to the return of the shares, its public float was approximately 8%. After the return of the Shares, the Registrant’s public float increased to approximately 10.5%.

 

The 15,000,000 shares were delivered to the Registrant’s Transfer Agent with instructions to remove them from issued and outstanding status and add them to the authorized but not issued status. The above action was completed on June 29, 2018.

 

Note 10 - Subsequent Event

 

The Company has evaluated subsequent events through the date these financial statements were issued and determined that there were no subsequent events or transactions that require recognition or disclosures in the financial statements.

 

7

 

   

Item 2. Management’s Discussion and Analysis or Plan of Operation

  

This 10−Q contains forward-looking statements. Our actual results could differ materially from those set forth as a result of general economic conditions and changes in the assumptions used in making such forward-looking statements. The following discussion and analysis of our financial condition and results of operations should be read together with the audited consolidated financial statements and accompanying notes and the other financial information appearing elsewhere in this report. The analysis set forth below is provided pursuant to applicable Securities and Exchange Commission regulations and is not intended to serve as a basis for projections of future events.

  

Overview

 

The Company is a development stage company and was incorporated in the State of Nevada in January 2016. The Company’s primary objective is commercial and residential land development, including the purchase and sale of real estate, targeting properties primarily in Southern California. We also intend to manage properties we own and properties owned by unaffiliated third parties. Our activities will include securing acquisition rights to properties, obtaining zoning and other entitlements for the properties, securing financing for purchase of the properties, improving the properties’infrastructure and amenities and selling the properties to homeowner and commercial owners for restaurants, offices and small businesses. Our first property acquisition was 29 acres in the city of Desert Hot Springs in Southern California. Due to problems with permits and adjacent landowners, rather than get involved in protracted negotiations, the Company sold the property to an independent third party for a profit.

 

Development Stage and Capital Resources

 

Since its inception, the Company has devoted substantially all of its efforts to business planning. Accordingly, the Company is considered to be in the development stage. In March, 2017, the Company generated its first revenues from the sale of vacant property in Desert Springs, California. There were revenue from real estate management services during the nine months ended September 30, 2018.There is no assurance of future revenues. 

 

There is no assurance that the Company’s activities will result in any operations or that any operations, if begun, will generate revenues. The Company will need additional capital, but there is no assurance that the Company will be able to obtain such capital on terms satisfactory to the Company. Accordingly, given the Company’s limited cash and cash equivalents on hand, the Company will be unable to implement its business plans and proposed operations unless it obtains additional financing or otherwise is able to generate revenues and profits. The Company may raise additional capital through sales of debt or equity, obtain loan financing or develop and consummate other alternative financial plans. 

 

Results of Operation for the three months ended September 30, 2018 and 2017

 

During the three months ended September 30, 2018 and 2017, the Company generated $9,000 and $6,000 of revenues. The increase was due to the property management service revenue started in August 2017. The corresponding cost of revenue was $0. During the three months ended September 30, 2018 and 2017, the Company incurred general and administrative expenses of $117,700 and $87,866, respectively. The increase was mainly due to the increase in rent expense and salary expense, partially offset by the decrease in consulting expense. For the three months ended September 30, 2018 and 2017, our net loss was $107,650 and $80,316, respectively. The increase in net loss was mainly due to the increase in general and administrative expense for the three months ended September 30, 2018, compared to the same period in last year.

 

Results of Operation for the nine months ended September 30, 2018 and 2017

 

During the nine months ended September 30, 2018 and 2017, the Company generated $27,000 and $6,000 of revenues. The increase was due to the property management service revenue started in August 2017. The corresponding cost of revenue was $0. During the nine months ended September 30, 2018 and 2017, the Company incurred general and administrative expenses of $280,685 and $292,081, respectively. The decrease in general and administrative expenses was mainly due to the decrease in consulting expenses from $247,250 for the period ended September 30, 2017 to $94,000 for the same period in this year. For the nine months ended September 30, 2018 and 2017, our net loss was $250,035 and $282,981, respectively. The decrease in net loss was mainly due to the increase in revenue and decrease in general and administrative expenses for the nine months ended September 30, 2018, compared to the same period in last year.

 

8

 

   

Equity and Capital Resources

 

We have incurred losses since inception of our business in 2016 and, as of September 30, 2018, we had an accumulated deficit of $589,498. As of September 30, 2018, we had cash of $625,586 and a working capital of $835,546, compared to cash of $824,777 and a working capital of $724,777 at December 31, 2017. The increase in the working capital was primarily due to collection of note receivable of $100,000. 

 

The Company does not anticipate that it will generate revenue sufficient to cover its planned operating expenses in the foreseeable future, and the Company must obtain additional financing in order to develop and implement its business plan and proposed operations. If the Company is not successful in generating sufficient revenues and/or obtaining additional funding to develop its business plan and proposed operations, this could have a material adverse effect on its business, results of operations liquidity and financial condition. 

 

Off-Balance Sheet Arrangements

 

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, and other contractual obligations. These transactions are recognized in our financial statements in accordance with generally accepted accounting principles in the United States.

 

Critical Accounting Policies

 

The financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires making estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. The estimates are based on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis of making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. 

 

The critical accounting policies are discussed in further detail in the notes to the unaudited financial statements appearing elsewhere in this prospectus. Management believes that the application of these policies on a consistent basis enables us to provide useful and reliable financial information about our operating results and financial condition.

 

9

 

     

Item 3. Quantitative and Qualitative Disclosures About Market Risk

 

As a “small reporting company” we are not required to provide this information under this item pursuant to Regulation S-K.

 

Item 4. Controls and Procedures.

 

Evaluation of Disclosure Controls and Procedures

 

As of the end of the period covered by this report on Form 10-Q, our President (principal executive officer) and our Chief Financial Officer performed an evaluation of the effectiveness of and the operation of our disclosure controls and procedures as defined in Rule 13a-15(e) or Rule 15d-15(e) under the Exchange Act. Based on that evaluation, our President and Chief Financial Officer each concluded that as of the end of the period covered by this report on Form 10-Q, our disclosure controls and procedures were not effective in timely alerting them to material information relating to Forge Innovation Development Corp. required to be included in our Exchange Act filings.

 

Changes in Internal Control over Financial Reporting

 

There were no changes in our internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Rule 13a-15 or Rule 15d-15 under the Exchange Act that occurred during the quarter ended September 30, 2018 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

 

10

 

   

PART II — OTHER INFORMATION

 

Item 1. Legal Proceedings.

 

None.

 

Item 1A. Risk Factors.

 

As a “smaller reporting company”, we are not required to provide this information under this item pursuant to Regulation S-K.

 

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

 

None 

 

Item 3. Defaults Upon Senior Securities.

 

None

 

Item 4. Mine Safety Disclosures.

 

Not applicable.

 

Item 5. Other Information.

 

None

 

Item 6. Exhibits.

 

(a) Exhibits.

 

Exhibit   Item
     
31.1*   Certification of Chief Executive Officer pursuant to Section 302(a) of the Sarbanes-Oxley Act of 2002
     
31.2*   Certification of Chief Financial Officer pursuant to Section 302(a) of the Sarbanes-Oxley Act of 2002
     
32.1*   Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
     
101.INS   XBRL Instance Document
101.SCH   XBRL Taxonomy Extension Schema Document
101.CAL   XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF   XBRL Taxonomy Extension Definition Linkbase Document
101.LAB   XBRL Taxonomy Extension Label Linkbase Document
101.PRE   XBRL Taxonomy Extension Presentation Linkbase Document

 

*   Filed herewith.

  

11

 

   

SIGNATURES

 

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

  FORGE INNOVATION DEVELOPMENT CORP.
   
Date: November 13, 2018 /s/ Patrick Liang
  Patrick Liang, President
  (Principal Executive Officer)
   
Date: November 13, 2018 /s/ Patrick Liang
  Patrick Liang, Chief Financial Officer
  (Principal Financial and Accounting Officer)

  

12

 

   

EXHIBIT INDEX

 

Exhibit   Item
     
31.1*   Certification of Chief Executive Officer pursuant to Section 302(a) of the Sarbanes-Oxley Act of 2002
     
31.2*   Certification of Chief Financial Officer pursuant to Section 302(a) of the Sarbanes-Oxley Act of 2002
     
32.1*   Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
     
101.INS   XBRL Instance Document
101.SCH   XBRL Taxonomy Extension Schema Document
101.CAL   XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF   XBRL Taxonomy Extension Definition Linkbase Document
101.LAB   XBRL Taxonomy Extension Label Linkbase Document
101.PRE   XBRL Taxonomy Extension Presentation Linkbase Document

 

*   Filed herewith.

13

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