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Liquidity and Going Concern
6 Months Ended
Sep. 30, 2021
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Liquidity and Going Concern

2. Liquidity and Going Concern

 

Our financial statements have been presented on the basis that we are a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. During the three and six months ended September 30, 2021, we reported a net loss of approximately $147,000 and $194,000, respectively. Cash flows of approximately $125,000 and $52,000 were used in operations for the six months ended September 30, 2021 and 2020, respectively.

 

Management is seeking to identify an operating company for the purpose of effecting a merger or business combination, or to acquire assets or shares of an entity actively engaged in a business that generates sustained revenues. We do not intend to restrict our consideration to any particular business or industry segment. Because we have limited resources, the scope and number of suitable candidates to merge with is relatively limited. Because we may participate in a business opportunity with a newly formed firm, a firm that is in the development stage, or a firm that is entering a new phase of growth, we may incur further risk due to the inability of the target’s management to have proven its abilities or effectiveness, or the lack of an established market for the target’s products or services, or the inability to reach profitability in the next few years.

 

Any business combination or transaction will likely result in a significant issuance of shares and substantial dilution to our present stockholders. It is expected that if a transaction is consummated, although no such transaction is assured, then the closing of such a transaction will result in a change in control and such transaction would be expected to be accounted for as a reverse merger, with the operating company being considered the legal acquiree and accounting acquirer, and we would be considered the legal acquirer and the accounting acquiree. As a result, at and subsequent to closing of any such transaction, the financial statements of the operating company would become our financial statements for all periods presented.

 

Although we have investigated certain opportunities to determine whether they would have the potential to add value to us for the benefit of our stockholders, we have not yet entered into any binding arrangements to merge with an operating company and there can be no assurance that we will ever identify an opportunity that could result in the consummation of merger or other business combination. As a result of the limited retained funds and uncertainty in consummating a possible merger or business combination, we expect our funds will not be sufficient to meet our needs for more than twelve months from the date of issuance of these financial statements. Accordingly, management believes there is substantial doubt about our ability to continue as a going concern.

 

 

EKIMAS CORPORATION

NOTES TO FINANCIAL STATEMENTS

SEPTEMBER 30, 2021

(UNAUDITED)