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Item 2.
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Management’s Discussion and Analysis of Financial Condition and Results of Operations
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Special Note Regarding Forward-Looking Statements
This Quarterly Report on Form 10-Q contains forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of
1934, as amended (the “Exchange Act”). The words “believe,” “may,” “will,” “potentially,”
“estimate,” “continue,” “anticipate,” “intend,” “could,” “would,”
“project,” “plan,” “expect” and similar expressions that convey uncertainty of future events
or outcomes are intended to identify forward-looking statements. These forward-looking statements include, but are not limited
to, statements concerning our future financial and operating results; our business strategy of pursuing the acquisition of an operating
entity; future financing initiatives; our intentions, expectations and beliefs regarding a merger, acquisition or other business
combination with a viable operating entity; and our ability to comply with evolving legal standards and regulations, particularly
concerning requirements for being a public company and United States export regulations.
These forward-looking statements speak only as of the date of
this Form 10-Q and are subject to uncertainties, assumptions and business and economic risks. As such, our actual results could
differ materially from those set forth in the forward-looking statements It is not possible for us to predict all risks, nor can
we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual
results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties
and assumptions, the forward-looking events and circumstances discussed in this Form 10-Q may not occur, and actual results could
differ materially and adversely from those anticipated or implied in our forward-looking statements.
Forward-looking statements should not be relied upon as predictions
of future events. Although we believe that the expectations reflected in our forward-looking statements are reasonable, we cannot
guarantee that the future results, levels of activity, performance or events and circumstances described in the forward-looking
statements will be achieved or occur. Moreover, neither we nor any other person assumes responsibility for the accuracy and completeness
of the forward-looking statements. We undertake no obligation to update publicly any forward-looking statements for any reason
after the date of this Form 10-Q to conform these statements to actual results or to changes in our expectations, except as required
by law.
The following discussion should be read in conjunction
with our unaudited condensed consolidated financial statements and notes thereto appearing elsewhere in this Quarterly Report
on Form 10-Q with the understanding that our actual future results, levels of activity, performance and events and
circumstances may be materially different from what we expect.
Overview
Ridgefield Acquisition Corp. (“we”,
“us”, “our”, “Ridgefield” or the “Company”) was originally incorporated as a Colorado
corporation on October 13, 1983 under the name Ozo Diversified, Inc. On June 23, 2006, the Company filed Articles of Merger with
the Secretary of State of the State of Nevada that effected the merger between the Company and a wholly-owned subsidiary formed
under the laws of the State of Nevada ("RAC-NV"), pursuant to the Articles of Merger, whereby RAC-NV was the surviving
corporation. The merger changed the domicile of the Company from the State of Colorado to the State of Nevada. Furthermore, as
a result of the Articles of Merger the Company is authorized to issue 35,000,000 shares of capital stock consisting of 30,000,000
shares of common stock, $.001 par value per share and 5,000,000 shares of preferred stock, $.01 par value per share.
Since July 2000, the Company has suspended all
operations, except for necessary administrative matters relating to the timely filing of periodic reports as required by the Securities
Exchange Act of 1934. The Company is a “shell company” as defined in Rule 12b-2 of the Exchange Act. Accordingly, during
the six months ended June 31, 2019 we earned no revenues.
Our principal executive office is located at
3250 Retail Drive, Suite 120-518, Carson City, NV 89706-0686, and the telephone number is (805) 484-8855. Our website address is
www.ridgefieldacquisition.com. None of the information on our website is part of this Form 10-Q.
Acquisition Strategy
Our plan of operation is to arrange for a merger,
acquisition, business combination or other arrangement by and between the Company and a viable operating entity. We have not identified
a viable operating entity for a merger, acquisition, business combination or other arrangement, and there can be no assurance that
the Company will ever successfully arrange for a merger, acquisition, business combination or other arrangement by and between
the Company and a viable operating entity.
We anticipate that the selection of a business
opportunity will be a complex process and will involve a number of risks, because potentially available business opportunities
may occur in many different industries and may be in various stages of development. Due in part to economic conditions in a number
of geographic areas, rapid technological advances being made in some industries and shortages of available capital, we believe
that there are numerous firms seeking either the limited additional capital which the Company will have or the benefits of a publicly
traded corporation, or both. The perceived benefits of a publicly traded corporation may include facilitating or improving the
terms upon which additional equity financing may be sought, providing liquidity for principal shareholders, creating a means for
providing incentive stock options or similar benefits to key employees, and other factors.
In some cases, management of the Company will
have the authority to effect acquisitions without submitting the proposal to the shareholders for their consideration. In some
instances, however, the proposed participation in a business opportunity may be submitted to the shareholders for their consideration,
either voluntarily by the Board of Directors to seek the shareholders' advice and consent, or because of a requirement of state
law to do so.
In seeking to arrange a merger, acquisition,
business combination or other arrangement by and between the Company and a viable operating entity, our objective will be to obtain
long-term capital appreciation for the Company's shareholders. There can be no assurance that we will be able to complete any merger,
acquisition, business combination or other arrangement by and between the Company and a viable operating entity.
The Company may need additional funds in order
to effectuate a merger, acquisition or other arrangement by and between the Company and a viable operating entity, although there
is no assurance that we will be able to obtain such additional funds, if needed. Even if we are able to obtain additional funds
there is no assurance that the Company will be able to effectuate a merger, acquisition or other arrangement by and between the
Company and a viable operating entity.
Critical Accounting Policies
The preparation of financial statements in conformity
with generally accepted accounting principles of the United States (“U.S. GAAP”) requires estimates and assumptions
that affect the reported amounts of assets and liabilities, revenues and expenses, and related disclosures of contingent assets
and liabilities in the financial statements and accompanying notes. The SEC has defined a company’s critical accounting policies
as the ones that are most important to the portrayal of the company’s financial condition and results of operations, and
which require the company to make its most difficult and subjective judgments, often as a result of the need to make estimates
of matters that are inherently uncertain. A description of our critical accounting policies and judgments used in the preparation
of our financial statements was provided in the Management’s Discussion and Analysis of Financial Condition and Results of
Operations section of our Annual Report on Form 10-K for the year ended December 31, 2018. There have been no material changes
in these critical accounting policies since December 31, 2018.
Results of Operations
Revenues
During the six months ended June 30, 2019 and
the six months ended June 30, 2018, the Company earned no revenues from operations. Overall, the Company incurred a net loss of
$10,575 during the three months ended June 30, 2019 as compared to $12,364 during the three months ended June 30, 2018. The Company
incurred a net loss of $31,758 during the six months ended June 30, 2019 as compared to $32,355 during the six months ended June
30, 2018.
Because the Company’s operations are primarily administrative,
the slight decrease in net loss relates to savings from closely managing administrative expenses offset almost entirely by additional
interest expense.
General and Administrative Expenses
During the three months ended June 30,
2019, the Company incurred general and administrative (G&A) expenses of $5,337, a decrease of $1,826 compared to expenses
of $7,163 during the three months ended June 30, 2018. Similarly, the Company incurred G&A expenses of $20,646 during the
six months ended June 30, 2019, compared to $22,446 during the six months ended June 30, 2018.
G&A expenses consist of professional fees,
service charges, office expenses and similar items. The decrease relates to a rigorous approach in 2019 to managing and reducing
G&A expenses, primarily professional fees. The Company will continue to monitor escalating costs and limit G&A expenditures
whenever possible.
Other Expense and Net Interest
Other expenses decreased to just $550 during
the three months ended June 30, 2019, as compared to $1,473 during the three months ended June 30, 2018. During the six months
ended June 30, 2019, the Company incurred other expenses of $1,975, a decrease of $923 compared to expenses of $2,898 during the
six months ended June 30, 2018. Other expenses primarily represent state licenses, filing fees, minimum tax expense and similar
non-operating costs. The year-over-year decrease generally relates to the timing of accruals and payments in prior periods. A
majority of these other expenses are incurred early in the year, thus subsequent quarters in 2019 are expected to continue to
show less other expenses when compared to the three months and six months ended June 30, 2019.
The Company incurred net interest expense of
$4,668 during the three months ended June 30, 2019 and $3,728 during the three months ended June 30, 2018, primarily as a result
of a loan from the President of the Company. During the six months ended June 30, 2019, the Company incurred net interest expenses
of $9,137, compared to $6,991 during the six months ended June 30, 2018. Interest expense increased consistent with the increase
in the underlying principal balance.
Liquidity and Capital Resources
Cash requirements for working capital and expenditures
have been funded from cash balances on hand and a loan from the President of the Company. As of June 30, 2019, we had cash and
cash equivalents of $1,795 and a working capital deficit of $247,205, which includes short-term indebtedness of $191,450 and related
accrued interest of $54,290.
Cash and cash equivalents consist of cash and
money market funds. We did not have any short-term or long-term investments as of June 30, 2019.
During the six months ended June 30, 2019, the
Company satisfied its working capital needs from related party loans from Steven N. Bronson, the Chairman, President, CEO, and
majority shareholder. The note agreement is a Revolving Promissory Note (the “Note”) under which the aggregate unpaid
principal amount of all outstanding advances shall not exceed $250,000. Borrowings under the Note (plus any accrued interest) bear
interest at a rate of 10% per annum. During the six months ended June 30, 2019 and 2018, the Company borrowed the following amounts
under the Note:
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Principal
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Interest
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Balance January 1, 2019
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$
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169,450
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$
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45,181
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Additions
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22,000
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9,109
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Cash Payments
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-
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-
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Balance June 30, 2019
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$
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191,450
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$
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54,290
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Balance January 1, 2018
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$
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126,950
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$
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30,010
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Additions
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27,500
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6,991
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Cash Payments
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-
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-
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Balance June 30, 2018
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$
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154,450
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$
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37,001
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While this arrangement will satisfy the Company's
immediate financial needs, it may not by itself have the capacity to provide the Company with sufficient capital to finance a
merger, acquisition or business combination between the Company and a viable operating entity. The Company may need additional
funds in order to complete a merger, acquisition or business combination between the Company and a viable operating entity. There
can be no assurances that the Company will be able to obtain additional funds if and when needed.
Off-Balance Sheet and Contractual Arrangements
We do not have any off-balance
sheet or contractual arrangements that are reasonably likely to have a current or future effect on our financial condition, revenues,
and results of operations, liquidity or capital expenditures.
