KID CASTLE EDUCATIONAL CORP MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (form 10-Q)

Forward-Looking Statements

This Quarterly Report on Form 10-Q (this “Quarterly Report”) contains
forward-looking statements. The Securities and Exchange Commission (the “SEC”)
encourages companies to disclose forward-looking information so that investors
can better understand a company’s future prospects and make informed investment
decisions. This Quarterly Report and other written and oral statements that we
make from time to time contain such forward-looking statements that set out
anticipated results based on management’s plans and assumptions regarding future
events or performance. We have tried, wherever possible, to identify such
statements by using words such as
“anticipate,””estimate,””expect,””project,””intend,””plan,””believe,””will” and
similar expressions in connection with any discussion of future operating or
financial performance. In particular, these include statements relating to
future actions, future performance or results of current and anticipated sales
efforts, expenses, the outcome of contingencies, such as legal proceedings, and
financial results.

We caution that the factors described herein, and other factors could cause our
actual results of operations and financial condition to differ materially from
those expressed in any forward-looking statements we make and that investors
should not place undue reliance on any such forward-looking statements. Further,
any forward-looking statement speaks only as of the date on which such statement
is made, and we undertake no obligation to update any forward-looking statement
to reflect events or circumstances after the date on which such statement is
made or to reflect the occurrence of anticipated or unanticipated events or
circumstances. New factors emerge from time to time, and it is not possible for
us to predict all of such factors. Further, we cannot assess the impact of each
such factor on our results of operations 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.



General


The following discussion highlights Kid Castle results of operations and the
principal factors that have affected our financial condition as well as our
liquidity and capital resources for the periods described and provides
information that management believes is relevant for an assessment and
understanding of the statements of financial condition and results of operations
presented herein. The following discussion and analysis are based on our audited
Financial Report, which we have prepared in accordance with United States
generally accepted accounting principles. You should read this discussion and
analysis together with such financial statements and the related notes thereto.

Kid Castle Educational Corporation, a Delaware corporation, (“Kid Castle,” “the
Company,” “We,” “KDCE,” “Us” or “Our’) operates and manages a portfolio of real
estate properties, digital assets, and other in-demand properties. Kid Castle
engages in rollup and consolidation of real estate, Biopharma and digital
economy assets and operations.

The Company changed its CBD-focused business after selling Cannabinoid
Biosciences, Inc.
in April 2021, to refocus on acquisition and management of
businesses and assets in real estate, Biopharma and digital economy. As the
subsidiary of Video River Networks, Inc. (NIHK), the Company’s business plan is
to help NIHK to achieve its business plan. The Company therefore will focus on
rolling up Artificial Intelligence, Machine Learning, Robotics, and digital
assets and businesses in North America.



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Our vision is to acquire and rollup profitable Artificial Intelligence, Machine
Learning, Robotics, and digital assets across the United States of America.
There is no guarantee that we could successfully make any acquisition or rollup.
Our mission as stated above is only a guiding principle as we start our
acquisition. We have never made any big acquisition prior to this moment.
Although we have a theoretical picture of what our mission called for, none of
our staff have ever done it previously.

Our principal business objective is to maximize stockholder returns through a
combination of (1) acquisition and rollup of profitable Artificial Intelligence,
Machine Learning, Robotics, and digital assets across the United States of
America
(2) sustainable long-term growth in cash flows from increased profits,
which we hope to pass on to stockholders in the form of distributions, and (3)
potential long-term appreciation in the value of our businesses through process
optimization and financial engineering. However, because of COVID-19, we were
unable to obtain the financing necessary to make the acquisition of the
businesses we needed to acquire. There is no guarantee that we could be able to
acquire one or more in the future. In addition, there is no guarantee that
viable businesses would still be available to us to acquire in the future, or at
reasonable price.




Basis of Presentation



The unaudited financial statements For the nine months ended September 30, 2022
and 2021 include a summary of our significant accounting policies and should be
read in conjunction with the discussion below. In the opinion of management, all
material adjustments necessary to present fairly the results of operations for
such periods have been included in these audited financial statements. All such
adjustments are of a normal recurring nature.



Principles of Consolidation


The consolidated financial statements include the accounts of the Company and
its subsidiaries, in which the Company has a controlling voting interest and
entities consolidated under the variable interest entities (“VIE”) provisions of
ASC 810, “Consolidation” (“ASC 810”). Inter-company balances and transactions
have been eliminated upon consolidation.

ASC 810 requires that the investor with the controlling financial interest
should consolidate the investee/affiliate. ASC 810-10 requires that an equity
interest investor consolidates a VIE when it retains an investment in the
entity, is considered a variable interest investor in the entity, and is the
primary beneficiary of the entity. An investor in a VIE is a “variable interest
beneficiary” when, per an arrangement’s governing documents, the investor will
absorb a portion of the VIE’s expected losses or will receive a portion of the
entity’s “residual returns.” The variable interest beneficiary retaining a
controlling financial interest in the VIE is designated as its “primary
beneficiary” and must consolidate the VIE. A variable interest beneficiary
retains a “controlling financial interest” in a VIE when that beneficiary
retains the power to direct the activities of the VIE that have the greatest
influence over the VIE’s economic performance and retains an obligation to
absorb the VIE’s significant losses or the right to receive benefits from the
VIE that could potentially be significant to the VIE.

The consolidated financial statements of the Company therefore include the 12
months operating results of the all wholly owned subsidiaries and the balance
sheet represent the financial position as at 12/31/2021 of the Company includes
Alpharidge Capital LLC and Others subsidiaries in which Kid Castle has a
controlling voting interest and entities consolidated under the variable
interest entities (“VIE”) provisions of ASC 810, “Consolidation” (“ASC 810”),
after elimination of intercompany transactions and accounts.



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Overview



Corporate History


On October 21, 2019, pursuant to a stock purchase agreement dated October 2,
2019
, Cannabinoid Biosciences, Inc., a California corporation, purchased one (1)
million shares of its preferred shares (one preferred share is convertible 1,000
share of common stocks) of the Company, representing 97.82% of our total issued
and outstanding voting shares of common stock and preferred stock.
Simultaneously with the purchase, the officers and directors of the Company
resigned. Frank I Igwealor, Chairman and CEO, Secretary, Treasurer, and
Director; Patience C Ogbozor, Director; and Dr. Solomon SK Mbagwu, MD, Director,
were elected to replace them. Following the share sales to Cannabinoid
Biosciences, Inc.
, the purchaser converted 900,000 of the preferred shares for
900,000,000 shares of the Company’s current outstanding shares of common stock.

Following the consummation of the October 21, 2019 transactions, the Company
decided to restart filing important information immediately. The Company used
the Form 10-12(g) to register its common stock with the SEC.

On September 15, 2020, Kid Castle Educational Corporation (the “Company”)
entered into a stock purchase agreement with certain corporation related to our
President and CEO with respect to the private placement of 900,000 shares of its
preferred stock at a purchase price of $3 in cash and a transfer of 100%
interest in, and control of Community Economic Development Capital, LLC (a
California Limited Liability Company). The shares were issued to the investors
without registration under the Securities Act of 1933 based upon exemptions from
registration provided under Section 4(2) of the Act and Regulation D promulgated
thereunder. The issuances did not involve any public offering; no general
solicitation or general advertising was used in connection with the offering.
Community Economic Development Capital, is a specialty real estate holding
company for specialized assets including, affordable housing, opportunity zones
properties, medical real estate investments, related commercial facilities,
industrial and commercial real estate, and other real estate related services.

Similarly, on September 16, 2020, as part of its purchase of unregistered
securities from certain corporation related to our President and CEO, the
Company, received $3.00 in cash and 1,000,000 shares of its preferred stock, and
in exchange transferred 100% interest in, and control of Community Economic
Development Capital, LLC
(“CED Capital“), a California Limited Liability
Company
, and 97% of the issued and outstanding shares of Cannabinoid
Biosciences, Inc.
(“CBDX”), to GiveMePower Corporation, a Nevada corporation.
This transaction gave the Company 88% of the voting control of GiveMePower.

On April 21, 2021, the Company sold Cannabinoid Biosciences, Inc. (“CBDX”), a
California corporation, to Premier Information Management, Inc. for $1 in cash.
As further consideration pursuant to the stated sales, CBDX returned Kid Castle
Educational Inc.
, the parent Company of GMPW, the 100,000 shares of KDCE
preferred stock and 900,000,000 shares of KDCE common stock that CBDX bought in
October of 2019. Pursuant to the April 21, 2021 transaction, CBDX ceased from
being a subsidiary of GMPW, effective April 1, 2021.

On December 30, 2021, in exchange for its 87% control block in GiveMePower
Corporation, the Company received 100% stake in Alpharidge Capital LLC from
GiveMePower, in a cashless transaction, resulting in each public company going
its separate way and an independent company.



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Strategy


As the subsidiary of Video River Networks, Inc. (NIHK), the Company’s business
plan is to help NIHK to achieve its business plan. The Company therefore will
focus on rolling up Artificial Intelligence, Machine Learning, Robotics, and
digital assets and businesses in North America.

Our vision is to acquire and rollup profitable Artificial Intelligence, Machine
Learning, Robotics, and digital assets across the United States of America.
There is no guarantee that we could successfully make any acquisition or rollup.
Our mission as stated above is only a guiding principle as we start our
acquisition. We have never made any big acquisition prior to this moment.
Although we have a theoretical picture of what our mission called for, none of
our staff have ever done it previously.

Plan of Operations for the Next Twelve Months

Kid Castle will need approximately $1,500,000 to sustain operations for the next
12 months. Our plan is to achieve meaningful revenue from acquisitions of
profitable rollup of Artificial Intelligence, Machine Learning, Robotics, and
digital assets businesses that meet our operating needs. However, we may not be
able to increase our revenue sufficiently to meet these needs in time. It is
also unlikely that we will be able to generate $1,500,000 in net income to
satisfy all of our obligations and cover our operating cost for the next 12
months. Our ability to continue operations will be dependent upon the
successfully long-term or permanent capital in form of equity financing, the
support of creditors and shareholders, and, ultimately, the achievement of
profitable operations. There can be no assurances that we will be successful,
which would in turn significantly affect our ability to be successful in our new
business plan. If not, we will likely be required to reduce operations or
liquidate assets. We will continue to evaluate our projected expenditures
relative to our available cash and to seek additional means of financing in
order to satisfy our working capital and other cash requirements.

We intend to implement the following tasks within the next twelve months:

1. Month 1-3: Phase 1 (1-3 months in duration; $600,000 to $1 million in

estimated fund receipt)

a. Hire 2 business development manager and officer manager to implement our

business plan.

b. Acquire and consolidate stakes in the operations of at least two select Ai,

Machine Learning, Robotics, and digital assets and biopharma businesses.

2. Month 3-6 Phase 2 (1-3 months in duration; cost control, process improvements,

admin & management.).

a. Integrate acquired business into the Company’s model – consolidate the

operations of the businesses including integration of their accounting and

finance systems, synchronization of their operating systems, and harmonization

of their human resources functions.

b. Complete and file quarterly reports and other required filings for the quarter

3. Month 6-9: Phase 3 (1-3 months in duration; $600,000 to $900,000 in estimated

fund receipt)

a. Identify and acquire complementary/similar businesses or assets in the target

market

4. Month 9-12: Phase 4 (1-3 months duration; use acquired businesses’ free cash

flow for more acquisitions)

a. Run the businesses efficiently, giving employees a conducive and friendly

workplace and add value to investors and shareholders by identifying and

reducing excesses and also identifying and executing growth strategies

b. Acquire more businesses that are below their book-value or undervalued

    businesses, restructure the businesses, and sell the businesses for profit or
    hold them for cash flow.


5. Operating expenses during the twelve months would be as follows:

a. For the six months through May 30, 2023, we anticipate to incur general and

other operating expenses of $388,000.

b. For the six months through November 30, 2023 we anticipate to incur additional

general and other operating expenses of $378,000.




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The execution of our current plan of operations requires us to raise significant
additional capital immediately. If we are successful in raising capital through
the sale of shares or borrowing, we believe that the Company will have
sufficient cash resources to fund its plan of operations for the next twelve
months.

If we are unable to do so, our ability to continue as a going concern will be in
jeopardy, likely causing us to curtail and possibly cease operations.

We continually evaluate our plan of operations discussed above to determine the
manner in which we can most effectively utilize our limited cash resources. The
timing of completion of any aspect of our plan of operations is highly dependent
upon the availability of cash to implement that aspect of the plan and other
factors beyond our control. There is no assurance that we will successfully
obtain the required capital or revenues, or, if obtained, that the amounts will
be sufficient to fund our ongoing operations. The inability to secure additional
capital would have a material adverse effect on us, including the possibility
that we would have to sell or forego a portion or all of our assets or cease
operations. If we discontinue our operations, we will not have sufficient funds
to pay any amounts to our stockholders.

Even if we raise additional capital in the near future, if our current business
plan is not successfully executed, our ability to fund our biopharmaceutical
research and development, or our financial product deployment and services
efforts would likely be seriously impaired. The ability of a biopharmaceutical
research and development business and continuing operations is conditioned upon
moving the development of products and services toward commercialization. If in
the future we are not able to demonstrate adequate progress in the development
and commercialization of our product, we will not be able to raise the capital
we need to continue our business operations and business activities, and we will
likely not have sufficient liquidity or cash resources to continue operating.

Because our working capital requirements depend upon numerous factors there can
be no assurance that our current cash resources will be sufficient to fund our
operations. At present, we have no committed external sources of capital, and do
not expect any significant product revenues for the foreseeable future. Thus, we
will require immediate additional financing to fund future operations. There can
be no assurance, however, that we will be able to obtain funds on acceptable
terms, if at all.




MERGERS AND ACQUISITION



Principles of Consolidation



The consolidated financial statements include the accounts of the Company and
its subsidiaries, in which the Company has a controlling voting interest and
entities consolidated under the variable interest entities (“VIE”) provisions of
ASC 810, “Consolidation” (“ASC 810”). Inter-company balances and transactions
have been eliminated upon consolidation.

We used the acquisition method of accounting (also known as business combination
accounting) for acquisition of subsidiaries by the Group method to account for
the purchase of businesses. The cost of the acquisition was measured as the fair
value of the assets given, equity instruments issued and liabilities incurred or
assumed at the date of exchange.



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Competition


Our business is highly competitive. We are in direct competition with more
established biopharmaceutical companies, private equity firms, private investors
and management companies. Many management companies offer similar products and
services for business rollups and consolidations. We may be at a substantial
disadvantage to our competitors who have more capital than we do to carry out
acquisition, operations and restructuring efforts. These competitors may have
competitive advantages, such as greater name recognition, larger capital-base,
marketing, research and acquisition resources, access to larger customer bases
and channel partners, a longer operating history and lower labor and development
costs, which may enable them to respond more quickly to new or emerging
opportunities and changes in customer requirements or devote greater resources
to the development, acquisition and promotion.

Increased competition could result in us failing to attract significant capital
or maintaining them. If we are unable to compete successfully against current
and future competitors, our business and financial condition may be harmed.

We hope to maintain our competitive advantage by keeping abreast of market
dynamism that is face by our industry, and by utilizing the experience,
knowledge, and expertise of our management team. Moreover, we believe that we
distinguish ourselves in the ways our model envisaged transformation of
businesses.




Government Regulation



Our activities currently are subject to no particular regulation by governmental
agencies other than that routinely imposed on corporate businesses. However, we
may be subject to the rules governing acquisition and disposition of businesses,
real estates and personal properties in each of the state where we have our
operations. We may also be subject to various state laws designed to protect
buyers and sellers of businesses. We cannot predict the impact of future
regulations on either us or our business model. Once we commence our
biopharmaceutical operations, we would be subject to many regulations that apply
to pharmaceutical and medical industry participants.



Intellectual Property


We currently have no patents, trademarks or other registered intellectual
property. We do not consider the grant of patents, trademarks or other
registered intellectual property essential to the success of our business.



Employees


We do not have a W-2 employee at the present. Frank Ikechukwu Igwealor, our
President, Chief Executive Officer and Chief Financial Officer, is our only
full-time staff As of September 30, 2022, pending when we could formalize an
employment contract for him. In addition to Mr. Igwealor, we have three
part-time unpaid staff who helps with bookkeeping and administrative chores.
Most of our part-time staff, officers, and directors will devote their time as
needed to our business and are expect to devote at least 15 hours per week to
our business operations. We plan on formalizing employment contract for those
staff currently helping us without pay. Furthermore, in the immediate future, we
intend to use independent contractors and consultants to assist in many aspects
of our business on an as needed basis pending financial resources being
available. We may use independent contractors and consultants once we receive
sufficient funding to hire additional employees. Even then, we will principally
rely on independent contractors for substantially all of our technical and
marketing needs.



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The Company has no written employment contract or agreement with any person.
Currently, we are not actively seeking additional employees or engaging any
consultants through a formal written agreement or contract. Services are
provided on an as-needed basis to date. This may change in the event that we are
able to secure financing through equity or loans to the Company. As our company
grows, we expect to hire more full-time employees.



Results of Operations


Three months ended September 30, 2022, as Compared to three months ended
September 30, 2021

Revenues – The Company recorded $1,036,461 in revenue for the three months ended
September 30, 2022 as compared to $1,998,489 for the same period of September
30, 2021
.

Operating Expenses – Total operating expenses for the three months ended
September 30, 2022 was $100,517 as compared to $102,974 in the same period in,
2021, due to increased operating activities, namely, consultants and financial
audit cost, during the period ended September 30, 2022.

Net Income – Net income for the three ended September 30, 2022 was $493,881 as
compared to Net Income of $79,734 for the three months ended September 30, 2021,
which included unrealized loss of $756,928.

Nine months ended September 30, 2022, as compared to nine months ended September
30, 2021

Revenues – The Company recorded $10,906,500 in revenue for the nine months ended
September 30, 2022 as compared to $6,040,683 for the same period of September
30, 2021
.

Operating Expenses – Total operating expenses for the nine months ended
September 30, 2022 was $349,386 as compared to $235,847 in the same period in,
2021, due to increased operating activities, namely, consultants and financial
audit cost, during the period ended September 30, 2022.

Net Income – Net income for nine months ended September 30, 2022 was $2,067,355
as compared to Net Income of $946,676 for the nine months ended September 30,
2021
, which include unrealized gain of $71.

OCI – Unrealized Gain or Other Comprehensive Income for nine months ended
September 30, 2022 was $3,700, as compared to Unrealized gain of $71, for the
nine months ended September 30, 2021. The other-comprehensive-income of $3,700
was a result of mark-to-market/fair value adjustment to Trading Securities for
the period.

Financial Condition, Liquidity and Capital Resources

As of September 30, 2022, the Company had a working capital of $293,292,
consisting of $90,190 in cash, $203,902 in Trading Securities, and $800 in
short-term liabilities.



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For the nine months period ended September 30, 2022, the Company generated
$2,296,527 from operating activities, used $3,992,846 on investing activities,
and generated cash of $1,187,119 from financing activities, resulting in an
decrease in total cash of $509,200 and a cash balance of $90,190 for the period.

For the nine months period ended September 30, 2021, the Company generated
$998,530 from operating activities, used $2,356,493 on investing activities, and
generated cash of $1,575,041 from financing activities, resulting in an increase
in total cash of $217,078 and a cash balance of $218,708 for the period..

As of September 30, 2022, total stockholders’ equity increased to $4,294,822
from $2,229,119 as of December 31, 2021.

As of September 30, 2022, the Company had a cash balance of $90,190 (i.e. cash
is used to fund operations). The Company does believe our current cash balances
will be sufficient to allow us to fund our operating plan for the next twelve
months. However, our ability to continue as a going concern is still dependent
on us obtaining adequate capital to fund operation or maintaining consecutive
quarterly profitability. If we are unable to obtain adequate capital, or
maintaining consecutive quarterly profitability, we could be forced to cease
operations or substantially curtail its drug development activities. These
conditions could raise substantial doubt as to our ability to continue as a
going concern. The accompanying financial statements do not include any
adjustments relating to the recoverability and classification of recorded asset
amounts and classification of liabilities should we be unable to continue as a
going concern.

Our principal sources of liquidity are: (1) Crypto Currency Mining, (2) Real
Estate Sales, (3) Entrepreneurship Development Initiative, and (3) Trading
Securities
. In the past, we have been generating cash from loans to us by our
major shareholder. In order to be able to achieve our strategic goals, we need
to further expand our business and implement our business plan. To continue to
develop our business plan and generate sales, significant capital has been and
will continue to be required. Management intends to fund future operations
through private or public equity and/or debt offerings. We continue to engage in
preliminary discussions with potential investors and broker-dealers, but no
terms have been agreed upon. There can be no assurances, however, that
additional funding will be available on terms acceptable to us, or at all. Any
equity financing may be dilutive to existing shareholders. We do not currently
have any contractual restrictions on our ability to incur debt and, accordingly
we could incur significant amounts of indebtedness to finance operations. Any
such indebtedness could contain covenants which would restrict our operations.

Off-Balance Sheet Arrangements

As of September 30, 2022, we did not engage in any off-balance sheet
arrangements as defined in Item 303(a)(4) of Regulation S-K promulgated by the
SEC under the Securities Exchange Act of 1934. The Company has no 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 is material to investors.

Critical Accounting Policies and Estimates

The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America (“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 consolidated 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.



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Based on this definition, we have identified the critical accounting policies
and judgments addressed which are described in Note 2 to our condensed
consolidated financial statements included elsewhere in this Quarterly Report.
Although we believe that our estimates, assumptions and judgments are
reasonable, they are based upon information presently available. Actual results
may differ significantly from these estimates under different assumptions,
judgments or conditions.

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