Item
1.
|
FINANCIAL
STATEMENTS
|
The
accompanying interim financial statements of Addentax Group Corp. (the “Company”), have been prepared without audit
pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures
normally included in financial statements prepared in accordance with United States generally accepted principles have been condensed
or omitted pursuant to such rules and regulations.
In
the opinion of management, the financial statements contain all material adjustments, consisting only of normal adjustments considered
necessary to present fairly the financial condition, results of operations, and cash flows of the Company for the interim periods
presented.
ADDENTAX
GROUP CORP.
Condensed
Balance Sheets
|
|
December 31, 2016
|
|
|
March 31, 2016
|
|
|
|
(Unaudited)
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
Current Assets
|
|
|
|
|
|
|
|
|
Prepaid expenses
|
|
$
|
8,333
|
|
|
$
|
-
|
|
Assets from discontinued operations
|
|
|
-
|
|
|
|
12,359
|
|
Total Current Assets
|
|
|
8,333
|
|
|
|
12,359
|
|
|
|
|
|
|
|
|
|
|
Assets from discontinued operations - non-current
|
|
|
-
|
|
|
|
2,281
|
|
TOTAL ASSETS
|
|
$
|
8,333
|
|
|
$
|
14,640
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
|
|
|
|
|
Current Liabilities
|
|
|
|
|
|
|
|
|
Accounts payable and accrued liabilities
|
|
|
298
|
|
|
|
-
|
|
Due to related party
|
|
|
-
|
|
|
|
8,100
|
|
Total Current Liabilities
|
|
|
298
|
|
|
|
8,100
|
|
|
|
|
|
|
|
|
|
|
TOTAL LIABILITIES
|
|
|
298
|
|
|
|
8,100
|
|
|
|
|
|
|
|
|
|
|
Stockholders’ Equity
|
|
|
|
|
|
|
|
|
Common stock, par value $0.001; 150,000,000 shares authorized, 6,920,000 and 6,883,000 shares issued and outstanding, respectively
|
|
|
6,920
|
|
|
|
6,883
|
|
Additional paid in capital
|
|
|
41,647
|
|
|
|
9,210
|
|
Accumulated deficit
|
|
|
(40,532
|
)
|
|
|
(9,553
|
)
|
Total Stockholders’ Equity
|
|
|
8,035
|
|
|
|
6,540
|
|
|
|
|
|
|
|
|
|
|
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
$
|
8,333
|
|
|
$
|
14,640
|
|
The
accompanying notes are an integral part of these unaudited financial statements.
ADDENTAX
GROUP CORP.
Condensed
Statements of Operations
(Unaudited)
|
|
For the Three Months Ended
|
|
|
For the Nine Months Ended
|
|
|
|
December 31,
|
|
|
December 31,
|
|
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General and administration
|
|
|
5,486
|
|
|
|
-
|
|
|
|
5,486
|
|
|
|
-
|
|
Total operating expenses
|
|
|
5,486
|
|
|
|
-
|
|
|
|
5,486
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss from continued operations
|
|
|
(5,486
|
)
|
|
|
-
|
|
|
|
(5,486
|
)
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expense)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss before taxes
|
|
|
(5,486
|
)
|
|
|
-
|
|
|
|
(5,486
|
)
|
|
|
-
|
|
Income tax benefit
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Loss from Continued Operations
|
|
|
(5,486
|
)
|
|
|
-
|
|
|
|
(5,486
|
)
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Discontinued operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from discontinued operations
|
|
|
-
|
|
|
|
(320
|
)
|
|
|
(21,525
|
)
|
|
|
(7,232
|
)
|
Loss on disposal of assets
|
|
|
(3,968
|
)
|
|
|
-
|
|
|
|
(3,968
|
)
|
|
|
-
|
|
Loss from Discontinued Operations, Net of Tax Benefits
|
|
|
(3,968
|
)
|
|
|
(320
|
)
|
|
|
(25,493
|
)
|
|
|
(7,232
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(9,454
|
)
|
|
$
|
(320
|
)
|
|
$
|
(30,979
|
)
|
|
$
|
(7,232
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Loss Per Common Share – Basic and Diluted
|
|
$
|
(0.00
|
)
|
|
$
|
(0.00
|
)
|
|
$
|
(0.00
|
)
|
|
$
|
(0.00
|
)
|
Net loss from continued operation
|
|
$
|
(0.00
|
)
|
|
$
|
(0.00
|
)
|
|
$
|
(0.00
|
)
|
|
$
|
(0.00
|
)
|
Net loss from discontinued operation
|
|
$
|
(0.00
|
)
|
|
$
|
(0.00
|
)
|
|
$
|
(0.00
|
)
|
|
$
|
(0.00
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted Average Common Shares Outstanding
|
|
|
6,920,000
|
|
|
|
6,009,218
|
|
|
|
6,919,464
|
|
|
|
6,000,000
|
|
The
accompanying notes are an integral part of these unaudited financial statements.
ADDENTAX
GROUP CORP.
Condensed
Statements of Cash Flows
(Unaudited)
|
|
For the Nine Months Ended
|
|
|
|
December 31,
|
|
|
|
2016
|
|
|
2015
|
|
|
|
|
|
|
|
|
Cash Flows from Operating Activities:
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(30,979
|
)
|
|
$
|
(7,232
|
)
|
Adjustments to reconcile net loss to net cash used in operating activities:
|
|
|
|
|
|
|
|
|
Loss on disposal of assets
|
|
|
3,968
|
|
|
|
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
Prepaid expense
|
|
|
(8,333
|
)
|
|
|
-
|
|
Accounts payable and accrued liabilities
|
|
|
298
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
Net Cash Used in continued operations
|
|
|
(35,046
|
)
|
|
|
(7,232
|
)
|
Net Cash from discontinued operations
|
|
|
10,672
|
|
|
|
6,777
|
|
Net Cash Used in Operating Activities
|
|
|
(24,374
|
)
|
|
|
(455
|
)
|
|
|
|
|
|
|
|
|
|
Cash Flows from Financing Activities:
|
|
|
|
|
|
|
|
|
Proceeds from sale of common stock
|
|
|
554
|
|
|
|
455
|
|
Loans from related party
|
|
|
23,820
|
|
|
|
-
|
|
Net Cash Provided By Financing Activities
|
|
|
24,374
|
|
|
|
455
|
|
|
|
|
|
|
|
|
|
|
Net Increase in Cash and Cash Equivalents
|
|
|
-
|
|
|
|
-
|
|
Cash and Cash Equivalents, beginning of period
|
|
|
-
|
|
|
|
-
|
|
Cash and Cash Equivalents, end of period
|
|
$
|
-
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
Supplemental Disclosure Information:
|
|
|
|
|
|
|
|
|
Cash paid for interest
|
|
$
|
-
|
|
|
$
|
-
|
|
Cash paid for taxes
|
|
$
|
-
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
Non-Cash Disclosure:
|
|
|
|
|
|
|
|
|
Forgiveness of debt by related party to contributed capital
|
|
$
|
31,920
|
|
|
$
|
-
|
|
The
accompanying notes are an integral part of these unaudited financial statements.
ADDENTAX
GROUP CORP.
Notes
to the Condensed Financial Statements
December
31, 2016
(Unaudited)
Note
1.
|
ORGANIZATION
AND NATURE OF BUSINESS
|
Addentax
Group Corp. (“the Company”, “we”, “us” or “our”) was incorporated in Nevada on
October 28, 2014, and the Company was engaged in the field of producing images on multiple surfaces using heat transfer technology.
On
November 21, 2016, our former sole officer and director, who was the holder of an aggregate of 6,000,000 shares of Common Stock
of the Company, representing approximately 86.7% of the issued and outstanding shares of Common Stock of the Company, sold all
6,000,000 of his shares of Common Stock. Of this amount 3,800,000 shares of Common Stock were purchased from our current sole
officer and director.
The
Company is exploring other business opportunities.
The
accompanying unaudited interim financial statements have been prepared assuming that the Company will continue as a going concern,
which contemplates the realization of assets and the liquidation of liabilities in the normal course of business. As of December
31, 2016, the Company has a loss from operations, an accumulated deficit and has no revenues from continuing operations. The Company
intends to fund operations through equity financing arrangements, which may be insufficient to fund its capital expenditures,
working capital and other cash requirements for the year ending March 31, 2017.
The
ability of the Company to emerge from an early stage is dependent upon, among other things, obtaining additional financing to
continue operations, and development of its business plan. In response to these problems, management intends to raise additional
funds through public or private placement offerings.
These
factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying
unaudited interim financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Note
3.
|
SUMMARY
OF SIGNIFCANT ACCOUNTING POLICIES
|
Basis
of presentation
The
accompanying financial statements have been prepared in accordance with generally accepted accounting principles in the United
States of America. The Company’s year-end is March 31. The accompanying unaudited interim financial statements and related
notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S.
GAAP”) for interim financial information, and with the rules and regulations of the United States Securities and Exchange
Commission set forth in Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required
by U.S. GAAP for complete financial statements. The unaudited interim financial statements furnished reflect all adjustments (consisting
of normal recurring accruals) which are, in the opinion of management, necessary to a fair statement of the results for the interim
periods presented. Unaudited interim results are not necessarily indicative of the results for the full fiscal year. These financial
statements should be read in conjunction with the financial statements of the Company for the fiscal year ended March 31, 2016
and notes thereto contained in the Company’s Annual Report on Form 10-K, as filed with the Securities and Exchange Commission
on June 1, 2016.
Use
of Estimates
The
preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities
at the date the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results
could differ from those estimates.
Discontinued
Operations
The
Company follows ASC 205-20,
“Discontinued Operations,”
to report for disposed or discontinued operations.
Reclassifications
Certain
prior year amounts have been reclassified to conform with the current year presentation.
Recent
Accounting Pronouncements
In
January 2017, the FASB has issued Accounting Standards Update (ASU) No. 2017-04,
“Intangibles - Goodwill and Other (Topic
350): Simplifying the Test for Goodwill Impairment.”
These amendments eliminate Step 2 from the goodwill impairment
test. The annual, or interim, goodwill impairment test is performed by comparing the fair value of a reporting unit with its carrying
amount. An impairment charge should be recognized for the amount by which the carrying amount exceeds the reporting unit’s
fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. In addition,
income tax effects from any tax deductible goodwill on the carrying amount of the reporting unit should be considered when measuring
the goodwill impairment loss, if applicable. The amendments also eliminate the requirements for any reporting unit with a zero
or negative carrying amount to perform a qualitative assessment and, if it fails that qualitative test, to perform Step 2 of the
goodwill impairment test. An entity still has the option to perform the qualitative assessment for a reporting unit to determine
if the quantitative impairment test is necessary. Effective for public business entities that are a SEC filers for annual or any
interim goodwill impairment tests in fiscal years beginning after December 15, 2019. Early adoption is permitted for interim or
annual goodwill impairment tests performed on testing dates after January 1, 2017. ASU 2017-04 should be adopted on a prospective
basis. The Company is currently evaluating the potential impact that the adoption of this ASU may have on its financial statements.
In
December 2016, the FASB has issued Accounting Standards Update (ASU) No. 2016-20,
“Technical Corrections and Improvements
to Topic 606, Revenue from Contracts with Customers.”
The amendments affect narrow aspects of the guidance issued in
ASU 2014-09 including Loan Guarantee Fees, Contract Costs, Provisions for Losses on Construction-Type and Production-Type Contracts,
Disclosure of Remaining Performance Obligations, Disclosure of Prior Period Performance Obligations, Contract Modifications, Contract
Asset vs. Receivable, Refund Liability, Advertising Costs, Fixed Odds Wagering Contracts in the Casino Industry, and Costs Capitalized
for Advisors to Private Funds and Public Funds. The effective date and transition requirements for the amendments are the same
as the effective date and transition requirements for FASB Accounting Standards Codification Topic 606. Public entities should
apply Topic 606 (and related amendments) for annual reporting periods beginning after December 15, 2017, including interim reporting
periods therein. The Company is currently evaluating the potential impact that the adoption of this ASU may have on its financial
statements.
Management
has considered all other recent accounting pronouncements issued since the last audit of our financial statements. The Company’s
management believes that these recent pronouncements will not have a material effect on the Company’s financial statements.
Note
4.
|
SHAREHOLDER’S
EQUITY
|
The
Company has 150,000,000, $0.001 par value shares of common stock authorized.
During
April 2016, the Company issued a total of 37,000 common shares for cash contributions of $554.
There
were 6,920,000 shares of common stock issued and outstanding as of December 31, 2016.
Note
5.
|
RELATED
PARTY TRANSACTIONS
|
The
Company will continue to rely on advances from related parties until when it can support its operations through generating revenue,
attaining adequate financing through sales of its equity securities or traditional debt financing. There is no formal written
commitment by the shareholders to continue to support the company’s operation. The amounts due to shareholders represent
advances or amounts paid on behalf of the Company in satisfaction of liabilities. These advances are considered temporary in nature
and have not been formalized by promissory notes. This loan is unsecured, non-interest bearing and due on demand.
During
the nine months ended December 31, 2016, the Company’s previous sole officer and director, who was also a majority shareholder,
advanced to the Company an amount of $23,820. On November 21, 2016, this officer and director resigned all positions with the
Company and forgave the $31,920 owing to him, which was recorded as additional paid in capital.
Note
6.
|
DISCONTINUED
OPERATIONS
|
On
November 21, 2016, due to the Changes in Control of Registrant,
the Company decided to exit
the field of producing images on multiple surfaces using heat transfer technology.
During
the nine months ended December 31, 2016, the Company recorded a loss on the disposal of assets of $3,968. The change of the business
qualified as a discontinued operation of the Company and accordingly, the Company has excluded results of the operations from
its Statements of Operations to present this business in discontinued operations.
The
following table shows the results of operations of Addentax for nine months ended December 31, 2016 and 2015 which are included
in the loss from discontinued operations:
|
|
Nine Months Ended
|
|
|
|
December 31,
|
|
|
|
2016
|
|
|
2015
|
|
|
|
|
|
|
|
|
Revenues
|
|
$
|
9,950
|
|
|
$
|
5,700
|
|
Cost of Goods Sold
|
|
|
(1,531
|
)
|
|
|
(713
|
)
|
Gross Profit
|
|
|
8,419
|
|
|
|
4,987
|
|
|
|
|
|
|
|
|
|
|
General and administrative expense
|
|
|
(29,410
|
)
|
|
|
(11,713
|
)
|
Depreciation
|
|
|
(534
|
)
|
|
|
(534
|
)
|
Loss on disposal of assets
|
|
|
(3,968
|
)
|
|
|
-
|
|
Total Expense
|
|
|
(33,912
|
)
|
|
|
(12,247
|
)
|
|
|
|
|
|
|
|
|
|
Provision for income taxes
|
|
|
-
|
|
|
|
28
|
|
Loss from Discontinued Operations, Net of Tax Benefits
|
|
$
|
(25,493
|
)
|
|
$
|
(7,232
|
)
|
The
following table shows the carrying amounts of the major classes of assets and liabilities associated with the Addentax as of the
November 21, 2016.
|
|
November 21, 2016
|
|
Prepaid expenses
|
|
$
|
190
|
|
Inventory
|
|
|
2,031
|
|
Equipment, net of accumulated depreciation of $1,869
|
|
|
1,047
|
|
Website
|
|
|
700
|
|
Net assets
|
|
|
3,968
|
|
Loss on disposal of assets
|
|
$
|
3,968
|
|
The
following table presents the carrying amounts of the major classes of assets and liabilities associated reported as discontinued
operations on our accompanying balance sheets.
|
|
December 31, 2016
|
|
|
March 31, 2016
|
|
Assets from discontinued operations
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
-
|
|
|
$
|
10,052
|
|
Prepaid expenses
|
|
|
-
|
|
|
|
1,330
|
|
Inventory
|
|
|
-
|
|
|
|
977
|
|
Equipment, net of accumulated depreciation of $1,869
|
|
|
-
|
|
|
|
1,581
|
|
Website
|
|
|
-
|
|
|
|
700
|
|
Total assets from discontinued operations
|
|
|
-
|
|
|
|
14,640
|
|
Current assets from discontinued operations
|
|
|
-
|
|
|
|
12,359
|
|
Non-current assets from discontinued operations
|
|
$
|
-
|
|
|
$
|
2,281
|
|
Note
7.
|
SUBSEQUENT
EVENTS
|
Effective December
28, 2016 the “Company has executed Sale & Purchase Agreement (“S&P”) for the acquisition of 100% of
the shares and assets of Yingxi Industrial Chain Group Co., Ltd., a company incorporated under the laws of the Republic of Seychelles.
The Company has agreed to issue five hundred million (500,000,000) shares of the Company to Yingxi Industrial Chain Group Co.,
Ltd. to acquire the shares and assets. Closing is dependent on the completion of due diligence.
Item
2.
|
Management’s
Discussion and Analysis of Financial Condition and Results of Operations
|
FORWARD
LOOKING STATEMENTS
This
quarterly report contains forward-looking statements. These statements relate to future events or our future financial performance.
In some cases, you can identify forward-looking statements by terminology such as “may”, “should”, “expects”,
“plans”, “anticipates”, “believes”, “estimates”, “predicts”, “potential”
or “continue” or the negative of these terms or other comparable terminology. These statements are only predictions
and involve known and unknown risks, uncertainties and other factors that may cause our or our industry’s actual results,
levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance
or achievements expressed or implied by these forward-looking statements. Although we believe that the expectations reflected
in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements.
Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the
forward-looking statements to conform these statements to actual results.
Our
unaudited financial statements are prepared in accordance with United States Generally Accepted Accounting Principles. The following
discussion should be read in conjunction with our financial statements and the related notes that appear elsewhere in this quarterly
report. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual
results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute
to such differences include, but are not limited to, those discussed below and elsewhere in this quarterly report.
In
this quarterly report, unless otherwise specified, all dollar amounts are expressed in United States dollars and all references
to “common shares” refer to the common shares in our capital stock.
As
used in this quarterly report, the terms “we”, “us”, “our” and “our company” mean
Addentax Group Corp., unless otherwise indicated.
General
Overview
Addentax
Group Corp. was incorporated in the State of Nevada on October 28, 2014 and established a fiscal year-end of March 31. We were
incorporated to produce images on multiple surfaces, such as glass, leather, plastic, ceramic, textile, and others using a 3D
sublimation vacuum heat transfer machine.
On
November 21, 2016, our former sole officer and director, who was the holder of an aggregate of 6,000,000 shares of Common Stock
of the Company, representing approximately 86.7% of the issued and outstanding shares of Common Stock of the Company, sold all
6,000,000 of his shares of Common Stock. Of this amount 3,800,000 shares of Common Stock were purchased from our current sole
officer and director.
The
Company ceased our previous operations on the change of control and we are exploring other business opportunities.
Our
business office is located at Floor 13th, Building 1, Block B, Zhihui Square, Nanshan District, Shenzhen City, China. Our telephone
number is +(86) 755 86961 405.
We
do not have any subsidiaries.
We
have never declared bankruptcy, been in receivership, or involved in any kind of legal proceeding.
Results
of Operations
Results
of Operations for the three and nine months ended December 31, 2016 and 2015:
|
|
Three Months Ended December 31,
|
|
|
Change
|
|
|
|
2016
|
|
|
2015
|
|
|
Amount
|
|
|
%
|
|
Revenue
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
|
-
|
|
Cost of goods sold
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Operating expenses
|
|
|
5,486
|
|
|
|
-
|
|
|
|
5,486
|
|
|
|
-
|
|
Net loss from continued operations
|
|
|
(5,486
|
)
|
|
|
-
|
|
|
|
(5,486
|
)
|
|
|
-
|
|
Net loss from discontinued operations
|
|
|
(3,968
|
)
|
|
|
(320
|
)
|
|
|
(3,648
|
)
|
|
|
1,140
|
%
|
Net loss
|
|
$
|
(9,454
|
)
|
|
$
|
(320
|
)
|
|
$
|
(9,134
|
)
|
|
|
2,854
|
%
|
|
|
Nine Months Ended December 31,
|
|
|
Change
|
|
|
|
2016
|
|
|
2015
|
|
|
Amount
|
|
|
%
|
|
Revenue
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
|
-
|
|
Cost of goods sold
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Operating expenses
|
|
|
5,486
|
|
|
|
-
|
|
|
|
5,486
|
|
|
|
-
|
|
Net loss from continued operations
|
|
|
(5,486
|
)
|
|
|
-
|
|
|
|
(5,486
|
)
|
|
|
-
|
|
Net loss from discontinued operations
|
|
|
(25,493
|
)
|
|
|
(7,232
|
)
|
|
|
(18,261
|
)
|
|
|
253
|
%
|
Net loss
|
|
$
|
(30,979
|
)
|
|
$
|
(7,232
|
)
|
|
$
|
(23,747
|
)
|
|
|
328
|
%
|
Revenue
and cost of goods sold
For
the three and nine months ended December 31, 2016 and 2015 the Company generated no revenue from continuing operations and cost
of goods sold.
Operating
expenses
Total
operating expenses for the three and nine months ended December 31, 2016 and 2015 were $5,486 and $0, respectively. The general
and administrative expenses for the three months ended December 31, 2016 included regulatory filing fees of $1,221, OTC fees of
$4,167 and professional fees of $98. The operating expenses for the three and nine months ended December 31, 2015 was reclassed
to discontinued operations due to the change in control.
Discontinued
Expenses
Pursuant
to the change in control, on November 21, 2016, the Company recorded all revenues and expenses for the prior business as discontinued
expenses. As a result, the Company recognized the loss on disposal of assets of $3,968 during the three and nine months ended
December 31, 2016.
Loss
from discontinued operations for the three months ended December 31, 2016 and 2015
was $3,968
and $320, respectively.
Loss
from discontinued operations for the nine months ended December 31, 2016 and 2015 was $25,493 and $7,232, respectively. It
is primarily attributed to the increase in general and administrative expense of discontinued operations.
Net
loss
The
net loss for the three months ended December 31, 2016 and 2015 was $9,454 and $320, respectively.
The
net loss for the nine months ended December 31, 2016 and 2015 was $30,979 and $7,232, respectively.
Increase in net
loss as of December 31, 2016 compare to December 31, 2015 is primarily attributed to the increase in general and administrative
expense of discontinued operations.
Liquidity
and Capital Resources and Cash Requirements
Working
Capital
|
|
|
|
|
|
|
|
Change
|
|
|
|
December 31, 2016
|
|
|
March 31, 2016
|
|
|
Amount
|
|
|
%
|
|
Cash
|
|
$
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current Assets
|
|
$
|
8,333
|
|
|
$
|
12,359
|
|
|
$
|
(4,026
|
)
|
|
|
(33
|
)%
|
Current Liabilities
|
|
|
298
|
|
|
|
8,100
|
|
|
|
(7,802
|
)
|
|
|
(96
|
)%
|
Working Capital
|
|
$
|
8,035
|
|
|
$
|
4,259
|
|
|
$
|
3,776
|
|
|
|
89
|
%
|
At
December 31, 2016 and March 31, 2016, the Company had a cash balance of $0. The Company had working capital of $8,035 and $4,259,
respectively. The working capital increased mainly due to a decrease in due to related party of $8,100. On the change of control
the prior management forgave the amounts owing to them and the amount were recorded to additional paid in capital.
Cash
Flows
|
|
Nine Months Ended December 31,
|
|
|
|
|
|
|
2016
|
|
|
2015
|
|
|
Change
|
|
Cash used in Operating Activities
|
|
$
|
(24,374
|
)
|
|
$
|
(455
|
)
|
|
$
|
(23,919
|
)
|
Cash provided by Financing Activities
|
|
$
|
24,374
|
|
|
$
|
455
|
|
|
|
23,919
|
|
Net Increase In Cash During Period
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
We
have not generated positive cash flows from operating activities.
For
the nine months ended December 31, 2016 net cash flows used in operating activities consisted of a net loss of $30,979 and was
increased by loss on disposal of assets of $3,968 and discontinued operations of $10,672, and reduced by a net decrease in change
of operating assets and liabilities of $8,035. For the nine months ended December 31, 2015, net cash flows used in operating consisted
of a net loss of $7,232 and a net increase in discontinued operations of $6,777.
During
the nine months ended December 31, 2016, the Company did not generate or use cash in investing activities.
During
the nine months ended December 31, 2016, the Company received cash from financing activities of $24,374 due to issuance of a total
of 37,000 common shares for cash contribution of $554 and received cash in the amount of $23,820 in the form of loans from our
previous director. During the nine months ended December 31, 2015, the Company generated $455 cash in financing activities as
we issued a total of 16,000 common shares for cash contribution of $455.
Future
Financing Requirements
We
will need to obtain proper funding from equity and/or additional debt financing in order to be able to fulfill our projections.
Failure to generate sufficient revenues, raise additional capital or reduce certain discretionary spending could have a material
adverse effect on our ability to achieve our business objectives and will greatly affect our ability to continue as a going concern.
Off-Balance
Sheet Arrangements
We
have 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, and capital expenditures or
capital resources that are material to stockholders.
Application
of Critical Accounting Policies
We
have identified the policies below as critical to our business operations and the understanding of our results of operations.
The impact on our business operations and any associated risks related to these policies are discussed throughout Management’s
Discussion and Analysis of Financial Condition and Results of Operations when such policies affect our reported or expected financial
results.
In
the ordinary course of business, we have made a number of estimates and assumptions relating to the reporting of results of operations
and financial condition in the preparation of our financial statements in conformity with accounting principles generally accepted
in the United States (“GAAP”). We base our estimates on historical experience and on various other assumptions that
we believe are reasonable under the circumstances. The results form the basis for making judgments about the carrying values of
assets and liabilities that are not readily apparent from other sources. Actual results could differ significantly from those
estimates under different assumptions and conditions.
Also,
refer Note 3 – Summary of Significant Accounting Policies in the unaudited condensed financial statements that are included
in this Report.
Recent
accounting pronouncements
For
discussion of recently issued and adopted accounting pronouncements, please see Note 3 to the unaudited condensed consolidated
financial statements included herein.
Item
4.
|
Controls
and Procedures
|
Disclosure
Controls and Procedures
We
maintain disclosure controls and procedures, as defined in Rule 13a-15(e) promulgated under the Securities Exchange Act of 1934
(the “Exchange Act”), that are designed to ensure that information required to be disclosed by us in the reports that
we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in
the Securities and Exchange Commission’s rules and forms and that such information is accumulated and communicated to our
management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding
required disclosure.
We
carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer
and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures as of December 31, 2016. Based on
the evaluation of these disclosure controls and procedures, and in light of the material weaknesses found in our internal controls
over financial reporting, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures
were not effective.
Management’s
Report on Internal Control over Financial Reporting
Management
is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Exchange Act
Rule 13a-15(f)). The Company’s internal control over financial reporting is a process designed to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance
with accounting principles generally accepted in the United States of America. Because of its inherent limitations, internal control
over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future
periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance
with the policies or procedures may deteriorate. Under the supervision and with the participation of management, including the
Chief Executive Officer and Chief Financial Officer, the Company conducted an evaluation of the effectiveness of the Company’s
internal control over financial reporting as of December 31, 2016 using the criteria established in “Internal Control -
Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”).
A
material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there
is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not
be prevented or detected on a timely basis. In its assessment of the effectiveness of internal control over financial reporting
as of December 31, 2016, the Company determined that there were control deficiencies that constituted material weaknesses, as
described below.
1.
We do not have an Audit Committee – While not being legally obligated to have an audit committee, it is the management’s
view that such a committee, including a financial expert member, is an utmost important entity level control over the Company’s
financial statement. Currently the Board of Directors acts in the capacity of the Audit Committee, and does not include a member
that is considered to be independent of management to provide the necessary oversight over management’s activities.
2.
We did not maintain appropriate cash controls – As of December 31, 2016, the Company has not maintained sufficient internal
controls over financial reporting for cash, including failure to segregate cash handling and accounting functions, and did not
require dual signatures on the Company’s bank accounts. Alternatively, the effects of poor cash controls were mitigated
by the fact that the Company had limited transactions in its bank accounts.
3.
We did not implement appropriate information technology controls – As at December 31, 2016, the Company retains copies of
all financial data and material agreements; however there is no formal procedure or evidence of normal backup of the Company’s
data or off-site storage of data in the event of theft, misplacement, or loss due to unmitigated factors.
Accordingly,
the Company concluded that these control deficiencies resulted in a reasonable possibility that a material misstatement of the
annual or interim financial statements will not be prevented or detected on a timely basis by the company’s internal controls.
As
a result of the material weaknesses described above, management has concluded that the Company did not maintain effective internal
control over financial reporting as of December 31, 2016 based on criteria established in Internal Control- Integrated Framework
issued by COSO.
Changes
in Internal Controls over Financial Reporting
There
has been no change in our internal control over financial reporting occurred during our second fiscal quarter that has materially
affected, or is reasonably likely to materially affect, our internal control over financial reporting.
This
quarterly report does not include an attestation report of the Company’s registered public accounting firm regarding internal
control over financial reporting. Management’s report was not subject to attestation by the Company’s registered public
accounting firm pursuant to temporary rules of the SEC that permit the Company to provide only management’s report in this
quarterly report.