ITEM
1. FINANCIAL STATEMENTS
ECARD
INC.
Financial
Statements
September
30, 2019 and December 31, 2018
REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To:
The Board of Directors and Stockholders of ECARD INC.
Results
of Review of Financial Statements
We
have reviewed the accompanying condensed balance sheet of ECARD INC. as of September 30, 2019, the related condensed statements
of operations for the three and nine month periods ended September 30, 2019 and 2018, and the condensed statements of cash flows
for the nine month periods ended September 30, 2019 and 2018, including the related notes (collectively referred to as the “interim
financial statements”). Based on our reviews, we are not aware of any material modifications that should be made to the
accompanying interim financial statements for them to be in conformity with accounting principles generally accepted in the United
States of America.
We
have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB),
the balance sheet of the Company as of December 31, 2018, and the related statements of operations, comprehensive loss, changes
in shareholders’ equity and cash flows for the year then ended (not presented herein), and in our report dated April 21,
2019, we expressed an unqualified opinion on those financial statements. In our opinion, the information set forth in the accompanying
condensed balance sheet as of December 31, 2018 is fairly stated in all material respects in relation to the financial statements
from which it has been derived.
The
accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed
in Note 3 to the financial statements, the Company had incurred substantial losses during the period, and has a working capital
deficit, which raises substantial doubt about its ability to continue as a going concern. Management’s plan regarding these
matters are described in Note 3. These financial statements do not include any adjustments that might result from the outcome
of this uncertainty.
Basis
for Review Results
These
interim financial statements are the responsibility of the Company’s management. We are a public accounting firm registered
with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws
and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our review in accordance
with the standards of the PCAOB. A review of interim financial information consists principally of applying analytical procedures
and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit
conducted in accordance with the standards of the PCAOB, the objective of which is the expression of an opinion regarding the
financial statements taken as a whole. Accordingly, we do not express such an opinion.
WWC,
P.C.
Certified
Public Accountants
San
Mateo, CA
November
[ ], 2019
ECARD
INC.
Condensed Balance Sheets
September 30, 2019 and December 31, 2018
(Unaudited)
|
|
September 30,
2019
|
|
|
December 31,
2018
|
|
|
|
(Unaudited)
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ DEFICIENCY
|
|
|
|
|
|
|
|
Accounts payable
|
|
|
7,786
|
|
|
|
4,238
|
|
Due to related parties
|
|
|
87,721
|
|
|
|
70,195
|
|
Accrued liabilities
|
|
|
3,020
|
|
|
|
7,718
|
|
Current liabilities
|
|
|
98,527
|
|
|
|
82,151
|
|
|
|
|
|
|
|
|
|
|
Total liabilities
|
|
|
98,527
|
|
|
|
82,151
|
|
|
|
|
|
|
|
|
|
|
Commitments and contingencies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders’ deficiency
|
|
|
|
|
|
|
|
|
Preferred stock, $0.0001 par value, 5,000,000 shares authorized; none issued and outstanding
|
|
|
-
|
|
|
|
-
|
|
Common stock, $0.0001 par value, 250,000,000 shares authorized; 49,511,775 and 49,511,775 shares issued and outstanding at September 30, 2019 and December 31, 2018, respectively
|
|
|
4,951
|
|
|
|
4,951
|
|
Additional paid-in capital
|
|
|
1,059,873
|
|
|
|
1,059,873
|
|
Accumulated deficit
|
|
|
(1,163,351
|
)
|
|
|
(1,146,975
|
)
|
Total Stockholders’ deficiency
|
|
|
(98,527
|
)
|
|
|
(82,151
|
)
|
|
|
|
|
|
|
|
|
|
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIENCY
|
|
$
|
-
|
|
|
$
|
-
|
|
See accompanying notes to the financial statements
ECARD
INC.
Condensed Statements of Operations
For the three and nine months ended September
30, 2019 and 2018
(Unaudited)
|
|
Three Months Ended
September 30,
|
|
|
Nine Months Ended
September 30,
|
|
|
|
2019
|
|
|
2018
|
|
|
2019
|
|
|
2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales - Net
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General and administrative
|
|
|
1,279
|
|
|
|
10,406
|
|
|
|
16,376
|
|
|
|
22,851
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from operations
|
|
|
(1,279
|
)
|
|
|
(10,406
|
)
|
|
|
(16,376
|
)
|
|
|
(22,851
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expense)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(1,279
|
)
|
|
$
|
(10,406
|
)
|
|
$
|
(16,376
|
)
|
|
$
|
(22,851
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Loss per share of common stock – basic and diluted
|
|
$
|
(0.00
|
)
|
|
$
|
(0.00
|
)
|
|
$
|
(0.00
|
)
|
|
$
|
(0.00
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of shares outstanding – basic and diluted
|
|
|
49,511,775
|
|
|
|
49,511,775
|
|
|
|
49,511,775
|
|
|
|
49,511,775
|
|
See accompanying notes to these financial
statements
ECARD INC.
Statements of Stockholders’ Deficiency
For the nine months ended September 30,
2019 and 2018
(Unaudited)
|
|
For the nine months ended September 30, 2018
|
|
|
|
Common Stock Issued
|
|
|
Additional
|
|
|
|
|
|
|
|
|
|
No. of
|
|
|
|
|
|
Paid in
|
|
|
Accumulated
|
|
|
|
|
|
|
Shares
|
|
|
Par Value
|
|
|
Capital
|
|
|
Deficit
|
|
|
Total
|
|
Balance at December 31, 2017
|
|
|
49,511,775
|
|
|
$
|
4,951
|
|
|
$
|
1,059,873
|
|
|
$
|
(1,112,168
|
)
|
|
$
|
(47,344
|
)
|
Net loss
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(25,851
|
)
|
|
|
(25,851
|
)
|
Balance at September 30, 2018
|
|
|
49,511,775
|
|
|
$
|
4,951
|
|
|
$
|
1,059,873
|
|
|
$
|
(1,138,019
|
)
|
|
$
|
(73,195
|
)
|
|
|
For the nine months ended September 30, 2019
|
|
|
|
Common Stock Issued
|
|
|
Additional
|
|
|
|
|
|
|
|
|
|
No. of
|
|
|
|
|
|
Paid in
|
|
|
Accumulated
|
|
|
|
|
|
|
Shares
|
|
|
Par Value
|
|
|
Capital
|
|
|
Deficit
|
|
|
Total
|
|
Balance at December 31, 2018
|
|
|
49,511,775
|
|
|
$
|
4,951
|
|
|
$
|
1,059,873
|
|
|
$
|
(1,146,975
|
)
|
|
$
|
(82,151
|
)
|
Net loss
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(16,376
|
)
|
|
|
(16,376
|
)
|
Balance at September 30, 2019
|
|
|
49,511,775
|
|
|
$
|
4,951
|
|
|
$
|
1,059,873
|
|
|
$
|
(1,163,351
|
)
|
|
$
|
(98,527
|
)
|
See accompanying notes to these financial
statements
ECARD
INC.
Condensed Statements of Cash Flows
For the nine months ended September 30, 2019
and 2018
(Unaudited)
|
|
For the Nine Months Ended
September 30,
|
|
|
|
2019
|
|
|
2018
|
|
|
|
|
|
|
|
|
Cash Flows from Operating Activities
|
|
|
|
|
|
|
Net loss
|
|
$
|
(16,376
|
)
|
|
$
|
(25,851
|
)
|
Adjustments to reconcile net loss to net cash used in operating activities:
|
|
|
|
|
|
|
|
|
Expenses paid by shareholders
|
|
|
12,828
|
|
|
|
22,851
|
|
Increase in accounts payable and accrued expenses
|
|
|
3,548
|
|
|
|
3,000
|
|
Net cash used in operating activities
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
Decrease in Cash and Cash equivalents
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
Cash and Cash Equivalents—Beginning of Period
|
|
|
-
|
|
|
|
-
|
|
Cash and Cash Equivalents—End of Period
|
|
$
|
-
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
Supplemental Disclosures
|
|
|
|
|
|
|
|
|
Cash paid for interest
|
|
$
|
-
|
|
|
$
|
-
|
|
Cash paid for taxes
|
|
$
|
-
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
Non-Cash Investing and Financing Activities
|
|
|
|
|
|
|
|
|
Issuance of issuable shares
|
|
$
|
-
|
|
|
$
|
-
|
|
See accompanying notes to these financial
statements
ECARD INC.
Notes to Financial Statements
NOTE
1. ORGANIZATION AND DESCRIPTION OF BUSINESS
ECARD
INC. (the “Company”), formerly known as The Enviromart Companies, Inc. until October 23, 2017, was incorporated under
the laws of the State of Delaware on June 18, 2012. On June 21, 2013, the Company completed an acquisition of intangible assets
comprised of intellectual properties and trademarks from its former Chief Executive Officer. In conjunction with the acquisition
of the intangible assets, the Company commenced operations.
On October 5, 2017, the Company entered into
a Stock Purchase Agreement (the “SPA”) with Eastone Equities, LLC, a New York limited liability company (the “Purchaser”),
and certain selling stockholders, pursuant to which the Purchaser acquired 44,566,412 shares of common stock of the Company from
the sellers for an aggregate purchase price of $295,000. The transaction contemplated in the SPA closed on October 9, 2017. The
acquired shares represented approximately 90% of issued and outstanding shares of common stock of the Company. The transaction
resulted in a change in control of the Company.
On October 23, 2017, the Company filed a Certificate
of Amendment with the Secretary of State of Delaware. As a result, the name of the Company was changed to “ECARD INC.”,
effective as of October 23, 2017.
Currently, the Company only possesses minimal
assets and liabilities, and does not have any substantial business operations; accordingly, there were no significant revenues
or positive cash flows for the nine months ended September 30, 2019. Management’s efforts are focused on acquiring a new
and profitable operating business with strong growth potential. Unless and until the Company completes an acquisition, its expenses
are expected to consist solely of legal, accounting and compliance costs, including those related to complying with reporting obligations
under the Securities and Exchange act of 1934.
NOTE
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis
of Presentation
The
accompanying financial statements of the Company have been prepared using the accrual basis of accounting and in accordance with
accounting principles generally accepted in the United States of America (“U.S. GAAP”) and the rules of the Securities
and Exchange Commission (“SEC”). 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 periods presented herein have been
reflected.
The
condensed financial statements of the Company as of and for the nine months ended September 30, 2019 and 2018 are unaudited. In
the opinion of management, all adjustments (including normal recurring adjustments) have been made that are necessary to present
fairly the financial position of the Company as of September 30, 2019, the results of its operations for the three and nine months
ended September 30, 2019 and 2018, and its cash flows for the nine months ended September 30, 2019 and 2018. Operating results
for the interim periods presented are not necessarily indicative of the results to be expected for a full fiscal year. The condensed
balance sheet at December 31, 2018 has been derived from the Company’s audited financial statements included in the Form
10-K for the year ended December 31, 2018.
The
statements and related notes have been prepared pursuant to the rules and regulations of the SEC. Accordingly, certain information and footnote disclosures normally included in financial statements prepared
in accordance with generally accepted accounting principles have been omitted pursuant to such rules and regulations. These financial
statements should be read in conjunction with the financial statements and other information included in the Company’s Annual
Report on Form 10-K for the fiscal year ended December 31, 2018, as filed with the SEC.
ECARD INC.
Notes to Financial Statements
Use
of Estimates and Assumptions
The
preparation of financial statements in conformity with U.S. GAAP 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 of the unaudited
consolidated financial statements and the reported amounts of expenses during the reporting period. Actual results could differ
from those estimates.
Cash
and Cash Equivalents
The
Company considers all highly liquid debt instruments with original maturities of three months or less when acquired to be cash
equivalents.
Concentration
of Risk
Deposits
made at financial institutions in the United States are subject to federally depository insurance maximum; deposits in excess
of the amount are subject to concentrations of credit risk of the financial institution; however, Management believe that financial
institutions located in the US are unlikely to become insolvent.
Income
Taxes
Deferred
tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured
using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to
be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in
the period that includes the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets
to the amounts expected to be realized.
Basic
and Diluted Earnings (Loss) Per Share
Basic
earnings per share is based on the weighted average number of common shares outstanding. Diluted earnings per share is based on
the weighted average number of common shares outstanding and dilutive common stock equivalents. Basic earnings per share is computed
by dividing net income/loss available to common stockholders (numerator) by the weighted average number of common shares outstanding
(denominator) during the period. Weighted average number of shares used to calculate basic and diluted loss per share is considered
the same as the effect of dilutive shares is anti-dilutive for all periods presented. There were no potentially dilutive or anti-dilutive
securities during the nine months ended September 30, 2019, and 2018.
Stock-Based
Compensation
The
Company expenses all stock-based payments to employees and non-employee directors based on the grant date fair value of the awards
over the requisite service period, adjusted for estimated forfeitures.
Recently
Issued Financial Accounting Standards
Management
has considered all recent accounting pronouncements issued. The Company’s management believes that these recent pronouncements
will not have a material effect on the Company’s financial statements.
NOTE
3. GOING CONCERN
During the nine months ended September 30,
2019, the Company has been unable to generate cash flows sufficient to support its operations. The Company has been dependent on
capital contributions from its prior controlling shareholders and related party advances from its current controlling shareholder.
In addition, the Company has experienced recurring net losses. As of September 30, 2019, the Company has accumulated deficits of
$1,163,351 and working capital deficits of $98,527. These factors raise substantial doubt about the Company’s ability to
continue as a going concern. The accompanying financial statements do not include any adjustments related to the recoverability
or classification of asset-carrying amounts or the amounts and classification of liabilities that may result should the Company
be unable to continue as a going concern.
ECARD INC.
Notes to Financial Statements
There can be no assurance that sufficient funds
required during the next year or thereafter will be generated from any future operations or that funds will be available from external
sources such as debt or equity financings or other potential sources. If the Company is unable to raise capital from external
sources when required, there would be a material adverse effect on its business. Furthermore, there can be no assurance that
any such required funds, if available, will be available on attractive terms or that they will not have a significant dilutive
effect on the Company’s existing stockholders. Management is now seeking to acquire an operating company. In the foreseeable
future, the Company will rely on related parties such as its controlling shareholder, to provide advances to funds general corporate
purposes and any potential acquisitions of profitable investments. There is no assurance, however, that the Company will achieve
its objectives or goals.
NOTE
4. RELATED PARTY TRANSACTIONS
During
the nine months ended September 30, 2019, the Company’s shareholder paid expenses on behalf of the Company in the amount
of $17,526. This amount has been recorded as amount due to related party. As of September 30, 2019 and December 31, 2018, the
outstanding balance was $87,721 and $70,195, respectively. The balance is unsecured, non-interest bearing, and due on demand with
no specified repayment schedule.
NOTE
5. STOCKHOLDERS’ EQUITY
Shares
issued and outstanding
As
of September 30, 2019 and December 31, 2018, there were 49,511,775 and 49,511,775 shares issued and outstanding, respectively.
NOTE
6. COMMITMENTS AND CONTINGENCIES
Except
as disclosed herein, we are not a party to any pending legal proceeding. To the knowledge of our management, except as disclosed
herein, no federal, state or local governmental agency is presently contemplating any proceeding against us.
NOTE
7. SUBSEQUENT EVENTS
The
Company evaluates subsequent events that have occurred after the balance sheet date but before the financial statements are issued.
There are two types of subsequent events: (1) recognized, or those that provide additional evidence with respect to conditions
that existed at the date of the balance sheet, including the estimates inherent in the process of preparing financial statements,
and (2) non-recognized, or those that provide evidence with respect to conditions that did not exist at the date of the balance
sheet but arose subsequent to that date.
The Company has evaluated subsequent events
through the date the financial statements were issued and up to the time of filing with the Securities and Exchange Commission.
The Company’s management has determined that there was no material subsequent events required disclosure.
ITEM
2. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION
Overview
On June 21, 2013, the Company completed the
acquisition of certain assets from Michael R. Rosa, its Chief Executive Officer, and commenced business operations. From the closing
of the acquisition, the Company had raised capital, hired employees, leased space, engaged consultants and advisors, conducted
extensive sales and marketing related activities both domestically and internationally, negotiated vendor relationships and engaged
sales representatives.
As of January 2, 2015, the Company’s
business was operated through its wholly-owned subsidiary, Enviro Pack Technologies, Inc. Effective on or about January 15, 2015,
the Company changed its name to The Enviromart Companies, Inc. and the Company’s wholly-owned subsidiary, EnviroPack Technologies,
Inc., changed its name to Enviromart Industries, Inc.
On October 23, 2017, the Company changed its
name to “ECARD INC.”, effective as of October 23, 2017.
Sale of Operating Business
On February 16, 2016, The Rushcap Group, Inc.
(“Rushcap”), an affiliate of Mark Shefts (then a significant shareholder of the Company), notified us that it would
discontinue its funding of our wholly owned subsidiary, effective March 31, 2016, under the Inventory Financing Agreement dated
June 19, 2015.
In light of the discontinuation of funding,
our Board assessed the operating company’s current business and funding prospects, including whether to transfer the operating
subsidiary to Michael R. Rosa, our founder and a significant shareholder, in accordance with that certain agreement among the Company,
Mr. Rosa and Mr. Shefts, dated July 14, 2014 (the “Break-up Agreement”). The Break-up Agreement was disclosed in the
Company’s Current Report on Form 8-K filed July 18, 2014, which is incorporated herein by reference.
Our Board concluded that the discontinuation
of funding would have a material adverse effect on our business, financial condition and results of operation, as it did not believe
that it would be able to timely secure funding to replace the discontinued Inventory Financing and on March 17, 2016, our Board
approved the sale of our sole operating subsidiary, Enviromart Industries, Inc., to Michael R. Rosa.
On March 21, 2016, we entered into a Stock
Purchase and Sale Agreement with Michael R. Rosa and Enviromart Industries, Inc., our sole operating subsidiary, pursuant to which
we transferred to Mr. Rosa all the issued and outstanding capital stock of Enviromart Industries, Inc. In consideration for such
transfer, Mr. Rosa transferred all of the 13,657,500 shares of the Company’s common stock owned by him, which have been since
reclassified as authorized and unissued shares.
The above-described transaction closed on July
21, 2016, effective April 1, 2016, and was approved by a majority of the Company’s shareholders by written consent on May
4, 2016. Upon consummation of the transaction, the Company’s operating business was discontinued and the Company started
seeking to acquire an operating business with strong growth potential. Upon the closing of the transaction, Mr. George Adyns resigned
from the Board and resigned from his position as the Company’s Chief Financial Officer.
On October 5, 2017, the Company entered a share
exchange agreement with Eastone Equities, LLC and certain stockholders of the Companies (the “SPA”), pursuant to which
Eastone Equities, LLC acquired 44,566,412 shares of common stock of the Company (the “SPA Shares”) from the selling
stockholders for an aggregate purchase price of $295,000. The transaction contemplated in the SPA closed on October 9, 2017. The
shares so acquired represent approximately 90% of the Company’s issued and outstanding shares of common stock. The transaction
resulted in a change in control of the Company.
On
October 23, 2017, the Company changed its name to “ECARD INC.”, effective as of October 23, 2017.
On
July 6, 2018, the Company submitted application materials to FINRA and requested to change its then ticker symbol from “EVRT”
to “ECRD.” The Company’s common stock is currently quoted on the OTC Pink Market under the symbol “ECRD”.
All
of the disclosures in this Quarterly Report on Form 10-Q must be viewed in light of the disposition of our sole operating subsidiary
and the value of the value of the Company is now dependent upon its ability to locate and consummate the acquisition of an operating
business with strong growth potential.
Results
of Operations
For
the quarter ended September 30, 2019, we had a net loss of $1,279, as compared to that of $10,406 for the same period in 2018.
The decrease in loss was primarily due to a decrease in the Company’s operating expenses, which can be attributed to the
Company’s better budget control. We do not expect this loss to recur in subsequent periods. Unless and until the Company
acquires an operating business, we expect our expenses to consist of legal fees, accounting fees, and administrative costs related
to maintaining a public company.
General
and Administrative Expenses
General
and administrative expenses were $1,279 as of September 30, 2019, as compared to that of $10,406 for the same period in 2018.
General and administrative expenses consist primarily of professional fees.
Recent
Developments
None.
Critical
Accounting Policies and Significant Judgments and Estimates
The
Securities and Exchange Commission (“SEC”) issued disclosure guidance for “critical accounting policies.”
The SEC defines “critical accounting policies” as those that require the application of management’s most difficult,
subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently
uncertain and may change in subsequent periods.
Our
significant accounting policies are described below. We anticipate that the following accounting policies will require the application
of our most difficult, subjective or complex judgments:
Concentration
of Risk
Financial
instruments, which potentially subject us to concentrations of credit risk, consist principally of cash. Our cash balances are
maintained in accounts held by major banks and financial institutions located in the United States. The Company occasionally maintains
amounts on deposit with a financial institution that are in excess of the federally insured limits. The risk is managed by maintaining
all deposits in high quality financial institutions.
Income
Taxes
Income
taxes are provided in accordance with FASB ASC 740 “Accounting for Income Taxes”. A deferred tax asset or liability
is recorded for all temporary differences between financial and tax reporting and net operating loss carry forwards. Deferred
tax expense (benefit) results from the net change during the year of deferred tax assets and liabilities. Deferred tax assets
are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion of the deferred
tax assets will be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates
on the date of enactment. As of September 30, 2019, all deferred tax assets continue to be fully reserved.
Liquidity
and Capital Resources
As
of September 30, 2019, the Company had minimal cash.
As disclosed elsewhere in this Report, on October
5, 2017, the Company entered a certain SPA with Eastone Equities, LLC and certain selling stockholders, pursuant to which Eastone
Equities, LLC acquired 44,566,412 shares of common stock of the Company from the selling stockholders for an aggregate purchase
price of $295,000. The transactions contemplated in the SPA closed on October 9, 2017 and resulted in a change of control.
Simultaneously with the closing of the transactions
contemplated in the SPA, effective as of October 23, 2017, Mr. Wayne Tsao was appointed as the Company’s Chief Executive
Officer, President and Chairman of the Board. Ms. Charlene Cheng was appointed as the Chief Financial Officer and as a Director
of the Board.
As a result of the closing of the transactions
contemplated in the SPA and the resulting change of control, the Company started seeking to acquire an operating business with
strong growth potential.
The
value of the Company is now dependent upon our ability to locate and consummate the acquisition of an operating business with
strong growth potential. As of the date of this Report, we have minimal cash. However, unless and until the Company acquires an
operating business, we expect our expenses to consist of legal fees, accounting fees, and administrative costs related to maintaining
a public company.
If
the Company needs to raise additional funds, we intend to do so through equity and/or debt financing.
Going
Concern Consideration
During
the nine months ended September 30, 2019, the Company was unable to generate cash flows sufficient to support its operations and
was dependent on capital contributions made by one significant stockholder. In addition, the Company has experienced recurring
net losses, and has an accumulated deficit of $1,163,351 as of September 30, 2019. These factors raise substantial doubt about
the Company’s ability to continue as a going concern.
There
can be no assurance that sufficient funds required during the next year or thereafter will be generated from any future operations
or that funds will be available from external sources such as debt or equity financings or other potential sources. If the Company
were unable to raise capital from external sources when required, there would be a material adverse effect on its business. Furthermore,
there can be no assurance that any such required funds, if available, will be available on attractive terms or that they will
not have a significant dilutive effect on the Company’s existing stockholders. The Company is currently seeking to acquire
an operating company. However, there is no assurance that the Company will achieve this goal.
Off-Balance
Sheet Arrangements
The
Company has no off-balance sheet arrangements as defined in Item 303(a) (4) (ii) of the SEC’s Regulation SK.