NOTES TO FINANCIAL STATEMENTS
December 31, 2019 and 2018
NOTE
1. GENERAL ORGANIZATION AND BUSINESS
Jade
Global Holdings, Inc. (the “Company”) was incorporated as FanSport, Inc., on March 16, 2011, to develop and provide
social gaming mobile applications for fantasy sports enthusiasts. On September 3, 2013, the Company changed its name from FanSport,
Inc. to Media Analytics Corporation. The Company was focused on developing or acquiring software that helps companies track their
social data.
On
December 15, 2016, Media Analytics Corporation, the majority shareholders of the Company (the “Sellers”) and certain
buyers (the “Purchasers”) entered into a stock purchase agreement (the “Stock Purchase Agreement”), whereby
the Purchasers purchased from the Sellers 380,000 shares of common stock, par value $0.0001 per share, of the Company (the “Shares”),
representing approximately 75.99% of the issued and outstanding shares of the Company. On December 27, 2016, the Company changed
its name to Jade Global Holdings, Inc. The Company intends to engage in the wholesale and retail trade of jade and jade products
through retail stores and online websites. In connection therewith, Michael Johnson, the Company’s then-sole officer and
Director, resigned from his positions and named Guoqiang Qian, Scott Silverman and Min Shi as directors, and Guoqiang Qian, Scott
Silverman and Min Shi to the positions of President and CEO, Treasurer and CFO, and Secretary, respectively.
On July 20, 2017, Jade Global Holdings
received Chinese government approval to form a new wholly-owned foreign enterprise operating subsidiary in Shanghai, P.R.China,
Shanghai Jaedo Jewelry Co., Ltd. (“Jaedo”). Jaedo was to seek opportunities to either enter into joint ventures or
to open wholly-owned jade trading clubs in the People’s Republic of China. As of December 31, 2019, Jaedo had not been formed
and the application was abandoned. As Jaedo was never formed and did not commence operations, no consolidation was necessary,
and the accompanying financial statements solely represent Jade Global Holdings, Inc.
NOTE
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Accounting Basis
These financial statements are prepared on
the accrual basis of accounting in conformity with accounting principles generally accepted in the United States of America. The
Company’s fiscal year end is December 31.
Cash
and Cash Equivalents
Cash
and cash equivalents are reported in the balance sheet at cost, which approximates fair value. For the purpose of the financial
statements, cash equivalents include all highly liquid investments with an original maturity of three months or less when purchased.
Earnings
(Loss) per Share
The Company has adopted FASB ASC 260,
Earnings per Share. Basic earnings (loss) per share is calculated by dividing the Company’s net income (loss) available
to common shareholders by the weighted average number of common shares outstanding during the year. Diluted earnings (per share
is calculated by dividing the Company’s net income available to common shareholders by the diluted weighted average number
of shares outstanding during the period, and is not presented if antidilutive due to net losses. The diluted weighted average
number of shares outstanding is the basic weighted number of shares adjusted as of the first of the year for any potentially dilutive
debt or equity. There were no dilutive or potentially dilutive securities outstanding as of December 31, 2019 and 2018.
JADE
GLOBAL HOLDINGS, INC.
NOTES TO FINANCIAL STATEMENTS
December 31, 2019 and 2018
NOTE
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – Continued
Income
Taxes
The
Company adopted FASB ASC 740, Income Taxes, at its inception. Under FASB ASC 740, 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, including tax loss and credit carryforwards, 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. Deferred income tax expense represents the change during the period
in the deferred tax assets and deferred tax liabilities. The components of the deferred tax assets and liabilities are individually
classified as current and non-current based on their characteristics. Deferred tax assets are reduced by a valuation allowance
when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be
realized. No deferred tax assets or liabilities were recognized as of December 31, 2019 or December 31, 2018.
Property
and Equipment
Property
and equipment is recorded at cost. Expenditures for major betterments and additions are charges to the asset accounts, while replacements,
maintenance and repairs which do not improve or extend the lives of the respective assets are charged to expense as incurred.
Property
and Equipment at December 31, 2019 and 2018 were as follows:
|
|
December 31,
2019
|
|
|
December 31,
2018
|
|
Furniture
|
|
$
|
11,811
|
|
|
$
|
11,811
|
|
Less accumulated depreciation
|
|
|
(6,141
|
)
|
|
|
(2,362
|
)
|
|
|
|
|
|
|
|
|
|
|
|
$
|
5,670
|
|
|
$
|
9,449
|
|
Depreciation
Depreciation
of property and equipment is computed by the straight-line method using various rates based generally on the useful lives of the
assets, which range from five to seven years.
During
the years ended December 31, 2019 and 2018, the Company recorded depreciation expense of $3,779 and $2,362, respectively.
Fair
Value of Financial Investments
The fair value of cash and cash equivalents,
accounts payable, accrued liabilities, and loans payable approximates the carrying amount of these financial instruments due to
their short term maturity.
Advertising
The
Company will expense advertising as incurred. Advertising expense was $0 and $3,206 for the twelve months ended December 31, 2019
and December 31, 2018, respectively.
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES – Continued
Use
of Estimates
The
preparation of financial statements in conformity with accounting principles generally accepted in the United States of America
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 financial statements and the reported amounts of revenue and expenses
during the reporting period. Actual results could differ from those estimates.
Reclassifications
When preparing the financial statements for
the twelve months ended December 31, 2019, management determined that certain amounts included in the Company’s December
31, 2018 financial statements required reclassification. In the twelve months ended December 31, 2018, Management and Consulting
Fees – related party were presented as part of General and Administrative Expense, and Transfer Agent Fees were presented
separately. In the current statements, these amounts have been reclassified to more accurately reflect the Statements of Operations.
In addition, proceeds received from Loans Payable - related party were reclassified from operating activities to financing activities.
No other changes were required in connection with the reclassification. Such reclassification had no effect on the financial position,
loss per share, operations or cash flows for the periods ended December 31, 2018.
In the twelve months ended December 31, 2018,
Advances from related party were presented as part of General and Administrative Expense. In the current statements, these amounts
have been reclassified to more accurately reflect the Statements of Operations. No other changes were required in connection with
the reclassification. Such reclassification had no effect on the financial position, loss per share, operations or cash flows for
the periods ended December 31, 2018.
Related
Parties
Related
parties, which can be a corporation, individual, investor or another entity are considered to be related if the party has the
ability, directly or indirectly, to control the other party or exercise significant influence over the Company in making financial
and operating decisions. Companies are also considered to be related if they are subject to common control or common significant
influence. The Company has these relationships.
Intangible Assets
The cost of intangible assets with determinable
useful lives is amortized to reflect the pattern of economic benefits consumed, either on a straight-line or accelerated basis
over the estimated periods benefited. Patents, technology and other intangibles with contractual terms are generally amortized
over their respective legal or contractual lives. Customer relationships, brands and other non-contractual intangible assets with
determinable lives are amortized over periods generally ranging from 5 to 30 years. When certain events or changes in operating
conditions occur, an impairment assessment is performed and lives of intangible assets with determinable lives may be adjusted.
During the years ended December 31, 2019 and 2018, the Company recorded impairment loss of $350 and $0, respectively.
JADE
GLOBAL HOLDINGS, INC.
NOTES TO FINANCIAL STATEMENTS
December 31, 2019 and 2018
NOTE
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – Continued
Intangible
assets at December 31, 2019 and 2018 were as follows:
|
|
December 31,
2019
|
|
|
December 31,
2018
|
|
Trademark
|
|
$
|
-
|
|
|
$
|
350
|
|
Less accumulated amortization
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
-
|
|
|
$
|
350
|
|
Recent
Authoritative Accounting Pronouncements
The Company has reviewed all recently-issued
pronouncements, and has determined them to have no current applicability to the Company, or their effect on the financial statements
is not significant.
Concentrations of Credit Risk
The Company maintains its cash in institutions
insured by the Federal Deposit Insurance Corporation (FDIC) up to $250,000. Our cash balances at December 31, 2019 and December
31, 2018 were not in excess of the FDIC insurance threshold
NOTE
3. GOING CONCERN
As reflected in the accompanying financial
statements, the Company has a net loss of $214,963 and negative cash flows of $17,816 for the twelve months ended December 31,
2019. In addition, the Company has not had any revenues and the only prospect for positive cash flow is through the issuance of
common stock or debt. If the Company does not begin to generate sufficient revenue or raise additional funds through a financing,
the Company may need to incur additional liabilities with certain related parties to sustain the Company’s existence. There
are currently no plans or agreements in place to provide such funding. The Company will require additional funding to finance
the growth of its future operations as well as to achieve its strategic objectives. As a result of the Covid-19 crisis, the Company
may experiencing difficulties in raising these funds due to economic impacts on funding sources. This raises substantial doubt
about its ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the
Company’s ability to raise additional capital and generate revenue. The financial statements do not include any adjustments
that might be necessary if the Company is unable to continue as a going concern.
NOTE
4. INCOME TAXES
The Financial Accounting Standards Board
(FASB) has issued FASB ASC 740-10. This standard requires a company to determine whether it is more likely than not that a tax
position will be sustained upon examination based upon the technical merits of the position. If the more-likely-than-not threshold
is met, a company must measure the tax position to determine the amount to recognize in the financial statements. As a result of
the implementation of this standard, the Company performed a review of its material tax positions in accordance with recognition
and measurement standards established by FASB ASC 740-10, and did not have any material unrecognized tax benefits as of December
31, 2019 or December 31, 2018.
The Company files tax returns in the U.S.
federal jurisdiction and the state of Florida. Our policy is to recognize interest and penalties related to uncertain tax positions
in income tax expense. During the twelve months ended December 31, 2019 and 2018, the Company did not recognize expense for interest
or penalties related to income tax, and does not have any amounts accrued at December 31, 2019 or 2018, as the Company does not
believe it has taken any uncertain tax positions. Tax returns for the years ended December 31, 2016 through December 31, 2019
have been filed and remain open for examination by the taxing authorities.
JADE
GLOBAL HOLDINGS, INC.
NOTES TO FINANCIAL STATEMENTS
December 31, 2019 and 2018
NOTE
4. INCOME TAXES – Continued
Deferred
taxes are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences and operating
loss and tax credit carryforwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences
are the differences between the reported amounts of assets and liabilities and their tax basis. Deferred tax assets are reduced
by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred
tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates
on the date of enactment.
On December 22, 2017, the 2017 Tax Cuts
and Jobs Act (the Tax Act) was enacted into law including a one-time mandatory transition tax on accumulated foreign earnings and
a reduction of the corporate income tax rate to 21%. We are required to recognize the effect of the tax law changes in the period
of enactment, such as determining the transition tax, remeasuring our U.S. deferred tax assets and liabilities as well as reassessing
the net realizability of our deferred tax assets and liabilities. The Company does not have any foreign earnings and therefore,
we do not anticipate the impact of a transition tax.
At December 31, 2019 and 2018, the Company
had net operating loss carryforwards of approximately $2,117,037 and $1,902,074, respectively, which may be offset against future
taxable income indefinitely. No tax benefit has been reported in the financial statements because the potential tax benefits of
the net operating loss carryforwards of approximately $444,578 and $399,436, respectively, are offset by valuation allowances of
the same amounts. The change in valuation allowance was $45,142 and $151,859 during the years ended December 31, 2019 and 2018,
respectively.
Due
to the change in ownership provisions of the Tax Reform Act of 1986, net operating loss carryforwards for Federal income tax reporting
purposes are subject to annual limitations. As a result of the change in majority ownership, net operating loss carryforwards
may be limited as to future use.
NOTE
5. STOCKHOLDERS’ EQUITY (DEFICIT)
Preferred
Stock
There are 10,000,000 Preferred Shares at
$0.0001 par value authorized with none issued and outstanding at December 31, 2019 or December 31, 2018.
Common
Stock
There are 25,000,000 Common shares at $0.0001
par value authorized with 12,000,383 shares issued and outstanding at December 31, 2019 and December 31, 2018. There were no common
stock transactions during the years ended December 31, 2019 and 2018.
NOTE 6. RELATED PARTY TRANSACTIONS
Loans Payable
On August 7, 2017, the Company’s
CEO loaned the Company $1,135 to fund operations.
During the twelve months ended December
31, 2019 and 2018, Jade International Group, Inc., a company owned and controlled by the Company’s CEO, loaned the Company
$89,555 and $276,300, respectively, to fund operations. During the 12 months ended December 31, 2019 and 2018, the Company repaid
$0 and $6,584, respectively.
The loans are non-interest bearing and
due on demand. As of December 31, 2019 and 2018, $360,406 and $270,851, respectively, was owed on these loans.
JADE
GLOBAL HOLDINGS, INC.
NOTES
TO FINANCIAL STATEMENTS
December 31, 2019 and 2018
NOTE 6. RELATED PARTY TRANSACTIONS – Continued
Management Fees
During the twelve months ended December
31, 2019 and 2018, the Company incurred $120,000 and $90,000, respectively, in financial management consulting fees with EverAsia
Financial Group, Inc, a company beneficially owned or controlled by Scott Silverman, our Chief Financial Officer and Director.
At December 31, 2019 and 2018, $88,500 and $15,000 in fees were due to EverAsia Financial Group.
During the twelve months ended December
31, 2019 and 2018, the Company incurred $18,000 and $203,000, respectively, in management consulting fees with Forbstco International,
LLC, a company beneficially owned or controlled by Min Shi, our Secretary and Director. At December 31, 2019 and 2018, $10,000
and $0, respectively, in fees were due Forbstco International.
The Company owed $458,906 and $285,851
to these related parties for management consulting services at December 31, 2019 and 2018, respectively.
NOTE 7. SUBSEQUENT EVENTS
On March 11, 2020, Jade International Group,
Inc, a company owned and controlled by the Company’s CEO, contributed $14,980 to the Company to fund operations. The contribution
was accounted for as contributed capital.
On May 14, 2020, Jade International Group,
Inc, a company owned and controlled by the Company’s CEO, contributed $10,000 to the Company to fund operations. The contribution
was accounted for as contributed capital.
The Company has evaluated events from December
31, 2019 through the date these financial statements were issued and there are no additional events requiring disclosure.