NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1 – ORGANIZATION AND PRINCIPAL ACTIVITIES
The Company was incorporated under the laws of the State of Delaware on July 15, 2002 with authorized common stock of 50,000,000 shares at $0.001 par value with the name “North America Marketing Corporation”. On March 29, 2004, the Company changed the domicile to the State of Nevada. On December 30, 2008, the Company entered into and completed an agreement for share exchange to acquire 100% ownership of Asian Trends Broadcasting Inc. (“Asian Trends”) from its shareholders. Asian Trends operates liquid crystal display (“LCD”) flat-panel televisions and LCD billboards that advertise throughout Hong Kong and creates revenue by selling advertising airtime.
At the beginning of 2010, the Company was principally engaged in operating LCD flat-panel televisions and LCD billboards that advertise throughout Hong Kong, creating revenue by selling advertising airtime. On August 31, 2010 the Company acquired 100% ownership of Global Mania Empire Management Limited (“GME”) from its shareholders with a consideration of 22,147,810 shares. GME is a Hong Kong company that specializes in project and artist management. On January 21, 2011, the Company sold GME back to the original shareholders by receiving 22,147,810 shares of the Company’s common stock.
The Company assigned the LCD flat-panel televisions and LCD billboards advertisement operations to Great China Media Limited (the “Assignee”), and in return the Assignee shall pay 5% of the gross proceeds from the business to the Company. Revenue is recognized in arrears on a quarterly basis and when collectability is reasonably assured.
On March 20, 2013, the Board approved the change of the Company’s name to Yus International Group Limited and a one hundred-for-one (100:1) reverse stock split applying to all shares of common stock in the Company.
On April 29, 2013, the majority shareholder of the Company entered into a series of stock purchase agreements wherein the majority shareholder of the Company agreed to sell a total of 6,624,789 shares of common stock in the Company to four third party entities. On April 30, 2013, after the receipt of consideration and completion of all conditions precedent, the stock purchase agreements were completed and closed.
On May 16, 2013, Zhi Jian Zeng resigned as the Chief Executive Officer and director of the Company and Huang Jian Nan resigned as the Chief Financial Officer and director of the Company.
On May 16, 2013, Mr. Ho Kam Hang was appointed as the Chief Executive Officer of the Company and Dr. Chong Cheuk Man Yuki was appointed as the Chief Financial Officer of the Company. On that same date, the company appointed Mr. Yu Cheung Fai Alex, Ms. Chan Fuk Yu, Mr. Yu Lok Man and Mr. Yu Ka Wai as Directors of the Company.
On April 9, 2015, Mr. Yu Lok Man resigned as director of the Company and Dr. Chong Cheuk Man Yuki resigned as Chief Financial Officer of the Company. On the same day, Ms. Chen Yongqi Dawn was appointed as Chief Financial Officer of the Company.
On July 31, 2015, Ms. Chen Yongqi Dawn resigned as Chief Financial Officer of the Company. On the same day, Ms. Chan Fuk Yu was appointed as Chief Financial Officer of the Company.
On January 12, 2017, the Company acquired 100% of the outstanding equity capital of YUS International Holdings Limited (“YIH”) for US$10,000 from Ho Kam Hang, the Company’s Chief Executive Officer, and Yu Cheung Fai Alex, a director of the Company. This transaction has the effect of making YIH a wholly-owned subsidiary of the Company. YIH is a limited company organized under the laws of Hong Kong. Other than holding dormant bank accounts, YIH has no material assets, liabilities, or operations. It is accounted for as a common control business combination under ASC 805.
On September 30, 2017, Mr. Yu Ka Wai resigned as director of the Company.
No business has been generated since January 1, 2013 up to the date of the change of control. Since then, the company became dormant and has remained so until the date of this report. The Company is seeking acquisition candidates.
Our current business plan is to seek and identify appropriate business opportunity for development of our new line of business. We intend to seek opportunities demonstrating the potential of long-term growth as opposed to short-term earnings. However, at the present time, we have not identified any business opportunity that we plan to pursue, nor have we reached any agreement or definitive understanding with any person concerning an acquisition or merger.
NOTE 2 – BASIS OF PRESENTATION
The unaudited interim consolidated financial statements of the Company have been prepared pursuant to the rules and regulations of the SEC. Certain information and disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the following disclosures are adequate to make the information presented not misleading. All significant intercompany balances and transactions have been eliminated.
The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities. Actual results could differ from these estimates.
For the three months ended and as of September 30, 2017, the unaudited consolidated financial statements include the accounts of the Company and the following wholly-owned subsidiary:
1) YUS International Holdings Limited (a Hong Kong corporation) (“YIH”)
The acquisition of all of the issued and outstanding stock of YIH on January 12, 2017 was accounted for as a common control business combination under ASC 805. All significant inter-company balances and transactions have been eliminated.
In the opinion of the management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position as of September 30, 2017, results of operations and cash flows for the three months ended September 30, 2017. The results of operations for the three months ended September 30, 2017 are not necessarily indicative of the operating results for the full year.
NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) Economic and Political Risk
The Company’s major operations are conducted in Hong Kong. Accordingly, the political, economic, and legal environments in Hong Kong, as well as the general state of Hong Kong’s economy may influence the Company’s business, financial condition, and results of operations.
The Company’s operations in Hong Kong are subject to special considerations and significant risks not typically associated with companies in North America and Western Europe. These include risks associated with, among others, the political, economic, and legal environment. The Company’s results may be adversely affected by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, and rates and methods of taxation, among other things.
(b) Cash and Cash Equivalents
The Company considers all highly liquid investments purchased with original maturities of three months or less to be cash equivalents.
(c) Fair Value of Financial Instruments
The carrying amounts of financial instruments such as cash and accounts payable approximate their fair value because of the short maturities of these instruments. The fair value of receivables from associated companies and payables to associated companies are not practical to estimate based upon the related party nature of the underlying transactions.
(d) Earnings/Losses Per Share
Basic earnings/losses per share is computed by dividing income/loss available to common shareholders by the weighted-average number of common shares outstanding during the period. Diluted earnings/losses per share is computed similar to basic earnings/losses per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. As of the balance sheet dates, there were no dilutive securities outstanding.
(e) Foreign Currency Translation
The Company translates its foreign operations to US dollars in accordance with ASC 830, “
Foreign Currency Matters
“. The Company’s functional currency and reporting currency is U.S. dollar, except its subsidiary’s functional currency is Hong Kong Dollars (“HKD”).
The Company’s subsidiary, whose records are not maintained in that company’s functional currency, re-measure its records into its functional currency as follows:
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·
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Monetary assets and liabilities at exchange rates in effect at the end of each period
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·
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Nonmonetary assets and liabilities at historical rates
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·
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Revenue and expense items at the average rate of exchange prevailing during the period
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Gains and losses from these re-measurements were not significant and have been included in the Company’s results of operations.
The Company’s subsidiary, whose functional currency is not the U.S. dollar, translate their records into U.S. dollar as follows:
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·
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Assets and liabilities at the rate of exchange in effect at the balance sheet date
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·
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Equities at historical rate
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·
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Revenue and expense items at the average rate of exchange prevailing during the period
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The translation rates are as follows:
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3 months
ended
Sept 30,
2017
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Year ended
December 31,
2016
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3 months
ended
Sept 30,
2016
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|
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Period/year end HK$ : US$ exchange rate
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0.1282
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|
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0.1282
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|
|
|
0.1282
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Average HK$ : US$ exchange rate for the period/year
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|
|
0.1282
|
|
|
|
0.1282
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|
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0.1282
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(g) Recent Accounting Pronouncements
The Company has adopted all recently issued accounting pronouncements. The adoption of these accounting pronouncements including those not yet in effect, is not anticipated to have a material effect on the financial statements of the Company.
NOTE 4 – BUSINESS COMBINATION
On January 12, 2017, the Company acquired 100% of the issued share capital of YUS International Holdings Limited, a Hong Kong corporation (“YIH”) for a consideration of US$10,000. As the transaction is between entities under common control, the Company has reported the results of operations for the period in a manner similar to a pooling of interests under ASC 805. The Company has consolidated financial results since the initial date in which the above companies were under common control. Assets and liabilities were combined on their carrying values. Any difference between consideration given by the Company and the carrying values of the net assets of YIH is recognized in equity as either a dividend paid or received. All significant inter-company balances and transactions have been eliminated. Comparative financial statements are retrospectively restated as if the Company and YIH had always been combined.
Recognition of dividend paid:
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US$
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Consideration given by the Company
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10,000
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Carrying values in the books of YIH:
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Assets
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Cash and cash equivalent
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6,875
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Liabilities
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Due to shareholder assumed
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(5,593
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)
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Net assets to be combined
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1,282
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Deemed dividend paid
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(8,718
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)
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Company’s additional paid-in capital
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420,021
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Consolidated additional paid-in capital
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411,303
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NOTE
5 – ACCRUED EXPENSES
Accrued expenses as of September 30, 2017 and December 31, 2016 represent accrued fees payable to various professional parties and service providers.
NOTE 6 – ADVANCE FROM A SHAREHOLDER
The advance from a shareholder as of September 30, 2017 and December 31, 2016 are unsecured, interest-free and has no fixed repayment terms.
NOTE 7 – GOING CONCERN
The accompanying condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As of September 30, 2017, the Company has deficits in shareholders’ equity of US$110,768 and deficits in working capital of $110,768.
As of September 30, 2017 the Company may need additional cash resources to operate during the upcoming 12 months, and the continuation of the Company may be dependent upon the continuing financial support of investors, directors and/or shareholders of the Company. The Company intends to attempt to acquire additional operating capital through private equity/debt offerings to the public and existing investors to fund its business plan. However, there is no assurance that equity or debt offerings will be successful in raising sufficient funds to assure the eventual profitability of the Company. The financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts of and classification of liabilities that might be necessary in the event the Company cannot continue in existence.
NOTE 8:- CONTINGENT LIABILITIES
The Company has not filed the required audited financial statements of YUS International Holdings Limited (“YIH”) for the merger with YIH on January 12, 2017, details of which are disclosed in Note 1. The Company has not fulfilled the reporting requirements of the U.S. Securities and Exchange Commission, and may be subjected to follow-up action which is subjected to the decision of the relevant authorities.