NOTES TO INTERIM CONDENSED FINANCIAL STATEMENTS
For the Three and Nine Months Ended June 30, 2018
(Unaudited)
Note 1 – Nature of Operations and Change of Control
Yinghong Guangda Technology Limited, formerly UBL Interactive, Inc. (the “Company”) was incorporated under the laws of the State of Delaware on September 30, 2009. The Company provided public identity services to businesses by managing their online profile information and distributing this information uniformly to search engines, directory publishers, social networks and mobile services until the discontinuance of operations in July 2015.
Effective May 24, 2018, the Company changed its name from UBL Interactive, Inc. to Yinghong Guangda Technology Limited. The change in name followed the May 2, 2018 closing of the transactions contemplated by that certain Stock Purchase Agreement (the “Agreement”) by and between William R. Alessi, Jr., the Company’s then majority stockholder (the “Seller”) and Hero Grand Everbright International Limited (the “Purchaser”). Pursuant to the Agreement, the Seller sold to the Purchaser (i) 4,175,000 shares of common stock, par value $0.01 per share (the “Common Stock”) of the Company and (ii) 10,000,000 Class A Preferred Shares, par value $0.01 per share, each convertible to 1,000 shares of Common Stock (the “Preferred Shares”), subject to certain adjustments, in consideration for $375,000 in cash from corporate funds of the Purchaser (the “Transaction”). Following consummation of the Transaction, the Purchaser holds 99.6% of the voting securities of the Company. The Transaction has resulted in a change in control of the Company from the Seller to the Purchaser. Following the Transaction, the Company remains a “shell” company with no business operations.
Note 2 – Basis of Presentation
The accompanying unaudited interim condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and are presented in U.S dollars. Accordingly, they do not include all of the information and footnotes required under U.S GAAP for complete financial statements. These unaudited interim condensed financial statements should be read in conjunction with the audited financial statements included in the Company’s Annual Report on Form 10-K for fiscal year 2017. In the opinion of management, all adjustments of a normal recurring nature and considered necessary for a fair presentation, have been made. Operating results for the nine months ended June 30, 2018 are not necessary indicative of its results for a full year.
Going Concern Assumptions
These unaudited interim condensed financial statements have been prepared on a going concern basis which contemplates that the Company will be able to realize its assets and discharge its liabilities in the normal course of business for the foreseeable future. If the going concern assumptions were not appropriate for these financial statements then adjustments would be necessary in the carrying value of assets and liabilities, the reported revenue and expenses and the statement to financial position classifications.
As of June 30, 2018, the Company had an accumulated deficit of $3,160,887 since inception. As of June 30, 2018, the Company does not have any cash balance and is in the process of pursuing business opportunities.
The continuation of the Company as a going concern is dependent upon its ability to raise additional financing and identify a suitable business and ultimately attain and maintain profitable operations. There can be no assurance that such financing and profitability will occur in the amounts and with terms expected. In the event that cash flow from operations, if any, together with the proceeds of any future financings, are insufficient to meet the Company’s current operating needs, the Company will be required to re-evaluate its planned expenditures and allocate its total resources in such a manner as the Board of Directors and management deem to be in the Company’s best interest.
These factors raise substantial doubt about the Company’s ability to continue as a going concern. These condensed financial statements do not give effect to adjustments to the carrying value and classifications of assets and liabilities and related expenses that would be necessary should the Company be unable to continue as a going concern.
Use of Estimates and Assumptions and Critical Accounting Estimates and Assumptions
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 dates of the financial statements and the reported amounts of revenues and expenses during the reporting periods.
Critical accounting estimates are estimates for which (a) the nature of the estimate is material due to the levels of subjectivity and judgment necessary to account for highly uncertain matters or the susceptibility of such matters to change and (b) the impact of the estimate on financial condition or operating performance is material. The Company’s critical accounting estimates and assumptions affecting the financial statements are limited to management assessment of the Company’s ability to continue as a going concern as discussed above.
Note 3 – Recently Issued Accounting Pronouncements
From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”) or other standard setting bodies that are adopted by the Company as of the specified effective date. Unless otherwise discussed, the Company believes that the impact of recently issued standards that are not yet effective will not have a material impact on our financial position or results of operations upon adoption.
In February 2016, the FASB issued guidance in the form of a FASB ASU No. 2016-12, “Leases.” The new standard establishes a right-of-use (“ROU”) model that requires a lessee to record an ROU asset and a lease liability on the balance sheet for all leases with terms longer than twelve months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. A modified retrospective transition approach is required for lessees for capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain optional practical expedients available. The new standard is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company currently does not have any outstanding lease agreement.
Note 4
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Debt Settlements
In February 2018, the Company issued 4,175,000 shares of Common Stock to William Alessi, a former director and officer of the Company, to settle a debt owed to him in the amount of $7,635.
In April 2018, the Company issued 10,000,000 shares of Class A Preferred Shares to William Alessi to settle a debt owed to him in the amount of $1,666. Each Class A Preferred Shares entitles its holder to convert each such share into 1,000 shares of Common Stock at no additional cost.
Note 5
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Related Party Transactions
Due to related party in the amount of $19,708, as of June 30, 2018, represents the operating expenses paid by an officer who is also the director of the Company on behalf of the Company. The balance due to this related party is unsecured, non-interest bearing and has no stated repayment date.