Quarterly Report (10-q)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2019

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______________ to ______________

Commission File Number: 001-34714

Zhong Ya International Limited

(Exact name of registrant as specified in its charter)

Nevada		26-3045445
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

64 North Pecos Road, Suite 900 Henderson, NV		89074
(Address of principal executive offices)		(Zip Code)

(702) 472-5066
(Registrant’s telephone number, including area code)

Not Applicable
(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act: None.

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ]

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such ﬁles). Yes [X] No [ ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

[ ]	Large accelerated filer	[ ]	Accelerated filer
[X]	Non-accelerated filer	[X]	Smaller reporting company
		[ ]	Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised ﬁnancial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ]

Indicate by check mark whether the registrant is a shell company (as deﬁned in Rule 12b-2 of the Exchange Act). Yes [X] No [ ]

As of August 14, 2019, there were 1,805,001 shares of the registrant’s common stock, par value $0.001 per share, issued and outstanding.

TABLE OF CONTENTS

		Page
PART I—FINANCIAL INFORMATION
Item 1	Financial Statements.	3
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	11
Item 3.	Quantitative and Qualitative Disclosures About Market Risk.	13
Item 4.	Controls and Procedures.	13

PART II—OTHER INFORMATION
Item 1.	Legal Proceedings.	14
Item 1A.	Risk Factors.	14
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.	14
Item 3.	Defaults Upon Senior Securities.	14
Item 4.	Mine Safety Disclosures.	14
Item 5.	Other Information.	14
Item 6.	Exhibits.	14

SIGNATURES		15

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

ZHONG YA INTERNATIONAL LIMITED
CONDENSED BALANCE SHEETS

		June 30,		December 31,
		2019		2018
		(Unaudited)
ASSETS

TOTAL ASSETS	$	-	$	-

LIABILITIES AND STOCKHOLDERS’ (DEFICIT)

Current Liabilities
Accounts payable and accrued expenses	$	9,989	$	10,203
Due to related party		47,140		27,201

Total current liabilities		57,129		37,404

Stockholders’ (deficit):
Common stock, $0.001 par value, 50,000,000 shares authorized; 1,805,001 shares issued and outstanding as of June 30, 2019 and December 31, 2018, respectively		1,805		1,805
Additional paid-in capital		620,334		620,334
(Deficit)		(679,268)		(659,543)

Total stockholders’ (deficit)		(57,129)		(37,404)

TOTAL LIABILITIES AND STOCKHOLDERS' (DEFICIT)	$	-	$	-

ZHONG YA INTERNATIONAL LIMITED
CONDENSED STATEMENTS OF OPERATIONS
(UNAUDITED)

		For the three months ended				For the six months ended
		June 30,				June 30,
		2019		2018		2019		2018
Operating expenses:
General and administrative expenses	$	(12,756)	$	(10,377)	$	(19,725)	$	(15,731)

Net (loss)	$	(12,756)	$	(10,377)	$	(19,725)	$	(15,731)

(Loss) per common share, basic and diluted	$	(0.01)	$	(0.06)	$	(0.01)	$	(0.09)

Weighted average shares outstanding, basic and diluted		1,805,001		187,350		1,805,001		172,736

ZHONG YA INTERNATIONAL LIMITED
CONDENSED STATEMENT OF CHANGES IN STOCKHOLDERS’ (DEFICIT)

					Additional
	Common Stock				Paid-in
	Shares		Amount		Capital		Deficit		Total

Balance, December 31, 2017	85,050	$	85	$	82,809	$	(123,432)	$	(40,538)
Stock issued for accounts payable and accrued expenses	102,300		102		34,436		-		34,538
Net (loss)	-		-		-		(15,731)		(15,731)

Balance, June 30, 2018 (Unaudited)	187,350	$	187	$	117,245	$	(139,163)	$	(21,731)


Balance, December 31, 2018	1,805,001	$	1,805	$	620,334	$	(659,543)	$	(37,404)
Net (loss)	-		-		-		(19,725)		(19,725)

Balance, June 30, 2019 (Unaudited)	1,805,001	$	1,805	$	620,334	$	(679,268)	$	(57,129)

ZHONG YA INTERNATIONAL LIMITED
CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)

		For the six months ended
		June 30,
		2019		2018
Cash flows from operating activities:

Net (loss)	$	(19,725)	$	(15,731)
Change in operating assets and liabilities:
Increase in accounts payable and accrued expenses		19,725		15,731

Net cash (used in) operating activities	$	-	$	-

Supplemental disclosure of non-cash investing and financing activities:

Accounts payable and accrued expenses paid directly by related party	$	19,939	$	14,867

Issuance of 102,300 shares for accounts payable and accrued expenses	$	-	$	34,538

1. GENERAL

Organization and Business Nature

On May 25, 2018, Western Lucrative Enterprises, Inc. (“WLUC”), an Iowa corporation, formed a wholly owned subsidiary, a Nevada corporation named Zhong Ya International Limited (“Zhong Ya”). On July 3, 2018, WLUC merged with and into Zhong Ya pursuant to an Agreement and Plan of Merger (“Merger Agreement”), with the surviving entity being Zhong Ya (such surviving entity referred to herein as the “Company”), for the purpose of changing domicile from Iowa to Nevada (“Merger”). Pursuant to the Merger Agreement, every one hundred outstanding shares of WLUC common stock were exchanged for one share of Zhong Ya common stock and the name of the Company was changed to Zhong Ya International Limited. The financial statements give retroactive effect to this Merger and the 1 for 100 stock exchange.

The Company has not generated any revenues from operations and can give no assurance of any future revenues. The Company will require substantial additional funding to initiate and develop its operations. There is no assurance that the Company will be able to obtain sufficient additional funds when needed, or that such funds, if available, will be obtainable on terms satisfactory to the Company (see Note 8).

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Accounting and Presentation

The accompanying unaudited condensed financial statements have been prepared on the accrual basis in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and interim financial information pursuant to the rules of the Securities and Exchange Commission (the “SEC”) and have been consistently applied. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Interim results are not necessarily indicative of results for the full year. These financial statements should be read in conjunction with the audited financial statements and notes thereto included in the Company’s Form 10-K for the fiscal year ended December 31, 2018, which was filed with the SEC on April 1, 2019.

Cash and Cash Equivalents

The Company considers all liquid investments with an original maturity of three months or less that are readily convertible into cash to be cash equivalents.

Income Taxes

The Company has not generated any taxable income, and, therefore, no provision for income taxes has been provided.

The Company accounts for income taxes in accordance with FASB ASC 740, Income Taxes , which requires the recognition of deferred income taxes for differences between the basis of assets and liabilities for financial statement and income tax purposes. Deferred tax assets and liabilities represent the future tax consequences for those differences, which will either be taxable or deductible when the assets and liabilities are recovered or settled. Deferred taxes are also recognized for operating losses that are available to offset future taxable income. A valuation allowance is established when necessary to reduce deferred tax assets to the amount expected to be realized. As of June 30, 2019 and December 31, 2018, the Company has established a full valuation allowance against its deferred tax assets, principally for operating losses, due to the uncertainty in realizing the benefits.

The Company follows the provisions of FASB ASC 740-10-25. The provisions prescribe a recognition threshold and measurement attribute for the recognition and measurement of tax positions taken or expected to be taken in income tax returns and require that uncertain tax positions are evaluated in a two-step process. The Company does not have any uncertain tax positions.

Fair Value of Financial Instruments

FASB ASC 820, Fair Value Measurement , specifies a hierarchy of valuation techniques based upon whether the inputs to those valuation techniques reflect assumptions other market participants would use based upon market data obtained from independent sources (observable inputs). In accordance with ASC 820, the following summarizes the fair value hierarchy:

Level 1 Inputs – Unadjusted quoted market prices for identical assets and liabilities in an active market that the Company has the ability to access.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Fair Value of Financial Instruments (continued)

Level 2 Inputs – Inputs, other than the quoted prices in Level 1, that are observable either directly or indirectly.

Level 3 Inputs – Inputs based on prices or valuation techniques that are both unobservable and significant to the overall fair value measurements.

FASB ASC 820 requires the use of observable market data, when available, in making fair value measurements. When inputs used to measure fair value fall within different levels of the hierarchy, the level within which the fair value measurement is categorized is based on the lowest level input that is significant to the fair value measurements. Valuation techniques used need to maximize the use of observable inputs and minimize the use of unobservable inputs.

The Company did not identify any assets or liabilities that are required to be presented at fair value on a recurring basis. Non-derivative financial instruments include payables and due to related parties. As of June 30, 2019, and December 31, 2018, the carrying values of these financial instruments approximated their fair values due to their short-term nature.

Use of Estimates

The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect certain 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 revenues and expenses during the reporting period. Actual results could differ from those estimates.

Earnings (Loss) per Share

The Company computes net earnings (loss) per share of common stock in accordance with FASB ASC 260, Earnings Per Share and SEC Staff Accounting Bulletin No. 98 (“SAB 98”). Under the provisions of ASC 260 and SAB 98, basic net earnings (loss) per common share is computed by dividing the amount of net income (loss) available to common stockholders by the weighted average number of shares of common stock outstanding during the period. Diluted income per share includes the effect of dilutive common stock equivalents from the assumed exercise of options, warrants, convertible preferred stock and convertible notes. The Company’s common stock equivalents, if any, are excluded in the computation of diluted net (loss) per share since their inclusion would be anti-dilutive.

3. RECENTLY ISSUED ACCOUNTING STANDARDS

As of the date of this quarterly report, there are no recently issued accounting pronouncements which adoption would have a material impact on the Company’s financial statements.

4. COMMON STOCK

Upon completion of the Merger on July 3, 2018, the surviving entity, Zhong Ya, had fifty million (50,000,000) shares of common stock authorized, par value $0.001 per share. As of June 30, 2019 and December 31, 2018, there were 1,805,001 shares of common stock issued and outstanding, respectively.

In May 2018, WLUC formed a wholly-owned Nevada corporation for the purposes of changing domicile from Iowa to Nevada and changing its name to Zhong Ya International Limited. The common stock of WLUC was exchanged on July 3, 2018 for the common stock of Zhong Ya, and the Iowa company was merged into Zhong Ya. Each one hundred (100) shares of common stock of WLUC issued and outstanding were cancelled and converted automatically into one (1) share of common stock of Zhong Ya. The transaction decreased the number of outstanding shares from 18,735,000 to 187,350. These financial statements have been retroactively adjusted to reflect this exchange.

In November 2018, the Company issued 1,617,650 shares of common stock valued at $0.31 per share for Wenjian Liu’s services as the Chief Executive Officer, Chief Financial Officer, secretary and director of the Company. Compensation expense for the issuance of common stock to Mr. Liu was $504,707.

5. INCOME TAXES

The Company is subject to United States tax laws which provides for a flat rate of 21% for 2019 and 2018. No provision for United States federal taxes has been made as the Company had taxable losses of approximately $12,000 and $10,000 for the three months, and approximately $19,000 and $16,000 for the six months ended June 30, 2019 and 2018, respectively.

5. INCOME TAXES (continued)

The provision for income taxes for the three and six months ended June 30, 2019 and 2018 are summarized as follows:

		For the three months ended June 30,				For the six months ended June 30,
		2019		2018		2019		2018
Current	$	-	$	-	$	-	$	-
Deferred		2,679		2,179		4,143		3,304
(Increase) in valuation allowance		(2,679)		(2,179)		(4,143)		(3,304)
Total	$	-	$	-	$	-	$	-

The primary components that give rise to deferred income taxes at June 30, 2019 and December 31, 2018 are as follows:

		June 30, 2019		December 31, 2018
Deferred tax assets (liabilities):
Net operating loss carry forwards	$	37,165	$	33,022
Less: valuation allowance		(37,165)		(33,022)
Total deferred tax assets (liabilities)	$	-	$	-

The Company reviews the valuation allowance to determine whether there is sufficient positive or negative evidence to support a change in judgment about the realization of the deferred tax asset. The Company has established 100% valuation allowances as of June 30, 2019 and December 31, 2018. The valuation allowance increased by $4,143 and $3,304 during the six months ended June 30, 2019 and 2018, respectively.

The following table reconciles the U.S. statutory rates to the Company’s effective tax rate for the three and six months ended June 30, 2019 and 2018:

	For the three months ended June 30,		For the six months ended June 30,
	2019	2018	2019	2018
Federal statutory tax rate	21.0%	21.0%	21.0%	21.0%
Valuation allowance	(21.0)	(21.0)	(21.0)	(21.0)
Effective tax rate	-%	-%	-%	-%

6. DUE TO RELATED PARTY

As of June 30, 2019, and December 31, 2018, the Company had a non-interest-bearing payable of $47,140 and $27,201, respectively, due to the principal stockholder, who also serves as sole director, Chief Executive Officer, Chief Financial Officer, secretary of the Company, who advanced funds for the Company’s operations.

7. CONTINGENCIES

The Company could become a party to various legal actions arising in the ordinary course of business. Matters that are probable of unfavorable outcomes to the Company and which can be reasonably estimated are accrued. Such accruals are based on information known about the matters, the Company’s estimates of the outcomes of such matters and its experience in contesting, litigating and settling similar matters.

As of the date of this report, there are no material pending legal proceedings to which the Company is a party or of which any of its property is the subject, nor are there any such proceedings known to be contemplated.

8. GOING CONCERN

The Company’s financial statements have been presented on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company is subject to the substantial business risks and uncertainties inherent to such an entity, including the potential risk of business failure. The Company has not generated any revenues since inception. While the Company is attempting to commence operations and generate revenues, the Company continues to be reliant upon its principal stockholder to support its operations. This raises substantial doubt about the Company’s ability to continue as a going concern.

Management plans to raise additional funds through the issuance of additional equity or debt securities.

While the Company believes in its ability to raise additional funds and the viability of its strategy, there can be no assurances that they will be successful. The Company’s ability to continue as a going concern is dependent upon the continued financial support from its principal stockholder and its ability to obtain the necessary equity or debt financing and eventually commence and attain profitable operations.

The accompanying financial statements do not include any adjustments that might be necessary should the Company be unable to continue as a going concern.

9. SUBSEQUENT EVENTS

The Company’s management has performed subsequent events procedures through August 14, 2019, which is the date the financial statements were available to be issued, and determined there were no subsequent events that would require recognition or disclosure in the financial statements.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

This quarterly report on Form 10-Q includes forward-looking statements. We have based these forward-looking statements on our current expectations and projections about future events. These forward-looking statements are subject to known and unknown risks, uncertainties and assumptions about us that may cause our 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 such forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may,” “should,” “could,” “would,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “continue,” or the negative of such terms or other similar expressions. The following discussion should be read in conjunction with our Financial Statements and related Notes thereto included elsewhere in this report. The terms “we,” “our” and the “Company” used throughout this report refer to Zhong Ya International Limited, a Nevada corporation.

Overview

We currently do not have any operations and did not actively conduct any operations for the quarter ended June 30, 2019. Our current business plan is to seek new business opportunities or to engage in a business combination with another company. The analysis of new business opportunities will be undertaken by or under the supervision of our management. As of the date of this report, we have not entered into any definitive agreement with any party, nor have there been any specific discussions with any potential business combination candidate regarding business opportunities for the Company. There can be no assurance that we will be able to identify and acquire any business entity. Even if we successfully acquire a business entity, there is no assurance that we can generate revenue and become profitable.

Results of Operations

Three months ended June 30, 2019 compared to June 30, 2018:

The following summary of our operations should be read in conjunction with our unaudited financial statements for the three months ended June 30, 2019 and 2018.

		For the three months ended June 30,
		2019		2018
Operating Expenses: General and administrative expenses	$	(12,756)	$	(10,377)
Net (loss)	$	(12,756)	$	(10,377)

During the three months ended June 30, 2019 and 2018, no revenues were recorded.

We had a net loss of $12,756 for the three months ended June 30, 2019 compared to a net loss of $10,377 for the three months ended June 30, 2018.

Our operating expenses for the three months ended June 30, 2019 were $12,756 compared to $10,377 for the three months ended June 30, 2018. Our general and administrative expenses represent fees paid for legal and accounting services in connection with our public company reporting obligations. The increase in our operating expense was due to the increase in legal and accounting fees.

We did not generate any revenue during these periods and do not expect to generate revenue for the foreseeable future. Therefore, we anticipate that we will continue to incur net losses for the foreseeable future.

Our financial statements have been prepared assuming that we will continue as a going concern and, accordingly, do not include adjustments relating to the recoverability and realization of assets and classification of liabilities that might be necessary should we be unable to continue in operation.

Six months ended June 30, 2019 compared to June 30, 2018:

The following summary of our operations should be read in conjunction with our unaudited financial statements for the six months ended June 30, 2019 and 2018.

		For the six months ended June 30,
		2019		2018
Operating expenses: General and administrative expenses	$	(19,725)	$	(15,731)
Net (loss)	$	(19,725)	$	(15,731)

During the six months ended June 30, 2019 and 2018, no revenues were recorded.

We had a net loss of $19,725 for the six months ended June 30, 2019 compared to a net loss of $15,731 for the six months ended June 30, 2018.

Our operating expenses for the six months ended June 30, 2019 were $19,725 compared to $15,731 for the six months ended June 30, 2018. Our general and administrative expenses represent fees paid for legal and accounting services in connection with our public company reporting obligations. The increase in our operating expense was due to the increase in legal and accounting fees.

Liquidity and Capital Resources

We expect we will require additional capital to meet our long-term operating requirements. We expect to finance our operations through advances from stockholders, the sale of equity or debt securities until we consummate a business combination. We currently have no cash and will need additional capital in order to continue operating and to acquire an operating business. Additional issuances of equity or convertible debt securities will result in dilution to our current stockholders. Further, such securities might have rights, preferences or privileges senior to our common stock. Additional financing may not be available upon acceptable terms, or at all. If adequate funds are not available or are not available on acceptable terms, we may not be able to take advantage of prospective new business endeavours or opportunities, which could significantly and materially restrict our business operations.

The financial statements have been prepared assuming that we will continue as a going concern, which contemplates that we will realize our assets and satisfy our liabilities and commitments in the ordinary course of business.

As of June 30, 2019, our total assets were $0 compared to $0 in total assets at December 31, 2018. As of June 30, 2019, our total liabilities were $57,129 compared to $37,404 in total liabilities at December 31, 2018. As of June 30, 2019, total liabilities were comprised of $9,989 in accounts payable and accrued expenses and $47,140 in related party payables. As of December 31, 2018, total assets were $0 and total liabilities were comprised of $10,203 in accounts payable and accrued expenses and $27,201 in related party payables.

Stockholders’ deficit was $57,129 as of June 30, 2019 compared to $37,404 as of December 31, 2018.

Off-Balance Sheet Arrangements

We have not entered into any 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, capital expenditures or capital resources and would be considered material to investors.

Commitments

We do not have any commitments which are required to be disclosed in tabular form as of June 30, 2019.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

As a smaller reporting company, we are not required to provide the information required by this item.

Item 4. Controls and Procedures.

(a) Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, carried out an evaluation of the effectiveness of our “disclosure controls and procedures” (as defined in the Exchange Act Rules 13a-15(e) and 15d-15(e) as of the end of the period covered by this report (the “Evaluation Date”). Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that as of the Evaluation Date, our disclosure controls and procedures were not effective to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act (i) is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms and (ii) 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 since our auditor had to make audit adjustments. Our management intends to work more closely with our auditors to correct this ineffectiveness.

(b) Changes in Internal Control over Financial Reporting

There were no changes in our internal controls over financial reporting that occurred during the last fiscal quarter to which this report relates that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II—OTHER INFORMATION

Item 1. Legal Proceedings.

None.

Item 1A. Risk Factors.

As a smaller reporting company, we are not required to provide the information required by this item.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

None.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

None.

Item 6. Exhibits.

Number		Description
31.1 *		Certification of Chief Executive Officer and Chief Financial Officer pursuant to Securities Exchange Act of 1934 Rule 13a-14(a) or 15d-14(a).

32.1 **		Certification pursuant to Securities Exchange Act of 1934 Rule 13a-14(b) or 15d-14(b) and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS*		XBRL Instance Document
101.SCH*		XBRL Taxonomy Extension Schema Document
101.CAL*		XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF*		XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*		XBRL Taxonomy Extension Label Linkbase Document
101.PRE*		XBRL Taxonomy Extension Presentation Linkbase Document

* Filed herewith

** Furnished herewith

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	Zhong Ya International Limited
Date: August 14, 2019
	By:	/s / Wenjian Liu
	Name:	Wenjian Liu
	Title:	Chief Executive Officer and Chief Financial Officer (Principal Executive Officer, and Principal Accounting Officer and Financial Officer)