REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To
the Board of Directors and
Stockholders of Lvyuan Green Building Material Technology Corporation
Opinion
on the Financial Statements
We
have audited the accompanying balance sheets of Lvyuan Green Building Material Technology Corporation (“the Company”)
as of April 30, 2018 and 2017, and the related statements of operations, stockholders’ equity, and cash flows for the two
years then ended, and the related notes (collectively referred to as the financial statements). In our opinion, the financial
statements present fairly, in all material respects, the financial position of the Company as of April 30, 2018 and 2017, and
the results of its operations and its cash flows for the two years then ended, in conformity with accounting principles generally
accepted in the United States of America.
Basis
for Opinion
These
financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on
the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company
Accounting Oversight Board (United States) (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 audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error
or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial
reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but
not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.
Accordingly, we express no such opinion.
Our
audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to
error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence
regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles
used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.
We believe that our audits provide a reasonable basis for our opinion.
Consideration
of the Company’s Ability to Continue as a Going Concern
The
accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed
in Note 5 to the financial statements, the Company has an accumulated deficit, net losses, and negative cash flows from operations.
These factors raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans
in regard to these matters are also described in Note 5. The financial statements do not include any adjustments that might result
from the outcome of this uncertainty.
/s/Fruci
& Associates II, PLLC
Fruci
& Associates II, PLLC
We
have served as the Company’s auditor since 2016
Spokane,
WA
July
30, 2018
NOTES
TO FINANCIAL STATEMENTS
1.
|
ORGANIZATION
AND PRINCIPAL ACTIVITIES
|
Lvyuan
Green Building Material Technology Corp. (the “Company”) was incorporated in the State of Nevada on January 10, 2013
as Green Supplements Online Inc. We changed our name to Lvyuan Green Building Material Technology Corp. on September 24, 2015.
Our principal executive offices are located at Room 1216, Building 3, Incubator Mansion, Development Zone, Daqing City, Heilongjiang
Province China. Our phone number is +86-755-2218-4466.
Our
business model was to buy nutrition and dietary products from different manufacturers and resell those products under our private
label. Our source of revenue from operations was to be reselling nutrition and dietary supply products. The line of nutrition
and dietary products that we intended to market was to be standard non-proprietary supplements and other products that contained
our label. Currently, we have not yet initiated any product development efforts nor generated any revenue to date.
2.
|
SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES
|
|
(a)
|
Basis of Presentation
|
The
Company maintains its general ledger and journals with the accrual method of accounting for financial reporting purposes. The
financial statements and notes are representations of management. Accounting policies adopted by the Company conform to U.S. GAAP
and have been consistently applied in the presentation of financial statements. The accompanying financial statements are presented
in U.S. dollars in conformity with accounting principles generally accepted in the United States of America and pursuant to the
rules and regulations of the SEC.
|
(b)
|
Net loss per common
share
|
The
Company complies with accounting and disclosure requirements of FASB ASC 260, “Earnings Per Share.” Net loss per common
share is computed by dividing net loss applicable to common stockholders by the weighted average number of common shares outstanding
for the period. At April 30, 2018 and 2017, the Company did not have any dilutive securities and other contracts that could, potentially,
be exercised or converted into common stock and then share in the earnings of the Company. As a result, diluted loss per common
share is the same as basic loss per common share for the period.
The
preparation of the 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 financial
statements and the reported amounts of revenues and expenses during the reporting periods. Management makes these estimates using
the best information available at the time the estimates are made; however actual results could differ materially from those estimates.
|
(d)
|
Recently issued
or adopted standards
|
The
Company does not expect the adoption of recently issued accounting pronouncements to have a significant impact on the Company’s
results of operations, financial position or cash flow.
As
of April 30, 2018, and 2017, the Company had $109,630 and $78,135 in accrued liabilities, respectively. The accrued liabilities
mainly consist of Professional fees.
The
Company complies with the accounting and reporting requirements of FASB ASC, 740, "Income Taxes," which requires an
asset and liability approach to financial accounting and reporting for income taxes. Deferred income tax assets and liabilities
are computed for differences between the financial statement and tax bases of assets and liabilities that will result in future
taxable or deductible amounts, based on enacted tax laws and rates applicable to the periods in which the differences are expected
to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected
to be realized. There were no unrecognized tax benefits as of April 30, 2018. FASB ASC 740 prescribes a recognition threshold
and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken
in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination
by taxing authorities. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax
expense. No amounts were accrued for the payment of interest and penalties at April 30, 2018. The Company is currently not aware
of any issues under review that could result in significant payments, accruals or material deviation from its position. The adoption
of the provisions of FASB ASC 740 did not have a material impact on the Company's financial position and results of operation
and cash flows as of and for the period ended April 30, 2018.
As
of April 30, 2018, we had a net operating loss carry-forward of approximately $(133,830) and a deferred tax asset of approximately
$28,104 using the statutory rate of 21%. The deferred tax asset may be recognized in future periods, not to exceed 20 years.
However, due to the uncertainty of future events we have booked valuation allowance of $(28,104)
|
|
April
30,
2018
|
|
April
30,
2017
|
Deferred
Tax Asset
|
|
$
|
28,104
|
|
|
$
|
21,490
|
|
Valuation
Allowance
|
|
|
(28,104
|
)
|
|
|
(21,490
|
)
|
Deferred
Tax Asset (Net)
|
|
$
|
—
|
|
|
$
|
—
|
|
The
Company files an income tax return in the U.S. federal jurisdiction and may file income tax returns in various U.S. states and
foreign jurisdictions. Generally, the Company is subject to income tax examinations by major taxing authorities during the three
year period prior to the period covered by these financial statements.
Due
to the change in ownership provisions of the Tax Reform Act of 1986, net operating loss carry forwards of approximately $133,830
for Federal income tax reporting purposes are subject to annual limitations. Should a change in ownership occur net operating
loss carry forwards may be limited as to use in future years.
5.
|
GOING
CONCERN AND CAPITAL RESOURCES
|
The
Company does not currently engage in any business activities that provide cash flow. During the next 12 months we anticipate incurring
costs related to:
●
|
filing
of Exchange Act reports,
|
●
|
payment
of annual corporate fees, and
|
●
|
investigating,
analyzing and consummating an acquisition.
|
As
of April 30, 2018, the Company had an accumulated deficit of $133,830. Management anticipates that fees associated with filing
of Exchange Act reports including accounting fees and legal fees and payment of annual corporate fees will not exceed $75,000
within next 12 months. We do not currently intend to retain any entity to act as a "finder" to identify and analyze
the merits of potential target businesses. Management intends to search for a business combination by contacting various sources
including, but not limited to, our affiliates, lenders, investment banking firms, private equity funds, consultants and attorneys
and does not plan to conduct a complete and exhaustive investigation and analysis of a business opportunity. Management decisions,
therefore, will likely be made without detailed feasibility studies, independent analysis, market surveys and the like which,
if we had more funds, would be desirable. If the management can find a suitable target company, we will have to budget for additional
fees relating to the investigation into the target company (including due diligence and possibly visiting the facilities) and
consummating the reverse merger, which may cost between $125,000 to $150,000. We expect that the expenses for the next 12 months
and beyond such time will be paid with amounts that may be loaned to or invested in us by our stockholders, management or other
investors. Since we have minimal assets and will continue to incur losses due to the expenses associated with being a reporting
company under the Exchange Act, we may cease business operations if we do not timely consummate a business combination.
Currently,
our ability to continue as a going concern is dependent upon our ability to generate future profitable operations and/or to obtain
the necessary financing to meet our obligations and repay our liabilities arising from normal business operations when they come
due. Our ability to continue as a going concern is also dependent upon our ability to find a suitable target company and enter
into a possible reverse merger with such company. Management’s plan includes obtaining additional funds by equity financing
through a reverse merger transaction and/or related party advances. However, there is no assurance of additional funding being
available.
The
Company may consider a business which has recently commenced operations, is a developing company in need of additional funds for
expansion into new products or markets, is seeking to develop a new product or service, or is an established business which may
be experiencing financial or operating difficulties and is in need of additional capital. In the alternative, a business combination
may involve the acquisition of, or merger with, a company which does not need substantial additional capital, but which desires
to establish a public trading market for its shares, while avoiding, among other things, the time delays, significant expense,
and loss of voting control which may occur in a public offering.
Any
target business that is selected may be a financially unstable company or an entity in its early stages of development or growth,
including entities without established records of sales or earnings. In that event, we will be subject to numerous risks inherent
in the business and operations of financially unstable and early stage or potential emerging growth companies. In addition, we
may effect a business combination with an entity in an industry characterized by a high level of risk, and, although our management
will endeavor to evaluate the risks inherent in a particular target business, there can be no assurance that we will properly
ascertain or assess all significant risks.
Our
management anticipates that it will likely be able to effect only one business combination, due primarily to our limited financing
and the dilution of interest for present and prospective stockholders, which is likely to occur as a result of our management’s
plan to offer a controlling interest to a target business in order to achieve a tax-free reorganization.
The
Company anticipates that the selection of a business combination will be complex and extremely risky. Our potential merger targets
are firms seeking either the benefits of a business combination with an SEC reporting company and/or the perceived benefits of
becoming a publicly traded corporation. Such perceived benefits of becoming a publicly traded corporation include, among other
things, facilitating or improving the terms on which additional equity financing may be obtained, providing liquidity for the
principals of and investors in a business, creating a means for providing incentive stock options or similar benefits to key employees,
and offering greater flexibility in structuring acquisitions, joint ventures and the like through the issuance of stock. While
a private operating company may achieve the same benefits by filing its own Exchange Act registration statement, such benefits
can be achieved at a potentially faster rate with limited regulatory review through the completion of a business combination with
a public reporting company. A potentially available business combination may occur in many different industries and at various
stages of development, all of which will make the task of comparative investigation and analysis of such business opportunities
extremely difficult and complex. The time required to select and evaluate a target business and to structure and complete a business
combination cannot presently be ascertained with any degree of certainty.
In
identifying, evaluating and selecting a target business, we may encounter intense competition from other entities having a business
objective similar to ours. There are numerous blank check companies that have gone public in the United States that have significant
financial resources, that are seeking to carry out a business plan similar to our business plan. Many of these entities are well
established and have extensive experience identifying and effecting business combinations directly or through affiliates. Many
of these competitors possess greater technical, human and other resources than us and our financial resources will be relatively
limited when contrasted with those of many of these competitors.
6. LOANS
FROM OFFICERS AND DIRECTORS
|
As
of April 30, 2018, the Company had received loans from its officers and directors aggregating $105,999. The loans are non-interest
bearing and contain no specific repayment terms.
7.
|
COMMON
STOCK TRANSACTIONS
|
During
the past two years there have been no stock issuances.
In
accordance with ASC 855, the Company has analyzed its operations subsequent to April 30, 2018 through July 30, 2018 when these
financial statements were issued, and has determined that it does not have any other material subsequent events to disclose in
these financial statements.