America Great Health - Quarter Report: 2018 December (Form 10-Q)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549   

FORM 10-Q

For the quarterly period ended December 31, 2018

For the transition period from                         to                            

Commission File No. 000-27873

America Great Health

(Exact name of registrant as specified in its charter)

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 ☒No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted 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 and post such files). Yes ☐   No ☒

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, 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.

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 ☐   No ☒

Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date.  The number of shares outstanding of the registrant’s common stock as of November 23, 2020 was 20,236,021,836.

AMERICA GREAT HEALTH AND SUBSIDIARIES

TABLE OF CONTENTS

PART I – FINANCIAL INFORMATION

This Quarterly Report includes forward-looking statements within the meaning of the Securities Exchange Act of 1934 (the “Exchange Act”). These statements are based on management’s beliefs and assumptions, and on information currently available to management. Forward-looking statements include the information concerning our possible or assumed future results of operations set forth under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Forward-looking statements also include statements in which words such as “expect,” “anticipate,” “intend,” “plan,” “believe,” “estimate,” “consider” or similar expressions are used.

Forward-looking statements are not guarantees of future performance. They involve risks, uncertainties and assumptions. Our future results and shareholder values may differ materially from those expressed in these forward-looking statements. Readers are cautioned not to put undue reliance on any forward-looking statements.

Item 1.      Financial Statements

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

AMERICA GREAT HEALTH AND SUBSIDIARIES

FORMERLY CROWN MARKETING AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 1 – BASIS OF PRESENTATION

The accompanying unaudited condensed consolidated financial statements of America Great Health, formerly Crown Marketing and Subsidiaries (the “Company”) have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X.  Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all normal recurring adjustments considered necessary for a fair presentation have been included.  Operating results for the six months ended December 31, 2018 are not necessarily indicative of the results that may be expected for the year ending June 30, 2019.

Nature of the Business

America Great Health, formerly Crown Marketing, is a Wyoming corporation (the "Company"). A change of control of the Company was completed on January 19, 2017 from Jay Hooper, the former officer and director of the Company and its former majority shareholder. Control was obtained by the sale of 16,155,746,000 shares of Company common stock from Mr. Hooper to an investor group led by Mike Q. Wang.  In connection with the change of control, the Company sold to its former majority shareholder a subsidiary for $100 and another subsidiary in exchange for the cancellation of all payables and accrued expenses. After December 31, 2016, the Company’s operations are determined and structured by the new investor group. As such, the Company accounted for all of its assets, liabilities and results of operations up to January 1, 2017 as discontinued operations.

On March 1, 2017, the Company filed with the Secretary of State of the State of Wyoming an Articles of Amendment to change the corporate name from Crown Marketing to America Great Health.

On March 9, 2017, the Company formed a wholly owned subsidiary, America Great Health, under the laws of the State of California.

Going Concern

The accompanying condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. As reflected in the accompanying condensed consolidated financial statements, the Company has incurred recurring net losses. For the six months ended December 31, 2018, the Company recorded a net loss of $44,174, used cash to fund operating activities of $23,955, and at December 31, 2018, had a shareholders’ deficit of $151,626. These factors create substantial doubt about the Company’s ability to continue as a going concern within the next twelve months from the date these financial statements are available to be issued.  The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

During the year ended June 30, 2017, the Company’s former majority shareholder sold his shares to an investor group. The new owners’ plans to continue as a going concern revolve around its ability to achieve profitable operations, as well as raise necessary capital to pay ongoing general and administrative expenses of the Company. The ability of the Company to continue as a going concern is dependent on securing additional sources of capital and the success of the Company’s plan. There is no assurance that the Company will be successful in raising the additional capital or in achieving profitable operations.

Our cash needs for the months ended December 31, 2018 were primarily met by loans and advances from current majority shareholder.  As of December 31, 2018, we had a cash balance of $136. We intend to finance operating costs over the next twelve months with existing cash on hand and advance from current majority shareholder.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Consolidation

The condensed consolidated financial statements include the accounts of the Company and its current wholly owned subsidiary, America Great Health in California. Intercompany transactions and accounts have been eliminated in consolidation.

Reclassifications

Prior period numbers have been reclassified to conform to the current period presentation. Professional fee was reclassified to be separately disclosed on the Consolidated Statements of Operations for the six months ended December 31, 2017.

Estimates 

The preparation of the financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Significant estimates include accounting for potential liabilities and the assumptions made in valuing stock instruments issued for services. Actual results could differ from those estimates.

Fair Value Measurements

Fair value measurements are determined using authoritative guidance issued by the FASB, with the exception of the application of the guidance to non-recurring, non-financial assets and liabilities as permitted. Fair value is defined in the authoritative guidance as the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. A fair value hierarchy was established, which prioritizes the inputs used in measuring fair value into three broad levels as follows:

Level 1—Quoted prices in active markets for identical assets or liabilities.

Level 2—Inputs, other than the quoted prices in active markets, are observable either directly or indirectly.

Level 3—Unobservable inputs based on the Company’s assumptions.

The Company is required to use observable market data if available without undue cost and effort.

The Company’s financial instruments include cash and accounts payable. Management has estimated that the carrying amounts approximate their fair value due to the short-term nature.

Loss per Share

Basic earnings (loss) per share are computed by dividing income available to common shareholders by the weighted-average number of common shares available. Diluted earnings (loss) per share is computed similar to basic earnings 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. The Company’s diluted loss per share is the same as the basic loss per share for the six months ended December 31, 2018 and 2017, as there are no potential shares outstanding that would have a dilutive effect.

Income Taxes

Income tax expense is based on pretax financial accounting income. Deferred tax assets and liabilities are recognized for the expected tax consequences of temporary differences between the tax bases of assets and liabilities and their reported amounts. Valuation allowances are recorded to reduce deferred tax assets to the amount that will more likely than not be realized. The Company recorded a valuation allowance against its deferred tax assets as of June 30, 2018 and 2017.

The Company accounts for uncertainty in income taxes using a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon settlement. The Company classifies the liability for unrecognized tax benefits as current to the extent that the Company anticipates payment (or receipt) of cash within one year. Interest and penalties related to uncertain tax positions are recognized in the provision for income taxes.

Recent Accounting Pronouncements

In July 2017, the FASB issued Accounting Standards Update 2017-11, “Earnings Per Share (Topic 260); Distinguishing Liabilities from Equity (Topic 480); Derivatives and Hedging (Topic 815): (Part I) Accounting for Certain Financial Instruments with Down Round Features, (Part II)”, which is the replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception. The amendments in Part I of this Update that relate to the recognition, measurement, and earnings per share of certain freestanding equity-classified financial instruments that include down round features affect entities that present earnings per share in accordance with the guidance in Topic 260, Earnings Per Share. The amendments in Part II of this Update do not have an accounting effect. The amendments in Part I of the update are effective for fiscal year, and interim periods within those fiscal years, beginning after December 15, 2018. The Company is assessing the impact to its accounting practices and financial reporting procedures as a result of the issuance of this standard.

Other recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities and Exchange Commission did not or is not believed by management to have a material impact on the Company’s present or future consolidated financial statements. 

NOTE 3 – RELATED PARTY TRANSACTIONS

During the six months ended December 31, 2018, the Company's current majority shareholder advanced $25,576 to the Company as working capital. As of December 31, 2018 and June 30, 2018, the Company owed its current majority shareholder of $124,601 and $100,525 respectively. The advances are non-interest bearing and are due on demand.

Currently the Company is using a premises for free, the premises is leased by a company owned by its current majority shareholder.

NOTE 4 – CONVERTIBLE, REDEEMABLE PREFERRED STOCK

During the year ended June 30, 2016, the Company’s Board of Directors authorized the creation of a series of preferred stock consisting of 1,000,000 shares designated as Series A Preferred Stock (the “Series A”). The Series A is entitled to a dividend of 4%, when and as declared, and is entitled to a liquidation preference of $1 per share plus unpaid dividends. The Series A is redeemable at the option of the Company at any time, in whole or in part, at a price of $1.00 per share, plus 4% per annum thereupon from the date of issuance (the “Stated Value”). In the event of any liquidation, dissolution or winding up of the Corporation, whether voluntary or involuntary, the Series A shall be entitled to a preferential amount equal to the Stated Value, prior to the holders of common stock receiving any distribution. Each share of Series A is automatically converted on the Conversion Date into a number of shares of common stock of the Company at the initial conversion rate (the “Conversion Rate”), which shall be the Stated Value as of the date of conversion divided by the Market Price. The Market Price for purposes of this Section 5 shall be equal to the average closing sales price of the Common Stock over the 5 previous trading days.

The Series A is also subject to adjustments to the Conversion Rate. If the common stock issuable on conversion of the Series A is changed into the same or a different number of shares of any other class or classes of stock, whether by capital reorganization, reclassification, or otherwise (other than a subdivision or combination of shares provided for above), the holders of the Series A shall, upon its conversion, be entitled to receive, in lieu of the common stock which the holders would have become entitled to receive but for such change, a number of shares of such other class or classes of stock that would have been subject to receipt by the holders if they had exercised their rights of conversion of the Series A immediately before that change.

In August 2016, the Company filed an amendment to its Articles of Incorporation to increase the number of authorized shares of Series A Preferred Stock from 1,000,000 to 10,000,000.

There were no preferred shares outstanding as of December 31, 2018 and June 30, 2018.

NOTE 5 – SHAREHOLDERS’ DEFICIT

At December 31, 2018 and June 30, 2018, the Company had 20,236,021,836 shares issued and outstanding.

NOTE 6 – JOINT VENTURE

On March 5th, 2018, America Great Health, a California Corporation (“AAGH California”), a wholly owned subsidiary of the Company, entered into a Sino-foreign Co-operative Joint Venture Contract (the “JV Agreement”) with Guangzhou Bona Biotechnology Co., Ltd. (“Bona”) pursuant to which the parties will establish a joint venture (the “JV Company”) for the purpose of promoting and developing sales channels for health and cosmetics related products supplied by AAGH California in the mainland of the People’s Republic of China, the Hong Kong Special Administration Region and the Macau Special Administration Region (together, the “China Market”).

Pursuant to the JV Agreement, AAGH California and Bona will each own 49% and 51% of the JV Company, respectively, and AAGH California has the veto right to the majority shareholder’s decision. The equity method has been used for this JV for the three months ended September 30, 2018. AAGH California will contribute the initial products supply in equivalent of cash amount of RMB 2.45 million to the JV Company and Bona will contribute any required operating capitals, experienced sales team, promotional effort, and customer services to ensure normal day to day operation of the JV Company. Bona will also be responsible for acquiring any required government permits, sales permits, and business licenses for the JV Company.

The following table summarizes the income statement of Pomeikang.

The following table provides the summary of balance sheet information for Pomeikang.

The difference of $1,932 was mainly due to the effect of exchange rate.

There was no operation during the period from October 1, 2018 to December 31, 2018, therefore at December 31, 2018, the Company decided to no longer participate in Pomeikang’s operations. As a result, a loss on disposal of investment of $12,012 was recorded at December 31, 2018. On April 1, 2019, AAGH California transferred its 49% ownership to Bona for $1.

NOTE 8 – INCOME TAXES

As of December 31, 2018, the Company had federal and California income tax net operating loss carryforwards of approximately $3.2 million. These net operating losses will begin to expire 20 years from the date the tax returns are filed.

Uncertain Tax Positions

Interest associated with unrecognized tax benefits are classified as income tax, and penalties are classified in selling, general and administrative expenses in the statements of operations. For the six months ended December 31, 2018 and 2017, the Company had no unrecognized tax benefits and related interest and penalties expenses. Currently, the Company is not subject to examination by major tax jurisdictions.

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

Forward Looking Statement Notice

Certain statements made in this Quarterly Report on Form 10-Q are “forward-looking statements” (within the meaning of the Private Securities Litigation Reform Act of 1995) regarding the plans and objectives of management for future operations.  Such statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements of Crown Marketing, (“we”, “us”, “our” or the “Company”) to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. The forward-looking statements included herein are based on current expectations that involve numerous risks and uncertainties. The Company’s plans and objectives are based, in part, on assumptions involving the continued expansion of business. Assumptions relating to the foregoing involve judgments with respect to, among other things, future economic, competitive and market conditions and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond the control of the Company.  Although the Company believes its assumptions underlying the forward-looking statements are reasonable, any of the assumptions could prove inaccurate and, therefore, there can be no assurance the forward-looking statements included in this Quarterly Report will prove to be accurate.  In light of the significant uncertainties inherent in the forward-looking statements included herein, the inclusion of such information should not be regarded as a representation by the Company or any other person that the objectives and plans of the Company will be achieved.

History and Organization

America Great Health, formerly Crown Marketing, is a Wyoming corporation (the “Company”). Pursuant to an Agreement and Plan of Reorganization dated December 2, 2013, the Company acquired all of the common stock of Okra Energy, Inc., a California corporation that was subscribed for on December 2, 2013 and then incorporated on December 18, 2013, in exchange for 16,155,746,000 shares of Common Stock of the Company (the “Common Stock”) at the closing of the Agreement on December 3, 2013.  Immediately prior to the closing, there were approximately 3,825,275,800 shares of Common Stock outstanding. After the closing, the beneficial owner of Okra Energy, Inc. shareholder, Jay Hooper, owned approximately 98.8% of the outstanding shares of common stock of the Company. The transaction was accounted for as a reverse merger (recapitalization) with Okra Energy, Inc. deemed to be the accounting acquirer and the Company deemed to be the legal acquirer.

A change of control took place on January 19, 2017 from Jay Hooper. Control was obtained by the sale of 16,155,746,000 shares of the Company common stock from Mr. Hooper to an investor group led by Mike Q. Wang. In connection with the change of control, the Company sold to Jay Hooper, one of its subsidiary, Italiano, Inc., for $100 and another subsidiary, Crown Laboratory Inc., in exchange for the cancellation of all payables and accrued expenses.

On March 1, 2017, the Company filed with the Secretary of State of Wyoming an Articles of Amendment to change the corporate name from Crown Marketing to America Great Health.

On March 9, 2017, the Company formed a wholly owned subsidiary, America Great Health, under the laws of the State of California.

Overview of Business

The Company under the new management will focus its business in the health related industry. The Company’s Chairman and president, Mike Wang, is the owner of several health related businesses below with which The Company is evaluating the possibilities of forming several joint ventures. The Company might effectuate the joint ventures using stocks.

On March 5, 2018, America Great Health, a California Corporation (“AAGH CA”), a wholly owned subsidiary of the Company, entered into a Sino-foreign Co-operative Joint Venture Contract (the “JV Agreement”) with Guangzhou Bona Biotechnology Co., Ltd. (“Bona”) to establish a JV,Pomeikang Biotechnology (Guangzhou) Co., Ltd. (“Pomeikang”), to promote and develop sales channels for health and cosmetics related products supplied by AAGH CA in the mainland of the People’s Republic of China, the Hong Kong Special Administration Region and the Macau Special Administration Region (together, the “China Market”).

Pursuant to the JV Agreement, AAGH CA and Bona each own 49% and 51% of Pomeikang, respectively, and AAGH California has the veto right to stop the majority shareholder’s decision. AAGH CA will contribute the initial products supply in equivalent of cash amount of RMB 2.45 million ($368,000) to Pomeikang and Bona will contribute any required operating capital, experienced sales team, promotional effort, and customer services to ensure normal day to day operation of Pomeikang. Bona will also be responsible for acquiring any required government permits, sales permits, and business licenses for Pomeikang.

At December 31, 2018, the Company decided to no longer participate in Pomeikang’s operations. On April 1, 2019, AAGH California transferred its 49% ownership to Bona for $1.

On May 21, 2018, the Company, entered into an Exclusive Oversea Distribution Agreement (the “Agreement”) with Foshan Wanshunbao Technology Co., Ltd. (“Wanshunbao”), a mainland China based company. According to the Agreement, Wanshunbao wishes to promote and develop overseas sales channels for its unique “Mysteries Fruit” tea and related products worldwide. The Company is appointed as Wanshunbao’s exclusive distributor to market and sell the “Mysteries Fruit” herbal tea and related products in geographic areas covers all over the world except mainland China.

In the past 20 years, Wangshunbao has dedicated to improve its R&D, and production of the unique “Mysteries Fruit” and related supplemental products, currently, Wangshunbao has developed a leading role in this industry, and is in the process of expanding its business model worldwide to a 10 billion RMB ($1.5 billion) industry chain. To achieve that goal, Wangshunbao’s management team had been actively seeking a qualified international distributor and business partner to execute its expansion plan.

The Company’s management team was invited to Foshan, China in early May, 2018 to visit Wangshunbao and its production facilities, upon extensive discussion and negotiation, the Company was granted with exclusive distribution rights worldwide for “Mysteries Fruit” tea and related products. The Company believes by introducing “Mysteries Fruit” products to oversee consumers would have a huge beneficial effect; and the management is confident about this business opportunity, as the Company’s core team members all have been in health and supplemental related industry for over 20 years, and has substantial nutrient products sales experiences and marketing channels. The Company is currently conducting preliminary sales campaigns for “Mysteries Fruit” products.

The Company is also planning to conduct additional acquisitions. Mike Wang has approached several health related companies in China and met the management of potential acquisition targets. Rapid economic advances in China in the last thirty years have greatly improved the living standards in China. This in turn brings demand in healthcare products and services. The Company feels strongly that despite the challenges of cross border business, it might be able to acquire some good growth companies and bring good values to our stockholders.

As inherent with any new business development, there are risks involved in such endeavor. For all the healthcare related businesses afore-mentioned, the Company is evaluating what kind of risks we are facing. The Company notices that vitamin and nutrition supplement business is a highly competitive market and faces multiple regulatory monitoring. The compliance challenge is constant. Regarding proton treatment sales, the device is very expensive and for such large ticket item, the procurement process can be long and arduous. The sale of cardio vascular device also has its challenges. The device is not well known and the acceptance of the use requires major efforts in educating not only the medical professionals but also consumers. This would demand financial as well as other resources. Although the Company is making some progress in the Merger and Acquisition efforts, any potential results, if any, are still not certain.

Critical Accounting Policies and Estimates

Estimates

The preparation of these consolidated financial statements in accordance 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 disclosures of contingent assets and liabilities at the dates of the consolidated financial statements and the reported amounts of net sales and expenses during the reported periods.  Actual results may differ from those estimates and such differences may be material to the financial statements.  The more significant estimates and assumptions by management include among others, the fair value of shares of common stock issued for services. The current economic environment has increased the degree of uncertainty inherent in these estimates and assumptions.

Recent Accounting Pronouncements

See Footnote 2 of the financial statements for a discussion of recently issued accounting standards.

Results of Operations

Results of Operations for the three and six months ended December 31, 2018 compared to the three and six months ended December 31, 2017.

There was no revenue and cost of sales for the three and six months ended December 31, 2018.

Operating expenses incurred for the six months ended December 31, 2018 and 2017 was $30,396 and $27,979, respectively. Operating expenses incurred for the three months ended December 31, 2018 and 2017 was $24,528 and $15,074, respectively. The increase was mainly due to the higher professional fee.

Our net loss for the three months ended December 31, 2018 and 2017 was $36,540 and $15,074, respectively. Our net loss for the six months ended December 31, 2018 and 2017 was $44,174 and $28,779, respectively. The increase in net loss was mainly due to the higher operating expenses and the loss on disposal of investment.

Liquidity and Capital Resources

Liquidity is the ability of a company to generate funds to support its current and future operations, satisfy its obligations, and otherwise operate on an ongoing basis. Significant factors in the management of liquidity are funds generated by operations, levels of accounts receivable and accounts payable and capital expenditures.

The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. As reflected in the accompanying consolidated financial statements, the Company has incurred recurring net losses. For the six months ended December 31, 2018, the Company recorded a net loss of $44,174, used cash to fund operating activities of $23,955, and at December 31, 2018, had a shareholders’ deficit of $151,626. For the six months ended December 31, 2017, the Company recorded a net loss of $28,779, used cash to fund operating activities of $25,751. These factors create substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

The new management’s plans to continue as a going concern revolve around its ability to achieve profitable operations, as well as raise necessary capital to pay ongoing general and administrative expenses of the Company. The ability of the Company to continue as a going concern is dependent on securing additional sources of capital and the success of the Company’s plan. There is no assurance that the Company will be successful in raising the additional capital or in achieving profitable operations.

Our cash needs for the six months ended December 31, 2018 were primarily met by loans and advances from current majority shareholder.  As of December 31, 2018, we had a cash balance of $136.  Our new majority shareholders will need to provide all of our working capitals going forward.

Primarily as a result of our recurring losses and our lack of liquidity, we received a report from our independent registered public accounting firm for our financial statements for the year ended June 30, 2018 that includes an explanatory paragraph describing the uncertainty as to our ability to continue as a going concern.

Financial Position

As of December 31, 2018, we had $136 in cash, negative working capital of $151,626 and an accumulated deficit of $3,213,856.

Contractual Obligations and Off-Balance Sheet Arrangements

We do not have any contractual obligations or off balance sheet arrangements.

Item 3.  Quantitative and Qualitative Disclosures About Market Risk.

As a “smaller reporting company” as defined by Item 10 of Regulation S-K, the Company is not required to provide information required by this Item.

Item 4.  Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Based upon an evaluation of the effectiveness of our disclosure controls and procedures performed by our Chief Executive Officer as of the end of the period covered by this report, our Chief Executive Officer concluded that our disclosure controls and procedures were not effective as a result of a weakness in the design of internal control over financial reporting identified below.

As used herein, “disclosure controls and procedures” mean controls and other procedures of our company that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act is accumulated and communicated to our management, including our principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Controls

There have been no changes in our internal controls over financial reporting during the period ended December 31, 2018 that have materially affected or are reasonably likely to materially affect our internal controls.

PART II — OTHER INFORMATION

Item 1.  Legal Proceedings.

We are not a party to or otherwise involved in any legal proceedings.

In the ordinary course of business, we are from time to time involved in various pending or threatened legal actions.  The litigation process is inherently uncertain and it is possible that the resolution of such matters might have a material adverse effect upon our financial condition and/or results of operations.  However, in the opinion of our management, other than as set forth herein, matters currently pending or threatened against us are not expected to have a material adverse effect on our financial position or results of operations.

Item 1A.  Risk Factors.

As a “smaller reporting company” as defined by Item 10 of Regulation S-K, the Company is not required to provide information required by this Item.

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

Not applicable.

Item 3.  Defaults Upon Senior Securities.

There have been no events which are required to be reported under this Item.

Item 4.  Mine Safety Disclosures.

Not applicable.

Item 5.  Other Information.

None.

Item 6.  Exhibits and Financial Statement Schedules

*XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections. In accordance with SEC Release 33-8238, Exhibits 32.1 and 32.2 are furnished and not filed.

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.