MS YOUNG ADVENTURE ENTERPRISE, INC. - Quarter Report: 2019 September (Form 10-Q)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended September 30, 2019

OR

[  ] 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 000-55738

MS YOUNG ADVENTURE ENTERPRISE, INC.

(Exact name of registrant as specified in its charter)

506 Enterprise Ave, Kitimat BC, Canada V8C 2E2

(Address of principal executive offices)

+1 (778) 888-2886

(Registrant’s telephone number, including area code)

MS Young Adventure Enterprise, Inc.

Former name, former address and formal fiscal year, if changed since last report)

Securities Registered Pursuant to Section 12(b) of the Act:

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 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 [X]

Indicate the number of shares outstanding of each of the registrant’s classes of common stock as of the latest practicable date.

Documents incorporated by reference: None

TABLE OF CONTENTS

PART I – FINANCIAL INFORMATION

ITEM 1. INTERIM FINANCIAL STATEMENTS

MS YOUNG ADVENTURE ENTERPRISE, INC.

CONDENSED BALANCE SHEETS

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

MS YOUNG ADVENTURE ENTERPRISE, INC.

CONDENSED STATEMENTS OF OPERATIONS

(Unaudited)

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

MS YOUNG ADVENTURE ENTERPRISE, INC.

CONDENSED STATEMENT OF STOCKHOLDERS’ EQUITY

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2019 AND FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017

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

MS YOUNG ADVENTURE ENTERPRISE, INC.

CONDENSED STATEMENTS OF CASH FLOWS

(Unaudited)

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

MS YOUNG ADVENTURE ENTERPRISE, INC.

Notes to Condensed Unaudited Financial Statements

NOTE 1 - NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NATURE OF OPERATIONS

MS Young Adventure Enterprise, Inc. (formerly “AllyMe Holding Inc,” and formerly “Rain Sound Acquisition Corporation”) (the “Company” or “MS Young”) was incorporated on December 7, 2016 under the laws of the state of Delaware. The Company engages in consulting services.

On November 13, 2017, the Company changed of the Company’s name to AllyMe Holding Inc.

On August 6, 2019, the Company changed the Company’s name to MS Young Adventure Enterprise, Inc.

The Company is a marketing and management consulting company that provides advisory services to companies located in Asia for the purpose of facilitating the competitiveness of those companies in the international market. The Company offers a wide assortment of advisory services, ranging from business planning consulting services, mergers and acquisitions advising, and marketing services. As of the date of this report, the Company has signed few clients.

BASIS OF PRESENTATION

The summary of significant accounting policies presented below is designed to assist in understanding the Company’s unaudited financial statements. Such unaudited financial statements and accompanying notes are the representations of the Company’s management, who are responsible for their integrity and objectivity. These accounting policies conform to accounting principles generally accepted in the United States of America (“GAAP”) in all material respects and have been consistently applied in preparing the accompanying unaudited financial statements.

Certain information and footnote disclosures normally present in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) were omitted pursuant to such rules and regulations. The results for the nine months ended September 30, 2019 are not necessarily indicative of the results to be expected for the year ending December 31, 2019.

USE OF ESTIMATES

The preparation of unaudited financial statements in conformity with 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. Actual results could differ from those estimates.

CASH

Cash include cash on hand and on deposit at banking institutions. Cash amounted to $4,143 and $244,089 as of September 30, 2019 and December 31, 2018, respectively.

CONCENTRATION OF RISK

Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash. Cash amounted to $4,143 and $244,089 as of September 30, 2019 and December 31, 2018, respectively. All of the Company’s cash is held in bank accounts in the United States and is protected by FDIC insurance. $0 and $0 are amounts that are not covered by FDIC insurance as of September 30, 2019 and December 31, 2018, respectively.

REVENUE RECOGNITION

The Company adopted Accounting Standards Codification (“ASC”) 606. ASC 606, Revenue from Contracts with Customers, establishes principles for reporting information about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity’s contracts to provide goods or services to customers. The core principle requires an entity to recognize revenue to depict the transfer of services to customers in an amount that reflects the consideration that it expects to be entitled to receive in exchange for those services recognized as performance obligations are satisfied.

The Company has assessed the impact of the guidance by performing the following five steps analysis:

Step 1: Identify the contract

Step 2: Identify the performance obligations

Step 3: Determine the transaction price

Step 4: Allocate the transaction price

Step 5: Recognize revenue

Based on the assessment, the Company concluded that there was no change to the timing and pattern of revenue recognition for its current revenue streams in scope of Topic 606 and therefore there were no material changes to the Company’s consolidated financial statements upon adoption of ASC 606.

The Company recognizes revenue from providing consulting services as of December 31,2018. Customer makes full payment at time of purchase. The Company does not offer customers right of refund.

The Company had revenue $24,000 and $0 for the nine months ended September 30,2019 and 2018, respectively.

INCOME TAXES

Under ASC 740, “Income Taxes,” deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Valuation allowances are established when it is more likely than not that some or all of the deferred tax assets will not be realized. As of September 30, 2019 and December 31, 2018, there were no deferred taxes due to the uncertainty of the realization of net operating loss or carry forward prior to expiration.

LOSS PER COMMON SHARE

Basic loss per common share excludes dilution and is computed by dividing net loss by the weighted average number of common shares outstanding during the period. Diluted loss per common share reflect the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the loss of the entity. As of September 30, 2019 and December 31, 2018, there are no outstanding dilutive securities.

FAIR VALUE OF FINANCIAL INSTRUMENTS

The Company follows guidance for accounting for fair value measurements of financial assets and financial liabilities and for fair value measurements of nonfinancial items that are recognized or disclosed at fair value in the financial statements on a recurring basis. Additionally, the Company adopted guidance for fair value measurement related to nonfinancial items that are recognized and disclosed at fair value in the financial statements on a nonrecurring basis. The guidance establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value.

The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to measurements involving significant unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are as follows:

Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date.

Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.

Level 3 inputs are unobservable inputs for the asset or liability. The carrying amounts of financial assets such as cash approximate their fair values because of the short maturity of these instruments.

RECENT ACCOUNTING PRONOUNCEMENTS

Recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force) and the United States Securities and Exchange Commission did not or are not believed by management to have a material impact on the Company’s present or future financial statements.

NOTE 2 - GOING CONCERN

The Company has generated only $39,915 revenue since inception to date and has sustained operating loss of $161,738 during the nine months ended September 30, 2019. The Company had a negative working capital deficit of $93,207 and an accumulated deficit of $339,239 as of September 30, 2019 and a working capital of $61,618 and an accumulated deficit of $177,501 as of December 31, 2018. The Company’s continuation as a going concern is dependent on its ability to generate sufficient cash flows from operations to meet its obligations and/or obtaining additional financing from its members or other sources, as may be required.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern; however, the above condition raises substantial doubt about the Company’s ability to do so. The financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result should the Company be unable to continue as a going concern.

In order to maintain its current level of operations, the Company will require additional working capital from either cash flow from operations or from the sale of its equity. However, the Company currently has no commitments from any third parties for the purchase of its equity. If the Company is unable to acquire additional working capital, it will be required to significantly reduce its current level of operations.

NOTE 3 – OTHER RECEIVABLE

Other receivable represents professional fees the Company paid on behalf of its clients. These payments are due on demand, interest free, and without collateral. The Company estimated the uncollectable amount and wrote off $59,387 and $70,809 as bad debt for the nine months ended September 30, 2019 and for the year ended December 31, 2018, respectively. As a result, other receivable amounted to $101 and $0 as of September 30, 2019 and December 31, 2018, respectively

NOTE 4 - ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

As of September 30, 2019 and December 31, 2018, accounts payable and accrued liabilities amounted to $8,345 and $12,845, respectively. Accounts payable and accrued liabilities mainly are accrued professional fees.

NOTE 5 - CUSTOMER DEPOSIT

Customer deposit amounted to $0 and $21,000 as of September 30, 2019 and December 31, 2018, respectively. Customer deposit represents amount received from customers for services not rendered yet.

NOTE 6 - RELATED PARTIES

Loan from a related party

On December 1, 2018, MS Young entered into an agreement to acquire a 51% interest in 0731380 B.C. Limited, a company registered in British Columbia, Canada (“0731380”). Initially, this transaction was structured as a purchase of equity by MS Young, however, the parties thereafter agreed (effective ab initio) that the transaction be structured as a convertible loan rather than an equity purchase transaction.

The restructuring of the initial Agreement and the amendment thereof on February 28, 2019 was approved by the Boards of Directors of both MS Young and 0731380. This is a related-party transaction as Chunxia Jiang is the principal and controlling shareholder and the sole director of both MS Young and 0731380.

Therefore, the parties have agreed that, in lieu of any purchase of an equity interest in 0731380, MS Young would advance a loan to 0731380 in the initial face amount of $150,000 (the “Loan”), which will be payable One (1) year following the advance of funding of the Loan. 0731380 will use the proceeds of the Loan to fund the acquisition of a license and development of a retail outlet for the sale of cannabis-related products by its wholly-owned subsidiary, Natural Recreation in Kitimat, BC, Canada. The loan bears interest at a rate of five percent (5%) per annum payable at Maturity. The Loan Agreement (“Loan Agreement”) provides that if all licenses required to operate the retail store in Kitimat are issued by an agreed date, the Loan may be converted, at the option of MS Young, into an equity investment in Natural Recreation. There is a further provision in the Loan Agreement that if the Loan is converted, MS Young may, at its sole option, additionally issue 3,060,000 shares of its common stock to 0731380 which, together with the conversion of the Loan, will be MS Young’s purchase price for a 51% interest in Natural Recreation. If full licensure for the retail store in Kitimat is not issued by the agreed date, then the loan will convert to a term loan to be repaid on a schedule mutually agreed by the parties. There is no penalty for the early payment of the Loan. As of this date, such licensure is only in the early application process and there is no guarantee when any license will be issued, if at all.

Loan from a related party amounted to $64,520 as of September 30, 2019. Interest income amounted to $4,500 as of September 30, 2019. In the quarter ended September 30, 2019, 0731380 has repaid $89,980 to MS Young in advance.

Due from a related party

Due from a related party amounted to $0 and $0 as of September 30, 2019 and December 31, 2018, respectively. Due from a related party are professional fees paid on behalf of a Company whose shareholder is Zilin Wang. Zilin Wang was a prior shareholder and also a prior officer of the Company. These payments are due on demand, interest free, and without collateral. The Company estimated the uncollectable amount and wrote off the entire $44,948 and $33,408 as bad debt for the nine months ended September 30, 2019 and for the year ended December 31, 2018, respectively.

Due to related parties

Due to related parties amounted to $153,626 and $153,626 as of September 30, 2019 and December 31, 2018, respectively. Due to related parties include fees paid on behalf of the Company by Zilin Wang, who was a prior shareholder and also a prior officer of the Company and by Chunxia Jiang who is a current shareholder and also a current officer of the Company. The amount due to related parties are unsecured, non-interest bearing, and due on demand. The Company accrued imputed interest with 6% per annum.

NOTE 7 - STOCKHOLDERS’ EQUITY (DEFICIT)

The Company is authorized to issue 100,000,000 shares of common stock and 20,000,000 shares of preferred stock.

There is no preferred stock issued and outstanding as of September 30, 2019 and December 31, 2018. There are 6,731,667 and 6,731,667 shares of common stock outstanding as of September 30, 2019 and December 31, 2018, respectively.

On January 21, 2018, the Company repurchased and canceled 500,000 shares of common stock from two shareholders at a cost basis of par value per share for $50. $25 was paid in April 2018 and $25 was paid in June 2018.

In February 2018, the Company sold 30,000 shares of common stock at $0.1 per share for total of $3,000 to 3 unrelated parties.

In February 2018, the Company sold 631,667 shares of common stock at $0.3 per share for total of $189,500 to 31 unrelated parties and 2 related parties.

In February 2018, the Company sold 40,000 shares of common stock at $0.4 per share for total of $16,000 to 2 unrelated parties.

In February 2018, the Company sold 10,000 shares of common stock at $0.5 per share for total of $5,000 to 1 unrelated party.

In February 2018, the Company sold 20,000 shares of common stock at $0.6 per share for total of $12,000 to 2 unrelated parties.

On April 7, 2018, prior CEO Zilin Wang transferred all of his 6,000,000 shares of Common Stock of the Company to Chunxia Jiang in a private transaction. The shares represented 100% of the issued and outstanding shares of the Company and thereby constituted a change of control of the Company. Simultaneously, Zilin Wang resigned all of his positions with the Company which were immediately assumed by Chunxia Jiang.

NOTE 8 - SUBSEQUENT EVENT

Management has evaluated subsequent events through November 13, 2019, the date that the financial statements were available to be issued. All subsequent events requiring recognition as of September 30, 2019 have been incorporated into these financial statements and there are no subsequent events that require disclosure in accordance with FASB ASC Topic 855, “Subsequent Events.”

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.

FORWARD LOOKING STATEMENTS

Statements made in this Form 10-Q that are not historical or current facts are “forward-looking statements” made pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933 (the “Act”) and Section 21E of the Securities Exchange Act of 1934. These statements often can be identified by the use of terms such as “may,” “will,” “expect,” “believe,” “anticipate,” “estimate,” “approximate” or “continue,” or the negative thereof. We intend that such forward-looking statements be subject to the safe harbors for such statements. We wish to caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. Any forward-looking statements represent management’s best judgment as to what may occur in the future. However, forward-looking statements are subject to risks, uncertainties and important factors beyond our control that could cause actual results and events to differ materially from historical results of operations and events and those presently anticipated or projected. We disclaim any obligation subsequently to revise any forward-looking statements to reflect events or circumstances after the date of such statement or to reflect the occurrence of anticipated or unanticipated events.

Overview of the Business

Corporate History and General Information

MS Young Adventure Enterprise, Inc., formerly known as AllyMe Holding, Inc. and Rain Sound Acquisition Corporation (“MS”) or the “Company”), was incorporated in Delaware on December 7, 2016.

In November 2017, the Company implemented a change of control by issuing shares to new stockholders, redeeming shares of existing stockholders, electing a new officer and director, Zilin Wang, and accepting the resignations of its then existing officers and directors. In connection with this change in control, the stockholders of the Company and its board of directors unanimously approved the change of the Company’s name from Rain Sound Acquisition Corporation to AllyMe Holding Inc. In August 2019, the board of directors unanimously approved the change of the Company’s name to MS Young Adventure Enterprise, Inc.

In May 2018, the Company implemented another change in control by electing a new officer and director and accepting the resignations of its then existing officer and director and whereby the then majority shareholder of the Company, Zilin Wang, sold his common stock shares in the Company to Chunxia Jiang, who is now the sole officer and director and majority shareholder of the Company.

Business

MS is a marketing and management consulting company that provides advisory services to companies for the purpose of facilitating the competitiveness of those companies in the international market. MS offers a wide assortment of advisory services, ranging business planning consulting services, mergers and acquisitions advising, and marketing services. MS intends to play a pivotal role in standardizing and improving the marketing and operations of a diverse portfolio firms as a means to enable such firms to comply with the prevailing norms of the international market and gain market acceptance. Based on the strength of its contacts within Asia as well as the experience of its managers, MS expects that it will be well positioned to facilitate its clients’ growth on an international scale.

Loan to 0731380 B.C. Limited

On December 1, 2018, MS entered into an agreement to acquire a 51% interest in 0731380 B.C. Limited, a company registered in British Columbia, Canada (“0731380”). Initially, this transaction was structured as a purchase of equity by MS, however, the parties thereafter agreed (effective ab initio) that the transaction be structured as a convertible loan rather than an equity purchase transaction.

The restructuring of the initial Agreement and the amendment thereof on February 28, 2019 was approved by the Boards of Directors of both MS and 0731380. This is a related-party transaction as Chunxia Jiang is the principal and controlling shareholder and the sole director of both MS and 0731380.

Therefore, the parties have agreed that, in lieu of any purchase of an equity interest in 0731380, MS would advance a loan to 0731380 in the initial face amount of $150,000 (the “Loan”), which will be payable One (1) year following the advance of funding of the Loan. 0731380 will use the proceeds of the Loan to fund the acquisition of a license and development of a retail outlet for the sale of cannabis-related products by its wholly-owned subsidiary, Natural Recreation in Kitimat, BC, Canada. The loan bears interest at a rate of five percent (5%) per annum payable at Maturity. The Loan Agreement (“Loan Agreement”) provides that if all licenses required to operate the retail store in Kitimat are issued by an agreed date, the Loan may be converted, at the option of MS, into an equity investment in Natural Recreation. There is a further provision in the Loan Agreement that if the Loan is converted, MS may, at its sole option, additionally issue 3,060,000 shares of its common stock to 0731380 which, together with the conversion of the Loan, will be MS’ purchase price for a 51% interest in Natural Recreation. If full licensure for the retail store in Kitimat is not issued by the agreed date, then the loan will convert to a term loan to be repaid on a schedule mutually agreed by the parties. There is no penalty for the early payment of the Loan. As of this date, such licensure is only in the early application process and there is no guarantee when any license will be issued, if at all.

Service Agreements

Service Agreement with Xizhen Zhu for the benefit of Billion Holding, Inc.

On April 15, 2018, MS entered into a client consulting agreement with Xizhen Zhu (“Ms. Zhu”) to provide management consulting services in exchange for a non-recurring service fee of $10,000 (the “Billion Agreement”). Under the terms of the Billion Agreement, Ms. Zhu will be acting for the benefit of Billion Holding, Inc., which is a third-party beneficiary to the Billion Agreement. The initial term of the Billion Agreement (which has been subsequently extended per the extension agreement described infra) was for a period of one (1) month.

On July 30, 2018, the Company and Ms. Zhu agreed to an extension of the Billion Agreement pursuant to which the Term of the Billion Agreement, as defined in the Billion Agreement, was amended such that the Term shall be for a period of one (1) year, and shall automatically be renewed for successive one (1) year periods unless terminated by mutual agreement of the Parties or if one party gives the other party 30 days’ notice of termination.

Service Agreement with Xizhen Zhu for the benefit of JS Beauty Land Network Technology Inc.

On May 5, 2018, MS entered into a client consulting agreement with Xizhen Zhu, acting as financial representative on behalf of JS Beauty Land Network Technology Inc., to provide management consulting services in exchange for a non-recurring service fee of $10,000 (the “JS Beauty Agreement”). Under the terms of the JS Beauty Agreement, Ms. Zhu will be acting for the benefit of JS Beauty Land Network Technology Inc., who is a third-party beneficiary to the JS Beauty Agreement. The initial term of the JS Beauty Agreement (which has been subsequently extended per the extension agreement described infra) was for a period of one (1) month.

On July 30, 2018, the Company and Ms. Zhu agreed to an extension of the JS Beauty Agreement pursuant to which the Term of the JS Beauty Agreement, as defined in the JS Beauty Agreement, was amended such that the Term shall be for a period of one (1) year, and shall automatically be renewed for successive one (1) year periods unless terminated by mutual agreement of the Parties or if one party gives the other party 30 days’ notice of termination.

Results of Operations

Three Months Ended September 30, 2019 Compared to September 30, 2018

The following table summarizes the results of our operations during the three months ended September 30, 2019 and 2018, respectively, and provides information regarding the dollar and percentage increase or (decrease) from the current three-month period to the prior three-month period:

We recorded a net loss of $74,340 for the three months year ended September 30, 2019 as compared with a net loss of $19,364 for the three months ended September 30, 2018 due primarily to an increase in general and administrative expense. The increase in expense resulted primarily from professional fees.

Nine Months Ended September 30, 2019 Compared to September 30, 2018

The following table summarizes the results of our operations during the nine months ended September 30, 2019 and 2018, respectively, and provides information regarding the dollar and percentage increase or (decrease) from the current nine-month period to the prior nine-month period:

We recorded a net loss of $161,738 for the nine months year ended September 30, 2019 as compared with net a loss of $46,664 for the nine months ended September 30, 2018 due primarily to an increase in general and administrative expense. The increase in expense resulted primarily from professional fees.

Liquidity and Capital Resources

As of September 30, 2019, we had total assets of $68,764, a negative working capital of $93,207 and an accumulated deficit of $339,239. Our operating activities used $175,426 in cash for the nine months ended September 30, 2019, while our operations used $37,004 cash in the nine months ended September 30, 2018. Our revenues were $24,000 for the nine months ended September 30, 2019 compared to revenues of $0 for the nine months ended September 30, 2018.

Management believes that the Company’s cash on hand may not be sufficient to fund all Company obligations and commitments for the next twelve months. Historically, we have depended on loans from our principal shareholders and their affiliated companies to provide us with working capital as required. There is no guarantee that such funding will be available when required and there can be no assurance that our stockholders, or any of them, will continue making loans or advances to us in the future.

At September 30, 2019, the Company had loans and advances from a related party shareholder in the aggregate amount of $153,626, which represents amounts loaned to the Company to pay the Company’s expenses of operation. These advances are payable on demand.

Off Balance Sheet Arrangements

We do not have 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 or capital expenditures or capital resources that is material to an investor in our securities.

Seasonality

Our operating results are not affected by seasonality.

Inflation

Our business and operating results are not affected in any material way by inflation.

Critical Accounting Policies

The Securities and Exchange Commission issued Financial Reporting Release No. 60, “Cautionary Advice Regarding Disclosure About Critical Accounting Policies” suggesting that companies provide additional disclosure and commentary on their most critical accounting policies. In Financial Reporting Release No. 60, the Securities and Exchange Commission has defined the most critical accounting policies as the ones that are most important to the portrayal of a company’s financial condition and operating results and require management to make its most difficult and subjective judgments, often as a result of the need to make estimates of matters that are inherently uncertain. The nature of our business generally does not call for the preparation or use of estimates.

Plan of Operations

The Company intends to (i) focus on obtaining visibility for its services by contacting small to medium sized enterprises located on China and throughout Asia and (ii) pursue obtaining licensure for a retail cannabis dispensary in Kitimat, BC, Canada.

Currently, these efforts are being funded through the proceeds of the Company’s private placements and loans from management. Management of the Company believes that having a trading market for the Company’s common stock will make other sources of financing available and assist it in engaging with larger distributors.

There is no assurance that the Company’s activities will generate sufficient revenues to sustain its operations without additional capital, or if additional capital is needed, that such funds, if available, will be obtainable on terms satisfactory to the Company. Accordingly, given the Company’s limited cash and cash equivalents on hand, the Company will be unable to implement its business plans and proposed operations unless it obtains additional financing or otherwise is able to generate revenues and profits. The Company may raise additional capital through sales of debt or equity, obtain loan financing or develop and consummate other alternative financial plans. In the near term, the Company plans to rely on its primary stockholder to continue his commitment to fund the Company’s continuing operating requirements. Management anticipates that the Company will require a minimum of $100,000 for the next 12 months to fund its operations, which will be used to fund expenses related to operations, office supplies, travel, salaries and other incidental expenses. Management believes that this capital would allow the Company to meet its operating cash requirements and would facilitate the Company’s business of providing management consulting services. Management also believes that the acquisition of such assets would generate revenue to cover overhead cost and general liabilities of the Company and allow the Company to achieve overall sustainable profitability.

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

Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) and Rule 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended (Exchange Act), as of September 30, 2019. Based on this evaluation, our principal executive officer and principal financial officer have concluded that our disclosure controls and procedures are not effective to ensure that information required to be disclosed by us in the reports we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms and that our disclosure and controls are not designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our principal executive officer and principal financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

The matters involving internal controls and procedures that our management considered to be material weaknesses under the standards of the Public Company Accounting Oversight Board were: (1) lack of a functioning audit committee, resulting in ineffective oversight in the establishment and monitoring of required internal controls and procedures; (2) inadequate segregation of duties consistent with control objectives; (3) ineffective controls over period end financial disclosure and reporting processes and (4) lack of timely communications with vendors and proper accrual of expenses.

Management believes that the material weaknesses set forth in items (2), (3) and (4) above did not have an effect on our financial results. However, management believes that the lack of a functioning audit committee and the lack of a majority of outside directors on our board of directors results in ineffective oversight in the establishment and monitoring of required internal controls and procedures, which could result in a material misstatement in our financial statements in future periods.

Changes in Internal Control Over Financial Reporting

There were no changes (including corrective actions with regard to significant deficiencies or material weaknesses) in our internal controls over financial reporting that occurred during the three months ended September 30, 2019 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

There are no legal proceedings which are pending or have been threatened against us or any of our officers, directors or control persons of which management is aware.

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

Except as may have previously been disclosed on a current report on Form 8-K or a quarterly report on Form 10-Q, we have not sold any of our securities in a private placement transaction or otherwise during the past three years.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

Not applicable.

ITEM 4. MINE SAFETY DISCLOSURES

None.

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS

SIGNATURES

In accordance with the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.