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
The Company was incorporated on
Results of Operations
Three months ended
The following table summarizes the results of our operations for the three months ended.
Percentage Three months Three months Increase Increase Line Item ended 3/31/21 ended 3/31/20
$ 765,616$ - $ 765,616n/a Operating expenses 53,669 28,303 25,366 89.62 % Net income (loss) 45,207 (28,303 ) 73,510 259.72 % Income (Loss) per share of common stock 0.00 (0.00 ) - n/a
We recorded net income of
$45,207for the three months ended March 31, 2021as compared with a net loss of $28,303for the three months ended March 31, 2020primarily due to the ramp-up of the Company's business operations in the relevant periods.
Nine months ended
The following table summarizes the results of our operations for the nine months ended
March 31, 2021and 2020, respectively, and provides information regarding the dollar and percentage increase or (decrease) from the current nine-month period to the prior nine-month period: Percentage Nine months Nine months Increase Increase Line Item ended 3/31/21 ended 3/31/20 (Decrease) (Decrease) Revenues $ 8,499,788$ - $ 8,499,788n/a Operating expenses 148,509 45,692 102,817 225.02 % Net income (loss) 1,025,050 (45,692 ) 1,070,742 2,343.39 % Income (Loss) per share of common stock 0.09 (0.01 ) 0.10 1,546.58 % We recorded net income of $1,025,050for the nine months ended March 31, 2021as compared with a net loss of $45,692for the nine months ended March 31, 2020primarily due to the ramp-up of the Company's business operations in the relevant periods.
Liquidity and capital resources
March 31, 2021, we had total assets of $12,806,768, working capital of $12,140,670and an accumulated stockholders' equity of $12,215,605. We recorded $8,499,788in revenues for the nine months ended March 31, 2021, while we had no revenues in the nine months ended March 31, 2020. Operating Activities Net cash used in operating activities for the nine months ended March 31, 2021was $2,578,186primarily as a result of net income of $1,025,050, depreciation and amortization expense of $8,215and due to net increase in operating assets of $3,611,451due to increase in accounts receivable of $3,470,436, increase in advance to suppliers of $622,291, increase in accounts payable of $122,015, increase in accrued expenses and other payables of $58,442, increase in tax payable of $268,581and increase in advances and deposits of $29,945, offset by decrease in prepaid expenses of $3,623and decrease in other payable to related party of $1,330. Cash used in operating activities for the nine months ended March 31, 2020was $21,084primarily due to the net loss of $45,692, and due to net increase in operating liabilities of $24,608as a result of increase in prepaid expenses of $918, increase in accounts payable of $16,059and increase in accrued expenses and other payable of $9,467. 3 Investing Activities Net cash used in investing activities for the nine months ended March 31, 2021was $8,162,519primarily due to loan of $8,085,285advanced to the customer, and cash paid for the acquisition of property and equipment of $77,234. Net cash used in investing activities for the nine months ended March 31, 2020was $0. Financing Activities Net cash provided by financing activities for the nine months ended March 31, 2021was $6,232,225primarily due to cash proceeds from sale of common stock of $6,230,225to third party investors, and cash proceeds from sale of stock of $2,000received from related party. Net cash provided by financing activities for the nine months ended March 31, 2020was $5,000as a result of loan received by the Company from a related party.
We recorded a gain of
As a result of the above explanations, we recorded a net decrease in cash of
$3,954,235for the nine months ended March 31, 2021as compared to a decrease in cash of $16,084for the same comparable period in 2020. Future Capital Requirements Our capital requirements for the fiscal year ending June 30, 2021will depend on numerous factors, including management's evaluation of the timing of projects to pursue. Subject to our ability to generate revenues and cash flow from operations and our ability to raise additional capital (including through possible joint ventures and/or partnerships), we expect to incur substantial expenditures to carry out our business plan, as well as costs associated with our capital raising efforts, and being a public company. Our plans to finance our operations include seeking equity and debt financing, alliances or other partnership agreements, or other business transactions, that would generate sufficient resources to ensure continuation of our operations. Management believes that the Company's cash on hand will 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 augment our working capital as required The sale of additional equity or debt securities may result in additional dilution to our shareholders. If we raise additional funds through the issuance of debt securities or preferred stock, these securities could have rights senior to those of our common stock and could contain covenants that would restrict our operations. Any such required additional capital may not be available on reasonable terms, if at all. If we were unable to obtain additional financing, we may be required to reduce the scope of, delay or eliminate some or all of our planned activities and limit our operations which could have a material adverse effect on our business, financial condition and results of operations. Going Concern The Company demonstrates adverse conditions that raise substantial doubt about the Company's ability to continue as a going concern. The continuation of the Company as a going concern is dependent upon the continued financial support from its shareholders, the ability of the Company to sell its stock to the investing community and obtain necessary financing to continue operations, and the attainment of profitable operations. Although the Company recorded a net income of $1,025,050for the nine months ended March 31, 2021, it has used net cash flows in operating activities of $2,578,186, and has a net decrease in cash of $3,954,236for the nine months ended March 31, 2021. These factors, among others, raise a substantial doubt regarding the Company's ability to continue as a going concern. If the Company is unable to obtain adequate capital, it could be forced to cease operations. The interim condensed consolidated financial statements do not include any adjustments to reflect the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. 4 Inflation The amounts presented in our financial statements do not provide for the effect of inflation on our operations or financial position. The net operating losses shown would be greater than reported if the effects of inflation were reflected either by charging operations with amounts that represent replacement costs or by using other inflation adjustments.
Off-balance sheet provisions
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.
Critical accounting policies
The Securities and Exchange Commissionissued 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 Commissionhas 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. Due to the fact that the Company does not have any operating business, we do not believe that we do not have any such critical accounting policies.
© Edgar online, source