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
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 9/30/21 ended 9/30/20 (Decrease) (Decrease) Revenues$ 743,677 $ 5,143,578 $ (4,399,901 ) (86 %) Operating expenses 67,325 42,447 24,878 59 % Net (loss) income (29,373 ) 959,808 (930,435 ) n/a
Income (Loss) per share of common stock 0.00 0.14 - n/a
We recorded a net loss of$29,373 for the three months endedSeptember 30, 2021 as compared to a net income of$959,808 for the three months endedSeptember 30, 2020 . The loss resulted primarily due to reduction in revenues due to effect of Covid - 19. The suppliers source suffered a significant setback due to the pandemic because of which we were not able to receive orders and ship the products to our prospective customers.
Liquidity and Capital Resources
As ofSeptember 30, 2021 , we had cash of$43,028 , total assets of$9,215,854 , working capital of$8,495,449 and stockholders' equity of$8,562,231 . Net cash used in operating activities was$115,760 . As ofSeptember 30, 2020 , we had total assets of$13,042,522 , working capital of$1,171,718 and an accumulated stockholders' equity of$1,247,692 . Our operating activities used$1,456,401 in cash, and financing activities provided$6,232,225 of cash for the three months endedSeptember 30, 2020 . We recorded$743,677 in revenues for the three months endedSeptember 30, 2021 , while we reported$5,143,578 in revenues for the three months endedSeptember 30, 2020 . 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. 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. 3 Our current available cash may not be sufficient to satisfy our liquidity requirements. Our capital requirements for the next twelve months will 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. 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. Operating Activities
Net cash used in operating activities for the three months endedSeptember 30, 2021 was$115,760 primarily as a result of net loss of$29,373 , depreciation and amortization expense of$4,692 , forgiveness of debt by an officer and director of$19,974 , and due to net increase in operating assets of$71,105 due to increase in accounts receivable of$67,545 , increase in accounts payable of$38,422 , decrease in advances and deposits of$30,912 , and decrease in accrued expenses and other payable of$11,070 . Cash used in operating activities for the three months endedSeptember 30, 2020 was$1,456,401 primarily due to the net income of$959,808 , and due to net increase in operating assets of$2,416,209 as a result of increase in accounts receivable of$1,413,328 , increase in advance to suppliers of$2,170,459 , increase in other receivable of$4,663 , increase in accounts payable of$1,078,745 , increase in accrued expenses and other payables of$92,134 offset by decrease in prepaid expenses of$2,692 , and decrease in other payables to related party of$1,330 . Investing Activities
Net cash used in investing activities for the three months endedSeptember 30, 2021 was$0 . Net cash used in investing activities for the three months endedSeptember 30, 2020 was$74,593 due to the acquisition of a vehicle. Financing Activities Net cash provided by financing activities for the three months endedSeptember 30, 2021 was$0 . Net cash provided by financing activities for the three months endedSeptember 30, 2020 was$6,232,225 as a result of cash received from the sale of common stock of$6,230,225 , and cash received from sale of common stock to a related party of$2,000 . We recorded a gain of$14,855 for the three months endedSeptember 30, 2021 as a result of effect of exchange rate fluctuation on cash. We recorded a gain of$337,691 for the three months endedSeptember 30, 2020 as a result of effect of exchange rate fluctuations on cash.
As a result of the above explanations, we recorded a net decrease in cash of
Future Capital Requirements
Our capital requirements for the fiscal year endingJune 30, 2022 will 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. 4 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. The Company recorded a net loss of$29,373 for the three months endedSeptember 30, 2021 , used net cash flows in operating activities of$115,760 , and has a net decrease in cash of$100,905 for the three months endedSeptember 30, 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. 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 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.
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, theSecurities 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.
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