YONG BAI CHAO NEW RETAIL CORPORATION Statements, other than historical facts, contained in this Quarterly Report on Form 10-Q, including statements of potential acquisitions and our strategies, plans and objectives, are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Although we believe that our forward-looking statements are based on reasonable assumptions, we caution that such statements are subject to a wide range of risks, trends and uncertainties that could cause actual results to differ materially from those projected. Among those risks, trends and uncertainties are important factors that could cause actual results to differ materially from the forward looking statements, including, but not limited to; the time management devotes to identifying a target business; management's ability to consummate a business combination; the financial condition of the target company with which we may enter a business combination; the effect of existing and future laws; governmental regulations; political and economic conditions; and conditions in the capital markets. We undertake no duty to update or revise these forward-looking statements.
When used in this Form 10-Q, the words, "expect," "anticipate," "intend," "plan," "believe," "seek," "estimate" and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. Because these forward-looking statements involve risks and uncertainties, actual results could differ materially from those expressed or implied by these forward-looking statements for a number of important reasons.
Overview
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The foregoing description of the Acquisition Agreement is qualified in its entirety by reference to the Acquisition Agreement, which is filed as Exhibit 10.1 to this Quarterly Report and incorporated herein by reference.
Effective
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Business Objectives of the Registrant
As of the date of this report, we have no current operations. Management has determined to direct our efforts and limited resources to pursue potential new business opportunities through a combination with an operating or development stage company, an acquisition of assets or other business transaction. We do not intend to limit ourselves to a particular industry and we have not established any particular criteria upon which we shall consider and proceed with a business opportunity. We expect to utilize our capital stock, debt or a combination of capital stock and debt, in effecting a business transaction. It may be expected that entering into a business transaction will involve the issuance of restricted shares of capital stock. The issuance of additional shares of our capital stock:
? may reduce the equity interest of our existing stockholders;
? may cause a change in control if a substantial number of our shares of
capital stock are issued, and most likely will also result in the
resignation or removal of our present officer and director; and
? may adversely affect the prevailing market price for our common stock.
Similarly, if we issued debt securities, it could result in:
? default and foreclosure on our assets if our operating revenues after a
business combination were insufficient to pay our debt obligations;
? acceleration of our obligations to repay the indebtedness even if we have
made all principal and interest payments when due if the debt security
contained covenants that required the maintenance of certain financial
ratios or reserves and any such covenants were breached without a waiver
or renegotiations of such covenants;
? our inability to obtain additional financing, if necessary, if the debt
security contained covenants restricting our ability to obtain additional
financing while such security was outstanding.
Based on our current business activities, we are a "shell company" as defined under the Exchange Act because we have no operations and nominal assets consisting solely of cash and/or cash equivalents. We are also a "blank check" company as defined under the Exchange Act because we are a development stage company that is issuing a "penny stock" (as defined under the Exchange Act) and have no specific business plan or purpose other than to merge with an unidentified company or companies. Our status as a blank check company and a shell company will impact our company and shareholders in many ways, including:
? the application of Rule 419 to any public offering of securities we may
undertake, which could make closing such an offering more difficult than
if we were not subject to such rule;
? the application of the "penny stock" rules to shares of our common stock,
which provide for enhanced disclosures by broker-dealers to persons
desiring to purchase our stock in the open market, which may diminish
demand for our stock in the open market;
? limitations on the availability of Rule 144 to our shareholders who hold
restricted stock, which may render raising capital in private transactions
more difficult; and
? limitations on the availability of Form S-8 to register shares of common
stock issuable to our employees and consultants.
Our management has broad discretion with respect to identifying and selecting a prospective business opportunity. We have not established any specific attributes or criteria (financial or otherwise) for a business opportunity and we may enter into a business combination with a development stage company, a distressed company or a foreign company engaged in any industry or we may purchase raw assets. Our management has never served in any capacity as management of a development stage public company that has consummated a business transaction such as that contemplated by us. Accordingly, our management may not successfully identify a prospective business opportunity or conclude a business transaction. In addition, our management engages in other business activities and is not obligated to devote any specific number of hours to our matters. Management intends to devote only as much time as it deems necessary to our affairs.
We anticipate that the selection of an appropriate business opportunity will be complex and extremely risky and we cannot assure you that we will be successful in concluding a transaction or if we do, that we will be successful thereafter. Our lack of financial and personnel resources may negatively impact our ability to consummate an attractive transaction or cause us to discontinue operations before we enter such a transaction.
We cannot assure you that we will be successful in concluding a business transaction. We will not realize any revenues or generate any income unless and until we successfully merge with or acquire an operating business that is generating revenues and otherwise is operating profitably. Moreover, we can offer no guarantee that we will achieve long-term or immediate short-term earnings from any business transaction.
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Any entity with which we enter into a business transaction will be subject to numerous risks in connection with its operations. To the extent we affect a business transaction with a financially unstable company or an entity in its early stage of development or growth, including entities without established records of sales or earnings, we may be affected by numerous risks inherent in the business and operations of such companies. If we consummate a business transaction with a foreign entity, we will be subject to all of the risks attendant to foreign operations. Although our management will endeavor to evaluate the risks inherent in a particular opportunity, we cannot assure you that we will properly ascertain or assess all significant risk factors.
Our management anticipates that our Company likely will affect only one business transaction, due primarily to our limited financial resources and the dilution of interest for present and prospective stockholders, which is likely to occur as a result of our management's plan to offer a controlling interest to a target in order to achieve a tax-free reorganization. This lack of diversification should be considered a substantial risk in investing in us because it will not permit us to offset potential losses from one venture against potential gains from another.
Critical Accounting Policies and Significant Judgments and Estimates
Our significant accounting policies are described in the Notes to these unaudited condensed financial statements. Currently, based on the Company's limited activity, we do not believe that there are any accounting policies that require the application of difficult, subjective or complex judgments.
Results of Operations
Three and Nine Months Ended
Revenue. We did not generate any revenue during the three and nine months ended
Operating Expenses. Our operating expenses consisted of consulting fees, and
other fees and expenses related to complying with our ongoing
For the three months ended
For the nine months ended
Other Income (Expense). Other income (expense) includes gain on extinguishment of debt and related interest and interest expense.
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For the three months ended
For the nine months ended
Income Taxes. We did not have any income taxes expense for the three and nine
months ended
Net Income (Loss). As a result of the factors described above, our net loss was
As a result of the factors described above, our net loss was
Liquidity and Capital Resources
At
Net cash flow used in operating activities was
Net cash flow provided by operating activities was
We expect to require working capital of approximately
We are a shell company with no revenue generating activities. We anticipate that our operating activities will generate negative net cash flow during the remaining year of 2021. The success of our business plan is dependent upon the availability of additional capital resources on terms satisfactory to management as we are not generating sufficient revenues from our business operations. Our sources of capital in the past were from related party advances. There can be no assurance that we can raise such additional capital resources on satisfactory terms. We believe that our current cash and other sources of liquidity discussed above are adequate to support operations for at least the next 12 months. We anticipate continuing to rely on related party advances in order to continue to fund our business operations. There is no assurance that we will achieve any additional arrange for debt or other financing to fund our plan of operations.
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Off-Balance Sheet Arrangements
We do not have any transactions, agreements or other contractual arrangements that constitute off-balance sheet arrangements.
Contractual Obligations
As a "smaller reporting company," as defined by Item 10 of Regulation S-K, the Company is not required to provide the information required by this Item.
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