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EX-3.4 - YABOO INC | v209149_ex3-4.htm |
EX-3.3 - YABOO INC | v209149_ex3-3.htm |
EX-23.1 - YABOO INC | v209149_ex23-1.htm |
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
Amendment
No. 4
FORM
S-1/A
REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OF 1933
Yaboo,
Inc.
(Name of
small business issuer in our charter)
Nevada
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7221
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26-3606113
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(State or other jurisdiction of
incorporation or organization)
|
(Primary Standard
Industrial Classification
Code Number)
|
IRS I.D.
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70
West Madison St., Suite 1400
Chicago,
IL
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60602
|
(Address
of principal executive offices)
|
(Zip
Code)
|
Registrant’s
telephone number: 312-214-6116
Corporate
Administrative Services, Inc.
1955
Baring Blvd
Sparks,
NV 89434
(775)
358-1412
(Name,
address and telephone number of agent for service)
SEC File
No: 333-164999
Approximate
date of commencement of proposed sale to the public: As soon as practicable
after the effective date of this Registration Statement.
If any of
the securities being registered on this Form are to be offered on a delayed or
continuous basis pursuant to Rule 415 under the Securities Act of 1933, check
the following box. x
If this
Form is filed to register additional securities for an offering pursuant to Rule
462(b) under the Securities Act, check the following box and list the Securities
Act Registration Statement number of the earlier effective Registration
Statement for the same offering. ¨
If this
Form is a post-effective amendment filed pursuant to Rule 462(c) under the
Securities Act, check the following box and list the Securities Act Registration
Statement number of the earlier effective Registration Statement for the same
offering. ¨
If this
Form is a post-effective amendment filed pursuant to Rule 462(d) under the
Securities Act, check the following box and list the Securities Act Registration
Statement number of the earlier effective Registration Statement for the same
offering. ¨
Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer or a smaller reporting
company.
Large
accelerated filer ¨
|
Accelerated
Filer ¨
|
|
|
Non-accelerated
filer ¨
|
Smaller
reporting company x
|
CALCULATION
OF REGISTRATION FEE
Title of each class of
securities to be registered
|
Amount to be
registered
|
Proposed
maximum
offering
price per
unit
|
Proposed
maximum
aggregate
offering price
|
Amount of
registration
fee [1] [2]
|
||||||||||||
Common
Stock offered by the Selling Stockholders [3]
|
2,502,000 | $ | 0.15 | $ | 375,300. | $ | 26.76 |
(1) Estimated
in accordance with Rule 457(a) of the Securities Act of 1933 solely for the
purpose of computing the amount of the registration fee based on recent prices
of private transactions.
(2) Calculated
under Section 6(b) of the Securities Act of 1933 as .00007130 of the aggregate
offering price.
(3) Represents
shares of the registrant’s common stock being registered for resale that have
been issued to the selling shareholders named in this registration
statement.
The
registrant hereby amends this registration statement on such date or dates as
may be necessary to delay our effective date until the registrant shall file a
further amendment which specifically states that this registration statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the registration statement shall become
effective on such date as the Commission, acting pursuant to Section 8(a) may
determine.
Yaboo,
Inc.
Selling
shareholders are offering up to 2,502,000 shares of common stock. The
selling shareholders will offer their shares at $0.15 per share until our shares
are quoted on the OTC Bulletin Board and, assuming we secure this qualification,
thereafter at prevailing market prices or privately negotiated
prices. We will not receive proceeds from the sale of
shares from the selling shareholders.
There are
no underwriting commissions involved in this offering. We have agreed
to pay all the costs of this offering. Selling shareholders will pay no offering
expenses.
Prior to
this offering, there has been no market for our securities. Our common stock is
not now listed on any national securities exchange, the NASDAQ stock market, or
the OTC Bulletin Board. There is no guarantee that our securities
will ever trade on the OTC Bulletin Board or other exchange.
This
offering is highly speculative and these securities involve a high degree of
risk and should be considered only by persons who can afford the loss of their
entire investment. See “Risk Factors” beginning on page
9.
Neither
the Securities and Exchange Commission nor any state securities commission has
approved or disapproved of these securities or passed upon the accuracy or
adequacy of this prospectus. Any representation to the contrary is a criminal
offense.
The
date of this prospectus is _________________ , 2011.
2
TABLE OF
CONTENTS
Summary
Information and Risk Factors
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4
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Risk
Factors
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8
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Use
of Proceeds
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17
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Determination
of Offering Price
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17
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Dilution
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17
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Selling
Shareholders
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17
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Plan
of Distribution
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20
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Legal
Proceedings
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22
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Directors,
Executive Officers, Promoters, and Control Persons
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22
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Security
Ownership of Certain Beneficial Owners and Management
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24
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Description
of Securities
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25
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Interest
of Named Experts
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25
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Disclosure
of Commission Position on Indemnification for Securities
Liabilities
|
26
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|
Description
of Business
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26
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Management’s
Discussion and Analysis of Financial Condition and Results of
Operations
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30
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Description
of Property
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36
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Certain
Relationships and Related Transactions
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37
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Market
for Common Equity and Related Stockholder Matters
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38
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Executive
Compensation
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40
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Changes
in and Disagreements with Accountants on Accounting and Financial
Disclosure
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43
|
|
financial
statements
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44
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3
SUMMARY
INFORMATION AND RISK FACTORS
You
should carefully read all information in the prospectus, including the financial
statements and their explanatory notes, under the Financial Statements prior to
making an investment decision.
Organization
Yaboo,
Inc. (the Company) was incorporated under the laws of Nevada on August 11, 2008,
with registered address at 375 N. Stephanie St., Suite 1411, Henderson, NV
89014. Yaboo, Inc. has principal office at 70 W. Madison St., Ste.
1400, Chicago, IL 60602. Our telephone number is
312-214-6116.
On April
17, 2009, Yaboo, Inc. established a 100% wholly foreign owned company in China,
Yaboo Agriculture (Taizgou) Co, Ltd, located at Hailing Modern Agricultural
Demonstration Zone, Hailing District, TaiZhou City, Jiangsu Province, People’s
Republic of China, to conduct and operate the business.
In
October 2009, Yaboo Agriculture (Taizgou) Co, Ltd. acquired the 100% ownership
of a Chinese company, Qilin Bay Ecological Restaurant Co., Ltd. (“Qilin Bay”),
owned by Taizhou Sunny Agricultural Development Co., Ltd. Taizhou
Sunny Agricultural Development Co., Ltd. was 100% owned and operated by local
district government, Hailing Modern Agricultural Demonstration Zone
Administration Office. Yaboo Agriculture (Taizhou) Co., Ltd. paid
cash of $146,455 to Taizhou Sunny Agricultural Development Co., Ltd., for the
100% ownership of Qilin Bay.
Qilin Bay
Restaurant Co., Ltd. (“Qilin Bay”), was incorporated on July 16, 2008 by Taizhou
Sunny Agricultural Development Co., Ltd. to operate a specialty restaurant
located in North Jiangzhou Road, Hailing Modern Agriculture Demonstration Zone,
Hailing District, Taizhou City, Jiangsu Province, China. Yaboo
Agriculture (Taizhou) Co. Ltd. will conduct the restaurant business in China
through Qilin Bay.
We own
and operate only one restaurant, Qilin Bay Restaurant. The sole
source of our revenues is through operations of our one restaurant since the
restaurant was opened on October 22, 2009. We did not generate
revenues prior to our restaurant being opened. We record revenue based upon the
food and beverage sales at the restaurant when the food and beverage is
delivered and consumed by restaurant customers for our retail customers who paid
with cash. A few local government organizations did sign sales
receipts and the restaurant would send the local government departments bills
for payments, and we recorded revenues when payment was received.
Business
We
operate what is known in China as a “green foods” restaurant, which comprises
the operating activities of the Qilin Bay Restaurant. There are no
“licensed” green foods restaurants in China. Instead, as what is know
as a “green foods” restaurant, we focus on selling foods that meet “Green Food”
standards set by the China Ministry of Agriculture. Chinese green
food standards are not as strictly defined or tested as USA’s organic food
standards. In China, “green food” means that the food materials were
naturally grow without utilizing pesticides or any chemicals, the food materials
must have no harmful materials tested which may have no negative effects on
human beings. Much of the food we serve was grown by farmers or in a
nearby greenhouse located in the Taizhou City Hailing Modern Agriculture
Demonstration Zone. Taizhou City Hailing Modern Agriculture
Demonstration Zone is approved by China Ministry of Agriculture to grow
vegetables according to China’s green food standards. We believe the
food we serve that is grown in the Taizhou City Hailing Modern Agriculture
Demonstration Zone meets Chinese “green food” standards, although we do not
perform any independent tests on these foods or on foods we buy at local markets
that are not grown in the Hailing Modern Agriculture Demonstration
Zone.
4
Our
restaurant comprises the operating activities of the Qilin Bay
Restaurant. The restaurant is located in the center of “Taizhou City
Hailing Modern Agricultural Demonstration Zone.” The restaurant’s interior is
built in accordance of Chinese-garden style. The restaurant includes a
3500-square meter greenhouse, with various flowers and trees. Customer will
enjoy their meals in this natural environment. The restaurant has
24-stylized dinning rooms, along with a 2000-square meter hall. The hall has an
entertainment stage surrounded by 300 seats. There is also a section built
inside of the restaurant, for the purpose of displaying green food, which could
also be used as VIP member club. The member club provides pre-cooked foods for
members to take home.
We
operate only one restaurant, Qilin Bay Restaurant. We will continue
to generate revenues solely from operations of this one restaurant, as described
above.
After
acquisition of the Qilin Bay Restaurant, we remodeled and started to
operate in October 2009. The gross sales revenue generated through
the operations of the restaurant was $117,547 as of December 31, 2009; the gross
revenue of $213,504 was for the nine month period from January 1 to September
30, 2010. There was an operating loss of $177,317 for 2009, and an
operating loss of $76,223 for nine month period from January 1 to September 30,
2010, primarily as the result of operating losses at the restaurant combined
with corporate overhead, respectively.
From
August 11, 2008 through September 30, 2010, we generated $331,051 in revenues
although we have had an operating loss during this period of
($266,246). From August 11, 2008 through September 30, 2010, our
total expenses including cost of goods and operating expenses was $598,193, and
the averaged monthly cost, i.e., the monthly burn rate was
$23,459. As of September 30, 2010, the averaged monthly sales revenue
was $12,982; and the net monthly negative cash flow was
$10,477. As of September 30, 2010, the cash balance in the bank
was $31,395, which will only last for three months’ operations. After
three months, the founder of the Company, Mr. Jiang and other board members have
orally agreed to loan to the company sufficient funds as the Company needs to
continue operations. We do not have any written loan agreement in
place with Mr. Baoguo Jiang or board members. The loan will be for
the company’s operation purpose without interest charge, the loan may be
requested to pay off as long as the Company can generate sufficient cash flows
to continue operations and repay the loan. As of September 30, 2010,
there was total $57,045 loan balance from shareholder, Mr. Baoguo
Jiang. We anticipate needing $150,000 to fund our proposed operations
for the next 12 months, including approximately $80,000 to fund the costs of
being a public company. We anticipate funding these amounts from cash
flow or from the oral agreements from management. If we do not
generate sufficient operating cash flow and our management does not loan us the
funds, and if we are unable to obtain alternative debt or equity financing, we
may have to suspend or cease operations.
In
addition, the management may pursue to increase marketing activities to increase
sales. Due to the approaching of year end and the Chinese Spring
Festival, we will advertise on local newspapers, send more brochures, menus, and
coupons to attract more Chinese New Year parties or banquets. And the
same time, we will continue contacts with local governments to attempt to get
more reservations. We anticipate spending approximately
$15,000 on these activities in the next 12
months.
5
Our
restaurant was closed and Qilin Bay was inactive from January to September 2009
due to prior restaurant operational management’s personal family
reasons. We do not expect this situation to reoccur as we have
replaced operational management. Our lack of operating history and financial
resources raises substantial doubt about our ability to continue as a going
concern and our financial statements contain a going concern
qualification.
The Company’s organization
chart is illustrated as follows:
Qilin Bay
Restaurant, is owned 100% by Yaboo Agriculture (Taizhou) Co., Ltd., a 100%
subsidiary of Yaboo, Inc.
The
Offering
As of the
date of this prospectus, we had 47,278,000 shares of common stock
outstanding.
Selling
shareholders are offering up to 2,502,000 shares of common stock. The
selling shareholders will offer their shares at $0.15 per share until our shares
are quoted on the OTC Bulletin Board and thereafter at prevailing market prices
or privately negotiated prices. We will pay all expenses of
registering the securities, estimated at approximately $100,000. We
will not receive any proceeds of the sale of these securities.
To be
quoted on the OTC Bulletin Board, a market maker must file an application on our
behalf in order to make a market for our common stock. The current
absence of a public market for our common stock means that our shares should be
considered totally illiquid, which inhibits investors’ ability to resell their
shares.
6
Financial
Summary
Because
this is only a financial summary, it does not contain all the financial
information that may be important to you. Therefore, you should carefully read
all the information in this prospectus, including the financial statements and
their explanatory notes before making an investment decision.
STATEMENT
OF LOSS:
Period
|
||||||||||||
August 11,
|
||||||||||||
Nine
Month
|
Year
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2008 (Date of
|
||||||||||
Ended
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Ended
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Inception)
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||||||||||
September
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December
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Through
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||||||||||
30,
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31,
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Sept 30
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||||||||||
2010
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2009
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2010
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||||||||||
Revenues:
|
$ | 213,504 | $ | 117,547 | $ | 331,051 | ||||||
Cost
of Goods Sold:
|
98,166 | 88,667 | 186,833 | |||||||||
Gross
Profit
|
115,338 | 28,880 | 144,218 | |||||||||
Operating
expenses:
|
180,459 | 206,197 | 411,360 | |||||||||
Net
Loss
|
$ | 76,223 | $ | 176,748 | $ | $266,246 |
BALANCE
SHEET:
September
30
|
December 31
|
December 31
|
||||||||||
2010
|
2009
|
2008
|
||||||||||
ASSETS
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$ | 272,582 | $ | 357,587 | $ | 477,025 | ||||||
LIABILITIES
|
72,215 | 81,210 | $ | 23,900 | ||||||||
STOCKHOLDERS’
Equity
|
200,367 | 276,377 | $ | 453,125 | ||||||||
TOTAL
LIABILITIES & EQUITY
|
$ | 272,582 | 357,587 | $ | 477,025 |
7
RISK
FACTORS
In
addition to the other information provided in this prospectus, you should
carefully consider the following risk factors in evaluating our business before
purchasing any of our common stock. All material risks are discussed
in this section.
Our generating no
significant revenues from operations makes it difficult for us to evaluate our
future business prospects and make decisions based on those estimates of our
future performance.
Since
our inception, as of September 30, 2010, we have generated revenues of $331,051
but have incurred operating losses of $(266,246). Our business plan
is still speculative and unproven. There is no assurance that we will be
successful in executing our business plan or that even if we successfully
implement our business plan, we will ever generate revenues or profits, which
makes it difficult to evaluate our business. As a consequence, it is
difficult, if not impossible, to forecast our future results based upon our
historical data. Because of the uncertainties related to our lack of
historical operations, we may be hindered in our ability to anticipate and
timely adapt to increases or decreases in sales, revenues or expenses. If
we make poor budgetary decisions as a result of unreliable historical data, we
may never generate revenues or become profitable or incur losses, which may
result in a decline in our stock price.
There is substantial doubt
about our ability to continue as a going concern as a result of our lack of
operating history and financial resources, and if we are unable to generate
significant revenue or secure financing we may be required to cease or curtail
our operations.
Our lack
of any operating history and financial resources raises substantial doubt about
our ability to continue as a going concern and our financial statements contain
a going concern qualification. Our financial statements do not
include adjustments that might result from the outcome of this uncertainty and
if we are unable to generate significant revenue or secure financing we may be
required to cease or curtail our operations.
Because we currently
maintain no insurance, we currently do not have may not have in the future
adequate assets to cover any losses or damages and could have to cease
operations and cause the loss of your entire investment.
We
currently maintain no insurance. We currently do not have insurance
and may not have in the future sufficient assets to damage to our premises or
any claims of injury or damage by our customers, all of which could cause us to
cease operations and cause the loss of your entire investment.
We may be
unable to compete effectively in the restaurant industry which could reduce our
revenues.
The
restaurant industry is intensely competitive. Many of our direct and indirect
competitors are well-established national, regional or local chains or local
operators such as Inner Mongolia Little Sheep Catering Chain Co., Ltd. with a
greater market presence than us. Further, some competitors have substantially
greater financial, marketing and other resources than us. In addition,
independent owners of local or regional establishments may enter the specialty
restaurant business without significant barriers to entry and such
establishments may provide price competition for our restaurant. Competition in
the specialty segment of the restaurant industry is expected to remain intense
with respect to price, service, location, concept and the type and quality of
food. We also face intense competition for qualified management personnel and
restaurant staff.
8
Expenses required to operate
as a public company will reduce funds available to develop our business and
could negatively affect our stock price and adversely affect our results of
operations, cash flow and financial condition.
Operating
as a public company is more expensive than operating as a private
company. For example, as a public company, we will be required to
obtain outside assistance from legal, accounting, investor relations, or other
professionals that could be more costly than planned. We may also be required to
hire additional staff to comply with additional SEC reporting
requirements. We anticipate that these costs will be approximately
$75,000 per year. Our failure to comply with reporting requirements
and other provisions of securities laws could negatively affect our stock price
and adversely affect our results of operations, cash flow and financial
condition.
Risk Factors Related to Our
Restaurant
Restaurant quarterly
operating results may fluctuate due to the timing of special events and other
factors,
Our
restaurant’s quarterly operating results will be subject to fluctuations based
on the dates for holiday and other celebration events in China such as the
Chinese New Year in February. Further, our quarterly operating
results may fluctuate significantly because of other factors,
including:
o Fluctuations
in food costs;
o Labor
availability and costs for staff and management personnel;
o Changes
in competitive factors;
o Disruption
in supplies;
o General
economic conditions and consumer confidence;
o The
impact from natural disasters;
As a
result of the factors discussed above, our quarterly and annual operating
results revenues may fluctuate significantly. Accordingly, results for any one
quarter are not necessarily indicative of results to be expected for any other
quarter or for any year. These fluctuations may cause future operating results
to fall below the expectations of securities analysts and investors. In that
event, the price of our common stock would likely decrease.
We are susceptible to
adverse trends and economic conditions in Jiangsu Province China which could reduce our
revenues.
We
operate only one restaurant and it is located in Jiangsu Province China. As a
result, e are susceptible to adverse trends and economic conditions in Jiangsu
Province. In addition, given our geographic concentration in one city, regional
occurrences such as local strikes, new or revised laws or regulations, or
disruptions in the supply of food products could reduce our
revenues.
9
Changes in consumer
preferences or discretionary consumer spending could harm our restaurant’s
performance which could reduce our revenues.
Our
success depends, in part, upon the continued popularity of specialty dining
restaurant styles. We also depend on trends toward consumers eating away from
home more often. Shifts in these consumer preferences could negatively affect
our future profitability. Reduced consumer demand for our menu items and could
result in a decrease in guest traffic to our restaurant, which could materially
harm our business. In addition, our success depends to a significant extent on
numerous factors affecting discretionary consumer spending, including economic
conditions, disposable consumer income and consumer confidence. A decline in
consumer spending or in economic conditions could reduce guest traffic or impose
practical limits on pricing, either of which could harm our business, financial
condition, operating results or cash flow.
Natural disasters and other
events could harm our restaurant’s performance which could reduce our
revenues.
A natural
disaster, such as a violent storm, a serious and widespread disease, such as an
avian flu pandemic, or other events, such as a serious terrorist attack, could
have a material adverse effect on our restaurant’s performance.
Government regulations
concerning restaurant operations may harm our restaurant’s operations which
could reduce our revenues.
The
restaurant industry is subject to numerous federal, state and local governmental
regulations, including those relating to the preparation and sale of food and
alcoholic beverages, sanitation, public health, fire codes, zoning and building
requirements. Termination of the liquor license for our restaurant would
adversely affect our revenues. Our restaurant is also subject to laws governing
our relationships with employees, including benefit, wage and hour laws, and
laws and regulations relating to workers' compensation insurance rates,
unemployment and other taxes, working and safety conditions and citizenship or
immigration status. Failure to comply with any of these regulations
or increases in the minimum wage rate, employee benefit costs or other costs
associated with employees, could adversely our operations.
An increase in the cost of
food products could adversely affect our operating results which could reduce
our revenues.
If the
cost of food we use in preparing dishes at our restaurant increases, cost of
sales will increase and operating income could be reduced. Our restaurant’s
primary food products are natural farmed pork, chicken, beef, and various
vegetables, grains, and rice. Any material increase in the cost of
food products, cost of sales could be affected by increases in the cost of the
food products, which can result from a number of factors, including seasonality,
increases in the cost of grain, disease and other factors that affect
availability, and greater international demand for domestic chicken and beef
products.
10
Risks Related to Management
and Personnel
We depend heavily on key
personnel, and turnover of key senior management could harm our
business.
Our
future business and results of operations depend in significant part upon the
continued contributions of our senior management personnel, including Baoguo
Jiang, Chairman. If Baoguo Jiang, Chairman fails to perform in his current
position, or if we are not able to attract and retain skilled employees as
needed, our business could suffer. We depend on the skills and
abilities of this key employee in managing the operations, marketing and sales
aspects of our business, any part of which could be harmed by turnover in the
future. We do not have a written employment agreement with our
Chairman and CEO, Baoguo Jiang.
Our management has no
experience in managing the day to day operations of a public company and, as a
result, we may incur additional expenses associated with the management of our
company.
Baoguo
Jiang, Chairman and CEO is responsible for the operations and reporting of the
combined company. The requirements of operating as a small public company are
new to management and the employees as a whole. This will require us to obtain
outside assistance from legal, accounting, investor relations, or other
professionals that could be more costly than planned. Our failure to
comply with reporting requirements and other provisions of securities laws could
negatively affect our stock price and adversely affect our results of
operations, cash flow and financial condition.
Because we do not have an
audit or compensation committee, shareholders will have to rely on the entire
board of directors, none of which are independent, to perform these
functions.
We do not
have an audit or compensation committee comprised of independent
directors. Indeed, we do not have any audit or compensation
committee. These functions are performed by the board of directors as
a whole. No members of the board of directors are independent
directors. Thus, there is a potential conflict in that board members
who are also part of management will participate in discussions concerning
management compensation and audit issues that may affect management
decisions.
Certain
of our stockholders hold a significant percentage of our outstanding voting
securities which could reduce the ability of minority shareholders to effect
certain corporate actions.
Our
officers, directors and majority shareholders are the beneficial owners of
approximately 79.95% of our outstanding voting securities. As a result, they
possess significant influence and can elect a majority of our board of directors
and authorize or prevent proposed significant corporate transactions. Their
ownership and control may also have the effect of delaying or preventing a
future change in control, impeding a merger, consolidation, takeover or other
business combination or discourage a potential acquirer from making a tender
offer.
Risks Related to our
Operations in China
Because
all our customers and operations are located in China, the following risks could
affect our business and thus harm our revenues.
11
General economic conditions
in China could reduce our revenues.
General
economic conditions in China have an impact on our business and financial
results. The global economy in general and in China specifically remains
uncertain. As a result, individuals and companies may delay or reduce
expenditures. Weak economic conditions and/or softness in the consumer or
business channels could result in lower demand for our products, resulting in
lower sales, earnings and cash flows.
Changes in China’s political
or economic situation could harm us and our operating
results.
Economic
reforms adopted by the Chinese government have had a positive effect on the
economic development of the country, but the government could change these
economic reforms or any of the legal systems at any time. This could either
benefit or damage our operations and profitability. Some of the things that
could have this effect are:
|
•
|
Level
of government involvement in the
economy;
|
|
•
|
Control
of foreign exchange;
|
|
•
|
Methods
of allocating resources;
|
|
•
|
Balance
of payments position;
|
|
•
|
International
trade restrictions; and
|
|
•
|
International
conflict.
|
The
Chinese economy differs from the economies of most countries belonging to the
Organization for Economic cooperation and Development, or OECD, in many ways.
For example, state-owned enterprises still constitute a large portion of the
Chinese economy, and weak corporate governance traditions and a lack of flexible
currency exchange policy continue to persist. As a result of these differences,
we could be adversely affected in that there could be increased competition from
state-owned enterprises or changes in economic policies could adversely affect
potential patron’s economic situation thereby reducing our
revenues.
Our business is largely
subject to the uncertain legal environment in China and your legal protection
could be limited.
The
Chinese legal system is a civil law system based on written statutes. Unlike
common law systems, it is a system in which precedents set in earlier legal
cases are not generally used. The overall effect of legislation enacted over the
past 20 years has been to enhance the protections afforded to foreign invested
enterprises in China. However, these laws, regulations and legal requirements
are relatively recent and are evolving rapidly, and their interpretation and
enforcement involve uncertainties. These uncertainties could limit the legal
protections available to foreign investors, such as the right of foreign
invested enterprises to hold licenses and permits such as requisite business
licenses. Further as a result, it could be difficult for investors to effect
service of process in the U.S. or to enforce a judgment obtained in the U.S.
against our Chinese operations and subsidiaries.
You may have difficulty in
enforcing any judgment against any or all of our executive officers and
directors as they are residents of China and not of the U.S., and substantially
all the assets of these persons are located outside the U.S.
All of
our executive officers and our directors are residents of China and not of the
U.S., and substantially all the assets of these persons are located outside the
U.S. As a result, it could be difficult for investors to effect service of
process in the U.S., or to enforce a judgment obtained in the U.S. against our
Chinese operations and subsidiaries.
12
The Chinese government
exerts substantial influence over the manner in which we must conduct their
business activities.
Only
recently has China permitted provincial and local economic autonomy and private
economic activities. The Chinese government has exercised and continues to
exercise substantial control over virtually every sector of the Chinese economy
through regulation and state ownership. Our ability to operate in China may be
harmed by changes in its laws and regulations, including those relating to
taxation, import and export tariffs, environmental regulations, land use rights,
property and other matters. We believe that our operations in China are in
material compliance with all applicable legal and regulatory requirements.
However, the central or local governments of the jurisdictions in which we
operate may impose new, stricter regulations or interpretations of existing
regulations that would require additional expenditures and efforts on our part
to ensure our compliance with such regulations or interpretations.
Accordingly,
government actions in the future, including any decision not to continue to
support recent economic reforms and to return to a more centrally planned
economy or regional or local variations in the implementation of economic
policies, could have a significant effect on economic conditions in China or
particular regions thereof, and could require us to divest ourselves of any
interest we then hold in Chinese properties or joint ventures. Any
divestiture could reduce our assets or revenues and thus reduce the value of our
stock.
The value of our securities
will be affected by the foreign exchange rate between U.S. dollars and
RMB.
The value
of our common stock will be affected by the foreign exchange rate between U.S.
dollars and RMB, and between those currencies and other currencies in which our
sales may be denominated. Currently, RMB is stronger than U.S. Dollars. For
example, to the extent that we need to convert U.S. dollars into RMB for our
operational needs and should RMB appreciate against the U.S. dollar at that
time, our financial position, the business of the Company, and the price of our
common stock may be harmed. Conversely, if we decide to convert our RMB into
U.S. dollars for the purpose of declaring dividends on our common stock or for
other business purposes and the U.S. dollar appreciates against RMB, the U.S.
dollar equivalent of our earnings from our subsidiaries in China would be
reduced.
In the
event that the U.S. dollars appreciate against RMB, our costs will increase. If
we cannot pass the resulting cost increase on to our customers, our
profitability and operating results will suffer. In addition, since our sales to
international customers grew rapidly, we are subject to the risk of foreign
currency depreciation.
Because our holding company
structure creates restrictions on the payment of dividends, our ability to pay
dividends is limited.
We have
no direct business operations, other than our ownership of our subsidiaries. If
we decide in the future to pay dividends, as a holding company, our ability to
pay dividends and meet other obligations depends upon the receipt of dividends
or other payments from our operating subsidiary. In addition, our
operating subsidiary, from time to time, may be subject to restrictions on their
ability to make distributions to us, including as a result of restrictive
covenants in loan agreements, restrictions on the conversion of local currency
into U.S. dollars or other hard currency and other regulatory restrictions. If
future dividends are paid in Renminbi, fluctuations in the exchange rate for the
conversion of Renminbi into U.S. dollars may adversely affect the amount
received by U.S. stockholders upon conversion of the dividend payment into U.S.
dollars. We do not presently have any intention to declare or pay dividends in
the future. You should not purchase shares of our common stock in anticipation
of receiving dividends in future periods.
13
We may be unable to enforce
our rights due to policies regarding the regulation of foreign investments in
China, which could reduce our ability to compete and our
revenues.
The PRC's
legal system is a civil law system based on written statutes in which decided
legal cases have little value as precedents, unlike the common law system
prevalent in the United States. The PRC does not have a
well-developed, consolidated body of laws governing foreign investment
enterprises. As a result, the administration of laws and regulations by
government agencies may be subject to considerable discretion and variation, and
may be subject to influence by external forces unrelated to the legal merits of
a particular matter. China's regulations and policies with respect to
foreign investments are evolving. Definitive regulations and policies with
respect to such matters as the permissible percentage of foreign investment and
permissible rates of equity returns have not yet been
published. Statements regarding these evolving policies have been
conflicting and any such policies, as administered, are likely to be subject to
broad interpretation and discretion and to be modified, perhaps on a
case-by-case basis. The uncertainties regarding such regulations and policies
present risks which may affect our ability to achieve our business
objectives. If we are unable to enforce any legal rights we may have
under our contracts or otherwise, our ability to compete with other companies in
our industry could be materially and negatively affected and our revenues could
be reduced.
It may be difficult for
stockholders to enforce any judgment obtained in the United States against us,
which may limit the remedies otherwise available to our
stockholders.
All of
our assets are located outside the United States and all of our current
operations are conducted in China. Moreover, all of our directors and
officers are nationals or residents of China. All or a substantial
portion of the assets of these persons are located outside the United
States. As a result, it may be difficult for our stockholders to
effect service of process within the United States upon these
persons. In addition, there
is uncertainty as to whether the courts of China would
recognize or enforce judgments of U.S. courts obtained against us or
such officers and/or directors predicated upon the civil
liability provisions of
the securities law of the United States or any state
thereof, or be competent to hear original actions brought in China against us or
such persons predicated upon
the securities laws of the United States or any state
thereof. Further, China’s treaties do not provide for reciprocal
recognition and enforcement of judgments of U.S. courts.
If we lose our restaurant
business license, we may have to suspend or cease operations which will reduce
our revenues.
Although
there are no requirements to keep a minimum amount of cash in our bank account
to keep our restaurant license, we have the risk of potential loss of the
restaurant business license for other reasons, such as if we will not pass the
annual environmental or health safety inspections by the local
government. If we lose our restaurant business license, we may have
to suspend or cease operations which will reduce our revenues.
14
Our executive officers are
not receiving any cash compensation although we may pay our executive officers
compensation in the future if the Board of Directors determines our resources
allow.
Currently
all executives officers are not receiving any compensation either in form of
cash compensation or stock compensation. As long as we are in the
development stage or incur net losses from operation, we will not compensate the
executive officer, specifically, to Chairman and CEO, Baoguo
Jiang. However, if we generate profits in the future, our net
revenues will be reduced by compensation expenses for our executive officers,
which we anticipate to be less that those received by executive officers of
comparable U.S. companies due to current lower cost of living in China,
generally in the range of $50,000 to $75,000 per year.
Risks Related to the Market
for our Stock
Investors may have
difficulty in reselling their shares due to the lack of market or state Blue Sky
laws.
Our
common stock is currently not quoted on any market. No market may ever develop
for our common stock, or if developed, may not be sustained in the
future.
The
holders of our shares of common stock and persons who desire to purchase them in
any trading market that might develop in the future should be aware that there
may be significant state law restrictions upon the ability of investors to
resell our shares. Accordingly, even if we are successful in having the Shares
available for trading on the OTCBB, investors should consider any secondary
market for the Company's securities to be a limited one. We intend to seek
coverage and publication of information regarding the company in an accepted
publication which permits a "manual exemption." This manual exemption permits a
security to be distributed in a particular state without being registered if the
company issuing the security has a listing for that security in a securities
manual recognized by the state. However, it is not enough for the security to be
listed in a recognized manual. The listing entry must contain (1) the names of
issuers, officers, and directors, (2) an issuer's balance sheet, and (3) a
profit and loss statement for either the fiscal year preceding the balance sheet
or for the most recent fiscal year of operations. We may not be able
to secure a listing containing all of this information. Furthermore,
the manual exemption is a non issuer exemption restricted to secondary trading
transactions, making it unavailable for issuers selling newly issued securities.
Most of the accepted manuals are those published in Standard and Poor's, Moody's
Investor Service, Fitch's Investment Service, and Best's Insurance Reports, and
many states expressly recognize these manuals. A smaller number of states
declare that they “recognize securities manuals” but do not specify the
recognized manuals. The following states do not have any provisions and
therefore do not expressly recognize the manual exemption: Alabama, Georgia,
Illinois, Kentucky, Louisiana, Montana, South Dakota, Tennessee, Vermont and
Wisconsin.
Accordingly,
our shares should be considered totally illiquid, which inhibits investors’
ability to resell their shares.
15
We will be subject to penny
stock regulations and restrictions and you may have difficulty selling shares of
our common stock.
The SEC
has adopted regulations which generally define so-called “penny stocks” to be an
equity security that has a market price less than $5.00 per share or an exercise
price of less than $5.00 per share, subject to certain exemptions. We
anticipate that our common stock will become a “penny stock”, and we will become
subject to Rule 15g-9 under the Exchange Act, or the “Penny Stock Rule”. This
rule imposes additional sales practice requirements on broker-dealers that sell
such securities to persons other than established customers. For transactions
covered by Rule 15g-9, a broker-dealer must make a special suitability
determination for the purchaser and have received the purchaser’s written
consent to the transaction prior to sale. As a result, this rule may affect the
ability of broker-dealers to sell our securities and may affect the ability of
purchasers to sell any of our securities in the secondary market.
For any
transaction involving a penny stock, unless exempt, the rules require delivery,
prior to any transaction in a penny stock, of a disclosure schedule prepared by
the SEC relating to the penny stock market. Disclosure is also required to be
made about sales commissions payable to both the broker-dealer and the
registered representative and current quotations for the securities. Finally,
monthly statements are required to be sent disclosing recent price information
for the penny stock held in the account and information on the limited market in
penny stock.
We do not
anticipate that our common stock will qualify for exemption from the Penny Stock
Rule. In any event, even if our common stock were exempt from the Penny Stock
Rule, we would remain subject to Section 15(b)(6) of the Exchange Act, which
gives the SEC the authority to restrict any person from participating in a
distribution of penny stock, if the SEC finds that such a restriction would be
in the public interest.
Sales of our common stock
under Rule 144 could reduce the price of our stock.
There are
9,478,000 shares of our common stock held by non-affiliates and 37,800,000
shares held by affiliates Rule 144 of the Securities Act of 1933 defines as
restricted securities.
All of
our shares held by non-affiliates are currently eligible for resale or are
being registered in this offering, however affiliates will still be subject to
the resale restrictions of Rule 144. In general, persons holding
restricted securities, including affiliates, must hold their shares for a period
of at least six months, may not sell more than one percent of the total issued
and outstanding shares in any 90-day period, and must resell the shares in an
unsolicited brokerage transaction at the market price. The
availability for sale of substantial amounts of common stock under Rule 144
could reduce prevailing market prices for our securities.
If in the future we are not required to
continue filing reports under Section 15(d) of the 1934 Act, for example because
we have less than three hundred shareholders of record at the end of the first
fiscal year in which this registration statement is declared effective, and
we do not file
a Registration Statement on Form 8-A upon the occurrence of such
an event, our
securities can no longer be quoted on the OTC Bulletin Board, which could reduce
the value of your investment.
As a
result of this offering as required under Section 15(d) of the Securities
Exchange Act of 1934, we will file periodic reports with the Securities and
Exchange Commission as required under Section 15(d). However, if in
the future we are not required to continue filing reports under Section 15(d),
for example because we have less than three hundred shareholders of record at
the end of the first fiscal year in which this registration statement is
declared effective, and we do not file a Registration Statement on Form 8-A upon
the occurrence of such an event, our securities can no longer be quoted on the
OTC Bulletin Board, which could reduce the value of your
investment. Of course, there is no guarantee that we will be able to
meet the requirements to be able to cease filing reports under Section 15(d), in
which case we will continue filing those reports in the years after the fiscal
year in which this registration statement is declared
effective. Filing a registration statement on Form 8-A will require
us to continue to file quarterly and annual reports with the SEC and will
also subject us to the proxy rules of the SEC. In addition, our officers,
directors and 10% stockholders will be required to submit reports to the SEC on
their stock ownership and stock trading activity. Thus the filing of
a Form 8-A in such event makes our securities continued to be able to be quoted
on the OTC Bulletin Board.
16
Special
Information Regarding Forward Looking Statements
Some of
the statements in this prospectus are “forward-looking
statements.” These forward-looking statements involve certain known
and unknown risks, uncertainties and other factors which may cause our actual
results, performance or achievements to be materially different from any future
results, performance or achievements expressed or implied by these
forward-looking statements. These factors include, among others, the
factors set forth above under “Risk Factors.” The words “believe,”
“expect,” “anticipate,” “intend,” “plan,” and similar expressions identify
forward-looking statements. We caution you not to place undue
reliance on these forward-looking statements. We undertake no
obligation to update and revise any forward-looking statements or to publicly
announce the result of any revisions to any of the forward-looking statements in
this document to reflect any future or developments. However, the
Private Securities Litigation Reform Act of 1995 is not available to us as a
non-reporting issuer. Further, Section 27A(b)(2)(D) of the Securities
Act and Section 21E(b)(2)(D) of the Securities Exchange Act expressly state that
the safe harbor for forward looking statements does not apply to statements made
in connection with an initial public offering.
USE
OF PROCEEDS
Not
applicable. We will not receive any proceeds from the sale of shares
offered by the selling shareholders.
DETERMINATION
OF OFFERING PRICE
The
offering price has been arbitrarily determined and does not bear any
relationship to our assets, results of operations, or book value, or to any
other generally accepted criteria of valuation. Prior to this offering, there
has been no market for our securities. In order to assure that
selling shareholders will offer their shares at $0.15 per share until our shares
are quoted on the OTC Bulletin Board, we will notified our shareholders and our
Transfer Agent that no sales will be allowed prior to the date our shares are
quoted on the OTC Bulletin Board without proof of the selling
price.
DILUTION
Not
applicable. We are not offering any shares in this registration statement. All
shares are being registered on behalf of our selling shareholders.
SELLING
SHAREHOLDERS
The
selling shareholders named below are selling the securities. The
table assumes that all of the securities will be sold in this offering. However,
any or all of the securities listed below may be retained by any of the selling
shareholders, and therefore, no accurate forecast can be made as to the number
of securities that will be held by the selling shareholders upon termination of
this offering.
We
believe that the selling shareholders listed in the table below have sole voting
and investment powers with respect to the securities indicated. We
will not receive any proceeds from the sale of the securities by the selling
shareholders. No selling shareholders are broker-dealers or
affiliates of broker-dealers. All selling shareholders may be deemed
underwriters.
17
Name
|
Total Shares
Owned
|
Shares
Registered
|
% owned
before
Offering
|
Amount
owned after
the offering,
assuming all
shares sold [1]
|
% owned after
the offering,
assuming all
shares sold [1]
|
Relationship
to us
|
|||||||||||||||
Jianhua
Li
|
6,000,000 | 100,000 | 12.69 | % | 5,900,000 | 12.48 | % | ||||||||||||||
Xinwei
Shi
|
50,000 | 50,000 | 0.11 | % | 0 | 0.00 | % | ||||||||||||||
Lijun
Jia
|
50,000 | 50,000 | 0.11 | % | 0 | 0.00 | % | ||||||||||||||
Zhiling
Yan
|
20,000 | 20,000 | 0.04 | % | 0 | 0.00 | % | ||||||||||||||
Wenquan
Li
|
1,000,000 | 100,000 | 2.12 | % | 900,000 | 1.90 | % | ||||||||||||||
Chunming
Shen
|
60,000 | 60,000 | 0.13 | % | 0 | 0.00 | % | ||||||||||||||
Jing
Yan
|
20,000 | 20,000 | 0.04 | % | 0 | 0.00 | % | ||||||||||||||
Xiaoyan
Gao
|
20,000 | 20,000 | 0.04 | % | 0 | 0.00 | % | ||||||||||||||
Meijuan
Li
|
60,000 | 60,000 | 0.13 | % | 0 | 0.00 | % | ||||||||||||||
Meilan
Cong
|
40,000 | 40,000 | 0.08 | % | 0 | 0.00 | % | ||||||||||||||
Yu
Yan
|
20,000 | 20,000 | 0.04 | % | 0 | 0.00 | % | ||||||||||||||
Xiaomeng
Lv
|
20,000 | 20,000 | 0.04 | % | 0 | 0.00 | % | ||||||||||||||
Lei
Yang
|
20,000 | 20,000 | 0.04 | % | 0 | 0.00 | % | ||||||||||||||
Xueqing
Chen
|
20,000 | 20,000 | 0.04 | % | 0 | 0.00 | % | ||||||||||||||
Changlong
Ju
|
20,000 | 20,000 | 0.04 | % | 0 | 0.00 | % | ||||||||||||||
Shilan
Dai
|
20,000 | 20,000 | 0.04 | % | 0 | 0.00 | % | ||||||||||||||
Lan
Dong
|
40,000 | 40,000 | 0.08 | % | 0 | 0.00 | % | ||||||||||||||
Haosheng
Dong
|
20,000 | 20,000 | 0.04 | % | 0 | 0.00 | % | ||||||||||||||
Linyan
Yan
|
20,000 | 20,000 | 0.04 | % | 0 | 0.00 | % | ||||||||||||||
Guohua
Mao
|
20,000 | 20,000 | 0.04 | % | 0 | 0.00 | % | ||||||||||||||
Fangzhou
Mao
|
20,000 | 20,000 | 0.04 | % | 0 | 0.00 | % | ||||||||||||||
Gang
Zhao
|
20,000 | 20,000 | 0.04 | % | 0 | 0.00 | % | ||||||||||||||
Bin
Dong
|
20,000 | 20,000 | 0.04 | % | 0 | 0.00 | % | ||||||||||||||
Shaofeng
Qu
|
20,000 | 20,000 | 0.04 | % | 0 | 0.00 | % | ||||||||||||||
Suping
Wang
|
20,000 | 20,000 | 0.04 | % | 0 | 0.00 | % | ||||||||||||||
Yanqiu
Qu
|
20,000 | 20,000 | 0.04 | % | 0 | 0.00 | % | ||||||||||||||
Zhiyin
Cao
|
20,000 | 20,000 | 0.04 | % | 0 | 0.00 | % | ||||||||||||||
Peiqin
Yu
|
20,000 | 20,000 | 0.04 | % | 0 | 0.00 | % | ||||||||||||||
Jixiang
Shun
|
20,000 | 20,000 | 0.04 | % | 0 | 0.00 | % | ||||||||||||||
Lianzhi
Fu
|
20,000 | 20,000 | 0.04 | % | 0 | 0.00 | % | ||||||||||||||
Xiaosong
Dong
|
20,000 | 20,000 | 0.04 | % | 0 | 0.00 | % | ||||||||||||||
Qing
Zhao
|
20,000 | 20,000 | 0.04 | % | 0 | 0.00 | % | ||||||||||||||
Yan
Tian
|
60,000 | 60,000 | 0.13 | % | 0 | 0.00 | % | ||||||||||||||
Jinbao
Liang
|
60,000 | 60,000 | 0.13 | % | 0 | 0.00 | % | ||||||||||||||
Xiujie
Han
|
60,000 | 60,000 | 0.13 | % | 0 | 0.00 | % | ||||||||||||||
Xianqi
Chen
|
20,000 | 20,000 | 0.04 | % | 0 | 0.00 | % | ||||||||||||||
Ailing
Zhu
|
20,000 | 20,000 | 0.04 | % | 0 | 0.00 | % | ||||||||||||||
Ruomin
Wang
|
20,000 | 20,000 | 0.04 | % | 0 | 0.00 | % | ||||||||||||||
Yanping
Wei
|
40,000 | 40,000 | 0.08 | % | 0 | 0.00 | % | ||||||||||||||
Qiang
Xu
|
100,000 | 100,000 | 0.21 | % | 0 | 0.00 | % | ||||||||||||||
Xingyi
Li
|
140,000 | 100,000 | 0.30 | % | 40,000 | 0.08 | % | ||||||||||||||
Fengqing
Huang
|
60,000 | 60,000 | 0.13 | % | 0 | 0.00 | % | ||||||||||||||
Chunling
Bi
|
22,000 | 22,000 | 0.05 | % | 0 | 0.00 | % | ||||||||||||||
Huisen
Lu
|
100,000 | 100,000 | 0.21 | % | 0 | 0.00 | % | ||||||||||||||
Sherman
Tong
|
100,000 | 100,000 | 0.21 | % | 0 | 0.00 | % | ||||||||||||||
Baocai
Jiang
|
60,000 | 60,000 | 0.13 | % | 0 | 0.00 | % | ||||||||||||||
Baoku
Jiang
|
20,000 | 20,000 | 0.04 | % | 0 | 0.00 | % | ||||||||||||||
Guilan
Yu
|
20,000 | 20,000 | 0.04 | % | 0 | 0.00 | % | ||||||||||||||
Baofu
Jiang
|
20,000 | 20,000 | 0.04 | % | 0 | 0.00 | % | ||||||||||||||
Shuhong
Cheng
|
20,000 | 20,000 | 0.04 | % | 0 | 0.00 | % | ||||||||||||||
Guiping
Su
|
20,000 | 20,000 | 0.04 | % | 0 | 0.00 | % | ||||||||||||||
Jishan
Dong
|
100,000 | 100,000 | 0.21 | % | 0 | 0.00 | % | ||||||||||||||
Baoxia
Jiang
|
300,000 | 200,000 | 0.63 | % | 100,000 | 0.21 | % | ||||||||||||||
Yu
Xia
|
100,000 | 100,000 | 0.21 | % | 0 | 0.00 | % | ||||||||||||||
Limin
Dai
|
100,000 | 100,000 | 0.21 | % | 0 | 0.00 | % | ||||||||||||||
Michael
T. Williams
|
236,000 | 100,000 | 0.50 | % | 136,000 | 0.29 | % |
Attorney
|
|||||||||||||
Total
|
9,578,000 | 2,502,000 | 20.26 | % | 7,076,000 | 14.97 | % |
18
[1] Assuming
sale of all shares registered hereunder
Shares of
three officers, Baoguo Jiang, Zhanmin Gao, and Zhongming Wang are not going to
be registered for sell
Acquisition of Shares by
Selling Shareholders
The
selling shareholders acquired their shares by purchase exempt from registration
under section 4(2) of the Securities Act of 1933 or Regulation S under the
Securities Act of 1933, as follows:
On
December 1, 2008, the founder and CEO of the company, Baoguo Jiang, transferred
16,100,000 of his shares as gift to five individuals, as follows:
Name
|
Transfer Date
|
Shares QTY
|
||||
Zhanmin
Gao
|
12/1/2008
|
5,000,000 | ||||
Zhongming
Wang
|
12/1/2008
|
5,000,000 | ||||
Jianhua
Li
|
12/1/2008
|
6,000,000 | ||||
Xinwei
Shi
|
12/1/2008
|
50,000 | ||||
Lijun
Jia
|
12/1/2008
|
50,000 | ||||
Total
|
16,100,000 |
19
There was
no cash consideration paid for these shares. None of the recipients
were U.S. citizens or residents and all the recipients were non-U.S. citizens or
residents. For the purposes of determining the holding period of
these shares for Rule 144, there was no taking of the holding period of the
donor and the applicable Rule 144 holding period recommenced as of the date of
transfer, December 1, 2008.
In
December 2008, an additional 3,142,000 shares were issued to 52 non U.S.
citizens or residents at $ 0.05 per share or $157,100.
On
December 31, 2008, 236,000 shares were issued to Williams Law Group at $ 0.05
per share for the legal service value $11,800. All of the above
shareholders except Williams Law Group are not citizens or residents of the
United States.
Blue Sky
The
holders of our shares of common stock and persons who desire to purchase them in
any trading market that might develop in the future should be aware that there
may be significant state law restrictions upon the ability of investors to
resell our shares. Accordingly, even if we are successful in having the Shares
available for trading on the OTCBB, investors should consider any secondary
market for the Company's securities to be a limited one. We intend to seek
coverage and publication of information regarding the company in an accepted
publication which permits a "manual exemption." This manual exemption permits a
security to be distributed in a particular state without being registered if the
company issuing the security has a listing for that security in a securities
manual recognized by the state. However, it is not enough for the security to be
listed in a recognized manual. The listing entry must contain (1) the names of
issuers, officers, and directors, (2) an issuer's balance sheet, and (3) a
profit and loss statement for either the fiscal year preceding the balance sheet
or for the most recent fiscal year of operations. We may not be able
to secure a listing containing all of this information. Furthermore,
the manual exemption is a non issuer exemption restricted to secondary trading
transactions, making it unavailable for issuers selling newly issued securities.
Most of the accepted manuals are those published in Standard and Poor's, Moody's
Investor Service, Fitch's Investment Service, and Best's Insurance Reports, and
many states expressly recognize these manuals. A smaller number of states
declare that they “recognize securities manuals” but do not specify the
recognized manuals. The following states do not have any provisions and
therefore do not expressly recognize the manual exemption: Alabama, Georgia,
Illinois, Kentucky, Louisiana, Montana, South Dakota, Tennessee, Vermont and
Wisconsin.
We
currently do not intend to and may not be able to qualify securities for resale
in other states which require shares to be qualified before they can be resold
by our shareholders.
PLAN
OF DISTRIBUTION
Our
common stock is currently not quoted on any market. No market may
ever develop for our common stock, or if developed, may not be sustained in the
future. Accordingly, our shares should be considered totally
illiquid, which inhibits investors’ ability to resell their shares.
Selling
shareholders are offering up to 2,502,000 shares of common stock. The
selling shareholders will offer their shares at $0.15 per share until our shares
are quoted on the OTC Bulletin Board and thereafter at prevailing market prices
or privately negotiated prices. We will not receive any proceeds of
the sale of these securities. We will pay all expenses of registering
the securities.
20
The
securities offered by this prospectus will be sold by the selling shareholders
without underwriters and without commissions. The distribution of the
securities by the selling shareholders may be effected in one or more
transactions that may take place in the over-the-counter market or privately
negotiated transactions.
The
selling shareholders may pledge all or a portion of the securities owned as
collateral for margin accounts or in loan transactions, and the securities may
be resold pursuant to the terms of such pledges, margin accounts or loan
transactions. Upon default by such selling shareholders, the pledge in such loan
transaction would have the same rights of sale as the selling shareholders under
this prospectus. The selling shareholders may also enter into exchange traded
listed option transactions, which require the delivery of the securities listed
under this prospectus. After our securities are qualified for quotation on the
OTC Bulletin Board, the selling shareholders may also transfer securities owned
in other ways not involving market makers or established trading markets,
including directly by gift, distribution, or other transfer without
consideration, and upon any such transfer the transferee would have the same
rights of sale as such selling shareholders under this prospectus.
In
addition to the above, each of the selling shareholders will be affected by the
applicable provisions of the Securities Exchange Act of 1934, including, without
limitation, Regulation M, which may limit the timing of purchases and sales of
any of the securities by the selling shareholders or any such other
person. We have instructed our selling shareholders that they many
not purchase any of our securities while they are selling shares under this
registration statement. We have advised them that we will monitor our
stock transfer records on a regular basis and will void any transaction they
undertake in violation of this restriction.
Upon this
registration statement being declared effective, the selling shareholders may
offer and sell their shares from time to time until all of the shares registered
are sold; however, this offering may not extend beyond two years from the
initial effective date of this registration statement.
There can
be no assurances that the selling shareholders will sell any or all of the
securities. In various states, the securities may not be sold unless
these securities have been registered or qualified for sale in such state or an
exemption from registration or qualification is available and is complied
with.
All of
the foregoing may affect the marketability of our securities. Pursuant to oral
promises we made to the selling shareholders, we will pay all the fees and
expenses incident to the registration of the securities.
Should
any substantial change occur regarding the status or other matters concerning
the selling shareholders or us, we will file a post-effective amendment
disclosing such matters.
OTC Bulletin Board
Considerations
To be
quoted on the OTC Bulletin Board, a market maker must file an application on our
behalf in order to make a market for our common stock. We have
engaged in preliminary discussions with an NASD Market Maker to file our
application on Form 211 with the NASD, but as of the date of this prospectus, no
filing has been made. We anticipate that after this registration
statement is declared effective, it will take approximately 2 – 8 weeks for the
NASD to issue a trading symbol.
21
The OTC
Bulletin Board is separate and distinct from the NASDAQ stock
market. NASDAQ has no business relationship with issuers of
securities quoted on the OTC Bulletin Board. The SEC’s order handling
rules, which apply to NASDAQ-listed securities, do not apply to securities
quoted on the OTC Bulletin Board.
Although
the NASDAQ stock market has rigorous listing standards to ensure the high
quality of our issuers, and can delist issuers for not meeting those standards,
the OTC Bulletin Board has no listing standards. Rather, it is the
market maker who chooses to quote a security on the system, files the
application, and is obligated to comply with keeping information about the
issuer in our files. The NASD cannot deny an application by a market
maker to quote the stock of a company. The only requirement for
inclusion in the bulletin board is that the issuer be current in our reporting
requirements with the SEC.
Although
we anticipate listing on the OTC Bulletin board will increase liquidity for our
stock, investors may have greater difficulty in getting orders filled because it
is anticipated that if our stock trades on a public market, it initially will
trade on the OTC Bulletin Board rather than on NASDAQ. Investors’
orders may be filled at a price much different than expected when an order is
placed. Trading activity in general is not conducted as efficiently
and effectively as with NASDAQ-listed securities.
Investors
must contact a broker-dealer to trade OTC Bulletin Board
securities. Investors do not have direct access to the bulletin board
service. For bulletin board securities, there only has to be one
market maker.
Bulletin
board transactions are conducted almost entirely manually. Because
there are no automated systems for negotiating trades on the bulletin board,
they are conducted via telephone. In times of heavy market volume,
the limitations of this process may result in a significant increase in the time
it takes to execute investor orders. Therefore, when investors place
market orders - an order to buy or sell a specific number of shares at the
current market price - it is possible for the price of a stock to go up or down
significantly during the lapse of time between placing a market order and
getting execution.
Because
bulletin board stocks are usually not followed by analysts, there may be lower
trading volume than for NASDAQ-listed securities.
LEGAL
PROCEEDINGS
There are
no pending or threatened lawsuits against us.
DIRECTORS,
EXECUTIVE OFFICERS, PROMOTERS, AND CONTROL PERSONS
The board
of directors elects our executive officers annually. A majority vote
of the directors who are in office is required to fill
vacancies. Each director shall be elected for the term of one year,
and until his successor is elected and qualified, or until his earlier
resignation or removal. Our director and executive officer is as
follows:
Name
|
Age
|
Position
|
||
Baoguo
Jiang
|
47
|
Chairman
of the Board, CEO
|
||
Zhanming
Gao
|
46
|
Secretary,
Director
|
||
Zhongming
Wang
|
|
46
|
|
Vice
President, Director
|
22
Baoguo
Jiang joined us in
August 2008 as founder of Yaboo, Inc., and has been Chairman and CEO since
then. In year 2003 to 2008, he was the President of Yao Yao
Corporation which operated a Asian Food Restaurant in Illinois,
USA. In year 1997 to 2008, he was the CEO of C&J Food Production
Inc in Oshkosh Wisconsin which operated two Chinese Restaurant in Wisconsin,
USA. . In year 1994 to 1996, he was the manager of Fond Du
Lac Wisconsin Company, a food distribution and Asian food
restaurant. In June 1984, he received an Agricultural Sciences
Bachelor Degree at Heilongjiang Bayi Agricultural University of
China. In December 1987, he received a Master Degree of Shenyang
Applied Ecology Institute, Chinese Academy of Sciences. In December
1994, he was PhD candidate for Agroecology in University of
Wisconsin. As our Director, he brings his significant education and
experience in our industry as well as knowledge of our products and
services.
Zhanmin
Gao has been Secretary since August 2008. In 1984 to 1998, he was a
Senior Agricultural Engineer at Heilongjiang Agricultural Sciences Institute. In
year 1998 to 2008, he was the General Manager and President of Heilongjiang
ShengYuan agricultural co, Ltd and the Director of NingAn Real Estate,
Incorp. In June 1984, he received an Agricultural Sciences Bachelor
Degree at Heilongjiang Bayi Agricultural University of China. As our
Director, he brings his significant management experience as well as knowledge
of agricultural services which will assist us having greater knowledge of the
products we buy to serve at our restaurant.
Zhongming
Wang has been Vice President since August 2008. In year 1985 to 1986,
he was a business manager of Trading Department of Shenzhen Eastern Development
co., Ltd. In 1987 to 1992, he was the manager of Trading Department
of Shenzhen LianHua Development Co. In 1992 to 1993, he was the
General Manager of Shenzhen Dadi Corporation. In 1993 to date, he was
the President of Mingchen Internatinal Co, Ltd, HongKong Yaoling Corporation,
Shenzhen Mingshi Hotel, Inc, and Jiangxi Nanchang Nanjiao Hotel, Inc. In June
1984, he received an Agricultural Sciences Bachelor Degree at Heilongjiang Bayi
Agricultural University of China.
As our
Director, he brings his management experience as well as financial services
background.
Legal
Proceedings
No
officer, director, or persons nominated for such positions, promoter or
significant employee has been involved in the last ten years in any of the
following:
|
·
|
Any
bankruptcy petition filed by or against any business of which such person
was a general partner or executive officer either at the time of the
bankruptcy or within two years prior to that
time,
|
|
·
|
Any
conviction in a criminal proceeding or being subject to a pending criminal
proceeding (excluding traffic violations and other minor
offenses),
|
|
·
|
Being
subject to any order, judgment, or decree, not subsequently reversed,
suspended or vacated, of any court of competent jurisdiction, permanently
or temporarily enjoining, barring, suspending or otherwise limiting his
involvement in any type of business, securities or banking
activities,
|
|
·
|
Being
found by a court of competent jurisdiction (in a civil action), the
Commission or the Commodity Futures Trading Commission to have violated a
federal or state securities or commodities law, and the judgment has not
been reversed, suspended, or
vacated.
|
23
|
·
|
Having
any government agency, administrative agency, or administrative court
impose an administrative finding, order, decree, or sanction against them
as a result of their involvement in any type of business, securities, or
banking activity.
|
|
·
|
Being
the subject of a pending administrative proceeding related to their
involvement in any type of business, securities, or banking
activity.
|
|
·
|
Having
any administrative proceeding been threatened against you related to their
involvement in any type of business, securities, or banking
activity.
|
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The
following tables set forth the ownership, as of the date of this prospectus, of
our common stock by each person known by us to be the beneficial owner of more
than 5% of our outstanding common stock, our directors, and our executive
officers and directors as a group. To the best of our knowledge, the
persons named have sole voting and investment power with respect to such shares,
except as otherwise noted. There are not any pending or anticipated
arrangements that may cause a change in control.
The
information presented below regarding beneficial ownership of our voting
securities has been presented in accordance with the rules of the Securities and
Exchange Commission and is not necessarily indicative of ownership for any other
purpose. Under these rules, a person is deemed to be a "beneficial owner" of a
security if that person has or shares the power to vote or direct the voting of
the security or the power to dispose or direct the disposition of the security.
A person is deemed to own beneficially any security as to which such person has
the right to acquire sole or shared voting or investment power within 60 days
through the conversion or exercise of any convertible security, warrant, option
or other right. More than one person may be deemed to be a beneficial owner of
the same securities. The percentage of beneficial ownership by any person as of
a particular date is calculated by dividing the number of shares beneficially
owned by such person, which includes the number of shares as to which such
person has the right to acquire voting or investment power within 60 days, by
the sum of the number of shares outstanding as of such date plus the number of
shares as to which such person has the right to acquire voting or investment
power within 60 days. Consequently, the denominator used for calculating such
percentage may be different for each beneficial owner. Except as otherwise
indicated below and under applicable community property laws, we believe that
the beneficial owners of our common stock listed below have sole voting and
investment power with respect to the shares shown. The business address for
these shareholders is 375 N. Stephanie St., Suite 1411, Henderson, NV
89014-8909
Name
|
Title
|
Number of Shares
|
% of
Common
Share
|
|||||||
Baoguo
Jiang
|
Chairman
|
27,800,000 | 58.80 | % | ||||||
Zhanming
Gao
|
Secretary
|
5,000,000 | 10.58 | % | ||||||
Zhongming
Wang
|
Vice
President
|
5,000,000 | 10.58 | % | ||||||
Jianhua
Li [1]
|
6,000,000 | 12.69 | % | |||||||
All
officers and directors as a group [3 persons]
|
37,800,000 | 79.95 | % |
24
[1] Of
these shares, 100,000 are being registered for resale in this registration
statement. If these shares are sold, he will own 5,900,000 shares or
12.48% of our issued and outstanding stock assuming no additional shares are
issued.
This
table is based upon information derived from our stock records. Unless otherwise
indicated in the footnotes to this table and subject to community property laws
where applicable, each of the shareholders named in this table has sole or
shared voting and investment power with respect to the shares indicated as
beneficially owned. Except as set forth above, applicable percentages are based
upon 47,278,000 shares of common stock outstanding as of December 14,
2010.
DESCRIPTION
OF SECURITIES
The
following description as a summary of the material terms of the provisions of
our Articles of Incorporation and Bylaws. The Articles of
Incorporation and Bylaws have been filed as exhibits to the registration
statement of which this prospectus is a part.
Common
Stock
We are
authorized to issue 500,000,000 shares of common stock with $0.001 par value per
share. As of the date of this registration statement, there were
47,278,000 shares of common stock issued and outstanding held by 59
shareholders of the record.
Each
share of common stock entitles the holder to one vote, either in person or by
proxy, at meetings of shareholders. The holders are not permitted to vote their
shares cumulatively. Accordingly, the shareholders of our common stock who hold,
in the aggregate, more than fifty percent of the total voting rights can elect
all of our directors and, in such event, the holders of the remaining minority
shares will not be able to elect any of such directors. The vote of the holders
of a majority of the issued and outstanding shares of common stock entitled to
vote thereon is sufficient to authorize, affirm, ratify or consent to such act
or action, except as otherwise provided by law.
Holders
of common stock are entitled to receive ratably such dividends, if any, as may
be declared by the Board of Directors out of funds legally available. We have
not paid any dividends since our inception, and we presently anticipate that all
earnings, if any, will be retained for development of our business. Any future
disposition of dividends will be at the discretion of our Board of Directors and
will depend upon, among other things, our future earnings, operating and
financial condition, capital requirements, and other factors.
Holders
of our common stock have no preemptive rights or other subscription rights,
conversion rights, redemption or sinking fund provisions. Upon our liquidation,
dissolution or winding up, the holders of our common stock will be entitled to
share ratably in the net assets legally available for distribution to
shareholders after the payment of all of our debts and other liabilities. There
are not any provisions in our Articles of Incorporation or our Bylaws that would
prevent or delay change in our control.
INTEREST
OF NAMED EXPERTS
The
financial statements for the period from inception to December 31, 2008 included
in this prospectus have been audited by Enterprise CPAs, Ltd. which are
independent certified public accountants, to the extent and for the periods set
forth in our report and are incorporated herein in reliance upon such report
given upon the authority of said firm as experts in auditing and
accounting.
25
The
legality of the shares offered under this registration statement is being passed
upon by Williams Law Group, P.A., Tampa, Florida. Michael T. Williams,
principal of Williams Law Group, P.A., owns 236,000 shares of our common stock,
of which 100,000 shares are being registered in this offering.
DISCLOSURE
OF COMMISSION POSITION ON INDEMNIFICATION FOR SECURITIES
LIABILITIES
Our
Bylaws, subject to the provisions of Nevada Law, contain provisions which allow
the corporation to indemnify any person against liabilities and other expenses
incurred as the result of defending or administering any pending or anticipated
legal issue in connection with service to us if it is determined that person
acted in good faith and in a manner which he reasonably believed was in the best
interest of the corporation. Insofar as indemnification for
liabilities arising under the Securities Act of 1933 may be permitted to our
directors, officers and controlling persons, we have been advised that in the
opinion of the Securities and Exchange Commission, such indemnification is
against public policy as expressed in the Securities Act of 1933 and is,
therefore, unenforceable.
DESCRIPTION
OF BUSINESS
Organization
Yaboo,
Inc. (the Company) was incorporated under the laws of Nevada on August 11, 2008,
with registered address at 1955 Baring Blvd, Sparks, NV 89434. Yaboo,
Inc. has principal office at 70 W. Madison St., Ste. 1400, Chicago, IL
60602. Our telephone number is 312-214-6116.
On April
17, 2009, Yaboo, Inc. established a 100% wholly foreign owned company in China,
Yaboo Agriculture (Taizgou) Co, Ltd, located at Hailing Modern Agricultural
Demonstration Zone, Hailing District, TaiZhou City, Jiangsu Province, People’s
Republic of China, to conduct and operate the business.
In
October 2009, Yaboo Agriculture (Taizgou) Co, Ltd. acquired the 100% ownership
of a Chinese company, Qilin Bay Ecological Restaurant Co., Ltd. (“Qilin Bay”),
owned by Taizhou Sunny Agricultural Development Co., Ltd. Taizhou
Sunny Agricultural Development Co., Ltd. was 100% owned and operated by local
district government, Hailing Modern Agricultural Demonstration Zone
Administration Office. Yaboo Agriculture (Taizhou) Co., Ltd. paid
cash of $146,455 to Taizhou Sunny Agricultural Development Co., Ltd., for the
100% ownership of Qilin Bay.
Qilin Bay
Restaurant Co., Ltd. (“Qilin Bay”), was incorporated on July 16, 2008 by Taizhou
Sunny Agricultural Development Co., Ltd. to operate a specialty restaurant
located in North Jiangzhou Road, Hailing Modern Agriculture Demonstration Zone,
Hailing District, Taizhou City, Jiangsu Province, China. Yaboo
Agriculture (Taizhou) Co. Ltd. will conduct the restaurant business in China
through Qilin Bay.
General
We own
and operate only one restaurant, Qilin Bay Restaurant. The sole
source of our revenues is through operations of our one restaurant since the
restaurant was opened on October 22, 2009. We did not generate
revenues prior to our restaurant being opened. We record revenue based upon the
food and beverage sales at the restaurant when the food and beverage is
delivered and consumed by restaurant customers for our retail customers who paid
with cash. A few local government organizations did sign sales
receipts and the restaurant would send the local government departments bills
for payments, and we recorded revenues when payment was received.
26
Business
We
operate what is known in China as a “green foods” restaurant, which comprises
the operating activities of the Qilin Bay Restaurant. There are no
“licensed” green foods restaurants in China. Instead, as what is know
as a “green foods” restaurant, we focus on selling foods that meet “Green Food”
standards set by the China Ministry of Agriculture. Chinese green
food standards are not as strictly defined or tested as USA’s organic food
standards. In China, “green food” means that the food materials were
naturally grow without utilizing pesticides or any chemicals, the food materials
must have no harmful materials tested which may have no negative effects on
human beings. Much of the food we serve was grown by farmers or in a
nearby greenhouse located in the Taizhou City Hailing Modern Agriculture
Demonstration Zone. Taizhou City Hailing Modern Agriculture
Demonstration Zone is approved by China Ministry of Agriculture to grow
vegetables according to China’s green food standards. We believe the
food we serve that is grown in the Taizhou City Hailing Modern Agriculture
Demonstration Zone meets Chinese “green food” standards, although we do not
perform any independent tests on these foods or on foods we buy at local markets
that are not grown in the Hailing Modern Agriculture Demonstration
Zone.
Our
restaurant comprises the operating activities of the Qilin Bay
Restaurant. The restaurant is located in the center of “Taizhou City
Hailing Modern Agricultural Demonstration Zone.” The restaurant’s interior is
built in accordance of Chinese-garden style. The restaurant includes a
3500-square meter greenhouse, with various flowers and trees. Customer will
enjoy their meals in this natural environment. Many of the dishes
include ingredients grown in nearby greenhouse, and provided by Hailing Modern
Agriculture Demonstration Zone. The restaurant has 24-stylized
dinning rooms, along with a 2000-square meter hall. The hall has an
entertainment stage surrounded by 300 seats. There is also a section built
inside of the restaurant, for the purpose of displaying green food, which could
also be used as VIP member club. The member club provides pre-cooked foods for
members to take home.
We
operate only one restaurant, Qilin Bay Restaurant. We will continue
to generate revenues solely from restaurant operations of this one restaurant,
as described above. .
After
acquisition of the Qilin Bay Restaurant, we remodeled and started to
operate in October 2009. The gross sales revenue generated through
the operations of the restaurant was $117,547 as of December 31, 2009; the gross
revenue of $213,504 was for the nine month period from January 1 to September
30, 2010. There was an operating loss of $177,317 for 2009, and an
operating loss of $76,223 for nine month period from January 1 to September 30,
2010, primarily as the result of operating losses at the restaurant combined
with corporate overhead, respectively.
27
From
August 11, 2008 through September 30, 2010, we generated $331,051 in revenues
although we have had an operating loss during this period of
($266,246). From August 11, 2008 through September 30, 2010, our
total expenses including cost of goods and operating expenses was $598,193, and
the averaged monthly cost, i.e., the monthly burn rate was
$23,459. As of September 30, 2010, the averaged monthly sales revenue
was $12,982; and the net monthly negative cash flow was
$10,477. As of September 30, 2010, the cash balance in the bank
was $31,395, which will only last for three months’ operations. After
three months, the founder of the Company, Mr. Jiang and other board members have
orally agreed to loan to the company sufficient funds as the Company needs to
continue operations. We do not have any written loan agreement in
place with Mr. Baoguo Jiang or board members. The loan will be for
the company’s operation purpose without interest charge, the loan may be
requested to pay off as long as the Company can generate sufficient cash flows
to continue operations and repay the loan. As of September 30, 2010,
there was total $57,045 loan balance from shareholder, Mr. Baoguo
Jiang. We anticipate needing $150,000 to fund our proposed operations
for the next 12 months, including approximately $80,000 to fund the costs of
being a public company. We anticipate funding these amounts from cash
flow or from the oral agreements from management. If we do not
generate sufficient operating cash flow and our management does not loan us the
funds, and if we are unable to obtain alternative debt or equity financing, we
may have to suspend or cease operations.
In
addition, the management may pursue to increase marketing activities to increase
sales. Due to the approaching of year end and the Chinese Spring
Festival, we will advertise on local newspapers, send more brochures, menus, and
coupons to attract more Chinese New Year parties or banquets. And the
same time, we will continue contacts with local governments to attempt to get
more reservations. We anticipate spending approximately $15,000
on these activities in the next 12 months.
Our
restaurant was closed and Qilin Bay was inactive from January to September 2009
due to prior restaurant operational management’s personal family
reasons. We do not expect this situation to reoccur as we have
replaced operational management. Our lack of operating history and financial
resources raises substantial doubt about our ability to continue as a going
concern and our financial statements contain a going concern
qualification.
Suppliers
Many of
the dishes include ingredients grown in nearby greenhouse at Hailing Modern
Agriculture Demonstration Zone. Our major supplier will be Taizhou
Sunny Agricultural Development Co., Ltd. owned by Hailing Modern Agriculture
Demonstration Zone Administration Office. Our ingredients
will include four-season vegetables, natural farm raised chicken, pork, beef,
and fish.
We did
not have any written agreements with any supplier. We have other
local suppliers to provide our needed ingredients: Taizhou Changrong Trading
Co., Ltd., Taizhou Wansheng Ltd., and Taizhou Xinli Groceries Ltd.
Marketing and
Advertising
We will
conduct marketing and advertising through local newspapers and our website,
currently under development. We intend to focus advertising on
conference and banquets needs and birthday party needs.
Competition
The
restaurant industry is intensely competitive. We compete on the basis of the
overall environment, healthy food taste, quality and price of food offered,
guest service, ambience, and overall dining experience.
28
In
Jiangsu Province and Greater Shanghai area, we believe we compete primarily with
Inner Mongolia Little Sheep Catering Chain Co., Ltd. Inner Mongolia
Little Sheep Catering Chain Co., Ltd. (Little Sheep) is one of the leading chain
restaurants in the area as well as across the country. They operate 2
restaurants in our area. They current have a seasoning plant, two
meat industry plants, and one logistics subsidiary in the
area. Little Sheep does not operate its restaurant as our Qilin Bay
Restaurant does. Our restaurant provides customers with unique
environment and live four season fresh vegetables directly from our in site
greenhouse. There are very few licensed “Green Food” restaurants in
Taizhou area. The ones that do promote green foods but do not operate
restaurants, and they may be our suppliers: Taizhou Hualong Eco-Farm, Taizhou
Sanchuan Eco-Farm, Shangri-la Ecological Farm.
Little
Sheep has the advantage of having the original green food concepts, which would
make them one of our main competitors in the future. The three farms are not our
biggest competitors, because they have smaller businesses, with various
customers. Our biggest weakness is that the location of our restaurant is not in
a busy area. Our advantage is that we are surrounded by good superior
environment and our already built entertainment and show stage, are also a
plus.
Proprietary
Rights
We do not
have any proprietary rights.
Government
Regulation
The
restaurant industry is subject to numerous federal, state and local governmental
regulations, including those relating to the preparation and sale of food and
alcoholic beverages, sanitation, public health, fire codes, zoning and building
requirements. Each restaurant requires appropriate licenses from regulatory
authorities allowing it to sell liquor, beer and wine, and each restaurant
requires food service licenses from local health authorities. The failure of a
restaurant to retain liquor or food service licenses could have a material
adverse effect on operations.
The
China Green Food Development Center is the first agency in the People's Republic of China to oversee
organic food standards. The
Center was established in November 1992, under the jurisdiction of the Ministry of Agriculture of the People's
Republic of China, and is headquartered in Beijing. The standards
focus on the end product rather than the process, and do not generally monitor
actual use of agricultural chemicals, preferring instead to test the products
themselves for chemical residues.
We are
also subject to laws governing our relationships with employees, including laws
and regulations relating to benefits, wages, hours, workers' compensation
insurance rates, unemployment and other taxes, working and safety
conditions.
Regulatory Environment in
China
China is
transitioning from a planned economy to a market economy. While the Chinese
government has pursued economic reforms since its adoption of the open-door
policy in 1978, a large portion of the Chinese economy is still operating under
five-year plans and annual state plans. Through these plans and other economic
measures, such as control on foreign exchange, taxation and restrictions on
foreign participation in the domestic market of various industries, the Chinese
government exerts considerable direct and indirect influence on the economy.
Many of the economic reforms carried out by the Chinese government are
unprecedented or experimental, and are expected to be refined and improved.
Other political, economic and social factors can also lead to further
readjustment of such reforms. This refining and readjustment process may not
necessarily have a positive effect on our operations or future business
development. Our operating revenues may be reduced by changes in China's
economic and social conditions as well as by changes in the policies of the
Chinese government, such as changes in laws and regulations (or the official
interpretation thereof), measures which may be introduced to control inflation,
changes in the interest rate or method of taxation, and the imposition of
additional restrictions on currency conversion.
29
China’s
legal system is a civil law system. Unlike the common law system, the civil law
system is based on written statutes in which decided legal cases have little
value as precedents. In 1979, China began to promulgate a comprehensive system
of laws and has since introduced many laws and regulations to provide general
guidance on economic and business practices in China and to regulate foreign
investment. Progress has been made in the promulgation of laws and regulations
dealing with economic matters such as corporate organization and governance,
foreign investment, commerce, taxation and trade. The promulgation of new laws,
changes of existing laws and the abrogation of local regulations by national
laws could have a negative impact on our business and business prospects. In
addition, as these laws, regulations and legal requirements are relatively
recent, their interpretation and enforcement involve significant
uncertainty.
Because
we are a wholly foreign owned enterprise, we are subject to the law on foreign
investment enterprises in China, and the foreign company provisions of the
Company Law of China, which governs the conduct of our wholly owned subsidiary
and its officers and directors. Additionally, we are also subject to varying
degrees of regulations and permit system by the Chinese government.
Research and
Development
We did
not incur any research and development expenses in our last fiscal
years.
Employees
We have
the total 33 employees, Mr. Baoguo Jiang is from USA, all other employees are in
China. The following full-time employees are:
Clerical
– 4
Operations
– 24
Administrative
– 2
Management
– 3
The
employees for operation are chefs, waiters and waitresses.
MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
-
The
following discussion of our financial condition and results of operations should
be read in conjunction with our financial statements and the related notes, and
other financial information included in this Form S-1.
Our
Management’s Discussion and Analysis contains not only statements that are
historical facts, but also statements that are
forward-looking. Forward-looking statements are, by their very
nature, uncertain and risky. These risks and uncertainties include
international, national, and local general economic and market conditions; our
ability to sustain, manage, or forecast growth; our ability to successfully make
and integrate acquisitions; new product development and introduction; existing
government regulations and changes in, or the failure to comply with, government
regulations; adverse publicity; competition; the loss of significant customers
or suppliers; fluctuations and difficulty in forecasting operating results;
change in business strategy or development plans; business disruptions; the
ability to attract and retain qualified personnel; the ability to protect
technology; the risk of foreign currency exchange rate; and other risks that
might be detailed from time to time in our filing with the Securities and
Exchange Commission.
30
Although
the forward-looking statements in this Registration Statement reflect the good
faith judgment of our management, such statements can only be based on facts and
factors currently known by them. Consequently, and because
forward-looking statements are inherently subject to risks and uncertainties,
the actual results and outcomes may differ materially from the results and
outcomes discussed in the forward-looking statements. You are urged
to carefully review and consider the various disclosures made by us in this
report as we attempt to advise interested parties of the risks and factors that
may affect our business, financial condition, and results of operations and
prospects.
Overview
We own
and operate only one restaurant, Qilin Bay Restaurant. The sole
source of our revenues is through operations of our one restaurant since the
restaurant was opened on October 22, 2009. We did not generate
revenues prior to our restaurant being opened. We record revenue based upon the
food and beverage sales at the restaurant when the food and beverage is
delivered and consumed by restaurant customers for our retail customers who paid
with cash. A few local government organizations did sign sales
receipts and the restaurant would send the local government departments bills
for payments, and we recorded revenues when payment was received.
We
operate what is known in China as a “green foods” restaurant, which comprises
the operating activities of the Qilin Bay Restaurant. There are no
“licensed” green foods restaurants in China. Instead, as what is know
as a “green foods” restaurant, we focus on selling foods that meet “Green Food”
standards set by the China Ministry of Agriculture. Chinese green
food standards are not as strictly defined or tested as USA’s organic food
standards. In China, “green food” means that the food materials were
naturally grow without utilizing pesticides or any chemicals, the food materials
must have no harmful materials tested which may have no negative effects on
human beings. Much of the food we serve was grown by farmers or in a
nearby greenhouse located in the Taizhou City Hailing Modern Agriculture
Demonstration Zone. Taizhou City Hailing Modern Agriculture
Demonstration Zone is approved by China Ministry of Agriculture to grow
vegetables according to China’s green food standards. We believe the
food we serve that is grown in the Taizhou City Hailing Modern Agriculture
Demonstration Zone meets Chinese “green food” standards, although we do not
perform any independent tests on these foods or on foods we buy at local markets
that are not grown in the Hailing Modern Agriculture Demonstration
Zone.
Our
restaurant comprises the operating activities of the Qilin Bay
Restaurant. The restaurant is located in the center of “Taizhou City
Hailing Modern Agricultural Demonstration Zone.” The restaurant’s interior is
built in accordance of Chinese-garden style. The restaurant includes a
3500-square meter greenhouse, with various flowers and trees. Customer will
enjoy their meals in this natural environment. Many of the dishes
include ingredients grown in nearby greenhouse, and provided by Hailing Modern
Agriculture Demonstration Zone. The restaurant has 24-stylized
dinning rooms, along with a 2000-square meter hall. The hall has an
entertainment stage surrounded by 300 seats. There is also a section built
inside of the restaurant, for the purpose of displaying green food, which could
also be used as VIP member club. The member club provides pre-cooked foods for
members to take home.
31
We
operate only one restaurant, Qilin Bay Restaurant. We will continue
to generate revenues solely from restaurant operations of this one restaurant,
as described above. .
After
acquisition of the Qilin Bay Restaurant, we remodeled and started to
operate in October 2009. The gross sales revenue generated through
the operations of the restaurant was $117,547 as of December 31, 2009; the gross
revenue of $213,504 was for the nine month period from January 1 to September
30, 2010. There was an operating loss of $177,317 for 2009, and an
operating loss of $76,223 for nine month period from January 1 to September 30,
2010, primarily as the result of operating losses at the restaurant combined
with corporate overhead, respectively.
From
August 11, 2008 through September 30, 2010, we generated $331,051 in revenues
although we have had an operating loss during this period of
($266,246). From August 11, 2008 through September 30, 2010, our
total expenses including cost of goods and operating expenses was $598,193, and
the averaged monthly cost, i.e., the monthly burn rate was
$23,459. As of September 30, 2010, the averaged monthly sales revenue
was $12,982; and the net monthly negative cash flow was
$10,477. As of September 30, 2010, the cash balance in the bank
was $31,395, which will only last for three months’ operations. After
three months, the founder of the Company, Mr. Jiang and other board members have
orally agreed to loan to the company sufficient funds as the Company needs to
continue operations. We do not have any written loan agreement in
place with Mr. Baoguo Jiang or board members. The loan will be for
the company’s operation purpose without interest charge, the loan may be
requested to pay off as long as the Company can generate sufficient cash flows
to continue operations and repay the loan. As of September 30, 2010,
there was total $57,045 loan balance from shareholder, Mr. Baoguo
Jiang. We anticipate needing $150,000 to fund our proposed operations
for the next 12 months, including approximately $80,000 to fund the costs of
being a public company. We anticipate funding these amounts from cash
flow or from the oral agreements from management. If we do not
generate sufficient operating cash flow and our management does not loan us the
funds, and if we are unable to obtain alternative debt or equity financing, we
may have to suspend or cease operations.
In
addition, the management may pursue to increase marketing activities to increase
sales. Due to the approaching of year end and the Chinese Spring
Festival, we will advertise on local newspapers, send more brochures, menus, and
coupons to attract more Chinese New Year parties or banquets. And the
same time, we will continue contacts with local governments to attempt to get
more reservations. We anticipate spending approximately $15,000 on
these activities in the next 12 months.
Our
restaurant was closed and Qilin Bay was inactive from January to September 2009
due to prior restaurant operational management’s personal family
reasons. We do not expect this situation to reoccur as we have
replaced operational management. Our lack of operating history and financial
resources raises substantial doubt about our ability to continue as a going
concern and our financial statements contain a going concern
qualification.
Results of
Operations
For the
period ended September 30, 2010, December 31, 2009, and December 31,
2008.
32
Revenue
Since our
company incorporated on August 11, 2008, there were no revenue generated as of
December 31, 2008, $117,547 as of December 31, 2009, and $213,504 for nine month
period ending September 30, 2010, respectively. The total revenue for
cumulative period from August 11, 2008 (Date of Inception) to September 30, 2010
was $331,051. All revenues were generated through operation of Qilin
Bay Restaurant since October 2009. By general Chinese local culture,
the management estimated that in general there may be more banquets, parties,
and government conferences by the year end. The management expects to
increase the restaurant revenue by the end of year 2010 through our marketing
efforts, and possible increase of local government conferences by the year
end. However, there is no guarantee that our revenue will increase
due to these efforts and possible increased local government
conferences.
Cost of
Revenue
Since our
company incorporated on August 11, 2008, there was cost of goods sold of $88,667
incurred as of December 31, 2009, and $98,166 for nine month period ending
September 30, 2010, respectively. The total cost of goods sold for
cumulative period from August 11, 2008 (Date of Inception) to September 30, 2010
was $186,833. We expect the price for cost of goods sold would be
relatively stable, and with expected increase of the total revenue, the total
cost of goods sold would be increased too, but the gross profit margin may be
relatively unchanged, as compared to the current averaged gross margin of
45%. Our gross profit margin in the period of opening the restaurant
business in 2009 was relatively low due to our marketing strategy to attract
very new customers with low selling prices.
Expense
Our
expenses consist of selling, general and administrative expenses:
Nine Months
|
Year Ended
|
Year Ended
|
||||||||||
Ended
|
31-Dec
|
31-Dec
|
||||||||||
30-Sep-10
|
2009
|
2008
|
||||||||||
Advertising
and Promotion
|
3,111 | $ | 11,862.93 | $ | - | |||||||
Delivery
charge
|
1,118 | 745.56 | ||||||||||
Meals
and Entertainment
|
3,905 | 12,399.12 | ||||||||||
Misc
Expenses
|
505 | 376.08 | 65 | |||||||||
Office
Supplies
|
2,619 | 8,066.68 | ||||||||||
Organization
Cost
|
- | 2,027.25 | 900 | |||||||||
Payroll
Expenses
|
97,862 | 60,473.00 | ||||||||||
Postage
and Shipping Expense
|
560 | 2,318.51 | ||||||||||
Professional
Fees
|
20,235 | 22,500.00 | 11,800 | |||||||||
Rent
Expense
|
21,745 | 48,140.09 | ||||||||||
Repairs
and Maintenance
|
1,115 | 5,243.60 | ||||||||||
Restaurant
Supplies
|
6,424 | 8,755.00 | ||||||||||
Telephone
Expense
|
1,430 | 1,682.85 | ||||||||||
Travel
Expense
|
5,301 | 8,394.20 | ||||||||||
Utilities
|
1,862 | 4,738.51 | ||||||||||
Vintage
filing fee
|
1,797 | |||||||||||
Automobile
|
3,699 | |||||||||||
Bank
charge
|
214 | |||||||||||
Business
permit
|
2,365 | |||||||||||
Cleaning
& Laundry
|
536 | |||||||||||
Insurance
|
2,673 | |||||||||||
Security
|
735 | |||||||||||
Software
|
368 | |||||||||||
Total
|
$ | 180,179.25 | $ | 206,196.98 | $ | 13,586.00 |
33
We had
total selling, general and administrative expenses of $180,458.47, $206,196.98,
and $13,586, for the nine months period from January 1 to September 30, 2010,
year ended December 31, 2009, and 2008, respectively by the Company as selling,
general, and administrative expenses.
The
relatively larger operation expense incurred in 2009 was due to the large amount
of expenses in advertising for starting the business, meals and entertainment,
payroll, professional fees, restaurant lease and equipment rent. Due
to the net operation loss in 2010, the Company orally renegotiated with
restaurant land lord to temporarily reduce the lease amount, accordingly the
actual rental expense in 2010 was significantly lower than 2009. The
orally reduced lease would be effective for the year 2010 and 2011, and the
reduced lease amount would be 50% less than the original signed lease
term.
For the
meals and entertainment expense for the year ended December 31, 2009, and for
the nine month period from January 1 to September 30, 2010, were $12,399, and
$3,905, respectively. The large amount of meals and entertainment
expense incurred in 2009 was partially the marketing purpose to secure the Qilin
Bay Restaurant license and business acquisition in 2009. Due to the
long negotiation and approval procedures in local Chinese government, it is
necessary and ordinary practice sometimes in China to conduct the business
discussing during lunch or dinner times. We’ll make our efforts to
reduce the cost of meals and entertainment in the future, we expect to cut the
cost for meals and entertainment by at least 50% in the year 2010.
For the
professional fees of $22,500 for the year ending December 31, 2009, $12,000 was
legal fee payable to Williams Law Group and $10,500 was auditing fee payable to
Enterprise CPAs, Ltd. For the professional fees of $20,235 for
the nine months period from January 1 to September 30, 2010, $12,000 was legal
fee payable to Williams Law Group, $7,500 was auditing fee payable to Enterprise
CPAs, Ltd, and $735 was accounting fee payable to Yang Associate.
During
the period of January 1 to September 30, 2010, the Company incurred more payroll
expenses due to the new hiring of restaurant manager and staff.
We expect
selling, general, and administrative expenses to increase in future periods as
we initiate a number of marketing and promotional activities.
Income & Operation
Taxes
We are
subject to income taxes in the U.S., while the China branch was subject to the
income tax laws of China.
We paid
no income taxes in USA for the year ended December 31, 2008 and 2009 due to the
net operation loss in USA.
We paid
no income taxes in China for the year ended December 31, 2008, and 2009 as the
subsidiary was established in April 2009.
34
Net Loss
We
incurred net losses of ($13,275) for the period ended December 31, 2008, net
loss of ($176,748) for the year ended December 31, 2009, and net loss of $76,223
for nine month period from January 1 to September 30, 2010. Our
accumulated net loss from August 11, 2008 (Date of Inception) to September 30,
2010 was $266,246. By general Chinese local culture, the management
estimated that in general there may be more banquets, parties, and government
conferences by the year end. The management expects to increase the
restaurant revenue by the end of year 2010 through our marketing efforts, and
possible increase of local government conferences by the year
end. However, there is no guarantee that our revenue will increase
due to these efforts and possible increased local government
conferences.
Commitments
and Contingencies
Yaboo
Agriculture (Taizhou) Co., Ltd. acquired the 100% share of a local Chinese
company, Qilin Bay Ecological Resurant Co., Ltd, owned by Taizhou Sunny
Agricultural Development Co., Ltd. in October 2009. The Qilin Bay
Restaurant is specialty restaurant located in North Jiangzhou Road, Hailing
Modern Agriculture Demonstration Zone.
In
September 2009, Yaboo Agriculture (TaiZhou) Co., Ltd entered into a leasing
agreement with Taizhou Sunny Agricultural Development co., Ltd for leasing the
Qilin Village staff dormitory and cafeteria from September 1, 2009 to August 31,
2014, and provide for renewal options.
Foreign
Currency Translation
The
Company has determined the United States dollars to be its functional currency
for Yaboo, Inc; People’s Republic of China Chines Yuan Renminbi to be its
functional currency in Yaboo Agriculture (Taizhou) co., Ltd. Assets
and liabilities were translated to U.S. dollars at the period-end exchange
rate. Statement of operations amounts were translated to U.S. dollars
using the first date of each month during the year. Gains and losses
resulting from translating foreign currency financial statements are accumulated
in other comprehensive income (loss), a separate component of shareholders’
equity.
Liquidity
and Capital Resources
September 30
|
December 31
|
December 31
|
||||||||||
2010
|
2009
|
2008
|
||||||||||
Current
Ratio
|
0.89 | 1.70 | 19.96 | |||||||||
Cash
|
$ | 31,395 | $ | 74,314 | $ | 472,025 | ||||||
Working
Capital
|
$ | (7,768 | ) | $ | 57,124 | $ | 453,125 | |||||
Total
Assets
|
$ | 272,582 | $ | 357,587 | $ | 477,025 | ||||||
Total
Liabilities
|
$ | 72,215 | $ | 81,210 | $ | 23,900 | ||||||
Total
Equity
|
$ | 200,367 | $ | 276,377 | $ | 453,125 | ||||||
Total
Debt/Equity
|
0.36 | 0.29 | 0.05 |
35
*Current
Ratio = Current Assets /Current Liabilities
** Total
Debt / Equity = Total Liabilities / Total Shareholders Equity.
The
Company had cash and cash equivalents of $472,025 at December 31, 2008 and the
working capital of $ 453,125; cash and cash equivalent of $74,314 at December
31, 2009 and the working capital of $57,124; and cash and cash equivalent of
$31,395 and the negative working capital of $ 7,768 for nine month period from
January 1 to September 30, 2010. This is not sufficient to fund our
operations for longer than the next 3 months. We anticipate we will
need $150,000 to fund our proposed operations during the next 12 months,
including an anticipated $80,000 to fund the costs of our being a public
company. We plan to fund our proposed operations including the cost
of being a public company by through revenues from our on-going Qilin Bay
Restaurant operations. We are also planning to obtain additional
funding by issuing debt or the sale of stock, if market conditions are
appropriate. We are not currently in negotiations with any lenders or
other funding sources and we are not certain that we will be able to obtain
additional funding on terms favorable to us or at all. Management has
orally committed to fund any of these requirements not funded from operations or
from additional debt or equity capital we may raise. The loan terms
will be no interest charge as needed by the Company. The loans will
be payable if the Company generate positive cash flows and can sustain its
operation. Such undetermined terms were categorized as current
liabilities in our balance sheets.
DESCRIPTION
OF PROPERTY
On
February 11, 2010, the company entered into an office leases in Chicago Loop
with First National Plaza; the office is located at 70 W Madison St., Three
First National Plaza, Suite 1400, Chicago, IL 60602. The lease term is from
February 15, 2010 through February 28, 2011 and requires a $ 219 monthly lease
payment.
In
September 2009, Yaboo Agriculture (TaiZhou) Co., Ltd entered into a leasing
agreement with Taizhou Sunny Agricultural Development Co., Ltd. for
leasing the Qilin Village staff dormitory and Qilin Bay Restaurant
cafeteria.
According
to The People's Republic of China on Economic Contracts Law and other relevant
laws and regulations, Yaboo Agriculture (TaiZhou) Co., Ltd and Taizhou Sunny
Agricultural Development Co., Ltd. have agreed on the
following:
|
1.
|
Leasing
areas: Qilin Village staff dormitory and
cafeteria.
|
|
2.
|
Leasing
period: The agreement is in effect starting 2009-09-01, ending
2014-08. The lease may be renewed if both Parties
agreed.
|
|
3.
|
Rent
and Payment method: from September 1, 2009 to August 31, 2014, for renewal
options for an annual rent of $58,608, $73,260; $102,564, $102,564, and
$102,564.
|
We do not
intend to renovate, improve, or develop properties except our existing
restaurant. We are not subject to competitive conditions for
property. We have no policy with respect to investments in real
estate or interests in real estate and no policy with respect to investments in
real estate mortgages. Further, we have no policy with respect to
investments in securities of or interests in persons primarily engaged in real
estate activity.
36
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS
On August
12, 2008, the Company issued 500,000 shares to the founders of the Company,
Baoguo Jiang at $0.001 per share or $ 500 for common stock (stock subscription
receivable).
On August
31, 2008, the Company issued total 27,400,000 shares to the founder and CEO of
the company, Baoguo Jiang, at $0.005 per share or $ 137,000 for common stock
(stock subscription receivable).
On
October 30, 2008, the Company issued total 16,000,000 shares to the founder and
CEO of the company, Baoguo Jiang, at $0.01 per share or $ 160,000 for common
stock (stock subscription receivable).
As of
December 1, 2008, all of the above stock subscriptions receivables have received
in full.
Loans from
Shareholders/Officers
On August
11, 2008, founder of the Company, Mr. Baoguo Jiang loaned $900.00 to the Company
to setting up the corporation.
On
December 1, 2008, the founder and CEO of the company, Baoguo Jiang, loaned $
23,000 to the company for company operating.
On March
2009, the company returned $ 900 to Baoguo Jiang for the US corporation initial
set up cost.
On
November 13, 2009, the loan amount of $23,000 from the Company’s Executive
officers and shareholders Baoguo Jiang for company’s operating and marketing
expense was paid back.
At
December 31, Baoguo Jiang advanced the loan of $42,865 for restaurant operation
as of December 31, 2009.
For the
period of January to September 2010, Baoguo Jiang advances additional $38,235 to
the Company.
For the
period of January to September 2010, the Company returned $ 24,055 to Baoguo
Jiang.
Therefore,
as of September 30, 2010, there was $57,045 of loans from the shareholder and
officer of the Company, Baoguo Jiang.
The loan
was for the company’s operation purpose without interest charge, the loan may be
requested to pay off as long as the Company can generate sufficient cash
flows. There were no written agreements for the loans from Baoguo
Jiang.
Except as
set forth above, we have not entered into any material transactions with any
director, executive officer, and promoter, beneficial owner of five percent or
more of our common stock, or family members of such persons.
37
Corporate
Governance and
Director Independence
Our Board
of Directors has three directors and has not established Audit, Compensation,
and Nominating or Governance Committees as standing committees. The Board does
not have an executive committee or any committees performing a similar function.
We are not currently listed on a national securities exchange or in an
inter-dealer quotation system that has requirements that a majority of the board
of directors be independent. The Board has determined that no members of the
Board are “independent” under the definition set forth in the listing standards
of the NASDAQ Stock Market, Inc., which is the definition that the Board has
chosen to use for the purposes of the determining independence, as the OTCBB
does not provide such a definition. Therefore, none of our current Board members
are independent.
MARKET
FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
Market
Information
There is
no established public trading market for our securities and a regular trading
market may not develop, or if developed, may not be sustained. A
shareholder in all likelihood, therefore, will not be able to resell his or her
securities should he or she desire to do so when eligible for public resales.
Furthermore, it is unlikely that a lending institution will accept our
securities as pledged collateral for loans unless a regular trading market
develops.
Penny Stock
Considerations
Our
shares will be "penny stocks", as that term is generally defined in the
Securities Exchange Act of 1934 to mean equity securities with a price of less
than $5.00. Thus, our shares will be subject to rules that impose
sales practice and disclosure requirements on broker-dealers who engage in
certain transactions involving a penny stock.
Under the
penny stock regulations, a broker-dealer selling a penny stock to anyone other
than an established customer must make a special suitability determination
regarding the purchaser and must receive the purchaser's written consent to the
transaction prior to the sale, unless the broker-dealer is otherwise
exempt.
In
addition, under the penny stock regulations, the broker-dealer is required
to:
|
·
|
Deliver,
prior to any transaction involving a penny stock, a disclosure schedule
prepared by the Securities and Exchange Commission relating to the penny
stock market, unless the broker-dealer or the transaction is otherwise
exempt;
|
|
·
|
Disclose
commissions payable to the broker-dealer and our registered
representatives and current bid and offer quotations for the
securities;
|
|
·
|
Send
monthly statements disclosing recent price information pertaining to the
penny stock held in a customer's account, the account's value, and
information regarding the limited market in penny stocks;
and
|
|
·
|
Make
a special written determination that the penny stock is a suitable
investment for the purchaser and receive the purchaser's written agreement
to the transaction, prior to conducting any penny stock transaction in the
customer's account.
|
38
Because
of these regulations, broker-dealers may encounter difficulties in their attempt
to sell shares of our Common Stock, which may affect the ability of selling
shareholders or other holders to sell their shares in the secondary market, and
have the effect of reducing the level of trading activity in the secondary
market. These additional sales practice and disclosure requirements
could impede the sale of our securities, if our securities become publicly
traded. In addition, the liquidity for our securities may be
decreased, with a corresponding decrease in the price of our
securities. Our shares in all probability will be subject to such
penny stock rules and our shareholders will, in all likelihood, find it
difficult to sell their securities.
OTC Bulletin Board
Qualification for Quotation
To have
our shares of Common Stock on the OTC Bulletin Board, a market maker must file
an application on our behalf in order to make a market for our Common
Stock. We have engaged in preliminary discussions with a FINRA Market
Maker to file our application on Form 211 with FINRA, but as of the date of this
Prospectus, no filing has been made. We anticipate that after this
registration statement is declared effective, it will take approximately 2 - 8
weeks for FINRA to issue a trading symbol and allow sales of our Common Stock
under Rule 144.
Sales of our common stock
under Rule 144.
Once this
registration statement is effective, the shares of our common stock being
offered by our selling shareholders will be freely tradable without restrictions
under the Securities Act of 1933, except for any shares held by our
"affiliates," which will be restricted by the resale limitations of Rule 144
under the Securities Act of 1933.
All of
our shares held by non-affiliates are currently eligible for resale or are being
registered in this offering, however affiliates will still be subject to the
resale restrictions of Rule 144. In general, persons holding
restricted securities, including affiliates, must hold their shares for a period
of at least six months, may not sell more than one percent of the total issued
and outstanding shares in any 90-day period, and must resell the shares in an
unsolicited brokerage transaction at the market price. The
availability for sale of substantial amounts of common stock under Rule 144
could reduce prevailing market prices for our securities.
Holders
As of the
date of this registration statement, we had approximately 59 shareholders of
record of our common stock.
Dividends
We have
not declared any cash dividends on our common stock since our inception and do
not anticipate paying such dividends in the foreseeable future. We
plan to retain any future earnings for use in our business. Any
decisions as to future payments of dividends will depend on our earnings and
financial position and such other facts, as the Board of Directors deems
relevant.
Reports to
Shareholders
As a
result of this offering as required under Section 15(d) of the Securities
Exchange Act of 1934, we will file periodic reports with the Securities and
Exchange Commission as required under Section 15(d). However, if in
the future we are not required to continue filing reports under Section 15(d),
for example because we have less than three hundred shareholders of record at
the end of the first fiscal year in which this registration statement is
declared effective and we do not file a Registration Statement on Form 8-A upon
the occurrence of such an event, our securities can no longer be quoted on the
OTC Bulletin Board. Of course, there is no guarantee that we will be able
to meet the requirements to be able to cease filing reports under Section 15(d),
in which case we will continue filing those reports in the years after the
fiscal year in which this registration statement is declared
effective. Filing a registration statement on Form 8-A will require
us to continue to file quarterly and annual reports with the SEC, even though we
are no longer required to do so under Section 15(d), and will also subject us to
the proxy rules of the SEC. In addition, our officers, directors and 10%
stockholders will be required to submit reports to the SEC on their stock
ownership and stock trading activity. Thus the filing of a Form 8-A
in such event makes our securities continued to be able to be quoted on the OTC
Bulletin Board. We are not required under Section 12(g)
or otherwise to become a mandatory 1934 Act filer unless we have more than 500
shareholders and total assets of more than $10 million, however we voluntarily
intend to do so if we are no longer obligated to file reports under Section
15(d)..
39
Where You Can Find
Additional Information
We have
filed with the Securities and Exchange Commission a registration statement on
Form S-1. For further information about us and the shares of common
stock to be sold in the offering, please refer to the registration statement and
the exhibits and schedules thereto. The registration statement and exhibits may
be inspected, without charge, and copies may be obtained at prescribed rates, at
the SEC's Public Reference Room at 100 F St., N.E., Washington, D.C.
20549. The public may obtain information on the operation of the
Public Reference Room by calling the SEC at 1-800-SEC-0330. The
registration statement and other information filed with the SEC are also
available at the web site maintained by the SEC at
http://www.sec.gov.
EXECUTIVE
COMPENSATION
Summary Compensation
Table
The table
below summarizes all compensation awarded to, earned by, or paid to our
Principal Executive Officer, our two most highly compensated executive officers
other than our PEO who occupied such position at the end of our latest fiscal
year and up to two additional executive officers who would have been included in
the table below except for the fact that they were not executive officers at the
end of our latest fiscal year, by us, or by any third party where the purpose of
a transaction was to furnish compensation, for all services rendered in all
capacities to us for the years ended December 31, 2009 and 2008.
Name
|
Title
|
Year
|
Salary
|
Bonus
|
Stock
awards
|
Option
awards
|
Non equity
incentive
plan
compensation
|
Non qualified
deferred
compensation
|
All other
compensation
|
Total
|
||||||||||||||||||||||||||
Baoguo Jiang
|
Chairman
|
2010
|
0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||
2009
|
0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||
2008
|
0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||
Zhanming
Gao
|
Secretary
|
2010
|
0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||
2009
|
0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||
2008
|
0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||
Zhongming
Wang
|
Vice-
|
2010
|
0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||
President
|
2009
|
0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||||||||||||||||||||
2008
|
0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
40
Summary Equity Awards
Table
The
following table sets forth certain information for our executive officers
concerning unexercised options, stock that has not vested, and equity incentive
plan awards as of December 31, 2009.
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END DECEMBER 31, 2009
|
||||||||||||||||||||||||||||||||||||
Name
|
Number of
Securities
Underlying
Unexercised
Options
(#)
Exercisable
|
Number of
Securities
Underlying
Unexercised
Options
(#)
Unexercisable
|
Equity
Incentive
Plan
Awards:
Number
of
Securities
Underlying
Unexercised
Unearned
Options
(#)
|
Option
Exercise
Price
($)
|
Option
Expiration
Date
|
Number
of
Shares
or
Units
of
Stock
That
Have
Not
Vested
(#)
|
Market
Value
of
Shares
or
Units
of
Stock
That
Have
Not
Vested
($)
|
Equity
Incentive
Plan
Awards:
Number
Of
Unearned
Shares,
Units or
Other
Rights
That
Have
Not
Vested
(#)
|
Equity
Incentive
Plan
Awards:
Market
or
Payout
Value
of
Unearned
Shares,
Units or
Other
Rights
That
Have
Not
Vested
($)
|
|||||||||||||||||||||||||||
Baoguo
Jiang
|
0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||||||||||||||||||||
Zhanming
Gao
|
0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||||||||||||||||||||
Zhongming
Wang
|
0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
Narrative disclosure to
summary compensation and option tables
We have
no employment agreement with our officer.
41
At no
time during the last fiscal year with respect to any person listed in the Table
above was there:
|
·
|
any
outstanding option or other equity-based award repriced or otherwise
materially modified (such as by extension of exercise periods, the change
of vesting or forfeiture conditions, the change or elimination of
applicable performance criteria, or the change of the bases upon which
returns are determined;
|
|
·
|
any
waiver or modification of any specified performance target, goal or
condition to payout with respect to any amount included in non-stock
incentive plan compensation or
payouts;
|
|
·
|
any
option or equity grant;
|
|
·
|
any
non-equity incentive plan award made to a named executive
officer;
|
|
·
|
any
nonqualified deferred compensation plans including nonqualified defined
contribution plans; or
|
|
·
|
any
payment for any item to be included under All Other Compensation (column
(i)) in the Summary Compensation
Table.
|
Board of
Directors
Director
Compensation
Name
|
Fees
earned
or paid
in cash
($)
|
Stock
awards
($)
|
Option
awards
($)
|
Non-equity
incentive
plan
compensation
($)
|
Nonqualified
deferred
compensation
earnings
($)
|
All other
compensation
($)
|
Total
($)
|
|||||||||||||||||||||
Baoguo
Jiang
|
0 | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||||||||||||||
Zhanming
Gao
|
0 | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||||||||||||||
Zhongming
Wang
|
0 | 0 | 0 | 0 | 0 | 0 | 0 |
We have
no compensation arrangements (such as fees for retainer, committee service,
service as chairman of the board or a committee, and meeting attendance) with
directors.
42
CHANGES
IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE
None.
43
FINANCIAL
STATEMENTS
YABOO,
INC.
Audited
Financial Statements
As
of December 31, 2009
1
Table
of Contents
Independent
Auditor’s Report on the Financial Statements
|
3
|
Statement
of Balance Sheet
|
4
|
Statement
of Loss
|
5
|
Statement
of Shareholders Equity
|
6
|
Statement
of Cash Flows
|
7
|
Notes
to Financial Statements
|
8
|
2
Independent Registered
Public Accounting Firm’s Auditor’s Report on the Financial
Statements
Board
of Directors and Shareholders of Yaboo,Inc.
We
have audited the accompanying balance sheets of Yaboo, Inc. as of December 31,
2009, 2008, and the related operating statements, shareholders’ equity, and cash
flows for the year ended December 31, 2009, and the cumulative period August 11,
2008 (date of inception) through December 31, 2008. These financial
statements are the responsibility of the Company’s management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We
conducted our audit in accordance with auditing standards of the Public Company
Accounting Oversight Board (United States). Those standards require that
we plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that
our audit provides a reasonable basis for our opinion.
In our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Yaboo, Inc. as of December 31,
2009, December 31, 2008, and the results of its operations and their cash flows
for the year ended December 31, 2009, and the period from August 11, 2008 (date
of inception) through December 31, 2008 in conformity with accounting principles
generally accepted in the United States of America.
The
Company’s lack of operating history and financial resources raise substantial
doubt about its ability to continue as a going concern. The financial
statements do not include adjustments that might result from the outcome of this
uncertainty and if the Company is unable to generate significant revenue or
secure financing, then the Company may be required to cease or curtail its
operation.
/s/ Enterprise CPAs,
Ltd.
Enterprise
CPAs, Ltd.
Chicago,
IL
May
12, 2010
3
YABOO,
INC
BALANCE
SHEET
December
31
|
December
31
|
|||||||
2009
|
2008
|
|||||||
ASSETS
|
||||||||
Current
assets:
|
||||||||
Cash
and cash equivalents
|
$ | 74,314 | $ | 472,025 | ||||
Accounts
receivable
|
$ | 45,878 | - | |||||
Inventory
|
$ | 18,142 | ||||||
Total
Current Assets
|
$ | 138,334 | $ | 472,025 | ||||
Other
current assets:
|
||||||||
Stock
subscription receivable
|
5,000 | |||||||
Total
Other Current Assets
|
$ | - | $ | 5,000 | ||||
Fixed
assets:
|
||||||||
Improvement,
net
|
$ | 219,253 | $ | - | ||||
Total
Fixed Assets
|
$ | 219,253 | ||||||
TOTAL
ASSETS
|
$ | 357,587 | $ | 477,025 | ||||
LIABILITIES
& EQUITY
|
||||||||
Current
liabilities:
|
||||||||
Accounts
payable
|
$ | 38,345 | - | |||||
Loan
from shareholders
|
$ | 42,865 | 23,900 | |||||
Total
current liabilities
|
$ | 81,210 | $ | 23,900 | ||||
Total
liabilities
|
$ | 81,210 | $ | 23,900 | ||||
Stockholders'
Equity:
|
||||||||
Common
stock, $0.001 par value; 500,000,000 shares authorized; 47,278,000
shares issued and outstanding.
|
$ | 47,278 | $ | 47,278 | ||||
Paid-in
capital
|
$ | 419,122 | $ | 419,122 | ||||
Deficit
accumulated during the development stage
|
$ | (190,023 | ) | (13,275 | ) | |||
Accumulated
other comprehensive loss
|
$ | - | - | |||||
$ | - | |||||||
Total
stockholders' equity
|
$ | 276,377 | $ | 453,125 | ||||
TOTAL
LIABILITIES & EQUITY
|
$ | 357,587 | $ | 477,025 |
4
YABOO,
INC
STATEMENT
OF LOSS
Period
from
|
||||||||
August
11, 2008
|
||||||||
Year
Ended
|
(Date
of Inception)
To
|
|||||||
December 31, 2009
|
December 31, 2008
|
|||||||
Revenues
|
$ | 117,547 | $ | - | ||||
Cost
of Goods Sold
|
88,667 | - | ||||||
Gross
Profit
|
$ | 28,880 | $ | - | ||||
Operating
expenses:
|
||||||||
Research
and development
|
- | - | ||||||
Selling,
general and administrative expenses
|
203,109 | 13,586 | ||||||
Depreciation
and amortization expenses
|
3,088 | - | ||||||
Total
Operating Expenses
|
$ | 206,197 | $ | 13,586 | ||||
Operating
Loss
|
$ | (177,317 | ) | $ | (13,586 | ) | ||
Investment
income, net
|
569 | 311 | ||||||
Interest
Expense, net
|
- | - | ||||||
Loss
before income taxes
|
(176,748 | ) | (13,275 | ) | ||||
Loss
tax expense
|
- | - | ||||||
Net
loss
|
$ | (176,748 | ) | $ | (13,275 | ) | ||
Net
loss per common share- Basics
|
$ | (0.00 | ) | $ | (0.00 | ) | ||
Net
loss per common share- Diluted
|
$ | 0.00 | $ | 0.00 | ||||
Other
comprehensive loss, net of tax:
|
||||||||
Foreign
currency translation adjustments
|
- | - | ||||||
Other
comprehensive loss
|
$ | - | $ | - | ||||
Comprehensive
Loss
|
$ | (176,748 | ) | $ | (13,275 | ) |
5
YABOO,
INC
STATEMENT
OF STOCKHOLDERS EQUITY
The
Period August 11, 2008 ( Date of Inception)
through
December 31, 2009
Deficit
|
||||||||||||||||||||
Accumulated
|
||||||||||||||||||||
Additional
|
During
the
|
Total
|
||||||||||||||||||
Common
Stock
|
Paid-in
|
Development
|
Stockholders'
|
|||||||||||||||||
Shares
|
Amount
|
Capital
|
Stage
|
Equity
|
||||||||||||||||
Issuance
of common stocks to
shareholders @0.001 per share
on August 12, 2008
|
500,000 | $ | 500 | $ | - | $ | 500 | |||||||||||||
Issuance
of common stocks to
shareholders @0.005 per share
on August 31, 2008
|
27,400,000 | $ | 27,400 | $ | 109,600 | $ | 137,000 | |||||||||||||
Issuance
of common stocks to
shareholders @0.01 per share
on October 31, 2008
|
16,000,000 | $ | 16,000 | $ | 144,000 | $ | 160,000 | |||||||||||||
Issuance
of common stocks to
shareholders @0.05 per share
on December 31, 2008
|
3,142,000 | $ | 3,142 | $ | 153,958 | $ | 157,100 | |||||||||||||
Issuance
of common stocks to
Williams @0.05 per share on
December 31, 2008
|
236,000 | $ | 236 | $ | 11,564 | $ | 11,800 | |||||||||||||
Net
loss for the period ended
December 31, 2008
|
$ | (13,275 | ) | $ | (13,275 | ) | ||||||||||||||
Balance,
December 31, 2008
|
47,278,000 | $ | 47,278 | $ | 419,122 | $ | (13,275 | ) | $ | 453,125 | ||||||||||
Net
loss for the period ended December 31,
2009
|
$ | (176,748 | ) | $ | (176,748 | ) | ||||||||||||||
Balance,
December 31, 2009
|
47,278,000 | $ | 47,278 | $ | 419,122 | $ | (190,023 | ) | $ | 276,377 |
6
YABOO,
INC
STATEMENT
OF CASH FLOWS
Period
from
|
||||||||
August
11, 2008
|
||||||||
Year
Ended
|
(Date
of Inception) To
|
|||||||
December 31, 2009
|
December 31, 2008
|
|||||||
Operating
Activities:
|
||||||||
Net
loss
|
$ | (176,748 | ) | $ | (13,275 | ) | ||
Adjustments
to reconcile net income to net cash provided by operating
activities:
|
||||||||
Non-cash
portion of share based legal fee expense
|
- | 11,800 | ||||||
Accounts
receivable
|
(45,878 | ) | - | |||||
Inventory
|
(18,142 | ) | - | |||||
Stock
subscription receivable
|
5,000 | - | ||||||
Accounts
payable
|
38,345 | - | ||||||
Loan
from shareholders/officers
|
18,965 | 23,900 | ||||||
Net
cash provided by operating activities
|
$ | (178,458 | ) | $ | 22,425 | |||
Investing
Activities:
|
||||||||
Improvement,
net
|
$ | (219,253 | ) | - | ||||
Net
cash provided by investing activities
|
$ | (219,253 | ) | $ | - | |||
Financing
Activities:
|
||||||||
Proceeds
from issuance of common stock
|
- | 449,600 | ||||||
Net
cash provided by financing activities
|
$ | - | $ | 449,600 | ||||
Effect
of Exchange Rate on Cash
|
||||||||
Net
increase (decrease) in cash and cash equivalents
|
$ | (397,711 | ) | $ | 472,025 | |||
Cash
and cash equivalents at beginning of the year
|
$ | 472,025 | $ | - | ||||
Cash
and cash equivalents at end of year
|
$ | 74,314 | $ | 472,025 | ||||
Supplemental
schedule of non-cash investing and financing
activities:
|
||||||||
Common stock issued pursuant to
stock subscription receivable -officer (Note D)
|
$ | - | $ | 5,000 |
7
YABOO,
INC.
NOTES
TO FINANCIAL STATEMENTS
NOTE
A- BUSINESS DESCRIPTION
Yaboo,
Inc. (the “Company”), incorporated under the laws of Nevada on August 11, 2008,
with registered address at 375 Stephanie St., Suite 1411, Henderson, NV
89014. Yaboo, Inc. operates its business in the U.S. and wholly owned
branch located in the State of Illinois and has principal office at, 70 W
Madison ST, STE 1400, Chicago, IL 60602, USA.
In
addition to the U.S. operation, Yaboo, Inc established and registered a wholly
foreign owned subsidiary in China on April 17, 2009.
Yaboo Agriculture (Taizgou) co, Ltd, the 100% wholly owned subsidiary, is
located at Hailing Modern Agricultural Demonstration Zone, Hailing District,
TaiZhou City, Jiangsu Province, People’s Republic of China, to conduct and
operate the business.
In
October, 2009, Yaboo Agriculture (Taizgou) Co, Ltd. acquired the 100% ownership
of a Chinese company, Qilin Bay Restaurant Co., Ltd. (“Qilin Bay”), owned by
Taizhou Sunny Agricultural Development Co., Ltd. Taizhou Sunny
Agricultural Development Co., Ltd. was 100% owned and operated by local district
government, Hailing Modern Agricultural Demonstration Zone Administration
Office. Yaboo Agriculture (Taizhou) Co., Ltd. paid cash of $146,455 to
Taizhou Sunny Agricultural Development Co., Ltd., for the 100% ownership of
Qilin Bay.
Qilin
Bay Restaurant Co., Ltd. (“Qilin Bay”), was incorporated on July 16, 2008 by
Taizhou Sunny Agricultural Development Co., Ltd. to operate a specialty
restaurant located in North Jiangzhou Road, Hailing Modern Agriculture
Demonstration Zone, Hailing District, Taizhou City, Jiangsu Province,
China.
Qilin
Bay is a Chinese themed fresh foods restaurant. The restaurant features variety
of fresh seafood complemented by a variety of sauces, and high
quality of healthy and frozen free vegetables, beef, pork, ribs, chicken
entrees and noodles dishes. Qilin Bay also offers specialty
appetizers, desserts and full liquor service.
The
Company’s strategy is to differentiate its restaurant by emphasizing
consistently high-quality food and service, generous portions at moderate prices
and a natural and wild atmosphere. Qilin Bay is a wild place to entertain and
eat. Part adventure, part restaurant, and wholly entertaining for the whole
family; the Qilin Bay recreates a subtropics with water flowing beneath a little
bridge, lush vegetation, and indigenous creatures.
8
YABOO,
INC.
NOTES
TO FINANCIAL STATEMENTS
NOTE
B – SIGNIFICANT ACCOUNTING POLICIES
Going Concern and Plan of
Operation
The
Company's financial statements have been presented on the basis that it is a
going concern, which contemplates the realization of assets and the satisfaction
of liabilities in the normal course of business. The Company has accumulated net
loss of $190,023 from August 11, 2008 (Date of Inception) to December 31, 2009.
These conditions raise substantial doubt about its ability to continue as a
going concern. These financial statements do not include any adjustments
to 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.
Development Stage
Company
The
Company is not considered to be in the development stage as defined in ASC 915,
“Accounting and Reporting
by Development Stage
Enterprises”. The Company has devoted its efforts to the corporate
formation, China’s business registration and acquisition, restaurant license
approval, and particularly the raising of capital for continuing operation of
Qilin Bay Restaurant. There was sales revenue generated through operation
of Qilin Bay Restaurant, the significant net loss and negative cash flows indeed
caused the management to seek more capital or financing resources. Without
additional capital or financing, the Company may have immediate difficulty to
operation. The management believes that the Company’s inability to achieve
or sustain profitability is not a basis for designation as a development stage
entity pursuant to ASC 915.
Basis of
accounting
The
financial statements reflect the assets, revenues and expenditures of the
Company on the accrued basis of accounting.
The
Company’s fiscal year end is December 31.
Principles of
Consolidation
The
consolidated financial statements of the Company include the accounts of Yaboo,
Inc., and Yaboo Taizhou Agriculture Co., Ltd. All significant intercompany
balances and transactions have been eliminated in
consolidation
9
YABOO,
INC.
NOTES
TO FINANCIAL STATEMENTS
NOTE
B - SIGNIFICANT ACCOUNTING POLICIES (Continued)
Use of
Estimates
The
preparation of financial statements in conformity with generally accepted
accounting principles in the United States of America requires management to
make estimates and assumptions that affect certain amounts reported in the
financial statements and disclosures. Accordingly, actual results could
differ from those estimates.
Foreign Currency
Translation
The
Company has determined the United States dollars to be its functional currency
for Yaboo, Inc; People’s Republic of China Chines Yuan Renminbi to be its
functional currency in Yaboo Agriculture (Taizhou) co., Ltd. Assets and
liabilities were translated to U.S. dollars at the period-end exchange
rate. Statement of operations amounts were translated to U.S. dollars
using the first date of each month during the year. Gains and losses
resulting from translating foreign currency financial statements are accumulated
in other comprehensive income (loss), a separate component of shareholders’
equity.
Cash and Cash
Equivalents
The
Company considers all highly-liquid investments with an original maturity of
three months or less when purchased to be cash equivalents. As of December 31,
2008, and December 31, 2009, there were $472,025 and $74,314 cash and cash
equivalents, respectively.
Revenues
The
Company records the food and beverage sales upon the foods and beverage are
delivered and consumed by customers. The restaurant was opened on October
22, 2009, most of retail customers paid the cash after their eating; and a few
local government organizations did sign the sales receipts and the restaurant
would send the local government departments bills for payments. It is very
common practice particularly the Qilin Bay Restaurant is special licensed by
local government. The payment terms are within 90 days. As of
December 31, 2009, there was total sales revenue of $117,547.00, including
accounts receivable from local governments.
Cost of
Goods Sold
The
cost of goods sold and inventories were valued at cost of purchase from local
suppliers. The purchase order was placed when the restaurant as
needed. As of December 31, 2009, the Cost of Goods Sold was
$88,667.
10
YABOO,
INC.
NOTES
TO FINANCIAL STATEMENTS
NOTE
B - SIGNIFICANT ACCOUNTING POLICIES (Continued)
Inventory
The
inventory was valued at cost of purchase from local suppliers. The
inventory balance as of December 31, 2009 was $18,142. The ending
inventory consists of liquors $9072, cigarettes $1,850, meats $2,721, vegetables
$905, live fishes $1, 812, and eggs, rice, flours $1,782.
Organization Cost and
Amortization
The
Company incurred organization cost for setting up Yaboo, Inc in USA and the cost
was $900, which was fully expensed as December 31, 2008.
Property, Plant, and
Equipment Depreciation
Property,
plant, and equipment are stated at cost. Depreciation is being provided
principally by straight line methods over the estimated useful lives of the
assets. As of December 31, 2008, there were no fixed assets in the
Company’s balance sheets.
During
September and October 2009, the Company incurred the remodeling and improvement
for re-opening the restaurant business, the improvement was recorded as fixed
asset to depreciate over 15 years with straight line method at mid month
convention. The net improvement balance was $219,253, i.e., total
remodeling cost of $222,341 minus depreciation $3,088.
The
total remodeling and improvement cost consists of following:
2009 Remodeling and Improvement
Materials
|
Labor
|
Total
|
||||||||||
Square
& Parking Lot
|
$ | 37,988 | $ | 56,982 | $ | 94,971 | ||||||
Gate
& Sign
|
$ | 18,641 | $ | 27,962 | $ | 46,603 | ||||||
Bar
Table
|
$ | 3,362 | $ | 5,043 | $ | 8,404 | ||||||
Entertainment
Stage
|
$ | 6,275 | $ | 9,412 | $ | 15,687 | ||||||
21
Private Dining Rooms
|
$ | 12,066 | $ | 18,099 | $ | 30,165 | ||||||
Dormitory
|
$ | 5,203 | $ | 7,804 | $ | 13,007 | ||||||
Sales
Station
|
$ | 4,517 | $ | 6,776 | $ | 11,293 | ||||||
Windows
|
$ | 885 | $ | 1,327 | $ | 2,212 | ||||||
Total Cost
|
$ | 88,936 | $ | 133,405 | $ | 222,341 |
11
YABOO,
INC.
NOTES
TO FINANCIAL STATEMENTS
NOTE
B - SIGNIFICANT ACCOUNTING POLICIES (Continued)
Property, Plant, and
Equipment Depreciation (Continued)
Assessing
and accounting for asset impairment:
An
asset is impaired if the carrying amount exceeds its recoverable amount. Signs
of impairment may be internal or external factors that would indicate that
potentially the recoverable amount of an asset is less than its carrying
value.
Leading
to an impairment for Company’s assets may be a damage to particular
assets/areas due to circumstances beyond Company’s control.
The
Company is required to identify assets that may be impaired if an indication on
impairment exists.
The
Company would take steps to make sure that the assets impairment is adequately
assessed and accounted for:
|
·
|
Maintenance
of fixed assets register to ensure existence of adequate custody over
fixed assets.
|
|
·
|
Physical
verification of all Company owned assets to ensure location of fixed
assets owned by the Company is known at all
times.
|
|
·
|
The
continuous reconciliation of fixed asset accounts to the Asset Management
to ensure the University’s accounts reflect the detailed fixed asset
register.
|
|
·
|
Authorization
of all asset related transactions, such as acquisition, transfer, disposal
and amendments.
|
|
·
|
Segregation
of duties.
|
During
the year 2009, the Company did not find any indication of the assets damages or
impairment, therefore there was no impairment loss assessed.
Operating
Expenses
From
the period of August 11, 2008 to December 31, 2008, there’s total of $13,586
operating expense; for the year ended December 31, 2009, the total operation
expense was $177,317.
12
YABOO,
INC.
NOTES
TO FINANCIAL STATEMENTS
NOTE
B - SIGNIFICANT ACCOUNTING POLICIES (Continued)
Operating Expenses
(Continued)
2009
|
2008
|
|||||||
Operating
Expense
|
||||||||
Advertising
and Promotion
|
$ | 11,862.93 | $ | - | ||||
Automobile
Expense
|
1,712.94 | |||||||
Bank
Service Charges
|
234.63 | 821 | ||||||
Business
License and Permit
|
216.00 | |||||||
China
Local Tax
|
3,222.03 | |||||||
Depreciation
Expense
|
3,088.00 | |||||||
Freight
& Delivery
|
745.56 | |||||||
Meals
and Entertainment
|
12,399.12 | |||||||
Misc
Expenses
|
376.08 | 65 | ||||||
Office
Supplies
|
8,066.68 | |||||||
Organization
Cost
|
2,027.25 | 900 | ||||||
Payroll
Expenses
|
60,473.00 | |||||||
Postage
and Shipping Expense
|
2,318.51 | |||||||
Professional
Fees
|
22,500.00 | 11800 | ||||||
Rent
Expense
|
48,140.09 | |||||||
Repairs
and Maintenance
|
5,243.60 | |||||||
Restaurant
Supplies
|
8,755.00 | |||||||
Telephone
Expense
|
1,682.85 | |||||||
Total
Travel Expense
|
8,394.20 | |||||||
Utilities
|
4,738.51 | |||||||
Total
Expense
|
$ | 206,196.98 | $ | 13,586.00 |
Advertising
and promotion expense:
The
advertising and promotion expense consists of newspaper, TV advertising, and
direct mails. The Company would have a budget for advertising and
promotion expense as 3-5% of sales. Due to the grand opening of the
restaurant, the initial advertising expense was higher than the expected
budget. The advertising on newspaper and TV were based on the purchase
order basis for weekly advertising. After completing and satisfying with
advertising design and settings, then the media companies began to advertise in
newspapers or TV and at the same time issued the bills to the Company.
Then the Company began to make payment. The Company adopted accrual
accounting method, if the media companies did advertisement, and sent bills, but
the Company did not make payment yet, the Company accrued as accounts
payable. As of December 31, 2009, there were no accounts payable balances
related to advertising and promotion expense.
13
YABOO,
INC.
NOTES
TO FINANCIAL STATEMENTS
NOTE
B - SIGNIFICANT ACCOUNTING POLICIES (Continued)
Concentration of credit
risk
The
Company maintains its cash in bank accounts which, at times, may exceed the
federally insured limits. The Company has not experienced any losses in
such accounts and believes it is not exposed to any significant credit risk on
cash.
Net Loss Per Common
Share
The
Company computes per share amounts in accordance with ASC 260, “Earnings per
Share”. ASC 260 requires presentation of basis and diluted EPS.
Basic EPS is computed by dividing the income (loss) available to Common
Shareholders by the weighted-average number of common shares outstanding for the
period. Diluted EPS is based on the weighted-average number of shares of
common stock and common stock equivalents outstanding during the
periods.
The
Company only issued one type of shares, i.e., common shares only. There
are no other types securities were issued. Accordingly, the diluted and
basics net loss per common share are the same.
The
following table shows the calculations for basics and diluted net loss per
common share for the year ended December 31, 2009.
Basic
& Diluted EPS Computation Year 2009
|
||||
Net
Loss for the Year 2009
|
$ | (176,748 | ) | |
Loss
available to common stockholders
|
$ | (176,748 | ) |
Dates
|
Shares
|
Fraction of
Period
|
Weighted -
|
|||||||||
Outstanding
|
Outstanding
|
On Daily Basis
|
Average Shares
|
|||||||||
January
1, 2009
|
47,278,000 | 1 | 47,278,000 | |||||||||
December
31, 2009
|
- | 1/ 365 | 0 | |||||||||
Weighted-average
shares
|
47,278,000 | |||||||||||
Basic & Diluted Net Loss Per Common
Share
|
$ | (0.00 | ) |
14
YABOO,
INC.
NOTES
TO FINANCIAL STATEMENTS
NOTE
B - SIGNIFICANT ACCOUNTING POLICIES (Continued)
Net Loss Per Common Share
(Continues):
The
following table shows the calculations for basics and diluted net loss per
common share for the cumulative period from August 11, 2008 (Date of Inception)
to December 31, 2009.
Period
From August 11 2008 to December 31, 2008
Basic
& Diluted EPS Computation
|
||||
Net
Loss December 31, 2008
|
$ | (13,275 | ) | |
Loss
available to common stockholders
|
$ | (13,275 | ) |
Dates
|
Shares
|
Fraction
of Period
|
Weighted
-
|
|||||||||
Outstanding
|
Outstanding
|
On Daily Basis
|
Average Shares
|
|||||||||
August
12, 2008
|
500,000 | 142/ 366 | 193,989 | |||||||||
August
31, 2008
|
27,400,000 | 123/ 366 | 9,208,197 | |||||||||
October
31, 2008
|
16,000,000 | 62/ 366 | 2,710,383 | |||||||||
December
31, 2008
|
3,378,000 | 1/ 366 | 9,230 | |||||||||
Weighted-average
shares
|
12,121,798 | |||||||||||
Basic
& Diluted Net Loss Per Common Share
|
$ | (0.00 | ) |
Stock-Based
Compensation
The
Company accounts for stock issued for services using the fair value
method. In accordance with ASC 718, Stock Compensation, the measurement
date of shares issued for services is the date at which the counterparty’s
performance is complete.
15
YABOO,
INC.
NOTES
TO FINANCIAL STATEMENTS
NOTE
B - SIGNIFICANT ACCOUNTING POLICIES (Continued)
Income
Tax
The
Company filed extension for corporate tax return Form 1120 to Internal Revenue
Service and IL 1120 to the State of Illinois. There is no income tax for
the State of Nevada.
Recent Accounting
Pronouncements
The
following pronouncements have become effective during the period covered by
these financial statements or will become effective after the end of the period
covered by these financial statements:
Pronouncement
|
Issued
|
Title
|
||
ASC
855
|
May
2009
|
Subsequent
Events
|
||
ASC
105
|
June
2009
|
The FASB Accounting Standards
Codification and
the Hierarchy of Generally Accepted Accounting Principles—a replacement of
FASB Statement No. 162
|
||
ASC
820
|
August
2009
|
Fair
Value Measurements and Disclosures – Measuring Liabilities at Fair
Value
|
||
ASC
260
|
September
2009
|
Earnings
per Share – Amendments to Section 260-10-S99
|
||
ASC
820
|
September
2009
|
Investments
in Certain Entities that Calculate Net Asset Value per Share (or Its
Equivalent)
|
||
ASC
605
|
October
2009
|
Revenue
Recognition (Topic 605): Multiple-Deliverable Revenue Arrangements – a
consensus of the FASB Emerging Issues Task Force
|
||
ASC
470
|
October
2009
|
Accounting
for Own-Share Lending Arrangements in Contemplation of Convertible Debt
Issuance or Other Financing – a consensus of the FASB Emerging Issues Task
Force
|
||
ASC
860
|
December
2009
|
Transfers
and Servicing (Topic 860): Accounting for Transfers of Financial
Assets
|
||
ASC
505
|
January
2010
|
Accounting
for Distributions to Shareholders with Components of Stock and Cash – a
consensus of the FASB Emerging Issues Task Force
|
||
ASC
810
|
January
2010
|
Consolidation
(Topic 810): Accounting and Reporting for Decreases in Ownership of a
Subsidiary – a Scope Clarification
|
||
ASC
718
|
January
2010
|
Compensation
– Stock Compensation (Topic 718): Escrowed Share Arrangements and the
Presumption of Compensation
|
||
ASC
820
|
January
2010
|
Fair
Value Measurements and Disclosures (Topic 820): Improving Disclosures
about Fair Value Measurements
|
||
ASC
810
|
February
2010
|
Consolidation
(Topic 810): Amendments for Certain Investment
Funds
|
||
ASC
815
|
|
March
2010
|
|
Derivatives
and Hedging (Topic 815): Scope Exception Related to Embedded Credit
Derivatives
|
16
YABOO,
INC.
NOTES
TO FINANCIAL STATEMENTS
NOTE
B - SIGNIFICANT ACCOUNTING POLICIES (Continued)
Recent Accounting
Pronouncements
Management
does not anticipate that the adoption of these standards will have a material
impact on the financial statements.
NOTE
C – RELATED PARTY TRANSACTIONS
Loans from
Shareholders/Officers
On
August 11, 2008, founder of the Company, Mr. Baoguo Jiang loaned $900.00 to the
Company to setting up the corporation. On December 1, 2008, the founder
and CEO of the company, Baoguo Jiang, loaned $ 23,000 to the company for company
operating.
As of
December 31, 2008, a total of $ 23,900 was loaned from the founder and CEO of
the company.
During
the year 2009, the Company paid back the loan balance of $23,900 to Baoguo
Jiang, and then incurred the new loan of $42,865 as of December 31,
2009.
The
loan was for the company’s operation purpose without interest charge, the loan
may be requested to pay off as long as the Company can generate sufficient cash
flows.
Loans
from shareholders Table
|
||||
Loans
from shareholders
|
||||
Loan
from CEO ( Organization Cost
) 8/11/2008
|
$ | 900 | ||
Advance from
CEO 12/1/2008
|
$ | 23,000 | ||
Total
loans from shareholders and officer at 12/31/2008
|
$ | 23,900 | ||
Repay
loans to officer at 3/11/2009
|
$ | (900 | ) | |
Total
loans from shareholders and officer at 3/31/2009
|
$ | 23,000 | ||
Repay
loans to shareholder at 11/13/2009
|
$ | (23,000 | ) | |
Advance
from CEO, 12/31/2009
|
$ | 42,865 | ||
Balance:
Loans from shareholders at 12/31/2009
|
$ | 42,865 |
17
YABOO,
INC.
NOTES
TO FINANCIAL STATEMENTS
Common Shares Issued to
Executive and Non-Executive Officers and Directors
As of
December 31, 2008, total 37,800,000 shares were issued to officers and
directors. Please see the Table below for details:
Name
|
Title
|
Share QTY
|
Date
|
% of
Common
Share
|
|||||||
Baoguo Jiang
|
CEO
|
27,800,000 |
8/12/08
|
58.80 | % | ||||||
Zhanmin Gao
|
Secretary
|
5,000,000 |
12/1/08
|
10.58 | % | ||||||
Zhongming Wang
|
Vice President
|
5,000,000 |
12/1/08
|
10.58 | % | ||||||
TOTAL
|
37,800,000 | 79.95 | % |
NOTE
D – SHAREHOLDERS’ EQUITY
Under
the Company’s Articles of Incorporation dated August 11, 2008, the Company is
authorized to issue 500,000,000 shares of capital stock with a par value of
$0.001.
On
August 11, 2008, the Company was incorporated in the State of
Nevada.
On
August 12, 2008, the Company issued 500,000 shares to the founders of the
Company, Baoguo Jiang at $0.001 per share or $500 for common stock (stock
subscription receivable). The $500 was received in October
2008.
On
August 31, 2008, the Company issued total 27,400,000 shares to the founder and
CEO of the company, Baoguo Jiang, at $0.005 per share or $137,000 for common
stock (stock subscription receivable). The $137,000 was received on
December 1, 2008.
On
October 30, 2008, the Company issued total 16,000,000 shares to the founder and
CEO of the company, Baoguo Jiang, at $0.01 per share or $160,000 for common
stock (stock subscription receivable). The $160,000 was received on
December 1, 2008.
18
YABOO,
INC.
NOTES
TO FINANCIAL STATEMENTS
NOTE
D – SHAREHOLDERS’ EQUITY (Continued)
On
December 1, 2008, the founder and CEO of the company, Baoguo Jiang, transferred
16,100,000 of his share as gift to 5 individual.
On
December 1, 2008, the founder and CEO of the company, Baoguo Jiang, transferred
total 16,100,000 of his share as gift to 5 individual. All transferred shares
were restricted shares subject to SEC rule 144 and would be hold for at least 6
months, beginning with the date when the securities were bought and fully paid,
i.e., December 1, 2008. Detail list as follow:
Name
|
Transfer
Date
|
Shares
QTY
|
||||
Zhanmin
Gao
|
12/1/2008
|
5,000,000 | ||||
Zhongming
Wang
|
12/1/2008
|
5,000,000 | ||||
Jianhua
Li
|
12/1/2008
|
6,000,000 | ||||
Xinwei
Shi
|
12/1/2008
|
50,000 | ||||
Lijun
Jia
|
12/1/2008
|
50,000 | ||||
Total
|
16,100,000 |
On
December 31, 2008, additional 3,142,000 shares were issued to 52 non-affiliated
shareholders at $ 0.05 per share or $ 157,100 for common stocks
On
December 31, 2008, 236,000 shares were issued to Williams Law Group at $ 0.05
per share for the legal service value $ 11,800.
As of
December 31, 2009, the total 47,278,000 shares were issued and
outstanding.
NOTE
E – Acquisition of Qilin Bay
In
October 22, 2009, Yaboo Agriculture (Taizgou) Co, Ltd. acquired the 100%
ownership of a Chinese restaurant, Qilin Bay Restaurant Co., Ltd. (“Qilin Bay”),
owned by Taizhou Sunny Agricultural Development Co., Ltd. Taizhou Sunny
Agricultural Development Co., Ltd. was 100% owned and operated by local district
government, Hailing Modern Agricultural Demonstration Zone Administration
Office.
19
YABOO,
INC.
NOTES
TO FINANCIAL STATEMENTS
NOTE
E – Acquisition of Qilin Bay (Continued)
Qilin
Bay Restaurant Co., Ltd. (“Qilin Bay”), was incorporated on July 16, 2008 by
Taizhou Sunny Agricultural Development Co., Ltd. to operate a specialty fresh
food restaurant located in North Jiangzhou Road, Hailing Modern Agriculture
Demonstration Zone, Hailing District, Taizhou City, Jiangsu Province,
China. After Qilin Bay was incorporated and licensed to conduct restaurant
business, Qinlin Bay conducted the restaurant business from August 2008 to
December 2008, then the restaurant business was closed, and the Qilin Bay was
inactive from January to September 2009.
In
September 22, 2009, Yaboo Agriculture (Taizhou) Co., signed an
agreement with Taizhou Sunny Agricultural Development Co., Ltd to initiate the
transferring the ownership of Qilin Bay. Yaboo Agriculture (Taizhou) Co.,
Ltd agreed to pay cash of $146,455 to Taizhou Sunny Agricultural Development
Co., Ltd., for the 100% ownership of Qilin Bay.
Based
on the appraised value of Qilin Bay, at Qilin Bay’s books, Qilin Bay was
inactive and there was an only asset, $146,455 balance at bank account.
The fair value of Qilin Bay was appraised as $146,455, which is equal to the
amount at bank account. Accordingly, Yaboo Agriculture (Taizhou) Co., Ltd.
paid cash of $146,455 to the owner of the Qilin Bay, Taizhou Sunny Agricultural
Development Co., Ltd., for the 100% ownership of bank account of $146,455 Qilin
Bay, in fact acquired the restaurant business through this acquisition.
There was no goodwill or no comprehensive other income recognized at this
acquisition.
According
to ASC 805, the transaction has been accounted for using the acquisition method
of accounting which requires, that most assets acquired and liabilities assumed
be recognized at the fair values as of acquisition date. The following
table summarizes the amounts recognized for assets acquired and liabilities
assumed as of the acquisition date.
As
of September 22, 2009:
|
Amounts
recognized as of Acquisition Date
|
|||
Agriculture
Bank Account Balance
|
$ | 146,455 | ||
Property,
plant and equipment
|
0.00 | |||
Other
noncurrent assets
|
0.00 | |||
Long-term
debt
|
0.00 | |||
Other
noncurrent liabilities
|
0.00 | |||
Total
identifiable net assets
|
0.00 | |||
Net
assets acquired
|
$ | 146,455 | ||
Total
consideration (cash) transferred
|
$ | 146,455 |
20
YABOO,
INC.
NOTES
TO FINANCIAL STATEMENTS
NOTE
E – Acquisition of Qilin Bay (Continued)
After
acquisition of the Qilin Bay Restaurant, the restaurant was remodeled and
started to operate after October 2009. The gross sales revenue generated
through the restaurant was $117,547 as of December 31, 2009.
NOTE
F – GOING CONCERN
As
shown in the accompanying financial statements which have been prepared in
conformity with accounting principles generally accepted in the United States of
America, which contemplates continuation of the Company as a going concern, the
Company has incurred operating losses of $190,023 for the period August 11, 2008
(date of inception) through December 31, 2009. Due to Company’s lack of
history and not sufficient revenues, the Company is considered to be a
development stage company.
There
is no guarantee that the Company will be able to raise enough capital or
generate more revenues to sustain its operations and carry out its business
plan. These conditions raise substantial doubt about the Company’s ability
to continue as a going concern.
The
financial statements do not include any adjustments relating to the carrying
amounts of recorded assets or the carrying amounts and classification of
recorded liabilities that may be required should the Company be unable to
continue as a going concern.
The
Company’s lack of operating history and financial resources raise substantial
doubt about its ability to continue as a going concern. The financial
statements do not include adjustments that might result from the outcome of this
uncertainty and if the Company is unable to generate significant revenue or
secure financing, then the Company may be required to cease or curtail its
operations.
21
YABOO,
INC.
Financial
Statements
(Unaudited)
As
of September 30, 2010
1
Table
of Contents
Consolidated
Balance Sheet
|
3
|
Consolidated
Statement of Operation
|
4
|
Consolidated
Shareholders Equity
|
5
|
Consolidated
Statement of Cash Flows
|
6
|
Notes
to Consolidated Financial Statements
|
7
|
Exhibit
A
2
YABOO,
INC.
CONSOLIDATED
BALANCE SHEET
September 30
|
December 31
|
December 31
|
||||||||||
2010
|
2009
|
2008
|
||||||||||
( Unaudited)
|
(unaudited)
|
(Unaudited)
|
||||||||||
ASSETS
|
||||||||||||
Current
assets:
|
||||||||||||
Cash
and cash equivalents
|
$ | 31,395 | $ | 74,314 | $ | 472,025 | ||||||
Accounts
receivable, net
|
27,949 | 45,878 | - | |||||||||
Inventory
|
5,103 | 18,142 | - | |||||||||
Total
Current Assets
|
$ | 64,447 | $ | 138,334 | $ | 472,025 | ||||||
Other
current assets:
|
||||||||||||
Stock
subscription receivable
|
- | - | 5,000 | |||||||||
Total
Other Current Assets
|
$ | - | $ | - | $ | 5,000 | ||||||
Fixed
assets:
|
||||||||||||
Improvement,
net
|
208,135 | 219,253 | - | |||||||||
Total
Fixed Assets
|
$ | 208,135 | $ | 219,253 | $ | - | ||||||
TOTAL
ASSETS
|
$ | 272,582 | $ | 357,587 | $ | 477,025 | ||||||
Current
liabilities:
|
||||||||||||
Account
payable
|
$ | 15,170 | $ | 38,345 | $ | - | ||||||
Loan
from shareholders
|
57,045 | 42,865 | 23,900 | |||||||||
Total
Current Liabilities
|
$ | 72,215 | $ | 81,210 | $ | 23,900 | ||||||
Stockholders'
Equity:
|
||||||||||||
Common
stock, $0.001 par value;
|
||||||||||||
500,000,000
shares authorized;
|
||||||||||||
47,278,000
shares issued and outstanding.
|
$ | 47,278 | $ | 47,278 | $ | 47,278 | ||||||
Paid-in
capital
|
419,122 | 419,122 | 419,122 | |||||||||
Deficit
accumulated during the development stage
|
(266,246 | ) | (190,023 | ) | (13,275 | ) | ||||||
Accumulated
other comprehensive Income(Loss)
|
213 | - | - | |||||||||
Total
stockholders' equity
|
$ | 200,367 | $ | 276,377 | $ | 453,125 | ||||||
TOTAL
LIABILITIES & EQUITY
|
||||||||||||
$ | 272,582 | $ | 357,587 | $ | 477,025 |
3
YABOO,
INC
CONSOLIDATED
STATEMENT OF OPERATION
Nine Months Ended
|
||||||||||||
September 30
|
||||||||||||
2010
|
2009
|
2008
|
||||||||||
Unaudited
|
Unaudited
|
Unaudited
|
||||||||||
Revenues:
|
$ | 213,504 | $ | - | $ | - | ||||||
Cost
of Goods Sold
|
98,166 | - | - | |||||||||
Gross
Profit
|
$ | 115,338 | $ | - | $ | - | ||||||
Operating
expenses:
|
||||||||||||
Research
and development
|
- | - | - | |||||||||
|
||||||||||||
Selling,
general and administrative expenses
|
180,459 | 67,268 | 634 | |||||||||
Depreciation
and amortization expenses
|
11,118 | - | - | |||||||||
Total
Operating Expenses
|
$ | 191,577 | $ | 67,268 | $ | 634 | ||||||
Operating
Income( Loss)
|
$ | (76,239 | ) | $ | (67,268 | ) | $ | (634 | ) | |||
Investment
income, net
|
16 | 774 | - | |||||||||
Interest
Expense, net
|
- | - | - | |||||||||
Income(Loss)
before taxes
|
(76,223 | ) | (66,494 | ) | (634 | ) | ||||||
Net
Income(Loss)
|
$ | (76,223 | ) | $ | (66,494 | ) | $ | (634 | ) | |||
Net
Income(Loss) per common share-Basics
|
$ | (0.00 | ) | $ | (0.00 | ) | $ | (0.00 | ) | |||
Net
Income(Loss) per common share-Diluted
|
$ | (0.00 | ) | $ | (0.00 | ) | $ | (0.00 | ) | |||
Other
comprehensive income (loss), net of tax:
|
||||||||||||
Foreign
currency translation adjustments
|
213 | (216 | ) | - | ||||||||
Other
comprehensive income (loss)
|
$ | 213 | $ | (216 | ) | $ | - | |||||
Comprehensive
Income (Loss)
|
$ | (76,010 | ) | $ | (66,710 | ) | $ | (634 | ) |
4
YABOO,
INC
STATEMENT
OF STOCKHOLDERS EQUITY
The
Period August 11, 2008 ( Date of Inception)
through
September 30, 2010
Deficit
|
Accumulated
|
|||||||||||||||||||||||
Additional
|
Accumulated
|
Other
|
Total
|
|||||||||||||||||||||
Common Stock
|
Paid-in
|
During the
|
Comprehensive
|
Stockholders'
|
||||||||||||||||||||
Shares
|
Amount
|
Capital
|
Development Stage
|
Income (Loss)
|
Equity
|
|||||||||||||||||||
Issuance
of common stocks
|
||||||||||||||||||||||||
to shareholders @0.001 per
|
||||||||||||||||||||||||
share on August 12, 2008
|
500,000 | $ | 500 | $ | - | $ | 500 | |||||||||||||||||
Issuance
of common stocks
|
||||||||||||||||||||||||
to shareholders @0.005 per
|
||||||||||||||||||||||||
share on August 31, 2008
|
27,400,000 | $ | 27,400 | $ | 109,600 | $ | 137,000 | |||||||||||||||||
Issuance
of common stocks
|
||||||||||||||||||||||||
to shareholders @0.01 per
|
||||||||||||||||||||||||
share on October 31, 2008
|
16,000,000 | $ | 16,000 | $ | 144,000 | $ | 160,000 | |||||||||||||||||
Issuance
of common stocks
|
||||||||||||||||||||||||
to shareholders @0.05 per
|
||||||||||||||||||||||||
share on December 31, 2008
|
3,142,000 | $ | 3,142 | $ | 153,958 | $ | 157,100 | |||||||||||||||||
Issuance
of common stocks
|
||||||||||||||||||||||||
to Williams @0.05 per share
|
||||||||||||||||||||||||
on December 31, 2008
|
236,000 | $ | 236 | $ | 11,564 | $ | 11,800 | |||||||||||||||||
Net
loss for the period
|
||||||||||||||||||||||||
ended December 31, 2008
|
$ | (13,275 | ) | $ | (13,275 | ) | ||||||||||||||||||
Balance,
December 31, 2008
|
47,278,000 | $ | 47,278 | $ | 419,122 | $ | (13,275 | ) | $ | - | $ | 453,125 | ||||||||||||
Net
loss for the period
|
||||||||||||||||||||||||
ended December 31, 2009
|
$ | (176,748 | ) | $ | (176,748 | ) | ||||||||||||||||||
Balance,
December 31, 2009
|
47,278,000 | $ | 47,278 | $ | 419,122 | $ | (190,023 | ) | $ | - | $ | 276,377 | ||||||||||||
Adjustment
for Exchange
|
||||||||||||||||||||||||
rate changes
|
$ | 213 | $ | 213 | ||||||||||||||||||||
Net
loss for the period
|
||||||||||||||||||||||||
ended September 30, 2010
|
$ | (76,223 | ) | $ | (76,223 | ) | ||||||||||||||||||
Balance,
September 30, 2010
|
47,278,000 | $ | 47,278 | $ | 419,122 | $ | (266,246 | ) | $ | 213 | $ | 200,367 |
5
YABOO,
INC
CONSOLIDATED
STATEMENT OF CASH FLOW
Nine Months Ended
|
||||||||||||
September 30
|
||||||||||||
2010
|
2009
|
2008
|
||||||||||
|
Unaudited
|
Unaudited
|
Unaudited
|
|||||||||
Operating Activities: | ||||||||||||
Net
Loss
|
$ | (76,223 | ) | $ | (66,494 | ) | $ | (634 | ) | |||
Adjustments
to reconcile net income to net cash provided by operating
activities:
|
||||||||||||
Non-cash
portion of share based legal fee expense
|
- | - | ||||||||||
Depreciation
Expense
|
11,118 | - | - | |||||||||
Inventory
|
13,039 | - | - | |||||||||
Prepaid
Rent
|
- | (24,409 | ) | - | ||||||||
Prepaid
Expenses
|
- | (123,775 | ) | - | ||||||||
Loan
to Qilin Bay
|
- | (184,615 | ) | - | ||||||||
Account
Receivable
|
17,929 | - | ||||||||||
Account
Payable
|
(23,175 | ) | - | - | ||||||||
Loan
from shareholders/officers
|
14,180 | (900 | ) | 634 | ||||||||
Net
cash provided by operating activities
|
$ | (43,132 | ) | $ | (400,193 | ) | $ | - | ||||
Investing
Activities:
|
||||||||||||
Improvement
|
- | - | - | |||||||||
Net
cash provided by investing activities
|
$ | - | $ | - | $ | - | ||||||
Financing
Activities:
|
||||||||||||
Proceeds
from issuance of common stock
|
- | 5,000 | - | |||||||||
Net
cash provided by financing activities
|
$ | - | $ | 5,000 | $ | - | ||||||
Effect
of Exchange Rate on Cash
|
$ | 213 | $ | (216 | ) | |||||||
Net
increase (decrease) in cash and cash equivalents
|
$ | (42,919 | ) | $ | (395,409 | ) | $ | - | ||||
Cash
and cash equivalents at beginning of the period
|
$ | 74,314 | $ | 472,025 | $ | - | ||||||
Cash
and cash equivalents at end of the period
|
$ | 31,395 | $ | 76,616 | $ | - | ||||||
Supplemental
schedule of non-cash investing and financing
activities:
|
||||||||||||
Common
stock issued pursuant to stock subscription receivable
-officer
|
$ | - | $ | (5,000 | ) | $ | 137,500 |
6
YABOO,
INC.
NOTES
TO FINANCIAL
STATEMENTS
|
NOTE
A- BUSINESS DESCRIPTION
Yaboo,
Inc. (the “Company”), incorporated under the laws of Nevada on August 11, 2008,
with registered address at 375 Stephanie St., Suite 1411, Henderson, NV
89014. Yaboo, Inc. operates its business in the U.S. and wholly
owned branch located in the State of Illinois and has principal office at, 70 W
Madison ST, STE 1400, Chicago, IL 60602, USA.
In
addition to the U.S. operation, Yaboo, Inc established and registered a wholly
foreign owned subsidiary in China on April 17,
2009. Yaboo Agriculture (Taizgou) co, Ltd, the 100% wholly owned
subsidiary, is located at Hailing Modern Agricultural Demonstration Zone,
Hailing District, TaiZhou City, Jiangsu Province, People’s Republic of
China, to conduct and operate the business.
In
October, 2009, Yaboo Agriculture (Taizgou) Co, Ltd. acquired the 100% ownership
of a Chinese company, Qilin Bay Restaurant Co., Ltd. (“Qilin Bay”), owned by
Taizhou Sunny Agricultural Development Co., Ltd. Taizhou Sunny
Agricultural Development Co., Ltd. was 100% owned and operated by local district
government, Hailing Modern Agricultural Demonstration Zone Administration
Office. Yaboo Agriculture (Taizhou) Co., Ltd. paid cash of $146,455
to Taizhou Sunny Agricultural Development Co., Ltd., for the 100% ownership of
Qilin Bay.
Qilin
Bay Restaurant Co., Ltd. (“Qilin Bay”), was incorporated on July 16, 2008 by
Taizhou Sunny Agricultural Development Co., Ltd. to operate a fresh food
restaurant located in North Jiangzhou Road, Hailing Modern Agriculture
Demonstration Zone, Hailing District, Taizhou City, Jiangsu Province,
China. Yaboo Agriculture (Taizhou) Co. Ltd. will conduct the fresh
food restaurant business in China through Qilin Bay.
Qilin
Bay is a Chinese themed fresh foods restaurant. The restaurant features variety
of fresh seafood complemented by a variety of sauces, and high
quality of healthy and frozen free vegetables, beef, pork, ribs, chicken
entrees and noodles dishes. Qilin Bay also offers specialty
appetizers, desserts and full liquor service.
7
YABOO,
INC.
NOTES
TO FINANCIAL
STATEMENTS
|
NOTE
A- BUSINESS DESCRIPTION (Continue)
The
Company’s strategy is to differentiate its restaurant by emphasizing
consistently high-quality food and service, generous portions at moderate prices
and a natural and wild atmosphere. Qilin Bay is a wild place to entertain and
eat. Part adventure, part restaurant, and wholly entertaining for the whole
family; the Qilin Bay recreates a subtropics with water flowing beneath a little
bridge, lush vegetation, and indigenous creatures.
Qilin
Bay’s primary focus as a company of restaurant is to provide a quality product
together with quality service across all of our brands. This goal entails
offering consumers of different demographic backgrounds an array of dining
alternatives suited for differing needs. Our sales are primarily generated
through a diverse customer base, which includes people eating in our restaurants
as regular patrons who return for meals several times a week or on special
occasions such as birthday parties, wedding parties, and private events and for
business entertainment.
NOTE
B – SIGNIFICANT ACCOUNTING POLICIES
Going Concern and Plan of
Operation
The
Company's financial statements have been presented on the basis that it is a
going concern, which contemplates the realization of assets and the satisfaction
of liabilities in the normal course of business. The Company has not earned any
revenues from operations to date. These conditions raise substantial doubt about
its ability to continue as a going concern. These financial
statements do not include any adjustments to 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.
Development Stage
Company
The
Company is not considered to be in the development stage as defined in
ASC 915, “Development
Stage Enterprises”. Though the Company has devoted substantially its
efforts to the corporate formation, the raising of capital and attempting to
generate additional sales revenue in order to create reasonable,
sustainable margins and achieve acceptable return on investment from the
restaurant.
8
YABOO,
INC.
NOTES
TO FINANCIAL
STATEMENTS
|
NOTE
B - SIGNIFICANT ACCOUNTING POLICIES (Continued)
Principles of
Consolidation
The
consolidated financial statements of the Company include the accounts of Yaboo,
Inc., Yaboo Taizhou Agriculture Co., Ltd and Qilin Bay
Restaurant. All significant intercompany balances and transactions
have been eliminated in consolidation
Basis of
accounting
The
financial statements reflect the assets, revenues and expenditures of the
Company on the accrued basis of accounting. The fiscal year end of the Company
is December 31.
Use of
Estimates
The
preparation of financial statements in conformity with generally accepted
accounting principles in the United States of America requires management to
make estimates and assumptions that affect certain amounts reported in the
financial statements and disclosures. Accordingly, actual results
could differ from those estimates.
Property, Plant, and
Equipment Depreciation
Property,
plant, and equipment are stated at cost. Depreciation is being
provided principally by straight line methods over the estimated useful lives of
the assets. As of September 30, 2009, there were no fixed assets in
the Company’s balance sheets.
During
October 2009, the Company incurred the remodeling and improvement for re-opening
the restaurant business, the improvement was recorded as fixed asset to
depreciate over 15 years with straight line method at mid month
convention. As of September 30, 2010, the company has improvement at
a cost of $222,341, and $14,206 of depreciation expense was
recorded.
9
YABOO,
INC.
NOTES
TO FINANCIAL STATEMENTS
|
NOTE
B - SIGNIFICANT ACCOUNTING POLICIES (Continued)
Cash and Cash
Equivalents
The
Company considers all highly-liquid investments with an original maturity of
three months or less when purchased to be cash equivalents. As of September 30,
2009, and September 30, 2010, there were $76,616 and $31,395 cash and cash
equivalents, respectively.
Account
Receivable
The
Company would allow a few local government organizations to sign a sales receipt
instead of immediately cashed paid after their eating; and the restaurant would
send the government department a bill for the payment. The bills are due in
three months or less. As of September 30, 2010, the Company has account
receivable of $27,949.
Inventory
The
inventory was valued at cost of purchase from local suppliers. Inventories
consist of food and beverages, and are stated at the lower of cost (first-in,
first-out) or market. The Company periodically makes advance purchases of
various inventory items such as beverages, fresh seafood, and other related
materials to ensure adequate supply or to obtain favorable pricing. And the
company purchases the fresh vegetables and meats every other day. The
inventory balance was $5,103 as of September 30, 2010, which including $3,226
of beverages, $669 of cigarettes, and retail merchandizes and $ 1,208 of
fresh vegetables, fishes, and meats.
Revenues
The
Company records food and beverage revenues upon sales or the foods are delivered
and consumed by customers. Most of retail customers are paid cash
after their eating; and a few local government organizations did sign sales
receipts and the restaurant would send the government department a bill for the
payment. As of September 30, 2010, total sales revenue of $213,504
was realized and earned.
10
YABOO,
INC.
NOTES
TO FINANCIAL
STATEMENTS
|
NOTE B - SIGNIFICANT ACCOUNTING POLICIES (Continued)
Cost of Goods
Sold
The
cost of goods sold and inventories were valued at cost of purchase from local
suppliers. The purchase order was placed when the restaurant as
needed. Cost of sales is consisting of food, beverage, retail merchandizes, and
other related materials.
As
of September 30, 2010, the Cost of Goods Sold was $98,166.
Operating
Expenses
Operating
expenses are consisting of labor expenses, professional fee, other restaurant
operating expenses, general and administrative expenses, and depreciation
expenses. Labor expenses include all direct and indirect labor costs that
incurred in operations; other restaurant operating expenses include certain
unit-level operating costs such as operating supplies, rent, repair and
maintenance, advertising expenses, utilities, and other miscellanies costs. Detail is showed in
Exhibit A.
Concentration of credit
risk
The
Company maintains its cash in bank accounts which, at times, may exceed the
federally insured limits. The Company has not experienced any losses
in such accounts and believes it is not exposed to any significant credit risk
on cash.
Stock-Based
Compensation
The
Company accounts for stock issued for services using the fair value
method. In accordance with ASC 718, the measurement date of shares
issued for services is the date at which the counterparty’s performance is
complete.
11
YABOO,
INC.
NOTES
TO FINANCIAL
STATEMENTS
|
NOTE
B - SIGNIFICANT ACCOUNTING POLICIES (Continued)
Basics and Diluted Net Loss
Per Common Share
Basic
earnings per share is computed by dividing income available to common
shareholders (the numerator) by the weighted-average number of common shares
outstanding (the denominator) for the period. Diluted earnings per share assume
that any dilutive convertible securities outstanding were converted, with
related preferred stock dividend requirements and outstanding common shares
adjusted accordingly. It also assumes that outstanding common shares were
increased by shares issuable upon exercise of those stock options for which
market price exceeds the exercise price, less shares which could have been
purchased by us with the related proceeds. In periods of losses, diluted loss
per share is computed on the same basis as basic loss per share as the inclusion
of any other potential shares outstanding would be
anti-dilutive.
The
Company only issued one type of shares, i.e., common shares
only. There are no other types securities were
issued. Accordingly, the diluted and basics net loss per common share
are the same.
Income
Tax
The
Company filed extension for corporate tax return Form 1120 to Internal Revenue
Service and IL 1120 to the State of Illinois. There is no income tax
for the State of Nevada.
12
YABOO,
INC.
NOTES
TO FINANCIAL
STATEMENTS
|
NOTE
B - SIGNIFICANT ACCOUNTING POLICIES (Continued)
Recent Accounting
Pronouncements
The
following pronouncements have become effective during the period covered by
these financial statements or will become effective after the end of the period
covered by these financial statements:
Pronouncement
|
Issued
|
Title
|
||
ASC
855
|
May
2009
|
Subsequent
Events
|
||
ASC
105
|
June
2009
|
The FASB Accounting Standards
Codification and
the Hierarchy of Generally Accepted Accounting Principles—a replacement of
FASB Statement No. 162
|
||
ASC
820
|
August
2009
|
Fair
Value Measurements and Disclosures – Measuring Liabilities at Fair
Value
|
||
ASC
260
|
September
2009
|
Earnings
per Share – Amendments to Section 260-10-S99
|
||
ASC
820
|
September
2009
|
Investments
in Certain Entities that Calculate Net Asset Value per Share (or Its
Equivalent)
|
||
ASC
605
|
October
2009
|
Revenue
Recognition (Topic 605): Multiple-Deliverable Revenue Arrangements – a
consensus of the FASB Emerging Issues Task Force
|
||
ASC
470
|
October
2009
|
Accounting
for Own-Share Lending Arrangements in Contemplation of Convertible Debt
Issuance or Other Financing – a consensus of the FASB Emerging Issues Task
Force
|
||
ASC
860
|
December
2009
|
Transfers
and Servicing (Topic 860): Accounting for Transfers of Financial
Assets
|
||
ASC
505
|
January
2010
|
Accounting
for Distributions to Shareholders with Components of Stock and Cash – a
consensus of the FASB Emerging Issues Task Force
|
||
ASC
810
|
January
2010
|
Consolidation
(Topic 810): Accounting and Reporting for Decreases in Ownership of a
Subsidiary – a Scope Clarification
|
||
ASC
718
|
January
2010
|
Compensation
– Stock Compensation (Topic 718): Escrowed Share Arrangements and the
Presumption of Compensation
|
||
ASC
820
|
January
2010
|
Fair
Value Measurements and Disclosures (Topic 820): Improving Disclosures
about Fair Value Measurements
|
||
ASC
810
|
February
2010
|
Consolidation
(Topic 810): Amendments for Certain Investment
Funds
|
||
ASC
815
|
|
March
2010
|
|
Derivatives
and Hedging (Topic 815): Scope Exception Related to Embedded Credit
Derivatives
|
Management
does not anticipate that the adoption of these standards will have a material
impact on the financial statements.
13
YABOO,
INC.
NOTES
TO FINANCIAL
STATEMENTS
|
NOTE
C – RELATED PARTY TRANSACTIONS
Loans from
Shareholder/Officer
On
August 11, 2008, founder of the Company, Mr. Baoguo Jiang loaned $900.00 to the
Company to setting up the corporation.
On
December 1, 2008, the founder and CEO of the company, Baoguo Jiang, loaned $
23,000 to the company for company operating.
As of
December 31, 2008, a total of $ 23,900 was loaned from the founder and CEO of
the company.
During
the year 2009, the Company repays the loan balance of $23,900 to Baoguo Jiang,
and then incurred the new loan of $42,865 as of December 31,
2009.
For
the period of January to September 2010, Baoguo Jiang advances another $ 38,235
to the Company.
For
the period of January to September 2010, the Company returned $ 24,055 to Baoguo
Jiang.
Therefore,
as of September 30, 2010, there was $ 57,045 of loans from the shareholder and
officer of the Company, Baoguo Jiang.
The
loan was for the company’s operation purpose without interest charge, the loan
may be requested to pay off as long as the Company can generate sufficient cash
flows.
NOTE
D – SHAREHOLDERS’ EQUITY
Under
the Company’s Articles of Incorporation dated August 11, 2008, the Company is
authorized to issue 500,000,000 shares of capital stock with a par value of
$0.001.
On
August 11, 2008, the Company was incorporated in the State of
Nevada.
14
YABOO,
INC.
NOTES
TO FINANCIAL
STATEMENTS
|
NOTE
D – SHAREHOLDERS’ EQUITY (Continued)
On
August 11, 2008, the Company issued 500,000 shares to the founders of the
Company, Baoguo Jiang at $0.001 per share or $ 500 for common stock (stock
subscription receivable). The $500 was received in October
2008.
On
August 31, 2008, the Company issued total 27,400,000 shares to the founder and
CEO of the company, Baoguo Jiang, at $0.005 per share or $ 137,000 for common
stock (stock subscription receivable). The $137,000 was received on
December 1, 2008.
On
October 30, 2008, the Company issued total 16,000,000 shares to the founder and
CEO of the company, Baoguo Jiang, at $0.01 per share or $ 160,000 for common
stock (stock subscription receivable). The $160,000 was received on
December 1, 2008.
On
December 1, 2008, the founder and CEO of the company, Baoguo Jiang, transferred
total 16,100,000 of his share as gift to 5 individual. All transferred shares
were restricted shares subject to SEC rule 144 and would be hold for at least 6
months, beginning with the date when the securities were bought and fully paid,
i.e., December 1, 2008. Detail list as follow:
Name
|
Transfer
Date
|
Shares
QTY
|
||||
Zhanmin
Gao
|
12/1/2008
|
5,000,000 | ||||
Zhongming
Wang
|
12/1/2008
|
5,000,000 | ||||
Jianhua
Li
|
12/1/2008
|
6,000,000 | ||||
Xinwei
Shi
|
12/1/2008
|
50,000 | ||||
Lijun
Jia
|
12/1/2008
|
50,000 | ||||
Total
|
16,100,000 |
On
December 31, 2008, additional 3,142,000 shares were issued to 52 non-affiliated
shareholders at $ 0.05 per share or $ 157,100 for common stocks
On
December 31, 2008, 236,000 shares were issued to Williams Law Group at $ 0.05
per share for the legal service value $1,800.
There
was no additional share issue at the period ended September 30,
2010. As of September 30, 2010, the total 47,278,000 shares were
issued and outstanding.
15
YABOO,
INC.
NOTES
TO FINANCIAL
STATEMENTS
|
NOTE
D – SHAREHOLDERS’ EQUITY (Continued)
Stock Subscription
Receivable – Officers / Shareholders
At
October 31, 2008, the Company had receivables from its founding stockholder
Baoguo Jiang aggregating $500 for the purchase of the Company common
stock. $500 was paid in October 2008. At December 1,
2008, the Company had receivable from its founding shareholder Baoguo Jiang
aggregating $297,000 for the purchase of the Company common
stock. The $297,000 was fully paid on December 1,
2008.
As of
December 31, 2008, the Company had outstanding stock subscription receivable of
$5,000 due from its 1 shareholder, Limin Dai, for the purchase of the Company
common stock. The outstanding balances were due on demand and were subsequently
paid in full in March 2009.
NOTE
E – Acquisition of Qilin Bay
In
October 22, 2009, Yaboo Agriculture (Taizgou) Co, Ltd. acquired the 100%
ownership of a Chinese restaurant, Qilin Bay Restaurant Co., Ltd. (“Qilin Bay”),
owned by Taizhou Sunny Agricultural Development Co., Ltd. Taizhou
Sunny Agricultural Development Co., Ltd. was 100% owned and operated by local
district government, Hailing Modern Agricultural Demonstration Zone
Administration Office.
Qilin
Bay Restaurant Co., Ltd. (“Qilin Bay”), was incorporated on July 16, 2008 by
Taizhou Sunny Agricultural Development Co., Ltd. to operate a specialty
ecological restaurant located in North Jiangzhou Road, Hailing Modern
Agriculture Demonstration Zone, Hailing District, Taizhou City, Jiangsu
Province, China. After Qilin Bay was incorporated and licensed to
conduct restaurant business, Qinlin Bay conducted the restaurant business from
August 2008 to December 2008, then the restaurant business was closed, and the
Qilin Bay was inactive from January to September 2009.
In
September 22, 2009, Yaboo Agriculture (Taizhou) Co., signed an
agreement with Taizhou Sunny Agricultural Development Co., Ltd to initiate the
transferring the ownership of Qilin Bay. Yaboo Agriculture (Taizhou)
Co., Ltd agreed to pay cash of $146,455 to Taizhou Sunny Agricultural
Development Co., Ltd., for the 100% ownership of Qilin Bay.
16
YABOO,
INC.
NOTES
TO FINANCIAL
STATEMENTS
|
NOTE E – Acquisition of Qilin Bay
Based
on the appraised value of Qilin Bay, at Qilin Bay’s books, Qilin Bay was
inactive and there was an only asset, $146,455 balance at bank
account. The fair value of Qilin Bay was appraised as
$146,455. Accordingly, Yaboo Agriculture (Taizhou) Co., Ltd. paid
cash of $146,455 to the owner of the Qilin Bay, Taizhou Sunny Agricultural
Development Co., Ltd., for the 100% ownership of bank account of $146,455 Qilin
Bay, in fact acquired the restaurant business through this
acquisition. There was no goodwill or no comprehensive other income
recognized at this license acquisition.
According
to ASC 805, the transaction has been accounted for using the acquisition method
of accounting which requires, that most assets acquired and liabilities assumed
be recognized at the fair values as of acquisition date. The
following table summarizes the amounts recognized for assets acquired and
liabilities assumed as of the acquisition date.
As of September 22, 2009: | Amounts recognized as of Acquisition Date | |||
Agriculture
Bank Account Balance
|
$ | 146,455 | ||
Property,
plant and equipment
|
0.00 | |||
Other
noncurrent assets
|
0.00 | |||
Long-term
debt
|
0.00 | |||
Other
noncurrent liabilities
|
0.00 | |||
Total
identifiable net assets
|
0.00 | |||
Net
assets acquired
|
$ | 146,455 | ||
Total
consideration (cash) transferred
|
$ | 146,455 |
After
acquisition of the Qilin Bay Restaurant, the restaurant was remodeled and
started to operate after October 2009. The gross sales revenue
generated through the restaurant was $117,547 as of December 31,
2009. From January 1 to September 30, 2010, the total revenue was
$213,504.
17
YABOO,
INC.
NOTES
TO FINANCIAL STATEMENTS
|
NOTE
F GOING CONCERN
As
shown in the accompanying financial statements which have been prepared in
conformity with accounting principles generally accepted in the United States of
America, which contemplates continuation of the Company as a going concern, the
Company has incurred accumulated operating losses of $ 266,246 for the period
August 11, 2008 (date of inception) through September 30, 2010. Due
to Company’s lack of history and not sufficient revenues, the Company is
considered to be a development stage company.
There
is no guarantee that the Company will be able to raise enough capital or
generate more revenues to sustain its operations and carry out its business
plan. These conditions raise substantial doubt about the Company’s
ability to continue as a going concern.
The
financial statements do not include any adjustments relating to the carrying
amounts of recorded assets or the carrying amounts and classification of
recorded liabilities that may be required should the Company be unable to
continue as a going concern.
The
Company’s lack of operating history and financial resources raise substantial
doubt about its ability to continue as a going concern. The financial
statements do not include adjustments that might result from the outcome of this
uncertainty and if the Company is unable to generate significant revenue or
secure financing, then the Company may be required to cease or curtail its
operations.
18
Exhibit
A
Nine Months
|
Year Ended
|
Year Ended
|
||||||||||
Ended
|
December 31
|
December 31
|
||||||||||
Sept. 30
2010
|
2009
|
2008
|
||||||||||
Advertising
and Promotion
|
3,111 | $ | 11,862.93 | $ | - | |||||||
Delivery
charge
|
1,118 | 745.56 | ||||||||||
Meals
and Entertainment
|
3,905 | 12,399.12 | ||||||||||
Misc
Expenses
|
505 | 376.08 | 65 | |||||||||
Office
Supplies
|
2,619 | 8,066.68 | ||||||||||
Organization
Cost
|
- | 2,027.25 | 900 | |||||||||
Payroll
Expenses
|
97,862 | 60,473.00 | ||||||||||
Postage
and Shipping Expense
|
560 | 2,318.51 | ||||||||||
Professional
Fees
|
20,235 | 22,500.00 | 11,800 | |||||||||
Rent
Expense
|
21,745 | 48,140.09 | ||||||||||
Repairs
and Maintenance
|
1,115 | 5,243.60 | ||||||||||
Restaurant
Supplies
|
6,424 | 8,755.00 | ||||||||||
Telephone
Expense
|
1,430 | 1,682.85 | ||||||||||
Travel
Expense
|
5,301 | 8,394.20 | ||||||||||
Utilities
|
1,862 | 4,738.51 | ||||||||||
Vintage
filing fee
|
1,797 | |||||||||||
Automobile
|
3,699 | |||||||||||
Bank
charge
|
214 | |||||||||||
Business
permit
|
2,365 | |||||||||||
Cleaning
& Laundry
|
536 | |||||||||||
Insurance
|
2,673 | |||||||||||
Security
|
735 | |||||||||||
Software
|
368 | |||||||||||
Total
|
$ | 180,179.25 | $ | 206,196.98 | $ | 13,586.00 |
19
YABOO,
INC.
Dated
_____________, 2011
Selling
shareholders are offering up to 2,502,000 shares of common stock. The
selling shareholders will offer their shares at $0.15 per share until our shares
are quoted on the OTC Bulletin Board and thereafter at prevailing market prices
or privately negotiated prices.
Our
common stock is not now listed on any national securities exchange, the NASDAQ
stock market or the OTC Bulletin Board.
Dealer Prospectus Delivery
Obligation
Until
_________ (90 days from the date of this prospectus) all dealers that effect
transactions in these securities, whether or not participating in this offering,
may be required to deliver a prospectus. This is in addition to the dealers'
obligation to deliver a prospectus when acting as underwriters and with respect
to their unsold allotments or subscriptions.
44
Part
II-INFORMATION NOT REQUIRED IN PROSPECTUS
INDEMNIFICATION
OF OFFICERS AND DIRECTORS
Under
Nevada law, a corporation may indemnify any person who was or is a party or
is threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative,
except an action by or in the right of the corporation, by reason of the fact
that the person is or was a director, officer, employee or agent of the
corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses, including attorneys’ fees,
judgments, fines and amounts paid in settlement actually and reasonably incurred
by the person in connection with the action, suit or proceeding if the
person:
(a) Is not liable pursuant to NRS 78.138 [Directors
and officers: Exercise of powers; performance of duties; presumptions and
considerations; liability to corporation and stockholders]; or
(b) Acted in good faith and in a manner which he or she reasonably believed to
be in or not opposed to the best interests of the corporation, and, with respect
to any criminal action or proceeding, had no reasonable cause to believe the
conduct was unlawful.
With
regard to the foregoing provisions, or otherwise, we have been advised that in
the opinion of the Securities and Exchange Commission, such indemnification is
against public policy as expressed in the Securities Act of 1933, as amended,
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by us of expenses incurred or
paid by a director, officer or controlling person of the Corporation in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, we will, unless in the opinion of our counsel the matter has been
settled by a controlling precedent, submit to a court of appropriate
jurisdiction the question of whether such indemnification by us is against
public policy as expressed in the Securities Act of 1933, as amended, and will
be governed by the final adjudication of such case.
OTHER
EXPENSES OF ISSUANCE AND DISTRIBUTION
The
following table is an itemization of all expenses, without consideration to
future contingencies, incurred or expected to be incurred by us in connection
with the issuance and distribution of the securities being offered by this
prospectus. Items marked with an asterisk (*) represent estimated expenses. We
have agreed to pay all the costs and expenses of this offering. Selling security
holders will pay no offering expenses.
ITEM
|
AMOUNT
|
|||
SEC
Registration Fee*
|
$ | 25 | ||
Legal
Fees and Expenses
|
50,000 | |||
Accounting
Fees and Expenses*
|
50,000 | |||
Total*
|
$ | 100,025 |
45
*
Estimated Figure
RECENT
SALES OF UNREGISTERED SECURITIES
On August
12, 2008, the Company issued 500,000 shares to the founders of the Company,
Baoguo Jiang at $0.001 per share or $ 500 for common stock (stock subscription
receivable).
On August
31, 2008, the Company issued total 27,400,000 shares to the founder and CEO of
the company, Baoguo Jiang, at $0.005 per share or $ 137,000 for common stock
(stock subscription receivable).
On
October 30, 2008, the Company issued total 16,000,000 shares to the founder and
CEO of the company, Baoguo Jiang, at $0.01 per share or $ 160,000 for common
stock (stock subscription receivable).
On
December 1, 2008, the founder and CEO of the company, Baoguo Jiang, transferred
16,100,000 of his share as gift to 5 individual. Detail list as
follow:
Name
|
Transfer Date
|
Shares QTY
|
||||
Zhanmin
Gao
|
12/1/2008
|
5,000,000 | ||||
Zhongming
Wang
|
12/1/2008
|
5,000,000 | ||||
Jianhua
Li
|
12/1/2008
|
6,000,000 | ||||
Xinwei
Shi
|
12/1/2008
|
50,000 | ||||
Lijun
Jia
|
12/1/2008
|
50,000 | ||||
Total
|
16,100,000 |
On
December 31, 2008, additional 3,142,000 shares were issued to 52 shareholders at
$ 0.05 per share or $ 157,100 for common stocks. Detail as follow:
Name
|
Share QTY
|
Purchase
Date
|
Amount
($0.05) Per
Share
|
Total
Shares
|
|||||||||
Zhiling
Yan
|
20,000 |
12/9/08
|
$ | 1,000.00 | 20,000 | ||||||||
Wenquan
Li
|
1,000,000 |
12/10/08
|
$ | 50,000.00 | 1,000,000 | ||||||||
Chunming
Shen
|
60,000 |
12/10/08
|
$ | 3,000.00 | 60,000 | ||||||||
Jing
Yan
|
20,000 |
12/11/08
|
$ | 1,000.00 | 20,000 | ||||||||
Xiaoyan
Gao
|
20,000 |
12/12/08
|
$ | 1,000.00 | 20,000 | ||||||||
Meijuan
Li
|
60,000 |
12/12/08
|
$ | 3,000.00 | 60,000 | ||||||||
Meilan
Cong
|
40,000 |
12/12/08
|
$ | 2,000.00 | 40,000 | ||||||||
Yu
Yan
|
20,000 |
12/12/08
|
$ | 1,000.00 | 20,000 | ||||||||
Xiaomeng
Lv
|
20,000 |
12/12/08
|
$ | 1,000.00 | 20,000 | ||||||||
Lei
Yang
|
20,000 |
12/12/08
|
$ | 1,000.00 | 20,000 | ||||||||
Xueqin
Chen
|
20,000 |
12/12/08
|
$ | 1,000.00 | 20,000 | ||||||||
Chanlong
Ju
|
20,000 |
12/12/08
|
$ | 1,000.00 | 20,000 |
46
Shilan
Dai
|
20,000 |
12/12/08
|
$ | 1,000.00 | 20,000 | ||||||||
Lan
Dong
|
40,000 |
12/15/08
|
$ | 2,000.00 | 40,000 | ||||||||
Haosheng
Dong
|
20,000 |
12/15/08
|
$ | 1,000.00 | 20,000 | ||||||||
Linyan
Yan
|
20,000 |
12/15/08
|
$ | 1,000.00 | 20,000 | ||||||||
Guohua
Mao
|
20,000 |
12/16/08
|
$ | 1,000.00 | 20,000 | ||||||||
Fangzhou
Mao
|
20,000 |
12/16/08
|
$ | 1,000.00 | 20,000 | ||||||||
Gang
Zhao
|
20,000 |
12/16/08
|
$ | 1,000.00 | 20,000 | ||||||||
Bing
Dong
|
20,000 |
12/17/08
|
$ | 1,000.00 | 20,000 | ||||||||
Shaofeng
Qu
|
20,000 |
12/18/08
|
$ | 1,000.00 | 20,000 | ||||||||
Supin
Wang
|
20,000 |
12/18/08
|
$ | 1,000.00 | 20,000 | ||||||||
Yanqiu
Qu
|
20,000 |
12/18/08
|
$ | 1,000.00 | 20,000 | ||||||||
Zhiyin
Cao
|
20,000 |
12/18/08
|
$ | 1,000.00 | 20,000 | ||||||||
Peiqin
Yu
|
20,000 |
12/18/08
|
$ | 1,000.00 | 20,000 | ||||||||
Jixiang
Shun
|
20,000 |
12/18/08
|
$ | 1,000.00 | 20,000 | ||||||||
Lianzi
Fu
|
20,000 |
12/18/08
|
$ | 1,000.00 | 20,000 | ||||||||
Xiaosong
Dong
|
20,000 |
12/18/08
|
$ | 1,000.00 | 20,000 | ||||||||
Qing
Zhao
|
20,000 |
12/18/08
|
$ | 1,000.00 | 20,000 | ||||||||
Tian
Yan
|
60,000 |
12/19/08
|
$ | 3,000.00 | 60,000 | ||||||||
Jinbao
Liang
|
60,000 |
12/19/08
|
$ | 3,000.00 | 60,000 | ||||||||
Xiujie
Han
|
60,000 |
12/21/08
|
$ | 3,000.00 | 60,000 | ||||||||
Xianqi
Chen
|
20,000 |
12/21/08
|
$ | 1,000.00 | 20,000 | ||||||||
Ailing
Zhu
|
20,000 |
12/22/08
|
$ | 1,000.00 | 20,000 | ||||||||
Ruomin
Wang
|
20,000 |
12/22/08
|
$ | 1,000.00 | 20,000 | ||||||||
Yanping
Wei
|
40,000 |
12/22/08
|
$ | 2,000.00 | 40,000 | ||||||||
Qiang
Xu
|
100,000 |
12/23/08
|
$ | 5,000.00 | 100,000 | ||||||||
Xingyi
Li
|
140,000 |
12/23/08
|
$ | 7,000.00 | 140,000 | ||||||||
Fengqing
Huang
|
60,000 |
12/23/08
|
$ | 3,000.00 | 60,000 | ||||||||
Chunling
Bi
|
22,000 |
12/23/08
|
$ | 1,100.00 | 22,000 | ||||||||
Huisen
Lu
|
100,000 |
12/23/08
|
$ | 5,000.00 | 100,000 | ||||||||
Sherman
Tong
|
100,000 |
12/23/08
|
$ | 5,000.00 | 100,000 | ||||||||
Baocai
Jiang
|
60,000 |
12/23/08
|
$ | 3,000.00 | 60,000 | ||||||||
Baoku
Jiang
|
20,000 |
12/23/08
|
$ | 1,000.00 | 20,000 | ||||||||
Guilan
Yu
|
20,000 |
12/23/08
|
$ | 1,000.00 | 20,000 | ||||||||
Baofu
Jiang
|
20,000 |
12/23/08
|
$ | 1,000.00 | 20,000 | ||||||||
Shuhong
Cheng
|
20,000 |
12/23/08
|
$ | 1,000.00 | 20,000 | ||||||||
Guiping
Su
|
20,000 |
12/26/08
|
$ | 1,000.00 | 20,000 | ||||||||
Jishan
Dong
|
100,000 |
12/26/08
|
$ | 5,000.00 | 100,000 | ||||||||
Baoxia
Jiang
|
200,000 |
12/30/08
|
$ | 10,000.00 | 200,000 | ||||||||
Yu
Xia
|
100,000 |
12/30/08
|
$ | 5,000.00 | 100,000 | ||||||||
Limin
Dai
|
100,000 |
12/31/08
|
$ | 5,000.00 | 100,000 |
On
December 31, 2008, 236,000 shares were issued to Williams Law Group at $ 0.05
per share for the legal service value $11,800. All of the above
shareholders except Williams Law Group are not citizens or residents of the
United States.
We relied
upon Section 4(2) of the Securities Act of 1933, as amended for the above
issuances to US citizens or residents.
47
We
believed that Section 4(2) of the Securities Act of 1933 was available
because:
|
·
|
None
of these issuances involved underwriters, underwriting discounts or
commissions.
|
|
·
|
Restrictive
legends were and will be placed on all certificates issued as described
above.
|
|
·
|
The
distribution did not involve general solicitation or
advertising.
|
|
·
|
The
distributions were made only to investors who were sophisticated enough to
evaluate the risks of the
investment.
|
We relied
upon Regulation S of the Securities Act of 1933, as amended for the above
issuances to non US citizens or residents.
We
believed that Regulation S was available because:
|
·
|
None
of these issuances involved underwriters, underwriting discounts or
commissions;
|
|
·
|
We
placed Regulation S required restrictive legends on all certificates
issued;
|
|
·
|
No
offers or sales of stock under the Regulation S offering were made to
persons in the United States;
|
|
·
|
No
direct selling efforts of the Regulation S offering were made in the
United States.
|
In
connection with the above transactions, although some of the investors may have
also been accredited, we provided the following to all investors:
|
·
|
Access
to all our books and records.
|
|
·
|
Access
to all material contracts and documents relating to our
operations.
|
|
·
|
The
opportunity to obtain any additional information, to the extent we
possessed such information, necessary to verify the accuracy of the
information to which the investors were given
access.
|
Prospective
investors were invited to review at our offices at any reasonable hour, after
reasonable advance notice, any materials available to us concerning our
business. Prospective Investors were also invited to visit our
offices.
48
Item
3
1 | Articles of Incorporation of Yaboo, Inc. * | |
|
2
|
Bylaws
of Yaboo, Inc. *
|
|
3
|
Organizational
Documents of Yaboo Agriculture (Taizhou) Co. Ltd.
**
|
|
4
|
Organizational
Documents of Qilin Bay Ecological Restaurant Co., Ltd.
**
|
Item
4
|
1
|
Form
of common stock Certificate of Yaboo, Inc.(1)
|
Item
5
|
1
|
Legal
Opinion of Williams Law Group,
P.A.*
|
Item
10
1 Lease*
Item
21
Yaboo Agriculture (Taizhou) Co.
Ltd.
Qilin Bay Ecological Restaurant Co.,
Ltd.
Item
23
1 Consent of
Enterprise CPAs, Ltd. **
2 Consent of
Williams Law Group, P.A. (included in Exhibit
5.1)*
All other
Exhibits called for by Rule 601 of Regulation SK are not applicable to this
filing.
(1)
|
Information
pertaining to our common stock is contained in our Articles of
Incorporation and Bylaws.
|
*previously
filed
**filed
herewith
UNDERTAKINGS
The
undersigned registrant hereby undertakes:
1.
|
To
file, during any period in which offers or sales are being made, a
post-effective amendment to this registration
statement:
|
i.
|
To
include any prospectus required by section
10(a)(3) of the Securities Act of
1933;
|
49
ii.
|
To
reflect in the prospectus any facts or events arising after the effective
date of the registration statement (or the most recent post-effective
amendment thereof) which, individually or in the aggregate, represent a
fundamental change in the information set forth in the registration
statement. Notwithstanding the foregoing, any increase or decrease in
volume of securities offered (if the total dollar value of securities
offered would not exceed that which was registered) and any deviation from
the low or high end of the estimated maximum offering range may be
reflected in the form of prospectus filed with the Commission pursuant to
Rule
424(b) if, in the aggregate, the changes in volume and price
represent no more than 20% change in the maximum aggregate offering price
set forth in the "Calculation of Registration Fee" table in the effective
registration statement.
|
iii.
|
To
include any material information with respect to the plan of distribution
not previously disclosed in the registration statement or any material
change to such information in the registration
statement;
|
2.
|
That,
for the purpose of determining any liability under the Securities Act of
1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
|
3.
|
To
remove from registration by means of a post-effective amendment any of the
securities being registered which remain unsold at the termination of the
offering.
|
4. That,
for the purpose of determining liability under the Securities Act of 1933 to any
purchaser: Each prospectus filed pursuant to Rule 424(b) as part of a
registration statement relating to an offering, other than registration
statements relying on Rule 430B or other than prospectuses filed in reliance on
Rule 430A, shall be deemed to be part of and included in the registration
statement as of the date it is first used after effectiveness. Provided,
however, that no statement made in a registration statement or prospectus that
is part of the registration statement or made in a document incorporated or
deemed incorporated by reference into the registration statement or prospectus
that is part of the registration statement will, as to a purchaser with a time
of contract of sale prior to such first use, supersede or modify any statement
that was made in the registration statement or prospectus that was part of the
registration statement or made in any such document immediately prior to such
date of first use.
|
5.
|
That,
for the purpose of determining liability of the registrant under the
Securities Act of 1933 to any purchaser in the initial distribution of the
securities: The undersigned registrant undertakes that in a primary
offering of securities of the undersigned registrant pursuant to this
registration statement, regardless of the underwriting method used to sell
the securities to the purchaser, if the securities are offered or sold to
such purchaser by means of any of the following communications, the
undersigned registrant will be a seller to the purchaser and will be
considered to offer or sell such securities to such
purchaser:
|
50
|
a.
|
Any
preliminary prospectus or prospectus of the undersigned registrant
relating to the offering required to be filed pursuant to Rule
424;
|
|
b.
|
Any
free writing prospectus relating to the offering prepared by or on behalf
of the undersigned registrant or used or referred to by the undersigned
registrant;
|
|
c.
|
The
portion of any other free writing prospectus relating to the offering
containing material information about the undersigned registrant or its
securities provided by or on behalf of the undersigned registrant;
and
|
|
d.
|
Any
other communication that is an offer in the offering made by the
undersigned registrant to the
purchaser.
|
Insofar
as indemnification for liabilities arising under the Securities Act of 1933 may
be permitted to our directors, officers and controlling persons, we have been
advised that in the opinion of the Securities and Exchange Commission, such
indemnification is against public policy as expressed in the Securities Act of
1933 and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by us of
expenses incurred or paid by a director, officer or controlling person of the
corporation in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in connection with the
securities being registered, we will, unless in the opinion of our counsel the
matter has been settled by a controlling precedent, submit to a court of
appropriate jurisdiction the question of whether such indemnification by us is
against public policy as expressed in the Securities Act of 1933, as amended,
and will be governed by the final adjudication of such case.
SIGNATURES
Pursuant
to the requirements of the Securities Act of 1933, the registrant has duly
caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized in Taizhou China on January 26,
2011.
Yaboo, Inc.
Title
|
Name
|
Date
|
Signature
|
|||
Chairman
|
|
Baoguo
Jiang
|
|
January
26, 2011
|
|
/s/
Baoguo Jiang
|
Pursuant
to the requirements of the Securities Act of 1933, this Registration Statement
has been signed by the following persons in the capacities and on the date
indicated.
SIGNATURE
|
NAME
|
TITLE
|
DATE
|
|||
/s/
Baoguo Jiang
|
Baoguo
Jiang
|
Chairman
of the Board/Principal Executive Officer and Principal
Accounting/Financial Officer
|
January
26, 2011
|
|||
/s/
Zhanming Gao
|
Zhanming
Gao
|
Secretary,
Director
|
January
26, 2011
|
|||
/s/
Zhongming Wang
|
|
Zhongming
Wang
|
|
Vice
President, Director
|
|
January
26, 2011
|
51