UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

 

FORM 10-Q

 

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

 

For the quarterly period ended March 31, 2016

 

[  ]	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from _____ to _____

 

Commission File No. 000-27791

 

Wincash Apolo Gold & Energy, Inc.

(Exact name of registrant as specified in its Charter)

 

Nevada		98-0412805
(State of Other Jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification No.)

 

Suite 2201, 22/F Malaysia Building, 50 Gloucester Road, Wanchai, Hong Kong

(Address of principal executive offices) (Zip Code)

 

(852) 3111 7718

(Registrant’s telephone number including area code)

 

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [  ]

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes [X] No [  ]

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

 

Large accelerated filer [  ]	Accelerated filer [  ]	Non-accelerated filer [  ]	Smaller reporting company [X]
		(Do not check if a smaller reporting company)

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [X] No [  ]

 

As of March 31, 2016, the Registrant had 21,872,118 shares of Common Stock outstanding.

 

Transitional Small Business Disclosure Format (check one): Yes [  ] No [X]

 

 

 

TABLE OF CONTENTS

 

		Page
Part I - Financial Information
Item 1. Condensed Financial Statements (unaudited)		3 - 9
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations General Overview		10
Item 3. Quantitative and Qualitative Disclosures About Market Risk		11
Item 4. Controls and procedures		12
Part II – Other Information
Item 1. Legal Proceedings		13
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		13
Item 3. Default Upon Senior Securities		13
Item 4. Mine Safety Disclosures		13
Item 5. Other Information		13
Item 6. Exhibits		13
Signatures		14

 

 

Part I - Financial Information

 

Item 1. Condensed Financial Statements (Unaudited)

 

WINCASH APOLO GOLD & ENERGY, INC.

CONDENSED BALANCE SHEETS

AS OF MARCH 31, 2016 AND JUNE 30, 2015

(Currency expressed in United States Dollars (“US$”), except for number of shares)

 

		March 31, 2016				June 30, 2015
		(Unaudited)				(Audited)
ASSETS
CURRENT ASSETS
Cash and cash equivalents		$	4,062			$	14,403
TOTAL ASSETS		$	4,062			$	14,403
LIABILITIES & STOCKHOLDERS’ DEFICIT
CURRENT LIABILITIES
Amount due to a director		$	31,375			$	-
Amount due to a former director			10,000				10,000
Other payables and accrued expenses			7,692				24,691
Total liabilities			49,067				34,691
COMMITMENTS & CONTINGENCIES
STOCKHOLDERS’ DEFICIT
Preferred stock, $0.001 par value; 25,000,000 shares authorized; None issued and outstanding
Common stock, $0.001 par value; 300,000,000 shares authorized; 21,872,118 shares issued and outstanding as of March 31, 2016 and June 30, 2015			21,872				21,872
Additional paid-in capital			15,939,279				15,939,279
Deferred compensation			(110,667	)			(550,000	)
Stock payable			16,000				-
Accumulated other comprehensive income			4,880				4,882
Accumulated deficit			(15,916,369	)			(15,436,321	)
TOTAL STOCKHOLDERS’ DEFICIT			(45,005	)			(20,288	)
TOTAL LIABILITIES & STOCKHOLDERS’ DEFICIT		$	4,062			$	14,403

 

See accompanying notes to the condensed financial statements.

 

 

WINCASH APOLO GOLD & ENERGY, INC.

CONDENSED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

FOR THE THREE AND NINE MONTHS ENDED MARCH 31, 2016 AND 2015

(Currency expressed in United States Dollars (“US$”), except for number of shares)

(Unaudited)

 

		Three Months Ended								Nine Months Ended
		March 31, 2016				March 31, 2015				March 31, 2016				March 31, 2015
REVENUES		$	-			$	-			$	-			$	-
EXPENSES
Consulting & professional fees			170,500				12,411				473,703				105,442
General & administrative expenses			2,825				3,623				6,344				9,519
TOTAL EXPENSES			173,325				16,034				480,047				114,961
LOSS BEFORE INCOME TAX			(173,325	)			(16,034	)			(480,047	)			(114,961	)
Other income			-				101				-				101
NET LOSS		$	(173,325	)		$	(15,933	)		$	(480,047	)		$	(114,860	)
Other comprehensive loss:
Foreign currency translation loss			(-	)			(2,799	)			(2	)			(20,300	)
COMPREHENSIVE LOSS		$	(173,325	)		$	(18,732	)		$	(480,049	)		$	(135,160	)
NET LOSS PER SHARE, BASIC & DILUTED:		$	(0.01	)		$	(0.00	)		$	(0.02	)		$	(0.00	)
WEIGHTED AVERAGE NUMBER OF COMMON STOCK OUTSTANDING, BASIC & DILUTED:			21,872,118				22,944,618				21,872,118				31,847,081

 

See accompanying notes to the condensed financial statements.

 

 

WINCASH APOLO GOLD & ENERGY, INC.

CONDENSED STATEMENTS OF CASH FLOWS

FOR THE NINE MONTHS ENDED MARCH 31, 2016 AND 2015

(Currency expressed in United States Dollars (“US$”))

(Unaudited)

 

		Nine Months Ended				Nine Months Ended
		March 31, 2016				March 31, 2015
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss		$	(480,047	)		$	(114,860	)
Adjustments to reconcile net loss to net cash used in operating activities:
Non-cash items:
Stock based compensation			455,333				32,333
Stock issued for debt			-				70,000
Changes in operating assets and liabilities
Accounts receivable			-				(1,000,000	)
Amount due to a director			31,375				-
Amount due to a former director			-				15,000
Other payables and accrued expenses			(16,999	)			15,482
Net cash used in operating activities			(10,338	)			(982,045	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Investment in Jiangxi Everenergy New Material Co, Ltd.			-				1,000,000
Net cash provided by investing activities			-				1,000,000
Effect of exchange rate changes on cash and cash equivalents			(3	)			(20,300	)
NET CHANGE IN CASH AND CASH EQUIVALENTS			(10,341	)			(2,345	)
Cash and cash equivalents, beginning of period			14,403				7,439
Cash and cash equivalents, end of period		$	4,062			$	5,094
SUPPLEMENTAL CASH FLOWS INFORMATION
Income taxes paid		$	-			$	-
Interest paid		$	-			$	-
NON-CASH INVESTING & FINANCING ACTIVITIES:
Common stock issued for mineral property interests		$	-				1,200,000
Common stock issued for investments		$	-			$	7,950,000

 

See accompanying notes to the condensed financial statements.

 

 

WINCASH APOLO GOLD & ENERGY, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

FOR THE NINE MONTHS ENDED MARCH 31, 2016

(Currency expressed in United States Dollars (“US$”), except for number of shares)

(Unaudited)

 

NOTE 1 – BASIS OF PRESENTATION

 

The accompanying unaudited condensed financial statements have been prepared by management in accordance with both accounting principles generally accepted in the United States (“GAAP”), and the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Certain information and notes disclosures normally included in audited financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to those rules and regulations, although the Company believes that the disclosure made are adequate to make the information not misleading.

 

In the opinion of management, the consolidated balance sheet as of June 30, 2015 which has been derived from audited consolidated financial statements and these unaudited condensed financial statements reflect all normal and recurring adjustments considered necessary to state fairly the results for the periods presented. The results for the period ended March 31, 2016 are not necessarily indicative of the results to be expected for the entire fiscal year ending June 30, 2016 or for any future period.

 

These unaudited condensed financial statements and notes thereto should be read in conjunction with the Management’s Discussion and the audited consolidated financial statements and notes thereto included in the Annual Report on Form 10-K for the year ended June 30, 2015.

 

NOTE 2 – ORGANIZATION AND DESCRIPTION OF BUSINESS

 

Wincash Apolo Gold & Energy, Inc. (“the Company”) was incorporated in March of 1997 under the laws of the State of Nevada primarily for the purpose of acquiring and developing mineral properties. The Company conducts operations primarily from its administrative offices at Suite 2201, 22/F Malaysia Building, 50 Gloucester Road, Wanchai, Hong Kong.

 

On June 18, 2015, the Company filed an Amendment to its Articles of Incorporation with the Nevada Secretary of State to change its name from Apolo Gold & Energy, Inc. to Wincash Apolo Gold & Energy, Inc.

 

The Company will continue to anticipate potential mineral property exploration and other energy related investments. As of March 31, 2016, the Company does not hold any mineral property exploration claims.

 

NOTE 3 – GOING CONCERN UNCERTAINTIES

 

These unaudited condensed financial statements have been prepared assuming that the Company will continue as a going concern which contemplates the realization of assets and the discharge of liabilities in the normal course of business for the foreseeable future.

 

As of March 31, 2016, the Company has accumulated deficits of $15,916,369 from prior years and with working capital deficit of $45,005. The continuation of the Company as a going concern is dependent upon the continuing financial support from its stockholders or external financing. Management believes the existing stockholders will provide the additional cash to meet with the Company’s obligations as they become due. However, there can be no assurance that the Company will be able to obtain sufficient funds to meet its obligations.

 

These factors raise substantial doubt about the Company’s ability to continue as a going concern. These condensed financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result in the Company not being able to continue as a going concern.

 

 

WINCASH APOLO GOLD & ENERGY, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

FOR THE NINE MONTHS ENDED MARCH 31, 2016

(Currency expressed in United States Dollars (“US$”), except for number of shares)

(Unaudited)

 

NOTE 4 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

The accompanying unaudited condensed financial statements reflect the application of certain significant accounting policies as described in this note and elsewhere in the accompanying unaudited condensed financial statements and notes.

 

Use of estimates

 

Management uses estimates and assumptions in preparing these unaudited condensed financial statements that affect the reported amounts of assets and liabilities in the balance sheet, and the revenue and expenses during the periods reported. Actual results may differ from these estimates.

 

Cash and cash equivalents

 

Cash and cash equivalents are carried at cost and represent cash on hand, demand deposits placed with banks or other financial institutions and all highly liquid investments with an original maturity of three months or less as of the purchase date of such investments.

 

Stock-based compensation

 

The Company adopts FASB Accounting Standards Codification Topic 718, Compensation – Stock Compensation (“ASC Topic 718”) using the fair value method. Under ASC Topic 718, the stock-based compensation is measured using the Black-Scholes Option-Pricing model on the date of grant under the modified prospective method. The fair value of stock-based compensation that are expected to vest are recognized using the straight-line method over the requisite service period.

 

Income taxes

 

Income taxes are determined in accordance with the provisions of ASC Topic 740, “Income Taxes” (“ASC Topic 740”). Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted income tax rates expected to apply to taxable income in the periods in which those temporary differences are expected to be recovered or settled. Any effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

 

ASC 740 prescribes a comprehensive model for how companies should recognize, measure, present, and disclose in their financial statements uncertain tax positions taken or expected to be taken on a tax return. Under ASC 740, tax positions must initially be recognized in the financial statements when it is more likely than not the position will be sustained upon examination by the tax authorities. Such tax positions must initially and subsequently be measured as the largest amount of tax benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the tax authority assuming full knowledge of the position and relevant facts.

 

Net loss per share

 

The Company calculates net loss per share in accordance with ASC Topic 260, “Earnings per Share.” Basic loss per share is computed by dividing the net loss by the weighted-average number of common shares outstanding during the period. Diluted income (loss) per share is computed similar to basic loss per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common stock equivalents had been issued and if the additional common shares were dilutive.

 

Comprehensive income (loss)

 

ASC Topic 220, “Comprehensive Income”, establishes standards for reporting and display of comprehensive income (loss), its components and accumulated balances. Comprehensive income (loss) as defined includes all changes in equity during a period from non-owner sources. Accumulated other comprehensive income, as presented in the accompanying statement of stockholders’ equity, consists of changes in unrealized gains and losses on foreign currency translation. This comprehensive income (loss) is not included in the computation of income tax expense or benefit.

 

 

WINCASH APOLO GOLD & ENERGY, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

FOR THE NINE MONTHS ENDED MARCH 31, 2016

(Currency expressed in United States Dollars (“US$”), except for number of shares)

(Unaudited)

 

Related parties

 

Parties, which can be a corporation or individual, are considered to be related if the Company has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions. Companies are also considered to be related if they are subject to common control or common significant influence.

 

Fair value of financial instruments

 

The carrying value of the Company’s financial instruments: cash and cash equivalents, accounts payable and accrued expenses, and amount due to a former director approximate at their fair values because of the short-term nature of these financial instruments.

 

The Company also follows the guidance of the ASC Topic 820-10, “Fair Value Measurements and Disclosures” (“ASC 820-10”), with respect to financial assets and liabilities that are measured at fair value. ASC 820-10 establishes a three-tier fair value hierarchy that prioritizes the inputs used in measuring fair value as follows:

 

Level 1: Observable inputs such as quoted prices in active markets;

 

Level 2: Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and

 

Level 3: Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.

 

Recent accounting pronouncements

 

In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09 that introduces a new five-step revenue recognition model in which an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This ASU also requires disclosures sufficient to enable users to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers, including qualitative and quantitative disclosures about contracts with customers, significant judgments and changes in judgments, and assets recognized from the costs to obtain or fulfill a contract. This standard is effective for fiscal years beginning after December 15, 2016, including interim periods within that reporting period.

 

In June 2014, the FASB issued ASU No. 2014-12, Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period. This ASU requires that a performance target that affects vesting and could be achieved after the requisite service period be treated as a performance condition. A reporting entity should apply existing guidance in ASC 718, Compensation-Stock Compensation, as it relates to such awards. ASU 2014-12 is effective for us in our first quarter of fiscal 2017 with early adoption permitted using either of two methods: (i) prospective to all awards granted or modified after the effective date; or (ii) retrospective to all awards with performance targets that are outstanding as of the beginning of the earliest annual period presented in the financial statements and to all new or modified awards thereafter, with the cumulative effect of applying ASU 2014-12 as an adjustment to the opening retained earnings balance as of the beginning of the earliest annual period presented in the financial statements.

 

In August 2014, the FASB issued ASU 2014-15. This ASU requires management to assess an entity’s ability to continue as a going concern by incorporating and expanding upon certain principles that are currently in U.S. auditing standards. Specifically, the ASU (1) provides a definition of the term substantial doubt, (2) requires an evaluation every reporting period including interim periods, (3) provides principles for considering the mitigating effect of management’s plans, (4) requires certain disclosures when substantial doubt is alleviated as a result of consideration of management’s plans, (5) requires an express statement and other disclosures when substantial doubt is not alleviated, and (6) requires an assessment for a period of one year after the date that the financial statements are issued (or available to be issued). This standard is effective for the fiscal years ending after December 15, 2016, and for annual periods and interim periods thereafter. Early application is permitted.

 

In March 2016, the FASB issued ASU No. 2016-09, Compensation-Stock Compensation . The new guidance simplifies several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The amendments in this standard are effective for our annual year and first fiscal quarter beginning on October 1, 2017 with early adoption is permitted. We are currently evaluating the impact of the application of this accounting standard update on our consolidated financial statements.

 

 

WINCASH APOLO GOLD & ENERGY, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

FOR THE NINE MONTHS ENDED MARCH 31, 2016

(Currency expressed in United States Dollars (“US$”), except for number of shares)

(Unaudited)

 

The Company has reviewed all recently issued, but not yet effective, accounting pronouncements and do not believe the future adoption of any such pronouncements may be expected to cause a material impact on its financial condition or the results of its operations.

 

NOTE 5 – AMOUNT DUE TO A DIRECTOR

 

As of March 31, 2016, the director of the Company has advanced $31,375 for the payment of administrative expenses. The amount is unsecured, bear no interest, and is payable upon demand. Imputed interest is considered insignificant.

 

NOTE 6 – COMMON STOCK

 

There were no stock options, warrants or other potentially dilutive securities outstanding as of March 31, 2016.

 

As of March 31, 2016, there were 21,872,118 shares of common stock issued and outstanding.

 

NOTE 7 – STOCK PAYABLE

 

On December 1, 2015, the Board of Directors of the Company approved to issue 200,000 shares of restricted common stock at $0.08 per share for the rendering of consulting services of $16,000 in a service period of twelve months commencing from December 2015. For the nine months ended March 31, 2016, the Company amortized $5,333 to the operations using the straight-line method. As of March 31, 2016, the shares have not been issued and $16,000 for this obligation was recorded as stock payable.

 

NOTE 8 – INCOME TAX

 

The Company is registered in the State of Nevada and is subject to the tax laws of the United States of America. For the nine months ended March 31, 2016, the Company incurred an operating loss of $480,047. As of March 31, 2016, the operations in the United States of America incurred $15,916,369 of cumulative net operating losses which can be carried forward to offset future taxable income. The net operating loss carryforwards begin to expire in the year 2017 through 2034, if unutilized. The Company has provided for a full valuation allowance of $5,570,729 against the deferred tax assets on the expected future tax benefits from the net operating loss carryforwards as the management believes it is more likely than not that these assets will not be realized in the future.

 

NOTE 9 – RELATED PARTY TRANSACTIONS

 

During the nine months ended March 31, 2016, Mr. Tsap Wai Ping, the director of the Company paid $31,375 for general expenses on behalf for the Company. A total of $31,375 is owed to Mr .Tsap as at March 31, 2016.

 

NOTE 10 – COMMITMENTS AND CONTINGENCIES

 

As of March 31, 2016, the Company has no commitments or contingencies to report.

 

NOTE 11 – SUBSEQUENT EVENTS

 

In accordance with ASC Topic 855, “ Subsequent Events”, which establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued, the Company has evaluated all events or transactions that occurred after March 31, 2016 up through the date the Company issued the condensed financial statements. There were no subsequent events that required recognition or disclosure.

 

 

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations General Overview

 

Apolo Gold & Energy Inc. (the “Company”) was incorporated in March 1997 under the laws of the State of Nevada. The Company’s objective was to pursue mineral properties in South America, Central America, North America and Asia. The Company incorporated a subsidiary - Compania Minera Apologold, C.A in Venezuela to develop a gold/diamond mining concession in Southeastern Venezuela. Project was terminated in August 2001, due to poor testing results and the property abandoned. This subsidiary company has been inactive since 2001 and will not be reactivated.

 

On April 16, 2002, the Company announced the acquisition of the mining rights to a property known as the Napal Gold Property, (“NUP”). This property is located 48 km south-west of Bandar Lampung, Sumatra, Indonesia. The property consisted of 733.9 hectares and possessed a Production Permit (a KP) # KW. 098PP325.

 

The terms of the Napal Gold Property called for a total payment of $375,000 US over a six-year period of which a total of $250,000 have been made to date. Company paid $250,000 over the past 5 years and subsequent to the year ending June 30, 2008 the Company terminated its agreement on the NUP property and returned all exploration rights to the owner.

 

On December 11, 2013, the Company acquired 70% interest in three gold exploration claims located in China’s Xinjiang Province from Yinfu Gold Corp. (“Yinfu”). The Company issued 6,000,000 shares of restricted common stock for the claims at $0.20 per share for the consideration of $1,200,000. On January 19, 2015, the Company and Yinfu reached a mutual agreement to terminate the acquisition at the current market value of $0.10 per share and therefore an investment loss of $600,000 was resulted. On February 3, 2015, all 6,000,000 shares of restricted common stock were returned and effectively cancelled.

 

On December 23, 2013, the Company acquired 24% interest in Jiangxi Everenergy New Material Co., Ltd. (“Everenergy”) for a consideration of $4,000,000. The consideration was settled with the issuance of 8,000,000 shares of restricted common stock at a deemed price of $0.375 per share, plus $1,000,000 in cash.

 

On February 19, 2014, the Company acquired an additional 29% interest in Everenergy for a consideration of $4,950,000. The consideration was settled with the issuance of 11,000,000 shares of restricted common stock at a deemed price of $0.45 per share.

 

On September 17, 2014, the Company cancelled both transactions with Everenergy at the current market value of $0.12 per share and requested the return of $1,000,000 cash payment. The 11,000,000 shares were effectively cancelled on October 21, 2014 and the remaining 8,000,000 shares are to be cancelled as of June 30, 2015. For the year ended June 30, 2015, the Company could not recover the $1,000,000 cash payment and therefore a total investment loss of $6,670,000 was resulted.

 

On February 13, 2015, the Company disposed its 100% equity interest in Apolo Gold Direct Limited (formerly known as Apolo Gold & Energy Asia Limited) to (i) Mr. Kelvin Chak Wai Man, the former Chief Executive Officer (“CEO”) and director of the Company, who acquired 40% equity interest, (ii) Mr. Tsap Wai Ping, the current CEO of the Company, who acquired 50% equity interest, and (iii) China Yi Gao Gold Trader Co., Limited, a company incorporated in Hong Kong, which acquired the remaining 10% equity interest, for a consideration of $100.

 

On June 18, 2015, the Company filed an Amendment to its Articles of Incorporation with the Nevada Secretary of State to change its name from Apolo Gold & Energy, Inc. to Wincash Apolo Gold & Energy, Inc.

 

On December 1, 2015, the Board of Directors of the Company approved the issuance of 200,000 shares of restricted common stock at $0.08 per share for the rendering of consulting services of $16,000 in a service period of twelve months commencing from December 2015. For the nine months ended March 31, 2016, the Company amortized $5,333 to the operations using the straight-line method. As of March 31, 2016, no shares were issued and the $16,000 for this obligation was recorded as stock payable.

 

The Company continues to pursue opportunities in the natural resource industry and will consider the acquisition of any other business opportunity in order to enhance value for our shareholders.

 

Results of Operations

 

REVENUES: The Company had generated no revenues for the three and nine months ended March 31, 2016 and 2015.

 

EXPENSES:

 

For the three months ended March 31, 2016, the Company incurred a loss of $173,325 (2015 - $15,933), an increase of $157,392 mainly attributed to the stock-based compensation (non-cash) relating to consulting services.

 

 

For the nine months ended March 31, 2016, the Company incurred a loss of $480,047 (2015 - $114,860), an increase of $365,187 mainly attributed to the stock-based compensation (non-cash) relating to consulting services provided.

 

The Company continues to carefully control its cash expenses, and intends to seek additional financing both for potential business opportunities it may develop. There is no assurance that the Company will be successful in its attempts to raise additional capital.

 

The Company has no employees in its head office at the present time other than its Officers and Directors, and engages personnel through consulting agreements where necessary as well as outside attorneys, accountants and technical consultants.

 

Cash and cash equivalents as of March 31, 2016 was $4,062 compared to $14,403 at June 30, 2015 and the Company recognizes it may not have sufficient funds to conduct its affairs. It fully intends to seek financing by way of loans, private placements or a combination of both in the coming months. The Company is dependent on its directors to provide necessary funding when required.

 

LIQUIDITY AND CAPITAL RESOURCES

 

Cash Used in Operating Activities

 

Net cash used in operating activities for the nine months ended March 31, 2016 was $10,338 as compared to $982,045 for the comparable nine months ended March 31, 2015. The decrease was attributable to the decrease in the accounts receivable of $1,000,000 being written off as bad debt for the nine months ended March 31, 2015.

 

Cash Provided By Investing Activities

 

Net cash provided by investing activities for the nine months ended March 31, 2016 and 2015 was $Nil and $1,000,000, respectively. The net cash provided by investing activities for the nine months ended March 31, 2015 was for the investment in Jiangxi Everenergy New Material Co., Limited.

 

The Company has financed its development to date by way of common stock and with loans from directors/ shareholders of the Company. As of March 31, 2016, the Company had 21,872,118 shares of common stock issued and outstanding, and has raised total capital since inception in excess of $7,500,000.

 

The Company has limited financial resources as of March 31, 2016 with cash and cash equivalents of $4,062 and $5,094 as of March 31, 2015.

 

As of March 31, 2016, the amount due to a former director, who had resigned from his position on September 23, 2015, was $10,000. The amount was unsecured, interest free, and is payable upon demand.

 

As of March 31, 2016, the amount due to a director was $31,375. The amount was unsecured, interest free, and is payable upon demand. Imputed interest is considered insignificant.

 

While the Company continues to seek out additional capital, there is no assurance that they will be successful in completing this necessary financing. The Company recognizes that it is dependent on the ability of its management team to obtain the necessary working capital required.

 

While in the pursuit of additional working capital, the Company is also very active in reviewing other resource development opportunities and will continue with these endeavors.

 

Off-Balance Sheet Arrangements

 

We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to stockholders.

 

Contractual Obligations

 

As of March 31, 2016, the Company has no contractual obligations involved.

 

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

 

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

 

 

Item 4. Controls and procedures

 

We carried out an evaluation of the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of March 31, 2016 (the “Evaluation Date”). This evaluation was carried out under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective as of the Evaluation Date as a result of the material weaknesses in internal control over financial reporting discussed below.

 

Disclosure controls and procedures are those controls and procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act are recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.

 

Notwithstanding the assessment that our internal control over financial reporting was not effective and that there were material weaknesses as identified in this report, we believe that our financial statements contained in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2016 fairly present our financial condition, results of operations and cash flows in all material respects.

 

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act, for the Company.

 

Internal control over financial reporting includes those policies and procedures that: (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of its management and directors; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.

 

Management recognizes that there are inherent limitations in the effectiveness of any system of internal control, and accordingly, even effective internal control can provide only reasonable assurance with respect to financial statement preparation and may not prevent or detect material misstatements. In addition, effective internal control at a point in time may become ineffective in future periods because of changes in conditions or due to deterioration in the degree of compliance with our established policies and procedures.

 

A material weakness is a significant deficiency, or combination of significant deficiencies, that results in there being a more than remote likelihood that a material misstatement of the annual or interim financial statements will not be prevented or detected.

 

Under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, management conducted an evaluation of the effectiveness of our internal control over financial reporting, as of the Evaluation Date, based on the framework set forth in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on its evaluation under this framework, management concluded that our internal control over financial reporting was not effective as of the Evaluation Date.

 

Management assessed the effectiveness of the Company’s internal control over financial reporting as of Evaluation Date and identified the following material weaknesses:

 

Inadequate Segregation of Duties: We have an inadequate number of personnel to properly implement control procedures.

 

Insufficient Written Policies & Procedures: We have insufficient written policies and procedures for accounting and financial reporting.

 

Inadequate Financial Statement Closing Process: We have an inadequate financial statement closing process.

 

Lack of Audit Committee: The lack of a functioning audit committee and lack of a majority of outside directors on the Company’s Board of Directors, resulting in ineffective oversight in the establishment and monitoring of required internal controls and procedures.

 

Management is committed to improving its internal controls and will (1) continue to use third party specialists to address shortfalls in staffing and to assist the Company with accounting and finance responsibilities, (2) increase the frequency of independent reconciliations of significant accounts which will mitigate the lack of segregation of duties until there are sufficient personnel and (3) prepare and implement sufficient written policies and checklists for financial reporting and closing processes and (4) may consider appointing outside directors and audit committee members in the future.

 

 

Management, including our Chief Executive Officer and the Chief Financial Officer, has discussed the material weakness noted above with our independent registered public accounting firm. Due to the nature of this material weakness, there is a more than remote likelihood that misstatements which could be material to the annual or interim financial statements could occur that would not be prevented or detected.

 

This quarterly report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the our registered public accounting firm pursuant to temporary rules of the SEC that permit us to provide only management’s report in this quarterly report.

 

Changes in internal control over financial reporting

 

There were no changes in our internal control over financial reporting that occurred during the quarter ended March 31, 2016 that have materially affected, or that are reasonably likely to materially affect, our internal control over financial reporting.

 

Limitations on the effectiveness of controls and procedures

 

Our management, including our Chief Executive Officer and the Chief Financial Officer, do not expect that the our controls and procedures will prevent all potential errors or fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met.

 

Part II - Other Information

 

Item 1. Legal Proceedings: There are no proceedings to report.

 

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds. None

 

Item 3. Default Upon Senior Securities: There are no defaults to report.

 

Item 4. Mine Safety Disclosures: N/A

 

Item 5. Other Information: None

 

Item 6. Exhibits

 

31.1		Sarbanes Oxley Section 302 Certification from C.E.O.& C.F.O.
32.1		Sarbanes Oxley Section 906 Certification from C.E.O.& C.F.O.
101		Interactive Data Files

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

WINCASH APOLO GOLD & ENERGY, INC.

 

Dated: May 4, 2016

 

/s/ Tsap Wai Ping
TSAP WAI PING President, Chief Executive Officer, Secretary, Director