Attached files
| file | filename |
|---|---|
| EX-32.2 - CERTIFICATION - New Momentum Corp. | ekkh_ex322.htm |
| EX-32.1 - CERTIFICATION - New Momentum Corp. | ekkh_ex321.htm |
| EX-31.2 - CERTIFICATION - New Momentum Corp. | ekkh_ex312.htm |
| EX-31.1 - CERTIFICATION - New Momentum Corp. | ekkh_ex311.htm |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(MARK ONE)
x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2018
OR
o 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. 000-52273
| EASON EDUCATION KINGDOM HOLDINGS, INC. |
| (Exact name of registrant as specified in its charter) |
| Nevada | 88-0435998 | |
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
Unit 19, 35/F., Tower 1,
Millennium City 1, No. 388 Kwun Tong Road,
Kwun Tong, Kowloon, Hong Kong
(Address of principal executive offices, zip code)
+852 2111-0810
(Registrant's telephone number, including area code)
___________________________________________________________
(Former name, former address and former fiscal year, if changed since last report)
Indicate by check mark whether the issuer (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 o
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 o No x
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 the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (check one):
| Large accelerated filer | o | Accelerated filer | o | |
| Non-accelerated filer | o | Smaller reporting company | x | |
| (Do not check if a smaller reporting company) | ||||
| Emerging growth company o | ||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Indicate by check mark whether the registrant is a shell company (as defined in Exchange Act Rule 12b-2 of the Exchange Act): Yes x No o
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes o No o
APPLICABLE ONLY TO CORPORATE ISSUERS
As of May 15, 2018, there were 310,868,500 shares of common stock, $0.001 par value per share, outstanding.
EASON EDUCATION KINGDOM HOLDINGS, INC.
QUARTERLY REPORT ON FORM 10-Q
FOR THE PERIOD ENDED MARCH 31, 2018
| 2 |
| Table of Contents |
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q of Eason Education Kingdom Holdings, Inc., a Nevada corporation (the “Company”), contains “forward-looking statements,” as defined in the United States Private Securities Litigation Reform Act of 1995. In some cases, you can identify forward-looking statements by terminology such as “may”, “will”, “should”, “could”, “expects”, “plans”, “intends”, “anticipates”, “believes”, “estimates”, “predicts”, “potential” or “continue” or the negative of such terms and other comparable terminology. These forward-looking statements include, without limitation, statements about our market opportunity, our strategies, competition, expected activities and expenditures as we pursue our business plan, and the adequacy of our available cash resources. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Actual results may differ materially from the predictions discussed in these forward-looking statements. The economic environment within which we operate could materially affect our actual results. Additional factors that could materially affect these forward-looking statements and/or predictions include, among other things to product demand, market and customer acceptance, competition, pricing, the exercise of the control over us by Chu Kin Hon, the Company's sole director and majority shareholder, and development difficulties, as well as general industry and market conditions and growth rates and general economic conditions; and other factors discussed in the Company's filings with the Securities and Exchange Commission (“SEC”).
Our management has included projections and estimates in this Form 10-Q, which are based primarily on management's experience in the industry, assessments of our results of operations, discussions and negotiations with third parties and a review of information filed by our competitors with the SEC or otherwise publicly available. We caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. We disclaim any obligation subsequently to revise any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events.
| 3 |
| Table of Contents |
EASON EDUCATION KINGDOM HOLDINGS, INC.
CONDENSED BALANCE SHEETS
MARCH 31, 2018 (UNAUDITED) AND DECEMBER 31, 2017 (AUDITED)
|
|
| March 31, |
|
| December 31, |
| ||
|
|
| 2018 |
|
| 2017 |
| ||
|
|
| (Unaudited) |
|
| (Audited) |
| ||
| ASSETS |
| |||||||
| CURRENT ASSETS: |
|
|
|
|
|
| ||
| Cash |
| $ | - |
|
| $ | - |
|
| Escrow accounts hold by director |
|
| - |
|
|
| - |
|
| Prepaid expenses |
|
| 9,000 |
|
|
| 12,000 |
|
| Escrow account hold by attorney |
|
| 130,656 |
|
|
| 131,314 |
|
| Total Current Assets |
|
| 139,656 |
|
|
| 143,314 |
|
|
|
|
|
|
|
|
|
|
|
| TOTAL ASSETS |
| $ | 139,656 |
|
| $ | 143,314 |
|
|
|
|
|
|
|
|
|
|
|
| LIABILITIES AND STOCKHOLDERS’ DEFICIT | ||||||||
|
|
|
|
|
|
|
|
|
|
| CURRENT LIABILITIES: |
|
|
|
|
|
|
|
|
| Accounts payable |
| $ | - |
|
| $ | - |
|
| Accounts payable - Related party |
|
| - |
|
|
| - |
|
| Accrued interest |
|
| - |
|
|
| - |
|
| Accrued interest - Related parties |
|
| - |
|
|
| - |
|
| Accrued liabilities |
|
| 29,000 |
|
|
| 25,000 |
|
| Amount due to shareholder |
|
| - |
|
|
| - |
|
| Notes payable |
|
| - |
|
|
| - |
|
| Notes payable - Related parties |
|
| - |
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
| Total Current Liabilities |
|
| 29,000 |
|
|
| 25,000 |
|
|
|
|
|
|
|
|
|
|
|
| STOCKHOLDERS’ EQUITY: |
|
|
|
|
|
|
|
|
| Preferred stock, Class A Preferred Stock; $0.001 par value 175,000,000 shares authorized; no shares issued and outstanding |
|
| - |
|
|
| - |
|
| Common stock, $0.001 par value; 500,000,000 shares authorized; 2018: 310,868,500 (2017: 310,868,500) shares issued and outstanding |
|
| 310,869 |
|
|
| 310,869 |
|
| Additional paid-in capital |
|
| 413,349 |
|
|
| 413,349 |
|
| Accumulated deficit |
|
| (613,562 | ) |
|
| (605,904 | ) |
|
|
|
|
|
|
|
|
|
|
| Total Stockholders’ Equity |
|
| 110,656 |
|
|
| 118,314 |
|
|
|
|
|
|
|
|
|
|
|
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY |
| $ | 139,656 |
|
| $ | 143,314 |
|
The accompanying notes are an integral part of the condensed financial statements.
| 4 |
| Table of Contents |
EASON EDUCATION KINGDOM HOLDINGS, INC.
CONDENSED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 2018 (UNAUDITED) AND 2017 (UNAUDITED)
|
|
| March 31, |
|
| March 31, |
| ||
|
|
| 2018 |
|
| 2017 |
| ||
|
|
| (Unaudited) |
|
| (Unaudited) |
| ||
|
|
|
|
|
|
|
|
|
|
| Revenues |
| $ | - |
|
| $ | - |
|
|
|
|
|
|
|
|
|
|
|
| Gross Revenues |
|
| - |
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
| Operating Expenses |
|
|
|
|
|
|
|
|
| General and administrative expenses |
|
| 7,658 |
|
|
| 6,000 |
|
|
|
|
|
|
|
|
|
|
|
| Total Operating Expenses |
|
| 7,658 |
|
|
| 6,000 |
|
|
|
|
|
|
|
|
|
|
|
| Loss from Operations |
|
| (7,658 | ) |
|
| (6,000 | ) |
|
|
|
|
|
|
|
|
|
|
| Other Income (Expense) |
|
|
|
|
|
|
|
|
| Gain on release of liabilities |
|
| - |
|
|
| - |
|
| Interest (expense) |
|
| - |
|
|
| - |
|
| Interest (expense) - Related Parties |
|
| - |
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
| Total Other Income/(Expense) |
|
| - |
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
| Loss before Income Taxes |
|
| (7,658 | ) |
|
| (6,000 | ) |
|
|
|
|
|
|
|
|
|
|
| Income Taxes expense |
|
| - |
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
| Net Loss |
| $ | (7,658 | ) |
| $ | (6,000 | ) |
|
|
|
|
|
|
|
|
|
|
| Basic and diluted loss per share |
| $ | (0.0000 | ) |
| $ | (0.0000 | ) |
|
|
|
|
|
|
|
|
|
|
| Weighted Average Shares Outstanding Basic and Diluted |
|
| 310,868,500 |
|
|
| 310,868,500 |
|
The accompanying notes are an integral part of the condensed financial statements.
| 5 |
| Table of Contents |
EASON EDUCATION KINGDOM HOLDINGS, INC.
CONDENSED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 2018 (UNAUDITED) AND 2017 (UNAUDITED)
|
|
| March 31, |
|
| March 31, |
| ||
|
|
| 2018 |
|
| 2017 |
| ||
|
|
|
|
|
|
|
| ||
| CASH FLOWS FROM OPERATING ACTIVITIES: |
|
|
|
|
|
| ||
| Net profits (loss) from operations |
| $ | (7,658 | ) |
| $ | (6,000 | ) |
| Changes in assets and liabilities: |
|
|
|
|
|
|
|
|
| Decrease in prepaid expenses |
|
| 3,000 |
|
|
| 2,500 |
|
| Increase in accrued liabilities |
|
| 4,000 |
|
|
| 2,351 |
|
| Decrease in accounts payable |
|
| - |
|
|
| - |
|
| Decrease in accrued expenses |
|
| - |
|
|
| - |
|
| Increase in escrow account hold by attorney |
|
| 658 |
|
|
| 1,149 |
|
| Net cash (used in) operating activities |
|
| - |
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
| CASH FLOWS FROM FINANCING ACTIVITIES: |
|
|
|
|
|
|
|
|
| Procced from debt settlement |
|
| - |
|
|
| - |
|
| Escrow accounts hold by director |
|
| - |
|
|
| - |
|
| Amount due to shareholder |
|
| - |
|
|
| - |
|
| Decrease in notes payable |
|
| - |
|
|
| - |
|
| Decrease in notes payable-related parties |
|
| - |
|
|
| - |
|
| Proceed from common stock issuance |
|
| - |
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
| Net cash provided by financing activities |
|
| - |
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
| Net increase/(decrease) in cash |
|
| - |
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
| CASH AT BEGINNING OF THE YEAR |
|
| - |
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
| CASH AT END OF THE YEAR |
| $ | - |
|
| $ | - |
|
|
|
|
|
|
|
|
|
|
|
| SUPPLEMENTAL CASH FLOW INFORMATION: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Cash paid for income taxes |
| $ | - |
|
| $ | - |
|
|
|
|
|
|
|
|
|
|
|
| Cash paid for interest expense |
| $ | - |
|
| $ | - |
|
The accompanying notes are an integral part of the condensed financial statements.
| 6 |
| Table of Contents |
EASON EDUCATION KINGDOM HOLDINGS, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2018 AND DECEMBER 31, 2017
NOTE 1 – ORGANIZATION, HISTORY AND BUSINESS ACTIVITY
Eason Education Kingdom Holdings, Inc. (formerly known as Han Logistics, Inc.) (the “Company”) was incorporated under the law of the State of Nevada on July 1, 1999. The Company organized to engage in the business of namely the development, marketing and delivering of logistical analysis, problem solving and other logistics services and general business services. The Company is currently seeking any business opportunities.
On February 12, 2015, Michael Vardakis, the then major shareholder, entered into a Stock Purchase Agreement with Kin Hon Chu (“New Majority Shareholder”) wherein Mr. Vardakis sold 8,813,225 shares of the Company’s common stock, representing approximately 85% of all issued and outstanding shares to Mr. Chu.
NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES
This summary of significant accounting policies of Eason Education Kingdom Holdings, Inc. is presented to assist in understanding the Company’s financial statements. The financial statements and notes are representations of the Company’s management, which is responsible for their integrity and objectivity. These accounting policies conform to accounting principles generally accepted in the United States of America (“GAAP”) and have been consistently applied in the preparation of the financial statements.
Cash and Cash Equivalents
The Company considers all highly liquid investments purchased with original maturities of three months or less to be cash equivalents. The Company currently has cash held in a trust account held by the Company’s legal counsel.
Fair Value of Financial Instruments
Effective January 1, 2008, the Company adopted FASB ASC 820, Fair Value Measurements, which provides a framework for measuring fair value under GAAP. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The standard also expands disclosures about instruments measured at fair value and establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value:
Level 1 – Quoted prices for identical assets and liabilities in active markets;
Level 2 – Quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets; and
Level 3 – Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.
The Company designates cash equivalents as Level 1. The total amount of the Company’s investment classified as Level 3 is de minimis.
The fair value of the Company’s debt as of March 31, 2018 and December 31, 2017 approximated fair value at those times.
Fair value of financial instruments: The carrying amounts of financial instruments, including cash, accounts payable, and accrued expenses approximated fair value as of March 31, 2018 and December 31, 2017 because of the relative short term nature of these instruments.
| 7 |
| Table of Contents |
Revenue Recognition
The Company recognizes revenue, in accordance with ASC 605, Revenue Recognition, which codified the Securities and Exchange Commission Staff Accounting Bulletin (SAB) number 104, which states that revenue is generally recognized when it is realized and earned. Specifically, the Company recognizes revenue when services are performed and projects are completed and accepted by the customer.
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 the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Management makes these estimates using the best information available at the time the estimates are made; however actual results could differ materially from those estimates.
Income Taxes
The Company accounts for income taxes under an asset and liability approach. This process involves calculating the temporary and permanent differences between the carrying amounts of the assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The temporary differences result in deferred tax assets and liabilities, which would be recorded on the Company’s balance sheets in accordance with ASC 740, Income Taxes, which established financial accounting and reporting standards for the effect of income taxes. The Company must assess the likelihood that its deferred tax assets will be recovered from future taxable income and, to the extent the Company believes that recovery is not likely, the Company must establish a valuation allowance. Changes in the Company’s valuation allowance in a period are recorded through the income tax provision on the statements of operations.
The Company records interest and penalties arising from the underpayment of income taxes in the statement of income under general and administrative expenses. As of March 31, 2018 and December 31, 2017, the Company had no accrued interest or penalties related to uncertain tax positions. The company also did not have any uncertain tax benefits during these years. The tax years 2017, 2016 and 2015 remain open to examination.
Earnings (Loss) per Share
The Company is required to provide basic and dilutive earnings (loss) per common share information.
The basic net loss per common share is computed by dividing the net loss applicable to common stockholders by the weighted average number of common shares outstanding.
Diluted net loss per common share is computed by dividing the net loss applicable to common stockholders, adjusted on an “as if converted” basis, by the weighted average number of common shares outstanding plus potential dilutive securities.
For the period ended March 31, 2018 and year ended December 31, 2017, potential dilutive securities had an anti-dilutive effect and were not included in the calculation of diluted net loss per common share.
Recent Accounting Pronouncements
In January 2017, the FASB issued Accounting Standards Board Update No. 2017-01: Business Combinations (Topic 805) - Clarifying the Definition of a Business (“ASU 2017-01”). The ASU clarifies the definition of business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. ASU 2017-01 will be effective for the Company’s fiscal year beginning January 1, 2018 and subsequent interim periods with prospective application with impacts on the Company’s financial statements that may vary depending on each specific acquisition. Early adoption is conditionally permitted.
| 8 |
| Table of Contents |
In March 2017, the FASB issued ASU No. 2017-08, Receivables – Nonrefundable Fees and Other Costs (Subtopic 310-20), Premium Amortization on Purchased Callable Debt Securities. Under current GAAP, entities normally amortize the premium as an adjustment of yield over the contractual life of the instrument. This guidance shortens the amortization period for certain callable debt securities held at a premium to the earliest call date. This update is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The adoption of ASU No. 2017-08 is not expected to have a material impact on the Company’s financial statements.
In May 2017, the FASB issued ASU 2017-09, Compensation – Stock Compensation: (Topic 718): Scope of Modification Accounting. ASU 2017-09 provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718. This pronouncement is effective for annual periods beginning after December 15, 2017, including interim periods within those annual periods. We expect to adopt the new standard using the full retrospective application, and we do not believe the adoption will have a significant impact on our recognition of net revenues or related disclosures for any period.
In July 2017, the FASB issued Accounting Standards Update (“ASU”) No. 2017-11, Earnings Per Share (Topic 260); Distinguishing Liabilities from Equity (Topic 480); Derivatives and Hedging (Topic 815) (“ASU 2017-11”). The update changes the classification of certain equity-linked financial instruments (or embedded features) with down round features. The update also clarifies existing disclosure requirements for equity-classified instruments. The update is effective retrospectively for annual reporting periods beginning after December 15, 2018, including interim periods within that reporting period. Early adoption is permitted for all companies in any interim or annual period.
We do not believe other recently issued but not yet effective accounting standards, if currently adopted, would have a material effect on the financial position, statements of operations and cash flows.
NOTE 3 – GOING CONCERN
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 incurred a net loss of $7,658 (from operations) for the three months ended March 31, 2018 and an accumulated deficit of $613,562. It also sustained operating losses in prior years as well. These factors raise substantial doubt as to its ability to remain a going concern and obtain debt and/or equity financing and achieve profitable operations.
Management intends to raise additional operating funds through equity and/or debt offerings. However, there can be no assurance management will be successful in its endeavors. Ultimately, the Company will need to achieve profitable operations in order to continue as a going concern.
There are no assurances that Eason Education Kingdom Holdings, Inc. will be able to either (1) achieve a level of revenues adequate to generate sufficient cash flow from operations; or (2) obtain additional financing through either private placement, public offerings and/or bank financing necessary to support its working capital requirements. To the extent that funds generated from operations and any private placements, public offerings and/or bank financing are insufficient, the Company will have to raise additional working capital. No assurance can be given that additional financing will be available, or if available, will be on terms acceptable to the Company. If adequate working capital is not available, the Company may be required to curtail its operations.
NOTE 4 – INCOME TAXES
Deferred taxes are provided on an asset and liability approach whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carry forwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax basis. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.
| 9 |
| Table of Contents |
| 2017: |
| Balance |
|
| Rate |
|
| Tax |
| |||
| Federal loss carryforward |
| $ | 565,305 |
|
|
| 34 | % |
| $ | 192,204 |
|
| Valuation allowance |
|
|
|
|
|
|
|
|
|
| (192,204 | ) |
| Deferred tax asset |
|
|
|
|
|
|
|
|
| $ | - |
|
| 2018: |
| Balance |
|
| Rate |
|
| Tax |
| |||
| Federal loss carryforward |
| $ | 572,963 |
|
|
| 25 | % |
| $ | 143,241 |
|
| Valuation allowance |
|
|
|
|
|
|
|
|
|
| (143,241 | ) |
| Deferred tax asset |
|
|
|
|
|
|
|
|
| $ | - |
|
A reconciliation between expected and actual tax liability is presented below.
|
|
| 2018 |
|
| 2017 |
| ||
| Expected (Benefit) – Federal rate 25% (2018 onward), 34% (2017) |
| $ | (1,915 | ) |
| $ | (20,447 | ) |
|
|
|
|
|
|
|
|
|
|
| Effect of: |
|
|
|
|
|
|
|
|
| Valuation allowance |
|
| 1,915 |
|
|
| 20,447 |
|
| Total Actual Provision |
| $ | - |
|
| $ | - |
|
As of March 31, 2018, the Company has provided tax losses of $572,963 (December 31, 2017: $565,305). Deferred tax asset is not provided for as the tax losses may not be able to carry forward after a change in substantial ownership of the Company in February 2015.
NOTE 5 – COMMON STOCK
As of March 31, 2018 and December 31, 2017, the Company authorized two classes of stock; 500,000,000 shares of common stock at par value of $0.001 and 175,000,000 Class A preferred stock at par value of $0.001., There are 310,868,500 common shares issued and outstanding as of March 31, 2018 and December 2017. None of the Class A preferred stock is issued During October 2015, the Company issued 300,500,000 share of common stock for a consideration of $300,500 in cash.
| 10 |
| Table of Contents |
NOTE 6 – RELATED PARTY TRANSACTIONS
The Company currently utilizes office space on a rent-free basis from a director and shareholder, and shall do so until substantial revenue-producing operations commence. Management deemed the rent-free space to be of no nominal value.
As of March 31, 2018 and December 31, 2017, total notes payable to the related parties and accrued interests amounted to $0 and $0 in the aggregate.
As of March 31, 2018 and December 31, 2017, there were no outstanding balance due from or due to the shareholders.
NOTE 7 – NOTE PAYABLE
As of March 31, 2018 and December 31, 2017, there were no notes payable and no interests incurred or accrued related to notes payable.
NOTE 8 – RELEASE OF LIABILITIES
On February 12, 2015, Michael Vardakis (“Then Majority Shareholder”) entered into a Stock Purchase Agreement with Kin Hon Chu (“New Majority Shareholder”) wherein Mr. Vardakis sold 8,813,225 shares of the Company’s common stock, representing approximately 85% of all issued and outstanding shares to Mr. Chu. Mr. Chu paid $4,406.61 to Michael Vardakis for this control block of shares and also directly paid off all of the existing liabilities of the Company. Accordingly, certain liabilities of $236,959 in the aggregate, including those notes payable as disclosed in note 6 and note 7, were released by the creditors as a result of the change.
NOTE 9 – SUBSEQUENT EVENTS
The Company has evaluated the period after the balance sheet date up through the date that the financial statements were issued, and determined that there were no subsequent events or transactions that required recognition or disclosure in the financial statements.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
The following information should be read in conjunction with (i) the financial statements of Eason Education Kingdom Holdings, Inc., a Nevada corporation (the “Company”), and development-stage company, and the notes thereto appearing elsewhere in this Form 10-Q together with (ii) the more detailed business information and the December 31, 2017 audited financial statements and related notes included in the Company's Form 10-K (File No. 000-52273; the “Form 10-K”), as filed with the Securities and Exchange Commission on April 16, 2018. Statements in this section and elsewhere in this Form 10-Q that are not statements of historical or current fact constitute “forward-looking” statements
OVERVIEW
The Company was incorporated in the State of Nevada on July 1, 1999 and established a fiscal year end of December 31. It is a development stage company.
Going Concern
To date the Company has little operations or revenues and consequently has incurred recurring losses from operations. No revenues are anticipated until we complete the financing we endeavor to obtain, as described in the Form 10-K, and implement our initial business plan. The ability of the Company to continue as a going concern is dependent on raising capital to fund our business plan and ultimately to attain profitable operations. Accordingly, these factors raise substantial doubt as to the Company's ability to continue as a going concern.
Our activities have been financed from related-party loans and the proceeds of share subscriptions. During October 2015, the Company raised a total of $300,500 in cash from offerings of our common stock. We have no outstanding loans.
The Company plans to raise additional funds through debt or equity offerings. There is no guarantee that the Company will be able to raise any capital through this or any other offerings.
PLAN OF OPERATION
Our business activities during the coming 12 months following the filing date of this Quarterly Report on Form 10-Q will be focused on raising $750,000 of funds to expand our business, primarily through the sale of shares of common stock registered in a public offering on Form S-1 (Registration No. 333-212918), which registration statement was declared effective by the Securities and Exchange Commission on May 15, 2017. We have no assurance that future financing will materialize. If that financing is not available we may be unable to continue. Management believes that if subsequent private placements are successful, we will be able to generate sales revenue within the following twelve months thereof. However, additional equity financing may not be available to us on acceptable terms or at all, and thus we could fail to satisfy our future cash requirements.
If we are unsuccessful in raising the additional proceeds through a private placement offering we will then have to seek additional funds through debt financing, which would be highly difficult for a new development stage company to secure. Therefore, the Company is highly dependent upon the success of the anticipated private placement offering and failure thereof would result in the Company having to seek capital from other sources such as debt financing, which may not even be available to the Company. However, if such financing were available, because we are a development stage company with no operations to date, it would likely have to pay additional costs associated with high risk loans and be subject to an above market interest rate. At such time these funds are required, management would evaluate the terms of such debt financing and determine whether the business could sustain operations and growth and manage the debt load. If we cannot raise additional proceeds via a private placement of its common stock or secure debt financing it would be required to cease business operations. As a result, investors in our common stock would lose all of their investment.
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RESULTS OF OPERATIONS
Three-Month Periods Ended March 31, 2018 and 2017
We did not earn revenues for the three-month periods ended March 31, 2018 and 2017.
For the period ended March 31, 2018, we incurred total operating expenses of $7,658, consisting solely of general and administrative expenses. By comparison, for the period ended March 31, 2017, we incurred total operating expenses of $6,000, consisting solely of general and administrative expenses.
For the period ended March 31, 2018, we had a net loss of $7,658. For the period ended March 31, 2017, we had a net loss of $6,000. Our accumulated deficit at March 31, 2018 and 2017 are $613,562 and $605,904.
Liquidity and Capital Resources
At March 31, 2018, we had a cash balance of $130,656, total current assets of $139,656 under escrow hold by attorney, accounts total current liabilities of approximately $29,000, and working capital and stockholders' equity of approximately $110,656. We do not have sufficient cash on hand to commence our 12-month plan of operation or to fund our ongoing operational expenses. We will need to raise funds to commence our plan of operation and fund our ongoing operational expenses. Additional funding will likely come from equity financing from the sale of our common stock or debt securities. If we are successful in completing an equity or debt financing, existing shareholders will experience dilution of their interest in our Company. We do not have any financing arranged and we cannot provide investors with any assurance that we will be able to raise sufficient funding from the sale of our common stock or debt securities to fund our planned activities and ongoing operational expenses. In the absence of such financing, our business will likely fail. There are no assurances that we will be able to achieve further sales of our common stock or any other form of additional financing. If we are unable to achieve the financing necessary to continue our plan of operations, then we will not be able to continue our operations and our business will fail.
Off-Balance Sheet Arrangements
We had no off-balance sheet arrangements for the three months ended March 31, 2018.
Subsequent Events
None through date of this filing.
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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
As a smaller reporting company (as defined in Rule 12b-2 of the Exchange Act), we are not required to provide the information called for by this Item 3.
ITEM 4. CONTROLS AND PROCEDURES.
Evaluation of disclosure controls and procedures
Our management, with the participation of our chief executive officer and chief financial officer, evaluated the effectiveness of our disclosure controls and procedures as defined in Rule 13a-15(e) under the Exchange Act as of the end of the period covered by this Quarterly Report on Form 10-Q. In designing and evaluating the disclosure controls and procedures, our management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs. The design of any disclosure controls and procedures also is based in part upon certain assumptions about the likelihood of future events and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.
Based on that evaluation, our chief executive officer and chief financial officer concluded that, as of March 31, 2018, our disclosure controls and procedures were not effective to provide reasonable assurance that information we are required to disclose in reports that we file or submit under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in SEC rules, regulations and forms, and (ii) that such information is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure.
Changes in internal control over financial reporting
Our management, with the participation of the chief executive officer and chief financial officer, has concluded there were no significant changes in our internal controls over financial reporting that occurred during this quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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The Company is not currently subject to any legal proceedings. From time to time, the Company may become subject to litigation or proceedings in connection with its business, as either a plaintiff or defendant. There are no such pending legal proceedings to which the Company is a party that, in the opinion of management, is likely to have a material adverse effect on the Company's business, financial condition or results of operations.
As a smaller reporting company (as defined in Rule 12b-2 of the Exchange Act), we are not required to provide the information called for by this Item 1A.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
None.
ITEM 4. MINE SAFETY DISCLOSURES.
Not applicable.
None.
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(a) Exhibits required by Item 601 of Regulation SK.
Number Description Amended and Restated Articles of Incorporation, dated December 9, 2010 (2) 101.INS * XBRL Instance Document 101.SCH * XBRL Taxonomy Extension Schema Document 101.CAL * XBRL Taxonomy Extension Calculation Linkbase Document 101.DEF * XBRL Taxonomy Extension Definition Linkbase Document 101.LAB * XBRL Taxonomy Extension Label Linkbase Document 101.PRE * XBRL Taxonomy Extension Presentation Linkbase Document
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| (1) | Incorporated by reference to the Registrant's Registration Statement on Form SB-2 (File No. 333-54002), filed with the Securities and Exchange Commission on January 19, 2001. |
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| (2) | Incorporated by reference to the Registrant's Definitive Information Statement on Schedule 14C (File No. 000-52273), filed with the Securities and Exchange Commission on November 17, 2010. |
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| (3) | Filed and incorporated by reference to the Company's Quarterly Report on Form 10-Q (File No. 000-52273), as filed with the Securities and Exchange Commission on August 14, 2015. |
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| (4) | Incorporated by reference to the Registrant's Annual Report on Form 10-K (File No. 000-52273), filed with the Securities and Exchange Commission on June 24, 2016. |
| * | XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections. |
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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.
| EASON EDUCATION KINGDOM HOLDINGS, INC. | |||
| (Name of Registrant) | |||
| Date: May 17, 2018 | By: | /s/ Law Wai Fan | |
| Name: | Law Wai Fan | ||
| Title: | Chief Executive Officer (principal executive officer) | ||
| Date: May 17, 2018 | By: | /s/ Cheng Kin Ning, Kenny | |
| Name: | Cheng Kin Ning, Kenny | ||
| Title: | Chief Financial Officer (principal accounting officer and principal financial officer) |
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