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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
☒ QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended October 31, 2018
or
☐ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________ to ________
Commission File Number: 333-209900
Jialijia Group Corporation Limited
(formerly known as Rizzen, Inc.)
(Exact name of registrant as specified in its charter)
| Nevada | 35-2544765 | |
| (State or other jurisdiction of incorporation) | (I.R.S. Employer Identification Number) |
Room 402, Unit B, Building 5, Guanghua Community
Guanghua Road, Tianning District, Changzhou City, Jiangsu Province, China 213000
(Address of principal executive offices and zip code)
(86-519) 8980-1180
(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 ☒ 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 ☒ NO ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ☐ | Accelerated filer | ☐ |
| Non-accelerated filer | ☒ | Smaller reporting company | ☒ |
| Emerging growth company | ☒ | ||
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. ☒
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES ☒ NO ☐
State the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date.
| Class | Outstanding December 14, 2018 | |
| Common Stock, $0.001 par value per share | 7,285,000 shares |
Jialijia Group Corporation Limited
FORM 10-Q
October 31, 2018
TABLE OF CONTENTS
| Page No. | ||
| PART I. - FINANCIAL INFORMATION | ||
| Item 1. | Financial Statements | |
| Condensed Balance Sheets as of October 31, 2018 (Unaudited) and January 31, 2018 | 1 | |
| Unaudited Condensed Statements of Operations for the Three and Nine Months Ended October 31, 2018 and 2017 | 2 | |
| Unaudited Condensed Statements of Cash Flows for the Nine Months Ended October 31, 2018 and 2017 | 3 | |
| Notes to Unaudited Condensed Financial Statements | 4 | |
| Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 7 |
| Item 3. | Quantitative and Qualitative Disclosures About Market Risk | 8 |
| Item 4. | Controls and Procedures | 8 |
| PART II - OTHER INFORMATION | ||
| Item 1. | Legal Proceedings | 9 |
| Item 1A. | Risk Factors | 9 |
| Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 9 |
| Item 3. | Defaults upon Senior Securities | 9 |
| Item 4. | Mine Safety Disclosures | 9 |
| Item 5. | Other Information | 9 |
| Item 6. | Exhibits | 9 |
| Signatures | 10 | |
PART I - FINANCIAL INFORMATION
| JIALIJIA GROUP CORPORATION LIMITED |
| (FORMERLY KNOWN AS RIZZEN, INC.) |
| CONDENSED BALANCE SHEETS |
| As of | ||||||||
| October 31, 2018 | January 31, 2018 | |||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| CURRENT ASSETS: | ||||||||
| Cash | $ | — | $ | — | ||||
| TOTAL CURRENT ASSETS | — | — | ||||||
| TOTAL ASSETS | $ | — | $ | — | ||||
| LIABILITIES AND STOCKHOLDERS' DEFICIT | ||||||||
| CURRENT LIABILITIES: | ||||||||
| Accrued liabilities | $ | 2,750 | $ | 200 | ||||
| Loan from related parties | 50,515 | 31,132 | ||||||
| TOTAL CURRENT LIABILITIES | 53,265 | 31,332 | ||||||
| TOTAL LIABILITIES | 53,265 | 31,332 | ||||||
| COMMITMENTS AND CONTINGENCIES | — | — | ||||||
| STOCKHOLDERS' DEFICIT: | ||||||||
| Common stock ($.001 par value; 1,000,000,000 shares authorized; | ||||||||
| 7,285,000 shares issued and outstanding | ||||||||
| at October 31, 2018 and January 31, 2018) | 7,285 | 7,285 | ||||||
| Additional paid-in capital | 24,415 | 24,415 | ||||||
| Accumulated deficit | (84,965 | ) | (63,032 | ) | ||||
| TOTAL STOCKHOLDERS' DEFICIT | (53,265 | ) | (31,332 | ) | ||||
| TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT | $ | — | $ | — | ||||
The accompanying notes to the unaudited condensed financial statements are an integral part of these statements.
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The accompanying notes to the unaudited condensed financial statements are an integral part of these statements.
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The accompanying notes to the unaudited condensed financial statements are an integral part of these statements.
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JIALIJIA GROUP CORPORATION LIMITED
(FORMERLY KNOWN AS RIZZEN, INC.)
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
The summary of significant accounting policies is presented to assist in the understanding of the Company's financial statements. The financial statements and notes are representations of the Company's management, who is responsible for their integrity and objectivity.
The Company follows the accounting guidance outlined in the Financial Accounting Standards Board Codification guidelines. The accompanying unaudited interim condensed financial statements have been prepared in accordance with generally accepted principles for interim financial information and with the instruction to Form 10-Q of Regulation S-K. They may not include all information and footnotes required by United States generally accepted accounting principles for complete financial statements. However, except as disclosed herein, there have been no material changes in the information disclosed in the notes to the financial statements for the year ended January 31, 2018 included in the Company's Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”).
The interim unaudited financial statements should be read in conjunction with those financial statements included in the Form 10-K. In the opinion of Management, all adjustments considered necessary for a fair presentation, which unless otherwise disclosed herein, consisting primarily of normal recurring adjustments, have been made. Operating results for the three and nine months ended October 31, 2018 are not necessarily indicative of the results that may be expected for the year ending January 31, 2019.
NOTE 1 – Description of Business and History
Jialijia Group Corporation Limited formerly known as Rizzen, Inc, (the “Company”) was incorporated under the laws of the State of Nevada on October 21, 2015 and has been inactive since our change in control reported on Form 8k filed December 30, 2016. We are a Shell company. Our prior business model was to provide vending and shipping services of electronic toys of various kinds manufactured in China and to distribute electronic kids toys of various price categories to both small and medium-sized vendors. We intended on selling, importing, and marketing our business to European and North American markets.
Following the change of control, the Company is seeking to acquire, through a merger, capital stock exchange, asset acquisition, stock purchase, reorganization, exchangeable share transaction or other similar business transaction with one or more operating businesses or assets that we have not yet identified.
NOTE 2 - Summary of Significant Accounting Policies
Basis of Presentation
The Company maintains its general ledger and journals with the accrual method of accounting for financial reporting purposes. The financial statements and notes are representations of management. Accounting policies adopted by the Company conform to generally accepted accounting principles in the United States of America (“U.S. GAAP”) and have been consistently applied in the presentation of financial statements. The accompanying financial statements are presented in U.S. dollars in conformity with accounting principles generally accepted in the United States of America and pursuant to the rules and regulations of the SEC. Management believes that all adjustments have been made for the three and nine months ended October 31, 2018 and 2017.
Use of Estimates
The preparation of the financial statements in conformity with U.S. GAAP 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.
Loss per Share Calculation
The Company complies with accounting and disclosure requirements of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 260, “Earnings Per Share.” Net loss per common share is computed by dividing net loss applicable to common stockholders by the weighted average number of common shares outstanding for the period. At October 31, 2018 and 2017, the Company did not have any dilutive securities and other contracts that could, potentially, be exercised or converted into common stock and then share in the earnings of the Company. As a result, diluted loss per common share is the same as basic loss per common share for the periods.
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Recent Accounting Pronouncements
The Company does not expect the adoption of recently issued accounting pronouncements to have a significant impact on the Company’s results of operations, financial position or cash flow.
NOTE 3 – Accrued Liabilities
At October 31, 2018, and January 31, 2018 the Company had $2,750 and $200 in accrued liabilities, respectively, which consisted of accrued professional service charges.
NOTE 4 – Income Taxes
The Company accounts for income taxes using the asset/liability method prescribed by FASB Codification Topic 740-10-25, Accounting for Uncertainty in Income Taxes, which requires the asset and liability approach to accounting for income taxes. Under this method, deferred tax assets and liabilities are measured based on differences between financial reporting and tax bases of assets and liabilities measured using enacted tax rates and laws that are expected to be in effect when differences are expected to reverse. As of October 31, 2018, we had a net operating loss carry-forward of $(84,965) and a deferred tax asset of approximately $17,843 using the statutory rate of 21%. The deferred tax asset may be recognized in future periods, not to exceed 20 years. However, due to the uncertainty of future events, we have booked valuation allowance of $(17,843). FASB ASC 740 prescribes recognition threshold and measurement attributes for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. FASB ASC 740 also provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. At October 31, 2018, the Company had not taken any tax positions that would require disclosure under FASB ASC 740.
| October 31, 2018 | January 31, 2018 | |||||||
| Deferred Tax Asset | $ | 17,843 | $ | 13,237 | ||||
| Valuation Allowance | (17,843 | ) | (13,237 | ) | ||||
| Deferred Tax Asset (Net) | $ | — | $ | — | ||||
On December 28, 2016, the controlling shareholders of Rizzen Inc. (the “Company”), Alexander Deshin and Shuisheng Zhu sold to Jialijia Group Corporation Limited, a Hong Kong registered corporation, (“JLJ”) 6 million shares of the Company’s restricted common stock which had previously been issued to Mr. Zhu and Mr. Deshin. The sale was the result of a privately negotiated transaction without the use of public dissemination of promotional or sales materials. The buyer represented that it was an accredited investor and as such could bear the risk of such investment for an indefinite period of time and to afford a complete loss thereof.
This resulted in a change in control. We are in the process of analyzing the effect on the deferred tax asset and the numbers above may change as a result, however the Deferred Tax Asset (net) will remain unchanged.
The Company files an income tax return in the U.S. federal jurisdiction and may file income tax returns in various U.S. states and foreign jurisdictions. Generally, the Company is subject to income tax examinations by major taxing authorities since inception.
NOTE 5 – Going Concern and Capital Resources
The Company does not currently engage in any business activities that provide cash flow. During the next 12 months, we anticipate incurring costs related to:
| • | filing of Exchange Act reports, |
| • | payment of annual corporate fees, and |
| • | investigating, analyzing and consummating an acquisition. |
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As of October 31, 2018, the Company had an accumulated deficit of $84,965. Management anticipates that fees associated with filing of Exchange Act reports including accounting fees and legal fees and payment of annual corporate fees will not exceed $75,000 within next 12 months. We do not currently intend to retain any entity to act as a "finder" to identify and analyze the merits of potential target businesses. Management intends to search for a business combination by contacting various sources including, but not limited to, our affiliates, lenders, investment banking firms, private equity funds, consultants and attorneys and does not plan to conduct a complete and exhaustive investigation and analysis of a business opportunity. Management decisions, therefore, will likely be made without detailed feasibility studies, independent analysis, market surveys and the like which, if we had more funds, would be desirable. If the management can find a suitable target company, we will have to budget for additional fees relating to the investigation into the target company (including due diligence and possibly visiting the facilities) and consummating the reverse merger, which may cost between $125,000 to $150,000. We expect that the expenses for the next 12 months and beyond such time will be paid with amounts that may be loaned to or invested in us by our stockholders, management or other investors. Since we have minimal assets and will continue to incur losses due to the expenses associated with being a reporting company under the Exchange Act, we may cease business operations if we do not timely consummate a business combination.
Currently, our ability to continue as a going concern is dependent upon our ability to generate future profitable operations and/or to obtain the necessary financing to meet our obligations and repay our liabilities arising from normal business operations when they come due. Our ability to continue as a going concern is also dependent upon our ability to find a suitable target company and enter into a possible reverse merger with such company. Management’s plan includes obtaining additional funds by equity financing through a reverse merger transaction and/or related party advances. However, there is no assurance of additional funding being available, which raises substantial doubt about the company’s ability to continue as a going concern.
NOTE 6 – Capital Stock
The Company has 1,000,000,000 shares of common stock authorized with a par value of $0.001 per share.
As of October 31, 2018 and January 31, 2018, the Company had 7,285,000 shares issued and outstanding.
There were no common stock transactions during the nine months ended October 31, 2018.
NOTE 7 – Related Party Transactions
In support of the Company’s efforts and cash requirements, it may rely on advances from related parties until such time that the Company can support its operations or attains adequate financing through sales of its equity or traditional debt financing. There is no formal written commitment for continued support by officers or shareholders. Amounts represent advances or amounts paid in satisfaction of liabilities. The advances are considered temporary in nature and have not been formalized by a promissory note.
During the nine months ended October 31, 2018 the company’s officers advanced $19,383 for operating expenses. The outstanding amount owed was $50,515 and $31,132 as of October 31, 2018 and January 31, 2018, respectively.
NOTE 8 – Subsequent Events
In accordance with ASC 855, the Company has analyzed its operations subsequent to October 31, 2018 through the date these financial statements were issued, and has determined that it does not have any material subsequent events to disclose in these financial statements.
Special Note Regarding Forward-Looking Statements
The following discussion should be read in conjunction with our financial statements, which are included elsewhere in this Form 10-Q (the “Report”). This Report contains forward-looking statements which relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as “may,” “should,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential” or “continue” or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties, and other factors that may cause our or our industry’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. While these forward-looking statements, and any assumptions upon which they are based, are made in good faith and reflect our current judgment regarding the direction of our business, actual results will almost always vary, sometimes materially, from any estimates, predictions, projections, assumptions or other future performance suggested herein. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual result.
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| ITEM 2. | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
The Company will attempt to locate and negotiate with a business entity for the combination of that target company with the Company. The combination will normally take the form of a merger, stock-for-stock exchange or stock-for-assets exchange (the "business combination"). In most instances the target company will wish to structure the business combination to be within the definition of a tax-free reorganization under Section 351 or Section 368 of the Internal Revenue Code of 1986, as amended. No assurances can be given that the Company will be successful in locating or negotiating with any target business.
The Company has not restricted its search for any specific kind of businesses, and it may acquire a business which is in its preliminary stage, which is already in operation, or in essentially any stage of its business life. It is impossible to predict the status of any business in which the Company may become engaged, in that such business may need to seek additional capital, may desire to have its shares publicly traded, or may seek other perceived advantages which the Company may offer.
In implementing a structure for a particular business acquisition, the Company may become a party to a merger, consolidation, reorganization, joint venture, or licensing agreement with another corporation or entity.
The Company will participate in a business combination only after the negotiation and execution of appropriate agreements. Negotiations with a target company will likely focus on the percentage of the Company which the target company shareholders would acquire in exchange for their shareholdings. Any merger or acquisition effected by the Company can be expected to have a significant dilutive effect on the percentage of shares held by the Company's shareholders at such time.
Results of Operations
Three and Nine Months Ended October 31, 2018 Versus Three and Nine Months Ended October 31, 2017
Revenues. We did not generate any revenue during the three and nine months ended October 31, 2018 and 2017. We are completely dependent upon the willingness of our management to fund our initial operations by way of loans or capital contributions from our majority shareholders.
Operating Expenses. For the three months ended October 31, 2018, general and administrative expenses amounted to $7,613 as compared to $5,759 for the three months ended October 31, 2017, a change of $1,854, or 32.2%. For the nine months ended October 31, 2018, general and administrative expenses amounted to $21,933 as compared to $25,375 for the nine months ended October 31, 2017, a change of $3,442, or 13.6%. The changes were primarily attributable to the fluctuation on professional service fees period over period.
Net Loss. During the three months ended October 31, 2018 and 2017, we had a net loss of $7,613 and $5,759, respectively. During the nine months ended October 31, 2018 and 2017, we had a net loss of $21,933 and $25,375, respectively.
Liquidity
The accompanying financial statements have been prepared in conformity with generally accepted accounting principles, which contemplate continuation of the Company as a going concern. As of October 31, 2018, we had cash of $0 and total liabilities of $53,265. Our cash flows from operating activities for the nine months ended October 31, 2018 was ($19,383). We had a working capital deficit, accumulated deficit, and shareholders’ deficit of $53,265, $84,965, and $53,265 at October 31, 2018, respectively.
Over the next 12 months we expect to expend approximately $20,000 in cash for legal, accounting and related services. Cash used for other expenditures is expected to be minimal. We hope to be able to attract suitable investors for our business plan, which will not require us to use our cash, although there can be no assurances that we will be successful in these efforts.
We expect to be able to secure capital through advances from our existing shareholder in order to pay expenses such as filing fees, accounting fees and legal fees. We believe it will be difficult to secure capital in the future because we have no assets to secure debt and there is currently no trading market for our securities. We will need additional capital in the next twelve months and if we cannot raise such capital on acceptable terms, we may have to curtail our operations or terminate our business entirely.
The inability to obtain financing or generate sufficient cash from operations could require us to reduce or eliminate expenditures for acquiring suitable partners or otherwise curtail or discontinue our operations, which could have a material adverse effect on our business, financial condition and results of operations. Furthermore, to the extent that we raise additional capital through the sale of equity or convertible debt securities, the issuance of such securities may result in dilution to existing stockholders. If we raise additional funds through the issuance of debt securities, these securities may have rights, preferences and privileges senior to holders of our common stock and the terms of such debt could impose restrictions on our operations. Regardless of whether our cash assets prove to be inadequate to meet our operational needs, we may seek to compensate providers of services by issuing stock in lieu of cash, which may also result in dilution to existing stockholders.
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Operating Capital and Capital Expenditure Requirements
Our controlling shareholder expects to advance us additional funding for operating costs in order to implement our business plan on an as needed basis. As such, our operating capital is currently limited to the resources of our controlling shareholder and are subject to our shareholder’s continued willingness to provide additional loans. The loans from our controlling shareholder are unsecured and non-interest bearing and have no set terms of repayment. We anticipate receiving additional capital should we be able to have our securities actively trading on a public exchange.
Off-Balance Sheet Arrangements
We have not entered into any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources and would be considered material to investors.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not applicable.
ITEM 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
Based on an evaluation of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act), as of October 31, 2018, the Company’s Chief Executive Officer and Chief Financial Officer (its principal executive officer and principal financial and accounting officer) has concluded that the Company’s disclosure controls and procedures were not effective at a reasonable assurance level.
Limitations on the Effectiveness of Controls
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. Because of the inherent limitations in all controls systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected. Our disclosure controls and procedures are designed to provide reasonable assurance of achieving its objectives.
Changes in Internal Control Over Financial Reporting
There have not been any changes in the Company’s internal controls over financial reporting that occurred during the Company’s fiscal quarter ended October 31, 2018 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.
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PART II - OTHER INFORMATION
We are not currently a party to any lawsuit or proceeding which, in the opinion of management, is likely to have a material adverse effect on us or our business.
Not applicable for smaller reporting companies.
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.
| Exhibit Number | Description | |
| 31.1* | Rule 13a-14(a) Certification of the Chief Executive and Financial Officer | |
| 32.1* | Section 1350 Certification of Chief Executive and Financial Officer |
| 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 |
* Filed along with this document
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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 hereunto duly authorized.
| Jialijia Group Corporation Limited | ||
| (Registrant) | ||
| Date: December 14, 2018 | By: | /s/ Jin Na |
| Jin Na | ||
| Chief Executive Officer (Principal Executive Officer), Chief Financial Officer (Principal Financial and Accounting officer), President | ||
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