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EX-32.2 - CERTIFICATION - UNION BRIDGE HOLDINGS LTD.ughl_ex322.htm
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EX-31.2 - CERTIFICATION - UNION BRIDGE HOLDINGS LTD.ughl_ex312.htm
EX-31.1 - CERTIFICATION - UNION BRIDGE HOLDINGS LTD.ughl_ex311.htm

 

 

U. S. 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 quarterly period ended March 31, 2020

 

OR

 

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

 

Union Bridge Holdings Limited

(Name of Registrant in its Charter)

 

Nevada

000-55731

32-0440076

(State or Jurisdiction of

Incorporation or Organization)

(Commission

File Number)

(I.R.S. Employer

Identification No.)

 

 Suite 4801, 48/F, Central Plaza, 18

Harbour Road, Wan Chai, Hong Kong S.A.R.

(Address of Principal Executive Offices)

 

Provide a copy of communications to:

 

Loeb & Loeb LLP
345 Park Ave
New York, New York 10154

Attn: Giovanni Caruso

 

Registrant’s telephone number, including area code: (852) 2468 3103

 

Not applicable.

(Former Name, former address and former fiscal year, if changed since last report)

 

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 every Interactive Data File required to be submitted 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 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 the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

 

Large accelerated filer

¨

Accelerated filer

¨

Non-accelerated filer

x

Smaller reporting company

x

Emerging Growth Company

x

 

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 Act). Yes ¨ No x

 

Securities registered pursuant to Section 12(b) of the Act: Not applicable.

 

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

 

 

 

 

As of May 4, 2020, 241,146,887 shares of the registrant’s common stock, par value $0.001, were outstanding.

 

 

 

  

 UNION BRIDGE HOLDINGS LIMITED

FORM 10-Q FOR THE QUARTER ENDED MARCH 31, 2020

 

TABLE OF CONTENTS

 

Page

PART I - FINANCIAL INFORMATION

 

Item 1.

Financial Statements

 

Condensed Consolidated Balance Sheets as of March 31, 2020 (unaudited) and December 31, 2019 (audited)

4

 

Condensed Consolidated Statements of Operations and Comprehensive Loss for the Three Months Ended March 31, 2020 and March 31, 2019 (unaudited)

5

 

Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2020 and March 31, 2019 (unaudited)

6

 

Notes to Condensed Financial Statements (unaudited)

8

 

Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

16

 

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

21

 

Item 4.

Controls and Procedures

21

PART II - OTHER INFORMATION

Item 1.

Legal Proceedings

22

 

Item 1A.

Risk Factors

22

 

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

22

 

Item 3.

Defaults Upon Senior Securities

22

 

Item 4.

Mine Safety Disclosures

22

 

Item 5.

Other Information

22

 

Item 6.

Exhibits

23

 

Signatures

24

 

 
2

 

 

FORWARD-LOOKING STATEMENTS

 

This quarterly report on Form 10-Q contains forward-looking statements regarding our business, financial condition, results of operations and prospects. Words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates” and similar expressions or variations of such words are intended to identify forward-looking statements, but are not deemed to represent an all-inclusive means of identifying forward-looking statements as denoted in this quarterly report on Form 10-Q. Additionally, statements concerning future matters are forward-looking statements.

 

Although forward-looking statements in this quarterly report on Form 10-Q reflect the good faith judgment of our management, such statements can only be based on facts and factors currently known by us. Consequently, forward-looking statements are inherently subject to risks and uncertainties and actual results and outcomes may differ materially from the results and outcomes discussed in or anticipated by the forward-looking statements. You are urged not to place undue reliance on these forward-looking statements, which speak only as of the date of this quarterly report on Form 10-Q.

 

We file reports with the SEC. The SEC maintains a website (www.sec.gov) that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC, including us. You can also read and copy any materials we file with, or furnish to, the SEC.

 

We undertake no obligation to revise or update any forward-looking statements in order to reflect any event or circumstance that may arise after the date of this quarterly report on Form 10-Q, except as required by law. Readers are urged to carefully review and consider the various disclosures made throughout the entirety of this quarterly report, which are designed to advise interested parties of the risks and factors that may affect our business, financial condition, results of operations and prospects.

 

 
3

Table of Contents

    

UNION BRIDGE HOLDINGS LIMITED

CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

 

 

 

March 31,

 

 

December 31,

 

 

 

2020

 

 

2019

 

ASSETS

 

 

 

 

 

 

Current Assets

 

 

 

 

 

 

Cash and cash equivalent

 

$ 6,639

 

 

$ 22,339

 

Accounts receivable

 

 

43,115

 

 

 

-

 

Prepaid expenses and deposits

 

 

281,266

 

 

 

135,112

 

Inventories

 

 

46,520

 

 

 

30,715

 

Total Current Assets

 

 

377,540

 

 

 

188,166

 

TOTAL ASSETS

 

$ 377,540

 

 

$ 188,166

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' DEFICIT

 

 

 

 

 

 

 

 

Current Liabilities

 

 

 

 

 

 

 

 

Accounts payable and accrued liabilities

 

 

386,298

 

 

 

294,635

 

Due to related parties

 

 

1,551,814

 

 

 

1,187,828

 

Total Current Liabilities

 

 

1,938,112

 

 

 

1,482,463

 

Total Liabilities

 

 

1,938,112

 

 

 

1,482,463

 

 

 

 

 

 

 

 

 

 

Stockholders' Deficit

 

 

 

 

 

 

 

 

Preferred stock, $0.001 par value, 20,000,000 shares authorized; No shares issued and outstanding

 

 

-

 

 

 

-

 

Common stock, $0.001 par value, 1,000,000,000 shares authorized; 241,146,887 shares issued and outstanding

 

 

241,147

 

 

 

241,147

 

Additional paid in capital

 

 

97,542

 

 

 

97,542

 

Accumulated deficit

 

 

(1,899,261 )

 

 

(1,632,986 )

Total Stockholders' Deficit

 

 

(1,560,572 )

 

 

(1,294,297 )

TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT

 

$ 377,540

 

 

$ 188,166

 

 

See accompanying notes to the unaudited consolidated condensed financial statements

 

 
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Table of Contents

 

UNION BRIDGE HOLDINGS LIMITED

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(UNAUDITED)

 

 

 

For the Three Months Ended

 

 

 

March 31,

 

 

 

2020

 

 

2019

 

Revenues – related party

 

$ -

 

 

$ 21,659

 

Revenues – unrelated party

 

 

43,365

 

 

 

-

 

Cost of Revenue

 

 

(21,787 )

 

 

(15,938 )

Gross profit

 

 

21,578

 

 

 

5,721

 

 

 

 

 

 

 

 

 

 

Operating Expenses

 

 

 

 

 

 

 

 

General and administrative expenses

 

 

256,936

 

 

 

42,089

 

Professional fees

 

 

30,917

 

 

 

19,170

 

Total operating expenses

 

 

287,853

 

 

 

61,259

 

 

 

 

 

 

 

 

 

 

Loss from operations

 

 

(266,275 )

 

 

(55,538 )

 

 

 

 

 

 

 

 

 

Other income

 

 

 

 

 

 

 

 

Interest income

 

 

-

 

 

 

15

 

   Total other income

 

 

-

 

 

 

15

 

 

 

 

 

 

 

 

 

 

Net loss

 

$ (266,275 )

 

$ (55,523 )

 

 

 

 

 

 

 

 

 

Other comprehensive loss

 

 

 

 

 

 

 

 

Foreign currency translation

 

 

-

 

 

 

(534 )

Total comprehensive loss

 

$ (266,275 )

 

$ (56,057 )

 

 

 

 

 

 

 

 

 

Basic and dilutive loss per common share

 

$ (0.00 )

 

$ (0.00 )

 

 

 

 

 

 

 

 

 

Weighted average number of common shares outstanding - basic and diluted

 

 

241,146,887

 

 

 

53,600,000

 

 

See accompanying notes to the unaudited consolidated condensed financial statements

 

 
5

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UNION BRIDGE HOLDINGS LIMITED

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT

(UNAUDITED)

 

For the three months ended March 31, 2020 and 2019:

 

 

 

 

 

 

 

Additional

 

 

 

 

 

Accumulated other

 

 

 

 

 

 

Common Stock

 

 

Paid in

 

 

Accumulated

 

 

comprehensive

 

 

 

 

 

 

 Shares

 

 

 Amount

 

 

 Capital

 

 

 Deficit

 

 

 income (loss)

 

 

 Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, December 31, 2019

 

 

241,146,887

 

 

$ 241,147

 

 

$ 97,542

 

 

$ (1,632,986 )

 

$ -

 

 

$ (1,294,297 )

Net loss

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(266,275 )

 

 

-

 

 

 

(266,275 )

Balance, March 31, 2020

 

 

241,146,887

 

 

$ 241,147

 

 

$ 97,542

 

 

$ (1,899,261 )

 

$ -

 

 

$ (1,560,572 )

  

 

 

 

 

 

 

Additional

 

 

 

 

Accumulated other

 

 

 

 

 

 

Common Stock

 

 

Paid in

 

 

Accumulated

 

 

comprehensive

 

 

 

 

 

 

 Shares

 

 

 Amount

 

 

 Capital

 

 

 Deficit

 

 

 loss

 

 

 Total

 

Balance, December 31, 2018

 

 

53,600,000

 

 

$ 53,600

 

 

$ -

 

 

$ (538,429 )

 

$ (83 )

 

$ (484,912 )

Net loss

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(55,523 )

 

 

-

 

 

 

(55,523 )

Foreign currency translation loss

 

 

-

 

 

 

-

 

 

 

 

 

 

 

-

 

 

 

(534 )

 

 

(534 )

Balance, March 31, 2019

 

 

53,600,000

 

 

$ 53,600

 

 

$ -

 

 

$ (593,952 )

 

$ (617 )

 

$ (540,969 )

 

See accompanying notes to the unaudited consolidated condensed financial statements

  

 
6

Table of Contents

 

UNION BRIDGE HOLDINGS LIMITED

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

 

 

 

Forthe Three Months Ended

 

 

 

March31,

 

 

 

2020

 

 

2019

 

 

 

 

 

 

 

 

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

 

 

 

Net loss

 

$ (266,275 )

 

$ (55,523 )

Expenses paid by related parties

 

 

160,917

 

 

 

-

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

Accounts receivable

 

 

(43,115 )

 

 

-

 

Prepaid expenses and deposits

 

 

(146,154 )

 

 

15,374

 

Inventory

 

 

(15,805 )

 

 

-

 

Accounts payable and accrued liabilities

 

 

91,663

 

 

 

(66,167 )

Net Cash Used in Operating Activities

 

 

(218,769 )

 

 

(106,316 )

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

 

 

 

 

 

 

Proceeds from related parties

 

 

222,300

 

 

 

73,449

 

Repayment to related parties

 

 

(19,231 )

 

 

-

 

Net Cash Provided By Financing Activities

 

 

203,069

 

 

 

73,449

 

 

 

 

 

 

 

 

 

 

Effects on changes in foreign exchange rate

 

 

-

 

 

 

(534 )

 

 

 

 

 

 

 

 

 

Net change in cash and cash equivalents

 

 

(15,700 )

 

 

(33,401 )

Cash and cash equivalents, beginning of period

 

 

22,339

 

 

 

97,870

 

Cash and cash equivalents, end of period

 

$ 6,639

 

 

$ 64,469

 

 

 

 

 

 

 

 

 

 

Supplemental cash flow information

 

 

 

 

 

 

 

 

Interest received

 

$ -

 

 

$ 15

 

Interest paid

 

$ -

 

 

$ -

 

Income taxes paid

 

$ -

 

 

$ -

 

 

See accompanying notes to the unaudited consolidated condensed financial statements

 

 
7

Table of Contents

 

UNION BRIDGE HOLDINGS LIMITED

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2020

(UNAUDITED)

 

NOTE 1 – ORGANIZATION, DESCRIPTION OF BUSINESS, AND GOING CONCERN

 

UNION BRIDGE HOLDINGS LIMITED (the “Company”) was incorporated under the laws of the State of Nevada on May 6, 2014. The Company‘’s principal business activities are as described below in “Recent Developments”.

 

Recent Developments

 

The Company incorporated two new wholly owned subsidiaries in the British Virgin Islands: 1.) Phoenix Creation Global Limited (“PC”) on October 26, 2017 and 2.) Windsor Honour Limited (“WH”) on October 30, 2017, respectively. These subsidiaries were formed with the intent to sell healthcare products and services to seniors and individual with disabilities. The Company recently procured samples of motorized wheelchairs, as the first product in an expected portfolio of products targeted at this market.

 

On February 2, 2018, the Company’s subsidiary Union Beam Investment Limited (“UB”) established Qianhai Lianqiao Investment Consulting (Shenzhen) Company Limited, renamed as Union Beam Trading (Shenzhen) Limited (“UB Trading”), a wholly foreign owned entity in the People’s Republic of China (“PRC”), to engage in the sale of healthcare products and services.

 

On February 13, 2018, the Company’s subsidiary PC established Union Care Investment Limited (“UC”) in Hong Kong, to engage in the provision of senior care services.

 

On May 25, 2018, UC established Sino Silver (Qianhai) Holdings Ltd. (“Sino Silver Qianhai”), a wholly owned entity in the PRC, to engage in the provision of elderly home care services, to establish senior care centers and to provide community services. As of December 31, 2019, UC is ready to be engaged in the business activities of the Company.

 

On September 20, 2018, Sino Silver Qianhai established Sino Sliver (Beijing) Elderly Service Ltd. (“Sino Silver Beijing”) in the PRC, to engage in the provision of elderly home care services, to establish senior care centers and to provide community services in Beijing region.

 

On December 27, 2018, the Company’s subsidiary UC established Sino Silver (Zhuhai Hengqin) Elderly Service Limited (“Sino Silver Zhuhai”), a wholly owned entity in the PRC engaging the elderly home care services, senior care centers and community services.

 

On September 24, 2019, the Company entered into a share exchange agreement (the “SEA”) with Conperin Group Inc. (“Conperin”) and Conperin’s shareholders whereby the Company issued 187,546,887 new common shares in exchange for all of the issued and outstanding common shares of Conperin, which totaled 2,500,000. Conperin is a private limited liability company, incorporated and domiciled in the British Virgin Islands. The Company and Conperin were under common control before the acquisition; therefore, the transaction has been accounted for as business combination under common control in accordance to ASC-805-50-30-5, in which the assets and liabilities of Conperin have been presented at their carrying values at the date of common control on March 12, 2019.

 

On March 12, 2019, Conperin established Circle YY Technologies Inc., a limited company incorporated in the British Virgin Islands (“Circle BVI”). Circle BVI’s principal business activity is investment holding.

 

On March 27, 2019, Conperin established Circle YY Technologies Limited, a limited company incorporated in Hong Kong (“Circle HK”). Circle HK’s principal business activity is development of website and mobile apps to promote positive communication between the elders and young people.

 

On September 27, 2019, Conperin established Circle YY International Inc., a limited company incorporated in the British Virgin Islands (“Circle International”). As of March 31, 2020, Circle International are ready to be engaged in the business activities of the Company.

 

 
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On November 6, 2019, the Company disposed of UB Trading, Sino Silver Qianhai and Sino Silver Beijing to unrelated parties at no consideration. On December 17, 2019, the Company disposed of Sino Silver Zhuhai to unrelated parties at no consideration. Before the disposal, the subsidiaries have minimal business activities. The Company finds no business rationale to maintain these subsidiaries.

 

Going Concern

 

The accompanying unaudited interim consolidated financial statements have been prepared assuming that the Company will continue as a going concern; however, the Company has incurred a net loss of $266,275 for the period ended March 31, 2020. As of March 31, 2020, the Company had an accumulated deficit of $1,899,261, working capital deficit of $1,560,572, and stockholders’ deficit of $1,560,572; its net cash used in operating activities for period ended March 31, 2020 was $218,769.

 

These factors raise substantial doubt on the Company's ability to continue as a going concern. The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty. Management’s plan for the Company’s continued existence is dependent upon Management's ability to identify investment opportunities, develop those opportunities to generate profit; additionally, Management will need to continue to rely on certain related parties to provide funding for investment, working capital, and general corporate purposes, and management expertise to the Company at less than prevailing market rates. If Management is unable to execute its plan, the Company may become insolvent.

 

The Company’s controlling shareholder and Chief Executive Officer has provided a personal guarantee of loan that he would provide to the Company of up to $1 million for investment and working capital purposes. Management believes this guarantee should be considered a material event in executing its overall plan described in the foregoing.

 

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES

 

Basis of Presentation

 

The accompanying unaudited interim consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Regulation S-X. Accordingly, the unaudited interim consolidated financial statements do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements.

 

When used in these notes, the terms “Union Bridge,”Company,” “we,” “us” and “our” mean Union Bridge Holdings Limited and all entities included in our unaudtied interim consolidated financial statements. In the opinion of management, all adjustments consisting of normal recurring entries necessary for a fair statement of the periods presented for: (a) the financial position; (b) the result of operations; and (c) cash flows, have been made in order to make the unaudited interim consolidated financial statements presented not misleading. The results of operations for such interim periods are not necessarily indicative of operations for a full year. The accompanying unaudited interim consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K, for the year ended December 31, 2019, as filed with the SEC on March 10, 2020.

 

 
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Basis of Consolidation

 

These financial statements include the accounts of the Company and its wholly-owned subsidiaries: First Channel Limited (“FC”), UB, PC, WH, UC, Conperin, Circle BVI, Circle HK and Circle International. These financial statements have also included the accounts of the subsidiaries previously wholly owned by the Company and have been disposed during the year, up to the date of disposal of the subsidiaries: UB Trading, Sino Silver Qianhai, Sino Silver Beijing and Sino Silver Zhuhai. All intercompany sales, purchases, balances, investments, and capital have been eliminated.

 

Use of Estimates

 

The preparation of 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 as well as the reported amount of revenues and expenses during the reporting period. Actual results could differ from these estimates.

 

Foreign Currency Translation and Re-measurement

 

The Company translates its foreign operations to the U.S. dollar in accordance with ASC 830, “Foreign Currency Matters”, except for the translation for Hong Kong dollar, which uses a fixed rate of 0.1280. Since Hong Kong dollar is pledged to U.S. dollar, management considers any difference between the market rate and the fixed rate of 0.1280 as having no significant effect in the Company’s financial statements.

 

The reporting currency for the Company and its subsidiaries is the U.S. dollar. The functional currency of FC, PC, WH and UB is U.S. dollar; the functional currency of UB Trading, Sino Silver Qianhai, Sino Silver Beijing and Sino Silver Zhuhai is Chinese Renminbi (“RMB”); and the functional currencies of UC, Conperin, Circle BVI, Circle HK and Circle International is the Hong Kong dollar (“HKD”).

 

The Company’s subsidiaries, whose records are not maintained in those entities’ respective functional currencies, re-measure their records into their functional currency as follows:

 

 

Monetary assets and liabilities at exchange rates in effect at the end of each period

 

Nonmonetary assets and liabilities at historical rates

 

Revenue and expense items at the average rate of exchange prevailing during the period

 

Gains and losses from these re-measurements were not significant and have been included in the Company’s results of operations.

  

The Company’s subsidiaries, whose functional currency is not the U.S. dollar, translate their records into the U.S. dollar as follows:

 

 

Assets and liabilities at the rate of exchange in effect at the balance sheet date

 

Equities at the historical rate

 

Revenue and expense items at the average rate of exchange prevailing during the period

 

Adjustments arising from such translations are included in accumulated other comprehensive income in shareholders’ equity.

 

 

 

March 31,

 

 

December 31,

 

 

 

2020

 

 

2019

 

Spot RMB: USD exchange rate

 

$ N/A

 

 

$ 0.1436

 

Average RMB: USD exchange rate

 

$ N/A

 

 

$ 0.1448

 

Spot HKD: USD exchange rate

 

$ 0.1280

 

 

$ 0.1280

 

Average HKD: USD exchange rate

 

$ 0.1280

 

 

$ 0.1280

 

 

The RMB is not freely convertible into foreign currency and all foreign exchange transactions must take place through authorized institutions. No representation is made that the RMB amounts could have been, or could be, converted into U.S. dollar at the rates used in translation.

 

Cash and Cash Equivalents

 

The Company considers all highly liquid instruments with a maturity of three months or less at the time of issuance to be cash equivalents. The Company’s bank deposits are held with large financial institutions located in Hong Kong. These deposits are not protected under FDIC; however, the Company has determined that there is no significant credit risk for these deposits and does not believe these institutions will become insolvent.

 

 
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Prepaid expenses

 

The Company makes certain payments for general corporate purposes to service providers that render services over time. The Company amortizes these services to its results of operations over the span of time that the services are contracted. Certain prepayments that are to be delivered after one operating period to the Company have been classified as long-term prepaid expenses. Management does not believe these prepayments qualify as financial instruments that require fair value consideration and disclosure.

 

Inventories

 

Inventories are computed using the first-in, first-out method and valued at the lower of cost or net realizable value. The Company periodically reviews inventories for obsolescence and any inventories identified as obsolete are written down or written off.

 

Fair value of financial instruments

 

The carrying value of the Company’s financial instruments: cash and cash equivalents, accounts receivable, prepaid expenses and deposits, accounts payable and accrued liabilities and amount due to a related party 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 : Inputs are based upon unadjusted quoted prices for identical instruments traded in active markets;

 

 

Level 2 : Inputs are based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques (e.g. Black-Scholes Option-Pricing model) for which all significant inputs are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Where applicable, these models project future cash flows and discount the future amounts to a present value using market-based observable inputs; and

 

 

Level 3 : Inputs are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques, including option pricing models and discounted cash flow models.

  

Fair value estimates are made at a specific point in time based on relevant market information about the financial instrument. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and, therefore, cannot be determined with precision. Changes in assumptions could significantly affect the estimates.

 

Commitments and contingencies

 

The Company follows subtopic 450-20 of the FASB Accounting Standards Codification to report accounting for contingencies. Certain conditions may exist as of the date the financial statements are issued, which may result in a loss to the Company, but which will only be resolved when one or more future events occur or fail to occur. The Company assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or un-asserted claims that may result in such proceedings, the Company evaluates the perceived merits of any legal proceedings or un-asserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein.

 

 
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If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s financial statements. If the assessment indicates that a potentially material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, and an estimate of the range of possible losses, if determinable and material, would be disclosed.

 

Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed. Management does not believe, based upon information available at this time, that these matters will have a material adverse effect on the Company’s consolidated financial position, results of operations or cash flows. However, there is no assurance that such matters will not materially and adversely affect the Company’s business, financial position, and results of operations or cash flows.

 

Income taxes

 

The Company complies with the accounting and reporting requirements of ASC Topic 740, “Income Taxes,” which requires an asset and liability approach to financial accounting and reporting for income taxes. Deferred income tax assets and liabilities are computed for differences between the financial statement and tax bases of assets and liabilities that will result in future taxable or deductible amounts, based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.

 

ASC Topic 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. The Company’s management determined that the Hong Kong is the Company’s major tax jurisdiction. The Company recognizes accrued interest and penalties related to unrecognized tax benefits, if any, as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of March 31, 2020. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position.

 

The Company conducts businesses in China and Hong Kong and is subject to tax in this jurisdiction. As a result of its business activities, the Company will file tax returns that are subject to examination by the foreign tax authority.

 

Net loss per share

 

The Company calculates net loss per share in accordance with ASC Topic 260, “Earnings per Share.” Basic income per share is computed by dividing the net income by the weighted-average number of common shares outstanding during the period. Diluted income per share is computed similar to basic income 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. As of March 31, 2020, the Company has no dilutive securities.

 

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 operational decisions. Companies are also considered to be related if they are subject to common control or common significant influence.

  

Revenue recognition

 

The Company adopts ASC606 “Revenue Recognition”, and recognizes revenue when control of the promised goods or services is transferred to customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services.

 

 
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The Company derives its revenues from the rendering of computer consulting services and selling of health products. The Company applies the following five steps in order to determine the appropriate amount of revenue to be recognized as it fulfills its obligations under each of its agreements:

 

identify the contract with a customer;

identify the performance obligations in the contract;

determine the transaction price;

allocate the transaction price to performance obligations in the contract; and

recognize revenue as the performance obligation is satisfied.

  

Recent Accounting Pronouncements

 

In October 2018, FASB issued ASU No. 2018-17, Consolidation - Targeted Improvements to Related Party Guidance for Variable Interest Entities (Topic 810). ASU No. 2018-17 guidance eliminates the requirement that entities consider indirect interests held through related parties under common control in their entirety when assessing whether a decision-making fee is a variable interest. Instead, the reporting entity will consider such indirect interests on a proportionate basis. This pronouncement is effective for public entities for fiscal years ending after December 15, 2019, with early adoption permitted. The Company does not expect the adoption to have a material impact on its consolidated financial statements.

 

Management has considered all recent accounting pronouncements issued. The Company’s management believes that these recent pronouncements will not have a material effect on the Company’s financial statements.

 

Reclassification

 

Certain amounts in the comparative financial statements have been reclassified to conform with the presentation of the financial statements of the current period.

 

NOTE 3 – BUSINESS COMBINATION

 

The assets, liabilities and net asset value of Conperin and its subsidiaries as of the date of beginning of common control is as follow:

 

 

 

March 12,

 

 

 

2019

 

ASSETS

 

$ -

 

 

 

 

 

 

LIABILITIES

 

 

 

 

Current Liabilities

 

 

 

 

Accounts payable and accrued liabilities

 

$ 8,334

 

Due to related parties

 

 

28,934

 

Total Current Liabilities

 

 

37,268

 

TOTAL LIABILITIES

 

 

37,268

 

NET LIABILITIES

 

$ (37,268 )

 

The Company and Conperin were under common control before the acquisition; therefore, the transaction has been accounted for as business combination under common control in accordance to ASC-805-30-5, in which the assets and liabilities of Conperin have been presented at their carrying values at the date of common control on March 12, 2019, and no goodwill is recognized.

 

NOTE 4 – ACCOUNTS RECEIVABLE

 

The Company has performed an analysis on all of its accounts receivable and determined that all amounts are collectible by the Company. As such, all accounts receivable are reflected as a current asset and no allowance for bad debt has been recorded as of March 31, 2020 and December 31, 2019. As at March 31, 2020 and December 31, 2019, the Company had accounts receivable of $43,115 and $0, respectively.

 

 
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NOTE 5 – PREPAID EXPENSES AND DEPOSITS

 

 

 

March 31,

 

 

December 31,

 

 

 

2020

 

 

2019

 

Prepaid expenses

 

$ 12,000

 

 

$ 12,000

 

Deposits for platform design

 

 

129,795

 

 

 

111,846

 

Trade deposits

 

 

128,205

 

 

 

-

 

Sundry deposits

 

 

11,266

 

 

 

11,266

 

 

 

$ 281,266

 

 

$ 135,112

 

 

NOTE 6 – INVENTORIES

 

$9,831 and $36,688 of the inventories of $46,520 as of March 31, 2020 is finished clothing goods and finished surgical masks, respectively. There are no inventory write-offs made as of March 31, 2020.

 

All of the inventories of $30,715 as of December 31, 2019 is finished clothing goods. There are no inventory write-offs made as of December 31, 2019.

 

NOTE 7 – ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

 

 

 

March 31,

 

 

December 31,

 

 

 

2020

 

 

2019

 

Accounts payable

 

$ 24,804

 

 

$ 55,015

 

Accrued charges

 

 

361,494

 

 

 

239,620

 

 

 

$ 386,298

 

 

$ 294,635

 

  

NOTE 8 - RELATED-PARTY TRANSACTIONS

 

For the periods ended March 31, 2020 and 2019, the Company received advances of $222,300 and $73,449 from the Company’s director, who is also our CEO and majority shareholder, and Union Glory Gold Holdings Limited (“Union Glory”), a Company controlled by our CEO, repaid $19,231 and $0, and the Company’s director paid operating expenses of $160,917 and $0 on behalf of the Company, respectively.

 

As of March 31, 2020 and December 31, 2019, the balances owed to the related parties totaled $1,551,814 and $1,187,828, respectively.

 

For the periods ended March 31, 2020 and 2019, the Company has provided computer services to Union Glory Gold Holdings Limited and earned a service income of $0 and $21,659, respectively. Union Glory Gold Holdings Limited is under the control by the major shareholder of the Company.

 

On September 24, 2019, the Company entered into a share exchange agreement (the “SEA”) with Conperin Group Inc. (“Conperin”) and Conperin’s shareholders whereby the Company issued 187,546,887 new common shares in exchange for all of the issued and outstanding common shares of Conperin, which totaled 2,500,000. Conperin is a private limited liability company, incorporated and domiciled in the British Virgin Islands. The Company and Conperin were under common control before the acquisition. Among the 187,546,887 new common shares, 131,282,821 shares were issued to our CEO and Director of the Company, and 56,264,066 shares were issued to a Director of the Company.

 

On November 6, 2019, the Company disposed of UB Trading, Sino Silver Qianhai and Sino Silver Beijing to unrelated parties at no consideration. On December 17, 2019, the Company disposed of Sino Silver Zhuhai to unrelated parties at no consideration. The Company’s director, who is also our CEO and majority shareholder, and Union Glory Gold Holdings Limited have agreed not to require the Company to repay the amounts due to them by the disposed subsidiaries and the Company recorded debt forgiveness of $97,542 as additional paid in capital. Loss on disposal of the subsidiaries have been charged to the consolidated statements of operations and comprehensive loss.

 

 
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The Company’s principal executive offices are located in Hong Kong. The office premises were provided by Company’s controlled by our CEO at no charge to the Company.

 

The Company is subject to the risk that if the related parties do not continue to provide services and advances to fund the company’s operations or expansion, or if those related parties demand immediate repayment, the Company may become insolvent.

 

NOTE 9 - STOCKHOLDERS’ DEFICIT

 

The Company is authorized to issue up to 1,000,000,000 shares of Common Stock, par value $0.001 per share, and 20,000,000 of Preferred Stock, par value $0.001 per share.

 

Common stock

 

During the period ended March 31, 2020, the Company has issued no Common Stock.

 

As of March 31, 2020 and December 31, 2019, 241,146,887 shares of Common Stock were issued and outstanding.

 

NOTE 10 – CONCENTRATION RISK

 

As of March 31, 2020, 98% of the accounts receivable of $43,115 was due from a single client, who is unrelated to the Company.

 

During the period ended March 31, 2020, 98% of the revenue of $43,365 was received from a single client, who is unrelated to the Company.

 

During the period ended March 31, 2019, 100% of the revenue of $21,659 was received from a single client, who is a related party to the Company (Note 8).

 

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, 2020, up through the date the Company issued the financial statements. During the period, the Company did not have any material recognizable subsequent events.

 

 
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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION

 

The following management’s discussion and analysis should be read in conjunction with the historical financial statements and the related notes thereto contained in this Quarterly Report. The discussion highlights the Company’s results of operations and the principal factors that have affected the Company’s financial condition, as well as its liquidity and capital resources for the periods described, and provides information that management believes is relevant for an assessment and understanding of the statements of financial condition and results of operations presented herein. The following discussion and analysis are based on the Company’s unaudited financial statements contained in this Quarterly Report, which we have prepared in accordance with United States generally accepted accounting principles. You should read this discussion and analysis together with such financial statements and the related notes thereto.

 

Overview

 

We were incorporated under the laws of the State of Nevada on May 6, 2014 under the name Costo, Inc. to engage in the business of distributing automobile parts and components necessary for the maintenance and repair of automobiles and specialty equipment, including construction and road machinery, principally in China, Europe and certain Commonwealth of Independent States countries. We changed our name to Union Bridge Holdings Limited on May 23, 2016 in connection with our expanded business plan under which we determined to expand operations into the health care industry. We never achieved any revenues from our automobile and specialty equipment business and during the fourth quarter of 2017 we determined to discontinue that area of business.

 

Recent Development

 

On September 24, 2019, we entered into a Stock Purchase Agreement (the “Purchase Agreement”), with shareholders of Conperin Group Inc., a British Virgin Islands company, who together owned shares constituting 100% of the issued and outstanding ordinary shares Shares of Conperin Group Inc. Pursuant to the terms of the Purchase Agreement, the shareholders of Conperin Group Inc. transferred to us all of their shares of Conperin Group Inc. in exchange for the issuance of 187,546,887 shares of our common stock (the “Stock Purchase”). As a result of the Stock Purchase, we are now a holding company, is engaged in providing technology in digital media industry, including developing a branded social network and e-commerce app platform aiming to promote a high quality of life for families and seniors by using artificial intelligence, blockchain and cognitive e-commerce technology in China, Hong Kong and Asia Pacific. As a result of the consummation of the Stock Purchase, we are no longer a shell company as that term is defined in Rule 12b-2 of the Securities Exchange Act of 1934, as amended.

 

We develop and operate CircleYY, a mobile-based social networking and premium e-commerce app and website platform that will also use impactful editorial content to promote a balanced quality of life for families and seniors aged 50 and above by understanding their behavior, tastes and needs. The platform enables users around the world to share family stories, build meaningful interactions between 50+ users and their family members, discover and buy fashion, beauty and other daily accessories products. We connect people and facilitate human interactions based on cities, interests and a variety of activities including pictures and short videos.

 

Our CircleYY mobile application can be downloaded and used free of charge, and we will generate our revenues from the various services we offer on our platforms, dedicated to a 50+ client base and their families: (i) collaborations with brands and users on the creation of premium content (ii) the sale of advertising on our social media platform (iii) the sale of third-party branded items, mainly fashion, beauty, daily accessories and services on our e-commerce platform.

 

As a global platform, CircleYY is expected to target a global audience with content designed for universal appeal amongst family members, notably 50+, along with a local focus for marketing campaigns. The initial opening market is intended to be Hong Kong SAR, followed by similar markets in the Asia-Pacific area and subsequently Europe and North America.

 

 
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On September 27, 2019, our wholly-owned subsidiary Conperin Group Inc. established Circle YY International Inc., a limited company incorporated in the British Virgin Islands (“Circle International”), to engage in new business when any suitable business opportunity arises. As of December 31, 2019, Circle International is ready to be engaged in the business activities of the Company.

 

On November 11, 2019, our subsidiary Circle YY Technologies Hong Kong Limited, which operates our CircleYY platforms, launched its unique ecosystem technology covering social networking, content and e-commerce. Our CircleYY website platform had 43 and 63 registered members as of March 31, 2020 and April 7, 2020, respectively.

 

In response to the coronavirus (COVID-19) pandemic situation, since January 2020, the Company has taken several actions to protect its employees, including asking employees to work from home, establishing split working schedules and restricting travel business travel. On March 11, 2020, the World Health Organization (WHO) officially declare COVID-19 a pandemic, pointing to the cases of COVID-19 illness in over 110 countries and territories around the world and the sustained risk of further global spread. Since March 19, 2020, the other floor of the office premises of the Company has a confirmed infection case of COVID-19 and the infected floor was temporary closed for immediate special cleaning and disinfecting actions by the building management. Given the dynamic nature of these circumstances, the duration and intensity of the impact of the COVID-19 and resulting disruption to the Company’s operations cannot be reasonably estimated at this time. While not yet quantifiable, the Company believes this situation had an adverse impact on its operating results for this fiscal quarter and continues to assess the financial impact for the remainder of the year.

 

RESULTS OF OPERATIONS

 

We are a development stage company and have not generated revenue to date. We have incurred recurring losses to date. Our financial statements have been prepared assuming that we will continue as a going concern and, accordingly, do not include adjustments relating to the recoverability and realization of assets and classification of liabilities that might be necessary should we be unable to continue in operation. We expect we will require additional capital to meet our long term operating requirements. We expect to raise additional capital through, among other things, the sale of equity or debt securities.

 

The following comparative analysis on results of operations was based on the comparative financial statements, footnotes and related information for the three months ended March 31, 2020 and 2019. This analysis should be read in conjunction with the financial statements and the notes to those statements that are included elsewhere in this report.

 

Three Month Period Ended March 31, 2020 Compared to the Three Month Period Ended March 31, 2019

 

 

 

For the Three Months Ended

 

 

 

 

 

 

 

March 31,

 

 

 

 

 

 

 

2020

 

 

2019

 

 

Change

 

 

%

 

Revenues

 

$ 43,365

 

 

$ 21,659

 

 

$ 21,706

 

 

 

100 %

Cost of revenue

 

 

(21,787 )

 

 

(15,938 )

 

 

(5,849 )

 

 

37 %

Gross Profit

 

 

21,578

 

 

 

5,721

 

 

 

15,857

 

 

 

277 %

General and administrative expenses

 

 

(256,936 )

 

 

(42,089 )

 

 

(214,847 )

 

 

510 %

Professional fees

 

 

(30,917 )

 

 

(19,170 )

 

 

(11,747 )

 

 

61 %

Interest income

 

 

-

 

 

 

15

 

 

 

(15 )

 

 

(100 )%

Net loss

 

$ (266,275 )

 

$ (55,523 )

 

$ (210,752 )

 

 

380 %

 

Revenue

 

For the three months ended March 31, 2020, we generated revenue of $43,365 from our sales of fashion and wellness products via our e-commerce platform compared with $21,659 for the same period in 2019 from computer consulting services provided to a client. The increase was mainly attributed to greater amount of sales of products compared with the computer consulting services provided.

 

 
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Cost of Revenue

 

For the three months ended March 31, 2020, we had cost of revenue of $21,787 compared with $15,938 for the same period in 2019. The increase was mainly attributed to greater purchase cost of products for sales compared with the cost of providing computer consulting services.

 

Operating Expenses

 

Total operating expenses for the three months ended March 31, 2020 were $287,853, an increase of $226,594, compared to the three months ended March 31, 2019 when total operating expenses were $61,259. The increase was primarily due to increase in salaries.

 

Net Loss

 

The net loss for the three months ended March 31, 2020 was $266,275, an increase of $210,752 compared to the three months ended March 31, 2019 when the net loss was $ 55,523. The increase was primarily the result of increase in operating expenses.

 

Liquidity and Capital Resources

 

 

 

March 31,

 

 

December 31,

 

 

 

 

 

 

 

2020

 

 

2019

 

 

Change

 

 

%

 

Cash

 

$ 6,639

 

 

$ 22,339

 

 

$ (15,700 )

 

 

(70 )%

Total assets

 

$ 377,540

 

 

$ 188,166

 

 

$ 189,374

 

 

 

101 %

Total liabilities

 

$ 1,938,112

 

 

$ 1,482,463

 

 

$ 455,649

 

 

 

31 %

Stockholders’ equity

 

$ (1,560,572 )

 

$ (1,294,297 )

 

$ (266,275 )

 

 

21 %

 

 

 

March 31,

December 31,

 

2020

2019

Change

%

 

Current assets

 

$ 377,540

 

 

$ 188,166

 

 

$ 189,374

 

 

 

101 %

Current liabilities

 

$ 1,938,112

 

 

$ 1,482,463

 

 

$ 455,649

 

 

 

31 %

Working capital deficiency

 

$ (1,560,572 )

 

$ (1,294,297 )

 

$ (266,275 )

 

 

21 %

 

Liquidity is the ability of an enterprise to generate adequate amounts of cash to meet its needs for cash requirements. As of March 31, 2020, we had a working capital deficit of $1,560,572, an increase of $266,275 from our working capital deficit of $1,294,297 at December 31, 2019. The increase in the deficit is primarily a result of an increase in accounts payable and accrued liabilities and due to related parties, partially offset by an increase in accounts receivable and prepaid expenses and deposits. As of March 31, 2020, our total assets were $377,540 compared to $188,166 in total assets at December 31, 2019. Total assets as of March 31, 2020 were comprised of $6,639 in cash and cash equivalents, $43,115 in accounts receivable, $281,266 in prepaid expenses and deposits and $46,520 in inventory, while as at December 31, 2019 total assets were comprised $22,339 in cash, $135,112 in prepaid expenses and deposits and $30,715 in inventory. As of March 31, 2020, our current liabilities were $1,938,112 comprised of $1,551,814 due to related parties and $386,298 for accounts payable and accrued liabilities. As of December 31, 2019, our current liabilities were $1,482,463 comprised of $1,187,828 due to related parties and $294,635 in accounts payable and accrued liabilities.

 

 

 

For the Three Months Ended

 

 

 

 

 

 

 

March 31,

 

 

 

 

 

 

 

2020

 

 

2019

 

 

Change

 

 

%

 

Cash used in operating activities

 

$ (218,769 )

 

$ (106,316 )

 

$ (112,453 )

 

 

106 %

Cash provided by financing activities

 

 

203,069

 

 

 

73,449

 

 

 

129,620

 

 

 

176 %

Effects on changes in foreign exchange rate

 

 

-

 

 

 

(534 )

 

 

534

 

 

 

(100 )%

Net change in cash and cash equivalents

 

$ (15,700 )

 

$ (33,401 )

 

$ 17,701

 

 

 

(53 )%

 

 
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Cash Flows From Operating Activities

 

Net cash used in operating activities for the three month period ended March 31, 2020 was $218,769, compared to $106,316 for the three month period ended March 31, 2019. The increase of $112,453 was primarily a result of an increase in net loss and prepaid expenses and deposits, partially offset by expenses paid by related parties, during the period.

 

Cash Flows From Financing Activities

 

We have financed our operations primarily with advances from shareholders. Net cash provided by financing activities was $203,069 during the three month period ended March 31, 2020 compared to $73,449 in the three month period ended March 31, 2019. The increase in cash provided by financing activities was primarily a result of an increase in advances from shareholders.

 

Plan of Operation and Funding

 

We expect that working capital requirements will continue to be funded through further issuances of our securities and loans from our executive officers and principal shareholders, including Joseph Ho. Our working capital requirements are expected to increase in line with the growth of our business.

 

Existing working capital, further advances and debt instruments, and anticipated cash flow are not expected to be adequate to fund our operations and potential acquisitions over the next twelve months. We have no lines of credit or other bank financing arrangements. Generally, we have financed operations to date through the proceeds of the private placement of equity and debt instruments. In connection with our business plan, management anticipates additional increases in operating expenses and capital expenditures relating to: (i) the acquisition of businesses in the health-related industry; (ii) acquisition of inventory; (iii) developmental expenses associated with a start-up business; and (iv) marketing expenses. We intend to finance these expenses with further issuances of equity securities and debt instruments. Thereafter, we expect we will need to raise additional capital and generate revenues to meet long-term operating requirements. Additional issuances of equity or convertible debt securities will result in dilution to our current shareholders. Further, such securities might have rights, preferences or privileges senior to our common stock. Additional financing may not be available upon acceptable terms, or at all. If adequate funds are not available or are not available on acceptable terms, we may not be able to take advantage of prospective new business endeavors or opportunities, which could significantly and materially restrict our business operations.

 

Material Commitments

 

On March 23, 2018, our subsidiary, Windsor Honour Limited (“WHL”) entered into a Binding Heads of Agreement with the owner of a land parcel for a senior care facility to be established in Chang Mai, Thailand. The parties will negotiate in good faith toward definitive agreements regarding the project. WHL would lease the land and be the developer of the project and would own the buildings on the site. WHL would have full control of the design and supervision of the construction of the project, as well as daily operations and management of the project. The land owner would be responsible for obtaining necessary construction, operation and other permits for the project and would provide necessary liaison with government officials. Total investment in the project for development and construction is estimated to be approximately 200 million Thai Baht (approximately US$6.4 million at current exchange rates), for which WHL would be responsible to obtain financing. WHL would also be responsible for arranging financing of operating costs until they can be funded from operations. The project would lease the land for 90 years with automatic renewals, each for 30 years. The total rent for the first 90 years would be 10 million Thai Baht (approximately US$320,000 at current exchange rates). In addition to the rent, WHL may consider a discretionary bonus to the land owner (with details to be agreed in the definitive agreements).

 

Upon signing the definitive agreement, WHL will pay 2 million Thai Baht (approximately US$64,300 at current exchange rates) as a deposit to the land owner within 90 days, which will be refundable if the development plan for the land as a senior nursing home facility has not been approved by the competent government authority within one year, or if before that date such authority has definitively denied the application for the development plan upon the request of WHL. Otherwise, the deposit will be applied to the rent for the land.

 

 
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No assurance can be given, however, that the Chang Mai, Thailand senior facility project will be successfully developed and operated because, (i) WHL may not successfully negotiate definitive agreements for the project, (ii) required permits may not be obtained, and (iii) required financing may not be obtainable.

 

Inflation

 

In the opinion of management, inflation has not and will not have a material effect on our operations in the immediate future. Management will continue to monitor inflation and evaluate the possible future effects of inflation on our business and operations.

 

Off-Balance Sheet Arrangements

 

As of the date of this Quarterly Report, we do not have 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 that are material to investors.

 

Going Concern

 

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates continuity of operations, realization of assets, and liquidation of liabilities in the normal course of business.

 

As reflected in the accompanying condensed consolidated financial statements, the Company had an accumulated deficit at March 31, 2020 of $1,899,261, a net loss for the three months ended March 31, 2020 of $266,275 and net cash used in operating activities for the three months ended March 31, 2020 of $218,769. These conditions raise substantial doubt about our ability to continue as a going concern.

 

The Company is attempting to produce sufficient revenue; however, the Company’s cash position is not sufficient to support its daily operations. While the Company believes in the viability of its strategy to produce sufficient revenue and in its ability to raise additional funds, there can be no assurances that the Company will accomplish its goals. The ability of the Company to continue as a going concern is dependent upon its ability to further implement its business plan and generate sufficient revenues and in its ability to raise additional funds.

 

The condensed consolidated financial statements do not include any adjustments related to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

 

The independent registered public accounting firm’s opinion accompanying our December 31, 2019 consolidated financial statements contained an explanatory paragraph expressing substantial doubt about our ability to continue as a going concern. The consolidated financial statements have been prepared “assuming that we will continue as a going concern,” which contemplates that we will realize our assets and satisfy our liabilities and commitments in the ordinary course of business.

 

 The Company’s controlling shareholder and Chief Executive Officer, Joseph Ho has provided a personal guarantee of loan that he would provide to the Company of up to $1 million for investment and working capital purposes. The Company believes this guarantee should be considered a material event in executing its overall plan described in the foregoing.

 

 
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Critical Accounting Policies

 

We have identified the following policies below as critical to our business and results of operations. Our reported results are impacted by the application of the following accounting policies, certain of which require management to make subjective or complex judgments. These judgments involve making estimates about the effect of matters that are inherently uncertain and may significantly impact quarterly or annual results of operations. For all of these policies, management cautions that future events rarely develop exactly as expected, and the best estimates routinely require adjustment. Specific risks associated with these critical accounting policies are described in the following paragraphs.

 

Use of Estimates

 

The preparation of 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 as well as the reported amount of revenues and expenses during the reporting period. Actual results could differ from these estimates.

 

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

 

Not applicable for smaller reporting companies.

 

ITEM 4. CONTROLS AND PROCEDURES

 

Evaluation of Disclosure Controls and Procedures

 

We maintain disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act that are designed to ensure that information required to be disclosed by us in reports that we file under the Exchange Act is recorded, processed, summarized and reported as specified in the SEC’s rules and forms and that such information required to be disclosed by us in reports that we file under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure. Management, with the participation of our Chief Executive Officer and Chief Financial Officer, performed an evaluation of the effectiveness of our disclosure controls and procedures as of March 31, 2020. Based on that evaluation, our management, including our Chief Executive Officer and Chief Financial Officer, concluded that our disclosure controls and procedures were not effective as of March 31, 2020 due to the following material weaknesses and significant deficiencies

 

 

·

Material Weakness - The Company did not maintain effective controls over certain aspects of the financial reporting process because we lacked a sufficient complement of personnel with a level of accounting expertise and an adequate supervisory review structure that is commensurate with our financial reporting requirements.

     

 

·

Significant Deficiencies - Inadequate segregation of duties.

 

We expect to be materially dependent upon third parties to provide us with accounting consulting services for the foreseeable future which we believe mitigates the impact of the material weaknesses discussed above. Until such time as we have a chief financial officer with the requisite expertise in U.S. GAAP and establish an audit committee and implement internal controls and procedures, there are no assurances that the material weaknesses and significant deficiencies in our disclosure controls and procedures will not result in errors in our financial statements which could lead to a restatement of those financial statements.

 

Our management, including our Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure controls and procedures will prevent all error and all 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. Further, the design of a control system must reflect the fact that there are resource constraints and the benefits of controls must be considered relative to their costs. Due to the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within our company have been detected.

 

Changes in Internal Control over Financial Reporting

 

There were no changes in the Company’s internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Rule 13a-15 or 15d-15 of the Exchange Act that occurred during the three month period ended March 31, 2020 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

 

 
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PART II - OTHER INFORMATION

 

ITEM 1. LEGAL PROCEEDINGS

 

Management is not aware of any legal proceedings involving us or our properties. As of the date of this Quarterly Report on Form 10-Q, no director, officer or affiliate is (i) a party adverse to us in any legal proceeding, or (ii) has an adverse interest to us in any legal proceedings.

 

ITEM 1A. RISK FACTORS

 

Not required 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.

 

ITEM 5. OTHER INFORMATION

 

None.

 

 
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ITEM 6. EXHIBITS

 

Exhibit No.

 

Description

 

31.1*

Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer

 

31.2*

 

Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer

 

32.1*

 

Section 1350 Certification of Chief Executive Officer

 

32.2*

 

Section 1350 Certification of Chief Financial Officer

 

101.INS*

 

XBRL INSTANCE DOCUMENT

 

101.SCH*

 

XBRL TAXONOMY EXTENSION SCHEMA

 

101.CAL*

 

XBRL TAXONOMY EXTENSION CALCULATION LINKBASE

 

101.DEF*

 

XBRL TAXONOMY EXTENSION DEFINITION LINKBASE

 

101.LAB*

 

XBRL TAXONOMY EXTENSION LABEL LINKBASE

 

101.PRE*

 

XBRL TAXONOMY EXTENSION PRESENTATION LINKBASE

_____________

* Filed herewith

 

 
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SIGNATURES

 

In accordance with 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.

 

 

UNION BRIDGE HOLDINGS LIMITED

     

 

Dated: May 4, 2020

By:

/s/ Joseph Ho

 

Name: Joseph Ho

 

Title: Chief Executive Officer Officer

     

 

Dated: May 4, 2020

By:

/s/ Kenny Chow

 

Name: Kenny Chow

 

Title: Chief Financial Officer