10-Q 1 fht_10q.htm FORM 10-Q fht_10q.htm

 

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 December 31, 2020

 

     TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

Commission file number: 333-230956

 

FHT FUTURE TECHNOLOGY LTD

(Formerly known as GHAR INC.)

(Exact name of registrant as specified in its charter)

 

 Nevada

 

35-2649453

(State or Other Jurisdiction of

Incorporation or Organization)

 

(I.R.S. Employer

Identification No.)

 

 

 

A1#303, Hang Kong Gudi Plaza,

Huli District, Xiamen City,

Fujian Province, China

 

89108

(Address of Principal Executive Offices)

 

(Zip Code)

 

Registrant’s telephone number, including area code: +86-18350283270

 

Indicate by check mark whether the registrant (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 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, a 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: As of July 21, 2021, the issuer had 324,500,000 shares of its common stock issued and outstanding.

 

 

 

 

Table of Contents

 

 

Page

 

 

 

 

 

 

PART I

 

 

 

 

 

 

 

 

Item 1.Consolidated Financial Statements

 

4

 

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

 

17

 

Item 3.Quantitative and Qualitative Disclosures About Market Risk

 

19

 

Item 4.Controls and Procedures

 

19

 

 

 

 

 

 

PART II

 

 

 

 

 

 

 

 

Item 1.Legal Proceedings

 

21

 

Item 1A.Risk Factors

 

21

 

Item 2.Unregistered Sales of Equity Securities and Use of Proceeds

 

21

 

Item 3.Defaults Upon Senior Securities

 

21

 

Item 4.Mining Safety Disclosures

 

21

 

Item 5.Other Information

 

21

 

Item 6.Exhibits

 

22

 

 

Signatures

 

23

 

 

 
2

 

 

 FORWARD LOOKING STATEMENTS

 

This quarterly report on Form 10-Q (“Report”), financial statements, and notes to financial statements contain forward-looking statements that discuss, among other things, future expectations and projections regarding future developments, operations, and financial conditions. Forward-looking statements may appear throughout this Report and other documents we file with the Securities and Exchange Commission (the “SEC”), including without limitation, the following section: Part I, Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this Report.

 

Forward-looking statements generally can be identified by words such as “anticipates,” “believes,” “estimates,” “expects,” “intends,” “plans,” “predicts,” “projects,” “will be,” “will continue,” “may,” “could,” “will likely result,” and similar expressions. These forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties, which could cause our actual results to differ materially from those reflected in the forward-looking statements. In addition, there is uncertainty about the spread of the Coronavirus Disease 2019 (“COVID-19”) and the impact it may have on the Company’s operations, the demand for the Company’s products or services, global supply chains, and economic activities in general. We undertake no obligation to revise or publicly release the results of any revision to these forward-looking statements, except as required by law. Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements.

 

 
3

Table of Contents

 

Part I - Financial Information

 

Item 1. Financial Statements

 

Contents

 

Consolidated Balance Sheets (Unaudited)

 

5

 

Consolidated Statements of Operations and Comprehensive Income (Loss) (Unaudited)

 

6

 

Consolidated Statements of Changes in Stockholders’ Equity (Deficit) (Unaudited)

 

7

 

Consolidated Statements of Cash Flows (Unaudited)

 

8

 

Notes to Unaudited Consolidated Financial Statements

 

9

 

 

 
4

Table of Contents

 

FHT Future Technology Ltd

 

(Formerly Known as Ghar Inc.)

 

Consolidated Balance Sheets

 

 

 

December 31,

2020

 

 

March 31,

2020

 

 

 

(Unaudited)

 

 

 

 

ASSETS

CURRENT ASSETS

 

 

 

 

 

 

Cash and cash equivalents

 

$10,662

 

 

$5,306

 

Account receivables

 

 

889,516

 

 

 

-

 

Due from related parties

 

 

130,634

 

 

 

-

 

Prepaid expenses

 

 

104,210

 

 

 

-

 

Prepaid expenses – related party

 

 

16,083

 

 

 

-

 

Inventories

 

 

1,079,862

 

 

 

-

 

Other receivables

 

 

6,864

 

 

 

-

 

Total current assets

 

 

2,237,831

 

 

 

5,306

 

 

 

 

 

 

 

 

 

 

NON-CURRENT ASSETS

 

 

 

 

 

 

 

 

Property and equipment, net

 

 

3,187

 

 

 

-

 

Total non-current assets

 

 

3,187

 

 

 

-

 

 

 

 

 

 

 

 

 

 

TOTAL ASSETS

 

$2,241,018

 

 

$5,306

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)

 

 

 

 

 

 

 

 

 

CURRENT LIABILITIES

 

 

 

 

 

 

 

 

Account payables

 

$1,630,815

 

 

$-

 

Accrued expenses

 

 

94,100

 

 

 

-

 

Income tax payable

 

 

24,564

 

 

 

-

 

Due to related parties

 

 

21,766

 

 

 

63,245

 

Deferred revenue

 

 

25,101

 

 

 

-

 

Total current liabilities

 

 

1,796,346

 

 

 

63,245

 

 

 

 

 

 

 

 

 

 

TOTAL LIABILITIES

 

 

1,796,346

 

 

 

63,245

 

 

 

 

 

 

 

 

 

 

STOCKHOLDERS’ EQUITY (DEFICIT)

 

 

 

 

 

 

 

 

Common stock: $0.001 par value, authorized: 375,000,000 shares. 324,500,000 and 31,000,000 shares issued and outstanding as of December 31, 2020 and March 31, 2020, respectively

 

 

324,500

 

 

 

31,000

 

Additional paid-in capital

 

 

89,445

 

 

 

28,500

 

Retained earnings (Accumulated deficit)

 

 

5,653

 

 

 

(117,439 )

Accumulated other comprehensive income

 

 

25,074

 

 

 

-

 

Total stockholders’ equity (deficit)

 

 

444,672

 

 

 

(57,939 )

 

 

 

 

 

 

 

 

 

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)

 

$2,241,018

 

 

$5,306

 

 

The accompanying notes are an integral part of these unaudited financial statements

 

 
5

Table of Contents

 

FHT Future Technology Ltd

 

(Formerly Known as Ghar Inc.)

 

Consolidated Statements of Operations and Comprehensive Income (Loss) (Unaudited)

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

December 31

 

 

December 31

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues

 

$1,570,549

 

 

$-

 

 

$1,570,549

 

 

$-

 

Cost of Revenues

 

 

1,207,073

 

 

 

-

 

 

 

1,207,073

 

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross Profit

 

 

363,476

 

 

 

-

 

 

 

363,476

 

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative expenses

 

 

180,009

 

 

 

48,625

 

 

 

216,047

 

 

 

83,706

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) from operations

 

 

183,467

 

 

 

(48,625)

 

 

147,429

 

 

 

(83,706)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) before tax

 

 

183,467

 

 

 

(48,625)

 

 

147,429

 

 

 

(83,706)

Income tax expenses

 

 

24,337

 

 

 

-

 

 

 

24,336

 

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income (Loss)

 

$159,130

 

 

$(48,625)

 

$123,093

 

 

$(83,706)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss)

 

 

159,130

 

 

 

(48,625)

 

 

123,093

 

 

 

(83,706)

Other comprehensive income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation adjustment

 

 

16,781

 

 

 

-

 

 

 

25,074

 

 

 

-

 

Total Comprehensive Income (Loss)

 

$175,911

 

 

$(48,625)

 

$148,167

 

 

$(83,706)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) per common stock, basic and diluted

 

$0.00

 

 

$(0.01)

 

$0.00

 

 

$(0.02)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted-average shares outstanding, basic and diluted

 

 

323,704,348

 

 

 

5,000,000

 

 

 

142,702,619

 

 

 

4,285,636

 

 

The accompanying notes are an integral part of these unaudited financial statements

 

 
6

Table of Contents

 

FHT Future Technology Ltd

 

(Formerly Known as Ghar Inc.)

 

Consolidated Statements of Changes in Stockholders’ Equity (Deficit)

(Unaudited)

 

 

 

Common Stock

 

 

Additional

 

 

 

 

Accumulated

Other

Comprehensive

 

 

Total

Stockholders’

 

 

 

Shares

 

 

Amount

 

 

Paid-in

Capital

 

 

Accumulated

Deficit

 

 

Income

(Loss)

 

 

Equity

(Deficit)

 

Balance - March 31, 2019

 

 

3,500,000

 

 

$3,500

 

 

$-

 

 

$(1,106)

 

$-

 

 

$2,394

 

Net loss

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(3,470)

 

 

-

 

 

 

(3,470)
Balance - June 30, 2019

 

 

3,500,000

 

 

$3,500

 

 

$-

 

 

$(4,576)

 

$-

 

 

$(1,076)

Issuance of shares

 

 

1,500,000

 

 

 

1,500

 

 

 

28,500

 

 

 

-

 

 

 

-

 

 

 

30,000

 

Net loss

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(31,611)

 

 

-

 

 

 

(31,611)
Balance - September 30, 2019

 

 

5,000,000

 

 

$5,000

 

 

$28,500

 

 

$(36,187)

 

$-

 

 

$(2,687)

Net loss

 

 

-

 

 

 

-

 

 

 

-

 

 

(48,625)

 

 

-

 

 

(48,625)
Balance – December 31, 2019

 

 

5,000,000

 

 

$5,000

 

 

$28,500

 

 

$(84,812)

 

$-

 

 

$(51,312)

 

 

 

Common Stock

 

 

Additional

 

 

 

 

 

 Accumulated

Other

comprehensive

 

 

Total

Stockholders’

 

 

 

Shares

 

 

Amount

 

 

Paid-in

Capital

 

 

Accumulated

Deficit

 

 

income/

(loss)

 

 

Equity

(Deficit)

 

Balance - March 31, 2020

 

 

31,000,000

 

 

$31,000

 

 

$28,500

 

 

$(117,439)

 

$-

 

 

$(57,939)

Related party payable forgiveness

 

 

-

 

 

 

-

 

 

 

60,945

 

 

 

-

 

 

 

-

 

 

 

60,945

 

Net loss

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(3,000)

 

 

-

 

 

 

(3,000)
Balance - June 30, 2020

 

 

31,000,000

 

 

$31,000

 

 

$89,445

 

 

$(120,439)

 

$-

 

 

$6

 

Issuance of shares

 

 

287,400,000

 

 

 

287,400

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

287,400

 

Net loss

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(33,038)

 

 

-

 

 

 

(33,038)

Foreign currency translation adjustment

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

8,293

 

 

 

8,293

 

Balance - September 30, 2020 (Restated) 

 

 

318,400,000

 

 

$318,400

 

 

$89,445

 

 

$(153,477)

 

$8,293

 

 

$262,661

 

Issuance of shares

 

 

6,100,000

 

 

 

6,100

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

6,100

 

Net income

 

 

-

 

 

 

-

 

 

 

-

 

 

 

159,130

 

 

 

-

 

 

 

159,130

 

Foreign currency translation adjustment

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

16,781

 

 

 

16,781

 

Balance – December 31, 2020

 

 

324,500,000

 

 

$324,500

 

 

$89,445

 

 

$5,653

 

 

$25,074

 

 

$444,672

 

 

The accompanying notes are an integral part of these unaudited financial statements

 

 
7

Table of Contents

 

FHT Future Technology Ltd

 

(Formerly Known as Ghar Inc.)

 

Consolidated Statements of Cash Flows

(Unaudited)

 

 

 

For the Nine Months Ended December 31, 2020

 

 

For the Nine Months Ended December 31, 2019

 

 

 

 

 

 

 

 

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

 

 

 

Net income (loss)

 

$123,093

 

 

$(83,706)

Adjustments to reconcile net income (loss) to net cash used in operating activities:

 

 

 

 

 

 

 

 

 Depreciation expense

 

 

220

 

 

 

-

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

Accounts receivables

 

 

(856,153)

 

 

-

 

Prepaid expenses

 

 

(100,302)

 

 

2,750

 

Prepaid expenses - related party

 

 

(15,480)

 

 

-

 

Due from related parties

 

 

(129,485)

 

 

-

 

Inventories

 

 

(1,039,361)

 

 

-

 

Other receivables

 

 

(831)

 

 

-

 

Account payables

 

 

1,569,650

 

 

 

-

 

Accrued expenses

 

 

93,383

 

 

 

-

 

Deferred revenue 

 

 

24,160

 

 

 

-

 

Income tax payable

 

 

24,336

 

 

 

-

 

Net cash used in operating activities

 

 

(306,770)

 

 

(80,956)

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

 

 

 

 

 

 

Purchase of property and equipment

 

 

(3,287)

 

 

-

 

Net cash used in investing activities:

 

 

(3,287)

 

 

-

 

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

 

 

 

 

 

 

Proceeds from sale of stock

 

 

287,500

 

 

 

30,000

 

Advance from related party

 

 

20,949

 

 

 

49,737

 

Repayment to related party

 

 

(2,300)

 

 

-

 

Net cash provided by financing activities

 

 

306,149

 

 

 

79,737

 

 

 

 

 

 

 

 

 

 

EFFECT OF EXCHANGE RATE CHANGE IN CASH AND CASH EQUIVALENTS

 

 

9,264

 

 

 

-

 

 

 

 

 

 

 

 

 

 

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

 

 

5,356

 

 

 

(1,219)

 

 

 

 

 

 

 

 

 

CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD

 

 

5,306

 

 

 

1,232

 

 

 

 

 

 

 

 

 

 

CASH AND CASH EQUIVALENTS - END OF PERIOD

 

$10,662

 

 

$13

 

 

 

 

 

 

 

 

 

 

NON-CASH INVESTING AND FINANCING TRANSACTION

 

 

 

 

 

 

 

 

Issuance of shares

 

$6,000

 

 

$-

 

Forgiveness of related party payable

 

$60,945

 

 

$-

 

 

 

 

 

 

 

 

 

 

SUPPLEMENTAL CASH FLOW INFORMATION:

 

 

 

 

 

 

 

 

Cash paid for interest

 

$-

 

 

$-

 

Cash paid for income taxes

 

$-

 

 

$-

 

 

The accompanying notes are an integral part of these unaudited financial statements

 

 
8

Table of Contents

 

FHT Future Technology Ltd

 

(Formerly Known as Ghar Inc.)

Notes to Consolidated Financial Statements

December 31, 2020

(Unaudited)

 

NOTE 1. BACKGROUND INFORMATION

 

Ghar Inc. (“GHAR”) was incorporated in the State of Nevada on December 11, 2018 and is located at 5348 Vegas Drive Las Vegas, NV, 89108.

 

On May 28, 2020, as a result of a private transaction, 29,500,000 shares of common stock of GHAR, were transferred from Hamza Abid to Custodian Ventures LLC. The consideration paid for the Shares, which represent approximately 95% of the issued and outstanding share capital of GHAR on a fully-diluted basis, was $45,000. In connection with the transaction, Hamza Abid released the Company from all debts owed and ceased to serve as GHAR’s President, Chief Executive Officer, Treasurer, Secretary and Director, and David Lazar consented to act as the new President, CEO, CFO, Treasurer, Secretary and sole director of the Board of Directors of GHAR effective June 1, 2020.

 

On June 30, 2020, as a result of a private transaction, 29,500,000 shares of common stock of GHAR were transferred from Custodian Ventures LLC to Wenjin Li. The consideration paid for the Shares, which represents approximately 95% of the issued and outstanding share capital of GHAR on a fully diluted basis, was $225,000. In connection with the transaction, Custodian Ventures LLC released GHAR from all debts owed and David Lazar ceased to serve as GHAR’s President, Chief Executive Officer, Treasurer, Secretary and Director. Wenjin Li consented to act as the new President, CEO, CFO, Treasurer, Secretary and sole director of the Board of Directors of GHAR. In addition, the Board of Directors and majority shareholder of GHAR approved a name change of GHAR from Ghar Inc. to FHT Future Technology Ltd (“FHTF”), the name change became effective in July 2020. 

 

Reorganization

 

On June 8, 2020, FHT Future Technology Pte Ltd (“FHT Singapore”) was incorporated by Wenjin Li in anticipation to conduct business in Singapore. On June 12, 2020, FHT Future (HK) Holdings Co., Ltd (“FHT HK”) was incorporated by a contracted independent party on behalf of FHTF solely for the purpose of being acquired by FHTF. Subsequently, FHT HK established new PRC subsidiary, Xiamen Zhenghe Xin Neng Digital Technology Co Ltd (“Zhenghe Xin Neng”) on July 6, 2020.

 

On July 23, 2020, FHTF acquired 100% ownership interest in FHT Singapore at the consideration of one Singapore Dollar from Wenjin Li. On September 28, 2020, FHTF completed its acquisition of FHT HK together with its wholly owned PRC subsidiary, at the consideration of one hundred Hong Kong dollar respectively from the contracted independent party (the “Reorganization”). 

 

Immediately before and after the Reorganization, the stockholders of FHTF effectively controlled FHTF, FHT Singapore and FHT HK, together with its wholly owned PRC subsidiary (collectively, the “Company”). Therefore, for accounting purpose, the Reorganization is accounted for as a transaction of entities under common control. Accordingly, the accompanying consolidated financial statements have been prepared as if the current corporate structure had been in existence throughout the periods presented. 

 

In November 2020, Xiamen Zhenghe Zhi Fang Digital Technology Co., Ltd. (“Zhenghe Zhi Fang”) and Xiamen Zhenghe Hui Chong Technology Co., Ltd. (“Zhenghe Hui Chong”) were incorporated in PRC as wholly owned subsidiaries of Zhenghe Xin Neng.

 

The Company has commenced its operation during the quarter ended December 31, 2020 to conduct business of selling cryptocurrencies mining machine and providing technical services through its subsidiaries.

 

The accompanying unaudited consolidated financial statements of the Company have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission, or the SEC, including the instructions to Form 10-Q and Regulation S-X. In the opinion of the management of the Company, all adjustments, which are of a normal recurring nature, necessary for a fair statement of the results for the nine months ended December 31, 2020, have been made. Results for the interim periods presented are not necessarily indicative of the results that might be expected for the entire fiscal year. Certain information and note disclosure normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States of America has been omitted from these statements pursuant to such accounting principles and, accordingly, they do not include all the information and notes necessary for comprehensive financial statements and should be read in conjunction with our consolidated financial statements for the year ended March 31, 2020, included in our Form 10-K.

 

 
9

Table of Contents

  

NOTE 2. GOING CONCERN

 

The Company has generated negative cash flow from operation for the nine months ended December 31, 2020 and did not have a significant working capital as of December 31, 2020. The Company has commenced operation during the three months ended December 31, 2020 and the management is currently not able to reasonably estimate whether the current scale of operation is able to provide the Company sufficient capital to pay off all expenses without further funding for the foreseeable future. These factors, among others, raises substantial doubt about the ability of the Company to continue as a going concern for a reasonable period of time. The Company intends on financing its future development activities and its working capital needs largely from the sale of public equity securities with additional funding from other traditional financing sources, such as advances from owners, until such time that funds provided by operations are sufficient to fund working capital requirements. The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the liquidation of liabilities in the ordinary course of business.

 

NOTE 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Basis of Presentation and Principals of Consolidation

 

The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). 

 

The consolidated financial statements include the accounts of the Company and its subsidiaries. Inter-company accounts and transactions have been eliminated.

 

Fair Value Measurements

 

The Company adopted the provisions of ASC Topic 820, “Fair Value Measurements and Disclosures”, which defines fair value as used in numerous accounting pronouncements, establishes a framework for measuring fair value and expands disclosure of fair value measurements.

 

The fair value measurements of financial assets and financial liabilities and for of nonfinancial items that are recognized or disclosed at fair value in the financial statements on a recurring basis. Additionally, the Company adopted guidance for fair value measurement related to nonfinancial items that are recognized and disclosed at fair value in the financial statements on a nonrecurring basis. The guidance establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value.

 

 
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ASC 820 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 describes three levels of inputs that may be used to measure fair value:

 

Level 1 - quoted prices in active markets for identical assets or liabilities 

Level 2 - quoted prices for similar assets and liabilities in active markets or inputs that are observable

Level 3 - inputs that are unobservable (for example cash flow modeling inputs based on assumptions)

 

Financial instruments included in current assets and current liabilities except for due to related parties are reported in the consolidated balance sheets at face value or cost, which approximate fair value because of the short period of time between the origination of such instruments and their expected realization and their current market rates of interest.

  

Use of Estimates

 

The preparation of financial statements in conformity with 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 amount of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates include going concern and write-down in value of inventory, and allowance for credit losses.

 

Reclassification

 

Certain prior period amounts have been reclassified to conform to the current period presentation. These reclassifications had no impact on net earnings and financial position.

 

Foreign Currency Translation

 

The accompanying consolidated financial statements are presented in United States dollar (“$”), which is the reporting currency of the Company. The functional currency of FHTF is United States dollar. The functional currency of FHT Singapore is Singapore dollar (“S$”), the functional currency of FHT HK is Hong Kong Dollar (“HK$) and the functional currency of the Company’s subsidiary located in the PRC is Renminbi (“RMB”). Given the exchange rate of the Hong Kong dollar to the U.S. dollar has remained close to the current pegged rate of HKD7.80=$1.00 since 1983, management does not expect significant foreign exchange gains or losses between the two currencies, therefore the Company chose to use simple translation method to translate all assets and liabilities, revenues and expenses and equity at the exchange rate of 7.80. For the subsidiaries whose functional currencies are RMB and S$, results of operations and cash flows are translated at average exchange rates during the period, assets and liabilities are translated at the unified exchange rate at the end of the period, and equity is translated at historical exchange rates. The resulting translation adjustments are included in determining other comprehensive income.

 

 
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Cash and Cash Equivalents

 

Cash and cash equivalents include cash in banks, money market funds, and certificates of term deposits with maturities of less than three months from inception, which are readily convertible to known amounts of cash and which, in the opinion of management, are subject to an insignificant risk of loss in value.

 

Inventories

 

Inventories, consisting mainly of mining machines, accounted for using the weighted average method, are valued at the lower of cost and market value.

 

As of December 31, 2020, substantially all of the Company’s inventories were purchased from one vendor.

 

Revenue recognition

 

The Company has adopted ASC 606, Revenue from Contracts with Customers (Topic 606) for all periods presented. Consistent with the criteria of Topic 606, the Company recognizes revenues to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to receive in exchange for those goods or services. Value-added tax that the Company collects concurrent with revenue-producing activities and is excluded from revenues. The Company determines revenues recognition through the following steps:

 

- Identification of the contract, or contracts, with a customer

- Identification of the performance obligations in the contract

- Determination of the transaction price

- Allocation of the transaction price to the performance obligations in the contract

- Recognition of revenue when (or as) we satisfy the performance obligation

 

Disaggregation of Revenues

 

 

 

For the nine months ended

December 31,

 

 

 

2020

 

 

 

 

 

Mining Machine Sales

 

$186,252

 

Technical Service

 

 

1,384,297

 

Total

 

$1,570,549

 

  

 
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Nature of operation

 

The Company generates revenues primarily from the sale of cryptocurrency mining machines and related directly to customers, such as a business or individual engaged in cryptocurrency mining activities. The Company recognizes revenues at a point in time when the control of the products has been transferred to customers. The transfer of control is considered complete when products have been picked up by or shipped to customers. For the sales arrangements, the Company generally requires payment upon issuance of invoices.

 

The Company also generate a small portion of revenue from services under separate contracts. Revenue from services include service fees for provide the application demand analysis and technical support for blockchain related courses to customer. Depending on the service content, revenue from service to the customer is recognized at a point in time when services are provided or in a period of time during the service period.

 

Contract asset and liability

 

Deferred revenue is recorded when consideration is received from a customer prior to the goods or service were delivered or provided. As of December 31, 2020, and March 31, 2020, the Company’s deferred revenue was $25,101 and nil respectively. During the nine months ended December 31, 2020, the Company recognized nil of deferred revenue in the opening balance.

 

The Company does not have any contract asset.

 

Segment Reporting

 

The Company uses the “management approach” in determining reportable operating segments. The management approach considers the internal organization and reporting used by the Company’s chief operating decision maker for making operating decisions and assessing performance as the source for determining the Company’s reportable segments. The Company’s chief operating decision maker has been identified as the chief executive officer of the Company who reviews financial information of separate operating segments based on GAAP. The chief operating decision maker now reviews results analyzed by customer. The Company has determined that it has only one operating segment. 

 

Income (Loss) per Share

 

The Company has adopted ASC 260, “Earnings Per Share,” (“EPS”) which requires presentation of basic and diluted EPS on the face of the income statements for all entities with complex capital structures, and requires a reconciliation of the numerator and denominator of the basic EPS computation to the numerator and denominator of the diluted EPS computation. In the accompanying financial statements, basic loss per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period.

 

The Company has no potentially dilutive securities, such as options or warrants, currently issued and outstanding.

 

Income Taxes

 

The Company accounts for income taxes using the asset and liability method in accordance with ASC 740, “Accounting for Income Taxes”. The asset and liability method provides that deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities and for operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using the currently enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company records a valuation allowance to reduce deferred tax assets to the amount that is believed more likely than not to be realized. As of December 31, 2020 the Company did not have any amounts recorded pertaining to uncertain tax positions.

 

 
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NOTE 4. INVENTORIES

 

As of December 31, 2020 and March 31, 2020, inventories consist of the following: 

 

 

 

December 31,

2020

 

 

March 31,

2020

 

 

 

 

 

 

 

 

Mining machines

 

$1,079,862

 

 

$-

 

Total

 

$1,079,862

 

 

$-

 

 

NOTE 5. SHAREHOLDERS’ EQUITY (DEFICIT) 

 

Authorized Stock

 

In June 2020, the Company filed a Certificate of Amendment with the Nevada Secretary of State to increase its authorized shares of common stock to 375,000,000 shares. The increase in authorized shares was effective with the Nevada Secretary of State in June 2020.

 

Common Share Issuances

 

Since inception December 11, 2018, the Company has issued a total of 31,000,000 common shares for total proceeds of $59,500. Shares issued and outstanding as of March 31, 2020 are 31,000,000.

 

In September 2020, the Company entered into share purchase agreements with investors to issue a total of 293,500,000 shares of common stock for an aggregate proceed of $293,500. As of September 30, 2020, the Company has received the proceeds of $287,400 to purchase 287,400,000 shares of common stock and included the corresponding shares in its consolidated balance sheet as if these shares were issued and outstanding on payment date as the Company has received the proceeds and the subscribers already obtained title to those shares.

 

The Company registered the 287,400,000 shares and issued the remaining 6,100,000 shares in October 2020. During the quarter ended December 31, 2020, the Company received proceeds of $100 and included the remaining uncollected balance of $6,000 in Other receivable.

 

 
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NOTE 6 - RELATED PARTY TRANSACTIONS

 

As of December 31, 2020, and March 31, 2020, the Company’s related party relationships and balances are as follows:

  

Name of the related parties

 

Nature of relationship

Wenjin Li

 

CEO and CFO of the Company

Hamza Abid

 

Former president of the Company

Ants Investment Management Pte Ltd.

 

Controlled by the CEO of the Company

Greating Future Info & Tech Co. Ltd.

 

Significant owner of the Company

X Capital Investment Pte Ltd.

 

Significant owner of the Company

Xiamen Tixian Network Technology Co., Ltd.

 

Controlled by the legal representative of the Company

Xiamen Chuangjian Future Information Technology Co., Ltd.

 

Controlled by the management of the Company

Hongliang Tong

 

The legal representative of the Company

Feiqubuke(Xiamen) Information Technology Co., Ltd.

 

Controlled by the CEO of the Company

Xiamen Youfang Network Technology Co., Ltd.

 

Controlled by the director of the Company

 

Due from related parties:

 

 

 

As of
December 31,
2020

 

 

As of
March 31,
2020

 

Xiamen Chuangjian Future Information Technology Co., Ltd.

 

$7,659

 

 

$-

 

Xiamen Tixian Network Technology Co., Ltd.

 

 

22,975

 

 

 

-

 

Wenjin Li

 

 

100,000

 

 

 

-

 

Total

 

$130,634

 

 

$-

 

 

During the nine months ended December 31, 2020, the Company prepaid Xiamen Chuangjian Future Information Technology Co., Ltd. and Xiamen Tixian Network Technology Co., Ltd. in the amount of $7,659 and $22,975 for an unperformed promotion service contract respectively. The ending balance was recorded in due from related parties as of December 31, 2020, and was recovered in July 2021.

 

During the nine months ended December 31, 2020, the Company paid $100,000 to Wenjin Li as a designated business advance regarding a technical service contract negotiated between the Company and Xiamen Youfang Network Technology Co., Ltd. The amount was paid to Xiamen Youfang Network Technology Co., Ltd. in January 2021.

   

 
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Prepaid expense – related party

 

As of
December 31,
2020

 

As of
March 31,
2020

 

Xiamen Tixian Network Technology Co., Ltd.

 

$16,083

 

 

$-

 

 

The prepaid expense associated with Xiamen Tixian Network Technology Co., Ltd. pertains to promotion service subscribed by the Company. During the nine months ended December 31, 2020, promotion expense in the amount of $11,057 was recognized due to services performed by Xiamen Tixian Network Technology Co., Ltd. The ending balance of this related party prepayment was $16,083 as of December 31, 2020.

 

Due to related parties:

 

 

 

As of

December 31,

 

 

As of

March 31,

 

 

 

2020

 

 

2020

 

 

 

 

 

 

 

 

Wenjin Li

 

$21,766

 

 

$-

 

Hamza Abid

 

 

-

 

 

 

63,245

 

Total

 

$21,766

 

 

$63,245

 

 

Balance due to related parties primarily represents amount advanced from related parties. These advances are unsecured, interest-free and due on demand. During the nine months ended December 31, 2020, The Company repaid $2,300 to Hamza Abid, and Hamza Abid forgave the remaining balance of $60,945 as a result of change in control. See Note 1. The amount forgiven was recorded as an equity transaction.

 

During the nine months ended December 31, 2020, the Company rented office space from Wenjin, Li for free.

  

During the period ended December 31, 2020, the Company signed share purchase agreements with companies to issue shares for cash. The Company received share purchase proceeds as of December 31, 2020 except for a $6,000 other receivable and the shares were issued subsequently. The title of such shares is granted to the parties upon receipt of proceeds. See Note 5.

 

The following table presents the information regarding the information of share subscription during the period ended December 31, 2020:

 

 

 

Number

of shares

 

 

Amount

 

Ants Investment Management Pte Ltd.

 

 

130,489,600

 

 

$130,490

 

Greating Future Info & Tech Co. Ltd.

 

 

75,000,000

 

 

$75,000

 

X Capital Investment Pte Ltd.

 

 

42,000,000

 

 

$42,000

 

 

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

 

The following information should be read in conjunction with our financial statements and related notes thereto included in Part I, Item 1, above. We also urge you to review and consider our disclosures describing various risks that may affect our business, which are set forth under the heading “Risk Factors,” below.

 

Forward Looking Statements

 

Statements made in this Form 10-Q that are not historical or current facts are “forward-looking statements” made pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933 (the “Act”) and Section 21E of the Securities Exchange Act of 1934. These statements often can be identified by the use of terms such as “may,” “will,” “expect,” “believe,” “anticipate,” “estimate,” “approximate” or “continue,” or the negative thereof. We intend that such forward-looking statements be subject to the safe harbors for such statements. We wish to caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. Any forward-looking statements represent management’s best judgment as to what may occur in the future. However, forward-looking statements are subject to risks, uncertainties and important factors beyond our control that could cause actual results and events to differ materially from historical results of operations and events and those presently anticipated or projected. We disclaim any obligation subsequently to revise any forward-looking statements to reflect events or circumstances after the date of such statement or to reflect the occurrence of anticipated or unanticipated events. 

 

Overview

 

Ghar Inc. (“GHAR”) was incorporated in the State of Nevada on December 11, 2018 and is located at 5348 Vegas Drive Las Vegas, NV, 89108.

 

On May 28, 2020, as a result of a private transaction, 29,500,000 shares of common stock of GHAR, were transferred from Hamza Abid to Custodian Ventures LLC. The consideration paid for the Shares, which represent approximately 95% of the issued and outstanding share capital of GHAR on a fully-diluted basis, was $45,000. In connection with the transaction, Hamza Abid released the Company from all debts owed and ceased to serve as GHAR’s President, Chief Executive Officer, Treasurer, Secretary and Director, and David Lazar consented to act as the new President, CEO, CFO, Treasurer, Secretary and sole director of the Board of Directors of GHAR effective June 1, 2020.

 

On June 30, 2020, as a result of a private transaction, 29,500,000 shares of common stock of GHAR were transferred from Custodian Ventures LLC to Wenjin Li. The consideration paid for the Shares, which represents approximately 95% of the issued and outstanding share capital of GHAR on a fully diluted basis, was $225,000. In connection with the transaction, Custodian Ventures LLC released GHAR from all debts owed and David Lazar ceased to serve as GHAR’s President, Chief Executive Officer, Treasurer, Secretary and Director. Wenjin Li consented to act as the new President, CEO, CFO, Treasurer, Secretary and sole director of the Board of Directors of GHAR. In addition, the Board of Directors and majority shareholder of GHAR approved a name change of GHAR from Ghar Inc. to FHT Future Technology Ltd (“FHTF”), the name change became effective in July 2020. 

 

Reorganization

 

On June 8, 2020, FHT Future Technology Pte Ltd (“FHT Singapore”) was incorporated by Mr. Wenjin Li in anticipation to conduct business in Singapore. On June 12, 2020, FHT Future (HK) Holdings Co., Ltd (“FHT HK”) was incorporated by a contracted independent party on behalf of FHTF solely for the purpose of being acquired by FHTF. Subsequently, FHT HK established new PRC subsidiary, Xiamen Zhenghe Xin Neng Digital Technology Co Ltd (“Zhenghe Xin Neng”) on July 6, 2020.

 

On July 23, 2020, FHTF acquired 100% ownership interest in FHT Singapore at the consideration of one Singapore Dollar from Wenjin Li. On September 28, 2020, FHTF completed its acquisition of FHT HK together with its wholly owned PRC subsidiary, at the consideration of one hundred Hong Kong dollar respectively from the contracted independent party (the “Reorganization”). 

 

 
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Immediately before and after the Reorganization, the stockholders of FHTF effectively controlled FHTF, FHT Singapore and FHT HK, together with its wholly owned PRC subsidiary (collectively, the “Company”). Therefore, for accounting purpose, the Reorganization is accounted for as a transaction of entities under common control. Accordingly, the accompanying consolidated financial statements have been prepared as if the current corporate structure had been in existence throughout the periods presented. 

 

In November 2020, Xiamen Zhenghe Zhi Fang Digital Technology Co., Ltd.(“Zhenghe Zhi Fang”) and Xiamen Zhenghe Hui Chong Technology Co., Ltd.(“Zhenghe Hui Chong”) were incorporated in the PRC as wholly owned subsidiary of Zhenghe Xin Neng.

 

The Company has commenced its operation during the quarter ended December 31, 2020 to conduct business of selling cryptocurrencies mining machine and providing technical services through its subsidiaries.

  

Results of Operations for the Three Months Ended December 31, 2020

 

We started operations in the quarter ended December 31, 2020, and our revenues during the three months ended December 31, 2020, were $1,570,549, and the cost of revenues was $1,207,073, as compared to nil and nil for the same period in 2019, respectively.

 

We recorded selling, general and administrative expenses of $180,009 for the three months ended December 31, 2020 as compared to $48,625 for the three months ended December 31, 2019. The increase is mainly associated with the selling operations commenced during the three months ended December 31, 2020.

 

We recorded net income of $159,130 for the three months ended December 31, 2020 as opposed to net loss of $48,625 for the three months ended December 31, 2019. The increase of income is mainly due to that we commenced operations and incurred revenues during the period.

 

Results of Operations for the Nine Months Ended December 31, 2020

 

We started operations in quarter ended December 31, 2020, and our revenues during the nine months ended December 31, 2020, were $1,570,549, and the cost of revenues was $1,207,703, as compared to nil and nil for the same period in 2019, respectively.

 

We recorded selling, general and administrative expenses of $216,047 for the nine months ended December 31, 2020 as compared to $83,706 for the nine months ended December 31, 2019. The increase is mainly associated with the selling operations commenced during the three months ended December 31, 2020.

 

We recorded net income of $123,093 for the nine months ended December 31, 2020 as opposed to net loss of $83,706 for the nine months ended December 31, 2019. The increase of income is mainly due to that we commenced operations and incurred revenues during the period.

  

 
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Liquidity and Capital Resources

 

As of December 31, 2020, we had assets of $2,241,018, which consisted of current assets of $10,662 in cash, $889,516 in account receivables, $130,634 due from related parties, $104,210 in prepaid expenses, $16,083 in prepaid expenses – related party, $6,864 in other receivables, and $1,079,862 as inventory, and noncurrent asset of $3,187 as property and equipment. We had liabilities of $1,796,346, which consisted of current liabilities of $1,630,815 in accounts payables, $94,100 in accrued expenses, $24,564 in income tax payables, $21,766 due to related parties, and $25,101 as deferred revenue. We had retained earnings of $5,653.

  

As of March 31, 2020, we had assets of $5,306, which is cash and cash equivalents, we had liabilities of $63,245, which is due to related party payables. We also had an accumulated deficit of $117,439.

 

Our primary source of liquidity historically has been equity contributions from our shareholders and borrowings, which have historically been sufficient to meet our working capital and capital expenditure requirements.

 

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 to smaller reporting companies.

 

Item 4. Controls and Procedures

 

Evaluation of Disclosure Controls and Procedures

 

We maintain disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) that are designed to be effective in providing reasonable assurance that information required to be disclosed in our reports under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission (the “SEC”), and that such information is accumulated and communicated to the Management to allow timely decisions regarding required disclosure. Our Chief Executive Officer and Chief Financial Officer evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report. Based on that evaluation and the material weaknesses disclosed in the Form 10-K report filed on April 29, 2020 and Form 10-Q/A report filed on June 11, 2021, they concluded that our disclosure controls and procedures were not effective as of December 31, 2020.

  

The Company plans to address these material weaknesses as resources become available by hiring additional professional staff, such as a Chief Financial Officer, as funding becomes available, outsourcing certain aspects of the recording and reporting functions, and separating responsibilities. 

 

 
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Inherent limitations on effectiveness of controls

 

Internal control over financial reporting has inherent limitations which include but is not limited to the use of independent professionals for advice and guidance, interpretation of existing and/or changing rules and principles, segregation of management duties, scale of organization, and personnel factors. Internal control over financial reporting is a process which involves human diligence and compliance and is subject to lapses in judgment and breakdowns resulting from human failures. Internal control over financial reporting also can be circumvented by collusion or improper management override. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements on a timely basis, however these inherent limitations are known features of the financial reporting process and it is possible to design into the process safeguards to reduce, though not eliminate, this risk. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statements preparation and presentation. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

 

Changes in Internal Control over Financial Reporting

 

There have been no changes in our internal controls over financial reporting that have occurred for the three months ending December 31, 2020, that have materially or are reasonably likely to materially affect, our internal controls over financial reporting. 

 

 
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Part II - Other Information

 

Item 1. Legal Proceedings

 

There are not presently any material pending legal proceedings to which the Company is a party or as to which any of our property is subject, and no such proceedings are known to the Company to be threatened or contemplated against it.

 

Item 1A. Risk Factors

 

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

 

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

 

None.

 

Item 3. Defaults upon Senior Securities

 

None.

 

Item 4. Mining Safety Disclosures

 

Not applicable.

 

Item 5. Other Information

 

None.

 

 
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Item 6. Exhibits

 

Exhibits

 

 

No.

 

Description

31.1

 

Certification of Chief Executive Officer and Chief Financial Officer pursuant to Securities Exchange Act of 1934 Rule 13a-14 (a) or 15d-14 (a).

32.1

 

Certification pursuant to Securities Exchange Act of 1934 Rule 13a-14 (b) or 15d-14(b) and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes - Oxley Act of 2002.

101.INS

 

Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document).

101.SCH

 

Inline XBRL Taxonomy Extension Schema Document.

101.CAL

 

Inline XBRL Taxonomy Extension Calculation Linkbase Document.

101.DEF

 

Inline XBRL Taxonomy Extension Definition Linkbase Document.

101.LAB

 

Inline XBRL Taxonomy Extension Labels Linkbase Document.

101.PRE

 

Inline XBRL Taxonomy Extension Presentation Linkbase Document.

104

 

Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101).

 

 
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SIGNATURES

 

In accordance with the requirements of the Exchange Act, the Registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

 

FHT Future Technology Ltd

 

 

 

 

Date: July 21, 2021

By:

/s/ Wenjin Li

 

 

Wenjin

Li

 

 

 

Chief Executive Officer,

 

 

 

Chief Financial Officer

 

 

 
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