Company Quick10K Filing
Asia Pacific Boiler
Price1.75 EPS-0
Shares46 P/E-130
MCap81 P/FCF-3,363
Net Debt-0 EBIT-1
TEV81 TEV/EBIT-130
TTM 2019-03-31, in MM, except price, ratios
10-Q 2019-03-31 Filed 2019-05-15
10-K 2018-12-31 Filed 2019-04-29
10-Q 2018-09-30 Filed 2018-11-08
10-Q 2018-06-30 Filed 2018-10-09
10-Q 2018-03-31 Filed 2018-10-09
10-K 2017-12-31 Filed 2018-10-05
10-Q 2017-09-30 Filed 2018-09-28
10-Q 2017-06-30 Filed 2018-09-28
10-Q 2017-03-31 Filed 2018-09-28
10-K 2016-12-31 Filed 2018-08-29
10-Q 2016-09-30 Filed 2018-08-27
10-Q 2016-06-30 Filed 2018-08-27
10-Q 2016-03-31 Filed 2018-08-27
10-K 2015-12-31 Filed 2018-08-09
10-Q 2015-09-30 Filed 2015-11-23
10-Q 2015-06-30 Filed 2015-08-14
10-Q 2015-03-31 Filed 2015-05-15
10-K 2014-12-31 Filed 2015-04-15
10-Q 2014-09-30 Filed 2014-11-19
10-K 2014-06-30 Filed 2014-09-29
10-Q 2014-03-31 Filed 2014-05-20
10-Q 2013-12-31 Filed 2014-02-19
10-Q 2013-09-30 Filed 2013-11-19
10-K 2013-06-30 Filed 2013-10-02
10-Q 2013-03-31 Filed 2013-05-15
10-Q 2012-12-31 Filed 2013-02-19
10-Q 2012-09-30 Filed 2012-11-01
10-K 2012-06-30 Filed 2012-09-12
10-Q 2012-03-31 Filed 2012-05-03
10-Q 2011-12-31 Filed 2012-03-26
8-K 2019-06-11
8-K 2019-03-09
8-K 2019-02-01
8-K 2018-07-12
8-K 2018-05-21
8-K 2018-04-16

PADR 10Q Quarterly Report

Part I. Financial Information
Item 1. Financial Statements (Unaudited)
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
Item 4. Controls and Procedures.
Part II - Other Information
Item 1. Legal Proceedings.
Item 1A. Risk Factors.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
Item 3. Defaults Upon Senior Securities.
Item 4. Mine Safety Disclosures.
Item 5. Other Information.
Item 6. Exhibits.
EX-31.1 f10q0319ex31-1_wunongasia.htm
EX-31.2 f10q0319ex31-2_wunongasia.htm
EX-32.1 f10q0319ex32-1_wunongasia.htm
EX-32.2 f10q0319ex32-2_wunongasia.htm

Asia Pacific Boiler Earnings 2019-03-31

Balance SheetIncome StatementCash Flow
3.62.41.20.0-1.2-2.42012201420172020
Assets, Equity
0.0-0.1-0.2-0.4-0.5-0.62013201520172020
Rev, G Profit, Net Income
0.40.20.1-0.1-0.2-0.42012201420172020
Ops, Inv, Fin

10-Q 1 f10q0319_wunongasia.htm QUARTERLY REPORT

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

(Mark One)

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

 

For the quarterly period ended March 31, 2019

 

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

 

For the transition period from ______________ to _____________

 

Commission file number:   333-176312

 

WUNONG ASIA PACIFIC COMPANY LIMITED

(Exact name of registrant as specified in its charter)

 

Nevada    
(State or other jurisdiction of
incorporation or organization)
  (I.R.S. Employer
Identification No.)
     

3 KeZhen Industrial Street,

Wuchun District, Hohhot,

People Republic of China

  N/A
(Address of principal executive offices)   (Zip Code)

 

+86-755-85250400

(Registrant’s telephone number, including area code)

 

 

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

 

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

 

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

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or 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 ☐

 

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY

PROCEEDINGS DURING THE PRECEDING FIVE YEARS

 

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13, or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes ☐ No ☐

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class   Trading Symbol(s)   Name of each exchange on which registered
         

 

APPLICABLE ONLY TO CORPORATE ISSUERS

 

Indicate the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date:

 

As of  May 15, 2019, there were 46,500,000 shares of $0.00001 par value common stock issued and outstanding.

 

 

 

 

 

 

FORM 10-Q

 

WUNONG ASIA PACIFIC COMPANY LIMITED

INDEX

  

 

    Page 
     
PART I. Financial Information  
     
  Item 1. Financial Statements (Unaudited) 1
     
  Condensed Consolidated Balance Sheets as of March 31, 2019 and December 31, 2018 1
     
  Condensed Consolidated Statements of Operations for the Three Months ended March 31, 2019 and 2018 2
     
  Condensed Consolidated Statements of Cash Flows for the Three Months ended March 31, 2019 and 2018 3
     
  Condensed Consolidated Statements of Shareholders’ Equity for the Three Months ended March 31, 2019 and 2018 4
     
  Notes to Condensed Consolidated Financial Statements 5 – 17
     
  Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations. 18
     
  Item 3. Quantitative and Qualitative Disclosures About Market Risk. 20
     
  Item 4. Controls and Procedures. 20
     
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. 22

  

i

 

 

PART I. FINANCIAL INFORMATION

  

Item 1. Financial Statements (Unaudited)

 

WUNONG ASIA PACIFIC COMPANY LIMITED

CONSOLIDATED BALANCE SHEETS

AS OF MARCH 31, 2019 AND DECEMBER 31, 2018

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

 

   March 31,   December 31, 
   2019   2018 
   (UNAUDITED)   (AUDITED) 
ASSETS        
Current assets:        
Prepaid Expense  $3,917   $9,167 
           
Total Current Assets  3,917   9,167 
           
TOTAL ASSETS  3,917   9,167 
           
LIABILITIES AND STOCKHOLDERS’ DEFICIT          
Current liabilities:          
Accrued liabilities and other payable   67,843    65,293 
Amount due to related parties   1,443,892    1,419,692 
Amount due to director or officer   88,526    88,526 
           
Total liabilities   1,600,261    1,573,511 
           
Commitments and contingencies          
           
Stockholder’s deficit          
Preferred stock, 100,000,000 shares authorized, $0.00001 per value; none of shares issued and outstanding   -    - 
Common stock, $0.00001 par value; 400,000,000 shares authorized; 39,300,000 shares issued and outstanding as of December 31, 2018 and 46,500,000 shares issued and outstanding as on March 31, 2019   465    393 
Common Stock to be issued   1,494,500    1,494,500 
Additional paid-in capital   2,782,898    2,282,970 
Accumulated deficit   (5,874,207)   (5,342,207)
           
Total stockholder’s deficit   (1,596,344)   (1,596,344)
           
Total          
           
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT  $3,917   $9,167 

 

See accompanying notes to consolidated financial statements.

 

1

 

 

WUNONG ASIA PACIFIC COMPANY LIMITED

CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE THREE MONTHS ENDED MARCH 31, 2019 AND 2018

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

 

  

Three months ended

March 31,

 
   2019   2018 
   (UNAUDITED)   (UNAUDITED) 
         
REVENUE  $-   $- 
COST OF REVENUES   -    - 
GROSS PROFIT   -    - 
           
OPERATING EXPENSES:          
Management fees   -    10,485 
Consulting fees   500,000    - 
Legal and accounting   25,500    2,000 
General and administrative   6,500   - 
Total operating expenses  532,000    12,485 
           
LOSS FROM OPERATIONS   (532,000)   (12,485)
           
Income tax expenses   -    - 
NET LOSS  $(532,000)  $(12,485)
           
Net loss per share:          
– Basic and diluted  $(0.00)  $(0.00)
           
Weighted average common shares outstanding:          
– Basic and diluted   41,140,000    39,300,000 

 

See accompanying notes to consolidated financial statements.

 

2

 

 

WUNONG ASIA PACIFIC COMPANY LIMITED

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE THREE MONTHS ENDED MARCH 31, 2019 AND 2018

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

 

   Three months ended 
   March 31, 
   2019   2018 
   (UNAUDITED)   (UNAUDITED) 
         
Cash flows from operating activities:        
Net loss  $(532,000)  $(12,485)
Adjustments to reconcile net income (loss) to net cash from operating activities:          
Consulting fees paid in stock   500,000      
Change in operating assets and liabilities:          
Prepaid expenses   5,250      
Accounts payable and accrued expenses   2,550    10,485 
Net cash used in operating activities   (24,200)   (2,000
       
Cash flows from financing activities:          
Proceeds from advances from related parties  $24,200    2,000 
Net cash from financing activities  $24,200   $2,000 
           
NET CHANGE IN CASH AND CASH EQUIVALENTS   -    - 
           
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR   -    - 
           
CASH AND CASH EQUIVALENTS, END OF YEAR   $-   $ - 
           
Supplementary cash flow information:          
Income taxes paid by cash  $    
Interest paid by cash       

 

See accompanying notes to consolidated financial statements.

 

3

 

 

WUNONG ASIA PACIFIC COMPANY LIMITED

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

FOR THE THREE MONTHS ENDED MARCH 31, 2019 AND 2018

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

 

           Common   Additional       Total 
   Common Stock   stock to be   Paid-in   Accumulated   Stockholders’ 
   Shares   Amount   issued   Capital   Deficit   Equity 
                         
Balance December 31, 2018 (Audited)   39,300,000   $393   $1,494,500   $2,282,970   $(5,342,207)  $(1,564,344)
Share issuance   7,200,000    72    -    499,928         500,000 
Net loss                       (532,000)   (532,000)
Balance March 31, 2019 (Unaudited)   46,500,000   $465   $1,494,500   $2,782,898   $(5,874,207)  $(1,596,344)

 

See accompanying notes to consolidated financial statements.

 

4

 

 

WUNONG ASIA PACIFIC COMPANY LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTHS ENDED MARCH 31, 2019 AND 2018

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

 

1.ORGANIZATION AND BUSINESS BACKGROUND

 

Wunong Asia Pacific Company Limited (fka Panama Dreaming Inc.) (“Asia Pacific” or the “Company” or “we” or “us”), have been prepared in accordance with accounting principles generally accepted in the United States of America. Asia Pacific was incorporated in Nevada on June 23, 2011 for the purpose of offering real estate consulting services to persons located in North America who are interested in investing in real estate located in Panama. 

 

On November 5, 2012, the Company filed Articles of Merger with the Nevada Secretary of State to change its name from “Panama Dreaming Inc.” to “Asia Pacific Boiler Corporation”, to be effected by way of a merger with its wholly-owned subsidiary Asia Pacific Boiler Corporation, which was created solely for the name change.

 

Also on November 5, 2012, the Company filed a Certificate of Change with the Nevada Secretary of State to give effect to a forward split of its authorized, issued and outstanding shares of common stock on a 4 new for 1 old basis and, consequently, the Company’s authorized common stock increased from 100,000,000 to 400,000,000 shares, and the Company’s issued and outstanding common shares increased from 7,950,000 to 31,800,000, all with a par value of $0.00001. The Company’s preferred stock remained unchanged with 100,000,000 preferred shares authorized, par value $0.00001, and no preferred shares issued or outstanding.

 

The forward split and name change became effective with the Over-the-Counter Bulletin Board at the opening of trading on November 9, 2012.

 

On November 6, 2014, the Company changed the fiscal year end to December 31 from June 30. These financial statements and this Form 10-K for the period ended December 31, 2017.

 

Merger with Million Place Investments Ltd.

 

On August 5, 2014, we entered into and closed a share exchange agreement with Million Place Investments Ltd. (“Million Place”) and the shareholders of Million Place.  Pursuant to the terms of the share exchange agreement, we agreed to acquire all 10,000 of the issued and outstanding shares of Million Place’s common stock in exchange for the issuance by our company of 7,500,000 shares of our common stock to the shareholders of Million Place. As a result of these transactions, Million Place has become our wholly owned subsidiary. We would have 39,300,000 issued and outstanding common shares upon issuance of the 7,500,000 shares of common stock. On November 19, 2015, we authorized and issued the 7,500,000 shares of common stock.

 

Business of Million Place Investments Ltd.

 

Million Place was incorporated on April 30, 2012 under the laws of the British Virgin Island (BVI) to engage in any lawful corporate undertaking, including but not limited to mergers and acquisitions. 

 

Pursuant to a Share Transfer Agreement dated December 3, 2012, Million Place purchased from John Gong, 14.7 million shares at Renminbi (RMB) 1.00 per ordinary share (approximately $2,227,273 in the aggregate) in the share capital of Inner Mongolia Yulong Pump Production Company Limited (Yulong Pump) thereby acquiring an equity interest of 49% in Yulong Pump.  Yulong Pump is a China foreign joint venture corporation engaged in the sale and manufacture of industrial equipment, and in the acquisition, development and exploitation of residential, commercial, and industrial real estate assets.  The business of Yulong Pump is further described below.  In acquiring a 49% interest in Yulong Pump, Million Place became the deemed cooperative foreign joint venture partner of Yulong Pump. 

 

5

 

 

WUNONG ASIA PACIFIC COMPANY LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTHS ENDED MARCH 31, 2019 AND 2018

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

 

Pursuant to PRC law, the partners in a cooperative foreign joint venture are permitted to share profits on an agreed basis and not necessarily in proportion to capital contribution.  The joint venture is not required to be a distinct legal entity from its partners and management and financial control of the foreign joint venture may be determined at the discretion of the partners by mutual agreement provided that, upon termination of the joint venture, all fixed assets will become the property of the Chinese participant in the joint venture. Pursuant to the December 3, 2012 Share Transfer Agreement, Million Place was entitled to appoint the board of directors of Yulong Pump. Further, absent an agreement between Million Place and Yulong Pump, the articles of association of Yulong Pump provide for distribution of dividends amongst its shareholder in proportion to the number of shares held by them.  

 

On April 25, 2015, Million Place entered into a Share Sale &Purchase Agreement with Xiushan Qin , our former President, former Chief Executive Officer and former Director, whereby Mr. Qin, who is the beneficial owner of a 51% interest in Yulong Pump, granted to Million Place the option to purchase an additional 2% equity interest in Yulong Pump (being 600,000 shares) for the aggregate purchase price of RMB 1.00 per share or approximately $96,278 in the aggregate.  The option is perpetual and without provision for termination.  With its acquisition of a 49% equity interest together with an option to purchase an aggregate 51% equity interest, Million Place is seeking to establish a majority equity stake in Yulong Pump. 

 

On May 22, 2015, Million Place entered into a Joint Venture Contract with Yulong Pump pursuant to which the companies intend to jointly engage in the manufacture of industrial boilers, the provision of consultancy services for the design of boiler systems, the manufacture of industrial water pumps and accessories, and the acquisition and development of real estate.  Pursuant to the Joint Venture Contract, Million Place will be solely responsible all operations and management of the joint venture and shall have exclusive authority to enter into agreements on behalf of the joint venture.  Million Place will in turn receive compensation for services it provides to the joint venture and shall be entitled to a 49% share of profit generated by the joint venture.  Both Million Place and Yulong Pump shall be entitled to engage in business that is competitive with the joint venture.  Pursuant to the Joint Venture Contract, Yulong Pump has allocated its 143,106 square foot commercial property located in Wulateqianqi, Mongolia to the joint venture operation. That property is currently under construction and is further described  below.  Additional assets or operations may be allocated to the joint venture on an ongoing basis. As of today, the joint venture contract has not been completed.

 

Business of Inner Mongolia Yulong Pump Production Company Limited

 

Inner Mongolia Yulong Pump Production Company Limited (“Yulong Pump”) was incorporated on October 6, 1998 under the laws of the Peoples’ Republic of China to engage in any lawful corporate undertaking, including, but not limited to, selected mergers and acquisitions.  

  

6

 

 

WUNONG ASIA PACIFIC COMPANY LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTHS ENDED MARCH 31, 2019 AND 2018

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

 

In 1998, Yulong Pump paid a total of RMB 799,000 ($131,985) to acquire land use rights in Wuchuan, Inner Mongolia for the purposes of establishing a manufacturing facility where. From 1998 until 2008, Yulong Pump was engaged in the manufacture of industrial water pumps for a variety of applications in Wuchuan, Inner Mongolia.  In 2008, Yulong Pump ceased its water pump manufacturing activities due to a decrease in demand for its products and increasing obsolescence of its manufacturing infrastructure.  The land use rights for the Wuchuan property expire in 2046 and are eligible for renewal subject to additional costs.  The Wuchuan property, is located in the city centre of Wuchuan, a suburb of Hohhot. Yulong pump intends to explore the potential for commercial development of these lands.  The land use right has not been transferred to Yulong Pump as of December 31, 2017. Yulong Pump has written off the net amount of land use right as of December 31, 2017.  

 

Since the termination of its water pump manufacturing operations, Yulong Pump has engaged in the identification and acquisition of other industrial manufacturing assets, and in the acquisition, development and exploitation of residential, commercial, and industrial real estate assets.

 

In 2008, Yulong Pump transformed itself from a local resident China company to a foreign joint venture company. As a result, the Company has become an entity with the status of a foreign joint venture company with registered capital of RMB  ¥30 million (approximately USD$4,839,181), which consists of 30 million shares of authorized, issued and outstanding voting common stock with a par value of RMB  ¥1.0 per share (USD$0.16).

 

In 2013, Yulong Pump applied to the Foreign Investment Committee of Inner Mongolia Autonomous Region to raise the registered capital from RMB 30 million to RMB 600 million (approximately USD$96,783,624).  This was approved in November 2013. 

 

During 2013, Yulong Pump raised RMB188,355,325 (USD$31,114,083) as a contribution from its president and CEO, Xiushan Qin .

 

On August 5, 2013 Yulong Pump entered into Real Estate Sales Contracts (Lease Agreements) with WulateqianqiHua Yuan Real Estate Limited Company pursuant to which Yulong Pump acquired the land use rights, expiring on September 15, 2080, to the third, fourth and fifth floors of a 6 story commercial building under development and located in Wulanteqianqi, Mongolia, China.  The leasehold area of the property is approximately 143,106 square feet.  Yulong pump paid RMB 188,355,325 (approximately USD $31,114,000) in consideration of the land use rights.  The Wulateqianqi property was subsequently allocated to the joint venture between Million Place and Yulong Pump pursuant to the Joint Venture Agreement dated May 22, 2015.  Million Place is therefore responsible for the administration and management of the property and entitled to receive 49% of the joint venture proceeds.  The parties intend to lease the facility upon completion of construction and a potential tenant has been identified.

 

7

 

 

WUNONG ASIA PACIFIC COMPANY LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTHS ENDED MARCH 31, 2019 AND 2018

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

 

On February 1, 2015, Yulong Pump entered into a Warranty Deed Agreement with Xiushan Qin , a former officer and former director of the Company, pursuant to which Mr. Qin has agreed to transfer to Yulong Pump by July 31, 2015 all outstanding securities of Hohhot Devotion Boiler General Company Private Limited (“Hohhot Devotion Boiler”).  The Warranty Deed Agreement does not provide for financial consideration Together, Hohhot Devotion Boiler and Yulong Pump are planning to begin construction of a new state of the art boiler manufacturing factory with a planned investment of approximately USD$250 million when the said amount has been raised. The companies intend to commence staffing and training of the new boiler plant employees concurrently with the start of construction. Yulong Pump and Hohhot Devotion Boiler also intend to rezone for commercial and residential use industrial land owned by Hohhot Devotion Boiler in Inner Mongolia.   As at the date of this report, the acquisition of Hohhot Devotion Boiler by Yulong Pump remains incomplete, and there is no guarantee that any such acquisition will be completed.  Further, there is no guarantee that Yulong Pump or Hohhot Devotion Boiler will successfully financing the construction of their planned boiler facility. On August 5, 2015, the warranty deed was extended to October 31, 2015. As at the date of this report, the acquisition has not been completed.  There is no guarantee that the transfer will be completed or that it will be completed on terms favorable to Yulong Pump.  Throughout the three months ended March 31, 2019 and year ended December 31, 2018, Yulong Pump had no business activities.

 

Through our wholly owned subsidiary, Million Place, together with its joint venture partner, Yulong Pump, we adopted a multi-pronged business plan involving the acquisition, development and exploitation of residential, commercial, and industrial real estate assets, the manufacture and sale of industrial water pumps and accessories and industrial boilers, and the provision of consultancy services for the design of industrial boiler systems. 

  

Description of subsidiary and associate

 

Name   Place of incorporation
and kind of legal entity
  Principal activities
and place of operation
  Particulars of issued/
registered share capital
  Effective interest held  
                   
Million Place Investments Limited   British Virgin Island   Investment holding   10,000 ordinary shares at US$1     100 %
                     
Inner Mongolia Yulong Pump Production Company Limited   The PRC, a limited liability company   Manufacture of water pump systems   RMB30,000,000     49 %

 

The Company and its subsidiary are hereinafter referred to as (the “Company”).

 

8

 

 

WUNONG ASIA PACIFIC COMPANY LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTHS ENDED MARCH 31, 2019 AND 2018

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

 

2.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Basis of presentation

 

These accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”).

 

Use of estimates

 

In preparing these consolidated financial statements, management makes estimates and assumptions that affect the reported amounts of assets and liabilities in the balance sheet and revenues and expenses during the years reported. Actual results may differ from these estimates.

 

Basis of consolidation

 

The consolidated financial statements include the financial statements of the Company and its subsidiary. All significant inter-company balances and transactions within the Company have been eliminated upon consolidation.

 

The Company accounts for the investment in associate in which the Company does not hold a controlling financial interest but have significant influence over operating and financial policies using the equity method. Under the equity method, the investment is recorded at cost and adjusted for the proportionate share of net earnings or losses and other comprehensive income or loss, cash contributions made and distributions received, and other adjustments, as appropriate. The Company performs a periodic evaluation of an investment to determine whether the fair value of each investment is less than the carrying value, and, if so, whether such decrease in value is deemed to be other-than-temporary. The Company has provided an impairment loss in full to the investment in an associate during 2015 fiscal year. As at March 31, 2019 and December 31, 2018, the investment in an associate was reduced to zero.

 

9

 

 

WUNONG ASIA PACIFIC COMPANY LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTHS ENDED MARCH 31, 2019 AND 2018

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

 

Net loss per share

 

The basic net loss per common share is computed by dividing the net loss by the weighted average number of common shares outstanding. Diluted net loss per common share is computed by dividing the net loss adjusted on an “as if converted” basis, by the weighted average number of common shares outstanding plus potential dilutive securities. For the three months ended March 31, 2019, there were no potentially dilutive securities outstanding.

 

Income taxes

 

The Company accounts for income taxes under the Financial Accounting Standards Board of Financial Accounting Standard ASC 740, “Accounting for Income Taxes ” (“ASC 740”). Under ASC 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under ASC 740, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. There was no current or deferred income tax expense or benefits for the periods ending March 31, 2019 and 2018.

 

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

 

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

 

For the three months ended March 31, 2019, the Company did not have any interest and penalties associated with tax positions. As of March 31, 2019 and December 31, 2018, the Company did not have any significant unrecognized uncertain tax positions. 

 

10

 

 

WUNONG ASIA PACIFIC COMPANY LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTHS ENDED MARCH 31, 2019 AND 2018

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

  

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.

 

Fair value of financial instruments

 

The carrying value of the Company’s financial instruments (excluding short-term bank borrowing and convertible promissory notes): cash and cash equivalents, accounts payable, accounts payable to a related party and advance from a related party approximate at their fair values because of the short-term nature of these financial instruments.

 

Management believes, based on the current market prices or interest rates for similar debt instruments, the fair value of its obligation under finance lease and short-term bank borrowing approximate the carrying amount.

 

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.

 

11

 

 

WUNONG ASIA PACIFIC COMPANY LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTHS ENDED MARCH 31, 2019 AND 2018

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

 

  Recent accounting pronouncements

 

In February 2016, the FASB issued ASU No. 2016-02, Leases. The standard requires that a lessee recognize the assets and liabilities that arise from operating leases. A lessee should recognize in its balance sheet a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term. For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities. In transition, lessees and lessors are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. The guidance in ASU 2016-02 is effective for annual and interim reporting periods beginning after December 15, 2018.

 

 In January 2017, the FASB issued ASU No. 2017-04, Intangibles - Goodwill and Other, which eliminates step two of the quantitative goodwill impairment test. Step two required determination of the implied fair value of a reporting unit, and then a comparison of this implied fair value with the carrying amount of goodwill for the reporting unit, in order to determine any goodwill impairment. Under the new guidance, an entity is only required to complete a one-step quantitative test, by comparing the fair value of a reporting unit with its carrying amount, and any goodwill impairment charge is determined by the amount by which the carrying amount exceeds the reporting unit’s fair value. However, the loss should not exceed the total amount of goodwill allocated to the reporting unit. The standard is effective for the Company in the first quarter of 2020, with early adoption permitted as of January 1, 2017, and is to be applied on a prospective basis.

 

12

 

 

WUNONG ASIA PACIFIC COMPANY LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTHS ENDED MARCH 31, 2019 AND 2018

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

 

In March 2017, the FASB issued ASU No. 2017-07, Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost, which changes how employers that sponsor defined benefit pension or other postretirement benefit plans present the net periodic benefit cost in the statement of operations. The new guidance requires entities to report the service cost component in the same line item or items as other compensation costs. The other components of net benefit cost are required to be presented in the statement of operations separately from the service cost component and outside the subtotal of loss from operations. ASU 2017-07 also provides that only the service cost component is eligible for capitalization. The standard is effective for the Company in the first quarter of 2018, with adoption to be applied on a retrospective basis.

 

In May 2017, the FASB issued ASU No. 2017-09, Compensation-Stock Compensation: Scope of Modification Accounting, which provides clarification on when modification accounting should be used for changes to the terms or conditions of a share-based payment award. This ASU does not change the accounting for modifications but clarifies that modification accounting guidance should only be applied if there is a change to the value, vesting conditions or award classification and would not be required if the changes are considered non-substantive. The amendments of this ASU are effective for the Company in the first quarter of 2018, with early adoption permitted.

 

In August 2017, the FASB issued ASU No. 2017-12, Derivatives and Hedging - Targeted Improvements to Accounting for Hedging Activities, which modifies the presentation and disclosure of hedging results. Further, it provides partial relief on the timing of certain aspects of hedge documentation and eliminates the requirement to recognize hedge ineffectiveness separately in income. The amendments in this ASU are effective for the Company in the first quarter of 2019.

 

In November 2017, the FASB has issued ASU No. 2017-14, Income Statement—Reporting Comprehensive Income (Topic 220), Revenue Recognition (Topic 605), and Revenue from Contracts with Customers (Topic 606). ASU 2017-14 includes amendments to certain SEC paragraphs within the FASB Accounting Standards Codification (Codification). ASU 2017-14 amends the Codification to incorporate the following previously issued guidance from the SEC. ‘The amendments in ASU No. 2017-14 amends the Codification to incorporate SEC Staff Accounting Bulletin (SAB) No. 116 and SEC Interpretive Release on Vaccines for Federal Government Stockpiles (SEC Release No. 33-10403) that bring existing SEC staff guidance into conformity with the FASB’s adoption of and amendments to ASC Topic 606, Revenue from Contracts with Customers.

 

In September 2017, the FASB has issued ASU No. 2017-13, Revenue Recognition (Topic 605), Revenue from Contracts with Customers (Topic 606), Leases (Topic 840), and Leases (Topic 842): Amendments to SEC Paragraphs Pursuant to the Staff Announcement at the July 20, 2017 EITF Meeting and Rescission of Prior SEC Staff Announcements and Observer Comments.” The amendments in ASU No. 2017-13 amends the early adoption date option for certain companies related to the adoption of ASU No. 2014-09 and ASU No. 2016-02. Both of the below entities may still adopt using the public company adoption guidance in the related ASUs, as amended. The effective date is the same as the effective date and transition requirements for the amendments for ASU 2014-09 and ASU 2016-02.

 

Other accounting standards that have been issued or proposed by the FASB or other standards-setting bodies that do not require adoption until a future date are not expected to have a material impact on the Company’s consolidated financial statements upon adoption.

 

13

 

 

WUNONG ASIA PACIFIC COMPANY LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTHS ENDED MARCH 31, 2019 AND 2018

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

 

3.GOING CONCERN UNCERTAINTIES

 

The accompanying consolidated financial statements have been prepared using the going concern basis of accounting, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.

 

 As of March 31, 2019, the Company has not generated revenues and has accumulated losses of $5,874,207 since inception. The Company has suffered from continuous losses with a net loss of $532,000 for the three months ended March 31, 2019. The continuation of the Company as a going concern through December 31, 2019 is dependent upon the continued financial support from its stockholders. Management believes the Company is currently pursuing additional financing for its operations. However, there is no assurance that the Company will be successful in securing sufficient funds to sustain the operations.

 

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

 

4.INVESTMENT IN AN ASSOCIATE

 

The Company, through Million Place, has a 49% interest in Yulong Pump, a pump and boiler production company in Inner Mongolia since December 1, 2012. We use the equity method to account for investments in Yulong Pump; accordingly, our results of operations include the Company’s proportionate share of the net income or loss of Yulong Pump. Our judgment regarding the level of influence over each equity method investment includes considering key factors such as our ownership interest, representation on the board of directors, participation in policy-making decisions and material intercompany transactions. Since the investment loss exceeded the carrying amount of an investment accounted for the equity method, the investment is reduced to zero as of December 31, 2018 and 2017. The Company will resume applying the equity method only after its share of that net income equals the share of net losses not recognized during the period the equity method was suspended.

 

No further investment loss from Yulong Pump was made for the three months ended March 31, 2019.

 

5.RELATED PARTY TRANSACTIONS

 

As of March 31, 2019, advances from the Company’s Chairman and Chief Executive Officer, Mr. John Gong, amounted to $88,526. The advance is unsecured, non-interest bearing and repayable on demand.

 

As of March 31, 2019, amount due to related parties was $1,443,892. These payables are payments made on behalf of the Company by two companies controlled by Mr. John Gong, our Chief Executive Officer, and by Wunong Technology (Shenzhen) Co., Ltd, owned by our major shareholder Peijiang Chen.

  

14

 

 

WUNONG ASIA PACIFIC COMPANY LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTHS ENDED MARCH 31, 2019 AND 2018

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

 

6.STOCKHOLDERS’ DEFICIT

 

As of March 31, 2019, the Company had no shares of its preferred stock issued and outstanding.

 

As of March 31, 2019, the Company had a total of 46,500,000 shares of its common stock issued and outstanding.

 

On April 16, 2018, Mr Peijiang Chen acquired an aggregate of 25,000,000 issued and outstanding common shares of Wunong Asia Pacific Company Limited. The shares were acquired in a private transaction from our Chairman, Chief Executive Officer and Director, Mr. John Gong. The purchase price, which was paid with personal funds of the purchaser, was $0.01 per share or $250,000 in the aggregate.

 

The 25,000,000 common shares constitute approximately 63.61% of our issued and outstanding voting securities as at the date of this report. There are no arrangements or understandings among Mr. Peijiang Chen, Mr. John Gong, or any of their respective associates with respect to the election of directors or other matters pertaining to the Company.

 

On March 9, 2019, the Company issued 7,200,000 shares of the Company’s common stock in exchange for services from Surewin Capital International Limited (Surewin). According to the 12-month-term consulting agreement between the Company and Surewin, Surewin will assist the Company in the acquisition of Wunong Technology (Shenzhen) Co., Ltd. and the completion of the relevant SEC reporting disclosures for the proposed acquisition. 

 

7.INCOME TAXES

 

United States

 

The Company is incorporated in United States, and is subject to corporate income tax rate of 21%.

 

On December 22, 2017, the United States enacted the Tax Cuts and Jobs Act (the “Act”) resulting in significant modifications to existing law. The Company has completed the accounting for the effects of the Act during the quarter ended December 31, 2018. The Company’s financial statements for the three months ended March 31, 2019 reflect certain effects of the Act which includes a reduction in the corporate tax rate from 34% to 21% as well as other changes.

 

15

 

  

WUNONG ASIA PACIFIC COMPANY LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTHS ENDED MARCH 31, 2019 AND 2018

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

 

As of March 31, 2019, the Company has $ 5,874,207 of cumulative net operating losses which can be carried forward to offset future taxable income. The net operating loss carryforwards begin to expire in 2038, if unutilized. The Company has provided for a full valuation allowance against the deferred tax assets of $1,233,583 on the expected future tax benefits from the net operating loss carryforwards as the management believes it is more likely than not that these assets will not be realized in the future.

 

   The Three months ended March 31,
2019
   The year ended December 31,
2018
 
         
Income tax provision at the federal statutory rate   21%   21%
Effect of operating losses   (21)%   (21)%
Effective tax rate   -    - 

 

Net deferred tax assets consist of the following:

 

   As of 
   March 31,
2019
   December 31,
2018
 
         
Deferred tax assets:          
Loss carryfoward – current rate  $1,233,583   $1,121,863 
Valuation allowance   (1,233,583)   (1,121,863)
           
Net deferred tax assets  $-   $- 

 

16

 

 

WUNONG ASIA PACIFIC COMPANY LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTHS ENDED MARCH 31, 2019 AND 2018

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

 

  8. NET LOSS PER SHARE

 

 Basic net loss per share is computed using the weighted average number of common shares outstanding during the year. The dilutive effect of potential common shares outstanding is included in diluted net loss per share. The following table sets forth the computation of basic and diluted net loss per share for the three months ended March 31, 2019 and the year ended December 31, 2018:

 

   March 31, 2019   December 31,
2018
 
         
Net loss attributable to common shareholders  $(532,000)  $(160,404)
           
Weighted average common shares outstanding – Basic and diluted   41,140,000    39,300,000 
           
Net loss per share – Basic and diluted  $(0.00)  $(0.00)

 

9.COMMITMENTS AND CONTINGENCIES

 

As of March 31, 2019, there were no commitments and contingencies involved. 

 

10.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, 2019 up through the date was the Company issued the unaudited consolidated financial statements. During the period, other the events below, the Company did not have any material recognizable subsequent events.

 

17

 

  

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

 

This quarterly report consists of three parts: management’s discussion and analysis (this section), the basic Financial Statements, and the Notes to the Financial Statements. The basic financial statement includes the series of financial statements. Certain statements, other than purely historical information, including estimates, projections, statements relating to business plans, objectives, and expected operating results, and assumptions are only predictions and involve known and unknown risks, uncertainties and other factors, that may cause our or our industry’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.

 

Our unaudited financial statements are stated in United States Dollars (US$) and are prepared in accordance with United States Generally Accepted Accounting Principles. The following discussion should be read in conjunction with our financial statements and the related notes that appear elsewhere in this quarterly report. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed below and elsewhere in this quarterly report.

 

Unless otherwise specified in this quarterly report, all dollar amounts are expressed in United States dollars and all references to “common stock” refer to shares of our common stock.

 

As used in this quarterly report, the terms “we”, “us”, “our”, and “our company” mean Wunong Asia Pacific Company Limited and our wholly-owned subsidiary, Million Place Investments Ltd., a British Virgin Islands corporation, unless otherwise indicated.

 

The Statement of Net Assets and the Statement of Activities

 

Our analysis of the Wunong Asia Pacific Company Limited and about its activities include all assets and liabilities using accrual basis of accounting, which is like the accounting used by the most private-sector companies. All the current year of expenses are considered regardless of when cash is paid.

 

These two statements report the Wunong Asia Pacific Company Limited’s liabilities and changes in them. You can think of the Wunong Asia Pacific Company Limited’s liabilities, as one way to measure Wunong Asia Pacific Company Limited’s financial position. Over time, the decreases in Wunong Asia Pacific Company Limited’s net assets are one indicator its financial health is deteriorating.

 

Overview

 

We were incorporated in Nevada on June 23, 2011, to originally engage in the business of real estate investment consulting with respect to properties located in Panama.

 

On November 5, 2012, we filed Articles of Merger with the Nevada Secretary of State to change our name from “Panama Dreaming Inc.” to “Asia Pacific Boiler Corporation”, to be effective by way of a merger with our wholly-owned subsidiary Asia Pacific Boiler Corporation, which was created solely for the name change.

 

On August 5, 2014, we entered into and closed a share exchange agreement with Million Place Investments Ltd, a British Virgin Islands company (“Million Place”) and the shareholders of Million Place to acquire all the ordinary shares of Million Place. Consequently, Million Place became our wholly-owned subsidiary. Million Place is a 49% equity stakeholder in a People’s Republic of China (“PRC”) Co-operative Joint Venture (“CJV”), Inner Mongolia Yulong Pump Production Company Limited (“Yulong Pump”). Yulong Pump was involved in the provision of consultancy services for the design of boiler systems, the manufacture of industrial water pumps and accessories, and the acquisition and development of real estate. Yulong Pump ceased its water pump manufacturing activities in 2008 due to a decrease in demand for its products and increasing obsolescence of its manufacturing infrastructure.

 

18

 

 

Through our wholly-owned subsidiary, Million Place, we are presently engaged in the development and management of two pieces of commercial real estate assets in cooperation with our joint venture partner, Xiushan Qin in Yulong Pump. As we have not been successful in raising significant capital to carry out our business plans, we have not begun operations and are presently a “shell” company.

 

Our current business activities are governed by a joint venture contract dated May 22, 2014 between Million Place and Xiushan Qin pursuant to which states that we intend to jointly engage in the manufacture of industrial boilers, the provision of consultancy services for the design of boiler systems, the manufacture of industrial water pumps and accessories, and the acquisition and development of real estate. Pursuant to the joint venture contract, Million Place is solely responsible for all operations and management of the joint venture and has the exclusive authority to enter into agreements on behalf of the joint venture. Million Place will in turn receive compensation for services it provides to the joint venture and shall be entitled to a 49% share of profit generated by the joint venture.

 

In the meantime, our management has been analyzing the various alternatives available to ensure our survival and to preserve our shareholder’s investment in our common shares. This analysis has included sourcing additional forms of financing to continue our business objective of developing and managing Yulong Pump’s Wuchuan and Wulanteqianqi properties, or mergers and/or acquisitions. At this stage in our operations, we believe either course is acceptable, as our operations have not been profitable and our prospects for our business are not good without further financing.

 

On March 9, 2019, we entered into a consulting agreement with Surewin Capital International Limited. The consulting agreement provides that Surewin Capital International Limited will act as consultant and assist the Company in the acquisition of Wunong Technology (Shenzhen) Co., Ltd. In connection therewith, Surewin Capital International Limited will act as liaison between the directors and senior officers of the Company and Wunong Technology (Shenzhen) Co., Ltd and assist in the completion of the relevant SEC reporting disclosures in respect of the proposed acquisition.

 

We believe that we will require additional funds to implement our growth strategy, whether it be through the developing and managing Yulong Pump’s Wuchuan and Wulanteqianqi properties and/or mergers and acquisitions. These funds may be raised through equity financing, debt financing, or other sources, which may result in further dilution in the equity ownership of our shares. There is no assurance that we will be able to maintain operations at a level enough for an investor to obtain a return on their investment in our common stock. Further, we may continue to be unprofitable.

 

Results of Operations

 

Comparison of Three Months Ended March 31, 2019 and 2018

 

Operating Revenues

 

We have not generated any material revenues since inception.

 

Operating Expenses and Net Loss

 

Operating expenses for the three months ended December 31, 2019 were $532,000 compared with $12,458 for the three months ended March 31, 2018. As part of our aforesaid mergers and acquisitions strategy, we entered into a consulting agreement with Surewin Capital International Limited to assist us in the acquisition of Wunong Technology (Shenzhen) Co., Ltd. In consideration therewith, we issued 7,200,000 shares of our common stock to Surewin Capital International Limited and incurred a $500,000 consulting cost paid in stock. Consequently, our net loss significantly increased from $12,485 for the three months ended 31 March 2018 to a net loss of $532,000 for the three months ended 31 March 2019. Because the consulting cost was paid in stock, it does not affect our cash flow.

 

For the three months ended March 31, 2019 and March 31, 2018, we had a net loss per share of $0.00, with weighted average common shares outstanding of 41,140,000 and 39,300,000 respectively.

 

Liquidity and Capital Resources

 

As of March 31, 2019, our total assets were $3,917 compared to $9,167 as of March 31, 2018. The decrease in total assets is attributed to the fact that we amortized prepaid expenses.

 

Cashflow from Operating Activities

 

During the three months ended March 31, 2019, we used $24,200 of cash for operating activities compared to the use of $2,000 of cash for operating activities during the three months ended March 31, 2018. The increase in cash used for operating activities is due to the fact that we incurred higher legal, accounting and administration cost.

 

19 

 

 

Cashflow from Financing Activities

 

During the three months ended March 31, 2019, we received proceeds of $24,200 from financing activities compared to $2,000 during the three months ended March 31, 2018. The increase was a result of more advances from related parties.

 

Quarterly Developments

 

On March 9, 2019, we entered into a consulting agreement with Surewin Capital International Limited. The consulting agreement provides that Surewin Capital International Limited will act as consultant and assist the Company in the acquisition of Wunong Technology (Shenzhen) Co., Ltd. In connection therewith, Surewin Capital International Limited will act as liaison between the directors and senior officers of the Company and Wunong Technology (Shenzhen) Co., Ltd and assist in the completion of the relevant SEC reporting disclosures in respect of the proposed acquisition. In consideration therewith, we issued 7,200,000 shares of our common stock to Surewin Capital International Limited on the date of execution of the agreement and relied on the exemptions from registration under Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”), Regulation D and Regulation S under the Securities Act for purposes of the issuance of the shares to Surewin Capital International Limited.

 

Going Concern

 

We have not attained profitable operations and are dependent upon obtaining financing to pursue any extensive acquisitions and activities. For these reasons, our auditors stated in their report on our audited financial statements that they have substantial doubt that we will be able to continue as a going concern without further financing.

 

Future Financings

 

We will continue to rely on equity sales of our common shares and advances from related parties in order to continue to fund our business operations. Issuances of additional shares will result in dilution to existing stockholders. There is no assurance that we will achieve any additional sales of the equity securities or arrange for debt or other financing to fund our operations and other activities.

 

Off-Balance Sheet Arrangements

 

We have no significant 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 stockholders.

 

Critical Accounting Policies

 

Our financial statements and accompanying notes have been prepared in accordance with United States generally accepted accounting principles applied on a consistent basis. The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods.

 

We regularly evaluate the accounting policies and estimates that we use to prepare our financial statements. A complete summary of these policies is included in the notes to our financial statements. In general, management's estimates are based on historical experience, on information from third party professionals, and on various other assumptions that are believed to be reasonable under the facts and circumstances. Actual results could differ from those estimates made by management.

 

Recently Issued Accounting Pronouncements

 

We have implemented all new accounting pronouncements that are in effect. These pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and we do not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on our financial position or results of operations.

 

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

 

As a “smaller reporting company”, we are not required to provide the information required by this Item.

 

Item 4. Controls and Procedures.

 

 Management’s Report on Disclosure Controls and Procedures

 

We maintain disclosure controls and procedures, that are designed to ensure that information required to be disclosed in our reports filed under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission rules and forms, and that such information is accumulated and communicated to our management, including our chief executive officer (our principal executive officer) and our chief financial officer (our principal financial officer and principal accounting officer) to allow timely decisions regarding required disclosure.

 

20

 

 

As of the end of the quarter covered by this report, we conducted an evaluation under the supervision and with the participation of our president (our principal executive officer) and our chief financial officer (our principal financial officer and principal accounting officer), of the effectiveness of the design and operation of our disclosure controls and procedures. Based on the foregoing, our chief executive officer (our principal executive officer) and our chief financial officer (our principal financial officer and principal accounting officer) concluded that our disclosure controls were not effective as of the end of the period covered by this report. Management identified the following material weaknesses in its assessment of the effectiveness of internal control over financial reporting as of March 31, 2019:

 

Lack of sufficient full-time accounting staff in our accounting department that have experience and knowledge in identifying and resolving complex accounting issues under U.S. Generally Accepted Accounting Principles (“GAAP”);

 

Lack of sufficient accounting personnel which would provide segregation of duties within our internal control procedures to support the accurate reporting of our financial results.

 

Changes in Internal Control Over Financial Reporting

 

There were no changes in our internal control over financial reporting during our last fiscal quarter that materially affected, or are reasonably likely to affect, our internal control over financial reporting.

 

Our management, including our chief executive officer and chief financial officer, does not expect that our disclosure controls and procedures or our internal controls 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. Because of 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 the Company have been detected.

 

21

 

  

PART II - OTHER INFORMATION

 

Item 1. Legal Proceedings.

 

We are currently not involved in any litigation that we believe could have a material adverse effect on our financial condition or results of operations. There is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the executive officers of our Company or any of our subsidiaries, threatened against or affecting our company, our common stock, any of our subsidiaries or of our companies or our subsidiaries’ officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect.

  

Item 1A. Risk Factors.

 

As a “smaller reporting company”, we are not required to provide the information required by this Item.

 

 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.

 

Item 6. Exhibits.

 

Copies of the following documents are included as exhibits to this report pursuant to Item 601 of Regulation S-K.

 

Exhibit No.   Title of Document
31.1   Certification of the Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002*
31.2   Certification of the Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002*
32.1   Certification of the Principal Executive Officer pursuant to U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 **+
32.2   Certification of the Principal Financial Officer pursuant to U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 **+
     
101.INS   XBRL Instance Document
101.SCH   XBRL Taxonomy Schema Document
101.CAL   XBRL Taxonomy Calculation Linkbase Document
101.DEF   XBRL Taxonomy Definition Linkbase Document
101.LAB   XBRL Taxonomy Label Linkbase Document
101.PRE   XBRL Taxonomy Presentation Linkbase Document

 

+ In accordance with SEC Release 33-8238, Exhibits 32.1 and Exhibit 32.2 are being furnished and not filed.
   
* Filed herewith.
   
** Furnished herewith.

 

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SIGNATURES

 

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

 

  WUNONG ASIA PACIFIC COMPANY LIMITED
     
Dated: May 15, 2019 By: /s/ John Gong Chin Ong
    John Gong Chin Ong
    Chief Executive Officer and Chairman
    (Principal Executive Officer)
     
Dated: May 15, 2019 By: /s/ Chin Leong Yang
    Chin Leong Yang
    Chief Financial Officer, Treasurer and Director
   

(Principal Financial Officer and

Principal Accounting Officer)

 

 

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