ELRE 10-Q
Yinfu Gold Corp. (ELRE)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
OR
TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Commission File Number:
(Exact name of registrant as specified in its charter) |
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(State or other jurisdiction of incorporation or organization) |
| (IRS Employer Identification No.) |
(Address of principal executive offices)
(86)
(Registrant’s telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the 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.
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).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filed,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer | ☐ | Accelerated filer | ☐ |
☒ | Smaller reporting company | ||
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| Emerging growth company |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act. Yes
Title of each class |
| Trading Symbol(s) |
| Name of each exchange on which registered |
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| OTC Market |
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: As of November 14, 2023, the Company had
YINFU GOLD CORPORATION
Quarterly Report on Form 10-Q
For the Period Ended September 30, 2023
FORWARD-LOOKING STATEMENTS
This Form 10-Q for the period ended September 30, 2023 contains forward-looking statements that involve risks and uncertainties. Forward-looking statements in this document include, among others, statements regarding our capital needs, business plans and expectations. Such forward-looking statements involve assumptions, risks and uncertainties regarding, among others, the success of our business plan, availability of funds, government regulations, operating costs, our ability to achieve significant revenues, our business model and products and other factors. Any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may”, “should”, “expect”, “plan”, “intend”, “anticipate”, “believe”, “estimate”, “predict”, “potential” or “continue”, the negative of such terms or other comparable terminology. In evaluating these statements, you should consider various factors, including the assumptions, risks and uncertainties set forth in reports and other documents we have filed with or furnished to the SEC. These factors or any of them may cause our actual results to differ materially from any forward-looking statement made in this document. While these forward-looking statements, and any assumptions upon which they are based, are made in good faith and reflect our current judgment regarding future events, our actual results will likely vary, sometimes materially, from any estimates, predictions, projections, assumptions or other future performance suggested herein. The forward-looking statements in this document are made as of the date of this document and we do not intend or undertake to update any of the forward-looking statements to conform these statements to actual results, except as required by applicable law, including the securities laws of the United States.
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TABLE OF CONTENT
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Management’s Discussion and Analysis of Financial Condition and Results of Operations |
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| Table of Contents |
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
YINFU GOLD CORPORATION
CONSOLIDATED BALANCE SHEETS
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ASSETS |
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Current Assets |
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Cash and cash equivalents |
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Other receivables |
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Total current Assets |
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Non-current assets |
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Operating lease right of use asset, net |
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Total non-current assets |
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Total Assets |
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LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
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Current liabilities |
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Accounts payable and accrued liabilities |
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Short-term loan |
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Short-term loan - related party |
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Accrued interest - related party |
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Operating lease liabilities - current |
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Due to related party |
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Total Current Liabilities |
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Non-current liabilities |
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Operating lease liabilities - noncurrent |
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Total Non-current Liabilities |
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Total Liabilities |
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Stockholders' Deficit |
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Common stock, ($ |
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Additional paid-in capital |
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Accumulated deficit |
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Accumulated other comprehensive loss |
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Total Stockholders' Deficit |
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Total Liabilities and Stockholders' Deficit |
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See Notes to the Condensed Consolidated Financial Statements.
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| Table of Contents |
YINFU GOLD CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
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Revenue,net |
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OPERATING EXPENSES: |
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Professional fees |
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Total operating expenses |
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Net loss from operations |
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Other Income and (Expense) |
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Interest income (expense) |
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Other income (expense) |
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Total other income(loss) |
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Net income (loss) before income taxes |
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Provision for income taxes |
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Net loss |
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Comprehensive income |
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Other comprehensive gain |
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Total comprehensive loss |
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Basic and diluted loss per common share |
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Weighted average number of common shares outstanding - basic and diluted |
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See Notes to the Condensed Consolidated Financial Statements.
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| Table of Contents |
YINFU GOLD CORPORATION
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIENCY
(Unaudited)
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| comprehensive loss |
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For six months ended September 30, 2022 |
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Balance as of March 31,2022 |
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Net loss |
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Foreign currency translation adjustment |
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Balance as of September 30,2022 |
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For six months ended September 30, 2023 | ||||||||||||||||||||||||
Balance as of March 31,2023 |
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Net loss |
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Balance as of September 30,2023 |
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See Notes to the Condensed Consolidated Financial Statements.
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| Table of Contents |
YINFU GOLD CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
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CASH FLOWS FROM OPERATING ACTIVITIES |
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Net loss |
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Adjustments to reconcile net income to net cash provided by operating activities |
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Amortization of right-of-use asset |
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Changes in assets and liabilities: |
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Other receivables |
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Accounts payable and accrued liabilities |
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Operating lease liability |
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Net cash provided by (used in) operating activities |
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CASH FLOWS FROM INVESTING ACTIVITIES |
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CASH FLOWS FROM FINANCING ACTIVITIES |
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Proceeds from short-term loan - related parties |
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Net proceeds from related parties |
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Net cash provided by financing activities |
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Effect on changes in foreign exchange rate |
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Net increase (decrease) in cash and cash equivalents |
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Cash and cash equivalents, end of period |
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Non-cash investing and financing activities: |
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Supplemental cash flow information |
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Cash paid for interest |
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| Table of Contents |
YINFU GOLD CORPORATION
Notes to the Condensed Consolidated Interim Financial Statements
September 30, 2023
(Unaudited)
NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS
Yinfu Gold Corporation (the “Company”) is a Wyoming corporation incorporated on September 1, 2005 under the name Ace Lock and Security, Inc. with a fiscal year end of March 31. On March 5, 2007, the Company filed a Certificate of Amendment with the Wyoming Secretary of State to change the name to Element92 Resources Corp. and increased the authorized capital to
The Company no longer pursues opportunities related to the exploration of minerals. The name changed signified that the Company has commenced working toward a major change in our business plan and business model.
Effective November 20, 2014, the Company executed a Sale and Purchase Agreement (the “Agreement”) to acquire
Additionally, the Agreement stated that both parties agreed that all shares issued, pursuant to the terms and conditions of the agreement, were to be issued as soon as practicable following the signing of the agreement, but all shares so issued were to be held in escrow until all terms and conditions are met.
The various terms and conditions of the Agreement were fulfilled on January 28, 2015, therefore, the share certificates representing the shares have been issued in the names of the CEI shareholders and the Agreement between the Company and CEI was closed on January 28, 2015.
On April 11, 2017, the Company acquired Yinfu Gold International Holdings Limited (“HK”), a company incorporated in Hong Kong, and HK’s subsidiary, Yinfu International Holdings Limited (“WOFE”), a wholly owned foreign enterprise incorporated in the People’s Republic of China. The acquired entities are owned by the Company’s management; therefore, the transaction has been accounted for as a business combination under common control in accordance to ASC-805-30-5, in which the assets and liabilities of HK and WOFE have been presented at their carrying values at the date of the transaction.
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| Table of Contents |
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying unaudited financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States for interim financial information and with the instructions to Form 10-Q and Regulation S-X. Accordingly, the financial statements do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements.
In the opinion of management, all adjustments consisting of normal recurring entries necessary for a fair statement of the periods presented for (a) the financial position, (b) the result of operations, and (c) cash flows have been made in order to make the financial statements presented not misleading. The results of operations for such interim periods are not necessarily indicative of operations for a full year.
These condensed consolidated financial statements are unaudited and should be read in conjunction with the audited consolidated financial statements included in the firm’s Annual Report on Form 10-K for the year ended March 31, 2023. The condensed consolidated financial information as of September 30, 2023 has been derived from audited consolidated financial statements not included herein. Certain reclassifications have been made to previously reported amounts to conform to the current presentation.
Interim Financial Information
The unaudited financial statements have been prepared in accordance with generally accepted accounting principles (GAAP) applicable to interim financial information and the requirements of Form 10-Q and Rule 8-03 of Regulation S-X of the Securities and Exchange Commission. Accordingly, they do not include all of the information and disclosure required by accounting principles generally accepted in the United States of America for complete financial statements. Interim results are not necessarily indicative of results for a full year. In the opinion of management, all adjustments considered necessary for a fair presentation of the financial position and the results of operations and cash flows for the interim periods have been included.
These financial statements should be read in conjunction with the audited financial statements as of and for the year ended March 31, 2023, as not all disclosures required by generally accepted accounting principles for annual financial statements are presented. The interim financial statements follow the same accounting policies and methods of computations as the audited financial statements as of and for the year ended March 31, 2023.
Principles of Consolidation
The accompanying consolidated financial statements of the Company include the accounts of the Company and its wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated in the consolidation.
The following diagram illustrates the current group structure:
| Yinfu Gold Corporation
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| Yinfu Group International Holdings Limited (“HK”)
incorporated in |
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| Yinfu International Holdings Limited (“WOFE”)
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Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. The estimates and judgments will also affect the reported amounts for certain revenues and expenses during the reporting period. Actual results could differ from these good faith estimates and judgments.
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| Table of Contents |
Reclassification of prior year presentation
Certain prior year amounts have been reclassified for consistency with the current year presentation. These reclassifications had no effect on the reported results of operations or balance sheets. An reclassification has been made to the Consolidated Statement of Cash Flows for the six months ended September 30, 2022 to reclassify wage payable to related party of $
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.
Foreign Currency Translation and Re-measurement
In accordance with ASC 830, “Foreign Currency Matters”, the Company’s foreign operations whose functional currency is not the U.S. dollar, the assets and liabilities are translated into U.S. dollars at current exchange rates. Resulting translation adjustments are reflected as other comprehensive income (loss) in stockholders’ equity. Revenue and expenses are translated at average exchange rates for the period. Transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are charged to operations as incurred. The Company had foreign currency translations gain of $
Concentrations of Credit Risk
The Company’s financial instruments that are exposed to concentrations of credit risk primarily consist of its cash and cash equivalents as well as related party payables that it will likely incur in the near future. The Company places its cash and cash equivalents with financial institutions of high credit worthiness. At times, its cash and cash equivalents with a particular financial institution may exceed any applicable government insurance limits. The Company’s management plans to assess the financial strength and credit worthiness of any parties to which it extends funds, and as such, it believes that any associated credit risk exposure is limited.
Financial Instruments
The Company follows ASC 820, “Fair Value Measurements and Disclosures,” which 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 that distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described below:
Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.
Level 2 applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data.
Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.
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| Table of Contents |
Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of September 30, 2023. The carrying values of our financial instruments, including, cash and cash equivalents; accounts payable and accrued expenses; and loans and notes payable approximate their fair values due to the short-term maturities of these financial instruments.
Business Combinations
In accordance with ASC 805-10, “Business Combinations”, the Company accounts for all business combinations using the acquisition method of accounting. Under this method, assets and liabilities, including any remaining noncontrolling interests, are recognized at fair value at the date of acquisition. The excess of the purchase price over the fair value of assets acquired, net of liabilities assumed, and noncontrolling interests is recognized as goodwill. Certain adjustments to the assessed fair values of the assets, liabilities, or noncontrolling interests made subsequent to the acquisition date, but within the measurement period, which is up to one year, are recorded as adjustments to goodwill. Any adjustments subsequent to the measurement period are recorded in income. Any cost or equity method interest that the Company holds in the acquired company prior to the acquisition is re-measured to fair value at acquisition with a resulting gain or loss recognized in income for the difference between fair value and the existing book value. Results of operations of the acquired entity are included in the Company’s results from the date of the acquisition onward and include amortization expense arising from acquired tangible and intangible assets.
Income Taxes, Deferred Income Taxes and Valuation Allowance
The Company accounts for income taxes under ASC 740, “Income Taxes.” Under the asset and liability method of ASC 740, where deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. 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. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period the enactment occurs. A valuation allowance is provided for certain deferred tax assets if it is more likely than not that the Company will not realize tax assets through future operations. No deferred tax assets or liabilities were recognized as at September 30, 2023 and March 31, 2023.
Net Income (Loss) Per Share of Common Stock
The Company has adopted ASC Topic 260, “Earnings per Share,” (“EPS”) which requires presentation of basic EPS on the face of the income statement for all entities with complex capital structures and requires a reconciliation of the numerator and denominator of the basic EPS computation. In the accompanying financial statements, basic earnings (loss) per share is computed by dividing net income (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.
The following table sets forth the computation of basic earnings (loss) per share, for the six months ended September 30, 2023 and 2022:
|
| Six Months Ended September 30, |
| |||||
|
| 2023 |
|
| 2022 |
| ||
Net loss |
| $ | ( | ) |
| $ | ( | ) |
Weighted average common shares outstanding (basic and diluted) |
|
|
|
|
|
| ||
Net loss per common share, basic and diluted |
| $ | ( | ) |
| $ | ( | ) |
| 11 |
| Table of Contents |
Commitments and Contingencies
The Company follows ASC 450-20, “Loss Contingencies,” to report accounting for contingencies. Liabilities for loss contingencies arising from claims, assessments, litigation, fines and penalties, as well as other sources are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated. There were no commitments or contingencies as of September 30, 2023 and March 31, 2023.
Leases
We determine if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use (“ROU”) assets, operating lease liabilities - current, and operating lease liabilities - noncurrent on the balance sheets. Finance leases are included in property and equipment, other current liabilities, and other long-term liabilities in our balance sheets.
ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of our leases do not provide an implicit rate, we generally use our incremental borrowing rate based on the estimated rate of interest for collateralized borrowing over a similar term of the lease payments at commencement date. The operating lease ROU asset also includes any lease payments made and excludes lease incentives. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term.
Advertising Costs
The Company follows ASC 720, “Advertising Costs,” and expenses costs as incurred. No advertising costs were incurred for the six months ended September 30, 2023 and 2022 respectively.
Related Parties
The Company follows ASC 850, “Related Party Disclosures,” for the identification of related parties and disclosure of related party transactions. See note 7.
Revenue Recognition
The Company adopted ASU 2014-09, Topic 606 on April 1, 2018, using the modified retrospective method. ASC 606 requires the use of a new five-step model to recognize revenue from customer contracts. The five-step model requires that the Company (i) identify the contract with the customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, including variable consideration to the extent that it is probable that a significant future reversal will not occur, (iv) allocate the transaction price to the respective performance obligations in the contract, and (v) recognize revenue when (or as) the Company satisfies the performance obligation.
The adoption of Topic 606 has no impact on the Company’s financials as the Company has not generated any revenues.
Recent Accounting Pronouncements
In August 2020, the FASB issued ASU 2020-06, “Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging — Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity”, which simplifies an issuer’s accounting for certain convertible instruments and the application of derivatives scope exception for contracts in an entity’s own equity. This guidance also addresses how convertible instruments are accounted for in the diluted earnings per share calculation and required enhanced disclosures about the terms of convertible instruments and contracts in an entity’s own equity. The new guidance is required to be applied either retrospectively to financial instruments outstanding as of the beginning of the first comparable reporting period for each prior reporting period presented or retrospectively with the cumulative effect of the change to be recognized as an adjustment to the opening balance of retained earnings at the date of adoption. This guidance is effective for the Company for the year ending March 31, 2023 and interim reporting periods during the year ending March 31, 2023. Early adoption is permitted. The Company is evaluating the effects, if any, of the adoption of this guidance on the financial position, results of operations and cash flows.
No other new accounting pronouncement issued or effective recently had or is expected to have a material impact on the Company’s consolidated financial statements or disclosures.
| 12 |
| Table of Contents |
NOTE 3 - GOING CONCERN
The Company’s financial statements are prepared using accounting principles generally accepted in the United States applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has not established an on-going source of revenues sufficient to cover its operating cost, and requires additional capital to commence its operating plan. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease operations.
As of September 30, 2023, the Company had an accumulated deficit of $
In order to continue as a going concern, the Company will need, among other things, additional capital resources. Management’s plan to obtain such resources for the Company include: sales of equity instruments; traditional financing, such as loans; and obtaining capital from management and significant stockholders sufficient to meet its minimal operating expenses. However, management cannot provide any assurance that the Company will be successful in accomplishing any of its plans.
There is no assurance that the Company will be able to obtain sufficient additional funds when needed or that such funds, if available, will be obtainable on terms satisfactory to the Company. In addition, profitability will ultimately depend upon the level of revenues received from business operations. However, there is no assurance that the Company will attain profitability. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.
| 13 |
| Table of Contents |
NOTE 4-STOCKHOLDERS’EQUITY (DEFICIT)
Common Stock
The Company is authorized to issue
On November 16, 2021, the board of directors approved a 5-in-1 reverse stock split for the Company’s common stock. On July 27, 2022, the Financial Industry Regulatory Authority (“FINRA”) also approved the
On February 14, 2023, the Company entered into Subscription Agreements for Placement of Shares with the six targeted subscribers. The Company raised proceeds of US$
As of September 30, 2023 and March 31, 2023, the Company has
NOTE 5 – SHORT-TERM LOAN – RELARED PARTIES
Short-term loan of $
Short-term loans of $
As of September 30, 2023 and March 31, 2023, accrual interest – related party was $
As of September 30, 2023 and March 31, 2023, short-term loan – related parties outstanding was $
NOTE 6 – LEASES
The Company has a lease agreement for its office space. The current lease agreement was signed to cover the lease for the period from May 1, 2020 to April 30, 2023. On April 25, 2023, the Company renewed the lease for the period from May 1, 2023 to April 30, 2028.
The Operating lease right-of-use assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. The discount rate used to calculate present value is incremental borrowing rate or, if available, the rate implicit in the lease. The Company determines the incremental borrowing rate for this lease based primarily on its lease term in PRC which is approximately
The Company has elected not to recognize lease assets and liabilities for leases if the lease term, which includes periods covered by renewal options whose exercise is reasonably certain, is less than 12 months.
Operating lease expenses were $
The future minimum lease payment schedule as follows:
For the year ended March 31, |
| Amount |
| |
2024 |
| $ |
| |
2025 |
|
|
| |
2026 |
|
|
| |
2027 |
|
|
| |
2028 |
|
|
| |
2029 |
|
|
| |
Thereafter |
|
|
| |
Total lease payment at Present Value |
| $ |
| |
| 14 |
| Table of Contents |
NOTE 7 - RELATED PARTY TRANSACTIONS
During the six months ended September 30, 2023, Mr. Jiang, Libin, the President and a director of the Company, advanced the Company $
During the six months ended September 30, 2022, Mr. Jiang, Libin, the President and a director of the Company, advanced the Company $
Mr. Jiang, Libin is entitled to extra monthly salary of $
On December 18, 2019, the Company signed a Letter of intent for Equity Acquisition (the “LOI Agreement”) as part of a joint venture plan between the Company and Ji’an Chengpin Mining Co., Ltd, a unrelated third-party company. The Company received $
As of September 30, 2023, the accrued salary payable to Mr. Jiang Libin and Mr. Huang Jing were $550,597 and $
As of September 30, 2023 and March 31, 2023, the Company owed $
The amounts due to related parties are no fixed terms of payment, non-interest bearing, and unsecured.
Due to related parties was summarized as follows.
|
| September 30, 2023 |
|
| March 31, 2023 |
| ||
Salary payable to Mr. Jiang, Libin |
| $ |
|
| $ |
| ||
Salary payable to Mr. Huang Jing |
|
|
|
|
|
| ||
Borrowing from Mr. Jiang, Libin |
|
|
|
|
|
| ||
|
| $ |
|
| $ |
| ||
NOTE 8 - SUBSEQUENT EVENTS
The Company evaluates subsequent events that have occurred after the balance sheet date but before the financial statements are issued. Based on this evaluation, the Company concluded that, there was no subsequent event that would require disclosure to or adjustment to the financial statements.
| 15 |
| Table of Contents |
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Forward-Looking Statements
Except for historical information, this report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such forward-looking statements involve risks and uncertainties, including, among other things, statements regarding our business strategy, future revenues and anticipated costs and expenses. Such forward-looking statements include, among others, those statements including the words “expects”, “anticipates”, “intends”, “believes” and similar language. Our actual results may differ significantly from those projected in the forward-looking statements. Factors that might cause or contribute to such differences include, but are not limited to, those discussed in the sections “Business”, “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations”. You should carefully review other documents we file from time to time with the Securities and Exchange Commission (“SEC”). You are cautioned not to place undue reliance on the forward-looking statements, which speak only as of the date of this report. We undertake no obligation to publicly release any revisions to the forward-looking statements or reflect events or circumstances after the date of this document.
Although we believe that the expectations reflected in these forward-looking statements are based on reasonable assumptions, there are a number of risks and uncertainties that could cause actual results to differ materially from such forward-looking statements.
All references in this Form 10-Q to the “Company”, “Yinfu”, “we”, “us” or “our” are to Yinfu Gold Corporation.
Our unaudited financial statements are stated in United States Dollars and are prepared in accordance with United States Generally Accepted Accounting Principles.
Overview
Yinfu Gold Corporation (the “Company”) is a Wyoming corporation incorporated on September 1, 2005, under the name Ace Lock & Security, Inc. Our name was changed to Yinfu Gold Corporation as of November 18, 2010.We are working to enter into new-emerging application industries of Internet Technology, Artificial Intelligence (AI) and the Internet of Things (IOT).
We have had limited operations and based upon our reliance on the sale of our common stock and the advances from our president, there are no assurances of any future source of funds for our operations.
Plan of Operation
We devote substantial efforts to enter into new-emerging application industries of Internet Technology, Artificial Intelligence (AI) and the Internet of Things (IOT). However, our planned principal operations have not yet commenced.
| 16 |
| Table of Contents |
Need for Additional Capital
The Company has not generated any revenues from operations, and may be unable to fund on-going activities. We cannot guarantee that we will be successful in our business operations. Our business is subject to risks inherent in the establishment of a new business enterprise, including limited capital resources, possible delays in developing our own hardware and software, and the possibility of new regulations that will make our company difficult or impossible to operate.
If we are unable to meet our needs for cash from either our operations, or possible alternative sources, then we may be unable to continue, develop, or expand our operations.
If we are unable to complete any phase of our development program or fail to raise additional capital to maintain our operations in the future, we may be unable to carry out our full business plan or we may be forced to cease operations.
Results of Operations
Three Months Ended September 30, 2023 and 2022
|
| Three Months Ended September 30, 2023 |
|
| Three Months Ended September 30, 2022 |
|
| Variance |
|
| % |
| ||||
Revenue |
| $ | - |
|
| $ | - |
|
|
|
|
|
|
| ||
Operating Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
General and administrative |
|
| 16,288 |
|
|
| 96,310 |
|
|
| (80,022 | ) |
|
| -83 | % |
Professional fees |
|
| 5,480 |
|
|
| 16,395 |
|
|
| -10,915 |
|
|
| -67 | % |
Total Operating Expenses |
|
| 21,768 |
|
|
| 112,705 |
|
|
| -90,937 |
|
|
| -81 | % |
Loss from Operations |
| $ | (21,768 | ) |
| $ | (112,705 | ) |
|
| 90,937 |
|
|
| -81 | % |
Net loss |
|
| (21,779 | ) |
|
| (112,550 | ) |
|
| 90,771 |
|
|
| -81 | % |
Revenues
The Company has generated no revenues during the three months ended September 30, 2023 and 2022.
Operating expenses
For the three months ended September 30, 2023, total operating expenses were $21,768, which consisted general and administrative fees and professional fees. For the three months ended September 30, 2022, total operating expenses were $112,705, which consisted general and administrative fees and professional fees. The general and administrative expense mainly consist of employees’ salary. The decrease in operating expense was due to the decrease in professional fees and the significant decrease in accrued management salary for the three months ended September 30, 2023.
| 17 |
| Table of Contents |
Six Months Ended September 30, 2023 and 2022
|
| Six Months Ended September 30, 2023 |
|
| Six Months Ended September 30, 2022 |
|
| Variance |
|
| % |
| ||||
Revenue |
| $ | - |
|
| $ | - |
|
|
|
|
|
|
| ||
Operating Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
General and administrative |
|
| 22,291 |
|
|
| 195,646 |
|
|
| (173,355 | ) |
|
| -89 | % |
Professional fees |
|
| 10,815 |
|
|
| 37,465 |
|
|
| -26,650 |
|
|
| -71 | % |
Total Operating Expenses |
|
| 33,106 |
|
|
| 233,111 |
|
|
| -200,005 |
|
|
| -86 | % |
Loss from Operations |
| $ | (33,106 | ) |
| $ | (233,111 | ) |
|
| 200,005 |
|
|
| -86 | % |
Net loss |
|
| (32,459 | ) |
|
| (232,123 | ) |
|
| 199,664 |
|
|
| -86 | % |
Revenues
The Company has generated no revenues during the six months ended September 30, 2023 and 2022.
Operating expenses
For the six months ended September 30, 2023, total operating expenses were $33,106, which consisted general and administrative fees and professional fees. For the six months ended September 30, 2022, total operating expenses were $233,111, which consisted general and administrative fees and professional fees. The general and administrative expense mainly consist of employees’ salary. The decrease in operating expense was due to the decrease in professional fees and the significant decrease in accrued management salary for the six months ended September 30, 2023.
The following table provides selected financial data about our company as of September 30, 2023 and March 31, 2023.
|
| September 30, 2023 |
|
| March 31, 2023 |
| ||
Cash |
| $ | 457 |
|
| $ | 896 |
|
Total Assets |
| $ | 13,893 |
|
| $ | 12,924 |
|
Total Liabilities |
| $ | 2,604,514 |
|
| $ | 2,620,716 |
|
Stockholders’ Equity (Deficit) |
| $ | (2,590,621 | ) |
| $ | (2,607,792 | ) |
As of September 30, 2023, the Company’s cash balance was $457 compared to $896 as of March 31, 2023, and our total assets as of September 30, 2023, were $13,893 compared with $12,924 as of March 31, 2023. The decrease in cash was immaterial and increase in total assets was mainly due to the increase in operating lease right of use asset, net.
| 18 |
| Table of Contents |
As of September 30, 2023, the Company had total liabilities of $2,604,514 compared with total liabilities of $2,620,716 as of March 31, 2023. The fluctuation of total liabilities was immaterial.
Liquidity and Capital Resources
Working Capital
|
| September 30, 2023 |
|
| March 31, 2023 |
| ||
Current Assets |
| $ | 9,985 |
|
| $ | 10,322 |
|
Current Liabilities |
| $ | 2,600,251 |
|
| $ | 2,620,716 |
|
Working Capital Deficiency |
| $ | (2,590,266 | ) |
| $ | (2,610,394 | ) |
As of September 30, 2023, the Company had a working capital deficiency of $2,590,266, compared with working capital deficiency of $2,610,394 as of March 31, 2023. The slight decrease in working capital deficiency was primarily attributed to the decrease in current liabilities due to the decrease of advance from the President and one individual creditor for operating expenses.
Cash Flows
|
| Six Months Ended September 30, 2023 |
|
| Six Months Ended September 30, 2022 |
| ||
Cash Flows Used in Operating Activities |
| $ | (7,518 | ) |
| $ | (89,853 | ) |
Cash Flows Provided by Investing Activities |
| $ | - |
|
| $ | - |
|
Cash Flows Provided by Financing Activities |
| $ | 7,089 |
|
| $ | 91,477 |
|
Effects on change in foreign exchange rate |
| $ | (10 | ) |
| $ | (41 | ) |
Net increase (decrease) in Cash During Period |
| $ | (439 | ) |
| $ | 1,583 |
|
Cash Flows Used in Operating Activities
During the six months ended September 30, 2023, the Company had $7,518 in cash used in operating activities, which was mainly attributed from the net loss of $32,459, the decrease of $5,796 in operating lease liability, the increase of $642 in other receivable, and offset by amortization of right-of-use asset of $2,873, the increase of $28,506 in accounts payable and accrued liabilities.
During the six months ended September 30, 2022, the Company had $89,853 in cash used in operating activities, which was mainly attributed from the net loss of $232,123, the decrease of $43,799 in operating lease liability, the increase of $2,124 in other receivable, and offset by the amortization of $25,564 in right-of-use asset, an increase of $37,606 in account payable and accrued expense, and an increase of $125,023 in wage payable to related parties.
Cash Flows Provided by Investing Activities
During the six months ended September 30, 2023 and 2022, the Company used no cash in investing activities.
Cash Flows Provided by Financing Activities
During the six months ended September 30, 2023, the related party have advanced the Company $7,089 for operating expenses.
During the six months ended September 30, 2022, the President and other related parties creditor have advanced the Company $91,477 for operating expenses.
Off-Balance Sheet Arrangements
We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.
| 19 |
| Table of Contents |
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
Not applicable.
Item 4. Controls and Procedures.
Management’s Report on Disclosure Controls and Procedures
As of September 30, 2023, management assessed the effectiveness of our internal control over financial reporting based on the criteria for effective internal control over financial reporting established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) and SEC guidance on conducting such assessments. Based on that evaluation, they concluded that, during the period covered by this report, such internal controls and procedures were not effective to detect the inappropriate application of US GAAP rules as more fully described below. This was due to deficiencies that existed in the design or operation of our internal controls over financial reporting that adversely affected our internal controls and that may be considered to be material weaknesses.
The matters involving internal controls and procedures that our management considered to be material weaknesses under the standards of the Public Company Accounting Oversight Board were: (1) lack of a functioning audit committee, (2) lack of a majority of outside directors on our board of directors, resulting in ineffective oversight in the establishment and monitoring of required internal controls and procedures; (3) inadequate segregation of duties consistent with control objectives; and (4) management dominated by two individuals without adequate compensating controls. The aforementioned material weaknesses were identified by our Chief Executive and Financial Officer in connection with their review of our financial statements as of September 30, 2023.
Management believes that the material weaknesses set forth above did not have an effect on our financial results. However, management believes that the lack of a functioning audit committee and the lack of a majority of outside directors on our board of directors’ results in ineffective oversight in the establishment and monitoring of required internal controls and procedures, which could result in a material misstatement in our financial statements in future periods.
Changes in Internal Control over Financial Reporting
There have been no changes in our internal controls over financial reporting that occurred during the six months ended September 30, 2023, that have materially or are reasonably likely to materially affect, our internal controls over financial reporting.
| 20 |
| Table of Contents |
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
We are not presently a party to any legal proceedings and, to our knowledge, no such proceedings are threatened or pending.
However, we noted the following risks arising recently:
· | Substantial uncertainties exist with respect to the interpretation and implementation of PRC Foreign Investment Law and how it may impact the viability of our current corporate structure, corporate governance and business operations. |
The PRC government will establish a foreign investment information reporting system, according to which foreign investors or foreign-invested enterprises shall submit investment information to the competent department for commerce concerned through the enterprise registration system and the enterprise credit information publicity system, and a security review system under which the security review shall be conducted for foreign investment affecting or likely affecting the state security.
Furthermore, the Foreign Investment Law provides that foreign invested enterprises established according to the existing laws regulating foreign investment may maintain their structure and corporate governance within five years after the implementing of the Foreign Investment Law.
In addition, the Foreign Investment Law also provides several protective rules and principles for foreign investors and their investments in the PRC, including, among others, that a foreign investor may freely transfer into or out of China, in Renminbi or a foreign currency, its contributions, profits, capital gains, income from disposition of assets, royalties of intellectual property rights, indemnity or compensation lawfully acquired, and income from liquidation, among others, within China; local governments shall abide by their commitments to the foreign investors; governments at all levels and their departments shall enact local normative documents concerning foreign investment in compliance with laws and regulations and shall not impair legitimate rights and interests, impose additional obligations onto FIEs, set market access restrictions and exit conditions, or intervene with the normal production and operation activities of FIEs; except for special circumstances, in which case statutory procedures shall be followed and fair and reasonable compensation shall be made in a timely manner, expropriation or requisition of the investment of foreign investors is prohibited; and mandatory technology transfer is prohibited.
● | The Chinese government exerts substantial influence over the manner in which we must conduct our business activities. We are currently not required to obtain approval from Chinese authorities to list on U.S exchanges, however, if our VIE or the holding company were required to obtain approval in the future and were denied permission from Chinese authorities to list on U.S. exchanges, we will not be able to continue listing on U.S. exchange, which would materially affect the interest of the investors. |
The Chinese government has exercised and continues to exercise substantial control over virtually every sector of the Chinese economy through regulation and state ownership. Our ability to operate in China may be harmed by changes in its laws and regulations, including those relating to taxation, environmental regulations, land use rights, property and other matters. The central or local governments of these jurisdictions may impose new, stricter regulations or interpretations of existing regulations that would require additional expenditures and efforts on our part to ensure our compliance with such regulations or interpretations. Accordingly, government actions in the future, including any decision not to continue to support recent economic reforms and to return to a more centrally planned economy or regional or local variations in the implementation of economic policies, could have a significant effect on economic conditions in China or particular regions thereof, and could require us to divest ourselves of any interest we then hold in Chinese properties.
As such, the Company’s business segments may be subject to various government and regulatory interference in the provinces in which they operate. The Company could be subject to regulation by various political and regulatory entities, including various local and municipal agencies and government sub-divisions. The Company may incur increased costs necessary to comply with existing and newly adopted laws and regulations or penalties for any failure to comply.
Furthermore, it is uncertain when and whether the Company will be required to obtain permission from the PRC government to list on U.S. exchanges in the future, and even when such permission is obtained, whether it will be denied or rescinded. Although the Company is currently not required to obtain permission from any of the PRC federal or local government to obtain such permission and has not received any denial to list on the U.S. exchange, our operations could be adversely affected, directly or indirectly, by existing or future laws and regulations relating to its business or industry.
| 21 |
| Table of Contents |
Item 1A. Risk Factors.
Not applicable.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
No stock was sold during the six months ended September 30, 2023.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Mine Safety Disclosures.
None.
Item 5. Other Information.
None.
| 22 |
| Table of Contents |
Item 6. Exhibits.
Index to Exhibits
| Rule 13a-14(a) / 15d-14(a) Certification of Chief Executive Officer. | |
| Rule 13a-14(a) / 15d-14(a) Certification of Chief Financial Officer. | |
| Section 1350 Certifications of Chief Executive Officer and Chief Financial Officer. | |
101.INS |
| XBRL Instance Document. |
101.SCH |
| XBRL Taxonomy Extension Schema Document. |
101.CAL |
| XBRL Taxonomy Extension Calculation Linkbase Document. |
101.DEF |
| XBRL Taxonomy Extension Definition Linkbase Document. |
101.LAB |
| XBRL Taxonomy Extension Label Linkbase Document. |
101.PRE |
| XBRL Taxonomy Extension Presentation Linkbase Document. |
| 23 |
| Table of Contents |
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.
| Yinfu Gold Corporation |
| |
| (Registrant) |
| |
|
|
|
|
Dated: November 13, 2023 |
| /s/ Jiang, Libin |
|
|
| Jiang, Libin |
|
|
| Chief Executive Officer |
|
| 24 |