UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K10-K/A
(Amendment No. 1)
☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended March 31, 2022
OR
☐ TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number: 333-152242
YINFU GOLD CORPORATION |
(Exact name of registrant as specified in its charter) |
WYOMING |
| 20-8531222 |
(State or other jurisdiction of incorporation or organization) |
| (IRS Employer Identification No.) |
Suite 2313, Dongfang Science and Technology Mansion, Nanshan District, Shenzhen, China 518000 (Address of principal executive offices)
(86)755-8316-0998 |
(Registrant’s telephone number, including area code) |
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. ☐ Yes ☒ No
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. ☐ Yes ☒ No
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. 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 if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting 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 ☒
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
| Trading Symbol(s) |
| Name of each exchange on which registered |
Common stock |
| ELRE |
| OTCQB |
As of June 29, 2022, we have 1,983,5181,983,993 shares of common stock, par value $0.001 per share issued and outstanding.
JLKZ CPA LLP.
Flushing, New York
PCAOB ID: 6519
EXPLANATORY NOTE
|
Yinfu Gold Corporation (the “Company” or “we”) filed its Annual Report on Form 10-K for the fiscal year ended March 31, 2022 (the “Original Annual Report”) with the Securities and Exchange Commission (the “SEC”) on June 29, 2022. The Company is filing this Amendment No. 1 (the “Amendment”) to the Original Annual Report solely for the purpose of providing certain disclosures regarding potential legal and operational risks associated with having business in China “Part I - Item 1A. Risk Factors” in response to the SEC’s comments set forth in its letter dated August 8, 2022.
In addition, pursuant to Rule 12b-15 under the Securities Exchange Act of 1934, as amended, the Amendment also contains new certifications by the principal executive officer and the principal financial officer as required by Section 302 of the Sarbanes-Oxley Act of 2002. Except for the contents described below, no other changes have been made to the Original Annual Report and there have been no changes to the XBRL data filed in Exhibit 101 of the Original Annual Report. In addition, except as specifically described above, this Amendment speaks as of the filing date of the Original Annual Report, does not reflect events that may have occurred subsequent to the filing date of the Original Annual Report, and does not modify or update in any way disclosures made in the Original Annual Report. Accordingly, this Amendment should be read in conjunction with our other filings made with the Commission subsequent to the filing of the Original Annual Report, including any amendments to those filings. Capitalized terms not otherwise defined have the meanings ascribed to them in the Original Annual Report. Forward-Looking Statements This Annual Report on Form 10-K contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements discuss matters that are not historical facts. Because they discuss future events or conditions, forward-looking statements may include words such as “anticipate,” “believe,” “estimate,” “intend,” “could,” “should,” “would,” “may,” “seek,” “plan,” “might,” “will,” “expect,” “anticipate,” “predict,” “project,” “forecast,” “potential,” “continue” negatives thereof or similar expressions. Forward-looking statements speak only as of the date they are made, are based on various underlying assumptions and current expectations about the future and are not guarantees. Such statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, level of activity, performance or achievement to be materially different from the results of operations or plans expressed or implied by such forward-looking statements. We cannot predict all of the risks and uncertainties. Accordingly, such information should not be regarded as representations that the results or conditions described in such statements or that our objectives and plans will be achieved and we do not assume any responsibility for the accuracy or completeness of any of these forward-looking statements. These forward-looking statements are found at various places throughout this Annual Report on Form 10-K and include information concerning possible or assumed future results of our operations, including statements about potential acquisition or merger targets; business strategies; future cash flows; financing plans; plans and objectives of management; any other statements regarding future acquisitions, future cash needs, future operations, business plans and future financial results, and any other statements that are not historical facts. These forward-looking statements represent our intentions, plans, expectations, assumptions and beliefs about future events and are subject to risks, uncertainties and other factors. Many of those factors are outside of our control and could cause actual results to differ materially from the results expressed or implied by those forward-looking statements. In light of these risks, uncertainties and assumptions, the events described in the forward-looking statements might not occur or might occur to a different extent or at a different time than we have described. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of the Annual Report on Form 10-K. All subsequent written and oral forward-looking statements concerning other matters addressed in this Annual Report on Form 10-K and attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this Annual Report on Form 10-K. Except to the extent required by law, we undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, a change in events, conditions, circumstances or assumptions underlying such statements, or otherwise. |
| |||
| ||||
| ||||
| ||||
| ||||
| ||||
| ||||
| ||||
| ||||
| ||||
|
| |||
| ||||
| ||||
|
| |||
| ||||
| ||||
| ||||
| ||||
| ||||
|
| |||
|
| |||
| ||||
| ||||
| ||||
| ||||
| 2 |
PART I
CAUTIONARY NOTE REGARDING 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 the risks described in this Annual Report on Form 10-K and in other documents we file from time to time with the Securities and Exchange Commission. 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-K to the “Company”, “Yinfu”, “we”, “us” or “our” are to Yinfu Gold Corporation.
Item 1. Business
Corporate OverviewItem 1A. Risk Factors
Yinfu Gold Corporation (the “Company”) isInvesting in our securities involves a Wyoming corporation incorporated on September 1, 2005, as a for-profit company,high degree of risk. Before investing in our securities, you should carefully consider the risks and has a fiscal year enduncertainties described below and the other information in this filing before deciding to purchase our common stock. If any of March 31. The Company’sthese risks or uncertainties actually occurs, our business, office is located at Suite 2313, Dongfang Sciencefinancial condition or future operating results could be materially harmed. In that case, the price of our common stock could decline and Technology Mansion, Nanshan District, Shenzhen, China 518000. The telephone number is (86)755-8316-0998.
The Company has limited cash on hand. We have sustained losses for year ended March 31, 2021 and has relied solely upon the funding obtained from management and significant stockholders.
Name Changeyou could lose part or all of your investment.
The Company was originally incorporatedRisks Relating to Doing Business in the PRC
PRC regulations relating to investments in offshore companies by PRC residents may subject our PRC-resident beneficial owners or our PRC subsidiaries to liability or penalties, limit our ability to inject capital into our PRC subsidiaries or limit our PRC subsidiaries’ ability to increase their registered capital or distribute profits.
In July 2014, SAFE promulgated the Circular on Relevant Issues Concerning Foreign Exchange Control on Domestic Residents’ Offshore Investment and Financing and Roundtrip Investment through Special Purpose Vehicles, or SAFE Circular 37, which replaces the previous SAFE Circular 75. SAFE Circular 37 requires PRC residents, including PRC individuals and PRC corporate entities, to register with SAFE or its local branches in connection with their direct or indirect offshore investment activities. SAFE Circular 37 is applicable to our shareholders who are PRC residents and may be applicable to any offshore acquisitions that we may make in the future.
Under SAFE Circular 37, PRC residents who make, or have prior to the implementation of SAFE Circular 37 made, direct or indirect investments in offshore special purpose vehicles, or SPVs, are required to register such investments with SAFE or its local branches. In addition, any PRC resident who is a direct or indirect shareholder of an SPV, is required to update its registration with the local branch of SAFE with respect to that SPV, to reflect any material change. Moreover, any subsidiary of such SPV in China is required to urge the PRC resident shareholders to update their registration with the local branch of SAFE to reflect any material change. If any PRC resident shareholder of such SPV fails to make the required registration or to update the registration, the subsidiary of such SPV in China may be prohibited from distributing its profits or the proceeds from any capital reduction, share transfer or liquidation to the SPV, and the SPV may also be prohibited from making additional capital contributions into its subsidiaries in China. In February 2015, SAFE promulgated a Notice on Further Simplifying and Improving Foreign Exchange Administration Policy on Direct Investment, or SAFE Notice 13. Under SAFE Notice 13, applications for foreign exchange registration of inbound foreign direct investments and outbound direct investments, including those required under SAFE Circular 37, must be filed with qualified banks instead of SAFE. Qualified banks should examine the applications and accept registrations under the lawssupervision of SAFE. We have used our best efforts to notify PRC residents or entities who directly or indirectly hold shares in our holding company and who are known to us as being PRC residents to complete the foreign exchange registrations. However, we may not be informed of the Stateidentities of Wyoming as Ace Lock & Security, Inc. On March 5, 2007,all the PRC residents or entities holding direct or indirect interest in our company, nor can we filed a Certificatecompel our beneficial owners to comply with SAFE registration requirements. We cannot assure you that all other shareholders or beneficial owners of Amendmentours who are PRC residents or entities have complied with, and will in the Wyoming Secretaryfuture make, obtain or update any applicable registrations or approvals required by SAFE regulations. Failure by such shareholders or beneficial owners to comply with SAFE regulations, or failure by us to amend the foreign exchange registrations of Stateour PRC subsidiaries, could subject us to changefines or legal sanctions, restrict our name from Ace Lock & Security, Inc.overseas or cross-border investment activities, limit our PRC subsidiaries’ ability to Element92 Resources Corp. On August 16, 2010, we filed a Certificate of Amendment with the Wyoming Secretary of Statemake distributions or pay dividends to changeus or affect our name from Element92 Resources Corp. to Yinfu Gold Corporation. On November 18, 2010, we received a notification from the Financial Industry Regulatory Authority (“FINRA”) that the name change was effective.ownership structure, which could adversely affect our business and prospects.
Change in Authorized Capital
On December 8, 2014,Furthermore, as these foreign exchange and outbound investment related regulations are relatively new and their interpretation and implementation has been constantly evolving, it is unclear how these regulations, and any future regulation concerning offshore or cross-border investments and transactions, will be interpreted, amended and implemented by the Company increasedrelevant government authorities. For example, we may be subject to a more stringent review and approval process with respect to our foreign exchange activities, such as remittance of dividends and foreign-currency-denominated borrowings, which may adversely affect our financial condition and results of operations. We cannot assure you that we have complied or will be able to comply with all applicable foreign exchange and outbound investment related regulations. In addition, if we decide to acquire a PRC domestic company, we cannot assure you that we or the authorized capital from 1,000,000,000 common sharesowners of such company, as the case may be, will be able to 3,000,000,000 common shares.obtain the necessary approvals or complete the necessary filings and registrations required by the foreign exchange regulations. This may restrict our ability to implement our acquisition strategy and could adversely affect our business and prospects.
| 3 |
| Table of Contents |
Reverse Split
The record date for the determinationAs a holding company with PRC subsidiaries, we may transfer funds to our Affiliate Entities or finance our operating entity by means of stockholders entitledloans or capital contributions. Any capital contributions or loans that we, as an offshore entity, make to consentour Company’s PRC subsidiaries are subject to the 1 for 100 Reverse Split was October 17, 2016 (the “Record Date”).above PRC regulations. We may not be able to obtain necessary government registrations or approvals on a timely basis, if at all. If we fail to obtain such approvals or make such registration, our ability to make equity contributions or provide loans to our Company’s PRC subsidiaries or to fund their operations may be negatively affected, which may adversely affect their liquidity and ability to fund their working capital and expansion projects and meet their obligations and commitments. As of that date, we had pre-reverse split shares of 991,770,361 issued and outstanding shares of common stock, par value $0.001. Each share of our common stock entitles the holder thereof to one vote on each matter that may come before a meeting or vote of our stockholders.
The Reverse Split was approved by the holders of a majority of our stock entitled to vote on the Record Date. The vote required to approve the Reverse Split was 50% of the shares entitled to vote plus one vote, a simple majority. The actual affirmative vote was 58.84% of the issued shares.
On November 9, 2016, we filed a Schedule 14C with Securities and Exchange Commission. On February 16, 2017, the Company received a notification from the Financial Industry Regulatory Authority (“FINRA”) that our application for Reverse Split was approved by FINRA and the market effective date was February 17, 2017. The post-split total shares outstanding is 9,917,592 shares (pre-reverse split 1-for-5 shares) with the fractional shares rounded to the next whole share.
On November 16, 2021, the board of directors approved a 5-in-1 reverse stock split for the Company’s common stock while waiting for approval from the Financial Industry Regulatory Authority (“FINRA”) as of this Annual Report filing. The reverse stock split was retrospectively reflected throughout the consolidated financial statements and footnotes. The post-split total shares outstanding is 1,983,518 shares with the fractional shares rounded to the next whole share.
Acquisition and disposition
On April 11, 2017, we 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.
During the year ended March 31, 2018, we disposed the discontinued business, Element Resources International Limited. No gain or loss was recognized as a result, of the disposal.
The Company has no present plansour liquidity and our ability to fund and expand our business may be acquired or to merge with another company, nor does the Company, nor any of its shareholders, have plans to enter into a change of control or similar transaction.negatively affected.
Current BusinessChanges in the policies of the PRC government could have a significant impact upon our ability to operate profitably in the PRC.
We conduct all of our operations and all of our future revenue is supposed to be generated in the PRC. Accordingly, economic, political and legal developments in the PRC will significantly affect our business, financial condition, results of operations and prospects. Policies of the PRC government can have significant effects on economic conditions in the PRC and the ability of businesses to operate profitably. Our ability to operate profitably in the PRC may be adversely affected by changes in policies by the PRC government, including changes in laws, regulations or their interpretation, particularly those dealing with the Internet, including censorship and other restriction on material which can be transmitted over the Internet, security, intellectual property, money laundering, taxation and other laws that affect our ability to operate our website.
PRC laws and regulations governing our current business operations are sometimes vague and uncertain and any changes in such laws and regulations may impair our ability to survive or operate profitable in the near future.
There are substantial uncertainties regarding the interpretation and application of PRC laws and regulations including, but not limited to, the laws and regulations governing our business and the enforcement and performance of our arrangements with customers in certain circumstances. The Company was originally incorporatedlaws and regulations are sometimes vague and may be subject to future changes, and their official interpretation and enforcement may involve substantial uncertainty. The effectiveness and interpretation of newly enacted laws or regulations, including amendments to existing laws and regulations, may be delayed, and our business may be affected if we rely on laws and regulations which are subsequently adopted or interpreted in a manner different from our understanding of these laws and regulations. New laws and regulations that affect existing and proposed future businesses may also be applied retroactively. We cannot predict what effect the interpretation of existing or new PRC laws or regulations may have on our business.
There are uncertainties under the PRC laws relating to the procedures for U.S. regulators to investigate and collect evidence from companies located in the PRC.
According to Article 177 of the newly amended PRC Securities Law which became effective in March 2020 (the “Article 177”), the securities regulatory authority of the PRC State Council may collaborate with securities regulatory authorities of Wyoming as Ace Lock & Security, Inc. The Company was established as an exploration stage company engagedother countries or regions in order to monitor and oversee cross border securities activities. Article 177 further provides that overseas securities regulatory authorities are not allowed to carry out investigation and evidence collection directly within the territory of the PRC, and that any Chinese entities and individuals are not allowed to provide documents or materials related to securities business activities to overseas agencies without prior consent of the securities regulatory authority of the PRC State Council and the competent departments of the PRC State Council.
Our PRC counsel has advised us of their understanding that (i) the Article 177 is applicable in the search for commercially viable minerals. We no longer pursue opportunitieslimited circumstances related to direct investigation or evidence collection conducted by overseas authorities within the explorationterritory of minerals. Our name changedthe PRC (in such case, the foregoing activities are required to Yinfu Gold Corporation, as filedbe conducted through collaboration with or by obtaining prior consent of competent Chinese authorities); (ii) the State of Wyoming on November 18, 2010, signified that we have commenced working toward a major change in our business plan and business model.
Effective November 20, 2014,Article 177 does not limit or prohibit the Company, executedas a Salecompany duly incorporated in Wyoming and Purchase Agreement (the “Agreement”) to acquire 100%be listed on Nasdaq, from providing the required documents or information to Nasdaq or the SEC pursuant to applicable Listing Rules and U.S. securities laws; and (iii) as the Article 177 is relatively new and there is no implementing rules or regulations which have been published regarding application of the shares and assetsArticle 177, it remains unclear how the law will be interpreted, implemented or applied by the Chinese Securities Regulatory Commission or other relevant government authorities. As of China Enterprise Overseas Investment & Finance Group Limited (“CEI”). Pursuantthe date hereof, we are not aware of any implementing rules or regulations which have been published regarding application of Article 177. However, we cannot assure you that relevant PRC government agencies, including the securities regulatory authority of the PRC State Council, would reach the same conclusion as we do. As such, there are uncertainties as to the agreement,procedures and time requirement for the Company has agreedU.S. regulators to issue 1,599,982 restricted common sharesbring about investigations and evidence collection within the territory of the Company to the owners of CEI. In connection with the acquisition, the Company acquired the domain http://www.dahuacheng.com with a customer database consisting of 31 million members as of November 17, 2014.PRC.
| 4 |
| Table of Contents |
PursuantOur principal business operation is conducted in the PRC. In the event that the U.S. regulators carry out investigation on us and there is a need to conduct investigation or collect evidence within the Agreement, on or before January 1, 2015, CEI was to deliver to the Company, duly authorized, properly and fully executed documents in English, evidencing and confirming the sale of 100%territory of the sharesPRC, the U.S. regulators may not be able to carry out such investigation or evidence collection directly in the PRC under the PRC laws. The U.S. regulators may consider cross-border cooperation with securities regulatory authority of CEI and its assets, specifically detailing the assets and an asset valuation preparedPRC by an independent professionally qualified valuator. The valuation report was received byway of judicial assistance, diplomatic channels or regulatory cooperation mechanism established with the Company on January 28, 2015.securities regulatory authority of the PRC.
Additionally, the Agreement stated that both parties agreed that all the shares, pursuant to the terms and conditions of the agreement, shall be issued as soon as practicable following the signing of the agreement, but all the shares so issued were to be heldBecause our business is conducted in escrow until all terms and conditions are fulfilled.
As of the date of this filing, the various terms and conditions of the Agreement have been fulfilled on January 28, 2015, therefore, the share certificates representing the shares have been issued in the names of the CEI shareholdersRMB and the Agreement between the Company and CEI was closed on January 28, 2015.
Currently, we do not yet have a source of revenue. We are not able to fund our cash requirements through our current operations. Historically, we were able to raise a limited amount of capital through a private placementprice of our equityshares of common stock and through loans from our president, but we are uncertain about our continued ability to obtain adequate capital to fund operating losses until we become profitable. Ifis quoted in United States dollars, changes in currency conversion rates may affect the Company is unable to obtain adequate capital, it could be forced to cease operations, our shareholders may lose some or allvalue of their investment and our business may fail.your investments.
Our presidentbusiness is conducted in the PRC, our books and directors continuerecords are maintained in RMB, which is the currency of the PRC, and the financial statements that we file with the SEC and provide to provide their labor at no charge. Whenour shareholders are presented in United States dollars. Changes in the exchange rate between the RMB and dollar affect the value of our assets and the results of our operations in United States dollars. The value of the RMB against the United States dollar and other currencies may fluctuate and is affected by, among other things, changes in the PRC’s political and economic conditions and perceived changes in the economy of the PRC and the United States. Any significant revaluation of the RMB may materially and adversely affect our cash flows, revenue and financial condition. Further, our shares offered by this prospectus are offered in United States dollars, and we are ablewill need to do so,convert the net proceeds we planreceive into RMB in order to hire up to 20 staff members duringuse the next 12 months of operation, and will also rely on the services of independent professionals for the auditing, evaluation and legal requirementsfunds for our listingbusiness. Changes in the conversion rate between the United States dollar and the RMB will affect that amount of proceeds we will have available for our business.
Markets
We are workingUnder the PRC Enterprise Income Tax Law, or the EIT Law, we may be classified as a “resident enterprise” of China, which could result in unfavorable tax consequences to enter into new-emerging application industries of Internet Technology, Artificial Intelligence(AI)us and the Internet of Things(IOT).
Competition
Barrier to entry in the industry is low and there are many competitors. Our competitors have significantly greater financial and marketing resources than we do. There are no assurances that our efforts to compete in the marketplace will be successful.
Seasonalitynon-PRC shareholders.
The natureEIT Law and its implementing rules provide that enterprises established outside of China whose “de facto management bodies” are located in China are considered “resident enterprises” under PRC tax laws. The implementing rules promulgated under the EIT Law define the term “de facto management bodies” as a management body which substantially manages, or has control over the business, personnel, finance and assets of an enterprise. In April 2009, the State Administration of Taxation, or SAT, issued a circular, known as Circular 82, which provides certain specific criteria for determining whether the “de facto management bodies” of a PRC-controlled enterprise that is incorporated offshore is located in China. However, there are no further detailed rules or precedents governing the procedures and specific criteria for determining “de facto management body.” Although our board of directors and management are located in the PRC, it is unclear if the PRC tax authorities would determine that we should be classified as a PRC “resident enterprise.”
If we are deemed as a PRC “resident enterprise,” we will be subject to PRC enterprise income tax on our worldwide income at a uniform tax rate of 25%, although dividends distributed to us from our existing PRC subsidiary and any other PRC subsidiaries which we may establish from time to time could be exempt from the PRC dividend withholding tax due to our PRC “resident recipient” status. This could have a material and adverse effect on our overall effective tax rate, our income tax expenses and our net income. Furthermore, dividends, if any, paid to our shareholders may be decreased as a result of the decrease in distributable profits. In addition, if we were considered a PRC “resident enterprise”, any dividends we pay to our non-PRC investors and the gains realized from the transfer of our future productsshares of common stock may be considered income derived from sources within the PRC and services does not appearbe subject to PRC tax, at a rate of 10% in the case of non-PRC enterprises or 20% in the case of non-PRC individuals (in each case, subject to the provisions of any applicable tax treaty). It is unclear whether holders of our shares of common stock would be affected by seasonal variations.
Government Regulations
Other thanable to claim the required adherence to general business lawsbenefits of any tax treaties between their country of tax residence and regulatory disclosure,the PRC in the event that we are treated as a PRC resident enterprise. This could have a material and adverse effect on the value of your investment in us and on the price of our services do not appear to be affected by any specific additional regulations. However, this does not preclude the possibility that governments where we operate or may eventually operate will not institute regulations that will make our company difficult or impossible to operate.
Intellectual Property
We currently hold rights to a registered database with 31 million members, and we have not filed for copyright or trademark protection for our name or services.shares of common stock.
| 5 |
| Table of Contents |
ResearchThere are significant uncertainties under the EIT Law relating to the withholding tax liabilities of our PRC subsidiary, and Developmentdividends payable by our PRC subsidiary to our offshore subsidiaries may not qualify to enjoy certain treaty benefits.
Under the PRC EIT Law and its implementation rules, the profits of a foreign invested enterprise generated through operations, which are distributed to its immediate holding company outside the PRC, will be subject to a withholding tax rate of 10%. Pursuant to a special arrangement between Hong Kong and the PRC, such rate may be reduced to 5% if a Hong Kong resident enterprise owns more than 25% of the equity interest in the PRC company. Our PRC subsidiary is wholly-owned by our Hong Kong subsidiary. Moreover, under the Notice of the State Administration of Taxation on Issues regarding the Administration of the Dividend Provision in Tax Treaties promulgated on February 20, 2009, the tax payer needs to satisfy certain conditions to enjoy the benefits under a tax treaty. These beneficial owner of the relevant dividends, and (2) the corporate shareholder to receive dividends from the PRC subsidiary must have continuously met the direct ownership thresholds during the 12 consecutive months preceding the receipt of the dividends. Further, the State Administration of Taxation promulgated the Notice on How to Understand and Recognize the “Beneficial Owner” in Tax Treaties on October 27, 2009, which limits the “beneficial owner” to individuals, projects or other organizations normally engaged in substantive operations, and sets forth certain detailed factors in determining the “beneficial owner” status. In current practice, a Hong Kong enterprise must obtain a tax resident certificate from the relevant Hong Kong tax authority to apply for the 5% lower PRC withholding tax rate. As the Hong Kong tax authority will issue such a tax resident certificate on a case-by-case basis, we cannot assure you that we will be able to obtain the tax resident certificate from the relevant Hong Kong tax authority. As of the date of this prospectus, we have not commenced the application process for a Hong Kong tax resident certificate from the relevant Hong Kong tax authority, and there is no assurance that we will be granted such a Hong Kong tax resident certificate.
Even after we obtain the Hong Kong tax resident certificate, we are required by applicable tax laws and regulations to file required forms and materials with relevant PRC tax authorities to prove that we can enjoy 5% lower PRC withholding tax rate. We have spent no time on specialized researchintend to obtain the required materials and development activities, and have nofile with the relevant tax authorities when it plans to undertake any research or development indeclare and pay dividends, but there is no assurance that the future.PRC tax authorities will approve the 5% withholding tax rate.
Environmental MattersU.S. regulatory bodies may be limited in their ability to conduct investigations or inspections of our operations in China.
Our operations are notAny disclosure of documents or information located in China by foreign agencies may be subject to environmentaljurisdiction constraints and must comply with China’s state secrecy laws, includingwhich broadly define the scope of “state secrets” to include matters involving economic interests and technologies. There is no guarantee that requests from U.S. federal or state regulators or agencies to investigate or inspect our operations will be honored by us, by entities who provide services to us or with whom we associate, without violating PRC legal requirements, especially as those entities are located in China. Furthermore, under the current PRC laws, an on-site inspection of our facilities by any laws addressing air and water pollution and management of hazardous substances and wastes and we do not anticipate capital expenditures for environmental control facilities.these regulators may be limited or prohibited.
Employees
We currently have eight employees, including our presidentThe PRC Securities Law was promulgated in December 1998 and directors who serve without remuneration. Towas subsequently revised in October 2005, June 2013, August 2014 and December 2019. According to Article 177 of the bestPRC Securities Law, or Article 177, which became effective in March 2020, no overseas securities regulator is allowed to directly conduct investigation or evidence collection activities within the territory of our knowledge, we arethe PRC. While there is no detailed interpretation regarding the rule implementation under Article 177, it will be difficult for an overseas securities regulator to conduct investigation or evidence collection activities in compliance with local prevailing wage regulations. None of our employees is represented by any collective bargaining agreement, and our relationship with our employees is good.
ADDITIONAL INFORMATION
We are required to file quarterly, annual and current reports. The Company files its reports electronically with the SEC. The SEC maintains an Internet site that contains reports, proxy and information statements, and other electronic information regarding issuers that file electronically with the SEC at http://www.sec.gov.
Item 1A. Risk Factors
As a “smaller reporting company”, we are not required to provide the information required by this Item.
Item 1B. Unresolved Staff Comments.
None.
Item 2. Properties.
Our principal place of business and corporate offices is located at Suite 2313, Dongfang Science and Technology Mansion, Nanshan District, Shenzhen, China 518000. The telephone number is (86)755-8316-0998.
Item 3. Legal Proceedings.
We are not involved in any pending legal proceeding nor are we aware of any pending or threatened litigation against us.
Item 4. Mine Safety Disclosures.
Not applicable.China.
| 6 |
| Table of Contents |
PART IIIf we become directly subject to the scrutiny, criticism and negative publicity involving U.S.-listed Chinese companies, we may have to expend significant resources to investigate and resolve the matter which could harm our business operations, stock price and reputation.
U.S. public companies that have substantially all of their operations in China have been the subject of intense scrutiny, criticism and negative publicity by investors, financial commentators and regulatory agencies, such as the SEC. Much of the scrutiny, criticism and negative publicity has centered on financial and accounting irregularities and mistakes, a lack of effective internal controls over financial accounting, inadequate corporate governance policies or a lack of adherence thereto and, in many cases, allegations of fraud. As a result of the scrutiny, criticism and negative publicity, the publicly traded stock of many U.S. listed Chinese companies sharply decreased in value and, in some cases, has become virtually worthless. Many of these companies are now subject to shareholder lawsuits and SEC enforcement actions and are conducting internal and external investigations into the allegations. It is not clear what effect this sector-wide scrutiny, criticism and negative publicity will have on us, our business and our stock price. If we become the subject of any unfavorable allegations, whether such allegations are proven to be true or untrue, we will have to expend significant resources to investigate such allegations and/or defend our company. This situation will be costly and time consuming and distract our management from developing our growth. If such allegations are not proven to be groundless, we and our business operations will be severely affected and you could sustain a significant decline in the value of our stock.
Item 5. Market for Registrant’s Common Equity, Related Stockholder MattersThe disclosures in our reports, other filings with the SEC and Issuer Purchasesour other public pronouncements are not subject to the scrutiny of Equity Securitiesany regulatory bodies in the PRC.
We are regulated by the SEC and our reports and other filings with the SEC are subject to SEC review in accordance with the rules and regulations promulgated by the SEC under the Securities Act and the Exchange Act. Our SEC reports and other disclosure and public pronouncements are not subject to the review or scrutiny of any PRC regulatory authority. For example, the disclosure in our SEC reports and other filings are not subject to the review by China Securities Regulatory Commission, a PRC regulator that is responsible for oversight of the capital markets in China. Accordingly, you should review our SEC reports, filings and our other public pronouncements with the understanding that no local regulator has done any review of us, our SEC reports, other filings or any of our other public pronouncements.
Market InformationChanges in China’s economic, political or social conditions or government policies could have a material adverse effect on our business and results of operations.
Our common stock is not traded on any exchange but is currently available for tradingprincipal office and planed business are located in the over‑the‑counter marketChina. Accordingly, our planed business, prospects, financial condition and is quoted on the Over-the-Counter Bulletin Board (“OTCBB”) and on the OTCQB operated by the OTC Markets Group, Inc. under the symbol “ELRE.” Our stock was approved for quotation on the OTCBB in 2007. Trading in stocks quoted on these markets is often thin and is characterized by wide fluctuations in trading prices due to many factors that may have little to do with a company’sresults of operations or business prospects.
Over the counter securities are not listed or traded on the floor of an organized national or regional stock exchange. Instead, these securities transactions are conducted through a telephone and computer network connecting dealers in stocks. Over-the-counter issuers are traditionally smaller companies that do not meet the financial and other listing requirements of a regional or national stock exchanges.
Trades in our common stock may be subjectinfluenced to Rule 15g‑9 of the Securities Exchange Act of 1934,a significant degree by political, economic and social conditions in China generally and by continued economic growth in China as amended, which imposes requirements on broker/dealers who sell securities subject to the rule to persons other than established customers and accredited investors. For transactions covered by the rule, broker/dealers must make a special suitability determination for purchasers of the securities and receive the purchaser’s written agreement to the transaction before the sale.whole.
The SEC alsoChinese economy differs from the economies of most developed countries in many respects, including the amount of government involvement, level of development, growth rate, control of foreign exchange and allocation of resources. Although the Chinese government has rules that regulate broker/dealer practicesimplemented measures emphasizing the utilization of market forces for economic reform, the reduction of state ownership of productive assets and the establishment of improved corporate governance in connection with transactionsbusiness enterprises, a substantial portion of productive assets in “penny stocks.” Penny stocks generally are equity securities with a price of less than $5.00 (other than securities listed on certain national exchanges, provided that the current price and volume information with respect to transactions in that securityChina is providedstill owned by the applicable exchangegovernment. In addition, the Chinese government continues to play a significant role in regulating industry development by imposing industrial policies. The Chinese government also exercises significant control over China’s economic growth through allocating resources, controlling payment of foreign currency-denominated obligations, setting monetary policy and providing preferential treatment to particular industries or system).companies.
While the Chinese economy has experienced significant growth over the past decades, growth has been uneven, both geographically and among various sectors of the economy. The penny stock rules requireChinese government has implemented various measures to encourage economic growth and guide the allocation of resources. Some of these measures may benefit the overall Chinese economy but may have a broker/dealer, before effecting a transactionnegative effect on us. For example, our financial condition and results of operations may be adversely affected by government control over capital investments or changes in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document prepared by the SEC that provides information about penny stocks and the nature and level of riskstax regulations. In addition, in the penny stock market. The broker/dealer also must providepast the customer with current bidChinese government has implemented certain measures, including interest rate increases, to control the pace of economic growth. These measures may cause decreased economic activity in China, and offer quotations for the penny stock, the compensation of the broker/dealer and its salespersonsince 2012, China’s economic growth has slowed down. Any prolonged slowdown in the transaction,Chinese economy may materially and monthly account statements showing the market valueadversely affect our business and results of each penny stock held in the customer’s account. The bid and offer quotations, and the broker/dealer and salesperson compensation information, must be given to the customer orally or in writing before effecting the transaction, and must be given to the customer in writing before or with the customer’s confirmation. These disclosure requirements may have the effect of reducing the level of trading activity in the secondary market for shares of our common stock. As a result of these rules, investors may find it difficult to sell their shares.operations.
| 7 |
| Table of Contents |
The following table sets forthUncertainties in the quarterly highinterpretation and low bid prices forenforcement of Chinese laws and regulations could limit the common stock from March 31, 2020legal protections available to March 31, 2022. The prices set forth below represent inter-dealer quotations, without retail markup, markdown or commission and may not be reflective of actual transactions
|
| High |
|
| Low |
| ||
Quarter ended March 31, 2020 |
| $ | 4.8 |
|
|
| 3.5 |
|
Quarter ended June 30, 2020 |
| $ | 4.0 |
|
|
| 2.8 |
|
Quarter ended September 30, 2020 |
| $ | 4.3 |
|
|
| 1.8 |
|
Quarter ended December 31, 2020 |
| $ | 3.0 |
|
|
| 1.6 |
|
Quarter ended March 31, 2021 |
| $ | 3.8 |
|
|
| 1.4 |
|
Quarter ended June 30, 2021 |
| $ | 0.8 |
|
|
| 0.4 |
|
Quarter ended September 30, 2021 |
| $ | 0.8 |
|
|
| 0.2 |
|
Quarter ended December 31, 2021 |
| $ | 0.8 |
|
|
| 0.2 |
|
Quarter ended March 31, 2022 |
| $ | 0.8 |
|
|
| 0.1 |
|
Holders
As of March 31, 2022, there were 1,732 stockholders of record, and an aggregate of 1,983,518 shares of our common stock were issued and outstanding.
The transfer agent of our company’s common stock is Transfer Online, Inc. at SE 512 Salmon Street, Portland, OR 97214.
Description of Securitiesus.
The authorizedPRC legal system is based on written statutes and prior court decisions have limited value as precedents. Since these laws and regulations are relatively new and the PRC legal system continues to rapidly evolve, the interpretations of many laws, regulations and rules are not always uniform and enforcement of these laws, regulations and rules involves uncertainties.
Although we have taken measures to comply with the laws and regulations that are applicable to our business operations, including the regulatory principles raised by the CBRC, and avoiding conducting any activities that may be deemed as illegal fund-raising, forming capital stockpool or providing guarantee to investors under the current applicable laws and regulations, the PRC government authority may promulgate new laws and regulations regulating the direct lending service industry in the future. We cannot assure you that our practices would not be deemed to violate any PRC laws or regulations relating to illegal fund-raising, forming capital pools or the provision of credit enhancement services. Moreover, we cannot rule out the possibility that the PRC government will institute a license requirement covering our industry at some point in the future. If such a licensing regime were introduced, we cannot assure you that we would be able to obtain any newly required license in a timely manner, or at all, which could materially and adversely affect our business and impede our ability to continue our operations.
From time to time, we may have to resort to administrative and court proceedings to enforce our legal rights. However, since PRC administrative and court authorities have significant discretion in interpreting and implementing statutory and contractual terms, it may be more difficult to evaluate the outcome of administrative and court proceedings and the level of legal protection we enjoy, than in more developed legal systems. Furthermore, the PRC legal system is based in part on government policies and internal rules (some of which are not published in a timely manner or at all) that may have a retroactive effect. As a result, we may not be aware of our company consistsviolation of 3,000,000,000 sharesthese policies and rules until sometime after the violation. Such uncertainties, including uncertainty over the scope and effect of common stock, at $0.001 par value.our contractual, property (including intellectual property) and procedural rights, could materially and adversely affect our business and impede our ability to continue our operation.
The relevant business currently carried out by our PRC subsidiaries and our investment in the PRC subsidiaries currently are not subject to the national security review under applicable PRC laws and regulations. However, if our future business operations or potential mergers and acquisitions we enter into in the PRC are related to material infrastructure or other national security sensitive areas or industries involving certain key technologies, national security review requirements will likely apply and the review result that is in compliance with PRC laws should be definitive. It remains unclear when the specific implementation measures of the Foreign Investment Law will be issued by the State Council. Given the uncertainties exist with respect to the interpretation and implementation of the Foreign Investment Law, its application may require further rules to be issued by Chinese government, which may incur and increase our compliance costs and expenses and accordingly our financial condition and operation will be adversely affected.
Dividend PolicyWe may be adversely affected by the complexity, uncertainties and changes in PRC regulation of internet-related businesses and companies, and any lack of requisite approvals, licenses or permits applicable to our business may have a material adverse effect on our business and results of operations.
We have not paid any cash dividends on our common stockThe PRC government extensively regulates the internet industry, including foreign ownership of, and have no present intentionthe licensing and permit requirements pertaining to, companies in the internet industry. These internet-related laws and regulations are relatively new and evolving, and their interpretation and enforcement involve significant uncertainties. As a result, in certain circumstances it may be difficult to determine what actions or omissions may be deemed to be in violation of paying any dividends onapplicable laws and regulations.
The evolving PRC regulatory system for the sharesinternet industry may lead to the establishment of our common stock. Our current policynew regulatory agencies. For example, in May 2011, the State Council announced the establishment of a new department, the State Internet Information Office (with the involvement of the State Council Information Office, the MITT, and the Ministry of Public Security). The primary role of this new agency is to retain earnings, if any, for usefacilitate the policy-making and legislative development in our operationsthis field, to direct and coordinate with the relevant departments in connection with online content administration and to deal with cross-ministry regulatory matters in relation to the development of our business. Our future dividend policy will be determined from time to time by our board of directors.internet industry.
| 8 |
| Table of Contents |
Equity Compensation Plan Information
We do not haveThe Circular on Strengthening the Administration of Foreign Investment in effect any compensation plans under which our equity securities are authorized for issuance and we do not have any outstanding stock options.
Recent SalesOperation of Unregistered Securities
We did not sell any equity securities, which were not registered under the Securities Act during the year ended March 31, 2022, that were not otherwise disclosed on our quarterly reports on Form 10-Q or our current reports on Form 8-K filed during the year ended March 31, 2022.
Purchase of Equity SecuritiesValue-added Telecommunications Business, issued by the IssuerMITT in July 2006, prohibits domestic telecommunication service providers from leasing, transferring or selling telecommunications business operating licenses to any foreign investor in any form, or providing any resources, sites or facilities to any foreign investor for their illegal operation of a telecommunications business in China. According to this circular, either the holder of a value-added telecommunication services operation permit or its shareholders must directly own the domain names and Affiliated Purchasers
We did not purchase anytrademarks used by such license holders in their provision of our sharesvalue-added telecommunication services. The circular also requires each license holder to have the necessary facilities, including servers, for its approved business operations and to maintain such facilities in the regions covered by its license. If an ICP License holder fails to comply with the requirements and also fails to remedy such non-compliance within a specified period of common stocktime, the MITT or other securities during our fourth quarter of our fiscal year ended March 31, 2022.
Item 6. Selected Financial Data
As a “smaller reporting company”, we are not requiredits local counterparts have the discretion to provide the information required by this Item.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operationstake administrative measures against such license holder, including revoking its ICP License.
The following discussion should be readinterpretation and application of existing PRC laws, regulations and policies and possible new laws, regulations or policies relating to the internet industry have created substantial uncertainties regarding the legality of existing and future foreign investments in, conjunction with our audited financial statements and the related notesbusinesses and activities of, internet businesses in China, including our business. We cannot assure you that appear elsewherewe have obtained all the permits or licenses required for conducting our business in this annual report. The following discussion contains forward-looking statements based upon current expectationsChina or will be able to maintain our existing licenses or obtain new ones. If the PRC government considers that involve riskswe were operating without the proper approvals, licenses or permits or promulgates new laws and uncertainties, such as our plans, objectives, expectations and intentions. Actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of a number of factors, including those set forth under the Item 1A.
Our audited 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 relianceregulations that require additional approvals or licenses or imposes additional restrictions on the saleoperation of any part of our common stockbusiness, it has the power, among other things, to levy fines, confiscate our income, revoke our business licenses, and require us to discontinue our relevant business or impose restrictions on the advances fromaffected portion of our president, there are no assurancesbusiness. Any of any future sourcethese actions by the PRC government may have a material adverse effect on our business and results of funds for our operations.
PlanPRC regulation of Operationloans to, and direct investment in, PRC entities by offshore holding companies may delay or prevent us from using proceeds from future financing activities to make loans or additional capital contributions to our PRC operating subsidiaries.
We devote substantial effortsIn July 2014, SAFE promulgated the Circular on Relevant Issues Concerning Foreign Exchange Control on Domestic Residents’ Offshore Investment and Financing and Roundtrip Investment through Special Purpose Vehicles, or SAFE Circular 37, which replaces the previous SAFE Circular 75. SAFE Circular 37 requires PRC residents, including PRC individuals and PRC corporate entities, to enter into new-emerging application industries of Internet Technology, Artificial Intelligence (AI) and the Internet of Things (IOT).. However,register with SAFE or its local branches in connection with their direct or indirect offshore investment activities. SAFE Circular 37 is applicable to our planned principal operations have not yet commenced.
Need for Additional Capital
The Company has not generated any revenues from operations,shareholders who are PRC residents and may be unableapplicable to fund on-going activities.any offshore acquisitions that we may make in the future.
Under SAFE Circular 37, PRC residents who make, or have prior to the implementation of SAFE Circular 37 made, direct or indirect investments in offshore special purpose vehicles, or SPVs, are required to register such investments with SAFE or its local branches. In addition, any PRC resident who is a direct or indirect shareholder of an SPV, is required to update its registration with the local branch of SAFE with respect to that SPV, to reflect any material change. Moreover, any subsidiary of such SPV in China is required to urge the PRC resident shareholders to update their registration with the local branch of SAFE to reflect any material change. If any PRC resident shareholder of such SPV fails to make the required registration or to update the registration, the subsidiary of such SPV in China may be prohibited from distributing its profits or the proceeds from any capital reduction, share transfer or liquidation to the SPV, and the SPV may also be prohibited from making additional capital contributions into its subsidiaries in China. In February, 2015, SAFE promulgated a Notice on Further Simplifying and Improving Foreign Exchange Administration Policy on Direct Investment, or SAFE Notice 13. Under SAFE Notice 13, applications for foreign exchange registration of inbound foreign direct investments and outbound direct investments, including those required under SAFE Circular 37, must be filed with qualified banks instead of SAFE. Qualified banks should examine the applications and accept registrations under the supervision of SAFE. We have used our best efforts to notify PRC residents or entities who directly or indirectly hold shares in our Nevada holding company and who are known to us as being PRC residents to complete the foreign exchange registrations. However, we may not be informed of the identities of all the PRC residents or entities holding direct or indirect interest in our company, nor can we compel our beneficial owners to comply with SAFE registration requirements. We cannot guaranteeassure you that weall other shareholders or beneficial owners of ours who are PRC residents or entities have complied with, and will be successful in the future make, obtain or update any applicable registrations or approvals required by, SAFE regulations. Failure by such shareholders or beneficial owners to comply with SAFE regulations, or failure by us to amend the foreign exchange registrations of our PRC subsidiaries, could subject us to fines or legal sanctions, restrict our overseas or cross-border investment activities, and limit our PRC subsidiaries’ ability to make distributions or pay dividends to us or affect our ownership structure, which could adversely affect 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.prospects.
| 9 |
| Table of Contents |
If weFurthermore, as these foreign exchange and outbound investment related regulations are unable to meet our needs for cash from either our operations,relatively new and their interpretation and implementation has been constantly evolving, it is unclear how these regulations, and any future regulation concerning offshore or possible alternative sources, thencross-border investments and transactions, will be interpreted, amended and implemented by the relevant government authorities. For example, we may be unablesubject to continue, develop,a more stringent review and approval process with respect to our foreign exchange activities, such as remittance of dividends and foreign-currency-denominated borrowings, which may adversely affect our financial condition and results of operations. We cannot assure you that we have complied or expand our operations.
Ifwill be able to comply with all applicable foreign exchange and outbound investment related regulations. In addition, if we are unabledecide to complete any phaseacquire a PRC domestic company, we cannot assure you that we or the owners of our development program or fail to raise additional capital to maintain our operations insuch company, as the future, wecase may be, unablewill be able to carry outobtain the necessary approvals or complete the necessary filings and registrations required by the foreign exchange regulations. This may restrict our fullability to implement our acquisition strategy and could adversely affect our business plan or we may be forced to cease operations.
Results of Operationsand prospects.
We have generated no revenuesmay decide to finance our PRC subsidiary by means of capital contributions. According to the relevant PRC regulations on foreign-invested enterprises in China, these capital contributions are subject to registration with or approval by the MOFCOM or its local counterparts. In addition, the PRC government also restricts the convertibility of foreign currencies into Renminbi and have incurred $472,803use of the proceeds. On March 30, 2015, SAFE promulgated Circular 19, which took effect and replaced certain previous SAFE regulations from June 1, 2015. SAFE further promulgated Circular 16, effective on June 9, 2016, which, among other things, amend certain provisions of Circular 19. According to SAFE Circular 19 and SAFE Circular 16, the flow and use of the Renminbi capital converted from foreign currency denominated registered capital of a foreign-invested company is regulated such that Renminbi capital may not be used for business beyond its business scope or to provide loans to persons other than affiliates unless otherwise permitted under its business scope. Violations of the applicable circulars and rules may result in expenses forsevere penalties, including substantial fines as set forth in the year ended March 31, 2022.Foreign Exchange Administration Regulations. These circulars may limit our ability to transfer the net proceeds from this offering to our PRC subsidiary, and we may not be able to convert the net proceeds from this offering into Renminbi to invest in or acquire any other PRC companies in China.
The following table provides selected financial data aboutIn light of the various requirements imposed by PRC regulations on loans to, and direct investment in, PRC entities by offshore holding companies, we cannot assure you that we will be able to complete the necessary government registrations or obtain the necessary government approvals on a timely basis, if at all, with respect to future loans to our company as of March 31, 2022PRC subsidiary or future capital contributions by us to our PRC subsidiary. If we fail to complete such registrations or obtain such approvals, our ability to use the proceeds we expect to receive from future funding and 2021.
|
| March 31, 2022 |
|
| March 31, 2021 |
| ||
Cash |
| $ | 525 |
|
| $ | 300 |
|
Total Assets |
|
| 13,321 |
|
|
| 81,630 |
|
Total Liabilities |
|
| 2,457,748 |
|
|
| 2,024,936 |
|
Stockholders’ Deficit |
| $ | (2,444,427 | ) |
| $ | (1,943,306 | ) |
As of March 31, 2022, the Company’s cash balance was $525 compared to $300 as of March 31, 2021,fund our PRC operations may be negatively affected, which could materially and adversely affect our liquidity and our total assets as of March 31, 2022, were $13,321 compared with $81,630 as of March 31, 2021. The decrease in total assets was dueability to the lessor operating lease right of use asset, net recognized as of March 31, 2022.fund and expand our business.
As of March 31, 2022, the Company had total liabilities of $2,457,748 comparedPRC laws and regulations governing our current business operations are sometimes vague and uncertain. Uncertainties with total liabilities of $2,024,936 as of March 31, 2021. The increase in total liabilities was primarily attributed to an increase in related party debt owedrespect to the PresidentPRC legal system, including those regarding the enforcement of laws, and sudden or unexpected changes, with little advance notice, in laws and regulations in China could adversely affect us and limit the legal protections available to you and us.
There are substantial uncertainties regarding the interpretation and application of PRC laws and regulations including, but not limited to, the laws and regulations governing our business and the enforcement and performance of our arrangements with customers in certain circumstances. The laws and regulations are sometimes vague and may be subject to future changes, and their official interpretation and enforcement could be unpredictable, with little advance notice. The effectiveness and interpretation of newly enacted laws or regulations, including amendments to existing laws and regulations, may be delayed, and our business may be affected if we rely on laws and regulations which are subsequently adopted or interpreted in a manner different from our understanding of these laws and regulations. New laws and regulations that affect existing and proposed future businesses may also be applied retroactively. We cannot predict what effect the interpretation of existing or new PRC laws or regulations may have on our business.
Our WFOE, Yinfu International Holdings Limited, its subsidiaries are formed under and governed by the laws of the Company, offset byPRC. The PRC legal system is a decrease in operating lease liabilities - currentcivil law system based on written statutes. Unlike the common law system, prior court decisions under the civil law system may be cited for reference, but have limited precedential value. Since these laws and other payables.
|
| Year Ended March 31, 2022 |
|
| Year Ended March 31, 2021 |
| ||
Revenue |
| $ | - |
|
| $ | - |
|
Operating Expenses |
|
|
|
|
|
|
|
|
General and administrative |
|
| 416,283 |
|
|
| 211,426 |
|
Professional fees |
|
| 56,520 |
|
|
| 75,055 |
|
Total Operating Expenses |
|
| 472,803 |
|
|
| 286,481 |
|
Loss from Operations |
| $ | (472,803 | ) |
| $ | (286,481 | ) |
Revenues
The Company has generated no operating revenues duringregulations are relatively new and the years ended March 31, 2022PRC legal system continues to rapidly evolve, the interpretations of many laws, regulations and 2021.
Operating expenses
Forrules are not always uniform and the year ended March 31, 2022, total operating expenses were $472,803 which consistedenforcement of generalthese laws, regulations and administrative fees and professional fees. For the year ended March 31,2021, total operating expenses were $286,481 which consisted of general and administrative fees and professional fees. The increase in operating expense was mainly due to the increase in general and administrative expense which mainly resulted from the increased management salary for the year ended March 31, 2022.rules involves uncertainties.
| 10 |
| Table of Contents |
LiquidityIn 1979, the PRC government began to promulgate a comprehensive system of laws and Capital Resourcesregulations governing economic matters in general, such as foreign investment, corporate organization and governance, commerce, taxation and trade. The overall effect of legislation over the past three decades has significantly enhanced the protections afforded to various forms of foreign investments in China. However, since the PRC legal system continues to evolve rapidly, the interpretations of many laws, regulations and rules are not always uniform and enforcement of these laws, regulations and rules involves uncertainties and sudden changes, sometimes with little advance notice. As a significant part of our business is conducted in China, our operations are principally governed by PRC laws and regulations, which may limit legal protections available to us. Uncertainties due to evolving laws and regulations could also impede the ability of a China-based company, such as our company, to obtain or maintain permits or licenses required to conduct business in China. In the absence of required permits or licenses, governmental authorities could impose material sanctions or penalties on us. In addition, some regulatory requirements issued by certain PRC government authorities may not be consistently applied by other PRC government authorities (including local government authorities), thus making strict compliance with all regulatory requirements impractical, or in some circumstances impossible. For example, we may have to resort to administrative and court proceedings to enforce the legal protection that we enjoy either by law or contract. However, since PRC administrative and court authorities have discretion in interpreting and implementing statutory and contractual terms, it may be more difficult to predict the outcome of administrative and court proceedings and the level of legal protection we enjoy than in more developed legal systems. Furthermore, the PRC legal system is based in part on government policies and internal rules, some of which are not published on a timely basis or at all and may have retroactive effect. As a result, we may not be aware of our violation of any of these policies and rules until sometime after the violation. In addition, any administrative and court proceedings in China may be protracted, resulting in substantial costs and diversion of resources and management attention.
The PRC government has significant oversight and discretion over the conduct of our business and may intervene or influence our operations as the government deems appropriate to further regulatory, political and societal goals. The PRC government has recently published new policies that significantly affected certain industries such as the education and internet industries, and we cannot rule out the possibility that it will in the future release regulations or policies regarding our industry that could adversely affect our business, financial condition and results of operations. Furthermore, the PRC government has recently indicated an intent to exert more oversight and control over securities offerings and other capital markets activities that are conducted overseas and foreign investment in China-based companies like us. Any such action, once taken by the PRC government, could significantly limit or completely hinder our ability to offer or continue to offer securities to investors and cause the value of such securities to significantly decline or in extreme cases, become worthless.
Furthermore, if China adopts more stringent standards with respect to certain areas such as environmental protection or corporate social responsibilities, we may incur increased compliance costs or become subject to additional restrictions in our operations. Certain areas of the law, including intellectual property rights and confidentiality protections in China may also not be as effective as in the United States or other countries. In addition, we cannot predict the effects of future developments in the PRC legal system on our business operations, including the promulgation of new laws, or changes to existing laws or the interpretation or enforcement thereof. These uncertainties could limit the legal protections available to us and our investors, including you.
We may become subject to a variety of laws and regulations in the PRC regarding privacy, data security, cybersecurity, and data protection. We may be liable for improper use or appropriation of personal information provided by our customers.
Working Capital
|
| As of March 31, 2022 |
|
| As of March 31, 2021 |
| ||
Current Assets |
| $ | 6,840 |
|
| $ | 1,995 |
|
Current Liabilities |
| $ | 2,457,748 |
|
| $ | 2,024,936 |
|
Working Capital Deficiency |
| $ | (2,450,908 | ) |
| $ | (2,022,941 | ) |
AsWe may become subject to a variety of March 31, 2022,laws and regulations in the Company had a working capital deficiency of $2,450,908 compared with working capital deficiency of $2,022,941 as of March 31, 2021.PRC regarding privacy, data security, cybersecurity, and data protection. These laws and regulations are continuously evolving and developing. The increase in working capital deficiency was primarily attributed to the increase in current liabilities due to an increase in payable to related partyscope and interpretation of the Company.
Cash Flows
|
| Year Ended March 31, 2022 |
|
| Year Ended March 31, 2021 |
| ||
Cash Used in Operating Activities |
| $ | (172,771 | ) |
| $ | (348,186 | ) |
Cash Used in Investing Activities |
| $ | - |
|
| $ | - |
|
Cash Provided by Financing Activities |
| $ | 172,981 |
|
| $ | 347,678 |
|
Effects on changes in foreign exchange rate |
| $ | 15 |
|
| $ | 33 |
|
Net (Decrease)/Increase in Cash During the Year |
| $ | 225 |
|
| $ | (475 | ) |
Cash Flows Used in Operating Activities
During the year ended March 31, 2022, the Company had $172,771 in cash used in operating activities which was mainly attributedlaws that are or may be applicable to loss from operations of $473,220, an increase in other receivable of $4,508us are often uncertain and a decrease in operating lease liability of $74,895 partially offset by the amortization of right-of-use asset of $74,895, the increase in wage payablemay be conflicting, particularly with respect to related party of $251,778, compared to cash used in operating activities of $348,186 during the year ended March 31, 2021. The decrease in cash used for operating activities was due to the increase in accounts payableforeign laws. In particular, there are numerous laws and accrued liabilitiesregulations regarding privacy and the increasecollection, sharing, use, processing, disclosure, and protection of personal information and other user data. Such laws and regulations often vary in wage payablescope, may be subject to related party for the year ended March 31, 2022.differing interpretations, and may be inconsistent among different jurisdictions.
| 11 |
| Table of Contents |
Cash Flows Used in Investing ActivitiesWe expect to obtain information about various aspects of our operations as well as regarding our employees and third parties. We also maintain information about various aspects of our operations as well as regarding our employees. The integrity and protection of our customer, employee and company data is critical to our business. Our customers and employees expect that we will adequately protect their personal information. We are required by applicable laws to keep strictly confidential the personal information that we collect, and to take adequate security measures to safeguard such information.
DuringThe PRC Criminal Law, as amended by its Amendment 7 (effective on February 28, 2009) and Amendment 9 (effective on November 1, 2015), prohibits institutions, companies and their employees from selling or otherwise illegally disclosing a citizen’s personal information obtained during the years ended March 31, 2022course of performing duties or providing services or obtaining such information through theft or other illegal ways. On November 7, 2016, the Standing Committee of the PRC National People’s Congress issued the Cyber Security Law of the PRC, or Cyber Security Law, which became effective on June 1, 2017.
Pursuant to the Cyber Security Law, network operators must not, without users’ consent, collect their personal information, and may only collect users’ personal information necessary to provide their services. Providers are also obliged to provide security maintenance for their products and services and shall comply with provisions regarding the protection of personal information as stipulated under the relevant laws and regulations.
The Civil Code of the PRC (issued by the PRC National People’s Congress on May 28, 2020 and effective from January 1, 2021) provides main legal basis for privacy and personal information infringement claims under the Chinese civil laws. PRC regulators, including the Cyberspace Administration of China, MIIT, and the Ministry of Public Security have been increasingly focused on regulation in the areas of data security and data protection.
The PRC regulatory requirements regarding cybersecurity are constantly evolving. For instance, various regulatory bodies in China, including the Cyberspace Administration of China, the Ministry of Public Security and the SAMR, have enforced data privacy and protection laws and regulations with varying and evolving standards and interpretations. In April 2020, the Chinese government promulgated Cybersecurity Review Measures, which came into effect on June 1, 2020. According to the Cybersecurity Review Measures, operators of critical information infrastructure must pass a cybersecurity review when purchasing network products and services which do or may affect national security.
In November 2016, the Standing Committee of China’s National People’s Congress passed China’s first Cybersecurity Law (“CSL”), which became effective in June 2017. The CSL is the first PRC law that systematically lays out the regulatory requirements on cybersecurity and data protection, subjecting many previously under-regulated or unregulated activities in cyberspace to government scrutiny. The legal consequences of violation of the CSL include penalties of warning, confiscation of illegal income, suspension of related business, winding up for rectification, shutting down the websites, and revocation of business license or relevant permits. In April 2020, the Cyberspace Administration of China and certain other PRC regulatory authorities promulgated the Cybersecurity Review Measures, which became effective in June 2020. Pursuant to the Cybersecurity Review Measures, operators of critical information infrastructure must pass a cybersecurity review when purchasing network products and services which do or may affect national security. On July 10, 2021, the Company used no cashCyberspace Administration of China issued a revised draft of the Measures for Cybersecurity Review for public comments (“Draft Measures”), which required that, in investing activities.
Cash Flows Provided by Financing Activities
Financingaddition to “operator of critical information infrastructure,” any “data processor” carrying out data processing activities for both 2022that affect or may affect national security should also be subject to cybersecurity review, and 2021 mainly referredfurther elaborated the factors to be considered when assessing the proceeds from related party for operating.
Mr. Jiang Libin advanced netnational security risks of the relevant activities, including, among others, (i) the risk of core data, important data or a large amount of $120,541personal information being stolen, leaked, destroyed, and $347,678 toillegally used or exited the Company forcountry; and (ii) the years ended March 31, 2022 and 2021 respectively. Mr. Huang Jing advanced netrisk of critical information infrastructure, core data, important data or a large amount of $52,440personal information being affected, controlled, or maliciously used by foreign governments after listing abroad. The Cyberspace Administration of China has said that under the proposed rules companies holding data on more than 1,000,000 users must now apply for cybersecurity approval when seeking listings in other nations because of the risk that such data and $0 topersonal information could be “affected, controlled, and maliciously exploited by foreign governments,” The cybersecurity review will also investigate the Company for the years ended March 31, 2022 and 2021 respectively.
Off-Balance Sheet Arrangements
potential national security risks from overseas IPOs. We do not have any off-balance sheet arrangementsknow what regulations will be adopted or how such regulations will affect us and our listing on Nasdaq. In the event that have orthe Cyberspace Administration of China determines that we are reasonably likelysubject to have a current or futurethese regulations, we may be required to delist from Nasdaq and we may be subject to fines and penalties. On June 10, 2021, the Standing Committee of the NPC promulgated the PRC Data Security Law, which will take effect on September 1, 2021. The Data Security Law also sets forth the data security protection obligations for entities and individuals handling personal data, including that no entity or individual may acquire such data by stealing or other illegal means, and the collection and use of such data should not exceed the necessary limits The costs of compliance with, and other burdens imposed by, CSL and any other cybersecurity and related laws may limit the use and adoption of our financial condition, changes in financial condition, revenuesproducts and services and could have an adverse impact on our business. Further, if the enacted version of the Measures for Cybersecurity Review mandates clearance of cybersecurity review and other specific actions to be completed by companies like us, we face uncertainties as to whether such clearance can be timely obtained, or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk.
As a “smaller reporting company”, we are not required to provide the information required by this Item.at all.
| 12 |
| Table of Contents |
Item 8. Financial StatementsIf the new PRC Data Security Law is enacted in September, we will not be subject to the cybersecurity review by the CAC for future offering, given that: (i) our products and Supplementary Data.services are offered not directly to individual users but through our institutional customers; (ii) we do not possess a large amount of personal information in our business operations; and (iii) data processed in our business does not have a bearing on national security and thus may not be classified as core or important data by the authorities. However, there remains uncertainty as to how the Draft Measures will be interpreted or implemented and whether the PRC regulatory agencies, including the CAC, may adopt new laws, regulations, rules, or detailed implementation and interpretation related to the Draft Measures. If any such new laws, regulations, rules, or implementation and interpretation comes into effect, we will take all reasonable measures and actions to comply and to minimize the adverse effect of such laws on us.
We cannot assure you that PRC regulatory agencies, including the CAC, would take the same view as we do, and there is no assurance that we can fully or timely comply with such laws. In the event that we are subject to any mandatory cybersecurity review and other specific actions required by the CAC, we face uncertainty as to whether any clearance or other required actions can be timely completed, or at all. Given such uncertainty, we may be further required to suspend our relevant business, shut down our website, or face other penalties, which could materially and adversely affect our business, financial condition, and results of operations.
Failure to make adequate contributions to various employee benefit plans as required by PRC regulations may subject us to penalties.
YINFU GOLD CORPORTIONWe are required under PRC laws and regulations to participate in various government sponsored employee benefit plans, including certain social insurance, housing funds and other welfare-oriented payment obligations, and contribute to the plans in amounts equal to certain percentages of salaries, including bonuses and allowances, of our employees up to a maximum amount specified by the local government from time to time at locations where we operate our businesses. The requirement of employee benefit plans has not been implemented consistently by the local governments in China given the different levels of economic development in different locations. We have not made adequate employee benefit payments. We may be required to make up the contributions for these plans as well as to pay late fees and fines. If we are subject to late fees or fines in relation to the underpaid employee benefits, our financial condition and results of operations may be adversely affected.
AUDITED CONSOLIDATED FINANCIAL STATEMENTSThe recent joint statement by the SEC and PCAOB, proposed rule changes submitted by Nasdaq, and the Holding Foreign Companies Accountable Act all call for additional and more stringent criteria to be applied to emerging market companies upon assessing the qualification of their auditors, especially the non-U.S. auditors who are not inspected by the PCAOB. These developments could add uncertainties to our future offering.
MARCH 31, 2022 AND 2021
(STATED IN U.S. DOLLARS)On April 21, 2020, SEC Chairman Jay Clayton and PCAOB Chairman William D. Duhnke III, along with other senior SEC staff, released a joint statement highlighting the risks associated with investing in companies based in or have substantial operations in emerging markets including China. The joint statement emphasized the risks associated with lack of access for the PCAOB to inspect auditors and audit work papers in China and higher risks of fraud in emerging markets.
| 13 |
| Table of Contents |
|
| ||
|
| ||
| |||
|
| ||
| |||
| |||
|
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
|
|
|
OpinionOn May 18, 2020, Nasdaq filed three proposals with the SEC to (i) apply minimum offering size requirement for companies primarily operating in “Restrictive Market”, (ii) adopt a new requirement relating to the qualification of management or board of director for Restrictive Market companies, and (iii) apply additional and more stringent criteria to an applicant or listed company based on the Financial Statementsqualifications of the company’s auditors.
We have auditedOn May 20, 2020, the accompanying balance sheetsU.S. Senate passed the Holding Foreign Companies Accountable Act requiring a foreign company to certify it is not owned or controlled by a foreign government if the PCAOB is unable to audit specified reports because the company uses a foreign auditor not subject to PCAOB inspection. If the PCAOB is unable to inspect the company’s auditors for three consecutive years, the issuer’s securities are prohibited to trade on a national securities exchange or in the over the counter trading market in the U.S. On December 2, 2020, the U.S. House of Yinfu Gold Corp. (the Company) as ofRepresentatives approved the Holding Foreign Companies Accountable Act. On December 18, 2020, the Holding Foreign Companies Accountable Act was signed into law.
On March 31, 202224, 2021, the SEC announced that it had adopted interim final amendments to implement congressionally mandated submission and 2021, and the related statements of operations, stockholders’ equity, and cash flows for eachdisclosure requirements of the yearsAct. The interim final amendments will apply to registrants that the SEC identifies as having filed an annual report on Forms 10-K, 20-F, 40-F or N-CSR with an audit report issued by a registered public accounting firm that is located in a foreign jurisdiction and that the PCAOB has determined it is unable to inspect or investigate completely because of a position taken by an authority in that jurisdiction. The SEC will implement a process for identifying such a registrant and any such identified registrant will be required to submit documentation to the SEC establishing that it is not owned or controlled by a governmental entity in that foreign jurisdiction, and will also require disclosure in the two-year period ended March 31, 2022,registrant’s annual report regarding the audit arrangements of, and governmental influence on, such a registrant.
On June 22, 2021, the related notes (collectively referredU.S. Senate passed the Accelerating Holding Foreign Companies Accountable Act, which, if passed by the U.S. House of Representatives and signed into law, would reduce the number of consecutive non-inspection years required for triggering the prohibitions under the HFCAA from three years to two, and thus, would reduce the time before our securities may be prohibited from trading or delisted.
On September 22, 2021, the PCAOB adopted a final rule implementing the HFCAA, which provides a framework for the PCAOB to use when determining, as contemplated under the financial statements). In our opinion,HFCAA, whether the financial statements present fairly,PCAOB is unable to inspect or investigate completely registered public accounting firms located in all material respects,a foreign jurisdiction because of a position taken by one or more authorities in that jurisdiction.
On December 2, 2021, the financial position ofSEC issued amendments to finalize rules implementing the Company as of March 31, 2022submission and 2021, and the results of its operations and its cash flows for each of the yearsdisclosure requirements in the two-year period ended March 31, 2022.HFCAA. The rules apply to registrants that the SEC identifies as having filed an annual report with an audit report issued by a registered public accounting firm that is located in a foreign jurisdiction and that PCAOB is unable to inspect or investigate completely because of a position taken by an authority in foreign jurisdictions.
Explanatory Paragraph Regarding Going ConcernOn December 16, 2021, the PCAOB issued a report on its determinations that it is unable to inspect or investigate completely PCAOB-registered public accounting firms headquartered in mainland China and in Hong Kong, because of positions taken by PRC authorities in those jurisdictions.
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 3lack of access to the PCAOB inspection in China prevents the PCAOB from fully evaluating audits and quality control procedures of the auditors based in China. As a result, the investors may be deprived of the benefits of such PCAOB inspections. The inability of the PCAOB to conduct inspections of auditors in China makes it more difficult to evaluate the effectiveness of these accounting firms’ audit procedures or quality control procedures as compared to auditors outside of China that are subject to the PCAOB inspections, which could cause existing and potential investors in our stock to lose confidence in our audit procedures and reported financial statements,information and the Company had incurred substantial losses during the year, and has a working capital deficit, which raises substantial doubt about its ability to continue as a going concern. Management’s plan in regards to these matters are described in Note 3. Thesequality of our financial statements do not include any adjustments that might result from the outcome of this uncertainty.statements.
Basis for Opinion
These financial statementsOur auditor, JLKZ CPA LLP.,the independent registered public accounting firm that issues the audit report included elsewhere in this prospectus, as an auditor of companies that are traded publicly in the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We areUnited States and a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are requiredPCAOB, is subject to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The Critical Audit Matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. We determined that there are no critical audit matters.
/s/ JLKZ CPA LLP
JLKZ CPA LLP.
Flushing, New York
June 29, 2022
We have served as the Company’s auditor since December 2018
|
|
|
|
| March 31, |
|
| March 31, |
| ||
|
| 2022 |
|
| 2021 |
| ||
ASSETS |
| |||||||
|
|
|
|
|
|
| ||
Current Assets |
|
|
|
|
|
| ||
Cash and cash equivalents |
| $ | 525 |
|
| $ | 300 |
|
Other receivables |
|
| 6,315 |
|
|
| 1,695 |
|
Total current Assets |
|
| 6,840 |
|
|
| 1,995 |
|
Non-current assets |
|
|
|
|
|
|
|
|
Operating lease right of use asset, net |
|
| 6,481 |
|
|
| 79,635 |
|
Total non-current assets |
|
| 6,481 |
|
|
| 79,635 |
|
Total Assets |
|
| 13,321 |
|
|
| 81,630 |
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
|
|
|
|
|
|
|
|
|
Current liabilities |
|
|
|
|
|
|
|
|
Accounts payable and accrued liabilities |
|
| 177,395 |
|
|
| 99,692 |
|
Other payables |
|
| 0 |
|
|
| 87,202 |
|
Short-term loan - related party |
|
| 228,675 |
|
|
| 171,666 |
|
Accrued interest - related party |
|
| 480 |
|
|
| 470 |
|
Operating lease liabilities - current |
|
| 26,003 |
|
|
| 98,526 |
|
Due to related party |
|
| 2,025,195 |
|
|
| 1,567,380 |
|
Total Current Liabilities |
|
| 2,457,748 |
|
|
| 2,024,936 |
|
Non-current liabilities |
|
|
|
|
|
|
|
|
Operating lease liabilities - noncurrent |
|
| 0 |
|
|
| 0 |
|
Total Non-current Liabilities |
|
| 0 |
|
|
| 0 |
|
Total Liabilities |
|
| 2,457,748 |
|
|
| 2,024,936 |
|
|
|
|
|
|
|
|
|
|
Commitment and Contingency |
|
| 0 |
|
|
| 0 |
|
|
|
|
|
|
|
|
|
|
Stockholders’ Deficit |
|
|
|
|
|
|
|
|
Common stock, ($0.001 par value, 3,000,000,000 shares authorized, 1,983,518 shares issued and outstanding as of March 31, 2022 and 2021) |
|
| 1,984 |
|
|
| 1,984 |
|
Additional paid-in capital |
|
| 7,934 |
|
|
| 7,934 |
|
Accumulated deficit |
|
| (2,401,469 | ) |
|
| (1,928,249 | ) |
Accumulated other comprehensive loss |
|
| (52,876 | ) |
|
| (24,975 | ) |
Total Stockholders’ Deficit |
|
| (2,444,427 | ) |
|
| (1,943,306 | ) |
Total Liabilities and Stockholders’ Deficit |
| $ | 13,321 |
|
| $ | 81,630 |
|
The accompanying notes are an integral part of these consolidated financial statements
Yinfu Gold Corporation | ||||||||
Consolidated Statements of Income and Comprehensive Income | ||||||||
(Stated in U.S. Dollars) | ||||||||
|
| For Years Ended March 31, |
| |||||
|
| 2022 |
|
| 2021 |
| ||
|
|
|
|
|
|
| ||
REVENUE |
| $ | 0 |
|
|
| 0 |
|
|
|
|
|
|
|
|
|
|
OPERATING EXPENSES: |
|
|
|
|
|
|
|
|
General and administrative |
|
| 416,283 |
|
|
| 211,426 |
|
Professional fees |
|
| 56,520 |
|
|
| 75,055 |
|
Total operating expenses |
|
| 472,803 |
|
|
| 286,481 |
|
|
|
|
|
|
|
|
|
|
Net loss from operations |
|
| (472,803 | ) |
|
| (286,481 | ) |
|
|
|
|
|
|
|
|
|
Other Income and (Expense) |
|
|
|
|
|
|
|
|
Interest income (expense) |
|
| 1 |
|
|
| 1 |
|
Other income (expense) |
|
| (418 | ) |
|
| 166 |
|
Total other income(loss) |
|
| (417 | ) |
|
| 167 |
|
|
|
|
|
|
|
|
|
|
Net income (loss) before income taxes |
|
| (473,220 | ) |
|
| (286,314 | ) |
|
|
|
|
|
|
|
|
|
Provision for income taxes |
|
| 0 |
|
|
| 0 |
|
Net loss |
|
| (473,220 | ) |
|
| (286,314 | ) |
|
|
|
|
|
|
|
|
|
Comprehensive income |
|
|
|
|
|
|
|
|
Other comprehensive loss |
|
| (27,901 | ) |
|
| (54,209 | ) |
Total comprehensive loss |
|
| (501,121 | ) |
|
| (340,523 | ) |
|
|
|
|
|
|
|
|
|
Basic and diluted loss per common share |
|
| (0.24 | ) |
|
| (0.14 | ) |
|
|
|
|
|
|
|
|
|
Weighted average number of common shares outstanding - basic and diluted |
|
| 1,983,518 |
|
|
| 1,983,518 |
|
The accompanying notes are an integral part of these consolidated financial statements
Yinfu Gold Corporation
Consolidated Statement of Changes in Stockholders’ Deficiency
(Stated in U.S. Dollars)
|
| Common Stock |
|
|
|
|
|
| Accumulated other |
|
|
| ||||||||||||
|
| Number |
|
| Par |
|
| Additional |
|
| Accumulated |
|
| comprehensive |
|
|
| |||||||
| of shares |
|
| value |
|
| paid-in capital |
|
| Deficit | loss | Total |
| |||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Balance as of March 31,2020 |
|
| 1,983,518 |
|
| $ | 1,984 |
|
| $ | 7,934 |
|
| $ | (1,641,935 | ) |
| $ | 29,234 |
|
| $ | (1,602,783 | ) |
Net loss |
|
|
|
|
|
|
|
|
|
|
|
|
|
| (286,314 | ) |
|
|
|
|
|
| (286,314 | ) |
Foreign currency translation adjustment |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (54,209 | ) |
|
| (54,209 | ) |
Balance as of March 31,2021 |
|
| 1,983,518 |
|
| $ | 1,984 |
|
| $ | 7,934 |
|
| $ | (1,928,249 | ) |
| $ | (24,975 | ) |
| $ | (1,943,306 | ) |
Net loss |
|
|
|
|
|
|
|
|
|
|
|
|
|
| (473,220 | ) |
|
|
|
|
|
| (473,220 | ) |
Foreign currency translation adjustment |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (27,901 | ) |
|
| (27,901 | ) |
Balance as of March 31,2022 |
|
| 1,983,518 |
|
| $ | 1,984 |
|
| $ | 7,934 |
|
| $ | (2,401,469 | ) |
| $ | (52,876 | ) |
| $ | (2,444,427 | ) |
The accompanying footnotes are an integral part of these consolidated financial statements
|
|
|
|
| For Years Ended March 31, |
| |||||
|
| 2022 |
|
| 2021 |
| ||
CASH FLOWS FROM OPERATING ACTIVITIES |
|
|
|
|
|
| ||
Net loss |
|
| (473,220 | ) |
|
| (286,314 | ) |
Adjustments to reconcile net income to net cash provided by operating activities |
|
|
|
|
|
|
|
|
Amortization of right-of-use asset |
|
| 74,895 |
|
|
| 73,040 |
|
Changes in assets and liabilities: |
|
|
|
|
|
|
|
|
Other receivables |
|
| (4,508 | ) |
|
| (651 | ) |
Accounts payable and accrued liabilities |
|
| 53,179 |
|
|
| (80,421 | ) |
Operating lease liability |
|
| (74,895 | ) |
|
| (66,953 | ) |
Wage payable to related party |
|
| 251,778 |
|
|
| 0 |
|
Other payable - related party |
|
| 0 |
|
|
| 13,112 |
|
Net cash used in operating activities |
| $ | (172,771 | ) |
| $ | (348,186 | ) |
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM INVESTING ACTIVITIES |
|
|
|
|
|
|
|
|
Net cash used in investing activities |
| $ | 0 |
|
| $ | 0 |
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM FINANCING ACTIVITIES |
|
|
|
|
|
|
|
|
Proceeds from short-term loan - related parties |
|
| 52,440 |
|
|
| 0 |
|
Net advances from related parties |
|
| 120,541 |
|
|
| 347,678 |
|
Net cash provided by financing activities |
| $ | 172,981 |
|
| $ | 347,678 |
|
|
|
|
|
|
|
|
|
|
Effect on changes in foreign exchange rate |
|
| 15 |
|
|
| 33 |
|
Net increase (decrease) in cash and cash equivalents |
|
| 225 |
|
|
| (475 | ) |
Cash and cash equivalents, beginning of period |
|
| 300 |
|
|
| 775 |
|
Cash and cash equivalents, end of period |
| $ | 525 |
|
| $ | 300 |
|
|
|
| - |
|
|
| - |
|
Supplemental cash flow information |
|
|
|
|
|
|
|
|
Cash paid for interest |
| $ | 0 |
|
| $ | 0 |
|
Cash paid for income taxes |
| $ | 0 |
|
| $ | 0 |
|
The accompanying footnotes are an integral part of these consolidated financial statements
Yinfu Gold Corporation
Notes to Consolidated Financial Statements
(Stated in U.S. Dollars)
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 1,000,000,000 common shares. On August 16, 2010 the Company filed an amendment with the State of Wyoming changing its name from Element92 resources Corp. to Yinfu Gold Corporation and on November 18, 2010, the Company received a notification from the Financial Industry Regulatory Authority (“FINRA”) that the Company’s change of name to Yinfu Gold Corporation was posted as effective with FINRA. The Company was established as an exploration stage company engaged in the search for commercially viable minerals.
The Company no longer pursues opportunities related to the exploration of minerals. The name change 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 100% of the shares and assets of China Enterprise Overseas Investment & Finance Group Limited (“CEI”), a British Virgin Islands corporation. Pursuant to the Agreement, the Company has agreed to issue 1,599,982 restricted common shares of the Company to the owners of CEI.
Pursuant to the Agreement, on or before January 1, 2015, CEI was to deliver to the Company, duly authorized, properly and fully executed documents in English, evidencing and confirming the sale of 100% of the shares of CEI and its assets, specifically detailing the assets and an asset valuation by a third-party valuator. The valuation report was received by the Company on January 28, 2015.
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.
During the year ended March 31, 2018, we disposed the discontinued business, Element Resources International Limited. No gain or loss was recognized as a result of the disposal.
The accompanying comparative financial statements have been retroactively restated to combine the financial data of previously separate entities with those of the Company.
Yinfu Gold Corporation
Notes to Consolidated Financial Statements
(Stated in U.S. Dollars)
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The financial statements and related disclosures have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The financial statements have been prepared using the accrual basis of accounting in accordance with Generally Accepted Accounting Principles (“GAAP”) of the United States and presented in US dollars.
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.
|
|
| ||||
|
|
|
| |||
|
|
|
| |||
|
|
|
| |||
|
|
|
| |||
Yinfu Group Overseas Investment & Finance Limited is a holding entity established in BVI that did not have any activities or operations since inception.
On June 25, 2019, the management decided to abandon the BVI entity and transfer its subsidiaries Yinfu Group International Holdings Limited and Yinfu International Holdings Limited (“WOFE”) to Yinfu Gold Corp.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires managementpursuant to make estimates and assumptions that affectwhich 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.
Reclassification of prior year presentation
Certain prior year amounts have been reclassified for consistencyPCAOB conducts regular inspections to assess our auditor’s compliance with the current year presentation. These reclassifications had no effect on the reported results of operations. An adjustment has been made to the Consolidated Balance Sheet as of March 31, 2021 to reclassify short-term loan of $171,666 to short-term loan - related party;applicable professional standards. Our auditor is headquartered in Flushing, New York and reclassify other payable of $470 to accrued interest -related party.
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, areis subject to an insignificant risk of loss in value.
Foreign Currency Translation and Re-measurement
In accordanceinspection by the PCAOB on a regular basis 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 loss of $27,901 and $54,209 for the years endedlast inspection conducted during March 31, 2022 and 2021 respectively.
Yinfu Gold Corporation
Notes to Consolidated Financial Statements
(Stated in U.S. Dollars)
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 and 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 exposures are 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
Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.
Level 2
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
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.
Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of March 31, 2022. The carrying valuesrecent developments would add uncertainties to our offering and we cannot assure you whether Nasdaq or regulatory authorities would apply additional and more stringent criteria to us after considering the effectiveness of our financial instruments, including, cashauditor’s audit procedures and cash equivalents; accounts payablequality control procedures, adequacy of personnel and accrued expenses; and loans and notes payable approximate their fair values duetraining, or sufficiency of resources, geographic reach or experience as it relates to the short-term maturities of these financial instruments.
Yinfu Gold Corporation
Notes to Consolidated Financial Statements
(Stated in U.S. Dollars)
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 non-controlling 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 non-controlling interests is recognized as goodwill. Certain adjustments to the assessed fair values of the assets, liabilities, or non-controlling 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, 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. For the years ended March 31, 2022 and 2021, since the Company has not generated any income, no provision was made for income taxes. Further, no deferred tax assets or liabilities were recognized as at March 31, 2022 and 2021.
Net 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 loss by the weighted average number of shares of common stock outstanding during the period.
The following table sets forth the computation of basic earnings per share, for the years ended March 31, 2022 and 2021:
|
| Year Ended March 31, |
| |||||
|
| 2022 |
|
| 2021 |
| ||
Net loss |
| $ | (473,220 | ) |
| $ | (286,314 | ) |
|
|
|
|
|
|
|
|
|
Weighted average number of common shares outstanding - basic and diluted |
|
| 1,983,518 |
|
|
| 1,983,518 |
|
|
|
|
|
|
|
|
|
|
Basic and diluted net loss per common share |
| $ | (0.24 | ) |
| $ | (0.14 | ) |
Yinfu Gold Corporation
Notes to Consolidated Financial Statements
(Stated in U.S. Dollars)
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 and 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 March 31, 2022 and 2021.
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 years ended March 31, 2022 and 2021.
Related Parties
The Company follows ASC 850, “Related Party Disclosures,” for the identification of related parties and disclosure of related party transactions. According to the standard, financial statements are required to disclose material related-party transactions other than compensation arrangements, expense allowances, or other similar items that occur in the ordinary course of business. A related party is essentially any party that controls or can significantly influence the management or operating policies of the company to the extent that the company may be prevented from fully pursuing its own interests. Related parties include affiliates, investees accounted for by the equity method, trusts for the benefit of employees, principal owners, management, and immediate family members of owners or management. Transactions with related parties must be disclosed even if there is no accounting recognition made for such transactions (e.g., a service is performed without payment).
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.
Yinfu Gold Corporation
Notes to Consolidated Financial Statements
(Stated in U.S. Dollars)
Recent Accounting Pronouncements
Management has considered all other recent accounting pronouncements issued since the last audit of our financial statements. The Company’s management believes that these recent pronouncements will not have a material effect on the Company’s financial statements.
NOTE 3 - GOING CONCERN
The Company’s financial statements are prepared using accounting principles generally accepted in the United States of America 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 ongoing 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 March 31, 2022, the Company had an accumulated deficit of $2,401,469 and net loss of $473,220 and net cash used in operations of $172,771 for the year ended March 31, 2022. Losses have principally occurred as a result of the substantial resources required for the operation of the wholly owned subsidiaries and being a SEC reporting entity. These factors raise substantial doubt about its ability to continue as a going concern.
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.
Yinfu Gold Corporation
Notes to Consolidated Financial Statements
(Stated in U.S. Dollars)
NOTE 4 – STOCKHOLDERS’ EQUITY (DEFICIT)
Common Stock
The Company is authorized to issue 3,000,000,000 shares of common stock.
As of March 31, 2022, and 2021, the Company has 1,983,518 shares of common stock issued and outstanding.
The Company has no potentially dilutive securities, such as options or warrants, currently issued and outstanding.
On November 16, 2021, the board of directors approved a 5-in-1 reverse stock split for the Company’s common stock while waiting for approval from the Financial Industry Regulatory Authority (“FINRA”) as of this Annual Report filing. The reverse stock split was retrospectively reflected throughout the consolidated financial statements and footnotes.
NOTE 5 – SHORT-TERM LOAN – RELARED PARTIES
Short-term loan of $175,593 consists of two notes from Ms. Wu Fengqun, 8.95% shareholder of the Company, in the amount of $131,629 (RMB834,673), annual fixed interest of $100, maturity date of April 11, 2020; and in the amount of $43,964 (HKD344,345), annual fixed interest of $50, maturity date of April 11, 2020. These two notes were extended to mature on March 31, 2023 without interest.
Short-term loan of $53,082 (RMB336,598) consists of a loan from Mr. Huang Jing, 8.68% shareholder of the Company and a legal representative of the Company’s subsidiary Yinfu International Holdings Limited Huizhou Branch. The loan matures on December 27, 2022 without interest.
As of March 31, 2022 and 2021, accrual interest – related party was $480 and $470 respectively.
As of March 31, 2022 and 2021, short-term loan – related parties outstanding was $228,675 and $171,666 respectively.
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, 2022.
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 4.75%.
The Company has elected to not recognized lease assets and liabilities for lease with a term less than twelve months.
Operating lease expenses were $74,895 and $73,040 for the years ended March 31, 2022 and 2021, respectively.
The undiscounted future minimum lease payment schedule as follows:
For the years ended March 31, |
| Amount |
| |
2023 |
|
| 6,428 |
|
2024 |
|
| - |
|
Thereafter |
|
| - |
|
Total |
| $ | 6,428 |
|
Yinfu Gold Corporation
Notes to Audited Consolidated Financial Statements
(Stated in U.S. Dollars)
NOTE 7 - RELATED PARTY TRANSACTIONS
During the year ended March 31, 2022, Mr. Jiang, Libin, the President and a director of the Company, had advanced the Company $138,037 for operating expenses, and received $17,496 from the Company as repayment. These advances have been formalized by non-interest-bearing demand notes.
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 third-party company. The Company received $143,508 (RMB 910,000) from the acquiree as earnest money deposit to secure the transfer of Mr. Jiang Libin’ shares as part of the LOI Agreement. On July 24, 2020, the LOI Agreement was terminated by all parties and the earnest money deposit of $143,508 (RMB 910,000) was not required to be returned to the acquiree according pursuant to the Termination Agreement. As a result, the earnest money deposit was reclassified as amount payable to Mr. Jiang. The amounts are due on demand, non-interest bearing, and unsecured.
During the year ended March 31, 2021, Mr. Jiang, Libin, the President and a director of the Company, had advanced the Company $345,693 for operating expenses, and received $101,012 from the Company as repayment. These advances have been formalized by non-interest-bearing demand notes.
As of March 31, 2022, the accrued salary payable to Mr. Jiang Libin and Mr. Huang Jing were $308,123 and $8,076 respectively.
As of March 31, 2022 and 2021, the Company owed $1,221,638 and $1,080,022 to Mr. Jiang, Libin respectively.
As of March 31, 2022 and 2021, the Company owed $487,358 and $487,358 to Mr. Tsap, respectively.
The amounts due to related parties are due on demand, non-interest bearing, and unsecured.
NOTE 8 – INCOME TAX
Deferred taxes are provided on liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carry forwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary different amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.
United States
Yinfu Gold Corporation is established in the State of Wyoming in United States and is subject to Wyoming state and US Federal tax laws. Yinfu Gold Corporation is subject to Federal statutory income tax rate of 21%.
As of March 31, 2022, Yinfu Gold Corporation has accumulated net operating loss of $1,383,994 that may be offset against future taxable income has not been recognized as an income tax benefit based on uncertainties concerning its ability to generate taxable in future period.
Due to the change in ownership provisions of the Tax Reform Act of 1986, net operating loss carry forwards for Federal Income tax reporting purposes are subject to annual limitations. Should a change in ownership occur, net operating loss carry forwards may be limited as to use in future years.
Yinfu Gold Corporation
Notes to Consolidated Financial Statements
(Stated in U.S. Dollars)
On December 22, 2017, the President of the United States signed into law the Tax Cuts and Jobs Act (“Tax Reform Act”). The legislation significantly changes U.S. tax law by, among other things, lowering corporate income tax rates, implementing a territorial tax system and imposing a transition tax on deemed repatriated earnings of foreign subsidiaries. The Tax Reform Act permanently reduces the U.S. corporate income tax rate from a maximum of 35% to a flat 21% rate, effective January 1, 2018. As a result of the reduction in the U.S. corporate income tax rate from 34% to 21% under the Tax Reform Act, the Company revalued its ending net deferred tax assets.
Hongkong
Yinfu Group International Holdings Limited was incorporated under the Hong Kong tax laws. The statutory income tax rate is 16.5%. Subsidiaries in Hong Kong are exempted from income tax on their foreign-derived income and there are no withholding taxes in Hong Kong on remittance of dividends.
PRC
Yinfu International Holdings Limited was incorporated under the China Enterprise Income Tax Law, or the EIT Law, domestic enterprises and foreign investment enterprises, or FIE, are subject to a unified 25% enterprise income tax rate, except for certain entities that are entitled to tax holidays or exemptions.
As of March 31, 2022, Yinfu International Holdings Limited has accumulated net operating loss of $1,032,161 that may be offset against future taxable income has not been recognized as an income tax benefit based on uncertainties concerning its ability to generate taxable in future period.
NOTE 9 – CONTINGENCIES & UNCERTAINTIES
Contingencies
On June 25, 2019, the management decided to abandon the Company’s subsidiary Yinfu Group Overseas Investment & Finance Limited (“Yinfu BVI”) that has been administratively struck off by the BVI registrar for non-payment of fees. Yinfu BVI is a holding entity established in BVI that did not have any activities or operations since inception. Yinfu BVI being a struck off company continues to have legal status. As such, it may incur additional liabilities (including fees and late payment penalties which would need be to repaid in order to restore the company); it may potentially be the subject of a creditor’s claim or judgement; and its members, directors, officers and agents remains responsible for any liabilities that existed before it was struck off. If the indicated events were to occur it may have negative effects on the Company’s operation.
NOTE 10 - 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 subsequent to March 31, 2022 but prior to June 29, 2022, the date the financial statements were available to be issued, there was no subsequent event that would require disclosure to or adjustment to the financial statements other than the ones disclosed above.
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.
There were no disagreements with our accountants related to accounting principles or practices, financial statement disclosure, internal controls or auditing scope or procedure during the 2022 fiscal years.
Item 9A. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
We maintain “disclosure controls and procedures,” as such term is defined in Rule 13a-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”), that are designed to ensure that information required to be disclosed in our Exchange Act reports 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 (“CEO”)/Chief Financial Officer (“CFO”), as appropriate, to allow timely decisions regarding required disclosure. We conducted an evaluation (the “Evaluation”), under the supervision and with the participation of our CEO/CFO of the effectiveness of the design and operation of our disclosure controls and procedures (“Disclosure Controls”) as of the end of the period covered by this report pursuant to Rule 13a-15 of the Exchange Act. Based on this evaluation and the existence of the material weaknesses discussed below in “Management’s Report on Internal Control over Financial Reporting,” our management, including our CEO/CFO concluded that our disclosure controls and procedures were not effective at the reasonable assurance level as of the end of the period covered by this Report.
We do not expect that our disclosure controls and procedures will prevent all errors and all instances of fraud. Disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the disclosure controls and procedures are met. Further, the design of disclosure controls and procedures must reflect the fact that there are resource constraints, and the benefits must be considered relative to their costs. Because of the inherent limitations in all disclosure controls and procedures, no evaluation of disclosure controls and procedures can provide absolute assurance that we have detected all our control deficiencies and instances of fraud, if any. The design of disclosure controls and procedures also is based partly on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.
Management’s Annual Report on Internal Control Over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance of achieving their control objectives. With the participation of our Chief Executive and Financial Officer, our management conducted an evaluation of the effectiveness of our internal control over financial reporting as of March 31, 2022 based on the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control – Integrated Framework. Based upon such evaluation, our management concluded that we did not maintain effective internal control over financial reporting as of March 31, 2022 based on the COSO framework criteria, 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 the review of our financial statements as of March 31, 2022.
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.
| 14 |
| Table of Contents |
This Annual ReportTrading in our securities may be prohibited under the HFCAA and as a result an exchange may determine to delist our securities if it is later determined that the PCAOB is unable to inspect or investigate completely our auditor because of a position taken by an authority in a foreign jurisdiction.
The HFCAA, was enacted on Form 10-K does not include an attestation report ofDecember 18, 2020. The HFCAA states if the Company’sSEC determines that a company has filed audit reports issued by a registered public accounting firm regarding internal control over financial reporting duethat has not been subject to permanent exemptionsinspection by the PCAOB for smaller reporting companies.three consecutive years beginning in 2021, the SEC shall prohibit such shares from being traded on a national securities exchange or in the over-the-counter trading market in the U.S.
On March 24, 2021, the SEC adopted interim final rules relating to the implementation of certain disclosure and documentation requirements of the HFCAA. A company will be required to comply with these rules if the SEC identifies it as having a “non-inspection” year under a process to be subsequently established by the SEC. The SEC is assessing how to implement other requirements of the HFCAA, including the listing and trading prohibition requirements described above.
Despite that we have a U.S.-based auditor that is registered with the PCAOB and subject to PCAOB inspection, there are still risks to the company and investors if it is later determined that the PCAOB is unable to inspect or investigate completely our auditor because of a position taken by an authority in a foreign jurisdiction. Such risks include, but are not limited to that trading in our securities may be prohibited under the HFCAA and as a result an exchange may determine to delist our securities.
Officers’ CertificationsThe M&A Rules and certain other PRC regulations establish complex procedures for some acquisitions of Chinese companies by foreign investors, which could make it more difficult for us to pursue growth through acquisitions in China.
Appearing as exhibitsThe Regulations on Mergers and Acquisitions of Domestic Companies by Foreign Investors, or the M&A Rules, adopted by six PRC regulatory agencies in August 2006 and amended in 2009, and some other regulations and rules concerning mergers and acquisitions established additional procedures and requirements that could make merger and acquisition activities by foreign investors more time consuming and complex, including requirements in some instances that the MOC be notified in advance of any change-of-control transaction in which a foreign investor takes control of a PRC domestic enterprise. Moreover, the Anti-Monopoly Law requires that the MOC shall be notified in advance of any concentration of undertaking if certain thresholds are triggered. In addition, the security review rules issued by the MOC that became effective in September 2011 specify that mergers and acquisitions by foreign investors that raise “national defense and security” concerns and mergers and acquisitions through which foreign investors may acquire de facto control over domestic enterprises that raise “national security” concerns are subject to this Annual Report are “Certifications” ofstrict review by the MOC, and the rules prohibit any activities attempting to bypass a security review, including by structuring the transaction through a proxy or contractual control arrangement. In the future, we may grow our Chief Executive Officer and Chief Financial Officer. The Certifications are required pursuant to Section 302business by acquiring complementary businesses. Complying with the requirements of the Sarbanes-Oxley Act of 2002 (the “Section 302 Certifications”). This section ofabove-mentioned regulations and other relevant rules to complete such transactions could be time consuming, and any required approval processes, including obtaining approval from the Annual Report contains information concerning the Controls Evaluation referredMOC or its local counterparts may delay or inhibit our ability to in the Section 302 Certification. This information should be read in conjunction with the Section 302 Certifications for a more complete understanding of the topics presented.such transactions, which could affect our ability to expand our business or maintain our market share.
Changes in Internal Control Over Financial ReportingAny failure to comply with PRC regulations regarding the registration requirements for employee stock incentive plans may subject the PRC plan participants or us to fines and other legal or administrative sanctions.
ThereIn February 2012, SAFE promulgated the Notices on Issues Concerning the Foreign Exchange Administration for Domestic Individuals Participating in Stock Incentive Plan of Overseas Publicly-Listed Company, replacing earlier rules promulgated in March 2007. Pursuant to these rules, PRC citizens and non-PRC citizens who reside in China for a continuous period of not less than one year who participate in any stock incentive plan of an overseas publicly listed company, subject to a few exceptions, are required to register with SAFE through a domestic qualified agent, which could be the PRC subsidiary of such overseas listed company, and complete certain other procedures. In addition, an overseas entrusted institution must be retained to handle matters in connection with the exercise or sale of stock options and the purchase or sale of shares and interests. We, our executive officers and other employees who are PRC citizens or who have resided in the PRC for a continuous period of not less than one year and who have been no changes ingranted options or other awards are subject to these regulations. Failure to complete the SAFE registrations may subject them to fines and legal sanctions and may also limit our internal control over financial reportingability to contribute additional capital into our PRC subsidiary and limit our PRC subsidiary’ ability to distribute dividends to us. We also face regulatory uncertainties that occurred during the year ended March 31, 2022, that have materially affected or are reasonably likelycould restrict our ability to materially affectadopt additional incentive plans for our internal control over financial reporting.
Item 9B. Other Information
None.
Item 10. Directors, Executive Officers and Corporate Governance
All directors, of the Company hold office until the next annual meeting of the security holders or until their successors have been elected and qualified. The officers of the Company are appointed by the board of directors and hold office until their death, resignation or removal from office. The directors and executive officers their ages, positions held, and duration as such, are as follows:
|
|
|
| |||
|
|
|
| |||
|
|
|
| |||
|
|
|
|
Background of Officers and Directors
Jiang, Libin: President and Director
Mr. Jiang Libin obtained the PhD from Camden University. He has worked in several large international trade companies for many years in which he is responsible for operation management and strategic development. He once served as the President of the Northeast Region of Hong Kong Store Chains Group and Chief Executive Officer of Liaoning Jinzhou Times Group. Since December 2015, he has been the Chairman of the Board&CEO of Yinfu Gold Corporation, and he has rich experiences in large-scale enterprise management operations and investment operations.
Zhang Hong: Director
Mr. Zhang Hong has rich experience in enterprise management and operations, he once served as General Manager of Shenzhen Peizheng Pharmaceutical Co., Ltd., General Manager of Guangxi Guiran Energy Co., Ltd. and Chairman of Shenzhen Jiazhan Energy Investment Co., Ltd. Now, he is the Executive Director&President of the Investment Department of Yinfu Gold Corporation.Over these years, he has been studying the development and current situation of the domestic and overseas financial systems. He has rich practical experience in team building, project operation and investment management. He is always enthusiastic about the public welfare and charity, and has been funding poor students and orphans for a long time. He is also the director and General Affair of Lions Clubs International, has planned and organized several large-scale charity activities in cooperation with domestic and foreign charities.employees under PRC law.
| 15 |
| Table of Contents |
Employment AgreementsRegulatory bodies of the United States may be limited in their ability to conduct investigations or inspections of our operations in China.
We haveFrom time to time, the Company may receive requests from certain U.S. agencies to investigate or inspect the Company’s operations or to otherwise provide information. While the Company will be compliant with these requests from these regulators, there is no formal employment agreementsguarantee that such requests will be honored by those entities who provide services to us or with whom we associate, especially as those entities are located in China. Furthermore, an on-site inspection of our facilities by any of our employees, directorsthese regulators may be limited or officers.entirely prohibited. Such inspections, though permitted by the Company and its affiliates, are subject to the capricious nature of Chinese enforcers and may therefore be impossible to facilitate.
Family RelationshipsRisks Related to Our Common Stock
Currently, there is a limited trading market for our common stock, which may adversely impact your ability to sell your shares and the price you receive.
There are no family relationships between anyis currently a limited trading market for our common stock and a more active trading market for our common stock may never develop or be sustained. The market price of our directorscommon stock may be significantly affected by factors such as actual or anticipated fluctuations in our operating results, general market conditions and executive officers.other factors. In addition, the stock market has from time to time experienced significant price and volume fluctuations that have particularly affected the market prices for the shares of developmental stage companies, which may materially adversely affect the market price of our common stock without regard to our operating performance. These fluctuations may also cause short sellers to enter the market from time to time in the belief that we will have poor results in the future. We cannot predict the actions of market participants and, therefore, can offer no assurances that the market for our common stock will be stable or appreciate over time. Furthermore, for companies such as us whose securities are quoted on the OTC Bulletin Board or Pink Sheets, it is more difficult (1) to obtain accurate quotations, (2) to obtain coverage for significant news events because major wire services generally do not publish press releases about such companies, and (3) to obtain needed capital. These factors may negatively impact your ability to sell shares of our common stock and the price you receive.
Potential Conflicts of InterestOur common stock is deemed to be a “penny stock,” which may make it more difficult for you to sell your shares.
We are not aware of any conflicts of interest with our directors and officers.
Involvement in Certain Legal Proceedings
None of our directors, executive officers, promoters or control persons has been involved in any of the following events during the past five years:
1. A petition under the Federal bankruptcy laws or any state insolvency law was filed by or against, or a receiver, fiscal agent or similar officer was appointed by a court for the business or property of such person, or any partnership in which he was a general partner at or within two years before the time of such filing, or any corporation or business association of which he was an executive officer at or within two years before the time of such filing;
2. Such person was convicted in a criminal proceeding or is a named subject of a pending criminal proceeding (excluding traffic violations and other minor offenses);
3. Such person was the subject of any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining him from, or otherwise limiting, the following activities:
|
| |
|
| |
|
|
4. Such person was the subject of any order, judgment or decree, not subsequently reversed, suspended or vacated, of any Federal or State authority barring, suspending or otherwise limiting for more than 60 days the right of such person to engage in any activity described in paragraph (f)(3)(i) of this section, or to be associated with persons engaged in any such activity;
5. Such person was found by a court of competent jurisdiction in a civil action or by the Commission to have violated any Federal or State securities law, and the judgment in such civil action or finding by the Commission has not been subsequently reversed, suspended, or vacated;
6. Such person was found by a court of competent jurisdiction in a civil action or by the Commodity Futures Trading Commission to have violated any Federal commodities law, and the judgment in such civil action or finding by the Commodity Futures Trading Commission has not been subsequently reversed, suspended or vacated;
7. Such person was the subject of, or a party to, any Federal or State judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended or vacated, relating to an alleged violation of:
|
| |
|
| |
|
|
8. Such person was the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the Exchange Act (15 U.S.C. 78c(a)(26))), any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act (7 U.S.C. 1(a)(29))), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member.
Compliance with Section 16(a) of the Exchange Act
The Company’sOur common stock is not registered pursuantsubject to the “penny stock” rules adopted under Section 1215(g) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Accordingly, officers, directorsThe penny stock rules apply to companies whose common stock is not listed on the NASDAQ Stock Market or another national securities exchange and principal shareholders aretrades at less than $5.00 per share or that have tangible net worth of less than $5,000,000 ($2,000,000 if the company has been operating for three or more years). These rules require, among other things, that brokers who trade penny stock to persons other than “established customers” complete certain documentation, make suitability inquiries of investors and provide investors with certain information concerning trading in the security, including a risk disclosure document and quote information under certain circumstances. Many brokers have decided not to trade penny stocks because of the requirements of the penny stock rules and, as a result, the number of broker-dealers willing to act as market makers in such securities is limited. Remaining subject to the beneficial ownership reporting requirementspenny stock rules should be expected to have an adverse effect on the market for our common stock by reducing the number of Section 16(a)potential investors. This may make it more difficult for investors in our common stock to sell shares to third parties or to otherwise dispose of the Exchange Act.them. This could cause our stock price to decline.
Code of EthicsWe need to raise additional capital, but that capital may not be available.
We have adopted a Codecannot assure you that we will be successful or that will generate sufficient revenues in the near future. Curretnly, we has not generated any revenue and we may encounter difficulty in obtaining these funds and/or credit lines. Moreover, even if additional financing or credit lines were to become available, it is possible that the cost of Business Conductsuch funds or credit would be high and Ethics that applies to, among other persons, members of our board of directors, our Company’s officers including our President, Chief Executive Officer and Chief Financial Officer, employees, consultants and advisors. As adopted, our Code of Business Conduct and Ethics sets forth written standards that are designed to deter wrongdoing and to promote:
|
| |
|
| |
|
| |
|
| |
|
|
Our Code of Business Conduct and Ethics requires, among other things, that all of our company’s senior officers commit to timely, accurate and consistent disclosure of information; that they maintain confidential information; and that they act with honesty and integrity.possibly prohibitive.
In addition, our Code of Business Conduct and Ethics emphasizes that all employees, and particularly senior officers, haveIf we were to decide to obtain such additional funds by equity financing in one or more private or public offerings, current stockholders would experience a responsibility for maintaining financial integrity within our company, consistent with generally accepted accounting principles, and federal and state securities laws. Any senior officer, who becomes aware of any incidents involving financial or accounting manipulation or other irregularities, whether by witnessing the incident or being told of it, must report it to our Company. Any failure to report such inappropriate or irregular conduct of others is to be treated as a severe disciplinary matter. It is against our Company policy to retaliate against any individual who reportscorresponding decrease in good faith the violation or potential violation of our company’s Code of Business Conduct and Ethics by another.
The Company will provide to any person, without charge and upon request, a copy of the code of ethics. Any such request must be made in writing to the Company at, Suite 2408, Dongfang Science and Technology Mansion, Nanshan District, Shenzhen, China 518000their percentage ownership.
Board and Committee Meetings
Our board of directors currently consists of two members, Jiang, Libin and Zhang Hong. The Board held no formal meetings during the year ended March 31, 2022. Until the Company develops a more comprehensive Board of Directors, all proceedings will be conducted by resolutions consented to in writing by all the directors and filed with the minutes of the proceedings of the directors. Such resolutions consented to in writing by the directors entitled to vote on that resolution at a meeting of the directors are, according to the Wyoming General Corporate Law and our Bylaws, as valid and effective as if they had been passed at a meeting of the directors duly called and held.
Nomination Process
As of March 31, 2022, we did not affect any material changes to the procedures by which our shareholders may recommend nominees to our board of directors. Our board of directors does not have a policy with regards to the consideration of any director candidates recommended by our shareholders. Our board of directors has determined that it is in the best position to evaluate our company’s requirements as well as the qualifications of each candidate when the board considers a nominee for a position on our board of directors. If shareholders wish to recommend candidates directly to our board, they may do so by sending communications to the president of our company at the address on the cover of this annual report.
Audit Committee
Currently the Company is developing a comprehensive Board of Directors and does not have an Audit Committee. The Company intends to appoint audit, compensation and other applicable committee members as it appoints individuals with pertinent expertise.
Audit Committee Financial Expert
Our board of directors does not have a member that qualifies as an “audit committee financial expert” as defined in Item 407(d)(5)(ii) of Regulation S-K.
Item 11. Executive Compensation.
The following tables set forth, for each of the last two completed fiscal years of the Company, the total compensation awarded to, earned by or paid to any person who was a principal executive officer during the preceding fiscal year and every other highest compensated executive officers earning more than $100,000 during the last fiscal year (together, the “Named Executive Officers”). The tables set forth below reflect the compensation of the Named Executive Officers.
Name and Principal Position |
|
Year ended |
|
Salary ($) |
|
Bonus ($) |
|
Stock Awards ($) |
|
Option Awards ($) |
|
Non-Equity Incentive Plan Compensation ($) |
| Change in Pension Value and Nonqualified Deferred Compensation Earnings ($) |
|
All Other Compensation ($) |
|
Total ($) |
Jiang, Libin |
| March 2022 |
| 246,875 |
| Nil |
| Nil |
| Nil |
| Nil |
| Nil |
| Nil |
| 246,875 |
President, Secretary and Director (1) |
| March 2021 |
| 61,633 |
| Nil |
| Nil |
| Nil |
| Nil |
| Nil |
| Nil |
| 61,633 |
Zhang, Hong |
| March 2022 |
| Nil |
| Nil |
| Nil |
| Nil |
| Nil |
| Nil |
| Nil |
| Nil |
Director (2) |
| March 2021 |
| Nil |
| Nil |
| Nil |
| Nil |
| Nil |
| Nil |
| Nil |
| Nil |
|
|
|
|
Other than set out below there are no arrangements or plans in which we provide pension, retirement or similar benefits for directors or executive officers. Our directors and executive officers may receive share options at the discretion of our board of directors in the future. We do not have any material bonus or profit sharing plans pursuant to which cash or non-cash compensation is or may be paid to our directors or executive officers, except that share options may be granted at the discretion of our board of directors.
Grants of Plan-Based Awards
There were no grants of plan-based awards during the year ended March 31, 2022.
Outstanding Equity Awards at Fiscal Year End
There were no outstanding equity awards at the year ended March 31, 2022.
Option Exercises and Stock Vested
During the year ended March 31, 2022, there were no options exercised by our named officer.
Compensation of Directors
We do not have any agreements for compensating our directors for their services in their capacity as directors.
Pension, Retirement or Similar Benefit Plans
There are no arrangements or plans in which we provide pension, retirement or similar benefits for directors or executive officers. We have no material bonus or profit-sharing plans pursuant to which cash or non-cash compensation is or may be paid to our directors or executive officers, except that stock options may be granted at the discretion of the board of directors or a committee thereof.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
The following table sets forth, as of June 13, 2022, certain information with respect to the beneficial ownership of our common shares by each shareholder known by us to be the beneficial owner of more than 5% of our common shares, as well as by each of our current directors and executive officers as a group. Each person has sole voting and investment power with respect to the shares of common stock, except as otherwise indicated. Beneficial ownership consists of a direct interest in the shares of common stock, except as otherwise indicated.
Name and Address of Beneficial Owner(1) |
| Number of shares |
|
| Percentage of total shares |
| ||
Wu Fengqun No.12, Lane 2, Nanxin Road Huicheng District Huizhou City, Guangdong, China |
|
| 177,496 |
|
|
| 8.95 | % |
Huang Jing Cexun Street, Xinli Town, Zhongxian, Chongoing, China |
|
| 172,240 |
|
|
| 8.68 | % |
Chen Guowei No.1 Jinjijing Huicheng District Huizhou City, Guangdong, China |
|
| 152,022 |
|
|
| 7.66 | % |
Item 13. Certain Relationships and Related Transactions, and Director IndependencePART IV
Security Ownership of Certain Beneficial Owners and Management
Not applicable.
Shareholder loan
During the year ended March 31, 2022, Mr. Jiang, Libin, the President and a director of the Company, had advanced the Company $138,037 for operating expenses, and received $17,496 from the Company as repayment. These advances have been formalized by non-interest-bearing demand notes.
Director Independence
Our Board of Directors has determined that it does not have a member that is “independent” as the term is used in Item 7(d) (3) (iv) of Schedule 14A under the Exchange Act.
Item 14. Principal Accounting Fees and Services
The aggregate fees billed for the most recently completed fiscal year ended March 31, 2022 and the year ended March 31, 2021 for professional services rendered by the principal accountant for the audit of our annual financial statements and review of the financial statements included in our quarterly reports on Form 10-Q and services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for these fiscal periods were as follows:
|
| Year Ended March 31, 2022 |
|
| Year Ended March 31, 2021 |
| ||
Audit fees (1) |
| $ | 14,000 |
|
| $ | 14,000 |
|
Audit related fees (2) |
| $ | - |
|
| $ | - |
|
Tax fees (3) |
| $ | - |
|
| $ | - |
|
All other fees (4) |
| $ | - |
|
| $ | - |
|
Total |
| $ | 14,000 |
|
| $ | 14,000 |
|
|
|
|
|
|
|
|
|
Our board of directors pre-approves all services provided by our independent auditors. All of the above services and fees were reviewed and approved by the board of directors either before or after the respective services were rendered.
Our board of directors has considered the nature and amount of fees billed by our independent auditors and believes that the provision of services for activities unrelated to the audit is compatible with maintaining our independent auditors’ independence.
Item 15. Exhibits, Financial Statement Schedules
Exhibits
In reviewing the agreements included as exhibits to this annual report on Form 10-K, please remember that they are included to provide you with information regarding their terms and are not intended to provide any other factual or disclosure information about our company or the other parties to the agreements. The agreements may contain representations and warranties by each of the parties to the applicable agreement. These representations and warranties have been made solely for the benefit of the parties to the applicable agreement and:
| · | should not in all instances be treated as categorical statements of fact, but rather as a way of allocating the risk to one of the parties if those statements prove to be inaccurate; |
|
|
|
| · | have been qualified by disclosures that were made to the other party in connection with the negotiation of the applicable agreement, which disclosures are not necessarily reflected in the agreement; |
|
|
|
| · | may apply standards of materiality in a way that is different from what may be viewed as material to you or other investors; and |
|
|
|
| · | were made only as of the date of the applicable agreement or such other date or dates as may be specified in the agreement and are subject to more recent developments. |
Accordingly, these representations and warranties may not describe the actual state of affairs as of the date they were made or at any other time. Additional information about the Company may be found elsewhere in this annual report on Form 10-K and the Company’s other public filings, which are available without charge through the SEC’s website at http://www.sec.gov.
Exhibit Number |
| Description of Exhibit |
|
|
|
(3) |
| Articles of Incorporation and Bylaws |
|
|
|
| ||
|
|
|
| ||
|
|
|
| ||
|
|
|
| ||
|
|
|
(10) |
| Material Contracts |
|
|
|
(31) |
| Rule 13a-14(a) / 15d-14(a) Certifications |
|
|
|
| Certification of Principal Executive pursuant to Section 302 of the Sarbanes-Oxley Act. | |
|
|
|
| Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act. | |
|
|
|
(32) |
| Section 1350 Certifications |
|
|
|
| Certification of Principal Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act | |
|
|
|
| Certification of Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act |
| Table of Contents |
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereto duly authorized.
|
| Yinfu Gold Corporation |
|
|
| (Registrant) |
|
|
|
|
|
Date: |
| /s/ Jiang, Libin |
|
|
| Jiang, Libin |
|
|
| President, Secretary and Director |
|
|
|
|
|
Date: |
| /s/ Jiang, Libin |
|
|
| Jiang, Libin |
|
|
| Interim Chief Financial Officer |
|
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
Date: |
| /s/ Jiang, Libin |
|
|
| Jiang, Libin |
|
|
| President, Secretary and Director |
|
|
|
|
|
Date: |
| /s/ Jiang, Libin |
|
|
| Jiang, Libin |
|
|
| Interim Chief Financial Officer |
|
|