U.S. UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Mark One☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the quarterly period ended February 28,Quarterly Period Ended November 30, 2022
or |
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☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______________ to ________________
COMMISSION FILE NO. Commission File Number 333-234137
|
(Exact name of registrant issuer as specified in its charter) |
Nevada |
| 7999 |
| 98-1448750 |
(State or Other
|
| (Primary Standard Industrial Classification Number) |
| ( Identification |
Azar International Corp.
Carretera Turistica, Luperon, 12th km, No. 7
Grand Parada, Puerto Plata, Dominican Republic
(829) 947-52515348 VEGAS DRIVE, LAS VEGAS, Nevada 89108
(Address and telephoneof principal executive offices, including zip code)
(+86) 18678961296
Registrant’s phone number, including area code
Securities registered pursuant to Section 12(b) of registrant’s executive office)the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
Common stock, $.001 par value | LQLY | N/A |
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 checkmarkcheck 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 issuer: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 pastpreceding 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 ☒ NoNO ☐
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 (§(section 232.405 of this chapter) during the preceding 12twelve months (or for such shorter period that the registrant was required to submit and post such files).
Yes ☒ NoNO ☐
Indicate by check mark whether the registrant is a large accelerated filed,filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” or an “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer | ☐ | Accelerated filer | ☐ |
Non-accelerated |
| 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. Yes ☐ No ☒
Indicate by checkmarkcheck mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☒ No ☐
Applicable Only to Issuer Involved in Bankruptcy Proceedings During the Preceding Five Years. N/A
Indicate by checkmark whether the issuer has filed all documents and reports required to be filed by Section 12, 13 and 15(d) of the Securities Exchange Act of 1934 after the distribution of securities under a plan confirmed by a court. Yes ☐ No ☐☒
Applicable Only to Corporate RegistrantsThe aggregate market value of the voting stock and non-voting common equity held by non-affiliates of the registrant as of January 13, 2023, was approximately $0.9 million.
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the mostlatest practicable date:date.
Class |
| Outstanding |
at January 13, 2023 | ||
Common Stock, |
| 3,895,000 |
AZAR INTERNATIONAL CORP.TABLE OF CONTENTS
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| F-1 | ||
Condensed Balance Sheets as of November 30, 2022 and August 31, 2022 (unaudited) | F-1 | ||
F-2 | |||
F-3 | |||
Condensed Statements of Cash Flows for the three months ended November 30, 2022 and 2021(unaudited) | F-4 | ||
F-5 | |||
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS | 2 | ||
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| Table of Contents |
AZAR INTERNATIONALPART I – FINANCIAL INFORMATION
Item 1. Financial statements
QLY BIOTECH GROUP CORP.
CONDENSED BALANCE SHEETS
AS OF NOVEMBER 30, 2022 AND AUGUST 31, 2022 (Unaudited)
ASSETS |
| FEBRUARY 28, 2022 (Unaudited) |
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| AUGUST 31, 2021 (Audited) |
| ||
Current Assets |
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Cash & cash equivalents |
| $ | 1,123 |
|
| $ | 5,169 |
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Total current assets |
| $ | 1,123 |
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| $ | 5,169 |
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Non-Current assets |
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Equipment (net) |
|
| 67 |
|
|
| 123 |
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Intangible assets (net) |
|
| 1,067 |
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|
| 1,867 |
|
Total non-Current assets |
| $ | 1,134 |
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|
| 1,990 |
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TOTAL ASSETS |
| $ | 2,257 |
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| $ | 7,159 |
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LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
Current Liabilities | ||||||||
Loans from related parties |
| $ | 14,186 |
|
| $ | 11,597 |
|
Accounts Payable |
|
| 0 |
|
|
| 1,525 |
|
Total current liabilities |
|
| 14,186 |
|
|
| 13,122 |
|
Total Liabilities |
| $ | 14,186 |
|
| $ | 13,122 |
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Stockholders’ Equity (Deficit) | ||||||||
Common stock, $0.001 par value, 75,000,000 shares authorized; 3,895,000 shares issued and outstanding |
|
| 3,895 |
|
|
| 3,895 |
|
Additional Paid-In-Capital |
|
| 25,955 |
|
|
| 25,955 |
|
Accumulated Deficit |
|
| (41,779 | ) |
|
| (35,813 | ) |
Total Stockholders’ equity (deficit) |
| $ | (11,929 | ) |
| $ | (5,963 | ) |
Total Liabilities and Stockholders’ Equity (Deficit) |
| $ | 2,257 |
|
| $ | 7,159 |
|
(Currency expressed in United States Dollars (“US$”), except for number of shares)
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| As of |
| |||||
|
| November 30, 2022 |
|
| August 31, 2022 |
| ||
ASSETS |
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TOTAL ASSETS |
| $ | - |
|
| $ | - |
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LIABILITIES AND STOCKHOLDERS’ DEFICIT |
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CURRENT LIABILITIES |
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Accrued liabilities |
| $ | 3,500 |
|
| $ | - |
|
Amount due to a director |
|
| 4,548 |
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|
| - |
|
Total current liabilities |
|
| 8,048 |
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|
| - |
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TOTAL LIABILITIES |
| $ | 8,048 |
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| $ | - |
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STOCKHOLDERS’ DEFICIT |
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Common stock, $0.001 par value, 1,000,000,000 shares authorized, 3,895,000 shares issued and outstanding as of November 30, 2022 and August 31, 2022, respectively |
| $ | 3,895 |
|
| $ | 3,895 |
|
Additional paid-in capital |
|
| 47,150 |
|
|
| 46,030 |
|
Accumulated deficit |
|
| (59,093 | ) |
|
| (49,925 | ) |
TOTAL STOCKHOLDERS’ DEFICIT |
|
| (8,048 | ) |
|
| - |
|
|
|
|
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TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT |
| $ | - |
|
| $ | - |
|
TheSee accompanying notes are an integral part of theseto the unaudited condensed financial statements.
| Table of Contents |
AZAR INTERNATIONALQLY BIOTECH GROUP CORP.
CONDENSED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(UNAUDITED)FOR THE THREE MONTHS ENDED NOVEMBER 30, 2022 AND 2021 (Unaudited)
(Currency expressed in United States Dollars (“US$”), except for number of shares)
|
| Three months ended February 28, 2022 |
|
| Three months ended February 28, 2021 |
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| Six months ended February 28, 2022 |
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| Six months ended February 28, 2021 |
| ||||
Revenue |
| $ | 0 |
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| $ | 0 |
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| $ | 0 |
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| $ | 0 |
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OPERATING EXPENSES |
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Cost of sales |
|
| 0 |
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| 0 |
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| 0 |
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| 0 |
|
General and administrative expenses |
|
| 1,755 |
|
|
| 23,769 |
|
|
| 5,967 |
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|
| 28,310 |
|
Total Operation expenses |
|
| 1,755 |
|
|
| 23,769 |
|
|
| 5,967 |
|
|
| 28,310 |
|
Income (Loss) before provision for income taxes |
|
| (1,755 | ) |
|
| (23,769 | ) |
|
| (5,967 | ) |
|
| (28,310 | ) |
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Provision for income taxes |
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Net income (loss) |
| $ | (1,755 | ) |
| $ | (23,769 | ) |
| $ | (5,967 | ) |
| $ | (28,310 | ) |
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Income (loss) per common share: |
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Basic and Diluted |
| $ | (0.00 | ) |
| $ | (0.00 | ) |
| $ | (0.00 | ) |
| $ | (0.00 | ) |
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Weighted Average Number of Common Shares Outstanding: |
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Basic and Diluted |
|
| 3,895,000 |
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| 3,895,000 |
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|
| 3,895,000 |
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| 3,895,000 |
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| For three months ended November 30, |
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| 2022 |
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| 2021 |
| ||
REVENUES |
| $ | - |
|
| $ | - |
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COSTS OF REVENUES |
|
| - |
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| - |
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GROSS INCOME |
|
| - |
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| - |
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GENERAL & ADMINISTRATIVE EXPENSES |
|
| 9,168 |
|
|
| 4,212 |
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LOSS BEFORE INCOME TAX |
|
| (9,168 | ) |
|
| (4,212 | ) |
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INCOME TAX EXPENSES |
|
| - |
|
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| - |
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NET LOSS |
| $ | (9,168 | ) |
| $ | (4,212 | ) |
|
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Other comprehensive gain (loss): |
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Foreign exchange adjustment gain (loss) |
|
| - |
|
|
| - |
|
COMPREHENSIVE LOSS |
| $ | (9,168 | ) |
| $ | (4,212 | ) |
|
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Net loss per share - Basic and diluted |
| $ | (0.00 | ) |
| $ | (0.00 | ) |
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Weighted average number of common shares outstanding – Basic and diluted |
|
| 3,895,000 |
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|
| 3,895,000 |
|
TheSee accompanying notes are an integral part of theseto the unaudited condensed financial statements.
| Table of Contents |
AZAR INTERNATIONALQLY BIOTECH GROUP CORP.
STATEMENTCONDENSED STATEMENTS OF STOCKHOLDER’S EQUITY (DEFICIT)CHANGES IN STOCKHOLDERS’ DEFICIT
FOR THE SIXTHREE MONTHS PERIODS ENDED FEBRUARY 28,NOVEMBER 30, 2022 AND 2021 (Unaudited)
(UNAUDITED)(Currency expressed in United States Dollars (“US$”), except for number of shares)
|
| Number of Common Shares |
|
| Amount |
|
| Additional Paid-In-Capital |
|
| Deficit accumulated |
|
| Total |
| |||||
Balance at August 31, 2020 |
|
| 3,895,000 |
|
| $ | 3,895 |
|
| $ | 25,955 |
|
| $ | (6,310 | ) |
| $ | 23,540 |
|
Net loss |
|
| - |
|
|
| 0 |
|
|
| 0 |
|
|
| (28,310 | ) |
|
| (28,310 | ) |
Balances as of February 28, 2021 |
|
| 3,895,000 |
|
| $ | 3,895 |
|
| $ | 25,955 |
|
| $ | (34,620 | ) |
| $ | (4,770 | ) |
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Balances as of August 31, 2021 |
|
| 3,895,000 |
|
| $ | 3,895 |
|
| $ | 25,955 |
|
| $ | (35,813 | ) |
| $ | (5,963 | ) |
Net loss |
|
| - |
|
|
| 0 |
|
|
| 0 |
|
|
| (5,967 | ) |
|
| (5,967 | ) |
Balances as of February 28, 2022 |
|
| 3,895,000 |
|
| $ | 3,895 |
|
| $ | 25,955 |
|
| $ | (41,779 | ) |
| $ | (11,929 | ) |
For the three months ended November 30, 2022
|
| COMMON STOCK |
|
|
| ADDITIONAL |
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| TOTAL | |||||||||
|
| Number of shares |
|
| Amount |
|
| PAID-IN CAPITAL |
|
| ACCUMULATED DEFICIT |
|
| STOCKHOLDER DEFICT |
| |||||
Balance as of September 1, 2022 |
|
| 3,895,000 |
|
| $ | 3,895 |
|
| $ | 46,030 |
|
| $ | (49,925 | ) |
| $ | - |
|
Satisfaction of amount due to current shareholder on November 30, 2022 |
|
| - |
|
|
| - |
|
|
| 1,120 |
|
|
| - |
|
|
| 1,120 |
|
Net loss |
|
| - |
|
|
| - |
|
|
| - |
|
|
| (9,168 | ) |
|
| (9,168 | ) |
Balance as of November 30, 2022 |
|
| 3,895,000 |
|
| $ | 3,895 |
|
| $ | 47,150 |
|
| $ | (59,093 | ) |
| $ | (8,048 | ) |
TheFor the three months ended November 30, 2021
|
| COMMON STOCK |
|
| ADDITIONAL |
|
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| TOTAL |
| ||||||||
|
| Number of shares |
|
| Amount |
|
| PAID-IN CAPITAL |
|
| ACCUMULATED DEFICIT |
|
| STOCKHOLDER DEFICT |
| |||||
Balance as of September 1, 2021 |
|
| 3,895,000 |
|
| $ | 3,895 |
|
| $ | 25,955 |
|
| $ | (35,813 | ) |
| $ | (5,963 | ) |
Net loss |
|
| - |
|
|
| - |
|
|
| - |
|
|
| (4,212 | ) |
|
| (4,212 | ) |
Balance as of November 30, 2021 |
|
| 3,895,000 |
|
| $ | 3,895 |
|
| $ | 25,955 |
|
| $ | (40,025 | ) |
| $ | (10,175 | ) |
See accompanying notes are an integral part of theseto the unaudited condensed financial statements.
| Table of Contents |
AZAR INTERNATIONALQLY BIOTECH GROUP CORP.
CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)FOR THE THREE MONTHS ENDED NOVEMBER 30, 2022 AND 2021 (Unaudited)
(Currency expressed in United States Dollars (“US$”), except for number of shares)
|
| Six months ended February 28, 2022 |
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| Six months ended February 28, 2021 |
| ||
CASH FLOWS FROM OPERATING ACTIVITIES |
|
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Net loss |
| $ | (5,967 | ) |
| $ | (28,310 | ) |
Accounts Payable |
|
| (1,525 | ) |
|
| 10,000 |
|
Adjustments as of non-cash items |
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Depreciation |
|
| 56 |
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|
| 56 |
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Amortization |
|
| 800 |
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|
| 800 |
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Net cash provided by (used in) Operating activities |
|
| (6,636 | ) |
|
| (17,454 | ) |
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CASH FLOWS FROM FINANCING ACTIVITIES |
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Proceeds from sale of common stock |
|
| 0 |
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| 0 |
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Proceeds of loan from shareholder |
|
| 2,590 |
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|
| 2,000 |
|
Net cash provided by Financing activities |
|
| 2,590 |
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|
| 2,000 |
|
Increase (decrease) in cash and equivalents |
|
| (4,046 | ) |
|
| (15,454 | ) |
Cash and equivalents at beginning of the period |
|
| 5,169 |
|
|
| 27,634 |
|
Cash and equivalents at end of the period |
| $ | 1,123 |
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| $ | 12,180 |
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Supplemental cash flow information: |
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Cash paid for: |
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Interest |
| $ | 0 |
|
| $ | 0 |
|
Taxes |
| $ | 0 |
|
| $ | 0 |
|
|
| For the three months ended November 30, |
| |||||
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| 2022 |
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| 2021 |
| ||
CASH FLOWS FROM OPERATING ACTIVITIES: |
|
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|
| ||
Net loss |
| $ | (9,168 | ) |
| $ | (4,212 | ) |
Adjustments to reconcile net loss to net cash used in operating activities |
|
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Amortization cost and depreciation |
|
| - |
|
|
| 428 |
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Changes in operating assets and liabilities: |
|
|
|
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|
|
|
|
Accounts payable |
|
| - |
|
|
| (1,025 | ) |
Accrued liabilities |
|
| 3,500 |
|
|
| - |
|
Net cash used in operating activities |
|
| (5,668 | ) |
|
| (4,809 | ) |
|
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CASH FLOWS FROM FINANCING ACTIVITIES: |
|
|
|
|
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|
|
|
Proceeds of loan from former shareholder |
|
| - |
|
|
| 800 |
|
Proceeds of loan from current shareholder |
|
| 5,668 |
|
|
| - |
|
Net cash generated from financing activities |
|
| 5,668 |
|
|
| 800 |
|
|
|
|
|
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|
|
|
Effect of exchange rate changes on cash and cash equivalents |
|
| - |
|
|
| - |
|
|
|
|
|
|
|
|
|
|
Net change in cash and cash equivalents |
|
| - |
|
|
| (4,009 | ) |
Cash and cash equivalents, beginning of year |
|
| - |
|
|
| 5,169 |
|
|
|
|
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CASH AND CASH EQUIVALENTS, END OF YEAR |
| $ | - |
|
| $ | 1,160 |
|
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|
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|
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|
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SUPPLEMENTAL CASH FLOWS INFORMATION |
|
|
|
|
|
|
|
|
Income taxes paid |
| $ | - |
|
| $ | - |
|
Interest paid |
| $ | - |
|
| $ | - |
|
|
|
|
|
|
|
|
|
|
NON-CASH INVESTMENT AND FINANCING ACTIVITIES |
|
|
|
|
|
|
|
|
Satisfaction of amount due to current shareholder on November 30, 2022 |
| $ | 1,120 |
|
| $ | - |
|
TheSee accompanying notes are an integral part of theseto the unaudited condensed financial statements.
| Table of Contents |
AZAR INTERNATIONALQLY BIOTECH GROUP CORP.
NOTES TO THE UNAUDITEDCONDENSED FINANCIAL STATEMENTS
FOR THE SIXTHREE MONTHS PERIOD ENDED FEBRUARY 28,NOVEMBER 30, 2022 (Unaudited)
(Currency expressed in United States Dollars (“US$”), except for number of shares)
NOTE 1 – ORGANIZATION AND BUSINESS BACKGROUND
AZAR INTERNATIONAL CORP. (the “Company”QLY Biotech Group Corp., a Nevada corporation (“the Company” or “QLY”) is a corporation establishedwas incorporated under the corporation laws inof the State of Nevada on September 20, 2018. Azar International Corp. is in the tourism business.
The Company has adopted August 31 fiscal year end.was used to engaged in the tourism. The company used to organize individual and group sailing tours in the Dominican Republic. Services and itineraries were used to be provide by our company include custom packages according to the client’s specifications. And we used to develop and offer our own sailing tours in the North part of Dominican Republic as well as third-party suppliers.
NOTE 2 – GOING CONCERNOn July 8, 2022, as a result of a private transactions, 3,000,000 shares of common stock, $0.001 par value per share (the “Shares”) of QLY Biotech Group Corp. (Former name: Azar International Corp.)., were transferred from Hilario Lopez Vargas to Lixue Yang. As a result, Lixue Yang became holders of approximately 77% of the voting rights of the issued and outstanding share capital of the Company and became the controlling shareholder. The consideration paid for the Shares was $350,000. The source of the cash consideration for the Shares was personal funds of Lixue Yang. In connection with the transaction, Hilario Lopez Vargas released the Company from all debts owed to him, and the Company agreed to assign the Computer and Designer (that were acquired by the Company on September 30, 2019 and November 1, 2019, respectively) to him.
On July 8, 2022, the existing director and officer resigned immediately. Accordingly, Hilario Lopez Vargas, serving as a director and an officer, ceased to be the Company’s Chief Executive Officer, Chief Financial Officer, President, Treasurer, Secretary and a Director. At the effective date of the transfer, Lixue Yang consented to act as the new Chief Executive Officer, Chief Financial Officer, President, Treasurer, Secretary and a Director of the Company.
NOTE 2 - GOING CONCERN UNCERTAINTIES
As of November 30, 2022, the Company suffered an accumulated deficit of $59,093 and incurred a net loss of $9,168. The Company’s financial statementscontinuation of the Company as of February 28, 2022 have been prepared using generally accepted accounting principles in the United States of America applicable to a going concern which contemplatesthrough November 30, 2022 is dependent upon improving the realization of assetsprofitability and liquidation of liabilities in the normal course of business. The Company has not yet established an ongoing source of revenues sufficientcontinuing financial support from its stockholders. Management believes the existing shareholders or external financing will provide the additional cash to cover its operating costsmeet the Company’s obligations as they become due.
These and allow itother factors raise substantial doubt about the Company’s ability to continue as a going concern. The Company has accumulated loss from inception (September 20, 2018) to February 28, 2022 of $41,779. These factors among others raise substantial doubt about the ability of the company to continue as a going concern for a reasonable period of time.
During the quarter ended February 28, 2022, the Company was negatively impacted by the effects of the worldwide COVID-19 pandemic. The Company’s business is tourism in the Dominican Republic. Border closer, travel bans and quarantine place doubt on the Company’s revenue, which could result in continued losses.
In order to continue as a going concern, the Company will need, among other things, additional capital resources. Management’s plan is to obtain such resources for the Company by obtaining capital from management and significant shareholders sufficient to meet its minimal operating expenses and seeking third party equity and/or debt financing. However, management cannot provide any assurances that the Company will be successful in accomplishing any of its plans. These financial statements do not include any adjustments related to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that might be necessary shouldmay result in the Company be unablenot being able to continue as a going concern.
NOTE 3 –- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BasisThe accompanying unaudited condensed financial statements reflect the application of Presentationcertain significant accounting policies as described in this note and elsewhere in the accompanying financial statements and notes.
● | Basis of presentation |
The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America. The Company’s fiscal year end is August 31. The Company’s financial statements are presented in U.S. dollars.
● | Use of estimates |
New Accounting Pronouncements
In preparing these condensed financial statements, management makes estimates and assumptions that affect the reported amounts of assets and liabilities in the balance sheets and revenues and expenses during the periods reported. Actual results may differ from these estimates.
There were various accounting standards and interpretations issued recently, none of which are expected to a have a material impact on our financial position, operations or cash flows.
● | Cash and cash equivalents |
Cash and Cash Equivalents
For purposes of the statement of cash flows, the CompanyThe company considers all highly liquid instruments purchased with an originala maturity of three months or less at the time of issuance to be cash equivalents. The Company’s bank accounts are deposited in insured institutions. The funds are insured up to $250,000. At February 28, 2022, the Company’s bank deposits did not exceed the insured amounts.
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Stock-Based CompensationQLY BIOTECH GROUP CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED NOVEMBER 30, 2022 (Unaudited)
(Currency expressed in United States Dollars (“US$”), except for number of shares)
● | Property, plant and equipment |
As
Property, plant and equipment are carried at cost less accumulated depreciation. Depreciation is provided over their estimated useful lives, using the straight-line method. Estimated useful lives of February 28, 2022, the Company has not issued any stock-based payments to its employees.property and equipment are as follows:
Stock-based compensation is accounted for at fair value in accordance with ASC 718, when applicable. To date, the Company has not adopted a stock option plan and has not granted any stock options.
Use of Estimates and Assumptions
Office equipment | 3 years |
The preparationcost of financial statements in conformitymaintenance and repairs is charged to expenses as incurred, whereas significant renewals and betterments are capitalized.
● | Intangible assets, net |
Intangible assets with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilitiesdefinite lives are stated at the date of the financial statements and the reported amounts of revenues and expenses during the period. Actual results could differ from those estimates.cost less accumulated amortization.
Due toAmortization is calculated on the limited level of operations,straight-line basis over the Company has not had to make material assumptions or estimates other than the assumption that the Company is a going concern.following estimated useful lives:
Fair Value of Financial Instruments
Website | 3 years |
ASC 825, “Disclosures about Fair Value of Financial Instruments”, requires disclosure of fair value information about financial instruments. ASC 820, “Fair Value Measurements” defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of February 28, 2022.
● | Revenue recognition |
The respective carrying valuesCompany assesses and follows the guidance of certain on-balance-sheet financial instruments approximate their fair values. These financial instruments include cash, accounts payable and related party loan payable. Fair values were assumed to approximate carrying values for these financial instruments since they are short term in nature and their carrying amounts approximate fair value.
Income Taxes
Income taxes are provided in accordance with ASC No. 740, Accounting for Income Taxes. A deferred tax asset or liability is recorded for all temporary differences between financial and tax reporting and net operating loss carry forwards. Deferred tax expense (benefit) results from the net change during the year of deferred tax assets and liabilities.
Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion of all of the deferred tax assets will be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.
Revenue Recognition
We adopted Accounting Standards Codification (“ASC”) Topic 606, “Revenue from Contracts with Customers”, and all related interpretations for recognition of our revenue from tours and services. Previously we recorded revenue based on ASC Topic 605. Adoption of new accounting standard did not have any material impact on our reported revenue.
Revenuecontracts with customers is recognized whenusing the following criteria are met:five steps:
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The Company has evaluated allhad generated zero revenue during the recentthree months ended November 30, 2022 and 2021, respectively.
● | Income taxes |
The Company followed the liability method of accounting pronouncementsfor income taxes in accordance with ASC 740, Income Taxes, or ASC 740. Under this method, deferred tax assets and liabilities are determined that there are no other accounting pronouncementsbased on the difference between the financial reporting and tax bases of assets and liabilities using enacted tax rates that will havebe in effect in the period in which the differences are expected to reverse. The Company recorded a materialvaluation allowance to offset deferred tax assets if based on the weight of available evidence, it is more-likely-than-not that some portion, or all, of the deferred tax assets will not be realized. The effect on deferred taxes of a change in tax rate is recognized in tax expense in the Company’s financial statements.period that includes the enactment date of the change in tax rate.
The Company accounted for uncertainties in income taxes in accordance with ASC 740. Interest and penalties related to unrecognizable tax benefit recognized in accordance with ASC 740 are classified in the statements of comprehensive loss as income tax expense.
● | Earnings per share |
The Company computes earnings per share (“EPS”) in accordance with ASC Topic 260, “Earnings per share”. Basic EPS is measured as the income or loss available to common shareholders divided by the weighted average common shares outstanding for the period. Diluted EPS is similar to basic EPS but presents the dilutive effect on a per share basis of potential common shares (e.g., convertible securities, options, and warrants) as if they had been converted at the beginning of the periods presented, or issuance date, if later. Any potential common shares in 2022 and 2021 that have an anti-dilutive effect (i.e. those that increase income per share or decrease loss per share) are excluded from the calculation of diluted EPS.
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Fixed AssetsQLY BIOTECH GROUP CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED NOVEMBER 30, 2022 (Unaudited)
(Currency expressed in United States Dollars (“US$”), except for number of shares)
● | Related party transaction |
Fixed assets are stated at cost, net
A related party is generally defined as (i) any person that holds 10% or more of accumulated depreciationthe Company’s securities and accumulated impairment losses, if any. The cost comprises purchase price, borrowing costs, if capitalization criteria are mettheir immediate families, (ii) the Company’s management, (iii) someone that directly or indirectly controls, is controlled by or is under common control with the Company, or (iv) anyone who can significantly influence the financial and directly attributable costoperating decisions of bringing the assetCompany. A transaction is considered to its working condition for the intended use. Any subsidy/reimbursement/contribution received for installation and acquisitionbe a related party transaction when there is a transfer of any fixed assets is shown as deduction in the year of receipt. Capital work- in progress is stated at cost.resources or obligations between related parties.
Subsequent expenditureTransactions involving related parties cannot be presumed to be carried out on an itemarm’s-length basis, as the requisite conditions of fixed assets is addedcompetitive, free market dealings may not exist. Representations about transactions with related parties, if made, shall not imply that the related party transactions were consummated on terms equivalent to its book value only if it increases the future benefits from the existing asset beyond its previously assessed standard of performance. All other expenses on existing fixed assets, including day-to-day repairs and maintenance expenditure and cost of replacing parts, are charged to the Statement of Profit and Loss for the period during whichthose that prevail in arm’s-length transactions unless such expenses are incurred.representations can be substantiated.
Gains or losses arising from de-recognition of fixed assets are measured as the difference between the net disposal proceeds and the carrying amount of the assets derecognized.
● | Recent accounting pronouncements |
The Company utilizes straight-line depreciation overhas reviewed all recently issued, but not yet effective, accounting pronouncements and does not believe the estimated useful lifefuture adoption of any such pronouncements may be expected to cause a material impact on its financial condition or the asset.
Office Equipment – 3 yearsresults of its operations.
Earnings per ShareNOTE 4 – ACCRUED LIABILITIES
ASC No. 260, “Earnings Per Share”, specifiesAs of November 30, 2022, the computation, presentationbalance of accrued liabilities was $3,500 that including the audit fee and disclosure requirementsstock agency expenses. As of August 31, 2022, the balance of accrued liabilities was $0.
NOTE 5 - AMOUNT DUE TO A DIRECTOR
As of November 30, 2022 and August 31, 2022, the director of the Company, Mr. Lixue Yang, advanced $4,548 and $0 to the Company, respectively, which is unsecured, interest-free with no fixed payment term, for earnings (loss) per share for entities with publicly held common stock. Theworking capital purpose.
NOTE 6 – COMMON STOCK
As of November 30, 2022 and August 31, 2022, the Company has adopted the provisions1,000,000,000 share authorized, 3,895,000 shares issued and outstanding, respectively. There are no shares of ASC No. 260.preferred stock issued and outstanding.
Basic net loss per share amounts is computed by dividingNOTE 7 – ADDITIONAL PAID-IN CAPITAL– CAPITAL CONTRIBUTION
As of November 30, 2022 and August 31, 2022, the net loss by the weighted average numberCompany has a total additional paid-in capital - capital contribution balance of common shares outstanding. Diluted earnings per share are the same as basic earnings per share$47,150 and $46,030, respectively. Such increase was due to the lacksatisfaction of dilutive items in the Company.amount of $1,120 due to current shareholder on November 30, 2022.
Risks and UncertaintiesNOTE 8 – SUBSEQUENT EVENT
In December 2019, a novel strainaccordance with ASC Topic 855, “Subsequent Events”, which establishes general standards of coronavirus surfaced in China, whichaccounting for and disclosure of events that occur after the balance sheet date but before condensed financial statements are issued, the Company has and is continuingevaluated all events or transactions that occurred up to spread throughoutJanuary 13, 2023, the world, includingdate the United States and Dominican Republic. On January 30, 2020,financial statements were available to issue. Based upon this review, the World Health Organization declared the outbreak of the coronavirus disease (COVID-19) a “Public Health Emergency of International Concern,” and on March 11, 2020, the World Health Organization characterized the outbreak as a “pandemic”. The governors of New York, California and several other states, as well as mayors on many cities,Company did not identify any subsequent events that would have ordered their residents to cease traveling to non-essential jobs and to curtail all unnecessary travel, and to stay in their homes as much as possiblerequired adjustment or disclosure in the coming weeks, as the nation confronts the escalating coronavirus outbreak, and similar restrictions have been recommended by the federal authorities and authorities in many other states and cities. The Company is not able to predict the ultimate impact that COVID -19 will have on its business; however, if the current economic conditions continue, the Company will be forced to significantly scale back its business operations and its growth plans, and could ultimately have a significant negative impact on the Company.
NOTE 4 – EQUIPMENT (NET)
Company purchased equipment as on September 30, 2019 for $339.
The Company depreciates its property using straight-line depreciation over the estimated useful life of 3 years.
For the six-month period ended February 28, 2022 the company recorded $56 in depreciation expense. From inception (September 20, 2018) through February 28, 2022 the company has recorded a total of $272 in depreciation expense.
NOTE 5 – INTANGIBLE ASSETS
Intangibles comprise of Company’ website. The website was purchased on October 31, 2019 for $4,800. The Company amortize its intangible using straight-line depreciation over the estimated useful life of 3 years.
For the six-month period ended February 28, 2022 the company recorded $800 in amortization expense. From inception (September 20, 2018) through February 28, 2022 the company has recorded a total of $3,733 in amortization expense.condensed financial statements.
NOTE 6 – CAPITAL STOCK
The Company has 75,000,000 shares of common stock authorized with a par value of $0.001 per share.
In November 2018, the Company issued 3,000,000 shares of its common stock at $0.001 per share for total proceeds of $3,000.
In July and August 2020, the Company issued 895,000 shares of its common stock at $0.03 per share for total proceeds of $26,850.
As of February 28, 2022, the Company had 3,895,000 shares issued and outstanding.
NOTE 7 – RELATED PARTY TRANSACTIONS
In support of the Company’s efforts and cash requirements, it may rely on advances from related parties until such time that the Company can support its operations or attains adequate financing through sales of its equity or traditional debt financing. There is no formal written commitment for continued support by officers, directors, or shareholders. Amounts represent advances or amounts paid in satisfaction of liabilities. The advances are considered temporary in nature and have not been formalized by a promissory note.
Since September 20, 2018 (Inception) through February 28, 2022, the Company’s sole officer and director loaned the Company $14,186 to pay for incorporation costs and operating expenses. As of February 28, 2022, the amount outstanding was $14,186. The loan is non-interest bearing, due upon demand and unsecured.
NOTE 8 – SUBSEQUENT EVENTS
The Company has evaluated subsequent events from February 28, 2022 to April 6, 2022, the date the financial statements were issued and has determined that there are no items to disclose.
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ITEMItem 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONManagement’s Discussion and Analysis of Financial Condition and Results of Operations
FORWARD LOOKING STATEMENTS
Statements madeThe following discussion should be read in conjunction with our financial statements, including the notes thereto, appearing elsewhere in this Form 10-Q that are not historical or current facts are “forward-looking statements” made pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933 (the “Act”) and Section 21E of the Securities Exchange Act of 1934. These statements often can be identified by the use of terms such as “may,” “will,” “expect,” “believe,” “anticipate,” “estimate,” “approximate” or “continue,” or the negative thereof. We intend that suchReport. The following discussion contains forward-looking statements be subject to the safe harbors for such statements. We wish to caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. Any forward-looking statements represent management’s best judgment as to what may occurthat reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the future. However, forward-looking statements are subject to risks, uncertainties and important factors beyond our controlforward- looking statements. Factors that could cause actual resultsor contribute to such differences include, but are not limited to those discussed below and events to differ materially from historical results of operationselsewhere in this Report. Our audited financial statements are stated in United States Dollars and events and those presently anticipated or projected. We disclaim any obligation subsequently to revise any forward-looking statements to reflect events or circumstances after the date of such statement or to reflect the occurrence of anticipated or unanticipated events.are prepared in accordance with United States Generally Accepted Accounting Principles.
DESCRIPTION OF BUSINESSCompany Overview
On September 20, 2018, QLY Biotech Group Corp. (“the CompanyCompany” or “QLY”), was incorporated under the laws ofin the State of Nevada. We areNevada on September 20, 2018. The Company was used to engaged in the tourism. Azar International Corp. organizesThe company used to organize individual and group sailing tours in the Dominican Republic. Services and itineraries providedwere used to be provide by our company include custom packages according to the client’s specifications. WeAnd we used to develop and offer our own sailing tours in the North part of Dominican Republic as well as third-party suppliers.
The Company has no operations or revenue as of the date of this Report due to the current director had not perform similar service. We are currently in the process of developing a business plan. Management intends to explore and identify viable business opportunities within the U.S. including seeking to acquire a business in a reverse merger. Our ability to effectively identify, develop and implement a viable plan for our business may be hindered by risks and uncertainties which are beyond our control, including without limitation, the continued negative effects of the coronavirus pandemic on the U.S. and global economies.
RESULTS OF OPERATIONSResults of Operation
Our financial statements have been prepared assuming that we will continue as a going concern and, accordingly, do not include adjustments relating to the recoverability and realization of assets and classification of liabilities that might be necessary should we be unable to continue in operation.
We expect we will require additional capital to meet our long-term operating requirements. We expect to raise additional capital through, among other things, the sale of equity or debt securities.
As of February 28, 2022, our total assets were $2,257 compared to $7,159 in total assets at August 31, 2021. As of February 28, 2022, our total liabilities were $14,186 compared to $13,122 in total liabilities at August 31, 2021.
Stockholders’ deficit was $11,929 as of February 28, 2022 compared to $5,963 in Stockholders’ Equity as of August 31, 2021.
Three months ended February 28, 2022 compared to three months February 28, 2021.
During three-month periods ended February 28, 2022 and 2020 we have not generated any revenue.
DuringFor the three months ended February 28,November 30, 2022 we incurred expenses of $1,755 compared to $23,769 incurred duringwith the three-month periodthree months ended February 28, 2021.November 30, 2021
Our net lossRevenue
The Company generated revenue of $0 for the three months ended February 28,November 30, 2022 was $1,755as compared to $23,769 duringrevenue of $0 for the three-month periodthree months ended February 28,November 30, 2021. The management intends to explore and identify business opportunities within the U.S., including a potential acquisition of an operating entity through a reverse merger, asset purchase or similar transaction. Our Chief Executive Officer has experience in business consulting, although no assurances can be given that he can identify and implement a viable business strategy or that any such strategy will result in profits. Our ability to effectively identify, develop and implement a viable plan for our business may be hindered by risks and uncertainties which are beyond our control, including without limitation, the continued negative effects of the coronavirus pandemic on the U.S. and global economies.
Cost of revenues
Cost of revenues of $0 and $0 for the three months ended November 30, 2022 and 2021, respectively.
Operating Expenses
Operating expenses of $9,168 and $4,212 for the three months ended November 30, 2022 and 2021, that were mainly consist of professional fees such as audit fees, annual list and edgar filing fee etc. Such increase was mainly derived from annual list and stock agency fee.
Net Loss
The net loss of $9,168 and $4,212 for the three months ended November 30, 2022 and 2021, respectively. Such increase was mainly derived from annual list and stock agency fee.
Liquidity and Capital Resources
As of November 30, 2022 and August 31, 2022, we had working capital deficit of $8,048 and $0, respectively. The increase in working capital deficit was reflected in the accrued liabilities and advanced from director. The Company’s net loss of $9,168 and $4,212 for the three months ended November 30, 2022 and 2021, respectively.
Cash Flow from Operating Activities
Net cash used in operating activities for the three months ended November 30, 2022 was $5,668 as compared to net cash used in operating activities of $4,809 for the three months ended November 30, 2021, reflecting an increase of $859 on net cash used in operating activities. Such increase was due to the Company incurred a lower net loss in current year.
Cash Flow from Investing Activities
Net cash generated from investing activities for the three months ended November 30, 2022 and 2021, was $0 and $0, respectively.
Cash Flow from Financing Activities
Net cash generated from financing activities for the three months ended November 30, 2022 was $5,668 as compared to net cash generated from financing activities of $800 for the three months ended November 30, 2021, reflecting an increase of $4,868 on net cash generated from financing activities. Such increase was mainly due to the director that paid the Company’s operating expenses on behalf of the Company, such as audit fee, annual list and stock agency fee etc.
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Six months ended February 28, 2022 compared to six months February 28, 2021.Credit Facilities
During six-month periods ended February 28, 2022 and 2020 we have not generated any revenue.
During the six months ended February 28, 2022, we incurred expenses of $5,967 compared to $28,310 incurred during the six-month period ended February 28, 2021.
Our net loss for the six months ended February 28, 2022 was $5,967 compared to $28,310 during the six-month period ended February 28, 2021.
Cash Flows used by Operating Activities
For the six-month period ended February 28, 2022, net cash flows used in operating activities was $6,636. Net cash flows provided by operating activities was $17,454 during the six-month period ended February 28, 2021.
Cash Flows from Financing Activities
For the six-month period ended February 28, 2022, net cash flows from financing activities was $2,590 received from the related party compared to $2,000 during the six-month period ended February 28, 2021.
Effects of COVID-19
In March 2020, a novel strain of coronavirus (COVID-19) was declared a global pandemic by the World Health Organization. This pandemic has negatively affected the U.S. and global economies, disrupted global supply chains and financial markets, and led to significant travel and transportation restrictions, including mandatory closures and orders to “shelter-in-place”.
As the pandemic continues the global tourism may continue to decline, which will continue to affect our revenue and, as a result, could adversely affect our operating results and financial condition. The Dominican government lifted the State of Emergency and allowed the resumption of commercial aviation effective July 1, however, there are still limitations regarding public activities. Social distancing protocols have been established for a variety of activities and masks are required by law in public spaces.
During the quarter ended February 28, 2022, the Company was negatively impacted by the effects of the worldwide COVID-19 pandemic, border closer, travel bans and quarantine, and is likely to continue to be adversely affected for a significant period of time.
PLAN OF OPERATION AND FUNDING
We expect that working capital requirements will continuedo not have any credit facilities or other access to be funded through a combination of our existing funds and further issuances of securities. Our working capital requirements are expected to increase in line with the growth of our business.bank credit.
Existing working capital, further advancesContractual Obligations, Commitments and debt instruments,Contingencies
We currently have three lease agreement in place with respect to office premises in Beijing and anticipated cash flow are expectedChangsha China to be adequate to fund our operations over the next twelve months. We have no lines of credit or other bank financing arrangements. Generally, we have financed operations to date through the proceeds of the private placement of equity and debt instruments. In connection with our business plan, management anticipates additional increases in operating expenses and capital expenditures relating to: (i) acquisition of inventory; (ii) developmental expenses associated with a start-up business; and (iii) marketing expenses. We intend to finance these expenses with further issuances of securities, and debt issuances. Thereafter, we expect we will need to raise additional capital and generate revenues to meet long-term operating requirements. Additional issuances of equity or convertible debt securities will result in dilution to our current shareholders. Further, such securities might have rights, preferences or privileges senior to our common stock. Additional financing may not be available upon acceptable terms, or at all. If adequate funds are not available or are not available on acceptable terms, we may not be able to take advantage of prospective new business endeavors or opportunities, which could significantly and materially restrictcommence our business operations.
OFF-BALANCE SHEET ARRANGEMENTSOff-balance Sheet Arrangements
As of the date of this Quarterly Report,November 30, 2022, we do not have anyno significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.
GOING CONCERN
The independent registered public accounting firm auditors’ report accompanying our August 31, 2021 financial statements contained an explanatory paragraph expressing substantial doubt about our ability to continue as a going concern. The financial statements have been prepared “assuming that we will continue as a going concern,” which contemplates that we will realize our assets and satisfy our liabilities and commitments in the ordinary course of business.stockholders.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.Item 3 Quantitative and Qualitative Disclosures About Market Risk.
As a “smaller reporting company” as defined by Item 10 of Regulation S-K, the Company is not required to provide information required by this Item.
ITEM 4. CONTROLS AND PROCEDURESItem 4 Controls and Procedures.
Evaluation of Disclosure Controls and ProceduresProcedures:
OurWe carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures are designed to ensure that information required to be disclosed in reports that we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission. Our principal executive officer and principal financial and accounting officer have reviewed the effectiveness of our “disclosure controls and procedures” (as defined in the Securities Exchange Act Rules 13a-15(e) and 15d-15(e)) as of 1934 Rules 13(a)-15(e)November 30, 2022. This evaluation was carried out under the supervision and 15(d)-15(e)) withinwith the endparticipation of the period covered by this Quarterly Report on Form 10-Qour Chief Executive Officer and haveour Chief Financial Officer. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, theas of November 30, 2022, our disclosure controls and procedures were not effective to ensure that material information relatingdue to the Companypresence of material weaknesses in internal control over financial reporting.
A material weakness is recorded, processed, summarized, and reporteda deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely manner.basis. Management has identified the following material weaknesses which have caused management to conclude that, as of November 30, 2022, our disclosure controls and procedures were not effective: (i) inadequate segregation of duties and effective risk assessment; and (ii) insufficient written policies and procedures for accounting and financial reporting with respect to the requirements and application of both US GAAP and SEC guidelines.
Changes in Internal ControlsControl over Financial ReportingReporting:
There have beenwere no changes in the Company’sour internal control over financial reporting during the six-month period covered by this reportquarter ending November 30, 2022, that have materially affected, or are reasonably likely to materially affect, the Company’sour internal control over financial reporting.
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PART II.II — OTHER INFORMATION
ITEMItem 1. LEGAL PROCEEDINGSLegal Proceedings
Management is not awareWe know of anyno materials, active or pending legal proceedings contemplated byagainst us, nor are we involved as a plaintiff in any governmental authoritymaterial proceedings or pending litigation. There are no proceedings in which any of our directors, officers or affiliates, or any otherbeneficial shareholder are an adverse party involving us or our properties. Ashas a material interest adverse to us.
Item 1A. Risk Factors.
We are a smaller reporting company as defined by Rule 12b-2 of the dateSecurities Exchange Act of 1934 and are not required to provide the information under this Quarterly Report, no director, officer or affiliate is (i) a party adverse to us in any legal proceeding, or (ii) has an adverse interest to us in any legal proceedings. Management is not aware of any other legal proceedings pending or that have been threatened against us or our properties.item.
ITEMItem 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDSUnregistered Sales of Equity Securities and Use of Proceeds
None.
ITEMItem 3. DEFAULTS UPON SENIOR SECURITIES
No senior securities were issued and outstanding during the six-month period ended February 28, 2022.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable to our Company.
ITEM 5. OTHER INFORMATIONDefaults Upon Senior Securities
None.
ITEM 6. EXHIBITSItem 4. Mine Safety Disclosures
Not applicable. | ||
Item 5. Other Information. None. |
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SIGNATURESITEM 6. Exhibits
Exhibit No. | Description | |
Rule 13(a)-14(a)/15(d)-14(a) Certification of principal executive officer* | ||
101.INS | XBRL Instance Document* | |
101.SCH | XBRL Schema Document* | |
101.CAL | XBRL Calculation Linkbase Document* | |
101.DEF | XBRL Definition Linkbase Document* | |
101.LAB | XBRL Label Linkbase Document* | |
101.PRE | XBRL Presentation Linkbase Document* | |
104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
* Filed herewith.
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SIGNATURES
In accordance with
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
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| (Name of Registrant) | |||
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| By: | /s/ Lixue Yang | ||
Lixue Yang | ||||
Chief Executive Officer, | ||||
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