UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
(Mark One)
☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 20202021
or
☐ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________ to __________
Commission File Number 000-54159
|
(Exact name of registrant as specified in its charter) |
Delaware |
| 84-1209978 |
(State or other jurisdiction of incorporation or organization) |
| (IRS Employer Identification No.) |
7th Floor, Naiten Building, No. 1 Six Li Oiao,
|
| 100161 |
(Address of principal executive offices) |
| (Zip Code) |
+86 1370-139-9692
(Registrant’s telephone number, including area code)
|
|
(Former(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
None | None | None |
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 preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☐ Yes ☒ No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files). ☒☐ Yes ☐☒ No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer | ☐ | Accelerated filer | ☐ |
Non-accelerated filer | ☒ | Smaller reporting company | ☒ |
| Emerging growth company | ☐ |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) ☒ Yes ☐ No
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
113,296,421date: 5,664,989 common shares issued and outstanding as of November 3, 2020.12, 2021.
FORM 10-Q
TABLE OF CONTENTS
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Management’s Discussion and Analysis of Financial Condition and Results of Operations. |
| 10 |
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| 14 |
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Unregistered Sales of Equity Securities and Use of Proceeds. |
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2 |
Table of Contents |
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
ARIEL CLEAN ENERGY, INC.QIANSUI INTERNATIONAL GROUP CO. LTD.
INDEX TOUNAUDITED INTERIM FINANCIAL STATEMENTS
UNAUDITED
| Page | ||
|
| ||
Balance Sheets at September 30, |
| 4 | |
|
| ||
| 5 | ||
|
|
|
|
| 6 |
| |
|
| ||
Statements of Cash Flows for the nine months ended September 30, |
| 7 | |
|
| ||
| 8 |
3 |
Table of |
QIANSUI INTERNATIONAL GROUP CO. LTD.
ARIEL CLEAN ENERGY, INC.
BALANCE SHEETSBalance Sheets
(Unaudited)
|
| September 30, |
|
| December 31, |
| ||
|
| 2020 |
|
| 2019 |
| ||
ASSETS |
|
|
| |||||
Current assets: |
|
|
|
|
|
| ||
Cash |
| $ | 0 |
|
| $ | 0 |
|
Total current assets |
|
| 0 |
|
|
| 0 |
|
Total assets |
| $ | 0 |
|
| $ | 0 |
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS’ DEFICIT | ||||||||
Current liabilities: |
|
|
|
|
|
|
|
|
Accounts payable and accrued liabilities |
| $ | 0 |
|
| $ | 12,561 |
|
Accrued interest - related party |
|
| 9,169 |
|
|
| 6,960 |
|
Note payable - related party |
|
| 76,060 |
|
|
| 24,339 |
|
Total current liabilities |
|
| 85,229 |
|
|
| 43,860 |
|
Total liabilities |
|
| 85,229 |
|
|
| 43,860 |
|
|
|
|
|
|
|
|
|
|
Shareholders’ deficit: |
|
|
|
|
|
|
|
|
Preferred stock: 50,000,000 authorized; $0.000006 par value; no shares issued and outstanding |
|
| 0 |
|
|
| 0 |
|
Common stock Class A: 1,000,000,000 authorized; $0.000006 par value; 113,296,421 shares issued and outstanding |
|
| 680 |
|
|
| 680 |
|
Common stock Class B: 200,000,000 authorized; $0.000006 par value; no shares issued and outstanding |
|
| 0 |
|
|
| 0 |
|
Additional paid-in capital |
|
| 176,438 |
|
|
| 176,438 |
|
Accumulated deficit |
|
| (262,347 | ) |
|
| (220,978 | ) |
Total shareholders’ deficit |
|
| (85,229 | ) |
|
| (43,860 | ) |
Total liabilities and shareholders’ deficit |
| $ | 0 |
|
| $ | 0 |
|
|
| September 30, |
|
| December 31, |
| ||
|
| 2021 |
|
| 2020 |
| ||
ASSETS |
| |||||||
Current assets: |
|
|
|
|
|
| ||
Cash |
| $ | 0 |
|
| $ | 0 |
|
Prepaid expense |
|
| 2,500 |
|
|
| 0 |
|
Total current assets |
|
| 2,500 |
|
|
| 0 |
|
|
|
|
|
|
|
|
|
|
Total assets |
| $ | 2,500 |
|
| $ | 0 |
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' DEFICIT | ||||||||
Current liabilities: |
|
|
|
|
|
|
|
|
Accounts payable |
| $ | 6,023 |
|
| $ | 4,784 |
|
Accrued interest - related party |
|
| 20,903 |
|
|
| 11,528 |
|
Due to related party |
|
| 57,511 |
|
|
| 14,427 |
|
Promissory note - related party |
|
| 76,060 |
|
|
| 76,060 |
|
Total current liabilities |
|
| 160,497 |
|
|
| 106,799 |
|
|
|
|
|
|
|
|
|
|
Total liabilities |
|
| 160,497 |
|
|
| 106,799 |
|
|
|
|
|
|
|
|
|
|
Stockholders' deficit: |
|
|
|
|
|
|
|
|
Preferred stock: 50,000,000 authorized; $0.000006 par value; no shares issued and outstanding |
|
| 0 |
|
|
| 0 |
|
Common stock Class A: 1,000,000,000 authorized; $0.000006 par value; 5,664,989 shares issued and outstanding |
|
| 34 |
|
|
| 34 |
|
Common stock Class B: 200,000,000 authorized; $0.000006 par value; no shares issued and outstanding |
|
| 0 |
|
|
| 0 |
|
Additional paid-in capital |
|
| 177,084 |
|
|
| 177,084 |
|
Accumulated deficit |
|
| (335,115 | ) |
|
| (283,917 | ) |
Total stockholders' deficit |
|
| (157,997 | ) |
|
| (106,799 | ) |
Total liabilities and stockholders' deficit |
| $ | 2,500 |
|
| $ | 0 |
|
The accompanying notes are an integral part of these unaudited financial statements.
4 |
Table of |
QIANSUI INTERNATIONAL GROUP CO. LTD.
ARIEL CLEAN ENERGY, INC.
STATEMENTS OF OPERATIONSStatements Of Comprehensive Loss
(Unaudited)
|
| Three Months Ended |
| Nine Months Ended |
|
| Three Months Ended |
| Nine Months Ended |
| ||||||||||||||||||||||
|
| September 30, |
| September 30, |
|
| September 30, |
| September 30, |
| ||||||||||||||||||||||
|
| 2020 |
|
| 2019 |
|
| 2020 |
|
| 2019 |
|
| 2021 |
|
| 2020 |
|
| 2021 |
|
| 2020 |
| ||||||||
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||
General and administrative |
| $ | 46 |
| $ | 0 |
| $ | 690 |
| $ | 0 |
|
| $ | 271 |
| $ | 46 |
| $ | 3,884 |
| $ | 690 |
| ||||||
Professional fees |
|
| 3,425 |
|
|
| 0 |
|
|
| 38,470 |
|
|
| 415 |
|
|
| 36,953 |
|
|
| 3,425 |
|
|
| 37,911 |
|
|
| 38,470 |
|
Total operating expenses |
|
| 3,471 |
|
|
| 0 |
|
|
| 39,160 |
|
|
| 415 |
|
|
| 37,224 |
|
|
| 3,471 |
|
|
| 41,795 |
|
|
| 39,160 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||
Loss from operations |
| (3,471 | ) |
| 0 |
| (39,160 | ) |
| (415 | ) |
| (37,224 | ) |
| (3,471 | ) |
| (41,795 | ) |
| (39,160 | ) | |||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||
Other expense: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||
Interest expense |
|
| (753 | ) |
|
| (736 | ) |
|
| (2,209 | ) |
|
| (2,184 | ) |
|
| (3,442 | ) |
|
| (753 | ) |
|
| (9,403 | ) |
|
| (2,209 | ) |
Total other expense |
|
| (753 | ) |
|
| (736 | ) |
|
| (2,209 | ) |
|
| (2,184 | ) |
|
| (3,442 | ) |
|
| (753 | ) |
|
| (9,403 | ) |
|
| (2,209 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||
Net loss before provision for income taxes |
| (40,666 | ) |
| (4,224 | ) |
| (51,198 | ) |
| (41,369 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||
Income tax benefit |
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| 0 |
| ||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||
Net loss |
| $ | (4,224 | ) |
| $ | (736 | ) |
| $ | (41,369 | ) |
| $ | (2,599 | ) |
| $ | (40,666 | ) |
| $ | (4,224 | ) |
| $ | (51,198 | ) |
| $ | (41,369 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||
Basic and dilutive net loss per common share |
| $ | (0.00 | ) |
| $ | (0.00 | ) |
| $ | (0.00 | ) |
| $ | (0.00 | ) |
| $ | (0.01 | ) |
| $ | (0.00 | ) |
| $ | (0.01 | ) |
| $ | (0.01 | ) |
Weighted average number of common shares outstanding - basic and diluted |
|
| 113,296,421 |
|
|
| 113,296,421 |
|
|
| 113,296,421 |
|
|
| 113,296,421 |
|
|
| 5,664,989 |
|
|
| 5,664,989 |
|
|
| 5,664,989 |
|
|
| 5,664,989 |
|
The accompanying notes are an integral part of these unaudited financial statements
5 |
Table of Contents |
QIANSUI INTERNATIONAL GROUP CO. LTD.
Statements of Changes in Stockholders’ Deficit
(Unaudited)
For the Three and Nine Months Ended September 30, 2021
|
| Preferred Stock |
|
| Class A Common Stock |
|
| Additional Paid in |
|
| Accumulated |
|
|
|
| |||||||||||||
|
| Shares |
|
| Amount |
|
| Shares |
|
| Amount |
|
| Capital |
|
| Deficit |
|
| Total |
| |||||||
Balance - December 31, 2020 |
|
| - |
|
| $ | 0 |
|
|
| 5,664,989 |
|
| $ | 34 |
|
| $ | 177,084 |
|
| $ | (283,917 | ) |
| $ | (106,799 | ) |
Net loss for the period |
|
| - |
|
|
| 0 |
|
|
| - |
|
|
| 0 |
|
|
| 0 |
|
|
| (7,447 | ) |
|
| (7,447 | ) |
Balance - March 31, 2021 |
|
| - |
|
|
| 0 |
|
|
| 5,664,989 |
|
|
| 34 |
|
|
| 177,084 |
|
|
| (291,364 | ) |
|
| (114,246 | ) |
Net loss for the period |
|
| - |
|
|
| 0 |
|
|
| - |
|
|
| 0 |
|
|
| 0 |
|
|
| (3,085 | ) |
|
| (3,085 | ) |
Balance - June 30, 2021 |
|
| - |
|
|
| 0 |
|
|
| 5,664,989 |
|
|
| 34 |
|
|
| 177,084 |
|
|
| (294,449 | ) |
|
| (117,331 | ) |
Net loss for the period |
|
| - |
|
|
| 0 |
|
|
| - |
|
|
| 0 |
|
|
| 0 |
|
|
| (40,666 | ) |
|
| (40,666 | ) |
Balance - September 30, 2021 |
|
| - |
|
| $ | 0 |
|
|
| 5,664,989 |
|
| $ | 34 |
|
| $ | 177,084 |
|
| $ | (335,115 | ) |
| $ | (157,997 | ) |
For the Three and Nine Months Ended September 30, 2020
|
| Preferred Stock |
|
| Class A Common Stock |
|
| Additional Paid in |
|
| Accumulated |
|
|
|
| |||||||||||||
|
| Shares |
|
| Amount |
|
| Shares |
|
| Amount |
|
| Capital |
|
| Deficit |
|
| Total |
| |||||||
Balance - December 31, 2019 |
|
| - |
|
| $ | 0 |
|
|
| 113,296,421 |
|
| $ | 680 |
|
| $ | 176,438 |
|
| $ | (220,978 | ) |
| $ | (43,860 | ) |
Net loss for the period |
|
| - |
|
|
| 0 |
|
|
| - |
|
|
| 0 |
|
|
| 0 |
|
|
| (15,700 | ) |
|
| (15,700 | ) |
Balance - March 31, 2020 |
|
| - |
|
|
| 0 |
|
|
| 113,296,421 |
|
|
| 680 |
|
|
| 176,438 |
|
|
| (236,678 | ) |
|
| (59,560 | ) |
Net loss for the period |
|
| - |
|
|
| 0 |
|
|
| - |
|
|
| 0 |
|
|
| 0 |
|
|
| (21,445 | ) |
|
| (21,445 | ) |
Balance - June 30, 2020 |
|
| - |
|
|
| 0 |
|
|
| 113,296,421 |
|
|
| 680 |
|
|
| 176,438 |
|
|
| (258,123 | ) |
|
| (81,005 | ) |
Net loss for the period |
|
| - |
|
|
| 0 |
|
|
| - |
|
|
| 0 |
|
|
| 0 |
|
|
| (4,224 | ) |
|
| (4,224 | ) |
Balance - September 30, 2020 |
|
| - |
|
| $ | 0 |
|
|
| 113,296,421 |
|
| $ | 680 |
|
| $ | 176,438 |
|
| $ | (262,347 | ) |
| $ | (85,229 | ) |
The accompanying notes are an integral part of these unaudited financial statements.
Table of |
QIANSUI INTERNATIONAL GROUP CO. LTD.
STATEMENTS OF SHAREHOLDERS’ DEFICITStatements of Cash Flows
(Unaudited)
For the Nine Months Ended September 30, 2020
|
| Preferred Stock |
|
| Class A Common Stock |
|
| Additional Paid in |
|
| Accumulated |
|
|
| ||||||||||||||
|
| Shares |
|
| Amount |
|
| Shares |
|
| Amount |
|
| Capital |
|
| Deficit |
|
| Total |
| |||||||
Balance - December 31, 2019 |
|
| - |
|
| $ | 0 |
|
|
| 113,296,421 |
|
| $ | 680 |
|
| $ | 176,438 |
|
| $ | (220,978 | ) |
| $ | (43,860 | ) |
Net loss for the period |
|
| - |
|
|
| 0 |
|
|
| - |
|
|
| 0 |
|
|
| 0 |
|
|
| (15,700 | ) |
|
| (15,700 | ) |
Balance - March 31, 2020 |
|
| - |
|
|
| 0 |
|
|
| 113,296,421 |
|
|
| 680 |
|
|
| 176,438 |
|
|
| (236,678 | ) |
|
| (59,560 | ) |
Net loss for the period |
|
| - |
|
|
| 0 |
|
|
| - |
|
|
| 0 |
|
|
| 0 |
|
|
| (21,445 | ) |
|
| (21,445 | ) |
Balance - June 30, 2020 |
|
| - |
|
|
| 0 |
|
|
| 113,296,421 |
|
|
| 680 |
|
|
| 176,438 |
|
|
| (258,123 | ) |
|
| (81,005 | ) |
Net loss for the period |
|
| - |
|
|
| 0 |
|
|
| - |
|
|
| 0 |
|
|
| 0 |
|
|
| (4,224 | ) |
|
| (4,224 | ) |
Balance - September 30, 2020 |
|
| - |
|
| $ | 0 |
|
|
| 113,296,421 |
|
| $ | 680 |
|
| $ | 176,438 |
|
| $ | (262,347 | ) |
| $ | (85,229 | ) |
For the Nine Months Ended September 30, 2019
|
| Preferred Stock |
|
| Class A Common Stock |
|
| Additional Paid in |
|
| Accumulated |
|
|
|
| |||||||||||||
|
| Shares |
|
| Amount |
|
| Shares |
|
| Amount |
|
| Capital |
|
| Deficit |
|
| Total |
| |||||||
Balance - December 31, 2018 |
|
| - |
|
| $ | 0 |
|
|
| 113,296,421 |
|
| $ | 680 |
|
| $ | 176,438 |
|
| $ | (217,593 | ) |
| $ | (40,475 | ) |
Net loss for the period |
|
| - |
|
|
| 0 |
|
|
| - |
|
|
| 0 |
|
|
| 0 |
|
|
| (745 | ) |
|
| (745 | ) |
Balance - March 31, 2019 |
|
| - |
|
|
| 0 |
|
|
| 113,296,421 |
|
|
| 680 |
|
|
| 176,438 |
|
|
| (218,338 | ) |
|
| (41,220 | ) |
Net loss for the period |
|
| - |
|
|
| 0 |
|
|
| - |
|
|
| 0 |
|
|
| 0 |
|
|
| (1,118 | ) |
|
| (1,118 | ) |
Balance - June 30, 2019 |
|
| - |
|
|
| 0 |
|
|
| 113,296,421 |
|
|
| 680 |
|
|
| 176,438 |
|
|
| (219,456 | ) |
|
| (42,338 | ) |
Net loss for the period |
|
| - |
|
|
| 0 |
|
|
| - |
|
|
| 0 |
|
|
| 0 |
|
|
| (736 | ) |
|
| (736 | ) |
Balance - September 30, 2019 |
|
| - |
|
| $ | 0 |
|
|
| 113,296,421 |
|
| $ | 680 |
|
| $ | 176,438 |
|
| $ | (220,192 | ) |
| $ | (43,074 | ) |
|
| Nine Months Ended |
| |||||
|
| September 30, |
| |||||
|
| 2021 |
|
| 2020 |
| ||
|
|
|
|
|
|
| ||
Cash flows from operating activities: |
|
|
|
|
|
| ||
Net loss |
| $ | (51,198 | ) |
| $ | (41,369 | ) |
Adjustments to reconcile net loss to net cash used in operations: |
|
|
|
|
|
|
| |
Stockholder advances funding operations |
|
| 43,084 |
|
|
| 51,721 |
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
|
Prepaid expense |
|
| (2,500 | ) |
|
| 0 |
|
Accounts payable |
|
| 1,239 |
|
|
| (12,561 | ) |
Accrued interest - related party |
|
| 9,375 |
|
|
| 2,209 |
|
Net cash used in operating activities |
|
| 0 |
|
|
| 0 |
|
|
|
|
|
|
|
|
|
|
Net change in cash |
|
| 0 |
|
|
| 0 |
|
Cash at beginning of period |
|
| 0 |
|
|
| 0 |
|
Cash at end of period |
| $ | 0 |
|
| $ | 0 |
|
|
|
|
|
|
|
|
|
|
Supplemental cash flow information |
|
|
|
|
|
|
|
|
Cash paid for interest |
| $ | 27 |
|
| $ | 0 |
|
Cash paid for taxes |
| $ | 0 |
|
| $ | 0 |
|
The accompanying notes are an integral part of these unaudited financial statements.
ARIEL CLEAN ENERGY, INC.
STATEMENTS OF CASH FLOWS
(Unaudited)
|
| Nine Months Ended |
| |||||
|
| September 30, |
| |||||
|
| 2020 |
|
| 2019 |
| ||
|
|
|
|
|
|
| ||
Cash flows from operating activities: |
|
|
|
|
|
| ||
Net loss |
| $ | (41,369 | ) |
| $ | (2,599 | ) |
Adjustments to reconcile net loss to net cash used in operations: |
|
| - |
|
|
|
|
|
Due to a related party |
|
| 51,721 |
|
|
|
|
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
|
Prepaid expense |
|
| 0 |
|
|
| 0 |
|
Accounts payable and accrued expenses |
|
| (12,561 | ) |
|
| 415 |
|
Accrued interest - related party |
|
| 2,209 |
|
|
| 2,184 |
|
Net cash used in operating activities |
|
| 0 |
|
|
| 0 |
|
|
|
|
|
|
|
|
|
|
Net change in cash |
|
| 0 |
|
|
| 0 |
|
Cash at beginning of period |
|
| 0 |
|
|
| 0 |
|
Cash at end of period |
| $ | 0 |
|
| $ | 0 |
|
|
|
|
|
|
|
|
|
|
Supplemental cash flow information |
|
|
|
|
|
|
|
|
Cash paid for interest |
| $ | 0 |
|
| $ | 0 |
|
Cash paid for taxes |
| $ | 0 |
|
| $ | 0 |
|
The accompanying notes are an integral part of these unaudited financial statements.
7 |
Table of |
ARIEL CLEAN ENERGY, INC.QIANSUI INTERNATIONAL GROUP CO. LTD.
NOTES TO THE UNAUDITED FINANCIAL STATEMENTSNotes to the Unaudited Financial Statements
SEPTEMBERSeptember 30, 20202021
NOTE 1 –DESCRIPTION OF BUSINESS, AND– GOING CONCERN
Ariel Clean Energy Inc. (“Ariel” or “the Company”) is currently seeking new business opportunities, including a merger with or acquisition of a target business.
Change of Control
Effective September 30, 2020, a change of control occurred with respect to the Company. Pursuant to a Securities Purchase Agreement (“Agreement”) dated September 30, 2020 by and among Mr. Yu Yang, an individual, as Buyer, Nexus BioFuel, Inc., a British Columbia corporation (“Nexus”) and SeaMorri Financial Partners, LLC, a Texas limited liability company (“SeaMorri”), as “Sellers” and the Company, Mr. Yang acquired all of the shares of Class A common stock of the Sellers, totaling 93,531,000 shares of common stock.
The Acquired Shares represent 82.55% of the total issued and outstanding Class A common stock of the Company.
In addition, pursuant to the Agreement, Nexus assigned to Mr. Yang all of its rights, titles and interests in and to certain loans made by Nexus to the Company totaling $85,229, plus accrued interest (see Note 3). These amounts include certain outstanding payables made by Nexus at closing.
On the Closing Date, Mr. Delbert Seabrook, the sole officer of the Company, resigned in all officer capacities from the Company and Mr. Yang was appointed Chief (Principal) Executive Officer, President, Chief (Principal) Financial Officer, Secretary and Treasurer of the Company. In addition, Mr. Yang was appointed a Director of the Company.
Going concernAND LIQUIDITY CONSIDERATIONS
The Company’s financial statements are prepared in accordance with generally accepted accounting principles applicable to a going concern. This contemplates the realization of assets and the liquidation of liabilities in the normal course of business. Currently, the Company does not have material assets, nor does it have operations or a source of revenue sufficient to cover its operation costs and allow it to continue as a going concern. The Company has an accumulated deficit of $335,115. The Company will be dependent upon the raising of additional capital through placement of its common stock in order to implement its business plan, or merge with an operating company. There can be no assurance that the Company will be successful in either situation in order to continue as a going concern. These financial statements do not include any adjustments relating to the recoverability and classification of recorded assets or the amounts of and classification of liabilities that might be necessary in the event the company cannot continue in existence. Accordingly, these factors raise substantial doubt as to the Company’s ability to continue as a going concern.
The officerofficers and director hasdirectors have committed to advancing certain operating costs of the Company, including compliance costs for being a public company.
NOTE 2 -– SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying unaudited interim financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Regulation S-X. Accordingly, the financial statements do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements.
In the opinion of management, all adjustments consisting of normal recurring entries necessary for a fair statement of the periods presented for: (a) the financial position; (b) the results of operations; and (c) cash flows, have been made in order to make the financial statements presented not misleading. The results of operations for such interim periods are not necessarily indicative of operations for a full year. The accompanying unaudited interim financial statements should be read in conjunction with the financial statements and related notes included in the Company’s Annual Report on Form 10-K, for the year ended December 31, 2019,2020, as filed with the SEC on July 6,September 23, 2021.
Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. The estimates and judgments will also affect the reported amounts for certain expenses during the reporting period. Actual results could differ from these good faith estimates and judgments.
A novel strain of coronavirus (COVID-19) was first identified in December 2019, and subsequently declared a global pandemic by the World Health Organization on March 11, 2020. As a result of the outbreak, many companies have experienced disruptions in their operations and in markets served. The Company considered the impact of COVID-19 on the assumptions and estimates used and determined that there were no material adverse impacts on the Company’s results of operations and financial position at September 30, 2021. The full extent of the future impacts of COVID-19 on the Company’s operations is uncertain. A prolonged outbreak could have a material adverse impact on financial results and business operations of the Company, including the timing and ability of the Company to develop its business plan.
8 |
Table of |
NOTE 3 - RELATED-PARTY TRANSACTIONS
NoteLoan Payable
During the nine months ended September 30, 2021, a corporation controlled by the Company’s officer paid operating expenses totaling $40,556 and $2,500 in prepaid expenses on behalf of the Company. The is payable on demand, unsecured and accrues an annual interest rate of 12%. For the three months and nine months ended September 30, 2021, the Company accrued interest of $1,109 and $2,454, respectively.
As of September 30, 2021 and December 31, 2020, the Company has recorded amounts due to related party of $57,511 and 2019,$14,427, and accrued interest payable of $2,454 and $0 respectively.
Promissory Note
On September 30, 2020, the Company issued a promissory note to the majority shareholder, sole officer and director of the Company, for principal of $76,060 and accrued interest of $9,169. The amount was originally due to a corporation controlled by the Company’s former officer paid operating expenses totaling $51,721 and $0 on behalf of the Company, respectively. Unpaid balances are dueCompany. The promissory note is payable on demand and withaccrue an annual interest rate of 12%. For the three and nine months ended September 30, 2021, the Company accrued interest of $2,332 and $6,921, respectively. As of September 30, 2021 and December 31, 2020, and 2019, interest expense was $2,209 and $2,184, respectively.
Note payablethe Company has recorded outstanding principal of $76,060 and accrued interest at September 30, 2020payable of $18,449 and December 31, 2019 consist of the following:
|
| September 30, |
|
| December 31, |
| ||
|
| 2020 |
|
| 2019 |
| ||
Note payable |
| $ | 76,060 |
|
| $ | 24,339 |
|
Accrued interest |
| $ | 9,169 |
|
| $ | 6,960 |
|
$11,528, respectively.
The Company plans to pay the note payable and accrued interest as cash flows become available.
NOTE 4 – INCOME TAXES
Income tax expense was $0 for the three and nine months ended September 30, 2021 and 2020.
As of January 1, 2021, the Company had no unrecognized tax benefits, and accordingly, the Company did not recognize interest or penalties during 2021 related to unrecognized tax benefits. There has been no change in unrecognized tax benefits during the three and nine months ended September 30, 2021, and there was no accrual for uncertain tax positions as of September 30, 2021. Tax years from 2017 through 2020 remain subject to examination by major tax jurisdictions.
There is no income tax benefit for the losses for the three and nine months ended September 30, 2021 and 2020, since management has determined that the realization of the net tax deferred asset is not assured and has created a valuation allowance for the entire amount of such benefits.
.
9 |
Table of Contents |
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
FORWARD LOOKING STATEMENTS
Except for historicalSome of the information in this reportsection 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 statementsthat involve substantial risks and uncertainties, including, among other things,uncertainties. You can identify these statements regardingby forward-looking words such as “may,” “will,” “expect,” “anticipate,” “believe,” “estimate” and “continue,” or similar words. You should read statements that contain these words carefully because they:
● | discuss our future expectations; | |
● | contain projections of our future results of operations or of our financial condition; and | |
● | state other “forward-looking” information. |
We believe it is important to communicate our business strategy,expectations. However, there may be events in the 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.that we are not able to accurately predict or over which we have no control. Our actual results mayand the timing of certain events could differ significantlymaterially 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 herein as well as in the “Description of Business - Risk Factors” section in our Annual Report on Form 10-K, as filed on July 6, 2020. You should carefully review the risks described in our Annual Report 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 reflectedanticipated in these forward-looking statements are based on reasonable assumptions, there areas a numberresult of risks and uncertainties that could cause actual results to differ materially from such forward-looking statements.certain factors.
COVID-19 Uncertainties
The COVID-19 pandemic could have an impact on our ability to obtain financing to fund our operations or to find a merger or combination candidate. The Company is unable to predict the ultimate impact at this time.
All references in this Form 10-Q to the “Company,” “Ariel Clean Energy,” “Ariel,“Qiansui,” “we,” “us,” or “our” are to Ariel Clean Energy, Inc.Qiansui International Group Co. Ltd.
Our Current BusinessPlan of Operations
We are currently seeking newThe Company is a shell company as defined in Rule 12b-2 of the Exchange Act. Our principal business opportunitiesobjective for the next 12 months and beyond such time will be to achieve long-term growth potential through a combination with establisheda business entities for merger with or acquisition of a target business. In certain instances, a target business may wish to become our subsidiary or may wish to contribute assets to us rather than merge. immediate, short-term earnings. The Company will not restrict our potential candidate target companies to any specific business, industry or geographical location and, thus, may acquire any type of business.
The Company currently does not engage in any business activities that provide cash flow. During the next twelve months we anticipate incurring costs related to:
(i) | filing Exchange Act reports, and |
(ii) | investigating, analyzing and consummating an acquisition. |
We have not yet begun negotiations or entered into any definitive agreements for potential new business opportunities, and there can be no assurance thatbelieve we will be able to enter into any definitive agreements.
Any new acquisitionmeet these costs through use of funds in our treasury, through deferral of fees by certain service providers and additional amounts, as necessary, to be loaned to or business opportunitiesinvested in us by our stockholders, management or other investors. As of the date of the period covered by this report, the Company has no cash. There are no assurances that we may acquire will require additional financing. There can be no assurance, however, that wethe Company will be able to acquiresecure any additional funding as needed. Currently, however our ability to continue as a going concern is dependent upon our ability to generate future profitable operations and/or to obtain the necessary financing necessary to enable usmeet our obligations and repay our liabilities arising from normal business operations when they come due. Our ability to pursuecontinue as a going concern is also dependent on our ability to find a suitable target company and enter into a possible reverse merger with such company. Management’s plan includes obtaining additional funds by equity financing through a reverse merger transaction and/or related party advances; however, there is no assurance of operation. If our company requires additional financing and we are unable to acquire such funds, our business may fail.funding being available.
Management of our company believes that there are benefits to being a reporting company with a class of securities quoted on the OTC Markets, such as: (i) the ability to use registered securities to acquire assets or businesses; (ii) increased visibility in the financial community; (iii) the facilitation of borrowing from financial institutions; (iv) potentially improved trading efficiency; (v) potential stockholder liquidity; (vi) potentially greater ease in raising capital subsequent to an acquisition; (vii) potential compensation of key employees through stock awards or options; (viii) potentially enhanced corporate image; and (ix) a presence in the United States’ capital market.
WeThe Company may seekconsider acquiring a business opportunity with entities that havewhich has recently commenced operations, is a developing company in need of additional funds for expansion into new products or entities who wish to utilize the public marketplace to raise additional capital in order to expand business development activities,markets, is seeking to develop a new product or service, or for other corporate purposes. Weis an established business which may acquire assetsbe experiencing financial or operating difficulties and establish wholly-owned subsidiariesis in various businesses or acquire existing businesses as subsidiaries.
need of additional capital. In implementingthe alternative, a structure for a particular business acquisition or opportunity, we may become a party to a merger, consolidation, reorganization, joint venture or licensing agreement with another corporation or entity. We may also acquire stock or assets of an existing business. Upon the consummation of a transaction, it is anticipated that our sole officer and director will continue to manage the Company; however, it is possible that with any business combination new management will be appointed.may involve the acquisition of, or merger with, a company which does not need substantial additional capital but which desires to establish a public trading market for its shares while avoiding, among other things, the time delays, significant expense, and loss of voting control which may occur in a public offering.
10 |
Table of Contents |
As of the date hereof, we haveOur management has not entered into any formal written agreements forwith any party regarding a business combination. Any target business that is selected may be a financially unstable company or an entity in its early stages of development or growth, including entities without established records of sales or earnings. In that event, we will be subject to numerous risks inherent in the business and operations of financially unstable and early stage or potential emerging growth companies. In addition, we may effect a business combination with an entity in an industry characterized by a high level of risk, and, although our management will endeavor to evaluate the risks inherent in a particular target business, there can be no assurance that we will properly ascertain or opportunity. Whenassess all significant risks. Our management anticipates that it will likely be able to effect only one business combination, due primarily to our limited financing and the dilution of interest for present and prospective stockholders, which is likely to occur as a result of our management’s plan to offer a controlling interest to a target business in order to achieve a tax-free reorganization. This lack of diversification should be considered a substantial risk in investing in us, because it will not permit us to offset potential losses from one venture against gains from another.
We will not acquire or merge with any such agreemententity which cannot provide audited financial statements at or within a reasonable period of time after closing of the proposed transaction. We are subject to all the reporting requirements included in the Exchange Act. Included in these requirements is reached, we intendour duty to disclose such an agreement by filingfile audited financial statements as part of our Form 8-K to be filed with the Securities and Exchange Commission upon consummation of a currentmerger or acquisition, as well as our audited financial statements included in our annual report on Form 8-K.10-K. If such audited financial statements are not available at closing, or within time parameters necessary to insure our compliance with the requirements of the Exchange Act, or if the audited financial statements provided do not conform to the representations made by the target business, the closing documents may provide that the proposed transaction will be voidable at the discretion of our present management.
We anticipateA business combination with a target business will normally involve the transfer to the target business of the majority of our common stock, and the substitution by the target business of its own management and board of directors.
The Company anticipates that the selection of a business opportunity in which to participatecombination will be complex and without certaintyextremely risky. Because of success. Business opportunitiesgeneral economic conditions, rapid technological advances being made in some industries and shortages of available capital, our management believes that there are numerous firms seeking even the limited additional capital which we will have and/or the perceived benefits of becoming a publicly traded corporation. Such perceived benefits of becoming a publicly traded corporation include, among other things, facilitating or improving the terms on which additional equity financing may be obtained, providing liquidity for the principals of and investors in a business, creating a means for providing incentive stock options or similar benefits to key employees, and offering greater flexibility in structuring acquisitions, joint ventures and the like through the issuance of stock. Potentially available business combinations may occur in many different industries and at various stages of development, all of which will make the task of comparative investigation and analysis of such business opportunities extremely difficult and complex. Business opportunities that we believe are in the best interests of our company may be scarce, or we may be unable to obtain the ones that we want. We can provide no assurance that we will be able to locate compatible business opportunities.
Currently, weWe do not havecurrently intend to retain any entity to act as a source“finder” to identify and analyze the merits of revenue. We are not able to fund our cash requirements through our current operations. We have been reliant on our controlling shareholders, Nexus BioFuel, Inc. or SeaMorri Financial Partners, LLC, to provide financial contributions and services to keep the company operating. Further, we believe that our company may have difficulties raising capital from other sources until we locate a prospective business combination candidate through which we can pursue our plan of operation. If we are unable to secure adequate capital to continue our acquisition efforts, our shareholders may lose some or all of their investment and our business may fail. We currently have no written or oral agreement from our majority shareholder to continue to provide financial contributions.potential target businesses.
Results of Operations
The Company has not conducted any active operations during the quarter ended September 30, 2020.2021. No revenue has been generated by the Company within such period. It is unlikely the Company will have any revenues unless it is able to effect an acquisition or merger with an operating company, or purchase assets which are currently producing income, of which there can be no assurance. It is management’s assertion that these circumstances may hinder the Company’s ability to continue as a going concern. The Company’s plan of operation for the next twelve months shall be to locate suitable acquisition candidates.
For the three months ended September 30, 2020 compared to three months ended September 30, 2019.
|
| Three Months Ended |
|
|
|
| ||||||
|
| September 30, |
|
|
|
| ||||||
|
| 2020 |
|
| 2019 |
|
| Changes |
| |||
Revenue |
| $ | - |
|
| $ | - |
|
| $ | - |
|
Total operating expenses |
|
| 3,471 |
|
|
| - |
|
|
| 3,471 |
|
Other expenses |
|
| 753 |
|
|
| 736 |
|
|
| 17 |
|
Net loss |
| $ | 4,224 |
|
| $ | 736 |
|
| $ | 3,488 |
|
Our operating expenses, for the three months ended September 30, 2020 were $3,471 compared to $0 for the same period in 2019. The increase in operating expenses was primarily as a result of an increase in professional fees, due to the completion of delinquent reporting of financial statements.
We incurred a net loss of $4,224 and $736 for the three months ended September 30, 2020 and 2019, respectively.
For the nine months ended September 30, 2020 compared to nine months ended September 30, 2019.
|
| Nine Months Ended |
|
|
|
| ||||||
|
| September 30, |
|
|
|
| ||||||
|
| 2020 |
|
| 2019 |
|
| Changes |
| |||
Revenue |
| $ | - |
|
| $ | - |
|
| $ | - |
|
Total operating expenses |
|
| 39,160 |
|
|
| 415 |
|
|
| 38,745 |
|
Other expenses |
|
| 2,209 |
|
|
| 2,184 |
|
|
| 25 |
|
Net loss |
| $ | 41,369 |
|
| $ | 2,259 |
|
| $ | 38,770 |
|
11 |
Table of Contents |
For the three months ended September 30, 2021 compared to three months ended September 30, 2020.
|
| Three Months Ended |
|
|
|
| ||||||
|
| September 30, |
|
|
|
| ||||||
|
| 2021 |
|
| 2020 |
|
| Changes |
| |||
Revenue |
| $ | - |
|
| $ | - |
|
| $ | - |
|
Total operating expenses |
|
| 37,224 |
|
|
| 3,471 |
|
|
| 33,753 |
|
Other expenses |
|
| 3,442 |
|
|
| 753 |
|
|
| 2,689 |
|
Net loss |
| $ | 40,666 |
|
| $ | 4,224 |
|
| $ | 36,442 |
|
Our operating expenses for the ninethree months ended September 30, 20202021 were $39,160$37,224 compared to $415$3,471 for the same period in 2019.2020. The increase in operating expenses was primarily as a result of an increase in professional fees, duefees.
Other expenses for the three months ended September 30, 2021 and 2020, consisting of interest expenses of $3,442 and $753, respectively, related to the completion of delinquent reporting of financial statements.a note payable and loans payable to a related party.
We incurred a net loss of $41,369$40,666 and $2,259$4,224 for the three months ended September 30, 2021 and 2020, respectively.
For the nine months ended September 30, 2021 compared to nine months ended September 30, 2020.
|
| Nine Months Ended |
|
|
|
| ||||||
|
| September 30, |
|
|
|
| ||||||
|
| 2021 |
|
| 2020 |
|
| Changes |
| |||
Revenue |
| $ | - |
|
| $ | - |
|
| $ | - |
|
Total operating expenses |
|
| 41,795 |
|
|
| 39,160 |
|
|
| 2,635 |
|
Other expenses |
|
| 9,403 |
|
|
| 2,209 |
|
|
| 7,194 |
|
Net loss |
| $ | 51,198 |
|
| $ | 41,369 |
|
| $ | 9,829 |
|
Our operating expenses for the nine months ended September 30, 2021 were $41,795 compared to $39,160 for the same period in 2020. The increase in operating expenses was primarily as a result of an increase in general and administrative expenses.
Other expenses for the nine months ended September 30, 2021 and 2020, consisting of interest expenses of $9,403 and 2019,$2,209, respectively, related to a note payable and loans payable to a related party.
We incurred a net loss of $51,198 and $41,369 for the nine months ended September 30, 2021 and 2020, respectively.
Liquidity and Capital Resources
The following table provides selected financial data about our company as of September 30, 20202021 and December 31, 2019,2020, respectively.
Working Capital
|
| September 30, |
|
| December 31, |
|
|
|
| |||
|
| 2020 |
|
| 2019 |
|
| Changes |
| |||
Total Current Assets |
| $ | - |
|
| $ | - |
|
| $ | - |
|
Total Current Liabilities |
|
| 85,229 |
|
|
| 43,860 |
|
|
| 41,369 |
|
Working Capital (Deficiency) |
| $ | (85,229 | ) |
| $ | (43,860 | ) |
| $ | (41,369 | ) |
As at September 30, 2020 our company’s cash balance and total assets were $nil. As at December 31, 2019, our company’s cash balance and total assets were $nil.
As at September 30, 2020, our company had total current liabilities of $85,229, compared with total current liabilities of $43,860 as at December 31, 2019.
As at September 30, 2020, our company had working capital deficiency of $85,229 compared with working capital deficiency of $43,860 as at December 31, 2019, an increase of $41,369. This was mainly driven by an increase in accounts payable and accrued liabilities.
Cash Flows
Operating Activities
Net cash used in operating activities was $nil for the nine months ended September 30, 2020 and 2019. For the nine months ended September 30, 2020, we had a net loss of $41,369 and an accounts payable change of $12,561, which was reduced by an increase in shareholder advances of $51,721 and accrued interest to a related party of $2,209. For the nine months ended September 30, 2019, we had a net loss of $2,599, which was reduced by a change in accounts payable of $415 and accrued interest to a related party of $2,184.
Investing Activities
We did not use any cash in investing activities for the nine months ended September 30, 2020 and 2019.
Financing Activities
We did not have any cash provided from financing activities for the nine months ended September 30, 2020 and 2019.
|
| September 30, |
|
| December 31, |
|
|
|
| |||
|
| 2021 |
|
| 2020 |
|
| Changes |
| |||
Total Current Assets |
| $ | 2,500 |
|
| $ | - |
|
| $ | 2,500 |
|
Total Current Liabilities |
|
| 160,497 |
|
|
| 106,799 |
|
|
| 53,698 |
|
Working Capital (Deficiency) |
| $ | (157,997 | ) |
| $ | (106,799 | ) |
| $ | (51,198 | ) |
12 |
Table of Contents |
As at September 30, 2021 and December 31, 2020, our company’s cash balance and total assets were $0, respectively.
As at September 30, 2021 and December 31, 2020, our company had total current assets of $2,500 and $0, respectively.
As at September 30, 2021 and December 31, 2020, our company had total current liabilities of $160,497 and $106,799, respectively.
As at September 30, 2021 and December 31, 2020, our company had working capital deficiency of $157,997 and $106,799, respectively. The increase in working capital deficiency was $51,198. This was mainly driven by an increase in due to related party of $43,084, accrued interest of $9,375 and accounts payable of $1,239 offset by an increase in prepaid expenses of $2,500.
Cash Flows from Operating Activities
We have not generated positive cash flows from operating activities. For the nine months ended September 30, 2021, net cash flows used in operating activities was $0, consisting of a net loss of $51,198, reduced by an increase in amounts due to related party of $43,084, accrued interest-related party of $9,375 and accounts payable of $1,239 and increased by an increase in prepaid expenses of $2,500. For the nine months ended September 30, 2020, net cash flows used in operating activities was $0, consisting of a net loss of $41,369, decreased by an increase in amounts due to related party of $51,721 and accrued interest-related party of $2,209 and increased by a decrease in accounts payable of $12,561.
Cash Flows from Investing Activities
We did not have any investing activities for the nine months ended September 30, 2021 and 2020.
Cash Flows from Financing Activities
We did not have any financing activities for the nine months ended September 30, 2021 and 2020.
Limited Operating History; Need for Additional Capital
There is no historical financial information about us upon which to base an evaluation of our performance. We are a developmentan early stage corporation and have not generated sufficient revenues from operations to fully implement our business plan. We cannot guarantee we will be successful in our business operations. Our business is subject to risks inherent in the establishment of a new business enterprise, including limited capital resources, and competition from larger organizations. We will require equity and/or debt financing to provide for the capital required to implement our plans. We will require additional funds to operate for the next year.
We have no assurance that future financing will be available to us on acceptable terms. If financing is not available on satisfactory terms, we may be unable to continue, develop or expand our operations.
Capital Resources
We had no material commitments for capital expenditures as of September 30, 2020.2021.
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Off Balance Sheet Arrangements
We doThe Company does not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on ourthe Company’s financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.
As of September 30, 2020, we have no off-balance sheet arrangements such as guarantees, retained or contingent interest in assets transferred, obligation under a derivative instrument and obligation arising out of or a variable interest in an unconsolidated entity.
Going ConcernCritical Accounting Policies
Our auditors have issued a going concern opinion on our audited financial statements for the year ended December 31, 2019. This means that there is substantial doubt that we can continue as an on-going business for the next twelve months unless we obtain sufficient debt or equity financing to fund our operating expenses. This is because we have not commenced planned principal operations. We have no actual or potential revenue source. There is no assurance we will ever reach this point. Our financial statements do not include any adjustments relating to the recoverability and classification of asset carrying amounts or the amount and classification of liabilities that might be necessary should we be unable to continue as a going concern.
The continuationdiscussion and analysis of our business is dependent upon obtaining further financing or acquiring a new businessfinancial condition and achieving a break even or profitable levelresults of operations are based upon our financial statements, which have been prepared in that new business. The issuance of additional equity securities by us could result in a significant dilutionaccordance with the accounting principles generally accepted in the equity interestsUnited States of America. Preparing financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, and expenses. These estimates and assumptions are affected by management’s application of accounting policies. We believe that understanding the basis and nature of the estimates and assumptions involved with the following aspects of our current stockholders. Itfinancial statements is not probable we would be ablecritical to obtain traditional loans froman understanding of our financial institutions because we have no business operations, no assets and no revenues.
There are no assurances that we will be able to obtain additional financing through private placements, bank financing or other loans necessary to support our working capital requirements. To the extent that funds generated from operations and any private placements, public offerings and/or bank financing are insufficient, we will have to raise additional working capital. No assurance can be given that additional financing will be available, or if available, will be on terms acceptable to us. We have been reliant on our majority shareholder to provide financial contributions and services to keep the company operating. We currently have no written or oral agreement from our majority shareholder to continue to provide financial contributions.statements.
Critical Accounting PoliciesUse of Estimates
We prepare ourThe preparation of financial statements in conformity with GAAP, whichaccounting principles generally accepted in the United States of America requires management to make certain estimates and assumptions that affect the reported amounts of assets and apply judgments. We base ourliabilities and disclosure of contingent assets and liabilities at the date of the financial statements. The estimates and judgments on historical experience, current trends and other factors that management believes to be important atwill also affect the timereported amounts for certain expenses during the financial statements are prepared, and actualreporting period. Actual results could differ from ourthese good faith estimates and such differences could be material. We have identified below the critical accounting policies which are assumptions made by management about matters that are highly uncertain and that are of critical importance in the presentation of our financial position, results of operations and cash flows. Due to the need to make estimates about the effect of matters that are inherently uncertain, materially different amounts could be reported under different conditions or using different assumptions. On a regular basis, we review our critical accounting policies and how they are applied in the preparation of our financial statements.judgments.
Contractual Obligations
As a “smaller reporting company” as defined by Rule 12b-2 of the Exchange Act, the Company is not required to provide this information.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
As a “smaller reporting company”, we are not required to provide the information required by this Item.
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Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures.
The Company’s management, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the Company’s disclosure controls and procedures (as that term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended) as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on that evaluation, management, with the participation of the Chief Executive Officer and Chief Financial Officer, concluded that the Company’s disclosure controls and procedures, as of the end of the period covered by this Quarterly Report on Form 10-Q, are not functioning effectively to provide reasonable assurance that the information required to be disclosed by the Company in reports filed under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the SEC’s Securities and Exchange Commission’s rules and forms and that such information is accumulated and communicated to the Company’s management, including the Company’s Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. A controls system, no matter how well designed and operated, cannot provide absolute assurance that the objectives of the controls system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected.
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 is dominated by one individual 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 September 30, 2020.2021.
Management believes that the material weaknesses set forth above did not have an effect on our financial results. However, management believes that the lack of a functioning audit committee and the lack of a majority of outside directors on our board of directors results in ineffective oversight in the establishment and monitoring of required internal controls and procedures, which could result in a material misstatement in our financial statements in future periods.
Changes in Internal Control over Financial Reporting.
There were no changes in our internal control over financial reporting that occurred during the quarter ended September 30, 20202021 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II - OTHER INFORMATION
Item 1. Legal Proceedings
Presently, there are not any material pending legal proceedings to which our Company is a party or as to which any of its property is subject, and no such proceedings are known to the Registrant to be threatened or contemplated against it.
Item 1A. Risk Factors
As a “smaller reporting company”, we are not required to provide the information required by this Item.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
None.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
Effective September 30, 2020, a change of control occurred with respect to the Company. Pursuant to a Securities Purchase Agreement (“Agreement”) dated September 30, 2020 by and among Mr. Yu Yang, an individual, as Buyer, Nexus BioFuel, Inc., a British Columbia corporation (“Nexus”) and SeaMorri Financial Partners, LLC, a Texas limited liability company (“SeaMorri”), as “Sellers” and the Company, Mr. Yang acquired all of the shares of Class A common stock of the Sellers, totaling 93,531,000 shares of common stock.
The Acquired Shares represent 82.55% of the total issued and outstanding Class A common stock of the Company.
In addition, pursuant to the Agreement, Nexus assigned to Mr. Yang all of its rights, titles and interests in and to certain loans made by Nexus to the Company totaling $85,229, plus accrued interest (see Note 3). These amounts include certain outstanding payables made by Nexus at closing.
On the Closing Date, Mr. Delbert Seabrook, the sole officer of the Company, resigned in all officer capacities from the Company and Mr. Yang was appointed Chief (Principal) Executive Officer, President, Chief (Principal) Financial Officer, Secretary and Treasurer of the Company. In addition, Mr. Yang was appointed a Director of the Company.None.
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Item 6. Exhibits
Exhibit Number |
| Description |
(31) |
| Rule 13a-14 (d)/15d-14d) Certifications |
Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer | ||
(32) |
| Section 1350 Certifications |
Section 1350 Certification of Chief Executive Officer and Chief Financial Officer | ||
101* |
| Interactive Data File |
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| Inline XBRL |
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| Inline XBRL |
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| |
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| |
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_____________
* Filed herewith.
** Furnished herewith
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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, thereunto duly authorized.
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(Registrant) | |||
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Dated: November | By: | /s/ Yu Yang |
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Yu Yang |
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President, Chief Executive Officer, Chief Financial Officer, Treasurer and Director |
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(Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer) |