Docoh
Loading...

RZZN Jialijia

Filed: 20 Sep 21, 8:12am

 

 

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 June 30, 2021

 

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 333-209900

 

JIALIJIA GROUP CORPORATION LIMITED

(Exact name of registrant as specified in its charter)

 

Nevada 35-2544765
(State or other jurisdiction of
incorporation or organization)
 (IRS Employer
Identification No.)

 

Room 402, Unit B, Building 5,Guanghua Community,

Guanghua Road, Tianning District,

Changzhou, Jiangsu, China

  
(Address of principal executive offices) (Zip Code)

 

+86 (519) 8980-1180
(Registrant’s telephone number, including area code)
 
N/A
(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
N/A N/A N/A

 

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 filerAccelerated filer
Non-accelerated filerSmaller 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

 

The number of shares outstanding of the registrant’s common stock, par value $.001 per share, as of September 13, 2021, was 4,858,784.

 

 

 

 

 

 

TABLE OF CONTENTS.

 

PART I - FINANCIAL INFORMATION 1
Item 1. Financial Statements 1
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 13
Item 3. Quantitative and Qualitative Disclosures About Market Risk 17
Item 4. Controls and Procedures 18
   
PART II - OTHER INFORMATION 19
Item 1. Legal Proceedings 19
Item 1A. Risk Factors 19
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 19
Item 3. Defaults Upon Senior Securities 19
Item 4. Mine Safety Disclosures 19
Item 5. Other Information 19
Item 6. Exhibits 20
   
SIGNATURES 21

 

i

 

 

CAUTIONARY NOTE CONCERNING FORWARD-LOOKING STATEMENTS

 

This Quarterly Report on Form 10-Q includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act, that are not historical facts, and involve risks and uncertainties that could cause actual results to differ materially from those expected and projected. All statements, other than statements of historical facts, included in this Form 10-Q including, without limitation, statements in the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” regarding the Company’s financial position, business strategy and the plans and objectives of management for future operations, events or developments which the Company expects or anticipates will or may occur in the future, including such things as future capital expenditures (including the amount and nature thereof); expansion and growth of the Company’s business and operations; and other such matters are forward-looking statements. These statements are based on certain assumptions and analyses made by the Company in light of its experience and its perception of historical trends, current conditions and expected future developments, as well as other factors it believes are appropriate under the circumstances. However, whether actual results or developments will conform with the Company’s expectations and predictions is subject to a number of risks and uncertainties, including general economic, market and business conditions; the business opportunities (or lack thereof) that may be presented to and pursued by the Company; changes in laws or regulation; and other factors, most of which are beyond the control of the Company.

 

These forward-looking statements can be identified by the use of predictive, future-tense or forward-looking terminology, such as “believes,” “anticipates,” “expects,” “estimates,” “plans,” “may,” “will,” or similar terms. These statements appear in a number of places in this filing and include statements regarding the intent, belief or current expectations of the Company, and its directors or its officers with respect to, among other things: (i) trends affecting the Company’s financial condition or results of operations for its limited history; (ii) the Company’s business and growth strategies; and, (iii) the Company’s financing plans. Investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve significant risks and uncertainties, and that actual results may differ materially from those projected in the forward-looking statements as a result of various factors. Such factors that could adversely affect actual results and performance include, but are not limited to, the Company’s limited operating history, potential fluctuations in quarterly operating results and expenses, government regulation, technological change and competition. For information identifying important factors that could cause actual results to differ materially from those anticipated in the forward-looking statements, please refer to our filings with the SEC under the Exchange Act and the Securities Act of 1933, as amended, including the Risk Factors section of the Company’s Current Report on Form 8-K filed with the U.S. Securities and Exchange Commission (the “SEC”) on May 22, 2020.

 

Consequently, all of the forward-looking statements made in this Form 10-Q are qualified by these cautionary statements and there can be no assurance that the actual results or developments anticipated by the Company will be realized or, even if substantially realized, that they will have the expected consequence to or effects on the Company or its business or operations. The Company assumes no obligations to update any such forward-looking statements.

 

ii

 

 

PART I. - FINANCIAL INFORMATION

Item 1. Financial Statements  

 

 Page No.
Consolidated Balance Sheets as of June 30, 2021 and December 31, 20202
Consolidated Statements of Operations and Comprehensive Loss (Unaudited) for the Three and Six Months Ended June 30, 2021 and 20203
Consolidated Statements of Changes in Deficit (Unaudited) for the Three and Six Months Ended June 30, 2021 and 20204
Consolidated Statements of Cash Flows (Unaudited) for the Six Months Ended June 30, 2021 and 20205
Notes to Consolidated Financial Statements (Unaudited)6

 

1

 

 

JIALIJIA GROUP CORPORATION LIMITED

CONSOLIDATED BALANCE SHEETS

 

  June 30,  December 31, 
  2021  2020 
  (Unaudited)    
Assets        
Current Assets        
Cash and cash equivalents $88,255  $13,933 
Prepaid expenses and other current assets  2,975   2,943 
Total Current Assets  91,230   16,876 
         
Property, plant, and equipment, net  -   - 
         
Total Assets $91,230  $16,876 
         
Liabilities and Stockholders’ Deficit        
         
Current Liabilities        
Accrued expenses $129,715  $108,903 
Due to related parties  3,401,099   3,235,771 
Other current liabilities  2,107   2,852 
Total Current Liabilities  3,532,921   3,347,526 
         
Total Liabilities  3,532,921   3,347,526 
         
Deficit        
Common stock, $0.001 par value, 1,000,000,000 shares authorized, 647,705 shares issued and outstanding as of June 30, 2021 and December 31, 2020  647   647 
Additional paid-in capital  2,609,532   2,609,532 
Treasury stock  (120,000)  (120,000)
Accumulated deficit  (4,952,940)  (4,875,603)
Accumulated other comprehensive loss  (135,525)  (112,951)
Total Stockholders’ Deficit  (2,598,286)  (2,498,375)
Noncontrolling interests  (843,405)  (832,275)
Total Deficit  (3,441,691)  (3,330,650)
Total Liabilities and Deficit $91,230  $16,876 

 

The accompanying notes are an integral part of these financial statements.

 

2

 

 

JIALIJIA GROUP CORPORATION LIMITED

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(UNAUDITED)

 

  For the Three Months Ended  For the Six Months Ended 
  June 30,  June 30, 
  2021  2020  2021  2020 
             
Net revenue $-  $-  $-  $- 
Cost of revenue  -   -   -   - 
Gross profit  -   -   -   - 
General and administrative expenses  62,453   30,220   79,647   43,339 
Total operating expense  62,453   30,220   79,647   43,339 
Loss from operations  (62,453)  (30,220)  (79,647)  (43,339)
Provision for income tax  -   -   -   - 
Net loss  (62,453)  (30,220)  (79,647)  (43,339)
Net loss attributable to noncontrolling interest  (1,331)  (745)  (2,310)  (1,447)
Net loss attributable to the Jialijia Group Corporation Ltd.  (61,122)  (29,475)  (77,337)  (41,892)
                 
Net loss  (62,453)  (30,220)  (79,647)  (43,339)
Other comprehensive income (loss):                
Foreign currency translation gain (loss)  (43,535)  (13,405)  (31,394)  42,111 
Comprehensive loss  (105,988)  (43,625)  (111,041)  (1,228)
Comprehensive income (loss) attributable to noncontrolling interest  (13,567)  (4,364)  (11,130)  9,924 
Comprehensive loss attributable to Jialijia Group Corporation Ltd. $(92,421) $(39,261) $(99,911) $(11,152)
                 
Net Loss Per Common Share:                
Net loss per common share - basic and diluted $(0.10) $(0.05) $(0.12) $(0.07)
                 
Weighted average shares outstanding:                
Basic and diluted  647,705   635,432   647,705   635,364 

 

The accompanying notes are an integral part of these financial statements.

 

3

 

 

JIALIJIA GROUP CORPORATION LIMITED

CONSOLIDATED STATEMENTS OF CHANGES IN DEFICIT

(UNAUDITED)

 

  Common Stock  Additional
Paid-in
  Subscriptions  Treasury  Accumulated  

Accumulated

Other

Comprehensive

  Non-controlling  Total 
  Shares  Amount  Capital  Receivable  Stock  Deficit  Loss  interest  Deficit 
Balance at December 31, 2020  647,705  $647  $2,609,532  $         -  $(120,000) $(4,875,603) $(112,951) $(832,275) $(3,330,650)
Foreign currency translation  -   -   -   -   -   -   8,725   3,416   12,141 
Net loss  -   -   -   -   -   (16,215)  -   (979)  (17,194)
Balance at March 31, 2021  647,705   647   2,609,532   -   (120,000)  (4,891,818)  (104,226)  (829,838)  (3,335,703)
Foreign currency translation  -   -   -   -   -   -   (31,299)  (12,236)  (43,535)
Net loss  -   -   -   -   -   (61,122)  -   (1,331)  (62,453)
Balance at June 30, 2021  647,705  $647  $2,609,532  $-  $(120,000) $(4,952,940) $(135,525) $(843,405) $(3,441,691)

 

  Common Stock  

Additional

Paid-in

  Subscriptions  Treasury  Accumulated  

Accumulated

Other

Comprehensive

  Non-controlling  Total 
  Shares  Amount  Capital  Receivable  Stock  Deficit  Loss  interest  Deficit 
Balance at December 31, 2019  635,296  $635  $2,602,099  $(7,821) $(120,000) $(4,806,088) $19,615  $(777,210) $(3,088,770)
Foreign currency translation  -   -   -       -   -   -   40,526   14,990   55,516 
Net loss  -   -   -   -   -   (12,417)  -   (702)  (13,119)
Balance at March 31, 2020  635,296   635   2,602,099   (7,821)  (120,000)  (4,818,505)  60,141   (762,922)  (3,046,373)
Capital contribution  12,409   12   7,433   7,821   -   -   -   -   15,266 
Foreign currency translation  -   -   -   -   -   -   (9,786)  (3,619)  (13,405)
Net loss  -   -   -   -   -   (29,475)  -   (745)  (30,220)
Balance at June 30, 2020  647,705  $647  $2,609,532  $-  $(120,000) $(4,847,980) $50,355  $(767,286) $(3,074,732)

 

The accompanying notes are an integral part of these consolidated financial statements.

 

4

 

 

JIALIJIA GROUP CORPORATION LIMITED

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

 

  For the Six Months Ended 
  June 30, 
  2021  2020 
CASH FLOWS FROM OPERATING ACTIVITIES      
Net loss $(79,647) $(43,339)
Adjustments to reconcile net loss to net cash provided by operating activities:        
Prepaid expenses and other current assets  -   114 
Accrued expenses and other current liabilities  20,184   19,155 
Net cash used in operating activities  (59,463)  (24,070)
         
CASH FLOWS FROM FINANCING ACTIVITIES        
Net proceeds from loans from related parties  134,229   8,563 
Capital contribution from issuance of common shares  -   15,266 
Net cash provided by financing activities  134,229   23,829 
         
EFFECT OF EXCHANGE RATE CHANGE ON CASH AND CASH EQUIVALENTS  (444)  (3)
         
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS  74,322   (244)
         
CASH AND CASH EQUIVALENTS, BEGINNING BALANCE  13,933   395 
CASH AND CASH EQUIVALENTS, ENDING BALANCE $88,255  $151 
         
SUPPLEMENTAL DISCLOSURES:        
Income tax paid $-  $- 
Interest paid $-  $- 

 

The accompanying notes are an integral part of these consolidated financial statements.

 

5

 

 

JIALIJIA GROUP CORPORATION LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

 

Note 1. Organization and Business

 

Jialijia Group Corporation Limited (the “Company”), formerly known as Rizzen, Inc., was incorporated as a corporation under the laws of the State of Nevada on October 21, 2015.

 

On July 10, 2019, the Company entered into a share purchase/exchange agreement (the “Exchange Agreement”) with Jialijia Zhongtai Chunfeng Group Co., Limited (“Jialijia Zhongtai Chunfeng”, formerly Huazhongyun Group Co., Limited), a company incorporated under the laws of Hong Kong, and Na Jin, the sole shareholder of Jialijia Zhongtai Chunfeng (the “Shareholder”) and the Chief Executive Officer of the Company. Jialijia Zhongtai Chunfeng owned 300,000 shares (the “Company Shares”) of the Company, which represented approximately 82% of the shares of the Company’s common stock, issued and outstanding, at the time of execution of the Exchange Agreement. The Shareholder owned an aggregate of 10,000 ordinary shares of Jialijia Zhongtai Chunfeng (“Jialijia Zhongtai Chunfeng Shares”), which constituted all of the issued and outstanding shares of Jialijia Zhongtai Chunfeng.

 

Pursuant to the Exchange Agreement, among other matters, the Shareholder sold and transferred the Jialijia Zhongtai Chunfeng Shares in exchange for all of the Company Shares. As a result, the Shareholder directly owned the Company Shares, which represented approximately 82% of the issued and outstanding shares of the Company’s common stock at the time of execution of the Exchange Agreement and Jialijia Zhongtai Chunfeng became a wholly-owned subsidiary of the Company.

 

Dajiwanqi Holding (Changzhou) Co., Ltd. (“Dajiwanqi (Changzhou)”, formerly Jialijia Jixiang Investment (Changzhou) Co., Ltd.) is a company incorporated under the laws of the People’s Republic of China (the “PRC”) on June 13, 2017. Jialijia Zhongtai Chunfeng owned all of the equity interests in Dajiwanqi (Changzhou) (“WFOE”), a wholly-foreign owned entity formed under the laws of PRC. Rucheng Wenchuan Gas Co., Ltd. (“Rucheng Wenchuan”) was incorporated under the laws of the PRC on March 30, 2006.

 

On January 7, 2019, Dajiwanqi (Changzhou) entered into an equity transfer agreement (the “Equity Transfer”) with Mr. Jiannan Wu, the shareholder who owned 94.77% of Rucheng Wenchuan’s outstanding shares. Pursuant to the Equity Transfer, Mr. Jiannan Wu agreed to transfer 70% of his ownership of Rucheng Wenchuan to Dajiwanqi (Changzhou), in exchange of RMB 1,000,000 and 143,000 common shares of the Company owned by Jialijia Zhongtai Chunfeng. Immediately after the equity transfer agreement, Dajiwanqi (Changzhou) owns 70% of the ownership and becomes the controlling shareholder of Rucheng Wenchuan. Both Jialijia Zhongtai Chunfeng and Dajiwanqi (Changzhou) are holding companies and have not carried out substantive business operations of their own. Rucheng Wenchuan is primarily engaged in the production and sale of gases for industrial and medical purposes, such as oxygen and nitrogen, in the PRC.

 

Pursuant to the Exchange Agreement, on August 29, 2019 (the “Closing Date”), Na Jin sold and transferred the Jialijia Zhongtai Chunfeng Shares to the Company in exchange for all of the Company Shares and the Company received all of the outstanding Jialijia Zhongtai Chunfeng Shares. As a result, on the Closing Date, Na Jin directly owned Company Shares representing approximately 48% of the issued and outstanding shares of the Company’s common stock, Jialijia Zhongtai Chunfeng became a wholly-owned subsidiary of the Company and the Company owned 70% of the outstanding equity interest in Rucheng Wenchuan through Jialijia Zhongtai Chunfeng and WFOE.

 

The acquisition of Jialijia Zhongtai Chunfeng and WFOE was treated as a reverse merger (the “Reverse Merger”) for accounting purposes. As a result of the consummation of the Reverse Merger on August 29, 2019, the Company, through its subsidiaries, entered into the business of producing and selling gases for industrial and medical purposes, such as oxygen and nitrogen, in the PRC. The Company has not commenced its gas production or generated any revenues.

 

On August 7, 2020, Jialijia Jixiang Investment (Changzhou) Co., Ltd. changed its name to Dajiwanqi Holding (Changzhou) Co., Ltd.

 

6

 

 

On August 28, 2020, Huazhongyun Group Co., Limited changed its name to Calico Darji Group Holdings Co., Limited and then to Jialijia Zhongtai Chunfeng Group Co., Limited on June 1, 2021.

 

On December 26, 2020, Jialijia Zhongtai Chunfeng entered into a share exchange agreement with Shenzhen Lintai Biotechnology Co., Limited (“Shenzhen Lintai”), a company incorporated under the laws of PRC; pursuant to which Jialijia Zhongtai Chunfeng agreed to exchange 26% of the Company’s common stock held by Jialijia Zhongtai Chunfeng for 100% of the equity interest of Shenzhen Lintai. As of June 30, 2021, this share exchange agreement has not been closed due to the required governmental procedures and documents necessary to consider the share exchange completed have not been completed and obtained by the Company.

 

On March 5, 2021, Jialijia Zhongtai Chunfeng formed a wholly-owned subsidiary, Zhongtai Chunfeng Wanqi (Chengdu) Industrial Group Co., Limited, under the laws of the PRC.

 

Note 2. Basis of Presentation

 

The accompanying unaudited interim consolidated financial statements and information have been prepared in accordance with accounting principles generally accepted in the United States and in accordance with the SEC’s regulations for interim financial information and with the instructions for Form 10-Q. Accordingly, they do not include all of the information and disclosures required by accounting principles generally accepted in the United States for complete financial statements. In the opinion of management, these financial statements contain all normal and recurring adjustments considered necessary to present fairly the Company’s financial position, results of operations, comprehensive income, cash flows, and stockholders’ equity for the periods presented. The results for the three and six months ended June 30, 2021 are not necessarily indicative of the results to be expected for the full year.

 

These unaudited interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes included in our Annual Report on Form 10-K for the year ended December 31, 2020 filed with the Securities and Exchange Commission. 

 

Note 3. Going Concern

 

These consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. As reflected in the Company’s accompanying consolidated financial statements, for the six months ended June 30, 2021, the Company had a net loss of $79,647. Additionally, the Company had an accumulated deficit of $4,952,940 and working capital deficit of $3,441,691 as of June 30, 2021, and has not yet generated revenues. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. The Company can give no assurances that any additional capital that it is able to obtain, if any, will be sufficient to meet its needs.

 

If the Company is unable to successfully commence its business operations in a short period of time, or unable to raise additional capital or secure additional lending, the Company may need to curtail or cease its operations. The Company believes that these matters raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

 

In order to continue as a going concern, the Company will need, among other things, additional capital resources. Management plans to obtain such resources for the Company include obtaining capital from the sale of its equity, and short-term and long-term borrowings from banks, stockholders or other related party(ies). However, management cannot provide any assurance that the Company will be successful in accomplishing any of its plans.

 

7

 

 

Note 4. Summary of Significant Accounting Policies

 

Basis of Accounting

 

The financial statements and accompanying notes are prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”).

 

Principles of consolidation

 

The consolidated financial statements include the financial statements of Jialijia Group Corporation Limited, Jialijia Zhongtai Chunfeng, Dajiwanqi (Changzhou) and its 70% owned subsidiary, Rucheng Wenchuan Gas Co., Ltd., and Zhongtai Chunfeng Wanqi (Chengdu), All inter-company transactions and balances are eliminated in consolidation.

 

Use of Estimates

 

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the amount of revenues and expenses during the reporting periods. Management makes these estimates using the best information available at the time the estimates are made. However, actual results could differ materially from those results.

 

Cash and Cash Equivalents

 

The Company considers all cash on hand and in banks, certificates of deposit with banks and other highly-liquid investments with maturities of three months or less, when purchased, to be cash and cash equivalents. There is no insurance securing these deposits in the PRC. The Company has not experienced any losses in such accounts and believes it is not exposed to any significant risks on its cash in bank accounts.

 

Property and Equipment

 

Property and equipment are recorded at cost less accumulated depreciation. Gains or losses on disposals are reflected as gain or loss in the period of disposal. All ordinary repair and maintenance costs are expensed as incurred.

 

Depreciation for financial reporting purposes is provided using the straight-line method over the estimated useful lives of the assets: 

 

  Estimated
Useful
Life
Buildings 20 years
Machinery and equipment 10 years
Office equipment 5 years
Vehicles 5 years

 

Costs incurred in constructing new facilities, including progress payments and other costs related to construction, are capitalized and transferred to property, plant and equipment on completion, at which time depreciation commences.

 

8

 

 

Impairment of Long-lived Assets

 

The Company evaluates long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable through the estimated undiscounted cash flows expected to result from the use and eventual disposition of the assets. Whenever any such impairment exists, an impairment loss will be recognized for the amount by which the carrying value exceeds the fair value.

 

Assets are grouped and evaluated at the lowest level for their identifiable cash flows that are largely independent of the cash flows of other groups of assets. The Company considers historical performance and future estimated results in its evaluation of potential impairment and then compares the carrying amount of the asset to the future estimated cash flows expected to result from the use of the asset. If the carrying amount of the asset exceeds estimated expected undiscounted future cash flows, the Company measures the amount of impairment by comparing the carrying amount of the asset to its fair value. The estimation of fair value is generally measured by discounting expected future cash flows as the rate the Company utilizes to evaluate potential investments. The Company estimates fair value based on the information available, judgments and projections are considered necessary. No impairment loss was recorded for the three and six months ended June 30, 2021 and 2020, respectively.

 

Impairment of Goodwill

 

Goodwill represents the excess of the purchase price over the fair value of net assets acquired in business combinations under the purchase method of accounting. Goodwill is assessed for impairment annually or if an event occurs or circumstances change that would indicate the carrying amount may be impaired. The impairment to be recognized is measured by the amount by which the carrying amount of the asset exceeds the fair value of the asset. No impairment of goodwill was recorded for the three and six months ended June 30, 2021 and 2020, respectively.

 

Income Taxes

 

The Company accounts for income taxes using an asset and liability approach which allows for the recognition and measurement of deferred tax assets based upon the likelihood of realization of tax benefits in future years. Under the asset and liability approach, deferred taxes are provided for the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. A valuation allowance is provided for deferred tax assets if it is more likely than not these items will either expire before the Company is able to realize their benefits, or that future deductibility is uncertain.

 

Under ASC 740, a tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The evaluation of a tax position is a two-step process. The first step is to determine whether it is more-likely-than-not that a tax position will be sustained upon examination, including the resolution of any related appeals or litigations based on the technical merits of that position. The second step is to measure a tax position that meets the more-likely-than-not threshold to determine the amount of benefit to be recognized in the financial statements. A tax position is measured at the largest amount of benefit that is greater than 50 percent likely of being realized upon ultimate settlement. Tax positions that previously failed to meet the more-likely-than-not recognition threshold should be recognized in the first subsequent period in which the threshold is met. Previously recognized tax positions that no longer meet the more-likely-than-not criteria should be de-recognized in the first subsequent financial reporting period in which the threshold is no longer met. Penalties and interest incurred related to underpayment of income tax are classified as income tax expense in the year incurred.

 

Foreign Currency Translation

 

The Company uses the United States dollar (“U.S. dollars”) for financial reporting purposes. The functional currency of the Company and its subsidiaries is the Chinese Yuan or Renminbi (“RMB”). The Company’s subsidiaries maintain their books and records in their functional currency, being the primary currency of the economic environment in which their operations are conducted. For the Company and its subsidiaries whose functional currencies are other than the U.S. dollar, all asset and liability accounts were translated at the exchange rate on the balance sheet date; stockholders’ equity is translated at the historical rates and items in the income statement and cash flow statements are translated at the average rate in each applicable period. Translation adjustments resulting from this process are included in accumulated other comprehensive income in the statement of shareholders’ equity. The resulting translation gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in the results of operations as incurred.

 

Fair Values of Financial Instruments

 

ASC 820 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 describes three levels of inputs that may be used to measure fair value:

 

Level 1 – quoted prices in active markets for identical assets or liabilities.

9

 

 

Level 2 – quoted prices for similar assets and liabilities in active markets or inputs that are observable

 

Level 3 – inputs that are unobservable

 

The Company’s financial instruments primarily consist of cash and cash equivalents, other receivables, advances to suppliers, accrued expenses, other payables, and related party borrowings. As of the balance sheet dates, the estimated fair values of the financial instruments were not materially different from their carrying values as presented on the balance sheets. This is attributed to the short maturities of the instruments and that interest rates on the borrowings approximate those that would have been available for loans of similar remaining maturity and risk profile at respective balance sheet dates.

 

Recent Accounting Pronouncements

 

Management has considered all recent accounting pronouncements issued and their potential effect on the consolidated financial statements. The Company’s management believes that these recent pronouncements will not have a material effect on its consolidated financial statements.

 

Note 5. Property, Plant, and Equipment, Net

 

Property, plant, and equipment consisted of the following:

 

  June 30,
2021
  December 31,
2020
 
      
Machinery and equipment $1,707,635  $1,689,734 
Buildings  33,958   33,602 
   1,741,593   1,723,336 
Less: Accumulated depreciation  (1,267,930)  (1,254,639)
Less: Accumulated impairment  (473,663)  (468,697)
Property, plant, and equipment, net $-  $- 

 

Depreciation expense for the three months ended June 30, 2021 and 2020 were $0 and $0, respectively.

 

Depreciation expense for the six months ended June 30, 2021 and 2020 were $0 and $0, respectively.

 

Note 6. Accrued Expenses

 

Accrued expenses consist of the following:

 

  June 30,  December 31, 
  2021  2020 
Accrued local taxes $60,698  $54,248 
Accrued professional fees  62,171   54,471 
Payroll and others  6,846   184 
  $129,715  $108,903 

 

Note 7. Income Tax

 

United States

 

The Company was incorporated in the United States of America and is subject to United States federal taxation. No provisions for income taxes have been made, as there was no taxable income from U.S. operations for the three and six months ended June 30, 2021 and 2020. The U.S. Tax Cuts and Jobs Act (the “Act”) was enacted on December 22, 2017. Effective in 2018, the Tax Act reduces the U.S. statutory tax rate from 35% to 21%.

 

10

 

 

PRC

 

The PRC Enterprise Income Tax Law, EIT Law, and Implementing Rules impose a unified enterprise income tax rate of 25% on all domestic-invested enterprises and foreign investment enterprises in PRC, unless they qualify under certain limited exceptions. As such, the Company’s subsidiaries in PRC are subject to an enterprise income tax rate of 25%. The Company had recorded no income tax provisions for the six months ended June 30, 2021 and 2020.

 

Provision for income tax expense (benefit) consists of the following: 

 

  For the Six Months Ended
June 30,
 
  2021  2020 
Current      
USA $       -  $        - 
China  -   - 
Deferred        
USA  -   - 
China  -   - 
Total provision for income tax expense (benefit) $-  $- 

 

The following is a reconciliation of the statutory tax rate to the effective tax rate:

 

  For the Six Months Ended
June 30,
 
  2021  2020 
U.S. statutory tax benefit  (21.0)%  (21.0)%
Change in deferred tax asset valuation allowance  21.0%  21.0%
PRC statutory tax benefit  (25.0)%  (25.0)%
Change in deferred tax asset valuation allowance  25.0%  25.0%
Effective income tax rate  0.0%  0.0%

 

The Company periodically evaluates the likelihood of the realization of deferred tax assets, and adjusts the carrying amount of the deferred tax assets by the valuation allowance to the extent that the future realization of the deferred tax assets is not judged to be more likely than not. The Company considers many factors when assessing the likelihood of future realization of its deferred tax assets, including its recent cumulative earnings experience by taxing jurisdiction, expectations of future taxable income or loss, the carryforward periods available to the Company for tax reporting purposes, and other relevant factors.

 

As of June 30, 2021 and December 31, 2020, based on the weight of available evidence, including cumulative losses in recent years and expectations of future taxable income, the Company determined that it was more likely than not that its deferred tax assets would not be realized and have a 100% valuation allowance associated with its deferred tax assets. 

 

11

 

 

Note 8. Related Party Transactions and Balances

 

The related parties of the company with whom transactions are reported in these consolidated financial statements are as follows:

 

Name of entity or Individual Relationship with the Company
Shenzhen Wenchuan Gas Co., Ltd. Mr. Jiannan Wu is the legal representative and president of this entity
Rucheng County Minhang Special Gas Co., Ltd Mr. Jiannan Wu is the legal representative and president of this entity
Jiannan Wu Major shareholder of Rucheng Wenchuan
Dongzhi Zhang Chairman of the Board
Na Jin Shareholder, director, Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”)

 

Due to related parties:

 

  June 30,  December 31, 
  2021  2020 
Shenzhen Wenchuan Gas Co., Ltd. $2,638,198  $2,610,542 
Dongzhi Zhang  569,094   433,034 
Rucheng County Minhang Special Gas Co., Ltd.  53,701   53,138 
Na Jin  122,759   121,892 
Jiannan Wu  17,347   17,165 
  $3,401,099  $3,235,771 

 

Due to related parties were advances from its related parties for the Company’s purchase of equipment and daily operating expenses. The balances are unsecured, non-interest bearing, and payable on demand.

 

Note 9. Equity

 

The Company has authorized 1,000,000,000 shares of Common Stock at par value of $0.001.

 

On May 28, 2020, by unanimous written consent in lieu of a meeting, the Board adopted resolutions authorizing a one (1)-for-twenty (20) reverse stock split and on June 24, 2020 filed Articles of Amendment to effect the reverse stock split with the Secretary of State of the State of Nevada. The reverse stock split becomes effective on June 19, 2020. All share and earnings per share information has been retroactively adjusted to reflect the reverse stock split.

 

On June 30, 2020, the Company entered into stock subscription agreements with 7 individuals, pursuant to which the Company agreed to issue an aggregate of 12,409 shares of the Company’s common stock for the purchase price of $0.6 per share. These shares were issued on June 30, 2020.

 

As of June 30, 2021, Jialijia Zhongtai Chunfeng owned 300,000 shares of the Company. These shares have been reclassified and recorded as treasury stock at the cost of $0.4 per share, as a result of the Reverse Merger.

 

In April and May 2021, the Company entered into stock subscription agreements with 200 individuals, pursuant to which the Company agreed to issue an aggregate of 2,278,373 shares of the Company’s common stock for the purchase price of $0.04 per share. In addition, the Company entered into stock subscription agreements with 10 individuals, pursuant to which the Company agreed to issue an aggregate of 1,932,706 shares of the Company’s common stock for the purchase price of $0.03 per share, of which 1,847,656 shares were subscribed by Dongzhi Zhang, the Company’s Chairman of the Board. All of these shares were issued in July 2021 (see Note 10).

 

Note 10. Subsequent Events

 

In July 2021, the Company issued 4,211,079 shares to 210 individual subscribers for $149,116, of which 1,847,656 shares were issued to Dongzhi Zhang, the Company’s Chairman of the Board, for $55,430 (see Note 9).

 

The Company has evaluated subsequent events through the date which the consolidated financial statements were available to be issued and determined that no subsequent events require disclosure in accordance with FASB ASC Topic 855, “Subsequent Events.”

 

12

 

 

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

 

We are currently a “shell company” with no meaningful assets or operations other than our efforts to identify and merge with an operating company. 

 

Our principal business is to achieve long-term growth potential through a combination with a business rather than immediate, short-term earnings. Based on proposed business activities, we are a “blank check” company. We intend to comply with the periodic reporting requirements of the Exchange Act for so long as it is subject to those requirements. 

 

We are in active discussions with an operating business affiliated with our executive officers regarding potential acquisition. There is no assurance that we will be able to successfully acquire such company or any company in the near future. 

 

Jialijia Group Corporation Limited, formerly known as Rizzen, Inc. (the “Company”) was incorporated as a corporation under the laws of the State of Nevada on October 21, 2015. On May 16, 2018, our Articles of Incorporation were amended to change our name to Jialijia Group Corporation Limited and increase the number of authorized shares the corporation from 75,000,000 to 1,000,000,000. 

 

Effective as of December 15, 2018, the Company appointed: (i) Mr. Dongzhi Zhang as the Chairman of the Board; (ii) Mr. Jiannan Wu as the Company’s General Manager and Director; and (iii) Ms. Weixia Hu as the Company’s Chinese Region Chief Representative. Ms. Na Jin is our CEO, CFO, Secretary and a director.  

 

On July 10, 2019, the Company entered into a share purchase/exchange agreement (the “Share Exchange Agreement”) with Huazhongyun Group Co., Limited (“Huazhongyun,” formerly known as “JLJ Group Corporation Limited”), a company formed under the laws of the Hong Kong Special Administrative Region, and Na Jin, the sole shareholder of Huazhongyun and the Chief Executive Officer and Chief Financial Officer of the Company. Na Jin, through Huazhongyun, owned 6,000,000 shares (or 300,000 post-reverse split) (the “Company Shares”) of the Company, which represented approximately 82% of the shares of the Company’s common stock, issued and outstanding, par value $0.001 per share, as of the date of execution of the Share Exchange Agreement. Na Jin owned an aggregate of 10,000 ordinary shares of Huazhongyun (“Huazhongyun Shares”), which constituted all of the issued and outstanding ordinary shares of Huazhongyun. On the date of execution of the Share Exchange Agreement, Huazhongyun owned all of the equity interests in Jialijia Jixiang Investment (Changzhou) Co., Ltd. (“WFOE”), a wholly-foreign owned entity formed under the laws of China, which in turn held seventy percent (70%) of the outstanding equity interest in Rucheng Wenchuan Gas Co., Ltd. (the “Rucheng Wenchuan”), a company formed under the laws of China.

 

Pursuant to the Share Exchange Agreement, on August 29, 2019 (the “Closing Date”), Na Jin sold and transferred all of the Huazhongyun Shares to the Company in exchange for all of the Company Shares and the Company received all of the outstanding Huazhongyun Shares. As a result, on the Closing Date, Na Jin directly owned Company Shares representing approximately 48% of the issued and outstanding shares of the Company’s common stock, Huazhongyun became a wholly-owned subsidiary of the Company, and the Company owned 70% of the outstanding equity interest in Rucheng Wenchuan through Huazhongyun and WFOE.

 

From July 22, 2019 to July 29, 2019, the Company entered into a securities subscription agreement (the “Subscription Agreement”) with fifty-four (54) investors (the “Investors”) who reside outside the United States where the Investors purchased an aggregate of 3,011,483 (or 150,574 post-reverse split) shares of the Company’s common stock, par value $0.001 per share, at a price of $0.03 ($0.60 post-reverse split) per share. Pursuant to each of the Subscription Agreements, the Company issued its shares of common stock to each Investor in the respective amounts as set forth in the Subscription Agreement and received the funds in the corresponding amounts as set forth therein. In addition, on April 20, 2019, Ms. Na Jin, the Chief Executive Officer of the Company, entered into a Subscription Agreement to purchase 1,000,000 (50,000 post-reverse split) shares of the Company’s common stock at a price of $0.01 ($0.20 post-reverse split) per share, for a total purchase price of $10,000, which purchase was consummated on July 24, 2019.

 

13

 

 

As a result of the consummation of the above merger on August 29, 2019, we entered into the business of producing and selling gases, such as oxygen and nitrogen, for industrial and medical purposes in the PRC. In 2020, the COVID-19 pandemic materially and adversely affected economic conditions and our operating results. As a result, we were unable to obtain the financing necessary to pursue this business.

 

Effective July15, 2020, we engaged in a one for twenty reverse stock split of our common stock whereby each twenty shares of common stock were reduced into one share of common stock with fractional shares rounded to one whole share. All descriptions of securities issuances occurring prior to such reverse stock split are provided on a pre-reverse and post-reverse basis.

 

On July 1, 2021, our Board of Directors approved the sale and issuance of an aggregate of: (i) 2,278,373 shares of our common stock at a per share price of $0.04 to approximately 200 non-US persons for aggregate gross proceeds of approximately $91,135; (ii) 1,932,706 shares of our common stock at a per share price of $0.03 to approximately 10 non-US persons for aggregate gross proceeds of approximately $57,981. The securities, aggregating 4,211,079 shares of Common Stock, were sold and issued in July and August 2021. The securities were sold pursuant to the exemption provided by Regulation S promulgated under the Securities Act of 1933, as amended.

 

Limited Operating History; Need for Additional Capital

 

We have had limited operations and have been issued a “going concern” opinion by our auditor, based upon our reliance on the sale of our common stock and loans from a related party, as the sole source of funds for our future operations.

 

There is no historical financial information about us upon which to base an evaluation of our performance. We have not generated any revenues from operations. 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, possible delays in the launching of our games and market or wider economic downturns. We do not believe we have sufficient funds to operate our business for the next 12 months.

 

We have no assurance that future financing will be available to us on acceptable terms, or at all. If financing is not available on satisfactory terms, we may be unable to continue, develop or expand our operations. Equity financing could result in additional dilution to existing shareholders. If we are unable to raise additional capital to maintain our operations in the future, we may be unable to carry out our full business plan or we may be forced to cease operations.

 

Going Concern

 

Our consolidated financial statements have been prepared on a going concern basis which assumes the Company will be able to realize its assets and discharge its liabilities in the normal course of business for the foreseeable future. As of June 30, 2021, the Company had working capital deficit of $3,441,691 and has incurred losses since its inception resulting in an accumulated deficit of $4,952,940. Further losses are anticipated in the development of the business, raising substantial doubt about the Company’s ability to continue as a going concern. The consolidated financial statements do not include any adjustment that might result from the outcome of this uncertainty.

 

The ability to continue as a going concern is dependent upon the Company generating profitable operations in the future and/or to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. Management intends to finance operating costs over the next twelve months with loans from directors and/or private placements of common stock.

 

14

 

 

Results of Operations

 

For The Three and Six Months Ended June 30, 2021 Compared to the Three and Six Months Ended June 30, 2020

 

The following table sets forth selected financial information from our statements of comprehensive loss for the three months ended June 30, 2021 and 2020:

 

  For the Three Months Ended 
  June 30, 
  2021  2020 
Net Revenue $-  $- 
Total Operating Expenses  62,453   30,220 
Net Loss $(62,453) $(30,220)

 

The following table sets forth selected financial information from our statements of comprehensive loss for the six months ended June 30, 2021 and 2020:

 

  For the Six Months Ended 
  June 30, 
  2021  2020 
Net Revenue $-  $- 
Total Operating Expenses  79,647   43,339 
Net Loss $(79,647) $(43,339)

 

Revenues 

 

The Company did not commence operations and did not generate any revenues for the three and six months ended June 30, 2021 and 2020.

 

Operating Expenses

 

Operating expenses for the three months ended June 30, 2021 and 2020, were $62,453 and $30,220, respectively. Operating expenses for the three months ended June 30, 2021 and 2020, consisted of general and administrative expenses of $62,453 and $30,220.

 

Operating expenses for the six months ended June 30, 2021 and 2020, were $79,647 and $43,339, respectively. Operating expenses for the six months ended June 30, 2021 and 2020, consisted of general and administrative expenses of $79,647 and $43,339.

 

Net Loss

 

As a result of the above factors, the Company incurred a net loss of $62,453 and $30,220 for the three months ended June 30, 2021 and 2020, respectively.

 

The Company incurred a net loss of $79,647 and $43,339 for the six months ended June 30, 2021 and 2020, respectively.

 

Foreign Currency Translation Gain (Loss)

 

The Company had $43,535 in foreign currency translation loss during the three months ended June 30, 2021 as compared to $13,405 in foreign currency translation loss during the three months ended June 30, 2020, reflecting a change of $30,130. Such decrease in foreign currency translation gain was primarily caused by the currency exchange rate fluctuation.

 

The Company had $31,394 in foreign currency translation loss during the six months ended June 30, 2021 as compared to $42,111 in foreign currency translation gain during the six months ended June 30, 2020, reflecting a change of $73,505. Such decrease in foreign currency translation gain was primarily caused by the currency exchange rate fluctuation.

 

15

 

 

Liquidity and Capital Resources 

 

The following summarizes the key component of our cash flows for the six months ended June 30, 2021 and 2020:

 

  For the Six Months Ended 
  June 30, 
  2021  2020 
Net cash used in operating activities $(59,463) $(24,070)
Net cash provided by financing activities  134,229   23,829 
Net increase (decrease) in cash and cash equivalents $74,322  $(244)

 

Net cash used in operating activities was $59,463 for the six months ended June 30, 2021, compared to that of $24,070 for the six months ended June 30, 2020. The increase of $35,393 or 147.0% of net cash used in operating activities was primarily due to the increase in net loss during the six months ended June 30, 2021.

 

Net cash provided by financing activities was $134,229 and $23,829 for the six months ended June 30, 2021 and 2020, respectively, representing an increase of $110,400 or 463.3%. The increase in net cash provided by financing activities was primarily attributable to the increase in advances from officers for working capital purpose.

 

Working Capital:

 

As of June 30, 2021 and December 31, 2020, we had cash and cash equivalent of $88,255 and $13,933, respectively. As of June 30, 2021, we have incurred accumulated operating losses of $4,952,940 since inception. As of June 30, 2021 and December 31, 2020, we had working capital deficit of $3,441,691 and $3,330,650, respectively.

 

Going Concern

 

We require additional funding to meet its ongoing obligations and to fund anticipated operating losses. Our auditor has expressed substantial doubt about our ability to continue as a going concern. Our ability to continue as a going concern is dependent on raising capital to fund its initial business plan and ultimately to attain profitable operations. These consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts, or amounts and classification of liabilities that might result from this uncertainty.

 

We expect to incur marketing and professional and administrative expenses as well expenses associated with maintaining our filings with the Commission. We will require additional funds during this time and will seek to raise the necessary additional capital. If we are unable to obtain additional financing, we may be required to reduce the scope of our business development activities, which could harm our business plans, financial condition and operating results. Additional funding may not be available on favorable terms, if at all. We intend to continue to fund its business by way of equity or debt financing and advances from related parties. Any inability to raise capital as needed would have a material adverse effect on our business, financial condition and results of operations.

 

If we cannot raise additional funds, we will have to cease business operations. As a result, our common stock investors would lose all of their investment. 

 

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

 

Use of estimates

 

The preparation of the financial statements in conformity with U.S. 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, as well as the reported amounts of revenues and expenses during the reporting periods. Management makes these estimates using the best information available at the time the estimates are made; however actual results could differ materially from those estimates.

 

16

 

 

Income Taxes

 

We account for income taxes as outlined in ASC 740, “Income Taxes”. Under the asset and liability method of ASC 740, deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled.

 

Loss per Share Calculation

        

We comply with accounting and disclosure requirements of ASC 260, “Earnings Per Share.” Net loss per common share is computed by dividing net loss applicable to common stockholders by the weighted average number of common shares outstanding for the period. For the three months ended June 30, 2021 and 2020, we did not have any dilutive securities and other contracts that could, potentially, be exercised or converted into common stock and then share in the earnings of us. As a result, diluted loss per common share is the same as basic loss per common share for the periods.

 

Fair values of financial instruments

 

ASC 820 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 describes three levels of inputs that may be used to measure fair value:

 

 Level 1–quoted prices in active markets for identical assets or liabilities.

 

 Level 2–quoted prices for similar assets and liabilities in active markets or inputs that are observable

 

 Level 3–inputs that are unobservable

 

There were no assets or liabilities measured at fair value on a recurring basis subject to the disclosure requirements of ASC 820 as of June 30, 2021 and December 31, 2020.

 

Recent Accounting Pronouncements

 

Management has evaluated all the recently issued accounting pronouncements and does not believe that they will have a material effect on the Company’s financial position and results of operations. 

 

Off-balance Sheet Arrangements 

 

As of June 30, 2021 and December 31, 2020, there were no off-balance sheet arrangements. 

 

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.

 

17

 

 

Item 4. Controls and Procedures

 

Evaluation of Disclosure Controls and Procedures

 

Our management is responsible for establishing and maintaining a system of disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act) that is designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer’s management, including its principal executive officer or officers and principal financial officer or officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

 

An evaluation was conducted under the supervision and with the participation of our management of the effectiveness of the design and operation of our disclosure controls and procedures as of June 30, 2021. Based on that evaluation, our management concluded that our disclosure controls and procedures were not effective as of such date to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms as a result of the following material weaknesses:

 

 Because of the company’s limited resources, there are limited controls over information processing.

  

 There is an inadequate segregation of duties consistent with control objectives. Our Company’s management is composed of two persons, resulting in a situation where limitations on segregation of duties exist. In order to remedy this situation, we would need to hire additional staff to provide greater segregation of duties. Currently, it is not feasible to hire additional staff to obtain optimal segregation of duties. Management will reassess this matter in the following year to determine whether improvement in segregation of duty is feasible.

 

 The Company does not have a sitting audit committee financial expert, and thus the Company lacks the board oversight role within the financial reporting process.

 

 There is a lack of formal policies and procedures necessary to adequately review significant accounting transactions. The Company utilizes a third-party independent contractor for the preparation of its financial statements. Although the financial statements and footnotes are reviewed by our management, we do not have a formal policy to review significant accounting transactions and the accounting treatment of such transactions. The third-party independent contractor is not involved in the day to day operations of the Company and may not be provided information from management on a timely basis to allow for adequate reporting/consideration of certain transactions.

 

Our management will continue to monitor and evaluate the effectiveness of our internal controls and procedures and our internal controls over financial reporting on an ongoing basis and is committed to taking further action and implementing additional enhancements or improvements, as necessary and as funds allow.

 

Changes in Internal Controls

 

There have been no changes in our internal controls over financial reporting identified in connection with the evaluation required by paragraph (d) of Securities Exchange Act Rule 13a-15 or Rule 15d-15 that occurred in the quarter ended June 30, 2021 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

18

 

 

PART II - OTHER INFORMATION

 

Item 1. Legal Proceedings

 

From time to time, we may become involved in litigation relating to claims arising out of its operations in the normal course of business. We are not involved in any pending legal proceeding or litigation and, to the best of our knowledge, no governmental authority is contemplating any proceeding to which we area party or to which any of our properties is subject, which would reasonably be likely to have a material adverse effect on us.

 

Item 1A. Risk Factors

 

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

 

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

 

None.

 

Item 3. Defaults Upon Senior Securities

 

None.

 

Item 4. Mine Safety Disclosures

 

Not Applicable.

 

Item 5. Other Information

 

None. 

 

19

 

 

Item 6. Exhibits

 

Number Description
3.1 Articles of Incorporation (1)
3.2 Certificate of Amendment (2)
3.3 Bylaws (1)
4.1 Form of common stock certificate (3)
4.2 Description of Securities (4)
21 Subsidiaries (4)
31.1* Certification of Chief Executive Officer and Chief Financial Officer Pursuant To Sarbanes-Oxley Section 302
32.1** Certification Pursuant To 18 U.S.C. Section 1350, as adopted to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS* Inline XBRL Instance Document.
101.SCH* Inline XBRL Taxonomy Extension Schema Document.
101.CAL* Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF* Inline XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB* Inline XBRL Taxonomy Extension Label Linkbase Document.
101.PRE* Inline XBRL Taxonomy Extension Presentation Linkbase Document.
104* Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

 

*Filed herewith.
**In accordance with Item 601(b)(32)(ii) of Regulation S-K and SEC Release No. 34-47986, the certifications furnished in Exhibits 32.1 and 32.2 herewith are deemed to accompany this Form 10-K and will not be deemed filed for purposes of Section 18 of the Exchange Act. Such certifications will not be deemed to be incorporated by reference into any filings under the Securities Act or the Exchange Act.
(1)Incorporated by reference to the exhibits to the Registration Statement on Form S-1 filed with the Securities and Exchange Commission on March 3, 2016.
(2)Incorporated by reference to Exhibit 3.1 to Current Report on Form 8-K filed with the Securities and Exchange Commission on May 25, 2018.
(3)Incorporated by reference to the Exhibits to Annual Report on Form 10-K filed with the Securities and Exchange Commission on April 26, 2021.
(4)Incorporated by reference to the Exhibits to Annual Report on Form 10-K filed with the Securities and Exchange Commission on September 16, 2021.

 

20

 

 

SIGNATURES

 

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

 

 Jialijia Group Corporation Limited
 (Registrant)
  
Dated: September 20, 2021/s/ Na Jin
 Na JIn
 Chief Executive Officer, Chief Financial Officer, and Director
 (Principal Executive Officer)

 

 

21

 

 

 

 

 

iso4217:USD xbrli:shares