0001040721
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0001040721
2016-03-31
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Wincash Apolo Gold & Energy, Inc.
0001040721
10-Q
2016-03-31
false
--06-30
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<p style="margin: 0pt"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>NOTE 1 – BASIS OF PRESENTATION</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><b> </b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The accompanying unaudited condensed financial
statements have been prepared by management in accordance with both accounting principles generally accepted in the United States
(“GAAP”), and the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Certain information and notes disclosures
normally included in audited financial statements prepared in accordance with generally accepted accounting principles have been
condensed or omitted pursuant to those rules and regulations, although the Company believes that the disclosure made are adequate
to make the information not misleading.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In the opinion of management, the consolidated
balance sheet as of June 30, 2015 which has been derived from audited consolidated financial statements and these unaudited condensed
financial statements reflect all normal and recurring adjustments considered necessary to state fairly the results for the periods
presented. The results for the period ended March 31, 2016 are not necessarily indicative of the results to be expected for the
entire fiscal year ending June 30, 2016 or for any future period.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">These unaudited condensed financial statements
and notes thereto should be read in conjunction with the Management’s Discussion and the audited consolidated financial
statements and notes thereto included in the Annual Report on Form 10-K for the year ended June 30, 2015.</p>
<p style="margin: 0pt"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>NOTE 2 – ORGANIZATION AND DESCRIPTION
OF BUSINESS</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><b> </b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Wincash Apolo Gold & Energy, Inc. (“the
Company”) was incorporated in March of 1997 under the laws of the State of Nevada primarily for the purpose of acquiring
and developing mineral properties. The Company conducts operations primarily from its administrative offices at Suite 2201, 22/F
Malaysia Building, 50 Gloucester Road, Wanchai, Hong Kong.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On June 18, 2015, the Company filed an Amendment
to its Articles of Incorporation with the Nevada Secretary of State to change its name from Apolo Gold & Energy, Inc. to Wincash
Apolo Gold & Energy, Inc.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company will continue to anticipate potential
mineral property exploration and other energy related investments. As of March 31, 2016, the Company does not hold any mineral
property exploration claims.</p>
<p style="margin: 0pt"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>NOTE 3 – GOING CONCERN UNCERTAINTIES</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><b> </b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">These unaudited condensed financial statements
have been prepared assuming that the Company will continue as a going concern which contemplates the realization of assets and
the discharge of liabilities in the normal course of business for the foreseeable future.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><b> </b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">As of March 31, 2016, the Company has accumulated
deficits of $15,916,369 from prior years and with working capital deficit of $45,005. The continuation of the Company as a going
concern is dependent upon the continuing financial support from its stockholders or external financing. Management believes the
existing stockholders will provide the additional cash to meet with the Company’s obligations as they become due. However,
there can be no assurance that the Company will be able to obtain sufficient funds to meet its obligations.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">These factors raise substantial doubt about
the Company’s ability to continue as a going concern. These condensed financial statements do not include any adjustments
to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of
liabilities that may result in the Company not being able to continue as a going concern.</p>
<p style="margin: 0pt"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>NOTE 4 – SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><b> </b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The accompanying unaudited condensed financial
statements reflect the application of certain significant accounting policies as described in this note and elsewhere in the accompanying
unaudited condensed financial statements and notes.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Use of estimates</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Management uses estimates and assumptions in
preparing these unaudited condensed financial statements that affect the reported amounts of assets and liabilities in the balance
sheet, and the revenue and expenses during the periods reported. Actual results may differ from these estimates.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Cash and cash equivalents</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 6pt; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Cash and cash equivalents are carried at cost
and represent cash on hand, demand deposits placed with banks or other financial institutions and all highly liquid investments
with an original maturity of three months or less as of the purchase date of such investments.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Stock-based compensation</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company adopts FASB Accounting Standards
Codification Topic 718, Compensation – Stock Compensation (“ASC Topic 718”) using the fair value method. Under
ASC Topic 718, the stock-based compensation is measured using the Black-Scholes Option-Pricing model on the date of grant under
the modified prospective method. The fair value of stock-based compensation that are expected to vest are recognized using the
straight-line method over the requisite service period.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Income taxes</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Income taxes are determined in accordance with
the provisions of ASC Topic 740, “Income Taxes” (“ASC Topic 740”). Under this method, deferred tax assets
and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying
amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using
enacted income tax rates expected to apply to taxable income in the periods in which those temporary differences are expected to
be recovered or settled. Any effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in
the period that includes the enactment date.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">ASC 740 prescribes a comprehensive model for
how companies should recognize, measure, present, and disclose in their financial statements uncertain tax positions taken or expected
to be taken on a tax return. Under ASC 740, tax positions must initially be recognized in the financial statements when it is more
likely than not the position will be sustained upon examination by the tax authorities. Such tax positions must initially and subsequently
be measured as the largest amount of tax benefit that has a greater than 50% likelihood of being realized upon ultimate settlement
with the tax authority assuming full knowledge of the position and relevant facts.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Net loss per share</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company calculates net loss per share in
accordance with ASC Topic 260, “Earnings per Share.” Basic loss per share is computed by dividing the net loss by the
weighted-average number of common shares outstanding during the period. Diluted income (loss) per share is computed similar to
basic loss per share except that the denominator is increased to include the number of additional common shares that would have
been outstanding if the potential common stock equivalents had been issued and if the additional common shares were dilutive.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Comprehensive income (loss)</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">ASC Topic 220, “Comprehensive Income”,
establishes standards for reporting and display of comprehensive income (loss), its components and accumulated balances. Comprehensive
income (loss) as defined includes all changes in equity during a period from non-owner sources. Accumulated other comprehensive
income, as presented in the accompanying statement of stockholders’ equity, consists of changes in unrealized gains and losses
on foreign currency translation. This comprehensive income (loss) is not included in the computation of income tax expense or benefit.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Related parties</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Parties, which can be a corporation or individual,
are considered to be related if the Company has the ability, directly or indirectly, to control the other party or exercise significant
influence over the other party in making financial and operating decisions. Companies are also considered to be related if they
are subject to common control or common significant influence.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Fair value of financial instruments</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The carrying value of the Company’s financial
instruments: cash and cash equivalents, accounts payable and accrued expenses, and amount due to a former director approximate
at their fair values because of the short-term nature of these financial instruments.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company also follows the guidance of the
ASC Topic 820-10, “Fair Value Measurements and Disclosures” (“ASC 820-10”), with respect to financial assets
and liabilities that are measured at fair value. ASC 820-10 establishes a three-tier fair value hierarchy that prioritizes the
inputs used in measuring fair value as follows:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.2in; text-align: justify">Level 1: Observable inputs such as
quoted prices in active markets;</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.2in; text-align: justify">Level 2: Inputs, other than the quoted
prices in active markets, that are observable either directly or indirectly; and</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.2in; text-align: justify">Level 3: Unobservable inputs in which
there is little or no market data, which require the reporting entity to develop its own assumptions.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Recent accounting pronouncements</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In May 2014, the Financial Accounting Standards
Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09 that introduces a new five-step revenue
recognition model in which an entity should recognize revenue to depict the transfer of promised goods or services to customers
in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.
This ASU also requires disclosures sufficient to enable users to understand the nature, amount, timing, and uncertainty of revenue
and cash flows arising from contracts with customers, including qualitative and quantitative disclosures about contracts with customers,
significant judgments and changes in judgments, and assets recognized from the costs to obtain or fulfill a contract. This standard
is effective for fiscal years beginning after December 15, 2016, including interim periods within that reporting period.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In June 2014, the FASB issued ASU No. 2014-12,
Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite
Service Period. This ASU requires that a performance target that affects vesting and could be achieved after the requisite service
period be treated as a performance condition. A reporting entity should apply existing guidance in ASC 718, Compensation-Stock
Compensation, as it relates to such awards. ASU 2014-12 is effective for us in our first quarter of fiscal 2017 with early adoption
permitted using either of two methods: (i) prospective to all awards granted or modified after the effective date; or (ii) retrospective
to all awards with performance targets that are outstanding as of the beginning of the earliest annual period presented in the
financial statements and to all new or modified awards thereafter, with the cumulative effect of applying ASU 2014-12 as an adjustment
to the opening retained earnings balance as of the beginning of the earliest annual period presented in the financial statements.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In August 2014, the FASB issued ASU 2014-15.
This ASU requires management to assess an entity’s ability to continue as a going concern by incorporating and expanding
upon certain principles that are currently in U.S. auditing standards. Specifically, the ASU (1) provides a definition of the term
substantial doubt, (2) requires an evaluation every reporting period including interim periods, (3) provides principles for considering
the mitigating effect of management’s plans, (4) requires certain disclosures when substantial doubt is alleviated as a result
of consideration of management’s plans, (5) requires an express statement and other disclosures when substantial doubt is
not alleviated, and (6) requires an assessment for a period of one year after the date that the financial statements are issued
(or available to be issued). This standard is effective for the fiscal years ending after December 15, 2016, and for annual periods
and interim periods thereafter. Early application is permitted.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In March 2016, the FASB issued ASU No. 2016-09,
Compensation-Stock Compensation . The new guidance simplifies several aspects of the accounting for share-based payment transactions,
including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement
of cash flows. The amendments in this standard are effective for our annual year and first fiscal quarter beginning on October
1, 2017 with early adoption is permitted. We are currently evaluating the impact of the application of this accounting standard
update on our consolidated financial statements.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company has reviewed all recently issued,
but not yet effective, accounting pronouncements and do not believe the future adoption of any such pronouncements may be expected
to cause a material impact on its financial condition or the results of its operations.</p>
<p style="margin: 0pt"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>NOTE 5 – AMOUNT DUE TO A DIRECTOR</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><b> </b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">As of March 31, 2016, the director of the
Company has advanced $31,375 for the payment of administrative expenses. The amount is unsecured, bear no interest, and is payable
upon demand. Imputed interest is considered insignificant.</p>
<p style="margin: 0pt"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>NOTE 6 – COMMON STOCK</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">There were no stock options, warrants or other
potentially dilutive securities outstanding as of March 31, 2016.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">As of March 31, 2016, there were 21,872,118
shares of common stock issued and outstanding.</p>
<p style="margin: 0pt"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>NOTE 7 – STOCK PAYABLE</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On December 1, 2015, the Board of Directors
of the Company approved to issue 200,000 shares of restricted common stock at $0.08 per share for the rendering of consulting
services of $16,000 in a service period of twelve months commencing from December 2015. For the nine months ended March 31, 2016,
the Company amortized $5,333 to the operations using the straight-line method. As of March 31, 2016, the shares have not been
issued and $16,000 for this obligation was recorded as stock payable.</p>
<p style="margin: 0pt"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>NOTE 9 – RELATED PARTY TRANSACTIONS</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><b> </b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">During the nine months ended March 31, 2016,
Mr. Tsap Wai Ping, the director of the Company paid $31,375 for general expenses on behalf for the Company. A total of $31,375
is owed to Mr .Tsap as at March 31, 2016.</p>
<p style="margin: 0pt"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>NOTE 10 – COMMITMENTS AND CONTINGENCIES</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">As of March 31, 2016, the Company has no commitments
or contingencies to report.</p>
<p style="margin: 0pt"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>NOTE 11 – SUBSEQUENT EVENTS</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In accordance with ASC Topic 855, “
Subsequent Events”, which establishes general standards of accounting for and disclosure of events that occur after the
balance sheet date but before financial statements are issued, the Company has evaluated all events or transactions that occurred
after March 31, 2016 up through the date the Company issued the condensed financial statements. There were no subsequent events
that required recognition or disclosure.</p>
200000
16000
5333
480047
<p style="margin: 0pt"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>NOTE 8 – INCOME TAX</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><b> </b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company is registered in the State of
Nevada and is subject to the tax laws of the United States of America. For the nine months ended March 31, 2016, the Company incurred
an operating loss of $480,047. As of March 31, 2016, the operations in the United States of America incurred $15,916,369 of cumulative
net operating losses which can be carried forward to offset future taxable income. The net operating loss carryforwards begin
to expire in the year 2017 through 2034, if unutilized. The Company has provided for a full valuation allowance of $5,570,729
against the deferred tax assets on the expected future tax benefits from the net operating loss carryforwards as the management
believes it is more likely than not that these assets will not be realized in the future.</p>
16000
5570729
greater than 50%
21872118
14403
4062
31375
10000
10000
24691
7692
34691
49067
21872
21872
15939279
15939279
550000
110667
16000
4882
4880
-15436321
-15916369
-20288
-45005
14403
4062
101
101
70000
<p style="margin: 0pt"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Use of estimates</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Management uses estimates and assumptions
in preparing these unaudited condensed financial statements that affect the reported amounts of assets and liabilities in the
balance sheet, and the revenue and expenses during the periods reported. Actual results may differ from these estimates.</p>
<p style="margin: 0pt"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Cash and cash equivalents</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 6pt; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Cash and cash equivalents are carried at cost
and represent cash on hand, demand deposits placed with banks or other financial institutions and all highly liquid investments
with an original maturity of three months or less as of the purchase date of such investments.</p>
<p style="margin: 0pt"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Stock-based compensation</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company adopts FASB Accounting Standards
Codification Topic 718, Compensation – Stock Compensation (“ASC Topic 718”) using the fair value method. Under
ASC Topic 718, the stock-based compensation is measured using the Black-Scholes Option-Pricing model on the date of grant under
the modified prospective method. The fair value of stock-based compensation that are expected to vest are recognized using the
straight-line method over the requisite service period.</p>
<p style="margin: 0pt"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Income taxes</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Income taxes are determined in accordance with
the provisions of ASC Topic 740, “Income Taxes” (“ASC Topic 740”). Under this method, deferred tax assets
and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying
amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using
enacted income tax rates expected to apply to taxable income in the periods in which those temporary differences are expected to
be recovered or settled. Any effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in
the period that includes the enactment date.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">ASC 740 prescribes a comprehensive model for
how companies should recognize, measure, present, and disclose in their financial statements uncertain tax positions taken or
expected to be taken on a tax return. Under ASC 740, tax positions must initially be recognized in the financial statements when
it is more likely than not the position will be sustained upon examination by the tax authorities. Such tax positions must initially
and subsequently be measured as the largest amount of tax benefit that has a greater than 50% likelihood of being realized upon
ultimate settlement with the tax authority assuming full knowledge of the position and relevant facts.</p>
<p style="margin: 0pt"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Net loss per share</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company calculates net loss per share
in accordance with ASC Topic 260, “Earnings per Share.” Basic loss per share is computed by dividing the net loss
by the weighted-average number of common shares outstanding during the period. Diluted income (loss) per share is computed similar
to basic loss per share except that the denominator is increased to include the number of additional common shares that would
have been outstanding if the potential common stock equivalents had been issued and if the additional common shares were dilutive.</p>
<p style="margin: 0pt"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Comprehensive income (loss)</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">ASC Topic 220, “Comprehensive Income”,
establishes standards for reporting and display of comprehensive income (loss), its components and accumulated balances. Comprehensive
income (loss) as defined includes all changes in equity during a period from non-owner sources. Accumulated other comprehensive
income, as presented in the accompanying statement of stockholders’ equity, consists of changes in unrealized gains and
losses on foreign currency translation. This comprehensive income (loss) is not included in the computation of income tax expense
or benefit.</p>
<p style="margin: 0pt"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Related parties</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Parties, which can be a corporation or individual,
are considered to be related if the Company has the ability, directly or indirectly, to control the other party or exercise significant
influence over the other party in making financial and operating decisions. Companies are also considered to be related if they
are subject to common control or common significant influence.</p>
<p style="margin: 0pt"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Fair value of financial instruments</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The carrying value of the Company’s financial
instruments: cash and cash equivalents, accounts payable and accrued expenses, and amount due to a former director approximate
at their fair values because of the short-term nature of these financial instruments.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company also follows the guidance of the
ASC Topic 820-10, “Fair Value Measurements and Disclosures” (“ASC 820-10”), with respect to financial assets
and liabilities that are measured at fair value. ASC 820-10 establishes a three-tier fair value hierarchy that prioritizes the
inputs used in measuring fair value as follows:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.2in; text-align: justify">Level 1: Observable inputs such as
quoted prices in active markets;</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.2in; text-align: justify">Level 2: Inputs, other than the quoted
prices in active markets, that are observable either directly or indirectly; and</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.2in; text-align: justify">Level 3: Unobservable inputs in
which there is little or no market data, which require the reporting entity to develop its own assumptions.</p>
<p style="margin: 0pt"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Recent accounting pronouncements</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In May 2014, the Financial Accounting Standards
Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09 that introduces a new five-step revenue
recognition model in which an entity should recognize revenue to depict the transfer of promised goods or services to customers
in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.
This ASU also requires disclosures sufficient to enable users to understand the nature, amount, timing, and uncertainty of revenue
and cash flows arising from contracts with customers, including qualitative and quantitative disclosures about contracts with customers,
significant judgments and changes in judgments, and assets recognized from the costs to obtain or fulfill a contract. This standard
is effective for fiscal years beginning after December 15, 2016, including interim periods within that reporting period.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In June 2014, the FASB issued ASU No. 2014-12,
Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite
Service Period. This ASU requires that a performance target that affects vesting and could be achieved after the requisite service
period be treated as a performance condition. A reporting entity should apply existing guidance in ASC 718, Compensation-Stock
Compensation, as it relates to such awards. ASU 2014-12 is effective for us in our first quarter of fiscal 2017 with early adoption
permitted using either of two methods: (i) prospective to all awards granted or modified after the effective date; or (ii) retrospective
to all awards with performance targets that are outstanding as of the beginning of the earliest annual period presented in the
financial statements and to all new or modified awards thereafter, with the cumulative effect of applying ASU 2014-12 as an adjustment
to the opening retained earnings balance as of the beginning of the earliest annual period presented in the financial statements.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In August 2014, the FASB issued ASU 2014-15.
This ASU requires management to assess an entity’s ability to continue as a going concern by incorporating and expanding
upon certain principles that are currently in U.S. auditing standards. Specifically, the ASU (1) provides a definition of the term
substantial doubt, (2) requires an evaluation every reporting period including interim periods, (3) provides principles for considering
the mitigating effect of management’s plans, (4) requires certain disclosures when substantial doubt is alleviated as a result
of consideration of management’s plans, (5) requires an express statement and other disclosures when substantial doubt is
not alleviated, and (6) requires an assessment for a period of one year after the date that the financial statements are issued
(or available to be issued). This standard is effective for the fiscal years ending after December 15, 2016, and for annual periods
and interim periods thereafter. Early application is permitted.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In March 2016, the FASB issued ASU No. 2016-09,
Compensation-Stock Compensation . The new guidance simplifies several aspects of the accounting for share-based payment transactions,
including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement
of cash flows. The amendments in this standard are effective for our annual year and first fiscal quarter beginning on October
1, 2017 with early adoption is permitted. We are currently evaluating the impact of the application of this accounting standard
update on our consolidated financial statements.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company has reviewed all recently issued,
but not yet effective, accounting pronouncements and do not believe the future adoption of any such pronouncements may be expected
to cause a material impact on its financial condition or the results of its operations.</p>
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