0001079974-18-000439.txt : 20180814 0001079974-18-000439.hdr.sgml : 20180814 20180814111048 ACCESSION NUMBER: 0001079974-18-000439 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 37 CONFORMED PERIOD OF REPORT: 20180630 FILED AS OF DATE: 20180814 DATE AS OF CHANGE: 20180814 FILER: COMPANY DATA: COMPANY CONFORMED NAME: J.E.M. CAPITAL, INC. CENTRAL INDEX KEY: 0001537528 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-NONSTORE RETAILERS [5960] IRS NUMBER: 460525801 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 333-179130 FILM NUMBER: 181015275 BUSINESS ADDRESS: STREET 1: 21/F., ONE HARBOUR SQUARE STREET 2: 181 HOI BUN ROAD, KWUN TONG CITY: KOWLOON STATE: K3 ZIP: 0000 BUSINESS PHONE: 852-96250097 MAIL ADDRESS: STREET 1: 21/F., ONE HARBOUR SQUARE STREET 2: 181 HOI BUN ROAD, KWUN TONG CITY: KOWLOON STATE: K3 ZIP: 0000 FORMER COMPANY: FORMER CONFORMED NAME: ZOSANO, INC. DATE OF NAME CHANGE: 20131106 FORMER COMPANY: FORMER CONFORMED NAME: ECO PLANET CORP DATE OF NAME CHANGE: 20111216 10-Q 1 jem10q_6302018.htm

 
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, 2018


 TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______________ to _______________.

Commission file number: 333-179130

 J.E.M. Capital, Inc.
(Exact name of registrant as specified in its charter)

Delaware
46-0525801
(State or other jurisdiction of incorporation or organization)
(I.R.S. Employer Identification No.)


21/F., One Harbour Square, 181 Hoi Bun Road, Kwun Tong, Kowloon, Hong Kong
(Address of principal executive offices)
 (852) 9625 0097
Registrant's telephone number, including area code (Former address, if changed since last report) (Former fiscal year, if changed since last report)
 
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 and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
 
Large accelerated filer ☐
 
Accelerated filer ☐
 
 
 
Non-accelerated filer ☐
 
Smaller reporting company ☒
(Do not check if a smaller reporting company)
   
   
Emerging growth company ☐
 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes   No ☐

Applicable only to issuers involved in bankruptcy proceedings during the preceding five years:

Indicate by check mark whether the registrant filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes No

Applicable only to corporate issuers:

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. As of August 10, 2018, there were 12,032,400 shares of common stock, $0.0001 par value per share, issued and outstanding.

 
 



 

J.E.M. CAPITAL, INC.
QUARTERLY REPORT ON FORM 10-Q

TABLE OF CONTENTS

 
   
Page
     
PART I.   FINANCIAL INFORMATION
 
     
 
Item 1.
Consolidated Financial Statements (Unaudited)
 3
       
 
Item 2.
Management's Discussion and Analysis of Financial Condition and
Results of Operations
 13
       
 
Item 3.
Quantitative and Qualitative Disclosures About Market Risk 
 16
       
 
Item 4.
Controls and Procedures
 16
       
PART II.   OTHER INFORMATION 
 
       
 
Item 1.
Legal Proceedings
 17
       
 
Item 1A.
Risk Factors
 17
       
 
Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds 
 17
       
 
Item 3.
Defaults Upon Senior Securities 
 17
       
 
Item 4.
Mine Safety Disclosures 
 17
       
 
Item 5.
Other Information
 17
       
 
Item 6.
Exhibits
 18
     
SIGNATURES
 19

 
 

 

- 2 -

 
 
 
PART I – FINANCIAL INFORMATION

This Quarterly Report on Form 10-Q includes forward-looking statements within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. These statements are based on management's beliefs and assumptions, and on information currently available to management. Forward-looking statements include the information concerning our possible or assumed future results of operations set forth under the heading "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Item 2 of Part I of this Quarterly Report on Form 10-Q. Forward-looking statements also include statements in which words such as "expect," "anticipate," "intend," "plan," "believe," "estimate," "consider," or similar expressions are used.

Forward-looking statements are not guarantees of future performance. They involve risks, uncertainties, and assumptions. Our future results and shareholder values may differ materially from those expressed in these forward-looking statements. Readers are cautioned not to put undue reliance on any forward-looking statements.


ITEM 1.   Consolidated Financial Statements

The unaudited consolidated financial statements of the registrant for the three and six months ended June 30, 2018 and consolidated financial statements for 2017 follows. The consolidated financial statements reflect all adjustments which are, in the opinion of management, necessary to a fair statement of the results for the interim periods presented. All such adjustments are of a normal and recurring nature.


CONSOLIDATED FINANCIAL STATEMENTS
 
Page
   
Consolidated Balance Sheets as of June 30, 2018 (Unaudited) and as of December 31, 2017
 4
   
Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2018 and 2017 (Unaudited)
 5
   
Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2018 and 2017 (Unaudited)
 6
   
Notes to Unaudited Consolidated Financial Statements  7
 
 
 

 
- 3 -

 

J.E.M. CAPITAL, INC.
Consolidated Balance Sheets
As of June 30, 2018 and December 31, 2017

   
June 30,
   
December 31,
 
   
2018
   
2017
 
   
(Unaudited)
       
ASSETS
 
Current assets:
           
 Cash
 
$
384
   
$
166
 
Deposit paid
   
-
     
550
 
Total current assets
   
384
     
716
 
                 
Equipment, Net
   
746
     
996
 
                 
Total assets
 
$
1,130
   
$
1,712
 
LIABILITIES AND STOCKHOLDERS' DEFICIT
 
Current liabilities:
               
Accounts payable and accrued expenses
 
$
35,299
   
$
24,459
 
Due to shareholder
   
32,429
     
-
 
Total current liabilities
 
$
67,728
   
$
24,459
 
                 
Total liabilities
 
$
67,728
   
$
24,459
 
                 
Commitments and contingencies
   
-
     
-
 
                 
Stockholders' deficit:
               
Preferred stock, $0.0001 par value, 5,000,000 shares authorized; no shares issued or outstanding
               
Common stock, $0.0001 par value; 195,000,000 shares authorized, 12,032,400 shares and 12,032,400 shares issued and outstanding as of June 30, 2018 and December 31, 2017
   
1,203
     
1,203
 
Additional paid-in capital
   
301,268
     
301,268
 
Accumulated deficit
   
(369,069
)
   
(325,218
)
Total stockholders' deficit
   
(66,598
)
   
(22,747
)
                 
Total liabilities and stockholders' deficit
 
$
1,130
   
$
1,712
 

 
See accompanying notes to unaudited consolidated financial statements.

 


- 4 -

 

 

J.E.M. CAPITAL, INC.
Consolidated Statements of Operations (Unaudited)


   
Three Months Ended
 
Six Months Ended
 
 
June 30,
 
June 30,
 
 
2018
 
2017
 
2018
 
2017
 
   
     
 
Operating expense:
 
 
 
 
 
 
 
 
General and administrative
 
$
23,952
 
 
$
50,324
 
 
$
43,851
 
 
$
127,308
 
Total operating expense
 
 
23,952
 
 
 
50,324
 
 
 
43,851
 
 
 
127,308
 
Loss before provision for income taxes
 
 
(23,952
)
 
 
(50,324
)
 
 
(43,851
)
 
 
(127,308
)
Provision for income taxes
 
 
-
 
 
 
-
 
 
 
-
 
 
 
-
 
Net loss
 
$
(23,952
)
 
$
(50,324
)
 
$
(43,851
)
 
$
(127,308
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net loss per common share - basic and diluted
 
$
(0.00
)
 
$
(0.00
)
 
$
(0.00
)
 
$
(0.01
)
Weighted average number of common shares outstanding - basic and diluted
 
 
12,032,400
 
 
 
12,143,811
 
 
 
12,032,400
 
 
 
11,977,002
 

 
See accompanying notes to unaudited consolidated financial statements.
 

 

- 5 -

 

 

J.E.M. CAPITAL, INC.
Consolidated Statements of Cash Flows (Unaudited)

     
Six Months Ended June 30,
 
   
2018
   
2017
 
Operating activities:
         
Net loss
 
$
(43,851
)
 
$
(127,308
)
Adjustments to reconcile net loss to net cash used in operating activities:
               
         Depreciation
   
250
     
790
 
 Changes in operating assets and liabilities
               
             Deposit paid
   
550
     
-
 
    Accounts payable and accrued liabilities
   
10,840
      29,373  
Net cash used in operating activities
 
$
(32,211
)
 
$
(97,145
)
 
               
Investing activities:
               
Purchase of equipment
 
$
-
   
$
(450
)
Net cash used in investing activities
 
$
-
   
$
(450
)
                 
Financing activities:
               
Proceeds from director
 
$
-
   
$
98,019
 
Proceeds from shareholder
   
32,429
     
-
 
Net cash provided by financing activities
 
$
32,429
   
$
98,019
 
                 
Net increase in cash
   
218
     
424
 
                 
Cash - Beginning of period
   
166
     
-
 
                 
Cash - End of period
 
$
384
   
$
424
 


See accompanying notes to unaudited consolidated financial statements.

 
 


- 6 -

 
 
J.E.M. CAPITAL, INC.
Notes to Unaudited Consolidated Financial Statements


 
1.  Basis of Presentation

The accompanying interim consolidated financial statements are unaudited. The unaudited interim consolidated financial statements have been prepared on the same basis as the annual audited consolidated financial statements and, in the opinion of management, reflect all adjustments, which includes normal recurring adjustments or a description of the nature and amount of any adjustments other than normal recurring adjustments, necessary for a fair presentation of the financial positions and results of operations for the periods presented. The financial data and other information disclosed in these notes to the interim consolidated financial statements are also unaudited. The results for the three and six months ended June 30, 2018 are not necessarily indicative of the results to be expected for the year ending December 31, 2018 or for any other interim period or for any future year. These consolidated financial statements should be read in conjunction with the Company's audited consolidated financial statements appearing in the Company's Annual Report on Form 10-K for the year ended December 31, 2017. The disclosures made in the unaudited interim consolidated financial statements generally do not repeat those in the annual statements.

There have been no material changes to the significant accounting policies during the three and six months ended June 30, 2018, as compared to the significant accounting policies described in Note 3 of the "Notes to Consolidated Financial Statements" in the Company's Annual Report on Form 10-K for the year ended December 31, 2017.

 
2.  Summary of Significant Accounting Policies
 
Nature of Operations

J.E.M. Capital, Inc. (the Company) was incorporated under the laws of the State of Delaware on September 14, 2011 and has had limited operations since inception. The Company's current business plan is to seek to identify a privately held operating company desiring to become a publicly held company by merging with the Company through a reverse merger or acquisition. The Company is a shell company as defined in Rule 12b-2 promulgated under the Securities Exchange Act of 1934. As a shell company, the Company has no operations and assets.

On January 5, 2017, the Company entered into a Share Exchange Agreement (the "Agreement") with Essential Elements Limited, a British Virgin Islands company ("ESEL"), and Leung Chi Wah Earnest, the principal shareholder of ESEL, pursuant to which the Company issued an aggregate of 2,005,400 shares of common stock, or approximately 17% of the issued and outstanding common stock of the Company, to Mr. Leung in exchange for 100% of the issued and outstanding shares of ESEL. ESEL owns all of the issued and outstanding shares of J.E.M. Capital Limited, a company organized under the laws of Hong Kong ("JEM Capital").

ESEL and JEM Capital currently have no operations, but include the corporate structure that the Company believes necessary for the acquisition of assets in Hong Kong and China. ESEL has incurred material expenses setting up such structure.

Risks and Uncertainties

The Company's activities are subject to significant risks and uncertainties, including failure to identify a privately held operating company desiring to merge with the Company, failure to complete a reverse merger transaction, and inability to secure funding to continue as a going concern.  (See Note 3 regarding going concern discussion.)



- 7 -


 

J.E.M. CAPITAL, INC.
Notes to Unaudited Consolidated Financial Statements


Use of Estimates

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (U.S. GAAP) for interim financial reporting and as required by Regulation S-X, Rule 10-01. The preparation of the accompanying consolidated financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities as of the date of the consolidated financial statements, and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from those estimates.

Principles of Consolidation
The unaudited consolidated financial statements include the financial statements of the Company and its subsidiaries for which it is the primary beneficiary. Upon making this determination, the Company is deemed to be the primary beneficiary of the entity, which is then required to be consolidated for financial reporting purposes. All significant intercompany transactions and balances have been eliminated upon consolidation.
Equipment, net
Equipment is stated at cost less accumulated depreciation and impairment losses, if any. Depreciation is provided on a straight-line basis, less estimated residual values over the assets' estimated useful lives. The estimated useful lives are as follows:

Computer hardware and software
3 years

When equipment is retired or otherwise disposed of, the related cost, accumulated depreciation and provision for impairment loss, if any, are removed from the respective accounts, and any gain or loss is reflected in the consolidated statements of operations. Repairs and maintenance costs on equipment are expensed as incurred.
Impairment of Long-Lived Assets
Long-lived assets, such as equipment, are reviewed for impairment whenever events or changes in circumstance indicate that the carrying amount of the assets may not be recoverable. An impairment loss is recognized when the carrying amount of a long-lived asset exceeds the sum of the undiscounted cash flows expected to be generated from the asset's use and eventual disposition. An impairment loss is measured as the amount by which the carrying amount exceeds the fair value of the asset calculated using an undiscounted cash flow analysis. There was no impairment of long-lived assets for the three and six months ended June 30, 2018 and 2017.
 
 
 
- 8 -

 
 
 
J.E.M. CAPITAL, INC.
Notes to Unaudited Consolidated Financial Statements
 

Fair value of financial instruments

ASC Topic 825, "Financial Instruments", requires disclosing fair value to the extent practicable for financial instruments which are recognized or unrecognized in the balance sheets. The fair values of the financial instruments are not necessarily representative of the amount that could be realized or settled, nor does the fair value amount consider the tax consequences of realization or settlement. For certain financial instruments, including deposits paid, accounts payable and accrued expenses, the fair values were determined based on the near-term maturities of such the assets and obligations.
Revenue
The Company has yet to generate revenue from operations for the three and six months ended June 30, 2018 and 2017.
Net Loss per Common Share
Basic loss per share is computed by dividing the net loss attributable to the common stockholders by the weighted average number of shares of common stock outstanding during the period. Fully diluted 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 shares had been issued and if the additional common shares were dilutive. There were no dilutive financial instruments issued or outstanding for the three and six months ended June 30, 2018 and 2017.
Income Taxes
The Company accounts for income taxes under ASC Topic 740, Income Tax. Deferred tax assets and liabilities are provided for the future tax effects attributable to temporary differences between the financial statement carrying amounts of assets and liabilities and their respective tax bases, and for the expected future tax benefits from items including tax loss carry forwards.
Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or reversed. The expense or benefit related to adjusting deferred tax assets and liabilities as a result of a change in tax rates is recognized in income or loss in the period that includes the enactment date.
The Company recognizes and measures uncertain tax positions and records tax benefits when it is more likely than not that the tax position will be sustained on examination by the taxing authorities based on the technical merits of the position. The tax benefits recognized in the financial statements from such positions are then measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. The company recognizes interest and penalties as a component of income tax expense if applicable. For the three and six months ended June 30, 2018 and 2017, the Company had not recognized any interest or penalties on its consolidated financial statements.
Recent Accounting Pronouncements
The Company has implemented all new accounting pronouncements that are in effect. These pronouncements did not have any material impact on the consolidated financial statements unless otherwise disclosed, and we do not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on our financial position or results of operations.

 
- 9 -

 
 
 
J.E.M. CAPITAL, INC.
Notes to Unaudited Consolidated Financial Statements

 
 
3.  Going Concern

The accompanying consolidated financial statements have been prepared in conformity with U.S. GAAP, which contemplate continuation of the Company as a going concern. The Company has not established any source of revenues to cover its operating costs, and as such, has incurred an operating loss since inception. Further, as of June 30, 2018, the cash resources of the Company were insufficient to continue to conduct its normal business operations. These and other factors raise substantial doubt about the Company's ability to continue as a going concern. The accompanying  consolidated 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 from the possible inability of the Company to continue as a going concern.
 

4.  General and Administrative Expenses

The following summarizes the type of expenses incurred during the three and six months ended June 30, 2018 and 2017:

  
Three Months Ended
 
Six Months Ended
 
 
June 30,
 
June 30,
 
 
2018
 
2017
 
2018
 
2017
 
  
(Consolidated and unaudited)
 
(Consolidated and unaudited)
 
General and administrative expense:
               
Professional fees
 
$
6,575
   
$
9,114
   
$
15,129
   
$
16,327
 
Filing fees
   
1,130
     
1,325
     
2,540
     
5,768
 
Franchise Tax expense
   
-
     
840
     
409
     
3,307
 
Salary and related expenses
   
14,884
     
33,639
     
23,769
     
86,249
 
Depreciation
   
125
     
407
     
250
     
789
 
Other office expenses
   
1,238
     
4,999
     
1,754
     
14,868
 
Total general and administrative expense
 
$
23,952
   
$
50,324
   
$
43,851
   
$
127,308
 

 

5.  Commitments and contingencies

Contingencies

The Company accounts for loss contingencies in accordance with ASC Topic 450 and other related guidelines. As of June 30, 2018, the Company's management is of the opinion that there are no commitments and contingencies to account for.
 
 
 
 
- 10 -

 
 
 
 
J.E.M. CAPITAL, INC.
Notes to Unaudited Consolidated Financial Statements
 
 
6.  Stockholders' Equity

Preferred Stock

The Company is authorized to issue 5,000,000 shares of preferred stock with a $0.0001 par value. As of June 30, 2018 and December 31, 2017, there were no shares of preferred stock issued or outstanding.

Common Stock

On January 5, 2017, the Company entered into a Share Exchange Agreement with Essential Elements Limited, a British Virgin Islands company ("ESEL"), and Leung Chi Wah Earnest, the principal shareholder of ESEL, pursuant to which the Company issued an aggregate of 2,005,400 shares of common stock, or approximately 17% of the issued and outstanding common stock of the Company, to Mr. Leung in exchange for 100% of the issued and outstanding shares of ESEL.  ESEL owns all of the issued and outstanding shares of J.E.M. Capital Limited, a company organized under the laws of Hong Kong ("JEM Capital"). ESEL and JEM Capital currently have no operations, but include the corporate structure that the Company believes necessary for the acquisition of assets in Hong Kong and China.  ESEL has incurred material expenses setting up such structure.
The Company is authorized to issue 195,000,000 shares of common stock with a $0.0001 par value. As of June 30, 2018 and December 31, 2017, 12,032,400 shares and 12,032,400 shares of common stock were issued and outstanding, respectively.

As of June 30, 2018 and December 31, 2017, the Company did not have any dilutive securities, such as stock options, warrants or convertible securities, issued or outstanding.
 

7.   Related Party Transactions
 
During the six months ended June 30, 2018 and 2017, the Company received loans of $nil and $98,019 from its director, respectively. As of June 30, 2018 and December 31, 2017, the Company recorded an amount of $nil and $nil payable to director. The amount is unsecured, bears no interest and is repayable on demand.
During the six months ended June 30, 2018, the Company received loans of $32,429 from its shareholder. As of June 30, 2018, the Company recorded an amount of $32,429 payable to its shareholder. The amount is unsecured, bears no interest and is repayable on demand.
 

 


- 11 -



J.E.M. CAPITAL, INC.
Notes to Unaudited Consolidated Financial Statements


8.   Income taxes

Income is subject to taxation in various countries in which the Company and its subsidiaries operate or are incorporated. The loss before income taxes by geographical locations for the three and six months ended June 30, 2018 and 2017 were summarized as follows:
  
Three Months Ended
 
Six Months Ended
 
 
June 30,
 
June 30,
 
 
2018
 
2017
 
2018
 
2017
 
  
(Consolidated and unaudited)
 
(Consolidated and unaudited)
 
 
               
United States
 
$
13,772
   
$
10,523
   
$
24,247
   
$
24,658
 
Foreign
   
10,180
     
39,801
     
19,604
     
102,650
 
 
 
$
23,952
   
$
50,324
   
$
43,851
   
$
127,308
 

The Company had accumulated tax losses of approximately $165,000 and $141,000 as of June 30, 2018 and December 31, 2017, respectively, which will expire between 2031 and 2037.
The net operating loss carryforwards indicated above represent the principle component of the Company's deferred tax assets as of June 30, 2018 and December 31, 2017. Deferred tax assets of approximately $46,000 and $39,000 as of June 30, 2018 and December 31, 2017, respectively, will be offset by valuation allowance of the same amounts as realization of such assets is uncertain.
   
June 30,
2018
   
December 31,
2017
 
Deferred tax assets:                 
Net operating loss carryforwards
 
$
46,080
   
$
39,323
 
Total deferred tax assets
   
46,080
     
39,323
 
Less: Valuation allowance
   
(46,080
)
   
(39,323
)
Net deferred tax assets
 
$
-
   
$
-
 

Movement in valuation allowance:

   
June 30,
2018
   
December 31,
2017
 
At the beginning of the period/year
 
39,323
   
55,760
 
Current period/year addition/(deduction)
   
6,757
     
(16,437
)
At the end of the period/year
 
$
46,080
   
$
39,323
 

The provision for income taxes differs from the expected provision determined by applying the federal statutory rate to the income before income taxes. The reasons for the difference are state and local income taxes and various non-deductible expenses. As a result of the reduction of the corporate income tax rate from 35% to 21% due to the Tax Cuts and Jobs Act which was enacted on December 22, 2017, U.S. GAAP requires companies to remeasure their deferred tax assets and liabilities as of the date of enactment, with resulting tax effects accounted for in the period of enactment. (the change in deferred tax balances would have a corresponding change to valuation allowance thereby resulting in no income tax expense for the year).
The Company' income tax returns are subject to examination for three years from the date filed or the due date, whichever is later.
The Company did not identify any material uncertain tax positions.
 

 

- 12 -



 
ITEM 2.   Management's Discussion and Analysis of Financial Condition and Results of Operations

Disclaimer Regarding Forward Looking Statements
 
Our Management's Discussion and Analysis of Financial Condition and Results of Operations contains not only statements that are historical facts, but also statements that are forward-looking. Forward-looking statements are, by their very nature, uncertain and risky. These risks and uncertainties include international, national and local general economic and market conditions; demographic changes; our ability to sustain, manage, or forecast growth; our ability to successfully make and integrate acquisitions; raw material costs and availability; new product development and introduction; existing government regulations and changes in, or the failure to comply with, government regulations; adverse publicity; competition; the loss of significant customers or suppliers; fluctuations and difficulty in forecasting operating results; changes in business strategy or development plans; business disruptions; the ability to attract and retain qualified personnel; the ability to protect technology; and other risks that might be detailed from time to time in our filings with the Securities and Exchange Commission.

Although the forward-looking statements in this Quarterly Report on Form 10-Q reflect the good faith judgment of our management, such statements can only be based on facts and factors currently known by them. Consequently, and because forward-looking statements are inherently subject to risks and uncertainties, the actual results and outcomes may differ materially from the results and outcomes discussed in the forward-looking statements. You are urged to carefully review and consider the various disclosures made by us in this Quarterly Report on Form 10-Q and in our other reports as we attempt to advise interested parties of the risks and factors that may affect our business, financial condition, and results of operations and prospects.

Overview
 
We were incorporated on September 14, 2011 in Delaware as "Eco Planet Corp." On October 21, 2013, we effected a 1-for-200 reverse stock split of our common stock, $0.0001 par value per share (the "Common Stock"), and changed our name to "Zosano, Inc." On October 31, 2013, we entered into a Stock Purchase Agreement with Zosano Pharma Corporation (formerly known as ZP Holdings, Inc.) pursuant to which we issued and sold 10,016,973 shares of Common Stock (the "Shares") to Zosano Pharma Corporation. As a result of our issuance and sale of the Shares to Zosano Pharma Corporation, a change in control of the Company occurred and Zosano Pharma Corporation became the owner of 99.9% of our outstanding Common Stock.

On November 14, 2016, Zosano Phama Corporation entered into Stock Purchase Agreements with eighteen (18) foreign investors (the "New Shareholders"), pursuant to which Zosano Pharma Corporation sold an aggregate of 10,016,973 shares of common stock of Zosano, Inc. (the "Company"), or approximately 99.9% of the issued and outstanding common stock of the Company, to the New Shareholders. As a result of the transaction, the New Shareholders acquired approximately 99.9% of the total votes entitled to be cast at any meeting of shareholders, giving them voting control of the Company.  The New Shareholders obtained the funds for the purchase of the Company's common stock in the transaction from each of their available cash on hand.

On December 15, 2016, we filed Articles of Amendment to its Amended Articles of Incorporation (the "Articles of Amendment") with the Secretary of State of Delaware effecting a name change of the Company to J.E.M. Capital, Inc. (the "Corporate Action").  The Corporate Action and the Amended Articles became effective on March 15, 2017, following compliance with notification requirements of the Financial Industry Regulatory Authority. The new CUSIP number for the Company's common stock is 46619V107.  On March 14, 2017, the Financial Industry Regulatory Authority (FINRA) approved the Corporate Action.   The Company's stock is quoted on the OTCQB under the ticker symbol ZOSN, but beginning March 15, 2017, the Company's common stock will begin trading under the symbol JEMC.
 
On January 5, 2017, we entered into a Share Exchange Agreement with Essential Elements Limited, a British Virgin Islands company ("ESEL"), and Leung Chi Wah Earnest, the principal shareholder of ESEL, pursuant to which the Company issued an aggregate of 2,005,400 shares of common stock, or approximately 17% of the issued and outstanding common stock of the Company, to Mr. Leung in exchange for 100% of the issued and outstanding shares of ESEL.  ESEL owns all of the issued and outstanding shares of J.E.M. Capital Limited, a company organized under the laws of Hong Kong ("JEM Capital"). ESEL and JEM Capital currently have no operations, but include the corporate structure that the Company believes necessary for the acquisition of assets in Hong Kong and China.  ESEL has incurred material expenses setting up such structure.

 

- 13 -




We are a shell company as defined in Rule 12b-2 promulgated under the Securities Exchange Act of 1934 (the "Exchange Act"). As a shell company, we have no operations and assets.  Our current business plan is to identify a privately held operating company, which is profitable or, in management's view, has growth potential, irrespective of the industry in which it is engaged, desiring to become a publicly held company with access to U.S. capital markets by merging with us through a reverse merger or acquisition.  We can give no assurances that we will be successful in finding or acquiring a desirable business opportunity, given the limited resources that are expected to be available to us for implementation of our business plan. Furthermore, we can give no assurances that any business combination, if one occurs, will be on terms that are favorable to us or our current stockholders.

Results of Operations

Three Months Ended June 30, 2018 Compared To Three Months Ended June 30, 2017

Revenue
 
We have not generated any revenues since our inception.

Operating expenses
 
Our operating expenses primarily consisted of general and administrative expenses, such as salary and related expenses, audit and review fees, tax returns preparation fees, transfer agent services, Edgar filing costs, franchise and business taxes, other professional services and general office expenses. Operating expenses for the three months ended June 30, 2018 and 2017 were $23,952 and $50,324, respectively. The decrease in operating expenses was due to the decrease in salary and related expenses paid for officers and other office expenses of the Company for the three months ended June 30, 2018.

Net loss
 
Net loss for the three months ended June 30, 2018 was $23,952, as compared to $50,324 for the three months ended June 30, 2017.  The decrease in operating expenses was due to the decrease in salary and related expenses paid for officers and other office expenses of the Company for the three months ended June 30, 2018.
 
Six Months Ended June 30, 2018 Compared To Six Months Ended June 30, 2017

Revenue
 
We have not generated any revenues since our inception.

Operating expenses
 
Our operating expenses primarily consisted of general and administrative expenses, such as audit and review fees, tax returns preparation fees, transfer agent services, Edgar filing costs, franchise and business taxes, and other professional services. Operating expenses for the six months ended June 30, 2018 and 2017 were $43,851 and $127,308, respectively. The decrease in operating expenses was due to the decrease in salary and related expenses paid for officers for the six months ended June 30, 2018 and the legal fee paid for the change of name of the Company for the six months ended June 30, 2017.

Net loss

Net loss for the six months ended June 30, 2018 was $43,851, as compared to $127,308 for the six months ended June 30, 2017.  The decrease in net loss was due to the decrease in salary and related expenses paid for officers for the six months ended June 30, 2018 and the legal fee paid for the change of name of the Company for the six months ended June 30, 2017.
 
 
- 14 -

 
Liquidity and Capital Resources
As of June 30, 2018, we had cash of $384, as compared to $166 as of December 31, 2017, an increase of $218 with the increase of proceeds from shareholder's loan. During the three months ended June 30, 2018 and 2017, because of our operating losses, we did not generate positive operating cash flows.

Our cash, current assets, total assets, current liabilities, and total liabilities as of June 30, 2018 compared to December 31, 2017 are as follows:

   
June 30, 2018
(Unaudited)
   
December 31, 2017
   
Change
 
                   
Cash
 
$
384
   
$
166
   
$
218
 
Deposit paid
   
-
     
550
     
(550
)
Total Current Assets
   
384
     
716
     
(332
)
Equipment, net
   
746
     
996
     
(250
)
Total Assets
   
1,130
     
1,712
     
(582
)
Total Current Liabilities
   
67,728
     
24,459
     
43,269
 
Total Liabilities
   
67,728
     
24,459
     
43,269
 
Assets and Liabilities
As of June 30, 2018, we had assets mainly related to office equipment. We had liabilities totalling $67,728 and $24,459 as of June 30, 2018 and December 31, 2017, respectively, which consisted of accrued expenses related to salary, office expenses, audit fees, transfer agent services, legal fees and advance from shareholder.

Stockholders' Deficit

Stockholders' deficit consisted primarily of shares issued to founders in the amount of $1,203, capital raised to fund our operations of $55,589, and additional capital provided to settle obligations for $245,679, offset by the accumulated deficit of $369,069 as of June 30, 2018.

         Cash Flows from Operating ActivitiesFor the six months ended June 30, 2018, our net cash used in operations was $32,211 compared to $97,145 net cash used in operations for the same period in 2017.  This was mainly attributable to decrease in expenses payment during the six months ended June 30, 2018.
Cash Flows from Investing Activities.  For the six months ended June 30, 2018, our net cash used in investing activities was $nil compared to $450 net cash used in investing activities for the same period in 2017.  This was attributable to the purchase of equipment during the six months ended June 30, 2017.
         Cash Flows from Financing Activities.  Net cash flows provided by financing activities in the six months ended June 30, 2018 was $32,429, compared to $98,019 net cash provided by financing activities in the same period in 2017.  The decrease was mainly due to decrease in proceeds from director's loan, set off by increase in proceeds from shareholder's loan, for financing our operations during the six months ended June 30, 2018.
Off Balance Sheet Arrangements

We have no off balance sheet arrangements.
 


- 15 -



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.

 
ITEM 4. Controls and Procedures

(a)   Evaluation of Disclosure Controls Procedures

Disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) are designed to ensure that information required to be disclosed in reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms. Disclosure and control procedures are also designed to ensure that such information is accumulated and communicated to management, including the chief executive officer and principal financial officer, to allow timely decisions regarding required disclosures.

As of June 30, 2018, we carried out an evaluation, under the supervision and with the participation of our chief executive officer and principal financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures. In designing and evaluating the disclosure controls and procedures, management recognizes that there are inherent limitations to the effectiveness of any system of disclosure controls and procedures, including the possibility of human error and the circumvention or overriding of the controls and procedures. Accordingly, even effective disclosure controls and procedures can only provide reasonable assurance of achieving their desired control objectives. Additionally, in evaluating and implementing possible controls and procedures, management is required to apply its reasonable judgment. We also do not have an audit committee. Based on the evaluation described above, and as a result, in part, of not having an audit committee and having one individual serve as our chief executive officer and principal financial officer, we have concluded that, as of the end of the period covered by this Quarterly Report on Form 10-Q, our disclosure controls and procedures were ineffective.

(b)  Changes in Internal Controls over Financial Reporting

There was no change in our internal controls over financial reporting that occurred during the period covered by this Quarterly Report on Form 10-Q, which has materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting.

(c)   Officer's Certifications

Appearing as an exhibit to this Quarterly Report on Form 10-Q are "Certifications" of our principal executive and financial officer. The Certifications are required pursuant to Sections 302 of the Sarbanes-Oxley Act of 2002 (the "Section 302 Certifications"). This section of the Quarterly Report on Form 10-Q contains information concerning the Controls Evaluation referred to in the Section 302 Certifications.  This information should be read in conjunction with the Section 302 Certifications for a more complete understanding of the topics presented.
 
 
 
- 16 -

 

 
PART II – OTHER INFORMATION
 
 
 
ITEM 1.    Legal Proceedings

There have been no events which are required to be reported under this Item.
 

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

There have been no events which are required to be reported under this Item.
 

ITEM 3.    Defaults Upon Senior Securities

There have been no events which are required to be reported under this Item.
 

ITEM 4.    Mine Safety Disclosures

There have been no events which are required to be reported under this Item.
 
 
ITEM 5.    Other Information

There have been no events which are required to be reported under this Item.
 
 
 
- 17 -

 
 
 
ITEM 6.    Exhibits
 
Item No.
Description
   
   
   
   
   
101.INS
XBRL Instance Document
   
101.SCH
XBRL Taxonomy Extension Schema Document
   
101.CAL
XBRL Taxonomy Extension Calculation Linkbase Document
   
101.DEF
XBRL Taxonomy Extension Definition Linkbase Document
   
101.LAB
XBRL Taxonomy Extension Label Linkbase Document
   
101.PRE
XBRL Taxonomy Extension Presentation Linkbase Document
 
 

 

- 18 -


 
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.
 
 
J.E.M. Capital, Inc.
     
Dated:    August 14, 2018
By:
 /s/ Earnest Leung
   
Earnest Leung
   
 Chief Executive Officer
     
     
     
Dated:    August 14, 2018
By:
 /s/ Cheng Sze Ki 
   
 Cheng Sze Ki
   
 Chief Financial Officer
 
 
 
 
 
 
 
- 19 -
EX-31.1 2 ex31_1.htm
 

EXHIBIT 31.1
 
 

Rule 13a-14(a)/15d-14(a) Certification of President (Principal Executive Officer)

I, Earnest Leung, certify that:

1.
I have reviewed this Quarterly Report on Form 10-Q of J.E.M. Capital, Inc.;

2.
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.
Based on my knowledge, the financial statements, and other financial information included in this report fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exhibit Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and

(d)
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a)
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and

(b)
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
 

 
Dated:    August 14, 2018    By: /s/ Earnest Leung
       Earnest Leung
       Chief Executive Officer

 
EX-31.2 3 ex31_2.htm

 
EXHIBIT 31.2

Rule 13a-14(a)/15d-14(a) Certification of Treasurer (Principal Financial Officer)

I, Cheng Sze Ki, certify that:

6.
I have reviewed this Quarterly Report on Form 10-Q of J.E.M. Capital, Inc.;

7.
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

8.
Based on my knowledge, the financial statements, and other financial information included in this report fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

9.
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exhibit Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(e)
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(f)
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(g)
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and

(h)
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

10.
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(c)
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and

(d)
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.


Dated:    August 14, 2018    By: /s/ Cheng Sze Ki
      Cheng Sze Ki
      Chief Financial Officer
EX-32.1 4 ex32_1.htm
 
EXHIBIT 32.1

 
 
CERTIFICATION PURSUANT TO 18 USC, SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 906
OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of J.E.M. Capital, Inc. (the "Company") on Form 10-Q for the quarter ended June 30, 2018, as filed with the Securities and Exchange Commission on or about the date hereof (the "Report"), I, Earnest Leung, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Sec. 1350, as adopted pursuant to Sec. 906 of the Sarbanes-Oxley Act of 2002, that:


(1)
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)
Information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.


Dated:    August 14, 2018    By: /s/ Earnest Leung
      Earnest Leung
      Chief Executive Officer

A signed original of this written statement required by Section 906 has been provided to J.E.M. Capital, Inc. and will be retained by J.E.M. Capital, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.
EX-32.2 5 ex32_2.htm
 

EXHIBIT 32.2
 

CERTIFICATION PURSUANT TO 18 USC, SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 906
OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of J.E.M. Capital, Inc. (the "Company") on Form 10-Q for the quarter ended June 30, 2018, as filed with the Securities and Exchange Commission on or about the date hereof (the "Report"), I, Cheng Sze Ki, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Sec. 1350, as adopted pursuant to Sec. 906 of the Sarbanes-Oxley Act of 2002, that:


(1)
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)
Information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.


Dated:    August 14, 2018    By: /s/ Cheng Sze Ki
      Cheng Sze Ki
      Chief Financial Officer


A signed original of this written statement required by Section 906 has been provided to J.E.M. Capital, Inc. and will be retained by J.E.M. Capital, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.



 
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Jun. 30, 2018
Aug. 10, 2018
Document And Entity Information    
Entity Registrant Name J.E.M. Capital, Inc.  
Entity Central Index Key 0001537528  
Document Type 10-Q  
Document Period End Date Jun. 30, 2018  
Amendment Flag false  
Current Fiscal Year End Date --12-31  
Is Entity a Well-known Seasoned Issuer? No  
Is Entity a Voluntary Filer? No  
Is Entity's Reporting Status Current? Yes  
Entity Filer Category Smaller Reporting Company  
Entity Common Stock, Shares Outstanding   12,032,400
Document Fiscal Period Focus Q2  
Document Fiscal Year Focus 2018  
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CONSOLIDATED BALANCE SHEETS - USD ($)
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Dec. 31, 2017
Current assets:    
Cash $ 384 $ 166
Deposit paid 550
Total current assets 384 716
Equipment, Net 746 996
Total assets 1,130 1,712
Current Liabilities:    
Accounts payable and accrued expenses 35,299 24,459
Due to shareholder 32,429
Total Current Liabilities 67,728 24,459
Total liabilities 67,728 24,459
Commitments and contingencies
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Additional paid-in capital 301,268 301,268
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Total stockholders' deficit (66,598) (22,747)
Total liabilities and stockholders' deficit $ 1,130 $ 1,712
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CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares
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Dec. 31, 2017
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CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($)
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Jun. 30, 2017
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Basis of Presentation
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Jun. 30, 2018
Accounting Policies [Abstract]  
Basis of Presentation

 

1.  Basis of Presentation

 

The accompanying interim consolidated financial statements are unaudited. The unaudited interim consolidated financial statements have been prepared on the same basis as the annual audited consolidated financial statements and, in the opinion of management, reflect all adjustments, which includes normal recurring adjustments or a description of the nature and amount of any adjustments other than normal recurring adjustments, necessary for a fair presentation of the financial positions and results of operations for the periods presented. The financial data and other information disclosed in these notes to the interim consolidated financial statements are also unaudited. The results for the three and six months ended June 30, 2018 are not necessarily indicative of the results to be expected for the year ending December 31, 2018 or for any other interim period or for any future year. These consolidated financial statements should be read in conjunction with the Company's audited consolidated financial statements appearing in the Company's Annual Report on Form 10-K for the year ended December 31, 2017. The disclosures made in the unaudited interim consolidated financial statements generally do not repeat those in the annual statements.

 

There have been no material changes to the significant accounting policies during the three and six months ended June 30, 2018, as compared to the significant accounting policies described in Note 3 of the "Notes to Consolidated Financial Statements" in the Company's Annual Report on Form 10-K for the year ended December 31, 2017.

 

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Summary of Significant Accounting Policies
6 Months Ended
Jun. 30, 2018
Notes to Financial Statements  
Summary of Significant Accounting Policies

2.  Summary of Significant Accounting Policies

 

Nature of Operations

 

J.E.M. Capital, Inc. (the Company) was incorporated under the laws of the State of Delaware on September 14, 2011 and has had limited operations since inception. The Company’s current business plan is to seek to identify a privately held operating company desiring to become a publicly held company by merging with the Company through a reverse merger or acquisition. The Company is a shell company as defined in Rule 12b-2 promulgated under the Securities Exchange Act of 1934. As a shell company, the Company has no operations and assets.

 

On January 5, 2017, the Company entered into a Share Exchange Agreement (the “Agreement”) with Essential Elements Limited, a British Virgin Islands company (“ESEL”), and Leung Chi Wah Earnest, the principal shareholder of ESEL, pursuant to which the Company issued an aggregate of 2,005,400 shares of common stock, or approximately 17% of the issued and outstanding common stock of the Company, to Mr. Leung in exchange for 100% of the issued and outstanding shares of ESEL. ESEL owns all of the issued and outstanding shares of J.E.M. Capital Limited, a company organized under the laws of Hong Kong (“JEM Capital”).

 

ESEL and JEM Capital currently have no operations, but include the corporate structure that the Company believes necessary for the acquisition of assets in Hong Kong and China. ESEL has incurred material expenses setting up such structure.

 

Risks and Uncertainties

 

The Company’s activities are subject to significant risks and uncertainties, including failure to identify a privately held operating company desiring to merge with the Company, failure to complete a reverse merger transaction, and inability to secure funding to continue as a going concern. (See Note 3 regarding going concern discussion.)

 

Use of Estimates

 

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (U.S. GAAP) for interim financial reporting and as required by Regulation S-X, Rule 10-01. The preparation of the accompanying consolidated financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities as of the date of the consolidated financial statements, and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from those estimates.

 

Principles of Consolidation

The unaudited consolidated financial statements include the financial statements of the Company and its subsidiaries for which it is the primary beneficiary. Upon making this determination, the Company is deemed to be the primary beneficiary of the entity, which is then required to be consolidated for financial reporting purposes. All significant intercompany transactions and balances have been eliminated upon consolidation.

Equipment, net

Equipment is stated at cost less accumulated depreciation and impairment losses, if any. Depreciation is provided on a straight-line basis, less estimated residual values over the assets’ estimated useful lives. The estimated useful lives are as follows:

Computer hardware and software 3 years

 

When equipment is retired or otherwise disposed of, the related cost, accumulated depreciation and provision for impairment loss, if any, are removed from the respective accounts, and any gain or loss is reflected in the consolidated statements of operations. Repairs and maintenance costs on equipment are expensed as incurred.

Impairment of Long-Lived Assets

Long-lived assets, such as equipment, are reviewed for impairment whenever events or changes in circumstance indicate that the carrying amount of the assets may not be recoverable. An impairment loss is recognized when the carrying amount of a long-lived asset exceeds the sum of the undiscounted cash flows expected to be generated from the asset’s use and eventual disposition. An impairment loss is measured as the amount by which the carrying amount exceeds the fair value of the asset calculated using an undiscounted cash flow analysis. There was no impairment of long-lived assets for the three and six months ended June 30, 2018 and 2017.

Fair value of financial instruments

ASC Topic 825, “Financial Instruments”, requires disclosing fair value to the extent practicable for financial instruments which are recognized or unrecognized in the balance sheets. The fair values of the financial instruments are not necessarily representative of the amount that could be realized or settled, nor does the fair value amount consider the tax consequences of realization or settlement. For certain financial instruments, including deposits paid, accounts payable and accrued expenses, the fair values were determined based on the near-term maturities of such the assets and obligations.

Revenue

The Company has yet to generate revenue from operations for the three and six months ended June 30, 2018 and 2017.

Net Loss per Common Share

Basic loss per share is computed by dividing the net loss attributable to the common stockholders by the weighted average number of shares of common stock outstanding during the period. Fully diluted 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 shares had been issued and if the additional common shares were dilutive. There were no dilutive financial instruments issued or outstanding for the three and six months ended June 30, 2018 and 2017.

Income Taxes

The Company accounts for income taxes under ASC Topic 740, Income Tax. Deferred tax assets and liabilities are provided for the future tax effects attributable to temporary differences between the financial statement carrying amounts of assets and liabilities and their respective tax bases, and for the expected future tax benefits from items including tax loss carry forwards.

Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or reversed. The expense or benefit related to adjusting deferred tax assets and liabilities as a result of a change in tax rates is recognized in income or loss in the period that includes the enactment date.

The Company recognizes and measures uncertain tax positions and records tax benefits when it is more likely than not that the tax position will be sustained on examination by the taxing authorities based on the technical merits of the position. The tax benefits recognized in the financial statements from such positions are then measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. The company recognizes interest and penalties as a component of income tax expense if applicable. For the three and six months ended June 30, 2018 and 2017, the Company had not recognized any interest or penalties on its consolidated financial statements.

Recent Accounting Pronouncements

The Company has implemented all new accounting pronouncements that are in effect. These pronouncements did not have any material impact on the consolidated financial statements unless otherwise disclosed, and we do not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on our financial position or results of operations.

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Going Concern
6 Months Ended
Jun. 30, 2018
Notes to Financial Statements  
Going Concern

 

3.  Going Concern

 

The accompanying consolidated financial statements have been prepared in conformity with U.S. GAAP, which contemplate continuation of the Company as a going concern. The Company has not established any source of revenues to cover its operating costs, and as such, has incurred an operating loss since inception. Further, as of June 30, 2018, the cash resources of the Company were insufficient to continue to conduct its normal business operations. These and other factors raise substantial doubt about the Company's ability to continue as a going concern. The accompanying  consolidated 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 from the possible inability of the Company to continue as a going concern.

 

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General and Administrative Expenses
6 Months Ended
Jun. 30, 2018
Notes to Financial Statements  
General and Administrative Expenses

 

4.  General and Administrative Expenses

 

The following summarizes the type of expenses incurred during the three and six months ended June 30, 2018 and 2017:

 

  Three Months Ended   Six Months Ended  
  June 30,   June 30,  
  2018   2017   2018   2017  
  (Consolidated and unaudited)   (Consolidated and unaudited)  
General and administrative expense:                
Professional fees   $ 6,575     $ 9,114     $ 15,129     $ 16,327  
Filing fees     1,130       1,325       2,540       5,768  
Franchise Tax expense     -       840       409       3,307  
Salary and related expenses     14,884       33,639       23,769       86,249  
Depreciation     125       407       250       789  
Other office expenses     1,238       4,999       1,754       14,868  
Total general and administrative expense   $ 23,952     $ 50,324     $ 43,851     $ 127,308  

 

 

XML 21 R10.htm IDEA: XBRL DOCUMENT v3.10.0.1
Commitments and Contingencies
6 Months Ended
Jun. 30, 2018
Commitments and Contingencies Disclosure [Abstract]  
Commitments and contingencies

 

5.  Commitments and contingencies

 

Contingencies

 

The Company accounts for loss contingencies in accordance with ASC Topic 450 and other related guidelines. As of June 30, 2018, the Company's management is of the opinion that there are no commitments and contingencies to account for.

 

XML 22 R11.htm IDEA: XBRL DOCUMENT v3.10.0.1
Stockholders' Equity
6 Months Ended
Jun. 30, 2018
Notes to Financial Statements  
Stockholders' Equity

 

6.  Stockholders' Equity

 

Preferred Stock

 

The Company is authorized to issue 5,000,000 shares of preferred stock with a $0.0001 par value. As of June 30, 2018 and December 31, 2017, there were no shares of preferred stock issued or outstanding.

 

Common Stock

 

On January 5, 2017, the Company entered into a Share Exchange Agreement with Essential Elements Limited, a British Virgin Islands company ("ESEL"), and Leung Chi Wah Earnest, the principal shareholder of ESEL, pursuant to which the Company issued an aggregate of 2,005,400 shares of common stock, or approximately 17% of the issued and outstanding common stock of the Company, to Mr. Leung in exchange for 100% of the issued and outstanding shares of ESEL.  ESEL owns all of the issued and outstanding shares of J.E.M. Capital Limited, a company organized under the laws of Hong Kong ("JEM Capital"). ESEL and JEM Capital currently have no operations, but include the corporate structure that the Company believes necessary for the acquisition of assets in Hong Kong and China.  ESEL has incurred material expenses setting up such structure.

The Company is authorized to issue 195,000,000 shares of common stock with a $0.0001 par value. As of June 30, 2018 and December 31, 2017, 12,032,400 shares and 12,032,400 shares of common stock were issued and outstanding, respectively.

 

As of June 30, 2018 and December 31, 2017, the Company did not have any dilutive securities, such as stock options, warrants or convertible securities, issued or outstanding.

 

XML 23 R12.htm IDEA: XBRL DOCUMENT v3.10.0.1
Related Party Transactions
6 Months Ended
Jun. 30, 2018
Notes to Financial Statements  
Related Party Transactions

 

7.   Related Party Transactions

 

During the six months ended June 30, 2018 and 2017, the Company received loans of $nil and $98,019 from its director, respectively. As of June 30, 2018 and December 31, 2017, the Company recorded an amount of $nil and $nil payable to director. The amount is unsecured, bears no interest and is repayable on demand.

 

During the six months ended June 30, 2018, the Company received loans of $32,429 from its shareholder. As of June 30, 2018, the Company recorded an amount of $32,429 payable to its shareholder. The amount is unsecured, bears no interest and is repayable on demand.

 

XML 24 R13.htm IDEA: XBRL DOCUMENT v3.10.0.1
Income Taxes
6 Months Ended
Jun. 30, 2018
Income Tax Disclosure [Abstract]  
Income Taxes

 

8.   Income taxes

 

Income is subject to taxation in various countries in which the Company and its subsidiaries operate or are incorporated. The loss before income taxes by geographical locations for the three and six months ended June 30, 2018 and 2017 were summarized as follows:

  Three Months Ended   Six Months Ended  
  June 30,   June 30,  
  2018   2017   2018   2017  
  (Consolidated and unaudited)   (Consolidated and unaudited)  
                 
United States   $ 13,772     $ 10,523     $ 24,247     $ 24,658  
Foreign     10,180       39,801       19,604       102,650  
    $ 23,952     $ 50,324     $ 43,851     $ 127,308  

 

The Company had accumulated tax losses of approximately $165,000 and $141,000 as of June 30, 2018 and December 31, 2017, respectively, which will expire between 2031 and 2037.

The net operating loss carryforwards indicated above represent the principle component of the Company's deferred tax assets as of June 30, 2018 and December 31, 2017. Deferred tax assets of approximately $46,000 and $39,000 as of June 30, 2018 and December 31, 2017, respectively, will be offset by valuation allowance of the same amounts as realization of such assets is uncertain.

   

June 30,

2018

   

December 31,

2017

 
Deferred tax assets:                 
Net operating loss carryforwards   $ 46,080     $ 39,323  
Total deferred tax assets     46,080       39,323  
Less: Valuation allowance     (46,080 )     (39,323 )
Net deferred tax assets   $ -     $ -  

 

Movement in valuation allowance:

 

   

June 30,

2018

   

December 31,

2017

 
At the beginning of the period/year   39,323     55,760  
Current period/year addition/(deduction)     6,757       (16,437 )
At the end of the period/year   $ 46,080     $ 39,323  

 

The provision for income taxes differs from the expected provision determined by applying the federal statutory rate to the income before income taxes. The reasons for the difference are state and local income taxes and various non-deductible expenses. As a result of the reduction of the corporate income tax rate from 35% to 21% due to the Tax Cuts and Jobs Act which was enacted on December 22, 2017, U.S. GAAP requires companies to remeasure their deferred tax assets and liabilities as of the date of enactment, with resulting tax effects accounted for in the period of enactment. (the change in deferred tax balances would have a corresponding change to valuation allowance thereby resulting in no income tax expense for the year).

The Company' income tax returns are subject to examination for three years from the date filed or the due date, whichever is later.

The Company did not identify any material uncertain tax positions.

 

XML 25 R14.htm IDEA: XBRL DOCUMENT v3.10.0.1
Summary of Significant Accounting Policies (Policies)
6 Months Ended
Jun. 30, 2018
Summary Of Significant Accounting Policies Policies  
Nature of Operations

 

Nature of Operations

 

J.E.M. Capital, Inc. (the Company) was incorporated under the laws of the State of Delaware on September 14, 2011 and has had limited operations since inception. The Company's current business plan is to seek to identify a privately held operating company desiring to become a publicly held company by merging with the Company through a reverse merger or acquisition. The Company is a shell company as defined in Rule 12b-2 promulgated under the Securities Exchange Act of 1934. As a shell company, the Company has no operations and assets.

 

On January 5, 2017, the Company entered into a Share Exchange Agreement (the "Agreement") with Essential Elements Limited, a British Virgin Islands company ("ESEL"), and Leung Chi Wah Earnest, the principal shareholder of ESEL, pursuant to which the Company issued an aggregate of 2,005,400 shares of common stock, or approximately 17% of the issued and outstanding common stock of the Company, to Mr. Leung in exchange for 100% of the issued and outstanding shares of ESEL. ESEL owns all of the issued and outstandin Kong ("JEM Capital").

 

ESEL and JEM Capital currently have no operations, but include the corporate structure that the Company believes necessary for the acquisition of assets in Hong Kong and China. ESEL has incurred material expenses setting up such structure.

 

 

Risks and Uncertainties

 

 

Risks and Uncertainties

 

The Company's activities are subject to significant risks and uncertainties, including failure to identify a privately held operating company desiring to merge with the Company, failure to complete a reverse merger transaction, and inability to secure funding to continue as a going concern.  (See Note 3 regarding going concern discussion.)

Use of Estimates

 

Use of Estimates

 

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (U.S. GAAP) for interim financial reporting and as required by Regulation S-X, Rule 10-01. The preparation of the accompanying consolidated financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities as of the date of the consolidated financial statements, and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from those estimates.

 

Principles of Consolidation

 

Principles of Consolidation

 

The unaudited condensed consolidated financial statements include the financial statements of the Company and its subsidiaries for which it is the primary beneficiary. Upon making this determination, the Company is deemed to be the primary beneficiary of the entity, which is then required to be consolidated for financial reporting purposes. All significant intercompany transactions and balances have been eliminated upon consolidation.

 

 

Equipment, net

Equipment, net

Equipment is stated at cost less accumulated depreciation and impairment losses, if any. Depreciation is provided on a straight-line basis, less estimated residual values over the assets' estimated useful lives. The estimated useful lives are as follows:

 

Computer hardware and software 3 years

 

When equipment is retired or otherwise disposed of, the related cost, accumulated depreciation and provision for impairment loss, if any, are removed from the respective accounts, and any gain or loss is reflected in the consolidated statements of operations. Repairs and maintenance costs on equipment are expensed as incurred.

Impairment of Long-Lived Assets

 

Impairment of Long-Lived Assets

 

Long-lived assets, such as equipment, are reviewed for impairment whenever events or changes in circumstance indicate that the carrying amount of the assets may not be recoverable. An impairment loss is recognized when the carrying amount of a long-lived asset exceeds the sum of the undiscounted cash flows expected to be generated from the asset's use and eventual disposition. An impairment loss is measured as the amount by which the carrying amount exceeds the fair value of the asset calculated using an undiscounted cash flow analysis. There was no impairment of long-lived assets for the three and six months ended June 30, 2018 and 2017.

 

Fair value of financial instruments

Fair value of financial instruments

 

ASC Topic 825, "Financial Instruments", requires disclosing fair value to the extent practicable for financial instruments which are recognized or unrecognized in the balance sheets. The fair values of the financial instruments are not necessarily representative of the amount that could be realized or settled, nor does the fair value amount consider the tax consequences of realization or settlement. For certain financial instruments, including deposits paid, accounts payable and accrued expenses, the fair values were determined based on the near-term maturities of such the assets and obligations.

Revenue

 

Revenue

 

The Company has yet to generate revenue from operations for the three and six months ended June 30, 2018 and 2017.

 

Net Loss per Common Share

 

Net Loss per Common Share

 

Basic loss per share is computed by dividing the net loss attributable to the common stockholders by the weighted average number of shares of common stock outstanding during the period. Fully diluted 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 shares had been issued and if the additional common shares were dilutive. There were no dilutive financial instruments issued or outstanding for the three and six months ended June 30, 2018 and 2017.

 

Income Taxes

 

Income Taxes

The Company accounts for income taxes under ASC Topic 740, Income Tax. Deferred tax assets and liabilities are provided for the future tax effects attributable to temporary differences between the financial statement carrying amounts of assets and liabilities and their respective tax bases, and for the expected future tax benefits from items including tax loss carry forwards.

 

Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or reversed. The expense or benefit related to adjusting deferred tax assets and liabilities as a result of a change in tax rates is recognized in income or loss in the period that includes the enactment date.

 

The Company recognizes and measures uncertain tax positions and records tax benefits when it is more likely than not that the tax position will be sustained on examination by the taxing authorities based on the technical merits of the position. The tax benefits recognized in the financial statements from such positions are then measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. The company recognizes interest and penalties as a component of income tax expense if applicable. For the three and six months ended June 30, 2018 and 2017, the Company had not recognized any interest or penalties on its consolidated financial statements.

 

Recent Accounting Pronouncements

 

Recent Accounting Pronouncements

 

The Company has implemented all new accounting pronouncements that are in effect. These pronouncements did not have any material impact on the consolidated financial statements unless otherwise disclosed, and we do not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on our financial position or results of operations.

 

XML 26 R15.htm IDEA: XBRL DOCUMENT v3.10.0.1
General and Administrative Expenses (Tables)
6 Months Ended
Jun. 30, 2018
General And Administrative Expenses Tables  
Summary of general and administrative expense

 

  Three Months Ended   Six Months Ended  
  June 30,   June 30,  
  2018   2017   2018   2017  
  (Consolidated and unaudited)   (Consolidated and unaudited)  
General and administrative expense:                
Professional fees   $ 6,575     $ 9,114     $ 15,129     $ 16,327  
Filing fees     1,130       1,325       2,540       5,768  
Franchise Tax expense     -       840       409       3,307  
Salary and related expenses     14,884       33,639       23,769       86,249  
Depreciation     125       407       250       789  
Other office expenses     1,238       4,999       1,754       14,868  
Total general and administrative expense   $ 23,952     $ 50,324     $ 43,851     $ 127,308  

 

XML 27 R16.htm IDEA: XBRL DOCUMENT v3.10.0.1
Income Taxes (Tables)
6 Months Ended
Jun. 30, 2018
Income Tax Disclosure [Abstract]  
Loss before income taxes by geographical locations
  Three Months Ended   Six Months Ended  
  June 30,   June 30,  
  2018   2017   2018   2017  
  (Consolidated and unaudited)   (Consolidated and unaudited)  
                 
United States   $ 13,772     $ 10,523     $ 24,247     $ 24,658  
Foreign     10,180       39,801       19,604       102,650  
    $ 23,952     $ 50,324     $ 43,851     $ 127,308  
Components of the Company's deferred tax assets

 

 

 

   

June 30,

2018

   

December 31,

2017

 
Deferred tax assets:                 
Net operating loss carryforwards   $ 46,080     $ 39,323  
Total deferred tax assets     46,080       39,323  
Less: Valuation allowance     (46,080 )     (39,323 )
Net deferred tax assets   $ -     $ -  

 

Movement in valuation allowance:

 

   

June 30,

2018

   

December 31,

2017

 
At the beginning of the period/year   39,323     55,760  
Current period/year addition/(deduction)     6,757       (16,437 )
At the end of the period/year   $ 46,080     $ 39,323  

 

 

 

 

XML 28 R17.htm IDEA: XBRL DOCUMENT v3.10.0.1
General and Administrative Expenses (Details) - USD ($)
3 Months Ended 6 Months Ended
Jun. 30, 2018
Jun. 30, 2017
Jun. 30, 2018
Jun. 30, 2017
General and administrative expense:        
Professional fees $ 6,575 $ 9,114 $ 15,129 $ 16,327
Filing fees 1,130 1,325 2,540 5,768
Franchise tax expense 840 409 3,307
Salary and related expense 14,884 33,639 23,769 86,249
Depreciation 125 407 250 789
Other office expenses 1,238 4,999 1,754 14,868
Total general and administrative expenses $ 23,952 $ 50,324 $ 43,851 $ 127,308
XML 29 R18.htm IDEA: XBRL DOCUMENT v3.10.0.1
Stockholders' Equity (Details Narrative) - $ / shares
Jun. 30, 2018
Dec. 31, 2017
Stockholders Equity Details Narrative    
Preferred stock, par value $ 0.0001 $ 0.0001
Preferred stock, shares authorized 5,000,000 5,000,000
Preferred stock, shares Issued 0 0
Preferred stock, shares outstanding 0 0
Common stock, par value $ 0.0001 $ 0.0001
Common stock shares authorized 195,000,000 195,000,000
Common stock shares issued 12,032,400 12,032,400
Common stock shares outstanding 12,032,400 12,032,400
XML 30 R19.htm IDEA: XBRL DOCUMENT v3.10.0.1
Related Party Transactions (Details Narrative) - USD ($)
6 Months Ended
Jun. 30, 2018
Jun. 30, 2017
Related Party Transactions [Abstract]    
Loans from Director related party $ 98,019
Shareholder loan to company $ 32,429  
XML 31 R20.htm IDEA: XBRL DOCUMENT v3.10.0.1
Income Taxes - Loss before income tax by region (Details) - USD ($)
3 Months Ended 6 Months Ended
Jun. 30, 2018
Jun. 30, 2017
Jun. 30, 2018
Jun. 30, 2017
Income Tax Disclosure [Abstract]        
United States $ 13,772 $ 10,523 $ 24,247 $ 24,658
Foreign 10,180 39,801 19,604 102,650
Loss before income tax $ (23,952) $ (50,324) $ (43,851) $ (127,308)
XML 32 R21.htm IDEA: XBRL DOCUMENT