The following discussion and analysis of financial condition and results of
operations relates to the operations and financial condition reported in the
unaudited condensed financial statements of the Company for the three and six
months ended June 30, 2022 and 2021 should be read in conjunction with such
financial statements and related notes included in this report. Except for the
historical information contained herein, the following discussion, as well as
other information in this report, contain "forward-looking statements," within
the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended, and are subject
to the "safe harbor" created by those sections. Actual results and the timing of
the events may differ materially from those contained in these forward-looking
statements due to a number of factors, including those discussed in the
"Forward-Looking Statements" set forth elsewhere in this Quarterly Report on
Form 10-Q.
Overview
Yong Bai Chao New Retail Corporation f/k/a Environmental Control Corp. ("we,"
"us," the "Company" or like terms) was incorporated in the State of Nevada on
February 17, 2004 under the name Boss Minerals, Inc. to pursue the exploration
and development of mining claims located in British Columbia, Canada.
During the quarter ended June 30, 2004, the Company filed a registration
statement on Form SB-2 with the Securities and Exchange Commission ("SEC") to
register shares of common stock for public resale by certain stockholders
identified in the registration statement. Upon the effective date of the
registration statement, the Company became subject to the reporting requirements
of Section 12(b) under the Securities Exchange Act of 1934, as amended (the
"Exchange Act") and commenced filing reports under the Exchange Act through the
quarter ended June 30, 2012.
In March 2006, the Company acquired the assets of Environmental Control
Corporation, which developed vehicle emission control devices and filed a
certificate of amendment to its articles of incorporation in April 2013 to
change its name to Environmental Control Corp. The Company filed reports under
the Exchange Act through the quarter ended June 30, 2012.
On May 2, 2016, the Eight Judicial District Court of Nevada entered an order
appointing Bryan Glass as custodian of the Company, authorizing and directing
him to, among other things, take any action reasonable, prudent and for the
benefit of the Company, including reinstating the Company under Nevada law,
appointing officers and convening an annual meeting of stockholders (the
"Order"). Mr. Glass was a shareholder of the Company on the date that he applied
to serve as a custodian of the Company. From time to time, Mr. Glass submits
applications to the courts of the state of Nevada to be appointed as the
custodian of corporations in which he already is a shareholder that have
forfeited their right to exist as a corporation for reasons such as failure to
file annual reports or to pay required fees, and such applications may or may
not be successful. If the court approves the application, Mr. Glass is appointed
to serve as the custodian of such corporations. In the past, he either has
contributed assets or sold them to third parties. Thereafter, the board of
directors and Mr. Glass, in his role as custodian, appointed himself to serve as
the President of the Company.
On May 5, 2016, the Company filed a Certificate of Reinstatement with the state
of Nevada to reestablish the Company's existence.
On May 9, 2016, the board of directors and Bryan Glass, in the exercise of his
power as the court-appointed custodian of the Company, appointed Bryan Glass as
our President, Secretary and Treasurer and authorized the issuance of 60,000,000
shares of stock to Mr. Glass for an aggregate price of $60,000, which sum was
paid by the performance of services to the Company and the reimbursement of
expenses incurred by Mr. Glass on the Company's behalf in the amount of $6,685.
The expenses incurred by Mr. Glass included $5,160 to the state of Nevada for
fees in connection with reinstating the Company and other filings to bring the
Company current under the requirements of Nevada corporate law; $1,250 to the
transfer agent for outstanding fees; and $275 to the state of Nevada as a filing
fee in connection with the amendment to the articles of incorporation.
On June 15, 2016, the Company held a stockholders meeting at which the
stockholders adopted Amended and Restated Articles of Incorporation of the
Company under which the Company increased the total number of shares it is
authorized to issue to 190 million shares consisting of 180 million shares of
common stock and 10 million shares of blank check preferred stock.
In December 2018, Mr. Glass sold 60 million shares of common stock, representing
all of the shares he owned in the Company, and equal to 56.83% of the total
number of outstanding shares of the Company's common stock, to Lili Xin for the
sum of $90,000. Ms. Chang became acquainted with Mr. Glass through a mutual
associate and they subsequently negotiated a deal for his control block of
shares in the Company. Concurrent with the sale of his shares, the board of
directors appointed Ms. Chang as the President and as a director of the Company
and resigned from all positions he held with the Company.
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On May 22, 2019, the Company filed a Form 15 with the SEC terminating the
registration of its class of common stock under Section 12(g) of the Exchange
Act and its duty to file periodic and other reports with the SEC.
In December 12, 2019, the Company filed a registration statement on Form 10 to
register its class of common stock under the Exchange Act, and the registration
statement automatically became effective in February 2020.
On June 29, 2021, Lili Xin, our former Chief Executive Officer, Chief Financial
Officer, director and principal stockholder of the Company ("Ms. Xin"), and Fei
Wang ("Mr. Wang"), entered into a Stock Purchase Agreement (the "Stock Purchase
Agreement") pursuant to which Ms. Xin agreed to sell to Mr. Wang 80,000,000
shares of Common Stock registered in her name (the "Shares"), representing 59%
of the outstanding shares of common stock in the Company, at a purchase price of
Three Hundred Fifty Thousand Dollars ($350,000). The seller relied on the
exemption from registration pursuant to Section 4(2) of, and Regulation D and/or
Regulation S promulgated under the Act in selling the Company's securities to
Mr. Wang. The funds came from the personal funds of Mr. Wang, and was not the
result of a loan. The closing occurred August 10, 2021.
In connection with such sale, Lili Xin, the then CEO, President and CFO resigned
from all of her positions associated with the Company. Concurrently therewith,
Mr. Wang was appointed to serve as the sole executive officer and director of
the Company.
On September 14, 2021, the Company entered into a Company Acquisition Agreement
(the "Acquisition Agreement") with Yong Bai Chao New Retail (Shenzhen) Co. Ltd.
("YBC"). Pursuant to the terms of the Acquisition Agreement, the Company agreed
to acquire all of the issued and outstanding securities of YBC in exchange for
50 million shares of our common stock. After the consummation of the
acquisition, the Company is obligated to change its name to Yong Bai Chao New
Retail Corp. Fei Wang, our sole executive officer and director, also serves as
the Chief Executive Officer and Director of YBC. This transaction has not yet
consummated, and the closing of this transaction is subject to certain terms and
conditions described in the Acquisition Agreement. In effectuating the
transaction contemplated in the Acquisition Agreement, the Company intends to
rely on the exemption from registration pursuant to Section 4(2) of, and
Regulation D and/or Regulation S promulgated under the Securities Act of 1933,
as amended.
Effective October 28, 2021, the Company's name changed to Yong Bai Chao New
Retail Corporation.
Currently, the Company only possesses minimal assets and liabilities with no
substantial business operations. There were no revenue or positive cash flows
from operating activities for the six months ended June 30, 2022. The Company's
management efforts are focused on seeking out a new and profitable operating
business with strong growth potential. Unless and until the Company's successful
acquisition of an operating business, we expect our expenses to primarily
consist of accounting fees and filing fees related to maintaining itself as a
public company.
Critical Accounting Policies and Significant Judgments and Estimates
The Securities and Exchange Commission ("SEC") issued disclosure guidance for
"critical accounting policies." The SEC defines "critical accounting policies"
as those that require the application of management's most difficult, subjective
or complex judgments, often as a result of the need to make estimates about the
effect of matters that are inherently uncertain and may change in subsequent
periods.
Our significant accounting policies are described in the Notes to these
unaudited condensed financial statements. Currently, based on the Company's
limited activity, we do not believe that there are any accounting policies that
require the application of difficult, subjective or complex judgments.
Results of Operations
Three and Six Months Ended June 30, 2022 Compared to the Three and Six Months
Ended June 30, 2021
Revenue. We did not generate any revenue during the three and six months ended
June 30, 2022 and 2021.
Operating Expenses. Our operating expenses primarily consisted of fees and
expenses related to complying with our ongoing SEC reporting requirements, which
have mainly consisted of accounting fees, legal service fees, filing fees, and
etc.
For the three months ended June 30, 2022, total operating expenses amounted to
$11,635 as compared to $756,850 for the three months ended June 30, 2021,
representing a decrease of $745,215 or 98.5%. The decrease was due to a decrease
in stock issued for services of $753,000, offset by an increase in professional
fees of approximately $8,000.
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For the six months ended June 30, 2022, total operating expenses amounted to
$31,840 as compared to $762,850 for the six months ended June 30, 2021,
reflecting a decrease of $731,010 or 95.8%. The decrease was due to a decrease
in stock issued for services of $753,000, offset by an increase in professional
fees of approximately $22,000.
Other (Expense) Income. Other (expense) income includes gain on extinguishment
of debt and interest expense.
For both of the three months ended June 30, 2022 and 2021, total other expense
amounted to $6,250.
For the six months ended June 30, 2022, total other expense amounted to $12,500
as compared to total other income of $40,616 for the six months ended June 30,
2021, a change of $53,116 or 130.8%. The change was due to a decrease in gain on
extinguishment of debt of approximately $54,000, offset by a decrease in
interest expense of approximately $1,000 as a result of reduction in debt.
Net Loss. As a result of the factors described above, we had net loss of $17,885
and $763,100, respectively, for the three months ended June 30, 2022 and 2021.
As a result of the factors described above, we had net loss of $44,340 and
$722,234, respectively, for the six months ended June 30, 2022 and 2021,
Liquidity and Capital Resources
At June 30, 2022, we did not have any cash, while, we had liabilities of
$518,718, and had a working capital deficit of $509,278. We expect to incur
continued losses during the remainder of 2022, possibly even longer.
Net cash flow used in operating activities was $53,550 for the six months ended
June 30, 2022. These included our net loss of approximately $44,000, and changes
in operating assets and liabilities totaling approximately $9,000.
Net cash flow used in operating activities was $9,850 for the six months ended
June 30, 2021. These included net loss of approximately $722,000 and the
non-cash item adjustments consisting of write-off of accrued interest on
extinguished debt of approximately $54,000, offset by stock issued for services
of $753,000 and changes in operating assets and liabilities totaling
approximately $14,000.
Net cash flow provided by financing activities was $53,550 for the six months
ended June 30, 2022. During the six months ended June 30, 2022, we received
proceeds from sale of common stock of approximately $54,000.
Net cash flow provided by financing activities was $9,850 for the six months
ended June 30, 2021. During the six months ended June 30, 2021, we acquired cash
from capital contributions of approximately $10,000 to pay for expenses.
We expect to require working capital of approximately $40,000 over the next 12
months to meet our financial obligations.
We are a shell company with no revenue generating activities. We anticipate that
our operating activities will generate negative net cash flow during the
remaining year of 2022. The success of our business plan is dependent upon the
availability of additional capital resources on terms satisfactory to management
as we are not generating sufficient revenues from our business operations. Our
sources of capital in the past have included the sale of equity securities,
which include common stock sold in private transactions and stockholder
advances. There can be no assurance that we can raise such additional capital
resources on satisfactory terms. We believe that our current cash and other
sources of liquidity discussed above are adequate to support operations for at
least the next 12 months. We anticipate continuing to rely on equity sales of
our common shares and shareholder advances in order to continue to fund our
business operations. Issuances of additional shares will result in dilution to
our existing shareholders. There is no assurance that we will achieve any
additional sales of our equity securities or arrange for debt or other financing
to fund our plan of operations.
Off-Balance Sheet Arrangements
As of June 30, 2022, we did not have any transactions, agreements or other
contractual arrangements that constitute off-balance sheet arrangements .
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YONG BAI CHAO NEW RETAIL CORPORATION 