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EX-32.1 - CERTIFICATION - MAKINGORG, INC.cqcq_ex321.htm
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U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

Form 10-Q 

 

Mark One

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

 

For the quarterly period ended June 30, 2017

 

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

 

For the transition period from _________ to __________

 

Commission File No. 000-55260

 

MakingORG, Inc.

(Exact name of registrant as specified in its charter)

 

Nevada

 

6770

 

39-2079723

(State or Other Jurisdiction of

Incorporation or Organization)

 

(Primary Standard Industrial

Classification Number)

 

(IRS Employer

Identification Number)

 

17800 Castleton St., #386

City of Industry, CA 91748

(213) 805-5799

(Address and telephone number of principal executive offices)

 

Indicate by checkmark whether the issuer: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 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 x No ¨

 

Indicate by check mark whether the registrant is a large accelerated filed, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company.

 

Large accelerated filer

¨

Accelerated filer

¨

Non-accelerated filer

¨

Smaller reporting company

¨

Emerging growth company

x

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act ¨

 

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

 

Applicable Only to Issuer Involved in Bankruptcy Proceedings During the Preceding Five Years. N/A

 

Indicate by checkmark whether the issuer has filed all documents and reports required to be filed by Section 12, 13 and 15(d) of the Securities Exchange Act of 1934 after the distribution of securities under a plan confirmed by a court. Yes ¨ No x

 

Applicable Only to Corporate Registrants

 

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the most practicable date:

 

Class

 

Outstanding as of August 1, 2017

Common Stock: $0.001

 

35,430,000

 

 
 
 
 

 

PART 1. FINANCIAL INFORMATION

 

 

 

 

 

Item 1

Financial Statements (Unaudited)

 

3

 

Balance Sheets

 

3

 

Statements of Operations

 

4

 

Statements of Cash Flows

 

5

 

Notes to the Financial Statements

 

6

 

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

10

 

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

 

14

 

Item 4.

Controls and Procedures

 

14

 

 

 

 

 

PART II. OTHER INFORMATION

 

 

 

 

 

Item 1

Legal Proceedings

 

15

 

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

 

15

 

Item 3

Defaults Upon Senior Securities

 

15

 

Item 4

Mine safety disclosures

 

15

 

Item 5

Other Information

 

15

 

Item 6

Exhibits

 

16

 

Signatures

 

17

 

 
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PART I.

FINANCIAL INFORMATION

 

MakingORG, Inc. and Subsidiary

(formerly DRIMEX INC.)

CONDENSED CONSOLIDATED BALANCE SHEETS

 

 

 

 

 

 

 

June 30,

2017

 

 

December 31,

2016

 

 

 

(Unaudited)

 

 

 

ASSETS

Current Assets

 

 

 

 

 

 

Cash and cash equivalents

 

$ 95,131

 

 

$ 165,481

 

Inventory

 

 

5,524

 

 

 

-

 

Prepaid expenses and other current assets

 

 

9,642

 

 

 

12,150

 

 

 

 

 

 

 

 

 

 

Total Assets

 

$ 110,297

 

 

$ 177,631

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ DEFICIT

Current Liabilities

 

 

 

 

 

 

 

 

Accounts payable and accrued liabilities

 

$ 22,275

 

 

$ 8,075

 

Due to related party

 

 

75,179

 

 

 

74,579

 

Total Current Liabilities

 

 

97,454

 

 

 

82,654

 

 

 

 

 

 

 

 

 

 

Long Term Liabilities

 

 

 

 

 

 

 

 

Convertible note payable net of discount $22,667

 

 

177,333

 

 

 

167,619

 

 

 

 

 

 

 

 

 

 

TOTAL LIABILITIES

 

 

274,787

 

 

 

250,273

 

 

 

 

 

 

 

 

 

 

Stockholders’ Deficit

 

 

 

 

 

 

 

 

Preferred stock, par value $0.001; 50,000,000 shares authorized, 

 

 

 

 

 

 

 

 

zero shares issued and outstanding

 

 

-

 

 

 

-

 

Common stock, par value $0.001; 150,000,000 shares authorized, 

 

 

 

 

 

 

 

 

35,430,000 shares issued and outstanding

 

 

35,430

 

 

 

35,430

 

Additional paid-in capital

 

 

27,592

 

 

 

27,592

 

Accumulated deficit

 

 

(227,512 )

 

 

(135,664 )

Total Stockholders’ Deficit

 

 

(164,490 )

 

 

(72,642 )

 

 

 

 

 

 

 

 

 

Total Liabilities and Stockholders’ Deficit

 

$ 110,297

 

 

$ 177,631

 

 

See accompanying notes to unaudited financial statements.

 

 
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MakingORG, Inc. and Subsidiary

(formerly DRIMEX INC.)

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

 

 

 

 

 

 

 

 

 

 

 

For the three months ended

June 30,

 

 

For the six months ended

June 30,

 

 

 

2017

 

 

2016

 

 

2017

 

 

2016

 

 

 

 

 

 

 

 

 

 

 

 

 

 

REVENUES

 

$ -

 

 

$ -

 

 

$ -

 

 

$ -

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATING EXPENSES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative

 

 

3,395

 

 

 

104

 

 

 

23,829

 

 

 

208

 

Professional fees

 

 

26,964

 

 

 

5,772

 

 

 

45,505

 

 

 

15,472

 

TOTAL OPERATING EXPENSES

 

 

30,359

 

 

 

5,876

 

 

 

69,334

 

 

 

15,680

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OTHER INCOME (EXPENSE)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense, net

 

 

10,857

 

 

 

-

 

 

 

21,714

 

 

 

-

 

TOTAL OTHER INCOME (EXPENSE)

 

 

10,857

 

 

 

-

 

 

 

21,714

 

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LOSS BEFORE INCOME TAX

 

 

(41,216 )

 

 

(5,876 )

 

 

(91,048 )

 

 

(15,680 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income tax 

 

 

800

 

 

 

-

 

 

 

800

 

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET LOSS

 

$ (42,016 )

 

$ (5,876 )

 

$ (91,848 )

 

$ (15,680 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET LOSS PER COMMON SHARE:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BASIC AND DILUTED

 

$ (0.00 )

 

$ (0.00 )

 

$ (0.00 )

 

$ (0.00 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BASIC AND DILUTED

 

 

35,430,000

 

 

 

35,430,000

 

 

 

35,430,000

 

 

 

35,430,000

 

 

See accompanying notes to unaudited financial statements.

 

 
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MakingORG, Inc. and Subsidiary

(formerly DRIMEX INC.)

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

 

 

 

 

 

 

 

For the six months ended

June 30,

 

 

 

2017

 

 

2016

 

 

 

 

 

 

 

 

CASH FLOWS FROM OPERATING ACTIVITIES

 

 

 

 

 

 

Net loss

 

$ (91,848 )

 

$ (15,680 )

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

 

 

 

 

 

Amortization of debt discount

 

 

9,714

 

 

 

-

 

Changes in assets and liabilities:

 

 

 

 

 

 

 

 

Inventory

 

 

(5,524 )

 

 

-

 

Prepaid expenses and other current assets

 

 

2,508

 

 

 

-

 

Accounts payable and accrued liabilities

 

 

14,200

 

 

 

192

 

CASH FLOWS USED IN OPERATING ACTIVITIES

 

 

(70,950 )

 

 

(15,488 )

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES  

 

 

 

 

 

 

 

 

Loan from related party

 

 

600

 

 

 

15,488

 

CASH FLOWS PROVIDED BY FINANCING ACTIVITIES

 

 

600

 

 

 

15,488

 

 

 

 

 

 

 

 

 

 

NET INCREASE IN CASH AND CASH EQUIVALENTS

 

 

(70,350 )

 

 

-

 

Cash and cash equivalents, beginning of period

 

 

165,481

 

 

 

-

 

Cash and cash equivalents, end of period

 

$ 95,131

 

 

$ -

 

 

 

 

 

 

 

 

 

 

SUPPLEMENTAL CASH FLOW INFORMATION:

 

 

 

 

 

 

 

 

Interest paid

 

$ -

 

 

$ -

 

Income taxes paid

 

$ 800

 

 

$ -

 

 

See accompanying notes to unaudited financial statements.

 

 
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MakingORG, Inc.

 

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2017

(UNAUDITED)

 

NOTE 1 – ORGANIZATION AND NATURE OF BUSINESS

 

MakingORG, Inc. was incorporated under the laws of the State of Nevada on August 10, 2012. The Company now intends to open a line of health food stores or stores-in-stores within the Asian communities in the United States. The trading symbol of the Company is "CQCQ" and the fiscal year end is December 31.

 

On October 20, 2016, the Company filed documents registering their intention to transact interstate business in the state of California. On November 29, 2016, the Company incorporated HK Feng Wang Group Limited.

 

The accompanying unaudited interim financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission, and should be read in conjunction with the audited financial statements and notes thereto contained in the Company’s most recent Annual Financial Statements filed with the SEC on Form 10-K. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim period presented have been reflected herein. The results of operations for the interim period are not necessarily indicative of the results to be expected for the full year. Notes to the financial statements which would substantially duplicate the disclosures contained in the audited financial statements for the most recent fiscal period, as reported in the Form 10-K, have been omitted.

 

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Principles of Consolidation

 

The unaudited accompanying condensed consolidated financial statements include the accounts of MakingORG, Inc. and its subsidiary as shown in the organization structure in Note 1 above. All significant intercompany transactions and balances were eliminated in consolidation.

 

Basis of Presentation

 

The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America and are presented in US dollars.

 

Accounting Basis

 

The Company uses the accrual basis of accounting and has adopted a December 31 fiscal year end.

 

Use of Estimates

 

The preparation of the financial statements in conformity with accounting principles generally accepted in the U.S requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the financial statement date, and reported amounts of revenue and expenses during the reporting period. Actual results could differ from these estimates.

 

 
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Cash and Cash Equivalents

 

The Company considers all highly liquid investments with the original maturities of three months or less to be cash equivalents. The Company had $95,131 and $165,481 cash and cash equivalents as at June 30, 2017 and December 31, 2016.

 

Inventory

 

The components of the Company’s inventory were packing materials. As of June 30, 2017 and December 31, 2016, inventory was $5,524 and nil, respectively.

 

Prepaid Expenses and Other Current Assets

 

Prepaid expenses and other current assets include primarily prepaid consulting fee, deposit for product processing fee, prepaid packing materials and security deposit for rent. As of June 30, 2017, and December 31, 2016, prepaid expenses and other current assets was $9,642 and 12,150, respectively.

 

Revenue Recognition

 

The Company recognizes revenue when (1) delivery of product has occurred or services have been rendered, (2) there is persuasive evidence of a sale arrangement, (3) selling prices are fixed or determinable, and (4) collectability from the customer is reasonably assured.

 

Recently Issued Accounting Pronouncements

 

Management has considered all recent accounting pronouncements issued since the last audit of the Company’s financial statements. The Company’s management believes that these recent pronouncements will not have a material effect on the Company’s financial statements.

 

NOTE 3 – GOING CONCERN

 

Pursuant to ASU 2014-15, the Company has assessed its ability to continue as a going concern for a period of one year from the date of the issuance of these financial statements. Substantial doubt about an entity’s ability to continue as a going concern exists when relevant conditions and events, considered in the aggregate, indicate that it is probable that the entity will be unable to meet its obligations as they become due within one year from the financial statement issuance date. The accompanying financial statements have been prepared in conformity with generally accepted accounting principle, which contemplate continuation of the Company as a going concern. The Company currently has an accumulated deficit, and has not completed its efforts to establish a stabilized source of revenues sufficient to cover operating costs over an extended period of time. These conditions raise substantial doubt as to its ability to continue as a going concern. These financial statements do not include adjustments relating to the recoverability and classification of reported asset amounts or the amount and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

 

Management anticipates that the Company will be dependent, for the near future, on additional investment capital to fund operating expenses The Company intends to position itself so that it may be able to raise additional funds through the capital markets. In light of management’s efforts, there are no assurances that the Company will be successful in this or any of its endeavors or become financially viable and continue as a going concern.

 

NOTE 4 – DUE TO RELATED PARTY

 

During the six months ended June 30, 2017 and 2016, the Company's sole officer advanced to the Company an amount of $600 and $15,488, respectively, by the way of loan. The officer paid expenses directly on behalf of the Company. As at June 30, 2017 and December 31, 2016, the Company was obligated to the officer, for an unsecured, non-interest bearing demand loan with a balance of $75,179 and $74,579, respectively.

 

 
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NOTE 5 – CONVERTIBLE NOTE PAYABLE

 

On September 1, 2016, the Company entered into a Convertible Note Agreement in the principal amount of $200,000 with an unrelated party. The note bears interest at 12% per annum and the holder is able to convert all unpaid interest and principal into common shares at $3.50 per share. The note matures on September 1, 2018. The Company recognized a discount on the note of $38,857 at the agreement date. The interest expense was due every six months commencing of March 1, 2017 until the principal amount of this convertible note was paid in full.

 

The Company recognized interest expense related to the convertible note of $21,714 for the six months ended June 30, 2017. The unamortized debt discount at June 30, 2017 is $22,667.

 

NOTE 6 – COMMITMENTS

 

Operating Lease

 

The Company has operating leases for its office. Rental expenses for the three months ended June 30, 2017 and 2016 were $3,000 and nil, respectively. Rental expenses for the six months ended June 30, 2017 and 2016 were $6,000 and nil, respectively. At June 30, 2017, total future minimum annual lease payments under operating lease was as follows, by years:

 

Twelve months ending June 30, 2018

 

$ 3,000

 

Thereafter

 

 

-

 

Total

 

$ 3,000

 

 

NOTE 7 – INCOME TAXES

 

The Company provides for income taxes under ASC 740, "Income Taxes. ASC 740 requires the use of an asset and liability approach in accounting for income taxes. Deferred tax assets and liabilities are recorded based on the differences between the financial statement and tax basis of assets and liabilities and the tax rates in effect when these differences are expected to reverse. It also requires the reduction of deferred tax assets by a valuation allowance if, based on the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized.

 

The Company is subject to taxation in the United States and certain state jurisdictions.

 

The provision for income taxes differs from the amounts which would be provided by applying the statutory federal income tax rate of 34% to the net loss before provision for income taxes for the following reasons:

 

 

 

For the Three Months Ended

 

 

 

June 30,

 

 

 

2017

 

 

2016

 

Tax benefit at statutory rates

 

$ 14,285

 

 

$ 1,998

 

Change in valuation allowance

 

 

(14,285 )

 

 

(1,998 )

Net provision for income taxes

 

$ -

 

 

$ -

 

 

 
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For the Six Months Ended

 

 

 

June 30,

 

 

 

2017

 

 

2016

 

Tax benefit at statutory rates

 

$ 31,228

 

 

$ 5,331

 

Change in valuation allowance

 

 

(31,228 )

 

 

(5,331 )

Net provision for income taxes

 

$ -

 

 

$ -

 

 

Net deferred tax assets consist of the following components as of:

 

 

 

June 30,

2017

 

 

December 31,

2016

 

Deferred tax asset:

 

 

 

 

 

 

Net operating loss carry forwards

 

$ 77,354

 

 

$ 46,126

 

Valuation allowance

 

 

(77,354 )

 

 

(46,126 )

Net deferred tax asset

 

$ -

 

 

$ -

 

 

Due to the change in ownership provisions of the Income Tax laws of United States of America, net operating loss carry forwards of approximately $227,500, which expire commencing in fiscal 2032, for federal income tax reporting purposes are subject to annual limitations. When a change in ownership occurs, net operating loss carry forwards may be limited as to use in future years.

 

NOTE 8 – SUBSEQUENT EVENT

 

The Company has evaluated all other subsequent events through the date the financial statements were issued, and determine that there were no other subsequent events or transactions that require recognition or disclosures in the financial statements.

 

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

 

As used in this Form 10-Q, references to “MakingORG”,” the “Company,” “we,” “our” or “us” refer to MakingORG, Inc. and its subsidiary unless the context otherwise indicates.

 

Forward-Looking Statements

 

The following discussion should be read in conjunction with our financial statements, which are included elsewhere in this Form 10-Q (the “Report”). This Report contains forward-looking statements which relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as “may,” “should,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential” or “continue” or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties, and other factors that may cause our or our industry’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.

 

While these forward-looking statements, and any assumptions upon which they are based, are made in good faith and reflect our current judgment regarding the direction of our business, actual results will almost always vary, sometimes materially, from any estimates, predictions, projections, assumptions or other future performance suggested herein. We assume no obligation to update forward-looking statements, except as otherwise required under the applicable federal securities laws.

 

Plan of Operation

 

Given our limited resources and the fact that we have never generated any revenues from the sale of our products, we are no longer focused on operating a business and have abandoned our initial business plan. Although our sole officer and director intends to have the Company open a line of health food stores or stores-in-stores within the Asian communities in the United States, we might just identify and negotiate with another company for the business combination or merger of that entity with and into our company. We would seek, investigate and, if such investigation warrants, acquire an interest in one or more business opportunities presented to it by persons or firms who or which desire to seek the perceived advantages of a publicly held corporation. At this time, we have no plan, proposal, agreement, understanding or arrangement to acquire or merge with any specific business or company, and the Company has not identified any specific business or company for investigation and evaluation. No member of management or promoter of the Company has had any material discussions with any other company with respect to any acquisition of that company.

 

We will not restrict our search for another target company to any specific business, industry or geographical location, and the Company may participate in a business venture of virtually any kind or nature. The discussion of the proposed plan of operation under this caption and throughout this Quarterly Report is purposefully general and is not meant to be restrictive of the Company's virtually unlimited discretion to search for and enter into potential business opportunities.

 

The following discussion should be read in conjunction with the unaudited interim financial statements contained in this Report and in conjunction with the Company's Form 10-K filed on April 17, 2017. Results for interim periods may not be indicative of results for the full year.

 

Critical Accounting Policies and Estimates

 

For revenue from product sales, the Company will recognize revenue in accordance with Staff Accounting Bulletin No. 104, “Revenue Recognition” (SAB No. 104), which superseded Staff Accounting Bulletin No. 101, “Revenue Recognition in Financial Statements” (SAB No. 101). SAB No. 104 requires that four basic criteria must be met before revenue can be recognized: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred; (3) the selling price is fixed and determinable; and (4) collectability is reasonably assured. Determination of criteria (3) and (4) are based on management’s judgment regarding the fixed nature of the selling prices of the products delivered and the collectability of those amounts. Provisions for discounts and rebates to customers, estimated returns and allowance, and other adjustments will be provided for in the same period the related sales are recorded.

 

 
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The preparation of financial statements in conformity with generally accepted accounting principles in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities at the date of the financial statements, and the reported amount of revenues and expenses during the reported period. Actual results could differ from those estimates.

 

Results of Operations

 

For the three months ended June 30, 2017 and 2016

 

 

 

Three Months Ended

June 30,

 

 

 

 

 

 

 

 

 

2017

 

 

2016

 

 

Change

 

 

Percent

 

Revenue

 

$ -

 

 

$ -

 

 

$ -

 

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative

 

 

3,395

 

 

 

104

 

 

 

3,291

 

 

 

3164 %

Professional fees

 

 

26,964

 

 

 

5,772

 

 

 

21,192

 

 

 

367 %

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from operations

 

 

30,359

 

 

 

5,876

 

 

 

24,483

 

 

 

417 %

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income (expenses):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

(10,857 )

 

 

-

 

 

 

(10,857 )

 

 

-

%

Total other income (expenses)

 

 

(10,857 )

 

 

-

 

 

 

(10,857 )

 

 

-

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss before income taxes

 

 

(41,216 )

 

 

(5,876 )

 

 

(35,340 )

 

 

601 %

Income tax expense

 

 

800

 

 

 

-

 

 

 

800

 

 

 

-

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$ (42,016 )

 

$ (5,876 )

 

$ (36,140 )

 

 

615 %

 

Revenues

 

The Company did not generate any revenues during the three months ended June 30, 2017 and 2016.

 

Total operating expenses

 

During the three months ended June 30, 2017, total operating expenses were $30,359, which consisted of professional fees of $26,965, rent expenses of $3,000, bank service charge of $369, and office expenses of $25. During the three months ended June 30, 2016, total operating expenses were $5,876, which included $5,772 of professional fees and $104 of miscellaneous expenses. Total operating expenses increased $24,483, or 417%, primarily as a result of the increase in rent expenses and the professional fees and in the three months ended June 30, 2017 from three months ended June 30, 2016.

 

Total other income (expenses)

 

During the three months ended June 30, 2017 and 2016, the Company had interest expense of $10,857 and nil, respectively.

 

 
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Net loss

 

During the three months ended June 30, 2017, the Company had a net loss of $42,016, as compared with a net loss of $5,876 for the three months ended June 30, 2016.

 

For the six months ended June 30, 2017 and 2016

 

 

 

Six Months Ended

June 30,

 

 

 

 

 

 

 

 

 

2017

 

 

2016

 

 

Change

 

 

Percent

 

Revenue

 

$ -

 

 

$ -

 

 

$ -

 

 

 

-

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative

 

 

23,829

 

 

 

208

 

 

 

23,621

 

 

 

11356 %

Professional fees

 

 

45,505

 

 

 

15,472

 

 

 

30,033

 

 

 

194 %

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from operations

 

 

69,334

 

 

 

15,680

 

 

 

53,654

 

 

 

342 %

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income (expenses):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense, net

 

 

(21,714 )

 

 

-

 

 

 

(21,714 )

 

 

-

%

Total other income (expenses)

 

 

(21,714 )

 

 

-

 

 

 

(21,714 )

 

 

-

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss before income taxes

 

 

(91,048 )

 

 

(15,680 )

 

 

(75,368 )

 

 

481 %

Income tax expense

 

 

800

 

 

 

-

 

 

 

800

 

 

 

-

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$ (91,848 )

 

$ (15,680 )

 

$ (76,168 )

 

 

486 %

 

Revenues

 

The Company did not generate any revenues during the six months ended June 30, 2017 and 2016.

 

Total operating expenses

 

During the six months ended June 30, 2017, total operating expenses were $69,334, which consisted of professional fees of $45,505, marketing and product exam expense of $10,275, research and development expense of $7,000, rent expenses of $6,000, bank service charge of $529, and office expenses of $25. During the six months ended June 30, 2016, total operating expenses were $15,680, which included $15,472 of professional fees and $208 of miscellaneous expenses. Total operating expenses increased $53,654, or 342%, primarily as a result of the increase in marketing and product exam expense, research and development expense, rent expenses and the professional fees and in the six months ended June 30, 2017 from six months ended June 30, 2016.

 

Total other income (expenses)

 

During the six months ended June 30, 2017 and 2016, the Company had interest expense of $21,714 and nil, respectively.

 

Net loss

 

During the six months ended June 30, 2017, the Company had a net loss of $91,848, as compared with a net loss of $15,680 for the six months ended June 30, 2016.

 

 
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Liquidity and Capital Resources

 

As of June 30, 2017, the Company had cash and cash equivalents and total assets of $95,131 and $110,297, respectively. As of said date, we have total liabilities of $274,787, of which $177,333 is due to convertible note payable and $75,179 is due to our sole officer and director as an unsecured, non-interest bearing demand loan. As of June 30, 2017 and December 31, 2016, the Company had working capital amount of $12,843 and $94,977, respectively.

 

Other than an oral agreement with Mrs. Cui to fund the expenses of the Company, we currently have no agreements, arrangements or understandings with any person to obtain funds through bank loans, lines of credit or any other sources. Since the Company has no such arrangements or plans currently in effect, its inability to raise funds for the above purposes will have a severe negative impact on its ability to remain a viable company.

 

Cash Flows from Operating Activities

 

For the six months ended June 30, 2017, net cash flows used in operating activities was $70,950 resulting from a net loss of $91,848, a decrease in prepaid expenses and other current assets of $2,508, an increase in inventory of $5,524, an increase in accounts payable and accrued liabilities of $14,200, and amortization of debt discount of $9,714. For the six months ended June 30, 2016, net cash flows used in operating activities was $15,488 resulting from a net loss of $15,680, and an increase in accounts payable and accrued liabilities of $192.

 

Cash Flows from Investing Activities

 

For the six months ended June 30, 2017 and 2016, the Company did not have any cash flow from investing activities.

 

Cash Flows from Financing Activities

 

For the six months ended June 30, 2017 and 2016, advances from the Company’s sole officer and director provided $600 and $15,488, respectively.

 

Going Concern Consideration

 

The Company is a shell company has no operations. The Company had no revenues and incurred a net loss of $91,848 for the six months ended June 30, 2017 and a net loss of $15,680 for the six months ended June 30, 2016. In addition, the Company had an accumulated deficit of $227,512 at June 30, 2017. These factors raise substantial doubt about the Company’s ability to continue as a going concern. The Company’s ability to continue as a going concern is dependent on its ability to raise additional capital. The Company’s financial statements do not include any adjustments relating to the recoverability and classification of reported asset amounts or the amount and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

 

Convertible Note Payable

 

On September 1, 2016, the Company entered into a Convertible Note Agreement in the principal amount of $200,000 with an unrelated party. The note bears interest at 12% per annum and the holder is able to convert all unpaid interest and principal into common shares at $3.50 per share. The note matures on September 1, 2018. The Company recognized a discount on the note of $38,857 at the agreement date. The interest expense was due every six months commencing of March 1, 2017 until the principal amount of this convertible note was paid in full. The convertible note holder agreed to receive the Company’s shares rather than cash for its interest on September 1, 2018.

 

The Company recognized interest expense related to the debt discount convertible note of $21,714 for the six months ended June 30, 2017. The unamortized debt discount at June 30, 2017 is $22,667.

 

 
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Operating Lease

 

The Company has operating leases for its office. Rental expenses for the three months ended June 30, 2017 and 2016 were $3,000 and nil, respectively. Rental expenses for the six months ended June 30, 2017 and 2016 were $6,000 and nil, respectively. At June 30, 2017, total future minimum annual lease payments under operating lease was as follows, by years:

 

Twelve months ending June 30, 2018

 

$ 3,000

 

Thereafter

 

 

-

 

Total

 

$ 3,000

 

 

Off-Balance Sheet Arrangements

 

We have no off-balance sheet arrangements.

 

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

 

Not applicable because we are an emerging growth company.

 

Item 4. Controls and Procedures.

 

Disclosure Controls and Procedures

 

Pursuant to Rule 13a-15(b) under the Securities Exchange Act of 1934 (“Exchange Act”), the Company carried out an evaluation, with the participation of the Company’s management, including the Company’s Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”) (the Company’s principal financial and accounting officer), of the effectiveness of the Company’s disclosure controls and procedures (as defined under Rule 13a-15(e) under the Exchange Act) as of the end of the period covered by this report. Based upon that evaluation, the Company’s CEO and CFO concluded that the Company’s disclosure controls and procedures are not effective as of June 30, 2017 to ensure that information required to be disclosed by the Company in the reports that the Company files or submits under the Exchange Act, is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to the Company’s management, including the Company’s CEO and CFO, as appropriate, to allow timely decisions regarding required disclosure for the reason described below.

 

Because of our limited operations, we have limited number of employees which prohibits a segregation of duties. In addition, we lack a formal audit committee with a financial expert. As we grow and expand our operations we will engage additional employees and experts as needed. However, there can be no assurance that our operations will expand.

 

Changes in Internal Control Over Financial Reporting

 

There were no changes in our internal control over financial reporting that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

 
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PART II. OTHER INFORMATION

 

Item 1. Legal Proceedings.

 

Management is not aware of any legal proceedings contemplated by any governmental authority or any other party involving us or our properties. As of the date of this Quarterly Report, no director, officer or affiliate is (i) a party adverse to us in any legal proceeding, or (ii) has an adverse interest to us in any legal proceedings. Management is not aware of any other legal proceedings pending or that have been threatened against us or our properties.

 

Item 1A. Risk Factors.

 

As an emerging growth company, we are not required to provide the information required by this item.

 

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

 

Unregistered Sales of Equity Securities

 

None.

 

Purchases of equity securities by the issuer and affiliated purchasers

 

None.

 

Use of Proceeds

 

None

 

Item 3. Defaults Upon Senior Securities.

 

None.

 

Item 4. Mine Safety Disclosures.

 

Not applicable.

 

Item 5. Other Information.

 

None.

 

 
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Item 6. Exhibits

 

31.1

 

Certification of Principal Executive Officer and Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act

 

32.1

 

Certification of Principal Executive Officer and Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act

 

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

 

 
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SIGNATURES

 

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

 

MakingORG, Inc.

 

Dated: August 7, 2017

By:

/s/ Juanzi Cui

 

Name:

Juanzi Cui

 

President, Chief Executive Officer and Chief Financial

 

Officer (principal executive officer and principal

financial and accounting officer)

 

 

17