UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.  20549

 

Form 10-Q

 

Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 

For the quarter ended November 30, 2017

 

Commission file number: 000-55514

 

JIN WAN HONG INTERNATIONAL HOLDINGS LIMITED

(Exact name of small business issuer as specified in its charter)

Nevada	7385	30-0809134
(State or other jurisdiction of incorporation or organization)	(Primary Standard Industrial  Classification Number)	(IRS Employer  Identification Number)

Room 1101, Block E, Guang Hua Yuan, 2031 Bin He Nan Road  FuTian District, Shenzhen City, China   (Address of principal executive offices)

+ 86 189-4831-9148

(Issuer’s telephone number)

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, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

 

Large accelerated filer ☐

Accelerated filer ☐

Non-accelerated filer ☐

Smaller reporting company ☒

 

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

 

State the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date:   8,100,000 common shares issued and outstanding as of March 27, 2018.

 

 

TABLE OF CONTENTS

 

		Page
PART I	FINANCIAL INFORMATION:
Item 1.	Financial Statements	3
Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	11
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	15
Item 4.	Controls and Procedures	15
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
Signature		18

 

 

PART I

 

Item 1. Financial Statements

 

Jin Wan Hong International Holdings Limited

 

FINANCIAL REPORTS

 

As of

 

November 30, 2017

 

TABLE OF CONTENTS

 

Balance Sheets as of November 30, 2017 (Unaudited) and May 31, 2016 (Audited)	4
Statement of Operations for the three month period ended November 30, 2017 (Unaudited) and November 30, 2016 (Unaudited) and six month period ended November 30, 2017 and November 30, 2016(Unaudited)	5
Statement of Cash Flows for the six month period ended November 30, 2017 (Unaudited) and November 30, 2016(Unaudited)	6
Notes to the Unaudited Financial Statements	7

 

 

Jin Wan Hong International Holdings Limited

 

Balance Sheet

 

		30-November 2017				31-May- 2017
		(Unaudited)				(Audited)
ASSETS
Current Assets:
Cash		$	0			$	0
Prepayment			0				5,000
Total Current Assets			0				5,000
Total Assets		$	0			$	5,000
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities:
Accounts payable			1,200				600
Loan from director			32,804				28,238
Total Liabilities		$	34,004			$	28,838
Shareholders’ Equity:
Common stock, par value $0.001; 75,000,000 shares authorized, 8,100,000 and 8,100,000 shares issued and outstanding, respectively			8,100				8,100
Additional paid-in capital			30,600				30,600
Accumulated deficit			(72,704	)			(62,538	)
Total Shareholders’ Equity			(34,004	)			(23,838	)
Total Liabilities and Shareholders’ Equity		$	0			$	5,000

 

The accompanying notes are an integral part of these financial statements

 

 

Jin Wan Hong International Holdings Limited    Statements of Operations (Unaudited)

 

		Three Months Ended				Three Months Ended				Six Months Ended				Six Months Ended
			30-Nov-17				30-Nov-16				30-Nov-17				30-Nov-16
Revenues:		$	—				0			$	—				0
Cost of Goods Sold			—				0				—				0
Gross Margin			—				0				—				0
Operating Expenses:
General and administrative expenses			374				8,819				10,166				14,519
Total operating expenses			374				8,819				10,166				14,519
Net loss from operations			(374	)			(8,819	)			(10,166	)			(14,519	)
Provision for income taxes			—				0				—				0
Net Loss		($	374	)		($	8,819	)		($	10,166	)		($	14,519	)
Net loss per share: basic and diluted		$	0.00			$	0.00			$	0.00			$	0.00
Weighted average number of common shares outstanding: basic and diluted			8,100,000				8,100,000				8,100,000				8,100,000

 

The accompanying notes are an integral part of these financial statements

 

 

Jin Wan Hong International Holdings Limited

 

Statements of Cash Flows 

(Unaudited) 

 

		Six Months Ended				Six Months Ended
		30-Nov-17				30-Nov-16
Cash flows from operating activities:
Net loss for the period			(10,166	)			(14,519	)
Adjustments to reconcile net loss to net cash (used in) operating activities:
Changes in operating assets and liabilities:
Deposit/inventory			0				0
Decrease in Prepayment			5,000				0
Increase in Accounts payable			600				3,155
Net cash flows used in operating activities			(4,566	)			(11,364	)
Cash flows from investing activities
Cash flows from financing activities:
Proceeds from sale of common stock			0				0
Loans from director			4,566				11,364
Contributed capital			0				0
Net cash flows provided by financing activities			4,566				11,364
Net increase (decrease) in cash			0				0
Cash, beginning of the period			0				0
Cash, end of the period			0				0
Supplemental Cash Flow Information:
Interest paid		$	—			$	—
Income taxes paid		$	—			$	—
Supplemental disclosure of non-cash activities:
Forgiveness of related party debt			0				0

 

The accompanying notes are an integral part of these financial statements

 

 

Jin Wan Hong International Holdings Limited

 

Notes to the Financial Statements

 

1.

NATURE OF OPERATIONS

 

Jin Wan Hong International Holdings Limited, formerly Karnet Capital Corp. (the “Company”) was incorporated in the State of Nevada on January 31, 2014. On January 14, 2016, Shu Feng Lu (President and Director of the Company), Hong Xia Li, and Chen Yang took control of the Company by purchasing shares of common stock from existing shareholders.

 

The Company plans to operate in tea related business in the future. The Company’s currently maintains an office in Room 1101, Block E, Guang Hua Yuan, 2031 Bin He Nan Road, FuTian District, Shenzhen, Guangdong, China.

 

2.

GOING CONCERN

 

The Company has generated limited revenues and incurred a loss since inception (January 31, 2014) resulting in an accumulated deficit of $72,704 as of November 30, 2017, and further losses are anticipated in the development of its business. Accordingly, there is substantial doubt about the Company’s ability to continue as a going concern.

 

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

 

Because of the Company’s history of losses, its independent auditors, in the reports on the financial statements for the year ended May 31, 2017, expressed substantial doubt about the Company’s ability to continue as a going concern. The accompanying unaudited financial statements for the period ended November 30, 2017 have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplate continuation of the Company as a going concern. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that could result from the outcome of this uncertainty.

 

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.

 

3.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Basis of Presentation

 

The accompanying unaudited financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America. 

 

 

Accounting Basis

 

The Company uses the accrual basis of accounting and accounting principles generally accepted in the United States of America (“GAAP” accounting). The Company has adopted a May 31 fiscal year end.

 

Unaudited Interim Financial Information

 

These unaudited interim consolidated financial statements have been prepared in accordance with GAAP for interim financial reporting and the rules and regulations of the Securities and Exchange Commission (“SEC”) that permit reduced disclosure for interim periods. In the opinion of management, all adjustments of a normal recurring nature necessary for a fair presentation of the financial position, results of operations and cash flows for the periods presented have been made.

 

The results of operations for the interim periods presented are not necessarily indicative of the results to be expected for the year ending May 31, 2018. These unaudited interim financial statements should be read in conjunction with the latest Annual Financial Statements and that interim disclosures generally do not repeat this in the annual statements.

 

Use of Estimates

 

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

 

Cash and Cash Equivalents

 

The Company considers all highly liquid investments with the original maturities of three months or less to be cash equivalents. There were no cash equivalents as of November 30, 2017.

 

Fair Value of Financial Instruments

 

The Company’s financial instruments consist of cash and cash equivalents, and amounts due to a shareholder, who is a Director and President of the Company. The carrying amount of these financial instruments approximates fair value due either to length of maturity or interest rates that approximate prevailing market rates unless otherwise disclosed in these financial statements.

 

Income Taxes

 

Income taxes are computed using the asset and liability method. Under the asset and liability method, deferred income tax assets and liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities and are measured using the currently enacted tax rates and laws. A valuation allowance is provided for the amount of deferred tax assets that, based on available evidence, are not expected to be realized.

 

Revenue Recognition

 

The Company follows paragraph 605-10-S99-1 of the FASB Accounting Standards Codification for revenue recognition. The Company will recognize revenue when it is realized or realizable and earned. The Company considers revenue realized or realizable and earned when all of the following criteria are met: (i) persuasive evidence of an arrangement exists, (ii) the product has been shipped or the services have been rendered to the customer, (iii) the sales price is fixed or determinable, and (iv) collectability is reasonably assured.

 

Stock-Based Compensation

 

We account for equity-based transactions with nonemployees under the provisions of ASC Topic No. 505-50, Equity-Based Payments to Non-Employees (“ASC 505-50”). ASC 505-50 establishes that equity-based payment transactions with nonemployees shall be measured at the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable. The fair value of common stock issued for payments to nonemployees is measured at the market price on the date of grant. The fair value of equity instruments, other than common stock, is estimated using the Black-Scholes option valuation model. In general, we recognize the fair value of the equity instruments issued as deferred stock compensation and amortize the cost over the term of the contract.

 

 

We account for employee stock-based compensation in accordance with the guidance of FASB ASC Topic 718, Compensation—Stock Compensation, which requires all share-based payments to employees, including grants of employee stock options, to be recognized in the financial statements based on their fair values.

 

The fair value of the equity instrument is charged directly to compensation expense and credited to additional paid-in capital over the period during which services are rendered.

 

Basic Income (Loss) Per Share

 

Basic income (loss) per share is calculated by dividing the Company’s net loss applicable to common shareholders by the weighted average number of common shares during the period. Diluted earnings per share is calculated by dividing the Company’s net income available to common shareholders by the diluted weighted average number of shares outstanding during the year. The diluted weighted average number of shares outstanding is the basic weighted number of shares adjusted for any potentially dilutive debt or equity. There are no such common stock equivalents outstanding as of April 15, 2017.

 

Recent Accounting Pronouncements

 

In August 2014, the FASB issued Accounting Standards Update “ASU” 2014-15 on “Presentation of Financial Statements Going Concern (Subtopic 205-40) –Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern” (“Update”). Currently, there is no guidance in U.S. GAAP about management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern or to provide related footnote disclosures. The amendments in this Update provide that guidance. In doing so, the amendments are intended to reduce diversity in the timing and content of footnote disclosures. The amendments require management to assess an entity’s ability to continue as a going concern by incorporating and expanding upon certain principles that are currently in U.S. auditing standards. Specifically, the amendments (1) provide a definition of the term substantial doubt, (2) require an evaluation every reporting period including interim periods, (3) provide principles for considering the mitigating effect of management’s plans, (4) require certain disclosures when substantial doubt is alleviated as a result of consideration of management’s plans, (5) require an express statement and other disclosures when substantial doubt is not alleviated, and (6) require an assessment for a period of one year after the date that the financial statements are issued (or available to be issued). The amendments in this Update are effective for public and nonpublic entities for annual periods ending after December 15, 2016. Early adoption is permitted.

 

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

 

4.

LOAN FROM SHAREHOLDERS

 

As of November 30, 2017, the Company owed its President, Director, and major shareholder, Shu Feng Lu $32,804. The total loan of $32,804 was unsecured, non-interest bearing and due on demand.

 

5.

COMMON STOCK

 

The Company has 75,000,000, $0.001 par value shares of common stock authorized. There were no shares issued during the quarter ended November 30, 2017.

 

 

There were 8,100,000 shares of common stock issued and outstanding as of November 30, 2017.

 

6.

COMMITMENTS AND CONTINGENCIES

 

The Company neither owns nor leases any real or personal property. Our CEO has provided use of an office without charge to the Company. There is no obligation for the officer to continue this arrangement. Such costs are immaterial to the financial statements and accordingly are not reflected herein. The officers and directors are involved in other business activities and most likely will become involved in other business activities in the future.

 

7.

SUBSEQUENT EVENTS

 

In accordance with SFAS 165 (ASC 855-10) the Company has analyzed its operations subsequent to November 30, 2017, through March 21, 2018 and has determined that it does not have any material subsequent events to disclose in these financial statements.

 

 

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

 

Description of Business

 

FORWARD-LOOKING STATEMENTS

 

This quarterly report contains forward-looking statements. These statements relate to future events or our future financial performance. These statements often can be identified by the use of terms such as “may,” “will,” “expect,” “believe,” “anticipate,” “estimate,” “approximate” or “continue,” or the negative thereof. We intend that such forward-looking statements be subject to the safe harbors for such statements. We wish to caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. Any forward-looking statements represent management’s best judgment as to what may occur in the future. However, forward-looking statements are subject to risks, uncertainties and important factors beyond our control that could cause actual results and events to differ materially from historical results of operations and events and those presently anticipated or projected. We disclaim any obligation subsequently to revise any forward-looking statements to reflect events or circumstances after the date of such statement or to reflect the occurrence of anticipated or unanticipated events.

 

Company

 

Jin Wan Hong International Holdings Limited was incorporated in the State of Nevada on January 31, 2014. On January 14, 2016, Shu Feng Lu (President and Director of the Company), Hong Xia Li, and Chen Yang took control of the Company by purchasing shares of common stock from existing shareholders. After the transaction our management is currently working on a new business plan and winding up the current business plan. The Company plans to operate in tea related business in the future.

 

Office

 

Our principal executive office is located at 1101, Block E, Guang Hua Yuan, 2031 Bin He Nan Road, Fu Tian District, Shenzhen City, China. Our CEO provides our Company with office space at no charge.

 

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

 

The following discussion should be read in conjunction with our financial statements, including the notes thereto, appearing elsewhere in this annual report. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs.  Our actual results could differ materially from those discussed in the forward-looking statements.   Our audited financial statements are stated in United States Dollars and are prepared in accordance with United States Generally Accepted Accounting Principles.

 

General

 

Management is currently working on a new business plan and winding up the current business plan. The Company plans on operating in tea related business in the future.

 

Results of Operations

 

We have incurred recurring losses to date. Our financial statements have been prepared assuming that we will continue as a going concern and, accordingly, do not include adjustments relating to the recoverability and realization of assets and classification of liabilities that might be necessary should we be unable to continue in operation.

 

We expect we will require additional capital to meet our long term operating requirements. We expect to raise additional capital through, among other things, the sale of equity or debt securities. There is no guarantee that we will be able to raise additional capital.

 

 

Three Month and Six Month Period Ended November 30, 2017 Compared To Three Month and Six Month Period Ended November 30, 2016

 

Revenue

 

We recognized revenue of $0 for the three month period ended November 30, 2017, and for the three month period ended November 30, 2016. We recognized revenue of $0 for the six month period ended November 30, 2017, and for the six month period ended November 30, 2016.

 

Operating expenses

 

We incurred operating expenses of $374 for the three month period ended November 30, 2017 compared to $8,819 for the three month period ended November 30, 2016, due to the decrease of legal and accounting expenses. We incurred operating expenses of $10,166 for the six month period ended November 30, 2017 compared to $14,519 for the six month period ended November 30, 2016.

 

Net Losses

 

Our net loss for the three month period ended November 30, 2017 was $374 compared to a net loss of $8,819 as of the three month period ended November 30, 2016 due to the decrease of legal and accounting expenses. Our net loss for the six month period ended November 30, 2017 was $10,166 compared to a net loss of $14,519 as of the six month period ended November 30, 2016.   

 

Liquidity and Capital Resources

 

As of November 30, 2017, our total assets were $0. Our total liabilities were $34,004, comprised of a loan of $32,804 from Shu Feng Lu, who is the Company’s President and Director, and payables to third parties of $1,200. As of May 31, 2017, our total assets were $5,000 and our total liabilities were $28,838.

 

Shareholders’ equity was ($34,004) as of November 30, 2017. As of May 31, 2017, shareholder’s equity was ($23,838).

 

The Company has accumulated a deficit of ($72,704) as of November 30, 2017, and further losses are anticipated in the development of its business. Accordingly, there is substantial doubt about the Company’s ability to continue as a going concern.  

 

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

 

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.

 

Cash Flow from Operating Activities

 

We have not generated positive cash flow from operating activities. For the six month period ended November 30, 2017, net cash flow used in operating activities was ($4,566) compared to ($11,364) for the six month period ended November 30, 2016.

 

 

Cash Flow from Investing Activities

 

We neither used, nor generated cash from investing activities for the six month period end November 30, 2017 and six month period ended November 30, 2016.

 

Cash Flow from Financing Activities

 

For the six month period ended November 30, 2017, net cash provided by financing activities was $4,566. The loans of $4,566 are from a shareholder of the Company, Shu Feng Lu, who is also the President and Director of the Company. The loans are unsecured, non-interest bearing and due on demand. For the six month period ended November 30, 2016, net cash provided by financing activities was $11,364.

 

Plan of Operation and Funding

 

We expect that working capital requirements will continue to be funded through a combination of our existing funds, sales, loans from a director and further issuances of securities. Our working capital requirements are expected to increase in line with the growth of our business

 

We have no lines of credit or other bank financing arrangements. Generally, we have financed operations to date through the proceeds of the private placement of equity, and debt instruments. In connection with our business plan, management anticipates additional increases in operating expenses and capital expenditures relating to:

 

● Legal and professional fees 

● Website development 

● Purchase of inventory 

● Marketing Campaign

 

We intend to finance these expenses with further issuances of securities, and debt issuances. Thereafter, we expect we will need to raise additional capital and generate revenues to meet long-term operating requirements. Additional issuances of equity or convertible debt securities will result in dilution to our current shareholders. Further, such securities might have rights, preferences or privileges senior to our common stock. Additional financing may not be available upon acceptable terms, or at all. If adequate funds are not available or are not available on acceptable terms, we may not be able to take advantage of prospective new business endeavors or opportunities, which could significantly and materially restrict our business operations.

 

Off-Balance Sheet Arrangements

 

As of the date of this Report, we do not have any off balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.

 

Significant Accounting Policies

 

Basis of Presentation

 

The accompanying financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America, and pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) and reflect all adjustments, consisting of normal recurring adjustments, which management believes are necessary to fairly present the financial position, results of operations, stockholders’ equity  and cash flows of the Company for three month period ended November 30, 2017.

 

 

Accounting Basis

 

The Company uses the accrual basis of accounting and accounting principles generally accepted in the United States of America (“GAAP” accounting).  The Company has adopted a May 31 fiscal year end.

 

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 $0 cash as of November 30, 2017.

 

Fair Value of Financial Instruments

 

The Company’s financial instruments consist of cash and cash equivalents and amounts due to shareholder. The carrying amount of these financial instruments approximates fair value due either to length of maturity or interest rates that approximate prevailing market rates unless otherwise disclosed in these financial statements.

 

Inventories

 

Inventories are stated at the lower of cost or market. Cost is principally determined using the first-in, first out (FIFO) method. The Company had $0 in inventory as of November 30, 2017.

 

Depreciation, Amortization, and Capitalization

 

The Company records depreciation and amortization when appropriate using both straight-line and declining balance methods over the estimated useful life of the assets (five to seven years). Expenditures for maintenance and repairs are charged to expense as incurred. Additions, major renewals and replacements that increase the property’s useful life are capitalized. Property sold or retired, together with the related accumulated depreciation is removed from the appropriated accounts and the resultant gain or loss is included in net income.

 

Income Taxes

 

Income taxes are computed using the asset and liability method.  Under the asset and liability method, deferred income tax assets and liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities and are measured using the currently enacted tax rates and laws.  A valuation allowance is provided for the amount of deferred tax assets that, based on available evidence, are not expected to be realized.

 

Use of Estimates

 

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

 

Revenue Recognition

 

The Company recognizes revenue when products are fully delivered or services have been provided and collection is reasonably assured.

 

Stock-Based Compensation

 

Stock-based compensation is accounted for at fair value in accordance with ASC Topic 718.  To date, the Company has not adopted a stock option plan and has not granted any stock options.

 

Basic Income (Loss) Per Share

 

Basic income (loss) per share is calculated by dividing the Company’s net loss applicable to common shareholders by the weighted average number of common shares during the period. Diluted earnings per share is calculated by dividing the Company’s net income available to common shareholders by the diluted weighted average number of shares outstanding during the year. The diluted weighted average number of shares outstanding is the basic weighted number of shares adjusted for any potentially dilutive debt or equity. There are no such common stock equivalents outstanding as of November 30, 2017.

 

 

Comprehensive Income

 

The Company has standards for reporting and display of comprehensive income, its components and accumulated balances.  When applicable, the Company would disclose this information on its Statement of Stockholders’ Equity.  Comprehensive income comprises equity except those resulting from investments by owners and distributions to owners. The Company has not had any significant transactions that are required to be reported in other comprehensive income.

 

Recent Accounting Pronouncements

 

The Company does not expect the adoption of recently issued accounting pronouncements to have a significant impact on the Company’s results of operations, financial position or cash flow.

 

Item 3. Quantitative and Qualitative Disclosures about Market Risk   

 

Not applicable to smaller reporting companies.

 

Item 4. Controls and Procedures

 

Disclosure Controls and Procedures

 

Management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Exchange Act Rule 13a-15(f)). The Company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Under the supervision and with the participation of management, including the Chief Executive Officer and Chief Financial Officer, the Company conducted an evaluation of the effectiveness of the Company’s internal control over financial reporting as of November 30, 2017 using the criteria established in “Internal Control - Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”).

 

A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis. In its assessment of the effectiveness of internal control over financial reporting as of November 30, 2017, the Company determined that there were control deficiencies that constituted material weaknesses, as described below.

 

1.

We do not have an Audit Committee – While not being legally obligated to have an audit committee, it is management’s view that such a committee, including a financial expert member, is an utmost important entity level control over the Company’s financial statement. Currently the Board of Directors acts in the capacity of the Audit Committee, and does not include a member that is considered to be independent of management to provide the necessary oversight over management’s activities.

 

2.

We did not maintain appropriate cash controls – As of November 30, 2017, the Company has not maintained sufficient internal controls over financial reporting for the cash process, including failure to segregate cash handling and accounting functions, and did not require dual signature on the Company’s bank accounts. Alternatively, the effects of poor cash controls were mitigated by the fact that the Company had limited transactions.

 

 

3.

We did not implement appropriate information technology controls – As at November 30, 2017, the Company retains copies of all financial data and material agreements; however, there is no formal procedure or evidence of normal backup of the Company’s data or off-site storage of data in the event of theft, misplacement, or loss due to unmitigated factors.

 

Accordingly, the Company concluded that these control deficiencies resulted in a reasonable possibility that a material misstatement of the annual or interim financial statements may not be prevented or detected on a timely basis by the Company’s internal controls.

 

As a result of the material weaknesses described above, management has concluded that the Company did not maintain effective internal control over financial reporting as of November 30, 2017 based on criteria established in Internal Control- Integrated Framework issued by COSO.

 

System of Internal Control over Financial Reporting

 

Although our Company is unable to meet the standards under COSO because of the limited funds available to a company of our size and stage of development, we are committed to improving our financial organization. As funds become available, we will undertake to: (1) create a position to segregate duties consistent with control objectives, (2) increase our personnel resources and technical accounting expertise within the accounting function (3) appoint one or more outside directors to our board of directors who shall be appointed to the audit committee of our Company resulting in a fully functioning audit committee who will undertake the oversight in the establishment and monitoring of required internal controls and procedures; and (4) prepare and implement sufficient written policies and checklists which will set forth procedures for accounting and financial reporting with respect to the requirements and application of US GAAP and SEC disclosure requirements.

 

We will continue to monitor and evaluate the effectiveness of our internal controls and procedures and our internal controls over financial reporting on an ongoing basis and are committed to taking further action and implementing additional enhancements or improvements, as necessary and as funds allow.  However, because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, within our Company have been detected.  These inherent limitations include the realities that judgments in decision making can be faulty and that breakdowns can occur because of simple error or mistake. The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.  Projections of any evaluation of controls effectiveness to future periods are subject to risks.

 

 

Part II. OTHER INFORMATION

 

Item 1.  Legal Proceedings

 

We know of no legal proceedings to which we are a party or to which any of our property is the subject which are pending, threatened or contemplated or any unsatisfied judgments against us.

 

Item 1A.  Risk Factors

 

Not applicable to smaller reporting companies.

 

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

 

There were no unregistered sales of equity securities during the quarter ended November 30, 2017.

 

Item 3. Defaults Upon Senior Securities

 

There were no defaults upon senior securities during the quarter ended November 30, 2017.

 

Item 4.  Mine Safety Disclosures

 

Not applicable.

 

Item 5. Other Information

 

There is no other information required to be disclosed under this item which was not previously disclosed

 

Item 6. Exhibits.

 

The following exhibits are included as part of this report by reference:

 

31.1		Certification of Chief Executive Officer pursuant to Securities Exchange Act of 1934 Rule 13a-14(a) or 15d-14(a).
31.2		Certification of Chief Financial Officer pursuant to Securities Exchange Act of 1934 Rule 13a-14(a) or 15d-14(a).
32.1		Certifications pursuant to Securities Exchange Act of 1934 Rule 13a-14(b) or 15d-14(b) and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes- Oxley Act of 2002.
101		The following materials from the Company’s Quarterly Report on Form 10-Q for the quarter ended November 30, 2017 are formatted in XBRL (Extensible Business Reporting Language): (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Income, (iii) the Consolidated Statements of Stockholders’ Equity, (iv) the Consolidated Statements of Cash Flows and (v) the Notes to Consolidated Financial Statements, tagged as blocks of text. (1)
(1)		Users of this data are advised that this XBRL information is being furnished and not filed herewith for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and Sections 11 or 12 of the Securities Act of 1933, as amended, and is not to be incorporated by reference into any filing, or part of any registration statement or prospectus, of Jin Wan Hong International Holdings Limited, whether made before or after the date hereof, regardless of any general incorporation language in such filing.

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized in China on March 29, 2018.

 

JIN WAN HONG INTERNATIONAL HOLDINGS LIMITED

 

By:	/s/	Teng Fei Ma
	Name:	Teng Fei Ma
	Title:	Principal Executive, Financial and Accounting Officer,
		(Principal Executive, Financial and Accounting Officer)