UNITED STATES

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

 

FORM 10-Q

 

☒     QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended February 28, 2021

 

OR

 

☐     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. 333-22981

 

YUMBA RECORDS STORAGE, INC.

(Exact Name of Small Business Issuer as specified in its charter)

 

Nevada		4225		32-0603983
(State or jurisdiction of incorporation or organization)		(Primary Standard Industrial Classification Code Number)		(I.R.S. Employer Identification Number)

 

Yumba Records Storage, Inc.

H. No FF-2, First Floor

Rosemina Arcade, Malbhat

Margao, State of Goa, India 403601

Telephone: 011-91-9689157273

Email: yumba.records@gmail.com

(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

  

Check 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 every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit 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.

 

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☒
Emerging growth company	☒

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. Yes ☒    No ☐

  

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: 10,200,000 common shares outstanding and 11,000,000 shares are issued as of April 12, 2021.

  

   

PART I. FINANCIAL INFORMATION

Item 1 Financial Statements.

 

Yumba Records Storage, Inc.

Condensed Consolidated Balance Sheets (Unaudited)
		February 28, 2021				August 31, 2020
ASSETS
Current assets
Cash		$	11,098			$	25,242
Prepaid expenses			200				-
Total current assets			11,298				25,242
Total assets		$	11,298			$	25,242
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
LIABILITIES
Current liabilities
Accounts payable and accrued liabilities		$	777			$	877
Due to related party			1,748				585
Total current liabilities			2,525				1,462
Long term liabilities
Related party notes payable, net of discount			14,552				14,194
Total liabilities			17,077				15,656
Commitments and contingencies (Note 7)
STOCKHOLDERS’ EQUITY (DEFICIT)
Common stock: $0.001 par value, 200,000,000 authorized, 11,000,000 shares issued and 10,200,000 shares outstanding as of February 28, 2021, 11,000,000 issued and outstanding as of August 31, 2020.			11,000				11,000
Additional paid-in capital			46,945				46,945
Treasury stock, at cost			(7,760	)			-
Accumulated deficit			(55,590	)			(48,167	)
Accumulated other comprehensive income			(374	)			(192	)
Total stockholders’ equity (deficit)			(5,779	)			9,586
Total liabilities and stockholders’ equity (deficit)		$	11,298			$	25,242

  

The accompanying notes are an integral part of these condensed consolidated financial statements

 

2

 

Yumba Records Storage, Inc.

Condensed Consolidated Statements of Operations and Comprehensive Loss

(Unaudited)
		For the Three Months								For the Six Months
		February 28, 2021				February 29, 2020				February 28, 2021				February 29, 2020
Revenue
Revenue – related parties		$	1,225			$	419			$	2,445			$	419
Expenses
General and administrative			1,972				7,652				2,607				8,680
Professional fees			1,750				3,000				6,250				9,738
Rent			164				-				652				-
Total expenses			3,886				10,652				9,509				18,418
Loss from operations			(2,661	)			(10,233	)			(7,064	)			(17,999	)
Other expenses
Interest expense			(181	)			(171	)			(359	)			(341	)
Loss on foreign currency exchange			-				(33	)			-				(68	)
Loss before provision for income tax			(2,842	)			(10,437	)			(7,423	)			(18,408	)
Provision for income tax			-				-				-				-
Net loss			(2,842	)			(10,437	)			(7,423	)			(18,408	)
Other comprehensive loss
Foreign currency translation			3				-				(182	)			-
Net comprehensive loss		$	(2,839	)		$	(10,437	)		$	(7,605	)		$	(18,408	)
Net loss per share – basic and diluted		$	(0.00	)		$	(0.00	)		$	(0.00	)		$	(0.00	)
Weighted average shares outstanding – basic and diluted			10,200,000				11,000,000				10,297,238				10,747,624

 

The accompanying notes are an integral part of these condensed consolidated financial statements

 

3

  

YUMBA RECORDS STORAGE, INC.

Condensed Consolidated Statement of Stockholders’ equity (deficit)

(Unaudited)
																										Accumulated Other
		Common Stock								Treasury Stock								Paid-in				Accumulated				Comprehensive
		Number				Par Value				Number				Amount				Capital				Deficit				Income				Total
Balance, September 1, 2020			11,000,000			$	11,000				-			$	-			$	46,945			$	(48,167	)		$	(192	)		$	9,586
Treasury stock purchases			-				-				(800,000	)			(7,760	)			-				-				-				(7,760	)
Net loss for the period			-				-				-				-								(4,581	)			-				(4,581	)
Foreign currency translation			-				-				-				-				-				-				(185	)			(185	)
Balance, November 30, 2020			11,000,000			$	11,000				(800,000	)		$	(7,760	)		$	46,945			$	(52,748	)		$	(377	)		$	(2,940	)
Net loss for the period			-				-				-				-								(2,842	)			-				(2,842	)
Foreign currency translation			-				-				-				-				-				-				3				3
Balance, February 28, 2021			11,000,000			$	11,000				(800,000	)		$	(7,760	)		$	46,945			$	(55,590	)		$	(374	)		$	(5,779	)

   

																										Accumulated  Other
		Common Stock								Treasury Stock								Paid-in				Accumulated				Comprehensive
		Number				Par Value				Number				Amount				Capital				Deficit				Income				Total
Balance, September 1, 2019			6,000,000			$	6,000				-			$	-			$	1,945			$	(24,639	)		$	-			$	(16,694	)
Issuance of common shares for cash			5,000,000				5,000				-				-				45,000				-				-				50,000
Net loss for the period			-				-				-				-				-				(7,971	)			-				(7,971	)
Balance, November 30, 2019			11,000,000				11,000				-				-				46,945				(32,610	)			-				25,335
Net loss for the period			-				-				-				-				-				(10,437	)			-				(10,437	)
Balance, February 29, 2020			11,000,000			$	11,000				-			$	-			$	46,945			$	(43,047	)		$	-			$	14,898

  

The accompanying notes are an integral part of these condensed consolidated financial statements

 

4

 

Yumba Records Storage, Inc.

Condensed Consolidated Statements of Cash Flows 

(Unaudited)
		For the Six Months Ended February 28, 2021				For the Six Months Ended February 29, 2020
Cash flows from operating activities
Net loss		$	(7,423	)		$	(18,408	)
Adjustments to reconcile net loss to net cash used in operating activities:
Amortization of debt discount			358				341
Change in operating assets and liabilities
Prepaid expenses			(200	)			-
Accounts payables and accrued liabilities			(100	)			-
Due to related parties			1,163				(2,241	)
Net cash used in operating activities			(6,202	)			(20,308	)
Cash flows from financing activities
Re-purchase of common stock for cash			(7,760	)			-
Proceeds from sale of common shares for cash			-				50,000
Net cash provided by financing activities			(7,760	)			50,000
Effect of exchange rate changes on cash			(182	)			-
Change in cash			(14,144	)			29,692
Cash – beginning of period			25,242				408
Cash – end of period		$	11,098			$	30,100
Supplemental cash flow disclosures
Cash paid for:
Interest			−				−
Income tax			−				−

 

The accompanying notes are an integral part of these condensed consolidated financial statements

 

5

   

Yumba Records Storage, Inc.

Notes to the Condensed Consolidated financial statements

(Unaudited)

  

1. NATURE AND BASIS OF OPERATIONS

  

Yumba Records Storage, Inc. (the "Company") was incorporated in the state of Nevada on July 21, 2017 ("Inception"). The Company plans to be a physical record storage and retrieval company. The Company's corporate headquarters are located in Margao, India and its fiscal year-end is August 31.

  

2. GOING CONCERN

  

These unaudited condensed consolidated financial statements have been prepared on a going concern basis, which assumes that the Company will continue to realize its assets and discharge its liabilities in the normal course of business. During the six months ended February 28, 2021, the Company incurred a net loss of $7,423. As of February 28, 2021, the Company had an accumulated deficit of $55,590. These factors, among others, raise substantial doubt about the ability of the Company to continue as a going concern within one year after the date that the financial statements are issued.

  

In order to continue as a going concern, the Company will need, among other things, significant revenue and additional capital resources. Management’s plan is to obtain such resources for the Company by obtaining capital from management and significant shareholders sufficient to meet its minimal operating expenses and seeking third party equity and/or debt financing. However, management cannot provide any assurances that the Company will be successful in accomplishing any of its plans. These financial statements do not include any adjustments related to the recoverability and classification of assets or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. These unaudited financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

    

Due to the COVID-19 global pandemic, the global economy and financial markets have been disrupted and there continues to be a significant amount of uncertainty about the length and severity of the consequences caused by the pandemic. The Company has begun to experience general business disruptions that impeded normal business activity including its ability to provide storage area access as the Company premises is under lock-down. These events may further affect the Company’s ability to continue as a going concern.

  

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

  

Condensed Consolidated Financial Information:

  

The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for financial information and with the rules of the Securities and Exchange Commission (“SEC”). They do not include all information and footnotes required by GAAP for complete financial statements. The August 31, 2020 condensed consolidated balance sheet was derived from the audited financial statements included in the Company’s Form 10-K filed with the SEC. The unaudited interim condensed consolidated financial statements should be read in conjunction with those financial statements included in the Form 10-K. In the opinion of Management, all adjustments considered necessary for a fair presentation, consisting solely of normal recurring adjustments, have been made. Operating results for the six months ended February 28, 2021 are not necessarily indicative of the results that may be expected for the year ending August 31, 2021.

  

Condensed Consolidated Financial Statements

  

The unaudited condensed consolidated financial statements include the accounts of Yumba Records Storage, Inc. and its wholly owned Canadian subsidiary, Yumba Records Storage Inc. and wholly owned Indian subsidiary, Yumba Records Storage Private Limited. All significant intercompany balances and transactions have been eliminated upon consolidation.

 

6

 

Yumba Records Storage, Inc. Notes to the Condensed Consolidated financial statements February 28, 2021 (unaudited)

 

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

  

Emerging Growth Company

  

Section 102(b)(1) of the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”) exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a registration statement under the Securities Act of 1933, as amended (the “Securities Act”), declared effective or do not have a class of securities registered under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such an election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard.

  

Foreign Currency Translation

   

Assets and liabilities of non-U.S. subsidiaries are translated into U.S. dollars at the respective rates of exchange prevailing at the end of the reporting period. Income and expense accounts are translated at average exchange rates prevailing during the reporting period. Translation adjustments resulting from this process are recorded directly in equity as accumulated other comprehensive (loss) income (“AOCI”) and will be included as income or expense only upon sale or liquidation of the underlying entity or asset. Yumba Records Storage Private Limited (India) considers its local currency (rupees) as its functional currency.

  

Cash and Cash Equivalents

  

The Company considers all highly liquid investments with an original maturity of 3 months or less when purchased to be cash equivalents. The Company had no cash equivalents at February 28, 2021 and August 31, 2020.

  

Revenue Recognition.

 

Revenues from our storage facilities, which are primarily composed of rental income earned pursuant to short term leases, are recognized as earned. The Company recognizes revenue in accordance with ASC 842 for Lessors.  The revenues were generated in the State of Goa, India. 

   

Use of Estimates and Assumptions

  

The preparation of condensed consolidated financial statements in conformity with US 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 of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the period. Actual results could differ from those estimates.

 

Due to the limited level of operations, the Company has not had to make material assumptions or estimates other than the assumption that the Company is a going concern.

  

Lease

  

On February 2016, the FASB issued Accounting Standards Update (ASU) No. 2016-02, Leases (Topic 842). The ASU introduces a new leasing model for both lessees and lessors. Topic 842 provides guidance in how to identify whether a lease arrangement exists. Management has evaluated its premise leasing arrangement and concluded that the company’s lease has a lease term of 12 months or less and per ASC 842 qualifies as short-term. Per ASC 842, a lessee may elect not to apply the recognition requirements of ASC 842 to short-term leases and should recognize the lease payments in net income on a straight-line basis over the lease term.

 

7

 

Yumba Records Storage, Inc.   Notes to the Condensed Consolidated financial statements February 28, 2021 (unaudited)

 

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

  

Treasury Stock

  

Treasury stock purchases are accounted for under the cost method whereby the entire cost of the acquired stock is recorded as treasury stock. Gains and losses on the subsequent reissuance of shares are credited or charged to paid-in capital in excess of par value using the average-cost method.

  

Loss Per Share of Common Stock

  

Basic earnings per share is computed by dividing net income (or loss) by the weighted- average number of shares outstanding during the period. Diluted earnings per share reflect the potential dilution of securities that could share in the earnings of the Company, assuming the issuance of an equivalent number of common shares pursuant to options, warrants, or convertible debt arrangements. Diluted earnings per share is not shown for periods in which the Company incurs a loss because it would be anti-dilutive. Similarly, potential common stock equivalents are not included in the calculation if the effect would be anti-dilutive. No potentially dilutive debt or equity securities were issued or outstanding during the six-month period ended February 28, 2021 and 2020.

  

Fair Value of Financial Instruments

  

The fair value of the Company’s assets and liabilities, which qualify as financial instruments under the Financial Accounting Standards Board (the “FASB”) Accounting Standards Codification (“ASC”) 820, “Fair Value Measurements and Disclosures,” approximates the carrying amounts represented in the condensed unaudited consolidated balance sheet.

  

Recent Accounting Pronouncements

  

From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies that are adopted by the Company as of the specified effective date. Unless otherwise discussed, we believe that the impact of recently issued standards that are not yet effective will not have a material impact on our financial position or results of operations upon adoption.

  

4. COMMON STOCK

  

The total number of common shares authorized that may be issued by the Company is 200,000,000 shares with a par value of $0.001 per share.

  

The Company became a reporting company on June 3, 2019 and offered a total of 5,000,000 shares of Company’s common stock on a "self-underwritten" basis at a fixed price of $0.01 per share. In October 2019, the Company completed its offering of a total of 5,000,000 shares of Company’s common stock on a "self-underwritten" basis at a fixed price of $0.01 per share, for total proceeds of $50,000.

 

In September 2020, the Company repurchased 800,000 shares of Common Stock from 4 shareholders for $7,760 and returned these shares to treasury. The following table summarizes the Company’s stock repurchase activity:

 

		Shares repurchased				Average price per share				Total Cost
Treasury Stock, February 28, 2021			800,000			$	0.0097			$	7,760

 

As at February 28, 2021, there were no issued and outstanding stock options or warrants.

 

8

    

Yumba Records Storage, Inc.  

Notes to the Condensed Consolidated financial statements

February 28, 2021 

(unaudited)

 

5. RELATED PARTY TRANSACTIONS

  

The Company does not own any real property. In February 2020, the Company entered into a lease agreement with a related party, namely the mother-in-law of the Company’s president, for $164 per month Three parties related to the Company's president have signed storage service contracts for $136 per month each. The relationships of three related parties are: (a) an unlimited company owned by the spouse of the Company’s president, (b) an unlimited company owned by the sister-in-law and (c) an unlimited company owned a cousin of the Company’s president. The Company has adopted ASC 842, Leases, on September 1, 2019 and elected to follow practical expedient for short term leases, which allows to not recognize lease liability and right of use asset on leases shorter than 12 months.

 

The Company has received $15,170 from related party (Note 6).

  

6. RELATED PARTY NOTES PAYABLE, NET OF DISCOUNT

  

As of August 31, 2019, the Company received advances of $15,170 from a related party. These advances are unsecured with no interest. The Company entered into a formal promissory note for the advanced amount as of April 1, 2019, with a maturity date of December 31, 2021 with no stated interest rate. The holder of the Note has verbally agreed to extend the Note by further one year to December 31, 2022. The computed discounted present value of the note payable at issuance, based on a 5% imputed interest rate, was $13,225 with $1,945 recognized as a debt discount, to be amortized over the life of the note using effective interest method. The amortization of the discount for six months ended February 28, 2021 and February 29, 2020  was $359 and  $341 respectively. Discount amortization is reported as interest expense.

 

		February 28, 2021				August 31, 2020
Principal amount of notes payable		$	15,170			$	15,170
Less: unamortized discount			(618	)			(976	)
Notes payable less unamortized discount		$	14,552			$	14,194

 

7. COMMITMENT AND CONTIGENCIES

  

Litigation

 

From time to time, the Company may become involved in litigation or claims arising out of its operations in the normal course of business. At the current time, the Company is not known to be a party to any legal proceedings that would be expected to have a materially adverse impact on its financial position, results of operations or cash flows.

 

Lease Commitments

  

The Company has signed a lease with a related party as discussed in Note 5 above.

  

Service Contracts

   

The Company signed storage service agreements with 3 related parties as discussed in Note 5 above 

 

8. SUBSEQUENT EVENTS

  

Management has evaluated subsequent events through to the date these unaudited condensed consolidated financial statements were issued. Based on their evaluation, no material events have occurred that require disclosure.

 

9

   

Item 2.

  

Management's Discussion and Analysis of Financial Conditions and Results of Operations.

  

Forward Looking Statements

  

The information in this quarterly report contains 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 (the “Exchange Act”). These forward-looking statements involve risks and uncertainties, including statements regarding the Company’s capital needs, business strategy and expectations. Any statements contained herein that are not statements of historical facts may be deemed to be forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “expect,” “plan,” “intend,” “anticipate,” “believe,” “estimate,” “predict,” “potential” or “continue,” the negative of such terms or other comparable terminology. Actual events or results may differ materially. In evaluating these statements, you should consider various factors, including the risks outlined from time to time, in other reports we file with the Securities and Exchange Commission (the “SEC”). These factors may cause our actual results to differ materially from any forward-looking statement. We disclaim any obligation to publicly update these statements or disclose any difference between its actual results and those reflected in these statements. The information constitutes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.

  

Overview

  

We have commenced our business operations by offering document and data storage services primarily to small and medium-sized businesses located in India. Our Company was incorporated on July 21, 2017 and we have taken steps to proceed with our intended business plan.

  

We focus on offering management services to companies that wish to store paper documents and related items and it is the simplest for us to accommodate. Our physical records management services will include records management programs that aid customers in their compliance with specific document storage regulatory requirements; implementation of programs that feature secure, cost-effective storage for all documents; and flexible retrieval access, retention management, and document destruction services.

  

We expect that our information protection and storage services will be broadly divided into two major service categories: records management, and data protection and recovery. We intend to offer both physical services and technology solutions in each of these categories. Media formats can be broadly divided into paper documents and electronic records that include various forms of magnetic media such as computer tapes, hard drives, and optical disks.

  

We provide a secure storage location and document indexing service to customers and provide storage boxes and related supplies in order to make handling records easier. We believe the issues encountered by customers trying to manage their electronic records are similar to the ones they face in their physical records management programs and consist primarily of: (1) storage capacity and the preservation of data; (2) access to and control over the data in a secure environment; and (3) the need to retain electronic records due to regulatory requirements.

  

Due to COVID-19 and lock-down in India, the Company’s has curtained it operations significantly and is unable to seek new clients or decreased it operating and reporting expenses.

 

During the period ended August 31, 2017, the Company issued 6,000,000 shares of common stock for total cash proceeds of $6,000 to the Company's director.

  

The Company became a reporting company on June 3, 2019 after we had filed a prospectus that relates to the offering of a total of 5,000,000 shares of our common stock on a self-underwritten basis at a fixed price of $0.01 per share. In October 2019, we completed the sale of 5,000,000 common shares at the price of a $0.01 per share for total proceeds of $50,000.

  

In September 2020, the Company re-purchased 800,000 common stock of the Company for $7,760 and returned these shares to the treasury.

 

10

  

There have been no material reclassifications, mergers, consolidations or purchases or sales of any significant amount of assets not in the ordinary course of business since the date of incorporation. The Company has never been party to any bankruptcy, receivership or similar proceeding, nor has it undergone any material reclassification, merger, consolidation, purchase or sale of a significant amount of assets not in the ordinary course of business.

  

Since inception, we have generated limited revenues and have incurred a cumulative net loss as reflected in the financial statements. We have minimal assets and have incurred losses since inception. Our limited start-up operations have consisted of the formation of our business plan and identification of our target market.

  

In order to continue as a going concern, the Company will need, among other things, additional capital resources. Management’s plan is to obtain such resources for the Company by obtaining capital from management and significant shareholders sufficient to meet its minimal operating expenses and seeking third party equity and/or debt financing. However, management cannot provide any assurances that the Company will be successful in accomplishing any of its plans. There is substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the audited financial statements are issued.

 

As we wish to be quoted on the OTC Market’s OTCQB Marketplace, we have requested a market maker to file an application on our behalf in order to make a market for our common stock.

  

Plan of Operation

  

About Our Company

  

We have commenced operations, but in order to continue as a going concern, the Company will need, among other things, additional capital resources. Management’s plan is to obtain such resources for the Company by obtaining capital from management and significant shareholders sufficient to meet its minimal operating expenses and seeking third party equity and/or debt financing. However, management cannot provide any assurances that the Company will be successful in accomplishing any of its plans. There is substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the financial statements are issued.

  

Currently, our President devotes approximately 5% of her business time to the Company’s operations. Ms. Mulla has indicated that she is willing to spend more time with the business as it grows, and her services are needed. We anticipate that she will be required to spend about 20 hours a week on matters relating to our business when operations commence. Up to February 28, 2021, we have compensated Ms. Mulla in the amount of Indian Rupees 50,000/- (US $681).

  

Investors should be aware that there is substantial doubt as to our ability to continue as a going concern. This means that there is substantial doubt that we can continue as an on-going business for the next 12 months. This opinion is based on our suffering initial losses, having limited operations, and having limited working capital. Besides generating limited revenue from our operations, our only other source for cash at this time is sell or our equity or loans by others in our Company. However, we do not have any written agreements in place for any investments or loans from third parties. We must raise cash to implement our projects and expand our operations. Management’s plan is to obtain such resources for the Company by obtaining capital from management and significant shareholders sufficient to meet its minimal operating expenses and seeking third party equity and/or debt financing. Due to COVID – 19 and lock-down in India, the Company’s has curtained it operations significantly and is unable to seek new clients or decreased it operating and reporting expenses. As such, management cannot provide any assurances that the Company will be successful in accomplishing any of its plans.

  

Since we became a reporting company, we are responsible for filing various forms with the United States Securities and Exchange Commission (the “SEC”) such as Form 10-K and Form 10-Qs. The shareholders may read and copy any material filed by us with the SEC at the SEC’s Public Reference Room at 100 F Street N.W., Washington, DC, 20549. The shareholders may obtain information on the operations of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC maintains an Internet site that contains reports, proxy and information statements, and other information which we have filed electronically with the SEC by assessing the website at the following

address: http://www.sec.gov.

  

Results of Operations

 

We commenced earning revenue on February 15, 2020 and hope to increase revenue that we generate from operations, but there is no assurance that our revenue will increase significantly.

 

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For the three months ended February 28, 2021, we earned $1,225 in gross revenue. We incurred total operating expenses in the amount of $3,886, comprised of professional fees totaling $1,750, transfer agent fees and filing fees totaling $1,872, rent totaling $164 and general and administration charges totaling $100.

  

For the three months ended February 29, 2020, we earned $419 in gross revenue. We incurred total operating expenses in the amount of $10,652, comprised of professional fees totaling $3,000, transfer agent set-up fees and filing fees totaling $7,005 and general and administration charges totaling $647.

  

For the six months ended February 28, 2021, we earned $2,445 in gross revenue. We incurred total operating expenses in the amount of $9,509, comprised of professional fees totaling $6,250, rent expense totaling $652, transfer agent fees totaling $2,231, fee payment to the Company CEO totaling $271 and general and administration charges totaling $105.

  

For the six months ended February 29, 2020, we earned $419 in gross revenue for a period of half month. We incurred total operating expenses in the amount of $18,418, comprised of professional fees totaling $9,738, transfer agent set-up fees and filing fees totaling $7,005 and general and administration charges totaling $1,675.

  

We have not incurred any expenses for research and development since inception. As a result of operating losses, there has been no provision for the payment of income taxes from the date of inception.

 

Liquidity and Capital Resources

  

Our cash balance at February 28, 2021 was $11,098 and $2,525 in current liabilities.

  

We believe we have sufficient current cash through cash on hand and from operations to cover our expenses for filing required quarterly and annual reports with the Securities and Exchange Commission and fund our plan of limited operation. We anticipate our costs of being a reporting company to be approximately $16,000 for the next twelve months in connection with our public filings that will have to be made with the SEC on a quarterly basis. If needed, we may get additional funding from advances from related parties and/or from equity financing from the sale of our common stock. If we are successful in completing an equity financing, existing shareholders will experience dilution of their interest in our Company. We do not have any financing arranged and we cannot provide investors with any assurance that we will be able to raise sufficient funding from the sale of our common stock to fund our plan of operation. In the absence of such financing, our business will fail. There are no assurances that we will be able to achieve further sales of our common stock or any other form of additional financing. If we are unable to achieve the financing necessary to continue our plan of operations, then we will not be able to continue our plan of operation for the next 12 months and our business will fail.

  

There is limited historical financial information about us upon which to base an evaluation of our performance. We are in start-up stage of operations. We cannot guarantee we will be successful in our business operations. Our business is subject to risks inherent in the establishment of a new business enterprise, including limited capital resources and possible cost overruns due to price and cost increases in services and products.

  

We anticipate continuing to rely on equity sales of our common stock in order to fund our business operations. Issuances of additional shares will result in dilution to existing stockholders. There is no assurance that we will achieve any additional sales of equity securities or arrange for debt or other financing to fund our planned business activities.

  

There is substantial doubt that we can continue as an on-going business for the next twelve months unless we generate sufficient revenues. There is no assurance we will ever reach that point. In the meantime, the continuation of the Company may be dependent upon the continued financial support from our shareholders, our ability to obtain necessary equity financing to continue operations and the attainment of profitable operations.

  

The detailed analysis of the risk factors is disclosed our Company’s registration statement Form S-1 as filed with the Securities and Exchange Commission.

  

IMPACT OF COVID-19

  

In March 2020, the outbreak of COVID-19 (coronavirus) caused by a novel strain of the coronavirus was recognized as a pandemic by the World Health Organization, and the outbreak has become increasingly widespread in India, including in each of the areas in which the Company operates.

 

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As a result of the global spread of COVID-19 beginning in early March, we have begun to experience general business disruptions that impeded normal business activity including our ability to provide storage area access as our premises is under lock-down, we cannot deliver on face-to-face interaction nor able to seek new clients.

  

Our Company has been following the recommendations of local health authorities to minimize exposure risk for the past several weeks, including the temporary closures of the office. Our Company continues to monitor the impact of the COVID-19 (coronavirus) outbreak closely. The extent to which the COVID-19 (coronavirus) outbreak will continue to impact our operations, ability to obtain financing or future financial results is uncertain.

  

Off-Balance Sheet Arrangements

  

We have no off-balance sheet arrangements including arrangements that would affect our liquidity, capital resources, market risk support and credit risk support or other benefits.

  

Item 3. Qualitative and Quantitative Disclosure about Market Risks

  

This item is not applicable as we are currently considered a smaller reporting company.

  

Item 4. Controls and Procedures.

  

Disclosure controls and procedures

  

Evaluation of Disclosure Controls and Procedures

  

Our Principal Executive Officer and Principal Financial Officer, after evaluating the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this report, have concluded that, as of February 28, 2021, our disclosure controls and procedures were not effective due to the presence of material weaknesses in internal control over financial reporting.

 

A material weakness is a deficiency, or a 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. Management has identified the following material weaknesses which have caused management to conclude that, as of February 28, 2021, our disclosure controls and procedures were not effective: (i) lack of a functioning audit committee, resulting in ineffective oversight in the establishment and monitoring of required internal controls and procedures; (ii) inadequate segregation of duties consistent with control objectives; and (iii) ineffective controls over period end financial disclosure and reporting processes.

  

Our disclosure controls and procedures were not effective as of February 28, 2021 due to the material weaknesses as disclosed in the Company’s Annual Report on Form 10-K filed with the SEC.

  

Controls and Procedures over Financial Reporting

  

There were no changes in our internal control over financial reporting during the quarter ended February 28, 2021, 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.

  

We know of no material, existing or pending legal proceedings against our Company, nor are we involved as a plaintiff in any material proceeding or pending litigation. There are no proceedings in which any of our directors, officers or affiliates, or any registered or beneficial shareholder, is an adverse party or has a material interest adverse to our interest.

  

Item 1A. Risk Factors

 

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

 

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

  

None.

  

Item 3. Default Upon Senior Securities:

  

None.

  

Item 4. Mine Safety Disclosures:

  

None.

  

Item 5. Other Information:

  

None.

 

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Item 6. Exhibits

 

Exhibit Number		Description of Exhibit
31.1		Certification of Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C.§ 1350, as adopted pursuant to § 302 of the Sarbanes-Oxley Act of 2002.
32.1		Certification of Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002.
101.INS*		XBRL Instance Document
101.SCH*		XBRL Taxonomy Extension Schema Document
101.CAL*		XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB*		XBRL Taxonomy Extension Label Linkbase Document
101.PRE*		XBRL Taxonomy Extension Presentation Linkbase Document
101.DEF*		XBRL Taxonomy Extension Definition 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, thereto duly authorized.

 

	YUMBA RECORDS STORAGE, INC.
Date: April 12, 2021	By:	/s/ Chasma Mulla
		Chasma Mulla
		Chief Executive Officer

     

	YUMBA RECORDS STORAGE, INC.
Date: April 12, 2021	By:	/s/ Chasma Mulla
		Chasma Mulla
		Chief Executive Officer

 

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