Attached files
| file | filename |
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| EX-32.1 - CERTIFICATION - United Royale Holdings Corp. | united_ex3201.htm |
| EX-31.1 - CERTIFICATION - United Royale Holdings Corp. | united_ex3101.htm |
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 Quarterly Period Ended March 31, 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 Number 333-208978
United Royale Holdings Corp.
(Exact name of registrant issuer as specified in its charter)
| Nevada | 98-1253258 | |
| (State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
2 Campbell
Drive, Suite 307C
Uxbridge, Ontario, Canada
L9P 1H6
(Address of principal executive offices, including zip code)
Registrant’s phone number, including area code (647) 400-6927
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
| N/A | N/A | N/A |
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, every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (section 232.405 of this chapter) during the preceding twelve months (or 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. 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 ☒ |
| 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 ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.
Yes ☐ No ☐
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
| Class | Outstanding at May 17, 2021 | |
| Common Stock, $.0001 par value | 141,990,387 |
| 2 |
PART I — FINANCIAL INFORMATION
ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
UNITED ROYALE HOLDINGS CORP.
CONDENSED CONSOLIDATED BALANCE SHEETS
AS OF MARCH 31, 2021 AND DECEMBER 31, 2020
(Currency expressed in United States Dollars (“US$”), except for number of share)
As of March 31, 2021 | As of December 31, 2020 | |||||||
| (Unaudited) | (Unaudited) | |||||||
| ASSETS | ||||||||
| CURRENT ASSETS | ||||||||
| Cash and cash equivalents | $ | 9,879 | $ | 6,731 | ||||
| Prepaid expenses and other receivables | 86,202 | 95,451 | ||||||
| Current assets from discontinued operation | – | (73,695 | ) | |||||
| TOTAL CURRENT ASSETS | 96,081 | 28,487 | ||||||
| NON-CURRENT ASSETS | ||||||||
| Non-current assets from discontinued operation | – | 41,691 | ||||||
| TOTAL ASSETS | $ | 96,081 | $ | 70,178 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| CURRENT LIABILITIES | ||||||||
| Accrued liabilities | $ | 34,453 | $ | 31,533 | ||||
| Due to director | 59,744 | 49,744 | ||||||
| Current liabilities from discontinued operation | – | 23,128 | ||||||
| TOTAL CURRENT LIABILITIES | 94,197 | 104,405 | ||||||
| TOTAL LIABILITIES | $ | 94,197 | $ | 104,405 | ||||
| STOCKHOLDERS’ EQUITY | ||||||||
| Preferred stock – Par value $0.0001; Authorized: 200,000,000 None issued and outstanding | $ | – | $ | – | ||||
| Common stock – Par value $ 0.0001; Authorized: 600,000,000 Issued and outstanding: 141,990,387 shares as of March 31, 2021 and December 31, 2020 | 14,199 | 14,199 | ||||||
| Additional paid-in capital | 789,468 | 789,468 | ||||||
| Accumulated other comprehensive income/(loss) | – | 1,477 | ||||||
| Accumulated deficit | (801,783 | ) | (839,371 | ) | ||||
| TOTAL STOCKHOLDERS’ EQUITY/(DEFICIT) | 1,884 | (34,227 | ) | |||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 96,081 | $ | 70,178 | ||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
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UNITED ROYALE HOLDINGS CORP.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
AND COMPREHENSIVE LOSS
FOR THE THREE MONTHS ENDED MARCH 31, 2021 AND 2020
(Currency expressed in United States Dollars (“US$”), except for number of shares)
For the Three Months Ended, March 31 | ||||||||
| 2021 | 2020 | |||||||
| (Unaudited) | (Unaudited) | |||||||
| REVENUE | $ | – | $ | – | ||||
| COST OF REVENUE | – | – | ||||||
| GROSS PROFIT | – | – | ||||||
| OPERATING EXPENSES: | ||||||||
| General and administrative | (19,021 | ) | (47,180 | ) | ||||
| LOSS FROM OPERATIONS | (19,021 | ) | (47,180 | ) | ||||
| Other income (expense), net | – | – | ||||||
| LOSS BEFORE INCOME TAX | (19,021 | ) | (47,180 | ) | ||||
| INCOME TAX EXPENSE | – | – | ||||||
| LOSS FROM DISCONTINUED OPERATIONS | ||||||||
| Loss from discontinued operations | (8,062 | ) | (1,177 | ) | ||||
| Gain from disposal of subsidiaries | 65,154 | – | ||||||
| NET INCOME / (LOSS) | 38,071 | (48,357 | ) | |||||
| OTHER COMPREHENSIVE INCOME (LOSS) | ||||||||
| Realized foreign currency translation due to disposal of subsidiaries | (482 | ) | – | |||||
| Foreign currency translation loss | (995 | ) | (3,254 | ) | ||||
| Comprehensive income (loss) | $ | 36,594 | $ | (51,611 | ) | |||
| NET INCOME (LOSS) PER SHARE, BASIC AND DILUTED | $ | 0.00 | $ | (0.00 | ) | |||
| WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING, BASIC AND DILUTED | 141,990,387 | 141,990,387 | ||||||
See accompanying notes to the unaudited consolidated financial statements.
| 4 |
UNITED ROYALE HOLDINGS CORP.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
FOR THE THREE MONTHS ENDED MARCH 31, 2021 AND 2020
(Currency expressed in United States Dollars (“US$”), except for number of shares)
Three months ended March 31, 2021 (Unaudited)
| COMMON STOCK | ADDITIONAL | ACCUMULATED OTHER | ||||||||||||||||||||||
| Number of Shares | Amount | PAID-IN CAPITAL | COMPREHENSIVE LOSS | ACCUMULATED DEFICIT | TOTAL EQUITY | |||||||||||||||||||
| Balance as of December 31, 2020 (audited) | 141,990,387 | $ | 14,199 | $ | 789,468 | $ | 1,477 | $ | (839,371 | ) | $ | (34,227 | ) | |||||||||||
| Disposal of subsidiaries | – | – | – | (482 | ) | – | (482 | ) | ||||||||||||||||
| Net income for the three months ended March 31, 2021 | – | – | – | – | 37,588 | 37,588 | ||||||||||||||||||
| Foreign currency translation | – | – | – | (995 | ) | – | (995 | ) | ||||||||||||||||
| Balance as of March 31, 2021 (Unaudited) | 141,990,387 | $ | 14,199 | $ | 789,468 | $ | – | $ | (801,783 | ) | $ | 1,884 | ||||||||||||
Three months ended March 31, 2020 (Unaudited)
| COMMON STOCK | ADDITIONAL | ACCUMULATED OTHER | ||||||||||||||||||||||
| Number of Shares | Amount | PAID-IN CAPITAL | COMPREHENSIVE LOSS | ACCUMULATED DEFICIT | TOTAL EQUITY | |||||||||||||||||||
| Balance as of December 31, 2019 | 141,990,387 | $ | 14,199 | $ | 789,468 | $ | 953 | $ | (712,303 | ) | $ | 92,317 | ||||||||||||
| Net loss for the three months ended March 31, 2020 | – | – | – | – | (48,357 | ) | (48,357 | ) | ||||||||||||||||
| Foreign currency translation | – | – | – | (3,254 | ) | – | (3,254 | ) | ||||||||||||||||
| Balance as of March 31, 2020 (Unaudited) | 141,990,387 | $ | 14,199 | $ | 789,468 | $ | (2,301 | ) | $ | (760,660 | ) | $ | 40,706 | |||||||||||
The accompanying notes are an integral part of these unaudited consolidated financial statements.
| 5 |
UNITED ROYALE HOLDINGS CORP.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 2021 AND 2020
(Currency expressed in United States Dollars (“US$”), except for number of shares)
For the three months ended | For the three months ended | |||||||
| (Unaudited) | (Unaudited) | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
| Net Income / (loss) | $ | 46,133 | $ | (47,179 | ) | |||
| Adjustments to reconcile net loss to net cash used in operating activities | ||||||||
| Depreciation and amortization expenses | – | 323 | ||||||
| Gain on disposal of subsidiaries | (65,154 | ) | – | |||||
| Changes in operating assets and liabilities: | ||||||||
| Increase/ (Decrease) in accrued liabilities | 2,920 | (15,450 | ) | |||||
| Decrease/ (Increase) in prepaid expenses and other receivables | 9,249 | 4,348 | ||||||
| Net cash flows used in operating activities | (6,851 | ) | (57,958 | ) | ||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
| Advance from directors | 10,000 | 2,564 | ||||||
| Net cash provided by financing activities | 10,000 | 2,564 | ||||||
| Effect of exchange rate changes in cash and cash equivalents | – | (207 | ) | |||||
| Net changes in cash and cash equivalents | 3,148 | (55,601 | ) | |||||
| Operating cash flows of the discontinued operation | (22,643 | ) | (1,069 | ) | ||||
| Investing cash flows of the discontinued operation | 40,342 | (2,288 | ) | |||||
| Financing cash flows of the discontinued operation | (15,985 | ) | – | |||||
| Cash and cash equivalents, beginning of period | 6,731 | 63,839 | ||||||
| CASH AT END OF PERIOD, CONTINUING OPERATIONS | $ | 9,879 | $ | 4,881 | ||||
| CASH AT END OF PERIOD, DISCONTINUED OPERATIONS | $ | 1,692 | $ | – | ||||
| SUPPLEMENTAL CASH FLOWS INFORMATION | ||||||||
| Income taxes paid | $ | – | $ | – | ||||
| Interest paid | $ | – | $ | – | ||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
| 6 |
UNITED ROYALE HOLDINGS CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MARCH 31, 2021 AND 2020 (UNAUDITED)
(Currency expressed in United States Dollars (“US$”), except for number of shares)
| 1. | BASIS OF PRESENTATION |
The accompanying unaudited condensed consolidated financial statements have been prepared by management in accordance with both accounting principles generally accepted in the United States (“GAAP”), and the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Certain information and note disclosures normally included in audited financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to those rules and regulations, although the Company believes that the disclosures made are adequate to make the information not misleading.
In the opinion of management, the balance sheet as of March 31, 2021 which has been derived from unaudited financial statements and these unaudited condensed consolidated financial statements reflect all normal and recurring adjustments considered necessary to state fairly the results for the periods presented. The results for the period ended March 31, 2021 are not necessarily indicative of the results to be expected for the entire fiscal year ending December 31, 2021 or for any future period.
These unaudited condensed consolidated financial statements and notes thereto should be read in conjunction with the Management’s Discussion and the audited financial statements and notes thereto included in the Form 10-K for the year ended December 31, 2020.
| 2. | DESCRIPTION OF BUSINESS AND ORGANIZATION |
United Royale Holdings Corp., formerly known as Bosy Holdings Corp. (“the Company”, “we”, “us” or “our”) was incorporated in the State of Nevada on June 23, 2015. We intend to offer planting and cultivation services to land owners in regards to the planting and cultivation of Aquilaria Subintegra & Aquilaria Sinensis trees. We also intend to provide services relating to the extraction of Agarwood from such trees through a process known as “inoculation.”
On September 30, 2018, the Company and Mr. CHEN Zheru, representing the sole shareholder of IV Enterprises Development Limited, a Seychelles corporation (“IVED”), entered into a Sale and Purchase Agreement, pursuant to which the Company acquired 100% (one hundred percent) of the shareholding of IVED. IVED provides tree nurseries, including planting, cultivation and inoculation services through its wholly-owned subsidiary, Oudh Tech Sdn Bhd, in Malaysia. The acquisition is completed on September 30, 2018.
Mr. CHEN Zheru is the common director and major shareholder of the Company and IVED. As a result of this common ownership and in accordance with the FASB Accounting Standards Codification Section 805 “Business Combination”, the transaction is being treated as a combination between entities under common control. The recognized assets and liabilities were transferred at their carrying amounts at the date of the transaction. The equity accounts of the combining entities are combined. Further, the companies will be combined retrospectively for prior year comparative information as if the transaction had occurred on January 1, 2017.
On March 30, 2021, the Company and Mr. Li Gongming (“Mr. Li”), the director of the Company, signed an instrument of transfer, pursuant to which Mr. Li acquired 100% (one hundred percent) of the shareholding of IVED. The consideration was set at $1, same as the consideration that the Company acquired IVED in 2018. There was a gain of $65,154 on disposal of the subsidiaries due to an equity deficit of the disposed subsidiaries.
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| 3. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
Basis of presentation
The accompanying financial statements are prepared in accordance with generally accepted accounting principles in the United States of America (“US GAAP”).
The accompanying financial statements include the accounts of the Company and its wholly-owned subsidiaries. Intercompany transactions and balances were eliminated in consolidation. As of March 31, 2021, there was no subsidiary held by the Company.
Use of estimates
Management uses estimates and assumptions in preparing these financial statements in accordance with US GAAP. Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities in the balance sheet, and the reported revenue and expenses during the periods reported. Actual results may differ from these estimates.
Going Concern
The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. During the three months ended March 31, 2021, the Company incurred a loss before income tax of $19,021 and used cash in operations of $6,852. These factors raise substantial doubt about the Company’s ability to continue as a going concern within one year of the date that the financial statements are issued. In addition, the Company’s independent registered public accounting firm, in its report on the Company’s December 31, 2020 financial statements, has expressed substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.
The Company’s ability to continue as a going concern is dependent upon improving its profitability and the continuing financial support from its shareholders. Management believes the existing shareholders or external financing will provide the additional cash to meet the Company’s obligations as they become due. Despite the amount of funds that we have raised, no assurance can be given that any future financing, if needed, will be available or, if available, that it will be on terms that are satisfactory to the Company. Even if the Company is able to obtain additional financing, if needed, it may contain undue restrictions on its operations, in the case of debt financing, or cause substantial dilution for its stockholders, in the case of equity financing.
Cash and cash equivalents
Cash and cash equivalents are carried at cost and represent cash on hand, demand deposits placed with banks or other financial institutions and all highly liquid investments with an original maturity of three months or less as of the purchase date of such investments.
Our deposit in Hong Kong is currently deposit in HSBC Hong Kong, and there is a Deposit Protection Scheme protects our eligible deposits held with bank in Hong Kong which is members of the Scheme. The scheme will pay us a compensation up to a limit of HKD500,000, which is equivalent to $64,102, if HSBC Hong Kong fails.
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Fair value of financial instruments
The carrying value of the Company’s financial instruments: cash and cash equivalents, prepayments, amount due to a director and accrued liabilities approximate at their fair values because of the short-term nature of these financial instruments.
The Company follows the guidance of the ASC Topic 820-10, “Fair Value Measurements and Disclosures” (“ASC 820-10”), with respect to financial assets and liabilities that are measured at fair value. ASC 820-10 establishes a three-tier fair value hierarchy that prioritizes the inputs used in measuring fair value as follows:
| · | Level 1 : Observable inputs such as quoted prices in active markets; |
| · | Level 2 : Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and |
| · | Level 3 : Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions information regarding the impact of the adoption of ASC 842 on the Company’s financial statements. |
Recent accounting pronouncements
In November 2016, the FASB issued Accounting Standards Update No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash (ASU 2016-18), which requires companies to include amounts generally described as restricted cash and restricted cash equivalents in cash and cash equivalents when reconciling beginning-of-period and end-of-period total amounts shown on the statement of cash flows. We adopted the new standard effective January 1, 2018, and the standard did not have a material impact on our financial statements.
In January 2017, the FASB issued Accounting Standards Update No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business (ASU 2017-01), which revises the definition of a business and provides new guidance in evaluating when a set of transferred assets and activities is a business. We adopted the new standard effective January 1, 2018 on a prospective basis. The new standard did not have a material impact on our consolidated financial statements.
The Company has reviewed all recently issued, but not yet effective, accounting pronouncements and do not believe the future adoption of any such pronouncements may be expected to cause a material impact on its financial condition or the results of its operations.
| 4. | PREPAID EXPENSES AND OTHER RECEIVABLES |
The prepaid expenses as of March 31, 2021 included OTCQB annual fee of $10,500, deposit of $100 in transfer agent, and $75,602 in other receivables from our former subsidiaries, while the prepaid expenses as of December 31, 2020 included OTCQB annual fee of $14,000, deposit of $600 and $6,410 in transfer agent and our consultancy firm.
| 5. | ACCRUED LIABILITIES |
The accrued liabilities as of March 31, 2021 included the auditor’s fee of $6,500, EDGAR fee of $1,025, professional fee to our consultancy firm of $24,359 and $2,569 payable to our former subsidiary, while the accrued liabilities as of December 31, 2020 included the auditor’s fee of $4,750, predecessor auditor consent fee of $5,000 and professional fee to our consulting service provider of $19,231.
| 6. | AMOUNT DUE TO DIRECTOR |
As of March 31, 2021, and December 31, 2020, our directors has loaned to the Company $59,744 and $49,744 as working capital, respectively. This loan is unsecured, non-interest bearing and due on demand.
| 9 |
| 7. | STOCKHOLDERS’ EQUITY |
As of March 31, 2021, and December 31, 2020, there were 141,990,387 and 141,990,387 shares of common stock issued and outstanding respectively.
There were no stock options, warrants or other potentially dilutive securities outstanding as of March 31, 2021.
| 8. | DISCONTINUED OPERATIONS |
On March 30, 2021, the Company has signed an instrument of transfer with our director, Mr. Li Gongming. Beginning on January 1, 2020, the Company historical financial results for periods prior to the above transaction have been reflected in our statement of income, retrospectively, as discontinued operations. Additionally, the related assets and liabilities associated with the discontinued operations in the prior year balance sheet are classified as discontinued operations. As such, as of March 31, 2021, the Company accounted for all of its assets, liabilities and results of operations up to March 30, 2021 as discontinued operations.
During the three months ended March 31, 2021, the Company did not record a gain or loss on this disposal of subsidiaries.
The following table shows the results of operations of the Company for three months ended March 31, 2021 and 2020 which are included in the loss from discontinued operations:
Three months ended March 31, 2021 | Three months ended March 31, 2020 | |||||||
| REVENUE | $ | – | $ | – | ||||
| COST OF REVENUE | – | – | ||||||
| GROSS PROFIT | – | – | ||||||
| GENERAL AND ADMINISTRATIVE EXPENSES | (8,062 | ) | (1,177 | ) | ||||
| LOSS FROM OPERATIONS | (8,062 | ) | (1,177 | ) | ||||
| OTHER INCOME/(EXPENSES) | – | – | ||||||
| LOSS BEFORE INCOME TAX | (8,062 | ) | (1,177 | ) | ||||
| INCOME TAX REFUND / (EXPENSE) | – | – | ||||||
| NET LOSS | $ | (8,062 | ) | $ | (1,177 | ) | ||
| 10 |
The following table shows the carrying amounts of the major classes of assets and liabilities associated with the Company as of March 30, 2021:
As of March 30, 2021 | ||||
| (Unaudited) | ||||
| ASSETS | ||||
| Current Assets | ||||
| Cash and cash equivalents | $ | 1,692 | ||
| Prepaid expenses | 724 | |||
| Total Current Assets | 2,416 | |||
| Non-current Assets | ||||
| Plant and equipment, net | 1,116 | |||
| Biological Assets | 38,651 | |||
| TOTAL ASSETS | $ | 42,183 | ||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||
| Current Liabilities | ||||
| Amount due to director | $ | 19,800 | ||
| Amount due to former parent company | 73,033 | |||
| Accounts payable and accrued expenses | 14,504 | |||
| Total Current Liabilities | 107,337 | |||
| TOTAL LIABILITIES | $ | 107,337 | ||
| STOCKHOLDERS’ EQUITY | ||||
| Equity | (65,154 | ) | ||
| TOTAL STOCKHOLDERS' EQUITY | (65,154 | ) | ||
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 42,183 | ||
| 9. | SUBSEQUENT EVENTS |
Our Board of Directors, Li Gongming, Teoh Kooi Sooi and Soh Khay Wee resigned from the board of directors on April 7, 2021. On the same day, Teoh Kooi Sooi resigned from the roles of Chief Executive Officer, Chief Financial Officer and Treasurer of the Company, David Edwin Evans resigned from the role of Chief Operation Officer of the Company, Liao Lin resigned from the role of Chief Sales Officer of the Company, Jaya C Rajamanickam resigned from the role of President of the Company while Feliana Binti Johny resigned from the role of Secretary of the Company.
On April 7, 2021, Mr. Gary Bartholomew was appointed as the Director, Chief Executive Officer, Chief Financial Officer, President, Secretary, Treasurer of the Company.
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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The information contained in this quarter report on Form 10-Q is intended to update the information contained in our Form 10-K dated March 29, 2021, for the year ended December 31, 2020 and presumes that readers have access to, and will have read, the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and other information contained in such Form 10-K. The following discussion and analysis also should be read together with our financial statements and the notes to the financial statements included elsewhere in this Form 10-Q.
The following discussion contains certain statements that may be deemed “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements appear in a number of places in this Report, including, without limitation, “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” These statements are not guarantees of future performance and involve risks, uncertainties and requirements that are difficult to predict or are beyond our control. Forward-looking statements speak only as of the date of this quarterly report. You should not put undue reliance on any forward-looking statements. We strongly encourage investors to carefully read the factors described in our Form 10-K dated March 29, 2021, in the section entitled “Risk Factors” for a description of certain risks that could, among other things, cause actual results to differ from these forward-looking statements. We assume no responsibility to update the forward-looking statements contained in this transition report on Form 10-Q. The following should also be read in conjunction with the unaudited Condensed Consolidated Financial Statements and notes thereto that appear elsewhere in this report.
Company Overview
United Royale Holdings Corp. (the “Company”) was incorporated under the laws of the State of Nevada on June 23, 2015. United Royale Holdings Corp., is a developmental stage company that intends to offer planting and cultivation services to land owners in regards to the planting and cultivation of Aquilaria Subintegra & Aquilaria Sinensis trees. The company also intend to provide services relating to the extraction of Agarwood (Agarwood is extracted from those tree, about 10-15% wood of the tree can become Agarwood) from such trees, through the process of “fungal inoculation.”
We offer planting and cultivation services to land owners in regards to the planting and cultivation of Aquilaria Subintegra & Aquilaria Sinensis trees. We also intend to provide services relating to the extraction of Agarwood from such trees through a process known as “inoculation.”
On February 1, 2018, the majority of the directors and shareholders of the Company adopted the resolution to request a name change of the Company from “Bosy Holdings Corp.” to “United Royale Holdings Corp.”. The name change became effective with the State of Nevada on February 5, 2018. FINRA announced on February 14, 2018 that the new name of “United Royale Holdings Corp.” was be effective on February 15, 2018, and the new ticker symbol of “URYL” was effective on February 15, 2018.
On March 30, 2018, Mr. Teoh Kooi Sooi resigned from the President of the Company. And Mr. Teoh retained his position of Chief Executive Officer, treasurer, and director in the board. The resignation was not the result of any disagreement with the Company on any matter relating to the Company’s operations, policies or practices. Mr. Teoh Kooi Sooi has been the President of the Company since September 18, 2015.
On March 30, 2018, Mr. Chen Zheru resigned from the Secretary of the Company. And Mr. Chen will retain his position of director in the board. The resignation was not the result of any disagreement with the Company on any matter relating to the Company’s operations, policies or practices. Mr. Chen Zheru has been the Secretary of the Company since September 18, 2015.
On March 30, 2018, Ms. Jaya C Rajamanickam was appointed as the Company’s new President. Ms. Feliana Binti Johny was appointed as the Company’s new Secretary. The biographies for new officers of the Company was filed in the Form 8-K filed with SEC on March 30, 2018.
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On September 30, 2018, the Company and Mr. CHEN Zheru, representing the sole shareholder of IV Enterprises Development Limited, a Seychelles corporation (“IVED”), entered into a Sale and Purchase Agreement, pursuant to which the Company acquired 100% (one hundred percent) of the shareholding of IVED. IVED provides tree nurseries, including planting, cultivation and inoculation services through its wholly-owned subsidiary, Oudh Tech Sdn Bhd, in Malaysia. The acquisition is completed on September 30, 2018.
On October 22, 2018, Mr. David Edwin Evans was appointed as the Company’s Chief Operating Officer. Mr. Liao Lin was appointed as the Company’s Chief Sales Officer. The biographies for new officers of the Company was filed in the Form 8-K filed with SEC on October 22, 2018.
On November 30, 2018, Mr. Chen Zheru resigned from the board of directors with the Company. The resignation was not the result of any disagreement with the Company on any matter relating to the Company’s operations, policies or practices. Mr. Chen Zheru has been the director of the Company since September 18, 2015. On the same day, Mr. Li Gongming was appointed as the Company’s new member of board of directors.
On December 5, 2018, as a result of a private transaction, 100% shareholding of Bosy Holdings Limited has been transferred from Mr. Chen Zheru to Mr. Li Gongming. The consideration paid for the transaction was $50,000. The source of the cash consideration for the transaction was personal funds of the Purchaser. Bosy Holdings Limited, a limited liability company incorporated in Seychelles, holds 78,415,100 shares of United Royale Holdings Corp. The Transaction resulted in the Purchaser acquiring a total of 55.235% of the issued and outstanding share capital of the Company on a fully-diluted basis, which caused a change in control of the Company. And Mr. Li owns 6,000,000 shares of the Company as of December 7, 2018, which constitutes a total shareholding of 59.461% of the Company.
On April 1, 2019, the Company entered into a six-year tenancy agreement with Halaman Girang Sdn Bhd, the landlord of the farmland, for renting Lot 4316, Batu 20, Jalan Segamat, 84900, Tangkak, Johor, Malaysia. The monthly rental payment is MYR1,500, equivalent to around $363. The tenancy period is valid from April 1, 2019 to March 31, 2025.
On April 1, 2019, the Company entered into an agarwood management agreement with Ms. Simone Yap Xin Wei for providing agarwood plantation management and farming operations in the farmland. The agreement is valid from April 1, 2019 to March 31, 2020, with monthly service fee of MYR2,640, equivalent to $639.
On June 12, 2019, Mr. Soh Khay Wee was appointed as the Company’s Director. The biographies for new officers of the Company was filed in the Form 8-K filed with SEC on June 12, 2019.
On March 30, 2021, the Company and Mr. Li Gongming (“Mr. Li”), the director of the Company, signed an instrument of transfer, pursuant to which Mr. Li acquired 100% (one hundred percent) of the shareholding of IVED. The consideration was set at $1, same as the consideration that the Company acquired IVED in 2018. There was a gain of $65,154 on disposal of the subsidiaries due to an equity deficit of the disposed subsidiaries. The disposal of subsidiaries was due to the uncertain business environment during the pandemic period since end of 2019.
Our Board of Directors, Li Gongming, Teoh Kooi Sooi and Soh Khay Wee resigned from the board of directors on April 7, 2021. On the same day, Teoh Kooi Sooi resigned from the roles of Chief Executive Officer, Chief Financial Officer and Treasurer of the Company, David Edwin Evans resigned from the role of Chief Operation Officer of the Company, Liao Lin resigned from the role of Chief Sales Officer of the Company, Jaya C Rajamanickam resigned from the role of President of the Company while Feliana Binti Johny resigned from the role of Secretary of the Company.
On April 7, 2021, Mr. Gary Bartholomew was appointed as the Director, Chief Executive Officer, Chief Financial Officer, President, Secretary, Treasurer of the Company.
Results of Operation
For the three months ended March 31, 2021 and 2020
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Revenues
We have not generated any revenue for the three months ended March 31, 2021 and 2020.
General and administrative expenses
We incurred a total of $19,021 and $47,180 general and administrative expenses during the three months ended March 31, 2021 and 2020 respectively. The general and administrative expenses are mainly comprised of Form 10-Q review fee, consulting fee, legal fee, transfer agent fee and Edgar filing fee. The decrease of general and administrative expenses is due to decrease in salary payout.
Net income / loss
For three months ended March 31, 2021 and 2020, we had generated no revenues. We incurred a total net income of $38,071 and net loss of $48,357 for the three months ended March 31, 2021 and 2020 respectively.
Loss from discontinued operations
For the three months ended March 31, 2021, there was a gain of $65,154 on the disposal of subsidiaries due to the deficit of the disposed subsidiaries and a loss of $8,062 on the discontinued operation. For the three months ended March 31, 2020, loss from discontinued operations of $1,177 consisted of the results of operations of the disposed subsidiaries.
Liquidity and Capital Resources
Cash Used In Operating Activities
For the three months ended March 31, 2021 and 2020, the cash flows used in operating activities was $6,852 and $57,058 respectively, consists of net loss and change in assets and liabilities.
Cash Provided By Financing Activities
For the three months ended March 31, 2021 and 2020, the cash flows provided by financial activities was $10,000 and $2,564 respectively, consists of advance from directors.
Off-balance Sheet Arrangements
We have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to our stockholders as of March 31, 2021.
Contractual Obligations
Nil.
Item 3 Quantitative and Qualitative Disclosures About Market Risk.
As a “smaller reporting company” as defined by Item 10 of Regulation S-K, the Company is not required to provide information required by this Item.
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Item 4 Controls and Procedures.
Evaluation of Disclosure Controls and Procedures:
We carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of March 31, 2021. This evaluation was carried out under the supervision and with the participation of our Chief Executive Officer and our Chief Operations Officer. Based upon that evaluation, our Chief Executive Officer and Chief Operations Officer concluded that, as of March 31, 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 March 31, 2021 our disclosure controls and procedures were not effective: (i) inadequate segregation of duties and effective risk assessment; and (ii) insufficient written policies and procedures for accounting and financial reporting with respect to the requirements and application of both US GAAP and SEC guidelines.
Changes in Internal Control over Financial Reporting:
There were no changes in our internal control over financial reporting during the quarter ending March 31, 2021, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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We know of no materials, active or pending legal proceedings against us, nor are we involved as a plaintiff in any material proceedings or pending litigation. There are no proceedings in which any of our directors, officers or affiliates, or any beneficial shareholder are an adverse party or has a material interest adverse to us.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
None.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not applicable.
None.
| 31.1 | Rule 13(a)-14(a)/15(d)-14(a) Certification of principal executive officer | |
| 32.1 | Section 1350 Certification of principal executive officer | |
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Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| UNITED ROYALE HOLDINGS CORP. | ||
| (Name of Registrant) | ||
| Date: May 24, 2021 | ||
| By: | /s/ Gary Bartholomew | |
| Title: |
Chief Executive Officer, Treasurer, Director (Principal Executive Officer, Principal Financial Officer, Principal Accounting Officer) | |
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