Results of Operations
We currently have no assets and no operations. During the fiscal year that ended
on June 30, 2020, we realized no revenue and incurred $37,494 in operating
expenses. During the year that ended on June 30, 2019, we realized no revenue
and incurred $5,365 in operating expenses. The increase in operating expenses
from fiscal year 2019 to fiscal year 2020 occurred because in the recent period
we were preparing and auditing the Company's financial statements for inclusion
in this Registration Statement, as well as negotiating with potential
acquisition targets. As of the date of filing of this Annual Report, we are not
engaged in any such negotiations. However, as our plan is to acquire an
operating company, it is likely that negotiations will ensue at a future date
with resulting expenses.
Control of HYB Holding Corp. was transferred to our current Chief Executive
Officer in July 2017. During his tenure, our Chief Executive Officer has
financed our operations by advancing funds to cover our expenses. We expect that
our Chief Executive Officer will continue to fund our operations for as long as
he holds the controlling interest in our Company, and that we will, therefore,
have sufficient cash to maintain our existence as a shell company for the next
twelve months, if necessary. Our management is not required to fund our
operations, however, by any contract or other obligation.
Our major expenses consist of fees to lawyers and accountants incurred in
connection with our plans to become an SEC reporting company. We also incur
administration expenses attendant to the trading of our common stock and the
cost of maintaining our corporate charter. In March 2020 we registered with the
Securities and Exchange Commission as a reporting company, which means that we
assumed the obligation to file periodic reports with the Securities and Exchange
Commission, which will entail payment of professional fees to accountants and
lawyers. Otherwise, we do not expect the level of our operating expenses to
change in the future until we implement a business plan or effect an
acquisition.
4
Liquidity and Capital Resources
At June 30, 2020 we had a working capital deficit of $44,511, as we had no
assets and had $44,511 in loans payable plus accounts payable and accrued
expenses, including loans payable and accounts payable to a related party. Our
liabilities consist primarily of amounts owed to our majority shareholder for
services as the Company's counsel and to reimburse him for funds he advanced to
pay our other expenses. We expect our working capital deficit to continue
indefinitely, until we obtain an operating company capable of funding our
overhead expenses.
Our operations used no cash during the year ended June 30, 2020 or the year
ended June 30, 2019. In each period we increased our accounts payable - related
party, our loan payable - related party and our accounts payable and accrued
expenses by the amount of our expenses, with the exception that during the year
ended June 30, 2019 we reclassified a liability of $590 from accounts payable to
accounts payable - related party when our CEO paid the account and invoiced HYB
Holding Corp. for the expense. In the future, unless we achieve the financial
and/or operational wherewithal to sustain our operations, it is likely that we
will continue to rely on borrowings to sustain our operations.
Our Chief Executive Officer is also our majority shareholder. Since July 2017 he
has financed our operations by making advances of funds to cover our expenses.
The advances are repayable upon demand, and the obligations do not bear
interest. We expect that our Chief Executive Officer will continue to fund our
operations until he sells his interest in the Company, and that we will continue
to require additional financing to maintain our existence as a shell company for
the next twelve months. Our management is not required to fund our operations by
any contract or other obligation. In the event that we undertake to complete an
acquisition that requires financing, we will likely depend on an outside source
for such financing. However, we have not identified any debt or equity financing
sources that can be relied upon to provide such financing.
It is unlikely that we will be able to raise financing through a public offering
of debt or equity. Among the reasons this is unlikely are the restrictions that
SEC Rule 419 would impose on such an offering. Rule 419 provides that a company,
such as HYB Holding Corp., that is classified a "blank check company" because it
has no specific business plan other than engaging in a merger or acquisition and
is issuing "penny stock" (i.e. securities that do not satisfy the criteria for
value and liquidity set forth in SEC Rule 3a51-1) must deposit the proceeds of
the offering into escrow, to be released only after the issuer contracts to make
an acquisition and gives to each investor the opportunity to rescind the
investor's investment. In the meantime, the shares sold in the offering cannot
trade. Because compliance with these restrictions substantially increases the
cost of an offering and substantially decreases the pool of potential investors,
it is unlikely that HYB Holding Corp. will conduct a public offering while it
remains a blank check company. Likewise, it is unlikely that HYB Holding Corp.
will conduct a private offering in which it gives registration rights to the
investors, because the registered resale of our securities by the investors to
the public would also have to comply with the restrictions and procedures
prescribed by Rule 419.
For the reasons set forth in Note 3 to our financial statements for the year
ended June 30, 2020, the opinion of our independent registered public accounting
firm with respect to our financial statements for that year states that there is
substantial doubt about the Company's ability to continue as a going concern.
That doubt will be alleviated only when we obtain the funds necessary to
initiate profitable operations.
5
Application of Critical Accounting Policies
Our financial statements and related financial information are based on the
application of accounting principles generally accepted in the United States of
America ("GAAP"). GAAP requires the use of estimates; assumptions, judgments and
subjective interpretations of accounting principles that have an impact on the
assets, liabilities, revenue, and expense amounts reported. These estimates can
also affect supplemental information contained in our external disclosures
including information regarding contingencies, risk and financial condition. We
believe our use of estimates and underlying accounting assumptions adhere to
GAAP and are consistently and conservatively applied. We base our estimates on
historical experience and on various other assumptions that we believe to be
reasonable under the circumstances. Actual results may differ materially from
these estimates under different assumptions or conditions. We continue to
monitor significant estimates made during the preparation of our financial
statements.
Our significant accounting policies are summarized in Note 2 to our financial
statements. While all these significant accounting policies impact our financial
condition and results of operations, the Company views certain of these policies
as critical. Policies determined to be critical are those policies that have the
most significant impact on the Company's financial statements and require
management to use a greater degree of judgment and estimates. Among our critical
policies is the determination, described in Note 5 to our financial statements,
that the Company should record a valuation allowance for the full value of the
deferred tax asset created by the net operating loss carryforwards. The primary
reason for the determination was the lack of certainty as to whether the Company
will achieve profitable operations in the future and be able to utilize their
carryforwards.
Actual results may differ from those estimates. Our management believes that
given current facts and circumstances, it is unlikely that applying any other
reasonable judgments or estimate methodologies would cause any effects on our
results of operations, financial position or liquidity for the periods presented
in this report.
Off-Balance Sheet Arrangements
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 or results
of operations.
Impact of Accounting Pronouncements
There have been no recent accounting pronouncements that have had, or are
expected to have, a material effect on our financial statements.
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