The following discussion and analysis of financial condition and results of
operations relates to the operations and financial condition reported in the
unaudited condensed financial statements of the Company for the three months
ended March 31, 2022 and 2021 should be read in conjunction with such financial
statements and related notes included in this report. Except for the historical
information contained herein, the following discussion, as well as other
information in this report, contain "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, and are subject to the
"safe harbor" created by those sections. Actual results and the timing of the
events may differ materially from those contained in these forward-looking
statements due to a number of factors, including those discussed in the
"Forward-Looking Statements" set forth elsewhere in this Quarterly Report on
Form 10-Q.
Overview
Yong Bai Chao New Retail Corporation f/k/a Environmental Control Corp. ("we,"
"us," the "Company" or like terms) was incorporated in the State of Nevada on
February 17, 2004 under the name Boss Minerals, Inc. to pursue the exploration
and development of mining claims located in British Columbia, Canada.
During the quarter ended June 30, 2004, the Company filed a registration
statement on Form SB-2 with the Securities and Exchange Commission ("SEC") to
register shares of common stock for public resale by certain stockholders
identified in the registration statement. Upon the effective date of the
registration statement, the Company became subject to the reporting requirements
of Section 12(b) under the Securities Exchange Act of 1934, as amended (the
"Exchange Act") and commenced filing reports under the Exchange Act through the
quarter ended June 30, 2012.
In March 2006, the Company acquired the assets of Environmental Control
Corporation, which developed vehicle emission control devices and filed a
certificate of amendment to its articles of incorporation in April 2013 to
change its name to Environmental Control Corp. The Company filed reports under
the Exchange Act through the quarter ended June 30, 2012.
On May 2, 2016, the Eight Judicial District Court of Nevada entered an order
appointing Bryan Glass as custodian of the Company, authorizing and directing
him to, among other things, take any action reasonable, prudent and for the
benefit of the Company, including reinstating the Company under Nevada law,
appointing officers and convening an annual meeting of stockholders (the
"Order"). Mr. Glass was a shareholder of the Company on the date that he applied
to serve as a custodian of the Company. From time to time, Mr. Glass submits
applications to the courts of the state of Nevada to be appointed as the
custodian of corporations in which he already is a shareholder that have
forfeited their right to exist as a corporation for reasons such as failure to
file annual reports or to pay required fees, and such applications may or may
not be successful. If the court approves the application, Mr. Glass is appointed
to serve as the custodian of such corporations. In the past, he either has
contributed assets or sold them to third parties. Thereafter, the board of
directors and Mr. Glass, in his role as custodian, appointed himself to serve as
the President of the Company.
On May 5, 2016, the Company filed a Certificate of Reinstatement with the state
of Nevada to reestablish the Company's existence.
On May 9, 2016, the board of directors and Bryan Glass, in the exercise of his
power as the court-appointed custodian of the Company, appointed Bryan Glass as
our President, Secretary and Treasurer and authorized the issuance of 60,000,000
shares of stock to Mr. Glass for an aggregate price of $60,000, which sum was
paid by the performance of services to the Company and the reimbursement of
expenses incurred by Mr. Glass on the Company's behalf in the amount of $6,685.
The expenses incurred by Mr. Glass included $5,160 to the state of Nevada for
fees in connection with reinstating the Company and other filings to bring the
Company current under the requirements of Nevada corporate law; $1,250 to the
transfer agent for outstanding fees; and $275 to the state of Nevada as a filing
fee in connection with the amendment to the articles of incorporation.
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On June 15, 2016, the Company held a stockholders meeting at which the
stockholders adopted Amended and Restated Articles of Incorporation of the
Company under which the Company increased the total number of shares it is
authorized to issue to 190 million shares consisting of 180 million shares of
common stock and 10 million shares of blank check preferred stock.
In December 2018, Mr. Glass sold 60 million shares of common stock, representing
all of the shares he owned in the Company, and equal to 56.83% of the total
number of outstanding shares of the Company's common stock, to Lili Xin for the
sum of $90,000. Ms. Chang became acquainted with Mr. Glass through a mutual
associate and they subsequently negotiated a deal for his control bloc of shares
in the Company. Concurrent with the sale of his shares, the board of directors
appointed Ms. Chang as the President and as a director of the Company and
resigned from all positions he held with the Company.
On May 22, 2019, the Company filed a Form 15 with the SEC terminating the
registration of its class of common stock under Section 12(g) of the Exchange
Act and its duty to file periodic and other reports with the SEC.
In December 12, 2019, the Company filed a registration statement on Form 10 to
register its class of common stock under the Exchange Act, and the registration
statement automatically was effective in February 2020.
On June 29, 2021, Lili Xin, our former Chief Executive Officer, Chief Financial
Officer, director and principal stockholder of the Company ("Ms. Xin"), and Wang
Fei ("Mr. Wang"), entered into a Stock Purchase Agreement (the "Stock Purchase
Agreement") pursuant to which Ms. Xin agreed to sell to Mr. Wang 80,000,000
shares of Common Stock registered in her name (the "Shares"), representing 59%
of the outstanding shares of common stock in the Company, at a purchase price of
Three Hundred Fifty Thousand Dollars ($350,000). The seller relied on the
exemption from registration pursuant to Section 4(2) of, and Regulation D and/or
Regulation S promulgated under the Act in selling the Company's securities to
Mr. Wang. The funds came from the personal funds of Mr. Wang, and was not the
result of a loan. The closing occurred August 10, 2021.
In connection with such sale, Lili Xin, our then current CEO, President and CFO
resigned from her positions as the sole director and executive officer of the
Company. Concurrently therewith, Mr. Wang appointed to serve as the sole
executive officer and director of the Company.
On September 14, 2021, the Company entered into a Company Acquisition Agreement
(the "Acquisition Agreement") with Yong Bai Chao New Retail (Shenzhen) Co. Ltd.
("YBC"). Pursuant to the terms of the Acquisition Agreement, the Company agreed
to acquire all of the issued and outstanding securities of YBC in exchange for
50 million shares of our common stock. After the consummation of the
acquisition, the Company is obligated change its name to Yong Bai Chao New
Retail Corp. Wang Fei, our sole executive officer and director, also serves as
the Chief Executive Officer and Director of YBC. This transaction has not yet
consummated, and the closing of this transaction is subject to certain terms and
conditions more fully described in the Acquisition Agreement. In
effectuating the share exchange, the Company intends to rely on the exemption
from registration pursuant to Section 4(2) of, and Regulation D and/or
Regulation S promulgated under the Securities Act of 1933, as amended.
Effective October 28, 2021, the Company's name was changed to Yong Bai Chao New
Retail Corporation.
Currently, the Company only possesses minimal assets and liabilities with no
substantial business operations. There were no revenue or positive cash flows
for the three months ended March 31, 2022. The Company's management efforts are
focused on seeking out a new and profitable operating business with strong
growth potential. Unless and until the Company's successful acquisition of an
operating business, we expect our expenses to consist of legal fees, accounting
fees, and administrative costs related to maintaining a public company.
Critical Accounting Policies and Significant Judgments and Estimates
The Securities and Exchange Commission ("SEC") issued disclosure guidance for
"critical accounting policies." The SEC defines "critical accounting policies"
as those that require the application of management's most difficult, subjective
or complex judgments, often as a result of the need to make estimates about the
effect of matters that are inherently uncertain and may change in subsequent
periods.
Our significant accounting policies are described in the Notes to these
unaudited condensed financial statements. Currently, based on the Company's
limited activity, we do not believe that there are any accounting policies that
require the application of difficult, subjective or complex judgments.
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Results of Operations
Three Months Ended March 31, 2022 Compared to the Three Months Ended March 31,
2021
Revenue. We did not generate any revenue during the three months ended March 31,
2022 and 2021.
Operating Expenses. Our operating expenses primarily consisted of fees and
expenses related to complying with our ongoing SEC reporting requirements, which
have consisted of accounting fees, legal service charges, transfer agent fees,
and filing fees etc.
For the three months ended March 31, 2022, total operating expenses amounted to
$20,205 as compared to $6,000 for the three months ended March 31, 2021, an
increase of $14,205 or 236.8%. The increase was primarily due to an increase in
accounting fees and legal service charges.
Other Income (Expense). Other income (expense) includes gain on extinguishment
of debt and interest expense.
For the three months ended March 31, 2022, total other expense amounted to
$6,250 as compared to total other income of $46,866 for the three months ended
March 31, 2021, a change of $53,116 or 113.3%. The change was due to a decrease
in gain on extinguishment of debt of approximately $54,000, offset by a decrease
in interest expense of approximately $1,000 as a result of reduction in debt.
Net (Loss) Income. During the three months ended March 31, 2022 and 2021, we had
net loss of $26,455 and net income of $40,866, respectively.
Liquidity and Capital Resources
At March 31, 2022, we did not have any cash, while, we had liabilities of
$544,943, and had a working capital deficit of $544,943. We expect to incur
continued losses during the remainder of 2022, possibly even longer.
Net cash flow provided by operating activities was $0 for the three months ended
March 31, 2022. These included changes in operating assets and liabilities
totaling approximately $26,000, offset by net loss of approximately $26,000.
Net cash flow provided by operating activities was $0 for the three months ended
March 31, 2021. These included net income of approximately $41,000 and changes
in operating assets and liabilities totaling approximately $13,000, offset by
the non-cash item adjustment consisting of write-off of accrued interest on
extinguished debt of approximately $54,000.
We expect to require working capital of approximately $40,000 over the next 12
months to meet our financial obligations.
We are a shell company with no revenue generating activities. We anticipate that
our operating activities will generate negative net cash flow during the
remaining year of 2022. The success of our business plan is dependent upon the
availability of additional capital resources on terms satisfactory to management
as we are not generating sufficient revenues from our business operations. Our
sources of capital in the past have included the sale of equity securities,
which include common stock sold in private transactions and stockholder
advances. There can be no assurance that we can raise such additional capital
resources on satisfactory terms. We believe that our current cash and other
sources of liquidity discussed above are adequate to support operations for at
least the next 12 months. We anticipate continuing to rely on equity sales of
our common shares and shareholder advances in order to continue to fund our
business operations. Issuances of additional shares will result in dilution to
our existing shareholders. There is no assurance that we will achieve any
additional sales of our equity securities or arrange for debt or other financing
to fund our plan of operations.
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Off-Balance Sheet Arrangements
We do not have any transactions, agreements or other contractual arrangements
that constitute off-balance sheet arrangements.
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