Item 1. Interim Financial Statements.
PONY GROUP INC., AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
|
|
|
September
30,
2021
|
|
|
December 31,
2020
|
|
|
|
|
|
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
Current assets
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
262,642
|
|
|
$
|
286,957
|
|
|
Accounts receivables
|
|
|
21,472
|
|
|
|
40,705
|
|
|
Other receivables
|
|
|
330
|
|
|
|
166
|
|
|
Other receivables-related party
|
|
|
8,998
|
|
|
|
8,998
|
|
|
Total current assets
|
|
|
293,442
|
|
|
|
336,826
|
|
|
Total assets
|
|
$
|
293,442
|
|
|
$
|
336,826
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
$
|
21,370
|
|
|
$
|
9,591
|
|
|
Other payable-related party
|
|
|
289,806
|
|
|
|
300,483
|
|
|
Other current liability
|
|
|
80,227
|
|
|
|
27,895
|
|
|
Total current liabilities
|
|
|
391,403
|
|
|
|
337,969
|
|
|
Total liabilities
|
|
$
|
391,403
|
|
|
$
|
337,969
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
|
Ordinary shares, $0.001 par value, 70,000,000 shares authorized, 11,500,000 shares issued and outstanding as of September 30,2021 and December 31, 2020, respectively*
|
|
|
11,500
|
|
|
|
11,500
|
|
|
Additional paid-in capital
|
|
|
176,000
|
|
|
|
176,000
|
|
|
Accumulated foreign currency exchange loss
|
|
|
(9,320
|
)
|
|
|
(6,323
|
)
|
|
Accumulated deficit
|
|
|
(276,141
|
)
|
|
|
(182,320
|
)
|
|
Total Pony Group Inc stockholders’
equity
|
|
|
(97,961
|
)
|
|
|
(1,143
|
)
|
|
Total equity
|
|
|
(97,961
|
)
|
|
|
(1,143
|
)
|
|
Total liabilities and equity
|
|
$
|
293,442
|
|
|
$
|
336,826
|
|
|
*
|
The shares are presented on a retroactive basis to reflect the nominal share issuance.
|
The accompanying notes are integral to these consolidated
financial statements.
PONY GROUP INC., AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
|
|
|
For The Three Months
Ended
September 30,
|
|
|
For The Nine Months
Ended
September 30,
|
|
|
|
|
2021
|
|
|
2020
|
|
|
2021
|
|
|
2020
|
|
|
Revenue
|
|
$
|
30,145
|
|
|
$
|
15,662
|
|
|
$
|
82,418
|
|
|
$
|
38,371
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenue
|
|
|
24,796
|
|
|
|
2,351
|
|
|
|
77,046
|
|
|
|
12,389
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
|
5,349
|
|
|
|
13,311
|
|
|
|
5,372
|
|
|
|
25,982
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General & administrative expenses
|
|
|
38,638
|
|
|
|
37,588
|
|
|
|
117,443
|
|
|
|
70,355
|
|
|
Total operating expenses
|
|
|
38,638
|
|
|
|
37,588
|
|
|
|
117,443
|
|
|
|
70,355
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from operation
|
|
|
(33,289
|
)
|
|
|
(24,277
|
)
|
|
|
(112,071
|
)
|
|
|
(44,373
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expenses)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expense)
|
|
|
(1,656
|
)
|
|
|
(1,521
|
)
|
|
|
18,250
|
|
|
|
1,440
|
|
|
Total other income
|
|
|
(1,656
|
)
|
|
|
(1,521
|
)
|
|
|
18,250
|
|
|
|
1,440
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (Loss) before income taxes
|
|
|
(34,945
|
)
|
|
|
(25,798
|
)
|
|
|
(93,821
|
)
|
|
|
(42,933
|
)
|
|
Provision for income tax
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
Net Income (Loss)
|
|
$
|
(34,945
|
)
|
|
$
|
(25,798
|
)
|
|
$
|
(93,821
|
)
|
|
$
|
(42,933
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income (Loss)
|
|
|
(34,945
|
)
|
|
|
(25,798
|
)
|
|
|
(93,821
|
)
|
|
|
(42,933
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Comprehensive Income
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
Comprehensive income (loss)
|
|
|
(34,945
|
)
|
|
|
(25,798
|
)
|
|
|
(93,821
|
)
|
|
|
(42,933
|
)
|
The accompanying notes are integral to these consolidated
financial statements.
PONY GROUP INC., AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CHANGE IN EQUITY
|
|
|
Common stock
|
|
|
Additional
Paid-In
|
|
|
Subscription
received
in
|
|
|
Accumulated
Other
Comprehensive
Income
|
|
|
Accumulated
Earnings
|
|
|
|
|
|
|
|
Shares*
|
|
|
Amount
|
|
|
Capital
|
|
|
advance
|
|
|
(Loss)
|
|
|
(Deficit)
|
|
|
Total
|
|
|
Balance as of December 31, 2019
|
|
|
9,000,000
|
|
|
$
|
9,000
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
(565
|
)
|
|
$
|
(140,533
|
)
|
|
$
|
(132,098
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock issued
|
|
|
2,500,000
|
|
|
|
2,500
|
|
|
|
176,000
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
178,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cumulative Foreign currency translation adjustment
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(3,400
|
)
|
|
|
-
|
|
|
|
(3,400
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (Loss)
|
|
|
|
|
|
|
-
|
|
|
|
-
|
|
|
$
|
-
|
|
|
|
-
|
|
|
|
(42,933
|
)
|
|
|
(42,933
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
|
|
|
Balance as of September 30, 2020
|
|
|
11,500,000
|
|
|
$
|
11,500
|
|
|
$
|
176,000
|
|
|
$
|
-
|
|
|
$
|
(3,965
|
)
|
|
$
|
(183,466
|
)
|
|
$
|
69
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cumulative Foreign currency translation adjustment
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(2,358
|
)
|
|
|
-
|
|
|
|
(2,358
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (Loss)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
$
|
-
|
|
|
|
-
|
|
|
|
1,146
|
|
|
|
1,146
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as of December 31, 2020
|
|
|
11,500,000
|
|
|
$
|
11,500
|
|
|
$
|
176,000
|
|
|
$
|
-
|
|
|
$
|
(6,323
|
)
|
|
$
|
(182,320
|
)
|
|
$
|
(1,143
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cumulative Foreign currency translation adjustment
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(2,977
|
)
|
|
|
-
|
|
|
|
(2,977
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (Loss)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(93,821
|
)
|
|
|
(93,821
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as of September 30, 2021
|
|
|
11,500,000
|
|
|
$
|
11,500
|
|
|
$
|
176,000
|
|
|
$
|
-
|
|
|
$
|
(9,320
|
)
|
|
$
|
(276,141
|
)
|
|
$
|
(97,961
|
)
|
|
*
|
The shares are presented on a retroactive basis to reflect the nominal share issuance.
|
The accompanying notes are integral to these consolidated
financial statements.
PONY GROUP INC., AND SUBSIDIARIES
CONSOLIDATED STATEMETNS OF CASH FLOWS
|
|
|
For The Nine Months Ended
September
30,
|
|
|
|
|
2021
|
|
|
2020
|
|
|
|
|
|
|
|
|
|
|
Operating activities
|
|
|
|
|
|
|
|
Net Loss
|
|
$
|
(93,821
|
)
|
|
$
|
(42,933
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
|
Accounts receivable
|
|
|
19,233
|
|
|
|
(15,896
|
)
|
|
Other receivable
|
|
|
(164
|
)
|
|
|
(128
|
)
|
|
Accounts payable
|
|
|
11,779
|
|
|
|
-
|
|
|
Other payable
|
|
|
52,332
|
|
|
|
57,046
|
|
|
Cash provided (used) in operating activities
|
|
|
(10,641
|
)
|
|
|
(1,911
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Cash flow used in investing activities:
|
|
|
|
|
|
|
|
|
|
Investment in Pony HK
|
|
|
-
|
|
|
|
-
|
|
|
Cash used in investing activities
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flow provided (used) by financing activities:
|
|
|
|
|
|
|
|
|
|
Pay for deferred offering cost
|
|
|
-
|
|
|
|
(23,000
|
)
|
|
Advance from (repayment to) related party
|
|
|
(10,677
|
)
|
|
|
(6,954
|
)
|
|
Proceed from Issue of Common Stock
|
|
|
-
|
|
|
|
250,000
|
|
|
Cash provided by financing activities
|
|
|
(10,677
|
)
|
|
|
220,046
|
|
|
|
|
|
|
|
|
|
|
|
|
Effects of currency translation on cash
|
|
|
(2,997
|
)
|
|
|
(3,400
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in cash
|
|
|
(24,315
|
)
|
|
|
214,735
|
|
|
Cash at beginning of the period
|
|
|
286,957
|
|
|
|
44,105
|
|
|
Cash at end of period
|
|
$
|
262,642
|
|
|
$
|
258,840
|
|
The accompanying notes are integral to these consolidated
financial statements.
PONY GROUP INC., AND SUBSIDIARIES
NOTES FOR THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIOD ENDED SEPTEMBER 30, 2021
NOTE 1 - ORGANIZATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
Organization and Operations
PONY GROUP INC, (The “Company” or
“PONY”) was incorporated on January 7, 2019 in the state of Delaware.
On March 7, 2019, Pony Group Inc (the “Purchaser”),
and Wenxian Fan, the sole owner of PONY LIMOUSINE SERVICES LIMITED, entered into a Stock Purchase Agreement (the “Purchase Agreement”),
pursuant to which Wenxian Fan (the “Seller”) would sell to the Purchaser, and the Purchaser will purchase from the Seller,
10,000 shares of the PONY LIMOUSINE SERVICES LIMITED, which represented 100% of the shares. On March 7, 2019, this transaction was completed.
PONY LIMOUSINE SERVICES LIMITED (“PONYHK”)
is a limited liability company formed under the laws of Hong Kong on April 28, 2016, which was formed by FAN WENXIAN. Its registered office
is located at FLAT/RM 01 11/F, LUCKY COMM BLDG, 103 DES VOEUX RD WEST, SHEUNG WAN, HONG KONG. The business nature of the Company is to
provide cross boarder limousine services to customers. On February 2, 2019, Universe Travel Culture & Technology Ltd. (“Universe
Travel”) was incorporated as a wholly-owned PRC subsidiary of Pony HK.
Details of the Company’s structure as of September 30, 2021
are as follow:
Reverse Merger Accounting –
Since Pony HK and Pony US were entities under Ms. Fan’s common control prior to the “Purchase Agreement” was executed,
and because of certain other factors, including that the member of the Company’s executive management is from Pony HK, Pony HK
is deemed to be the acquiring company for accounting purposes and the Merger was accounted for as a reverse merger and a recapitalization
in accordance with generally accepted accounting principles in the United States (“GAAP”). These unaudited consolidated financial
statements reflect the historical results of Pony HK prior to the Merger and that of the combined Company following the Merger, and do
not include the historical financial results prior to the completion of the Merger. Common stock and the corresponding capital amounts
of the Company pre-Merger have been retroactively restated as capital stock shares.
Basis of Accounting and Presentation -
The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States
of America.
Cash and Cash Equivalents –
For purpose of the statements of cash flows, the Company considers all highly liquid debt instruments purchased with a maturity of 90
days or less to be cash equivalents.
Accounts Receivable -
The customers are required to make payments when they book the services, otherwise, the services will not be arranged. Sometimes, the
Company extends credit to its group clients.
As of September 30, 2021 and December 31, 2020,
accounts receivable was $21,472 and $40,705, respectively. The company considers accounts receivable to be fully collectible and determined
that an allowance for doubtful accounts was not necessary.
PONY LIMOUSINE SERVICES LIMITED, a 100% subsidiary
of the Company, has agreements with its two major clients that the payments for the services rendered be settled every six months. The
two major clients account for 75.97% of the revenue for the nine months ended September 30, 2021 and 37.02% for the same period 2020,
respectively.
Revenue Recognition -
The Company recognizes revenue in accordance with ASC 606. The core principle of ASC606 is to recognize revenue when promised goods or
services are transferred to customers in an amount that reflects the consideration that is expected to be received for those goods or
services. ASC 606 defines a five-step process to achieve this core principle, which includes: (1) identifying contracts with customers,
(2) identifying performance obligations within those contracts, (3) determining the transaction price, (4) allocating the transaction
price to the performance obligation in the contract, which may include an estimate of variable consideration, and (5) recognizing revenue
when or as each performance obligation is satisfied. Our sales arrangements generally ask customers to pay in advance before any services
can be arranged. The company recognizes revenue when each performance obligation is satisfied. Documents and terms and the completion
of any customer acceptance requirements, when applicable, are used to verify services rendered. The Company has no returns or sales discounts
and allowances because services rendered and accepted by customers are normally not returnable.
Cost of revenue – Cost
of revenue includes cost of services rendered during the period, net of discounts and sales tax.
Income Taxes –
Income tax expense represents current tax expense. The income tax payable represents the amounts expected to be paid to the taxation
authority. Hong Kong profits tax has been provided at the rate of 16.5% on the estimated assessable profit for the period.
Foreign Currency Translation -
PONY LIMOUSINE SERVICES LIMITED’s functional currency is the Hong Kong Dollar (HK$) and Universe Travel Culture & Technology
Ltd.’s functional currency is the Renminbi (RMB). The reporting currency is that of the US Dollar. Assets, liabilities and owners’
contribution are translated at the exchange rates as of the balance sheet date. Income and expenditures are translated at the average
exchange rate of the year.
The exchange rates used to translate amounts
in HK$ and RMB into USD for the purposes of preparing the financial statements were as follows:
|
September 30, 2020
|
|
|
|
|
|
Balance sheet
|
|
HK$7.79 to US $1.00
|
|
RMB 6.44 to US $1.00
|
|
Statement of operation and other comprehensive income
|
|
HK$7.77 to US $1.00
|
|
RMB 6.47 to US$1.00
|
|
December 31, 2020
|
|
|
|
|
|
Balance sheet
|
|
HK$7.75 to US $1.00
|
|
RMB 6.53 to US $1.00
|
|
September 30, 2020
|
|
|
|
|
|
Statement of operation and other comprehensive income
|
|
HK$7.76 to US $1.00
|
|
RMB 6.99 to US$1.00
|
NOTE 2 - GOING
CONCERN
The Company had operating losses of $93,821 and
$42,933 during the nine months ended September 30, 2021 and 2020, respectively.
The Company has accumulated deficit of $276,141
and $182,320 as of September 30, 2021 and December 31, 2020, respectively. The Company’s continuation as a going concern is dependent
on its ability to generate sufficient cash flows from operations to meet its obligations and/or obtain additional financing, as may be
required.
The accompanying financial statements have been
prepared assuming the Company will continue as a going concern; however, the above condition raises substantial doubt about the Company’s
ability to do so. The financial statements do not include any adjustments to reflect the possible future effects on the recoverability
and classification of assets or the amounts and classification of liabilities that may result should the Company be unable to continue
as a going concern.
Management’s Plan to Continue as a Going
Concern
In order to continue as a going concern, the
Company will need, among other things, additional capital resources. Management’s plans to obtain such resources for the Company
include (1) obtaining capital from the sale of its equity securities, (2) sales of the Company’s products, (3) short-term and long-term
borrowings from banks, and (4) short-term borrowings from stockholders or other related party (ies) when needed. However, management
cannot provide any assurance that the Company will be successful in accomplishing any of its plans.
The ability of the Company to continue as a going
concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually to secure
other sources of financing and attain profitable operations.
NOTE 3 - RELATED
PARTY TRANSACTIONS
PONY GROUP INC, incorporated on Jan 7, 2019 in
the state of Delaware, is the sole owner of PONY LIMOUSINE SERVICES LIMITED (Pony HK), during the nine months ended September 30, 2021,
Pony HK paid $77,914 on behalf of PONY GROUP INC for U.S. legal and audit costs in connection with the OTC listing.
Amount of receivable from shareholders due to
the company declared a 6,000 to 1 stock split. After the stock split, the par value of the commons stocks was $0.001 per share. The shareholders
should pay the consideration of $8,998 to the company. For the company use a retroactive basis to present the nominal shares, the considerations
and receivable form shareholders also should be represented.
|
|
|
September
30,
2021
|
|
|
December 31,
2020
|
|
|
Receivable from shareholders
|
|
$
|
8,998
|
|
|
$
|
8,998
|
|
|
Total due from related parties
|
|
$
|
8,998
|
|
|
$
|
8,998
|
|
Ms. Wenxian Fan, the director, loaned working
capital to Pony HK with no interest and paid on behalf of Pony HK for the subcontracted services and employee salaries.
The Company has the following payables to Ms.
Wenxian Fan:
|
|
|
September
30,
2021
|
|
|
December 31,
2020
|
|
|
To Wenxian Fan
|
|
$
|
289,806
|
|
|
$
|
300,483
|
|
|
Total due to related parties
|
|
$
|
289,806
|
|
|
$
|
300,483
|
|
NOTE 4 - MAJOR
SUPPLIERS AND CUSTOMERS
The Company purchased majority of its subcontracted
services from two major suppliers during the nine months ended September 30, 2021: CHANGYING BUSINESS LIMITED for 54.03%, Shenzhen Lingshang
Cultural Technology Co., Ltd for 33.50%.
The Company had one major customer for the nine
months ended September 30, 2021: HENG TAI WINE LIMITED for 76.1% of revenue.
NOTE 5 - COMMON
STOCK
On May 23, 2019, PONY GROUP INC sold 1,500 shares
of common stock to the following shareholders. On May 24, 2019, these transactions were completed, the consideration received were deposited
into the company’s bank account. On June 1, 2020, the company declared a 6,000 to 1 stock split. After the stock split, the par
value of the commons stocks was $0.001 per share. The shareholders and the number of shares held after the stock dividend are as following:
|
Name
|
|
Shares
|
|
|
Consideration
|
|
|
Pony Group Ltd.
|
|
|
5,580,000
|
|
|
|
5,580
|
|
|
Aller Bonvoyage Inc
|
|
|
360,000
|
|
|
|
360
|
|
|
Capital Club Holding Limited
|
|
|
360,000
|
|
|
|
360
|
|
|
KERUIDA Investment Limited
|
|
|
900,000
|
|
|
|
900
|
|
|
Synionm Investments Limited
|
|
|
900,000
|
|
|
|
900
|
|
|
Wisdom travel service investments Limited
|
|
|
900,000
|
|
|
|
900
|
|
In June 2020, the Company
announced the closing of its initial public offering of 2,500,000 ordinary shares at a public offering price of $0.1 per share, for total
gross proceeds of approximately $250,000 before deducting underwriting discounts, commissions and other related expenses.
NOTE 6 - SUBSEQUENT EVENTS
Management has evaluated
subsequent events through November 12, 2021, the date which the financial statements were available to be issued. All subsequent
events requiring recognition as of September 30, 2021 have been incorporated into these financial statements and there are no subsequent
events that require disclosure in accordance with FASB ASC Topic 855, “Subsequent Events.”
Item 2. Management’s Discussion and Analysis
of Financial Condition and Results of Operations
Overview
We were incorporated in the State of Delaware on January 7, 2019.
We are a travel service provider. We currently provide car services to individual and group travellers. We currently offer carpooling,
airport pick-up and drop-off, and personal driver services for travellers between Guangdong Province and Hong Kong. We collaborate with
car fleet companies and charge a service fee by matching the traveller and the driver. We officially launched our online service through
our “Let’s Go” mobile application in December 2019 to provide multi-language services to international travellers coming
to visit China. Redefining user experience, we aim to provide our users with comprehensive and convenient service offerings and become
a one-stop travel booking resource for travellers. While network scale is important, we recognize that transportation happens locally.
We currently operate in two markets – Guangdong Province and Hong Kong and plan to expand our offering in more oversea markets.
Plan of Operations
In January 2019, we started our Research and Development (“R&D”)
project mobile Lets Go App (“App”) designed to have multi-language interface to attract users from the world, focusing on
providing one-stop travel services to foreigners traveling in China, for both leisure and business.
In April 2019, we rolled out the basic version which supports carpooling,
car rental, airport pick-up and/or drop-off, etc., ready for download at Apple App store; the basic version has an interface in Chinese
language only. In May 2019, we rolled out second version which has an enhanced interface in both Chinese and English language, supporting
payment through PayPal.
We intend to attract users from outside of China to use our App and
expand our offerings on the App to serve as a one-stop shop to book tickets, reserve hotels, rent cars and hire English speaking drivers.
Our goal is to grow to an international player in the travel service
market. To accomplish such goal, we will cooperate with other businesses which have capital, marketing and technology resources or products.
We expect to recruit more workforce and talents, and develop new technologies and products.
Results
of Operations
For the three and
nine months ended September 30, 2021 Compared to September 30, 2020
Revenue
For
the three months ended September 30, 2021 and 2020, revenues were $30,145 and $15,662, respectively, with an increase of $14,483 over
the same period in 2020. Due to the effects of COVID-19, the number of travellers between Guangdong province and Hong Kong deceased significantly
during the three months ended September 30, 2020.
During the nine months ended September 30, 2021,
orders for our travel service business have recovered.
For
the nine months ended September 30, 2021 and 2020, revenues were $82,418 and $38,371 respectively, with an increase of $44,047 over the
same period in 2020. In compliance with the government health emergency
rules in place, the Company temporarily closed all offices in China and ceased operations from January 19, 2020 to February 10, 2020.
During the nine months ended September 30, 2021, orders for our travel service business have recovered.
Cost of Revenue
Cost of Revenue for the three months ended September
30, 2021 and 2020 were $24,796 and $2,351, respectively, with an increase of $22,445 over the same period in 2020. The increase mainly
due to increase of service orders during the quarter thus the cost of revenue increased accordingly.
Cost of Revenue for the nine months ended September
30, 2021 and 2020 were $77,046 and $12,389, respectively, with an increase of $64,657 over the same period in 2020. The increase mainly
due to increase of service orders during the quarter thus the cost of revenue increased accordingly.
Gross Profit
Gross profits were $5,349 and $13,311 for the
three months ended September 30, 2021 and 2020, respectively, a decrease of $7,962 over the same period in 2020. The gross profit margin
as a percentage of sales for the three months ending September 30, 2021 and 2020 were 17.74% and 84.99% respectively.
Gross profits were $5,372 and $25,982 for the
nine months ended September 30, 2021 and 2020, respectively, a decrease of $20,610 over the same period in 2020. The gross profit margin
as a percentage of sales for the nine months ending September 30, 2021 and 2020 were 6.52% and 67.71%, respectively.
Operating Expenses
Operating expenses for the three months ended
September 30, 2021 and 2020 were $38,638 and $37,588 respectively for an increase of $1,050.
Operating expenses for the nine months ended
September 30, 2021 and 2020 were $117,443 and $70,355, respectively, an increase of $47,088 from the same period in 2020. The increase
was mainly due to the effect of COVID-19 which the Company temporarily closed all offices in China and ceased operations from January
19, 2020 to February 10, 2020. There was no such item during the nine months ended September 30, 2021.
Other Income (expense)
Other income consists of interest income and
exchange gain (loss) for the three months ended September 30, 2021 and 2020, the net other expense were $1,656 and $1,521, respectively
with an increase of $135. The increase was mainly due to the change of exchange rate and the increase of average cash balance.
For the nine months ended September 30, 2021
and 2020, the net other income were $18,250 and $1,440, respectively with an increase of $16,810. The increase was mainly due to the
change of exchange rate and the increase of average cash balance.
For the three and
nine months ended September 30, 2020 compared to September 30, 2019
Revenue
For the three months ended September 30, 2020
and 2019, revenues were $15,662 and $16,175, respectively, with a decrease of $513 over the same period in 2019. Due to the effect of
COVID-19, the number of travelers between Guandong province and Hong Kong decease a lot. Thus the orders of our travel service business
decrease in the three months ended September 30, 2020. The decrease was offset by the service revenue of Universe Travel Culture &
Technology Ltd. (“Universe Travel”).The company provided active planning and other service for “Shenzhen Yinxin Enterprise
Service Co., Ltd ” in August 2020, this part revenue was RMB 87,302 (USD12,624).
For the nine months ended September 30, 2020
and 2019, revenues were $38,371 and $42,496, respectively, with an decrease of $4,125 over the same period in 2019.The decrease was mainly
due to the effect of COVID-19. In compliance with the government health emergency rules in place, the Company temporarily closed all
offices in China and ceased operations from January 19, 2020 to February 10, 2020. We expect the COVID-19 outbreak may materially affect
our financial condition and results of operations going forward.
Cost of Revenue
Cost of Revenue for the three months ended September
30, 2020 and 2019 were $2,351 and $12,778, respectively, with a decrease of $10,427 over the same period in 2019. The decrease mainly
due to the service orders decreases a lot, thus the cost of revenue decrease accordingly.
Cost of Revenue for the nine months ended September
30, 2020 and 2019 were $12,389 and $36,353, respectively, with a decrease of $23,964 over the same period in 2019. The decrease mainly
due to the service orders decreases a lot, thus the cost of revenue decrease accordingly.
Gross Profit
Gross profits were $13,311 and $3,397 for the
three months ended September 30, 2020 and 2019, respectively, an increase of $9,914 over the same period in 2019. The increase of gross
profit mainly due to other service provide by the company have a higher gross margin than car services.
Gross profits were $25,982 and $6,143 for the
September 30, 2020 and 2019, respectively, an increase of $19,839 over the same period in 2019. The increase of gross profit mainly due
to other service provide by the company have a higher gross margin than car services.
Operating Expenses
Operating expenses for the three months ended
September 30, 2020 and 2019 were $ 37,588 and $31,564 respectively for an increase of $6,024. The increase mainly due to professional
fee paid for OTC listed,
Operating expenses for the nine months ended
September 30, 2020 and 2019 were $70,355 and $109,571, respectively, a decrease of $39,216 or 35.79% from the same period in 2019. The
decrease mainly due to the effect of COVID-19 the Company temporarily closed all offices in China and ceased operations from January
19, 2020 to February 10, 2020.
Other Income (Expense)
Other income consists of interest income and
exchange gain (loss) for the three months ended September 30, 2020 the net other expense were $1,521 when it was net income of $89 for
the same period in 2019.The change of other Income (expense) mainly due to the change of exchange rate For the nine months ended September
30, 2020 and 2019, the net other income were $1,440 and $1,582, respectively with a decrease of $142. The decrease was mainly due to
the change of exchange rate.
Liquidity and Capital Resources
We suffered recurring losses from operations
and have an accumulated deficit of $276,141 as of September 30, 2021. We had a cash balance of $262,642 and working capital of negative
$97,961 as of September 30, 2021. The Company has incurred losses of $93,821 and $42,933 for the nine months ended September 30, 2021
and 2020, respectively. The Company has not continually generated significant gross margins. Unless our operations generate a significant
increase in gross margins and cash flows from operating activities, our continued operations will depend on whether we are able to raise
additional funds through various sources, such as equity and debt financing, other collaborative agreements and/or strategic alliances.
Our management is actively engaged in seeking additional capital to fund our operations in the short to medium term. Such additional
funds may not become available on acceptable terms and there can be no assurance that any additional funding that we do obtain will be
sufficient to meet our needs in the long term. As of September 30, 2021, we have enough cash to last approximately six months.
Net cash used in operating activities for the
nine months ended September 30, 2021, amounted to $10,641, compared to $1,911 net cash used in operating activities for the nine months
ended September 30, 2020. The increase of net cash used in operating activities mainly due to the increase of net loss.
There were $0 cash used by investment activities
for the nine months ended September 30, 2021 and 2020.
Net cash used in financing activities for the
nine months ended September 30, 2021 amounted to $16,677, compared to net cash provided by financing activities of $220,046 in the same
period 2020. In June 2020, we completed the initial public offering and received proceeds of $250,000 before deducting underwriting discounts,
commissions and other related expenses.
COVID-19
In January 2020, the World Health Organization
declared a global health emergency as the novel coronavirus (“COVID-19”) outbreak continues to spread beyond China. In an
effort to contain COVID-19, the Chinese authorities have suspended air, road, and rail travel in the area around Wuhan and placed restrictions
on travel and other activities throughout China, including Guangdong Province and Hong Kong, the key market in which we operate. In compliance
with the government health emergency rules in place, the Company temporarily closed all offices in China and ceased operations from January
19, 2020 to February 10, 2020. At the end of this period, management reopened our business.
As of the date of this prospectus, the Hong Kong
government has reported cases of COVID-19 in the city, has upgraded its response level to emergency, its highest response level, and
is taking other steps to manage the outbreak. On February 8, 2020, the Hong Kong government began enforcing a compulsory 21-day quarantine
for anyone, with reduced quarantine period for vaccinated persons arriving in Hong Kong from overseas depending on their port of embarkation.
Moreover, this mandatory quarantine does not apply to individuals transiting Hong Kong International Airport and certain exempted groups
such as flight crews. However, health screening measures are in place at all of Hong Kong’s borders and the Hong Kong authorities
will quarantine individual travellers, including passengers transiting the Hong Kong International Airport, if the Hong Kong authorities
determine the traveller to be a health risk. On January 30, 2020, the Hong Kong government closed certain transportation links and border
checkpoints connecting Hong Kong with mainland China (all located in Guangdong Province) until further notice, and on February 3, 2020
suspended ferry services from Macau (which has border checkpoints connecting Macau with Guangdong Province).
The effects of the COVID-19 pandemic, including
the travel restrictions described above, have resulted in a dramatic reduction in the number of people travelling from Guangdong Province
to Hong Kong and a similar reduction in the number of our customers and have, severely impacted our operating results during the first
quarter of 2020. For example, compared to the first quarter of 2019, the first quarter of 2020’s revenue, cost of revenue and operating
expenses decreased by 33.2%, 43.8% and 76.6%, respectively, and gross profit and other income increased by 19.9% and 240.8%, respectively.
We believe the decreases, including the decrease in cost of revenue, are primarily attributable to the fact that we ceased car services
for individual and group travellers between Guangdong Province and Hong Kong in the first quarter of 2020, resulting in a decrease of
customers. In the same period, we started to provide express, small-package delivery services for customers in the same region in cities
including Shenzhen, Guangzhou, Zhuhai and Zhongshan, which brought in an estimated $8,700 of revenue. We expect that after our offices
reopened on February 11, 2020 and as the travel restrictions started to ease, our business will gradually return to normal levels, although
we are unable to predict as of the date of this prospectus the speed of the recovery.
We expect the COVID-19 outbreak may materially
affect our financial condition and results of operations going forward. Our business operations and active ties in many regions (including
Hong Kong and Guangdong Province) may be subject to quarantines, “shelter-in-place” rules, and various other restrictions
for the foreseeable future. Due to the uncertainty of the future impacts of the COVID-19 pandemic, the extent of the financial impact
cannot be reasonably estimated at this time. Without limited the generality of the foregoing sentence, any significant disruption to
travel, including travel restrictions and other potential protective quarantine measures against COVID-19 by governmental agencies, may
increase the difficulty and could make it difficult for the Company to provide its services to its customers. Travel restrictions and
protective measures against COVID-19 could cause the Company to incur additional unexpected costs and expenses. The extent to which COVID-19
impacts the Company’s business, sales and results of operations will depend on future developments, which are highly uncertain
and cannot be predicted.
Going Concern
The accompanying consolidated financial statements
have been prepared assuming the Company will continue as a going concern; however, the above condition raises substantial doubt about
the Company’s ability to do so. The financial statements do not include any adjustments to reflect the possible future effects
on the recoverability and classification of assets or the amounts and classification of liabilities that may result should the Company
be unable to continue as a going concern.
In order to continue as a going concern, the
Company will need, among other things, additional capital resources. Management’s plans to obtain such resources for the Company
include (1) obtaining capital from the sale of its equity securities, (2) sales of the Company’s services, (3) short-term and long-term
borrowings from banks, and (4) short-term borrowings from stockholders or other related party(ies) when needed. However, management cannot
provide any assurance that the Company will be successful in accomplishing any of its plans. The ability of the Company to continue as
a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually
to secure other sources of financing and attain profitable operations.
Critical Accounting Policies
The discussion and analysis of the Company’s
financial condition and results of operations are based upon the Company’s consolidated financial statements, which have been prepared
in accordance with accounting principles generally accepted in the United States of America. We continually evaluate our estimates, including
those related to bad debts, the useful life of property and equipment and intangible assets, and the valuation of equity transactions.
We base our estimates on historical experience and on various other assumptions that we believed to be reasonable under the circumstances,
the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent
from other sources. Any future changes to these estimates and assumptions could cause a material change to our reported amounts of revenues,
expenses, assets and liabilities. Actual results may differ from these estimates under different assumptions or conditions. We believe
the following critical accounting policies affect our significant judgments and estimates used in the preparation of the financial statements.
Accounts Receivable - The customers are
required to make payments when they book the services, otherwise, the services will not be arranged. Sometimes, the Company extends credit
to its group clients. The company considers accounts receivable to be fully collectible at year-end. Accordingly, no allowance for doubtful
accounts has been recorded.
Revenue Recognition - The Company recognizes
revenue in accordance with ASC 606. The core principle of ASC606 is to recognize revenue when promised goods or services are transferred
to customers in an amount that reflects the consideration that is expected to be received for those goods or services. ASC 606 defines
a five-step process to achieve this core principle, which includes: (1) identifying contracts with customers, (2) identifying performance
obligations within those contracts, (3) determining the transaction price, (4) allocating the transaction price to the performance obligation
in the contract, which may include an estimate of variable consideration, and (5) recognizing revenue when or as each performance obligation
is satisfied. Our sales arrangements generally ask customers to pay in advance before any services can be arranged. The company recognizes
revenue when each performance obligation is satisfied. Documents and terms and the completion of any customer acceptance requirements,
when applicable, are used to verify services rendered. The Company has no returns or sales discounts and allowances because services
rendered and accepted by customers are normally not returnable
Off-Balance Sheet Arrangements
As of September 30, 2021, we did not have any
off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K.