Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
FORWARD LOOKING STATEMENTS
Except for historical information, this report contains forward-looking statements. Such forward-looking statements involve risks and uncertainties, including, among other things, statements regarding our business strategy, future revenues and anticipated costs and expenses. Such forward-looking statements include, among others, those statements including the words "expects," "anticipates," "intends," "believes" and similar language. Our actual results may differ significantly from those projected in the forward-looking statements. Factors that might cause or contribute to such differences include, but are not limited to, those discussed herein as well as in the "Description of Business – Risk Factors" section in our Form S-1 Amendment No. 2, as filed with the SEC on February 28, 2014. You should carefully review the risks described in our Prospectus and in other documents we file from time to time with the Securities and Exchange Commission. You are cautioned not to place undue reliance on the forward-looking statements, which speak only as of the date of this report. We undertake no obligation to publicly release any revisions to the forward-looking statements or reflect events or circumstances after the date of this document.
Although we believe that the expectations reflected in these forward-looking statements are based on reasonable assumptions, there are a number of risks and uncertainties that could cause actual results to differ materially from such forward-looking statements.
All references in this Form 10-Q to the "Company," "Bally," "we," "us," or "our" are to Bally, Corp.
Corporate Overview
We were incorporated under the laws of the state of Nevada on March 13, 2013 with the intention to import small farming, household gardening and general small tools directly from manufacturers and market to consumers in the Republic of India. Our plan was to market via our website: http://www.ballycorp.com and sell these products directly to end users through our website.
On June 24, 2016, in connection with the sale of a controlling interest in our company, Katiuska Moran, our company's former Chief Executive Officer and Director and Surjeet Singh (individually and collectively the "Seller(s)") of our company, entered into and closed on certain share purchase agreements with Aureas Capital Co., Ltd., ("Aureas"), whereby Aureas purchased from the Sellers a total of 6,918,800 shares of our company's common stock (the "Shares") for an aggregate price of $100,000.00. The Shares acquired represent approximately 70.6% of the issued and outstanding shares of common stock of our company.
On June 24, 2016, Lung Ming Chun was appointed a director and officer of our company and Katiuska Moran and Surjeet Singh resigned from all positions they held as officers and directors of our company. With the change of management, our company intended to pursue business opportunities in tire recycling.
On June 8, 2017, Lung Ming Chun reigned from all of the positions he held as an officer and director of our company and Kong Nguan Hong was appointed Chief Executive Officer, President, Secretary, Chief Financial Officer, Treasurer, and as a director.
Pursuant to a stock purchase agreement (the "Agreement"), effective as of April 4, 2018, by and among Aureas, Chen Yi-Dou, Ming-Chun Lung, NYJJ Investments, Ti-Jung Chen, Yi-Fang Lin and Zhiqing Wu (together, the "Sellers") and Haiping Hu, the Sellers sold an aggregate of 9,797,600 shares of Common Stock of our company, to Mr. Hu for cash consideration of $360,000 from personal funds of Mr. Hu (the "Transaction"). Of the net proceeds, $7,500 have been held back in escrow for the payment of past due taxes. The Transaction closed on April 4, 2018. Following consummation of the Transaction, Mr. Hu holds 99.5% of the voting securities of our company, based on 9,850,000 shares issued and outstanding as of April 4, 2018. The Transaction has resulted in a change in control of our company.
In connection with the Transaction, Kong Nguan Hong, the sole officer and director of our company, resigned from all of his officer positions, including Chief Executive Officer, Chief Financial Officer and Secretary, effective immediately upon the consummation of the Transaction, but remained a director of our company for 10 days following the date on which our company filed a Schedule 14F-1 with the SEC and the mailed the Schedule 14F-1 to the holders of record of our company. The Schedule 14F-1 was filed with the SEC on April 6, 2018. An amended Schedule 14F-1 was filed on April 10, 2018 and mailed to shareholders on or about that same day.
In connection with the Transaction, Haiping Hu was appointed as Chief Executive Officer, Chief Financial Officer, Secretary and as a director of our company, effective April 4, 2018.
Our fiscal year end is September 30. Our business address is 986 Dongfang Rd., One Hundred Shanshan Bldg 25th Fl, Pudong Shanghai China 200122. . Our telephone number is (86) 138 1833 3008.
Results of Operations
The following summary of our operations should be read in conjunction with our unaudited financial statements for the three months ended December 31, 2018 and 2017.
Three months ended December 31, 2018 compared to December 31, 2017.
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Three Months Ended
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December 31,
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2018
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2017
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Change
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Revenue
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$
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-
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$
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-
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$
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-
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Professional fees
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9,989
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8,300
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1,689
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Net loss
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$
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(9,989
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)
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$
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(8,300
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)
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$
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1,689
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During the three months ended December 31, 2018 and 2017, no revenues were recorded.
Our financial statements report a net loss of $9,989 for the three months ended December 31, 2018 compared to a net loss of $8,300 for the three months ended December 31, 2017.
Our operating expenses for the three months ended December 31, 2018 were $9,989 compared to $8,300 for the three months ended December 31, 2017. Operating expenses consists of professional fees.
Liquidity and Capital Resources
The following table provides selected financial data about our company as of December 31, 2018 and September 30, 2018, respectively.
Working Capital
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December 31,
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September 30,
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2018
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2018
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Changes
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Current Assets
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$
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-
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$
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-
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$
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-
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Current Liabilities
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20,460
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10,471
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9,989
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Working Capital
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$
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(20,460
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)
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$
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(10,471
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)
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$
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(9,989
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)
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Cash Flows
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Three Months Ended
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December 31,
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2018
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2017
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Net cash used in operating activities
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$
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(9,989
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$
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(9,500
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)
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Net cash provided by financing activities
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9,989
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9,500
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Net change in cash and cash equivalents
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$
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-
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$
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-
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As at December 31, 2018, our total current assets were $0 compared to $0 in total current assets at September 30, 2018.
As at December 31, 2018, our current liabilities were $20,460 compared to $10,471 in current liabilities as at September 30, 2018. Stockholders’ deficit was $20,460 as of December 31, 2018 compared to stockholders' deficit of $10,471 as of September 30, 2018. The increase in current liabilities is due to an increase in due to shareholder.
Operating Activities
Net cash used in operating activities during the three months ended December 31, 2018 was $9,989, compared to $9,500 net cash used in operating activities during the three months ended December 31, 2017.
Financing Activities
Cash provided by financing activities during the three months ended December 31, 2018 was $9,989 as compared to $9,500 in cash provided by financing activities during the three months ended December 31, 2017.
Going Concern
Our auditors issued a going concern opinion on our financial statements as of and for the year ended September 30, 2018. This means that there is substantial doubt that we can continue as an ongoing business for the next twelve months unless we obtain additional capital to pay for our expenses, as we have not generated any revenues and no sales are yet possible. There is no assurance we will ever reach this point. Accordingly, we must raise sufficient capital from sources. Our only other source for cash at this time is advances by our sole director and officer. We must raise cash to stay in business. In response to these problems, management intends to raise additional funds through public or private placement offerings. At this time, however, the Company does not have plans or intentions to raise additional funds by way of the sale of additional securities. We have no assurance that future financing will be available to us on acceptable terms. If financing is not available on satisfactory terms, we may be unable to continue, develop or expand our operations. Equity financing could result in additional dilution to existing shareholders.
Off-Balance Sheet Arrangements
We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, and capital expenditures or capital resources that are material to stockholders.
Critical Accounting Policies and Estimates
We prepare our financial statements in conformity with GAAP, which requires management to make certain estimates and apply judgments. We base our estimates and judgments on historical experience, current trends and other factors that management believes to be important at the time the condensed financial statements are prepared. On a regular basis, we review our accounting policies and how they are applied and disclosed in our condensed financial statements.
While we believe that the historical experience, current trends and other estimates considered support the preparation of our financial statements in conformity with GAAP, actual results could differ from our estimates and such differences could be material.
Item 4. Controls and Procedures
Management’s Report on Disclosure Controls and Procedures
We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports filed under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and President (who is also our principal executive officer, principal financial officer and principle accounting officer) to allow for timely decisions regarding required disclosure.
As of the end of the quarter covered by this report, we carried out an evaluation, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer (who is also our principal executive officer, principal financial officer and principle accounting officer), of the effectiveness of the design and operation of our disclosure controls and procedures. Based on the foregoing, our Chief Executive Officer and President (who is also our principal executive officer and principal financial officer) concluded that our disclosure controls and procedures were not effective as of the end of the period covered by this quarterly report.
The matters involving internal controls and procedures that our management considered to be material weaknesses under the standards of the Public Company Accounting Oversight Board were: (1) lack of a functioning audit committee, (2) lack of a majority of outside directors on our board of directors, resulting in ineffective oversight in the establishment and monitoring of required internal controls and procedures; (3) inadequate segregation of duties consistent with control objectives; and (4) management dominated by a single individual without adequate compensating controls. The aforementioned material weaknesses were identified by our Chief Executive Officer and Chief Financial Officer (who is also our principal executive officer and principal financial officer) in connection with the review of our financial statements as of December 31, 2018.
Management believes that the material weaknesses set forth above did not have an effect on our financial results. However, management believes that the lack of a functioning audit committee and the lack of a majority of outside directors on our board of directors results in ineffective oversight in the establishment and monitoring of required internal controls and procedures, which could result in a material misstatement in our financial statements in future periods.
C
hanges in Internal Control Over Financial Reporting
There have been no changes in our internal controls over financial reporting that occurred during the period ended December 31, 2018, that have materially or are reasonably likely to materially affect, our internal controls over financial reporting.
