Notes
to the Financial Statements
1. General Information
Mondo
Acquisition II, Inc. was incorporated in the State of Delaware on
October 30, 2006 and the name was changed to Green Planet
Bioengineering Co., Ltd. (“Company”) on October 2,
2008. In October 2008, the Company acquired Elevated Throne
Overseas Ltd, incorporated in British Virgin Islands, and its
subsidiaries (“Elevated Throne”) and operated the
business in the agritech sector in the People’s Republic of
China. The Company divested Elevated Throne to One Bio, Corp.
(“ONE”) on April 14, 2010.
In
March 2012, the Company became a wholly owned subsidiary of Global
Funds Holdings Corp. (“Global Funds”) an Ontario,
Canada corporation.
The Company operates
as a public reorganized shell corporation with the purpose to
acquire or merge with an existing business
operation. The Company's activities are
subject to significant risks and uncertainties, as
their ability to implement and execute future business
plans and generate sufficient business revenue is directly
influenced by their ability to secure adequate financing or find
profitable business opportunities.
Certain amounts in the prior period statement of cashflows have
been reclassified to conform to the current period presentation.
These reclassifications had no effect on the previously reported
total change in cashflows.
2. Summary of Significant Accounting Policies
Basis of Presentation
The
financial statements of the Company have been prepared in
accordance with generally accepted accounting principles in the
United States of America (“US GAAP”).
Use of Estimates
The
preparation of financial statements in accordance with U.S. GAAP
requires management to make estimates and assumptions that affect
the reported amounts of assets and liabilities and the disclosure
of contingent assets and liabilities as of the date of the
financial statements and the reported amounts of revenue and
expenses for the years reported. Actual results could differ from
those estimates. Significant items that require estimates were
accruals of liabilities.
Cash and Cash Equivalents
Cash
and cash equivalents include all cash, deposits in banks and other
highly liquid investments with initial maturities of three months
or less to be cash equivalents. Balances of cash and cash
equivalents in financial institutions may at times exceed the
government-insured limits.
Income Taxes
The
Company accounts for income taxes in accordance with FASB ASC Topic
740 “Income
Taxes” under which deferred tax assets and liabilities
are determined based on temporary differences between accounting
and tax bases of assets and liabilities and net operating loss and
credit carry forwards, using enacted tax rates in effect for the
year in which the differences are expected to reverse. Valuation
allowances are established when necessary to reduce deferred tax
assets to the amounts expected to be realized. A provision for
income tax expense is recognized for income taxes payable for the
current period, plus the net changes in deferred tax amounts. Any
interest and penalties are expensed in the year that the Notice of
Assessment is received. The Company’s practice is to
recognize interest and/or penalties related to income tax matters
as interest expense.
Earnings Per Share
Earnings
per share is reported in accordance with FASB ASC Topic 260
“Earnings per
Share” which requires dual presentation of basic
earnings per share (“EPS”) and diluted EPS on the face
of all statements of earnings, for all entities with complex
capital structures. Diluted EPS reflects the potential dilution
that could occur from common shares issuable through the exercise
or conversion of stock options, restricted stock awards, warrants
and convertible securities. In certain circumstances, the
conversion of these options, warrants and convertible securities
are excluded from diluted EPS if the effect of such inclusion would
be anti-dilutive. Fully diluted EPS is not provided, when the
effect is anti-dilutive. When the effect of dilution on loss per
share is anti-dilutive, diluted loss per share equals the loss per
share.
2. Summary of Significant Accounting Policies –
continued
Fair Value Measurements
FASB
ASC Topic 820, “Fair Value
Measurements and Disclosures” defines fair value,
establishes a framework for measuring fair value in accordance with
U.S. GAAP, and expands disclosures about fair value measurements.
Investments measured and reported at fair value are classified and
disclosed in one of the following hierarchy:
Level 1 -
Quoted prices are available in active markets for identical
investments as of the period reporting date.
Level 2 -
Pricing inputs are other than quoted prices in active markets,
which are either directly or indirectly observable as of the
reporting date, and fair value is determined through the use of
models or other valuation methodologies.
Level 3 -
Pricing inputs are unobservable for the investment and included
situations where there is little, if any, market activity for the
investment. The inputs into the determination of fair value require
significant management judgment or estimation.
Recent Changes in Accounting Standards
In
August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure
Framework—Changes to the Disclosure Requirements for Fair
Value Measurement. The standard will modify the disclosure
requirements for fair value measurements by removing, modifying, or
adding certain disclosures. ASU No. 2018-13 is effective for annual
reporting periods beginning after December 15, 2019, including
interim periods within that reporting period. Early adoption is
permitted upon issuance of this ASU. The Company is permitted to
early adopt any removed or modified disclosures upon issuance of
this ASU and delay adoption of the additional disclosures until
their effective date. The Company expects that the adoption of this
ASU would not have a material impact on the Company’s
financial statements.
In June
2018, the FASB issued ASU 2018-07, “Improvements to
Nonemployee Share-Based Payment Accounting”, which simplifies
the accounting for share-based payments granted to nonemployees for
goods and services. Under the ASU, most of the guidance on such
payments to nonemployees would be aligned with the requirements for
share-based payments granted to employees. The changes take effect
for public companies for fiscal years starting after December 15,
2018, including the interim periods within that fiscal year. For
all other entities, the amendments are effective for fiscal years
beginning after December 15, 2019, and interim periods within
fiscal years beginning after December 15, 2020. The adoption of
this ASU did not have a material impact on the Company’s
financial statements.
Management does not believe that any other recently issued, but not
yet effective accounting pronouncements, if adopted, would have a
material effect on the accompanying financial
statements.
3. Going Concern
The
financial statements have been prepared assuming that the Company
will continue as a going concern. The Company is currently a public
reorganized shell corporation and has no current business activity.
The Company’s ability to continue as a going concern is
dependent on continued support from Global Funds, the majority
stockholder. This gives rise to substantial doubt about the
Company’s ability to continue as a going
concern.
4. Amount Due to a Related Company
The
Company relies on a related company to advance funds to fund its
operating expenses. The amounts advanced of $282,645 are
interest-free, unsecured and are repayable upon
demand.
In
addition, the Chief Executive Officer, Chief Financial Officer and
Director of the Company is also a director of the related
party.
5. Preferred Stock
Series A preferred stock
The Company is authorized under its Articles of Incorporation to
issue 10,000,000 shares of Series A preferred stock with a par
value of $0.001 per share. Each share of the Company’s
preferred stock provides the holder with the right to vote 1,000
votes on all matters submitted to a vote of the shareholders of the
Company and is convertible into 1,000 shares of the Company’s
common stock. The preferred stock is non-participating and carries
no dividend. The Company does not have any issued shares of the
preferred stock as of December 31, 2019 and 2018.
6. Stock-based compensation
There
was no non-cash stock-based compensation recognized for the years
ended
December 31, 2019 and 2018.
7. Income Tax
As of
December 31, 2019, the Company had net operating loss carry
forwards of approximately $917,000 that may be available to reduce
future years’ taxable income through 2038 for approximately
$891,000 and indefinitely for $26,000 of the net operating losses.
Future tax benefits which may arise as a result of these losses
have not been recognized in these financial statements, as their
realization is determined not likely to occur and accordingly, the
Company has recorded a valuation allowance for the deferred tax
asset relating to these tax loss carry-forwards. The deferred tax
asset and valuation allowance were reduced by approximately $71,000
to reflect the change in the federal tax rate from 34% to
21%.
The
provision for Federal income tax consists of the following for the
years ended December 31, 2019 and December 31, 2018:
|
|
|
|
|
|
|
|
|
Federal
income tax benefit attributable to:
|
|
|
|
Net
loss
|
$6,400
|
$8,450
|
|
Less:
valuation allowance
|
(6,400)
|
(8,450)
|
|
|
|
|
|
|
|
|
|
Net
provision for Federal income taxes
|
$-
|
$-
|
The
cumulative tax effect at the expected rate of 21% for 2019 and 21%
for 2018 of significant items comprising our net deferred tax
amount is as follows as of December 31, 2019 and December 31,
2018:
|
|
|
|
|
|
|
|
|
Deferred
tax asset attributable to:
|
|
|
|
Net
operating loss carryover
|
$232,000
|
$296,389
|
|
Less:
valuation allowance
|
(232,000)
|
(296,389)
|
|
|
|
|
|
|
|
|
|
Net
deferred tax asset
|
$-
|
$-
|
Due to the change in ownership in March 2012, the net operating
loss carry forwards as of December 31, 2011 of $213,844 may be
subject to limitations in accordance with Sec 382 of the provisions
of the Tax Reform Act of 1986 for Federal income tax purposes. Tax
return for the years ended December 31, 2019, 2018 and 2017 remain
open to and it by Federal and State Tax Authorities.
