ITEM 1. FINANCIAL STATEMENTS
UNION BRIDGE HOLDINGS LTD.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
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September 30,
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December 31
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2017
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2016
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ASSETS
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Current Assets
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|
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|
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Cash and cash equivalents
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$
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122,633
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$
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6,427
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Prepaid expenses
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3,333
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10,000
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Total Current Assets
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125,966
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16,427
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TOTAL ASSETS
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$
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125,966
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$
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16,427
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LIABILITIES AND STOCKHOLDERS' DEFICIT
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Current Liabilities
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Accounts payable and accrued liabilities
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$
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3,919
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$
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11,523
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Due to related parties
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223,964
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54,601
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Total Current Liabilities
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227,883
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66,124
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TOTAL LIABILITIES
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227,883
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66,124
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Stockholders' Deficit
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Preferred stock, $0.001 par value, 20,000,000 shares authorized;
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0 shares issued and outstanding
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-
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-
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Common stock, $0.001 par value, 1,000,000,000 shares authorized;
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53,600,000 shares issued and outstanding
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53,600
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53,600
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Capital Deficiency
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(18,400
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)
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(18,400
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)
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Accumulated deficit
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(137,117
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)
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(84,897
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)
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Total Stockholders' Deficit
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(101,917
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)
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(49,697
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)
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TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT
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$
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125,966
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|
$
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16,427
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|
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
UNION BRIDGE HOLDINGS LTD.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
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Three months ended
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Nine months ended
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September 30,
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September 30,
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2017
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2016
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2017
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2016
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Revenues
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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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$
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-
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Operating Expenses
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General and administrative expenses (recovery)
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(23
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)
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-
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31
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31
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Professional fees
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15,819
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10,819
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52,189
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49,077
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Total operating expenses
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15,796
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10,819
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52,220
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49,108
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Loss from operations
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(15,796
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)
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(10,819
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)
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(52,220
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)
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(49,108
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)
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Other expense
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-
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-
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-
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-
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Net loss
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$
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(15,796
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)
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$
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(10,819
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)
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$
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(52,220
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)
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$
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(49,108
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)
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Basic and dilutive net loss per common share
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$
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(0.00
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)
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$
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(0.00
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)
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$
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(0.00
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)
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$
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(0.00
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)
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Weighted average number of common shares outstanding - basic and diluted
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53,600,000
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53,600,000
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53,600,000
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53,600,000
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The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
UNION BRIDGE HOLDINGS LTD.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
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Nine months ended
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September 30,
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2017
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2016
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CASH FLOWS FROM OPERATING ACTIVITIES:
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Net loss
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$
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(52,220
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)
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$
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(49,108
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)
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Adjustments to reconcile net loss to net cash used in operations:
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Expenses paid by related parties
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27,627
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34,203
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Changes in operating assets and liabilities:
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Decrease in prepaid expenses
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6,667
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-
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Increase (decrease) in accounts payable
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(7,604
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)
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3,764
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Net Cash Used in Operating Activities
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(25,530
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)
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(11,141
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)
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CASH FLOWS FROM FINANCING ACTIVITIES:
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Proceeds from a related party
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141,736
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-
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Net Cash Provided By Financing Activities
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141,736
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-
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Net increase (decrease) in cash and cash equivalents
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116,206
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(11,141
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)
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Cash and cash equivalents, beginning of period
|
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6,427
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11,141
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|
Cash and cash equivalents, end of period
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$
|
122,633
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$
|
-
|
|
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|
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|
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Supplemental cash flow information
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Cash paid for interest
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$
|
-
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$
|
-
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|
Cash paid for taxes
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|
$
|
-
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|
$
|
-
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|
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
UNION BRIDGE HOLDINGS LIMITED
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2017
NOTE 1 - ORGANIZATION, DESCRIPTION OF BUSINESS, AND GOING CONCERN
UNION BRIDGE HOLDINGS LIMITED (the “Company”) was incorporated under the laws of the State of Nevada on May 6, 2014. The Company has been developing a business relating to the distribution of auto parts and components necessary for maintenance and repairs of automobiles and special equipment (construction, road machinery etc.) from China to Europe and CIS countries (Kyrgyzstan, Kazakhstan, Armenia, Azerbaijan, Tajikistan, Uzbekistan), but has recently developed a growth plan that includes expansion into businesses in the health-related industry, with the goal to maintaining long term sustainable growth and shareholders' wealth creation.
The accounting and reporting policies of the Company conform to accounting principles generally accepted in the United States of America, and the Company’s fiscal year end is December 31.
Going Concern
The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplate continuation of the Company as a going concern. However, the Company has a net loss for the nine months ended September 30, 2017 of $52,220, an accumulated deficit of $137,117, cash flows used in operating activities of $25,530, and needs additional cash to maintain its operations.
These factors raise substantial doubt about the Company's ability to continue as a going concern. The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty. The Company's continued existence is dependent upon management's ability to develop profitable operations, continued contributions from the Company's executive officers to finance its operations and the ability to obtain additional funding sources to explore potential strategic relationships and to provide capital and other resources for the further development and marketing of the Company's products and business.
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying unaudited financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America for interim financial information and with the instructions to Form 10-Q and Regulation S-X. Accordingly, the financial statements do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements.
In the opinion of management, all adjustments consisting of normal recurring entries necessary for a fair statement of the periods presented for: (a) the financial position; (b) the result of operations; and (c) cash flows, have been made in order to make the financial statements presented not misleading. The results of operations for such interim periods are not necessarily indicative of operations for a full year. The accompanying unaudited financial statements should be read in conjunction with the financial statements and related notes included in the Company's Annual Report on Form 10-K for the year ended December 31, 2016, as filed with the SEC on March 29, 2017.
Basis of Consolidation
These financial statements include the accounts of the Company and the wholly-owned subsidiaries, First Channel Limited and Union Beam Investment Limited. All material intercompany balances and transactions have been eliminated.
Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements as well as the reported amount of revenues and expenses during the reporting period. Actual results could differ from these estimates.
Recent accounting pronouncements
Management has considered all recent accounting pronouncements issued. The Company's management believes that these recent pronouncements will not have a material effect on the Company's financial statements.
NOTE 3 - RELATED-PARTY TRANSACTIONS
During the nine month periods ended September 30, 2017 and 2016, directors have paid $27,627 and $34,203, respectively, of operating expenses on behalf of the Company.
During the nine month periods ended September 30, 2017 and 2016, directors have advanced $141,736 and $0, respectively, to the Company to use as working capital.
As of September 30, 2017, and December 31, 2016, the Company owed to related parties $223,964 and $54,601, respectively.
The Company’s principal executive offices in Hong Kong, which it shares with its controlling shareholder, are furnished to the Company without any charge.
NOTE 4 - SUBSEQUENT EVENTS
The Company has analyzed its operations subsequent to September 30, 2017 to the date these financial statements were issued, and has determined that it does not have any material events to disclose.
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION
Overview
Union Bridge Holdings Limited (the “Company”) was incorporated under the laws of the State of Nevada on May 6, 2014 under the name Costo Inc. On May 23, 2016, the Company changed its name to Union Bridge Holdings Limited in connection with its growth plan that includes expansion into businesses in the health-related industry with the goal to maintaining long term sustainable growth and shareholders’ wealth creation. The Company is evaluating the viability of becoming a distributor of auto parts and components necessary for the maintenance and repairs of automobiles and special equipment (construction, road machinery etc.) from China to Europe and CIS countries (Kyrgyzstan, Kazakhstan, Armenia, Azerbaijan, Tajikistan, and Uzbekistan).
The Company is planning to use the recently formed subsidiaries discussed below to expand its business to include business operations in the health-related industry. Prospective targets are companies in the biotech industry, innovative healthcare products such health supplements and devices as well as healthcare hospitality and service operations. Our expansion is expected to include raising working capital. We have not entered into any definitive agreements for acquisitions and do not have any commitments for financing as of the date of this report.
Union Beam Investment Limited, a Hong Kong company, was formed on February 18, 2016 and First Channel Limited, a British Virgin Islands company was formed on March 18, 2016. Union Beam became a wholly owned subsidiary of First Channel on August 11, 2016 and First Channel became a wholly owned subsidiary of the Company on August 8, 2016. The Company plans to use these newly formed subsidiaries to expand the Company’s business operations in the health-related industry.
Change in Fiscal Year End
On May 23, 2016, the Company changed its fiscal year end from November 30 to December 31. The Company now operates on a calendar year ending on December 31.
RESULTS OF OPERATIONS
We are a development stage company and have not generated revenue to date. We have incurred recurring losses to date. Our financial statements have been prepared assuming that we will continue as a going concern and, accordingly, do not include adjustments relating to the recoverability and realization of assets and classification of liabilities that might be necessary should we be unable to continue in operation. We expect we will require additional capital to meet our long term operating requirements. We expect to raise additional capital through, among other things, the sale of equity or debt securities.
The following comparative analysis on results of operations was based primarily on the comparative financial statements, footnotes and related information for the periods identified below and should be read in conjunction with the financial statements and the notes to those statements that are included elsewhere in this report.
The results discussed below are for the three and nine months ended September 30, 2017 and September 30, 2016. For comparative purposes, we are comparing the three and nine months ended September 30, 2017 to the three and nine months ended September 30, 2016 as a result of our change in fiscal year end from November 30 to December 31, discussed above.
Three and Nine Month Periods Ended September 30, 2017 Compared to the Three and Nine Month Periods Ended September 30, 2016
Revenue
During the three and nine months ended September 30, 2017 and September 30, 2016 we did not generate any revenue.
Operating Expenses
Total operating expenses for the three months ended September 30, 2017 increased by $4,977 compared to the three months ended September 30, 2016. Total operating expenses for the nine months ended September 30, 2017 increased by $3,112 compared to the nine months ended September 30, 2016. The increases were primarily due to an increase in professional fees incurred in connection with the Company’s reporting obligations to the Securities and Exchange Commission.
Net Loss
The net loss for the three months ended September 30, 2017 was $15,796, an increase of $4,977 compared to the three months ended September 30, 2016. The net loss for the nine months ended September 30, 2017 was $52,220, an increase of $3,112 compared to the nine months ended September 30, 2016. The increases were primarily a result of the increase in operating expenses discussed above.
Liquidity and Capital Resources
Liquidity is the ability of an enterprise to generate adequate amounts of cash to meet its needs for cash requirements. As of September 30, 2017, we had a working capital deficit of $101,917, an increase of $52,220 compared to our working capital deficit of $49,697 on December 31, 2016. The increase is primarily a result of an increase in total current liabilities of $161,759, partially offset by an increase in total current assets of $109,539.
Cash Flows From Operating Activities
Net cash used in operating activities for the nine month period ended September 30, 2017 was $25,530, compared to $11,141 for the nine month period ended September 30, 2016. The increase of $14,389 was primarily a result of a reduction in accounts payable and partially offset by a reduction in prepaid expenses and expenses paid directly by related parties.
Cash Flows From Financing Activities
We have financed our operations primarily with advances from shareholders. Net cash provided by financing activities was $141,736 during the nine month period ended September 30, 2017 compared to $0 in the nine month period ended September 30, 2016. The increase in cash provided by financing activities consisted of proceeds from related party advances.
Plan of Operation and Funding
We expect that working capital requirements will continue to be funded through further issuances of our securities and loans from our principal shareholders. Our working capital requirements are expected to increase in line with the growth of our business.
Existing working capital, further advances and debt instruments, and anticipated cash flow are not expected to be adequate to fund our operations and potential acquisitions over the next twelve months. We have no lines of credit or other bank financing arrangements. Generally, we have financed operations to date through the proceeds of the private placement of equity and debt instruments. In connection with our business plan, management anticipates additional increases in operating expenses and capital expenditures relating to: (i) the acquisition of businesses in the health-related industry; (ii) acquisition of inventory; (iii) developmental expenses associated with a start-up business; and (iv) marketing expenses. We intend to finance these expenses with further issuances of equity securities and debt instruments. Thereafter, we expect we will need to raise additional capital and generate revenues to meet long-term operating requirements. Additional issuances of equity or convertible debt securities will result in dilution to our current shareholders. Further, such securities might have rights, preferences or privileges senior to our common stock. Additional financing may not be available upon acceptable terms, or at all. If adequate funds are not available or are not available on acceptable terms, we may not be able to take advantage of prospective new business endeavors or opportunities, which could significantly and materially restrict our business operations.
Material Commitments
As of September 30, 2017, we had no material commitments.
Off-Balance Sheet Arrangements
As of the date of this Quarterly Report, 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, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.
Going Concern
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates continuity of operations, realization of assets, and liquidation of liabilities in the normal course of business.
As reflected in the accompanying condensed consolidated financial statements, the Company had an accumulated deficit at September 30, 2017 of $137,117, a net loss for the nine months ended September 30, 2017 of $52,220 and net cash used in operating activities for the nine months ended September 30, 2017 of $25,530. These conditions raise substantial doubt about our ability to continue as a going concern.
The Company is attempting to produce sufficient revenue; however, the Company’s cash position is not sufficient to support its daily operations. While the Company believes in the viability of its strategy to produce sufficient revenue and in its ability to raise additional funds, there can be no assurances that the Company will accomplish its goals. The ability of the Company to continue as a going concern is dependent upon its ability to further implement its business plan and generate sufficient revenues and in its ability to raise additional funds.
The condensed consolidated financial statements do not include any adjustments related to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.
The independent registered public accounting firm’s opinion accompanying our December 31, 2016 consolidated financial statements contained an explanatory paragraph expressing substantial doubt about our ability to continue as a going concern. The consolidated financial statements have been prepared “assuming that we will continue as a going concern,” which contemplates that we will realize our assets and satisfy our liabilities and commitments in the ordinary course of business.
Critical Accounting Policies
We have identified the following policies below as critical to our business and results of operations. Our reported results are impacted by the application of the following accounting policies, certain of which require management to make subjective or complex judgments. These judgments involve making estimates about the effect of matters that are inherently uncertain and may significantly impact quarterly or annual results of operations. For all of these policies, management cautions that future events rarely develop exactly as expected, and the best estimates routinely require adjustment. Specific risks associated with these critical accounting policies are described in the following paragraphs.
Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements as well as the reported amount of revenues and expenses during the reporting period. Actual results could differ from these estimates.