The full text of the Company's audited consolidated
financial statements for the fiscal years ended August 31, 2018 and August 31, 2017, begins on page F-1 of this Annual Report on
Form 10-K.
BALANCE SHEETS
|
|
August 31,
2018
|
|
August 31,
2017
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
CURRENT ASSETS
|
|
|
|
|
|
|
|
|
Cash
|
|
$
|
40,885
|
|
|
$
|
4,211
|
|
Prepaid
|
|
|
310
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
TOTAL CURRENT ASSETS
|
|
$
|
41,195
|
|
|
$
|
4,211
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT LIABILITIES
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
$
|
3,927
|
|
|
$
|
3,149
|
|
Other liability (Note 5)
|
|
|
-
|
|
|
|
2,500
|
|
Due to related party (Note 4)
|
|
|
24,500
|
|
|
|
5,501
|
|
|
|
|
|
|
|
|
|
|
TOTAL CURRENT LIABILITIES
|
|
|
28,427
|
|
|
|
11,150
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
STOCKHOLDERS’ EQUITY (DEFICIT)
|
|
|
|
|
|
|
|
|
Capital stock (Note 3)
|
|
|
|
|
|
|
|
|
Authorized
|
|
|
|
|
|
|
|
|
2,000,000 shares of preferred stock, $0.001 par value,
|
|
|
|
|
|
|
|
|
Issued and outstanding - nil
|
|
|
-
|
|
|
|
-
|
|
200,000,000 shares of common stock, $0.001 par value,
|
|
|
|
|
|
|
|
|
Issued and outstanding
|
|
|
|
|
|
|
|
|
65,600,000 shares of common stock (65,600,000 - August 31, 2017)
|
|
|
65,600
|
|
|
|
65,600
|
|
Advanced receipts - Shares to be issued
|
|
|
100,000
|
|
|
|
-
|
|
Additional paid in capital
|
|
|
(40,509
|
)
|
|
|
(46,010
|
)
|
Accumulated deficit
|
|
|
(112,323
|
)
|
|
|
(26,529
|
)
|
|
|
|
|
|
|
|
|
|
TOTAL STOCKHOLDERS’ EQUITY (DEFICIT)
|
|
|
12,768
|
|
|
|
(6,939
|
)
|
|
|
|
|
|
|
|
|
|
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
|
|
$
|
41,195
|
|
|
$
|
4,211
|
|
|
|
|
|
|
|
|
|
|
Going
Concern (Note 1)
The accompanying
notes are an integral part of these financial statements.
CHINA
WUYI MOUNTAIN, LTD.
(Formerly
Kokos Group Inc.)
STATEMENTS
OF OPERATIONS
|
|
Year ended
August 31, 2018
|
|
Year ended
August 31, 2017
|
|
|
|
|
|
REVENUE
|
|
$
|
-
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
EXPENSES
|
|
|
|
|
|
|
|
|
Office and general
|
|
$
|
22,794
|
|
|
$
|
9,240
|
|
Consulting fees
|
|
|
45,000
|
|
|
|
-
|
|
Professional fees
|
|
|
20,500
|
|
|
|
15,950
|
|
|
|
|
|
|
|
|
|
|
TOTAL EXPENSES
|
|
|
(88,294
|
)
|
|
|
(25,190
|
)
|
|
|
|
|
|
|
|
|
|
Other Income
|
|
|
2,500
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
NET LOSS
|
|
$
|
(85,794
|
)
|
|
$
|
(25,190
|
)
|
|
|
|
|
|
|
|
|
|
BASIC NET LOSS PER COMMON SHARE
|
|
$
|
(0.00
|
)
|
|
$
|
(0.00
|
)
|
|
|
|
|
|
|
|
|
|
WEIGHTED AVERAGE NUMBER OF BASIC COMMON SHARES OUTSTANDING
|
|
|
65,600,000
|
|
|
|
515,502,466
|
|
The accompanying
notes are an integral part of these financial statements.
CHINA WUYI MOUNTAIN, LTD.
STATEMENT OF STOCKHOLDERS’ EQUITY (DEFICIT)
FOR THE PERIOD FROM August 31, 2016 TO August
31, 2018
|
Common Stock
|
|
Number of shares
|
Amount
|
Additional Paid-in Capital
|
Advanced receipts -Shares to be issued
|
Deficit Accumulated During the Development Stage
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, August 31, 2016
|
800,000,000
|
$ 800,000
|
$(790,000)
|
$
-
|
$
(1,339)
|
$ 8,661
|
|
|
|
|
|
|
|
Common shares issued for cash – at $0.000375 per share, March 31, 2017
|
25,600,000
|
25,600
|
(16,000)
|
-
|
-
|
9,600
|
|
|
|
|
|
|
|
Shares return to treasury – at $0.000000013 per share – April 20, 2017
|
(760,000,000)
|
(760,000)
|
759,990
|
-
|
-
|
(10)
|
|
|
|
|
|
|
|
Net loss for the year ended August 31, 2017
|
-
|
-
|
-
|
-
|
(25,190)
|
(25,190)
|
|
|
|
|
|
|
|
Balance, August 31, 2017
|
65,600,000
|
65,600
|
(46,010)
|
-
|
(26,529)
|
(6,939)
|
|
|
|
|
|
|
|
Common shares subscribed not issued for cash at $0.0075 – May 2, 2018 (Note 4)
|
-
|
-
|
-
|
100,000
|
-
|
100,000
|
|
|
|
|
|
|
|
Loan forgiveness – October 19, 2017
|
-
|
-
|
5,501
|
-
|
-
|
5,501
|
|
|
|
|
|
|
|
Net loss for the year ended August 31, 2018
|
-
|
--
|
-
|
-
|
(85,794)
|
(85,794)
|
|
|
|
|
|
|
|
Balance, August 31, 2018
|
65,600,000
|
$ 65,600
|
$ (40,509)
|
$ 100,000,
|
$ (112,323)
|
$ (12,768)
|
The accompanying
notes are an integral part of these financial statements.
CHINA WUYI MOUNTAIN, LTD.
(Formerly Kokos Group Inc.)
STATEMENTS OF CASH FLOWS
|
|
Year ended August 31, 2018
|
|
Year ended August 31,
2017
|
|
|
|
|
|
OPERATING ACTIVITIES
|
|
|
|
|
|
|
|
|
Net loss for the period
|
|
$
|
(85,794
|
)
|
|
$
|
(25,190
|
)
|
Adjustments to reconcile net loss to net cash used in operating activities:
|
|
|
|
|
|
|
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
Prepaid
|
|
|
(310
|
)
|
|
|
|
|
Increase (decrease) in accounts payables
|
|
|
778
|
|
|
|
3,149
|
|
Increase (decrease) in other liability
|
|
|
(2,500
|
)
|
|
|
2,500
|
|
|
|
|
|
|
|
|
|
|
NET CASH USED IN OPERATING ACTIVITIES
|
|
|
(87,826
|
)
|
|
|
(19,541
|
)
|
|
|
|
|
|
|
|
|
|
CASH FLOW FROM INVESTING ACTIVITIES
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
CASH FLOW FROM FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
|
Proceeds on sale of common stock
|
|
|
-
|
|
|
|
9,600
|
|
Shares to be issued
|
|
|
100,000
|
|
|
|
-
|
|
Proceeds from related parties
|
|
|
34,500
|
|
|
|
3,816
|
|
Payment to related party loan
|
|
|
(10,000
|
)
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
NET CASH PROVIDED BY FINANCING ACTIVITIES
|
|
|
124,500
|
|
|
|
13,416
|
|
|
|
|
|
|
|
|
|
|
NET INCREASE (DECREASE) IN CASH
|
|
|
36,674
|
|
|
|
(6,125
|
)
|
|
|
|
|
|
|
|
|
|
CASH, BEGINNING
|
|
|
4,211
|
|
|
|
10,336
|
|
|
|
|
|
|
|
|
|
|
CASH, ENDING
|
|
$
|
40,885
|
|
|
$
|
4,211
|
|
|
|
|
|
|
|
|
|
|
SUPPLEMENTAL CASH FLOW INFORMATION AND NONCASH
FINANCING ACTIVITIES;
Cash paid during the period for:
|
|
|
|
|
|
|
|
|
Interest
|
|
$
|
-
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
Income taxes
|
|
$
|
-
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
The accompanying
notes are an integral part of these financial statements.
CHINA WUYI MOUNTAIN, LTD
(Formerly Kokos Group Inc.).
NOTES TO FINANCIAL STATEMENTS
August 31, 2018
NOTE 1 – NATURE OF OPERATIONS AND
BASIS OF PRESENTATION
KOKOS GROUP INC. was incorporated in the State
of Nevada as a for-profit Company on July 26, 2016 and established a fiscal year end of August 31. The Company is organized to
bottle, market, distribute and sell our own brand of coconut water, presently called “Koos Coconut Water”. On November
10, 2017 the Board of directors and the majority of its shareholders of Kokos Group Inc., amended the Company’s current Certificate
of Incorporation in conformity with the applicable laws of the State of Nevada to change the name of the Company from Kokos Group
Inc. to China Wu Yi Mountain Ltd. On May 24, 2018 FINRA approved the Company’s corporate action changing the Company’s
name and trading symbol effective May 25, 2018.
On October 19, 2017
Mr. Lei Wang became its Chief Executive Officer, Chief Financial Officer and sole Director and Mr. Richard Rappaprt was appointed
Secretary. In addition, Mr. Baterina and Messrs. Flemming H.H. Hansen and Arthur T. Claravall submitted his resignations from all
executive officer positions with the Company, including Chief Executive Officer and President effective October 19, 2017, and each
submitted their resignation as a member of the Board. On January 18, 2018, Richard Rappaport submitted his resignation as Secretary
of Kokos Group Inc. (the "Company"), effective immediately. On the same day, Ying Zhang was appointed
Secretary, effective immediately.
Going concern
To date the Company has generated no revenues
from its business operations and has incurred operating losses since inception of $112,323. As at August 31, 2018, the Company
has working capital of $12,768. The Company requires additional funding to meet its ongoing obligations and to fund anticipated
operating losses. The ability of the Company to continue as a going concern is dependent on raising capital to fund its initial
business plan and ultimately to attain profitable operations. Accordingly, these factors raise substantial doubt as to the Company’s
ability to continue as a going concern. The Company intends to continue to fund its business by way of private placements and advances
from related parties as may be required. As of August 31, 2018, the Company has issued 800,000,000 founders shares at $0.0000125
per share for net proceeds of $10,000 to the Company and private placements of 25,600,000 common shares at $0.000375 per share
for net proceeds of $9,600.
On May 2, 2018, the Company entered into a subscription agreement
with a China-based company, Grand Biotechnology Group Liaoning, (the authorized signor for Grand Biotechnology is a 4.9% shareholder
of the Company), for the issuance of an aggregate of 20,000,000 shares of restricted common stock at $0.0075 per share for an aggregate
purchase price of U.S.$150,000. On May 15, 2018 the Company had received $100,000
These financial statements do not include
any adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classification of liabilities
that might result from this uncertainty.
NOTE 2
– SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The financial statements present the balance
sheet, statements of operations, stockholders’ equity (deficit) and cash flows of the Company. These financial statements
are presented in the United States dollars and have been prepared in accordance with accounting principles generally accepted in
the United States.
Segmented Reporting
FSAB ASC 280, “Disclosure about Segments
of an Enterprise and Related Information”, changed the way public companies report information about segments of their business
in their quarterly reports issued to shareholders. It also requires entity-wide disclosures about the products and services the
entity provides, the material countries in which it holds assets and reports revenues and its major customers.
Comprehensive Loss
“Reporting Comprehensive Income,”
establishes standards for the reporting and display of comprehensive loss and its components in the financial statements. As at
August 31, 2018 the Company has no items that represent a comprehensive loss and, therefore, has not included a schedule of comprehensive
loss in the financial statements.
CHINA WUYI MOUNTAIN, LTD
(Formerly Kokos Group Inc.).
NOTES TO FINANCIAL STATEMENTS
August 31, 2018
NOTE 2
– SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Use of Estimates and Assumptions
Preparation of the financial statements in
conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain
reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements
and the reported amounts of revenues and expenses during the period. Accordingly, actual results could differ from those estimates.
Cash and Cash Equivalents
For purposes of the statement of cash flows,
the Company considers highly liquid financial instruments purchased with a maturity of three months or less to be cash equivalents.
Revenue Recognition
The Company recognizes revenue in accordance
with ASC topic 605 “Revenue Recognition, and other applicable revenue recognition guidance under US GAAP. Sales revenue
is recognized for our retail and wholesale customers when: (i) persuasive evidence of a sales arrangement exists, (ii) the sales
terms are fixed or determinable, (iii) title and risk of loss have transferred, and (iv) collectability is reasonably assured —
generally when products are shipped to the customer and services are rendered, except in situations in which title passes upon
receipt of the products by the customer. Revenue consists of revenue earned for the sale of organic coconut water and services
provided by the Company. Revenue is recognized at the time the product is shipped to the customer and or services provided by the
Company are fulfilled.
Financial Instruments
All significant financial assets, financial
liabilities and equity instruments of the Company are either recognized or disclosed in the financial statements together with
other information relevant for making a reasonable assessment of future cash flows,
interest rate risk and credit risk. Where practical
the fair values of financial assets and financial liabilities have been determined and disclosed; otherwise only available information
pertinent to fair value has been disclosed.
Loss per Common Share
The basic earnings (loss) per share is calculated
by dividing the Company’s net income available to common shareholders by the weighted average number of common shares during
the year. The diluted earnings (loss) per share is calculated by dividing the Company’s net income (loss) available to common
shareholders by the diluted weighted average number of shares outstanding during the year. The diluted weighted average number
of shares outstanding is the basic weighted number of shares adjusted for any potentially dilutive debt or equity. Diluted earnings
(loss) per share are the same as basic earnings (loss) per share due to the lack of dilutive items in the Company.
Income Taxes
The Company follows the liability method of
accounting for income taxes. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences
attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective
tax balances and tax loss carry-forwards. Deferred tax assets and liabilities are measured using enacted or substantially enacted
tax rates expected to apply to the taxable income in the years in which those differences are expected to be recovered or settled.
The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes
the date of enactment or substantive enactment.
Stock-based Compensation
The Company follows ASC 718-10, "Stock
Compensation", which addresses the accounting for transactions in which an entity exchanges its equity instruments for goods
or services, with a primary focus on transactions in which an entity obtains employee services in share-based payment transactions.
ASC 718-10 is a revision to SFAS No. 123, "Accounting for Stock-Based Compensation," and supersedes Accounting Principles
Board ("APB") Opinion No. 25, "Accounting for Stock Issued to
CHINA WUYI MOUNTAIN, LTD
(Formerly Kokos Group Inc.).
NOTES TO FINANCIAL STATEMENTS
August 31, 2018
NOTE 2
– SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Stock-based Compensation (continued)
Employees," and its related implementation
guidance. ASC 718-10 requires measurement of the cost of employee services received in exchange for an award of equity instruments
based on the grant-date fair value of the award (with limited exceptions). Incremental compensation costs arising from subsequent
modifications of awards after the grant date must be recognized. The Company has not adopted a stock option plan and has not granted
any stock options. As at May 31, 2017 the Company had not adopted a stock option plan nor had it granted any stock options. Accordingly,
no stock-based compensation has been recorded to date.
Recent Accounting Pronouncements
The Company’s management has evaluated
all the recently issued, but not yet effective, accounting standards that have been issued or proposed by the FASB or other standards-setting
bodies through the filing date of these financial statements and does not believe the future adoption of any such pronouncements
will have a material effect on the Company’s financial position and results of operations.
NOTE
3 – CAPITAL STOCK
The Company’s capitalization is 200,000,000
common shares with a par value of $0.001 per share and 2,000,000 preferred shares with a par value of $0.001 per share. Total shares
issued as of November 30, 2017 are 65,600,000 common shares and no preferred shares have been issued.
On July 26, 2016 the Company issued 800,000,000
(pre-split-10,000,000) common shares at $0.0000125 (pre-split $0.001) per share to the former sole director and President of the
Company for cash proceeds of $10,000.
During March 2017 the Company received $9,600
in private placements for the purchase of 25,600,000 (pre-split -320,000 common shares of the Company’s stock at $0.000375
(pre-split $0.03) per share.
On April 6, 2017 the directors of the Company
amended the Company’s Articles of Incorporation to increase the authorized capital structure of the Corporation to include
two million (2,000,000) shares of preferred stock, par value $0.001, and to retain the previously authorized two hundred million
(200,000,000) shares of common stock, par value ($0.001).
On April 10, 2017, the founding shareholder
of the Company returned 760,000,000 (9,500,000 pre-split) restricted shares of common stock to treasury and the shares were subsequently
cancelled by the Company. The shares were returned to treasury for $0.000000013 per share for a total consideration of $10 to the
shareholder. Post-split our founding shareholder will have 40,000,000 shares of common stock of the Company.
On April 20, 2017, the directors of the Company
approved a special resolution to undertake a forward split of the common stock of the Company on a basis of 80 new common shares
for 1 old common share. All references in these financial statements to number of common shares, price per share and weighted average
number of shares outstanding prior to the 80:1 forward split have been adjusted to reflect the stock split on a retroactive basis,
unless otherwise noted.
On May
2, 2018, the Company entered into a subscription agreement with a China-based company, Grand Biotechnology Group Liaoning, (the
authorized signor for Grand Biotechnology is a 4.9% shareholder of the Company), for the issuance of an aggregate of 20,000,000
shares of restricted common stock at $0.0075 per share for an aggregate purchase price of U.S.$150,000. As of August 31, 2018,
the Company had received $100,000. These funds are recorded as “
Advance receipts
for common stock
“under stockholders’ equity on the balance sheet.
As of August 31, 2018, the Company has not
granted any stock options and has not recorded any stock-based compensation.
As of August 31, 2018, the Company issued 0
shares of preferred stock and 65,600,000 common shares are issued and outstanding.
CHINA WUYI MOUNTAIN, LTD
(Formerly Kokos Group Inc.).
NOTES TO FINANCIAL STATEMENTS
August 31, 2018
NOTE
4 – RELATED PARTY TRANSACTIONS
On October 19, 2017, the former CEO of the Company
forgave all related party loans to the Company in a total of $5,501. This will be reflected an increase in Additional-Paid-In-Capital
in the financial statements.
During the period ended August 31, 2018, Century
Acquisition (Formerly WP Acquisition Company, LLC), a 25.12% shareholder, advanced the Company $31,000 and paid invoices in the
amount of $3,500 on behalf of the Company. On June 8, 2018 the Company repaid a total of $10,000 to related party advances. The
amounts due to the related party are unsecured and non- interest-bearing with no set terms of repayment.
As of August 31, 2018, the balance of due to
related party is $24,500 (August 31, 2017 - $5,501). The amounts due to the related party are unsecured and non- interest-bearing
with no set terms of repayment.
NOTE
5 – AGREEMENTS
On February 25, 2017 the Company entered into
a Purchase Agreement to supply 69,300 private label Tetra Prisma 330ml packs of organic coconut water. The total purchase price
is $55,410. The purchaser has made the initial non-refundable payment of $2,500. Other items on payment schedule include; an additional
$2,500 non-refundable payment upon approval of private label artwork; $35,000 upon final order by purchaser; and $15,410 due on
delivery and acceptance of product by purchaser. Product will be delivered to purchaser within 90 days of the Company receiving
payments as per above schedule. Subsequent to the year end on August 31, 2018 the client who entered into the Purchase Agreement
has decided not to proceed with the purchase order.
NOTE 6
– INCOME TAXES
A reconciliation of the provision for income
taxes at the United States federal statutory rate compared to the Company’s income tax expense as reported is as follows:
|
|
August 31,
2018
|
|
August 31,
2017
|
|
|
|
|
|
Net loss before income taxes per financial statements
|
|
$
|
(85,794
|
)
|
|
$
|
(25,190
|
)
|
Income tax rate
|
|
|
21
|
%
|
|
|
21
|
%
|
Income tax recovery
|
|
|
(18,017
|
)
|
|
|
(5,290
|
)
|
Non-deductible
|
|
|
--
|
|
|
|
--
|
|
Valuation allowance change
|
|
|
18,017
|
|
|
|
5,290
|
|
|
|
|
|
|
|
|
|
|
Provision for income taxes
|
|
|
$ –
|
|
|
$
|
-
|
|
The significant component of deferred income
tax assets at August 31, 2018 and August31, 2017, is as follows:
|
|
August 31,
2018
|
|
August 31,
2017
|
Net operating loss carry-forward
|
|
$
|
23,588
|
|
|
$
|
9,019
|
|
Valuation allowance
|
|
|
(23,588
|
)
|
|
|
(9,019
|
)
|
|
|
|
|
|
|
|
|
|
Net deferred income tax asset
|
|
$
|
–
|
|
|
$
|
–
|
|
The amount taken into income as deferred income
tax assets must reflect that portion of the income tax loss carry forwards that is more likely-than-not to be realized from future
operations. The Company has chosen to provide a full valuation allowance against all available income tax loss carry forwards.
The Company has recognized a valuation allowance for the deferred income tax asset since the Company cannot be assured that it
is more likely than not that such benefit will be utilized in future
CHINA WUYI MOUNTAIN, LTD
(Formerly Kokos Group Inc.).
NOTES TO FINANCIAL STATEMENTS
August 31, 2018
NOTE 6 – INCOME TAXES (continued)
years. The valuation allowance is reviewed
annually. When circumstances change, and which cause a change in management's judgment about the realizability of deferred income
tax assets, the impact of the change on the valuation allowance is generally reflected in current income.
On December 22, 2017, new federal tax reform
legislation was enacted in the United States (the “2017 Tax Act”), resulting in significant changes from previous tax
law. The 2017 Tax Act reduces the federal corporate income tax rate to 21% from 35% effective July 1, 2018 for the Company. The
rate change, along with certain immaterial changes in tax basis resulting from the 2017 Tax Act, resulted in a reduction of the
Company’s deferred tax assets of $4,838 and a corresponding reduction in the valuation allowance.
As of August 31, 2018,
and August 31, 2017 the Company has no unrecognized income tax benefits. The Company’s policy for classifying interest and
penalties associated with unrecognized income tax benefits is to include such items as tax expense. No interest or penalties have
been recorded during the year ended August 31, 2018 and August 31, 2017 and no interest or penalties have been accrued as of August
31, 2018 and August 31, 2017. As of August 31, 2018, and August 31, 2017, the Company did not have any amounts recorded pertaining
to uncertain tax positions.
The tax years from
2016 and forward remain open to examination by federal and state authorities due to net operating loss and credit carryforwards.
The Company is currently not under examination by the Internal Revenue Service or any other taxing authorities.
Due to a subsequent
change in control, certain losses may not be available for carryforward under Section 382 of the Internal Revenue Code.