Item 1. Interim Financial Statements.
PONY GROUP INC., AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
| | |
March 31,
2023 | | |
December 31,
2022 | |
| | |
(Unaudited) | | |
| |
| Assets | |
| | |
| |
| Current assets | |
| | |
| |
| Cash and cash equivalents | |
$ | 25,542 | | |
$ | 49,803 | |
| Accounts receivables | |
| 14,435 | | |
| 10,723 | |
| Other receivables | |
| 26,496 | | |
| 285 | |
| Other receivables-related parties | |
| 8,998 | | |
| 8,998 | |
| Total current assets | |
| 75,471 | | |
| 69,809 | |
| | |
| | | |
| | |
| Total assets | |
$ | 75,471 | | |
$ | 69,809 | |
| | |
| | | |
| | |
| Liabilities and Equity | |
| | | |
| | |
| | |
| | | |
| | |
| Current liabilities | |
| | | |
| | |
| Accounts payable | |
$ | 34,793 | | |
$ | 31,343 | |
| Other payable- related parties | |
| 387,838 | | |
| 378,753 | |
| Other current liability | |
| 66,334 | | |
| 15,257 | |
| Total current liabilities | |
| 488,965 | | |
| 425,353 | |
| Total liabilities | |
$ | 488,965 | | |
$ | 425,353 | |
| | |
| | | |
| | |
| Equity | |
| | | |
| | |
| Ordinary shares, $0.001 par value, 70,000,000 shares authorized, 11,500,000 shares issued and outstanding as of March 31, 2023 and December 31, 2022, respectively | |
| 11,500 | | |
| 11,500 | |
| Additional paid-in capital | |
| 176,000 | | |
| 176,000 | |
| Accumulated other comprehensive income | |
| 5,461 | | |
| 6,360 | |
| Accumulated deficit | |
| (606,455 | ) | |
| (549,404 | ) |
| Total equity | |
| (413,494 | ) | |
| (355,544 | ) |
| Total liabilities and equity | |
$ | 75,471 | | |
$ | 69,809 | |
The accompanying notes are integral to these consolidated
financial statements.
PONY GROUP INC., AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
| | |
For The Three Months Ended
March 31, | |
| | |
2023 | | |
2022 | |
| | |
| | |
| |
| Revenue | |
$ | 56,166 | | |
$ | 29,868 | |
| | |
| | | |
| | |
| Cost of revenue | |
| 24,604 | | |
| 24,824 | |
| | |
| | | |
| | |
| Gross profit | |
| 31,562 | | |
| 5,044 | |
| | |
| | | |
| | |
| Operating expenses | |
| | | |
| | |
| General & administrative expenses | |
| 88,535 | | |
| 114,348 | |
| Research and development expense | |
| - | | |
| 7,070 | |
| Total operating expenses | |
| 88,535 | | |
| 121,418 | |
| | |
| | | |
| | |
| Income (loss) from operation | |
| (56,973 | ) | |
| (116,374 | ) |
| | |
| | | |
| | |
| Other (expense) income | |
| | | |
| | |
| Other (expense) income | |
| (79 | ) | |
| 34 | |
| Total other (expense) income | |
| (79 | ) | |
| 34 | |
| | |
| | | |
| | |
| Net Loss | |
$ | (57,052 | ) | |
$ | (116,340 | ) |
| | |
| | | |
| | |
| Foreign Currency Translation | |
| (899 | ) | |
| (442 | ) |
| Total comprehensive loss | |
| (57,951 | ) | |
| (116,782 | ) |
Basic and diluted net loss per common share | |
| (0.005 | ) | |
| (0.010 | ) |
| Weighted average number of shares outstanding | |
| 11,500,000 | | |
| 11,500,000 | |
The accompanying notes are integral to these consolidated
financial statements.
PONY GROUP INC., AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CHANGE IN EQUITY
(Unaudited)
For the Three Months Ended March 31, 2023
| | |
Common stock | | |
Additional
Paid-In | | |
Subscription
received in | | |
Accumulated
Other
Comprehensive
Income | | |
Accumulated | | |
| |
| | |
Shares | | |
Amount | | |
Capital | | |
advance | | |
(Loss) | | |
Deficit | | |
Total | |
| Balance as of December 31, 2022 | |
| 11,500,000 | | |
$ | 11,500 | | |
$ | 176,000 | | |
$ | - | | |
$ | 6,360 | | |
$ | (549,404 | ) | |
$ | (355,544 | ) |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| Cumulative Foreign currency translation adjustment | |
| - | | |
| - | | |
| - | | |
| - | | |
| (899 | ) | |
| - | | |
| (899 | ) |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| Net Loss | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| (57,052 | ) | |
| (57,052 | ) |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| Balance as of March 31, 2023 | |
| 11,500,000 | | |
$ | 11,500 | | |
$ | 176,000 | | |
$ | - | | |
$ | 5,461 | | |
$ | (606,456 | ) | |
$ | (413,495 | ) |
For the Three Months
Ended March 31, 2022
| | |
Common
stock | | |
Additional
Paid-In | | |
Subscription
received
in | | |
Accumulated
Other
Comprehensive
Income | | |
Accumulated | | |
| |
| | |
Shares | | |
Amount | | |
Capital | | |
advance | | |
(Loss) | | |
Deficit | | |
Total | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| |
| Balance
as of December 31, 2021 | |
| 11,500,000 | | |
$ | 11,500 | | |
$ | 176,000 | | |
$ | - | | |
$ | (10,158 | ) | |
$ | (280,326 | ) | |
$ | (102,984 | ) |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| Cumulative
Foreign currency translation adjustment | |
| - | | |
| - | | |
| - | | |
| - | | |
| (442 | ) | |
| - | | |
| (442 | ) |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| Net
Loss | |
| | | |
| - | | |
| - | | |
$ | - | | |
| - | | |
| (116,340 | ) | |
| (116,340 | ) |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| Balance
as of March 31, 2022 | |
| 11,500,000 | | |
$ | 11,500 | | |
$ | 176,000 | | |
$ | - | | |
$ | (10,600 | ) | |
$ | (396,666 | ) | |
$ | (219,766 | ) |
The accompanying notes are integral to these consolidated
financial statements.
PONY GROUP INC., AND SUBSIDIARIES
CONSOLIDATED STATEMETNS OF CASH FLOWS
(Unaudited)
| | |
For The Three Months Ended
March 31, | |
| | |
2023 | | |
2022 | |
| | |
| | |
| |
| Cash flow from operating activities: | |
| | |
| |
| Net Loss | |
$ | (57,052 | ) | |
$ | (116,340 | ) |
| Adjustments to reconcile net loss to net cash used in operating activities: | |
| | | |
| | |
| Changes in operating assets and liabilities: | |
| | | |
| | |
| Accounts receivable | |
| (3,712 | ) | |
| 27,734 | |
| Other receivable | |
| (26,211 | ) | |
| (24 | ) |
| Accounts payable | |
| 3,450 | | |
| (17,484 | ) |
| Other payable | |
| 51,078 | | |
| (10,080 | ) |
| Cash provided used in operating activities | |
| (32,447 | ) | |
| (116,194 | ) |
| | |
| | | |
| | |
| Cash flow from investing activities: | |
| | | |
| | |
| Cash from investing activities | |
| - | | |
| - | |
| | |
| | | |
| | |
| Cash flow from financing activities: | |
| | | |
| | |
| Advance from (repayment to) related party | |
| 9,085 | | |
| (2,915 | ) |
| Cash from financing activities | |
| 9,085 | | |
| (2,915 | ) |
| | |
| | | |
| | |
| Effects of currency translation on cash | |
| (899 | ) | |
| (442 | ) |
| | |
| | | |
| | |
| Net decrease in cash | |
| (24,261 | ) | |
| (119,551 | ) |
| Cash at beginning of the period | |
| 49,803 | | |
| 266,011 | |
| Cash at end of period | |
$ | 25,542 | | |
$ | 146,460 | |
The accompanying notes are integral to these consolidated
financial statements.
PONY GROUP INC., AND SUBSIDIARIES
NOTES FOR THE CONSOLIDATED FINANCIAL STATEMENTS
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 (“Pony HK”), 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 Pony HK, which represented 100% of the shares. On March 7, 2019, this transaction was completed.
Pony HK is a limited corporation 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
March 31, 2023 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 March 31, 2023 and December 31, 2022, accounts
receivable was $14,435 and $10,723, respectively. The company considers accounts receivable to be fully collectible and determined that
an allowance for doubtful accounts was not necessary.
Pony HK, a 100% subsidiary of the Company, has
agreements with its one major client that the payments for the services rendered be settled every six months. The major clients accounted
for 20.6% of the revenue for the three months ended March 31, 2023, respectively.
Universe Travel Culture & Technology Ltd.
(“Universe Travel”) was incorporated as a wholly-owned PRC subsidiary of Pony HK, has agreements with two major clients,
the two clients combined accounted for 77.3% of the revenue for the three months ended March 31, 2023.
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 HK’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:
| March 31, 2023 |
|
|
|
|
| Balance sheet |
|
HK$7.85 to US $1.00 |
|
RMB 6.87 to US $1.00 |
| Statement of operation and other comprehensive income |
|
HK$7.84 to US $1.00 |
|
RMB 6.84 to US $1.00 |
| December 31, 2022 |
|
|
|
|
| Balance sheet |
|
HK$7.80 to US $1.00 |
|
RMB 6.89 to US $1.00 |
| March 31, 2022 |
|
|
|
|
| Statement of operation and other comprehensive income |
|
HK$7.81 to US $1.00 |
|
RMB 6.35 to US$1.00 |
Recent accounting pronouncements
The Company does not believe that any recently
issued but not yet effective accounting standards, if currently adopted, would have a material effect on the consolidated financial position,
statements of operations and cash flows.
NOTE 2 - GOING
CONCERN
The Company had operating losses of $57,052 and
$116,340 during the three months ended March 31, 2023 and 2022, respectively.
The Company has accumulated deficit of $606,455
and $549,404 as of March 31, 2023 and December 31, 2022, 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
The Company was incorporated on January 7,
2019 in the state of Delaware, and is the sole owner of Pony HK. As of March 31, 2023, Pony HK has paid $310,580 on behalf of PONY
GROUP INC for the US legal and audit cost incurred relevant to 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.
| | |
March 31,
2023 | | |
December 31,
2022 | |
| 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:
| | |
March 31,
2023 | | |
December 31,
2022 | |
| To Wenxian Fan | |
$ | 387,838 | | |
$ | 378,753 | |
| Total due to related parties | |
$ | 387,838 | | |
$ | 378,753 | |
NOTE 4 - MAJOR
SUPPLIERS AND CUSTOMERS
The Company purchased majority of its subcontracted
services from one major supplier during the three months ended March 31, 2023: Changying Business Limited for 23.70% of the cost.
NOTE 5 - SUBSEQUENT EVENTS
Management has evaluated subsequent events through
May 14, 2023, the date which the financial statements were available to be issued. All subsequent events requiring recognition as of
March 31, 2023 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
The following discussion and analysis of our
results of operations and financial condition should be read together with our consolidated financial statements and the notes thereto
and other financial information, which are included elsewhere in this Report. Our financial statements have been prepared in accordance
with U.S. GAAP. In addition, our financial statements and the financial information included in this Report reflect our organizational
transactions and have been prepared as if our current corporate structure had been in place throughout the relevant periods.
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 travelers. We currently
offer carpooling, airport pick-up and drop-off, and personal driver services for travelers between Guangdong Province and Hong Kong.
We collaborate with car fleet companies and charge a service fee by matching the traveler 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
travelers coming to visit China. Redefining the user experience, we aim to provide our users with comprehensive and convenient service
offerings and become a one-stop travel booking resource for travelers. 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 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 the second version which has an enhanced interface in both Chinese
and English language which supports payment through PayPal. By the end of 2019, we rolled out third version which has multi-language
interface to attract users from all-over the world. In January 2020, we official launched the App.
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 a car and hire an
English speaking driver.
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 months ended March 31, 2023 compared to March 31,
2022
Revenue
For the three months ended March 31, 2023
and 2022, revenues were $56,166 and $29,868, respectively, with an increase of $26,298 over the same period in 2022. The increase
mainly due to Universe Travel providing technology development services to Shenzhen Shangjia Electronic Technology., Ltd and
Shenzhen Zhongke Hengjin Technology Co., Ltd in the amount of $43,411 during the three month ended March 31, 2023.
Cost of Revenue
Cost of Revenue for the three months ended March
31, 2023 and 2022 were $24,604 and $24,824, respectively, with a decrease of $220 over the same period in 2022. The decrease was mainly
due to the decrease of orders of Pony HK, thus the cost of revenue decreased accordingly.
Gross Profit
Gross profits were $31,562 and $5,044 for the
three months ended March 31, 2023 and 2022. The gross profit margin as a percentage of sales were 56.2% and 16.9% for the three months
ended March 31, 2023 and 2022, respectively. The increase of gross profit margin was due to Universe Travel providing technology development
services to Shenzhen Shangjia Electronic Technology., Ltd and Shenzhen Zhongke Hengjin Technology Co., Ltd. This service provided has
a higher gross profit margin and led to the increase of the total gross profit margin for the three months ended March 31, 2023.
Operating Expenses
Operating expenses for the three months
ended March 31, 2023 and 2022 were $88,535 and $121,418, respectively for a decrease of $32,883. The decrease of operating expense
was mainly due to the Company paying $35,000 legal fee for OTC listing during the three months ended March 31,
2022 and such legal fee was not incurred for the three months ended March 31, 2023.
Other (Expense)Income
Other income consists of interest income and
exchange gain (loss) for the three months ended March 31, 2023 and 2022, the net other expense was $79 compared to $34
for the same period last year. This was mainly due to the change of exchange rate and the increase of average cash balances.
Liquidity and Capital Resources
We have suffered recurring losses from operations
and have an accumulated deficit of $606,455 as of March 31, 2023. We had a cash balance of $25,542 and negative working capital of $413,494
as of March 31, 2023. The Company has incurred losses of $57,052 and $116,340 for the three months ended March 31, 2023 and 2022, 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 March 31, 2023, we have enough cash to continue operations for approximately six months.
Net cash used in operating activities for the
three months ended March 31, 2023, amounted to $32,447, compared to $116,194 net cash used in operating activities for the three months
ended March 31, 2022. The decrease of net cash used in operating activities mainly due to the decrease of net loss.
There were $0 cash used in investment activities
for the three months ended March 31, 2023 and 2022.
Net cash provided by financing activities for
the three months ended March 31, 2023 amounted to $9,085, compared to net cash used in financing activities of $2,915 in the same period
2022. The net cash provided by financing activities were from shareholders who paid cost and other expenses on behalf of the Company.
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 had 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 Report, 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. Prior to December 13, 2022, the Hong Kong government only allows vaccinated persons arriving
from overseas to enter, and all vaccinated persons are subject to a three-day self-monitoring period for COVID-19 while in the city.
During the self-monitoring period, vaccinated persons are not permitted to enter designated places of public gathering including restaurants,
places of amusement and religious premises. As of the date of this Report, the Hong Kong government no longer requires travelers to undergo
the three-day-self monitoring period, however, travelers to Hong Kong must be fully vaccinated and undergo COVID-19 testing before departure.
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). On February 6, 2023, the Hong Kong government has reopened all transportation
links and border checkpoints with mainland China.
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. The number of travellers
between Guangdong province and Hong Kong deceases significantly. Thus, the orders for our travel service business decreased. In the same
period, to generate new revenues we started providing monthly subscription service to obtain new customers. Our subsidiary Universe
Travel started to provided technology and development services to help our clients to develop their own mobile application and platform. We believe that such services will generate additional revenue in the future.
Many of the restrictive measures previously adopted
by the PRC governments at various levels to control the spread of the COVID-19 virus have been revoked or replaced with more
flexible measures since December 2022. While the revocation or replacement of the restrictive measures to contain the COVID-19
pandemic could have a positive impact on our normal operations, it may also shift the public’s interest in COVID-19 vaccines.
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.
See Note 1 to our unaudited condensed consolidated
financial statements for a discussion of our significant accounting policies
Off-Balance Sheet Arrangements
As of March 31, 2023, we did not have any off-balance
sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K.