ITEM 1. Financial Statements
BANNY COSMIC INTERNATIONAL HOLDINGS, INC.
INDEX TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
(UNAUDITED)
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September 30,
2018
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June 30,
2018
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ASSETS
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Current
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Cash
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$
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349,047
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$
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2,502
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Prepaid expenses
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62,163
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-
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411,210
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2,502
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Long-term
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Intangible asset (Notes 6 and 7)
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20,000
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20,000
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Total Assets
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$
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431,210
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$
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22,502
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LIABILITIES
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Current
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Trades and other payables (Note 4)
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$
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171,817
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$
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12,628
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Customer deposits
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158,704
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-
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Due to related parties (Note 8)
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122,680
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75,720
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Taxes payable
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10,901
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-
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Total Liabilities
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464,102
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88,348
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STOCKHOLDERS' DEFICIENCY
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Capital Stock
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Authorized
1,000,000,000 common stock, voting, par value $0.001 each
100,000,000 preferred stock, non-voting, par value $0.001 each
Issued
141,137,387 shares of common stock (Note 8)
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141,137
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141,137
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Additional paid in capital
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16,115,188
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16,115,188
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Accumulated deficit
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(16,294,099
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)
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(16,327,053
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Accumulated other comprehensive income
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4,882
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4,882
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Total Stockholders' Deficiency
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(32,892
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)
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(65,846
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)
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Total Liabilities and Stockholders' Deficiency
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$
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431,210
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$
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22,502
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Going Concern
(Note 2)
The accompanying notes are an integral part of these consolidated financial statements
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BANNY COSMIC INTERNATIONAL HOLDINGS, INC.
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Condensed Consolidated Interim Statements of Operations and Comprehensive Income (Loss)
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Stated in US dollars
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For the three-month periods ended September 30, 2018 and 2017
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(Unaudited)
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Three months
ended
September 30
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2018
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2017
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Revenue
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$
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395,100
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$
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-
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Cost of goods sold
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131,574
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-
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Gross profit
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263,526
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-
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Selling and administrative expenses
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Advertising and promotion
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30,137
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-
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Commission
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148,570
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-
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Consulting fees
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15,165
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-
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General and administration
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18,481
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14,073
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Professional fees
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7,318
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-
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219,671
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14,073
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Income (loss) before income tax expense
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43,855
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(14,073
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Income tax expense
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10,901
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-
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Net income (loss) and comprehensive income (loss)
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$
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32,954
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$
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(14,073
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Basic and diluted loss per stock
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$
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0.00
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$
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(0.00
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Weighted average number of shares outstanding
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141,137,387
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23,678,695
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The accompanying notes are an integral part of these consolidated financial statements
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Common Stock
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Additional Paid in
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Accumulated Other Comprehensive
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Accumulated
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Shares
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Amount
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Capital
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Income (Loss)
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Deficit
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Total
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Balance, June 30, 2017
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22,072,118
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$
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22,072
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$
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15,955,079
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$
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4,882
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$
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(16,135,661
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$
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(153,628
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Common stock issued
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-
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- for debt
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4,065,269
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4,065
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155,109
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-
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-
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159,174
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- for cash
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20,000,000
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20,000
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80,000
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-
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-
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100,000
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- for capital stock of Gain First Group Corporation
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20,000,000
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20,000
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(10,000
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-
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-
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10,000
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- for exclusive agreement with De Lasselle Ltd.
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75,000,000
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75,000
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(65,000
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-
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-
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10,000
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Net loss and comprehensive loss for the year
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-
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-
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-
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-
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(191,392
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(191,392
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Balance, June 30, 2018
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141,137,387
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141,137
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16,115,188
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4,882
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(16,327,053
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(65,846
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Net income and comprehensive income for the period
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-
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-
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-
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-
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32,954
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32,954
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Balance, September 30, 2018
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141,137,387
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$
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141,137
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$
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16,115,188
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$
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4,882
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$
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(16,294,099
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$
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(32,892
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The accompanying notes are an integral part of these consolidated financial statements
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Three months
ended
September 30
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2018
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2017
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Cash flows from operating activities
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Net income (loss) for the period
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$
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32,954
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$
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(14,073
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Changes in non-cash working capital:
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Prepaid expenses
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(62,163
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-
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Trade and other payables
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159,189
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-
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Customer deposits
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158,704
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-
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Taxes payable
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10,901
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-
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Net cash provided by (used in) operating activities
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299,585
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(14,073
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Cash flows from financing activities
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Advances from related parties
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46,960
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25,000
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Net cash provided by financing activities
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46,960
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25,000
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Net cash increase for period
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346,545
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10,927
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Cash, beginning of the period
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2,502
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9,630
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Cash, end of the period
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$
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349,047
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$
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20,557
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Supplemental cash flow information
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Income taxes paid
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$
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-
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$
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-
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Interest paid
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$
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-
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$
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-
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The accompanying notes are an integral part of these consolidated financial statements
BANNY COSMIC INTERNATIONAL HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE PERIODS ENDED SEPTEMBER 30, 2018
(Expressed in United States Dollars)
1. ORGANIZATION AND DESCRIPTION OF BUSINESS
Banny Cosmic International Holdings, Inc., formerly “Wincash Apolo Gold & Energy, Inc., (“the Company”) was incorporated in March of 1997 under the laws of the State of Nevada primarily for the purpose of acquiring and developing mineral properties.
On October 12, 2017, the Company acquired Gain First Group Corporation (“Gain First”), a corporation formed under the laws of the British Virgin Islands. Gain First had signed a sole agency agreement with De Lassalle Ltd., a wine producer located in France, to distribute De Lassalle’s wine products in Greater China region. On December 12, 2017, Gain First signed another sole agency with De Lassalle to distribute De Lassalle’s wine products in South East Asia.
During the first quarter ended September 30, 2018, the Company incorporated two additional subsidiaries, Banny Cosmic Group Limited, a Hong Kong company, and Shenzhen Qianhai Volcanic Lava Cross-border Trading Co. Ltd., a People’s Republic of China company, to conduct its wine distribution business in China.
2. GOING CONCERN UNCERTAINTIES
These consolidated financial statements have been prepared assuming that the Company will continue as a going concern which contemplates the realization of assets and the discharge of liabilities in the normal course of business for the foreseeable future.
As of September 30, 2018, the Company has incurred accumulated deficits of $16,294,099. The Company’s ability to continue as a going concern is dependent upon the continuing financial support from its stockholders or external financing. Management believes the existing stockholders will provide the additional cash to meet with the Company’s obligations as they become due. However, there can be no assurance that the Company will be able to obtain sufficient funds to meet its obligations.
These factors raise substantial doubt about the Company’s ability to continue as a going concern. These condensed interim 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.
3
.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The Company’s condensed consolidated interim financial statements included herein are prepared under the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America. These consolidated financial statements include the financial statements of its wholly owned subsidiaries, Gain First Group Corporation, Banny Cosmic (HK) Ltd., and Shenzhen Qianhai Volcanic Lava Cross-border Trading Co. Ltd. All inter-company balances and transactions have been eliminated.
There have been no changes in accounting policies from those disclosed in the notes to the audited financial statement for the year ended June 30, 2018.
4
.
RECENT ACCOUNTING PRONOUNCEMENTS
The Company adopts new pronouncements relating to generally accepted accounting principles applicable to the Company as they are issued, which may be in advance of their effective date. The Company has reviewed all recently issued, but not yet effective, accounting pronouncements and does not believe the future adoption of any such pronouncements may be expected to cause a material impact on its financial condition or the results of its operations.
BANNY COSMIC INTERNATIONAL HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE PERIODS ENDED SEPTEMBER 30, 2018
(Expressed in United States Dollars)
5. INTANGIBLE ASSETS
On October 12, 2007, the Company exchanged 20,000,000 shares of its common stock for 100% of the shares in the common stock of Gain First Group Corporation (“Gain First”) a corporation formed under the laws of the British Virgin Islands. Gain First had no assets or liabilities other than an agreement to be the exclusive marketing and sales agent in China for De Lassalle Ltd. The transaction was recorded as an asset purchase as it did not include the purchase of inputs and a substantive process. The fair value of the transaction of $10,000 was based on the asset acquired, namely the agency agreement, as its value was more clearly evident than the consideration given.
On December 12, 2017, the Company issued 75,000,000 shares of its common stock to De Lassalle Ltd. as consideration for Gain First to acquire an agency agreement for exclusive rights to distribute De Lassalle’s wine products in the South East Asia region. The exclusive agreement was also valued at $10,000.
No amortization has been recorded on these assets as yet. Although the Company has revenue from wine in China, these sales were not from the De Lassalle winery and do not affect the value of these assets. The Company has not yet determined their useful life.
6. COMMON STOCK
On July 27, 2017, the Company issued 3,238,431common shares as settlement of $126,800 in advances made by the director of the Company.
On July 27, 2017, the Company issued 826,838 common shares as settlement of $32,375 in advances made by a former director of the Company.
On October 12, 2017, the Company completed a private placement of $100,000 and issued 20,000,000 shares of its common stock at a price of $0.005 per share and used the proceeds to settle all outstanding liabilities with a former director.
On October 12, 2007, the Company exchanged 20,000,000 shares of its common stock for 100% of the shares of common stock of Gain First.
On December 12, 2017, the Company issued 75,000,000 shares of its common stock to De Las salle Ltd.as consideration for Gain First to acquire an agency agreement for exclusive rights to distribute De Lassalle Ltd.’s wine products in the South East Asia region.
As at September 30, 2018, there were 141,137,387 shares of common stock issued and outstanding and no options or warrants issued and outstanding.
7. RELATED PARTY TRANSACTIONS
A director advanced $46,960 to fund company expenses during the period resulting in a related party balance of $122,680 as at September 30, 2018. The advances bear no interest or stated terms of repayment and remain unpaid as at September 30, 2018.
ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations General Overview
Forward Looking Statements
This Quarterly Report on Form 10-Q contains forward-looking statements. These statements relate to future events or our future financial performance. These statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance, or achievements expressed or implied by forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “potential” or “continue,” the negative of such terms or other comparable terminology. These statements are only predictions. Actual events or results may differ materially.
Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Moreover, neither we nor any other person assumes responsibility for the accuracy and completeness of the forward-looking statements. We undertake no duty to update any of the forward-looking statements after the date of this report to conform such statements to actual results or to changes in our expectations.
Available Information
Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and all amendments to those reports that we file with the U.S. Securities and Exchange Commission (SEC) are available at the SEC’s public reference room at 100 F Street, N.E., Washington, D.C. 20549. The public may obtain information on the operation of the public reference room by calling the SEC at 1-800-SEC-0330. The SEC also maintains a website at www.sec.gov that contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC.
History
Banny Cosmic International Holdings, Inc., formerly Wincash Apolo Gold & Energy Inc., (“Company”) was incorporated in March 1997 under the laws of the State of Nevada. Its objective was to pursue mineral properties in South America, Central America, North America and Asia. The Company incorporated a subsidiary: Compania Minera Apologold, C.A in Venezuela to develop a gold/diamond mining concession in Southeastern Venezuela. Project was terminated in August 2001, due to poor testing results and the property abandoned. This subsidiary company has been inactive since 2001 and will not be reactivated.
On April 16, 2002, the Company announced the acquisition of the mining rights to a property known as the Napal Gold Property, (“NUP”). This property is located 48 km south-west of Bandar Lampung, Sumatra, Indonesia. The property consisted of 733.9 hectares and possessed a Production Permit (a KP) # KW. 098PP325. The terms of the Napal Gold Property called for a total payment of $375,000 US over a six-year period of which a total of $250,000 have been made to date. Company paid $250,000 over the past 5 years and subsequent to the year ending June 30, 2008 the Company terminated its agreement on the NUP property and returned all exploration rights to the owner.
On December 11, 2013, the Company acquired 70% interest in three gold exploration claims located in China’s Xinjiang Province from Yinfu Gold Corp. (“Yinfu”). The Company issued 6,000,000 shares of restricted common stock for the claims at $0.20 per share for the consideration of $1,200,000. On January 19, 2015, the Company and Yinfu reached a mutual agreement to terminate the acquisition at the current market value of $0.10 per share and therefore an investment loss of $600,000 was resulted. On February 3, 2015, all 6,000,000 shares of restricted common stock were returned and effectively cancelled.
On December 23, 2013, the Company acquired 24% interest in Jiangxi Everenergy New Material Co., Ltd. (“Everenergy”) for a consideration of $4,000,000. The consideration was settled with the issuance of 8,000,000 shares of restricted common stock at a deemed price of $0.375 per share, plus $1,000,000 in cash.
On February 19, 2014, the Company acquired an additional 29% interest in Everenergy for a consideration of $4,950,000. The consideration was settled with the issuance of 11,000,000 shares of restricted common stock at a deemed price of $0.45 per share.
On September 17, 2014, the Company cancelled both transactions with Everenergy at the current market value of $0.12 per share and requested the return of $1,000,000 cash payment. The 11,000,000 shares were effectively cancelled on October 21, 2014 and the Company continues to pursue the return and cancellation of the remaining 8,000,000 shares. On October 16, 2016, the Company received and cancelled 6,208,655 shares. For the year ended June 30, 2015, the Company could not recover the $1,000,000 cash payment and therefore a total investment loss of $6,670,000 was resulted.
On February 13, 2015, the Company disposed its 100% equity interest in Apolo Gold Direct Limited (formerly Apolo Gold & Energy Asia Limited) to (i) Mr. Tommy Tsap Wai Ping, who acquired 50% equity interest. Mr. Tsap Wai Ping became the Chief Executive Officer (“CEO”) and director of the Company on December 1, 2015. (ii) Mr. Kelvin Chak Wai Man, the former president, CEO and director of the Company and a relative of the current CEO of the Company, acquired 40% equity interest, and (iii) China Yi Gao Gold Trader Co., Limited, a company incorporated in Hong Kong, which acquired the remaining 10% equity interest, for a consideration of $100.
On June 4, 2015, the Company issued 6,000,000 shares of restricted common stock at $0.10 per share for the rendering of business and strategic consulting services of $600,000. For the years ended June 30, 2016 and 2015, the Company amortized $550,000 and $50,000 in expenses, respectively to the operations of the Company using the straight-line method.
On June 9, 2015, the Company issued 400,000 shares of restricted common stock at $0.10 per share for the rendering of administrative consulting services of $40,000. As of June 9, 2015, the current market value was $0.10 per share.
On June 18, 2015, the Company filed an Amendment to its Articles of Incorporation with the Nevada Secretary of State to change its name from Apolo Gold & Energy, Inc. to Wincash Apolo Gold & Energy, Inc.
On June 26, 2015, the Board of Directors of the Company approved the issuance of 340,000 shares of restricted common stock at $0.15 per share to settle a debt of $51,000 owed to the Chief Executive Officer and a director of the Company. All 340,000 shares were issued July 2, 2015. As of June 26, 2015, the current market value was $0.16 per share.
On December 1, 2015, the Board of Directors of the Company approved the issuance of 200,000 shares of restricted common stock at $0.08 per share for the rendering of consulting services with a value of $16,000. For the nine months ended March 31, 2017, all 200,000 shares have been issued and the Company amortized $6,667 to the operations using the straight-line method.
On July 27, 2017, the Company issued 3,238,431 common shares as settlement of $126,800 in advances made by a former director of the Company and another 826,838 common shares as settlement of $32,375 in advances made by another former director of the Company.
On October 12, 2017 the Company closed a private placement and issued 20,000,000 shares of its common stock for $100,000.00 in cash.
On October 12, 2017 the Company exchanged 20,000,000 shares of its common stock for 50,000 shares of the common stock of Gain First Group Corporation ("Gain First"), a Corporation formed under the laws of the British Virgin Islands. As a result of that transaction, Gain First became a wholly owned subsidiary of the Company. Gain First is a newly formed startup Company with nominal assets. It has signed a sole agency agreement with De Lassalle Ltd. (“De Lasalle”), whereby Gain First is to market and sell De Lasalle’s wine products in China. This acquisition resulted in a change of business direction of the Company. Since that time the Company has been active in the wine distribution business.
On December 12, 2017, the Company issued 75,000,000 shares of its common stock as consideration in lieu of a payment at a deemed value of $10,000 for Gain First to acquire an agency agreement for exclusive rights to distribute De Lassalle’s wine products in the South East Asia region.
On April 3, 2018, the Company entered into a share exchange agreement with Banny International Trading Co., Ltd., a Macau company. Under the terms of that share exchange agreement, the Company will issue 36,500,000 shares of its common stock and an option to purchase an additional 36,500,000 shares of its common stock in exchange for rights to the brand name “Banny Choice” and the right to use Banny’s sale and distribution network for the sale of wine under the Banny Choice name in Asia and other parts of the World.
On July 23, 2018, the Company filed an Amendment to its Articles of Incorporation with the Nevada Secretary of State to change its name from Wincash Apolo Gold & Energy, Inc. to Banny Cosmic International Holdings, Inc. and increases the number of authorized shares from 300,000,000 common shares and 25,000,000 preferred shares, each with a par value of $0.001 per share, to 1,000,000,000 common shares and 100,000,000 preferred shares with a par value of $0.001 per share.
On September 10, 2018, the Company signed a cancellation agreement with Banny International Trading Co. Ltd. to cancel the transaction described in the paragraph above. As a part of this cancellation transaction, the 36,500,000 shares issued to Banny International Group (Holdings) Limited will be returned to the Company’s treasury for cancellation, and the option to acquire 36,500,000 shares of the Company’s common stock granted to Banny International Group (Holdings) Limited will be cancelled.
Results of Operations – Three months ended September 30, 2018 compared to the three months ended September 30, 2017
REVENUES:
During the three months ended September 30, 2018, the Company had sales revenue of $395,100 compared to zero sales revenue for the corresponding period in 2017. The cost of goods sold for the three months ended September 30, 2018 was $131,574 and the gross profit was $263,526.
EXPENSES:
During the three months ended September 30, 2018, the Company had total operating expenses of $219,671 compared to $14,073 for the corresponding period in 2017. For the three months ended September 30, 2018, the Company had expenses in advertising and promotion of $30,137, commission of $148,570, consulting fees of $15,165, general and administration expenses of $18,481 and professional fees of $7,318 compared to no consulting fees, no filing fees, general and administration expenses of $14,073 and no professional fees for the three months ended September 30, 2017. The increase in expenses for the three months ended March 31, 2018 was primarily due to the increase of corporate and operating activities during the period.
Net Income
During the three months ended September 30, 2018, the Company had a net comprehensive income of $32,954 compared to a net comprehensive loss of $14,073 in 2017. The increase in net income was primarily due to the Company having sales revenue during the three months ended September 30, 2018 compared to no sales revenue in 2017.
Cash Provided by Operating Activities
Net cash provided by operating activities for the three months ended September 30, 2018 was $299,585 compared to net cash used in operating activities of $14,073 for the three months ended September 30, 2017.
Cash Used in Investing Activities
There was no cash used in or generated from investing activities for three months ended September 30, 2018 and 2017.
Cash Provided by Financing Activities
Net cash provided by financing activities for the three months ended September 30, 2018 was $46,960 compared to $25,000 for 2017.
LIQUIDITY AND CAPITAL RESOURCES
As of September 30, 2018, the Company had total current assets of $411,210, which consists of $349,047 in cash and $62,163 in prepaid expenses, and had total current liabilities of $464,102, which consists of $171,817 from trades and other payables, $158,704 from customer deposits, $122,680 from related parties and $10,901 from taxes payable.
The Company has financed its development to date primarily by way of the sale of common stock and from loans with directors and shareholders of the Company.
As of November 1, 2018, the Company had 141,137,387 shares of common stock outstanding.
As of September 30, 2018, the amount due to related parties was $122,680 compared to $75,720 as at June 30, 2018. These debts were unsecured, interest free and have no fixed terms of repayment.
As of September 30, 2018, the Company had cash of $349,047 compared to $2,502 on June 30, 2018.
While the Company continues to seek out additional capital, there is no assurance that they will be successful in completing this necessary financing. The Company recognizes that it is dependent on the ability of its management team to obtain the necessary working capital required.
Off-Balance Sheet Arrangements
We have no off-balance sheet arrangements, financings or other relationships.
Contractual Obligations and Commitments
As of September 30, 2018, we did not have any contractual obligations and commitments other than the agency agreement with De Lassalle for distribution of De Lassalle’s wine products in the China and South-East Asia regions.
Going Concern
We have incurred losses since our inception. We anticipate incurring additional losses before realizing growth in revenue and we will depend on additional financing in order to meet our continuing obligations and ultimately to attain profitability. Our ability to obtain additional financing, whether through the issuance of additional equity or through the assumption of debt, is uncertain. Accordingly, our independent auditors’ report on our financial statements for the year ended June 30, 2018 includes an explanatory paragraph regarding concerns about our ability to continue as a going concern, including additional information contained in the notes to our financial statements describing the circumstances leading to this disclosure. The financial statements contained in this report do not include any adjustments that might result from the uncertainty about our ability to continue our business.
