The accompanying condensed consolidated unaudited financial statements have been prepared in accordance with accounting principles generally accepted in the United States and the rules of the Securities and Exchange Commission (“SEC”) and should be read in conjunction with the audited financial statements and notes thereto contained in our Form 10-K for the fiscal year ended May 31, 2017 filed with the SEC on August 21, 2017. All numbers provided in the condensed consolidated unaudited financial statements are stated in United States Dollars. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the periods presented have been reflected herein. The results of operations for the periods presented are not necessarily indicative of the results to be expected for the full year.
The accompanying notes are integral part of these condensed financial statements.
The accompanying notes are integral part of these condensed financial statements.
The accompanying notes are integral part of these condensed financial statements.
NOTE 1. ORGANIZATION AND NATURE OF OPERATIONS
HK eBus Corporation, formerly known as Rambo Medical Group, Inc., was incorporated in the State of Nevada on November 18, 2005. On October 14, 2009, the Company filed a Certificate of Amendment to its Articles of Incorporation to increase its shares of authorized common stock from 100,000,000 to 300,000,000 and to change its name from Cobra Oil and Gas Company to Viper Resources, Inc. The Company was formed to engage in identifying, investigating, exploring, and where determined advantageous, developing, mining, refining, and marketing oil and gas. The Company may also engage in any other business permitted by law, as designated by the Board of Directors of the Company. On April 25, 2011, the Company’s previous management was replaced in its entirety. In May 2012, the Company’s management determined to discontinue its oil and gas operations, and attempt to acquire other assets or business operations that will maximize shareholder value. On August 31, 2015, the Company changed its name to HK EBUS Corporation and changed its ticker symbol to HKEB.
NOTE 2. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A summary of significant accounting policies of HK eBus Corporation (hereinafter the “Company”), a company organized in the state of Nevada (A Development Stage Company) is presented to assist in understanding the Company’s financial statements. The accounting policies presented in these footnotes conform to accounting principles generally accepted in the United States of America and have been consistently applied in the preparation of the accompanying financial statements. These financial statements and notes are representations of the Company’s management who are responsible for their integrity and objectivity. The Company has not realized significant revenues from its planned principal business purpose and is considered to be in its development state in accordance with ASC 915, “Development Stage Entities”, formerly known as SFAS 7,
“Accounting and Reporting by Development State Enterprises.”
Basis of Presentation
Our financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The preparation of our financial statements requires us to make estimates and assumptions that affect, among other areas, the reported amounts of trade receivable reserves and inventory reserves, impairment of long-lived assets, and recoverability of deferred tax assets. These estimates and assumptions also impact revenues, expenses and the disclosures in our financial statements and accompanying notes. Although these estimates are based on our knowledge of current events and actions we may undertake in the future, actual results may ultimately differ from these estimates and assumptions.
Development Stage
The Company is currently in the development stage and has no significant operations. On August 9, 2013, the Company effected a 1-for-100 reverse split of the outstanding common stock. The accompanying financial statements and notes to the financial statements give retroactive effect to the reverse stock split for all periods presented.
Fair Value Measurements
In January 2010, the FASB ASC Topic 825,
Financial Instruments
, began requiring
disclosures about fair value of financial instruments in quarterly reports as well as in annual reports. For the Company, this statement applies to certain investments and long-term debt. Also, FASB ASC Topic 820,
Fair Value Measurements and Disclosures,
clarifies the definition of fair value for financial reporting, establishes a framework for measuring fair value and requires additional disclosures about the use of fair value measurements.
Various inputs are considered when determining the value of the Company’s investments and long-term debt. The inputs or methodologies used for valuing securities are not necessarily an indication of the risk associated with investing in these securities. These inputs are summarized in the three broad levels listed below.
Level 1 – observable market inputs that are unadjusted quoted prices for identical assets or liabilities in active markets.
Level 2 – other significant observable inputs (including quoted prices for similar securities, interest rates, credit risk, etc.).
Level 3 – significant unobservable inputs (including the Company’s own assumptions in determining the fair value of investments).
The Company’s adoption of FASB ASC Topic 825 effectively at the inception did not have a material impact on the Company’s financial statements.
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HK eBus Corporation
Notes to the Condensed Financial Statements
For the six month period ended November 30, 2017
(Unaudited)
NOTE 2. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
The carrying value of financial assets and liabilities recorded at fair value is measured on a recurring or nonrecurring basis. Financial assets and liabilities measured on a non-recurring basis are those that are adjusted to fair value when a significant event occurs. The Company had no financial assets or liabilities carried and measured on a nonrecurring basis during the reporting periods. Financial assets and liabilities measured on a recurring basis are those that are adjusted to fair value each time a financial statement is prepared. The Company does not have financial assets as an investment carried at fair value on a recurring basis as of November 30, 2017 and 2016.
The availability of inputs observable in the market varies from instrument to instrument and depends on a variety of factors including the type of instrument, whether the instrument is actively traded, and other characteristics particular to the transaction. For many financial instruments, pricing inputs are readily observable in the market, the valuation methodology used is widely accepted by market participants, and the valuation does not require significant management discretion. For other financial instruments, pricing inputs are less observable in the market and may require management judgment. As of November 30, 2017 and 2016, the Company had assets and liabilities in cash, property and equipment that were fully depreciated, and various payables. Management believes that they are being presented at their fair market value.
Use of Estimates
The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make certain estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. The Company is subject to uncertainty of future events, economic, environmental and political factors and changes in the Company's business environment; therefore, actual results could differ from these estimates. Accordingly, accounting estimates used in the preparation of the Company's financial statements will change as new events occur and that more experience is acquired, as additional information is obtained and as the Company's operating environment changes. Changes are made in estimates as circumstances warrant. Such changes in estimates and refinement of estimation methodologies are reflected in the statements.
Cash and Cash Equivalents
Cash and cash equivalents include short-term, highly liquid investments with maturities of less than three months when acquired. The Company had $1,058 and $8,611 in cash on November 30, 2017 and May 31, 2017, respectively. The Company had no cash equivalent on November 30, 2017 and May 31, 2017.
Accounts Payable
Services and goods received from vendors and billed but not yet paid are recorded as accounts payable in periods when the services and goods were received. As of November 30, 2017, $7,311 was recorded as accounts payable. The balance of accounts payable was $7,311 and $990 as of November 30, 2017 and May 31, 2017, respectively.
NOTE 3. GOING CONCERN
Under the going concern assumption, an entity is ordinarily viewed as continuing in business for the foreseeable future with neither the intention nor the necessity of liquidation, ceasing trading, or seeking protection from creditors pursuant to laws or regulations. Accordingly, assets and liabilities are recorded on the basis that the entity will be able to realize its assets and discharge its liabilities in the normal course of business.
The future of the Company is dependent upon its ability to obtain financing and upon future profitable operations from the development of its planned business. Management has plans to seek additional capital through a public or private offering of equity or debt securities, or by other means. These conditions raise substantial doubt about the Company's ability to continue as a going concern. These financial statements do not include any adjustments that might arise from this uncertainty.
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HK eBus Corporation
Notes to the Condensed Financial Statements
For the six month period ended November 30, 2017
(Unaudited)
NOTE 3. GOING CONCERN (continued)
There can be no assurance that sufficient funds required during the next year or thereafter will be generated from operations or that funds will be available from external sources such as debt or equity financings or other potential sources. The lack of additional capital resulting from the inability to generate cash flow from the operations or to raise capital from external sources would force the Company to substantially curtail or cease operations and would, therefore, have a material adverse effect on its business. Furthermore, there can be no assurance that any such required funds, if available, will be available on attractive terms or that they will not have a significant dilutive effect on the Company's existing stockholders.
The financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts of and classification of liabilities that might necessary in the event the Company cannot continue in existence.
NOTE 4. RELATED PARTY TRANSACTIONS
On May 31, 2012, ACI made a non-interest bearing, unsecured loan to the Company in the amount of $30,000, due on May 31, 2020. On December 18, 2012, ACI made another non-interest bearing, unsecured loan to the Company in the amount of $20,000, due on December 18, 2019.
On May 16, 2013, ACI made a non-interest bearing, unsecured loan to the Company in the amount of $5,000, due on May 16, 2020. On November 4, 2013, ACI made a non-interest bearing, unsecured loan to the Company in the amount of $10,000, due on November 4, 2020.
During 2013, American Compass Inc. (“ACI”), a related party based upon the beneficial ownership of the Company held by certain key management of ACI, paid $28,859 in legal fees and $5,000 in auditing fees on behalf of the Company. As of November 30, 2013, ACI paid a total of $33,859 in legal and auditing fees on behalf of the Company, due upon request.
On April 17, 2014, ACI made a non-interest bearing, unsecured loan to the Company in the amount of $10,000, due on April 17, 2018. On June 30, 2014, ACI made a non-interest bearing, unsecured loan to the Company in the amount of $10,000, due on June 30, 2018. On November 19, 2014, ACI made a non-interest bearing, unsecured loan to the Company in the amount of $10,000, due on November 19, 2019.
On February 4, 2015, June 24, 2015, September 30, 2015, October 21, 2015 and November 18, 2015, ACI made non-interest bearing, unsecured loans to the Company in the amounts of $10,000, $10,000, $10,000, $10,000 and $20,000, respectively, due on February 4, 2020, June 24, 2020, September 30, 2020, October 21, 2020 and November 18, 2020, respectively.
On January 23, 2017 and May 9, 2017, ACI made a non-interest bearing, unsecured loans to the Company in the amounts of $10,000 and $10,000, respectively, due on January 23, 2020 and May 9, 2020, respectively.
As of November 30, 2017, the total balance due to ACI is $208,859.
NOTE 5. COMMON STOCK
The Company is authorized to issue 100,000,000 shares of preferred stock with a par value of $.00001. The Company is also authorized to issue 300,000,000 shares of common stock with a par value of $.00001. On May 6, 2008, the Company effected a 35-for-1 forward split of its outstanding shares of common stock. On July 20, 2010, the Company issued 50,000 shares of common stock to investors at a price of $2 per unit for a total of $100,000. The Company issued a total of 0.15 million shares of common stock to compensate its officers during the fiscal year of 2012. In order to seek alternative business development and future merging and stock offering, on August 8, 2013, the Company effected a 1-for-100 reverse stock split of the Company’s outstanding shares of common stock and changed its name to Rambo Medical Group Inc. There were 992,192 and 992,192 shares issued and outstanding as of November 30, 2017 and May 31, 2017 respectively.
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HK eBus Corporation
Notes to the Condensed Financial Statements
For the six month period ended November 30, 2017
(Unaudited)
NOTE 6. WARRANTS
As of May 31, 2008, the Company had 10,000 common stock purchase warrants outstanding, originally sold as part of a unit, allowing the holder to purchase one share of common stock at an exercise price of $40, anytime through May 15, 2011. In fiscal year 2009, the Company sold 10,000 units to an investor for cash at a price of $25 per unit for aggregate proceeds of $250,000. Each unit consists of one share of common stock and one warrant to purchase one share of common stock at an exercise price of $40, anytime through June 9, 2011. As of May 31, 2009, none of the warrants had been exercised, leaving a year-end balance of 20,000 warrants. The aggregate value of the units equal to $250,000 was assigned to the common stock as the warrants are non-detachable.
In fiscal year 2010, the Company sold 20,252 units to investors for cash at prices ranging from $17 - $100 per unit, or an aggregate of $1,250,000. Each unit consists of one share of common stock, and one warrant to purchase one share of common stock at exercise prices ranging from of $20 - $125, anytime through expiration dates from June 2012 through February 2013. The entire value of the units was assigned to the common stock as the warrants are non-detachable. As of May 31, 2010, none of the warrants had been exercised or had expired, leaving a year-end balance of 40,252 warrants.
During the year ended May 31, 2011, the Company sold 50,000 units to investors at a price of $2 per unit for an aggregate of $100,000. Each unit consists of one share of common stock, and one warrant to purchase one share of common stock at an exercise price of $2.50, anytime through expiration date of July 2013. The entire value of the units was assigned to the common stock as the warrants are non-detachable. As of May 31, 2011, none of the warrants had been exercised. During the fiscal year of 2011, 10,000 warrants expired, leaving a year-end balance of 80,252 warrants.
During the year ended May 31, 2012, 10,000 warrants expired, leaving a year-end balance of 70,252 warrants.
During the year ended May 31, 2013, 20,252 warrants expired, leaving a year-end balance of 50,000 warrants.
During the year ended May 31, 2014, 50,000 warrants expired, leaving a year-end balance of 0 warrants.
During the six-months ended November 30, 2017, there were no warrants outstanding.
NOTE 7. SUBSEQUENT EVENTS
The Company does not have any subsequent events to report as of January 16, 2018.
These financial statements were approved by the Company's management and are available for issuance as of January 16, 2018. Subsequent events have been evaluated through January 16, 2018.
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