UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q10-Q/A
Amendment No. 1
☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended June 30, 2021
or
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ______ to ______
Commission File Number 333-208978
United Royale Holdings Corp.TrueNorth Quantum, Inc.
(Exact name of registrant issuer as specified in its charter)
| Nevada | 98-1253258 | |
| (State or other jurisdiction of | (I.R.S. Employer Identification No.) |
2 Campbell Drive5428 South Regal Street #30954, Spokane, Suite 307CWAUxbridge, On99223tario, CanadaL9P 1H6
(Address of principal executive offices, including zip code)
Registrant’s phone number, including area code (647) 400-6927
United Royale Holdings Corp.
2 Campbell Drive, Suite 307C, Uxbridge, Ontario, Canada
(Former name, former address and former fiscal year, if changed since last report.)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
| N/A | N/A | N/A |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes ☐ YESNo ☒ NO ☐
Indicate by check mark whether the registrant has submitted electronically, every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (section 232.405 of this chapter) during the preceding twelve months (or shorter period that the registrant was required to submit such files).
Yes ☐ YESNo ☒ NO ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
| Large Accelerated Filer ☐ | Accelerated Filer ☐ | Non-accelerated Filer ☒ | Smaller reporting company ☒ |
| Emerging growth company ☒ |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ Yes ☒ No ☐☒
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.
Yes ☐ No ☐
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
| Class | Outstanding at | |
| Common Stock, |
EXPLANATORY NOTES
This Amendment No. 1 to our Quarterly Report on Form 10-Q/A for the six months ended June 30, 2021, amends in its entirety the Quarterly Report on Form 10-Q that was originally filed on September 8, 2021 (the “Quarterly Report”), to:
| ● | comply with Rule 10-01(d) Regulation S-X, which requires interim financial statements included in quarterly reports on Form 10-Q to be reviewed by an independent public accountant using professional standards and procedures for conducting such reviews, as established by PCAOB, | |
| ● | to update financial statements and various other disclosures throughout this quarterly report, and | |
| ● | to include the required certifications of the Company’s Principal Executive Officer and Principal Financial and Accounting Officer as required by Sections 302 and 906 of the Sarbanes-Oxley Act. |
This Amendment No. 1 revises the Original Report and does not otherwise reflect events that may have occurred subsequent to the original filing date.
| i |
TABLE OF CONTENTS
PART I — FINANCIAL INFORMATION
ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
UNITED ROYALE HOLDINGS CORP.
CONDENSED CONSOLIDATED BALANCE SHEETS
AS OF JUNE 30, 2021 AND DECEMBER 31, 2020TrueNorth Quantum, Inc.
(Currency expressed infka United States Dollars (“US$”Royale Holdings Corp.), except for number
Interim Financial Statements
(Unaudited)
Table of share)Contents
As of June 30, 2021 | As of December 31, 2020 | |||||||
| (Unaudited) | (Unaudited) | |||||||
| ASSETS | ||||||||
| CURRENT ASSETS | ||||||||
| Cash and cash equivalents | $ | 9,879 | $ | 6,731 | ||||
| Prepaid expenses and other receivables | 86,202 | 95,451 | ||||||
| Current assets from discontinued operation | 0 | (73,695 | ) | |||||
| TOTAL CURRENT ASSETS | 96,081 | 28,487 | ||||||
| NON-CURRENT ASSETS | ||||||||
| Non-current assets from discontinued operation | 0 | 41,691 | ||||||
| TOTAL ASSETS | $ | 96,081 | $ | 70,178 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| CURRENT LIABILITIES | ||||||||
| Accrued liabilities | $ | 34,453 | $ | 31,533 | ||||
| Due to director | 59,744 | 49,744 | ||||||
| Current liabilities from discontinued operation | 0 | 23,128 | ||||||
| TOTAL CURRENT LIABILITIES | 94,197 | 104,405 | ||||||
| TOTAL LIABILITIES | $ | 94,197 | $ | 104,405 | ||||
| STOCKHOLDERS’ EQUITY | ||||||||
| Preferred stock – Par value $; Authorized: issued and outstanding | $ | 0 | $ | 0 | ||||
| Common stock – Par value $ ; Authorized: Issued and outstanding: shares as of June 30, 2021 and December 31, 2020 | 14,199 | 14,199 | ||||||
| Additional paid-in capital | 789,468 | 789,468 | ||||||
| Accumulated other comprehensive income/(loss) | 0 | 1,477 | ||||||
| Accumulated deficit | (801,783 | ) | (839,371 | ) | ||||
| TOTAL STOCKHOLDERS’ EQUITY/(DEFICIT) | 1,884 | (34,227 | ) | |||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 96,081 | $ | 70,178 | ||||
| 2 |
TrueNorth Quantum Inc.
(fka United Royale Holdings Corp.)
Condensed Consolidated Balance Sheets
(Unaudited)
| June 30, | December 31, | |||||||
| 2021 | 2020 | |||||||
| ASSETS | ||||||||
| Current Assets: | ||||||||
| Cash and cash equivalents | $ | 0 | $ | 6,731 | ||||
| Prepaid expenses and other receivables | 7,000 | 21,756 | ||||||
| Total Current Assets | 7,000 | 28,487 | ||||||
| Non-current assets from discontinued operation | 0 | 41,691 | ||||||
| TOTAL ASSETS | $ | 7,000 | $ | 70,178 | ||||
| LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) | ||||||||
| Current Liabilities: | ||||||||
| Accounts payable and accrued liabilities | 234 | 31,533 | ||||||
| Due to related party | 0 | 49,744 | ||||||
| Current liabilities from discontinued operation | 0 | 23,128 | ||||||
| Total Current Liabilities | 234 | 104,405 | ||||||
| Total Liabilities | 234 | 104,405 | ||||||
| Stockholders' Equity (Deficit): | ||||||||
| Preferred stock, $ par value, shares authorized, issued and outstanding | 0 | |||||||
| Common stock, $ par value, shares authorized, shares issued and outstanding | 14,199 | 14,199 | ||||||
| Additional paid-in capital | 873,597 | 789,468 | ||||||
| Accumulated other comprehensive income | 0 | 1,477 | ||||||
| Accumulated deficit | (881,030 | ) | (839,371 | ) | ||||
| Total Stockholders' Equity (Deficit) | 6,766 | (34,227 | ) | |||||
| TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT | $ | 7,000 | $ | 70,178 | ||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
| 3 |
UNITED ROYALE HOLDINGS CORP.TrueNorth Quantum Inc.
(fka United Royale Holdings Corp.)
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONSCondensed Consolidated Statements of Operations and Comprehensive Loss
AND COMPREHENSIVE LOSS
FOR THE THREE and SIX MONTHS ENDED JUNE 30, 2021 AND 2020
(Currency expressed in United States Dollars (“US$”), except for number of shares)(Unaudited)
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||||||
| REVENUE | $ | 0 | $ | 0 | $ | 0 | $ | 0 | ||||||||
| COST OF REVENUE | $ | 0 | $ | 0 | $ | 0 | $ | 0 | ||||||||
| GROSS PROFIT | $ | 0 | $ | 0 | $ | 0 | $ | 0 | ||||||||
| OPERATING EXPENSES: | ||||||||||||||||
| General and administrative | $ | 0 | $ | (23,855 | ) | $ | (19,021 | ) | $ | (72,211 | ) | |||||
| LOSS FROM OPERATIONS | $ | 0 | $ | (23,855 | ) | $ | (19,021 | ) | $ | (72,211 | ) | |||||
| OTHER EXPENSE | ||||||||||||||||
| Other income (expense), net | 0 | 0 | 0 | 0 | ||||||||||||
| LOSS BEFORE INCOME TAX | 0 | (23,855 | ) | (19,021 | ) | (72,211 | ) | |||||||||
| INCOME TAX EXPENSE | 0 | 0 | 0 | 0 | ||||||||||||
| NET LOSS | $ | 0 | $ | (23,855 | ) | $ | (19,021 | ) | $ | (72,211 | ) | |||||
| LOSS FROM DISCONTINUED OPERATIONS | ||||||||||||||||
| Loss from discontinued operations | 0 | 0 | (8,062 | ) | 0 | |||||||||||
| Gain from disposal of subsidiaries | 0 | 0 | 65,154 | 0 | ||||||||||||
| NET INCOME / (LOSS) | 0 | (23,855 | ) | 38,071 | (72,211 | ) | ||||||||||
| OTHER COMPREHENSIVE INCOME (LOSS) | ||||||||||||||||
| Realized foreign currency translation due to disposal of subsidiaries | 0 | 0 | (482 | ) | 0 | |||||||||||
| Foreign currency translation income (loss) | 0 | 398 | (995 | ) | (2,856 | ) | ||||||||||
| COMPREHENSIVE LOSS | $ | 0 | (23,457 | ) | (75,067 | ) | (75,067 | ) | ||||||||
| NET LOSS PER SHARE, BASIC AND DILUTED | $ | (0.00 | ) | $ | (0.00 | ) | $ | (0.00 | ) | $ | (0.00 | ) | ||||
| WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING, BASIC AND DILUTED | 141,990,387 | 141,990,387 | 141,990,387 | 141,990,387 | ||||||||||||
| Three Months Ended | Six months ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||||||
| Revenues | $ | 0 | $ | 0 | $ | 0 | $ | 0 | ||||||||
| Operating Expenses | ||||||||||||||||
| General and administrative | 6,215 | 22,655 | 25,236 | 69,835 | ||||||||||||
| Total Operating Expenses | 6,215 | 22,655 | 25,236 | 69,835 | ||||||||||||
| Loss from operations | (6,215 | ) | (22,655 | ) | (25,236 | ) | (69,835 | ) | ||||||||
| Loss from continuing operation | (6,215 | ) | (22,655 | ) | (25,236 | ) | (69,835 | ) | ||||||||
| Loss from discontinued operations | ||||||||||||||||
| Loss from discontinued operations | 0 | (1,199 | ) | (8,062 | ) | (2,376 | ) | |||||||||
| Loss from disposal of subsidiaries | 0 | 0 | (8,361 | ) | 0 | |||||||||||
| Loss from discontinued operations | 0 | (1,199 | ) | (16,423 | ) | (2,376 | ) | |||||||||
| Net Loss | $ | (6,215 | ) | $ | (23,854 | ) | $ | (41,659 | ) | $ | (72,211 | ) | ||||
| Other Comprehensive Income (loss) | ||||||||||||||||
| Realized foreign currency translation due to disposal of subsidiaries | 0 | 0 | (482 | ) | 0 | |||||||||||
| Foreign currency translation loss | 0 | 398 | (995 | ) | (2,856 | ) | ||||||||||
| Comprehensive loss | $ | (6,215 | ) | $ | (23,456 | ) | $ | (43,136 | ) | $ | (75,067 | ) | ||||
| Net Loss Per Common Share: Basic and Diluted | $ | (0.00 | ) | $ | (0.00 | ) | $ | (0.00 | ) | $ | (0.00 | ) | ||||
| Weighted Average Number of Common Shares Outstanding: Basic and Diluted | 141,990,387 | 464,667,527 | 141,990,387 | 664,499,399 | ||||||||||||
See accompanying notes to the unaudited consolidated financial statements.
| 4 |
UNITED ROYALE HOLDINGS CORP.TrueNorth Quantum Inc.
(fka United Royale Holdings Corp.)
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITYCondensed Consolidated Statements of Changes in Stockholders’ Equity (Deficit)
FOR THE THREE and SIX MONTHS ENDED JUNE 30, 2021 AND 2020
(Currency expressed in United States Dollars (“US$”), except for number of shares)
(Unaudited)
Three and Six months ended June 30, 2021 (Unaudited)
| COMMON STOCK | ADDITIONAL | ACCUMULATED OTHER | ||||||||||||||||||||||
| Number of Shares | Amount | PAID-IN CAPITAL | COMPREHENSIVE LOSS | ACCUMULATED DEFICIT | TOTAL EQUITY | |||||||||||||||||||
| Balance as of December 31, 2020 (audited) | 141,990,387 | $ | 14,199 | $ | 789,468 | $ | 1,477 | $ | (839,371 | ) | $ | (34,227 | ) | |||||||||||
| Disposal of subsidiaries | – | 0 | 0 | (482 | ) | 0 | (482 | ) | ||||||||||||||||
| Net income for the three months ended March 31, 2021 | – | 0 | 0 | 0 | 37,588 | 37,588 | ||||||||||||||||||
| Foreign currency translation | – | 0 | 0 | (995 | ) | 0 | (995 | ) | ||||||||||||||||
| Balance as of March 31, 2021 (Unaudited) | 141,990,387 | $ | 14,199 | $ | 789,468 | $ | – | $ | (801,783 | ) | $ | 1,884 | ||||||||||||
| Net income for the three months ended June 30, 2021 | – | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||
| Foreign currency translation | – | 0 | 0 | 0 | 0 | |||||||||||||||||||
| Balance as of June 30, 2021 (Unaudited) | 141,990,387 | $ | 14,199 | $ | 789,468 | $ | – | $ | (801,783 | ) | $ | 1,884 | ||||||||||||
| Accumulated | ||||||||||||||||||||||||||||||||
| Additional | Other | |||||||||||||||||||||||||||||||
| Preferred Stock | Common stock | Paid-in | comprehensive | Accumulated | ||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Capital | Income (loss) | Deficit | Total | |||||||||||||||||||||||||
| Balance, December 31, 2020 | – | $ | – | 141,990,387 | $ | 14,199 | $ | 789,468 | $ | 1,477 | $ | (839,371 | ) | $ | (34,227 | ) | ||||||||||||||||
| Disposal of subsidiaries | – | – | – | – | – | (482 | ) | – | (482 | ) | ||||||||||||||||||||||
| Foreign currency translation | – | – | – | – | – | (995 | ) | – | (995 | ) | ||||||||||||||||||||||
| Net loss for the period | – | – | – | – | – | – | (35,444 | ) | (35,444 | ) | ||||||||||||||||||||||
| Balance, March 31, 2021 | – | $ | – | 141,990,387 | $ | 14,199 | $ | 789,468 | $ | – | $ | (874,815 | ) | $ | (71,148 | ) | ||||||||||||||||
| Debt forgiveness | – | – | – | – | 84,129 | – | 84,129 | |||||||||||||||||||||||||
| Net loss for the period | – | – | – | – | – | – | (6,215 | ) | (6,215 | ) | ||||||||||||||||||||||
| Balance, June 30, 2021 | – | $ | – | 141,990,387 | $ | 14,199 | $ | 873,597 | $ | – | $ | (881,030 | ) | $ | 6,766 | |||||||||||||||||
Three and Six months ended June 30, 2020 (Unaudited)
| COMMON STOCK | ADDITIONAL | ACCUMULATED OTHER | ||||||||||||||||||||||
| Number of Shares | Amount | PAID-IN CAPITAL | COMPREHENSIVE LOSS | ACCUMULATED DEFICIT | TOTAL EQUITY | |||||||||||||||||||
| Balance as of December 31, 2019 | 141,990,387 | $ | 14,199 | $ | 789,468 | $ | 953 | $ | (712,303 | ) | $ | 92,317 | ||||||||||||
| Net loss for the three months ended March 31, 2020 | – | 0 | 0 | 0 | (48,357 | ) | (48,357 | ) | ||||||||||||||||
| Foreign currency translation | – | 0 | 0 | (3,254 | ) | 0 | (3,254 | ) | ||||||||||||||||
| Balance as of March 31, 2020 (Unaudited) | 141,990,387 | $ | 14,199 | $ | 789,468 | $ | (2,301 | ) | $ | (760,660 | ) | $ | 40,706 | |||||||||||
| Net loss for the three months ended June 30, 2020 | – | 0 | 0 | 0 | (23,855 | ) | (23,855 | ) | ||||||||||||||||
| Foreign currency translation | – | 0 | 0 | 398 | 0 | 398 | ||||||||||||||||||
| Balance as of June 30, 2020 (Unaudited) | 141,990,387 | $ | 141,990,387 | $ | 141,990,387 | $ | (1,903 | ) | $ | (784,515 | ) | $ | 17,249 | |||||||||||
| Common Stock | Additional | Accumulated Other | Total | |||||||||||||||||||||
| Number of Shares | Amount | Paid-in Capital | Comprehensive Loss | Accumulated Deficit | Sttockholders’ Equity | |||||||||||||||||||
| Balance as of December 31, 2019 | 141,990,387 | $ | 14,199 | $ | 789,468 | $ | 953 | $ | (712,303 | ) | $ | 92,317 | ||||||||||||
| Net loss for the three months ended March 31, 2020 | – | – | – | – | (48,357 | ) | (48,357 | ) | ||||||||||||||||
| Foreign currency translation | – | – | – | (3,254 | ) | – | (3,254 | ) | ||||||||||||||||
| Balance as of March 31, 2020 | 141,990,387 | $ | 14,199 | $ | 789,468 | $ | (2,301 | ) | $ | (760,660 | ) | $ | 40,706 | |||||||||||
| Net loss | – | – | – | – | (23,854 | ) | (23,854 | ) | ||||||||||||||||
| Foreign currency translation | – | – | – | 398 | – | 398 | ||||||||||||||||||
| Balance as of June 30, 2020 | 141,965,520 | $ | 14,199 | $ | 789,468 | $ | (1,903 | ) | $ | (784,515 | ) | $ | 17,249 | |||||||||||
The accompanying notes are an integral part of these unaudited consolidated financial statements.
| 5 |
TrueNorth Quantum Inc.
UNITED ROYALE HOLDINGS CORP.(fka United Royale Holdings Corp.)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWSCondensed Consolidated Statements of Cash Flows
FOR THE SIX MONTHS ENDED JUNE 30, 2021 AND 2020
(Currency expressed in United States Dollars (“US$”), except for number of shares)(Unaudited)
For the six months ended | For the six months ended | |||||||
| (Unaudited) | (Unaudited) | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
| Net Income / (loss) | $ | 46,133 | $ | (72,211 | ) | |||
| Adjustments to reconcile net loss to net cash used in operating activities | ||||||||
| Depreciation and amortization expenses | 0 | 2,255 | ||||||
| Gain on disposal of subsidiaries | (65,154 | ) | 0 | |||||
| Changes in operating assets and liabilities: | ||||||||
| Increase/ (Decrease) in accrued liabilities | 2,920 | (17,091 | ) | |||||
| Decrease in Lease Liabilities | 0 | (1,521 | ) | |||||
| Decrease/ (Increase) in prepaid expenses and other receivables | 9,249 | (80,770 | ) | |||||
| (Increase)/ Decrease in biological assets | 0 | (4,522 | ) | |||||
| Net cash flows used in operating activities | (6,851 | ) | (85,292 | ) | ||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
| Advance from directors | 10,000 | 27,987 | ||||||
| Net cash provided by financing activities | 10,000 | 27,987 | ||||||
| Effect of exchange rate changes in cash and cash equivalents | 0 | (219 | ) | |||||
| Net changes in cash and cash equivalents | 3,148 | (57,524 | ) | |||||
| Operating cash flows of the discontinued operation | (22,643 | ) | 0 | |||||
| Investing cash flows of the discontinued operation | 40,342 | 0 | ||||||
| Financing cash flows of the discontinued operation | (15,985 | ) | 0 | |||||
| Total changes in cash and cash equivalents including discontinued operations | 1,714 | (57,524 | ) | |||||
| Cash and cash equivalents, beginning of period | 6,731 | 63,839 | ||||||
| CASH AT END OF PERIOD, CONTINUING OPERATIONS | $ | 9,879 | $ | 6,315 | ||||
| CASH AT END OF PERIOD, DISCONTINUED OPERATIONS | $ | 1,692 | $ | 0 | ||||
| SUPPLEMENTAL CASH FLOWS INFORMATION | ||||||||
| Income taxes paid | $ | 0 | $ | 0 | ||||
| Interest paid | $ | 0 | $ | 0 | ||||
| Six months ended | ||||||||
| June 30, | ||||||||
| 2021 | 2020 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||
| Net loss | $ | (41,659 | ) | $ | (72,211 | ) | ||
| Accounts receivable - related party | – | – | ||||||
| Depreciation expense | 0 | 2,255 | ||||||
| Loss on disposal of subsidiaries | 8,361 | 0 | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Prepaid expenses | 14,756 | 7,798 | ||||||
| Accounts payable and accrued liabilities | (31,299 | ) | (17,091 | ) | ||||
| Lease liabilities | 0 | (1,521 | ) | |||||
| Discontinued assets and liabilities | 8,725 | 0 | ||||||
| Net Cash Used in Operating Activities | (41,116 | ) | (80,770 | ) | ||||
| CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||
| Purchase of biological assets | 0 | (4,522 | ) | |||||
| Net cash used in Investing Activities | 0 | (4,522 | ) | |||||
| CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||
| Advance from directors | 34,385 | 27,987 | ||||||
| Net cash provided by Financing Activities | 34,385 | 27,987 | ||||||
| Effect of exchange rate changes in cash and cash equivalents | 0 | (219 | ) | |||||
| Net cash decrease for period | (6,731 | ) | (57,524 | ) | ||||
| Cash at beginning of period | 6,731 | 63,839 | ||||||
| Cash at end of period | $ | 0 | $ | 6,315 | ||||
| SUPPLEMENTAL CASH FLOW INFORMATION: | ||||||||
| Cash paid for income taxes | $ | 0 | $ | 0 | ||||
| Cash paid for interest | $ | 0 | $ | 0 | ||||
| NON CASH INVESTING AND FINANCING ACTIVITIES | ||||||||
| Initial recognition of operating lease right-of-use assets and operating lease obligations | $ | 0 | $ | 21,330 | ||||
| Debt forgiveness | $ | 84,129 | $ | 0 | ||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
| 6 |
TrueNorth Quantum Inc.
UNITED ROYALE HOLDINGS CORP.(fka United Royale Holdings Corp.)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTSNotes to the Condensed Consolidated Financial Statements
FOR THE SIX MONTHS ENDED JUNEJune 30, 2021 AND 2020 (UNAUDITED)
(Currency expressed in United States Dollars (“US$”), except for number of shares)(Unaudited)
| 1. |
Organization
TrueNorth Quantum, Inc., formerly United Royale Holdings Corp., (“the Company”, “TNQ”, “we”, “us” or “our”) was incorporated under the laws of the State of Nevada on June 23, 2015 to offer planting and cultivation services to land owners in regards to the planting and cultivation of Aquilaria Subintegra & Aquilaria Sinensis trees. On February 15, 2017, we changed our name from Bosy Holdings Corp. to United Royale Holdings Corp. to facilitate our re-branding efforts and develop and enhance our business.
On September 30, 2018, the Company and Mr. CHEN Zheru, representing the sole shareholder of IV Enterprises Development Limited, a Seychelles corporation (“IVED”), entered into a Sale and Purchase Agreement, pursuant to which the Company acquired 100% (one hundred percent) of the shareholding of IVED. IVED provides tree nurseries, including planting, cultivation and inoculation services through its wholly-owned subsidiary, Oudh Tech Sdn Bhd, in Malaysia. The acquisition is completed on September 30, 2018.
On March 30, 2021, the Company and Mr. Li Gongming (“Mr. Li”), the director of the Company, signed an instrument of transfer, pursuant to which Mr. Li acquired 100% (one hundred percent) of the shareholding of IVED. The consideration was set at $1, same as the consideration that the Company acquired IVED in 2018.
Our Board of Directors, Li Gongming, Teoh Kooi Sooi and Soh Khay Wee resigned from the board of directors on April 7, 2021. On the same day, Teoh Kooi Sooi resigned from the roles of Chief Executive Officer, Chief Financial Officer and Treasurer of the Company, David Edwin Evans resigned from the role of Chief Operation Officer of the Company, Liao Lin resigned from the role of Chief Sales Officer of the Company, Jaya C Rajamanickam resigned from the role of President of the Company while Feliana Binti Johny resigned from the role of Secretary of the Company.
On April 7, 2021, Mr. Gary Bartholomew was appointed as the Director, Chief Executive Officer, Chief Financial Officer, President, Secretary, Treasurer of the Company.
On April 22, 2021, CyberNorth Ventures Inc. acquired an aggregate of shares of Common Stock of the Company, representing approximately 77.6% of the issued and outstanding shares of Common Stock of the Company as of such date, from the previous majority shareholders of the Company. As a result of such acquisition CyberNorth Ventures Inc. is able to unilaterally control the election of our board of directors, all matters upon which shareholder approval is required and, ultimately, the direction of our Company. CyberNorth Ventures Inc. is wholly owned by our director, Gary Bartholomew.
On October 4, 2021, the Company amended its Articles of Incorporation to (i) change its name to TrueNorth Quantum Inc. and (ii) designate its Series A Preferred Stock.
On October 20, 2021, the board of directors of the Company appointed Witold (Wit) Ostrenko as a director of the Company, and appointed Brad Herr as the Company’s Chief Financial Officer.
| 7 |
On October 29, 2021, the Company closed its acquisition of TrueNorth Quantum Inc. (“TNQ”), a corporation existing under the laws of the Province of Alberta, Canada pursuant to the Exchange Agreement, Support Agreement and Trust Agreement disclosed in the Company’s Current Report filed October 13, 2021.
On November 8, 2021, the board of directors of the Company appointed William Douglas (Doug) Beynon and David Mironov as directors of the Company.
Description of Business
TNQ is a technology company that has developed an enterprise platform providing security, connectivity and systems compatibility for existing financial institution’s back and front office. This includes integration into major Banks systems from compliance to customer information, including their trading platforms. The TNQ technology (“Northern Shield”) utilizes quantum cryptography (or Quantum key distribution) to secure the clients private key to their crypto assets and this key is held within the trusted Bank environment with the potential to be insured against cyberattack and theft.
Northern Shield enables banks to “institutionalize” crypto currencies the blockchain market. Crypto currencies such as Bitcoin were originally designed to “decentralize” currency. However, the Northern Shield will provide the vehicle for integration to applications and utility for digital wallets inbound and outbound. Northern Shield is a custody solution with insurance. Currently, crypto holders have an account at the crypto-exchange where they invested in that crypto currency. Our solution enables major banks to possess custody on behalf of their clients providing flexibility to trade on multiple exchanges with access to financial and payment networks in a secure and insured account.
| 2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
Basis of presentation
The accompanying unaudited condensed consolidated financial statements have been prepared by management in accordance with both accounting principles generally accepted in the United States (“GAAP”), and the instructions to Form 10-Q and Rule 10-018 of Regulation S-X. Certain information and note disclosures normally included in audited financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to those rules and regulations, although the Company believes that the disclosures made are adequate to make the information not misleading.
In the opinion of management, the balance sheet as of June 30, 2021 which has been derived from unaudited financial statements and these unaudited condensed consolidated financial statements reflect all normal and recurring adjustments considered necessary to state fairly the results for the periods presented. The results for the period ended June 30, 2021 are not necessarily indicative of the results to be expected for the entire fiscal year ending December 31, 2021 or for any future period.
These unaudited condensed consolidated financial statements and notes thereto should be read in conjunction with the Management’s Discussion and the audited financial statements and notes thereto included in the Form 10-K for the year ended December 31, 2020.
United Royale Holdings Corp., formerly known as Bosy Holdings Corp. (“the Company”, “we”, “us” or “our”) was incorporated in the State of Nevada on June 23, 2015. We intended to offer planting and cultivation services to land owners in regards to the planting and cultivation of Aquilaria Subintegra & Aquilaria Sinensis trees. We also intended to provide services relating to the extraction of Agarwood from such trees through a process known as “inoculation.”
On September 30, 2018, the Company and Mr. CHEN Zheru, representing the sole shareholder of IV Enterprises Development Limited, a Seychelles corporation (“IVED”), entered into a Sale and Purchase Agreement, pursuant to which the Company acquired 100% (one hundred percent) of the shareholding of IVED. IVED provides tree nurseries, including planting, cultivation and inoculation services through its wholly-owned subsidiary, Oudh Tech Sdn Bhd, in Malaysia. The acquisition was completed on September 30, 2018.
Mr. CHEN Zheru was the common director and major shareholder of the Company and IVED. As a result of this common ownership and in accordance with the FASB Accounting Standards Codification Section 805 “Business Combination”, the transaction was treated as a combination between entities under common control. The recognized assets and liabilities were transferred at their carrying amounts at the date of the transaction. The equity accounts of the combining entities are combined. Further, the companies were combined retrospectively for prior year comparative information as if the transaction had occurred on January 1, 2017.
On March 30, 2021, the Company and Mr. Li Gongming (“Mr. Li”), the director of the Company, signed an instrument of transfer, pursuant to which Mr. Li acquired 100% (one hundred percent) of the shareholding of IVED. The consideration was set at $1, same as the consideration that the Company acquired IVED in 2018. There was a gain of $65,154 on disposal of the subsidiaries due to an equity deficit of the disposed subsidiaries.
Our Board of Directors, Li Gongming, Teoh Kooi Sooi and Soh Khay Wee resigned from the board of directors on April 7, 2021. On the same day, Teoh Kooi Sooi resigned from the roles of Chief Executive Officer, Chief Financial Officer and Treasurer of the Company, David Edwin Evans resigned from the role of Chief Operation Officer of the Company, Liao Lin resigned from the role of Chief Sales Officer of the Company, Jaya C Rajamanickam resigned from the role of President of the Company while Feliana Binti Johny resigned from the role of Secretary of the Company.
On April 7, 2021, Mr. Gary Bartholomew was appointed as the Director, Chief Executive Officer, Chief Financial Officer, President, Secretary, Treasurer of the Company.
On April 22, 2021, CyberNorth Ventures Inc. acquired an aggregate of 109,423,767 shares of Common Stock of the Company, representing approximately 77.6% of the issued and outstanding shares of Common Stock of the Company as of such date, from the previous majority shareholders of the Company. As a result of such acquisition CyberNorth Ventures Inc. is able to unilaterally control the election of our board of directors, all matters upon which shareholder approval is required and, ultimately, the direction of our Company. CyberNorth Ventures Inc. is wholly owned by our director, Gary Bartholomew.
The Company does not currently have operations.
Basis of presentation
The accompanying financial statements are prepared in accordance with generally accepted accounting principles in the United States of America (“US GAAP”).
The accompanying financial statements include the accounts of the Company and its wholly-owned subsidiaries. Intercompany transactions and balances were eliminated in consolidation. As of June 30, 2021, there was no subsidiary held by the Company.Company (see Note 7).
Use of estimates
Management uses estimates and assumptions in preparing these financial statements in accordance with US GAAP. Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities in the balance sheet, and the reported revenue and expenses during the periods reported. Actual results may differ from these estimates.
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Going Concern
The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. During the six months ended June 30, 2021, the Company incurred a loss before income tax of $19,021 and used cash in operations of $$6,852. 6,85141,116. These factors raise substantial doubt about the Company’s ability to continue as a going concern within one year of the date that the financial statements are issued. In addition, the Company’s independent registered public accounting firm, in its report on the Company’s December 31, 2020 financial statements, has expressed substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.
The Company’s ability to continue as a going concern is dependent upon improving its profitability and the continuing financial support from its shareholders. Management believes the existing shareholders or external financing will provide the additional cash to meet the Company’s obligations as they become due. Despite the amount of funds that we have raised, no assurance can be given that any future financing, if needed, will be available or, if available, that it will be on terms that are satisfactory to the Company. Even if the Company is able to obtain additional financing, if needed, it may contain undue restrictions on its operations, in the case of debt financing, or cause substantial dilution for its stockholders, in the case of equity financing.
Cash and cash equivalents
Cash and cash equivalents are carried at cost and represent cash on hand, demand deposits placed with banks or other financial institutions and all highly liquid investments with an original maturity of three months or less as of the purchase date of such investments.
Fair value of financial instruments
The carrying value of the Company’s financial instruments: cash and cash equivalents, prepayments, amount due to a director and accrued liabilities approximate at their fair values because of the short-term nature of these financial instruments.
The Company follows the guidance of the ASC Topic 820-10, “Fair Value Measurements and Disclosures” (“ASC 820-10”), with respect to financial assets and liabilities that are measured at fair value. ASC 820-10 establishes a three-tier fair value hierarchy that prioritizes the inputs used in measuring fair value as follows:
| · | Level 1 : Observable inputs such as quoted prices in active markets; |
| · | Level 2 : Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and |
| · | Level 3 : Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions information regarding the impact of the adoption of ASC 842 on the Company’s financial statements. |
Recent accounting pronouncements
In November 2016, the FASB issued Accounting Standards Update No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash (ASU 2016-18), which requires companies to include amounts generally described as restricted cash and restricted cash equivalents in cash and cash equivalents when reconciling beginning-of-period and end-of-period total amounts shown on the statement of cash flows. We adopted the new standard effective January 1, 2018, and the standard did not have a material impact on our financial statements.
In January 2017, the FASB issued Accounting Standards Update No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business (ASU 2017-01), which revises the definition of a business and provides new guidance in evaluating when a set of transferred assets and activities is a business. We adopted the new standard effective January 1, 2018 on a prospective basis. The new standard did not have a material impact on our consolidated financial statements.
The Company has reviewed all recently issued, but not yet effective, accounting pronouncements and do 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.
| PREPAID EXPENSES AND OTHER RECEIVABLES |
The prepaid expenses as of June 30, 2021 included OTCQB annual fee of $10,5007,000, deposit of $100 in transfer agent, and $75,602 in other receivables from our former subsidiaries, while the prepaid expenses as of December 31, 2020 included OTCQB annual fee of $14,000, deposit of $600 and $6,410 in transfer agent and our consultancy firm.
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| ACCRUED LIABILITIES |
The accrued liabilities as of June 30, 2021 included the auditor’stransfer agent fee of $6,500234, EDGAR fee of $1,025, professional fee to our consultancy firm of $24,359 and $2,569 payable to our former subsidiary, while the accrued liabilities as of December 31, 2020 included the auditor’s fee of $4,750, predecessor auditor consent fee of $5,000 and professional fee to our consulting service provider of $19,231.
| AMOUNT DUE TO DIRECTOR |
As of June 30, 2021, and December 31, 2020, our directors has loaned to the Company $59,744$0 and $49,744 as working capital, respectively. This loan is unsecured, non-interest bearing and due on demand.
During the six months ended June 30, 2021, directors advanced $34,385 to the Company and due to director of $84,129 was forgiven.
| STOCKHOLDERS’ EQUITY |
As of June 30, 2021, and December 31, 2020, there were shares of common stock issued and outstanding respectively.outstanding.
There were stock options, warrants or other potentially dilutive securities outstanding as of June 30, 2021.
| DISCONTINUED OPERATIONS |
On March 30, 2021, the Company has signed an instrument of transfer with our director, Mr. Li Gongming. Beginning on January 1, 2020, the Company historical financial results for periods prior to the above transaction have been reflected in our statement of income, retrospectively, as discontinued operations. Additionally, the related assets and liabilities associated with the discontinued operations in the prior year balance sheet are classified as discontinued operations. As such, as of June 30, 2021, the Company accounted for all of its assets, liabilities and results of operations up to JuneMarch 30, 2021 as discontinued operations.
During the three months ended June 30, 2021, the Company did not record a gain or loss on this disposal of subsidiaries.
The following table shows the results of operations of the Company for three and six months ended June 30, 2021 and 2020 which are included in the loss from discontinued operations:
| Schedule of discontinued operations | Six months ended June 30, 2021 | Six months ended June 30, 2020 | ||||||
| REVENUE | $ | 0 | $ | 0 | ||||
| COST OF REVENUE | 0 | 0 | ||||||
| GROSS PROFIT | 0 | 0 | ||||||
| GENERAL AND ADMINISTRATIVE EXPENSES | (8,062 | ) | – | |||||
| LOSS FROM OPERATIONS | (8,062 | ) | – | |||||
| OTHER INCOME/(EXPENSES) | 0 | 0 | ||||||
| LOSS BEFORE INCOME TAX | (8,062 | ) | – | |||||
| INCOME TAX REFUND / (EXPENSE) | 0 | 0 | ||||||
| NET LOSS | $ | (8,062 | ) | $ | – | |||
| Schedule of discontinued operations | ||||||||||||||||
| Three Months Ended | Six months ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||||||
| Revenue | $ | 0 | $ | 0 | $ | 0 | $ | 0 | ||||||||
| General and administrative | 0 | 1,199 | 8,062 | 2,376 | ||||||||||||
| Loss from operations | 0 | (1,199 | ) | (8,062 | ) | (2,376 | ) | |||||||||
| Other income (expense) | 0 | 0 | 0 | 0 | ||||||||||||
| Loss before income tax | 0 | (1,199 | ) | (8,062 | ) | (2,376 | ) | |||||||||
| Income tax expense (refund) | 0 | 0 | 0 | 0 | ||||||||||||
| Net loss from discontinued operations | $ | 0 | $ | (1,199 | ) | $ | (8,062 | ) | $ | (2,376 | ) | |||||
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The following table shows the loss from disposal of subsidiaries from carrying amounts of the major classes of assets and liabilities associated with the Company as of JuneMarch 30, 2021:
| Schedule of discontinued operations - balance sheet | As of June 30, 2021 | |||
| (Unaudited) | ||||
| ASSETS | ||||
| Current Assets | ||||
| Cash and cash equivalents | $ | 9,879 | ||
| Prepaid expenses | 86,202 | |||
| Total Current Assets | 96,081 | |||
| Non-current Assets | ||||
| Plant and equipment, net | 0 | |||
| Biological Assets | 0 | |||
| TOTAL ASSETS | $ | 96,081 | ||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||
| Current Liabilities | ||||
| Amount due to director | $ | 59,744 | ||
| Amount due to former parent company | 0 | |||
| Accounts payable and accrued expenses | 34,453 | |||
| Total Current Liabilities | 94,197 | |||
| TOTAL LIABILITIES | $ | 94,197 | ||
| STOCKHOLDERS’ EQUITY | ||||
| Equity | 1,884 | |||
| TOTAL STOCKHOLDERS' EQUITY | 1,884 | |||
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 96,081 | ||
| Schedule of discontinued operations - balance sheet | ||||
| March 30, | ||||
| 2021 | ||||
| Current Assets | ||||
| Cash and cash equivalents | $ | 1,692 | ||
| Prepaid expenses | 724 | |||
| Plant and equipment, net | 1,116 | |||
| Biological Assets | 38,651 | |||
| Amount due to director | (19,800 | ) | ||
| Accounts payable and accrued expenses | (14,504 | ) | ||
| Realized foreign currency translation due to disposal of subsidiaries | 482 | |||
| Loss from disposal of subsidiaries | $ | 8,361 | ||
| SUBSEQUENT EVENTS |
On September 3, 2021, the Company’s sole director and shareholder holding a majority of the Company’s voting stock approved the following actions by written consent: change of the Company’s name to TrueNorth Quantum, Inc., designation of one share of Series A Preferred Stock with special voting rights, and approval of a stock incentive plan and deferred stock unit plan.
On October 4, 2021, the Company amended its Articles of Incorporation to (i) change its name to TrueNorth Quantum Inc. and (ii) designate its Series A Preferred Stock.
On October 20, 2021, the board of directors of the Company appointed Witold (Wit) Ostrenko as a director of the Company, and appointed Brad Herr as the Company’s Chief Financial Officer.
On October 29, 2021, the Company closed its acquisition of TrueNorth Quantum Inc. (“TNQ”), a corporation existing under the laws of the Province of Alberta, Canada pursuant to the Exchange Agreement, Support Agreement and Trust Agreement disclosed in the Company’s Current Report filed October 13, 2021.
On November 5, 2021, TrueNorth Quantum, Inc., a Nevada corporation formerly known as United Royale Holdings Corp. (the “Company”) dismissed Zia Masood Kiani & Co. (“ZMKC”) as the Company’s independent registered public accounting firm. Following a careful deliberation, on November 5, 2021, the Company engaged BF Borger CPA PC (“BFB”) as the Company’s independent registered public accounting firm.
On November 8, 2021, the board of directors of the Company appointed William Douglas (Doug) Beynon and David Mironov as directors of the Company.
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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The information contained in this quarter report on Form 10-Q10-Q/A is intended to update the information contained in our Form 10-K dated March 29, 2021, for the year ended December 31, 2020 and presumes that readers have access to, and will have read, the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and other information contained in such Form 10-K. The following discussion and analysis also should be read together with our financial statements and the notes to the financial statements included elsewhere in this Form 10-Q.
The following discussion contains certain statements that may be deemed “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements appear in a number of places in this Report, including, without limitation, “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” These statements are not guarantees of future performance and involve risks, uncertainties and requirements that are difficult to predict or are beyond our control. Forward-looking statements speak only as of the date of this quarterly report. You should not put undue reliance on any forward-looking statements. We strongly encourage investors to carefully read the factors described in our Form 10-K dated March 29, 2021, in the section entitled “Risk Factors” for a description of certain risks that could, among other things, cause actual results to differ from these forward-looking statements. We assume no responsibility to update the forward-looking statements contained in this transition report on Form 10-Q. The following should also be read in conjunction with the unaudited Condensed Consolidated Financial Statements and notes thereto that appear elsewhere in this report.
Company Overview
TrueNorth Quantum Inc. (formerly United Royale Holdings Corp.) (the “Company”, “TrueNorth”) was incorporated under the laws of the State of Nevada on June 23, 2015. United Royale Holdings Corp., is a developmental stage company that intends2015 to offer planting and cultivation services to land owners in regards to the planting and cultivation of Aquilaria Subintegra & Aquilaria Sinensis trees. On February 15, 2017, we changed our name from Bosy Holdings Corp. to United Royale Holdings Corp. to facilitate our re-branding efforts and develop and enhance our business.
The company also intendCompany’s products include a highly scalable, institutional-grade cloud platform called the Northern Shield that enables the rapid build and scale of decentralized applications across many industries. The Northern Shield is the convergence of Security, Blockchain, AI, and Big Data into a single platform we call Web 3.0. The Company has started to provide services relatingwork with application development companies to adapt or build their application using the Northern Shield. The Northern Shield is offered as a Platform as a Service (PaaS) offering a complex and highly secured and managed system reducing the cost of industry scale application development for disruption in Healthcare, Fintech, AgTech, and Wellness. These industries are transforming to a decentralized architecture enabling the Northern Shield to disrupt the way business is done today. The Company has numerous engagements to build applications using the Northern Shield, allowing for highly secured and insured capability with a global scale running on the blockchain. In addition to offering the Northern Shield as a PaaS, we offer full application development to the extractionbusiness that has the disruptive idea but needs a strong technical partner to implement their decentralized vision. This contract software development service is offered on a fixed price basis based on the Statement of Agarwood (Agarwood is extracted from those trees, about 10-15% wood of the tree can become Agarwood) from such trees, through the process of “fungal inoculation.”
We offer planting and cultivationWork mutually agreed to in a services to land owners in regards to the planting and cultivation of Aquilaria Subintegra & Aquilaria Sinensis trees. We also intend to provide services relating to the extraction of Agarwood from such trees through a process known as “inoculation.”
On February 1, 2018, the majority of the directors and shareholders of the Company adopted the resolution to request a name change of the Company from “Bosy Holdings Corp.” to “United Royale Holdings Corp.”. The name change became effective with the State of Nevada on February 5, 2018. FINRA announced on February 14, 2018 that the new name of “United Royale Holdings Corp.” was be effective on February 15, 2018, and the new ticker symbol of “URYL” was effective on February 15, 2018.
On March 30, 2018, Mr. Teoh Kooi Sooi resigned from the President of the Company. And Mr. Teoh retained his position of Chief Executive Officer, treasurer, and director in the board. The resignation was not the result of any disagreement with the Company on any matter relating to the Company’s operations, policies or practices. Mr. Teoh Kooi Sooi has been the President of the Company since September 18, 2015.
On March 30, 2018, Mr. Chen Zheru resigned from the Secretary of the Company. And Mr. Chen will retain his position of director in the board. The resignation was not the result of any disagreement with the Company on any matter relating to the Company’s operations, policies or practices. Mr. Chen Zheru has been the Secretary of the Company since September 18, 2015.
On March 30, 2018, Ms. Jaya C Rajamanickam was appointed as the Company’s new President. Ms. Feliana Binti Johny was appointed as the Company’s new Secretary. The biographies for new officers of the Company was filed in the Form 8-K filed with SEC on March 30, 2018.
contract.
On September 30, 2018, the Company and Mr. CHEN Zheru, representing the sole shareholder of IV Enterprises Development Limited, a Seychelles corporation (“IVED”), entered into a Sale and Purchase Agreement, pursuant to which the Company acquired 100% (one hundred percent) of the shareholding of IVED. IVED provides tree nurseries, including planting, cultivation and inoculation services through its wholly-owned subsidiary, Oudh Tech Sdn Bhd, in Malaysia. The acquisition is completed on September 30, 2018.
On October 22, 2018, Mr. David Edwin Evans was appointed as the Company’s Chief Operating Officer. Mr. Liao Lin was appointed as the Company’s Chief Sales Officer. The biographies for new officers of the Company was filed in the Form 8-K filed with SEC on October 22, 2018.
On November 30, 2018, Mr. Chen Zheru resigned from the board of directors with the Company. The resignation was not the result of any disagreement with the Company on any matter relating to the Company’s operations, policies or practices. Mr. Chen Zheru has been the director of the Company since September 18, 2015. On the same day, Mr. Li Gongming was appointed as the Company’s new member of board of directors.
On December 5, 2018, as a result of a private transaction, 100% shareholding of Bosy Holdings Limited has been transferred from Mr. Chen Zheru to Mr. Li Gongming. The consideration paid for the transaction was $50,000. The source of the cash consideration for the transaction was personal funds of the Purchaser. Bosy Holdings Limited, a limited liability company incorporated in Seychelles, holds 78,415,100 shares of United Royale Holdings Corp. The Transaction resulted in the Purchaser acquiring a total of 55.235% of the issued and outstanding share capital of the Company on a fully-diluted basis, which caused a change in control of the Company. And Mr. Li owns 6,000,000 shares of the Company as of December 7, 2018, which constitutes a total shareholding of 59.461% of the Company.
On April 1, 2019, the Company entered into a six-year tenancy agreement with Halaman Girang Sdn Bhd, the landlord of the farmland, for renting Lot 4316, Batu 20, Jalan Segamat, 84900, Tangkak, Johor, Malaysia. The monthly rental payment is MYR1,500, equivalent to around $363. The tenancy period is valid from April 1, 2019 to March 31, 2025.
On April 1, 2019, the Company entered into an agarwood management agreement with Ms. Simone Yap Xin Wei for providing agarwood plantation management and farming operations in the farmland. The agreement is valid from April 1, 2019 to March 31, 2020, with monthly service fee of MYR2,640, equivalent to $639.
On June 12, 2019, Mr. Soh Khay Wee was appointed as the Company’s Director. The biographies for new officers of the Company was filed in the Form 8-K filed with SEC on June 12, 2019.
On March 30, 2021, the Company and Mr. Li Gongming (“Mr. Li”), the director of the Company, signed an instrument of transfer, pursuant to which Mr. Li acquired 100% (one hundred percent) of the shareholding of IVED. The consideration was set at $1, same as the consideration that the Company acquired IVED in 2018. There was a gain of $65,154 on disposal of the subsidiaries due to an equity deficit of the disposed subsidiaries. The disposal of subsidiaries was due to the uncertain business environment during the pandemic period since end of 2019.
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Our Board of Directors, Li Gongming, Teoh Kooi Sooi and Soh Khay Wee resigned from the board of directors on April 7, 2021. On the same day, Teoh Kooi Sooi resigned from the roles of Chief Executive Officer, Chief Financial Officer and Treasurer of the Company, David Edwin Evans resigned from the role of Chief Operation Officer of the Company, Liao Lin resigned from the role of Chief Sales Officer of the Company, Jaya C Rajamanickam resigned from the role of President of the Company while Feliana Binti Johny resigned from the role of Secretary of the Company.
On April 7, 2021, Mr. Gary Bartholomew was appointed as the Director, Chief Executive Officer, Chief Financial Officer, President, Secretary, Treasurer of the Company.
On April 22, 2021, CyberNorth Ventures Inc. acquired an aggregate of 109,423,767 shares of Common Stock of the Company, representing approximately 77.6% of the issued and outstanding shares of Common Stock of the Company as of such date, from the previous majority shareholders of the Company. As a result of such acquisition CyberNorth Ventures Inc. is able to unilaterally control the election of our board of directors, all matters upon which shareholder approval is required and, ultimately, the direction of our Company. CyberNorth Ventures Inc. is wholly owned by our director, Gary Bartholomew.
TheOn October 4, 2021, the Company does not currently have operations.amended its Articles of Incorporation to (i) change its name to TrueNorth Quantum Inc. and (ii) designate its Series A Preferred Stock.
On October 20, 2021, the board of directors of the Company appointed Witold (Wit) Ostrenko as a director of the Company, and appointed Brad Herr as the Company’s Chief Financial Officer.
On October 29, 2021, the Company closed its acquisition of TrueNorth Quantum Inc. (“TNQ”), a corporation existing under the laws of the Province of Alberta, Canada pursuant to the Exchange Agreement, Support Agreement and Trust Agreement disclosed in the Company’s Current Report filed October 13, 2021.
On November 8, 2021, the board of directors of the Company appointed William Douglas (Doug) Beynon and David Mironov as directors of the Company.
Results of Operation
For the three months ended June 30, 2021 and 2020
Revenues
We have not generated any revenue for the three months ended June 30, 2021 and 2020.
General and administrative expenses
We incurred a total of $0$6,215 and $23,457$22,655 general and administrative expenses during the three months ended June 30, 2021 and 2020 respectively. The general and administrative expenses are mainly comprised of Form 10-Q review fee, consulting fee, legal fee, transfer agent fee and Edgar filing fee. The decrease of general and administrative expenses is due to decrease in salary payout.
Loss from discontinued operations
For the three months ended June 30, 2021 and 2020, loss from discontinued operations of $0 and $1,199 consisted of the results of operations of the disposed subsidiaries.
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Net income / loss
For three months ended June 30, 2021 and 2020, we had generated no revenues. We incurred a total net incomeloss of $0$6,215 and net loss of $23,457$23,854 for the three months ended June 30, 2021 and 2020, respectively.
For the six months ended June 30, 2021 and 2020
Revenues
We have not generated any revenue for the six months ended June 30, 2021 and 2020.
General and administrative expenses
We incurred a total of $25,236 and $69,835 general and administrative expenses during the six months ended June 30, 2021 and 2020 respectively. The general and administrative expenses are mainly comprised of Form 10-Q review fee, consulting fee, legal fee, transfer agent fee and Edgar filing fee. The decrease of general and administrative expenses is due to decrease in salary payout.
Loss from discontinued operations
For the six months ended June 30, 2021 there was a gain of $65,154 on the disposal of subsidiaries due to the deficit of the disposed subsidiaries and a loss of $8,062 on the discontinued operation. For the six months ended June 30, 2020, loss from discontinued operations of $0$8,062 and $2,376 consisted of the results of operations of the disposed subsidiaries.subsidiaries and loss form disposal of subsidiaries of $8,361 and $0, respectively.
Net loss
For six months ended June 30, 2021 and 2020, we had generated no revenues. We incurred a total net loss of $41,659 and net loss of $72,211 for the six months ended June 30, 2021 and 2020 respectively.
Liquidity and Capital Resources
Cash Used Inin Operating Activities
For the six months ended June 30, 2021 and 2020, the cash flows used in operating activities was $3,148$41,116 and ($57,524) respectively, consists$80,770 respectively. The decrease in cash used in operation activities is primarily due to a decrease in operating expenses.
Cash Used in Investing Activities
For the six months ended June 30, 2021 and 2020, the Company used $0 and $4,522 for purchase of net loss and change inbiological assets, and liabilities.respectively.
Cash Provided Byby Financing Activities
For the six months ended June 30, 2021 and 2020, the cash flows provided by financial activities was $10,000$34,385 and $27,987 respectively, consists of advanceadvances from directors.
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Off-balance Sheet Arrangements
We have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to our stockholders as of June 30, 2021.
Contractual Obligations
Nil.None.
Critical Accounting Policies
The discussion and analysis of our financial condition and results of operations are based upon our financial statements, which have been prepared in accordance with the accounting principles generally accepted in the United States of America. Preparing financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, and expenses. These estimates and assumptions are affected by management’s application of accounting policies. We believe that understanding the basis and nature of the estimates and assumptions involved with the following aspects of our financial statements is critical to an understanding of our financial statements.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. The estimates and judgments will also affect the reported amounts for certain expenses during the reporting period. Actual results could differ from these good faith estimates and judgments.
Item 3 Quantitative and Qualitative Disclosures About Market Risk.
As a “smaller reporting company” as defined by Item 10 of Regulation S-K, the Company is not required to provide information required by this Item.
Item 4 Controls and Procedures.
Evaluation of Disclosure Controls and Procedures:
We carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of June 30, 2021. This evaluation was carried out under the supervision and with the participation of our Chief Executive Officer and our Chief OperationsFinancial Officer. Based upon that evaluation, our Chief Executive Officer and Chief OperationsFinancial Officer concluded that, as of June 30, 2021, our disclosure controls and procedures were not effective due to the presence of material weaknesses in internal control over financial reporting.
A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely basis. Management has identified the following material weaknesses which have caused management to conclude that, as of June 30, 2021 our disclosure controls and procedures were not effective: (i) inadequate segregation of duties and effective risk assessment; and (ii) insufficient written policies and procedures for accounting and financial reporting with respect to the requirements and application of both US GAAP and SEC guidelines.
Changes in Internal Control over Financial Reporting:
There were no changes in our internal control over financial reporting during the quarter ending June 30, 2021, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
PART II — OTHER INFORMATION
Item 1. Legal Proceedings
We know of no materials, active or pending legal proceedings against us, nor are we involved as a plaintiff in any material proceedings or pending litigation. There are no proceedings in which any of our directors, officers or affiliates, or any beneficial shareholder are an adverse party or has a material interest adverse to us.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
None.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information.
None.
ITEM 6. Exhibits
| TrueNorth Canadian Exchange Agreement (2) | ||
| 2.2 | TrueNorth Non-Canadian Exchange Agreement (2) | |
| 3(i).1 | Articles of Incorporation, as amended (1) | |
| 3(i).2 | Certificate of Amendment (2) | |
| 3(ii).1 | Bylaws, as amended (1) | |
| 10.1 | TrueNorth Trust Agreement (2) | |
| 10.2 | TrueNorth Support Agreement (2) | |
| 10.3 | Incentive Stock Option Plan (2) | |
| 10.4 | Deferred Stock Unit Plan (2) | |
| 31.1* | Rule 13(a)-14(a)/15(d)-14(a) Certification of | |
| Rule 13(a)-14(a)/15(d)-14(a) Certification of Chief Financial Officer. | ||
| 32.1** | Section 1350 Certification of | |
| Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document) | ||
| Inline XBRL Taxonomy Extension Schema Document | ||
| Inline XBRL Taxonomy Extension Calculation Linkbase Document | ||
| Inline XBRL Taxonomy Extension Definition Linkbase Document | ||
| Inline XBRL Taxonomy Extension Label Linkbase Document | ||
| Inline XBRL Taxonomy Extension Presentation Linkbase Document | ||
* Filed herewith
** Furnished herewith
(1) Previously filed as an exhibit to the Company’s Form 8-K filed with SEC on February 15, 2018 and incorporated herein by reference.
(2) Previously filed as an exhibit to the Company’s Form 8-K filed with SEC on October 13, 2021 and incorporated herein by reference.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| Date: | ||
| By: | /s/ Gary Bartholomew | |
| Title: | Chief Executive Officer, (Principal Executive | |