UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
(Mark One) |
| | |
x | QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED March 31, 2017 |
| | |
o | TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT FOR THE TRANSITION PERIOD FROM __________ TO __________ |
COMMISSION FILE NUMBER 000-55708
HAHA Generation Corp. |
(Exact name of registrant as specified in its charter) |
Nevada | | 32-0442871 |
(State or other jurisdiction of incorporation or organization) | | (I.R.S. Employer Identification No.) |
4F, No. 132, Songshan Road, Xinyi District
Taipei City, 110, Taiwan (Republic of China)
(Address of principal executive offices, Zip Code)
011-886-227492597
(Registrant’s telephone number, including area code)
___________________________________________________________
(Former name, former address and former fiscal year, if changed since last report)
Copies to:
Thomas E. Stepp, Jr.
Stepp Law Corporation
15707 Rockfield Boulevard, Suite 101
Irvine, California 92618
Phone: (949) 660-9700 ext. 124
Fax: (949) 660-9010
Indicate by check mark whether the registrant (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act 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 x No o
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No o
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 definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer | o | Accelerated filer | o |
Non-accelerated filer | o | Smaller reporting company | x |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes x No o
The number of shares of registrant’s common stock outstanding, as of May 5, 2017, is 1,498,280.
TABLE OF CONTENTS
PART I – FINANCIAL INFORMATION
Item 1. Financial Statements
HAHA GENERATION CORP. |
BALANCE SHEETS |
|
| | March 31, | | | December 31, | |
| | 2017 | | | 2016 | |
| | (Unaudited) | | | | |
Assets |
| | | | | | |
Current Assets | | | | | | |
Cash and cash equivalents | | $ | 36,165 | | | $ | 50,150 | |
Other receivable | | | - | | | | 1,010 | |
Prepaid expense | | | 1,350 | | | | 1,125 | |
Total current assets | | | 37,515 | | | | 52,285 | |
| | | | | | | | |
Total Assets | | $ | 37,515 | | | $ | 52,285 | |
| | | | | | | | |
Liabilities and Stockholders’ Equity |
| | | | | | | | |
Current Liabilities | | | | | | | | |
Accrued expense and other liabilities | | | 21,000 | | | | 2,000 | |
Due to shareholders | | | 3,307 | | | | 3,317 | |
Total current liabilities | | | 24,307 | | | | 5,317 | |
| | | | | | | | |
Total liabilities | | | 24,307 | | | | 5,317 | |
| | | | | | | | |
Stockholders’ Equity | | | | | | | | |
Common stock, $0.1 par value; 25,000,000 shares authorized, 1,498,280 shares issued and outstanding | | | 149,828 | | | | 149,828 | |
Additional paid-in capital | | | 163,171 | | | | 163,171 | |
Accumulated deficit | | | (299,791 | ) | | | (266,031 | ) |
Total stockholders’ equity | | | 13,208 | | | | 46,968 | |
| | | | | | | | |
Total Liabilities and Stockholders’ Equity | | $ | 37,515 | | | $ | 52,285 | |
The accompanying notes to financial statements are an integral part of these statements.
HAHA GENERATION CORP. |
STATEMENTS OF OPERATIONS |
FOR THE THREE MONTHS ENDED MARCH 31, 2017 AND 2016 |
(UNAUDITED) |
|
| | Three Months Ended | |
| | March 31,
2017 | | | March 31,
2016 | |
| | | | | | |
Net revenue | | $ | - | | | $ | - | |
| | | | | | | | |
General and administrative expenses | | | 33,760 | | | | 22,533 | |
| | | | | | | | |
Loss from operations | | | (33,760 | ) | | | (22,533 | ) |
| | | | | | | | |
Loss before income taxes | | | (33,760 | ) | | | (22,533 | ) |
| | | | | | | | |
Provision for income taxes | | | - | | | | - | |
Net loss | | $ | (33,760 | ) | | $ | (22,533 | ) |
| | | | | | | | |
Net loss per share | | | | | | | | |
Basic and diluted | | $ | (0.02 | ) | | $ | (0.02 | ) |
| | | | | | | | |
Weighted Average Shares Outstanding: | | | | | | | | |
Basic and diluted | | | 1,498,280 | | | | 1,051,405 | |
The accompanying notes to financial statements are an integral part of these statements.
HAHA GENERATION CORP. |
STATEMENTSOF CASH FLOWS |
FOR THE THREE MONTHS ENDED MARCH 31, 2017 AND 2016 |
(UNAUDITED) |
|
| | Three Months Ended | |
| | March 31,
2017 | | | March 31,
2016 | |
Cash Flows from Operating Activities | | | | | | |
Net loss | | $ | (33,760 | ) | | $ | (22,533 | ) |
Changes in assets and liabilities: | | | | | | | | |
Decrease (Increase) in other receivable | | | 1,010 | | | | - | |
Decrease (Increase) in prepaid expenses | | | (225 | ) | | | - | |
Increase (Decrease) in accrued expenses | | | 19,000 | | | | 22,533 | |
Increase (Decrease) in due to shareholders | | | (10 | ) | | | - | |
Increase (Decrease) in other payable | | | - | | | | 69,355 | |
Net cash provided by (used in) operating activities | | | (13,985 | ) | | | 69,355 | |
| | | | | | | | |
Net increase (decrease) in cash and cash equivalents | | | (13,985 | ) | | | 69,355 | |
| | | | | | | | |
Cash and Cash Equivalents | | | | | | | | |
Beginning | | | 50,150 | | | | 3,369 | |
Ending | | $ | 36,165 | | | $ | 72,724 | |
| | | | | | | | |
Supplemental Disclosure of Cash Flows | | | | | | | | |
Cash paid during the year for: | | | | | | | | |
Interest | | $ | - | | | $ | - | |
| | | | | | | | |
Income taxes | | $ | - | | | $ | - | |
The accompanying notes to financial statements are an integral part of these statements.
HAHA GENERATION CORP.
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2017
(UNAUDITED)
NOTE 1. NATURE OF OPERATIONS AND SUMMARY OF ACCOUNTING POLICIES
Basis of Presentation
The accompanying unaudited financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) for interim financial reporting and in accordance with instructions for Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, the unaudited financial statements contained in this report reflect all adjustments that are normal and recurring in nature and considered necessary for a fair presentation of the financial position and the results of operations for the interim periods presented. The year-end balance sheet data were derived from audited financial statements, but do not include all disclosures required by GAAP. The results of operations for the interim period are not necessarily indicative of the results expected for the full year. These unaudited financial statements, footnote disclosures, and other information should be read in conjunction with the financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016.
Organization
HAHA Generation Corp., a company in the developmental stage (the “Company”), was incorporated on June 10, 2014 in the State of Nevada. The Company has conducted limited business operations and had no revenues from operations since its inception. The Company’s business plan is to distribute fabrics that were made out of silicon crystals.
Going Concern
The accompanying financial statements have been prepared assuming the Company will continue as a going concern. For the period ended March 31, 2017, the Company had limited operations. As of March 31, 2017, the Company has not emerged from the development stage. In view of these matters, the Company’s ability to continue as a going concern is dependent upon the Company’s ability to begin operations and to achieve a level of profitability. The Company intends on financing its future development activities and its working capital needs largely from the sale of public equity securities with some additional funding from a loan commitment of $100,000 from Hsuan-Hsien Liao, our President and sole director, which commitment is for 12 months, and all amounts lent by Ms. Liao pursuant to that commitment shall not accrue interest and shall be payable on demand; provided however, such command will not be made prior to the expiration of that 12 month period after the date of that commitment, which date was March 31, 2017. The financial statements of the Company did not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classifications of liabilities that might be necessary should the Company be unable to continue as a going concern. As shown in the accompanying financial statements, the Company has incurred an accumulated deficit of $299,791 and $266,031 as of March 31, 2017 and December 31, 2016, respectively. These conditions raise substantial doubt about the Company’s ability to continue as a going concern.
The Company faces all the risks common to companies at development stage, including capitalization and uncertainty of funding sources, high initial expenditure levels, uncertain revenue streams, and difficulties in managing growth. The Company’s losses raise substantial doubt about its ability to continue as a going concern. The Company’s financial statements do not reflect any adjustments that might result from the outcome of this uncertainty.
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. The Company plans to seek additional funds through private placements of our securities and/or capital contributions and loans by Hsuan-Hsien Liao, our President and sole director. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. The financial statements included in the registration statement of which this prospectus is a part do not include any adjustments that might occur from this uncertainty.
Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles 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 and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.
Classification
Certain classifications have been made to the prior year financial statements to conform to the current year presentation. The reclassification had no impact on previously reported net loss or accumulated deficit.
Cash and Cash Equivalents
Cash and cash equivalents include cash and all highly liquid instruments with original maturities of three months or less.
Net Income (loss) per Share
Basic income (loss) per share is computed by dividing net income by weighted average number of shares of common stock outstanding during each period. Diluted income per share is computed by dividing net loss by the weighted average number of shares of common stock, common stock equivalents and potentially dilutive securities outstanding during each period. At March 31, 2017 and December 31, 2016, the Company does not have any outstanding common stock equivalents; therefore, a separate computation of diluted loss per share is not presented.
Income Taxes
The Company accounts for income taxes in accordance with ASC 740, Income Taxes, which requires that the Company recognize deferred tax liabilities and assets based on the differences between the financial statement carrying amounts and the tax basis of assets and liabilities, using enacted tax rates in effect in the years the differences are expected to reverse. Deferred income tax benefit (expense) results from the change in net deferred tax assets or deferred tax liabilities. A valuation allowance is recorded when, in the opinion of management, it is more likely than not that some or all of any deferred tax assets will not be realized.
Recent Accounting Pronouncements
The Company does not expect the adoption of recently issued accounting pronouncements to have a significant impact on its result of operations, financial position or cash flow.
Subsequent events
Management has evaluated subsequent events through the date which the financial statements are available to be issued. All subsequent events requiring recognition as of March 31, 2017 have been incorporated into these consolidated financial statements and there are no subsequent events that require disclosure in accordance with FASB ASC Topic 855, “Subsequent Events.”
NOTE 2. DUE TO SHAREHOLDERS
The Company has advanced funds from its director and shareholder for working capital purposes. As of March 31, 2017 and December 31, 2016, there were $3,307 and $3,317 advances outstanding, respectively. The Company has agreed that the outstanding balances bear 0% interest rate and are due upon demand after 30 days written notice by the director and shareholder.
NOTE 3. INCOME TAXES
As of March 31, 2017, the Company had net operating loss carry forwards of approximately $299,791 that may be available to reduce future years’ taxable income through 2037. Future tax benefits which may arise as a result of these losses have not been recognized in these financial statements, as their realization is determined not likely to occur and accordingly, the Company has recorded a valuation allowance for the deferred tax asset relating to these tax loss carry-forwards.
The provision for Federal income tax consists of the following for the three months ended March 31:
| | Three months
ended
March 31,
2017 | | | Three months
ended
March 31,
2016 | |
Federal income tax benefit attributable to: | | | | | | |
Current Operations | | $ | 11,478 | | | $ | 7,662 | |
Less: valuation allowance | | | (11,478 | ) | | | (7,662 | ) |
Net provision for Federal income taxes | | $ | - | | | $ | - | |
The cumulative tax effect at the expected rate of 34% of significant items comprising our net deferred tax amount as of March 31, 2017 and December 31, 2016 is as follows:
| | March 31,
2017 | | | December 31,
2016 | |
Deferred tax asset attributable to: | | | | | | |
Net operating loss carryover | | $ | 101,928 | | | $ | 90,450 | |
Less: valuation allowance | | | (101,928 | ) | | | (90,450 | ) |
Net deferred tax asset | | $ | - | | | $ | 0 | |
The difference between the effective rate reflected in the provision for income taxes on loss before taxes and the amounts determined by applying the applicable statutory U.S. tax rate for the three months ended March 31, 2017 and 2016 are analyzed below:
| | Three months
ended
March 31,
2017 | | | Three months
ended
March 31,
2016 | |
Statutory tax benefit | | | (34 | )% | | | (34 | )% |
Permanent items | | | - | | | | - | |
Change in deferred tax asset valuation allowance | | | 34 | % | | | 34 | % |
Provision for income taxes | | | -% | | | | -% | |
For the three months ended March 31, 2017 and 2016, the Company had no unrecognized tax benefits and related interest and penalties expenses. Currently, the Company is not subject to examination by major tax jurisdictions.
******
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operation.
Cautionary Note Regarding Forward-Looking Statements
This Quarterly Report on Form 10-Q, including this discussion and analysis by management, contains or incorporates forward-looking statements. All statements other than statements of historical fact made in report are forward looking. In particular, the statements herein regarding industry prospects and future results of operations or financial position are forward-looking statements. These forward-looking statements can be identified by the use of words such as “believes,” “estimates,” “could,” “possibly,” “probably,” anticipates,” “projects,” “expects,” “may,” “will,” or “should” or other variations or similar words. No assurances can be given that the future results anticipated by the forward-looking statements will be achieved. Forward-looking statements reflect management’s current expectations and are inherently uncertain. Our actual results may differ significantly from management’s expectations.
The following discussion and analysis should be read in conjunction with our financial statements, included herewith. This discussion should not be construed to imply that the results discussed herein will necessarily continue into the future, or that any conclusion reached herein will necessarily be indicative of actual operating results in the future. Such discussion represents only the best present assessment of our management.
Three months ended March 31, 2017 compared to the three months ended March 31, 2016
Net revenue for the three months ended March 31, 2017, and for the three months ended March 31, 2016, was $0.
General and administrative expenses primarily consist of legal, accounting, and professional service fees. General and administrative expenses for the three months ended March 31, 2017, were $33,760 as compared to $22,533 for the three months ended March 31, 2016. The increase in those expenses was primarily attributable to the increase in legal, accounting, and professional service fees.
Our net loss was $33,760 for the three months ended March 31, 2017, as compared to $22,533 for the three months ended March 31, 2016. The increase in net loss was a result of the increase in general and administrative expenses.
Liquidity and Capital Resources
Cash and cash equivalents were $36,165 at March 31, 2017. Our total current assets were $37,515 at March 31, 2017. Our total current liabilities were $24,307 at March 31, 2017.
We had working capital of $13,208 at March 31, 2017, compared to working capital of $46,968 at December 31, 2016. The decrease in working capital was primarily due to an increase in accrued expenses and other liabilities.
Net cash provided by operating activities during the three months ended March 31, 2017, was $(13,985), compared to $69,355 for the three months ended March 31, 2016. The decrease in the cash provided by operating activities was primarily due to the increase in net loss.
Net change in cash and cash equivalents was a decrease of $13,985 for the three months ended March 31, 2017, compared to an increase of $69,355 for the three months ended March 31, 2016. Such decrease was primarily due to an increase in net loss and accrued expenses.
Inflation
Our opinion is that inflation has not had a material effect on our operations and is not expected to have any material effect on our operations.
Climate Change
Our opinion is that neither climate change, nor governmental regulations related to climate change, have had, or are expected to have, any material effect on our operations.
Item 3. Quantitative and Qualitative Disclosures about Market Risk.
As a smaller reporting company, we are not required to provide this information.
Item 4. Controls and Procedures.
As of the end of the period covered by this report, we conducted an evaluation, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, of our disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) of the Exchange Act). Based upon this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of end of the period covered by this report to ensure that information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act of 1934 is (1) accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure; and (2) recorded, processed, summarized and reported, within the time periods specified in the rules and forms of the Securities and Exchange Commission.
There was no change to our internal controls or in other factors that could affect these controls during our last fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
PART II – OTHER INFORMATION
Item 1. Legal Proceedings.
None.
Item 1A. Risk Factors.
As a smaller reporting company, we are not required to provide this information.
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.
The following exhibits are filed as part of this quarterly report, pursuant to Item 601 of Regulation S-K. All exhibits are attached hereto unless otherwise noted.
___________________
* | Included as exhibits to that Registration Statement on Form S-1 filed with the SEC on October 16, 2015. |
** | Filed herewith. |
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| HAHA Generation Corp. | |
| | | |
Date: May 15, 2017 | By: | /s/ Hsuan-Hsien Liao | |
| | Hsuan-Hsien Liao | |
| | Principal Executive Officer, Principal Financial
Officer, President and Chairman of the Board | |
