UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X]QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended:September 30, 2018
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:333-213314
HUAHUI EDUCATION GROUP CORPORATION
(Exact name of registrant as specified in its charter)
| Nevada | 35-2518128 | |
| (State or Other Jurisdiction of Incorporation or Organization) | I.R.S. Employer Identification Number |
Block 2, Duo Li Hi Tech Industrial Park, No.9,
Jinlong 1st Road, Baolong Residential District,
Longgang District, Shenzhen.
(86) 17722567599
(Address and telephone number of principal executive offices)
N/A
(Former Name or former address if changed from last report.)
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 past 12 months, and (2) has been subject to such filing requirements for the past 90 days.
Yes [ ] No [X]
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:
| Large accelerated filer | [ ] | Accelerated filer | [ ] |
| Non-accelerated filer | [ ] | Smaller reporting company | [X] |
| Emerging growth company | [X] |
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 accounting standard provided pursuant to Section 13(a) of the Exchanger Act. [ ]
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes [X] No [ ]
As of November 14, 2018 there were 2,734,900 shares outstanding of the registrant’s common stock.
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PART I – FINANCIAL INFORMATION
The accompanying interim condensed financial statements of Huahui Education Group Corporation, formerly Duonas Corp. (“the Company”, “we”, “us” or “our”) have been prepared without audit pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with United States generally accepted principles have been condensed or omitted pursuant to such rules and regulations.
In the opinion of management, the financial statements contain all material adjustments, consisting only of normal adjustments considered necessary to present fairly the financial condition, results of operations, and cash flows of the Company for the interim periods presented.
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HUAHUI EDUCATION GROUP CORPORATION (fka “Duonas Corp”)
AS OF SEPTEMBER 30, 2018 AND JUNE 30, 2018
| September 30, 2018 | June 30, 2018 | |||||||
| (Unaudited) | (Audited) | |||||||
| ASSETS | ||||||||
| Current Assets | ||||||||
| Prepaid expenses | $ | 5,000 | 5,000 | |||||
| Current assets under discontinued operations | $ | - | - | |||||
| Total Current Assets | 5,000 | 5,000 | ||||||
| Non-Current assets under discontinued operations | - | - | ||||||
| Total Non-Current Assets | - | - | ||||||
| Total Assets | $ | 5,000 | 5,000 | |||||
| LIABILITIES AND STOCKHOLDERS’ DEFICIT | ||||||||
| Liabilities | ||||||||
| Current Liabilities | ||||||||
| Amount Due to related party | $ | 28,547 | 22,547 | |||||
| Accounts Payable | 3,892 | 3,896 | ||||||
| Total Current Liabilities | 32,439 | 26,443 | ||||||
| Total Liabilities | 32,439 | 26,443 | ||||||
| COMMITMENTS AND CONTINGENCIES | ||||||||
| Stockholder’s Deficit | ||||||||
| Preferred stock, par value $0.001;100,000,000 shares authorized and 0 outstanding; | ||||||||
| Common stock, par value $0.001; 700,000,000 shares authorized, 2,734,900 issued and outstanding as of 9/30/2018 and 6/30/2018 | 2,735 | 2,735 | ||||||
| Additional paid in capital | 37,734 | 37,734 | ||||||
| Accumulated deficit | (67,908 | ) | (61,912 | ) | ||||
| Total Stockholder’s Deficit | (27,439 | ) | (21,443 | ) | ||||
| Total Liabilities and Stockholder’s Deficit | $ | 5,000 | 5,000 | |||||
Accompanying notes are an integral part of these unaudited condensed financial statements
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HUAHUI EDUCATION GROUP CORPORATION (fka “Duonas Corp”)
THREE MONTHS PERIOD ENDED SEPTEMBER 30, 2018 AND 2017
(Unaudited)
| Three Months Ended September 30, | ||||||||
| 2018 | 2017 | |||||||
| REVENUES | $ | - | $ | - | ||||
| COST OF GOODS SOLD | - | - | ||||||
| GROSS PROFIT | - | - | ||||||
| GENERAL AND ADMINISTRATIVE EXPENSES | (5,996 | ) | - | |||||
| TOTAL OPERATING EXPENSES | (5,996 | ) | - | |||||
| LOSS BEFORE INCOME TAX | (5,996 | ) | - | |||||
| INCOME TAX PROVISION | - | - | ||||||
| LOSS FROM CONTINUING OPERATIONS | $ | (5,996 | ) | - | ||||
| DISCONTINUED OPERATIONS: | ||||||||
| Loss from discontinued operations | - | (13,399 | ) | |||||
| BASIC AND DILUTED LOSS PER SHARE | ||||||||
| FROM CONTINUING OPERATIONS | (0.00 | ) | - | |||||
| FROM DISCONTINUED OPERATIONS | - | (0.00 | ) | |||||
| Weighted average number of common shares outstanding – Basic and diluted | 2,734,900 | 2,734,900 | ||||||
Accompanying notes are an integral part of these unaudited condensed financial statements
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HUAHUI EDUCATION GROUP CORPORATION (fka “Duonas Corp”)
THREE MONTHS PERIOD ENDED SEPTEMBER 31, 2018 AND 2017
(Unaudited)
| Three months ended September 30 | ||||||||
| 2018 | 2017 | |||||||
| Cash flows from operating activities: | ||||||||
| Net loss from continuing operations | $ | (5,996 | ) | $ | - | |||
| Increase in prepaid expenses | - | - | ||||||
| Decrease in account payable | (4 | ) | - | |||||
| Net cash used in operating activities - continuing operations | (6,000 | ) | - | |||||
| Adjustments to reconcile net loss to net cash provided by discontinued operations: | ||||||||
| Net loss from discontinued operations | - | (13,399 | ) | |||||
| Changes in assets and liabilities | - | 1,397 | ||||||
| Net cash used in operating activities - discontinued operations | - | (12,002 | ) | |||||
| Net cash used in operating activities | - | (12,002 | ) | |||||
| Net cash provided by investing activities – discontinued operations | - | - | ||||||
| Cash flows from financing activities - continuing operations: | ||||||||
| Proceeds from note payable - related party | 6,000 | - | ||||||
| Net cash provided by financing activities - continuing operations | 6,000 | - | ||||||
| Net cash provided by financing activities - discontinued operations | - | 10,500 | ||||||
| Net cash provided by financing activities | - | 10,500 | ||||||
| Net increase (decrease) in cash | - | (1,502 | ) | |||||
| Cash at beginning of period | - | 3,027 | ||||||
| Cash at end of period | $ | - | $ | 1,525 | ||||
Accompanying notes are an integral part of these unaudited condensed financial statements
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HUAHUI EDUCATION GROUP CORPORATION (fka “Duonas Corp”)
Notes to the condensed financial statements
September 30, 2018
(Unaudited)
Note 1 –ORGANIZATION AND NATURE OF BUSINESS
Huahui Education Group Corporation , formerly Duonas Corp. (“the Company”, “we”, “us” or “our”) was incorporated in the State of Nevada on September 19, 2014 to start business operations concerned with production of stylish decorative items made from concrete, such as: different sculptures, candleholders, lamps, tabletops, bookcases, vases of different shapes and forms, decorations for the garden; and subsequent selling thereof. For these purposes we will use equipment purchased from Zhengzhou Xinyu Machinery Co., Ltd. Our office is located at Block 2, Duo Li Hi Tech Industrial Park, No.9, Jinlong 1st Road, Baolong Residential District, Longgang District, Shenzhen. Our phone number is +86 177 2256 7599.
A change of control took place on November 2, 2017 from Vladyslav Beinars. Control was obtained by the sale of 2,000,000 shares of the Company common stock from Vladyslav Beinars to Zhongpeng Chen, Shuiyu Zhong, Xihan Huang, Meihua Zhuang, Peina Huang, Yanru He, Yin Ao, Zhanpeng Fang, Liming Huang, Chuhong Huang, Xiaodong Du, Qiaohong Xie, Lizhen Huang, Liyu Zhang, Chuhua Chen, Meina Xie, Meiyun Wang, Ning Xie, Lirong Zhang, Chan Li, Qiongju Ou, Xijuan Huang, Yihao Chen, Huilin Chen, Yulan Chen, Yixiong Chen, Qixia Yao, Baoquan Huang, Wei Xiong, Changli Huang and Wu Lin. In connection with the transaction, Vladyslav Beinars released the Company from all debts owed.
Through October 22, 2017, the Company’s primary business activity was production of stylish decorative items made from concrete, such as: different sculptures, candleholders, lamps, tabletops, bookcases, vases of different shapes and forms, decorations for the garden; and subsequent selling thereof. Going forward, the Company’s operations will be determined and structured by the new investor group. As such, at September 30, 2018, the Company accounted for all of its assets, liabilities and results of operations up to October 22, 2017 as discontinued operations.
Note 2 –GOING CONCERN
The accompanying financial statements have been prepared in conformity with generally accepted accounting principles, which contemplate continuation of the Company as a going concern. The Company had net loss from continuing operations was $5,996 for three months ended September 30, 2018 The Company had total stockholder’s deficit $27,440 as of September 30, 2018. The Company currently has not completed its efforts to establish a stabilized source of revenues sufficient to cover operating costs over an extended period of time. Therefore, there is substantial doubt about the ability of the entity to continue as a going concern within one year after the date that the financial statements are issued. Management anticipates that the Company will be dependent, for the near future, on additional investment capital to fund operating expenses. In light of management’s efforts, there are no assurances that the Company will be successful in this or any of its endeavors or become financially viable and continue as a going concern. The Company expects to finance operations primarily through capital contributions from the CEO. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Note 3 –SUMMARY OF SIGNIFCANT ACCOUNTING POLICIES
Basis of presentation
The accompanying interim condensed financial statements of Huahui Education Group Corporation, formerly Duonas Corp. (“the Company”, “we”, “us” or “our”) should be read in conjunction with the 10-K that was filed with the United States Securities and Exchange Commission (the “SEC”) on September 28, 2018. The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, since they are interim statements, the accompanying financial statements do not include all the information and notes required by GAAP for complete financial statement presentation. In the opinion of management, the interim financial statements reflect all adjustments (consisting of normal, recurring adjustments) that are necessary for a fair presentation of the financial position, results of operations, and cash flows for the interim periods presented. Interim results are not necessarily indicative of results for a full year. The Company’s year end is June 30.
Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles 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 the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Discontinued Operations
The Company follows ASC 205-20,“Discontinued Operations,��� to report for disposed or discontinued operations.
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HUAHUI EDUCATION GROUP CORPORATION (fka “Duonas Corp”)
Notes to the condensed financial statements
SEPTEMBER 30, 2018
(Unaudited)
Income Taxes
Income taxes are computed using the asset and liability method. Under the asset and liability method, deferred income tax assets and liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities and are measured using the currently enacted tax rates and laws. A valuation allowance is provided for the amount of deferred tax assets that, based on available evidence, are not expected to be realized.
Related party balances and transactions
A related party is generally defined as:
(i) any person that holds the Company’s securities including such person’s immediate families,
(ii) the Company’s management,
(iii) someone that directly or indirectly controls, is controlled by or is under common control with the Company, or
(iv) anyone who can significantly influence the financial and operating decisions of the Company.
A transaction is considered to be a related party transaction when there is a transfer of resources or obligations between related parties.
Basic Income (Loss) Per Share
The Company computes income (loss) per share in accordance with FASB ASC 260 “Earnings per Share”. Basic loss per share is computed by dividing net income (loss) available to common shareholders by the weighted average number of outstanding common shares during the period. Diluted income (loss) per share gives effect to all dilutive potential common shares outstanding during the period. Dilutive loss per share excludes all potential common shares if their effect is anti-dilutive. As of September 30, 2018 there were no potentially dilutive debt or equity instruments issued or outstanding.
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HUAHUI EDUCATION GROUP CORPORATION (fka “Duonas Corp”)
Notes to the condensed financial statements
SEPTEMBER 30, 2018
(Unaudited)
Recent Accounting Pronouncements
In January 2016, the FASB issued ASU 2016-01, “Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and
Financial Liabilities (“ASU 2016-01”)”. The standard addresses certain aspects of recognition, measurement, presentation, and disclosure of financial instruments.ASU 2016-01 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017. The Company evaluated the impact of adopting the new standard and conclude there was no material impact to its financial statement.
In August 2016, the FASB issued ASU 2016-15, “Statement of Cash flows - Classification of Certain Cash Receipts and Cash Payment”, effective for the fiscal years beginning after December 15, 2017, and interim periods within that fiscal year. This Update addresses eight specific cash flow issues with the objective of reducing the existing diversity in practice. The Company evaluated the impact of adopting the new standard on its financial statements and conclude there was no material impact to the Company’s financial statement.
In February 2016, the FASB issued ASU 2016-02, “Lease (Topic 842),” which amends recognition of lease assets and lease liabilities by lessees for those leases classified as operating leases. Under the new guidance, lessees will be required to recognize a lease liability and a right-of-use asset for all leases (with the exception of short-term leases) at the commencement date. This standard will take effect for fiscal years, and interim periods within those fiscal years beginning after December 15, 2018. The Company is currently assessing the impact of this new standard on its financial statements.
In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers (Topic 606).” (“ASU 2014-09”). The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU 2014-09 supersedes most existing revenue recognition guidance in US GAAP. In August 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of Effective Date (“ASU 2015-14”), which defers the effective date of ASU 2014-09 to January 1, 2018 for the Company. Early adoption is permitted. The Company adopts ASU 2014-09 utilizing the modified retrospective method.The Company evaluated the impact of adopting the new standard and concluded there was no material impact on the Company’s revenue recognition policy.
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HUAHUI EDUCATION GROUP CORPORATION (fka “Duonas Corp”)
Notes to the condensed financial statements
SEPTEMBER 30, 2018
(Unaudited)
Note 4 –DISCONTINUED OPERATIONS
On November 2, 2017, due to the Changes in Control of Registrant, the Company decided to exit the field of production of stylish decorative items made from concrete, such as: different sculptures, candleholders, lamps, tabletops, bookcases, vases of different shapes and forms, decorations for the garden; and subsequent selling thereof.
The change of the business qualified as a discontinued operation of the Company and accordingly, the Company has excluded results of the operations from its Statements of Operations to present this business in discontinued operations.
The following table shows the results of operations of the Company for three months ended September 30, 2018 and 2017 which are included in the loss from discontinued operations:
| Three Months Ended September 30 | ||||||||
| 2018 | 2017 | |||||||
| Revenues | $ | - | $ | 1,500 | ||||
| Cost of Goods Sold | - | 508 | ||||||
| Gross Profit | $ | - | $ | 992 | ||||
| General and administrative expense | - | 14,391 | ||||||
| Depreciation | - | - | ||||||
| Total Expense | - | 14,391 | ||||||
| Provision for income taxes | - | - | ||||||
| Loss from Discontinued Operations, Net of Tax Benefits | $ | - | $ | (13,399 | ) | |||
Note 5 –AMOUNT DUE TO RELATED PARTY
As of September 30, 2018 and June 30, 2018, a director of the Company advanced $28,547 and $22,547, respectively to the Company, which is unsecured, interest-free with no fixed repayment term, for working capital purpose. Imputed interest is considered insignificant.
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HUAHUI EDUCATION GROUP CORPORATION (fka “Duonas Corp”)
Notes to the condensed financial statements
SEPTEMBER 30, 2018
(Unaudited)
Note 6 –COMMON STOCK
The Company has 700,000,000 shares of common stock, par value $0.001, authorized, and 100,000,000 shares of preferred stock, par value $0.001, authorized.
There were 2,734,900 and 2,734,900 shares of common stock issued and outstanding as of September 30, 2018 and as of June 30, 2018.
Note 7-SUBSEQUENT EVENTS
In accordance with ASC Topic 855, “Subsequent Events”, which establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued, the Company has evaluated all events or transactions that occurred after September 30, 2018 up through the date the Company presented this condensed financial statement.
During the period, the Company did not have any material recognizable subsequent event.
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
This quarterly report and other reports filed by Huahui Education Group Corporation, formerly Duonas Corp. (“the Company”, “we”, “us” or “our”), from time to time contain or may contain forward-looking statements and information that are based upon beliefs of, and information currently available to, the Company’s management as well as estimates and assumptions made by Company’s management. Readers are cautioned not to place undue reliance on these forward-looking statements, which are only predictions and speak only as of the date hereof. When used in the filings, the words “anticipate”, “believe”, “estimate”, “expect”, “future”, “intend”, “plan” or the negative of these terms and similar expressions as they relate to the Company or the Company’s management identify forward-looking statements. Such statements reflect the current view of the Company with respect to future events and are subject to risks, uncertainties, assumptions, and other factors. Should one or more of these risks or uncertainties materialize, or should the underlying assumptions prove incorrect, actual results may differ significantly from those anticipated, believed, estimated, expected, intended, or planned.
Although the Company believes that the expectations reflected in the forward-looking statements are reasonable, the Company cannot guarantee future results, levels of activity, performance, or achievements. Except as required by applicable law, including the securities laws of the United States, the Company does not intend to update any of the forward-looking statements to conform these statements to actual results.
Our financial statements are prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). These accounting principles require us to make certain estimates, judgments, and assumptions. We believe that the estimates, judgments, and assumptions upon which we rely are reasonable based upon information available to us at the time that these estimates, judgments, and assumptions are made. These estimates, judgments, and assumptions can affect the reported amounts of assets and liabilities as of the date of the financial statements as well as the reported amounts of revenues and expenses during the periods presented. Our financial statements would be affected to the extent there are material differences between these estimates.
General
Huahui Education Group Corporation, formerly Duonas Corp. (“the Company”, “we”, “us” or “our”) was incorporated in the State of Nevada on September 19, 2014 and established a fiscal year end of June 30. We are a company formed to commence operations concerned with production of decor pieces and living accessories made from concrete, such as: different sculptures, bookends, candle holders, billets for clocks, vases of different shapes and forms, planters; and subsequent selling thereof.
The Company ceased our previous operations on the change of control and we are exploring other business opportunities.
Our business office is located at Block 2, Duo Li Hi Tech Industrial Park, No.9, Jinlong 1st Road, Baolong Residential District, Longgang District, Shenzhen. Our telephone number is +(86) 177 2256 7599.
We do not have any subsidiaries.
We have never declared bankruptcy, been in receivership, or involved in any kind of legal proceeding.
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Offices
Our office is located at Block 2, Duo Li Hi Tech Industrial Park, No.9, Jinlong 1st Road, Baolong Residential District, Longgang District, Shenzhen. Our phone number is +(86) 177 2256 7599.
Government Regulation
We will be required to comply with all regulations, rules and directives of governmental authorities and agencies applicable to our business in any jurisdiction which we would conduct activities. We do not believe that regulation will have a material impact on the way we conduct our business.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
Results of Operations for the three months ended September 30, 2018 and 2017:
Revenue and cost of goods sold
For the three months ended September 30, 2018, the Company generated no revenue from continuing operations and cost of goods sold.
Operating expenses
Total operating expenses for the three months ended September 30, 2018 were $5,996 compared to $0 for the three months ended September 30, 2017 from continuing operations. Pursuant to the change in control, on November 2, 2017, the Company recorded all revenues and expenses for the prior business as discontinued expenses. Loss from discontinued operations for the three months ended September 30, 2018 and 2017 was $0 and $13,399, respectively. The reason for decrease of operating expenses for the three months period ended from September 30, 2018 to 2017 was the reduction in office and other administrative costs
For the three months ended September 30, 2018, our President, Zihua Wu, paid and absorbed the rental fees.
Discontinued Expenses
Pursuant to the change in control, on November 2, 2017, the Company recorded all revenues and expenses for the prior business as discontinued expenses.
Net Income/Loss
The net loss for the three months period ended September 30, 2018 and 2017 was $5,996 and $13,399, respectively.
Liquidity and Capital Resources and Cash Requirements
Liquidity is the ability of a company to generate funds to support its current and future operations, satisfy its obligations, and otherwise operate on an ongoing basis. Significant factors in the management of liquidity are funds generated by operations, levels of accounts receivable and accounts payable and capital expenditures.
The accompanying consolidated 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. As reflected in the accompanying consolidated financial statements, the Company has incurred recurring net losses. For the three months ended September 30, 2018, the Company recorded a net loss of $5,996, and at September 30, 2018, had a shareholders’ deficit of $27,440. These factors create 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.
For the three months ended September 30, 2018, cash flow used in operating activities was $6,000. For the three months ended September 30, 2017, cash flow used in operating activities was $12,002.
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During the three month period ended September 30, 2018, net cash provided by financing is $6,000 and net cash provided by financing activities is $10,500 during three month period ended September 30, 2017.
We are attempting to raise funds to proceed with our plan of operation. We will attempt to raise at least the minimum funds necessary to proceed with our plan of operation. In a long term we may need additional financing. We do not currently have any arrangements for additional financing. Obtaining additional funding will be subject to a number of factors, including general market conditions, investor acceptance of our business plan and initial results from our business operations. These factors may impact the timing, amount, terms or conditions of additional financing available to us. There is no assurance that any additional financing will be available or if available, on terms that will be acceptable to us.
Off-Balance Sheet Arrangements
The Company does not have any off balance sheet arrangements that have or are reasonably likely to have a current or future effect on the Company’s financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.
Item 3. Quantitative and Qualitative Disclosures about Market Risk.
As a “smaller reporting company” as defined by Item 10 of Regulation S-K, we are not required to provide information required by this Item.
Item 4. Controls and Procedures.
Disclosure Controls and Procedures
We maintain disclosure controls and procedures, as defined in Rule 13a-15(e) promulgated under the Securities Exchange Act of 1934 (the “Exchange Act”), that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.
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We carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer, of the effectiveness of our disclosure controls and procedures as of September 30, 2018. Based on the evaluation of these disclosure controls and procedures, and in light of the material weaknesses found in our internal controls over financial reporting, our Chief Executive Officer concluded that our disclosure controls and procedures were not effective.
Management’s Report on Internal Control over Financial Reporting
Management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Exchange Act Rule 13a-15(f)). The Company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Under the supervision and with the participation of management, including the Chief Executive Officer and Chief Financial Officer, the Company conducted an evaluation of the effectiveness of the Company’s internal control over financial reporting as of September 30, 2018 using the criteria established in “Internal Control - Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO - 2013”).
A material weakness is a deficiency, or 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. In its assessment of the effectiveness of internal control over financial reporting as of September 30, 2018, the Company determined that there were control deficiencies that constituted material weaknesses, as described below.
| 1. | We do not have an Audit Committee – While not being legally obligated to have an audit committee, it is the management’s view that such a committee, including a financial expert member, is an utmost important entity level control over the Company’s financial statement. Currently the Board of Directors acts in the capacity of the Audit Committee, and does not include a member that is considered to be independent of management to provide the necessary oversight over management’s activities. | |
| 2. | We did not implement appropriate information technology controls – As of September 30, 2018, the Company retains copies of all financial data and material agreements; however there is no formal procedure or evidence of normal backup of the Company’s data or off-site storage of data in the event of theft, misplacement, or loss due to unmitigated factors. |
Accordingly, the Company concluded that these control deficiencies resulted in a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis by the company’s internal controls.
As a result of the material weaknesses described above, management has concluded that the Company did not maintain effective internal control over financial reporting as of September 30, 2018 based on criteria established in Internal Control- Integrated Framework issued by COSO.
Changes in Internal Controls over Financial Reporting
There has been no change in our internal control over financial reporting occurred during our first fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
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| Item 1. | LEGAL PROCEEDINGS |
We know of no material, existing or pending legal proceedings against our Company, nor are we involved as a plaintiff in any material proceeding or pending litigation. There are no proceedings in which any of our directors, officers or affiliates, or any registered or beneficial shareholder, is an adverse party or has a material interest adverse to our interest.
| Item 1A. | RISK FACTORS |
As a “smaller reporting company” as defined by Item 10 of Regulation S-K, we are not required to provide information required by this Item.
| Item 2. | UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS |
None.
| Item 3. | DEFAULTS UPON SENIOR SECURITIES |
None.
| Item 4. | MINE SAFETY DISCLOSURE |
Not applicable to our Company.
| Item 5. | OTHER INFORMATION |
None.
| Item 6. | EXHIBITS |
ITEM 6. Exhibits
| Exhibit No. | Description | |
| 3.1 | ||
| 3.2 | ||
| 3.3 | ||
| 3.4 | ||
| 31.1 | ||
| 32.1 | Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 * | |
| 101.INS | XBRL Instance Document* | |
| 101.SCH | XBRL Schema Document* | |
| 101.CAL | XBRL Calculation Linkbase Document* | |
| 101.DEF | XBRL Definition Linkbase Document* | |
| 101.LAB | XBRL Label Linkbase Document* | |
| 101.PRE | XBRL Presentation Linkbase Document* |
* Filed herewith.
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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.
| HUAHUI EDUCATION GROUP CORPORATION | ||
| formerly Duonas Corp. | ||
| Date: November 14, 2018 | By: | /s/ Zihua Wu |
| Name: | ZihuaWu | |
| Title: | President, CEO, CFO, Treasurer, Secretary, Director | |
| (Principal Executive, Financial and Accounting Officer) | ||
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