| Organizations and Summary of Significant Accounting Policies | NOTE 1 - ORGANIZATIONS AND
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Organization and Operations On July 2, 2007, the Company through its
wholly-owned subsidiary, YesRx.com (“YesRx”) acquired all the outstanding shares of H&H Glass, Inc. (“H&H
Glass”), in exchange for 3,915,000 shares of its common stock in a reverse triangular merger. On May 15, 2016, the Company and Xiuhua
Song (the “Purchaser”) entered into a Stock Purchase Agreement (the “Purchase Agreement”), pursuant to
which IPLO (the “Seller”) would sell to the Purchaser, and the Purchaser will purchase from the Seller, an aggregate
of 3,915,000 newly issued shares of IPLO Common Stock (the “Shares”), which Shares represented 87% of the issued and
outstanding shares of common stock. On July 1, 2016, this transaction was completed. On July 1, 2016, Standard Resources Ltd.
(“Standard”), previously IPLO’s majority stockholder, and IPLO entered into a share purchase agreement (“H&H
Vend Out”) whereby Standard would cancel 3,915,000 shares of IPLO common stock held by it in exchange for all of the outstanding
shares of H&H Glass. The H&H Glass Vend Out was completed on August 31, 2016. On July 1, 2016, the Company executed a
Share Exchange Agreement (“ Exchange Agreement Yibaoccyb Yibaoccyb
Shareholders YibaoHK Yibao PRC China Confucian The Exchange Agreement was completed on
August 31, 2016 concurrent with the H&H Vend Out. The Company issued 2,040,000 shares of the Company’s common stock (the
“ IPLO Shares On December 22, 2016, the Company amended
its Certificate of Incorporation (the “Amendment”). As a result of the Amendment, the Company’s corporate name
was changed from International Packaging and Logistics Group, Inc. to YBCC, Inc. Yibaoccyb is a limited liability company
incorporated under the laws of the British Virgin Islands on May 30, 2016. Other than all the issued and outstanding shares of
YibaoHK, Yibaoccyb has no other assets or operations. YibaoHK is a limited liability company
incorporated under the laws of the Hong Kong on June 15, 2016, which was formed by Yibaoccyb. Confucian was founded on October 31, 2012.
Confucian is in the Food Industrial Park inside the economic development Zone of JinXiang County, Jining City in the province of
Shandong in China. Confucian possesses manufacturing permits
for food product, hygienic products, sanitary products, and health products. The Company's main business includes research and
development of chondroitin and garlic oil; trading, cold storage, and pretreating of garlic, fruit, and vegetables products; trading
of chemical products (excluding hazardous chemicals); import and export of goods and technology (excluding those restricted by
China government); and, the manufacturing and sale of health products including powder, granules, tablets, hard capsule, soft capsule
products. Details of the Company’s
structure as of March 31, 2019 is as follow: [Organization chart
here] Reverse
Merger Accounting Basis
of Accounting and Presentation Principles of Consolidation The unaudited consolidated financial statements
include the accounts of YBCC and its subsidiaries. The Company’s subsidiaries include 51% of Yibaoccyb, YibaoHK and Confucian,
of which 49% of Yibaoccyb’s consolidated operating results was shown in non-controlling interest on the consolidated balance
sheets. Intercompany accounts and transactions
have been eliminated upon consolidation. Use of Estimates Cash and Cash Equivalents Accounts Receivable As of March 31, 2019 and December 31, 2018,
accounts receivable were $214,442 and $0, respectively. The Company believes that its accounts receivables are fully collectable
and determined that an allowance for doubtful accounts was not necessary. Account balances are charged off against
the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. The Company
does not have any off-balance-sheet credit exposure related to its customers. Inventories Inventory, comprised
principally of finished goods, raw material and packaging material, are valued at the lower of cost or market.
March 31, December 31,
Finished goods $ 63,886 $ 135,996
Work in progress 52,781 45,012
Raw materials 143,094 87,193
Packaging material 60,825 36,960
Total $ 320,586 $ 305,161 The Company periodically estimates an inventory
allowance for estimated unmarketable inventories. Inventory amounts are reported net of such allowances, if any. There were no
allowances for inventory as of March 31, 2019 and December 31, 2018. Property, Plant and Equipment Expenditures for maintenance and repairs
are charged to operations; major expenditures for renewals and betterments are capitalized. Assets that are still kept in service
after reaching the end of their estimated useful lives are depreciated over the estimated useful life of their residual value.
Gain or loss on disposal of property, plant, and equipment is recognized as non-operating income or expenses. Depreciation is computed by applying the
following methods and estimated lives:
Category Estimated Life Method
Manufacturing equipment 10 Straight Line
Office equipment 5 Straight Line
Buildings 20 Straight Line Intangible Assets Non-Controlling Interest Revenue
Recognition Amounts billed
and due from our customers are classified as accounts receivables on our consolidated balance sheets and require payment on a short-term
basis. Invoices are generally issued at the point control transfers and substantially all of our invoices are due within 30 days
or less. Periodically, we require payment prior to the point in time we recognize revenue. Amounts received from customers prior
to revenue recognition on a contract are contract liabilities, are classified as customer deposit on our consolidated balance
sheets and are typically applied to an invoice within 30 days of receipt. As of March 31, 2019 and December 31, 2018, the Company
had customer deposits (including related party deposit) of $24,701 and $144,641, respectively. Cost of goods sold Impairment
of Long-Live Assets Income Taxes In accordance with ASC Topic 740-10, “Accounting
for Uncertainty in Income Taxes — An Interpretation of FASB ASC Topic 740”, which requires income tax positions to
meet a more-likely-than-not recognition threshold to be recognized in the financial statements. Tax positions that previously failed
to meet the more-likely-than-not threshold should be recognized in the first subsequent financial reporting period in which that
threshold is met. Previously recognized tax positions that no longer meet the more-likely-than-not threshold should be derecognized
in the first subsequent financial reporting period in which that threshold is no longer met. As of March 31, 2019, and December
31, 2018, management considered that the Company had no uncertain tax positions, and will continue to evaluate for uncertain positions
in the future. The application of tax laws and regulations
is subject to legal and factual interpretation, judgment and uncertainty. Tax laws and regulations themselves are subject to change
because of changes in fiscal policy, changes in legislation, the evolution of regulations and court rulings. Therefore, the actual
liability may be materially different from our estimates, which could result in the need to record additional tax liabilities or
potentially reverse previously recorded tax liabilities or deferred tax asset valuation allowance. The Company has made a comprehensive review
of its portfolio of tax positions in accordance with recognition standards established by ASC 740-10 and has not recognized any
material uncertain tax positions. In addition, companies in the PRC are required
to pay an Enterprise Income Tax at 25%. Foreign Currency Translation The exchange rates used to translate amounts
in RMB into USD for the purposes of preparing the consolidated financial statements were as follows:
Balance sheet
Balance sheet as of March 31, 2019 RMB 6.71 to US $1.00
Balance sheet as of December 31, 2018 RMB 6.88 to US $1.00
Statement of operation and other comprehensive income
Statement of operation and other comprehensive income for three months ended March 31, 2019 RMB 6.74 to US $1.00
Statement of operation and other comprehensive income for three months ended March 31, 2018 RMB 6.35 to US $1.00 Fair Value of Financial Instruments Level 1 Inputs— Unadjusted quoted
market prices for identical assets and liabilities in an active market that the Company has the ability to access. Level 2 Inputs— Inputs other
than the quoted prices in active markets that are observable either directly or indirectly. Level 3 Inputs— Inputs based
on valuation techniques that are both unobservable and significant to the overall fair value measurements ASC 820 requires the use of observable
market data, when available, in making fair value measurements. When inputs used to measure, fair value fall within different levels
of the hierarchy, the level within which the fair value measurement is categorized is based on the lowest level input that is significant
to the fair value measurement. Valuation techniques used need to maximize the use of observable inputs and minimize the use of
unobservable inputs. The Company did not identify any assets
or liabilities that are required to be presented at fair value on a recurring basis. Carrying values of non-derivative financial
instruments, including cash, accounts and other receivable, prepaid expenses, accounts payable, taxes payable, and other payables,
approximated their fair values due to the short maturity of these financial instruments. There were no changes in methods or assumptions
during the periods presented. Net Earnings (Loss) Per Share Reclassifications Recent
Accounting Pronouncements In
July 2017, the FASB issued ASU 2017-11, Earnings Per Share (Topic 260); Distinguishing Liabilities from Equity (Topic 480);
Derivatives and Hedging (Topic 815): In June 2016,
the FASB issued ASC Update No. 2016-13, Financial Instruments – Credit Losses: Measurement of Credit Losses on Financial
Instruments (Topic 326) The Company has
considered all new accounting pronouncements and has concluded that there are no new pronouncements that may have a material impact
on results of operations, financial condition, or cash flows, based on current information. |
