See accompanying notes to condensed financial statements.
See accompanying notes to condensed financial statements.
See accompanying notes to condensed financial statements.
See accompanying notes to condensed financial statements.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MARCH 31, 2023
AND 2022
(Currency expressed in United States Dollars
(“US$”), except for number of shares)
NOTE – 1 DESCRIPTION OF BUSINESS
AND ORGANIZATION
Namliong Skycosmos, Inc. (the “Company”
or “KRBF”) was incorporated as Gemwood Productions, Inc. under the laws of the State of Nevada on February 7, 2005. Gemwood
Productions, Inc. changed its name to Kreido Biofuels, Inc. on November 2, 2006. The Company took its current form on January 12, 2007
when Kreido Laboratories, Inc. (“Kreido Labs”), completed a reverse triangular merger with Kreido Biofuels, Inc. On April
19, 2022, the Company changed its current name to Namliong SkyCosmos, Inc.
Our current business will be to seek to effect
a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses.
We have not selected any specific business combination target and we have not, nor has anyone on our behalf, initiated any substantive
discussions, directly or indirectly, with any business combination target.
Our acquisition strategy will be to assess a broad
range of potential business combination targets and complete a business combination. In doing so, we will evaluate the historical
financial statements of the target, its management, and projected future results. In evaluating a prospective target business, we expect
to conduct a thorough due diligence review that will encompass, among other things, meetings with incumbent management and employees,
document reviews, inspection of facilities, as well as a review of financial and other information that will be made available to us.
We are not prohibited from pursuing a business
combination with a company that is affiliated with our management, but we have no plans to do so. We do not plan to retain a significant
equity position after closing of any acquisition and management does not plan to continue as part of the new management team.
We have not selected any specific business combination
target. Our sole officer and director presently has, and in the future may have additional, fiduciary or contractual obligations to other
entities pursuant to which such officer or director is or will be required to present a business combination opportunity. Accordingly,
if our officer and director becomes aware of a business combination opportunity which is suitable for an entity to which he or she has
then-current fiduciary or contractual obligations, he or she will honor his or her fiduciary or contractual obligations to present such
opportunity to such entity. We do not believe, however, that the fiduciary duties or contractual obligations of our officer/director will
materially affect our ability to complete our business combination.
Our executive officer is not required to commit
any specified amount of time to our affairs, and, accordingly, will have conflicts of interest in allocating management time among various
business activities, including identifying potential business combination targets and monitoring the related due diligence.
On December 14, 2021, certain shareholders owning
13,099,243 of our common stock, representing a majority of issued and outstanding shares, agreed to sell their shares to 6 shareholders.
This constitutes a change in control of the Company.
NOTE – 2 SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES
The accompanying condensed financial statements
reflect the application of certain significant accounting policies as described in this note and elsewhere in the accompanying financial
statements and notes.
These accompanying condensed financial statements
have been prepared in U.S. Dollars in conformity with generally accepted accounting principles in the United States of America (“U.S.
GAAP”) for interim financial information pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”).
Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the
opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary to make the financial statements
not misleading have been included. Operating results for the interim period ended March 31, 2023 are not necessarily indicative of the
results that may be expected for the fiscal year ending December 31, 2023. The information included in this Form 10-Q should be read in
conjunction with Management’s Discussion and Analysis, and the financial statements and notes thereto included in the Company’s
Form 10-K for the fiscal year ended December 31, 2022 filed with the SEC on March 15, 2023.
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Use of estimates and assumptions |
In preparing these condensed financial statements,
management makes estimates and assumptions that affect the reported amounts of assets and liabilities in the balance sheet and revenues
and expenses during the periods reported. Actual results may differ from these estimates.
Basic loss per share is calculated by dividing
the Company’s net loss applicable to common shareholders by the weighted average number of common shares during the period. Diluted
earnings per share is calculated by dividing the Company’s net income available to common shareholders by the diluted weighted average
number of shares outstanding during the period.
The Company adopted the ASC 740 Income tax
provisions of paragraph 740-10-25-13, which addresses the determination of whether tax benefits claimed or expected to be claimed on a
tax return should be recorded in the condensed financial statements. Under paragraph 740-10-25-13, the Company may recognize the tax benefit
from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing
authorities, based on the technical merits of the position. The tax benefits recognized in the condensed financial statements from such
a position should be measured based on the largest benefit that has a greater than fifty percent (50%) likelihood of being realized upon
ultimate settlement. Paragraph 740-10-25-13 also provides guidance on de-recognition, classification, interest and penalties on income
taxes, accounting in interim periods and requires increased disclosures. The Company had no material adjustments to its liabilities for
unrecognized income tax benefits according to the provisions of paragraph 740-10-25-13.
The estimated future tax effects of temporary
differences between the tax basis of assets and liabilities are reported in the accompanying balance sheets, as well as tax credit carry-backs
and carry-forwards. The Company periodically reviews the recoverability of deferred tax assets recorded on its balance sheets and provides
valuation allowances as management deems necessary.
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Uncertain tax positions |
The Company did not take any uncertain tax positions
and had no adjustments to its income tax liabilities or benefits pursuant to the ASC 740 provisions of Section 740-10-25 for the periods
ended March 31, 2022 and 2021.
The Company follows the ASC 850-10, Related
Party for the identification of related parties and disclosure of related party transactions.
Pursuant to section 850-10-20 the related parties
include a) affiliates of the Company; b) entities for which investments in their equity securities would be required, absent the election
of the fair value option under the Fair Value Option Subsection of section 825–10–15, to be accounted for by the equity method
by the investing entity; c) trusts for the benefit of employees, such as pension and Income-sharing trusts that are managed by or under
the trusteeship of management; d) principal owners of the Company; e) management of the Company; f) other parties with which the Company
may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one
of the transacting parties might be prevented from fully pursuing its own separate interests; and g) other parties that can significantly
influence the management or operating policies of the transacting parties or that have an ownership interest in one of the transacting
parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully
pursuing its own separate interests.
The condensed financial statements shall include
disclosures of material related party transactions, other than compensation arrangements, expense allowances, and other similar items
in the ordinary course of business. However, disclosure of transactions that are eliminated in the preparation of consolidated or combined
financial statements is not required in those statements. The disclosures shall include: a) the nature of the relationship(s) involved;
b) a description of the transactions, including transactions to which no amounts or nominal amounts were ascribed, for each of the periods
for which income statements are presented, and such other information deemed necessary to an understanding of the effects of the transactions
on the financial statements; c) the dollar amounts of transactions for each of the periods for which income statements are presented
and the effects of any change in the method of establishing the terms from that used in the preceding period; and d) amount due from
or to related parties as of the date of each balance sheet presented and, if not otherwise apparent, the terms and manner of settlement.
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Commitments and contingencies |
The Company follows the ASC 450-20, Commitments
to report accounting for contingencies. Certain conditions may exist as of the date the financial statements are issued, which may result
in a loss to the Company but which will only be resolved when one or more future events occur or fail to occur. The Company assesses such
contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal
proceedings that are pending against the Company or un-asserted claims that may result in such proceedings, the Company evaluates the
perceived merits of any legal proceedings or un-asserted claims as well as the perceived merits of the amount of relief sought or expected
to be sought therein.
If the assessment of a contingency indicates that
it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would
be accrued in the Company’s condensed financial statements. If the assessment indicates that a potentially material loss contingency
is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, and an
estimate of the range of possible losses, if determinable and material, would be disclosed.
Loss contingencies considered remote are generally
not disclosed unless they involve guarantees, in which case the guarantees would be disclosed. Management does not believe, based upon
information available at this time that these matters will have a material adverse effect on the Company’s financial position, results
of operations or cash flows. However, there is no assurance that such matters will not materially and adversely affect the Company’s
business, financial position, and results of operations or cash flows.
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Recent accounting pronouncements |
The FASB established the Accounting Standards
Codification (“Codification” or “ASC”) as the source of authoritative accounting principles recognized by the
FASB to be applied by nongovernmental entities in the preparation of financial statements in accordance with generally accepted accounting
principles in the United States (“GAAP”).
Rules and interpretative releases of the Securities
and Exchange Commission (“SEC”) issued under authority of federal securities laws are also sources of GAAP for SEC registrants.
Other accounting standards that have been issued
or proposed by FASB that do not require adoption until a future date are not expected to have a material impact on the financial statements
upon adoption. The Company does not discuss recent pronouncements that are not anticipated to have an impact on or are unrelated to its
financial condition, results of operations, cash flows or disclosures.
NOTE – 3 GOING CONCERN UNCERTAINTIES
The accompanying condensed financial statements
have been prepared using the going concern basis of accounting, which contemplates the realization of assets and the satisfaction of liabilities
in the normal course of business.
In order to continue as a going concern, the Company
will need, among other things, additional capital resources. Management's plan is to obtain such resources for the Company by obtaining
capital from management sufficient to meet its minimal operating expenses and seeking equity and/or debt financing. However, Management
cannot provide any assurances that the Company will be successful in accomplishing any of its plans, which raises substantial doubt about
the ability of the Company to continue as a going concern.
The ability of the Company to continue as a going
concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually secure
other sources of financing and attain profitable operations. The accompanying condensed financial statements do not include any adjustments
that might be necessary if the Company is unable to continue as a going concern.
NOTE – 4 AMOUNT DUE TO A DIRECTOR
The amount represented temporary advances from
the Company’s director for working capital purpose, which were unsecured, interest-free and had no fixed terms of repayments.
NOTE – 5 STOCKHOLDERS’ DEFICIT
Common Stock
The Company’s Articles of Incorporation
authorize the issuance of up to 300,000,000 common shares, par value $0.001 per share, and 10,000,000 preferred shares, also $0.001 par
value. There were 14,706,513 shares of common stock outstanding at March 31, 2023 and December 31, 2022, respectively. There were no preferred
shares outstanding during any periods presented.
NOTE – 6 INCOME TAX
On December 22, 2017, the 2019 Tax Cuts and Jobs
Act (the “Tax Act”) was enacted into law including a one-time mandatory transition tax on accumulated foreign earnings and
a reduction of the corporate income tax rate to 21% effective January 1, 2018, among others. We are required to recognize the effect of
the tax law changes in the period of enactment, such as determining the transition tax, remeasuring our U.S. deferred tax assets and liabilities
as well as reassessing the net realizability of our deferred tax assets and liabilities. The Company does not have any foreign earnings
and therefore, we do not anticipate the impact of a transition tax.
The cumulative tax effect at the expected rate
of 21% as of March 31, 2023 and December 31, 2022 of significant items comprising our net deferred tax amount is as follows:
| Schedule of deferred tax assets | |
March 31, 2023 | | |
December 31, 2022 | |
| | |
| | |
| |
| Net operating loss carryover | |
$ | 49,582,996 | | |
$ | 49,520,154 | |
| Deferred tax asset | |
| 10,412,429 | | |
| 10,399,232 | |
| Less: valuation allowance | |
| (10,412,429 | ) | |
| (10,399,232 | ) |
| Net deferred tax asset | |
$ | – | | |
$ | – | |
At March 31, 2023, the Company had net operating
loss carry forwards of approximately $49,582,996 that may be offset against future taxable income. The Tax Act also changed the rules
on net operating loss carry forwards. The 20-year limitation was eliminated, giving the taxpayer the ability to carry forward losses indefinitely.
However, NOL carry forward arising after January 1, 2020, will now be limited to 80 percent of taxable income.
No tax benefit has been reported in the period
ended March 31, 2023, the Company’s financial statements since the potential tax benefit is offset by a valuation allowance of the
same amount. Due to the change in ownership provisions of the Tax Reform Act of 1986, net operating loss carry forwards for federal income
tax reporting purposes are subject to annual limitations. A change in ownership may limit net operating loss carry forwards in future
years. The benefits of our deferred tax assets, including our NOLs, built-in losses and tax credits would be reduced or potentially eliminated
if we experienced an “ownership change” under Section 382.
NOTE – 7 RELATED PARTY TRANSACTIONS
During the three months ended March 31, 2023 and
2022, the Company has been provided with free office space by its shareholders. The management determined that such cost is nominal and
did not recognize the rent expense in its financial statements.
Apart from the transactions and balances detailed
elsewhere in these accompanying financial statements, the Company has no other significant or material related party transactions during
the periods presented.
NOTE – 8 COMMITMENTS AND CONTINGENCIES
As of March 31, 2023, the Company has no material
commitments or contingencies.
NOTE – 9 SUBSEQUENT EVENTS
On March 31, 2023, the Company entered into a
Share Exchange Agreement with Continental Development Corporation, a Samoa company (“CDC”) that is controlled by Cheng Hsing
HSU, our sole executive officer and director, to purchase 1,000,000 shares of common stock of Orient Express & Co., Ltd. ("OEC"),
a SAMOA company, constituting all of the issued and outstanding ordinary shares of OEC, held by CDC. In consideration for such OEC shares,
the Company agreed to issue to CDC two million shares of its common stock at a per share price of $0.50. Mr. HSU is the director and sole
executive officer of CDC. The acquisition was consummated on April 30, 2023, and as a result, OEC became a wholly owned subsidiary of
the Company.
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 condensed financial statements are issued, the Company has evaluated all events or transactions that occurred after March 31,
2023, up through the date the Company issued the unaudited condensed financial statements.