10-Q: Yong Bai Chao New Retail Corporation Reports Minimal Activity and Net Loss in Q1 2024

Yong Bai Chao New Retail Corporation reported no revenue and a net loss of $17,833 for the first quarter of 2024, with management focused on seeking a new operating business.

Summary

• Yong Bai Chao New Retail Corporation, formerly known as Environmental Control Corp., reported its financial results for the quarter ended March 31, 2024.
• The company had no revenue for the quarter, consistent with the same period in 2023.
• Operating expenses totaled $17,833, a decrease from $25,000 in the first quarter of 2023, primarily due to lower audit fees.
• The company recorded a net loss of $17,833 for the quarter, compared to a net loss of $25,000 in the same period last year.
• There were no cash flows from operating activities during the quarter.
• The company's accumulated deficit stood at $3,693,541 as of March 31, 2024, and it had a working capital deficit of $124,492.
• Management is focused on identifying a new and profitable operating business with strong growth potential.
• The company's expenses are expected to consist mainly of legal, accounting, and filing fees until a new business is acquired.

Sentiment

Score: 3

Explanation: The sentiment is negative due to the lack of revenue, continued losses, and the company's status as a shell company with material weaknesses in internal controls. The company's future is highly uncertain and dependent on finding a new business and raising capital.

Positives

• Operating expenses decreased by $7,167 compared to the same quarter last year, primarily due to lower audit fees.
• The net loss improved by $7,167 compared to the same quarter last year.

Negatives

• The company generated no revenue for the quarter.
• The company has a significant accumulated deficit of $3,693,541.
• The company has a working capital deficit of $124,492.
• The company has no current operating activities and is considered a shell company.
• The company's disclosure controls and procedures were deemed ineffective due to material weaknesses in internal controls over financial reporting.

Risks

• The company's ability to continue as a going concern is in doubt due to its accumulated deficit and lack of operating activities.
• The company is dependent on raising additional capital to fund its operations and pursue business acquisitions.
• There is no assurance that the company will be able to raise additional capital on satisfactory terms.
• The company's internal controls over financial reporting have material weaknesses.
• The company's disclosure controls and procedures were not effective as of March 31, 2024.

Future Outlook

The company's management is focused on seeking a new and profitable operating business with strong growth potential, and expects expenses to mainly consist of legal, accounting, and filing fees until a new business is acquired. The company anticipates continuing to rely on equity sales of its common shares and shareholder advances in order to continue to fund its business operations.

Management Comments

• The company's management efforts are focused on seeking out a new and profitable operating business with rapid growth potential.
• Unless and until the company's successful acquisition of an operating business, we expect our expenses to mainly consist of the legal service fee, accounting fee, and filing fee etc. related to maintaining a public company.
• We believe that our current cash and other sources of liquidity discussed above are adequate to support operations for at least the next 12 months.

Industry Context

The company's current state as a shell company with minimal operations is not uncommon for companies undergoing restructuring or seeking new business opportunities. The focus on finding a new operating business is a common strategy for such entities.

Comparison to Industry Standards

• It is difficult to compare Yong Bai Chao New Retail Corporation to industry standards due to its current status as a shell company with no revenue-generating activities.
• The company's financial metrics are not comparable to active companies in the retail or technology sectors, as it is not currently engaged in any specific industry.
• The company's lack of revenue and significant accumulated deficit are not typical for established companies in any sector, but are common for companies in a restructuring phase.
• The company's reliance on equity sales and shareholder advances for funding is a common practice for early-stage or distressed companies.

Management Changes

Legal Proceedings

• The company is not currently a party to any lawsuit or proceeding which, in the opinion of management, is likely to have a material adverse effect on us or our business.

Related Party Transactions

• The company had a payable amount owed to its former CEO, Fei Wang, of $100,087 as of March 31, 2024.

Stakeholder Impact

• Shareholders face significant risk due to the company's lack of revenue, accumulated deficit, and dependence on additional capital.
• Employees are not directly impacted as the company has minimal operations and no substantial business activities.
• Customers and suppliers are not impacted as the company has no current business operations.
• Creditors face risk due to the company's working capital deficit and dependence on additional capital.

Next Steps

• The company will continue to seek a new and profitable operating business with strong growth potential.
• The company will continue to rely on equity sales and shareholder advances to fund operations.
• The company needs to address the material weaknesses in its internal controls over financial reporting.

Key Dates

Keywords

financial results, net loss, operating expenses, shell company, business acquisition, internal controls, going concern, capital resources, reverse stock split