ITEM 1. Business
Overview
Borneo Industrial Fishery Corp Inc. (formerly “China Xibolun Technology Holdings Corporation”) was initially incorporated under the name “Dimus Partners, Inc” in the state of Nevada on April 18, 2008.
On or around October 14, 2008, we affected a two for one (2:1) forward stock split of our outstanding shares of common stock (the “Forward Split”). The Forward Split is retroactively reflected throughout this Report.
Borneo Industrial Fishery Corp Inc. is a strategic, financial and operational consulting company, which plans to consult with clients in an effort to generate additional revenues for such clients, by lowering overhead expenses and/or increasing the clients marketing efforts. We plan to concentrate on smaller customers who our management believes are typically overlooked by traditional consulting firms which in our management’s experience only focus on larger, higher paying clients. All of our ideas and recommendations will focus on the objective of improving the bottom-line profit results of our future customers. We also plan to help clients discover and create operational efficiencies by building software and eventually by working to create pre-packaged software products, funding and software creation permitting.
The Company has developed a contingent fee based methodology for billing business consulting which we call The CXBL Advantage (the Company has not obtained any trademarks for The CXBL Advantage due to cost constraints, however, the Company may take action in the future, funding permitting to obtain a trademark for such term). The “CXBL Advantage” is the Company’s idea of only charging potential clients a success based fee instead of hourly billing rates. The CXBL Advantage is not a product or service, but only a way of billing clients. By only charging a fee if our efforts successfully increase the client’s revenues, marketing ability, reduce their expenses, or enable the client to meet such other goals or targets as the client and the Company determine prior to the engagement by the Company (each “Goals”), we believe that we will be able to share in the success of our potential clients over the long-term and that our services will be more affordable and attractive to our potential clients (as they will only pay us if they see a benefit from such services) than other traditionally priced consulting services. Each engagement agreement we will enter into with future clients will set forth the specific Goals that the client is attempting to meet, based on mutually agreeable criteria (i.e., criteria and goals as agreed upon by us and the client based on what areas of the clients’ business operations they are seeking to improve) and targets for improvement, which will vary engagement to engagement, based upon the negotiation of the parties at the time of engagement, and which we and the client believe are reasonable. The fees payable to us will then be determined by whether the client meets such previously established Goals with our consulting assistance. We will only generate fees if the client meets the mutually agreed upon Goals and in the event the client fails to meet the pre-established Goals, they may not be required to pay us any fees at all.
While each contingent success based fee arrangement based on the CXBL Advantage will be different, based on the individual Goals each future client is trying to accomplish, the negotiations of the Company and the client, the size of the engagement and difficulty of the client meeting such Goals, which can only be established at the time of engagement, we anticipate that each arrangement will have similar characteristics. Those characteristics will likely include 1) a breakup fee payable to the Company in the event the client does not choose to implement the Company’s recommended suggestions for meeting such Goals; 2) set a baseline for (a) the clients expected ability to meet the Goals; or (b) the clients continued operations on a status quo basis, assuming no intervention by the Company; 3) determine the period or ending date during which the client will be required to meet the Goals with the Company’s consulting assistance; and 4) provide the fees due to the Company in the event the client meets the Goals over the predetermined period (collectively the “Engagement Terms”). As described above, all Engagement Terms will be determined and negotiated by the Company and its clients on a case by case basis at the time of engagement. We call the methodologies and analysis techniques that we plan to use to prepare a potential client for our contingent success fee based approach to consulting and understand where our expertise can help the “CXBL Trace Toolkit.” Similar to the CXBL Advantage, the Company has not obtained any trademarks for CXBL Trace Toolkit due to cost constraints; however, the Company may take action in the future, funding permitting to obtain a trademark for such term. The CXBL Trace Toolkit is not a product or service, but just a proprietary set of written analysis techniques, questionnaires and processes to assist us and our clients in the engagement process.
We have not generated any revenues to date. To date we have had only limited operations. We do not currently have any paying clients, nor have we ever had any paying clients. We have however, previously consulted with a limited number of clients for free in return for such clients providing us references and in an effort to gain experience. Additionally, we have had ongoing discussions with certain customer home builders, including Jimmy Jacobs Custom Homes, as described below, which have not generated any revenues, but which we believe have provided us much needed experience and word of mouth regarding our services. As a result of the above, we have not had a sufficient opportunity to determine the feasibility and success of the results-oriented billing techniques of the CXBL Advantage.
We plan to focus on small to mid-sized companies in various industries and markets, including, but not limited to the construction industry (as described below) and our management believes that there are significant growth opportunities in mid-market companies whose day-to-day operations have not benefited from dedicated strategic, financial or operational support systems. We believe that these companies share many of the same problems found in Fortune 500 corporations, but may lack the human and capital resources needed to take advantage of the business-improving principles consulting can provide. Our business is targeted at these small to mid-sized companies that cannot afford traditional business consulting.
Target Market
We are focused primarily on small to mid-sized, privately-owned companies, somewhere in the yearly revenue range of $15 million to $50 million per year. Initially we will concentrate efforts in the Austin and San Antonio, Texas corridor. As the Company expands, we hope to open offices in the Dallas and Houston areas, funding and demand permitting, which will increase the number of potential clients we can offer our services to. While we have initially focused our attention on companies in the construction industry, similar to the Customer (defined below), moving forward we hope to branch out various additional industries and markets.
We do not currently have any paying clients nor do we have any material agreements in place to provide services to any paying clients other than as provided below. As described above, to date we have had only limited operations.
Three Tiered Approach to Business Consulting
The Company offers comprehensive business consulting services. Upon entering into an engagement, the Company intends to work with a client company for up to five (5) years through a 3-tiered approach:
During the Tier 1 stage, which we believe will take place during the first year of any engagement, we plan to focus on short-term, profit-impacting operational improvements including cost and pricing analysis, immediate process improvement and other pressing issues affecting the client company.
During the Tier 2 stage, we plan to take a longer term strategic focus on top-line revenue growth and internal policies. Tier 2 will likely occur during the second and third years of an engagement and consist of strategically analyzing the client’s markets, competitive landscape and internal policies to determine opportunities and threats facing the client company.
Lastly, during the Tier 3 stage, we plan to focus on substantially growing the client company’s business through vertical and horizontal integration opportunities, as well as through acquisitions of synergistic companies.
Operation Efficiencies
The Company plans to examine the client company’s operating environment to determine those areas that can be improved to reach optimal performance, quality and profit. We will attempt to improve the synergies created by a business’ employees. We will also attempt to dispose of poorly performing and loss-making product lines and/or business units; reduce overhead; eliminate duplicative administration; eliminate obsolete inventory; and elevate accountability.
Financial Management Services
The Company believes that financial management is the most important aspect of operating a small-to-medium sized business, as pursuant to our management’s experience, many small and medium-sized businesses are faced with cash management issues on a daily basis. Making payroll, paying suppliers and purchasing new equipment all require cash expenditures that can weigh heavily on a business if its cash flow is not managed properly. Several key aspects of proper financial management include:
· Proper cash management for growing companies;
· Activity-based cost accounting to properly match fixed overhead costs with the activities that create them;
· Performance assessment through financial analysis;
· Capital structure optimization;
· Lease vs. purchase decisions; and
· Accurately determining the value of the business.
Performance Management Services
Performance management includes all the ways in which a business aligns its processes and its owners and employees toward the vision and goals of the company. We will attempt to align employees’ goals and objectives to those of the client company. We believe this can be accomplished by assigning individual goals and creating incentive-based compensation plans. Several key aspects of proper performance management analysis include:
· Understanding the core competencies and strategies of the business;
· Mapping current performance against this key purpose;
· Determining cost, revenue, and other drivers toward the key purpose;
· Designing a full featured goal, measurement, and review system that allows for performance management techniques to be implemented;
· Designing a matching compensation system that fits both the company's cash-flow and cultural constraints; and
· Rollout of the package, including gaining the trust and buy-in at all levels of the company.
Need for Government Approval
The Company does not believe that it is or will be subject to any material regulations or requirements from any existing or probable laws or government regulation as a result of its planned business operations. Additionally, the Company plans to enter into mutual non-disclosure agreements with any actual or potential clients in an effort to protect both its own and its clients’ confidential intellectual property and trade secrets. The Company has not entered into any non-disclosure agreements to date.
Patents, Trademarks and Intellectual Property
The Company does not currently have any patents, trademarks, licenses or other registered or documented intellectual property rights associated with its proprietary platform and applications. Moving forward, if funding permits, the Company may take action to apply for such protection; however in the meantime, the Company anticipates entering into non-disclosure agreements with each of its clients and potential clients in an effort to protect its intellectual property. The Company does not currently have any plans to secure any patent, trademark or similar rights at this time, nor has it budgeted any funds for such rights at this time.
Competition
Within the current landscape of business and management consulting, there is a vast and diverse set of competitors and service providers. These companies range from the smallest one person firms, to large multinational companies that offer a diverse, broad, and more generic set of services. Depending on the focus and type of company, the competitive comparison to Borneo Industrial Fishery Corp Inc. varies. In the case of the smaller firm, the breadth and depth of the services provided are not, in the belief of management, comparable with those planned to be offered by the Company. With the larger firms, management believes that there is a lack of focus and interest in BOFC Partner’s target customer due to the apparent lack of resources available to fund high cost, relatively short-turnaround engagements. However, we believe that the majority of the firms which operate in the business and management consulting market, which include well-established companies and start-up companies such as ours, have substantially greater financial, managerial and other resources than those presently available to the Company, and are focusing significant resources on providing business consulting services that currently compete and will compete with the Company's services in the future. As a result, these firms may be able to spend more money on advertising and marketing, have greater brand recognition and be in a position to undercut the prices that the Company charges for its services.
We plan to focus on small to mid-sized companies and believe there are significant growth opportunities in mid-market companies whose day-to-day operations have not benefited from dedicated strategic, financial or operational support systems. In our management’s experience, these companies share many of the same problems found in Fortune 500 corporations, but lack the human and capital resources needed to take advantage of the business-improving principles consulting can provide. Our business is targeted at these small to mid-sized companies which we believe cannot afford traditional business consulting fees.
The Company has developed a contingent fee based billing methodology for business consulting which we call The CXBL Advantage (the Company has not obtained any trademarks for The CXBL Advantage due to cost constraints, however, the Company may take action in the future, funding permitting to obtain a trademark for such term). The “CXBL Advantage” is the Company’s idea of only charging potential clients a success based fee instead of hourly billing rates. By only charging a fee if our efforts successfully increase the client’s revenues, marketing and/or reduce their expenses, we believe that we will be able to share in the success of our potential clients over the long-term and that our services will be more affordable and attractive to our potential clients (as they will only pay us if they see a benefit from such services) than other traditionally priced consulting services. The Company’s idea of a success based/contingent fee arrangement has not been proven to be successful in the business consulting market and as a result, we may be unable to compete with traditional consulting firms which bill on an hourly basis or for project based fees, or such fee structures may be more attractive to our potential clients.
Although we believe that there is a need for a “niche” business, such as ours that can provide logistical expertise at a reduced cost to smaller businesses who are overlooked by larger consulting firms and that there will be a market for a success based fee approach to providing consulting services such as ours, the Company may not be able to effectively compete with other consulting firms or compete with competitive pressures, including possible downward pressure on the prices we charge for our products and services. In the event that the Company cannot effectively compete on a continuing basis or competitive pressures arise, such inability to compete or competitive pressures will have a material adverse effect on the Company’s business, results of operations and financial condition.
Sales & Marketing
The overall positioning and branding strategy for Borneo Industrial Fishery Corp Inc. will be to establish us and our consultants as partners with our clients and to add real, quantifiable value to these clients before we see any financial gain. Secondarily, we plan to build our brand around the idea of providing world-class consulting capabilities to those companies that traditionally cannot afford these services. We hope that our success fee-based model will not only aligns us to our client’s goals, but also will entice target customers who are reluctant to pay the high hourly rates charged by our competitors. Finally, we plan to make sure our services, or more specifically, the ideas behind our services, are simple and easy to understand.
Promotion Strategy
Early on, in the growth stage of the Company, the most important promotional avenue will be customer referrals and word of mouth. Because we want to be seen and known as a “local” firm, it is important the local business owners provide very positive accounts of our engagements. Initially our advertising and marketing campaign will consist of door-to-door solicitations and phone calls to various targeted business owners around the Austin-San Antonio area. We believe that some of these calls will lead to face-to-face meetings with the owners and managers of these businesses where we can either engage a new client or gain referrals to other potential clients identified by these businesses.
Material Agreements:
The Company is not currently subject to any customer agreements or understandings.
Funding Events:
Expenses of the Company are currently being paid by an affiliate of our controlling shareholders.
The Company has periodically received cash advances from the Company’s directors. The entire balance was settled in September 2012.
On November 2, 2010 the Company entered into a $50,000 line of credit with the Company’s former president, James Patton. The line of credit bears interest of 10% per annum (15% if in default) and was settled in full in September 2012. The line of credit is no longer available to the Company.
On September 21, 2012, James Patton, Nathan Pettus and James Pacey (“Sellers”), who are collectively the controlling shareholders of the Company, sold 4,200,000 shares of common stock of the Company to Chin Yung Kong and Anyuan Sun (“Purchasers”) for an aggregated price of $190,000.The 4,200,000 shares of common stock represented approximately 96.2% of the total issued and outstanding stock of the Company. As result of this share purchase transaction, Chin Yung Kong and Anyuan Sun became the controlling shareholders of the Company.
In conjunction with the September 21, 2012 transaction, all the liabilities of the Company prior to September 21, 2012 were settled by a Company shareholder for $123,040, resulting in a gain on settlement of $17,310.
Employees
We currently do not have any employee.
Intellectual Property
The Company does not have any patents, trademarks, licenses, or franchises.
ITEM 1A.
ITEM 1A. Risk Factors
Not applicable for Smaller Reporting Companies.
ITEM 1B.
ITEM 1B. Unresolved Staff Comments
Not applicable.
ITEM 2.
ITEM 2. Properties
We currently use a free office space provided by our director Chin Yung Kong at 136-40 39th Avenue Garden Plaza, Suite 6B, Flushing, NY 11354.
ITEM 3.
ITEM 3. Legal Proceedings
From time to time, we may become party to litigation or other legal proceedings that we consider to be a part of the ordinary course of our business. We are not currently involved in legal proceedings that could reasonably be expected to have a material adverse effect on our business, prospects, financial condition or results of operations. We may become involved in material legal proceedings in the future.
ITEM 4.
ITEM 4. Mine Safety Disclosures
Not applicable.
PART II
ITEM 5.
ITEM 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
In November 2011, we obtained quotation for our common stock on the Over-The-Counter Bulletin Board (“OTCBB”) under the symbol “DIMU.OB”; however, no shares of our common stock have traded to date and there is currently no public market for our common stock. Effective on November 29, 2012, our common stock started to be quoted on OTCBB under the new stock symbol CXBL. On July 30, 2015, our common stock started to be quoted on OTCBB under the new symbol BOFC.
The Company's common stock is considered a "penny stock" as defined in the Commission's rules promulgated under the Exchange Act (the “Rules”). The Commission's rules regarding penny stocks impose additional sales practice requirements on broker-dealers who sell such securities to persons other than established customers and accredited investors (generally persons with net worth in excess of $1,000,000, exclusive of residence, or an annual income exceeding $200,000 or $300,000 jointly with their spouse). For transactions covered by the rules, the broker-dealer must make a special suitability determination for the purchaser and receive the purchaser's written agreement to the transaction prior to the sale. Thus the Rules affect the ability of broker-dealers to sell the Company's shares should they wish to do so because of the adverse effect that the Rules have upon liquidity of penny stocks. Unless the transaction is exempt under the Rules, under the Securities Enforcement Remedies and Penny Stock Reform Act of 1990, broker-dealers effecting customer transactions in penny stocks are required to provide their customers with (i) a risk disclosure document; (ii) disclosure of current bid and ask quotations if any; (iii) disclosure of the compensation of the broker-dealer and its sales personnel in the transaction; and (iv) monthly account statements showing the market value of each penny stock held in the customer's account. As a result of the penny stock rules, the market liquidity for the Company's securities may be severely adversely affected by limiting the ability of broker-dealers to sell the Company's securities and the ability of purchasers of the securities to resell them.
We have authorized capital stock consisting of 100,000,000 shares of common stock, $0.001 par value per share and 10,000,000 shares of preferred stock, $0.001 par value per share (“Preferred Stock”). As of July 31, 2015, there were 4,366,649 shares of common stock issued and outstanding, held by 39 shareholders of record.
Common Stock
The holders of outstanding shares of common stock are entitled to receive dividends out of assets or funds legally available for the payment of dividends of such times and in such amounts as the board from time to time may determine. Holders of common stock are entitled to one vote for each share held on all matters submitted to a vote of shareholders. There is no cumulative voting of the election of directors then standing for election. The common stock is not entitled to pre-emptive rights and is not subject to conversion or redemption. Upon liquidation, dissolution or winding up of our company, the assets legally available for distribution to stockholders are distributable ratably among the holders of the common stock after payment of liquidation preferences, if any, on any outstanding payment of other claims of creditors. Each outstanding share of common stock is, and all shares of common stock to be outstanding upon completion of this Offering will upon payment therefore be, duly and validly issued, fully paid and non-assessable.
Preferred Stock
Shares of Preferred Stock may be issued from time to time in one or more series, each of which shall have such distinctive designation or title as shall be determined by our Board of Directors (“Board of Directors”) prior to the issuance of any shares thereof. Preferred Stock shall have such voting powers, full or limited, or no voting powers, and such preferences and relative, participating, optional or other special rights and such qualifications, limitations or restrictions thereof, as shall be stated in such resolution or resolutions providing for the issue of such class or series of Preferred Stock as may be adopted from time to time by the Board of Directors prior to the issuance of any shares thereof. The number of authorized shares of Preferred Stock may be increased or decreased (but not below the number of shares thereof then outstanding) by the affirmative vote of the holders of a majority of the voting power of all the then outstanding shares of our capital stock entitled to vote generally in the election of the directors, voting together as a single class, without a separate vote of the holders of the Preferred Stock, or any series thereof, unless a vote of any such holders is required pursuant to the terms of any series of Preferred Stock.
Options, Warrants and Convertible Securities
We have no options, warrants or other convertible securities outstanding. We have no equity compensation plans either approved by security holders or not approved by security holders.
Dividends
We have not paid any dividends on our common stock to date and do not anticipate that we will be paying dividends in the foreseeable future. Any payment of cash dividends on our common stock in the future will be dependent upon the amount of funds legally available, our earnings, if any, our financial condition, our anticipated capital requirements and other factors that our Board of Directors may think are relevant. However, we currently intend for the foreseeable future to follow a policy of retaining all of our earnings, if any, to finance the development and expansion of our business and, therefore, do not expect to pay any dividends on our common stock in the foreseeable future. Additionally, the terms of our preferred stock impose restrictions on our ability to pay dividends.
Recent Sales of Unregistered Securities
None.
Item 6.
Item 6. Selected Financial Data
Not required pursuant to Item 301 of Regulation S-K.
Item 7.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
We caution you that this report contains forward-looking statements regarding, among other things, financial, business, and operational matters.
All statements that are included in this Quarterly Report, other than statements of historical fact, are forward-looking statements. Forward-looking statements involve known and unknown risks, assumptions, uncertainties, and other factors. Statements made in the future tense, and statements using words such as “may,” “can,” “could,” “should,” “predict,” “aim’” “potential,” “continue,” “opportunity,” “intend,” “goal,” “estimate,” “expect,” “expectations,” “project,” “projections,” “plans,” “anticipates,” “believe,” “think,” “confident” “scheduled” or similar expressions are intended to identify forward-looking statements. Forward-looking statements are not a guarantee of performance and are subject to a number of risks and uncertainties, many of which are difficult to predict and are beyond our control. These risks and uncertainties could cause actual results to differ materially from those expressed in or implied by the forward-looking statements, and therefore should be carefully considered. We caution you not to place undue reliance on the forward-looking statements, which speak only as of the date of this report. We disclaim any obligation to update any of these forward-looking statements as a result of new information, future events, or otherwise, except as expressly required by law. As used herein, the “Company,” “we,” “us,” “our” and words of similar meaning refer to Borneo Industrial Fishery Corp Inc. (formerly “China Xibolun Technology Holdings Corporation”).
Overview
Borneo Industrial Fishery Corp Inc. (formerly “China Xibolun Technology Holdings Corporation,” formerly Dimus Partners, Inc.) was incorporated in the state of Nevada on April 18, 2008, under the name Dimus Partners, Inc. We have not generated any revenues to date. To date we have had only limited operations.
On September 21, 2012, James Patton, Nathan Pettus and James Pacey (“Sellers”), who are collectively the controlling shareholders of Dimus Partners, Inc (“Company”), sold 4,200,000 shares of common stock of the Company to Chin Yung Kong and Anyuan Sun (“Purchasers”) for an aggregated price of $ 190,000.00.The 4,200,000 shares of common stock represented approximately 96.2% of the total issued and outstanding stock of the Company. As result of this share purchase transaction, Chin Yung Kong and Anyuan Sun became the controlling shareholders of the Company. The liabilities of $187,350 of the Company prior to September 21, 2012 have been settled by the Company resulting in a $17,310 gain.
On October 11, 2012, we changed our name to China Xibolun Technology Holdings Corporation.
On July 30, 2015, we changed our name to Borneo Industrial Fishery Corp Inc.
Results of Operations For The Year Ended April 30, 2015 Compared To The Year Ended April 30, 2014
The Company did not generate any revenues for the year ended April 30, 2015 or 2014, and has not generated any revenues to date.
We had general and administrative expenses of $15,317 for the year ended April 30, 2015, compared to general and administrative expenses of $29,685 for the year ended April 30, 2014, a decrease of $14,368 in operating expenses from the prior year. The decrease of expense was mainly because of the legal expenses decreased.
LIQUIDITY AND CAPITAL RESOURCES
We had total assets of $0 as of April 30, 2015. We had liabilities of $65,985 as of April 30, 2015.
We had $16,384 of net cash used in operating activities for the year ended April 30, 2015, which resulted from the net loss and decrease in accounts payable and accrued expenses.
We had $16,384 of net cash provided by financing activities for the year ended April 30, 2015, which was due to advance from Mr. Chin for expenses.
Expenses of the Company are currently being paid by our controlling shareholders. The Company is dependent on such arrangements or additional outside financing, if even available to the Company, in order to meet its financial obligations and continue its operations.
There are no assurances that the Company will be able to either (1) achieve a level of revenues adequate to generate sufficient cash flow from operations; or (2) obtain additional financing through either private placement, public offerings and/or bank financing necessary to support the Company’s working capital requirements. To the extent that funds generated from any private placements, public offerings and/or bank financing are insufficient to support the Company’s working capital requirements, the Company will have to raise additional working capital from additional financing. No assurance can be given that additional financing will be available, or if available, will be on terms acceptable to the Company. If adequate working capital is not available, the Company may not be able continue its operations.
These conditions caused our auditors to have substantial doubt about the Company’s ability to continue as a going concern and issue an audit report on our year-end financial statements with an additional paragraph emphasizing the going concern issue. The financial statements do not include any adjustments relating to the recoverability and classification of asset carrying amounts or the amount and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.
Critical Accounting Policies:
Use of Estimates
The preparation of financial statements requires the Company to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosure of contingent assets and liabilities. Estimates are based on historical experience and on various other assumptions that the Company believes to be reasonable under the circumstances, the results of which form the basis for judgments about results and the carrying values of assets and liabilities. Actual results and values may differ significantly from these estimates.
Income Taxes
The Company has adopted Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 740, “Income Taxes”. This standard requires the use of an asset and liability approach for financial accounting, and reporting on income taxes. If it is more likely than not that some portion or all of a deferred tax asset will not be realized, a valuation allowance is recognized.
The asset and liability approach is used to account for income taxes by recognizing deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax basis of assets and liabilities. The Company records a valuation allowance to reduce any deferred tax assets to the amount that is more likely than not to be realized.
Recent Accounting Pronouncements
In June 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-10, “Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements, Including an Amendment to Variable Interest Entities Guidance in Topic 810, Consolidation.” This ASU removes the definition of a development stage entity from the ASC, thereby removing the financial reporting distinction between development stage entities and other reporting entities from GAAP. In addition, the ASU eliminates the requirements for development stage entities to (1) present inception-to-date information in the statements of operations, cash flows, and shareholders’ deficit, (2) label the financial statements as those of a development stage entity, (3) disclose a description of the development stage activities in which the entity is engaged, and (4) disclose in the first year in which the entity is no longer a development stage entity that in prior years it had been in the development stage. Early adoption is permitted. The Company has elected to adopt this ASU and, accordingly, no inception to date financial information is disclosed and the accompanying financial statements are not labeled as those of a development stage entity.
The Company has implemented all new accounting standards that are in effect and may impact its financial statements and does not believe that there are any other new accounting standards that have been issued that might have a material impact on its financial position or results of operations.
Item 7A.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
Pursuant to Item 305(e) of Regulation S-K (§ 229.305(e)), the Company is not required to provide the information required by this Item as it is a “smaller reporting company,” as defined by Rule 229.10(f)(1).
Item 8.
Item 8. Financial Statements and Supplementary Data
Please see the financial statements and footnotes annexed to the end of this Form 10-K.
Item 9.
Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure
(a) On May 21, 2015, the Company dismissed its independent registered public accounting firm, Friedman LLP (“Friedman”).
None of the reports of Friedman, on the Company's financial statements for either of the past two years or subsequent interim period contained an adverse opinion or disclaimer of opinion, or was qualified or modified as to audit scope or accounting principles, except for the explanatory paragraph included in each of our reports referencing significant doubt about the entity’s ability to continue as a going concern.
There were no disagreements between the Company and Friedman, for the two most recent fiscal years and any subsequent interim period through the date of Friedman’s termination on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which, if not resolved to the satisfaction of Friedman, would have caused them to make reference to the subject matter of the disagreement in connection with its report.
(b) On May 21, 2015, the Company engaged McCormack, Su & Company Inc. (McCormack, Su & Co.”) as its new principal accountant to audit the Company's financial statements. During the years ended April 30, 2014 and 2013 and through May 21, 2015, neither the Company nor anyone on its behalf consulted McCormack, Su & Co. regarding (i) the application of accounting principles to a specific completed or contemplated transaction, (ii) the type of audit opinion that might be rendered on the Company's financial statements, or (iii) any matter regarding the Company that was either the subject of a disagreement (as defined in Item 304(a)(1)(iv) of Regulation S-K and related instructions to Item 304 of Regulation S-K) or a reportable event (as defined in Item 304(a)(1)(v) of Regulation S-K).
Item 9A.
Item 9A. Controls and Procedures
Evaluation of disclosure controls and procedures. Our Chief Executive Officer and Principal Financial Officer, after evaluating the effectiveness of our "disclosure controls and procedures" (as defined in the Securities Exchange Act of 1934, as amended (the “Exchange Act”) Rules 13a-15(e) and 15d-15(e)) as of the end of the period covered by this Annual Report on Form 10-K (the "Evaluation Date"), has concluded that as of the Evaluation Date, our disclosure controls and procedures were not effective to provide reasonable assurance that information we are required to disclose in 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 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. This conclusion was based on the existence of the material weaknesses in our internal control over financial reporting previously disclosed and discussed below.
A material weakness is a deficiency, or a 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. We identified and continue to have the following material weakness in our internal controls over financial reporting:
We currently do not have an internal audit group, and we will need to hire additional accounting and financial staff with appropriate public company experience and technical accounting knowledge. Additionally, due to the fact that we only have one officer and two directors, it may impair our ability to maintain effective internal controls over financial reporting and disclosure controls and procedures, which may result in material misstatements to our financial statements and an inability to provide accurate and timely financial information to our stockholders.
To address the need for more effective internal controls, management has plans to improve the existing controls and implement new controls as our financial position and capital availability improves.
Management’s Annual Report on Internal Control over Financial Reporting
The management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rule 13a-15(f) under the Exchange Act. The Company's internal control over financial reporting is a process designed under the supervision of the Company's Chief Executive Officer and Chief Financial Officer to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the Company's financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America (US GAAP) and includes those policies and procedures that:
- pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets;
- provide reasonable assurance that the transactions are recorded as necessary to permit the preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and
- provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on the financial statements.
Management recognizes that there are inherent limitations in the effectiveness of any system of internal control, and accordingly, even effective internal control can provide only reasonable assurance with respect of financial statement preparation and may not prevent or detect misstatements. In addition, effective internal control at a point in time may become ineffective in future periods because of changes in conditions or due to deterioration in the degree of compliance with our established policies and procedures.
Effective as of April 30, 2015, management assessed the effectiveness of the Company's internal control over financial reporting based on the criteria for effective internal control over financial reporting established in Internal Control--Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO") and SEC guidance on conducting such assessments.
Based on that evaluation, management concluded that, during the period covered by this report, such internal controls and procedures were not effective to detect the inappropriate application of US GAAP rules as more fully described below. This was due to deficiencies that existed in the design or operation of our internal control over financial reporting that adversely affected our internal controls and that taken together may be considered to be a material weakness.
A material weakness is a deficiency, or combination of deficiencies, that results in more than a remote likelihood that a material misstatement of annual or interim financial statements will not be prevented or detected. In connection with the assessment described above, management identified the following control deficiencies that represent material weaknesses at April 30, 2014:
(1) lack of a functioning audit committee and lack of a majority of outside Directors on the Company's Board of Directors capable to perform the audit function; and
(2) inadequate segregation of duties due to limited number of personnel, which makes the reporting process susceptible to management override.
Management believes that the material weaknesses set forth in items (1) and (2) above did not have an affect on the Company's financial reporting in fiscal 2015. However, management believes that the lack of a functioning audit committee and lack of a majority of outside Directors on the Company's Board of Directors can adversely affect reporting in the future years, when our operations become more complex and less transparent and require higher level of financial expertise from the overseeing body of the Company.
We are committed to improving our financial organization. As part of this commitment, we will, as soon as funds are available to the Company (1) appoint one or more outside Directors to our Board of Directors who shall be appointed to the audit committee of the Company resulting in a fully functioning audit committee who will undertake the oversight in the establishment and monitoring of required internal controls and procedures; (2) create a position to segregate duties consistent with control objectives and will increase our personnel resources; and (3) hire independent third parties to provide expert advice.
We will continue to monitor and evaluate the effectiveness of our internal controls and procedures and our internal controls over financial reporting on an ongoing basis and are committed to taking further action and implementing additional enhancements or improvements, as necessary and as funds allow.
Changes in internal control over financial reporting. There were no changes in our internal control over financial reporting during our most recent fiscal quarter that materially affected, or were reasonably likely to materially affect, our internal control over financial reporting.
Item 9B.
Item 9B. Other Information
None.
Part III
Item 10.
Item 10. Directors, Executive Officers and Corporate Governance
The following table sets forth the name, age and position of our Directors and executive officers. There are no other persons who can be classified as a promoter or controlling person of us, other than as provided below. Our executive officers and Directors currently serving are as follows:
Set forth below is a brief description of the background and business experience of our executive officer and Directors.
Chin Yung Kong, a Malaysian citizen, age 62, resides in Dalian, China. Mr. Chin has served as the Company’s President, Secretary, Treasurer and sole director since December 2012. Mr. Chin is the Managing Director of QMIS Capital Finance. Since 2002 Mr. Chin has devoting most of his time advising Chinese clients on financial restructuring, pre-audit evaluation before going public, pre-IPO investment strategies, and on the process of going public in the United States. From 1995 to 2002, Mr. Chin was financial controller for the Kwok Group Company in China. Prior to 1995 Mr. Chin was a practicing auditor and Certified Public Accountant (CPA) with Foo Kon & Tan in Singapore. Mr. Chin graduated from University of Hull in the United Kingdom with a Masters degree in Finance. Mr. Chin provides financial and strategic expertise to the Company as a member of its board of directors.
Anyuan Sun, our former director, resigned from his position on July 22, 2014, due to personal reasons.
Director Independence
The Company’s Directors are not independent as the Company is not required to maintain independent Directors at this time. Furthermore, the Over-The-Counter Bulletin Board, where the Company hopes to quote its common stock does not require that quoted companies maintain independent Directors. The Company will seek to appoint independent Directors, if and when it is required to do so.
Family Relationships
There are no family relationships among our Directors.
Involvement in Certain Legal Proceedings
None of our Directors have been involved in any of the following events during the past ten years:
1. any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time;
2. any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offenses’);
3. being subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities; or
4. being found by a court of competent jurisdiction (in a civil action), the Commission or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated.
Audit Committee and Financial Expert, Nominating and Compensation Committee
Our board of Directors has determined that we do not have a board member that qualifies as an "audit committee financial expert" as defined in Item 407(D)(5) of Regulation S-K, nor do we have a Board member that qualifies as "independent" as the term is used in Item 7(d)(3)(iv)(B) of Schedule 14A under the Securities Exchange Act of 1934, as amended, and as defined by Rule 4200(a)(14) of the FINRA Rules. The Company is not required to have an Audit Committee and as such, does not have one. The Company is not required to have a Nominating Committee or Compensation Committee and as such, does not have a Nominating Committee or Compensation Committee. The functions typically handled by an Audit Committee, Nominating Committee and Compensation Committee are handled by the Company’s full Board of Directors.
Code of Ethics
We have not adopted a formal Code of Ethics. The Board of Directors evaluated the business of the Company and the number of employees and determined that general rules of fiduciary duty and federal and state criminal, business conduct and securities laws are adequate ethical guidelines. In the event our operations, employees and/or Directors expand in the future, we may take actions to adopt a formal Code of Ethics.
SECTION 16 (A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires our Directors and officers, and the persons who beneficially own more than ten percent of our common stock, to file reports of ownership and changes in ownership with the SEC. Copies of all filed reports are required to be furnished to us pursuant to Rule 16a-3 promulgated under the Exchange Act.
We believe that, during fiscal year ended April 30, 2015, our Directors, executive officers, and ten percent stockholders complied with all Section 16(a) filing requirements.
Item 11.
Item 11. Executive Compensation
Summary Compensation Table:
Stock Option Grants/Equity Awards
We have not granted any stock options to and have no outstanding equity awards held by our executive officers.
Employment Agreements
We do not have an employment or consultant agreement.
Compensation Discussion and Analysis
Director Compensation
Our Board of Directors does not currently receive any consideration for their services as members of the Board of Directors. The Board of Directors reserves the right in the future to award the members of the Board of Directors cash or stock based consideration for their services to the Company, which awards, if granted shall be in the sole determination of the Board of Directors.
Executive Compensation Philosophy
Our Board of Directors determines the compensation given to our executive officers in their sole determination. As our executive officers currently draw no compensation from us, we do not currently have any executive compensation program in place.
Incentive Bonus
None.
Long-term, Stock Based Compensation
None.
Item 12.
Item 12. Security Ownership of Certain Beneficial Owners and Management and related Stockholder Matters
The following table presents certain information regarding the beneficial ownership of all shares of common stock as of July 31, 2015 by (i) each person who owns beneficially more than five percent (5%) of the outstanding shares of common stock based on 4,366,649 shares outstanding as of July 31, 2015, (ii) each of our Directors, (iii) each named executive officer and (iv) all Directors and officers as a group. Except as otherwise indicated, all shares are owned directly.
(1)On July 22, 2014, Anyuan Sun transferred 1,680,000 shares of common stock to Chin Yung Kong.
The number of shares of common stock owned are those "beneficially owned" as determined in accordance with Rule 13d-3 of the Exchange Act of 1934, as amended, including any shares of common stock as to which a person has sole or shared voting or investment power and any shares of common stock which the person has the right to acquire within sixty (60) days through the exercise of any option, warrant or right. In computing the percentage ownership of any person, the amount of shares is deemed to include the amount of shares beneficially owned by such person by reason of such acquisition rights. As a result, the percentage of outstanding shares of any person as shown in the following table does not necessarily reflect the person’s actual voting power at any particular date.
Equity Compensation Plan Information
The Company has no Equity Compensation Plans in place, whether approved by securities holders or otherwise.
Item 13.
Item 13. Certain relationships and related Transactions, and Director Independence
In April 2008, the Company issued 2,000,000 post Forward Split shares of its common stock to James Pacey in consideration for business development and advisory consulting services rendered in connection with the founding and organization of the Company, which shares were valued at $1,000 or the par value of the Company’s common stock $0.001 per share. Mr. Pacey was pivotal in the initial formation and direction of the Company and the Company believes that his marketing skills, budgetary knowledge and business relationships are vital to the Company’s future success.
On April 29, 2008, the Company entered into an Exchange Agreement with DPLLC, whereby the then members of DPLLC, Nathan Pettus and James Patton, exchanged 100% of the outstanding membership interests of DPLLC for 2,000,000 post Forward Split shares, 1,000,000 shares each to Mr. Pettus and Mr. Patton, of the common stock of the Company, which shares were valued at $1,000. Upon completion of the Exchange Agreement, DPLLC became a wholly-owned subsidiary of the Company.
Effective October 2008, in connection with the Company’s entry into an Engagement Agreement with The Loev Law Firm, PC, the Company’s former attorney, the Company agreed to issue David M. Loev 200,000 post Forward Split shares of the Company’s common stock, which shares were valued at $100 or the par value of the Company’s common stock $0.001 per share.
Expenses of the Company are currently being paid by an affiliate of our controlling shareholders. We have accrued for such expenses at April 30, 2015 but have not been billed.
The Company has periodically received cash advances from the Company’s directors. The entire balance was settled in September 2012.
On November 2, 2010 the Company entered into a $50,000 line of credit with the Company’s former president, James Patton. The line of credit bears interest of 10% per annum (15% if in default) and was settled in full in September 2012. The line of credit is no longer available to the Company.
On September 21, 2012, James Patton, Nathan Pettus and James Pacey (“Sellers”), who are collectively the controlling shareholders of the Company, sold 4,200,000 shares of common stock of the Company to Chin Yung Kong and Anyuan Sun (“Purchasers”) for an aggregated price of $190,000.The 4,200,000 shares of common stock represented approximately 96.2% of the total issued and outstanding stock of the Company. As result of this share purchase transaction, Chin Yung Kong and Anyuan Sun became the controlling shareholders of the Company.
In conjunction with the September 21, 2012 transaction, all the liabilities of the Company prior to September 21, 2012 were settled by a Company shareholder for $123,040, resulting in a gain on settlement of $17,310.
Expenses of the Company are currently being paid by an affiliate of our controlling shareholders. During the year ended April 30, 2015, Chin Yung Kong, the director and shareholder of the Company, advanced $15,317 to its audit and consultant fees. As of April 30, 2015 and 2014, the Company had towed this related party for $65,535 and $49,151, respectively.
Review, Approval and Ratification of Related Party Transactions
Given our small size and limited financial resources, we have not adopted formal policies and procedures for the review, approval or ratification of transactions, such as those described above, with our executive officers, Directors and significant stockholders. However, all of the transactions described above were approved and ratified by Directors. In connection with the approval of the transactions described above, our Directors, took into account several factors, including their fiduciary duties to the Company; the relationships of the related parties described above to the Company; the material facts underlying each transaction; the anticipated benefits to the Company and related costs associated with such benefits; whether comparable products or services were available; and the terms the Company could receive from an unrelated third party.
We intend to establish formal policies and procedures in the future, once we have sufficient resources and have appointed additional Directors, so that such transactions will be subject to the review, approval or ratification of our Board of Directors, or an appropriate committee thereof. On a moving forward basis, our Directors will continue to approve any related party transaction based on the criteria set forth above.
Item 14.
Item 14. Principal Accounting Fees and Services
Following is a summary of the fees expensed relating to professional services rendered by the principal accountants during the fiscal years ended April 30, 2015 and April 30, 2014:
Part IV
Item 15.
Item 15. Exhibits, Financial Statement Schedules
(a) We have filed the following documents as part of this Annual Report on Form 10-K. Financial statement schedules have been omitted since they either are not required, not applicable, or the information is otherwise included.
Financial Statements
Report of Independent Registered Public Accounting Firm
Balance Sheets as of April 30, 2015 and 2014
Statements of Operations for the Years Ended April 30, 2015 and 2014
Statements of Stockholders’ Deficit for the Years Ended April 30, 2015 and 2014
Statements of Cash Flows for the Years Ended April 30, 2015 and 2014
Notes to Financial Statements
(b) Exhibit listing.
See the Exhibit Index immediately following the signature page of this Annual Report on Form 10-K.
SIGNATURES
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, hereunto duly authorized.
Borneo Industrial Fishery Corp Inc.
Date: August 11, 2015
By: /s/ Chin Yung Kong
Chin Yung Kong
Chief Executive Officer
(Principal Executive Officer,
Principal Financial Officer and
Principal Accounting Officer),
President, Treasurer and Director
EXHIBIT INDEX
* Attached hereto.
(1) Filed as an exhibit to the Company’s Form S-1 Registration Statement filed with the Commission on February 5, 2010, and incorporated herein by reference.
(2) Filed as an exhibit to the Company’s Form S-1/A Registration Statement (Amendment No. 2) filed with the Commission on November 23, 2010, and incorporated herein by reference.
(#) XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.
ANNEX: FINANCIAL STATEMENTS AND FOOTNOTES
Table of Contents to Financial Statements
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and
Stockholders of China Xibolun Technology Holdings Corporation
We have audited the accompanying balance sheets of China Xibolun Technology Holdings Corporation as of April 30, 2014, and the related statements of operations, stockholders' deficit, and cash flows for each of the years in the two year period ended April30, 2014. China Xibolun Technology Holdings Corporation's management is responsible for these financial statements. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of China Xibolun Technology Holdings Corporation as of April 30, 2014, and the results of its operations and its cash flows for the year ended April 30, 2014 in conformity with accounting principles generally accepted in the United States of America.
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 4 to the financial statements, the Company's accumulated stockholders' deficit, lack of working capital and negative cash flows from operating activities raise substantial doubt about its ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and
Stockholders of Borneo Industrial Fishery Corp Inc.
We have audited the accompanying balance sheets of Borneo Industrial Fishery Corp Inc. (formerly “China Xibolun Technology Holdings Corporation”) as of April 30, 2015, and the related statements of operations, stockholders’ deficit, and cash flows for the year ended April 30, 2015. Borneo Industrial Fishery Corp Inc.’s management is responsible for these financial statements. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Borneo Industrial Fishery Corp Inc. as of April 30, 2015, and the results of its operations and its cash flows for the year ended April 30, 2015 in conformity with accounting principles generally accepted in the United States of America.
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 4 to the financial statements, the Company's accumulated stockholders’ deficit, lack of working capital and negative cash flows from operating activities raise substantial doubt about its ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Borneo Industrial Fishery Corp Inc.
(Formerly “China Xibolun Technology Holdings Corporation”)
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 2015
NOTE 1- Organization and Basis of presentation
Organization
Borneo Industrial Fishery Corp Inc. (the “Company”), formerly “China Xibolun Technology Holdings Corporation was incorporated under the laws of the State of Nevada on May 24, 2007. Prior to incorporation on April 30, 2008, Dimus Partners, LLC was a Texas limited liability company effective May 24, 2007. Dimus Partners, LLC (the “Texas Company”) and the Company entered into a Certificate of Exchange whereby the Nevada Corporation acquired 100% of the issued and outstanding membership interest of the Texas Company, in exchange for two million (2,000,000) common shares of the Company.
On September 21, 2012, James Patton, Nathan Pettus and James Pacey (“Sellers”), who were collectively the controlling shareholders of the Company, sold 4,200,000 shares of common stock of the Company to Chin Yung Kong and Anyuan Sun (“Purchasers”) for an aggregated price of $ 190,000.The 4,200,000 shares of common stock represented approximately 96.2% of the total issued and outstanding stock of the Company. As result of this share purchase transaction, Chin Yung Kong and Anyuan Sun became the controlling shareholders of the Company. The liabilities of $187,350 of the Company prior to September 21, 2012 have been settled by the Company resulting in a $17,310 gain.
On October 11, 2012, we changed our name to China Xibolun Technology Holdings Corporation.
On July, 30, 2015, we changed our name to Borneo Industrial Fishery Corp Inc.
Basis of presentation
The accompanying financial statements of Borneo Industrial Fishery Corp Inc. (Formerly known as “China Xibolun Technology Holdings Corporation”) have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”).
NOTE 2 -SUMMARY OF ACCOUNTING POLICIES
Use of Estimates
The preparation of financial statements in conformity with GAAP requires the Company to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosure of contingent assets and liabilities. Estimates are based on historical experience and on various other assumptions that the Company believes to be reasonable under the circumstances, the results of which form the basis for judgments about results and the carrying values of assets and liabilities. Actual results and values may differ significantly from these estimates.
Income Taxes
The Company has adopted Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 740, “Income Taxes”. This standard requires the use of an asset and liability approach for financial accounting, and reporting on income taxes. If it is more likely than not that some portion or all of a deferred tax asset will not be realized, a valuation allowance is recognized.
The asset and liability approach is used to account for income taxes by recognizing deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax basis of assets and liabilities. The Company records a valuation allowance to reduce any deferred tax assets to the amount that is more likely than not to be realized.
Recent Accounting Pronouncements
In June 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-10, “Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements, Including an Amendment to Variable Interest Entities Guidance in Topic 810, Consolidation.” This ASU removes the definition of a development stage entity from the ASC, thereby removing the financial reporting distinction between development stage entities and other reporting entities from GAAP. In addition, the ASU eliminates the requirements for development stage entities to (1) present inception-to-date information in the statements of operations, cash flows, and shareholders’ deficit, (2) label the financial statements as those of a development stage entity, (3) disclose a description of the development stage activities in which the entity is engaged, and (4) disclose in the first year in which the entity is no longer a development stage entity that in prior years it had been in the development stage. Early adoption is permitted. The Company has elected to adopt this ASU and, accordingly, no inception to date financial information is disclosed and the accompanying financial statement are not labeled as those of a development stage entity.
The Company has implemented all new accounting standards that are in effect and may impact its financial statements and does not believe that there are any other new accounting standards that have been issued that might have a material impact on its financial position or results of operations.
NOTE 3 - RELATED PARTY TRANSACTIONS
Expenses of the Company are currently being paid by an affiliate of our controlling shareholders. During the year ended April 30, 2015, Chin Yung Kong, the director and shareholder of the Company, advanced $16,384 to the Company for its audit and consultant fees. As of April 30, 2015 and 2014, the Company had owed this related party for $65,535 and $49,151, respectively.
NOTE 4 - GOING CONCERN
There are no assurances that the Company will be able to either (1) achieve a level of revenues adequate to generate sufficient cash flow from operations; or (2) obtain additional financing through either private placement, public offerings and/or bank financing necessary to support the Company’s working capital requirements. To the extent that funds generated from any private placements, public offerings and/or bank financing are insufficient to support the Company’s working capital requirements, the Company will have to raise additional working capital from additional financing. No assurance can be given that additional financing will be available, or if available, will be on terms acceptable to the Company. If adequate working capital is not available, the Company may not be able continue its operations.
These conditions caused our auditors to have substantial doubt about the Company’s ability to continue as a going concern and issue an audit report with an additional paragraph emphasizing the going concern issue. The financial statements do not include any adjustments relating to the recoverability and classification of asset carrying amounts or the amount and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.
NOTE 5 -INCOME TAXES
Current tax laws limit the amount of loss available to be offset against future taxable income when a substantial change in ownership occurs. Therefore, the amount available to offset future taxable income may be limited. The provision for income taxes differs from the result which would be obtained by applying the statutory income tax rate of 34% to income before income taxes.
At April 30, 2015 and 2014, deferred tax assets consisted of the following:
At April 30, 2015, the Company had an unused net operating loss carry-forward $259,691 that is available to offset future taxable income; the loss carry-forward will start to expire in 2029.
During the years ended April 30, 2015 and 2014, the effective tax rate of the Company is reconciled to the U.S. federal statutory rate, as follows:
NOTE 6 - SUBSEQUENT EVENTS
On July 30, 2015, the Company changed its name from China Xibolun Technology Holdings Corporation to Borneo Industrial Fishery Corp Inc.