NOTES TO FINANCIAL STATEMENTS

MARCH 31, 2018

(UNAUDITED)

NOTE 1 – ORGANIZATION, DESCRIPTION OF BUSINESS, AND GOING CONCERN

UNION BRIDGE HOLDINGS LIMITED (the “Company”) was incorporated under the laws of the State of Nevada on May 6, 2014. The Company did not have operations that generated revenues and positive cash flows; however, the Company’s management has been reviewing investment opportunities. As described below in “Recent Developments”, Management has identified certain opportunities that it believes may generate profits for the Company in the future.

Recent Developments

The Company incorporated three new wholly owned subsidiaries in the British Virgin Islands: 1.) Phoenix Creation Global Limited (“PC”) on October 26, 2017, 2.) Windsor Honour Limited (“WHL”) on October 30, 2017 and 3.) First Channel Limited (“FC”) on March 18, 2016, respectively. PC & WHL were formed with intent to construct and / or manage elderly facilities such as home-care centers and senior skilled nursing facilities in China market (including Hong Kong) and overseas market respectively while FC was incorporated for the purpose to act as an authorized distributor to sell healthcare products and services to seniors and individual with disabilities. The Company recently procured samples of motorized wheelchairs, as the first product in an expected of a portfolio of products targeted at this market.

On August 11, 2016, the Company’s subsidiary FC entered into an equity transfer agreement with Joseph Ho to acquire 100% entire equity interests in Union Beam Investment Limited (“UB”) which is incorporated in Hong Kong.

On February 2, 2018, UB established Qianhai Lianqiao Investment Consulting (Shenzhen) Company Limited (“Lianqiao”), a wholly foreign owned entity in the People’s Republic of China (“PRC”) with the expectation that the Company will use this entity to conduct sales in the PRC for healthcare products and services.

On February 13, 2018, the Company’s subsidiary PC established Union Care Investment Limited in Hong Kong. It is expected that the Company will use this entity to provide elderly care services in elderly center in Hong Kong.

On March 23, 2018, our subsidiary, Windsor Honour Limited entered into a Binding Heads of Agreement with the owner of a land parcel for a senior care facility to be established in Chang Mai, Thailand. The facility is proposed to have four blocks, each with eight floors, and houses approximately 400 residents. The parties will negotiate in good faith toward definitive agreements regarding the project. WHL would lease the land and be the developer of the project and would own the buildings on the site. WHL would have full control of the design and supervision of the construction of the project, as well as daily operations and management of the project. The land owner would be responsible for obtaining necessary construction, operation and other permits for the project and would provide necessary liaison with government officials. Total investment in the project for development and construction is estimated to be approximately 200 million Thai Baht (approximately US$6.4 million at current exchange rates), for which WHL would be responsible to obtain financing. WHL would also be responsible for arranging financing of operating costs until they can be funded from operations. The project would lease the land for 90 years with automatic renewals, each for 30 years. The total rent for the first 90 years would be 10 million Thai Baht (approximately US$320,000 at current exchange rates). In addition to the rent, WHL may consider a discretionary bonus to the land owner (with details to be agreed in the definitive agreements).

Upon signing the definitive agreement, WHL will pay 2 million Thai Baht (approximately US$64,300 at current exchange rates) as a deposit to the land owner within 90 days, which will be refundable if the development plan for the land as a senior nursing home facility has not been approved by the competent government authority within one year, or if before that date such authority has definitively denied the application for the development plan upon the request of WHL. Otherwise, the deposit will be applied to the rent for the land.

Going Concern

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern; however, the Company has incurred a net loss of $36,360 for the period ended March 31, 2018. As of March 31, 2018, the Company had an accumulated deficit of $285,604, working capital deficit of $232,004, and stockholders’ deficit of $232,004; its cash flows used in operating activities for the period ended March 31, 2018 were $55,430, respectively.

These factors raise substantial doubt on the Company's ability to continue as a going concern. The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty. Management’s plan for the Company’s continued existence is dependent upon Management's ability to identify investment opportunities, develop those opportunities to generate profit; additionally, Management will need to continue to rely on certain related parties to provide funding for investment, working capital, and general corporate purposes, and management expertise to the Company at less than prevailing market rates. If Management is unable to execute its plan, the Company may become insolvent.

 

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The Company’s controlling shareholder and Chief Executive Officer, Joseph Ho has provided a personal guarantee of loan that he would provide to the Company of up to $1 million for investment and working capital purposes. Management believes this guarantee should be considered a material event in executing its overall plan described in the foregoing.

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying unaudited interim financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America for interim financial information and with the instructions to Form 10-Q and Regulation S-X. Accordingly, the unaudited interim financial statements do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements.

In the opinion of management, all adjustments consisting of normal recurring entries necessary for a fair statement of the periods presented for: (a) the financial position; (b) the result of operations; and (c) cash flows, have been made in order to make the unaudited interim financial statements presented not misleading. The results of operations for such interim periods are not necessarily indicative of operations for a full year. The accompanying unaudited interim consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K, for the year ended December 31, 2017, as filed with the SEC on April 2, 2018.

Basis of Consolidation

These financial statements include the accounts of the Company and its wholly-owned subsidiaries: First Channel Limited (“FC”), Union Beam Investment Limited (“UB”), Phoenix Creation Global Limited (“PC”) and Windsor Honour Limited (“WHL”), Qianhai Lianqiao Investment Consulting (Shenzhen) Company Limited (“Lianqiao”), Union Care Investment Limited (“UC”). All intercompany sales, purchases, balances, investments, and capital have been eliminated.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements as well as the reported amount of revenues and expenses during the reporting period. Actual results could differ from these estimates.

Foreign currency translation and re-measurement

The Company translates its foreign operations to the U.S. dollar in accordance with ASC 830, “Foreign Currency Matters”.

The reporting currency for the Company and its subsidiaries is the US dollar. The Company, UB, FC, PC, UC and WHL’s functional currency is the U.S. dollar; Lianqiao uses the Chinese Renminbi (“RMB”) as their functional currency.

The Company’s subsidiaries, whose records are not maintained in those entities’ respective functional currencies, re-measure their records into their functional currency as follows:

Gains and losses from these re-measurements were not significant and have been included in the Company’s results of operations.

The Company’s subsidiaries, whose functional currency is not the U.S. dollar, translate their records into the U.S. dollar as follows:

 

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Adjustments arising from such translations are included in accumulated other comprehensive income in shareholders’ equity.

The RMB is not freely convertible into foreign currency and all foreign exchange transactions must take place through authorized institutions. No representation is made that the RMB amounts could have been, or could be, converted into US Dollars at the rates used in translation.

Cash and c ash e quivalents

The Company considers all highly liquid instruments with a maturity of three months or less at the time of issuance to be cash equivalents. The Company’s bank deposits are held with large financial institutions located in Hong Kong. These deposits are not protected under FDIC; however, the Company has determined that there is no significant credit risk for these deposits and does not believe these institutions will become insolvent.

Prepaid expenses

The Company makes certain payments for general corporate purposes to service providers that render services over time. The Company amortizes these services to its results of operations over the span of time that the services are contracted. Certain prepayments that are to be delivered after one operating period to the Company have been classified as long term prepaid expenses. Management does not believe these prepayments qualify as financial instruments that require fair value consideration and disclosure.

Income taxes

The Company accounts for income tax using an asset and liability approach and allows for recognition of deferred tax benefits in future years. Under the asset and liability approach, deferred taxes are provided for the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. A valuation allowance is provided for deferred tax assets if it is more likely than not these items will either expire before the Company is able to realize their benefits, or that future realization is uncertain.

Earnings per share

The Company computes earnings per share (“EPS”) in accordance with ASC Topic 260, “Earnings per share”. Basic EPS is measured as the income or loss available to common shareholders divided by the weighted average common shares outstanding for the period. Diluted EPS is similar to basic EPS but presents the dilutive effect on a per share basis of potential common shares (e.g., convertible securities, options, and warrants) as if they had been converted at the beginning of the periods presented, or issuance date, if later. Potential common shares that have an anti-dilutive effect (i.e. those that increase income per share or decrease loss per share) are excluded from the calculation of diluted EPS.

 

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Commitments and contingencies

Liabilities for loss contingencies arising from claims, assessments, litigation, fines and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated. Management assessed that the Company was not subject to any capital commitments that required the accrual of financial obligation after considering the memorandum of understanding that the Company endorsed in November 2017; management determined that these memorandums were not definitive binding agreements.

Comprehensive income

Comprehensive income is defined to include all changes in equity except those resulting from investments by owners and distributions to owners. Among other disclosures, all items that are required to be recognized under current standards as components of comprehensive income are required to be reported in a financial statement that is presented with same prominence as other financial statements. The Company’s current component of other comprehensive income includes the foreign currency translation adjustment and unrealized gain or loss.

Recent Accounting Pronouncements

Management has considered all recent accounting pronouncements issued. The Company’s management believes that these recent pronouncements will not have a material effect on the Company’s financial statements.

NOTE 3 - RELATED-PARTY TRANSACTIONS

For the period ended March 31, 2018, Joseph Ho, the Company’s director paid $8,535 of general and administrative expenses on behalf of the Company. As of March 31, 2018, the accumulated outstanding balance owed to Mr. Ho was $92,818; this balance is unsecured, non-interest bearing, and due on demand.

For the period ended March 31, 2018, Union Glory Gold Holdings Limited, a Company controlled by Mr. Ho advanced funds to the Company totaling $405,564. As of March 31, 2018, the accumulated outstanding balance owed this related party was $529,591; this balance is unsecured, non-interest bearing, and due on demand.

As of March 31, 2018 and December 31, 2017, the balances owed to related parties totaled $622,409 and $208,310, respectively.

The Company’s principal executive offices are located in Hong Kong. The office premises were provided by Company’s controlled by Mr. Ho at no charge to the Company.

The Company is subject to the risk that if the related parties do not continue to provide services and advances to fund the company’s operations or expansion, or if those related parties demand immediate repayment, the Company may become insolvent.