0001640334-17-002476.txt : 20171117 0001640334-17-002476.hdr.sgml : 20171117 20171117141243 ACCESSION NUMBER: 0001640334-17-002476 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 55 CONFORMED PERIOD OF REPORT: 20170930 FILED AS OF DATE: 20171117 DATE AS OF CHANGE: 20171117 FILER: COMPANY DATA: COMPANY CONFORMED NAME: eBullion, Inc. CENTRAL INDEX KEY: 0001573766 STANDARD INDUSTRIAL CLASSIFICATION: [6221] IRS NUMBER: 462323674 STATE OF INCORPORATION: DE FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-55231 FILM NUMBER: 171210525 BUSINESS ADDRESS: STREET 1: RM 1805-06, TOWER 6 CHINA HONG KONG CITY STREET 2: 33 CANTON ROAD, TSIM SHA TSUI CITY: HONG KONG STATE: K3 ZIP: 00000 BUSINESS PHONE: 852-3187-4300 MAIL ADDRESS: STREET 1: RM 1805-06, TOWER 6 CHINA HONG KONG CITY STREET 2: 33 CANTON ROAD, TSIM SHA TSUI CITY: HONG KONG STATE: K3 ZIP: 00000 10-Q 1 ebml_10q.htm FORM 10-Q ebml_10q.htm

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

(MARK ONE)

 

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended September 30, 2017

 

OR

 

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from _________ to _________

 

Commission File No. 000-55231

 

EBULLION, INC.

(Exact name of registrant as specified in its charter)

  

Delaware

 

46-2323674

(State or other jurisdiction of

 

(I.R.S. Employer

incorporation or organization)

 

Identification No.)

 

Room 1805-06, Tower 6

33 Canton Road, Tsim Sha Tsui

Hong Kong

(Address of principal executive offices, zip code)

 

+852 3187-4300

(Registrant’s telephone number, including area code)

 

______________________________________________________________

(Former name, former address and former fiscal year, if changed since last report)

 

Indicate by check mark whether the issuer (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes o No x

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (check one):

 

Large accelerated filer

o

Accelerated filer

o

Non-accelerated filer

o

Smaller reporting company

x

(Do not check if a smaller reporting company)

Emerging growth company

o

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

 

Indicate by check mark whether the registrant is a shell company (as defined in Exchange Act Rule 12b-2 of the Exchange Act): Yes o No x

 

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY

PROCEEDINGS DURING THE PRECEDING FIVE YEARS:

 

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes o No o

 

APPLICABLE ONLY TO CORPORATE ISSUERS

 

As of November 13, 2017, there were 512,600,000 shares of common stock, $0.0001 par value per share, outstanding.

 

 
 
 

EBULLION, INC.

QUARTERLY REPORT ON FORM 10-Q

FOR THE PERIOD ENDED SEPTEMBER 30, 2017

 

INDEX

 

Index

 

Page

 

Part I. Financial Information

 

 

Item 1.

Financial Statements

 

4

 

Condensed Consolidated Balance Sheets as of September 30, 2017 (unaudited) and March 31, 2017.

 

4

 

Condensed Consolidated Statements of Comprehensive (Loss) income for the Three and Six Months Ended September 30, 2017 and 2016 (unaudited).

 

5

 

Condensed Consolidated Statements of Shareholders’ Equity for the Years Ended March 31, 2017 and Six Months Ended September 30, 2017 (unaudited).

 

6

 

Consolidated Statements of Cash Flows for the Six Months Ended September 30, 2017 and 2016 (unaudited).

 

7

 

Notes to Financial Statements (unaudited).

 

8

 

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations.

 

20

 

Item 3.

Quantitative and Qualitative Disclosures About Market Risk.

 

24

 

Item 4.

Controls and Procedures.

 

24

 

Part II. Other Information

 

Item 1.

Legal Proceedings.

 

25

 

Item 1A.

Risk Factors

 

25

 

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds.

 

25

 

Item 3.

Defaults Upon Senior Securities.

 

25

 

Item 4.

Mine Safety Disclosures.

 

25

 

Item 5.

Other Information.

 

25

 

Item 6.

Exhibits.

 

26

 

Signatures

 

27

 

 
2
 
 

 

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

 

This Quarterly Report on Form 10-Q of eBullion, Inc., a Delaware corporation (the “Company”), contains “forward-looking statements,” as defined in the United States Private Securities Litigation Reform Act of 1995. In some cases, you can identify forward-looking statements by terminology such as “may”, “will”, “should”, “could”, “expects”, “plans”, “intends”, “anticipates”, “believes”, “estimates”, “predicts”, “potential” or “continue” or the negative of such terms and other comparable terminology. These forward-looking statements include, without limitation, statements about our market opportunity, our strategies, competition, expected activities and expenditures as we pursue our business plan, and the adequacy of our available cash resources. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Actual results may differ materially from the predictions discussed in these forward-looking statements. The economic environment within which we operate could materially affect our actual results. Additional factors that could materially affect these forward-looking statements and/or predictions include, among other things: the volatility of oil and gas prices, the possibility that equipment development efforts will not produces equipment that prospective customers want to purchase, the Company’s need for and ability to obtain additional financing, other factors over which we have little or no control; and other factors discussed in the Company’s filings with the Securities and Exchange Commission (“SEC”).

 

Our management has included projections and estimates in this Form 10-Q, which are based primarily on management’s experience in the industry, assessments of our results of operations, discussions and negotiations with third parties and a review of information filed by our competitors with the SEC or otherwise publicly available. We caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. We disclaim any obligation subsequently to revise any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events.

 

 
3
 
Table of Contents

PART I. FINANCIAL INFORMATION

   

ITEM 1. FINANCIAL STATEMENTS.

  

eBullion, Inc.

Condensed Consolidated Balance Sheets

As of September 30, 2017 and March 31, 2017

(Expressed in US dollars)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unaudited

September 30,

2017

 

 

Audited

March 31,

2017

 

ASSETS

 

 

 

 

 

 

Current Assets

 

 

 

 

 

 

Cash

 

$ 1,049,831

 

 

$ 1,061,609

 

Commissions receivable

 

 

648,990

 

 

 

546,310

 

Deposits and prepaid expenses

 

 

82,495

 

 

 

42,142

 

Total current assets

 

 

1,781,316

 

 

 

1,650,061

 

 

 

 

 

 

 

 

 

 

Noncurrent Assets

 

 

 

 

 

 

 

 

Deposits and prepaid expenses

 

 

195,684

 

 

 

188,010

 

Equipment, net

 

 

186,753

 

 

 

224,350

 

Loan receivable from Global Long Inc. Limited

 

 

-

 

 

 

772,157

 

Deferred income taxes

 

 

2,474

 

 

 

71,221

 

Total noncurrent assets

 

 

384,911

 

 

 

1,255,738

 

 

 

 

 

 

 

 

 

 

Total assets

 

$ 2,166,227

 

 

$ 2,905,799

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

Current Liabilities

 

 

 

 

 

 

 

 

Accounts payable and accrued liabilities

 

$ 160,279

 

 

 

56,161

 

Amount due to directors

 

 

236,160

 

 

 

313,050

 

Amount due to a related company

 

 

48,369

 

 

 

-

 

Customer deposits

 

 

95,089

 

 

 

212,886

 

Total current liabilities

 

 

539,897

 

 

 

582,097

 

 

 

 

 

 

 

 

 

 

Noncurrent Liabilities:

 

 

 

 

 

 

 

 

Deferred income taxes

 

 

-

 

 

 

466

 

Total noncurrent liabilities

 

 

-

 

 

 

466

 

 

 

 

 

 

 

 

 

 

Total liabilities

 

 

539,897

 

 

 

582,563

 

 

 

 

 

 

 

 

 

 

Commitments

 

 

 

 

 

 

 

 

Shareholders’ Equity

 

 

 

 

 

 

 

 

Common stock, $0.0001 par value, 1,000,000,000 shares authorized, 512,600,000 shares issued and outstanding

 

 

51,260

 

 

 

51,260

 

Additional paid in capital

 

 

1,477,404

 

 

 

1,477,404

 

Retained earnings

 

 

194,427

 

 

 

818,849

 

Accumulated other comprehensive loss

 

 

(96,761 )

 

 

(24,277 )

Total shareholders’ equity

 

 

1,626,330

 

 

 

2,323,236

 

Total liabilities and shareholders’ equity

 

$ 2,166,227

 

 

$ 2,905,799

 

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

 

 
4
 
Table of Contents

  

eBullion, Inc.

Condensed Consolidated Statements of Comprehensive (Loss) Income

For the Three and Six Months Ended September 30, 2017 and 2016

(Expressed in US dollars)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

September 30,

 

 

Six Months Ended

September 30,

 

 

 

2017

 

 

2016

 

 

2017

 

 

2016

 

REVENUES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commission revenue

 

$ 35,690

 

 

$ 561,178

 

 

$ 126,454

 

 

$ 1,034,416

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EXPENSES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

General and administrative

 

 

211,091

 

 

 

330,115

 

 

 

415,307

 

 

 

675,632

 

Employee compensation and benefits

 

 

142,678

 

 

 

186,183

 

 

 

320,147

 

 

 

360,601

 

Depreciation and amortization

 

 

18,763

 

 

 

18,905

 

 

 

37,597

 

 

 

37,800

 

Total expenses

 

 

372,532

 

 

 

535,203

 

 

 

773,051

 

 

 

1,074,033

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(LOSS) INCOME FROM OPERATIONS

 

 

(336,842 )

 

 

25,975

 

 

 

(646,597 )

 

 

(39,617 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OTHER INCOME

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income, net

 

 

8,005

 

 

 

7,743

 

 

 

19,698

 

 

 

21,107

 

Total other income

 

 

8,005

 

 

 

7,743

 

 

 

19,698

 

 

 

21,107

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(LOSS) INCOME BEFORE INCOME TAXES

 

 

(328,837 )

 

 

33,718

 

 

 

(626,899 )

 

 

(18,510 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

INCOME TAX PROVISION (BENEFIT)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Deferred

 

 

5

 

 

 

(2,405 )

 

 

(2,477 )

 

 

(3,668 )

Total income tax provision (benefit)

 

 

5

 

 

 

(2,405 )

 

 

(2,477 )

 

 

(3,668 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET (LOSS) INCOME

 

 

(328,842 )

 

 

36,123

 

 

 

(624,422 )

 

 

(14,842 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OTHER COMPREHENSIVE (LOSS) INCOME

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation

 

 

(68,205 )

 

 

1,056

 

 

 

(72,484 )

 

 

(343 )

COMPREHENSIVE (LOSS) INCOME

 

$ (397,047 )

 

$ 37,179

 

 

$ (696,906 )

 

$ (15,185 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted

 

 

512,600,000

 

 

 

512,600,000

 

 

 

512,600,000

 

 

 

512,600,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BASIC AND DILUTED (LOSS) EARNINGS PER COMMON SHARE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted (loss) earnings per common share

 

$ (0.00 )

 

$ 0.00

 

 

$ (0.00 )

 

$ (0.00 )

      

The accompanying notes are an integral part of these condensed consolidated financial statements.

  

 
5
 
Table of Contents

  

eBullion, Inc.

Condensed Consolidated Statements of Shareholders’ Equity

For the Years Ended March 31, 2017 and Six Months Ended September 30, 2017

(Expressed in US dollars)

 

  

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

Common Stock

 

 

Additional

 

 

 

 

Other

 

 

Total

 

 

 

Number of

 

 

 

 

Paid in

 

 

Retained

 

 

Comprehensive

 

 

Shareholders’

 

 

 

Shares

 

 

Par Value

 

 

Capital

 

 

Earnings

 

 

Loss

 

 

Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BALANCE, March 31, 2016 – Audited

 

 

512,600,000

 

 

$ 51,260

 

 

$ 1,477,404

 

 

$ 873,954

 

 

$ (1,524 )

 

$ 2,401,094

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(55,105 )

 

 

-

 

 

 

(55,105 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation adjustment

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(22,753 )

 

 

(22,753 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BALANCE, March 31, 2017 – Audited

 

 

512,600,000

 

 

$ 51,260

 

 

$ 1,477,404

 

 

$ 818,849

 

 

$ (24,277 )

 

$ 2,323,236

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(624,422 )

 

 

-

 

 

 

(624,422 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation adjustment

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(72,484 )

 

 

(72,484 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BALANCE, September 30, 2017 – Unaudited

 

 

512,600,000

 

 

$ 51,260

 

 

$ 1,477,404

 

 

$ 194,427

 

 

$ (96,761 )

 

$ 1,626,330

 

     

The accompanying notes are an integral part of these condensed consolidated financial statements.

      

 
6
 
Table of Contents

      

eBullion, Inc.

Consolidated Statements of Cash Flows

For the Six Months Ended September 30, 2017 and 2016

(Expressed in US dollars)

 

 

 

 

 

 

 

 

 

Six months ended

September 30,

 

 

 

2017

 

 

2016

 

OPERATING ACTIVITIES:

 

 

 

 

 

 

Net loss

 

$ (624,422 )

 

$ (14,842 )

Adjustments to reconcile net loss to net

 

 

 

 

 

 

 

 

Cash used in operating activities

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

37,597

 

 

 

(8,344 )

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

Commissions receivable

 

 

(105,664 )

 

 

(102,130 )

Loan receivable from Global Long Inc. Limited

 

 

769,210

 

 

 

 

 

Deposits and prepaid expenses

 

 

(49,291 )

 

 

(87,103 )

Accounts payable and accrued liabilities

 

 

104,476

 

 

 

(649 )

Amount due to a director

 

 

(75,370 )

 

 

-

 

Amount due to a related company

 

 

48,436

 

 

 

-

 

Customer deposits

 

 

(116,853 )

 

 

16,543

 

Deferred income taxes

 

 

(2,477 )

 

 

(3,668 )

 

 

 

 

 

 

 

 

 

Net cash used in operating activities

 

 

(14,358 )

 

 

(200,193 )

 

 

 

 

 

 

 

 

 

FINANCING ACTIVITIES:

 

 

 

 

 

 

 

 

Bank overdraft

 

 

-

 

 

 

(30,628 )

Net cash used in financing activities

 

 

-

 

 

 

(30,628 )

 

 

 

 

 

 

 

 

 

NET DECREASE IN CASH

 

 

(14,358 )

 

 

(230,821 )

EFFECT OF EXCHANGE RATE CHANGES ON CASH

 

 

2,580

 

 

 

(150 )

Cash, beginning of period

 

 

1,061,609

 

 

 

1,109,465

 

Cash, end of period

 

$ 1,049,831

 

 

$ 878,494

 

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:

 

 

 

 

 

 

 

 

Cash paid for income taxes

 

$ -

 

 

$ -

 

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

 

 
7
 
Table of Contents

  

eBullion, Inc.

Notes to Condensed Consolidated Financial Statements

For the Six Months Ended September 30, 2017 and 2016 (unaudited)

(Expressed in US Dollars)

      

1.

Nature of Operations and Basis of Presentation

       

 

eBullion, Inc. (“eBullion” or “the Company”) was incorporated in Delaware on January 28, 2013.

 

 

 

The Company provides trading services for gold and silver trading positions on Man Loong’s proprietary, 24-hour electronic trading platform, and its telephone transaction system located in Hong Kong. The Company is licensed through the Chinese Gold and Silver Exchange Society (“CGSE”) a self-regulatory organization located in Hong Kong which acts as an exchange for the trading of Kilo gold and Loco London gold and silver price indices quoted on the London Metals Exchange.

 

 

Description of subsidiaries

  

Name

 

Place of incorporation

and kind of

legal entity

 

Principal activities

and place of operation

 

Particulars

paid-up

capital

 

Effective

interest

held

 

Man Loong Bullion Company Limited (“Man Loong”)

 

Hong Kong, a limited liability company

 

Provision of sub-agency service in London gold dealing

 

HK$10,152,000

 

100%

 

Shenzhen Qianhai Man Loong Bullion Company Limited

(“SQML”)

 

The PRC, a limited liability company

 

Provision of gold trading service in the PRC

 

RMB2,000,000

 

100%

                

eBullion and its subsidiaries are hereinafter referred to as (the “Company”).

 

 

Basis of Presentation

      

The Company’s condensed consolidated financial statements are expressed in U.S. Dollars and are presented in accordance with U.S. GAAP and the rules and regulations of the Securities and Exchange Commission (“SEC”). The Company’s and Man Loong’s fiscal year end is March 31.

 

 

The accompanying unaudited condensed consolidated financial statements have been prepared by management in accordance with both accounting principles generally accepted in the United States (“GAAP”), and the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Certain information and note disclosures normally included in audited financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to those rules and regulations, although the Company believes that the disclosures made are adequate to make the information not misleading.

 

 

In the opinion of management, the consolidated balance sheet as of March 31, 2017 which has been derived from audited financial statements and these unaudited condensed consolidated financial statements reflect all normal and recurring adjustments considered necessary to state fairly the results for the periods presented. The results for the period ended September 30, 2017 are not necessarily indicative of the results to be expected for the entire fiscal year ending March 31, 2018 or for any future period.

 

 

These unaudited condensed consolidated financial statements and notes thereto should be read in conjunction with the Management’s Discussion and the audited financial statements and notes thereto included in the Annual Report on Form 10-K for the year ended March 31, 2017.

 

 

Principles of Consolidation

 

 

The condensed consolidated financial statements as of September 30, 2017, include the accounts of eBullion and its wholly owned subsidiary, Man Loong. All significant intercompany transactions have been eliminated.

   

 
8
 
Table of Contents

    

eBullion, Inc.

Notes to Condensed Consolidated Financial Statements

For the Six Months Ended September 30, 2017 and 2016 (unaudited)

(Expressed in US Dollars)

 

2.

Summary of Significant Accounting Policies

 

 

 

Use of Estimates

 

 

 

The preparation of these condensed consolidated 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 condensed consolidated financial statements and the reported amounts of revenue and expenses during the year. Changes in these estimates are recorded when known. Significant estimates made by management include:

  

 

·

Valuation of assets and liabilities

 

·

Useful lives of equipment

 

·

Accounting for transactions with variable interest entities

 

·

Other matters that affect the reported amounts and disclosures of contingencies in the condensed consolidated financial statements.

 

Actual results could differ from those estimates.

 

 

Reclassifications

 

 

Certain reclassifications have been made to amounts reported in the previous years to conform to the current presentation. Such reclassifications had no effect on net income (loss).

 

 

Revenue Recognition

 

 

The Company recognizes revenue in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 605, Revenue Recognition, which requires that four basic criteria must be met before revenue can be recognized: (1) persuasive evidence that an arrangement exists; (2) delivery has occurred or services have been rendered; (3) the fee is fixed and determinable; and (4) collectability is reasonably assured. The Company is not a counter party for trades executed through its trading platform and telephone transaction system and, instead, recognizes revenue to the extent of the flat-fee commission it receives on each trade processed for its agents and their customers.

 

 

Cash and cash equivalents

 

 

Cash and cash equivalents consist primarily of cash on deposit, certificates of deposits, money market accounts, and investment grade commercial paper that are readily convertible to cash and purchased with original maturities of six months or less. As of September 30, 2017 and March 31, 2017, the Company had no cash equivalents. The Company reclassifies cash overdrafts to accounts payable.

     

 
9
 
Table of Contents

    

eBullion, Inc.

Notes to Condensed Consolidated Financial Statements

For the Six Months Ended September 30, 2017 and 2016 (unaudited)

(Expressed in US Dollars)

 

2.

Summary of Significant Accounting Policies – continued

 

Fair Value of Financial Instruments

 

 

 

ASC 820, “Fair Value Measurements”, defines fair value and establishes a three-level valuation hierarchy for disclosures of fair value measurement and enhances disclosure requirements for fair value measures. The carrying amounts reported in the balance sheets for cash, commissions receivable, loan receivable from Global Long, accounts payable and accrued liabilities and customer deposits qualify as financial instruments and are a reasonable estimate of fair value because of the short period of time between the origination of such instruments and their expected realization and their current market rate of interest.

 

 

 

The standard establishes a fair value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement). The three levels of the fair value hierarchy defined by the standard are as follows:

 

 

 

Level 1 - Quoted prices are available in active markets for identical assets or liabilities as of the reporting date. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis. Level 1 primarily consists of financial instruments such as exchange-traded derivatives, listed equities and U.S. government treasury securities.

 

 

 

Level 2 - Pricing inputs are other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date. Level 2 includes those financial instruments that are valued using models or other valuation methodologies. These models are primarily industry-standard models that consider various assumptions, including quoted forward prices for commodities, time value, volatility factors, and current market and contractual prices for the underlying instruments, as well as other relevant economic measures. Substantially all of these assumptions are observable in the marketplace throughout the full term of the instrument, can be derived from observable data or are supported by observable levels at which transactions are executed in the marketplace. Instruments in this category include non-exchange-traded derivatives such as over the counter forwards, options and repurchase agreements.

 

 

 

Level 3 - Pricing inputs include significant inputs that are generally less observable from objective sources. These inputs may be used with internally developed methodologies that result in management’s best estimate of fair value from the perspective of a market participant. Level 3 instruments include those that may be more structured or otherwise tailored to customers’ needs.

 

 

 

Commissions Receivable

 

 

 

Commissions receivable represent commissions to be collected from agents for their customers’ trades executed across Man Loong’s electronic trade platform and telephone transaction system through the balance sheet date. Commissions receivable are typically remitted to the Company within 180 days of trade execution. The Company has not historically incurred credit losses on these commissions receivable. As of September 30, 2017 and March 31, 2017, the Company had no reserve for credit losses nor had it incurred any bad debts for the six months ended September 30, 2017 and 2016.

 

 
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Table of Contents

  

eBullion, Inc.

Notes to Condensed Consolidated Financial Statements

For the Six Months Ended September 30, 2017 and 2016 (unaudited)

(Expressed in US Dollars)

   

2.

Summary of Significant Accounting Policies – continued

 

 

 

Deposits and Prepaid Expenses

 

 

 

The Company records goods and services paid for but not received until a future date as deposits and prepaid expenses. These primarily include deposits and prepayments for occupancy related expenses. Deposit or prepaid expenses which will be realized more than 12 months past the balance sheet date are classified as non-current assets in the accompanying condensed consolidated balance sheets.

 

 

 

Equipment

 

 

 

Equipment is stated at cost. The cost of an asset consists of its purchase price and any directly attributable costs of bringing the asset to its present working condition and location for its intended use.

 

 

 

Equipment is depreciated using the straight-line method over the estimated useful lives of the assets as follows:

     

Office equipment

 

5 years

Furniture and fixtures

 

5 years

Computer equipment

 

5 years

 

Expenditures for maintenance and repairs are charged to expense as incurred. Additions, renewals and betterments are capitalized.

 

 

Gain or loss on disposal of equipment is the difference between net sales proceeds and the carrying amount of the relevant assets, if any, and is recognized as income or loss in the accompanying condensed consolidated statements of comprehensive income (loss).

 

 

 

Reporting Currency and Foreign Currency Translation

 

 

 

As of September 30, 2017 and March 31, 2017 and for the six months ended September 30, 2017 and 2016, the accounts of the Company were maintained in their functional currencies, which is the U.S. dollar for eBullion and the Hong Kong dollar ("HK dollar") for Man Loong. The financial statements of Man Loong have been translated into U.S. dollars which is its reporting currency. All assets and liabilities of Man Loong are translated at the exchange rate on the balance sheet date, shareholders’ equity is translated at historical rates and the statements of comprehensive income, and statements of cash flows are translated at the weighted average exchange rate for the periods. The resulting translation adjustments for the period are reported under other comprehensive income (loss) and accumulated translation adjustments are reported as a separate component of shareholders’ equity.

 

 

 

Foreign exchange rates used:

      

 

 

2017

 

 

2016

 

 

 

 

 

 

 

 

Six months ended September 30, 2017 USD/HKD exchange rate

 

 

7.8110

 

 

 

7.7548

 

Average USD/HKD exchange rate:

 

 

7.8002

 

 

 

7.7582

 

Six months ended September 30, 2017 USD/RMB exchange rate

 

 

1.1737

 

 

 

1.1625

 

Average USD/RMB exchange rate:

 

 

1.1531

 

 

 

1.1755

 

 

 
11
 
Table of Contents

     

eBullion, Inc.

Notes to Condensed Consolidated Financial Statements

For the Six Months Ended September 30, 2017 and 2016 (unaudited)

(Expressed in US Dollars)

 

2.

Summary of Significant Accounting Policies – continued

 

 

 

Long-Lived Assets

 

The Company periodically evaluates the carrying value of long-lived assets when events and circumstances warrant such review. The carrying value of a long-lived assets is considered impaired when the anticipated undiscounted cash flow from such an asset is less than its carrying value. In that event, a loss is recognized in the amount by which the carrying value exceeds the fair market value of the long-lived asset. The Company has identified no such impairment losses.

 

Accounts payable and accrued liabilities

 

Accounts payable and accrued liabilities at September 30, 2017 and March 31, 2017 primarily consist of accrued statutory bonus payable to employees in Hong Kong, audit fees payable to the Company’s auditors and accountants and legal fees payable to the Company’s legal counsel.

 

Customer Deposits

 

Customer deposits at September 30, 2017 and March 31, 2017 were accepted pursuant to the Company’s agreements with certain of its independent agents. Under terms of those agreements, the Company accepts margin deposits for certain of the agents’ customers who prefer that the Company hold those deposits. If an agent’s customer suffers a trading loss equaling 80% or more of the customers’ deposit balance, the customer is required to increase the balance of his deposit or the customer’s trading position is closed and the remaining deposit balance is remitted to the agent in order to fund the customer’s trading losses.

 

Accordingly, the Company had no risk of loss related to customer deposits at September 30, 2017 and March 31, 2017.

 

Accumulated Other Comprehensive (Loss)

 

The Company’s accumulated other comprehensive (loss) as September 30, 2017 and March 31, 2017 consists of adjustments resulting from translating Man Loong’s functional currency, the HK dollar, to its reporting currency, the U.S. dollar.

 

 
12
 
Table of Contents

      

eBullion, Inc.

Notes to Condensed Consolidated Financial Statements

For the Six Months Ended September 30, 2017 and 2016 (unaudited)

(Expressed in US Dollars)

 

2.

Summary of Significant Accounting Policies – continued

 

Income Taxes

 

 

 

The Company utilizes ASC 740, Income Taxes, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.

 

The Company has adopted the provisions of the interpretation, of ASC 740, Accounting for Uncertainty in Income Taxes. The Company did not have any material unrecognized tax benefits and there was no effect on its financial condition or results of operations as a result of implementing the interpretation. The Company files income tax returns in the United States and the Company is subject to federal income tax examinations for the fiscal years ended March 31, 2014 through 2016. Man Loong files income tax returns in Hong Kong and is no longer subject to tax examinations by tax authorities for years before 2008. At September 30, 2017, Man Loong had no uncertain tax positions.

 

Historically, we have not provided for U.S. income and foreign withholding taxes on Man Loong’s undistributed earnings, because such earnings have been retained and reinvested by Man Loong. The Company does not intend to require Man Loong to pay dividends for the foreseeable future and so additional income taxes and applicable withholding taxes that would result from the repatriation of such earnings are not practicably determinable.

 

Earnings (Loss) per Share

 

The Company computes earnings (loss) per share (“EPS”) in accordance with ASC 260, Earnings Per Share. ASC 260 requires companies with complex capital structures to present basic and diluted EPS. Basic EPS is measured as net income divided by the weighted average common shares outstanding during the period.

 

Diluted EPS is similar to basic EPS but presents the dilutive effect on a per share basis of contracts to issue ordinary 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. The computation of diluted EPS includes the estimated impact of the exercise of contracts to purchase common stocks using the treasury stock method and the potential shares of converted common stock associated with the convertible debt using the if-converted method.

 

Potential common shares that have an anti-dilutive effect (i.e., those that increase earnings per share or decrease loss per share) are excluded from the calculation of diluted EPS.

 

The Company does not have any securities that may potentially dilute its basic earnings (loss) per share.

     

 
13
 
Table of Contents

     

eBullion, Inc.

Notes to Condensed Consolidated Financial Statements

For the Six Months Ended September 30, 2017 and 2016 (unaudited)

(Expressed in US Dollars)

 

2.

Summary of Significant Accounting Policies - continued

 

Comprehensive Income (Loss)

 

 

 

Comprehensive income (loss) is comprised of net income (loss) and other comprehensive income (loss). Other comprehensive income (loss) includes unrealized gains and losses resulting from translating Man Loong’s functional currency, the HK dollar, to its reporting currency, the U.S. dollar.

 

Recent Accounting Pronouncements

 

In January 2017, the FASB has issued Accounting Standards Update (ASU) No. 2017-04, “Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment.” These amendments eliminate Step 2 from the goodwill impairment test. The annual, or interim, goodwill impairment test is performed by comparing the fair value of a reporting unit with its carrying amount. An impairment charge should be recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. In addition, income tax effects from any tax deductible goodwill on the carrying amount of the reporting unit should be considered when measuring the goodwill impairment loss, if applicable. The amendments also eliminate the requirements for any reporting unit with a zero or negative carrying amount to perform a qualitative assessment and, if it fails that qualitative test, to perform Step 2 of the goodwill impairment test. An entity still has the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. Effective for public business entities that are a SEC filers for annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. ASU 2017-04 should be adopted on a prospective basis.

 

In December 2016, the FASB has issued Accounting Standards Update (ASU) No. 2016-20, “Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers.” The amendments affect narrow aspects of the guidance issued in ASU 2014-09 including Loan Guarantee Fees, Contract Costs, Provisions for Losses on Construction-Type and Production-Type Contracts, Disclosure of Remaining Performance Obligations, Disclosure of Prior Period Performance Obligations, Contract Modifications, Contract Asset vs. Receivable, Refund Liability, Advertising Costs, Fixed Odds Wagering Contracts in the Casino Industry, and Costs Capitalized for Advisors to Private Funds and Public Funds. The effective date and transition requirements for the amendments are the same as the effective date and transition requirements for FASB Accounting Standards Codification Topic 606. Public entities should apply Topic 606 (and related amendments) for annual reporting periods beginning after December 15, 2017, including interim reporting periods therein.

 

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.

    

 
14
 
Table of Contents

     

eBullion, Inc.

Notes to Condensed Consolidated Financial Statements

For the Six Months Ended September 30, 2017 and 2016 (unaudited)

(Expressed in US Dollars)

 

3.

Deposits and Prepaid Expenses

 

Deposits and prepaid expenses consisted of the following as of September 30, 2017 and March 31, 2017.

 

 

 

Unaudited

 

 

Audited

 

 

September 30,

2017

 

 

March 31,

2017

 

 

 

 

 

 

 

 

Current

 

 

 

 

 

 

Prepaid rent and occupancy expenses

 

$ 82,495

 

 

$ 42,142

 

 

 

 

 

 

 

 

 

 

Noncurrent

 

 

 

 

 

 

 

 

Rent and occupancy deposits

 

 

195,684

 

 

 

188,010

 

Total deposits and prepaid expenses

 

$ 278,179

 

 

$ 230,152

 

 

4.

Loan receivable from Global Long

 

 

 

On April 3, 2015, Man Loong loaned Global Long Inc. Limited (“Global Long”) $774,164 (HKD$6,000,000). Global Long is registered in Hong Kong and through its subsidiary in the Peoples Republic of China, eBullion Trade Company Limited (“eBullion Trade”), is engaged in trading silver contracts as an electronic trading member of the Guangdong Precious Metal Exchange (“GPME”). The loan bears interest at a 6% annual rate, matures on its 5th anniversary and is secured by a first right of claim on a bank deposit held by eBullion Trade. Under terms of the loan, interest is payable to Man Loong quarterly and Global Long has the right to repay the loan at any time before the maturity date. Until all principal and accrued interest are repaid on the loan, Global Long may not enter into additional borrowings without Man Loong’s written permission, and upon certain events of default, the Loan becomes due on demand. The purpose of the loan was to establish a relationship with Global Long with the intent of becoming their first choice for Global Long’s customers who wish to trade in gold trading positions through the CGSE.

 

The Company determined that the loan to Global Long does not give the Company a variable interest in Global Long and that Global Long is not a variable interest entity (“VIE”) because Man Loong does not have the power to direct any of the activities of Global Long or eBullion Trade that significantly impact their economic performance. Accordingly, the Company has not condensed consolidated Global Long into its condensed consolidated financial statements.

 

At September 30, 2017, the loan receivable from Global Long was fully repaid.

     

 
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Table of Contents

        

eBullion, Inc.

Notes to Condensed Consolidated Financial Statements

For the Six Months Ended September 30, 2017 and 2016 (unaudited)

(Expressed in US Dollars)

 

5.

Equipment

 

Equipment, including leasehold improvements, consisted of the following as of September 30, 2017 and March 31, 2017

      

 

 

Unaudited

September 30,

2017

 

 

Audited

March 31,

2017

 

Office equipment

 

$ 206,345

 

 

$ 206,345

 

Computer equipment

 

 

59,919

 

 

 

59,919

 

Furniture and fixtures

 

 

111,916

 

 

 

111,916

 

 

 

 

378,180

 

 

 

378,180

 

Less: Accumulated depreciation

 

 

(191,427 )

 

 

(153,830 )

Equipment, net

 

$ 186,753

 

 

$ 224,350

 

      

Depreciation expense was $37,597 and $37,800 for the six months ended September 30, 2017 and 2016, respectively, and was recorded as depreciation expense in the accompanying condensed consolidated statements of comprehensive (loss) income.

     

6.

General and Administrative Expenses

 

 

 

General and administrative expenses consist of the following for the three and six months ended September 30, 2017 and 2016.

  

 

 

Three months ended

September 30,

 

 

Six months ended

September 30,

 

 

 

2017

 

 

2016

 

 

2017

 

 

2016

 

Marketing expenses

 

$ -

 

 

$ 97,837

 

 

$ 8,582

 

 

$ 212,688

 

Trading platform rent

 

 

30,030

 

 

 

24,929

 

 

 

56,152

 

 

 

61,716

 

Transportation

 

 

71

 

 

 

2,014

 

 

 

826

 

 

 

3,152

 

Internet

 

 

7,944

 

 

 

5,608

 

 

 

12,649

 

 

 

10,469

 

Travel and entertainment

 

 

-

 

 

 

2,673

 

 

 

612

 

 

 

3,028

 

Computers and software

 

 

7,648

 

 

 

7,856

 

 

 

14,862

 

 

 

22,061

 

Legal and professional

 

 

41,658

 

 

 

41,700

 

 

 

63,377

 

 

 

106,466

 

Licenses

 

 

574

 

 

 

10,443

 

 

 

1,974

 

 

 

13,866

 

Occupancy

 

 

109,180

 

 

 

117,266

 

 

 

230,181

 

 

 

206,795

 

Advertising

 

 

1,280

 

 

 

124

 

 

 

2,564

 

 

 

353

 

Other

 

 

12,706

 

 

 

19,665

 

 

 

23,528

 

 

 

35,038

 

Total general and administrative expense

 

$ 211,091

 

 

$ 330,115

 

 

$ 415,307

 

 

$ 675,632

 

 

 
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eBullion, Inc.

Notes to Condensed Consolidated Financial Statements

For the Six Months Ended September 30, 2017 and 2016 (unaudited)

(Expressed in US Dollars)

 

7.

Income Taxes

 

 

 

(Loss) income before income taxes as shown in the accompanying condensed consolidated statements of comprehensive (loss) income is summarized below for the six months ended September 30, 2017 and 2016.

     

 

 

Six months ended

September 30,

 

 

 

2017

 

 

2016

 

United States

 

$ (19,436 )

 

 

(24,851 )
Hong Kong

 

 

(607,463 )

 

 

6,341

 

(Loss) income before income taxes

 

$ (626,899 )

 

 

(18,510 )
  

The provision (benefit) for income taxes consists of the following for the six months ended September 30, 2017 and 2016:

      

 

 

Six months Ended

September 30,

 

 

 

2017

 

 

2016

 

Current:

 

 

 

 

 

 

United States

 

$ -

 

 

$ -

 

Hong Kong

 

 

-

 

 

 

-

 

Total current provision

 

 

-

 

 

 

-

 

 

 

 

 

 

 

 

 

 

Deferred:

 

 

 

 

 

 

 

 

United States

 

 

-

 

 

 

-

 

Hong Kong

 

 

(2,477 )

 

 

(3,668 )

Total deferred benefit

 

 

(2,477 )

 

 

(3,668 )

 

 

 

 

 

 

 

 

 

Total income tax provision (benefit)

 

$ (2,477 )

 

$ (3,668 )

 

The reconciliation of the income tax provision to the amount computed by applying the U.S. statutory federal income tax rate to (loss) income before income taxes is as follows:

       

 

 

Six months

Ended September 30,

 

 

 

2017

 

 

2016

 

Income tax provision (benefit) at the U.S. statutory tax rate

 

$ (213,145 )

 

$ (6,293 )

Valuation allowance on U.S. net operating loss carryforwards

 

 

6,608

 

 

 

8,449

 

Impact of foreign operations

 

 

204,060

 

 

 

(5,824 )

Income tax provision (benefit)

 

$ (2,477 )

 

$ (3,668 )

 

At September 30, 2017, the Company had U.S. net operating loss carryforwards of approximately $480,000 which expire in 2037. Based on the available evidence, it is uncertain whether future U.S. taxable income will be sufficient to offset the estimated net loss carryforwards, accordingly, the Company has recorded a valuation allowance of approximately $163,200 as of September 30, 2017.

 

 
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Table of Contents

      

eBullion, Inc.

Notes to Condensed Consolidated Financial Statements

For the Six Months Ended September 30, 2017 and 2016 (unaudited)

(Expressed in US Dollars)

 

7.

Income Taxes, Continued

 

 

 

At September 30, 2017 and March 31, 2017, the Company’s and Man Loong’s differences between the book and tax basis of equipment gave rise to deferred income tax asset of $2,474 and $71,221, respectively which are recorded as noncurrent in the accompanying condensed consolidated statements of financial condition. The Company had no other differences between the book and tax basis of assets and liabilities as at September 30, 2017 and March 31, 2017.

            

As a result of the implementation of ASC 740, Accounting for Income Taxes, the Company recognized no material adjustment to unrecognized tax benefits. The Company will continue to classify income tax penalties and interest, if any, as part of interest and other expenses in the accompanying condensed consolidated statements of comprehensive income (loss). The Company has incurred no interest or penalties during the six months ended September 30, 2017 and 2016.

        

8.

Related Party Transactions and Balances

 

 

 

The Company engaged in related party transactions with certain shareholders, and a company under common control as described below.

      

On May 27, 2011, the Company entered into an agreement with a company under common control, True Technology Company Limited (“True Technology”), under which True Technology hosts the Company’s servers and provides a connection between the customer’s servers and the internet using True Technology’s public network connections. The fee for these services was $12,894 per month through April 2013 when the fee was reduced to $3,868 per month and is recorded as trading platform rent expense as a component of general and administrative expenses. Included in general and administrative expenses in the accompanying unaudited condensed consolidated statements of comprehensive (loss) income for the six months ended September 30, 2017 and 2016, are rental fees which were paid to True Technology of $23,076 and $23,201 respectively.

        

Included in employee compensation and benefits in the accompanying condensed consolidated statements of comprehensive (loss) income for the six months ended September 30, 2017 and 2016, are salaries and director compensation of $19,230 and $18,045 respectively, which were paid to two of the Company’s directors and shareholders.

       

 
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Table of Contents

    

eBullion, Inc.

Notes to Condensed Consolidated Financial Statements

For the Six Months Ended September 30, 2017 and 2016 (unaudited)

(Expressed in US Dollars)

 

9.

Commitments

 

 

 

The Company leases office space under non-cancellable operating lease agreements that expire on various dates through 2019.

     

In December 2012, the Company entered into a lease agreement on approximately 10,000 square feet of office space which replaced its previous office facilities. The Company occupied the space in January 2013. Under terms of the lease, the Company paid approximately $192,000 in lease deposits and was committed to lease and management fee payments of approximately $46,647 per month for 29 months.

     

In September 2015, the Company entered into a new lease agreement on approximately 5,500 square feet of office space which will replace its previous office facilities. The Company will occupy the space in December 2015. Under terms of the lease, the Company paid approximately $147,397 in lease deposits and is committed to lease and management fee payments of approximately $27,209 per month for 35 months.

      

In May 27, 2011, the Company entered into an agreement with True Technology, a company under common control under which True Technology hosts the Company’s servers and provides a connection between the customer’s servers and the internet using True Technology’s public network connections. The fees paid to True Technology are approximately $12,894 per month for 12 months after which the fees were reduced to $3,866 per month for 24 months. In April 2017, the trading platform lease with True Technology was renewed for 2 years with monthly payment of approximately $3,866 until March 31, 2019.

    

Future annual minimum lease payments, including maintenance and management fees, for non-cancellable operating leases and trading platform fees, are as follows:

   

Years ending September 30,

 

 

 

2018

 

$ 504,710

 

2019

 

 

47,478

 

 

 

$ 552,188

 

 

10.

Subsequent events

 

 

 

In accordance with ASC Topic 855, “Subsequent Events”, which establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued, the Company has evaluated all events or transactions that occurred after September 30, 2017, up through the date the Company issued the unaudited condensed financial statements. During the period, the Company did not have any material recognizable subsequent events.

      

 
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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

 

The following information should be read in conjunction with (i) the financial statements of eBullion, Inc., a Delaware corporation (the “Company”), and development stage company, and the notes thereto appearing elsewhere in this Form 10-Q together with (ii) the more detailed business information and the March 31, 2017 audited financial statements and related notes included in the Company’s Form 10-K, as amended (File No. 000-55231; the “Form 10-K”), as filed with the Securities and Exchange Commission on July 6, 2017. Statements in this section and elsewhere in this Form 10-Q that are not statements of historical or current fact constitute “forward-looking” statements

 

OVERVIEW

 

On April 3, 2013, we entered into a Contribution Agreement with the shareholders of Man Loong, whereby we acquired 100% of the issued and outstanding capital stock of Man Loong from its stockholders, in exchange for 507,600,000 newly issued shares of our common stock, with a par value of $0.0001. After the transaction, Man Loong became our wholly owned subsidiary.

 

This share exchange transaction (the “Merger”) was accounted for as a recapitalization whereby Man Loong was the acquirer for financial reporting purposes and eBullion was the acquired company. Consequently, the assets and liabilities and the operations that are reflected in the historical financial statements prior to the Merger were those of Man Loong and were recorded at the historical cost basis. The consolidated financial statements after completion of the Merger include the assets and liabilities of eBullion and Man Loong, historical operations of Man Loong and operations of eBullion from the closing date of the Merger. Common stock and the corresponding capital amounts of the Company pre-merger have been retroactively restated as capital stock shares reflecting the exchange ratio in the Merger. In conjunction with the Merger, Man Loong received no cash and assumed no liabilities of eBullion.

 

In March 2015, we increased the number of our authorized shares from 500,000,000 to 1,000,000,000. The par value of our shares remained unchanged at $.0001. We also effected a 10-for-1 stock split, whereby we exchanged 10 of our shares for every 1 share issued at outstanding before the split. Following the share split, we have 512,600,000 shares issued and outstanding. All share and per share amounts for the prior year have been retroactively restated to give effect of the 10-for-1 share split.

 

Since April 3, 2013, through our subsidiary, Man Loong, we have been engaged in the precious metals trading business, facilitating the execution of gold and silver price contracts for customers of its agents via an electronic trading platform which we license from an affiliated company, True Technology. In facilitating trades of these price contracts, Man Loong acts in its capacity as an officially designated electronics trading member of the Chinese Gold and Silver Exchange Society, or the “CGSE”, in Hong Kong. Man Loong holds a Type AA License which it uses to engage in the electronic trading of Kilo Gold and Loco London Gold and Silver. The electronic trading platform that Man Loong licenses from True Technology provides its agents’ customers with CGSE price quotations on gold and silver price contracts, on a Loco London basis, as well as information updates on the gold and silver market, based on an evaluation of third-party market pricing sources such as Reuters or Bloomberg. Man Loong’s customer base is located primarily in China where it works through independent agents, and in Hong Kong where it has one office and maintains its trading platforms. Man Loong has 3 agents in Hong Kong which cover three main geographic areas, including Hong Kong Island, Kowloon and the New Territories. In mainland China, Man Loong has 10 agents located in Shanghai and Guangdong and Fujian provinces. Each of our agents in Hong Kong have between 100 and 150 customers and our agents in China each have between 100 and 600 customers.

 

In April 2016, Man Loong received a license from the CGSE to trade gold contracts in the new Qian Hai trade zone in Shenzhen, China. Concurrent with receiving the license, Man Loong registered a new subsidiary, Shenzhen Qian Hai Man Loong Bullion Company Ltd. (“Shenzhen Qian Hai”) organized as a Wholly Foreign Owned Enterprise under PRC law. The new license will allow Man Loong to provide its trading platform and trading services to its existing and new customers who are citizens of the PRC to trade gold contracts through Shenzhen Qian Hai. Man Loong intends to charge a fee to facilitate such trades, and is in the process of defining its business and marketing strategies and processes for trades placed through Shenzhen Qian Hai.

 

 
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Man Loong’s membership in the CGSE allows it to facilitate trades on behalf of nonmembers who execute trades to buy and/or sell gold and/or silver price contracts without it being required to become a counterparty to the trade or to purchase or sell any gold or silver being traded as a principal. Man Loong facilitates the trades that are placed using its electronic trading platform. Man Loong provides agents and their customers with access to its electronic trading platform which has a direct connection to the CGSE. Man Loong enters into an agency agreement with each agent for which it facilitates trades pursuant to which the agent agrees to pay a commission to Man Loong for each trade that Man Loong facilitates and the agent agrees to take all responsibility for trade losses. The agents often use Man Loong’s offices and conference rooms as a physical place to meet with customers and Man Loong provides a dedicated investment center where agents and their customers can access the electronic trading platform to place and process contract orders for gold, and silver and obtain up-to-date market data, trade reports and gain/ loss reports to assist them in evaluating their portfolio and effecting contract trades.

 

Man Loong provides its agents and their customers, with access to its electronic trading platform to place and process price contract orders for gold and silver, which price contracts do not involve the physical transfer or delivery of any actual gold, silver or other precious metals. The electronic trading platform also provides an agent’s customers with up-to-date market data, trade reports and gain/ loss reports to assist them in evaluating their portfolio and effecting price contract trades. Man Loong’s agents assume all of the portfolio trading risk of their price contract orders. Man Loong merely supplies the trading platform that processes the trade as a member of the CGSE and receives a commission. The electronic trading platform communicates and confirms all of the trades that are placed by Man Loong to the CGSE and the CGSE, through the electronic trading platform, provides both the customers of the agents and the agents with confirmation codes which confirm execution of the trades placed through the electronic platform.

 

Man Loong receives a brokerage commission per trade ranging from $20 to $40 regardless of the purchase price paid or received for the gold or silver traded and the agent assumes the sole responsibility for settlement of the purchase price of the gold or silver traded and for any resulting gain or loss recognized on those trades.

 

All of our revenue has been derived by Man Loong from the commission it receives on each trade executed through its electronic trade platform or telephone transaction system. Man Loong calculates and charges the agents’ account a flat fee of between $20 - $40 when each trade is closed and invoices those agents for their commission at the end of each month. Payment terms for commissions are net 30 days. The typical fee is $40 per trade; however, for agents whose customers execute a large number of trades, Man Loong will discount the fee to as low as $20 per trade. Man Loong evaluates its commission fee on an annual basis and adjusts it accordingly based upon its operational costs, which include the fees to run its electronic trading platform, the fees associated with the maintenance of its office, the fees that are charged by the CGSE and its employee costs.

 

Man Loong is not a counterparty in the trades executed by our agents’ customers on our trading platforms, instead it charges a commission which ranges from $20 to $40 for each completed trade. Man Loong’s revenue is dependent upon the amount of commission it generates which in turn is dependent upon the number of agents it has, the number of customers its agents have, and trade volume as opposed to the price of the commodities. Man Loong’s revenues increase as it adds new contracted agents and as those agents increase the number of their customers. If Man Loong has fewer agents, its revenue may suffer. In addition, past trends indicate that at times of price volatility in the prices of gold and silver, Man Loong’s agents’ customers tend to increase the number of trades that they execute across Man Loong’s trading platforms and in times of low gold and silver price volatility Man Loong’s agents’ customers decrease the number of trades. The number of agents’ customers decreased by 2 during the year ended March 31, 2016 and those 2 customers historically accounted for more than 10% of commission revenue. Additionally, the number of agent customers decreased by 19 during the nine months ended December 31, 2016. Volatility in the price of gold increased during the three and nine months ended December 31, 2016 compared to the prior year, trading in a range of approximately $1,100 to $1,400 per ounce compared to a relatively steady trading range of $1,050 to $1,300 per ounce for the three and nine months ended December 31, 2015. Volatility in the price of silver also increased during the three and nine months ended December 31, 2016 compared to the prior year, trading in a range of approximately $15 to $20 per ounce compared to a relatively steady trading range of $15 to $17 per ounce for the three and nine months ended December 31, 2015. For the three and nine months ended December 31, 2016, revenues decreased by $60,279, or 11.4% and increased by $131,586 or 9.6%, respectively, as compared to the three and nine months ended December 31, 2015. We believe that revenues decreased or increased primarily because of the decrease or increase in volatility in gold and silver prices. A decrease in the volatility in gold prices in the future or further decreases in the number of agents and their customers could result in declines in trade revenue compared to past results.

 

Our principal office is located at 18/F, Tower 6, China Hong Kong City, 33 Canton Road, Tsim Sha Tsui, Hong Kong. The telephone number at Man Loong’s principal executive office is +85221553999. All of Man Loong’s transactions and the technologies, including the servers that carry out these transactions, are all processed and located in Hong Kong.

 

Our Corporate History and Background

 

We were incorporated under the laws of the State of Delaware on January 28, 2013. We were initially formed to develop software for use in on-line trading of gold and silver contracts. Since the acquisition of Man Loong, our business development focus has been, and we expect will continue to be, solely on increasing Man Loong’s market share for the on-line trading of gold and silver contracts within the Hong Kong market while developing a business model for the on-line trading of gold and silver contracts by Man Loong in the People’s Republic of China.

 

 
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CRITICAL ACCOUNTING POLICIES

 

The discussion and analysis of our financial condition and results of operations are based on our condensed consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States ("US GAAP"). The preparation of these condensed consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an ongoing basis, we evaluate our estimates based on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. We have identified the policies below as critical to our business operations and to the understanding of our financial results:

 

Basis of Accounting

 

The Company's financial statements are prepared using the accrual method of accounting and are presented in United States Dollars.

 

Cash and Cash Equivalents

 

The Company considers all highly liquid instruments purchased with maturities of three months or less to be cash equivalents.

 

Property and Equipment

 

Property and equipment are stated at cost. Major repairs and betterments are capitalized and normal maintenance and repairs are charged to expense as incurred. Depreciation is computed by the straight-line method over the estimated useful lives of the related assets. Upon retirement or sale of an asset, the cost and accumulated depreciation are removed from the accounts and any gain or loss is reflected in operations.

 

Fair Value of Financial Instruments

 

The fair value of cash and cash equivalents and accounts receivable and accounts payable approximates their carrying amount.

 

Recent Accounting Pronouncements

 

The Company does not expect the adoption of recently issued accounting pronouncements to have a significant impact on its results of operations, financial position or cash flow.

 

Results of Operations for the Three Months Ended September 30, 2017 and 2016

 

Man Loong’s revenue was $35,690 and $561,178 for the quarter ended September 30, 2017 and 2016, respectively, a decrease of $525,488, or 93.6%. All of Man Loong's revenue was derived from commissions on trades placed through its trading platform and telephone transaction system. During the quarter ended September 30, 2017, the number of agent customers decreased to 1. The number of agent customers remained unchanged during the quarter ended September 30, 2016. We believe that revenues decreased as compared to the prior quarter primarily because of the loss of the major agent customers and decrease in volatility in gold and silver prices. A lack of volatility in gold and silver prices in the future or further decreases in the number of agents and their customers could result in declines in commission revenues as it has in the past.

 

Total expenses were $372,532 for the quarter ended September 30, 2017 as compared to $535,203 for the quarter ended September 30, 2016, a decrease of $162,671 or 30.4%. Approximately 56.7% of our total expenses for the quarter ended September 30, 2017 were attributed to general and administrative expenses compared to 61.7% for the quarter ended September 30, 2016. Employee compensation and benefits expense was $142,678 or 38.3% of Man Loong’s total expenses for the quarter ended September 30, 2017 and $186,183 or 34.8% of Man Loong’s total expenses for the quarter ended September 30, 2016. For the quarter ended September 30, 2017 and 2016, depreciation and amortization was $18,763 and $18,905, or 5% and 3.5% of Man Loong’s total expenses for the quarters ended September 30, 2017 and 2016, respectively.

 

 
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Net loss was $328,842 for the quarter ended September 30, 2017, compared to net income of $36,123 for the quarter ended September 30, 2016, a decrease of $364,965 or 1,010%. The decrease in net income was primarily the result of Man Loong’s decrease in revenue while its expenses decreased by a smaller ratio, as a percentage of revenue for the quarter ended September 30, 2017 as compared to the quarter ended September 30, 2016.

 

Results of Operations for the Six Months Ended September 30, 2017 and 2016

 

Man Loong’s revenue was $126,454 and $1,034,416 for the six months ended June 30, 2017 and 2016, respectively, a decrease of $907,962, or 87.8%. All of Man Loong's revenue was derived from commissions on trades placed through its trading platform and telephone transaction system. During the six months ended September 30, 2017 the number of agent customers decreased to 1. The number of agent customers remained unchanged during the six months ended September 30, 2016. We believe that revenues decreased as compared to the prior quarter primarily because of the loss of the major agent customers, and decrease in volatility in gold and silver prices. A lack of volatility in gold and silver prices in the future or further decreases in the number of agents and their customers could result in declines in commission revenues as it has in the past.

 

Total expenses were $773,051 for the six months ended September 30, 2017 as compared to $1,074,033 for the six months ended September 30, 2016, a decrease of $300,982 or 28%. Approximately 53.7% of our total expenses for the six months ended September 30, 2017 were attributed to general and administrative expenses compared to 62.9% for the six months ended September 30, 2016. Employee compensation and benefits expense was $320,147 or 41.4% of Man Loong’s total expenses for the six months ended September 30, 2017 and $360,601 or 33.6% of Man Loong’s total expenses for the six months ended September 30, 2016. For the six months ended September 30, 2017 and 2016, depreciation and amortization was $37,597 and $37,800, or 4.9% and 3.5% of Man Loong’s total expenses for the six months ended September 30, 2017 and 2016, respectively.

 

Net loss was $624,422 for the six months ended September 30, 2017, compared to a net loss of $14,842 for the six months ended September 30, 2016, a decrease of $609,580 or 4,107%. The increase in net loss was primarily the result of Man Loong’s decrease in revenue while its expenses decreased by a smaller ratio, as a percentage of revenue for the six months ended September 30, 2017 as compared to the six months ended September 30, 2016.

 

Liquidity and Capital Resources

 

To date, eBullion has funded its operations from cash flows generated by operations. As of September 30, 2017, eBullion had cash totaling $1,049,831, total assets of $2,166,227, total liabilities of $539,897 and working capital of $1,241,419. Net cash used in operations was $14,358 and $200,193 for the six months ended September 30, 2017 and 2016, respectively. The decrease in net cash used in operations for the six months ended September 30, 2017, included an increase in commissions receivable of $105,664, a decrease in loan receivable from Global Long Inc. Limited of 769,210, an increase in deposits and prepaid expenses of $49,291, an increase in accounts payable and accrued expenses of $104,476, a decrease in deferred income taxes of 2,477, and a decrease in customer deposits of $116,853. Net cash used in financing activities was $0 and $30,628 for the six months ended September 30, 2017 and 2016, respectively. The decrease in net cash used in financing activities for the six months ended September 30, 2017 was primarily due to no lending activity during the six months ended September 30, 2017. Global Long is registered in Hong Kong and through its subsidiary in the Peoples Republic of China, eBullion Trade Company Limited (“EBullion Trade”), is engaged in trading silver contracts as an electronic trading member of the Guangdong Precious Metal Exchange. The loan bears interest at a 6% annual rate, matures on its 5th anniversary and is secured by a first right of claim on a bank deposit held by a subsidiary of Global Long. Under terms of the loan, interest is payable to Man Loong quarterly and Global Long has the right to repay the loan at any time before the maturity date. Until all principal and accrued interest are repaid on the loan, Global Long may not enter into additional borrowings without Man Loong’s written permission, and upon certain events of default, the Loan becomes due on demand. The purpose of the loan was to establish a relationship with Global Long with the intent of becoming the first choice for eBullion Trade’s customers who wish to trade in gold trading positions through the CGSE. At September 30, 2017, the loan receivable from Global Long was fully repaid.

 

 

 
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As of September 30, 2017, and for the six months then ended, Man Loong’s customer deposits decreased from $212,886 at March 31, 2017 to $95,089 at September 30, 2017, a decrease of 117,797 or 55.3%. Customer deposits arise when customers of Man Loong’s agents request that Man Loong hold the minimum deposit required to secure the customer’s account from trading losses instead of the agent. Man Loong will continue to offer this service to customers who request it, and expects the number of customers who hold minimum deposit funds in its accounts to increase in the future.

 

As of September 30, 2017, and for the six months then ended, Man Loong’s commission receivables increased from $546,310 at March 31, 2017 to $648,990 at September 30, 2017, an increase of $102,680 or 18.8%. Commissions receivable represent commissions to be collected from agents for their customers’ trades executed across Man Loong’s electronic trade platform and telephone transaction system. Commissions receivable are typically remitted to Man Loong within 30 days of trade execution. We have not historically incurred credit losses on these commissions receivable, and we continue working with our agents to improve the payment times of commissions accrued but unpaid at the end of each month. As of September 30, 2017, we had no reserve for credit losses nor had we incurred any bad debts for the three and six months ended September 30, 2017.

 

As of September 30, 2017, and for the six months then ended, Man Loong’s deposits and prepaid expenses increased from $230,152 at March 31, 2017 to $278,179 at September 30, 2017, an increase of $48,027 or 20.9%. Deposits and prepaid expenses consist primarily of prepaid rent and occupancy expenses on Man Loong’s principal offices in Hong Kong.

 

No dividends were declared or paid in the quarters ended September 30, 2017 and 2016 and none are expected to be paid for the foreseeable future.

 

Subsequent Events

 

None through date of this filing.

 

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

 

As a smaller reporting company (as defined in Rule 12b-2 of the Exchange Act), we are not required to provide the information called for by this Item 3.

 

ITEM 4. CONTROLS AND PROCEDURES.

 

DISCLOSURE CONTROLS AND PROCEDURES

 

Under the supervision and with the participation of our management, our principal executive officer and our principal financial officer are responsible for conducting an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as of the end of the fiscal year covered by this report. Disclosure controls and procedures means that the material information required to be included in our Securities and Exchange Commission reports is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms relating to our company, including any consolidating subsidiaries, and was made known to us by others within those entities, particularly during the period when this report was being prepared. Based on this evaluation, our principal executive officer and principal financial officer concluded as of the evaluation date that our disclosure controls and procedures were not effective as of September 30, 2017.

 

There were no changes in the Company’s internal controls over financial reporting during the most recently completed fiscal quarter that have materially affected or are reasonably likely to materially affect the Company’s internal control over financial reporting.

 

 
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PART II. OTHER INFORMATION

 

ITEM 1. LEGAL PROCEEDINGS.

 

The Company is not currently subject to any legal proceedings. From time to time, the Company may become subject to litigation or proceedings in connection with its business, as either a plaintiff or defendant. There are no such pending legal proceedings to which the Company is a party that, in the opinion of management, is likely to have a material adverse effect on the Company’s business, financial condition or results of operations.

 

ITEM 1A. RISK FACTORS

 

As a smaller reporting company (as defined in Rule 12b-2 of the Exchange Act), we are not required to provide the information called for by this Item 1A.

 

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

 

None.

 

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

 

None.

 

ITEM 4. MINE SAFETY DISCLOSURES.

 

None.

 

ITEM 5. OTHER INFORMATION.

 

None.

 

 
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ITEM 6. EXHIBITS.

 

(a) Exhibits required by Item 601 of Regulation SK.:

 

Number

 

Description

 

3.1.1

 

Certificate of Incorporation (1)

3.2

 

Bylaws (1)

31.1

 

Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2

 

Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1

 

Certification of Principal Executive Officer and Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS *

 

XBRL Instance Document

101.SCH *

 

XBRL Taxonomy Extension Schema Document

101.CAL *

 

XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF *

 

XBRL Taxonomy Extension Definition Linkbase Document

101.LAB *

 

XBRL Taxonomy Extension Label Linkbase Document

101.PRE *

 

XBRL Taxonomy Extension Presentation Linkbase Document

_____________

(1) Incorporated by reference to the Company’s Registration Statement on Form S-1 (File No. 333-188003) filed with the Securities and Exchange Commission on March 23, 2013.

 

* 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.

 

 
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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, thereunto duly authorized.

 

 

EBULLION, INC.

 

(Name of Registrant)

 

Date: November 17, 2017

By:

/s/ Kee Yuen Choi

 

Name: Kee Yuen Choi

 

Title: President and Chief Executive Officer, and

Chief Financial Officer (principal executive officer, principal accounting officer and principal financial officer)

 

 

27

 

EX-31.1 2 ebml_ex311.htm CERTIFICATION ebml_ex311.htm

EXHIBIT 31.1

 

SECTION 302 CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER OF EBULLION, INC.

 

I, Kee Yuen Choi, certify that:

 

1. I have reviewed this quarterly report on Form 10-Q of eBullion, Inc.;

 

 

2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

 

 

3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

 

 

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a–15(e) and 15d–15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a–15(f) and 15d–15(f)) for the registrant and have:

 

 

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

 

 

 

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

 

 

 

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

 

 

 

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

 

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

 

 

 

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

 

Date: November 17, 2017

By:

/s/ Kee Yuen Choi

Kee Yuen Choi

President and Chief Executive Officer, and

Chief Financial Officer

(principal executive officer,

principal accounting officer and

principal financial officer)

 

EX-31.2 3 ebml_ex312.htm CERTIFICATION ebml_ex312.htm

EXHIBIT 31.2

 

SECTION 302 CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER OF EBULLION, INC.

 

I, Kee Yuen Choi, certify that:

 

1. I have reviewed this quarterly report on Form 10-Q of eBullion, Inc.;

 

 

2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

 

 

3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

 

 

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a–15(e) and 15d–15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a–15(f) and 15d–15(f)) for the registrant and have:

 

 

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

 

 

 

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

 

 

 

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

 

 

 

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

 

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

 

 

 

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

 

Date: November 17, 2017

By:

/s/ Kee Yuen Choi

Kee Yuen Choi

President and Chief Executive Officer,

Chief Financial Officer, and Treasurer

(principal executive officer,

principal accounting officer and

principal financial officer)

 

EX-32.1 4 ebml_ex321.htm CERTIFICATION ebml_ex321.htm

EXHIBIT 32.1

 

SECTION 906 CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER AND PRINCIPAL FINANCIAL OFFICER OF EBULLION, INC.

 

In connection with the accompanying Quarterly Report on Form 10-Q of eBullion, Inc. for the quarter ended September 30, 2017, the undersigned, Kee Yuen Choi, Secretary and Treasurer of eBullion, Inc., does hereby certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

 

(1) such Quarterly Report on Form 10-Q for the quarter ended September 30, 2017 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

 

 

(2) the information contained in such Quarterly Report on Form 10-Q for the quarter ended September 30, 2017 fairly presents, in all material respects, the financial condition and results of operations of eBullion, Inc.

 

 

Date: November 17, 2017

By:

/s/ Kee Yuen Choi

President and Chief Executive Officer, and

Chief Financial Officer

(principal executive officer,

principal accounting officer and

principal financial officer)

 

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Document and Entity Information - shares
6 Months Ended
Sep. 30, 2017
Nov. 13, 2017
Document and Entity Information [Abstract]    
Entity Registrant Name eBullion, Inc.  
Entity Central Index Key 0001573766  
Trading Symbol ebml  
Current Fiscal Year End Date --03-31  
Entity Filer Category Smaller Reporting Company  
Entity Common Stock, Shares Outstanding   512,600,000
Document Type 10-Q  
Document Period End Date Sep. 30, 2017  
Amendment Flag false  
Document Fiscal Year Focus 2018  
Document Fiscal Period Focus Q2  
XML 12 R2.htm IDEA: XBRL DOCUMENT v3.8.0.1
Condensed Consolidated Balance Sheets - USD ($)
Sep. 30, 2017
Mar. 31, 2017
Current Assets    
Cash $ 1,049,831 $ 1,061,609
Commissions receivable 648,990 546,310
Deposits and prepaid expenses 82,495 42,142
Total current assets 1,781,316 1,650,061
Noncurrent Assets    
Deposits and prepaid expenses 195,684 188,010
Equipment, net 186,753 224,350
Loan receivable from Global Long Inc. Limited   772,157
Deferred income taxes 2,474 71,221
Total noncurrent assets 384,911 1,255,738
Total assets 2,166,227 2,905,799
Current Liabilities    
Accounts payable and accrued liabilities 160,279 56,161
Amount due to directors 236,160 313,050
Amount due to a related company 48,369  
Customer deposits 95,089 212,886
Total current liabilities 539,897 582,097
Noncurrent Liabilities:    
Deferred income taxes   466
Total noncurrent liabilities   466
Total liabilities 539,897 582,563
Commitments
Shareholders' Equity    
Common stock, $0.0001 par value, 1,000,000,000 shares authorized, 512,600,000 shares issued and outstanding 51,260 51,260
Additional paid in capital 1,477,404 1,477,404
Retained earnings 194,427 818,849
Accumulated other comprehensive loss (96,761) (24,277)
Total shareholders' equity 1,626,330 2,323,236
Total liabilities and shareholders' equity $ 2,166,227 $ 2,905,799
XML 13 R3.htm IDEA: XBRL DOCUMENT v3.8.0.1
Condensed Consolidated Balance Sheets (Parentheticals) - $ / shares
Sep. 30, 2017
Mar. 31, 2017
Statement of Financial Position [Abstract]    
Common stock, par value (in dollars per share) $ 0.0001 $ 0.0001
Common stock, shares authorized 1,000,000,000 1,000,000,000
Common stock, shares issued 512,600,000 512,600,000
Common stock, shares outstanding 512,600,000 512,600,000
XML 14 R4.htm IDEA: XBRL DOCUMENT v3.8.0.1
Condensed Consolidated Statements of Comprehensive (Loss) Income - USD ($)
3 Months Ended 6 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Sep. 30, 2017
Sep. 30, 2016
REVENUES        
Commission revenue $ 35,690 $ 561,178 $ 126,454 $ 1,034,416
EXPENSES        
General and administrative 211,091 330,115 415,307 675,632
Employee compensation and benefits 142,678 186,183 320,147 360,601
Depreciation and amortization 18,763 18,905 37,597 37,800
Total expenses 372,532 535,203 773,051 1,074,033
(LOSS) INCOME FROM OPERATIONS (336,842) 25,975 (646,597) (39,617)
OTHER INCOME        
Interest income, net 8,005 7,743 19,698 21,107
Total other income 8,005 7,743 19,698 21,107
(LOSS) INCOME BEFORE INCOME TAXES (328,837) 33,718 (626,899) (18,510)
INCOME TAX PROVISION (BENEFIT)        
Current 0 0 0 0
Deferred 5 (2,405) (2,477) (3,668)
Total income tax provision (benefit) 5 (2,405) (2,477) (3,668)
NET (LOSS) INCOME (328,842) 36,123 (624,422) (14,842)
OTHER COMPREHENSIVE (LOSS) INCOME        
Foreign currency translation (68,205) 1,056 (72,484) (343)
COMPREHENSIVE (LOSS) INCOME $ (397,047) $ 37,179 $ (696,906) $ (15,185)
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING        
Basic and diluted (in shares) 512,600,000 512,600,000 512,600,000 512,600,000
BASIC AND DILUTED (LOSS) EARNINGS PER COMMON SHARE        
Basic and diluted (loss) earnings per common share (in dollars per share) $ (0.00) $ 0.00 $ (0.00) $ (0.00)
XML 15 R5.htm IDEA: XBRL DOCUMENT v3.8.0.1
Condensed Consolidated Statements of Shareholders' Equity - USD ($)
Common Stock
Additional Paid in Capital
Retained Earnings
Accumulated Other Comprehensive Loss
Total
BALANCE at Mar. 31, 2016 $ 51,260 $ 1,477,404 $ 873,954 $ (1,524) $ 2,401,094
BALANCE (in shares) at Mar. 31, 2016 512,600,000        
Increase (Decrease) in Stockholders' Equity [Roll Forward]          
Net loss     (55,105)   (55,105)
Foreign currency translation adjustment       (22,753) (22,753)
BALANCE at Mar. 31, 2017 $ 51,260 1,477,404 818,849 (24,277) 2,323,236
BALANCE (in shares) at Mar. 31, 2017 512,600,000        
Increase (Decrease) in Stockholders' Equity [Roll Forward]          
Net loss     (624,422)   (624,422)
Foreign currency translation adjustment       (72,484) (72,484)
BALANCE at Sep. 30, 2017 $ 51,260 $ 1,477,404 $ 194,427 $ (96,761) $ 1,626,330
BALANCE (in shares) at Sep. 30, 2017 512,600,000        
XML 16 R6.htm IDEA: XBRL DOCUMENT v3.8.0.1
Consolidated Statements of Cash Flows - USD ($)
6 Months Ended
Sep. 30, 2017
Sep. 30, 2016
OPERATING ACTIVITIES:    
Net loss $ (624,422) $ (14,842)
Adjustments to reconcile net loss to net Cash used in operating activities    
Depreciation and amortization 37,597 37,800
Changes in operating assets and liabilities:    
Commissions receivable (105,664) (102,130)
Loan receivable from Global Long Inc. Limited 769,210  
Deposits and prepaid expenses (49,291) (87,103)
Accounts payable and accrued liabilities 104,476 (649)
Amount due to a director (75,370)  
Amount due to a related company 48,436  
Customer deposits (116,853) 16,543
Deferred income taxes (2,477) (3,668)
Net cash used in operating activities (14,358) (200,193)
FINANCING ACTIVITIES:    
Bank overdraft   (30,628)
Net cash used in financing activities   (30,628)
NET DECREASE IN CASH (14,358) (230,821)
EFFECT OF EXCHANGE RATE CHANGES ON CASH 2,580 (150)
Cash, beginning of period 1,061,609 1,109,465
Cash, end of period 1,049,831 878,494
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:    
Cash paid for income taxes $ 0 $ 0
XML 17 R7.htm IDEA: XBRL DOCUMENT v3.8.0.1
Nature of Operations and Basis of Presentation
6 Months Ended
Sep. 30, 2017
Nature of Operations and Basis of Presentation [Abstract]  
Nature of Operations and Basis of Presentation

1.

Nature of Operations and Basis of Presentation

       

 

eBullion, Inc. (“eBullion” or “the Company”) was incorporated in Delaware on January 28, 2013.

 

 

 

The Company provides trading services for gold and silver trading positions on Man Loong’s proprietary, 24-hour electronic trading platform, and its telephone transaction system located in Hong Kong. The Company is licensed through the Chinese Gold and Silver Exchange Society (“CGSE”) a self-regulatory organization located in Hong Kong which acts as an exchange for the trading of Kilo gold and Loco London gold and silver price indices quoted on the London Metals Exchange.

 

 

Description of subsidiaries

  

Name

 

Place of incorporation

and kind of

legal entity

 

Principal activities

and place of operation

 

Particulars

paid-up

capital

 

Effective

interest

held

 

Man Loong Bullion Company Limited (“Man Loong”)

 

Hong Kong, a limited liability company

 

Provision of sub-agency service in London gold dealing

 

HK$10,152,000

 

100%

 

Shenzhen Qianhai Man Loong Bullion Company Limited

(“SQML”)

 

The PRC, a limited liability company

 

Provision of gold trading service in the PRC

 

RMB2,000,000

 

100%

                

eBullion and its subsidiaries are hereinafter referred to as (the “Company”).

 

 

Basis of Presentation

      

The Company’s condensed consolidated financial statements are expressed in U.S. Dollars and are presented in accordance with U.S. GAAP and the rules and regulations of the Securities and Exchange Commission (“SEC”). The Company’s and Man Loong’s fiscal year end is March 31.

 

 

The accompanying unaudited condensed consolidated financial statements have been prepared by management in accordance with both accounting principles generally accepted in the United States (“GAAP”), and the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Certain information and note disclosures normally included in audited financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to those rules and regulations, although the Company believes that the disclosures made are adequate to make the information not misleading.

 

 

In the opinion of management, the consolidated balance sheet as of March 31, 2017 which has been derived from audited financial statements and these unaudited condensed consolidated financial statements reflect all normal and recurring adjustments considered necessary to state fairly the results for the periods presented. The results for the period ended September 30, 2017 are not necessarily indicative of the results to be expected for the entire fiscal year ending March 31, 2018 or for any future period.

 

 

These unaudited condensed consolidated financial statements and notes thereto should be read in conjunction with the Management’s Discussion and the audited financial statements and notes thereto included in the Annual Report on Form 10-K for the year ended March 31, 2017.

 

 

Principles of Consolidation

 

 

The condensed consolidated financial statements as of September 30, 2017, include the accounts of eBullion and its wholly owned subsidiary, Man Loong. All significant intercompany transactions have been eliminated.
XML 18 R8.htm IDEA: XBRL DOCUMENT v3.8.0.1
Summary of Significant Accounting Policies
6 Months Ended
Sep. 30, 2017
Summary of Significant Accounting Policies [Abstract]  
Summary of Significant Accounting Policies

2.

Summary of Significant Accounting Policies

 

 

 

Use of Estimates

 

 

 

The preparation of these condensed consolidated 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 condensed consolidated financial statements and the reported amounts of revenue and expenses during the year. Changes in these estimates are recorded when known. Significant estimates made by management include:

  

 

·

Valuation of assets and liabilities

 

·

Useful lives of equipment

 

·

Accounting for transactions with variable interest entities

 

·

Other matters that affect the reported amounts and disclosures of contingencies in the condensed consolidated financial statements.

 

Actual results could differ from those estimates.

 

 

Reclassifications

 

 

Certain reclassifications have been made to amounts reported in the previous years to conform to the current presentation. Such reclassifications had no effect on net income (loss).

 

 

Revenue Recognition

 

 

The Company recognizes revenue in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 605, Revenue Recognition, which requires that four basic criteria must be met before revenue can be recognized: (1) persuasive evidence that an arrangement exists; (2) delivery has occurred or services have been rendered; (3) the fee is fixed and determinable; and (4) collectability is reasonably assured. The Company is not a counter party for trades executed through its trading platform and telephone transaction system and, instead, recognizes revenue to the extent of the flat-fee commission it receives on each trade processed for its agents and their customers.

 

 

Cash and cash equivalents

 

 

Cash and cash equivalents consist primarily of cash on deposit, certificates of deposits, money market accounts, and investment grade commercial paper that are readily convertible to cash and purchased with original maturities of six months or less. As of September 30, 2017 and March 31, 2017, the Company had no cash equivalents. The Company reclassifies cash overdrafts to accounts payable.

 

Fair Value of Financial Instruments

 

 

 

ASC 820, “Fair Value Measurements”, defines fair value and establishes a three-level valuation hierarchy for disclosures of fair value measurement and enhances disclosure requirements for fair value measures. The carrying amounts reported in the balance sheets for cash, commissions receivable, loan receivable from Global Long, accounts payable and accrued liabilities and customer deposits qualify as financial instruments and are a reasonable estimate of fair value because of the short period of time between the origination of such instruments and their expected realization and their current market rate of interest.

 

 

 

The standard establishes a fair value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement). The three levels of the fair value hierarchy defined by the standard are as follows:

 

 

 

Level 1 - Quoted prices are available in active markets for identical assets or liabilities as of the reporting date. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis. Level 1 primarily consists of financial instruments such as exchange-traded derivatives, listed equities and U.S. government treasury securities.

 

 

 

Level 2 - Pricing inputs are other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date. Level 2 includes those financial instruments that are valued using models or other valuation methodologies. These models are primarily industry-standard models that consider various assumptions, including quoted forward prices for commodities, time value, volatility factors, and current market and contractual prices for the underlying instruments, as well as other relevant economic measures. Substantially all of these assumptions are observable in the marketplace throughout the full term of the instrument, can be derived from observable data or are supported by observable levels at which transactions are executed in the marketplace. Instruments in this category include non-exchange-traded derivatives such as over the counter forwards, options and repurchase agreements.

 

 

 

Level 3 - Pricing inputs include significant inputs that are generally less observable from objective sources. These inputs may be used with internally developed methodologies that result in management’s best estimate of fair value from the perspective of a market participant. Level 3 instruments include those that may be more structured or otherwise tailored to customers’ needs.

 

 

 

Commissions Receivable

 

 

 

Commissions receivable represent commissions to be collected from agents for their customers’ trades executed across Man Loong’s electronic trade platform and telephone transaction system through the balance sheet date. Commissions receivable are typically remitted to the Company within 180 days of trade execution. The Company has not historically incurred credit losses on these commissions receivable. As of September 30, 2017 and March 31, 2017, the Company had no reserve for credit losses nor had it incurred any bad debts for the six months ended September 30, 2017 and 2016.

 

 

 

Deposits and Prepaid Expenses

 

 

 

The Company records goods and services paid for but not received until a future date as deposits and prepaid expenses. These primarily include deposits and prepayments for occupancy related expenses. Deposit or prepaid expenses which will be realized more than 12 months past the balance sheet date are classified as non-current assets in the accompanying condensed consolidated balance sheets.

 

 

 

Equipment

 

 

 

Equipment is stated at cost. The cost of an asset consists of its purchase price and any directly attributable costs of bringing the asset to its present working condition and location for its intended use.

 

 

 

Equipment is depreciated using the straight-line method over the estimated useful lives of the assets as follows:

     

Office equipment

 

5 years

Furniture and fixtures

 

5 years

Computer equipment

 

5 years

 

Expenditures for maintenance and repairs are charged to expense as incurred. Additions, renewals and betterments are capitalized.

 

 

Gain or loss on disposal of equipment is the difference between net sales proceeds and the carrying amount of the relevant assets, if any, and is recognized as income or loss in the accompanying condensed consolidated statements of comprehensive income (loss).

 

 

 

Reporting Currency and Foreign Currency Translation

 

 

 

As of September 30, 2017 and March 31, 2017 and for the six months ended September 30, 2017 and 2016, the accounts of the Company were maintained in their functional currencies, which is the U.S. dollar for eBullion and the Hong Kong dollar ("HK dollar") for Man Loong. The financial statements of Man Loong have been translated into U.S. dollars which is its reporting currency. All assets and liabilities of Man Loong are translated at the exchange rate on the balance sheet date, shareholders’ equity is translated at historical rates and the statements of comprehensive income, and statements of cash flows are translated at the weighted average exchange rate for the periods. The resulting translation adjustments for the period are reported under other comprehensive income (loss) and accumulated translation adjustments are reported as a separate component of shareholders’ equity.

 

 

 

Foreign exchange rates used:

      

 

 

2017

 

 

2016

 

 

 

 

 

 

 

 

Six months ended September 30, 2017 USD/HKD exchange rate

 

 

7.8110

 

 

 

7.7548

 

Average USD/HKD exchange rate:

 

 

7.8002

 

 

 

7.7582

 

Six months ended September 30, 2017 USD/RMB exchange rate

 

 

1.1737

 

 

 

1.1625

 

Average USD/RMB exchange rate:

 

 

1.1531

 

 

 

1.1755

 

 

 

 

Long-Lived Assets

 

The Company periodically evaluates the carrying value of long-lived assets when events and circumstances warrant such review. The carrying value of a long-lived assets is considered impaired when the anticipated undiscounted cash flow from such an asset is less than its carrying value. In that event, a loss is recognized in the amount by which the carrying value exceeds the fair market value of the long-lived asset. The Company has identified no such impairment losses.

 

Accounts payable and accrued liabilities

 

Accounts payable and accrued liabilities at September 30, 2017 and March 31, 2017 primarily consist of accrued statutory bonus payable to employees in Hong Kong, audit fees payable to the Company’s auditors and accountants and legal fees payable to the Company’s legal counsel.

 

Customer Deposits

 

Customer deposits at September 30, 2017 and March 31, 2017 were accepted pursuant to the Company’s agreements with certain of its independent agents. Under terms of those agreements, the Company accepts margin deposits for certain of the agents’ customers who prefer that the Company hold those deposits. If an agent’s customer suffers a trading loss equaling 80% or more of the customers’ deposit balance, the customer is required to increase the balance of his deposit or the customer’s trading position is closed and the remaining deposit balance is remitted to the agent in order to fund the customer’s trading losses.

 

Accordingly, the Company had no risk of loss related to customer deposits at September 30, 2017 and March 31, 2017.

 

Accumulated Other Comprehensive (Loss)

 

The Company’s accumulated other comprehensive (loss) as September 30, 2017 and March 31, 2017 consists of adjustments resulting from translating Man Loong’s functional currency, the HK dollar, to its reporting currency, the U.S. dollar.

 

Income Taxes

 

 

 

The Company utilizes ASC 740, Income Taxes, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.

 

The Company has adopted the provisions of the interpretation, of ASC 740, Accounting for Uncertainty in Income Taxes. The Company did not have any material unrecognized tax benefits and there was no effect on its financial condition or results of operations as a result of implementing the interpretation. The Company files income tax returns in the United States and the Company is subject to federal income tax examinations for the fiscal years ended March 31, 2014 through 2016. Man Loong files income tax returns in Hong Kong and is no longer subject to tax examinations by tax authorities for years before 2008. At September 30, 2017, Man Loong had no uncertain tax positions.

 

Historically, we have not provided for U.S. income and foreign withholding taxes on Man Loong’s undistributed earnings, because such earnings have been retained and reinvested by Man Loong. The Company does not intend to require Man Loong to pay dividends for the foreseeable future and so additional income taxes and applicable withholding taxes that would result from the repatriation of such earnings are not practicably determinable.

 

Earnings (Loss) per Share

 

The Company computes earnings (loss) per share (“EPS”) in accordance with ASC 260, Earnings Per Share. ASC 260 requires companies with complex capital structures to present basic and diluted EPS. Basic EPS is measured as net income divided by the weighted average common shares outstanding during the period.

 

Diluted EPS is similar to basic EPS but presents the dilutive effect on a per share basis of contracts to issue ordinary 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. The computation of diluted EPS includes the estimated impact of the exercise of contracts to purchase common stocks using the treasury stock method and the potential shares of converted common stock associated with the convertible debt using the if-converted method.

 

Potential common shares that have an anti-dilutive effect (i.e., those that increase earnings per share or decrease loss per share) are excluded from the calculation of diluted EPS.

 

The Company does not have any securities that may potentially dilute its basic earnings (loss) per share.

     

Comprehensive Income (Loss)

 

 

 

Comprehensive income (loss) is comprised of net income (loss) and other comprehensive income (loss). Other comprehensive income (loss) includes unrealized gains and losses resulting from translating Man Loong’s functional currency, the HK dollar, to its reporting currency, the U.S. dollar.

 

Recent Accounting Pronouncements

 

In January 2017, the FASB has issued Accounting Standards Update (ASU) No. 2017-04, “Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment.” These amendments eliminate Step 2 from the goodwill impairment test. The annual, or interim, goodwill impairment test is performed by comparing the fair value of a reporting unit with its carrying amount. An impairment charge should be recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. In addition, income tax effects from any tax deductible goodwill on the carrying amount of the reporting unit should be considered when measuring the goodwill impairment loss, if applicable. The amendments also eliminate the requirements for any reporting unit with a zero or negative carrying amount to perform a qualitative assessment and, if it fails that qualitative test, to perform Step 2 of the goodwill impairment test. An entity still has the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. Effective for public business entities that are a SEC filers for annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. ASU 2017-04 should be adopted on a prospective basis.

 

In December 2016, the FASB has issued Accounting Standards Update (ASU) No. 2016-20, “Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers.” The amendments affect narrow aspects of the guidance issued in ASU 2014-09 including Loan Guarantee Fees, Contract Costs, Provisions for Losses on Construction-Type and Production-Type Contracts, Disclosure of Remaining Performance Obligations, Disclosure of Prior Period Performance Obligations, Contract Modifications, Contract Asset vs. Receivable, Refund Liability, Advertising Costs, Fixed Odds Wagering Contracts in the Casino Industry, and Costs Capitalized for Advisors to Private Funds and Public Funds. The effective date and transition requirements for the amendments are the same as the effective date and transition requirements for FASB Accounting Standards Codification Topic 606. Public entities should apply Topic 606 (and related amendments) for annual reporting periods beginning after December 15, 2017, including interim reporting periods therein.

 

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.

XML 19 R9.htm IDEA: XBRL DOCUMENT v3.8.0.1
Deposits and Prepaid Expenses
6 Months Ended
Sep. 30, 2017
Deposits and Prepaid Expenses [Abstract]  
Deposits and prepaid expenses

3.

Deposits and Prepaid Expenses

 

Deposits and prepaid expenses consisted of the following as of September 30, 2017 and March 31, 2017.

 

 

 

Unaudited

 

 

Audited

 

 

September 30,

2017

 

 

March 31,

2017

 

 

 

 

 

 

 

 

Current

 

 

 

 

 

 

Prepaid rent and occupancy expenses

 

$ 82,495

 

 

$ 42,142

 

 

 

 

 

 

 

 

 

 

Noncurrent

 

 

 

 

 

 

 

 

Rent and occupancy deposits

 

 

195,684

 

 

 

188,010

 

Total deposits and prepaid expenses

 

$ 278,179

 

 

$ 230,152

 

XML 20 R10.htm IDEA: XBRL DOCUMENT v3.8.0.1
Loan receivable from Global Long
6 Months Ended
Sep. 30, 2017
Loan Receivable from Global Long [Abstract]  
Loan receivable from Global Long

4.

Loan receivable from Global Long

 

 

 

On April 3, 2015, Man Loong loaned Global Long Inc. Limited (“Global Long”) $774,164 (HKD$6,000,000). Global Long is registered in Hong Kong and through its subsidiary in the Peoples Republic of China, eBullion Trade Company Limited (“eBullion Trade”), is engaged in trading silver contracts as an electronic trading member of the Guangdong Precious Metal Exchange (“GPME”). The loan bears interest at a 6% annual rate, matures on its 5th anniversary and is secured by a first right of claim on a bank deposit held by eBullion Trade. Under terms of the loan, interest is payable to Man Loong quarterly and Global Long has the right to repay the loan at any time before the maturity date. Until all principal and accrued interest are repaid on the loan, Global Long may not enter into additional borrowings without Man Loong’s written permission, and upon certain events of default, the Loan becomes due on demand. The purpose of the loan was to establish a relationship with Global Long with the intent of becoming their first choice for Global Long’s customers who wish to trade in gold trading positions through the CGSE.

 

The Company determined that the loan to Global Long does not give the Company a variable interest in Global Long and that Global Long is not a variable interest entity (“VIE”) because Man Loong does not have the power to direct any of the activities of Global Long or eBullion Trade that significantly impact their economic performance. Accordingly, the Company has not condensed consolidated Global Long into its condensed consolidated financial statements.

 

At September 30, 2017, the loan receivable from Global Long was fully repaid.

XML 21 R11.htm IDEA: XBRL DOCUMENT v3.8.0.1
Equipment
6 Months Ended
Sep. 30, 2017
Property and Equipment [Abstract]  
Equipment

5.

Equipment

 

Equipment, including leasehold improvements, consisted of the following as of September 30, 2017 and March 31, 2017

      

 

 

Unaudited

September 30,

2017

 

 

Audited

March 31,

2017

 

Office equipment

 

$ 206,345

 

 

$ 206,345

 

Computer equipment

 

 

59,919

 

 

 

59,919

 

Furniture and fixtures

 

 

111,916

 

 

 

111,916

 

 

 

 

378,180

 

 

 

378,180

 

Less: Accumulated depreciation

 

 

(191,427 )

 

 

(153,830 )

Equipment, net

 

$ 186,753

 

 

$ 224,350

 

      

Depreciation expense was $37,597 and $37,800 for the six months ended September 30, 2017 and 2016, respectively, and was recorded as depreciation expense in the accompanying condensed consolidated statements of comprehensive (loss) income.
XML 22 R12.htm IDEA: XBRL DOCUMENT v3.8.0.1
General and Administrative Expenses
6 Months Ended
Sep. 30, 2017
General and Administrative Expense [Abstract]  
General and Administrative Expenses

6.

General and Administrative Expenses

 

 

 

General and administrative expenses consist of the following for the three and six months ended September 30, 2017 and 2016.

  

 

 

Three months ended

September 30,

 

 

Six months ended

September 30,

 

 

 

2017

 

 

2016

 

 

2017

 

 

2016

 

Marketing expenses

 

$ -

 

 

$ 97,837

 

 

$ 8,582

 

 

$ 212,688

 

Trading platform rent

 

 

30,030

 

 

 

24,929

 

 

 

56,152

 

 

 

61,716

 

Transportation

 

 

71

 

 

 

2,014

 

 

 

826

 

 

 

3,152

 

Internet

 

 

7,944

 

 

 

5,608

 

 

 

12,649

 

 

 

10,469

 

Travel and entertainment

 

 

-

 

 

 

2,673

 

 

 

612

 

 

 

3,028

 

Computers and software

 

 

7,648

 

 

 

7,856

 

 

 

14,862

 

 

 

22,061

 

Legal and professional

 

 

41,658

 

 

 

41,700

 

 

 

63,377

 

 

 

106,466

 

Licenses

 

 

574

 

 

 

10,443

 

 

 

1,974

 

 

 

13,866

 

Occupancy

 

 

109,180

 

 

 

117,266

 

 

 

230,181

 

 

 

206,795

 

Advertising

 

 

1,280

 

 

 

124

 

 

 

2,564

 

 

 

353

 

Other

 

 

12,706

 

 

 

19,665

 

 

 

23,528

 

 

 

35,038

 

Total general and administrative expense

 

$ 211,091

 

 

$ 330,115

 

 

$ 415,307

 

 

$ 675,632

 

XML 23 R13.htm IDEA: XBRL DOCUMENT v3.8.0.1
Income Taxes
6 Months Ended
Sep. 30, 2017
Income Taxes [Abstract]  
Income Taxes

7.

Income Taxes

 

 

 

(Loss) income before income taxes as shown in the accompanying condensed consolidated statements of comprehensive (loss) income is summarized below for the six months ended September 30, 2017 and 2016.

     

 

 

Six months ended

September 30,

 

 

 

2017

 

 

2016

 

United States

 

$ (19,436 )

 

 

(24,851 )
Hong Kong

 

 

(607,463 )

 

 

6,341

 

(Loss) income before income taxes

 

$ (626,899 )

 

 

(18,510 )

  

The provision (benefit) for income taxes consists of the following for the six months ended September 30, 2017 and 2016:

      

 

 

Six months Ended

September 30,

 

 

 

2017

 

 

2016

 

Current:

 

 

 

 

 

 

United States

 

$ -

 

 

$ -

 

Hong Kong

 

 

-

 

 

 

-

 

Total current provision

 

 

-

 

 

 

-

 

 

 

 

 

 

 

 

 

 

Deferred:

 

 

 

 

 

 

 

 

United States

 

 

-

 

 

 

-

 

Hong Kong

 

 

(2,477 )

 

 

(3,668 )

Total deferred benefit

 

 

(2,477 )

 

 

(3,668 )

 

 

 

 

 

 

 

 

 

Total income tax provision (benefit)

 

$ (2,477 )

 

$ (3,668 )

 

The reconciliation of the income tax provision to the amount computed by applying the U.S. statutory federal income tax rate to (loss) income before income taxes is as follows:

       

 

 

Six months

Ended September 30,

 

 

 

2017

 

 

2016

 

Income tax provision (benefit) at the U.S. statutory tax rate

 

$ (213,145 )

 

$ (6,293 )

Valuation allowance on U.S. net operating loss carryforwards

 

 

6,608

 

 

 

8,449

 

Impact of foreign operations

 

 

204,060

 

 

 

(5,824 )

Income tax provision (benefit)

 

$ (2,477 )

 

$ (3,668 )

 

At September 30, 2017, the Company had U.S. net operating loss carryforwards of approximately $480,000 which expire in 2037. Based on the available evidence, it is uncertain whether future U.S. taxable income will be sufficient to offset the estimated net loss carryforwards, accordingly, the Company has recorded a valuation allowance of approximately $163,200 as of September 30, 2017.

       

 

At September 30, 2017 and March 31, 2017, the Company’s and Man Loong’s differences between the book and tax basis of equipment gave rise to deferred income tax asset of $2,474 and $71,221, respectively which are recorded as noncurrent in the accompanying condensed consolidated statements of financial condition. The Company had no other differences between the book and tax basis of assets and liabilities as at September 30, 2017 and March 31, 2017.

            

As a result of the implementation of ASC 740, Accounting for Income Taxes, the Company recognized no material adjustment to unrecognized tax benefits. The Company will continue to classify income tax penalties and interest, if any, as part of interest and other expenses in the accompanying condensed consolidated statements of comprehensive income (loss). The Company has incurred no interest or penalties during the six months ended September 30, 2017 and 2016.

XML 24 R14.htm IDEA: XBRL DOCUMENT v3.8.0.1
Related Party Transactions and Balances
6 Months Ended
Sep. 30, 2017
Related Party Transactions and Balances [Abstract]  
Related Party Transactions and Balances

8.

Related Party Transactions and Balances

 

 

 

The Company engaged in related party transactions with certain shareholders, and a company under common control as described below.

      

On May 27, 2011, the Company entered into an agreement with a company under common control, True Technology Company Limited (“True Technology”), under which True Technology hosts the Company’s servers and provides a connection between the customer’s servers and the internet using True Technology’s public network connections. The fee for these services was $12,894 per month through April 2013 when the fee was reduced to $3,868 per month and is recorded as trading platform rent expense as a component of general and administrative expenses. Included in general and administrative expenses in the accompanying unaudited condensed consolidated statements of comprehensive (loss) income for the six months ended September 30, 2017 and 2016, are rental fees which were paid to True Technology of $23,076 and $23,201 respectively.

        

Included in employee compensation and benefits in the accompanying condensed consolidated statements of comprehensive (loss) income for the six months ended September 30, 2017 and 2016, are salaries and director compensation of $19,230 and $18,045 respectively, which were paid to two of the Company’s directors and shareholders.

XML 25 R15.htm IDEA: XBRL DOCUMENT v3.8.0.1
Commitments
6 Months Ended
Sep. 30, 2017
Commitments and contingencies [Abstract]  
Commitments

9.

Commitments

 

 

 

The Company leases office space under non-cancellable operating lease agreements that expire on various dates through 2019.

     

In December 2012, the Company entered into a lease agreement on approximately 10,000 square feet of office space which replaced its previous office facilities. The Company occupied the space in January 2013. Under terms of the lease, the Company paid approximately $192,000 in lease deposits and was committed to lease and management fee payments of approximately $46,647 per month for 29 months.

     

In September 2015, the Company entered into a new lease agreement on approximately 5,500 square feet of office space which will replace its previous office facilities. The Company will occupy the space in December 2015. Under terms of the lease, the Company paid approximately $147,397 in lease deposits and is committed to lease and management fee payments of approximately $27,209 per month for 35 months.

      

In May 27, 2011, the Company entered into an agreement with True Technology, a company under common control under which True Technology hosts the Company’s servers and provides a connection between the customer’s servers and the internet using True Technology’s public network connections. The fees paid to True Technology are approximately $12,894 per month for 12 months after which the fees were reduced to $3,866 per month for 24 months. In April 2017, the trading platform lease with True Technology was renewed for 2 years with monthly payment of approximately $3,866 until March 31, 2019.

    

Future annual minimum lease payments, including maintenance and management fees, for non-cancellable operating leases and trading platform fees, are as follows:

   

Years ending September 30,

 

 

 

2018

 

$ 504,710

 

2019

 

 

47,478

 

 

 

$ 552,188

 

XML 26 R16.htm IDEA: XBRL DOCUMENT v3.8.0.1
Subsequent events
6 Months Ended
Sep. 30, 2017
Subsequent Events [Abstract]  
Subsequent events

10.

Subsequent events

 

 

 

In accordance with ASC Topic 855, “Subsequent Events”, which establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued, the Company has evaluated all events or transactions that occurred after September 30, 2017, up through the date the Company issued the unaudited condensed financial statements. During the period, the Company did not have any material recognizable subsequent events.

XML 27 R17.htm IDEA: XBRL DOCUMENT v3.8.0.1
Summary of Significant Accounting Policies (Policies)
6 Months Ended
Sep. 30, 2017
Summary of Significant Accounting Policies [Abstract]  
Basis of Presentation
Basis of Presentation

The Company’s condensed consolidated financial statements are expressed in U.S. Dollars and are presented in accordance with U.S. GAAP and the rules and regulations of the Securities and Exchange Commission ("SEC"). The Company’s and Man Loong’s fiscal year end is March 31.
 
The accompanying unaudited condensed consolidated financial statements have been prepared by management in accordance with both accounting principles generally accepted in the United States ("GAAP"), and the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Certain information and note disclosures normally included in audited financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to those rules and regulations, although the Company believes that the disclosures made are adequate to make the information not misleading.
 
In the opinion of management, the consolidated balance sheet as of March 31, 2017 which has been derived from audited financial statements and these unaudited condensed consolidated financial statements reflect all normal and recurring adjustments considered necessary to state fairly the results for the periods presented. The results for the period ended September 30, 2017 are not necessarily indicative of the results to be expected for the entire fiscal year ending March 31, 2018 or for any future period.
 
These unaudited condensed consolidated financial statements and notes thereto should be read in conjunction with the Management’s Discussion and the audited financial statements and notes thereto included in the Annual Report on Form 10-K for the year ended March 31, 2017.
Principles of Consolidation
Principles of Consolidation
 
The condensed consolidated financial statements as of September 30, 2017, include the accounts of eBullion and its wholly owned subsidiary, Man Loong. All significant intercompany transactions have been eliminated.
Use of Estimates

Use of Estimates

 
The preparation of these condensed consolidated 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 condensed consolidated financial statements and the reported amounts of revenue and expenses during the year. Changes in these estimates are recorded when known. Significant estimates made by management include:

 

·

Valuation of assets and liabilities

·

Useful lives of equipment

·

Accounting for transactions with variable interest entities

·

Other matters that affect the reported amounts and disclosures of contingencies in the condensed consolidated financial statements.

 

Actual results could differ from those estimates.

Reclassifications
Reclassifications

 

 

Certain reclassifications have been made to amounts reported in the previous years to conform to the current presentation. Such reclassifications had no effect on net income (loss).
Revenue Recognition
Revenue Recognition
 
The Company recognizes revenue in accordance with Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 605, Revenue Recognition, which requires that four basic criteria must be met before revenue can be recognized: (1) persuasive evidence that an arrangement exists; (2) delivery has occurred or services have been rendered; (3) the fee is fixed and determinable; and (4) collectability is reasonably assured. The Company is not a counter party for trades executed through its trading platform and telephone transaction system and, instead, recognizes revenue to the extent of the flat-fee commission it receives on each trade processed for its agents and their customers.
Cash and cash equivalents
Cash and cash equivalents
 
Cash and cash equivalents consist primarily of cash on deposit, certificates of deposits, money market accounts, and investment grade commercial paper that are readily convertible to cash and purchased with original maturities of six months or less. As of September 30, 2017 and March 31, 2017, the Company had no cash equivalents. The Company reclassifies cash overdrafts to accounts payable.
Fair Value of Financial Instruments
Fair Value of Financial Instruments

 

 

ASC 820, “Fair Value Measurements”, defines fair value and establishes a three-level valuation hierarchy for disclosures of fair value measurement and enhances disclosure requirements for fair value measures. The carrying amounts reported in the balance sheets for cash, commissions receivable, loan receivable from Global Long, accounts payable and accrued liabilities and customer deposits qualify as financial instruments and are a reasonable estimate of fair value because of the short period of time between the origination of such instruments and their expected realization and their current market rate of interest.
 

 

 

 The standard establishes a fair value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement). The three levels of the fair value hierarchy defined by the standard are as follows:
 

 

 

 Level 1 - Quoted prices are available in active markets for identical assets or liabilities as of the reporting date. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis. Level 1 primarily consists of financial instruments such as exchange-traded derivatives, listed equities and U.S. government treasury securities.
 

 

 

 Level 2 - Pricing inputs are other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date. Level 2 includes those financial instruments that are valued using models or other valuation methodologies. These models are primarily industry-standard models that consider various assumptions, including quoted forward prices for commodities, time value, volatility factors, and current market and contractual prices for the underlying instruments, as well as other relevant economic measures. Substantially all of these assumptions are observable in the marketplace throughout the full term of the instrument, can be derived from observable data or are supported by observable levels at which transactions are executed in the marketplace. Instruments in this category include non-exchange-traded derivatives such as over the counter forwards, options and repurchase agreements.
 

 

 

 Level 3 - Pricing inputs include significant inputs that are generally less observable from objective sources. These inputs may be used with internally developed methodologies that result in management’s best estimate of fair value from the perspective of a market participant. Level 3 instruments include those that may be more structured or otherwise tailored to customers’ needs.
 
Commissions Receivable

Commissions Receivable

 

 

Commissions receivable represent commissions to be collected from agents for their customers’ trades executed across Man Loong’s electronic trade platform and telephone transaction system through the balance sheet date. Commissions receivable are typically remitted to the Company within 180 days of trade execution. The Company has not historically incurred credit losses on these commissions receivable. As of September 30, 2017 and March 31, 2017, the Company had no reserve for credit losses nor had it incurred any bad debts for the six months ended September 30, 2017 and 2016.
 

 

Deposits and Prepaid Expenses
Deposits and Prepaid Expenses
 
The Company records goods and services paid for but not received until a future date as deposits and prepaid expenses. These primarily include deposits and prepayments for occupancy related expenses. Deposit or prepaid expenses which will be realized more than 12 months past the balance sheet date are classified as non-current assets in the accompanying condensed consolidated balance sheets.
Equipment

Equipment

 

 

Equipment is stated at cost. The cost of an asset consists of its purchase price and any directly attributable costs of bringing the asset to its present working condition and location for its intended use.

 

 

 

Equipment is depreciated using the straight-line method over the estimated useful lives of the assets as follows:

 

 

Office equipment

 

5 years

Furniture and fixtures

 

5 years

Computer equipment

 

5 years

 

Expenditures for maintenance and repairs are charged to expense as incurred. Additions, renewals and betterments are capitalized.

 

Gain or loss on disposal of equipment is the difference between net sales proceeds and the carrying amount of the relevant assets, if any, and is recognized as income or loss in the accompanying condensed consolidated statements of comprehensive income (loss).
Reporting Currency and Foreign Currency Translation

Reporting Currency and Foreign Currency Translation

 

 

As of September 30, 2017 and March 31, 2017 and for the six months ended September 30, 2017 and 2016, the accounts of the Company were maintained in their functional currencies, which is the U.S. dollar for eBullion and the Hong Kong dollar ("HK dollar") for Man Loong. The financial statements of Man Loong have been translated into U.S. dollars which is its reporting currency. All assets and liabilities of Man Loong are translated at the exchange rate on the balance sheet date, shareholders’ equity is translated at historical rates and the statements of comprehensive income, and statements of cash flows are translated at the weighted average exchange rate for the periods. The resulting translation adjustments for the period are reported under other comprehensive income (loss) and accumulated translation adjustments are reported as a separate component of shareholders’ equity.

 

 

 

Foreign exchange rates used:

 

 

 

 

2017

 

 

2016

 

 

 

 

 

 

 

Six months ended September 30, 2017 USD/HKD exchange rate

 

 

7.8110

 

 

 

7.7548

 

Average USD/HKD exchange rate:

 

 

7.8002

 

 

 

7.7582

 

Six months ended September 30, 2017 USD/RMB exchange rate

 

 

1.1737

 

 

 

1.1625

 

Average USD/RMB exchange rate:

 

 

1.1531

 

 

 

1.1755

 

Long-Lived Assets

Long-Lived Assets

 

The Company periodically evaluates the carrying value of long-lived assets when events and circumstances warrant such review. The carrying value of a long-lived assets is considered impaired when the anticipated undiscounted cash flow from such an asset is less than its carrying value. In that event, a loss is recognized in the amount by which the carrying value exceeds the fair market value of the long-lived asset. The Company has identified no such impairment losses.

Accounts payable and accrued liabilities

Accounts payable and accrued liabilities

 

Accounts payable and accrued liabilities at September 30, 2017 and March 31, 2017 primarily consist of accrued statutory bonus payable to employees in Hong Kong, audit fees payable to the Company’s auditors and accountants and legal fees payable to the Company’s legal counsel.

Customer Deposits

Customer Deposits

 

Customer deposits at September 30, 2017 and March 31, 2017 were accepted pursuant to the Company’s agreements with certain of its independent agents. Under terms of those agreements, the Company accepts margin deposits for certain of the agents’ customers who prefer that the Company hold those deposits. If an agent’s customer suffers a trading loss equaling 80% or more of the customers’ deposit balance, the customer is required to increase the balance of his deposit or the customer’s trading position is closed and the remaining deposit balance is remitted to the agent in order to fund the customer’s trading losses.

 

Accordingly, the Company had no risk of loss related to customer deposits at September 30, 2017 and March 31, 2017.

Accumulated Other Comprehensive (Loss)

Accumulated Other Comprehensive (Loss)

 

The Company’s accumulated other comprehensive (loss) as September 30, 2017 and March 31, 2017 consists of adjustments resulting from translating Man Loong’s functional currency, the HK dollar, to its reporting currency, the U.S. dollar.

Income Taxes
Income Taxes

 

 

 The Company utilizes ASC 740, Income Taxes, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.
 

The Company has adopted the provisions of the interpretation, of ASC 740, Accounting for Uncertainty in Income Taxes. The Company did not have any material unrecognized tax benefits and there was no effect on its financial condition or results of operations as a result of implementing the interpretation. The Company files income tax returns in the United States and the Company is subject to federal income tax examinations for the fiscal years ended March 31, 2014 through 2016. Man Loong files income tax returns in Hong Kong and is no longer subject to tax examinations by tax authorities for years before 2008. At September 30, 2017, Man Loong had no uncertain tax positions.

 
Historically, we have not provided for U.S. income and foreign withholding taxes on Man Loong’s undistributed earnings, because such earnings have been retained and reinvested by Man Loong. The Company does not intend to require Man Loong to pay dividends for the foreseeable future and so additional income taxes and applicable withholding taxes that would result from the repatriation of such earnings are not practicably determinable.
 
 
 
Earnings (Loss) per Share

Earnings (Loss) per Share

 

The Company computes earnings (loss) per share (“EPS”) in accordance with ASC 260, Earnings Per Share. ASC 260 requires companies with complex capital structures to present basic and diluted EPS. Basic EPS is measured as net income divided by the weighted average common shares outstanding during the period.

 

Diluted EPS is similar to basic EPS but presents the dilutive effect on a per share basis of contracts to issue ordinary 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. The computation of diluted EPS includes the estimated impact of the exercise of contracts to purchase common stocks using the treasury stock method and the potential shares of converted common stock associated with the convertible debt using the if-converted method.

 

Potential common shares that have an anti-dilutive effect (i.e., those that increase earnings per share or decrease loss per share) are excluded from the calculation of diluted EPS.

 

The Company does not have any securities that may potentially dilute its basic earnings (loss) per share.

Comprehensive Income (Loss)
Comprehensive Income (Loss)

Comprehensive income (loss) is comprised of net income (loss) and other comprehensive income (loss). Other comprehensive income (loss) includes unrealized gains and losses resulting from translating Man Loong’s functional currency, the HK dollar, to its reporting currency, the U.S. dollar.
Recent Accounting Pronouncements

Recent Accounting Pronouncements

 

In January 2017, the FASB has issued Accounting Standards Update (ASU) No. 2017-04, “Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment.” These amendments eliminate Step 2 from the goodwill impairment test. The annual, or interim, goodwill impairment test is performed by comparing the fair value of a reporting unit with its carrying amount. An impairment charge should be recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. In addition, income tax effects from any tax deductible goodwill on the carrying amount of the reporting unit should be considered when measuring the goodwill impairment loss, if applicable. The amendments also eliminate the requirements for any reporting unit with a zero or negative carrying amount to perform a qualitative assessment and, if it fails that qualitative test, to perform Step 2 of the goodwill impairment test. An entity still has the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. Effective for public business entities that are a SEC filers for annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. ASU 2017-04 should be adopted on a prospective basis.

 

In December 2016, the FASB has issued Accounting Standards Update (ASU) No. 2016-20, “Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers.” The amendments affect narrow aspects of the guidance issued in ASU 2014-09 including Loan Guarantee Fees, Contract Costs, Provisions for Losses on Construction-Type and Production-Type Contracts, Disclosure of Remaining Performance Obligations, Disclosure of Prior Period Performance Obligations, Contract Modifications, Contract Asset vs. Receivable, Refund Liability, Advertising Costs, Fixed Odds Wagering Contracts in the Casino Industry, and Costs Capitalized for Advisors to Private Funds and Public Funds. The effective date and transition requirements for the amendments are the same as the effective date and transition requirements for FASB Accounting Standards Codification Topic 606. Public entities should apply Topic 606 (and related amendments) for annual reporting periods beginning after December 15, 2017, including interim reporting periods therein.

 

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.

XML 28 R18.htm IDEA: XBRL DOCUMENT v3.8.0.1
Nature of Operations and Basis of Presentation (Tables)
6 Months Ended
Sep. 30, 2017
Nature of Operations and Basis of Presentation [Abstract]  
Schedule of description of subsidiaries

Name

 

Place of incorporation

and kind of

legal entity

 

Principal activities

and place of operation

 

Particulars

paid-up

capital

 

Effective

interest

held

 

Man Loong Bullion Company Limited (“Man Loong”)

 

Hong Kong, a limited liability company

 

Provision of sub-agency service in London gold dealing

 

HK$10,152,000

 

100%

 

Shenzhen Qianhai Man Loong Bullion Company Limited

(“SQML”)

 

The PRC, a limited liability company

 

Provision of gold trading service in the PRC

 

RMB2,000,000

 

100%

XML 29 R19.htm IDEA: XBRL DOCUMENT v3.8.0.1
Summary of Significant Accounting Policies (Tables)
6 Months Ended
Sep. 30, 2017
Summary of Significant Accounting Policies [Abstract]  
Schedule of estimated useful lives of the assets

Office equipment

 

5 years

Furniture and fixtures

 

5 years

Computer equipment

 

5 years

Schedule of foreign exchange rates translation

 

 

2017

 

 

2016

 

 

 

 

 

 

 

 

Six months ended September 30, 2017 USD/HKD exchange rate

 

 

7.8110

 

 

 

7.7548

 

Average USD/HKD exchange rate:

 

 

7.8002

 

 

 

7.7582

 

Six months ended September 30, 2017 USD/RMB exchange rate

 

 

1.1737

 

 

 

1.1625

 

Average USD/RMB exchange rate:

 

 

1.1531

 

 

 

1.1755

 

XML 30 R20.htm IDEA: XBRL DOCUMENT v3.8.0.1
Deposits and Prepaid Expenses (Tables)
6 Months Ended
Sep. 30, 2017
Deposits and Prepaid Expenses [Abstract]  
Schedule of deposits and prepaid expenses

 

 

Unaudited

 

 

Audited

 

 

September 30,

2017

 

 

March 31,

2017

 

 

 

 

 

 

 

 

Current

 

 

 

 

 

 

Prepaid rent and occupancy expenses

 

$ 82,495

 

 

$ 42,142

 

 

 

 

 

 

 

 

 

 

Noncurrent

 

 

 

 

 

 

 

 

Rent and occupancy deposits

 

 

195,684

 

 

 

188,010

 

Total deposits and prepaid expenses

 

$ 278,179

 

 

$ 230,152

 

XML 31 R21.htm IDEA: XBRL DOCUMENT v3.8.0.1
Equipment (Tables)
6 Months Ended
Sep. 30, 2017
Property and Equipment [Abstract]  
Schedule of property and equipment, including leasehold improvements

 

 

Unaudited

September 30,

2017

 

 

Audited

March 31,

2017

 

Office equipment

 

$ 206,345

 

 

$ 206,345

 

Computer equipment

 

 

59,919

 

 

 

59,919

 

Furniture and fixtures

 

 

111,916

 

 

 

111,916

 

 

 

 

378,180

 

 

 

378,180

 

Less: Accumulated depreciation

 

 

(191,427 )

 

 

(153,830 )

Equipment, net

 

$ 186,753

 

 

$ 224,350

 

XML 32 R22.htm IDEA: XBRL DOCUMENT v3.8.0.1
General and Administrative Expenses (Tables)
6 Months Ended
Sep. 30, 2017
General and Administrative Expense [Abstract]  
Schedule of general and administrative expenses

 

 

Three months ended

September 30,

 

 

Six months ended

September 30,

 

 

 

2017

 

 

2016

 

 

2017

 

 

2016

 

Marketing expenses

 

$ -

 

 

$ 97,837

 

 

$ 8,582

 

 

$ 212,688

 

Trading platform rent

 

 

30,030

 

 

 

24,929

 

 

 

56,152

 

 

 

61,716

 

Transportation

 

 

71

 

 

 

2,014

 

 

 

826

 

 

 

3,152

 

Internet

 

 

7,944

 

 

 

5,608

 

 

 

12,649

 

 

 

10,469

 

Travel and entertainment

 

 

-

 

 

 

2,673

 

 

 

612

 

 

 

3,028

 

Computers and software

 

 

7,648

 

 

 

7,856

 

 

 

14,862

 

 

 

22,061

 

Legal and professional

 

 

41,658

 

 

 

41,700

 

 

 

63,377

 

 

 

106,466

 

Licenses

 

 

574

 

 

 

10,443

 

 

 

1,974

 

 

 

13,866

 

Occupancy

 

 

109,180

 

 

 

117,266

 

 

 

230,181

 

 

 

206,795

 

Advertising

 

 

1,280

 

 

 

124

 

 

 

2,564

 

 

 

353

 

Other

 

 

12,706

 

 

 

19,665

 

 

 

23,528

 

 

 

35,038

 

Total general and administrative expense

 

$ 211,091

 

 

$ 330,115

 

 

$ 415,307

 

 

$ 675,632

 

XML 33 R23.htm IDEA: XBRL DOCUMENT v3.8.0.1
Income Taxes (Tables)
6 Months Ended
Sep. 30, 2017
Income Taxes [Abstract]  
Schedule of income (loss) before income taxes

 

 

Six months ended

September 30,

 

 

 

2017

 

 

2016

 

United States

 

$ (19,436 )

 

 

(24,851 )
Hong Kong

 

 

(607,463 )

 

 

6,341

 

(Loss) income before income taxes

 

$ (626,899 )

 

 

(18,510 )
Schedule of income tax provision (benefit)

 

 

Six months Ended

September 30,

 

 

 

2017

 

 

2016

 

Current:

 

 

 

 

 

 

United States

 

$ -

 

 

$ -

 

Hong Kong

 

 

-

 

 

 

-

 

Total current provision

 

 

-

 

 

 

-

 

 

 

 

 

 

 

 

 

 

Deferred:

 

 

 

 

 

 

 

 

United States

 

 

-

 

 

 

-

 

Hong Kong

 

 

(2,477 )

 

 

(3,668 )

Total deferred benefit

 

 

(2,477 )

 

 

(3,668 )

 

 

 

 

 

 

 

 

 

Total income tax provision (benefit)

 

$ (2,477 )

 

$ (3,668 )
Schedule of reconciliation of the income tax provision (benefit)

 

 

Six months

Ended September 30,

 

 

 

2017

 

 

2016

 

Income tax provision (benefit) at the U.S. statutory tax rate

 

$ (213,145 )

 

$ (6,293 )

Valuation allowance on U.S. net operating loss carryforwards

 

 

6,608

 

 

 

8,449

 

Impact of foreign operations

 

 

204,060

 

 

 

(5,824 )

Income tax provision (benefit)

 

$ (2,477 )

 

$ (3,668 )
XML 34 R24.htm IDEA: XBRL DOCUMENT v3.8.0.1
Commitments (Tables)
6 Months Ended
Sep. 30, 2017
Commitments and contingencies [Abstract]  
Schedule of future annual minimum lease payments

Years ending September 30,

 

 

 

2018

 

$ 504,710

 

2019

 

 

47,478

 

 

 

$ 552,188

 

XML 35 R25.htm IDEA: XBRL DOCUMENT v3.8.0.1
Nature of Operations and Basis of Presentation (Details) - 6 months ended Sep. 30, 2017 - Limited liability company
HKD
CNY (¥)
Man Loong Bullion Company Limited ("Man Loong") | Hong Kong    
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items]    
Principal activities and place of operation Provision of sub-agency service in London gold dealing  
Particulars paid-up capital | HKD HKD 10,152,000  
Effective interest held 100.00%  
Shenzhen Qianhai Man Loong Bullion Company Limited ("SQML") | PRC    
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items]    
Principal activities and place of operation Provision of gold trading service in the PRC  
Particulars paid-up capital | ¥   ¥ 2,000,000
Effective interest held 100.00%  
XML 36 R26.htm IDEA: XBRL DOCUMENT v3.8.0.1
Summary of Significant Accounting Policies (Details)
6 Months Ended
Sep. 30, 2017
Office equipment  
Property, Plant and Equipment [Line Items]  
Equipment estimated useful lives 5 years
Furniture and fixtures  
Property, Plant and Equipment [Line Items]  
Equipment estimated useful lives 5 years
Computer equipment  
Property, Plant and Equipment [Line Items]  
Equipment estimated useful lives 5 years
XML 37 R27.htm IDEA: XBRL DOCUMENT v3.8.0.1
Summary of Significant Accounting Policies (Details 1)
6 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Six months ended USD/HKD exchange rate    
Accounting Policy [Line Items]    
Foreign exchange rate 7.8110 7.7548
Average USD/HKD exchange rate:    
Accounting Policy [Line Items]    
Foreign exchange rate 7.8002 7.7582
Six months ended USD/RMB exchange rate    
Accounting Policy [Line Items]    
Foreign exchange rate 1.1737 1.1625
Average USD/RMB exchange rate    
Accounting Policy [Line Items]    
Foreign exchange rate 1.1531 1.1755
XML 38 R28.htm IDEA: XBRL DOCUMENT v3.8.0.1
Summary of Significant Accounting Policies (Detail Textuals)
6 Months Ended
Sep. 30, 2017
Summary of Significant Accounting Policies [Abstract]  
Customer deposits description If an agent's customer suffers a trading loss equaling 80% or more of the customers' deposit balance, the customer is required to increase the balance of his deposit or the customer's trading position is closed and the remaining deposit balance is remitted to the agent in order to fund the customer's trading losses.
XML 39 R29.htm IDEA: XBRL DOCUMENT v3.8.0.1
Deposits and Prepaid Expenses (Details) - USD ($)
Sep. 30, 2017
Mar. 31, 2017
Current    
Prepaid rent and occupancy expenses $ 82,495 $ 42,142
Noncurrent    
Rent and occupancy deposits 195,684 188,010
Total deposits and prepaid expenses $ 278,179 $ 230,152
XML 40 R30.htm IDEA: XBRL DOCUMENT v3.8.0.1
Loan receivable from Global Long (Detail Textuals)
Apr. 03, 2015
USD ($)
Mar. 31, 2017
USD ($)
Apr. 03, 2015
HKD
Accounts, Notes, Loans and Financing Receivable [Line Items]      
Loan receivable from Global Long Inc. Limited   $ 772,157  
Global Long      
Accounts, Notes, Loans and Financing Receivable [Line Items]      
Loan receivable from Global Long Inc. Limited $ 774,164   HKD 6,000,000
Interest rate on loan 6.00%    
XML 41 R31.htm IDEA: XBRL DOCUMENT v3.8.0.1
Equipment (Details) - USD ($)
Sep. 30, 2017
Mar. 31, 2017
Property, Plant and Equipment [Line Items]    
Equipment, gross $ 378,180 $ 378,180
Less: Accumulated depreciation (191,427) (153,830)
Equipment, net 186,753 224,350
Office equipment    
Property, Plant and Equipment [Line Items]    
Equipment, gross 206,345 206,345
Computer equipment    
Property, Plant and Equipment [Line Items]    
Equipment, gross 59,919 59,919
Furniture and fixtures    
Property, Plant and Equipment [Line Items]    
Equipment, gross $ 111,916 $ 111,916
XML 42 R32.htm IDEA: XBRL DOCUMENT v3.8.0.1
Equipment (Detail Textuals) - USD ($)
3 Months Ended 6 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Sep. 30, 2017
Sep. 30, 2016
Property and Equipment [Abstract]        
Depreciation expense $ 18,763 $ 18,905 $ 37,597 $ 37,800
XML 43 R33.htm IDEA: XBRL DOCUMENT v3.8.0.1
General and Administrative Expenses (Details) - USD ($)
3 Months Ended 6 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Sep. 30, 2017
Sep. 30, 2016
General and Administrative Expense [Abstract]        
Marketing expenses $ 0 $ 97,837 $ 8,582 $ 212,688
Trading platform rent 30,030 24,929 56,152 61,716
Transportation 71 2,014 826 3,152
Internet 7,944 5,608 12,649 10,469
Travel and entertainment 0 2,673 612 3,028
Computers and software 7,648 7,856 14,862 22,061
Legal and professional 41,658 41,700 63,377 106,466
Licenses 574 10,443 1,974 13,866
Occupancy 109,180 117,266 230,181 206,795
Advertising 1,280 124 2,564 353
Other 12,706 19,665 23,528 35,038
Total general and administrative expense $ 211,091 $ 330,115 $ 415,307 $ 675,632
XML 44 R34.htm IDEA: XBRL DOCUMENT v3.8.0.1
Income Taxes (Details) - USD ($)
3 Months Ended 6 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Sep. 30, 2017
Sep. 30, 2016
Tax jurisdictions from:        
Local     $ (19,436) $ (24,851)
(Loss) income before income taxes $ (328,837) $ 33,718 (626,899) (18,510)
HONG KONG        
Tax jurisdictions from:        
Foreign     $ (607,463) $ 6,341
XML 45 R35.htm IDEA: XBRL DOCUMENT v3.8.0.1
Income Taxes (Details 1) - USD ($)
3 Months Ended 6 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Sep. 30, 2017
Sep. 30, 2016
Current:        
United States     $ 0 $ 0
Total current provision $ 0 $ 0 0 0
Deferred:        
United States     0 0
Total deferred benefit 5 (2,405) (2,477) (3,668)
Total income tax provision (benefit) $ 5 $ (2,405) (2,477) (3,668)
Hong Kong        
Current:        
Foreign     0 0
Deferred:        
Foreign     $ (2,477) $ (3,668)
XML 46 R36.htm IDEA: XBRL DOCUMENT v3.8.0.1
Income Taxes (Details 2) - USD ($)
3 Months Ended 6 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Sep. 30, 2017
Sep. 30, 2016
Income Taxes [Abstract]        
Income tax provision (benefit) at the U.S. statutory tax rate     $ (213,145) $ (6,293)
Valuation allowance on U.S. net operating loss carryforwards     6,608 8,449
Impact of foreign operations     204,060 (5,824)
Total income tax provision (benefit) $ 5 $ (2,405) $ (2,477) $ (3,668)
XML 47 R37.htm IDEA: XBRL DOCUMENT v3.8.0.1
Income Taxes (Detail Textuals) - USD ($)
6 Months Ended
Sep. 30, 2017
Mar. 31, 2017
Income Taxes [Abstract]    
Operating loss carryforwards $ 480,000  
Operating loss valuation allowance 163,200  
Deferred income taxe assets $ 2,474 $ 71,221
Operating loss carryforwards, expiration date Mar. 31, 2037  
XML 48 R38.htm IDEA: XBRL DOCUMENT v3.8.0.1
Related Party Transactions and Balances (Detail Textuals) - USD ($)
1 Months Ended 6 Months Ended
Apr. 30, 2013
May 27, 2011
Sep. 30, 2017
Sep. 30, 2016
Related Party Transaction [Line Items]        
Salaries and director compensation     $ 19,230 $ 18,045
True Technology Company Limited ("True Technology")        
Related Party Transaction [Line Items]        
Related party internet service fees $ 3,868 $ 12,894    
Rental fees     $ 23,076 $ 23,201
XML 49 R39.htm IDEA: XBRL DOCUMENT v3.8.0.1
Commitments and contingencies (Details)
Sep. 30, 2017
USD ($)
Years ending March 31,  
2018 $ 504,710
2019 47,478
Future annual minimum lease payments $ 552,188
XML 50 R40.htm IDEA: XBRL DOCUMENT v3.8.0.1
Commitments and contingencies (Detail Textuals)
1 Months Ended
Apr. 30, 2017
USD ($)
Sep. 30, 2015
USD ($)
ft²
Dec. 31, 2012
USD ($)
ft²
May 27, 2011
USD ($)
Commitments And Contingencies [Line Items]        
Area of office space | ft²   5,500 10,000  
Lease deposits   $ 147,397 $ 192,000  
Payment for management fee   $ 27,209 $ 46,647  
Lease term   35 months 29 months  
True Technology Company Limited ("True Technology")        
Commitments And Contingencies [Line Items]        
Fees paid per month for 12 months       $ 12,894
Renewal term 2 years      
Monthly payment for 24 months $ 3,866      
Lease expiration date Mar. 31, 2019      
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