NOTES
TO THE UNAUDITED CONDENSED FINANCIAL STATEMENTS
FOR
THE THREE MONTHS ENDED JULY 31, 2018 AND 2017
NOTE
1 – ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization
and Description of Business
Historically, Evergreen International
Corp. (formerly Arbor Entech Corporation) (“Evergreen”, “we” or “the
Company”) was a wood products company that had been in business since 1980. Our business fluctuated over the years. We
were almost wholly dependent on sales to The Home Depot, Inc. On September 2, 2003, we terminated our business relationship
with Home Depot due to increased difficulties in transacting business with such company on a profitable basis. These
difficulties included Home Depot’s prohibition against price increases, despite increases in our costs of production, a
diminution in the Home Depot territories to which we were allowed to sell product, and Home Depot’s demands regarding
returns of ordered products that we were unwilling to accede to for economic reasons.
On
June 22, 2018,
the Company entered into a Stock Purchase Agreement (the “SPA”)
with a third party (the “Purchaser”) and certain selling stockholders, including the Company’s controlling stockholders
(the “Sellers”), pursuant to which the Purchaser has agreed to acquire shares
of common stock representing
approximately 98.75% of the company’s issued and outstanding common stock (the “Shares”). The transaction contemplated
by the SPA was subject to various conditions, including payment of a cash dividend to the Company’s stockholders and the
Company’s changing its name and stock symbol as per the direction of the Purchaser.
On July 6, 2018, the Board of directors
of the Company (i) declared a cash dividend in an aggregate amount of $181,996, or an average of $0.024760 per share, payable to
stockholders of record on July 16, 2018, and (ii) approved an amendment to the Company’s Certificate of Incorporation to
change the Company’s name to Evergreen International Corp., which amendment was filed with the Secretary of State of the
State of Delaware on July 13, 2018 and became effective July 27, 2018.
On
July 27, 2018, the transactions contemplated by the SPA were closed, and as a result, the Purchaser completed the acquisition
of the Shares, representing 98.75% of the company’s issued and outstanding common stock for $325,000, which was funded out
of the purchaser’s personal funds. The consummation of the transactions contemplated by the SPA resulted in a change of
control of the Company.
Basis
of Presentation
The accompanying financial statements as
of July 31, 2018 and for the three months ended July 31, 2018 and 2017 are unaudited. In the opinion of management, all adjustments
have been made, consisting of normal recurring items, that are necessary to present fairly the financial position as of July 31,
2018 as well as the results of operations and cash flows for the three months ended July 31, 2018 and 2017 in accordance with accounting
principles generally accepted in the United States of America. The results of operations for any interim period are not necessarily
indicative of the results expected for the full year. The interim financial statements and related notes thereto should be read
in conjunction with the audited financial statements and related notes thereto for the fiscal year ended April 30, 2018.
Interim
Financial Statements
The interim condensed financial
statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission from the
accounts of the Company without audit. The condensed balance sheet at April 30, 2018 was derived from audited financial
statements but does not include all disclosures required by accounting principles generally accepted in the United States of
America. The other information in these condensed financial statements is unaudited; however, in the opinion of management,
the information presented reflects all adjustments of a normal recurring nature which are necessary to present fairly the
Company's financial position and results of operations and cash flows for the period presented. It is recommended that these
condensed financial statements be read in conjunction with the financial statements and the notes thereto included in the
Company's fiscal year 2018 Annual Report on Form 10-K filed on July 24, 2018 and other financial reports filed by the Company
from time to time.
Cash
and Cash Equivalents
The
Company considers all highly liquid short-term investments with a maturity of three months or less at time of purchase to be cash
equivalents.
Use
of Estimates
The
preparation of financial statements in conformity with accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure
of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.
Income
Taxes
Income
taxes are provided in accordance with ASC 740 Accounting for Income Taxes. A deferred tax asset or liability is recorded for all
temporary differences between financial and tax reporting and net operating loss carry forwards. Deferred tax expense (benefit)
results from the net change during the year of deferred tax assets and liabilities. Deferred tax assets are reduced by a valuation
allowance when, in the opinion of management, it is more likely than not that some portion of all of the deferred tax assets will
be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of
enactment.
Income
(Loss) Per Common Share
The
basic computation of loss per share is based on the weighted average number of shares outstanding during the period presented
in accordance with ASC 260, “Earnings Per Share”. Since the Company has no common stock equivalents, diluted earnings
(loss) per share is the same as basic earnings (loss) per share.
Fair
Value of Financial Instruments
The
fair value of the Company’s financial instruments, which consist primarily of cash and cash equivalents and accounts payable
and accrued liabilities, approximate their carrying amounts reported due to their short-term nature.
Concentration
of Credit Risk
Financial instruments that potentially subject
the Company to concentration of credit risk consist of cash accounts in a financial institution which, at times may exceed the
Federal depository insurance coverage of $250,000. The Company has not experienced losses on these accounts and management believes
the Company is not exposed to significant risks on such accounts.
NOTE
2 – STOCKHOLDERS EQUITY
Change
of Control
On
June 22, 2018, the Company entered into a Stock Purchase Agreement (the “SPA”) with Tan Ying Lok (the “Purchaser”)
and certain selling stockholders, including Airmont Trust and Brad Houtkin, the Company’s two controlling stockholders (collectively,
the “Sellers”), pursuant to which the Purchaser agreed to acquire 7,258,850 shares of common stock representing approximately
98.75% of the company’s issued and outstanding common stock (the “Shares”) for $325,000.
On
July 27, 2018, the transactions contemplated by the SPA was closed, and as a result, the Purchaser completed the acquisition of
the Shares, representing 98.75% of the company’s issued and outstanding common stock for $325,000, which was funded out
of the purchaser’s personal funds. The consummation of the transactions contemplated by the SPA resulted in a change of
control of the Company.
Special
Dividend
As a condition to the SPA discussed above,
the Company issued a cash dividend of substantially all of its cash, less a reserve to discharge any remaining liabilities of the
Company. The dividend was paid based on an average rate of $0.024760 per share for an aggregate total of $181,996.
NOTE
3 – CHANGES IN MANAGEMENT
Pursuant
to the requirements of the SPA closed on July 27, 2018, effective on August 6, 2018, Mr. Brad Houtkin resigned from his positions
as President, CEO, CFO, Treasurer and Director of the Company. Mr. Michael Houtkin resigned as the Secretary and Director of the
Company, and Ms. Sherry Houtkin resigned as the Director of the Company. Further, effective as of the same date, the Board of
Directors of the Company appointed Jianguo Wei as the sole Director, CEO, CFO, President and Treasurer of the Company, and Ge
Gao as the Corporate Secretary of the Company.
NOTE
4 – SUBSEQUENT EVENTS
We have evaluated all events that occurred
after the balance sheet date through the date when our financial statements were issued to determine if they must be reported.
Management has determined that there were no additional reportable subsequent events to be disclosed.
Evergreen
International Corp.