Pony Group Inc. 10-K

Item 8. Financial Statements and Supplementary Data The financial statements required by this item begin on page F-1 hereof. Index to Financial Statements Report of Independent Registered Public Accounting Firm (PCAOB ID #6781) F-2 Financial Statements: Consolidated Balance Sheets as of December 31, 2024 and 2023 F-3 Consolidated Statements of Operations and Comprehensive Loss for the Years Ended December 31, 2024 and 2023 F-4 Consolidated Statements of Changes in Stockholders’ Equity for the Years Ended December 31, 2024 and 2023 F-5 Consolidated Statements of Cash Flows for the Years Ended December 31, 2024 and 2023 F-6 Notes to Consolidated Financial Statements F-7 F- 1 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Stockholders of Pony Group Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Pony Group Inc and Subsidiaries (collectively, the “Company”) as of December 31, 2024 and 2023, and the related consolidated statements of operations and comprehensive loss, changes in stockholders’ equity, and cash flows for the years ended December 31, 2024 and 2023, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for years ended December 31, 2024 and 2023, in conformity with accounting principles generally accepted in the United States of America. Going Concern The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 3 to the consolidated financial statements, the Company has an accumulated deficit as of December 31, 2024, recurring net losses and net cash used in operating activities for the year then ended. Those factors raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 3. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. Basis for Opinion These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statement. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matters The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. We determined that there are no critical audit matters. /s/ YCM CPA INC. We have served as the Company’s auditor since 2023. PCAOB ID 6781 Irvine, California March 27, 2025 F- 2 PONY GROUP INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS December 31, 2024 December 31, 2023 Assets Current assets Cash and cash equivalents $ 10,952 $ 16,578 Accounts receivables 5,880 20,224 Other receivables 297 260 Total current assets 17,129 37,062 Total assets $ 17,129 $ 37,062 Liabilities and Equity Current liabilities Other payable- related parties 640,066 503,543 Other current liability 52,439 51,649 Total current liabilities 692,505 555,192 Total liabilities $ 692,505 $ 555,192 Stockholders’ equity Common stock, $ 0.001 par value; 70,000,000 shares authorized, 11,500,000 shares issued and outstanding as of December 31, 2024 and 2023 11,500 11,500 Additional paid-in capital 176,000 176,000 Accumulated foreign currency exchange gain 25,618 18,790 Accumulated deficit ( 888,494 ) ( 724,420 ) Total stockholders’ equity ( 675,376 ) ( 518,130 ) Total liabilities and Stockholders’ equity $ 17,129 $ 37,062 The accompanying notes are integral to these consolidated financial statements. F- 3 PONY GROUP INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS For the Years Ended December 31, 2024 2023 Revenue $ 97,394 $ 177,570 Cost of revenue 55,473 96,107 Gross profit 41,921 81,463 Operating expenses General & administrative expenses 204,957 229,301 Total operating expenses 204,957 229,301 Loss from operation ( 163,036 ) ( 147,838 ) Other income (expenses) Other income (expenses) ( 1,038 ) ( 683 ) Total other income (expenses) ( 1,038 ) ( 683 ) Loss before income taxes ( 164,074 ) ( 148,521 ) Provision for income tax - - Net Loss $ ( 164,074 ) $ ( 148,521 ) Other Comprehensive Income 6,828 5,855 Comprehensive loss $ ( 157,246 ) $ ( 142,666 ) Basic and diluted earnings (loss) per share of common stock $ ( 0.014 ) $ ( 0.013 ) Weighted average number of shares outstanding 11,500,000 11,500,000 The accompanying notes are integral to these consolidated financial statements. F- 4 PONY GROUP INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGE IN STOCKHOLDERS’ EQUITY For the Years Ended December 31, 2024 and 2023 Common stock Additional Paid-In Subscription received in Accumulated Other Comprehensive Income Accumulated Shares* Amount Capital advance (Loss) Deficit Total Balance as of December 31, 2022 (As restated) 11,500,000 $ 11,500 $ 176,000 $ - $ 12,935 $ ( 575,899 ) $ ( 375,464 ) Cumulative Foreign currency translation adjustment - - - - 5,855 5,855 Net Loss - - - - ( 148,521 ) ( 148,521 ) Balance as of December 31, 2023 11,500,000 $ 11,500 $ 176,000 $ - $ 18,790 $ ( 724,420 ) $ ( 518,130 ) Cumulative Foreign currency translation adjustment - - - - 6,828 6,828 Net Loss - - - - ( 164,074 ) ( 164,074 ) Balance as of December 31, 2024 11,500,000 $ 11,500 $ 176,000 $ - $ 25,618 $ ( 888,494 ) $ ( 675,376 ) The accompanying notes are integral to these consolidated financial statements. F- 5 PONY GROUP INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS For the Years Ended December 31, 2024 2023 Cash flows from operating activities: Net Loss $ ( 164,074 ) $ ( 148,521 ) Changes in operating assets and liabilities: Accounts receivable 14,344 5,409 Other receivable ( 37 ) 43,084 ) Deferred revenue - ( 14,910 ) Accounts payable - ( 31,343 ) Other payable 790 ( 6,668 ) Net cash used in operating activities ( 148,977 ) ( 152,949 ) Cash flows from financing activities: Advance from related party 136,523 129,676 Net cash provided by financing activities 136,523 129,676 Effects of currency translation on cash 6,828 5,855 Net decrease in cash ( 5,626 ) ( 17,418 ) Cash at beginning of the period 16,578 33,996 Cash at end of period $ 10,952 $ 16,578 The accompanying notes are integral to these consolidated financial statements. F- 6 PONY GROUP INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 1 - ORGANIZATION AND PRINCIPAL ACTIVITIES Organization and Operations PONY GROUP INC, (the “Company” or “PONY”) was incorporated on January 7, 2019 in the state of Delaware. On March 7, 2019, the Company entered into and a stock purchase agreement with Wenxian Fan, the sole owner of PONY LIMOUSINE SERVICES LIMITED (“Pony HK”), a limited liability company formed under the laws of Hong Kong on April 28, 2016, to acquire 100 % equity ownership of Pony HK. Pony HK provides cross boarder limousine services to its customers and dedicated to developing applications based on Wechat platform. As a result, Pony HK has become the Company’s wholly owned subsidiary. On February 2, 2019, Universe Travel Culture & Technology Ltd. (“Universe Travel”) was incorporated as a wholly-owned PRC subsidiary of Pony HK. NOTE 2 - Basis of presentation and summary of significant accounting policies Basis of Accounting and Presentation - The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Use of Estimates - The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Leases- On March 31, 2022, the Company adopted ASU 2016-02, Leases (Topic 842). For all leases that were entered into prior to the effective date of Topic 842, the Company elected to apply the package of practical expedients. Based on this guidance the Company did not reassess the following: (1) whether any expired or existing contracts are or contain leases; (2) the lease classification for any expired or existing leases; and (3) initial direct costs for any existing leases. The adoption of Topic 842 did not have a material impact on the Company’s consolidated statements of operations and comprehensive income (loss). Principles of Consolidation- The consolidated financial statements include the financial statements of PONY GROUP INC and its subsidiaries. All inter-company balances and transactions have been eliminated upon consolidation. Company Date of establishment Place of establishment Percentage of legal ownership by Pony Principal activities Subsidiaries: Pony HK April 28, 2016 Hong Kong, PRC 100 % Car services Universe Travel February 2, 2019 Mainland, PRC 100 % Car services and Technological development and operation service Cash and Cash Equivalents – For purpose of the statements of cash flows, the Company considers all highly liquid debt instruments purchased with a maturity of 90 days or less to be cash equivalents. There is no cash equivalents as of December 31, 2024 and 2023. Accounts Receivable - The customers are required to make payments when they book the services, otherwise, the services will not be arranged. Sometimes, the Company extends credit to its group clients. F- 7 As of December 31, 2024 and December 31, 2023, accounts receivable were $ 5,880 and $ 20,224 , respectively. The company considers accounts receivable to be fully collectible and determined that an allowance for doubtful accounts was not necessary. For the year ended December 31, 2024, the following clients accounted for over 10 % of the revenue for the company: JunRong Development Co., Ltd with 31.58 %; XAARPLC (Shenzhen) Technology Ltd with 11.29 %. The Company determines the adequacy of reserves for doubtful accounts based on individual account analysis and historical collections. The Company establishes a provision for doubtful receivables when there is objective evidence that the Company may not be able to collect amounts due. The allowance is based on management’s best estimates of specific losses on individual exposures, as well as a provision on historical trends of collections. The provision is recorded against accounts receivable balances, with a corresponding charge recorded in the consolidated statements of operations and comprehensive income (loss). Actual amounts received may differ from management’s estimate of credit worthiness and the economic environment. Delinquent account balances are written-off against the allowance for doubtful accounts after management has determined that the likelihood of collection is not probable. Revenue Recognition - The Company recognizes revenue in accordance with ASC 606. The core principle of ASC606 is to recognize revenue when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received for those goods or services. ASC 606 defines a five-step process to achieve this core principle, which includes: (1) identifying contracts with customers, (2) identifying performance obligations within those contracts, (3) determining the transaction price, (4) allocating the transaction price to the performance obligation in the contract, which may include an estimate of variable consideration, and (5) recognizing revenue when or as each performance obligation is satisfied. Our sales arrangements generally ask customers to pay in advance before any services can be arranged. The company recognizes revenue when each performance obligation is satisfied. Documents and terms and the completion of any customer acceptance requirements, when applicable, are used to verify services rendered. The Company has no returns or sales discounts and allowances because services rendered and accepted by customers are normally not returnable. Car service The Company currently provides car services to individual and group travelers. It currently offers carpooling, airport pick-up and drop-off, and personal driver services for travelers between Guangdong Province and Hong Kong. It collaborates with car fleet companies and charge a service fee by matching the traveler and the driver. Redefining the user experience, the Company aims to provide its users with comprehensive and convenient service offerings and become a one-stop travel booking resource for travelers. When the traveler selects and initiates a car service request, an estimated service fee is displayed and the traveler can further decide whether to place the service request or not. Once the traveler places the ride service request and the Company accepts the service request, a car service agreement is entered into between the traveler and the Company. Upon completion of the car services, the Company recognizes ride hailing services revenues on a gross basis. Technological development and operation service Revenues from technological development service, including information technology system design and cloud platform development, revenue are recognized monthly by fixed amount based on the contract. From time to time, the Company enters into arrangement to provide technological support and maintenance service of applications to its customers. the Company’s efforts are expended evenly throughout the service period. The revenues for the technological support and maintenance service are recognized over the support and maintenance services period, usually from 3 months to one year. The Company’s contracts have a single performance obligation and are primarily on a fixed-price basis. No significant returns, refund and other similar obligations during each reporting period. F- 8 Cost of revenue – For car services, cost of revenues, which are directly related to revenue generating transactions, primarily consists of driver earnings and driver incentives. For technological development and operation service, cost of revenue includes of the salaries of development department and the service fee paid to third party. Income Taxes – Income tax expense represents current tax expense. The income tax payable represents the amounts expected to be paid to the taxation authority. Hong Kong profits tax has been provided at the rate of 16.5 % on the estimated assessable profit for the period. Value added tax (“VAT”) – Sales revenue derived from the invoiced car service and technological development and operation service is subject to VAT. Prior to that, the Company was subject to a fixed rate of business tax of 3 %. Foreign Currency Translation – Pony HK’s functional currency is the Hong Kong Dollar (HK$) and Universe Travel’s functional currency is the Renminbi (RMB). The reporting currency is that of the US Dollar. Assets, liabilities and equity amounts are translated at the exchange rates as of the balance sheet date. Income and expenditures are translated at the average exchange rate of the year. The exchange rates used to translate amounts in HK$ and RMB into USD for the purposes of preparing the financial statements were as follows: December 31, 2024 Balance sheet HK$ 7.77 to US $1.00 RMB 7.30 to US $1.00 Statement of operation and other comprehensive income HK$ 7.80 to US $1.00 RMB 7.20 to US $1.00 December 31, 2023 Balance sheet HK$ 7.81 to US $1.00 RMB 7.09 to US $1.00 Statement of operation and other comprehensive income HK$ 7.83 to US $1.00 RMB 7.08 to US $1.00 Recent accounting pronouncements The Company does not believe that any recently issued but not yet effective accounting standards, if currently adopted, would have a material effect on the consolidated financial position, statements of operations and cash flows. F- 9 NOTE 3 - GOING CONCERN The Company had net losses of $ 164,074 and $ 148,521 during the years ended December 31, 2024 and 2023, respectively. The Company has accumulated deficit of $ 888,494 and working capital deficit of $ 675,376 as of December 31, 2024. The Company’s continuation as a going concern is dependent on its ability to generate sufficient cash flows from operations to meet its obligations and/or obtain additional financing, as may be required. The accompanying financial statements have been prepared assuming the Company will continue as a going concern; however, the above condition raises substantial doubt about the Company’s ability to do so. The financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result should the Company be unable to continue as a going concern. In order to continue as a going concern, the Company will need, among other things, additional capital resources. Management’s plans to obtain such resources for the Company include (1) obtaining capital from the sale of its equity securities, (2) sales of the Company’s products, (3) short-term and long-term borrowings from banks, and (4) short-term borrowings from stockholders or other related party (ies) when needed. However, management cannot provide any assurance that the Company will be successful in accomplishing any of its plans. The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually to secure other sources of financing and attain profitable operations. NOTE 4 - RELATED PARTY TRANSACTIONS Wenxian Fan is the founder of our Company and has been serving as our Chair of the Board of Directors, Chief Executive Officer and Chief Financial Officer since its inception. Wenxian Fan loaned working capital to Pony HK and Universe Travel with no interest and paid on behalf of the company for the subcontracted services and employee salaries. The Company has the following payables to Ms. Wenxian Fan: December 31, 2024 December 31, 2023 To Wenxian Fan $ 640,066 $ 503,543 Total due to related parties $ 640,066 $ 503,543 Universe Travel entered into a Lease Agreement with Shenzhen Yilutong Technology Co. Ltd (founded by Ms. Wenxian Fan in December 2015.), the Company rented a portion at Engineer Experiment Building, A202, 7 Gaoxin South Avenue, Nanshan District, Shenzhen, Guangdong Province, China, encompassing approximately 205 square meters of space for a monthly rent of RMB 10,000 (approximately $ 1,408 ). This contract will terminate on March 31, 2025 and the Company expects to renew such lease for a further term upon expiration. NOTE 5 - MAJOR SUPPLIERS AND CUSTOMERS The Company purchased majority of its subcontracted services from three major suppliers: Yahong Business Limited with 47.43 %, CHANGYING BUSINESS LIMITED with 17.77 % and Shenzhen Yuegang Liantong Car Service., Ltd with 11.29 % of the total cost for the year ended December 31, 2024. The Company purchased majority of its subcontracted services from one major supplier: CHANGYING BUSINESS LIMITED representing 21.31 % of the total cost for the year ended December 31, 2023. The Company had two major customers for the year ended December 31, 2024: JunRong Development Co., Ltd with 31.58 %; XAARPLC (Shenzhen) Technology Ltd with 20.98 % of the total revenue The Company had three major customers for the year ended December 31, 2023: Shenzhen Zhongke Hengjin with 27.56 %; Shenzhen Eryuechuer Culture & Technology., Ltd, with 14.17 %; and Shenzhen Shangjia Electronic Technology., Ltd with 11.81 % of the total revenue F- 10 NOTE 6 - LEASES On March 31, 2022, the Company adopted ASU 2016-02, Leases (ASC Topic 842). For all leases that were entered into prior to the effective date of Topic 842, the Company elected to apply the package of practical expedients. The Company leases office space under non-cancelable operating leases, with terms typically ranging from one to four years . The Company determines whether an arrangement is or includes an embedded lease at contract inception. Operating lease assets and lease liabilities are recognized at commencement date and initially measured based on the present value of lease payments over the defined lease term. Lease expense is recognized on a straight-line basis over the lease term. On March 1, 2022, Universe Travel entered into a Lease Agreement with Shenzhen Yilutong Technology Co. Ltd (founded by Ms. Wenxian Fan in December 2015.), pursuant to which the Company rented a portion at Engineer Experiment Building, A202, 7 Gaoxin South Avenue, Nanshan District, Shenzhen, Guangdong Province, China, encompassing approximately 205 square meters of space for a monthly rent of RMB 10,000 (approximately $1, 424). The lease term was from March 1, 2022 to March 31, 2023. On April 1, 2023, the Company renewed such lease contract and the term was from April 1, 2023 to March 31, 2024. On April 1, 2024, the Company renewed the Lease Agreement with Shenzhen Yilutong Technology Co. Ltd with a one -year term beginning on April 1, 2024 and terminating on March 31, 2025. The Company expects to renew such lease for a further term upon expiration. NOTE 7 - COMMON STOCK As of December 31, 2024 and 2023, there were 11,500,000 shares of common stock, par value $ 0.001 per share, of the registrant issued and outstanding. NOTE 8 - C OMMITMENTS AND CONTINGENCIES Legal proceedings From time to time, we may in the future become a party to various legal or administrative proceedings arising in the ordinary course of our business, including actions with respect to intellectual property infringement, violation of third-party licenses or other rights, breach of contract and labor and employment claims. We are currently not a party to, and we are not aware of any threat of, any legal or administrative proceedings that, in the opinion of our management, are likely to have any material and adverse effect on our business, financial condition, cash-flow or results of operations. NOTE 9 - SUBSEQUENT EVENTS Management has evaluated subsequent events through March 27, 2025, the date which the financial statements were available to be issued. All subsequent events requiring recognition as of December 31, 2024 have been incorporated into these financial statements and there are no subsequent events that require disclosure in accordance with FASB ASC Topic 855, “Subsequent Events.” F- 11 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure On April 6, 2023, the Board of Directors of the Company dismissed Ben Borges CPA PC (“BBCPA”) as the Company’s independent registered public accounting firm. During the fiscal years ended December 31, 2022 and 2021 there have been no (i) disagreements with BBCPA on any matter or accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which connects with its reports; or (ii) “reportable events” as defined in Item 304(a)(1)(v) of Regulation S-K. The audit reports of BBCPA on the Company’s financial statements as of and for the years ended December 31, 2022 and 2021 contained no adverse opinion or disclaimer of opinion nor were any such reports qualified or modified as to uncertainty, audit scope or accounting principle.