Quarterly Report (10-q)

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

 

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

For the quarterly period ended  March 31, 2014

o  TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT

 

For the transition period from ______________ to ______________

SEC file number  333-163035

 

Hyperera, Inc.

(Name of small business issuer in our charter)

 

Nevada		7370		26-2007556
(State or other jurisdiction of incorporation or organization)		(Primary Standard Industrial Classification Code Number)		IRS I.D.

 

2316 S Wentworth Ave Chicago, IL		60616
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number:  312-842-2288

N/A

(Former name, former address and former six months, if changed since last report)

 

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 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  o

 

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.

 

Large accelerated filer	o	Accelerated filer	o
Non-accelerated filer	o	Smaller Reporting Company	x

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

As of March 31, 2014 there were 40,104,000 shares issued and outstanding of the registrant’s common stock.

 

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TABLE OF CONTENTS

 

PART I — FINANCIAL INFORMATION
Item 1.	Financial Statements.			3
Item 2.	Management’s Discussion and Analysis or Plan of Operation.			25
Item 3.	Quantitative and Qualitative Disclosure about Market Risk.			31
Item 4.	Controls and Procedures.			31
PART II — OTHER INFORMATION
Item 1.	Legal Proceedings.			32
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.			32
Item 3.	Defaults Upon Senior Securities.			32
Item 4.	Mine Safety Disclosures.			32
Item 5.	Other Information.			32
Item 6.	Exhibits.			33

 

 

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PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

 

HYPERERA, INC.

 

(A Development Stage Enterprise)

 

Financial Statements

(Unaudited)

 

As of March 31, 2014

 

 

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Table of Contents

Consolidated Balance Sheet			5
Consolidated Statement of Operation			6
Statement of Shareholders Equity			7
Consolidated Statement of Cash Flow			8
Notes to Consolidated Financial Statements			9
Exhibit A			24

 

 

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HYPERERA, INC.

(A Development Stage Enterprise)

CONSOLIDATED BALANCE SHEETS

 

		March 31,				December 31,
		2014				2013
ASSETS
Current assets:
Cash and cash equivalents		$	126,597			$	129,009
Total Current Assets		$	126,597			$	129,009
Other current assets:
Prepaid Expenses		$	46,328			$	10,328
Loans to related supplier			64,627				135,232
Accrued interest			2,515				1,762
Total Other Current Assets		$	113,470			$	147,322
Fixed assets:
Furniture & Equipment, Net		$	28,492			$	31,543
Total Fixed Assets		$	28,492			$	31,543
Other assets:
Loans to Greensaver Corp			1,538,462				1,538,462
Total Other Assets		$	1,538,462			$	1,538,462
TOTAL ASSETS		$	1,807,021			$	1,846,336
LIABILITIES & EQUITY
Current liabilities:
Account payable		$	29,000			$	1,800
Loan from shareholders			85,910				3,346
Loan from others			241,734				241,734
Payroll liabilities			4,337				1,188
Total current liabilities		$	360,981			$	248,068
Stockholders' Equity:
Common stock, $0.001 par value;
200,000,000 shares authorized;
40,104,000 shares issued and outstanding.		$	40,104			$	40,104
Paid-in capital			2,722,464				2,722,464
Deficit accumulated during the development stage			(1,008,066	)			(856,211	)
Accumulated other comprehensive income (loss)			(308,462	)			(308,089	)
Total stockholders' equity		$	1,446,040			$	1,598,268
TOTAL LIABILITIES & EQUITY		$	1,807,021			$	1,846,336

 

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HYPERERA, INC.
(A Development Stage Enterprise)
CONSOLIDATED STATEMENTS OF LOSS

 

										Cumulative from
		Three Month Ended				Three Month Ended				February 19, 2008 (Date of Inception) Through
		March 31,				March 31,				March 31,
		2014				2013				2014
Revenues		$	-			$	-			$	228,858
Cost of Goods Sold			-				-			$	207,998
Gross Profit		$	-			$	-			$	20,860
Operating expenses:
Research and development		$	-			$	-			$	-
Selling, general and administrative expenses			147,510				46,889				1,431,313
Depreciation and amortization expenses			4,385				3,844				42,506
Total Operating Expenses		$	151,895			$	50,733			$	1,473,819
Operating Loss		$	(151,895	)		$	(50,733	)		$	(1,452,959	)
Investment income, net		$	774			$	38,480			$	445,894
Interest Expense, net		$	734			$	-			$	1,001
Loss before income taxes		$	(151,855	)		$	(12,253	)		$	(1,008,066	)
Income tax expense		$	-			$	-			$	-
Net loss		$	(151,855	)		$	(12,253	)		$	(1,008,066	)
											-
Net loss per common share- Basics		$	(0.00	)		$	(0.00	)		$	(0.03	)
Net loss per common share- Diluted		$	(0.00	)		$	(0.00	)		$	(0.03	)
Other comprehensive income (loss), net of tax:
Uncollectible interest receivable write off			-				-				(339,726	)
Foreign currency translation adjustments			(373	)			823				31,264
Other comprehensive income (loss)		$	(373	)		$	823			$	(308,462	)
Comprehensive Income (Loss)		$	(152,228	)		$	(11,430	)		$	(1,316,528	)

 

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HYPERERA, INC.
(A Development Stage Enterprise)
STATEMENT OF STOCKHOLDERS EQUITY
The Period February 19, 2008 ( Date of Inception) through March 31, 2014

 

														Deficit
														Accumulated				Accumulated
										Additional				During the				Other				Total
		Common Stock								Paid-in				Development				Comprehensive				Stockholders'
		Shares				Amount				Capital				Stage				Income (Loss)				Equity
Balance, December 31, 2008			27,939,000			$	27,939			$	230,231			$	(51,611	)		$	(311	)		$	206,248
Balance, December 31, 2009			27,999,000			$	27,999			$	242,171			$	(90,244	)		$	(453	)		$	179,473
Balance, December 31, 2010			35,984,000			$	35,984			$	1,831,186			$	(281,478	)		$	22,561			$	1,608,253
Balance, December 31, 2011			38,204,000			$	38,204			$	2,344,364			$	(395,763	)		$	28,739			$	2,015,544
Adjustment for Rate Exchange																		$	(459	)		$	(459	)
Net loss for the period ended December 31, 2012														$	(200,249	)						$	(200,249	)
Balance, December 31, 2012			38,204,000			$	38,204			$	2,344,364			$	(596,012	)		$	28,280			$	1,814,836
Issuance of common stocks to shareholder @0.2 per share on July 01, 2013			400,000			$	400			$	79,600											$	80,000
Issuance of common stocks to shareholders @0.20 per share on August 30, 2013			1,500,000			$	1,500			$	298,500											$	300,000
Adjustment for Rate Exchange																		$	3,357			$	3,357
Write off Interest Receivable																		$	(339,726	)		$	(339,726	)
Net loss for the period ended December 31, 2013														$	(260,199	)						$	(260,199	)
Balance, December 31, 2013			40,104,000			$	40,104			$	2,722,464			$	(856,211	)		$	(308,089	)		$	1,598,268
Adjustment for Rate Exchange																		$	(373	)		$	(373	)
Net loss for the period ended March 31, 2014														$	(151,855	)						$	(151,855	)
Balance, March 31, 2014			40,104,000			$	40,104			$	2,722,464			$	(1,008,066	)		$	(308,462	)		$	1,446,040

 

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HYPERERA, INC.

(A Development Stage Enterprise)

STATEMENT OF CASH FLOWS

 

										Cumulative from
		Three Month Ended				Three Month Ended				February 19, 2008 (Date of Inception) to
		March 31,				March 31,				March 31,
		2014				2013				2014
Operating Activities:
Net loss		$	(151,855	)		$	(12,253	)		$	(1,008,066	)
Adjustments to reconcile net income to net cash provided
by operating activities:
Non-cash portion of share based legal fee expense			-				-				4,170
Non-cash portion of share based consulting fee expense			-				-				20,000
Depreciation expense			4,385				3,844				42,505
Accrued interest receivable			(753	)			38,462				(2,515	)
Prepaid expenses			(36,000	)			13				(46,328	)
Loan from others			-				13,160				241,734
Account payable			27,200				(27,500	)			29,000
Payroll liabilities			3,149				6,154				4,337
Loan from shareholders			82,564				(24,616	)			85,910
Net cash provided by operating activities		$	(71,310	)		$	(2,736	)		$	(629,253	)
Investing Activities:
Furniture & Equipment, Net		$	(1,334	)		$	(2,328	)		$	(70,997	)
Net cash provided by investing activities		$	(1,334	)		$	(2,328	)		$	(70,997	)
Financing Activities:
Proceeds from issuance of common stock		$	-			$	-			$	2,738,398
Loans Greensaver Corp			-				-				(1,538,462	)
Loans to related supplier			70,605				(3,881	)			(64,627	)
Prepaid for stock purchase			-				-				-
Net cash provided by financing activities		$	70,605			$	(3,881	)		$	1,135,309
Effect of Exchange Rate on Cash		$	(373	)		$	823			$	31,264
Uncollectible interest receivable write off		$	-			$	-			$	(339,726	)
Net increase (decrease) in cash and cash equivalents		$	(2,412	)		$	(8,122	)		$	126,597
Cash and cash equivalents at beginning of the period		$	129,009			$	34,896			$	-
Cash and cash equivalents at end of period		$	126,597			$	26,774			$	126,597

 

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HYPERERA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

NOTE A – BUSINESS DESCRIPTION

Hyperera, Inc. (the “Company”), incorporated under the laws of Nevada on February 19, 2008. Hyperera, Inc. operates its business in the U.S. as Hyperera USA, Inc. the Company’ s wholly owned branch located in the State of Illinois and has principal office at 2316 South Wentworth Avenue, Chicago, IL 60616.

In addition to the U.S. operation, the Company had one representative office in China, which was established on April 2, 2008; the representative office was closed effective on July 1, 2009. In order to developing and operating more efficiently, in the mean time, Hyperera, Inc established a subsidiary Hyperera Technology (Beijing) Co, Ltd in China in July 3, 2009 to replace the representative office to conduct and operate the business of trading services, distribution, and marketing of the surgery anesthesia clinic management software and ICU management system software and hardware system in Asia.

Hyperera Technology (Beijing) Co, Ltd, as the wholly owned subsidiary, is registered on July 3, 2009 in China. Hyperera Technology (Beijing), Ltd is located at Room 11A, Block B, Kingwing Hotel, No. 17 Dongsanhuan South Road, Chaoyang District, Beijing, China 100021.

Hyperera, Inc. is headquartered in 2316 South Wentworth Avenue, Chicago, IL 60616, USA. The telephone number is 312-842-2288.

Hyperera Inc is a high-tech enterprise specialized in the surgery anesthesia clinic management software and intensive care unit (ICU) management system, control software research, development, software maintenance, upgrade and services. Our business is the sale of the surgery anesthesia clinic management software and ICU management system in Asia, and North America.

The surgery anesthesia clinic management software and ICU management system software is developed in China by Beijing Chaoran Chuangshi Technology Co., Ltd (“Beijing Chaoran”). It was established in 2002 specializing in technology developed and service, sales of computer hardware and software, machine and electric equipment. Beijing Chaoran Chuangshi Technology Co. is located in No.28 Mujiu Road, Mujiayu Town, Miyun, Beijing, China. On March 1 st , 2008, Hyperera, Inc. signed a long-term distribution agreement with Beijing Chaoran Chuangshi Technology Co. Beijing Chaoran Chuangshi Technology Co is a Chinese Technology company owned 100% by Mr.Liancheng Li, a Chinese national, the founder of the company.

 

 

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HYPERERA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE B – SIGNIFICANT ACCOUNTING POLICIES

Basis of accounting

The financial statements reflect the assets, revenues and expenditures of the Company on the accrual basis of accounting. The Company’s fiscal year end is December 31.

Principles of Consolidation

The consolidated financial statements of the Company include the accounts of Hyperera, Inc., and Hyperera Technology (Beijing) Co., Ltd. All significant intercompany balances and transactions have been eliminated in consolidation.

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles in the United States of America requires management to make estimates and assumptions that affect certain amounts reported in the financial statements and disclosures. Accordingly, actual results could differ from those estimates.

Cash and Cash Equivalents

The Company considers all highly-liquid investments with an original maturity of three months or less when purchased to be cash equivalents. As of March 31, 2014 there were $126,597 cash and cash equivalents.

Foreign Currency Translation

The Company has determined the United States dollars to be its functional currency for Hyperera USA, Inc; People’s Republic of China Chines Yuan Renminbi to be its functional currency in Hyperera BeiJing office. Assets and liabilities were translated to U.S. dollars at the period-end exchange rate. Statement of operations amounts were translated to U.S. dollars using the first date of each month during the year. Gains and losses resulting from translating foreign currency financial statements are accumulated in other comprehensive income (loss), a separate component of shareholders’ equity.

Stock-Based Compensation

The Company accounts for stock issued for services using the fair value method. In accordance with FASB ASC 505, the measurement date of shares issued for services is the date at which the counterparty’s performance is complete.

 

 

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HYPERERA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

NOTE B – SIGNIFICANT ACCOUNTING POLICIES (Continued)

Property, Plant, and Equipment Depreciation

Property, plant, and equipment are stated at cost. Depreciation is being provided principally by straight line methods with mid-month convention over the estimated useful lives of the assets. As of March 31, 2014, the net fixed assets were $ 28,492 in the Company’s balance sheets. The straight line depreciation methods over 7 years for furniture and 5 years for computers were used to calculate depreciations.

Net Loss Per Common Share

Basic EPS is computed by dividing the income (loss) available to Common Shareholders by the weighted-average number of common shares outstanding for the period. Diluted EPS is based on the weighted-average number of shares of common stock and common stock equivalents outstanding during the periods.

The Company only issued one type of shares, i.e., common shares only. There is no other type of securities issued. Accordingly, the diluted net loss and basic net loss per common share are the same.

Concentration of credit risk

The Company maintains its cash in bank accounts which, at times, may exceed the federally insured limits. The Company has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk on cash.

Loans to Greensaver Corporation

On April 15, 2012, the Company through its subsidiary Hyperera Technology (Beijing) Co., Ltd. signed a loan agreement with Greensaver Corporation, to advance a loan amount of $1,538,462 [10,000,000 RMB] at an annual interest rate of 10%. Greensaver Corporation is a silicon battery manufacturer located in 8 North Yangzijinag Rd, Ningbo, Zhejiang, China. The Company is in reorganization under the local Chinese laws. The loan agreement was amended on March 2013 to provide for a monthly payment of $80,645 starting July 1, 2013 and continuing until the loan is paid off by July 2015. Due to the reorganization of the Greensaver Corporation, the risk of default for our loan to Greensaver is high. If the loan is at default by Greensaver, our Company may have going concern. In fact the default occurred and the loan had to be restructured again.

 

 

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HYPERERA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

NOTE B – SIGNIFICANT ACCOUNTING POLICIES (Continued)

Loans to Greensaver Corporation (Continued)

On March 25, 2014, Loan Supplementary Agreement III was signed by Hyperera Technology (Beijing) Co., Ltd. And Greensaver Corporation. Based on the legal opinion of local Chinese law firm, United Law Office, Beijing China, the principal of loan amount of $1,538,462 [10,000,000 RMB] shall be protected by Chinese law but the interest of loan. If there is a lawsuit between Hyperera (Beijing) and Greensaver, in many Chinese court cases based on the legal opinion, the interest of loan shall not be held lawful by Chinese courts. Accordingly, the accumulated interest receivable of $ 339,726 was written off at December 31, 2013, and there’s no interest receivable was record as of March 31, 2014.

 

Revenue Recognition

In accordance with the FASB ASC 985-605-25-3 Software Revenue Recognition if the arrangement does not require significant production, modification, or Customization of software, revenue shall be recognized when all of the following criteria are

The Company recognizes sales revenue for hardware, software and customized clinical information systems sales when it is realized or realizable and earned.

 

(1)	Sales of Hardware

For most of the Company’s hardware product sales, these criteria are met at the time the product is shipped. The Company recognizes revenue from the sale of hardware products, and software bundled with hardware that is essential to the functionality of the hardware sold by the Company in accordance with general revenue recognition accounting guidance   based on guidance in FASB ASC 605-25.

For the fiscal year ended December 31, 2013 and 2012, there were no hardware sales.

For the year 2010, the total hardware sales was $162,840, there was no any software bundle with the hardware sold in 2010.

No hardware sales since 2010.

 

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HYPERERA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

NOTE B – SIGNIFICANT ACCOUNTING POLICIES (Continued)

 

(2)	Sales of Software

In accordance with FASB ASC 605-25 and FASB ASC 985-605-25, “Revenue Recognition,” the Company recognizes software sales revenue when it is realized or realizable and earned. Revenue is realized or realizable when the product is exchanged for cash or for claim to cash or other assets that are readily convertible into known amount of Cash.

The Company must meet all of the following four criteria under FASB ASC 605-25 and FASB ASC 985-605-25 to recognize software revenue.

·	Persuasive evidence of an arrangement exists

·	Delivery has occurred

·	The vendor’s fee is fixed or determinable

·	Collectability is probable.

 

The Company recognizes revenue in accordance with industry specific software accounting guidance for the following types of sales transactions: (i) standalone sales of software products, (ii) sales of software upgrades and (iii) sales of software bundled with hardware not essential to the functionality of the hardware.

 

(3)	Multiple-element Arrangement for Sales of Hardware, Software and CIS:

We currently recognize multiple-element sales revenue pursuant to FASB ASC Topic 985-605 Software, Revenue Recognition, or ASC 985-605. We generate revenue from the sale of our software products sold directly to end-users. We also generate revenue from sales of hardware and third party software, implementation, training, software   customization, post-contract support (maintenance). A typical system contract contains multiple elements of the above items. FASB ASC Topic 985-605-25, Software, Revenue Recognition, Multiple Elements, or ASC 985-605-25, as amended, requires revenue earned on software arrangements involving multiple elements to be allocated to each element based on the relative fair values of those elements. The fair value of an element must be based on vendor specific objective evidence ("VSOE"). We limit our assessment of VSOE for each element to either the price charged when the same element is sold separately or the price established by management having the relevant authority to do so, for an element not yet sold separately. VSOE calculations are updated and reviewed at the end of each quarter or annually depending on the nature of the product or service.

 

 

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HYPERERA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

NOTE B – SIGNIFICANT ACCOUNTING POLICIES (Continued)

Revenue Recognition (Continued)

In accordance with paragraph 4-14 of FASB ASC 605-45, "Reporting Revenues Gross as a Principal versus Net as an Agent", the Company will recognize revenues on a gross basis. ASC 605-45 discusses whether revenues and cost of goods sold to arrive at gross profit and their corresponding assets and liabilities should be recorded at gross or net.

The following indicators of gross revenue recognition are applicable in the Company:

·	Acts as principal in the transaction.

·	Has risk and rewards of ownership, such as risk of loss for collection, delivery and returns, and

·	Takes title to the products,

·	Flexibility in pricing

·	Assumes credit risk;

·	The company can change the products or perform part of the service, and the Company customizes the supplier’s software based on customer’s needs.

All the indicators of net revenue reporting (ASC 605-45, paragraph 16-23) are not applicable in the Company.

There were no software sales and software revenue realized for the Company.

Operating Expenses

Operation expenses include selling, general & administrative expenses and depreciation & amortization expenses.

For the fiscal quarter end March 31, 2014 and 2013, there are total of $ 151,895 and $ 50,733 operating expenses respectively. The selling, general and administrative expenses and depreciation details were showed in the Exhibit A.

Professional Fee

Professional fees are included accounting and auditing fee, consulting fee, legal fee, SEC filing expenses, and other professional fees. For the fiscal quarter ended 2014 and 2013, the Company incurred $25,400 and $ 300 respectively.

 

 

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HYPERERA, INC .

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

NOTE B – SIGNIFICANT ACCOUNTING POLICIES (Continued)

Operating Leases

 

The Company entered into three leases for its corporate offices under terms of non-cancelable operating leases. The first lease term is from March 1, 2014 through February 28, 2015 and requires a $ 600 monthly lease payment. This office space is the corporate office of US, and is leased from a related party, which is the Company’s officer Simon Bai. For the fiscal quarter ended March 31, 2014 and 2013, there were $1,800 rent expenses incurred.

The second lease is the administration office space for China’s subsidiary in Beijing located at Room 11A, Block B, Kingwing Hotel, No. 17 Dongsanhuan South Road, Chaoyang District, Beijing, China 100021. The lease term runs from March 25, 2013 through March 24, 2015 and required a RMB 24,731.76 monthly lease payment. The third lease is the development and research, sales and marketing office space for China’s subsidiary in Beijing located at Room 7B, Block B, Kingwing Hotel, No. 17 Dongsanhuan South Road, Chaoyang District, Beijing, China 100021. The lease term runs from August 11, 2013 through August 10, 2014 and required a RMB 19,437.62 monthly lease payment. For the fiscal quarter ended March 31, 2014, and 2013, there was USD $ 21,372, and $ 9,574 rent expenses incurred correspondingly for China offices.

Therefore, there was total of $ 23,172 and $ 11,374 rent expenses for the fiscal quarter ended March 31, 2014 and 2013.

Comprehensive Income (Loss)

The company’s comprehensive income (loss) is comprised of net income (loss), unrealized gains and losses on marketable securities classified foreign currency translation adjustments, and unrealized gains and losses on derivative financial instruments related to foreign currency hedging, and the write off of the uncollectible interest receivable. Based on the legal opinion of local Chinese law firm, United Law Office, Beijing China, as Greensaver is in reorganization under the local Chinese laws, If there is a lawsuit between Hyperera (Beijing) and Greensaver, the principal of loan amount of $1,538,462 [10,000,000 RMB] shall be protected by Chinese law but not the interest of loan. Accordingly, the accumulated interest receivable of $339,726 from Greensaver was written off at December 31, 2013.

For the fiscal quarter ended March 31, 2014, and 2013, the company has $ 373 comprehensive income and $ 823 comprehensive loss respectively. For the cumulative period from February 19, 2008 to March 31, 2014, the company has accumulated comprehensive loss of $308,462.

 

 

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HYPERERA, INC .

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE B – SIGNIFICANT ACCOUNTING POLICIES (Continued)

Income Tax

The Company filed extension for corporate tax return Form 1120 to Internal Revenue Service and IL 1120 to the State of Illinois for the year 2013. There is no income tax for the State of Nevada.

 Hyperera Technology (Beijing) Co., Ltd. Filed annual report to Beijing local tax bureau, and no income tax dues were paid to Chinese government.

New Pronouncement:

Pronouncement		Issued		Title
ASC 855		May 2009		Subsequent Events
ASC 105		June 2009		The   FASB Accounting Standards Codification   and the Hierarchy of Generally Accepted Accounting Principles—a replacement of FASB Statement No. 162
ASC 820		August 2009		Fair Value Measurements and Disclosures – Measuring Liabilities at Fair Value
ASC 260		September 2009		Earnings per Share – Amendments to Section 260-10-S99
ASC 820		September 2009		Investments in Certain Entities that Calculate Net Asset Value per Share (or Its Equivalent)
ASC 605		October 2009		Revenue Recognition (Topic 605): Multiple-Deliverable Revenue Arrangements – a consensus of the FASB Emerging Issues Task Force
ASC 470		October 2009		Accounting for Own-Share Lending Arrangements in Contemplation of Convertible Debt Issuance or Other Financing – a consensus of the FASB Emerging Issues Task Force
ASC 860		December 2009		Transfers and Servicing (Topic 860): Accounting for Transfers of Financial Assets
ASC 505		January 2010		Accounting for Distributions to Shareholders with Components of Stock and Cash – a consensus of the FASB Emerging Issues Task Force
ASC 810		January 2010		Consolidation (Topic 810): Accounting and Reporting for Decreases in Ownership of a Subsidiary – a Scope Clarification
ASC 718		January 2010		Compensation – Stock Compensation (Topic 718): Escrowed Share Arrangements and the Presumption of Compensation
ASC 820		January 2010		Fair Value Measurements and Disclosures (Topic 820): Improving Disclosures about Fair Value Measurements

 

 

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HYPERERA, INC .

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

NOTE B – SIGNIFICANT ACCOUNTING POLICIES (Continued)

 

ASC 855		February 2010		Subsequent Events (Topic 855): Amendments to Certain Recognition and Disclosure Requirements
ASC 810		February 2010		Consolidation (Topic 810): Amendments for Certain Investment Funds
ASC 815		March 2010		Derivatives and Hedging (Topic 815): Scope Exception Related to Embedded Credit Derivatives

Management assessed that the new accounting pronouncements listed above will have a material impact on our financial statements. The Company shall adopt the ASC 605 for revenue recognition of multiple elements arrangement for sales of customized information system software.

 

NOTE C – RELATED PARTY TRANSACTIONS

Common Shares Issued to Executive and Non-Executive Officers and Directors

As of March 31, 2014, total 20,400,000 shares were issued to officers and directors were not changed. But, the total outstanding shares were changed to 40,104,000; the percentage of common shares issued to executive and non-executive officers and directors have been changed accordingly. Please see the Table below for details:

Name		Title		Share QTY				Amount			Date		% of Common Share*
Zhi Yong Li		Chairman			10,000,000			$	10,000.00		2/19/2008			24.94	%
Wei Wu		President			5,000,000			$	5,000.00		2/19/2008			12.47	%
Hui Tao Zhou		Director			5,000,000			$	5,000.00		2/19/2008			12.47	%
Jian Wu Zhang		Director			100,000			$	3,000.00		3/31/2008			0.25	%
Ming Liu		Director			100,000			$	3,000.00		3/31/2008			0.25	%
Hong Tao Bai		Vice-President			100,000			$	3,000.00		3/31/2008			0.25	%
Nan Su		CTO			100,000			$	3,000.00		3/31/2008			0.25	%
Simon Bai		CFO												0.00	%
Total					20,400,000			$	32,000.00					50.87	%

_____________

* The percentage was based on the total outstanding shares of 40,104,000 as of March 31, 2014.

 

 

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HYPERERA, INC .

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

NOTE C – RELATED PARTY TRANSACTIONS (Continue)

Loans from Shareholders

On March 2, 2008, founder of the Company, Mr. Zhiyong Li opened a bank account at Chicago branch with CitiBank. Mr. Zhiyong Li loaned $500.00 to the Company to open the bank account, and the same amount have returned back to him on March, 2009. In the year of 2009, the Company’s founder and CEO, Mr. Zhiyong Li have loaned $53,631 to Beijing subsidiary, Hyperera Technology (Beijing) Co. Ltd for operating and administrating expenses.

In 2010, the Company repaid the loan balance to Mr. Li Zhiyong. As of December 31, 2010, there was travel related expense of $985 paid by Mr. Li Zhiyong, which was accounted as loans from shareholders.

From January to December 31, 2011, Mr. Zhiyong Li advanced additional amount of $6,901 to the Company. The loans would be repaid as request without interest. As of December 31, 2011, the balance of loan from Shareholder was $7,886.

In 2012, Mr. Zhiyong Li advanced additional $24,867 to the Company. Therefore, as of December 31, 2012, the balance of loan from Shareholder was $32,753. The loans would be repaid as request without interest.

In year 2013, the Company returned $ 29,407 to the shareholder. As of December 31, 2013, the balance of loan from Shareholder is $3,346. The loans would be repaid as request without interest.

From January to March 31, 2014, Mr. Zhiyong Li advanced additional amount of $ 82,564 to the Company. The loans would be repaid as request without interest. As of March 31, 2014, the balance of loan from Shareholder was $85,910.

Loans from Others

In order to continually operation and survive the business, the Company loaned money from shareholders relatives and other friends.

As of March 31, 2014, the balance of loan from others is $241,734. The loans would be repaid as request without interest.

 

 

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HYPERERA, INC .

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

NOTE C – RELATED PARTY TRANSACTIONS (Continue)

Loans to Related Party Supplier- Beijing Chaoran

From   October to December 2010, the Company advanced short-term loans of $995,836 as of December 31, 2010 to related party supplier, Beijing Chaoran. The interest rate was agreed at annual rate of 3.0%, the accrued interest receivables were $3,127. The repayment terms were demanded as request by the Company.

From January to March 31, 2011, the Company advanced additional short-term loans of $747,500 to related party supplier, Beijing Chaoran. The interest rate was estimated at annual rate of 3%, the accrued interest receivables were $9,273.

On April 15, 2011, Beijing Chaoran returned the loan amount of $1,538,462 to the Company; the Company signed a loan agreement with un-related party Greensaver Corporation to advance loan amount of $1,538,462 at annual interest rate of 10%. The loan term is for short-term 6 months.

As of December 31, 2012, the balance of loan amount to Related Party Supplier-Beijing Chaoran was $5,873, and the interest incomes from Beijng Chaoran were based on annual interest rate of 3% in year 2012

As of December 31, 2013, the balance of loan amount to Related Party Supplier-Beijing Chaoran is $135,232, and the interest incomes from Beijng Chaoran were based on annual interest rate of 3%.

From January to March 31, 2014, the Company returned $ 70,605 loans to Chaoran. As of March 31, 2014, the balance of loan amount to Related Party Supplier-Beijing Chaoran is $ 64,627, and the interest incomes from Beijng Chaoran were based on annual interest rate of 3%.

 

Cost of Goods Sold

The Company’s purchase cost is primarily from supplier, Beijing Chaoran Chuangshi Technology Co., Ltd (“Beijing Chaoran”), owned 100% by Mr.Liancheng Li, the father of Mr. Zhiyong Li. The management believes that the purchase price for the parts will be market price.

 

 

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HYPERERA, INC .

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

NOTE C – RELATED PARTY TRANSACTIONS (Continue)

Cost of Goods Sold (Continue)

The products the Company will sell are provided by Beijing Chaoran Chuangshi Technology Co., Ltd. Beijing Chaoran was established in 2002 specializing in management information system applied in power industry. The Company signed a two-year software license and distribution agreement with Beijing Chaoran on March 1, 2009.

 

Under the terms of the agreement Beijing Chaoran authorizes Hyperera to be its exclusive sales and service agent for suegery anesthesia clinic management software and ICU management system product lines. The product lines shall include the products that Beijing Chaoran developed before the agreement signed and the products that will be developed solely by Beijing Chaoran during the term of the agreement. Beijing Chaoran is the exclusive supplier of the products Hyperera sells. The management of Hyperera, Inc. believes that the purchase price for the system and software from Hyperera will be market price. Hyperera, Inc. and Beijing Chaoran are two totally separated entities, i.e., Hyperara, Inc. is a USA corporation and will fully comply with USA regulations and USA general accepted accounting principles; Beijing Chaoran is a Chinese company and it will comply with Chinese legal systems. Hyperera, Inc. and Beijing Chaoran will operate independently. Beijing Chaoran, as a Chinese local company, will record their software and hardware costs based on the Chinese accounting regulations rulings. But, when Hyperera, Inc. purchases the software and hardware and the services from Beijing Chaoran, Hyperera, Inc. will assume the product and service liabilities with customers, and Hyperera, Inc. record the actual costs paid to Beijing Chaoran as long as the products or services been delivered to Hyperera, Inc. by Beijing Chaoran.

The management of Beijing Chaoran disclosed to Hyperera, Inc. that Beijing Chaoran adopted the cost plus pricing policies with market adjustment, negotiable with customers. Beijing Chaoran adopted the cost plus system for all the products for all customers including the product, surgery anesthesia clinic management software and ICU management system exclusively distributed by Hyperera, Inc. Specifically, the selling price for Beijing Chaoran is determined by total actual cost of direct materials (hardware), direct labor, and allocated overhead, plus 5-10% of total cost.

For the fiscal quarter ended March 31, 2014, and 2013 there was zero cost of goods sold incurred.

 

 

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HYPERERA, INC .

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

NOTE D – SHAREHOLDERS’ EQUITY

Under the Company’s Articles of Incorporation dated February 19, 2008, the Company is authorized to issue 200,000,000 shares of capital stock with a par value of $0.001.

On Feburary 19, 2008, the Company was incorporated in the State of Nevada.

On February 19, 2008, the Company issued 20,000,000 shares to three founders of the Company, Zhiyong Li, Wei Wu, and Huitao Zhou at $0.001 per share or $20,000 for initial capital (stock subscription receivable). On March 31, 2008, the Company issued total 5,200,000 shares to 52 shareholders at $0.03 per share or $156,000 for common stock (stock subscription receivable). On April 28, 2008, the Company issued additional 1,400,000 shares to 14 shareholders at $0.03 per share or $42,000 for common stock (stock subscription receivable). On July 20, 2008, additional 1,200,000 shares were issued to 7 shareholders at $ 0.03 per share, and the total proceeds of $36,000 were received.

On July 20, 2008, 139,000 shares were issued to Williams Law Group at $ 0.03 per share for the legal service value $4,170.

At December 15, 2009, additional 60,000 shares were issued to 3 shareholders, Baozhong Fu, Long Zhang, and Xuefeng Zhang, Chinese citizens, at $ 0.20 per share, and the total proceeds of $12,000 were received.

On September 10, 2010, additional 2,030,000 shares were issued to 79 shareholders, Chinese citizens, at $ 0.20 per share or $ 406,000 for common stock (stock subscription receivable). On December 15, 2010, additional 5,855,000 shares were issued to 70 shareholders at $0.20 per share for $1,171,000. On December 31, 2010, additional 100,000 shares were issued to Mr. Jing Li for financial consulting services at $0.20 per share for $20,000. Therefore, as of December 31, 2010, the Company has a total of 35,984,000 shares were issued and outstanding.

At January 1, 2011, 50,000 shares were issued to one shareholder at $0.20 per share for $10,000. On March 31, 2011, additional 1,660,000 shares were issued to 13 shareholders, Chinese citizens at RMB 1.40 per share, equivalent at USD $0.2153 per share for RMB 2,324,000. At May 1, 2011, 210,000 shares were issued to 8 shareholders at $0.30 per share for $63,000. At June 30, 2011, 200,000 shares were issued to one shareholder at $0.20 per share for $40,000 which was stock subscription receivable as of June 30, 2011.

At July 15, 2011 100,000 shares were issued to one shareholder at $0.45 per share, total proceeds of $45,000 were received on July 2011.

 

 

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HYPERERA, INC .

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

NOTE D – SHAREHOLDERS’ EQUITY (Continue)

There was no share issued in year 2012.

On July 1, 2013, additional 400,000 shares were issued to 1 shareholder, Chinese citizens, at $ 0.20 per share for $80,000.

On August 30, 2013, additional 1,500,000 shares were issued to 2 shareholders, Chinese citizens, at $ 0.20 per share for $300,000.

Therefore, as of March 31, 2014, the total outstanding common shares were 40,104,000.

 

NOTE E – GOING CONCERN

As shown in the accompanying financial statements which have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplates continuation of the Company as a going concern, the Company has incurred operating losses of $ 151,895 and $ 50,733 for the fiscal quarter ended March 31, 2014 and 2013 and a cumulative operating loss of $ 1,452,959 for the period February 19, 2008 (inception) through March 31, 2014. The Company is considered to be a development stage company.

The financial statements do not include any adjustments relating to the carrying amounts of recorded assets or the carrying amounts and classification of recorded liabilities that may be required should the Company be unable to continue as a going concern.

The Company’s loans to GreenSaver Corp. of $1,538,462 raised substantial doubt about it’s ability to carry out it’s operational business plan and cause uncertainty about its cash flows immediately, such borrows or withdraws may raise substantial doubt about the Company’s ability to continue as going concern immediately. The Company amended the loan agreement with new management of the Greensaver Corp and new management of Greensaver Corp will start paying the principal and interest to the Company over the next 3 years, the loan balance will be paid off by July 31, 2015 based on the amended loan agreement signed on March 2013. Due to GreenSaver Corp is in reorganization under the Chinese laws, there will be uncertainty about the Greesaver Corp. The risk of the loan in default is significant high. If the loan is in default, then the Company will be required to cease or curtail its operation immediately.

 

 

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HYPERERA, INC .

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

NOTE E – GOING CONCERN (Continue)

There is no guarantee that the Company will be able to raise enough capital or generate revenues to sustain its operations and carry out its business plan. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include adjustments that might result from the outcome of this uncertainty and if the Company is unable to generate significant revenue or secure financing, then the Company may be required to cease or curtail its operation.

 

 

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Exhibit A

 

		Three Month Ended March 31,				Three Month Ended March 31,				Cumulative from February 19, 2008 (Date of Inception) to March 31,
		2014				2013				2014
Operating Expenses
Automobile Expenses			3,495				451				33,561
Administration Expense			-				225				225
Bank Service Charges			139				128				4,392
Computer and Internet Expenses			-				159				826
Depreciation			4,385				3,844				42,505
Employees Welfare Expense			2,669				-				10,674
Gift and promotion Expense			-				1,758				7,034
small tools and equipment			-				-				150
Dues and Subscriptions			-				-				110
Insurance Expense			4,349				2,291				27,464
License & Registration			474				399				15,837
Meals and Entertainment			1,990				-				28,810
Meeting & Conference			7,581				-				34,915
Office Supplies			14,172				9,923				76,994
Research & development expense			-				-				3,960
Supplies			-				-				1,307
Payroll Expenses			54,093				18,461				357,480
Postage			472				-				3,008
Professional Fees
Legal Fee			-				-				108,553
Consulting Fees			-				-				102,741
Accounting & Auditing			25,000				-				135,443
SEC Filing Fee			-				-				36,339
Professional Fees - Other			400				300				70,199
Professional Fees			25,400				300				453,276
Rent Expense
Rent Expense - China Subsidiary			21,372				9,574				199,002
Rent Expense - US Corporation			1,800				1,800				43,800
Rent Expense - Other			-				-				3,024
Rent Expense			23,172				11,374				245,826
Tax-China Office Operation			-				-				11,466
Telephone Expense			-				-				1,619
Travel Expense
Air Tickets			6,605				-				66,240
Visa Application Fee			-				-				133
Transportation expenses			552				-				11,909
Lodging & Hotel			967				838				16,687
Travel Expense			8,124				838				94,968
Utilities			1,379				582				17,413
Total Expense		$	151,895			$	50,733			$	1,473,819

 

 

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Item 2. Management’s Discussion and Analysis or Plan of Operation.

 

The following discussion of our financial condition and results of operations should be read in conjunction with our financial statements and the related notes, and other financial information included in this Form 10-Q.

Our Management’s Discussion and Analysis contains not only statements that are historical facts, but also statements that are forward-looking. Forward-looking statements are, by their very nature, uncertain and risky. These risks and uncertainties include specifically the risk that the Greensaver loan as described below in “ Loans to Greensaver Corporation ” may not be repaid in whole or in part as further described in this subsection and related opinion and additional information from China counsel filed as an exhibit to this Registration Statement as well as general risks from matters such as international, national, and local general economic and market conditions; our ability to sustain, manage, or forecast growth; our ability to successfully make and integrate acquisitions; new product development and introduction; existing government regulations and changes in, or the failure to comply with, government regulations; adverse publicity; competition; the loss of significant customers or suppliers; fluctuations and difficulty in forecasting operating results; change in business strategy or development plans; business disruptions; the ability to attract and retain qualified personnel; the ability to protect technology; the risk of foreign currency exchange rate; and other risks that might be detailed from time to time in our filings with the Securities and Exchange Commission.

Although the forward-looking statements in this Report reflect the good faith judgment of our management, such statements can only be based on facts and factors currently known by them. Consequently, and because forward-looking statements are inherently subject to risks and uncertainties, the actual results and outcomes may differ materially from the results and outcomes discussed in the forward-looking statements. You are urged to carefully review and consider the various disclosures made by us in this report as we attempt to advise interested parties of the risks and factors that may affect our business, financial condition, and results of operations and prospects.

Overview

Existing Business

Our business is the sale of hardware and software and the customization of clinical information system software for medical clinics and hospitals in China and throughout Asia. We have been developing our infrastructure to begin marketing clinical information system software and hardware. We have generated no hardware sales revenues for the three months period ended March 31, 2014, and cumulative revenue of $228,858 from date of inception February 19, 2008 to March 31, 2014. There were no software sales revenues generated for the first quarter ended March 31, 2014.

 

The Clinical Information System was developed in China by Beijing Chaoran Chuangshi Technology Co., Ltd (“Beijing Chaoran”). It was established in 2002 specializing in technology developed and service, sales of computer hardware and software, machine and electric equipment. Beijing Chaoran is located in No.28 Mujiu Road, Mujiayu Town, Miyun, Beijing, China. Beijing Chaoran is a Chinese Technology company owned 100% by Mr.Liancheng Li, the father of our Chairman Zhi Yong Li.

 

We signed a three-year software distribution agreement with Beijing Chaoran on March 1, 2009. Under the terms of the agreement Beijing Chaoran authorizes Hyperera to be its exclusive sales and service agent for surgery anesthesia clinic management software and ICU management system product lines. The product lines shall include the products that Beijing Chaoran developed before the agreement signed and the products that will be developed by Beijing Chaoran during the term of the agreement. Beijing Chaoran is the exclusive supplier of the products Hyperera sells.

 

The purchase price Hyperera will pay for all products subject to this agreement will be comparable to what Hyperera would have paid a non-related party in arm’s-length transactions. Specifically, the selling price for Beijing Chaoran is determined by total actual cost of direct materials (hardware), direct labor, and allocated overhead, plus 5-10% of Beijing Chaoran’s total purchase cost if Beijing Chaoran resells to Hyperera.

 

 

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Our operations depend heavily on the continuation of our distribution agreement with Beijing Chaoran. The agreement with Beijing Chaoran was originally for a term of three years commencing March 1, 2009, subject to earlier termination upon terms described in the Agreement. We have orally agreed to extend the Agreement for three additional years upon the same terms and conditions. Although we believe such events are not likely, if they were to occur, we may not be able to find alternative suppliers if the agreement is terminated or not renewed which could reduce our revenues or cause us to cease operations.

 

We have continued to encounter difficulties in marketing this product but our efforts are continuing. We’ve hired another 6 employees and rent a new office to continue the project of the sale of hardware and software and the customization of clinical information system software for medical clinics and hospitals. We are planning to sell the software of Mobile Nurse Station, Mobile Healthcare and Impatient System in China and sell relevant equipment relating to the above systems. The research and development is completed however we have made no sales and no assurance can be given if or when we would make sales.

In February 2014, Hyperera and Sichuan Province Information Institute of Medicine (Sichuan Province Health Information Center) reached an agreement on the collaborative development of Deyang regional health information platform (research) project (“Deyang RHIE Project”). It is a research agreement, which no profit results. But the test results and modules from this project will be helpful to the potential cooperation in RHIE.

 

We have continued our efforts to develop our business and ultimately generate revenues. H yperera (Beijing) Technology Ltd. invested significant time and effort to secure a sales agent agreement with Caradigm, and finally secured the agreement in April 2014, which agreement is filed as an exhibit to this Report on Form 10-Q. With this Agreement, the Company can act as Caradigm's sales agent on a non-exclusive basis with respect to sale of certain of their products, primarily the Caradigm Intelligence Platform, in the territory of China.  The Agreement is for a term of one year commencing April 19, 2014.

 

Caradigm has its roots in healthcare and application development, and is focused exclusively on the healthcare IT market. A joint venture of Microsoft and GE Healthcare, Caradigm combines deep expertise in building platforms and ecosystems with complementary experience in clinical and administrative workflow solutions. The Caradigm Intelligence Platform (CIP) aggregates and normalizes clinical and financial data from across the care continuum to support the needs of healthcare organizations. It serves as the basis for a portfolio of software applications and analytics built to improve quality, connect providers, coordinate care and manage risk. Caradigm believes that these solutions help organizations achieve the patient outcomes, operational effectiveness and financial results they require to thrive in a dynamic and competitive healthcare environment.

Emerging Growth Company

We are an “emerging growth company” (“EGC”) that is exempt from certain financial disclosure and governance requirements for up to five years as defined in the Jumpstart Our Business Startups Act (“the JOBS Act”), that eases restrictions on the sale of securities; and increases the number of shareholders a company must have before becoming subject to the U.S. Securities and Exchange Commission’s (SEC’s) reporting and disclosure rules (See “Emerging Growth Companies” section above). We have elected to use the extended transition period for complying with new or revised accounting standards under Section 102(b)(2) of the Jobs Act, that allows us to delay the adoption of new or revised accounting standards that have different effective dates for public and private companies until those standards apply to private companies. As a result of this election, our financial statements may not be comparable to companies that comply with public company effective dates.

 

 

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Results of Operations

For the first quarter ended March 31, 2014 vs. March 31, 2013.

Revenue

For the first quarter ended March 31, 2014 and 2013, the Company had $0.00 revenue for hardware sales respectively.

For the first quarter ended March 31, 2014, and 2013, there were no software sales.

Cost of Revenue

All the products sold were purchased from Beijing Chaoran. For the first quarter ended March 31, 2014 and 2013, the Company incurred zero cost of goods sold.

 

For the first quarter ended March 31, 2014, and 2013, there was no software cost of goods sold incurred.

 

Expense

 

For the first quarter ended March 31, 2014, the Company incurred selling, general and administrative expenses, and depreciation expense of $ 151,895. The primary expenses were professional fee of $ 25,400, rental expense of $ 23,172, office supplies of $ 14,172, meeting and conference of $ 7,581, travel expense of $ 8,124, and payroll expense of $ 54,093.

For the first quarter ended March 31, 2013, the Company incurred selling, general and administrative expenses and depreciation expense of $ 50,733.

The Company is still development stage enterprise and need to secure financing activities to survive the business. And the Company was in the progress of building up the network relations and promotion of Hyperera’s name and its products. Accordingly, the Company incurred significant increase of overall selling, general and administrative expenses.

 

Income Taxes

There were no income taxes.

Net Loss

For first quarter ended March 31, 2014, the Company had net loss of $ 151,855; for first quarter ended March 31, 2013, the Company incurred net loss of $ 12,253. At March 31, 2014, the Company had accumulated net loss of $ 1,008,066 for cumulative period from February 19, 2008 (Date of Inception) through March 31, 2014.

 

Commitments and Contingencies

Our Company is still a development stage enterprise, and we continue to expend our efforts in our marketing to sell our software. However, we have met unanticipated significant market resistance to our software because its current technological stage of development. Further, due to most of our potential customers are state-owned hospitals, we incurred significant difficulty to go through the lengthy governmental approval process. We continue to explore methods to improve our product and remedy this situation and we believe with H yperera (Beijing) Technology Ltd. investment of significant time and effort to secure a sales agent agreement with Caradigm, and finally securing the agreement in April 2014 demonstrates how we continue to move forward to advance our business despite these difficulties.

 

We continue to be unable to secure repayment of our significant loan to Greensaver Corporation. See discussion of “Loans to Greensaver Corporation” below for a more complete discussion of the current status of this matter.

 

 

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Loans to Related Party Supplier- Beijing Chaoran

From   October to December 2010, the Company advanced short-term loans of $995,836 as of December 31, 2011 to supplier, Beijing Chaoran. The interest rate was agreed at annual rate of 3.0%, the accrued interest receivables were $3,127. The repayment terms were upon demand as request by the Company.

From January to March 31, 2011 the Company advanced additional short-term loans of $747,500 to supplier, Beijing Chaoran. The interest rate was estimated at annual rate of 3%, the accrued interest receivables were $9,273.

 

On April 14, 2011, Beijing Chaoran repaid the loan amount of $1,538,462 to the Company; the Company signed a loan agreement with unrelated party Greensaver Corporation to advance loan amount of $1,538,462 at annual interest rate of 10%.

As of December 31, 2012, the balance of loan amount to Related Party Supplier-Beijing Chaoran was $5,873, and the interest incomes from Beijng Chaoran were based on annual interest rate of 3% in year 2012.

As of December 31, 2013, the balance of loan amount to Related Party Supplier-Beijing Chaoran is $135,232, and the interest incomes from Beijng Chaoran were based on annual interest rate of 3%.

From January to March 31, 2014, the Company returned $ 70,605 loans to Chaoran. As of March 31, 2014, the balance of loan amount to Related Party Supplier-Beijing Chaoran is $ 64,627, and the interest incomes from Beijng Chaoran were based on annual interest rate of 3%.

Loans to Greensaver Corporation

On April 14, 2012, the Company through its subsidiary Hyperera Technology (Beijing) Co., Ltd. signed a loan agreement with unrelated party Greensaver Corporation to advance a loan amount of $1,538,462 [10,000,000 RMB] at annual interest rate of 10%. The loan agreement was amended on March 2013 as follows: 

The status of our relationship with Greensaver Corporation as of March 31, 2013 is as follows:

 

(1)	The loan agreement was amended and extended to December 31, 2015;
(2)	Because Greensaver is incapable to repay the loan, the loan amount plus interest was paid only once at January 2013 for total RMB 500,000 by Greensaver as of today. The loan agreement was amended on March 2013 to provide for a monthly payment of $80,645 starting July 1, 2013 and continuing until the loan is paid off by December 31, 2015.

 

In December 2013, owing to suddenly monetary tightening in China, the state loan was temporarily shelved, Greensaver failed to resume production. In addition, part of the creditor sued it, resulting in funds are not in place on schedule, and Greensaver’s inability to timely repay the company's debt. Based on the above situation, although we could sue for Greensaver, we prefer to receive the loan repayment without lawsuit. It has been subsequently amended as follows:

Greensaver Corp. promise:

Pay back  ￥ 50,000 in the second quarter of 2014,

Pay back  ￥ 150,000 in the third quarter of 2014,

Pay back  ￥ 300,000 in the fourth quarter of 2014.

From the beginning of 2015 to repay  ￥ 2.5 million per quarter, by the end of 2015 to repay all principal and interest payable (calculated at an annual rate of 10%)

 

Greensaver Corp.

(Seal)

 

[1 Chinese Yuan equals $0.16 US Dollar as of May 12, 2014.]

 

 

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The Company has been involved in on-going discussions concerning this matter and if the Company has signed anything binding which changes or modifies the foregoing, it will file a Form 8-K concerning such matter.

However, because of the continuing difficulties in collecting on this loan, the Company asked Chinese legal counsel to furnish a legal opinion as to the status of this loan. This opinion has been filed as an exhibit to our Form 10-K for the fiscal year ended December 31, 2013 along with the Amended Greensaver Agreement. Chinese counsel consented to the opinion being attached to the Form 10-K in writing and to a discussion of the opinion and subsequent correspondence with the Company’s US legal counsel. In essence, China legal counsel indicates that it is his opinion that the Amendment is valid and lawful and that the Company still has a valid claim to the principal amount of the loan. In a subsequent e-mail to US counsel, China counsel indicated: “Regarding the chance of collection for Hyperera, on the base of present conditions, it is impossible to give a accurate rate of chance of collection. But I can confirm that there is a reasonable likelihood, that Hyperera will have chance to collect part or whole loan on the claim.”

 

Notwithstanding any of the foregoing, based upon the history of this transaction, the Company urges any investor making an investment decision in the stock of the company to exercise extreme caution if that decision is based in any in in whole or in part, no matter how small the part, on the assumption that the Company will ever collect anything on this loan.

 

Liquidity and Capital Resources

		At March 31,				At December 31,
		2014				2013
Current Ratio*			0.67				1.11
Cash		$	126,597			$	129,009
Working Capital***		$	(120,917	)		$	28,263
Total Assets		$	1,807,021			$	1,846,336
Total Liabilities		$	360,981			$	248,068
Total Equity		$	1,446,040			$	1,598,268
Total Debt/Equity**			0.25				0.16

*Current Ratio = Current Assets / Current Liabilities

**Total Debt / Equity = Total Liabilities / Total Shareholders’ Equity.

***Working Capital = Current Assets – Current Liabilities

 

The Company had cash and cash equivalents of $126,597 at March 31, 2014 and the negative working capital of $ 120,917, and cash and cash equivalent of $129,009 at December 31, 2013 and the working capital of $ 28,263.

The Company’s related party transactions, the short-term loans to related party supplier, may raise substantial doubt about its ability to carry out its operational business plan and cause uncertainty about its cash flows, such related party borrows or withdraws may raise substantial doubt about the Company’s ability to continue as going concerns.

 

Conclusion

 

There is no guarantee that the Company will be able to raise enough capital or generate revenues to sustain its operations and carry out its business plan. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include adjustments that might result from the outcome of this uncertainty and if the Company is unable to generate significant revenue or secure financing, then the Company may be required to cease or curtail its operation.

 

 

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  Shareholder’s Equity

 

The Company had total equity of $ 1,598,268 at March 31, 2014, and $ 1,814,836 at March 31, 2013 respectively

 

On February 19, 2008, the Company issued 20,000,000 shares to six founders of the Company, Zhiyong Li, Wei Wu, and Huitao Zhou at $0.001 per share or $20,000 for initial capital (stock subscription receivable). On September 30, 2008, the Company issued total 5,200,000 shares to 52 shareholders at $0.03 per share or $156,000 for common stock (stock subscription receivable). On April 28, 2008, the Company issued additional 1,400,000 shares to 14 shareholders at $0.03 per share or $42,000 for common stock (stock subscription receivable). On July 20, 2008, additional 1,200,000 shares were issued to 7 shareholders at $ 0.03 per share, and the total proceeds of $36,000 were received.

 

On July 20, 2008, 139,000 shares were issued to Williams Law Group at $ 0.03 per share for the legal service value $4,170.

 

At December 15, 2009, additional 60,000 shares were issued to 3 shareholders, Baozhong Fu, Long Zhang, and Xuefeng Zhang, Chinese citizens, at $ 0.20 per share, and the total proceeds of $12,000 were received.

On September 10, 2010, additional 2,030,000 shares were issued to 79 shareholders, Chinese citizens, at $ 0.20 per share or $ 406,000 for common stock (stock subscription receivable). On December 15, 2010, additional 5,855,000 shares were issued to 70 shareholders at $0.20 per share for $1,171,000. On December 31, 2010, additional 100,000 shares were issued to Mr. Jing Li for financial consulting services at $0.20 per share for $20,000. Therefore, as of December 31, 2010, the Company has a total of 35,984,000 shares were issued and outstanding.

At January 1, 2011, 50,000 shares were issued to one shareholder at $0.20 per share for $10,000. On March 31, 2013, additional 1,660,000 shares were issued to 13 shareholders, Chinese citizens at RMB 1.40 per share, equivalent at USD $0.2153 per share for RMB 2,324,000. At May 1, 2011, 210,000 shares were issued to 8 shareholders at $0.30 per share for $63,000. At March 31, 2013, 200,000 shares were issued to one shareholder at $0.20 per share for $40,000 which was stock subscription receivable as of March 31, 2013.

At July 15, 2011 100,000 shares were issued to one shareholder at $0.45 per share, total proceeds of $45,000 were received on July 2011.

 

There was no share issued in year 2013.

On July 1, 2013, additional 400,000 shares were issued to 1 shareholder, Chinese citizens, at $ 0.20 per share for $ 80,000.

 

On August 30, 2013, additional 1,500,000 shares were issued to 2 shareholders, Chinese citizens, at $ 0.20 per share for $ 300,000.

Therefore, as of March 31, 2014, the total outstanding common shares were 40,104,000.

 

 

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Item 3. Quantitative and Qualitative Disclosure about Market Risk.

Not applicable.

 

Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

 

The Company maintains disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act) that are designed to ensure that information required to be disclosed in the Company’s Securities Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and that such information is accumulated and communicated to the Company’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

 

The Company’s management, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the Company’s disclosure controls and procedures as of the end of the period covered by this report. Based upon that evaluation, the Chief Executive Officer and the Chief Financial Officer have concluded that, as of the end of the period covered by this report, the Company’s disclosure controls and procedures were not effective.

 

Changes in Internal Control over Financial Reporting

 

There have not been any changes in the Company’s internal control over financial reporting (as such term is defined in Rule 13a-15(f) under the Securities Exchange Act) during the fiscal quarter ended March 31, 2014 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.

None.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

 

None.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

Not applicable.

 

 

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Item 6. Exhibits.

Exhibit No.		Document Description
10.1		Agreement with Caradigm
31.1		CERTIFICATION of CEO PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002.
31.2		CERTIFICATION of CFO PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002.
32.1 *		CERTIFICATION of CEO PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEYACT OF 2002.
32.2 *		CERTIFICATION of CFO PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEYACT OF 2002.
Exhibit 101		Interactive data files formatted in XBRL (eXtensible Business Reporting Language): (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Operations, (iii) the Consolidated Statements of Cash Flows, and (iv) the Notes to the Consolidated Financial Statements.**

 

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**

____________

* This exhibit shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 of the Securities Exchange Act of 1934, whether made before or after the date hereof and irrespective of any general incorporation language in any filings.

 

** 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

 

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

Hyperera, Inc., a Nevada corporation

 

Title		Name		Date		Signature
Principal Executive Officer		Zhi Yong Li		May 20, 2014		/s/ Zhi Yong Li

 

In accordance with the Exchange Act, this Report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

SIGNATURE		NAME		TITLE		DATE
/s/ Zhi Yong Li		Zhi Yong Li		Principal Executive Officer and Director		May 20, 2014
/s/ Simon Bai		Simon Bai		Principal Financial Officer and		May 20, 2014
				Principal Accounting Officer

 

 

 

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EXHIBIT INDEX

 

 

Exhibit No.		Document Description
10.1		Agreement with Caradigm
31.1		CERTIFICATION of CEO PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002.
31.2		CERTIFICATION of CFO PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002.
32.1 *		CERTIFICATION of CEO PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEYACT OF 2002.
32.2 *		CERTIFICATION of CFO PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEYACT OF 2002.
Exhibit 101		Interactive data files formatted in XBRL (eXtensible Business Reporting Language): (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Operations, (iii) the Consolidated Statements of Cash Flows, and (iv) the Notes to the Consolidated Financial Statements.**

 

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**

____________

* This exhibit shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 of the Securities Exchange Act of 1934, whether made before or after the date hereof and irrespective of any general incorporation language in any filings.

 

** 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.

 

 

35

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