Kind 10-Q Sincerity Utilized Materi For: Mar 31

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Table of Contents

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION

13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended March 31,

2020

 

☐ TRANSITION REPORT PURSUANT TO SECTION

13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from _______ to _______

 

Commission File Number: 000-55475

 

SINCERITY APPLIED

MATERIALS HOLDINGS CORP.

(Exact name of registrant as specified in its charter)

 

Nevada 45-2859440
(State or other jurisdiction of incorporation) (I.R.S. Employer Identification No.)
   

Suite 1105, Level 11

370 Pitt Street

Sydney, Victoria, Australia 2000

 

 

VIC 3141

(Address of principal executive offices) (Zip Code)

 

+61-421-007-277

(Registrant’s telephone number, including

area code)

 

N/A

(Former name, former address and former fiscal

year, if changed since last report)

 

Securities

registered pursuant to Section 12(b) of the Act:  None

 

Securities

registered pursuant to Section 12(g) of the Act:  Common Stock, par value $0.001 per share

 

Indicate by check mark whether the registrant

(1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months

(or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements

for the past 90 days. Yes ☒ No ☐

 

Indicate by check mark whether the registrant

has submitted electronically every Interactive Data File required to be submitted 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 such files). Yes ☒ No ☐

 

Indicate by check mark whether the registrant

is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company.

See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and

“emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer ☐ Accelerated filer ☐ Non-accelerated filer ☐ Smaller reporting company ☒
      Emerging growth company ☒

 

If an emerging growth company, indicate by check

mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting

standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

Indicate by check mark whether the registrant

is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

 

As of September 1, 2021, there were 73,590,730

shares of the registrant’s common stock, par value $0.001 per share, issued and outstanding.

   

 

SINCERITY APPLIED MATERIALS HOLDINGS CORP.

 

FORM 10-Q

FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2020

TABLE OF CONTENTS

 

  

 

 

 

 

PART I – FINANCIAL INFORMATION

 

Item 1. Financial Statements.

  

SINCERITY APPLIED MATERIALS HOLDINGS CORP.

Consolidated Balance Sheets

As at March 31, 2020 (Not Reviewed) and

December 31, 2019 (Not Audited)

 

 

    March 31,

2020
  December 31,

2019
 
  Note $  $ 
    (Not Reviewed)  (Not Audited) 
Assets          
Cash and cash equivalents 4  5,728   22,764 
Accounts receivables 5  91,488   93,038 
Related party loan    306,635   298,873 
Total current assets    403,851   414,675 
           
Property, plant and equipment, net of accumulated depreciation and amortization 6  106,558   108,510 
Deferred tax asset 10  108,344   123,760 
Total non-current assets    214,902   232,270 
Total assets    618,753   646,945 
           
Liabilities and Stockholders’ Equity/(Deficit)          
           
Liabilities          
Accounts payables    270,750   187,495 
Accrued and other liabilities 7  80,878   119,255 
Long-term debt – current position 8  19,015   21,861 
Line of credit 9  171,487   185,807 
Total current liabilities    542,130   514,418 
           
Long-term debt – non-current position 8  68,256   86,390 
Total non-current liabilities    68,256   86,390 
Total liabilities    610,386   600,808 
           
Equity          
Preferred stock          
Authorized: $0.001 par value, 10,000,000 shares authorized

Issued and outstanding: nil preferred shares
          
Common stock          
Authorized: $0.001 par value, 290,000,000 shares authorized

Issued and outstanding: 73,590,730 and 73,590,730, respectively
    123,953   123,953 
Additional paid in capital    3,442,920   3,442,920 
Adjustments to equity to reflect retroactive application of reverse acquisition of accounting    (53,511)  (53,511)
Accumulated losses    (3,515,259)  (3,512,096)
Foreign currency translation differences 11  10,264   44,871 
Total stockholders’ surplus/(deficit)    (8,367)  46,137 
Total liabilities and stockholders’ equity    618,753   646,945 

 

The accompanying notes are an integral part of these

consolidated financial statements.

 

 

 

 

SINCERITY APPLIED MATERIALS HOLDINGS CORP.

Consolidated Statement of Operations

For the three months ended March 31, 2020

(Not Reviewed) and 2019

 

 

    Three Months ended March 
    2020  2019 
  Note $  $ 
   (Not Reviewed)    
Revenue          
Sales    93,586   235,651 
Cost of sales    (81,625)  (229,184)
Gross profit    11,961   6,467 
           
Operating expenses          
Depreciation and amortization    1,952   2,418 
Selling, general and administrative expenses    4,022   8,336 
Employee expenses        
Professional service fees    66   9,832 
Bad debt expenses        
Total operating expenses    6,040   20,586 
           
Profit/(Loss) from operations    5,921   (14,119)
           
Other income/(expenses)          
Other income    4,512   4,881 
Interest expense    (1,415)  (4,630)
Other Finance Gain        
Fair value adjustments on Convertible note        
Gain on derivative financial instrument        
Fair value adjustment of Warrant liabilities        
Foreign currency transaction loss    (12,932)  (324)
Total other expenses    (9,835)  (73)
Loss from continuing operations before income tax expenses    (3,914)  (14,192)
           
Income tax benefit/(expense) 10  751   4,034 
           
Net loss after income tax expense for the period    (3,163)  (10,158)
           
Other comprehensive income /(loss)          
Exchange differences arising on translation of foreign operations    (34,607)  (3,348)
Other comprehensive income/(loss)    (34,607)  (3,348)
           
Total comprehensive loss for the period    (37,745)  (13,506)
           
Net (loss)/gain per share          
Basic and diluted    (0.00)  (0.20)
Weighted average number of common stock outstanding          
Basic and diluted    73,590,730   50,730 

 

The accompanying notes are an integral part of these

consolidated financial statements.

 

 

 

 

SINCERITY APPLIED MATERIALS HOLDINGS CORP.

Consolidated Statement of Changes in Stockholders’ Equity

/ (Deficit)

For the three months ended March 31, 2020

(Not Reviewed) and 2019

 

 

   Common

Stock
                     
   Shares   Amount   Additional

Paid in Capital
   Other

Comprehensive Earnings
   Accumulated

Losses
   Adjustments

to equity to reflect retroactive application of reverse acquisition accounting
   Total

(Deficit)/Equity
 
Balance

at December 31, 2019
  73,590,730  $123,953  $3,442,920  $44,871  $(3,512,096) $(53,511) $46,137 
Loss after income tax expense for

the year
              (3,163)     (3,138)
Other comprehensive

loss for the year
           (34,607)        (34,607)
                             
Balance

at March 31, 2020
  73,590,730  $123,953  $3,442,920  $10,264  $(3,515,259) $(53,511) $(8,367)
                             
Balance at December

31, 2018
  50,730  $50,413  $3,442,920  $66,248  $(3,500,406) $(53,511) $5,664 
Loss after income tax expense for

the year
              (10,158)     (10,158)
Other comprehensive

loss for the year
           (3,348)        (3,348)
                             
Balance

at March 31, 2019
  50,730  $50,413  $3,442,920  $62,900  $(3,510,564) $(53,511) $(7,842)

 

The accompanying notes are an integral

part of these consolidated financial statements

 

 

 

 

 

 

 

 

SINCERITY APPLIED MATERIALS HOLDINGS CORP.

Consolidated Statement of Cash Flows

For the three months ended March 31, 2020

(Not Reviewed) and 2019

 

 

  Three Months ended March 
  2020  2019 
  $  $ 
  (Not Reviewed)    
Cash flows from operating activities:        
Net loss  (3,163)  (10,158)
Adjustments to reconcile net income/(loss) to net cash provided by operating activities:        
Depreciation  1,952   2,418 
FBT employee contribution  26   (4,881)
Net difference on foreign exchange  12,932   893 
Net changes in operating assets and liabilities        
(Increase)/decrease in trade and other receivables  1,549   37,300 
(Increase)/decrease in other assets     (25)
Increase/(decrease) in trade and other payables  75,592   15,012 
Decrease in other liabilities  (30,713)  (15,369 
(Increase)/decrease in deferred tax asset  15,416   (4,603 
Increase/(decrease) in tax provision      
Net cash provided by/(used in) operating activities  73,591   20,587 
Cash flows from investing activities        
Advances to related entities  (9,529)  (25,184)
Net cash used in investing activities  (9,929)  (25,184)
Cash flows from financing activities        
Repayment of borrowings  (14,320)   
Payment of finance lease liabilities  (38,270)  (4,365)
Net cash provided by/(used in) financing activities  (52,590)  (4,365)
         
Net increase/(decrease) in cash and cash equivalents  11,472   (8,962)
Effect of exchange rate changes on cash and cash equivalents  (28,508)  (3,649)
Cash and cash equivalents at the beginning of period  22,764   23,245 
Cash and cash equivalents at the end of period  5,728   10,634 

 

The accompanying notes are an integral part of these

consolidated financial statements

 

 

 

 

 

SINCERITY APPLIED MATERIALS HOLDINGS CORP.

Notes to Consolidated Statements

 

 

 1.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

 1.1Nature of Operations

 

Sincerity Applied Material Holdings

Corp (the “Company’’) is a specialized provider of technologically advanced packing materials for the automotive, packaging,

building & construction, and engineering industries, with headquarters located near Melbourne, Australia. The Company’s primary

customer is an unrelated entity with global operations that accounts for approximately 80% – 90% of The Company’s revenue, and The

Company’s primary suppliers are in China and Malaysia.

 

 1.2Basis of Accounting

 

The accompanying financial statements

include the accounts of Sincerity Applied Material Holdings Corp which is a company domiciled in Australia. These financial statements

have been prepared in accordance with the accounting principles generally accepted in the United States (“GAAP”) and Regulation

S-X published by the US Securities and Exchange Commission (the “SEC”). Certain prior period amounts have been reclassified

to conform to the current period presentation. Such reclassifications had no effect on the prior period net income, accumulated deficit,

net assets, or total shareholders’ deficit. The Company has evaluated events or transactions through the date of issuance of this

report in conjunction with the preparation of these consolidated financial statements. All amounts presented are in US dollars, unless

otherwise noted.

 

The financial statements, except for

cash flow information, have been prepared on an accruals basis and are based on historical costs, modified, where applicable, by the measurement

at fair value of selected non-current assets, financial assets and financial liabilities. The amounts presented in the financial statements

have been rounded to the nearest dollar.

 

 1.3Going Concern Basis

 

The financial statements have been

prepared on the going concern basis, which assumes continuity of normal business activities and the realization of assets and the settlement

of liabilities in the ordinary course of business.

 

At March 31,2020, the company had a

current asset deficiency of $138,279 and net asset deficiency of $8,367 (December 31, 2019 current asset deficiency of $99,743 and net

asset surplus of $46,137). The Company reported an after tax loss of $3,163 for the year (March 31, 2019 after tax loss: $10,158).

 

Despite the current asset deficiency,

the company has prepared the financial statements on a going concern basis that contemplates the continuity of normal business activity,

realization of assets and settlement of liabilities at the amounts recorded in the financial statements in the ordinary course of business.

 

The company believes that there are

reasonable grounds to support the fact that it will be able to pay its debts as and when they become due and payable. In forming this

opinion, the Group has considered the following factors:

 

(i)The company has the ability to raise fund through private placements and convertible

notes;
(ii)The company has been streamlining its operation by reducing operation costs; and
(iii)Applying for financial assistance from the Australian Government available for

businesses impacted by COVID-19.

 

 

 

 

SINCERITY APPLIED MATERIALS HOLDINGS CORP.

Notes to Consolidated Statements

 

 

 1.3Going Concern Basis (continued)

 

If the Company is unable to continue

as a going concern it may be required to realize its assets and extinguish its liabilities other than in the ordinary course of business

at amounts different from those stated in the financial statements.

 

The financial statements do not include

adjustments relating to the recoverability and classification of recorded asset amounts or to the amounts and classification of liabilities

that might be necessary should the Company not continue as a going concern.

 

 

The preparation of financial statements

in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP’’) requires

management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets

and liabilities at the date of the financial statements and reported amounts of revenue and expenses during the reporting period. Actual

results could differ from those estimates.

 

 1.5Foreign Currency Translation

 

The functional currency of the Company

is its local currency, the Australian dollar (AUD). The financial statements of the Company have been translated into U.S. dollars (USD).

All balance sheet accounts, other than those in stockholder’s deficiency, which are translated, based on historical rates accumulated

over time, have been translated using the exchange rate in effect at the balance sheet date. Income statement amounts have been translated

using the average exchange rate in effect for the period ended March 31, 2020. Accumulated net translation adjustments have been reported

separately in other comprehensive loss in the financial statements. Foreign currency translation adjustments resulted in a loss of $34,607

for the period ended March 31, 2020; such translation adjustments are not subject to income taxes. Foreign currency transaction losses

resulting from exchange rate fluctuations on transactions denominated in a currency other than the AUD, the functional currency, totaled

$12,932 for the period ended March 31, 2020, and is included in the accompanying statement of income for the period.

 

 1.6Cash and Cash Equivalents and Concentration of Credit Risk

 

The Company considers all highly liquid

short term investments with original maturities of three months or less at the date of acquisition to be cash equivalents. The carrying

value of cash and cash equivalents approximates fair value due to the short term nature of these instruments.

 

The Company’s financial instruments

exposed to concentrations of credit risk consist primarily of cash and cash equivalents. Cash and cash equivalents are held in several

Australian bank accounts. The Company regularly assesses the level of credit risk we are exposed to and whether there are better ways

of managing credit risk. The Company invests its cash and cash equivalents with reputable financial institutions. The Company has not

incurred any losses related to these deposits.

 

 1.7Accounts Receivable

 

The Company carries its accounts receivable

at cost less an allowance for doubtful accounts. The Company evaluates its accounts receivable on a regular basis and establishes an allowance

for doubtful accounts, when deemed necessary, based on a history of past write- offs and collections and current credit conditions. A

receivable is considered past-due based either on contractual terms or payment history. Accounts are written off as uncollectible after

collection efforts have failed. In addition, The Company does not generally charge interest on past-due accounts or require collateral.

It is at least reasonably possible that changes may occur in the near term that would affect management’s estimate of the allowance

for doubtful accounts. At March 31, 2019, management determined that no allowance for doubtful accounts was required.

 

 

 

 

SINCERITY APPLIED MATERIALS HOLDINGS CORP.

Notes to Consolidated Statements

 

 

 1.8Property and Equipment

 

Property and equipment are recorded

at cost. Costs of renewal and improvements that substantially extend the useful lives of assets are capitalized. Maintenance and repair

costs are expensed when incurred. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets,

generally five years.

 

Derecognition

 

An item of plant and equipment is derecognized

upon disposal or when no further economic benefits are expected from its use or disposal.

 

 

 

Payables are carried at amortized cost

and, due to their short-term nature, they are not discounted. They represent liabilities for goods and services provided to the Company

prior to the end of the financial period that are unpaid and arise when the Company becomes obliged to make future payments in respect

of the purchase of these goods and services. The amounts are unsecured and are usually paid within 30 days of recognition.

 

 

Provisions are recognized when the

Company has a legal or constructive obligation, as a result of past events, for which it is probable that an outflow of economic benefits

will result and that outflow can be reliably measured. Provisions are measured using the best estimate of the amounts required to settle

the obligation at the end of the reporting period.

 

 

Leases of fixed assets, where substantially

all the risks and benefits incidental to the ownership of the asset – but not the legal ownership – are transferred to entities

in the consolidated group, are classified as finance leases.

 

Finance leases are capitalized by recognizing

an asset and a liability at the lower of the amounts equal to the fair value of the leased property or the present value of the minimum

lease payments, including any guaranteed residual values. Lease payments are allocated between the reduction of the lease liability and

the lease interest expense for the period.

 

Leased assets are depreciated on a

straight-line basis over the shorter of their estimated useful lives or the lease term.

 

Lease payments for operating leases,

where substantially all the risks and benefits remain with the lessor, are recognized as expenses on a straight-line basis over the lease

term.

 

 

 

 

 

SINCERITY APPLIED MATERIALS HOLDINGS CORP.

Notes to Consolidated Statements

 

 

 1.12Loans and Borrowings

 

All loans and borrowings are initially

recognized at cost, being the fair value of the consideration received net of issue costs associated with the borrowing.

 

After initial recognition, interest-bearing

loans and borrowings are subsequently measured at amortized cost using the effective interest method. Amortized cost is calculated by

taking into account any issue costs, and any discount or premium on settlement.

 

 1.13Revenue Recognition

 

The Company recognizes revenue when

the goods are delivered at the port of shipment by the supplier, the price is fixed or determinable, and collectability is reasonably

assured.

 

Interest revenue is recognized using

the effective interest method, which for floating rate financial assets is the rate inherent in the instrument.

 

All revenue is stated net of the amount

of goods and services tax.

 

 

We account for income taxes using the

asset and liability method, under which the current income tax expense or benefit is the amount of income tax expected to be payable or

refundable in the current year. Deferred tax assets and liabilities are recorded for the estimated future tax consequences of temporary

differences between the financial statement carrying amounts of assets and liabilities and their respective tax bases, and for operating

loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable

income in the year in which the temporary differences are expected to be recovered or settled.

 

We evaluate the realizability of our

deferred tax assets and establish a valuation allowance when it is more likely than not that all or a portion of our deferred tax assets

will not be realized. In making such a determination, we consider all available positive and negative evidence, including future reversals

of existing taxable temporary differences, projected future taxable income, tax planning strategies, and results of recent operations.

If we determine that we would be able to realize our deferred tax assets in the future in excess of their net recorded amount, we would

make an adjustment to the deferred tax asset valuation allowance, which would reduce the provision for income taxes.

 

 

We account for the uncertainty in income

tax components based on tax positions taken or expected to be taken in a tax return. To recognize a benefit, a tax position must be more

likely than not to be sustained upon examination by taxing authorities. We do not recognize tax benefits that have a less than 50 percent

likelihood of being sustained. Our policy is to recognize interest and tax penalties related to unrecognized tax benefits in income tax

expense; no interest or tax penalties on uncertain tax benefits have been recorded through March 31, 2020.

 

 

 

 

 

SINCERITY APPLIED MATERIALS HOLDINGS CORP.

Notes to Consolidated Statements

 

 

 1.15Goods and Services Tax (GST)

 

Revenues, expenses and assets are recognized

net of the amount of GST, except where the amount of GST incurred is not recoverable from the Australian Taxation Office (ATO).

 

Receivables and payables are stated

inclusive of the amount of GST receivable or payable. The net amount of GST recoverable from, or payable to, the ATO is included with

other receivables or payables in the statement of financial position.

 

Cash flows are presented on a gross

basis. The GST components of cash flows arising from investing or financing activities, which are recoverable from or payable to the ATO,

are presented as operating cash flows included in receipts from customers or payments to suppliers.

 

 1.16Impairment of Long-Lived Assets

 

The Company reviews long-lived assets,

including fixed assets, for impairment whenever events or circumstances indicate that the carrying value of such assets may not be fully

recoverable. Impairment is present when the sum of undiscounted estimated future cash flows expected to result from use of the asset is

less than carrying value. If impairment is present, the carrying value of the impaired asset is reduced to its fair value. Fair value

is determined based on discounted cash flows or appraised values, depending on the nature of the asset. During the period ended March

31, 2020, no impairment losses were recognized for long-lived assets.

 

 1.17Stock-Based Compensation

 

The Company recognizes all employee

share-based compensation as a cost in the consolidated financial statements. Equity-classified awards principally related to stock options,

restricted stock units (“RSUs”) and performance stock units (“PSU”), are measured at the grant date fair value

of the award. The Company determines grant date fair value of stock option awards using the Black-Scholes option-pricing model. The fair

value of restricted stock awards is determined using the closing price of the Company’s common stock on the grant date. For service

based vesting grants, expense is recognized over the requisite service period based on the number of options or shares expected to ultimately

vest. For performance based vesting grants, expense is recognized over the requisite period until the performance obligation is met, assuming

that it is probable. No expense is recognized for performance-based grants until it is probable the vesting criteria will be satisfied.

Forfeitures are estimated at the date of grant and revised when actual or expected forfeiture activity differs materially from original

estimates.

 

Stock-based payments to non-employees

are re-measured at each reporting date and recognized as services are rendered, generally on a straight-line basis. The Company believes

that the fair values of these awards are more reliably measurable than the fair values of the services rendered.

 

 1.18Earnings (Loss) per Common Share

 

Basic earnings (loss) per common share

is computed by dividing income or losses available to common shareholders by the weighted average number of common shares outstanding

for the period. Diluted earnings (loss) per common share is computed similar to basic net income or losses per share except that the denominator

is increased to include the number of additional common shares that would have been outstanding if all the potential common shares, warrants

and stock options had been issued and of the additional common shares were dilutive. Diluted earnings (loss) per common share is based

on the assumption that all dilutive convertible shares and stock options were converted or exercised. Dilution is computed by applying

the treasury stock method for the outstanding options and the if-converted method for the outstanding convertible preferred shares. Under

the treasury stock method, options and warrants are assumed to be exercised at the beginning of the period (or at the time of issuance,

if later), and as if funds obtained thereby were used to purchase common stock at the average market price during the period. Under if

–converted method, convertible outstanding instruments are assumed to be converted into common stock at the beginning of the period

(or at the time of issuance, if later).

 

 

 

 

SINCERITY APPLIED MATERIALS HOLDINGS CORP.

Notes to Consolidated Statements

 

 

 1.19Accumulated Other Comprehensive Income (Loss)

 

Comprehensive income (loss) is presented

net of applicable income taxes in the accompanying consolidated statements of stockholders’ equity and comprehensive income (loss).

Other comprehensive income (loss) is comprised of revenues, expenses, gains, and losses that under GAAP are reported as separate components

of stockholders’ equity instead of net income (loss).

 

 

 1.20Recently Issued Accounting Standards

 

The Company continually assesses any

new accounting pronouncements to determine their applicability to the Company. Where it is determined that a new accounting pronouncement

affects the Company’s financial reporting, the Company undertakes a study to determine the consequence of the change to its financial

statements and assures that there are proper controls in place to ascertain that the Company’s financials properly reflect the change.

The Company currently does not have any recent accounting pronouncements that they are studying and feel may be applicable.

 

 1.21Reverse Acquisition Accounting

 

In accordance with “reverse acquisition”

accounting treatment, our historical financial statements as of period ends, and for periods ended, prior to the Acquisition will be replaced

with the historical financial statements of Sincerity Australia Pty Ltd (“SAPL”), prior to the Acquisition, in all future

filings with the SEC. Consequently retroactive adjustments have been made to the equity balances of SAPL to reflect the equity balances

of the legal parent company Sincerity Applied Materials Holdings Corp as required under ASC 805 and the application of reverse acquisition

accounting.

 

 

The outbreak of the novel strain of

coronavirus (“COVID-19”) and the ongoing pandemic, has resulted in governments worldwide enacting various emergency measures

to combat the spread of the virus. These measures, which include the implementation of travel bans, border shutdowns, self-imposed quarantine

periods, closing of non-essential businesses and social distancing, have caused material disruption to businesses globally resulting in

an economic slowdown. In addition, global equity markets have experienced significant volatility and weakness. Governments and central

banks have reacted with significant monetary and fiscal interventions designed to stabilize economic conditions.

 

To date, the COVID-19 pandemic had

a material negative impact on the Group’s results of operations with reduced orders from its customers and the Group having to apply

for government assistance where available.

 

 2.Critical Accounting Estimates and Judgements

 

The Directors evaluate estimates and

judgements incorporated into the financial statements based on historical knowledge and best available current information. Estimates

assume a reasonable expectation of future events and are based on current trends and economic data, obtained both externally and within

the Company.

 

 

 

 

 

SINCERITY APPLIED MATERIALS HOLDINGS CORP.

Notes to Consolidated Statements

 

 

Key Estimates

 

 

The Company determines the estimated

useful lives and related depreciation and amortization charges for its property and equipment and finite life intangible assets. The useful

lives could change significantly as a result of technical innovations or some other event. The depreciation and amortization charge will

increase where the useful lives are less than previously estimated lives, or technically obsolete or non-strategic assets that have been

abandoned or sold will be written off or written down.

 

 

The Company is subject to income taxes

in the jurisdictions in which it operates. Significant judgement is required in determining the provision for income tax. There are many

transactions and calculations undertaken during the ordinary course of business for which the ultimate tax determination is uncertain.

The Company recognizes liabilities for anticipated tax audit issues based on the Company’s current understanding of the tax law.

Where the final tax outcome of these matters is different from the carrying amounts, such differences will impact the current and deferred

tax provisions in the period in which such determination is made.

 

Key Judgements

 

 (i)Provision for impairment of receivables

 

The provision for impairment of receivables

assessment requires a degree of estimation and judgement. The level of provision is assessed by taking into account the recent sales experience,

the ageing of receivables, historical collection rates and specific knowledge of the individual debtors’ financial position.

 

 

The Company assessed that no indicators

of impairment existed at the reporting date and as such no impairment testing was performed.

 

 3.Segment Information

 

The consolidated entity operates predominantly

in one industry and one geographical segment, those being sales of technical advanced plastics materials in Australia, respectively.

 

 

 

 

 

SINCERITY APPLIED MATERIALS HOLDINGS CORP.

Notes to Consolidated Statements

 

 

 4.Cash and Cash Equivalents

 

Cash at the end of the financial periods

as shown in the statement of cash flows is reconciled to items in the balance sheets as follows:

 

  

March 31,

2020

  

December 31,

2019

 
       
Cash at bank $5,118  $22,063 
Petty Cash  610   701 
  $5,728  $22,764 

 

 5.Account Receivables and Other Assets

 

  

March 31,

2020

  

December 31,

2019

 
       
Current        
         
Account Receivables $91,488  $93,038 
  $91,488  $93,038 

 

 6.Property, Plant and Equipment

 

  March 31,2020  December 31, 2019  Estimated Useful Lives
         
Vehicles $131,242  $131,242  5 years
Office equipment and furniture and fixtures  25,565   25,565  5 years
   156,807   156,807   
Less: accumulated depreciation  50,249   48,297   
Total, net of accumulated depreciation $106,558  $108,510   

 

 7.Accrued and Other Liabilities

 

  March 31, 2020  December 31, 2019 
       
Current        
Accrued expenses $80,878  $88,542 
  $80,878  $88,542 

 

 

 

 

SINCERITY APPLIED MATERIALS HOLDINGS CORP.

Notes to Consolidated Statements

 

 

 

The Company has a chattel mortgage

outstanding at March 31, 2020 secured by a motor vehicle requiring monthly payments approximating $2,671 (and a final payment approximating

$39,976) that includes interest approximating 6.2%, and maturing on August 22, 2022. The components of the balance due under the chattel

mortgage at March 31, 2020 are as follows:

 

  March 31, 2020  December 31,2019 
       
Chattel mortgage $87,271  $129,870 
Less: current portion  (19,015)  (21,619)
  $68,256,  $108,251 

 

Maturities of long-term debt at March

31, 2020 for each of the next five years and in the aggregate, are as follows:

 

  March 31, 2020  December 31,2019 
       
Next 12 months $27,890  $31,644 
2 years  27,890   31,644 
3 years  51,597   66,582 
4 years      
  $107,377  $131,304 

 

 

  March 31, 2020  December 31,2019 
       
Business Loan $90,140  $105,194 
Business Credit Card  1,347   613 
Short-term borrowing  80,000   80,000 
  $171,487  $186,812 

 

 

 

 

 

SINCERITY APPLIED MATERIALS HOLDINGS CORP.

Notes to Consolidated Statements

 

 

The Company has a total $950,000 (AUD) bank credit line (approximately $586,625 (USD) at March 31, 2020) personally guaranteed by certain

Company officers, and secured by real property owned by those officers, available to be used for core business working capital requirements,

$800,000 (AUD) of which is designated as the “mortgage loan” portion with the remaining balance of $150,000 (AUD) designated

as the “business loan” portion. The mortgage loan portion of the credit line is subject to the bank’s business mortgage

index rate (5.94% per annum at March 31, 2020) minus 2.23% per annum for a maximum term of 30 years from the first drawdown date, and

the business loan portion of the credit line is subject to the bank’s business mortgage index rate minus 1.08% per annum for a

maximum term of 15 years from the first drawdown date. The business loan at March 31, 2020, $106,427 (USD) is drawn and payable on the

business loan; no drawings have been made on the mortgage loan as of the balance sheet date. Interest only is due monthly in arrears

for the first 3 years from the first drawdown date for draws from the mortgage loan and from the business loan.

 

 10.Income Tax Expense

 

 (a)The components of tax (expense)/income comprise:

 

  March 31, 2020  March 31,2019 
       
Current tax        
– Australia $751  $4,034 
– US      
Total $751  $4,034 

 

 (b)The prima facie tax on profit from ordinary activities before income tax is reconciled to income tax as follows:

 

Profit/(loss) from continuing operations

before income tax expense:

 

– Australia $(2,888) $(14,668)
– US  (1,026)  476 
– Hong Kong      
Total $(3,914) $(14,192)

 

Income tax expense/(credit) at statutory

rate:

 

– Australia $(751) $(4,034)
– US  (210)  100)
– Hong Kong      
Total $(961) $(3,934)

 

 

 

 

 

SINCERITY APPLIED MATERIALS HOLDINGS CORP.

Notes to Consolidated Statements

 

 

 10.Income Tax Expense (continued)

 

Tax effect amounts which are not deductible/(taxable)

in calculating taxable income:

 

Other non-allowable items $(210) $(100)
Valuation allowance      
Underprovision o prior year tax      
Consolidated income tax expense/(income) $(210) $(100)

  

On December 22, 2017, new tax reform

legislation in the U.S., known as the Tax Cuts and Jobs Act of 2017 (the “Act”) was signed into law. At March 31, 2020, the

Company has not yet completed its accounting assessment for the tax effects of the enactment of the Act; however, as described below,

the Company has made a reasonable estimate of the effects on the existing deferred tax balances.

 

As a result of the lower enacted corporate

tax rate, the Company has remeasured certain deferred tax assets and liabilities based on the rates at which they are expected to reverse

in the future, which is generally 21%. The provisional amount recorded related to the remeasurement of our tax balance was $476 that is

fully offset by accumulated losses from earlier periods.

 

Staff Accounting Bulletin No. 118 (“SAB

118”) was issued to address the application of US GAAP in situations when a registrant does not have the necessary information available,

prepared, or analyzed (including computations) in reasonable detail to complete the accounting for certain income tax effects of the Act.

In accordance with SAB 118, the Company has provisionally determined that there is no deferred tax benefit or expense with respect to

the remeasurement of certain deferred tax assets and liabilities due to the full valuation allowance against net deferred tax assets.

The Company is still analyzing certain aspects of the Act and refining its calculations, which could potentially affect the measurement

of these balances or potentially give rise to new deferred tax amounts. Additional analysis of the law and the impact to the Company will

be performed and any impact will be recorded in the respective quarter in 2019.

 

 11.Other Comprehensive Earnings

 

  March 31, 2020  December 31,2019 
         
Foreign currency translation reserve $10,264  $44,871 
         
 12.Capital and Leasing Commitments

 

There was no capital or leasing expenditure

at March 31, 2020.

 

 

 

 

 

SINCERITY APPLIED MATERIALS HOLDINGS CORP.

Notes to Consolidated Statements

 

 

 

From

time to time, we may be a defendant and plaintiff in various legal proceedings arising in the normal course of our business. We are currently

not a party to any material legal proceedings or government actions, including any bankruptcy, receivership, or similar proceedings. In

addition, we are not aware of any known litigation or liabilities involving the operators of our properties that could affect our operations.

Furthermore, as of the date of this quarterly, our management is not aware of any proceedings to which any of our directors, officers,

or affiliates, or any associate of any such director, officer, affiliate, or security holder is a party adverse to our company or has

a material interest adverse to us.

 

 14.Related Party Transactions

 

 

Sincerity Australia Pty Ltd which is

incorporated in Australia and Prana Hong Kong Limited which is incorporated in Hong Kong are wholly owned subsidiaries of Sincerity Applied

Materials Holdings Corp. Prana Hong Kong Limited is under process of de-registration.

 

 (b)Outstanding balances with related parties

 

The following balances are outstanding

at reporting date in relation to transactions with related parties:

 

  

March 31,

2020

  

December 31,

2019

 
         
Loan to Stockholder $306,635  $298,873 

 

  Three Months ended March 
  2020  2019 
         
Purchase from Shanghai Sincerity Co Ltd $  $8,944 

 

 15.Events After the Reporting Period

 

There has not arisen in the interval

between the end of the financial period and the date of these financial statements any other item, transaction or event of a material

and unusual nature likely, in the opinion of the Directors of the Company, to affect significantly the operation of the company, the results

of those operations, or the state of affairs of the company, in future financial years except for:

 

(a)On August 5, 2021, the New York County Supreme Court has granted Section 3(a)(10) of the Securities Acto

fo 1933 as amended exempts the offer and sale of securities in certain exchange transactions from the registration statement requirements

in the case of Infinity Fund LLC v Sincerity Applied Materials Holdings Corp.

 

(b)On August 20, 2020, the Group has entered into a stock purchase agreement with Simcor (Jiangsu) Materials

Technology Ltd (SMTL), a company formed in the Peoples Republic of China with its registered address at No 67, Yanzhen East Rd, Niutang,

Wujin, Changzhou, Jiangsu, China. SMTL will sell to the group 2,000,000 ordinary shares to the Group for a consideration of USD 2,500,000.

SMTL also will issue and sell to the Group 5,000,000 ordinary shares for a consideration of USD 4,500,000.

 

 

 

 

 

Item 2. Management’s Discussion and Analysis

of Financial Condition and Results of Operations.

  

The following management’s discussion and

analysis should be read in conjunction with the historical financial statements and the related notes thereto contained in this report.

The management’s discussion and analysis contains forward-looking statements, such as statements of our plans, objectives, expectations

and intentions. Any statements that are not statements of historical fact are forward-looking statements. When used, the words “believe,”

“plan,” “intend,” “anticipate,” “target,” “estimate,” “expect”

and the like, and/or future tense or conditional constructions (“will,” “may,” “could,” “should,”

etc.), or similar expressions, identify certain of these forward-looking statements. These forward-looking statements are subject to risks

and uncertainties that could cause actual results or events to differ materially from those expressed or implied by the forward-looking

statements. The Company’s actual results and the timing of events could differ materially from those anticipated in these forward-looking

statements as a result of several factors. The Company does not undertake any obligation to update forward-looking statements to reflect

events or circumstances occurring after the date of this report.

 

The following discussion highlights the Company’s

results of operations and the principal factors that have affected our financial condition, as well as our liquidity and capital resources

for the periods described, provides information that management believes is relevant for an assessment and understanding of the statements

of financial condition and results of operations presented herein. The following discussion and analysis are based on the Company’s

unaudited financial statements contained in this Quarterly Report, which we have prepared in accordance with United States generally accepted

accounting principles. You should read this discussion and analysis together with such financial statements and the related notes thereto.

 

Company Overview

 

Through our wholly owned subsidiary, Sincerity

Australia Pty Ltd. (“SAPL”), we primarily operate as a distributor and reseller of applied materials, particularly plastics,

with an extensive network in China of high quality suppliers for a wide range of both basic and high application polymer products ranging

from generic construction materials to high end breathable stretch film and antibacterial sheeting. SAPL is based in Melbourne, Australia

and distributes to a number of larger resellers and end users, including Visy Industries (trading as Pratt Group America in the USA),

one of the world’s largest packaging and recycling groups.

 

SAPL’s business was commenced in 2009 by

James Zhang, our Chairman, President and Chief Executive Officer and the son of the founder of (i) Changzhou Sincerity Plastics and Chemicals

Technology Ltd. (“Sincerity China”), a well-established plastics and applied materials manufacturer with a 20-year operating

history, based in Changzhou, China, and (ii) Shanghai Sincerity Co. Ltd., a Shanghai, China based company through which most of the products

we purchase from Sincerity China are sourced and sold to us. SAPL originally commenced operations by supplying basic extruded plastic

components (moldings, auto interior components, kitchen splash backs etc.) to the Australian auto, retail and construction industries.

In 2015, SAPL began importing specialty high quality plastic trays and film for use in fresh food packaging and distribution. The first

major customer for this business was the Propac Group, leading supplier of plastic packaging materials to Coles, one of Australia’s

2 dominant supermarket chains.

 

Over the past 3 years, SAPL has refocused its

marketing efforts towards larger resellers and distributors in Australia, allowing SAPL to build strong relationships with key industry

players who acquire its products for their own distribution and reseller networks. Research and investment in addressing the key fresh

food issue of plastic film “breathability” has created a unique technology platform whereby air circulation in packaged foods

can be adjusted according to the type of food. This has the effect of prolonging shelf life, key to building relationship metrics within

the food retailing industry. SAPL recently started to supply Visy Industries, with high technology, breathable plastic film for use in

Visy Industries’ packaging supply contract with the other dominant player in Australia’s supermarket industry.

 

Presently all of SAPL’s revenue is derived

from sales within the Australian market, however, due to the strong international presence of SAPL’s major customers such as Visy,

particularly in the US, combined with the technology metrics of SAPL’s product range (breathable stretch film and antibacterial

polymer products), it is expected that SAPL’s products will be increasingly utilized in global markets.

 

 

 

 

 

SAPL will continue with the process of further

vertical integration of its product range. Value adding packaging technology, such as breathable film, and ventilated stretch film, is

expected to provide an innovative edge over our competition. Rapid growth in demand from fresh fruit and vegetable packaging is already

reflected through increasing sales to Visy Industries and will also allow SAPL to transition these new products to the global market.

 

SAPL supplies Australian market with a well-diversified

product range, while commodity type provides a strong foundation of business grow, the value adding innovations on each product will bring

SAPL to the next level and expand for beyond Australia.

 

SAPL is fast growing, it is running at loss as

a public company and needs more working capital for stronger growth.

 

SAPL’s flag ship range in ventilated packaging

are in the final stage of commercial production, and it is expected to disrupt the fresh produce packaging market with strong performance

and competitive price.

 

    Three Months ended March 
    2020  2019 
  Note $  $ 
   (Not Reviewed)    
Revenue          
Sales    93,586   235,651 
Cost of sales    (81,625)  (229,184)
Gross profit    11,961   6,467 
           
Operating expenses          
Depreciation and amortization    1,952   2,418 
Selling, general and administrative expenses    4,022   8,336 
Employee expenses        
Professional service fees    66   9,832 
Bad debt expenses        
Total operating expenses    6,040   20,586 
           
Profit/(Loss) from operations    5,921   (14,119)
           
Other income/(expenses)          
Other income    4,512   4,881 
Interest expense    (1,415)  (4,630 
Other Finance Gain        
Fair value adjustments on Convertible note        
Gain on derivative financial instrument        
Fair value adjustment of Warrant liabilities        
Foreign currency transaction loss    (12,932)  (324)
Total other expenses    (9,835)  (73)
Loss from continuing operations before income tax expenses    (3,914)  (14,192)
           
Income tax benefit/(expense) 10  751   4,034 
           
Net loss after income tax expense for the period    (3,163)  (10,158)
           
Other comprehensive income /(loss)          
Exchange differences arising on translation of foreign operations    (34,607)  (3,348)
Other comprehensive income/(loss)    (34,607)  (3,348)
           
Total comprehensive loss for the period    (37,745)  (13,506)

 

 

 

Revenues

 

Revenue was $94k for the three months ended

March 31, 2020, compared to $236k for the three months ended March 31, 2019, a decrease of $142k. The decrease can be attributed to

timing and quantity of orders by our customers and the type of products they purchase, which can vary in margin.

 

Selling, general and administrative expenses

 

Selling, general and administrative expenses was

$4k for the three months ended March 31, 2020, compared to $8k for the three months ended March 31, 2019. The decrease was primarily due

to reduction in business activities in the quarter.

 

Employee expenses

 

No employee expenses were incurred for the 3 months

ended March 31, 2020 and March 31, 2019.

 

Professional service fees

 

Professional service fees were minimal for the

three months ended March 31, 2020, compared to $10k for the three months ended March 31, 2019. The lower professional service fees incurred

for the 3 months ended March 31, 2020 was to due payments reduced consultant costs.

 

Other Income and Expenses

 

The increase in other income and expenses was

due foreign currency transaction loss due to the depreciation of the Australian dollar against the US Dollar.

  

Liquidity and Capital Resources 

 

As at March 31, 2020, we had a working capital

deficit of $138,279 compared with a working capital deficit of $99,743 as at December 31, 2019. The deterioration in working capital is

attributable to lower cashflows available to pay account payables in the operations.

 

Our primary uses of cash have been for operations.

The main sources of cash have been sales to customers.

 

The Company believes that cash flow from operations

will be sufficient to sustain its current level of operations for at least the next three months of operations.

 

As of March 31, 2020, we had cash and cash equivalent of approximately

$6,000, which might not be sufficient to fund our operating and capital needs in the short term. The Company has been seeking funding

from various sources as discussed below:

 

(i)The company has the ability to raise fund through private placements and convertible

notes;
(ii)The company has been streamlining its operation by reducing operation costs; and
(iii)Applying for financial assistance from the Australian Government available for

businesses impacted by COVID-19.

 

In the three months ended

March 31, 2020, the net cash provided by operating activities primarily reflects the loss from operations of approximately $3,000 with

approximately $62,000 in changes in operating assets and liabilities, offset by non-cash items of approximately $13,000 and amortization

and depreciation of approximately $2,000 that had no effect on cash flows.

 

 

 

 

 

Net cash used for investing

activities of approximately $10,000 and $25,000 relates to advances to related entities for the three months ended March 31, 2020 and

three months ended March 31, 2019, respectively.

 

Net cash used in financing

activities was approximately $53,000 for the three months ended March 31, 2020 compared to approximately $4k used in financial activities

for the three months ended March 31, 2019.

 

Critical Accounting Estimates and Judgements

 

The Directors evaluate estimates and judgements

incorporated into the financial statements based on historical knowledge and best available current information. Estimates assume a reasonable

expectation of future events and are based on current trends and economic data, obtained both externally and within the Company.

 

Key Estimates

 

 

The Company determines the estimated useful lives and related depreciation

and amortization charges for its property and equipment and finite life intangible assets. The useful lives could change significantly

as a result of technical innovations or some other event. The depreciation and amortization charge will increase where the useful lives

are less than previously estimated lives, or technically obsolete or non-strategic assets that have been abandoned or sold will be written

off or written down.

 

 

The Company is subject to income taxes in the jurisdictions in which

it operates. Significant judgement is required in determining the provision for income tax. There are many transactions and calculations

undertaken during the ordinary course of business for which the ultimate tax determination is uncertain. The Company recognizes liabilities

for anticipated tax audit issues based on the Company’s current understanding of the tax law. Where the final tax outcome of these

matters is different from the carrying amounts, such differences will impact the current and deferred tax provisions in the period in

which such determination is made.

 

Key Judgements

 

(i)Provision for impairment of receivables

 

The provision for impairment of receivables assessment requires

a degree of estimation and judgement. The level of provision is assessed by taking into account the recent sales experience, the ageing

of receivables, historical collection rates and specific knowledge of the individual debtors’ financial position.

 

 

The Company assessed that no indicators of impairment existed

at the reporting date and as such no impairment testing was performed.

 

Item 3. Quantitative and Qualitative Disclosures

About Market Risk.

 

Not applicable.

 

 

 

 

 

Item 4. Controls and Procedures.

 

Evaluation of Disclosure Controls and Procedures

 

We maintain disclosure controls and procedures

that are designed to ensure that material information required to be disclosed in our periodic reports filed under the Securities Exchange

Act of 1934, as amended, or 1934 Act, is recorded, processed, summarized, and reported within the time periods specified in the SEC’s

rules and forms and to ensure that such information is accumulated and communicated to our management, including our chief executive officer

and chief financial officer as appropriate, to allow timely decisions regarding required disclosure. At the end of the quarter ended March

31, 2019, we carried out an evaluation, under the supervision and with the participation of our management, including our principal executive

officer and the principal financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures,

as defined in Rule 13(a)-15(e) and Rule 15d-15(e) under the 1934 Act. Based on this evaluation, management concluded that as of March

31, 2019 our disclosure controls and procedures were not effective due to material weaknesses resulting from our internal controls  and

procedures including (1) lack of a functioning audit committee, resulting in ineffective oversight in the establishment and monitoring

of required internal controls and procedures; (2) lack of an audit committee financial expert (as such term is defined in Item 407(d)(5)(ii)

of Regulation S-K) on our board of directors; (3) inadequate segregation of duties consistent with control objectives; and (4) ineffective

controls over period end financial disclosure and reporting processes.

 

Changes in Internal Controls

 

During the quarter ended March 31, 2020, there

have been no changes in our internal control over financial reporting that have materially affected or are reasonably likely to materially

affect our internal controls over financial reporting.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PART II – OTHER INFORMATION

 

Item 1. Legal Proceedings.

 

From time to time, we may be a defendant and plaintiff

in various legal proceedings arising in the normal course of our business. We are currently not a party to any material legal proceedings

or government actions, including any bankruptcy, receivership, or similar proceedings. In addition, we are not aware of any known litigation

or liabilities involving the operators of our properties that could affect our operations. Furthermore, as of the date of this Quarterly

Report, our management is not aware of any proceedings to which any of our directors, officers, or affiliates, or any associate of any

such director, officer, affiliate, or security holder is a party adverse to our company or has a material interest adverse to us.

 

Item 1A. Risk Factors.

 

Not applicable.

 

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

 

There are no unregistered sales of equity securities

during the period covered by this report that were not previously reported in a Current Report on Form 8-K.

 

Item 3. Defaults Upon Senior Securities.

 

None.

 

Item 4. Mine Safety Disclosures.

 

Not applicable. 

 

Item 5. Other Information.

 

None.

 

Item 6. Exhibits.

 

 

* Furnished herewith.

   

 

 `

SIGNATURES

 

In accordance with the requirements of the Securities

Exchange Act of 1934, the Registrant has caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

 SINCERITY APPLIED MATERIALS HOLDINGS CORP.
  
September 2, 2021By:/s/ Yiwen Zhang
  

Yiwen Zhang

Chief Executive Officer

(Principal Executive Officer)

  
September 2, 2021By:/s/ Chris Lim
  

Chris Lim

Chief Financial Officer

(Principal Financial and Accounting Officer)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EXHIBIT 31.1

 

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 302 OF

THE SARBANES-OXLEY ACT OF 2002

 

I, Yiwen Zhang, certify that:

 

1.I have reviewed this Quarterly Report on Form 10-Q of Sincerity Applied Materials Holdings Corp.;
  
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
  
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
  
4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13-a-15(f) and 15d-15(f)) for the registrant and have:

 

 (a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
   
 (b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
   
 (c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
   
 (d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

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

 

 (a)All significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
   
 (b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

 

 Sincerity Applied Materials Holdings Corp. 
    
Dated: September 2, 2021By:/s/ Yiwen Zhang 
  Yiwen Zhang 
  Chief Executive Officer  
  (Principal Executive Officer) 

 

 

 

EXHIBIT 31.2

 

CERTIFICATION OF CHIEF FINANCIAL OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 302 OF

THE SARBANES-OXLEY ACT OF 2002

 

I, Chris Lim, certify that:

 

1.I have reviewed this Quarterly Report on Form 10-Q of Sincerity Applied Materials Holdings Corp.;
  
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
  
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
  
4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13-a-15(f) and 15d-15(f)) for the registrant and have:

 

 (a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
   
 (b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
   
 (c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
   
 (d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

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

 

 (a)All significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
   
 (b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

 

 Sincerity Applied Materials Holdings Corp. 
    
Dated: September 2, 2021By:/s/ Chris Lim 
  Chris Lim 
  Chief Financial Officer 
  (Principal Financial Officer and Principal Accounting Officer) 

 

 

EXHIBIT 32.1

 

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO SECTION 906

OF THE SARBANES-OXLEY ACT of 2002

 

In connection with the Quarterly Report of Sincerity

Applied Materials Holdings Corp. (the “Company”) on Form 10-Q for the period ended March 31, 2020 as filed with the Securities

and Exchange Commission on the date hereof (the “Quarterly Report”), Yiwen Zhang, Chief Executive Officer of the Company,

certifies, pursuant to 18 U.S.C. section 1350, as adopted pursuant to Sec. 906 of the Sarbanes-Oxley Act of 2002, that:

 

 1.The Quarterly Report, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
   
 2.The information contained in the Quarterly Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

 

 Sincerity Applied Materials Holdings Corp. 
    
Dated: September 2, 2021 By:/s/ Yiwen Zhang 
  Yiwen Zhang 
  Chief Executive Officer  
  (Principal Executive Officer) 

 

 

EXHIBIT 32.2

 

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO SECTION 906

OF THE SARBANES-OXLEY ACT of 2002

 

In connection with the Quarterly Report of Sincerity

Applied Materials Holdings Corp. (the “Company”) on Form 10-Q for the period ended March 31, 2020 as filed with the Securities

and Exchange Commission on the date hereof (the “Quarterly Report”), Chris Lim, Chief Financial Officer of the Company, certifies,

pursuant to 18 U.S.C. section 1350, as adopted pursuant to Sec. 906 of the Sarbanes-Oxley Act of 2002, that:

 

 1.The Quarterly Report, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
   
 2.The information contained in the Quarterly Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

 

 Sincerity Applied Materials Holdings Corp. 
    
Dated: September 2, 2021By:/s/ Chris Lim 
  Chris Lim 
  Chief Financial Officer  
  (Principal Accounting Officer)