ITEM 1. BUSINESS
DESCRIPTION OF BUSINESS AND RECENT HISTORY
General
Gold Billion Group Holdings Limited used to be a service provider in the hospitality industry, supplying a range of services in relation to computerized minibars that are primarily intended for in-room refreshments. However, no business has been generated since 5 September 2014 when all the subsidiaries have been disposed of. The company became dormant and has remained so until the date of this report.
On November 25, 2014 The Company approved and acknowledged a Stock Purchase Agreement, entered into by and between certain shareholders of the Company, as Sellers, and RichCorp Holdings Ltd., a Samoa corporation, as Buyer, pursuant to which the Buyer purchased from the Sellers a total of 2,308,345 shares of common stock in the Company. The parties closed the transaction contemplated in the Stock Purchase Agreement on November 25, 2014.
The Shares represent approximately 78.3% of the Company’s issued and outstanding common stock, and as a result, the transaction resulted in a change of control of the Company. Mr. Eddy Kok Seng Yeap owns 100% of the issued and outstanding common stock of RichCorp Holdings Ltd., and may be deemed to be the beneficial owner of the Shares purchased by RichCorp Holdings Ltd.
In conjunction with the share purchase transaction between the Sellers and the Buyer, on November 25, 2014, Mr. Avraham Bahry, the Registrant’s sole officer and director, resigned from his respective positions as the President, Chief Executive Officer and Chief Financial Officer of the Company. His resignation was not due to a disagreement with the Company. Mr. Bahry did not resign his position as a member of the board of directors.
On November 25, 2014, the board of directors of the Company appointed Mr. Eddy Kok Seng Yeap as both a director and as the President, Chief Executive Officer and Chief Financial Officer of the Company. Mr. Eddy Kok Seng Yeap does not have any employment agreements with the Company.
On July 29, 2015 the Company entered into an Agreement and Plan of Merger (the "Merger Agreement") pursuant to which the Company merged with its wholly owned subsidiary, Gold Billion Group Holdings Limited, a Delaware corporation with no material operations ("Merger Sub" and such merger transaction, the "Merger"). Upon the consummation of the Merger, the separate existence of Merger Sub ceased and shareholders of the Company became shareholders of the surviving company named Gold Billion Group Holdings Limited.
As permitted by the Delaware General Corporation Law Title 8, Section 251(f), the sole purpose of the Merger was to effect a change of the Company's name from Hotel Outsource Management International, Inc. to Gold Billion Group Holdings Limited. Upon the filing of the Certificate of Merger (the "Certificate of Merger") with the Secretary of State of Delaware on July 30, 2015 to effect the Merger, the Company's Articles of Incorporation were deemed amended to reflect the change in the Company's corporate name.
As at date of this report, the Company does not currently have any active business operations.
Operations
As of December 31, 2016, the Company has no operations.
Intellectual Property
None.
Employees
As of December 31, 2016, the Company had no employees.
Business Plan
Our current business plan is to seek and identify appropriate business opportunity for development of our new line of business. We have no capital and must depend on the resources of our shareholders to provide us with the necessary funds to implement our business plan. We intend to seek opportunities demonstrating the potential of long-term growth as opposed to short-term earnings. However, at the present time, we have not identified any business opportunity that we plan to pursue, nor have we reached any agreement or definitive understanding with any person concerning an acquisition or merger.
Our sole director will be primarily responsible for investigating combination opportunities. However, we believe that business opportunities may also come to our attention from various sources, including professional advisors such as attorneys, and accountants, securities broker-dealers, venture capitalists, members of the financial community, and others who may present unsolicited proposals. We have no plan, understanding, agreements, or commitments with any individual for such person to act as a finder of opportunities for us.
No direct discussions regarding the possibility of a combination are currently ongoing and we can give no assurances that we will be successful in finding or acquiring a desirable business opportunity. Furthermore, we can give no assurances that any acquisition, if it occurs, will be on terms that are favorable to us or our current stockholders.
We do not propose to restrict our search for business opportunity to any particular geographical area or industry, and therefore, we are unable to predict the nature of our future business operations. Our management’s discretion in the selection of business opportunities is unrestricted, subject to the availability of such opportunities, economic conditions, and other factors.
Investigation and Selection of Business Opportunities
Certain types of business acquisition transactions may be completed without requiring us to first submit the transaction to our stockholders for their approval. If the proposed transaction is structured in such a fashion our stockholders (other than our majority stockholder) will not be provided with financial or other information relating to the candidate prior to the completion of the transaction.
If a proposed business combination or business acquisition transaction is structured that requires our stockholder approval, and we are a reporting company, we will be required to provide our stockholders with information as applicable under Regulations 14A and 14C under the Exchange Act.
The analysis of business opportunities will be undertaken by or under the supervision of our sole director. In analyzing potential merger candidates, our management will consider, among other things, the following factors:
- Potential for future earnings and appreciation of value of securities;
- Perception of how any particular business opportunity will be received by the investment community and by our stockholders;
- Historical results of operation;
- Liquidity and availability of capital resources;
- Competitive position as compared to other companies of similar size and experience within the industry segment as well as within the industry as a whole;
- Strength and diversity of existing management or management prospects that are scheduled for recruitment;
- Amount of debt and contingent liabilities; and
- The products and/or services and marketing concepts of the target business
There is no single factor that will be controlling in the selection of a business opportunity. Our management will attempt to analyze all factors appropriate to each opportunity and make a determination based upon reasonable investigative measures and available data. Potentially available business opportunities may occur in many different industries and at various stages of development, all of which will make the task of comparative investigation and analysis of such business opportunities. We may not discover or adequately evaluate adverse facts about the business opportunity to be acquired.
We are unable to predict when we may participate in a business opportunity. We expect, however, that the analysis of specific proposals and the selection of a business opportunity may take several months.
Prior to making a decision to participate in a business transaction, we will generally request that we be provided with written materials regarding the business opportunity containing as much relevant information as possible, including, but not limited to, a description of products, services and company history; management resumes; financial information; available projections, with related assumptions upon which they are based; an explanation of proprietary products and services; evidence of existing patents, trademarks, or service marks, or rights thereto; present and proposed forms of compensation to management; a description of transactions between such company and its affiliates during the relevant periods; a description of present and required facilities; an analysis of risks and competitive conditions; a financial plan of operation and estimated capital requirements; audited financial statements, or if audited financial statements are not available, unaudited financial statements, together with reasonable assurance that audited financial statements would be able to be produced to comply with the requirements of a Current Report on Form 8-K to be filed with the Securities and Exchange Commission, or Commission, upon consummation of the business combination.
As part of our investigation, our directors may meet personally with management and key personnel, may visit and inspect material facilities, obtain independent analysis or verification of certain provided information, check references of management and key personnel, and take other reasonable investigative measures, to the extent of our limited financial and management resources.
ITEM 1A.
ITEM 1A.RISK FACTORS
This information is not required of smaller reporting companies.
ITEM 1B.
ITEM 1B.UNRESOLVED STAFF COMMENTS
Not applicable.
ITEM 2.
ITEM 2.PROPERTIES
The Company owns no properties and utilizes space on a rent-free basis from the sole director. This arrangement is expected to continue until such time as the Company becomes involved in a business venture which necessitates its relocation, as to which no assurances can be given. The Company has no agreements with respect to the maintenance or future acquisition of the office facilities, however, if a successful merger/acquisition is negotiated, it is anticipated that the office of the Company will be moved to that of the acquired company.
ITEM 3.
ITEM 3.LEGAL PROCEEDINGS
None.
ITEM 4.
ITEM 4.MINE SAFETY DISCLOSURES
Not applicable.
PART II
ITEM 5.
ITEM 5.MARKET FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
Market Information
The Company’s stock is assigned the symbol GBGH and is quoted and traded on the OTCQB.
The range of low to high closing prices on the OTCQB is shown in the table below (rounded to the nearest cent). This information is taken from MSN Money and CSI. Readers should note OTCQB quotations are a reflection of inter-dealer prices, without retail mark-up, mark-down, or commissions, and may not represent actual transactions.
Holders of the Company’s Stock
The Company has issued common stock only. On December 31, 2016, the total number of holders of record as according to our transfer agent was approximately 128.
Dividends
We did not pay any cash dividends on our common stock for fiscal year ended on December 31, 2016.
Unregistered Sales of Equity Securities
The number of shares issued was based on the average closing price of our common shares on the OTCQB during certain periods. The shares were exempt from registration pursuant to Section 4(2) under the Securities Act of 1933, as amended, pursuant to Rule 903, as a sale by the issuer in an offshore transaction. No underwriting or other commissions were paid in connection with the issuance of these shares. No forms of conversion or exercise options are attached to the shares.
ITEM 6.
ITEM 6.SELECTED FINANCIAL DATA
This information is not required of smaller reporting companies.
ITEM 7.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis provides information that we believe is relevant to an assessment and understanding of our results of operations and financial condition for the year ended December 31, 2016. The following discussion should be read in conjunction with the financial statements for the year ended December 31, 2016.
Overview
The Company does not currently have any active business operations.
Our common stock was listed on the Over-the-Counter Bulletin Board, or "OTC Bulletin Board" from February 2004 to August 2015 under the symbol "HOUM". Effective as of July 30, 2015, the Company changed its name from Hotel Outsource Management International, Inc., to Gold Billion Group Holdings Limited. In conjunction with its name change, effective in the marketplace at the open of business on August 28, 2015, the Company’s trading symbol changed to “GBGH.”
On January 11, 2016 the Company acquired all of the issued and outstanding stock of GBGH Hong Kong Limited (“GBGH HK”), a Hong Kong Corporation, at a consideration of HK$500,000 (approximately US$64,000), and as a result of the transaction, GBGH HK became a wholly-owned subsidiary of the Company. On April 6, 2016, the Company issued 16,000,000 shares of its authorized but previously unissued shares of common stock as the consideration for acquisition of the shares of GBGH HK. The shares issued by the Company were valued for purposes of the acquisition at HK$0.03125 per share (approximately US$0.004 per share), or an aggregate of HK$500,000 (approximately US$64,000). As a result of this transaction, the Company’s issued and outstanding common stock increased from 2,949,484 shares to 18,949,484 shares. Prior to their acquisition by the Company, all of the issued and outstanding shares of GBGH HK were owned by Richcorp Holdings, Ltd. (“Richcorp”), a Samoa corporation, which was also the principal shareholder of the Company prior to the transaction. Accordingly, following completion of this transaction, Richcorp is the owner of 18,308,345 shares, or approximately 96.6%, of the Company’s issued and outstanding common stock.
The above acquisition of all of the issued and outstanding stock of GBGH HK on January 11, 2016 was accounted for as a common control business combination.
Results of Operations
Two Years Ended December 31, 2016 and 2015
Revenues
There were no revenues in 2016 and 2015.
Operating Expenses
Operating expenses decreased to $34,533 for the year 2016, which were all professional fees incurred at the parent company, from $47,961 for the year 2015, where professional fees of $47,192 was incurred at the parent company level and general and administrative expenses of $769 was incurred in the subsidiary level, a decrease of $13,428. The decrease was mainly due to decreased SEC reporting cost.
Other Expenses
We had other expenses of $326,080 in 2016 and $nil in 2015, attributable to the loss on settlement of debt to a related party.
Net Loss
As a result of the above common control business combination with GBGH HK, we had a net consolidated loss of $360,613 for the year 2016, compared to the net loss of $47,961 in 2015, an increase of $312,652. The increase was mainly due to the loss on settlement of debt to a related party.
Liquidity and Capital Resources
As shown in the accompanying financial statements, the Company had an accumulated loss of $15,129,523 as of December 31, 2016 compared to the accumulated loss of $14,768,910 for the year ended December 31, 2015. There was a working capital deficit of $102,839 on December 31, 2016 and it was $74,961 as of December 31, 2015. It increased $27,878. The increase was mainly due to increase in amount due to related party.
Operating Activities
No net cash was used in operating activities for the year 2016 and 2015, due to the fact that the net loss was set off by adjustments for non-cash items and change in operating assets and liabilities.
The Company financed its growth by utilizing loans from directors. Loans from directors were unsecured, and deferred payment term and without interest bearing.
Subsequent Event
Management has evaluated subsequent events through the date this report was available to be issued. Based on the evaluation no material events have occurred that require disclosure.
Off Balance Sheet Arrangements
GBGH has no significant off balance sheet arrangements.
Inflation
We do not believe that inflation has had a significant impact on our results of operations or financial condition.
ITEM 7A.
ITEM 7A.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
This information is not required of smaller reporting companies.
ITEM 8.
ITEM 8.FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Financial statements are attached hereto following Part IV, Item 15 beginning on Page of this Annual Report.
ITEM 9.
ITEM 9.CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
On August 26, 2016 the board of directors of the Company resolved to terminate the service of JTC FAIR SONG CPA FIRM, its independent registered accounting firm. The Company engaged Anthony Kam & Associates Ltd. ("AKAM"), as its new independent registered public accountant. During the fiscal years ended December 31, 2014 and December 31, 2015, and the subsequent interim period prior to the engagement of AKAM, neither the Registrant nor anyone on its behalf consulted with AKAM regarding the application of accounting principles to a specified transaction whether completed or uncompleted, the type of audit opinion that might be rendered on the Registrant’s financial statements or as to any matter that was either the subject of a disagreement with the previous independent auditor or was a reportable event. The decision to engage AKAM was recommended and approved by the Registrant’s Board of Directors.
ITEM 9A.
ITEM 9A.CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
Management is required by Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 to evaluate, with the participation of the Chief Executive Officer and Chief Financial Officer, the effectiveness of disclosure controls and procedures as of the end of the period covered by this report. Disclosure controls and procedures refer to controls and other procedures designed to ensure that information required to be disclosed in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the rules and forms of the Securities and Exchange Commission. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in our reports that we file or submit under the Exchange Act is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. In designing and evaluating our disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management was required to apply its judgment in evaluating and implementing possible controls and procedures.
During the year ending December 31, 2016, management carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures. Such an evaluation requires the check and testing of the existence of the required controls. As of December 31, 2016, management had performed the examination with regard to all of the Company’s material subsidiaries. As a result, management has concluded that its disclosure controls and procedures are currently effective.
Management’s Report on Internal Control Over Financial Reporting
Management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934, as amended. Internal control over financial reporting refers to a process designed by, or under the supervision of, the Chief Executive Officer and Chief Financial Officer and effected by the board of directors, management and other personnel 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, and includes those policies and procedures that:
·pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets;
·provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and our board of directors; and
·provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on our financial statements.
Internal control over financial reporting cannot provide absolute assurance of achieving financial reporting objectives because of its inherent limitations. Internal control over financial reporting is a process that involves human diligence, compliance and is subject to lapses in judgment and breakdowns resulting from improper segregation of duties and human failures. Because of such limitations, there is a risk that material misstatements may not be prevented or detected on a timely basis by internal control over financial reporting. However, these inherent limitations are known features of the financial reporting process. Therefore, it is possible to design into the process safeguards to reduce, though not eliminate, this risk.
Management evaluated the effectiveness of our internal control over financial reporting as of December 31, 2016 using the framework set forth in the report of the Treadway Commission’s Committee of Sponsoring Organizations (COSO), “Internal Control - Integrated Framework.” The Public Company Accounting Oversight Board’s Auditing Standard No. 2 defines a material weakness as a significant deficiency, or combination of significant deficiencies, that result in more than a remote likelihood that a material misstatement of the annual or interim financial statements will not be prevented or detected. As of December 31, 2016, management has concluded that internal control over financial reporting is effective.
This annual report does not include an attestation report of the company's registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by the company's registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit the company to provide only management's report in this annual report.
ITEM 9B.
ITEM 9B.OTHER INFORMATION
On July 1, 2016, the sole director of the Company appointed Mr. Lai Kok Meng as Director and Vice Chairman of the Company.
On December 27, 2016, Richcorp Holdings, Ltd., a Samoa corporation, as the holder of approximately 92.94% of the Company’ issued and outstanding common stock, executed a written consent in lieu of a meeting approving the removal, without cause, of Lai Kok Meng, as a member of the Company’s board of directors.
The notice of the above mentioned action has been mailed to all the shareholders of the Company pursuant to Section 14 of the Securities Exchange Act of 1934 as amended, and Regulations 14C and Schedule 14C thereunder on or about February 7, 2017. The board of directors of the Company has not received any comments from the shareholders since the mailing and has determined that the date of removal of Lai Kok Meng to be March 28, 2017.
PART III
ITEM 10.
ITEM 10.DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Directors and Executive Officers
Our Board of Directors and executive officers and their respective ages as of December 31, 2016 are set forth in the table below. Each of the directors of GBGH will serve until the next annual meeting of shareholders or until his successor is elected and qualified. On March 28, 2017, by a Shareholders’ Consent described in an information statement dated December 29, 2016 sent to the shareholders of the Company, Mr. Lai Kok Meng, ceased to be a director of the Company.
Also provided is a brief description of the business experience of each director and executive officer and the key personnel during the past three years and an indication of directorships (if any) held by each director in other companies subject to the reporting requirements under the Federal securities laws.
Biographies
Mr. Kok Seng Yeap Eddy - aged 41, currently serves as the Company’s Director, President, Chief Executive Officer and Chief Financial Officer. He is a Malaysian and is a Life Insurance Practitioner with the qualification obtained from the Malaysia Insurance Institute. Eddy has also completed the Legal Professional Will Writing Course with Rockwills Sdn Bhd, Malaysia. He is currently Managing Director of NobleCorp Asset Management Ltd. (“NobleCorp”) which is set up in May 2015 for venturing into the Asset Management Field. NobleCorp is holding approximately 10.7% of the issued capital of Kung Fu Dragon Group Limited (Formerly “PMI Construction Group”), a company traded on OTCQB market. Eddy is also a director of Kung Fu Dragon Group Limited. Prior to founding NobleCorp, Eddy was the director and shareholder of several private and public companies in Malaysia, Singapore, Macau, Indonesia, Hong Kong and China, including Kingsburg Holdings Limited. Currently, Eddy is venturing into his own businesses, including asset management, risk management services, alternative insurance services, healthcare research and fruit plantation projects.
Mr. Lai Kok Meng, aged 52, served as Director and Vice-Chairman of the Company from July 2016 to March 2017. He holds a Doctorate degree in Philosophy Causa in Entrepreneurship from the Golden State University, USA. He is the founder and Managing Director of LV Worldwide (M) Sdn Bhd and Tianz Alliance (Shanghai) Group Limited. Mr. Lai has been specializing in manufacturing of high quality GMP standard healthcare, nutritional and beauty products since 1988. His personal business ventures also extended to the areas of packaging services, development, patents registration as well as biomass green technology business.
Section 16(a) Beneficial Ownership Reporting Compliance
Our current sole director and officer, Kok Seng Yeap Eddy did not file a required report on Form 3 following the change of control on November 25, 2014.
Code of Ethics
GBGH has not yet adopted a code of ethics.
Corporate Governance
There have been no material changes to the procedures by which security holders may recommend nominees to GBGH's board of directors.
Audit Committee Financial Expert
As of December 31, 2016, the Company has no audit committee.
ITEM 11.
ITEM 11.EXECUTIVE COMPENSATION
The following is a chart of compensation paid to all executive officers of the Company.
Directors Compensation
Compensation Committee
Currently, the Company does not have a compensation committee. The sole director participates in deliberations concerning executive officer compensation.
ITEM 12.
ITEM 12.SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
Principal Stockholders
The following table sets forth certain information known to the Company with respect to beneficial ownership of the Company’s common stock as of December 31, 2016, the number and percentage of outstanding shares of common stock beneficially owned by each person who beneficially owns:
·More than 5% of the outstanding shares of our common stock;
·Each of our officers and directors;
·All of our officers and directors as a group.
Except as otherwise noted, the persons named in this table, based upon information provided by these persons, have sole voting and investment power with respect to all shares of common stock owned by them.
(1)Mr. Kok Seng Yeap Eddy owns 90.2% of the equity of RichCorp and may be deemed to individually beneficially own 16,514,127 shares of the shares of common stock of the Issuer owned by RichCorp. The other 9.8% interest of RichCorp is owned by Alpha Dynasty Limited, a Seychelles Corporation. All the issued share capital of Alpha Dynasty Limited is equally held beneficially by12 individuals whose individual effective shareholding of the Issuer are below 5%.
(2)Removed in March 2017.
ITEM 13.
ITEM 13.CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
There have been no transactions or proposed transactions which have materially affected or will materially affect us in which all director, executive officer or beneficial holder of more than 5% of the outstanding common stock, or any of their respective relatives, spouses, associates or affiliates, has had or will have any direct or material indirect interest.
ITEM 14.
ITEM 14.PRINCIPAL ACCOUNTANT FEES AND SERVICES
The Company’s Board of Directors pre-approved all audit and non-audit services provided to us and during the periods listed below. The Company’s Board approves discrete projects on a case-by-case basis that may have a material effect on our operations and also considers whether proposed services are compatible with the independence of the public accountants.
The following table presents fees for professional services rendered by our auditors for the periods ended December 31, 2016 and 2015:
PART IV
ITEM 15.
ITEM 15.EXHIBITS, FINANCIAL STATEMENT SCHEDULES
(a)The following Exhibits are filed as part of this report.
Exhibit
Number Description on Document
10.1* Service Agreement, dated March 1, 2016, between Gold Billion Group Holdings Limited and Fintel (USA) Limited
31.1* Certification of Director, President and Chief Executive Officer
31.2* Certification of Chief Financial Officer
32.1* Statement required by 18 U.S.C. Section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002
32.2* Statement required by 18 U.S.C. Section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002
The following materials from the Company’s Annual Report on Form 10-K for the year ended December 31, 2016, formatted in XBRL (eXtensible Business Reporting Language); (i) Balance Sheets at December 31, 2016 and 2015, (ii) Statement of Operations for the years ended December 31, 2016 and 2015, (iii) Statement of Stockholders’ Equity for the years ended December 31, 2016 and 2015, and (iv) Statement of Cash Flows for the years ended December 31, 2016 and 2015, (v) Notes to Financial Statements.
__________________
*Filed herewith.
GOLD BILLION GROUP HOLDINGS LIMITED
CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2016 and 2015
PAGE
Report of Independent Registered Public Accounting Firm
Consolidated Balance Sheets
Consolidated Statements of Operations
Consolidated Statements of Stockholders’ Deficit
Consolidated Statements of Cash Flows
Notes to Consolidated Financial Statements
-
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholders of Gold Billion Group Holdings Limited
(Incorporated in the State of Delaware, United States of America)
We have audited the accompanying consolidated balance sheets of Gold Billion Group Holdings Limited and its subsidiaries as of December 31, 2016 and December 31, 2015, and the consolidated statements of operations, the consolidated statements of stockholders’ equity (deficit), and the consolidated statements of cash flows for the years ended December 31, 2016 and December 31, 2015. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (“PCAOB”).Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. The Company is not required to have, nor have we been engaged to perform, an audit from its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statements presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, these consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of Gold Billion Group Holdings Limited and its subsidiaries as of December 31, 2016 and December 31, 2015, and the consolidated results of its operations and its cash flows for the years ended December 31, 2016 and December 31, 2015, in conformity with accounting principles generally accepted in the United States of America.
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the consolidated financial statements, the Company has incurred a loss since inception, resulting in an accumulated deficit of $15,129,523 as of December 31, 2016 and further losses are anticipated in the development of its business. These factors raise substantial doubt about the Company's ability to continue as a going concern. Management's plans concerning these matters are also described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
/s/Anthony Kam & Associates Limited
Anthony Kam & Associates Limited
Certified Public Accountants
May 5, 2017
Hong Kong, China
GOLD BILLION GROUP HOLDINGS LIMITED
CONSOLIDATED BALANCE SHEETS
The accompanying notes are an integral part of the consolidated financial statements.
GOLD BILLION GROUP HOLDINGS LIMITED
CONSOLIDATED STATEMENTS OF OPERATIONS
The accompanying notes are an integral part of the consolidated financial statements.
GOLD BILLION GROUP HOLDINGS LIMITED
STATEMENTS OF STOCKHOLDERS' EQUITY
FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015
(United States dollars, except number of shares, per share data and unless otherwise stated)
The accompanying notes are an integral part of the consolidated financial statements
GOLD BILLION GROUP HOLDINGS LIMITED
CONSOLIDATED STATEMENTS OF CASH FLOWS
The accompanying notes are an integral part of the consolidated financial statements.
GOLD BILLION GROUP HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2016 AND 2015
NOTE 1 - NATURE OF OPERATIONS AND GOING CONCERN
Gold Billion Group Holdings Limited (“the Company”) was incorporated in Delaware on November 9, 2000 under the name of Hotel Outsource Management International, Inc.
On July 29, 2015, the Company entered into an Agreement and Plan of Merger (the "Merger Agreement") pursuant to which the Company merged with its wholly owned subsidiary, Gold Billion Group Holdings Limited, a Delaware corporation with no material operations ("Merger Sub" and such merger transaction, the "Merger"). Upon the consummation of the Merger, the separate existence of Merger Sub ceased and shareholders of the Company became shareholders of the surviving company named Gold Billion Group Holdings Limited.
As permitted by the Delaware General Corporation Law, the sole purpose of the Merger was to effect a change of the Company's name from Hotel Outsource Management International, Inc. to Gold Billion Group Holdings Limited. Upon the filing of the Certificate of Merger (the "Certificate of Merger") with the Secretary of State of Delaware on July 30, 2015 to effect the Merger, the Company's Articles of Incorporation were deemed amended to reflect the change in the Company's corporate name.
On January 11, 2016, the Company acquired all of the issued and outstanding stock of GBGH Hong Kong Limited, a Hong Kong Corporation, and as a result of the transaction, GBGH Hong Kong Limited (“GBGH HK”) became a wholly-owned subsidiary of the Company. On April 6, 2016, the Company issued 16,000,000 shares of its authorized but previously unissued shares of common stock as the consideration for acquisition of the shares of GBGH HK. Prior to their acquisition by the Company, all of the issued and outstanding shares of GBGH HK were owned by Richcorp Holdings, Ltd. (“Richcorp”), a Samoa corporation, which was also the principal shareholder of the Company prior to the transaction. Accordingly, following completion of this transaction, Richcorp, is the owner of 18,308,345 shares, or approximately 96.6%, of the Company’s issued and outstanding common stock.
The above companies were controlled by the same individual, their sole director and officer (more than 80%) immediately prior to the above exchanges. As a result of those share exchanges, the above companies became 100% owned subsidiaries of the Company. As these transactions are between entities under common control, the Company has reported the results of operations for the period in a manner similar to a pooling of interests and has consolidated financial results since the initial date in which the above companies were under common control. Assets and liabilities were combined on their carrying values and no recognition of goodwill was made. The Company has presented earnings per share based on the new parent company shares issued to the former shareholders of the Company.
Going Concern
As of December 31, 2016, and December 31, 2015, the Company had no cash.
The financial statements have been prepared on a going concern basis which assumes the Company will be able to realize its assets and discharge its liabilities in the normal course of business for the foreseeable future. The Company has incurred a loss since Inception, resulting in an accumulated deficit of $15,129,523 as of December 31, 2016 and further losses are anticipated in the development of its business. Accordingly, there is substantial doubt about the Company’s ability to continue as a going concern.
The ability to continue as a going concern is dependent upon the Company generating profitable operations in the future and/or to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. Management intends to finance operating costs over the next twelve months and loans from directors and/or private placement of common stock.
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation and Principle of Consolidation
The consolidated financial statements and related disclosures have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The consolidated financial statements have been prepared using the accrual basis of accounting in accordance with Generally Accepted Accounting Principles (“GAAP”) of the United States. The fiscal year end is December 31.
For the year ended and as of December 31, 2016, the consolidated financial statements include the accounts of GBGH HK, a wholly-owned subsidiary incorporated in Hong Kong on June 29, 2015.
The acquisition of all of the issued and outstanding stock of GBGH HK on January 11, 2016 was accounted for as a common control business combination under ASC 805. All significant inter-company balances and transactions have been eliminated.
Use of Estimates
The preparation of financial statements in accordance with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates include assumptions about collection of accounts and notes receivable, the valuation and recognition of stock-based compensation expense, the valuation and recognition of derivative liability, valuation allowance for deferred tax assets and useful life of fixed assets.
Foreign Currency
The accompanying consolidated financial statements are presented in U.S. dollars ("USD"). The Company's wholly owned subsidiary (GBGH HK’s) functional currency is the Hong Kong Dollar (“HKD”). The financial statements are translated into USD in accordance with Codification ASC 830, “Foreign Currency Matters”. All assets and liabilities were translated at the current exchange rate, at respective balance sheet dates, shareholders' equity is translated at the historical rates and income statement items are translated at the average exchange rate for the reporting periods. The resulting translation adjustments are reported as other comprehensive income and accumulated other comprehensive income in the shareholders' equity in accordance with Codification ASC 220, “Comprehensive Income”.
Translation gains and losses that arise from exchange rate fluctuations from transactions denominated in a currency other than the functional currency are translated into USD at the rate on the date of the transaction and included in the results of operations as incurred. There were no material transaction gains or losses in the periods presented.
Fair Value of Financial Instruments
The Company’s financial instruments consist primarily of accounts payable and accrued expenses. The carrying amounts of such financial instruments approximate their respective estimated fair value due to the short-term maturities and approximate market interest rates of these instruments.
Income taxes
The Company accounts for income taxes in accordance with ASC 740 "Income Taxes". Under ASC 740, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial statement reported amounts at each period end, based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amounts expected to be realized. The provision for income taxes represents the tax expense for the period, if any, and the change during the period in deferred tax assets and liabilities. ASC 740 also provides criteria for the recognition, measurement, presentation and disclosure of uncertain tax positions. Under ASC 740, the impact of an uncertain tax position on the income tax return may only be recognized at the largest amount that is more-likely-than-not to be sustained upon audit by the relevant taxing authority. At December 31, 2016 and 2015, a full deferred tax asset valuation allowance has been provided and no deferred tax asset has been recorded.
Net Loss Per Share of Common Stock
The Company has adopted ASC Topic 260, “Earnings per Share,” (“EPS”) which requires presentation of basic EPS on the face of the income statement for all entities with complex capital structures and requires a reconciliation of the numerator and denominator of the basic EPS computation. In the accompanying financial statements, basic earnings (loss) per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period.
The Company has no potentially dilutive securities, such as options or warrants, currently issued and outstanding.
Recent pronouncements
In January 2017, the FASB has issued Accounting Standards Update (ASU) No. 2017-04, “Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment.” These amendments eliminate Step 2 from the goodwill impairment test. The annual, or interim, goodwill impairment test is performed by comparing the fair value of a reporting unit with its carrying amount. An impairment charge should be recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. In addition, income tax effects from any tax deductible goodwill on the carrying amount of the reporting unit should be considered when measuring the goodwill impairment loss, if applicable. The amendments also eliminate the requirements for any reporting unit with a zero or negative carrying amount to perform a qualitative assessment and, if it fails that qualitative test, to perform Step 2 of the goodwill impairment test. An entity still has the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. Effective for public business entities that are a SEC filers for annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. ASU 2017-04 should be adopted on a prospective basis.
In December 2016, the FASB has issued Accounting Standards Update (ASU) No. 2016-20, “Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers.” The amendments affect narrow aspects of the guidance issued in ASU 2014-09 including Loan Guarantee Fees, Contract Costs, Provisions for Losses on Construction-Type and Production-Type Contracts, Disclosure of Remaining Performance Obligations, Disclosure of Prior Period Performance Obligations, Contract Modifications, Contract Asset vs. Receivable, Refund Liability, Advertising Costs, Fixed Odds Wagering Contracts in the Casino Industry, and Costs Capitalized for Advisors to Private Funds and Public Funds. The effective date and transition requirements for the amendments are the same as the effective date and transition requirements for FASB Accounting Standards Codification Topic 606. Public entities should apply Topic 606 (and related amendments) for annual reporting periods beginning after December 15, 2017, including interim reporting periods therein.
Management has considered all recent accounting pronouncements issued. The Company’s management believes that these recent pronouncements will not have a material effect on the Company’s financial statements.
NOTE 3 - RELATED PARTY TRANSACTIONS
During the year ended December 31, 2016 and 2015, an officer and director of the Company, Mr. Kok Seng Yeap, has advanced $31,550 and $47,192 to pay operating expenses on behalf of the Company, respectively.
On December 30, 2016, the Company issued 443,646 shares of common stock with a fair value of $332,735 as settlement of amounts due to a related party of $6,655. As a result, the Company recorded a loss on settlement of $326,080.
As of December 31, 2016, and 2015, the Company owed to Mr. Kok Seng Yeap $99,087 and $74,192, respectively.
NOTE 4 - INCOME TAX
The Company’s income tax expense differs from the “expected” tax expense for federal income tax purpose by applying the Federal rate of 35% as follows:
The components of deferred income taxes are as follows:
As of December 31, 2016, the Company has a net operating loss carry forward of approximately $2,743,373 available to offset future taxable income, which will begin to expire in 2020. The utilization of these NOLs may become subject to limitations based on past and future changes in ownership of the Company pursuant to Internal Revenue Code Section 382.
Tax returns for the years ended December 31, 2016, 2015 and 2014 are subject to examination by the United States tax authority.
NOTE 5 - STOCKHOLDERS’ EQUITY
The capitalization of the Company consists of the following classes of capital stock as of December 31, 2016:
Preferred Stock
The Company has authorized 5,000,000 shares of preferred stock with a par value of $0.001 per share. No shares of preferred stock have been issued.
Common Stock
Authorized Shares of Common Stock
The Company now has authorized 200,000,000 shares of common stock with a par value of $0.001 per shares. Each common share entitles the holder to one vote, in person or proxy, on any matter on which action of the stockholders of the corporation is sought.
During the year ended December 31, 2016, the Company issued common shares, as follows:
·16,000,000 shares of common stock to the stockholders of GBGH HK in exchange for 100% of their issued and outstanding common stock (see Note 1)
·750,000 shares of common stock for $0.05 per share, for a stock subscription of $37,500, which was not yet paid as of the date of this report
·443,646 shares of common stock with a fair value of $332,735 for settlement of amounts due to related party of $6,655 (See Note 4)
During the year ended December 31, 2015, there were no share issuances.
As at December 31, 2016 and December 31, 2015, the Company had 20,143,130 and 2,949,484 shares of common stock issued and outstanding, respectively.
The Company has no stock option plan, warrants or other dilutive securities.
NOTE 6 - COMMITMENTS AND CONTINGENCIES
From time to time the Company may become a party to litigation matters involving claims against the Company. Management believes that it is adequately insured for its operations and there are no current matters that would have a material effect on the Company's financial position or results of operations.
NOTE 7 - SUBSEQUENT EVENTS
Management has evaluated subsequent events through the date these financial statements were available to be issued. Based on our evaluation no material events have occurred that require disclosure.
SIGNATURES
Pursuant to the requirements of the Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized on the 5th day of May, 2017.
GOLD BILLION GROUP HOLDINGS LIMITED
By: /s/ Kok Seng Yeap
Kok Seng Yeap
Director
(President, Chief Executive Officer and Chief Financial Officer)
In accordance with the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
Name Title Date
/s/ Kok Seng Yeap
Kok Seng Yeap
Director
(President, Chief Executive Officer and
Chief Financial Officer)
May 5,
INDEX TO EXHIBITS
Exhibit
Number Description on Document
10.1* Service Agreement, dated March 1, 2016, between Gold Billion Group Holdings Limited and Fintel (USA) Limited
31.1* Certification of Director, President and Chief Executive Officer
31.2* Certification of Chief Financial Officer
32.1* Statement required by 18 U.S.C. Section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002
32.2* Statement required by 18 U.S.C. Section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002
The following materials from the Company’s Annual Report on Form 10-K for the year ended December 31, 2016, formatted in XBRL (eXtensible Business Reporting Language); (i) Balance Sheets at December 31, 2016 and 2015, (ii) Statement of Operations for the years ended December 31, 2016 and 2015, (iii) Statement of Stockholders’ Equity for the years ended December 31, 2016 and 2015, and (iv) Statement of Cash Flows for the years ended December 31, 2016 and 2015, (v) Notes to Financial Statements.
__________________
*Filed herewith.