ITEM 1. DESCRIPTION OF BUSINESS
History
Apolo Gold & Energy Inc, (the “Company”) was incorporated in March 1997 under the laws of the State of Nevada as Apolo Gold Inc., for the purpose of financing and operating precious metals concessions. In May 2005, the Company amended its articles of incorporation to change the name of the Company from Apolo Gold Inc. to Apolo Gold & Energy Inc.
After incorporation in 1997 the Company focused on precious metals opportunities in Latin and South America. Shortly thereafter the Company formed a subsidiary, Compania Minera Apologold, C.A. a corporation, and on May 18, 1999 the Venezuela subsidiary entered into an agreement with Empresa Proyectos Mineros Goldma, C.A. in Caracas Venezuela, to acquire the diamond and gold mining concession in Southern Venezuela known as Codsa 13, located in the Gran Sabana Autonomous Municipality, State of Bolivar, Venezuela. This project was subsequently cancelled in August 2001 because of poor testing results. The subsidiary company in Venezuela has been dormant since 2001 and will not be reactivated.
On April 16, 2002, the Company executed an agreement with Pt. Metro Astatama, of Jakarta, Indonesia, for the mining rights to a property known as Nepal Umbar Picung (“NUP”), which is located west of Bandar Lampung, on the island of Sumatra, Indonesia. NUP has a KP, Number KW. 098PP325, which is a mineral tenement license for both Exploration and Exploitation. All KP’s must be held by an Indonesian entity.
The “NUP” is 733.9 hectares in size and Apolo had an 80% interest. These claims are owned privately by citizens of Indonesia and are not crown granted claims. Apolo was entitled to recover all of its development costs on the “NUP” including property payments before the partner with 20% can participate.
The total purchase price for “NUP” was $375,000, of which payments amounting to $250,000 had been made. After various exploration programs including different drilling programs failed to yield sufficient positive results, the Company discussed various options with the property owner and decided to terminate its agreement with the NUP property and return all exploration rights to the property owners.
On December 11, 2013, the Company acquired 70% interest in three gold exploration claims located in China’s Xinjiang Province from Yinfu Gold Corp. (“Yinfu”). The Company issued six million shares of restricted common stocks for the claims.
On December 23, 2013, the Company acquired 24% equity interest in Jiangxi Everenergy New Material Co., Ltd. (“Everenergy”). The consideration was settled by the issuance of eight-million restricted common stocks at a deemed price of $0.375 per share, plus $1-million in cash. Additionally, on February 19, 2014, the Company acquired an additional 29% equity interest in Everenergy. The consideration was settled with the issuance of 11-million restricted common stock at a deemed price of $0.45 per share.
On September 17, 2014, the Company cancelled both transactions with Everenergy and had requested return of the $1-million payment and all the shares. The 11-million shares issued were effectively cancelled on October 21, 2014. The remaining 8-million shares issued are in the process of cancellation and the $1 million paid for the acquisition was written off as investment loss.
On January 19, 2015, the Company and Yinfu reached a mutual agreement to terminate the acquisition of the 70% interest in the three gold exploration claims in the PRC. On February 3, 2015, all six million shares of restricted common stock had been returned by the wholly owned subsidiary of Yinfu and cancelled by the Company.
On February 13, 2015, the Company disposed its 100% equity interest in Apolo Gold Direct Limited (formerly known as Apolo Gold & Energy Asia Limited) to (i) Mr. Kelvin Chak Wai Man, the Chief Executive Officer (“CEO”) and director of the Company, who acquired 40% equity interest, (ii) Mr. Tsap Wai Ping, a relative of the CEO of the Company, who acquired 50% equity interest, and (iii) China Yi Gao Gold Trader Co., Limited, a company incorporated in Hong Kong, which acquired the remaining 10% equity interest, for a consideration of $100.
On June 18, 2015, the Company filed an Amendment to its Articles of Incorporation with the Nevada Secretary of State to change its name from Apolo Gold & Energy, Inc. to Wincash Apolo Gold & Energy, Inc.
The Company will continue to anticipate potential mineral property exploration and other energy related investments.
Government Regulation
The Company was aware of environmental requirements in the operation of a concession. The Company is comfortable with the requirements and regulations and will abide by them.
ITEM 1A.
ITEM 1A. Risk Factors
1.	The Company has no record of earnings. It is also subject to all the risks inherent in a developing business enterprise including lack of cash flow, and no assurance of recovery of precious metals.
2.	The Company’s success and possible growth will depend on its ability to develop or acquire new business operations. It continues to explore opportunities but has yet to secure an opportunity that is acceptable.
3.	Liquidity and need for additional financing is a concern for the Company. At the present time, the Company does not have sufficient cash to finance its operations. The Company is dependent on the ability of its management team to obtain the necessary working capital to operate successfully. There is no assurance that the Company will be able to obtain additional capital as required or if the capital is available, to obtain it on terms favorable to the Company. The Company may suffer from a lack of liquidity in the future that could impair its production efforts and adversely affect its results of operations.
4.	Competition is more in the area of ability to sell at world prices that the Company cannot control, and the Company competes for access to the world markets with its products.
5.	The Company is wholly dependent at the present upon the personal efforts and abilities of its Officers and Directors, who exercise control over the day-to-day affairs of the Company.
6.	There are currently 29,872,118 common shares outstanding at July 27, 2015 out of a total authorized capital of 300,000,000 shares. This is after giving effect of the cancellation issuance of 11,000,000 common shares for the acquisition of 29% interest in Everenergy; cancellation issuance of 6,000,000 common shares for the three mineral properties; issuance of 1,040,000 common shares as debt settlement; issuance of 6,400,000 common shares as consulting services provided. The Board of Directors has the power to issue such shares, subject to Shareholder approval, in some instances.
7. There are no dividends anticipated by the Company.
Company’s Office
The Company’s office is at 9/F, Kam Chung Commercial Building, 19-21 Hennessy Road, Wanchai, Hong Kong. Its telephone number is 852-3111-7718.
ITEM 1B.
ITEM 1B. Unresolved Staff Comments
Not applicable
ITEM 2.
ITEM 2. Description of Property
None
ITEM 3.
ITEM 3. Legal Proceedings
The Company is not a party to any pending or threatened litigation and to its knowledge, no action, suit or proceedings has been threatened against its officers and its directors.
ITEM 4.
ITEM 4. Mine Safety Disclosures
None
PART II
ITEM 5.
ITEM 5. Market for Common Equity and Related Stockholder Matters
The Company’s common stock has been quoted on the National Association of Securities Dealers’ Over-the-Counter market since May 17, 2000. There is no other public trading market for the Company’s equity securities.
The following table summarizes trading in the Company’s common stock, as provided by quotations published by the OTC Bulletin Board for the periods as indicated. The quotations reflect inter-dealer prices without retail mark-up, markdown or commission, and may not represent actual transactions.
The common shares were consolidated 20:1 as a result of shareholder approval on October 29, 2010. The consolidation was effective November 29, 2010. Quotations for September 30, 2010 are based on pricing prior to consolidation of shares.
As of July 27, 2015, there were 207 holders of record of the Company’s common stock. That does not include the number of beneficial holders whose stock is held in the name of broker-dealers or banks.
The Company has not paid, and, in the foreseeable future, the Company does not intend to pay any dividends.
Equity Compensation Plan Information
The Company has no existing Equity Compensation Plan and all options granted under previous plans have been exercised, expired or cancelled.
ITEM 6.
ITEM 6. Selected Financial Data
As a smaller business issuer, the Company is not required to include this Item.
ITEM 7.
ITEM 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations/Plan of Operation
General Overview
Apolo Gold & Energy Inc. (“Company”) was incorporated in March 1997 under the laws of the State of Nevada. Its objective was to pursue mineral properties in South America, Central America, North America and Asia. The Company incorporated a subsidiary - Compania Minera Apologold, C.A in Venezuela to develop a gold/diamond mining concession in Southeastern Venezuela. Project was terminated in August 2001, due to poor testing results and the property abandoned. This subsidiary company has been inactive since 2001 and will not be reactivated.
On April 16, 2002, the Company announced the acquisition of the mining rights to a property known as the Napal Gold Property, (“NUP”). This property is located 48 km south-west of Bandar Lampung, Sumatra, Indonesia. The property consisted of 733.9 hectares and possessed a Production Permit (a KP) # KW. 098PP325.
The terms of the Napal Gold Property called for a total payment of $375,000 US over a six-year period of which a total of $250,000 have been made to date. Company paid $250,000 over the past 5 years and subsequent to the year ending June 30, 2008 the Company terminated its agreement on the NUP property and returned all exploration rights to the owner.
On December 11, 2013, the Company acquired 70% interest in three gold exploration claims located in China’s Xinjiang Province from Yinfu Gold Corp. (“Yinfu”). The Company issued 6,000,000 shares of restricted common stock for the claims at $0.20 per share for the consideration of $1,200,000. On January 19, 2015, the Company and Yinfu reached a mutual agreement to terminate the acquisition at the current market value of $0.10 per share and therefore an investment loss of $600,000 was resulted. On February 3, 2015, all 6,000,000 shares of restricted common stock were returned and effectively cancelled.
On December 23, 2013, the Company acquired 24% interest in Jiangxi Everenergy New Material Co., Ltd. (“Everenergy”) for a consideration of $4,000,000. The consideration was settled with the issuance of 8,000,000 shares of restricted common stock at a deemed price of $0.375 per share, plus $1,000,000 in cash.
On February 19, 2014, the Company acquired an additional 29% interest in Everenergy for a consideration of $4,950,000. The consideration was settled with the issuance of 11,000,000 shares of restricted common stock at a deemed price of $0.45 per share.
On September 17, 2014, the Company cancelled both transactions with Everenergy at the current market value of $0.12 per share and requested the return of $1,000,000 cash payment. The 11,000,000 shares were effectively cancelled on October 21, 2014and the remaining 8,000,000 shares are to be cancelled as of June 30, 2015. For the year ended June 30, 2015, the Company could not recover the $1,000,000 cash payment and therefore a total investment loss of $6,670,000 was resulted.
On February 13, 2015, the Company disposed its 100% equity interest in Apolo Gold Direct Limited (formerly known as Apolo Gold & Energy Asia Limited) to (i) Mr. Kelvin Chak Wai Man, the Chief Executive Officer (“CEO”) and director of the Company, who acquired 40% equity interest, (ii) Mr. Tsap Wai Ping, a relative of the CEO of the Company, who acquired 50% equity interest, and (iii) China Yi Gao Gold Trader Co., Limited, a company incorporated in Hong Kong, which acquired the remaining 10% equity interest, for a consideration of $100.
On June 18, 2015, the Company filed an Amendment to its Articles of Incorporation with the Nevada Secretary of State to change its name from Apolo Gold & Energy, Inc. to Wincash Apolo Gold & Energy, Inc.
The Company continues to pursue opportunities in the natural resource industry and will consider the acquisition of any other business opportunity in order to enhance its value.
Results of Operations - Year ended June 30, 2015 compared to year ended June 30, 2014
REVENUES: The Company had no revenues in the past fiscal years.
EXPENSES:
During the fiscal year ending June 30, 2015 and June 30, 2014, the Company had no exploration costs. Total expenses for the year amounted to $7,549,476 compared to $210,554 in the year ending June 30, 2014, an increase of $7,338,922. The increase is mainly attributable to the investment loss of $7,270,000 which resulted from the termination of the acquisition of (i) 70% interest in gold exploration claims in Mainland China and (ii) an aggregate 53% equity interest in Jiangxi Everenergy New Material Co., Ltd. These transactions details are stated in the note 4 and 5 to the Notes to the Consolidated Financial Statements in this Annual Reporting.
Consulting and professional fees amounted to $237,597 compared to $179,724 for the year ending June 30, 2014. Among the consulting and professional fees, approximately $122,300 and $51,700 were settled by stock based compensation for the year ended June 30, 2015 and 2014, respectively.
There were no additional or extraordinary expenses incurred in the current year ending June 30, 2015 as the Company focused its efforts in seeking out a resource project that would be beneficial to shareholders.
The Company continues to carefully control its expenses, and intends to seek additional financing both for potential business opportunities it may develop. There is no assurance that the Company will be successful in its attempts to raise additional capital.
The Company has no employees in its head office at the present time other than its Officers and Directors, and engages personnel through consulting agreements where necessary as well as outside attorneys, accountants and technical consultants.
Cash and cash equivalents at June 30, 2015 was $14,403 compared to $7,439 in 2014 and the Company recognizes it may not have sufficient funds to conduct its affairs. It fully intends to seek financing by way of loans, private placements or a combination of both in the coming months. The Company is dependent on its directors to provide necessary funding when required.
LIQUIDITY AND CAPITAL RESOURCES
Cash Used in Operating Activities
Net cash used in operating activities for the year ended June 30, 2015 was $142,531 as compared to $144,847 for the comparable year ended in 2014. The cash used in operating activities are mainly attributed from the net loss of $7,549,476 for the year ended June 30, 2015 and off set by the investment loss of $7,270,000 and stock based compensation of $122,333.
Cash Used in Investing Activities
Net cash used in investing activities for the year ended June 30, 2015 and 2014 was $0 and $1,000,000, respectively. The cash used in investing activities for the year ended June 30, 2014 was for the acquisition of equity interest of Jiangxi Everenergy New Material Co. Limited.
Cash Provided by Financing Activities
Net cash provided by financing activities for the year ended June 30, 2015 and 2014 was $146,482 and $1,150,000, respectively. The cash provided by financing activities for the year ended June 30, 2015 was advances from a director and comparable to the same period in 2014 was the sale of common stocks.
The Company has financed its development to date by way of sale of common stock and with loans from directors/shareholders of the Company. At July 27, 2015, the Company had 21,872,118 shares of common stock outstanding, and has raised total capital since inception in excess of $7,500,000.
The Company has limited financial resources at June 30, 2015 with cash and cash equivalents of $14,403 and $7,439 as of June 30, 2015 and 2014, respectively.
Other payables and accrued liabilities as of June 30, 2015 amounted to $24,691 compared to $10,079 as of June 30, 2014. The other payables and accrued liabilities as of June 30, 2015 include amounts owing for professional fees, and sundry amounts owing to former suppliers.
As of June 30, 2015, the amount due to a director was $10,000. As of June 30, 2014, the amount due from a director was $15,482. The amounts were unsecured, interest free and have no fixed terms of repayment.
While the Company continues to seek out additional capital, there is no assurance that they will be successful in completing this necessary financing. The Company recognizes that it is dependent on the ability of its management team to obtain the necessary working capital required.
While in the pursuit of additional working capital, the Company is also very active in reviewing other resource development opportunities and will continue with these endeavors.
Off-Balance Sheet Arrangements
We have no off-balance sheet arrangements, financings or other relationships.
Contractual Obligations and Commitments
As of June 30, 2015, we did not have any contractual obligations and commitments.
Critical Accounting Policies
Our significant accounting policies are described in the notes to our consolidated financial statements for the year ended June 30, 2015, and are included elsewhere in this annual report on Form 10-K.
INFLATION
Inflation has not been a factor during the fiscal year ending June 30, 2015. While inflationary forces are showing some signs of increasing in the next year, it is not considered a factor in capital expenditures or production activities.
REPORT OF MANAGEMENT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
Our management is responsible for establishing and maintaining adequate internal control over financial reporting for the company. Internal control over financial reporting is a process to provide reasonable assurance regarding the reliability of our financial reporting for external purposes in accordance with accounting principles generally accepted in the United States of America. Internal control over financial reporting includes maintaining records that in reasonable detail accurately and fairly reflect our transactions; providing reasonable assurance that transactions are recorded as necessary for preparation of our financial statements; providing reasonable assurance that receipts and expenditures of company assets are made in accordance with management authorization; and providing reasonable assurance that unauthorized acquisition, use or disposition of company assets that could have a material effect on our financial statements would be prevented or detected on a timely basis. Because of its inherent limitations, internal control over financial reporting is not intended to provide absolute assurance that a misstatement of our financial statements would be prevented or detected.
In connection with the preparation of this Annual Report on Form 10-K for the year ended June 30, 2015, Management on Internal Control over Financial Reporting is under the supervision of the principal executive officer who is the chief executive officer of the Company. Under his direction, the Company has evaluated the effectiveness of its disclosure controls and procedures as required by Exchange Act Rule 13a-15(b) as of June 30, 2015. Based on that evaluation, the Principal Executive Officer concluded that Disclosures Controls and Procedures were not effective as of June 30, 2015. Due to limited financial resources available, there is a lack of segregation of duties in financial reporting although the Principal Executive Officer, who also serves as Principal Financial Officer, is an experienced financial executive and professional with professional accreditation.
ITEM 7A.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
The Company does not have any market risk sensitive financial instruments for trading or other purposes. All Company cash is held in insured deposit accounts.
Item 8.
Item 8. Financial Statements and Supplementary Data.
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholders,
Wincash Apolo Gold & Energy, Inc.
We have audited the accompanying consolidated balance sheets of Wincash Apolo Gold & Energy, Inc. (an Exploration Stage Company) as of June 30, 2015 and the related consolidated statements of operations and comprehensive loss, consolidated statement of stockholders’ equity and consolidated statements of cash flows for the years ended June 30, 2015 and 2014. 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 (United States of America). Those standards require that we plan and perform an audit to obtain reasonable assurance whether the consolidated financial statements are free of material misstatement. An audit includes examining on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall consolidated financial statement presentation. We believe that our audits provide a reasonable basis for my opinion.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of the Company as of June 30, 2015 and 2014 and the results of its operations and its consolidated cash flows for the years ended June 30, 2015 and 2014 in conformity with accounting principles generally accepted in the United States of America.
The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the consolidated financial statements, the Company has incurred substantial losses, which raises substantial doubt about its ability to continue as a going concern. Management’s plans in regard to their planned financing and other matters are also described in Note 2. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
/s/ WELD ASIA ASSOCIATES
WELD ASIA ASSOCIATES
Date: August 27, 2015
Kuala Lumpur, Malaysia
WINCASH APOLO GOLD & ENERGY, INC.
CONSOLIDATED BALANCE SHEETS
AS OF JUNE 30, 2015 AND 2014
(Currency expressed in United States Dollars (“US$”), except for number of shares)
See accompanying notes to the consolidated financial statements.
WINCASH APOLO GOLD & ENERGY, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
FOR THE YEARS ENDED JUNE 30, 2015 AND 2014
(Currency expressed in United States Dollars (“US$”), except for number of shares)
See accompanying notes to the consolidated financial statements.
WINCASH APOLO GOLD & ENERGY, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED JUNE 30, 2015 AND 2014
(Curreny expressed in United States Dollars (“US$”))
See accompanying notes to the consolidated financial statements.
WINCASH APOLO GOLD & ENERGY, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
FOR THE YEARS ENDED JUNE 30, 2015 AND 2014
(Currency expressed in United States Dollars (“US$”), except for number of shares)
See accompanying notes to the consolidated financial statements.
WINCASH APOLO GOLD & ENERGY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED JUNE 30, 2015 AND 2014
(Currency expressed in United States Dollars (“US$”), except for number of shares)
NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS
Wincash Apolo Gold & Energy, Inc.(“the Company”) was incorporated in March of 1997 under the laws of the State of Nevada primarily for the purpose of acquiring and developing mineral properties. The Company conducts operations primarily from its administrative offices in Vancouver, British Columbia, Canada.
On December 11, 2013, the Company entered into a sale agreement with Yinfu Gold Corp. (“Yinfu”) to acquire 70% interest in three gold exploration claims located in Xinjian Province, the People’s Republic of China (the “PRC”). The Company issued 6,000,000 shares of restricted common stock of the Company at $0.20 per share for the consideration of $1,200,000. On January 19, 2015, the Company and Yinfu reached a mutual agreement to terminate the acquisition at the current market value of $0.10 per share and an investment loss of $600,000 was resulted.
On December 23, 2013, the Company entered into an Asset Sale & Purchase Agreement with Mr. Tang Wenbo (“Mr. Tang”) to acquire Mr. Tang’s 24% equity interest and assets in Jiangxi Everenergy New Material Co., Ltd. (“Everenergy”). The Company issued 8,000,000 shares of restricted common stock of the Company at $0.375 per share and paid $1,000,000 for the aggregate consideration of $4,000,000.
On February 19, 2014, the Company entered into an Asset Sale & Purchase Agreement with Mr. Hu Qinjian (“Mr. Hu”) to acquire Mr. Hu’s 29% equity interest and assets in Everenergy. The Company issued 11,000,000 shares of restricted common stock of the Company at $0.45 per share for the consideration of $4,950,000.
On September 17, 2014, the Company terminated the Asset Sale & Purchase Agreements with Mr. Tang and Mr. Hu for the acquisition of 24% and 29% equity interest and assets in Everenergy, respectively due to neither Mr. Tang, Mr. Hu or Everenergy had complied various terms and conditions of the Asset Sale & Purchase Agreement. On the same day, the Board of Directors approved the cancellation of the total 19,000,000 shares of restricted common stock at the current market value of $0.12 per share. On October 21, 2014, 11,000,000 shares were returned and effectively cancelled and the remaining 8,000,000 shares are to be cancelled on June 30, 2015. For the year ended June 30, 2015, the Company could not recover the $1,000,000 cash payment and a total investment loss of $6,670,000 was resulted.
On February 13, 2015, the Company disposed its 100% equity interest in Apolo Gold Direct Limited (formerly known as Apolo Gold & Energy Asia Limited) to Mr. Kelvin Chak, the Chief Executive Officer (“CEO”) and director of the Company, Mr. Tsap Wai Ping, the brother of the CEO and China Yi Gao Gold Trader Co., Limited, a company incorporated in Hong Kong, for a consideration of $100. For the year ended June, 30, 2015, there was no gain or loss recognized on the disposal of a subsidiary.
On June 18, 2015, the Company filed an Amendment to its Articles of Incorporation with the Nevada Secretary of State to change its name from Apolo Gold & Energy, Inc. to Wincash Apolo Gold & Energy, Inc.
The Company will continue to anticipate potential mineral property exploration and other energy related investments. As of June 30, 2015, the Company does not hold any mineral property exploration claims.
NOTE 2 - GOING CONCERN UNCERTAINTIES
The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As of June 30, 2015, the Company suffered an accumulated deficit of $15,436,321 and the Company had generated limited revenue and had no committed sources of capital or financing for the reporting period.
These consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the discharge of liabilities in the normal course of business for the foreseeable future.
As of June 30, 2015, the Company suffered the accumulated deficits of $15,436,321 from prior years and suffered from a working capital deficit of $20,288. The continuation of the Company as a going concern is dependent upon the continuing financial support from its stockholders or external financing. Management believes the existing stockholders will provide the additional cash to meet with the Company’s obligations as they become due. However, there can be no assurance that the Company will be able to obtain sufficient funds to meet its obligations.
These factors raise substantial doubt about the Company’s ability to continue as a going concern. These consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result in the Company not being able to continue as a going concern.
WINCASH APOLO GOLD & ENERGY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED JUNE 30, 2015 AND 2014
(Currency expressed in United States Dollars (“US$”), except for number of shares)
NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of presentation
The accompanying consolidated financial statements are prepared in accordance with generally accepted accounting principles in the United States of America (“US GAAP”).
Basis of consolidation
The consolidated financial statements include the accounts of the Company and its subsidiary. All inter-company accounts and transactions have been eliminated in consolidation.
On February 13, 2015, the Company disposed of its 100% equity interest in Apolo Gold Direct Limited (formerly known as Apolo Gold & Energy Asia Limited), a company incorporated in Hong Kong, to Mr. Kelvin Chak, the Chief Executive Officer (“CEO”) and director of the Company, Mr. Tsap Wai Ping, the brother of the CEO and China Yi Gao Gold Trader Co., Limited, a company incorporated in Hong Kong, for a consideration of $100. For the year ended June 30, 2015, there was no gain or loss recognized on the disposal of a subsidiary.
Estimates
Management uses estimates and assumptions in preparing these financial statements in accordance with US GAAP. Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities in the balance sheet, and the reported revenue and expenses during the periods reported. Actual results may differ from these estimates.
Cash and cash equivalents
Cash and cash equivalents are carried at cost and represent cash on hand, demand deposits placed with banks or other financial institutions and all highly liquid investments with an original maturity of three months or less as of the purchase date of such investments.
Investments
Affiliated companies, in which the Company has significant influence, but no control, are accounted for investment. Investment adjustments include the Company’s proportionate share of investee income or loss, gains or losses resulting from investee capital transactions, adjustments to recognize certain differences between the Company’s carrying value and the Company’s equity in net assets of the investee at the date of investment, impairments, and other adjustments required by the equity method. Gain or losses are realized when such investments are sold.
Stock-based compensation
The Company adopts FASB Accounting Standards Codification Topic 718, Compensation - Stock Compensation (“ASC Topic 718”) using the fair value method. Under ASC Topic 718, the stock-based compensation is measured using the Black-Scholes Option-Pricing model on the date of grant under the modified prospective method. The fair value of stock-based compensation that are expected to vest are recognized using the straight-line method over the requisite service period.
Income taxes
Income taxes are determined in accordance with the provisions of ASC Topic 740, “Income Taxes” (“ASC Topic 740”). Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted income tax rates expected to apply to taxable income in the periods in which those temporary differences are expected to be recovered or settled. Any effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.
ASC 740 prescribes a comprehensive model for how companies should recognize, measure, present, and disclose in their financial statements uncertain tax positions taken or expected to be taken on a tax return. Under ASC 740, tax positions must initially be recognized in the financial statements when it is more likely than not the position will be sustained upon examination by the tax authorities. Such tax positions must initially and subsequently be measured as the largest amount of tax benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the tax authority assuming full knowledge of the position and relevant facts.
WINCASH APOLO GOLD & ENERGY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED JUNE 30, 2015 AND 2014
(Currency expressed in United States Dollars (“US$”), except for number of shares)
Net loss per share
The Company calculates net loss per share in accordance with ASC Topic 260, “Earnings per Share.” Basic loss per share is computed by dividing the net loss by the weighted-average number of common shares outstanding during the period. Diluted income per share is computed similar to basic loss per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common stock equivalents had been issued and if the additional common shares were dilutive.
Comprehensive income
ASC Topic 220, “Comprehensive Income”, establishes standards for reporting and display of comprehensive income, its components and accumulated balances. Comprehensive income as defined includes all changes in equity during a period from non-owner sources. Accumulated other comprehensive income, as presented in the accompanying consolidated statement of stockholders’ equity, consists of changes in unrealized gains and losses on foreign currency translation. This comprehensive income is not included in the computation of income tax expense or benefit.
Related parties
Parties, which can be a corporation or individual, are considered to be related if the Company has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions. Companies are also considered to be related if they are subject to common control or common significant influence.
Fair value of financial instruments
The carrying value of the Company’s financial instruments: cash and cash equivalents, subscription receivable, notes receivable, accounts payable and loans from related parties approximate at their fair values because of the short-term nature of these financial instruments.
The Company also follows the guidance of the ASC Topic 820-10, “Fair Value Measurements and Disclosures” (“ASC 820-10”), with respect to financial assets and liabilities that are measured at fair value. ASC 820-10 establishes a three-tier fair value hierarchy that prioritizes the inputs used in measuring fair value as follows:
Level 1: Observable inputs such as quoted prices in active markets;
Level 2: Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and
Level 3: Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.
Foreign currency translation
Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transaction. Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency using the applicable exchange rates at the balance sheet dates. The resulting exchange differences are recorded in the statement of operations.
The reporting currency of the Company is United States Dollars (“US$”) and the accompanying financial statements have been expressed in US$. In addition, the Company’s former subsidiary in Hong Kong maintains its books and record in its local currency, Hong Kong Dollars (“HK$”), which is functional currency as being the primary currency of the economic environment in which the entity operates.
In general, for consolidation purposes, assets and liabilities of its subsidiaries whose functional currency is not US$ are translated into US$, in accordance with ASC Topic 830-30, “Translation of Financial Statement”, using the exchange rate on the balance sheet date. Revenues and expenses are translated at average rates prevailing during the period. The gains and losses resulting from translation of financial statements of foreign subsidiary are recorded as a separate component of accumulated other comprehensive income within the statement of stockholders’ equity. The gains and losses are recorded as a separate component of accumulated other comprehensive income within the statement of stockholders’ equity.
WINCASH APOLO GOLD & ENERGY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED JUNE 30, 2015 AND 2014
(Currency expressed in United States Dollars (“US$”), except for number of shares)
Translation of amounts from HK$ into US$1 has been made at the following exchange rates for the respective periods:
Recent accounting pronouncements
FASB issues various Accounting Standards Updates relating to the treatment and recording of certain accounting transactions. On June 10, 2014, the Financial Accounting Standards Board issued Accounting Standards Update (ASU) No. 2014-10,Development Stage Entities (Topic 915) - Elimination of Certain Financial Reporting Requirements, Including an Amendment to Variable Interest Entities Guidance in Topic 810, Consolidation, which eliminates the concept of a development stage entity (DSE) entirely from current accounting guidance. The Company has elected adoption of this standard, which eliminates the designation of DSEs and the requirement to disclose results of operations and cash flows since inception.
The Company has reviewed all recently issued, but not yet effective, accounting pronouncements and do not believe the future adoption of any such pronouncements may be expected to cause a material impact on its financial condition or the results of its operations.
NOTE 4 - MINERAL PROPERTY INTERESTS
On December 11, 2013, the Company entered into a sale agreement with Yinfu Gold Corp. (“Yinfu”) to acquire 70% interest in three gold exploration claims located in Xinjian Province, the PRC. The Company issued 6,000,000 shares of restricted common stock at $0.20 per share to the wholly owned subsidiary of Yinfu in payment of $1,200,000 for the acquisition.
On January 19, 2015, the Company and Yinfu reached a mutual agreement to terminate the acquisition of the 70% interest in the three gold exploration claims in the PRC. All 6,000,000 shares of restricted common stock were returned and cancelled at the current market value of $0.10 per share and an investment loss of $600,000 was resulted.
As of June 30, 2015, the Company does not hold any mineral property exploration claims.
NOTE 5 - INVESTMENTS
On December 23, 2013, the Company entered into an Asset Sale & Purchase Agreement with Mr. Tang Wenbo (“Mr. Tang”) to acquire Mr. Tang’s 24% equity interest and assets in Jiangxi Everenergy New Material Co., Ltd. (“Everenergy”). The Company issued 8,000,000 shares of restricted common stock of the Company at $0.375 per share and paid $1,000,000 for the aggregate payment of $4,000,000 for the acquisition.
On February 19, 2014, the Company entered into an Asset Sale & Purchase Agreement with Mr. Hu Qinjian (“Mr. Hu”) to acquire Mr. Hu’s 29% equity interest and assets in Everenergy. The Company issued 11,000,000 shares of restricted common stock of the Company at $0.45 per share for the consideration of $4,950,000 for the acquisition.
On September 17, 2014, the Company terminated the Asset Sale & Purchase Agreements with Mr. Tang and Mr. Hu for the acquisition of 24% and 29% equity interest and assets in Everenergy, respectively due to neither Mr. Tang, Mr. Hu and Everenergy had complied various terms and conditions of the Asset Sale & Purchase Agreement. On the same day, the Board of Directors approved the cancellation of all 19,000,000 shares of restricted common stock at a current market value of $0.12 per share. On October 21, 2014, 11,000,000 shares of restricted common stock were returned and effectively cancelled and the remaining 8,000,000 shares are to be cancelled as of June 30, 2015. For the year ended June 30, 2015, the Company could not recover the $1,000,000 cash payment and a total investment loss of $6,670,000 was resulted.
As of June 30, 2015, the Company does not hold any investments.
NOTE 6 - AMOUNT DUE TO A DIRECTOR
As of June 30, 2015, the director of the Company has advanced $10,000 for the payment of administrative expenses., The amount is unsecured, bears no interest and is payable upon demand.
WINCASH APOLO GOLD & ENERGY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED JUNE 30, 2015 AND 2014
(Currency expressed in United States Dollars (“US$”), except for number of shares)
NOTE 7 - COMMON STOCK
On September 30, 2013, the Company issued 1,875,000 shares of restricted common stock at $0.08 per share for a private placement of $150,000.
On December 1, 2013, the Company issued 200,000 shares of restricted common stock at $0.08 per share for the rendering of business consulting services of $16,000. As of December 1, 2013, the current value was $0.23 per share.
On December 1, 2013, the Company issued 100,000 shares of restricted common stock at $0.23 per share for the rendering of business consulting services of $23,000. As of December 1, 2013, the current market value was $0.23 per share.
On December 4, 2013, the Company issued 5,000,000 shares of restricted common stock at $0.20 per share for a private placement of $1,000,000.
On December 11, 2013, the Company issued 6,000,000 shares of restricted common stock at $0.20 per share in lieu of $1,200,000 consideration for the acquisition of 70% interest in three gold exploration claims in the PRC. As of December 11, 2013, the current market value was $0.25 per share. On January 19, 2015, the Company and Yinfu mutually agreed to terminate the acquisition and cancel all 6,000,000 shares at the current market value of $0.10 per share.
On December 23, 2013, the Company issued 8,000,000 shares of restricted common stock at $0.375 per share plus $1,000,000 in cash for the acquisition of 24% equity interest in Everenergy with an aggregated consideration of $4,000,000. As of December 23, 2013, the current market value was $0.33 per share.
On February 11, 2014, the Company issued 100,000 shares of restricted common stock at $0.45 per share for the rendering of business consulting services of $45,000. As of February 11, 2014, the current market value was $0.45 per share.
On February 19, 2014, the Company issued 11,000,000 shares of restricted common stock at $0.45 per share for the acquisition of additional 29% equity interest in Everenergy in a consideration of $4,950,000. As of February 19, 2014, the current market value was $0.35 per share.
On June 16, 2014, the Company issued 653,823 shares of restricted common stock at $0.20 per share to settle a debt of $130,764 owed to the Chief Executive Officer and director of the Company. As of June 16, 2014, the current market value was $0.15 per share.
On September 17, 2014, the Board of Directors approved the cancellation of the total 19,000,000 shares of restricted common stocks issued for the acquisition of equity interest in Everenergy at a current market value of $0.12 per share. The 11,000,000 shares issued to Mr. Hu were effectively cancelled on October 21, 2014 and the remaining 8,000,000 shares issued to Mr. Tang are to be cancelled as of June 30, 2015.
On February 12, 2015, the Company issued 700,000 shares of restricted common stock at $0.10 per share to settle a debt of $70,000 owed to the Chief Executive Officer and director of the Company. As of February 12, 2015, the current market value was $0.10 per share.
On June 4, 2015, the Company issued 6,000,000 shares of restricted common stock at $0.10 per share for the rendering of business and strategic consulting services of $600,000 in a service period of twelve months commencing from June 2015. For the year ended June 30, 2015, the Company amortized $50,000 to the operations using the straight-line method. As of June 30, 2015, the deferred expenditure is recorded as $550,000.
On June 9, 2015, the Company issued 400,000 shares of restricted common stock at $0.10 per share for the rendering of administrative consulting services of $40,000. As of June 9, 2015, the current market value was $0.10 per share.
On June 26, 2015, the Board of Directors of the Company approved to issue 340,000 shares of restricted common stock at $0.15 per share to settle a debt of $51,000 owed to the Chief Executive Officer and director of the Company. All 340,000 shares were issued subsequently on July 2, 2015. As of June 26, 2015, the current market value was $0.16 per share.
There were no stock options, warrants or other potentially dilutive securities outstanding as at June 30, 2015 and 2014.
As of June 30, 2015 there are 21,872,118 shares of common stock issued and outstanding.
WINCASH APOLO GOLD & ENERGY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED JUNE 30, 2015 AND 2014
(Currency expressed in United States Dollars (“US$”), except for number of shares)
NOTE 8 - INCOME TAX
For the years ended June 30, 2015 and 2014, the local (United States) and foreign components of loss before income taxes were comprised of the following:
The provision for income taxes consisted of the following:
The Company is registered in the State of Nevada and is subject to the tax laws of the United States of America. As of June 30, 2015, the operations in the United States of America incurred $15,436,319 of cumulative net operating losses which can be carried forward to offset future taxable income. The net operating loss carryforwards begin to expire in the year 2017 through 2034, if unutilized. The Company has provided for a full valuation allowance of $3,859,080 against the deferred tax assets on the expected future tax benefits from the net operating loss carryforwards as the management believes it is more likely than not that these assets will not be realized in the future.
NOTE 9 - RELATED PARTY TRANSACTIONS
During the year ended June 30, 2015, Mr. Kelvin Chak, the CEO and director of the Company paid a total of $50,596 for general expenses and management fees of $25,482 and $25,114, respectively.
On February 12, 2015, the Company issued 700,000 shares of restricted common stocks at $0.10 per share to settle a debt of $70,000 owed to the CEO and director of the Company at the current market value of $0.10 per share.
On February 13, 2015, the Company disposed its 100% equity interest in Apolo Gold Direct Limited (formerly known as Apolo Gold & Energy Asia Limited) to (i) Mr. Kelvin Chak Wai Man, the Chief Executive Officer (“CEO”) and director of the Company, who acquired 40% equity interest, (ii) Mr. Tsap Wai Ping, the brother of the CEO of the Company, who acquired 50% equity interest, and (iii) China Yi Gao Gold Trader Co., Limited, a company incorporated in Hong Kong, which acquired the remaining 10% equity interest, for a consideration of $100.
On June 4, 2015, the Company issued 2,000,000 shares of restricted common stocks at $0.10 per share for the rendering of business consulting services provided by the brother of the CEO and director of the Company at the current market value of $0.11 per share.
On June 9, 2015, the Company issued 200,000 shares of restricted common stocks at $0.10 per share for the rendering of administrative consulting services provided by the Chief Financial Officer of the Company at the current market value of $0.22 per share.
On June 26, 2015, the Board of Directors of the Company approved to issue 340,000 shares of restricted common stock at $0.15 per share to settle a debt of $51,000 owed to the CEO and director of the Company at the current market value of $0.16 per share. All 340,000 shares were issued subsequently on July 2, 2015.
NOTE 10 - COMMITMENTS AND CONTINGENCIES
As of June 30, 2015, the Company has no commitments or contingencies involved.
NOTE 11 - SUBSEQUENT EVENTS
In accordance with ASC Topic 855, “Subsequent Events”, which establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued, the Company has evaluated all events or transactions that occurred after June 30, 2015 up through the date the Company issued the audited consolidated financial statements. There were no subsequent events that required recognition or disclosure.
ITEM 9.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
None
ITEM 9A.
ITEM 9A. CONTROLS AND PROCEDURES
Disclosure Controls and Procedures
We carried out an evaluation of the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of June 30, 2015 (the “Evaluation Date”). This evaluation was carried out under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective as of the Evaluation Date as a result of the material weaknesses in internal control over financial reporting discussed below.
Disclosure controls and procedures are those controls and procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act are recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.
Notwithstanding the assessment that our internal control over financial reporting was not effective and that there were material weaknesses as identified in this report, we believe that our financial statements contained in our Annual Report on Form 10-K for the year ended June 30, 2015 fairly present our financial condition, results of operations and cash flows in all material respects.
Management’s Annual Report on Internal Control Over Financial Reporting
Our 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 Exchange Act, for the Company.
Internal control over financial reporting includes those policies and procedures that: (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets; (2) 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 its management and directors; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.
Management recognizes that there are inherent limitations in the effectiveness of any system of internal control, and accordingly, even effective internal control can provide only reasonable assurance with respect to financial statement preparation and may not prevent or detect material misstatements. In addition, effective internal control at a point in time may become ineffective in future periods because of changes in conditions or due to deterioration in the degree of compliance with our established policies and procedures.
A material weakness is a significant deficiency, or combination of significant deficiencies, that results in there being a more than remote likelihood that a material misstatement of the annual or interim financial statements will not be prevented or detected.
Under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, management conducted an evaluation of the effectiveness of our internal control over financial reporting, as of the Evaluation Date, based on the framework set forth in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on its evaluation under this framework, management concluded that our internal control over financial reporting was not effective as of the Evaluation Date.
Management assessed the effectiveness of the Company’s internal control over financial reporting as of Evaluation Date and identified the following material weaknesses:
Inadequate Segregation of Duties: We have an inadequate number of personnel to properly implement control procedures.
Insufficient Written Policies & Procedures: We have insufficient written policies and procedures for accounting and financial reporting.
Inadequate Financial Statement Closing Process: We have an inadequate financial statement closing process.
Lack of Audit Committee: The lack of a functioning audit committee and lack of a majority of outside directors on the Company’s Board of Directors, resulting in ineffective oversight in the establishment and monitoring of required internal controls and procedures.
Management is committed to improving its internal controls and will (1) continue to use third party specialists to address shortfalls in staffing and to assist the Company with accounting and finance responsibilities, (2) increase the frequency of independent reconciliations of significant accounts which will mitigate the lack of segregation of duties until there are sufficient personnel and (3) prepare and implement sufficient written policies and checklists for financial reporting and closing processes and (4) may consider appointing outside directors and audit committee members in the future.
Management, including our Chief Executive Officer and the Chief Financial Officer, has discussed the material weakness noted above with our independent registered public accounting firm. Due to the nature of this material weakness, there is a more than remote likelihood that misstatements which could be material to the annual or interim financial statements could occur that would not be prevented or detected.
This annual report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the our registered public accounting firm pursuant to temporary rules of the SEC that permit us to provide only management’s report in this annual report.
Changes in internal control over financial reporting
There were no changes in our internal control over financial reporting that occurred during the last quarter ended June 30, 2015 that have materially affected, or that are reasonably likely to materially affect, our internal control over financial reporting.
Limitations on the effectiveness of controls and procedures
Our management, including our Chief Executive Officer and the Chief Financial Officer, do not expect that the our controls and procedures will prevent all potential errors or fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met.
PART III
ITEM 10.
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
(a) Directors and Executive Officers
NAME POSITION
Date of Position and Term of Office
Kelvin Chak Director, President, Chief Executive Officer -
Edward Low Chief Financial Officer -
Business Experience
Kelvin Chak
Mr. Kelvin Chak has been appointed President and Chief Executive Officer and Mr. Edward Low has been appointed Chief Financial Officer of the Corporation. They replace Mr. Robert Dinning who submitted his resignation as Director, President and CEO, CFO, and Secretary effective November 15, 2013.
Mr. Chak, based in Hong Kong, is a Solutions Engineer in Hong Kong with a 10 year career as an IT Engineer. He has a Master of Business Administration from the University of Surrey, United Kingdom, a Master of Information Technology from the University of Nottingham, United Kingdom and a BA Degree in Chinese Language from Hong Kong Baptist University.
Edward Low
Mr. Low, based in Vancouver, Canada, has provided accounting services to public companies for the past 18 years. Currently, Mr. Low is CFO of Alternative Earth Resources Inc. (AER:TSXV), June 2013 to present and QMC Quantum Minerals (QMC:TSXV), September 2014 to present. Mr. Low had been the Controller for Nevada Geothermal Power Inc., an alternative energy company with an operating Faulkner I geothermal power plant in northern Nevada, from February 2003 to June 2012. The plant was built with funding from EIG Global Energy Partners and John Hancock Life Insurance Company, along with cash grants from the US Department of Treasury.
Committees: Meetings of the Board
The Company does not have a separate Compensation Committee, Audit Committee or Nominating Committee. These functions are done by the Board of Directors meeting as a whole. The Company’s Board of Directors held both in person meetings during the fiscal year ended June 30, 2015 and meetings by were conducted by telephone. All corporate actions by the Board of Directors were either consented to in writing by all Directors or were agreed to unanimously at a meeting where proper notice had been given and a quorum was present.
Audit Committee
The board of directors has not established an audit committee. The functions of the audit committee are currently performed by the entire board of directors. The Company is under no legal obligation to establish an audit committee and has elected not to do so at this time so as to avoid the time and expense of identifying independent directors willing to serve on the audit committee. The Company may establish an audit committee in the future if the board determines it to be advisable or we are otherwise required to do so by applicable law, rule or regulation.
As the board of directors does not have an audit committee, it therefore has no “audit committee financial expert” within the meaning of Item 401(e) of Regulation S-B. except its chief financial officer. In general, an “audit committee financial expert” is an individual member of the audit committee who:
● understands generally accepted accounting principles and financial statements,
● is able to assess the general application of such principles in connection with accounting for estimates, accruals and reserves,
● has experience preparing, auditing, analyzing or evaluating financial statements comparable to the breadth and complexity to our financial statements,
● understands internal controls over financial reporting, and
● understands audit committee functions.
Board of Directors Independence
One of the Company’s directors is “independent” within the meaning of definitions established by the Securities and Exchange Commission or any self-regulatory organization. This director is Kelvin Chak. The Company is not currently subject to any law, rule or regulation requiring that all or any portion of its board of directors include “independent” directors.
Director Nominees
The Company does not have a nominating committee. The board of directors, sitting as a board, selects those individuals to stand for election as members of our board. Since the board of directors does not include a majority of independent directors, the decision of the board as to director nominees is made by persons who have an interest in the outcome of the determination. The board will consider candidates for directors proposed by security holders, although no formal procedures for submitting candidates have been adopted. Until otherwise determined, not less than 90 days prior to the next annual board of directors’ meeting at which the slate of board nominees is adopted, the board accepts written submissions that include the name, address and telephone number of the proposed nominee, along with a brief statement of the candidate’s qualifications to serve as a director and a statement of why the shareholder submitting the name of the proposed nominee believes that the nomination would be in the best interests of shareholders. If the proposed nominee is not the security holder submitting the name of the candidate, a letter from the candidate agreeing to the submission of his or her name for consideration should be provided at the time of submission. The letter should be accompanied by a resume supporting the nominee’s qualifications to serve on the board of directors, as well as a list of references.
The board identifies director nominees through a combination of referrals, including by management, existing board members and security holders, where warranted. Once a candidate has been identified the board reviews the individual’s experience and background, and may discuss the proposed nominee with the source of the recommendation. If the board believes it to be appropriate, board members may meet with the proposed nominee before making a final determination whether to include the proposed nominee as a member of management’s slate of director nominees submitted for shareholders for election to the board.
Among the factors that the board considers when evaluating proposed nominees are their experience in the information technology industry, knowledge of and experience with and knowledge of and experience in business matters, finance, capital markets and mergers and acquisitions. The board may request additional information from the candidate prior to reaching a determination. The board is under no obligation to formally respond to all recommendations, although as a matter of practice, it will endeavor to do so.
Security Holder Communications with our Board of Directors
The Company provides an informal process for security holders to send communications to our board of directors. Security holders who wish to contact the board of directors or any of its members may do so by writing to Wincash Apolo Gold & Energy Inc., #210 - 905 West Pender Street, Vancouver BC, Canada V6C 1L6.
Correspondence directed to an individual board member is referred, unopened, to that member. Correspondence not directed to a particular board member is referred, unopened, to the President and CEO.
Code of Ethics
Under the Sarbanes-Oxley Act of 2002 and the Securities and Exchange Commission’s related rules, the Company is required to disclose whether it has adopted a code of ethics that applies to the Company’s principal executive officer, principal financial officer, principal accounting officer or controller or persons performing similar functions. The Company has adopted a code of ethics that applies to its chief executive officer, chief financial officer and other officers, legal counsel and to any person performing similar functions. The Company has made the code of ethics available and intends to provide disclosure of any amendments or waivers of the code within five business days after an amendment or waiver on the Company’s website wwww.apologold.com.
Compliance with Section 16(a) of Securities Exchange Act of 1934
During the fiscal year ended June 30, 2015 our Directors and Officers have complied with all applicable Section 16(a) filing requirements.
Family Relationships
There is no family relationship between any Director, executive or person nominated or chosen by the Company to become a Director or executive officer.
ITEM 11.
ITEM 11. EXECUTIVE COMPENSATION
Furnish the information required by Item 402 of Regulation S-K (§ 229.402 of this chapter) and paragraph (e)(4) and (e)(5) of Item 407 of Regulation S-K
The following table shows for the fiscal years ending June 30, 2015, and 2014, the compensation awarded or paid by the Company to its Chief Executive Officer. No executive officers of the Company had total salary and bonus exceeding $100,000 during such year.
Summary Compensation Table
Option Grants in Last Fiscal Year and June 30, 2015 was - Nil
Compensation of Directors
Standard Arrangements: The members of the Company’s Board of Directors are reimbursed for actual expenses incurred in attending Board meetings.
Other Arrangements: There are no other arrangements.
Employment Contracts and Termination of Employment, And Change-in-control Arrangements
The Company’s CEO and CFO do not have employment agreements.
Termination of Employment and Change of Control Arrangement
There is no compensatory plan or arrangement in excess of $100,000 with respect to any individual named above which results or will result from the resignation, retirement or any other termination of employment with the Company, or from a change in the control of the Company.
Compensation Discussion and Analysis
The following Compensation Discussion and Analysis (CD&A) provides information on the compensation programs established for our “Named Executive Officers” during our fiscal year ended June 30, 2014. All information provided herein should be read in conjunction with the tables provided below.
Our Board of Directors is responsible for establishing, implementing and monitoring the policies governing compensation for our executives. Currently our Board does not have a compensation committee. Our officers are members of our Board of Directors and are able to vote on matters of compensation. We are not currently under any legal obligation to establish a compensation committee and have elected not to do so at this time. In the future, we may establish a compensation committee if the Board determines it to be advisable or we are otherwise required to do so by applicable law, rule or regulation. During the year ended June 30, 2015 our Board did not employ any outside consultants to assist in carrying out its responsibilities with respect to executive compensation, although we have access to general executive compensation information regarding both local and national industry compensation practices. In future periods we may participate in regional and national surveys that benchmark executive compensation by peer group factors such as company size, annual revenues, market capitalization and geographical location.
The executive employment market in general is very competitive due to the number of companies with whom we compete to attract and retain executive and other staff with the requisite skills and experience to carry out our strategy and to maintain compliance with multiple Federal and State regulatory agencies. Many of these companies have significantly greater economic resources than our own. Our Board has recognized that our compensation packages must be able to attract and retain highly talented individuals that are committed to our goals and objectives, without at this time paying cash salaries that are competitive with some of our peers with greater economic resources. Our compensation structure is weighted towards equity compensation in the form of options to acquire common stock, which the Board believes motivates and encourages executives to pursue strategic opportunities while managing the risks involved in our current business stage, and aligns compensation incentives with value creation for our shareholders.
Components of Our Executive Compensation Program
Our executive compensation program incorporates components we believe are necessary in order for the Company to provide a competitive compensation package relative to our peers and to provide an appropriate mix between short-term and long-term cash and non-cash compensation. Elements of our executive compensation are listed below:
● Base Salary
● Stock Awards
● Other benefits available to all employees
● Items specific to our President and Chief Executive Officer per an employment agreement
Base Salary: At present we do not have a salary structure for employees and executives is based on skill set, knowledge and responsibilities. Base salaries may be established as necessary. During the year ended June 30, 2015 none of our Named Executive Officers received a salary increase.
Stock Awards: A portion of compensation paid to our executives is equity based. We believe equity compensation helps align the interests of our executives with the interests of our shareholders. In that regard, our executives’ compensation is subject to downside risk in the event that our common stock price decreases. In addition, we believe stock awards provide incentives to aid in the retention of key executives.
Other Benefits: Our Executive Officers and employees receive no other benefits.
Item 12.
Item 12. Security Ownership of Certain Beneficial Owners and Management
Item 13.
Item 13. Certain Relationships and Related Transactions
During the year ended June 30, 2015, Mr. Kelvin Chak, the CEO and director of the Company paid a total of $50,596 for general expenses and management fees of $25,482 and $25,114, respectively.
On February 12, 2015, the Company issued 700,000 shares of restricted common stocks at $0.10 per share to settle a debt of $70,000 owed to the CEO and director of the Company at the current market value of $0.10 per share.
On February 13, 2015, the Company disposed of its 100% equity interest in Apolo Gold Direct Limited (formerly known as Apolo Gold & Energy Asia Limited) to Mr. Kelvin Chak, the CEO and director of the Company, Mr. Tsap Wai Ping, a relative of the CEO, and China Yi Gao Gold Trader Co., Limited, a company incorporated in Hong Kong, for a consideration of $100.
On June 4, 2015, the Company issued 2,000,000 shares of restricted common stocks at $0.10 per share for the rendering of business consulting services provided by the brother of the CEO and director of the Company at the current market value of $0.11 per share.
On June 9, 2015, the Company issued 200,000 shares of restricted common stocks at $0.10 per share for the rendering of administrative consulting services provided by the Chief Financial Officer of the Company at the current market value of $0.22 per share.
On June 26, 2015, the Board of Directors of the Company approved to issue 340,000 shares of restricted common stock at $0.15 per share to settle a debt of $51,000 owed to the CEO and director of the Company at the current market value of $0.16 per share. All 340,000 shares were issued subsequently on July 2, 2015.
Item 14.
Item 14. Principal Accountant Fees And Services
Weld Asia Associates is the Company’s independent auditor to examine the financial statements of the Company for the fiscal year ending June 30, 2015.
Audit Fees
Weld Asia Associates was paid aggregate fees of approximately $19,000 for professional services rendered including (i) the 2015 audit of the Company’s annual financial statements, and (ii) the reviews of the financial statements included in the Company’s quarterly reports on Form 10QSB during these fiscal years.
Audit-Related Fees
Weld Asia Associates was not paid any additional fees for the fiscal years ended June 30, 2015 and 2014 for assurance and related services reasonably related to the performance of the audit or review of the Company’s financial statements.
Tax Fees
Weld Asia Associates was not paid any aggregate fees for the fiscal years ended June 30, 2015 and 2014 for professional services rendered for tax compliance, tax advice and tax planning. This service was not provided.
Other Fees
Weld Asia Associates was paid no other fees for professional services during the fiscal years ended June 30, 2015 and 2014.
Item 15.
Item 15. Exhibits and Financial Statement Schedules
A. Exhibits
3.1 Articles of Incorporation (Incorporated by reference from Form 10SB)
3.2 By-Laws effective May 20, 2005 (Incorporated by reference from Current Report on Form 8-K filed on May 31, 2005)
3.3 Certificate of Amendment (Incorporated by reference from Annual Report on Form 10KSB filed on August 29, 2005).
Code of Ethics (Incorporated by reference from Annual Report on Form 10KSB filed on August 27, 2004)
16.1 Letter of Williams & Webster, P.S., dated September 16, 2008, regarding change in certifying accountant of Apolo Gold & Energy, Inc. (Incorporated by reference from Current Report on Form 8-K filed on September 16, 2008)
31.1 Sarbanes Oxley Section 302 Certification from C.E.O.
31.2 Sarbanes Oxley Section 302 Certification from C.F.O.
32.1 Sarbanes Oxley Section 906 Certification from C.E.O.
32.2 Sarbanes Oxley Section 906 Certification from C.F.O.
Interactive Data Files
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Date: September 2, 2015
/s/ Kelvin Chak
Kelvin Chak, President/CEO
In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
Signature
Title
Date
/s/ Kelvin Chak
Kelvin Chak
Chairman, President, CEO, Director
September 2, 2015
/s/ Edward Low
Edward Low
Chief Financial Officer
September
2, 2015