ITEM 1. BUSINESS
As used in this annual report, the terms “we,” “us,” “our,” the “Company,” each means LUBOA GROUP, INC., unless otherwise indicated. All dollar amounts refer to US dollars unless otherwise indicated.
We were incorporated under the name “Sunrise Tours, Inc.” in Nevada on March 19, 2013. On January 20, 2016, we filed a Certificate of Amendment with the Secretary of State of Nevada and changed our corporate name to “Luboa Group, Inc.” Concurrently with the name change, we also changed our principal business plan from developing and offering special services, such as 3D virtual tours for companies that would like to promote their venues on the Internet and through electronic media, to developing specialized agricultural products and a carbon emission trading platform in Asia. However, as of August 31, 2018, no definitive agreement had been entered into in connection with our business plan. Our principal headquarters is located in Kaohsiung City, Taiwan. From our inception through August 31, 2018, we accumulated losses of approximately $195,417.
ITEM 1A.
ITEM 1A. RISK FACTORS
Not applicable to smaller reporting companies.
ITEM 1B.
ITEM 1B. UNRESOLVED STAFF COMMENTS
None.
ITEM 2.
ITEM 2. PROPERTIES
We do not own any property.
ITEM 3.
ITEM 3. LEGAL PROCEEDINGS
We know of no material, existing or pending legal proceedings against us, nor are we involved as a plaintiff in any material proceeding or pending litigation. There are no proceedings in which any of our directors, officers or affiliates, or any registered or beneficial stockholder, is an adverse party or has a material interest adverse to our company.
ITEM 4.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
PART II
ITEM 5.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
MARKET INFORMATION
There is no public market for our common shares, which are quoted on the OTC Bulletin Board and OTC Link under the symbol “LBAO.” Because there is currently no established public trading market for any class of our common equity, the information available on over-the-counter market quotations is currently insufficient for us to provide the range of high and low bid information for our common stock. If quotation information does become available through the OTC Bulletin Board or OTC Link as a result of increased trading volume or otherwise, we remind the reader that such over-the-counter market quotations reflect inter-dealer prices. Such prices do include retail mark-up, mark-down, or commissions and may not necessarily represent actual transactions. As a result, any over-the-counter quotation information that becomes available for our stock in the future may contain stock price information that differs materially from the price that an investor would pay at or around the time of such quotation. We also note that trading in stocks quoted on the OTC Bulletin Board and OTC Link is often thin and is characterized by wide fluctuations in trading prices due to many factors that may be unrelated to a company’s operations or business prospects. We cannot assure you that there will be a market in the future for our common stock.
HOLDERS
The information required under this Item 5 about holders of our common equity is included below in Part III, Item 12, which is incorporated herein by reference.
DIVIDENDS
We have never paid or declared any dividends on our common stock and do not anticipate paying cash dividends in the foreseeable future.
SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS
We currently do not have any equity compensation plans.
ITEM 6.
ITEM 6. SELECTED FINANCIAL DATA
Not applicable to smaller reporting companies.
ITEM 7.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULT OF OPERATIONS
Forward-Looking Statements
The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs, and it should be read in conjunction with our financial statements, including the notes thereto, appearing elsewhere in this annual report. Our actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to those discussed below and elsewhere in this Annual Report. Our audited financial statements are stated in United States Dollars and are prepared in accordance with United States Generally Accepted Accounting Principles (“GAAP”).
RESULTS OF OPERATIONS
As of August 31, 2018, we had total assets of $833 and total liabilities of $146,821. We have incurred recurring losses to date. Our financial statements have been prepared assuming that we will continue as a going concern and, accordingly, do not include adjustments relating to the recoverability and realization of assets and classification of liabilities that might be necessary should we be unable to continue in operation.
We expect we will require additional capital to meet our long term operating requirements. We expect to raise additional capital through, among other things, the sale of equity or debt securities.
Our net loss for the fiscal year ended August 31, 2018 was $60,320, as compared to $58,215 during the fiscal year ended August 31, 2017. During fiscal years ended August 31, 2018 and 2017, we did not generate any revenue.
During the fiscal year ended August 31, 2018, we incurred expenses of $60,320, as compared to $58,215 during the fiscal year ended August 31, 2017.
LIQUIDITY AND CAPITAL RESOURCES
As of August 31, 2018, our total asset consisted of a prepaid expense in the amount of $833, which was the same as of August 31, 2017. As of August 31, 2018, our current liabilities were $146,821 as compared to $86,502 at August 31, 2017.
Stockholders’ deficit increased from $85,669 as of August 31, 2017 to $145,988 as of August 31, 2018.
The weighted average number of common shares outstanding was 11,600,000 for the fiscal years ended August 31, 2018 and 2017.
Cash Flows from Operating Activities
We have not generated positive cash flows from operating activities. For the fiscal year ended August 31, 2018, net cash flows used in operating activities was $58,792, consisting of a $60,320 net loss, increased by a $1,528 change in accounts payable and accrued expense. Net cash flows used in operating activities was $52,838 for the fiscal year ended August 31, 2017.
Cash Flows from Investing Activities
For the fiscal year ended August 31, 2018, there were no net cash flows used in investing activities.
Cash Flows from Financing Activities
We have financed our operations from either loans or the issuance of equity and debt instruments. For the fiscal year ended August 31, 2018, net cash flows from financing activities came from proceeds of a $58,792 loan received from a major shareholder for the fiscal year ended August 31, 2017, net cash flows from financing activities is $52,838, a loan received from a major shareholder as well.
Plan of Operation and Funding
We expect that working capital requirements will continue to be funded through a combination of related party loans and issuances of equity and debt securities. Our working capital requirements are expected to increase if and when we are able to execute on our current business plan. As of August 31, 2018, we had a working capital deficit in the amount of $145,988.
We expect to fund our operations over the next 12 months with further loans from related parties. In connection with our business plan, management anticipates additional increases in operating expenses and capital expenditures relating to: (i) developmental expenses associated with a start-up business, and (ii) marketing expenses. Thereafter, we expect we will need to raise additional capital and generate revenues to meet long-term operating requirements. Additional issuances of equity or convertible debt securities will result in dilution to our current shareholders. Further, such securities might have rights, preferences or privileges senior to our common stock. Additional financing may not be available upon acceptable terms, or at all. If adequate funds are not available or are not available on acceptable terms, we may not be able to take advantage of prospective new business endeavors or opportunities, which could significantly and materially restrict our business operations. This could materially impair our financial condition and results of operation.
Material Commitments
As of the date of this annual report, we do not have any material commitments.
Purchase of Significant Equipment
We do not intend to purchase any significant equipment during the next twelve months.
OFF-BALANCE SHEET ARRANGEMENTS
As of the date of this annual report, we do not have any off-balance sheet arrangements that have or are reasonably likely to have a material current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.
Going Concern
The independent auditors’ report accompanying our August 31, 2018 and August 31, 2017 audited financial statements contains an explanatory paragraph expressing substantial doubt about our ability to continue as a going concern. These financial statements have been prepared “assuming that we will continue as a going concern,” which contemplates that we will realize our assets and satisfy our liabilities and commitments in the ordinary course of business. This assumption may, however, not hold true for a variety of reasons, many of which are out of our control.
ITEM 7A.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not applicable to smaller reporting companies.
ITEM 8.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Commences on the following page.
MICHAEL GILLESPIE & ASSOCIATES, PLLC
CERTIFIED PUBLIC ACCOUNTANTS
10544 ALTON AVE NE
SEATTLE, WA 98125
206.353.5736
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors
Luboa Group, Inc.
Opinion on the Financial Statements
We have audited the accompanying balance sheet of Luboa Group, Inc. as of August 31, 2018 and 2017 and the related statements of operations, changes in stockholder’s deficit, cash flows, and the related notes (collectively referred to as “financial statements”) for the periods then ended. In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of August 31, 2018 and 2017 and the results of its operations and its cash flows for the periods then ended, in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.
The accompanying financial statements have been prepared assuming the Company will continue as a going concern. As discussed in Note #2 to the financial statements, although the Company has limited operations it has yet to attain profitability. This raises substantial doubt about its ability to continue as a going concern. Management’s plan in regard to these matters is also described in Note #2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
/S/ MICHAEL GILLESPIE & ASSOCIATES, PLLC
We have served as the Company’s auditor since 2014.
Seattle, Washington
November 17, 2018
LUBOA GROUP, INC.
BALANCE SHEETS
(AUDITED)
The accompanying notes are an integral part of these financial statements
LUBOA GROUP, INC.
STATEMENTS OF OPERATIONS
(AUDITED)
The accompanying notes are an integral part of these financial statements
LUBOA GROUP, INC.
STATEMENT OF CHANGES IN STOCKHOLDER’S EQUITY
FOR THE YEARS ENDED AUGUST 31, 2018 AND 2017
(AUDITED)
The accompanying notes are an integral part of these financial statements
LUBOA GROUP, INC.
STATEMENTS OF CASH FLOWS
(AUDITED)
The accompanying notes are an integral part of these financial statements
LUBOA GROUP, INC.
NOTES TO THE AUDITED FINANCIAL STATEMENTS
AUGUST 31, 2018
NOTE 1 - ORGANIZATION AND BUSINESS OPERATIONS
Organization and Description of Business
Luboa Group, Inc. (the “Company”), formerly known as Sunrise Tours, Inc., was incorporated under the laws of the State of Nevada on March 19, 2013 (“Inception”). On January 20, 2016, the Company filed a Certificate of Amendment with the Secretary of State of Nevada and changed its corporate name to “Luboa Group Inc.” Concurrent with the change of corporate name, the Company also changed its principal business plan from developing and offering special services such as 3D virtual tours for companies which would like to promote their venues on the Internet and electronic media, to developing specialized agricultural products and a carbon emission trading platform in Asia. However, as of August 31, 2018, no definitive agreement had been entered into in connection with the business plan. The Company’s principal headquarters is located in Kaohsiung City, Taiwan. From Inception through August 31, 2018, the Company accumulated losses of approximately $195,417.
In June 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-10, “Development Stage Entities.” The amendments in this update remove the definition of a development stage entity from the Master Glossary of the ASC thereby removing the financial reporting distinction between development stage entities and other reporting entities from U.S. GAAP. In addition, the amendments eliminate the requirements for development stage entities to (1) present inception-to-date information in the statements of income, cash flows, and shareholder equity, (2) label the financial statements as those of a development stage entity, (3) disclose a description of the development stage activities in which the entity is engaged, and (4) disclose in the first year in which the entity is no longer a development stage entity that in prior years it had been in the development stage. The amendments in this update are applied retroactively. The adoption of ASU 2014-10 removed the development stage entity financial reporting requirements for the Company.
NOTE 2 - GOING CONCERN
The Company has incurred losses since Inception, resulting in an accumulated deficit of approximately $195,417 as of August 31, 2018, and further losses are anticipated in the development of its business plan. 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’s ability to successfully execute its business plan and generate 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 with loans from related parties or the issuance of equity and debt securities.
NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying consolidated financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) and are presented in US dollars.
Cash and Cash Equivalents
For purposes of the accompanying statement of cash flows, the Company considers all highly liquid instruments purchased with an original maturity of three months or less to be cash equivalents. The Company’s funds are deposited in insured institutions. At August 31, 2018, the Company’s did not have any bank deposit.
Basic and Diluted Income (Loss) Per Share
The Company computes income (loss) per share in accordance with ASC 260, “Earnings per Share,” which requires presentation of both basic and diluted earnings per share on the face of the statement of operations. Basic loss per share is computed by dividing net income (loss) available to common shareholders by the weighted average number of outstanding common shares during the period. Diluted income (loss) per share gives effect to all dilutive potential common shares outstanding during the period. Dilutive loss per share excludes all potential common shares if their effect is anti-dilutive.
For the years ended August 31, 2018 and 2017, there were no potentially dilutive debt or equity instruments issued or outstanding and any such shares would have been excluded from the computation because they would have been anti-dilutive as the Company incurred losses in these years.
Fair Value of Financial Instruments
ASC 820, “Fair Value Measurements and Disclosures,” establishes a three-tier fair value hierarchy, which prioritizes the inputs in measuring fair value. The hierarchy prioritizes the inputs into three levels based on the extent to which inputs used in measuring fair value are observable in the market.
These tiers include:
Level 1: defined as observable inputs such as quoted prices in active markets;
Level 2: defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and
Level 3: defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions.
The carrying value of cash and the Company’s loan from shareholder approximates its fair value due to their short-term maturity.
Income Taxes
The Company accounts for income taxes pursuant to ASC 740, “Income Taxes.” Under ASC 740, deferred income taxes are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss carryforwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not 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. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.
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 August 31, 2018, there were no unrecognized tax benefits.
Revenue Recognition
The Company will recognize revenue in accordance with ASC 605, “Revenue Recognition.” ASC-605 requires that four basic criteria must be met before revenue can be recognized: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred; (3) the selling price is fixed and determinable; and (4) collectability is reasonably assured. Determination of criteria (3) and (4) are based on management’s judgments regarding the fixed nature of the selling prices of the products delivered and the collectability of those amounts. Provisions for discounts and rebates to customers, estimated returns and allowances, and other adjustments are provided for in the same period the related sales are recorded. The Company will defer any revenue for which the product has not been delivered or is subject to refund until such time that the Company and the customer jointly determine that the product has been delivered or no refund will be required.
Advertising Costs
The Company’s policy regarding advertising is to expense advertising when incurred. The Company incurred advertising expense of $0 during fiscal years ended August 31, 2018 and 2017.
Recent accounting pronouncements
Management has reviewed all of the recently issued, but not yet effective, accounting pronouncements and does not believe any of these pronouncements will have a material impact on the Company.
Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses for the reporting period. Actual results could differ from those estimates.
Stock-Based Compensation
As of August 31, 2018, the Company had not issued any stock-based compensation to its employees.
Stock-based compensation is accounted for at fair value in accordance with ASC 718, when applicable. To date, the Company has not adopted a stock option plan and has not granted any stock options.
NOTE 4 - COMMON STOCK
The Company has 75,000,000 shares of common stock authorized with a par value of $ 0.001 per share.
On September 23, 2013, the Company issued 9,000,000 shares at $0.001 per share for total proceeds of $9,000.
During the year ended August 31, 2015, the Company issued 2,600,000 shares at $0.01 per share for total proceeds of $26,000.
As of August 31, 2018, 11,600,000 shares of common stock were issued and outstanding. See Note 8 (Change of Control) regarding the January 14, 2016 transaction resulting in the ownership change of approximately 77.59% of these common shares.
NOTE 5 - INCOME TAXES
As of August 31, 2018, the Company had a net operating loss carry forwards of approximately $166,115 that may be available to reduce future years’ taxable income through 2035 and 2037. Future tax benefits which may arise as a result of these losses have not been recognized in the accompanying consolidated financial statements, as their realization is determined not likely to occur and accordingly, the Company has recorded a valuation allowance for the deferred tax asset relating to these tax loss carry-forwards.
Components of net deferred tax assets, including a valuation allowance, are as follows at August 31, 2018 and 2017:
The valuation allowance for deferred tax assets as of August 31, 2018 was $165,115. In assessing the recovery of the deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income in the periods in which those temporary differences become deductible. Management considers the scheduled reversals of future deferred tax assets, projected future taxable income, and tax planning strategies in making this assessment. As a result, management determined it was more likely than not the deferred tax assets would not be realized as of August 31, 2018 and 2017.
Reconciliation between the statutory rate and the effective tax rate is as follows at August 31, 2018 and 2017:
NOTE 6 - LOAN FROM SHAREHOLDER
The Company relies on advances from related parties until such time that the Company can support its operations or attains adequate financing through sales of its equity or traditional debt financing. There is no formal written commitment for continued support by shareholders. Amounts represent advances or amounts paid in satisfaction of liabilities. The advances are considered temporary in nature and have not been formalized by a promissory note.
From Inception through January 14, 2016, the Company’s then sole shareholder and director Alexander Karpetskiy loaned the Company $15,066 to pay for incorporation costs and operating expenses. The loan was non-interest bearing, due upon demand and unsecured. As of January 14, 2016, the amount outstanding was $14,429. As a result of the ownership change described in Note 8, the entire unpaid balance of the loan was discharged by Mr. Karpetskiy.
Since January 14, 2016, a current director who is also one of the Company’s major shareholders has loaned the Company $81,025 to pay for operating expenses. As of August 31, 2017, the amount outstanding was $81,025. As of August 31, 2018, the amount outstanding was $139,817. The loan is non-interest bearing, due upon demand and unsecured.
NOTE 7 - SUBSEQUENT EVENTS
In accordance with ASC 855-10, the Company has analyzed its operations subsequent to August 31, 2018 to the date these financial statements were issued on November 17, 2018, and has determined that it does not have any material subsequent events to disclose in these financial statements.
NOTE 8 - CHANGE OF CONTROL
On January 14, 2016 (the “Closing Date”), Mr. Karpetskiy entered into a Securities Purchase Agreement (the “SPA”) with Hsin-Nan Lin, pursuant to which Mr. Lin acquired from Mr. Karpetskiy all 9 million shares of the Company’s common stock owned by him. Pursuant to the SPA, all of the Company’s outstanding liabilities as of the Closing Date, including the outstanding balance of Mr. Karpetskiy’s loan to the Company, were fully paid by utilizing cash on hand (or discharged in the case of Mr. Karpetskiy’s loan). As a result, the Company was relieved of unpaid shareholder loan in the amount of $14,428, which is recorded by the Company as additional paid-in capital as of August 31, 2016.
NOTE 9 - RECLASSIFICATIONS
Certain reclassifications have been made to the prior period financial information to conform to the presentation used in the financial statements for the years ended August 31, 2018 and 2017.
ITEM 9.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
ITEM 9A.
ITEM 9A. CONTROLS AND PROCEDURES
Our management is responsible for establishing and maintaining a system of disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act) that is designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer’s management, including its principal executive officer or officers and principal financial officer or officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
An evaluation was conducted under the supervision and with the participation of our management of the effectiveness of the design and operation of our disclosure controls and procedures as of August 31, 2018. Based on that evaluation, our management concluded that our disclosure controls and procedures were effective as of such date to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms. Such officers also confirmed that there was no change in our internal control over financial reporting during the year August 31, 2018 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
ITEM 9B.
ITEM 9B. OTHER INFORMATION
None.
PART III
ITEM 10.
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CORPORATE GOVERNANCE
Hsin-Nan Lin has served as the Company’s Chief Executive Officer since January 14, 2016. He also founded Taiwan Luboa Development Co., Ltd. (“Luboa Taiwan”), a water resources management and coal mine development company, in Taiwan in 2011, and has since served as its President. Mr. Lin earned an executive MBA degree from National Chiayi University in Taiwan in 2010.
Chien-Hui Lin has served as Chief Executive Officer of Luboa Taiwan since May 2013. She is also the Chairman of Human Nature Co., Ltd. in Taiwan since January 2014, and I-DO Philanthropy Institute since September 2014, and a Director of Long Term Energy International Co., Ltd. since December 2013. She was an independent writer from 2010 to 2013. Ms. Lin earned an executive MBA degree from National Chiayi University in Taiwan in 2010.
Ta-Chin Lin has served as the Special Assistant to Chief Executive Officer at Luboa Taiwan since April 2015. He was a corporate banking specialist at E-Sun Bank of Taiwan from June 2014 to April 2015, and prior to that was an instructor at Way-to-Win Educational Institute. Mr. Lin graduated from National Taiwan University in 2013 with a B.A. in agricultural economics.
Hsin-Nan Lin and Chien-Hui Lin are husband and wife. Ta-Chin Lin is their son.
During the past ten years none of our current directors or executive officers was involved in any legal proceedings described in subparagraph (f) of Item 401 of Regulations S-K.
Under the Company’s bylaws, each of our directors serve for a term ending at the next following Annual Meeting of Stockholders and until their successors have been duly elected and qualified. Officers serve at the pleasure of the board and, which appoints our Chief Executive Officer, who in turn appoints all other officers. Each officer, including our Chief Executive Officer, holds office until a successor is duly elected and qualified or until his or her earlier death, resignation or removal as hereinafter provided.
CORPORATE GOVERNANCE
Audit Committee
We do not have an audit committee or an audit committee financial expert. We do not have an audit committee financial expert because we believe the cost related to retaining a financial expert at this time is prohibitive. Further, because we have no operations, at the present time, we believe the services of a financial expert are not warranted. Rather the full board performs this function.
Code of Ethics
We have not adopted a Code of Ethics and do not maintain a website. We would, however, plan to consider adopting such a code if and when we become able to execute on our current business plan, at which time we would expect to consider establishing a website capable of hosting any Code of Ethics that we may adopt in the future.
Material Changes to Procedures for Recommending Nominees to the Board of Directors
Between August 31 of 2017 and 2018, there have been no material changes to the procedures by which security holders may recommend nominees to our board of directors.
SIGNIFICANT EMPLOYEES
Other than our directors, we do not expect any other individuals to make a significant contribution to our business.
ITEM 11.
ITEM 11. EXECUTIVE COMPENSATION
We made no payments for compensation disclosable under Item 402(n) of Regulation S-K, 17 CFR § 229.402(n) during the fiscal years ended August 31, 2018 and 2017 to any person serving as our principal executive officer (“PEO”), or any person serving as our principal financial officer (“PFO”). Nor did we make any such payments to the two most highly compensated executive officers other than our PEO and PFO. Accordingly, the table described under item 402(n) is omitted as inapplicable pursuant to Item 402(m)(4).
There are no current employment agreements between the Company and its officers.
We have no pension plans or compensatory plans or other arrangements which provide compensation in the event of a termination of employment or a change in our control.
ITEM 12.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
The following table sets forth information as of August 31, 2018 regarding the ownership of our common stock by each shareholder known by us to be the beneficial owner of more than five percent (5%) of our outstanding shares of common stock (“Significant Holders”), each executive officer and director, and all executive officers and directors as a group. Except as otherwise indicated, each of the shareholders has sole voting and investment power with respect to the shares of common stock beneficially owned.
Beneficial Ownership of Current Directors, Executive Officers and Holders of at least 5% of the Company
(1) Unless otherwise noted, the address for each of the named beneficial owners is: 3F., No. 102, Bo’ai 2nd Road, Zuoying District, Kaohsiung City 813, Taiwan, Province of China.
(2) Under Rule 13d-3, a beneficial owner of a security includes any person who, directly or indirectly, through any contract, arrangement, understanding, relationship, or otherwise has or shares: (i) voting power, which includes the power to vote, or to direct the voting of shares; and (ii) investment power, which includes the power to dispose or direct the disposition of shares. Certain shares may be deemed to be beneficially owned by more than one person (if, for example, persons share the power to vote or the power to dispose of the shares). In addition, shares are deemed to be beneficially owned by a person if the person has the right to acquire the shares (for example, upon exercise of an option) within 60 days of the date as of which the information is provided. In computing the percentage ownership of any person, the amount of shares outstanding is deemed to include the number of shares beneficially owned by such person (and only such person) by reason of these acquisition rights. As a result, the percentage of outstanding shares of any person as shown in this table does not necessarily reflect the person’s actual ownership or voting power with respect to the number of shares actually outstanding.
(3) Unless otherwise noted, the number and percentage of outstanding shares of common stock is based on 11,600,000 shares outstanding as of November 20, 2018.
The information required under Item 201 of Regulation S-K is provided in Item 5 under Part II of this annual report, which is incorporated herein by reference. As of August 31, 2018, the Company has no equity compensation plan, and as a result, has no information to disclose under Item 201 of Regulation S-K.
ITEM 13.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
Since January 14, 2016, a director who is also one of the Company’s major shareholders loaned the Company $139,817 to pay for operating expenses. As of August 31, 2018, the amount outstanding was $139,817. The loan is non-interest bearing, due upon demand and unsecured. Our board considers the terms of this loan to be fair to the Company and on terms no less favorable than we could have secured from another source who is not a related person under Item 404 of Regulation S-K.
As of August 31, 2018, the Company is listed on OTC Bulletin Board, OTCQB, which has corporate governance standards that require independent directors only for Alternative Reporting Companies. The OTCQB Standards define an independent director as person not employed by the Company or having a relationship that our board of directors deems would interfere with independent judgment in carrying out the responsibilities of a director. We are not an Alternative Reporting Company under the OTCQB Standards because we are an SEC Reporting Company. As a result, we are not subject to the corporate governance requirement under section 1.1(7) of the OTCQB Standards requiring independent directors.
ITEM 14.
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
The following table shows the fees that were billed for audit and other services during the fiscal years ended August 31, 2018 and 2017:
(1) Audit Fees - This category includes the audit of our annual financial statements, review of financial statements included in our Quarterly Reports on Form 10-Q, and services that are normally provided by independent auditors in connection with the engagement for fiscal years. This category also includes advice on audit and accounting matters that arose during, or as a result of, the audit or the review of interim financial statements.
(2) Audit-Related Fees - This category consists of assurance and related services by our independent auditors that are reasonably related to the performance of the audit or review of our financial statements and are not reported above under “Audit Fees.”
(3) Tax Fees - This category consists of professional services rendered by our independent auditors for tax compliance and tax advice. The services for the fees disclosed under this category include tax return preparation and technical tax advice.
(4) All Other Fees - This category consists of fees for other miscellaneous items.
PART IV
ITEM 15.
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
(a) The following documents are included in this annual report:
(1) The consolidated financial statements listed in the accompanying Index to consolidated financial statements are filed as part of this annual report.
(2) Schedules are omitted because the required information is not present or is not present in amounts sufficient to require submission of the schedule or because the information required is given in the consolidated financial statements or the notes thereto.
(3) The exhibits required by Item 601 of Regulation S-K and Item 15(b) of this annual report are listed in the Exhibit Index immediately preceding the exhibits and are incorporated herein. We have identified in the Exhibit Index each management contract and compensation plan filed as an exhibit to this annual report in response to Item 15(a) (3) of Form 10-K.
Exhibit Index
The following exhibit index shows those exhibits filed with this annual report and those incorporated herein by reference.
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Dated: November 20, 2018
By: /s/ Chien-Hui Lin
Chien-Hui Lin,
Chief Financial Officer
Pursuant to the requirements of 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/ Hsin-Nan Lin
Chief Executive Officer and Director
November 20, 2018
Hsin-Nan Lin
/s/ Chien-Hui Lin
Chief Financial Officer and Director
November 20, 2018
Chien-Hui Lin
/s/ Ta-Chin Lin
Director
November 20, 2018
Ta-Chin Lin