Item 1.
Business
China Elite Information Co., Ltd., formerly known as Relocate411.com, Inc., was initially organized under the laws of the State of Delaware on December 19, 1997 under the name of Stateside Fundings, Inc.
A Summary of What We Do
The Company’s has no current or specific plan to identify and acquire a favorable business opportunity. However, Company does not plan to limit its options, but will evaluate each opportunity on its merits.
At present we have no real property and we maintain an office at the offices at c/o DeHeng Chen, LLC, 233 Broadway, Suite 2200, New York, New York 10279. Our telephone number is (212) 608-6500.
Our History
On December 19, 1997, we were organized in the State of Delaware under the name of Stateside Fundings, Inc. We initially adopted a fiscal year ending November 30. On January 26, 2000, the stockholders of Relocate411.com, Inc., a New York corporation, completed a merger and stock exchange with us. At the same time as the merger, we issued 5,175,000 shares of our common stock pursuant to a private placement offering and received net proceeds of $1,354,250. The net proceeds received were after a payment of $150,000 to redeem 4,100,000 shares of our common stock from our founder. As part of the merger and stock exchange, we issued 6,600,000 shares of our common stock to the shareholders of Relocate411.com, Inc. in exchange for receiving all of the shares (66 shares) of Relocate411.com, Inc. Relocate411.com, Inc. became our wholly owned subsidiary. On January 27, 2000, we filed a certificate of amendment changing our name to Relocate411.com, Inc.
Relocate411.com, Inc., the New York corporation, was a predecessor of our company as that term is defined by Item 405 of Regulation C. Relocate 411.com, Inc., the New York corporation, which was incorporated in August 1999, was a development stage Internet based company whose goal was to develop a web site to be utilized in various real estate services such as relocation, listings of real estate sales or rentals, mortgage information and other real estate related information or content. The merger and stock exchange between us and Relocate411.com, Inc., the New York corporation, was completed on January 26, 2000. Prior to such time the business plan of Stateside Fundings, Inc. was to function as a “blank check company” as that term is defined in Rule 419 of Regulation C. None of the promoters of the blank check company, Stateside Fundings, Inc., were related in any way to the officers, directors, affiliates or associates of our present company.
On May 21, 2004, Jandah Management Limited (“Jandah”), Glory Way Holdings, Limited (“GWH”) and Good Business Technology Limited (“GBT”), each a corporation organized under the laws of the British Virgin Islands, entered into privately negotiated transactions with the stockholders of Relocate411.com, Inc. (the “Company”) to purchase an aggregate of 10,976,000 shares of common stock of the Company, representing 98% of the issued and outstanding shares, for an aggregate purchase price of $350,000.
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Jandah acquired 9,276,000 shares of common stock from the three largest shareholders of the Company, Darrell Lerner, Byron Lerner and James Tubbs, for an aggregate purchase price of $307,500. Darrell Lerner retained 224,000 shares of common stock. As a condition to closing, the Company and Mr. Darrell Lerner entered into a six-month consulting agreement pursuant to which Mr. Darrell Lerner assisted the Company with various transition issues and provided other business consulting services. Under this consulting agreement, Mr. Darrell Lerner was paid an aggregate consulting fee of $150,000.
GWH acquired 396,000 shares of common stock for an aggregate purchase price of $9,900 from each of the following selling security holders in separate agreements listed in the amendment number 8 to the Company’s registration statement on Form SB-2/A (SEC File Number 333-100803) (the “SB-2”): Anslow & Jaclin, LLP, Frank Massaro, Michael and Thelma Hartman, Nicholas A. Waslyn, Eric Tjaden, Margaret Indelicato, Juan C. Morales, Sheldon Shalom, Patricia Faro and Philip Mazzella. GWH also acquired an aggregate of 450,000 shares of common stock for an aggregate purchase price of $11,250 from each of Barry Manko (250,000 shares) and Grushko & Mittman (200,000 shares).
GBT acquired an aggregate of 854,000 shares of common stock for an aggregate purchase price of $21,350 from each of the following selling security holders in separate agreements listed in the SB-2: Richard Zapolski, William Grimm, Richard Volpe, Mark J. Parendo, Mitch Hershkowitz, Kristine Gentile, Robert M. J.Hartman, Danielle L. Hartman, Martin Miller, Dolores E. Miller, Dolores E. Miller a/c/f Dillon Engel, Drew Goldberg, Carol Sitte, Karen Pasteressa a/c/f Samantha Pasteressa, Desert Green, Inc., Robert Giambrone, Anthony Giambrone, Melvin D. Bernstein, Linda Bernstein, Beth Sussman, Jeffrey Wenzel, Tracey Wenzel, Harold Sussman, Amy Sussman and Meg L. Sussman. In connection with, and as a condition to the closing of these stock purchase transactions, Darrell Lerner resigned as the sole officer of the Company effective as of May 21, 2004. Pursuant to the Company’s Bylaws and applicable SEC regulations, Mr. Lerner appointed Li Kin Shing, the sole shareholder of Jandah, as the President of the Company and, effective as of June 4, 2004, as the sole member of the Board of Directors.
On July 21, 2004, our Board of Directors approved the change of the jurisdiction under which the Company was incorporated from the State of Delaware to the British Virgin Islands (“BVI”) and reincorporated as a British Virgin Islands International Business Company, pursuant to Section 390 of the Delaware General Corporations Law and the applicable laws of the BVI. In connection with this reincorporation, we changed our name from “Relocate 411.com, Inc.” to “China Elite Information Co., Ltd.” As a result of the reincorporation, we adopted new corporate governance documents consisting of a Memorandum of Association, Articles of Incorporation and Articles of Continuation.
Our Business
During the past year, our management has made only limited attempts to identify and pursue profitable business opportunities through mergers and acquisitions as such opportunities became available.
We have not been involved in any bankruptcy, receivership or similar proceeding. We have not been involved in any material reclassification, merger, consolidation, or purchase or sale of a significant amount of assets not in the ordinary course of business.
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We have not yet entered into any stock purchase agreement, nor do we have any commitment to enter into or become engaged in any transaction as of the date of this filing.
We have no current plans to (i) purchase or sell any plant or equipment, (ii) change the number of employees, or (iii) incur any significant research and development expenses. Our plans may change if we have an opportunity to identify and acquire a suitable business acquisition.
We believe that we are not a blank check company as that term is defined in Rule 419 of Regulation C under the Rules of the Securities Act of 1933 (the “Securities Act”). Except as part of our strategy to expand and grow our business as described above, we do not have any intention of merging with another company or allowing ourselves to be acquired by another company, or to act as a blank check company as defined in Regulation C.
Employees
We currently employ, on an as-needed basis, consultants or other professionals as necessary to implement our plan of operation. We will employ additional people as we continue to implement our plan of operation. None of our consultants are covered by a collective bargaining agreement and we believe that our relationship with our consultants is satisfactory.
Item 1A.
Item 1A.
Risk Factors
As a Smaller Reporting Company, we are not required to provide the information required by this item.
Item 1B.
Item 1B.
Unresolved Staff Comments
None.
Item 2.
Item 2.
Properties
We currently use office space in a building located at c/o DeHeng Chen, LLC, 233 Broadway, Suite 2200, New York, New York 10279. We do not have a formal lease with DeHeng Chen. We have no available cash to invest in real estate, real estate mortgages and/or securities or other interests in persons primarily engaged in real estate activities. If we identify and acquire a suitable business opportunity, we may change this investment policy without a vote of our shareholders. Any suitable business that we may acquire will primarily be for income, although we do reserve the right to acquire any such suitable business for possible capital gain.
Item 3.
Item 3.
Legal Proceedings
To the best of our knowledge, there are no known or pending litigation proceedings against us.
Item 4.
Item 4.
Mine Safety Disclosures
Not applicable.
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PART II
Item 5.
Item 5.
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
There is no established public trading market for our securities. We intend to seek a market maker to apply for eligibility to quote our securities on the OTC Bulletin Board in the United States. Our shares are not and have not been listed or quoted on any exchange or quotation system.
Number of Shareholders as of November 30, 2019 - 9.
Currently, we do not have any outstanding options or warrants to purchase, or securities convertible into, our shares of common stock.
Rule 144 Shares
As of March 13, 2020, we had a total of 11,200,000 common shares outstanding and as of March 13, 2020, only 1,250,000 common shares are available for resale to the public without compliance with Rule 144 (as explained below). Such shares are comprised of 396,000 shares of our common stock acquired by GWH from the selling security holders under the SB-2 and 854,000 shares of our common stock acquired by GBT from the selling security holders under the SB-2. All such shares may be sold without complying with the volume and trading limitations of Rule 144 of the Securities Act.
Jandah acquired 9,276,000 shares of common stock from the three largest shareholders of the Company, Darrell Lerner, Byron Lerner and James Tubbs. These shares were acquired by Jandah from affiliates of the Company in a private transaction and, therefore, became eligible for resale under Rule 144 on May 21, 2005.
In general, under Rule 144, a person who is not an affiliate of an issuer and who has beneficially owned shares of an issuer’s stock for at least six months may freely sell some or all of such shares provided that the issuer has complied with the current public information requirements of Rule 144(c)(1). A person who is not an affiliate of the issuer and who has beneficially owned shares of an issuer’s stock for at least one year may sell some or all of such shares without any restrictions. A person who is an affiliate of an issuer and who has beneficially owned the shares of an issuer’s stock for at least six months is entitled to sell within any three-month period a number of shares that does not exceed the greater of:
1.
1% of the number of shares of the Company’s common stock then outstanding which, in our case, would equal approximately 112,000 shares as of March 13, 2020; or
2.
The average weekly trading volume of the Company’s common stock during the four calendar weeks preceding the filing of a notice on form 144 with respect to the sale.
Sales by affiliates under Rule 144 are also subject to manner of sale provisions and notice requirements and to the availability of current public information about the Company.
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Dividends
To date, we have not declared or paid any dividends on our common shares. We currently do not anticipate paying any dividends in the foreseeable future on our common shares. Although we intend to retain our earnings, if any, to finance the development and growth of our business, our Board of Directors will have the discretion to declare and pay dividends in the future. Payment of dividends in the future will depend upon our earnings, capital requirements, and other factors, which our Board of Directors may deem relevant.
Item 6.
Item 6.
Selected Financial Data
As a Smaller Reporting Company, we are not required to provide the information required by this item.
Item 7.
Item 7.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis provides information which management believes is relevant to an assessment and understanding of our results of operations and financial condition. The discussion should be read in conjunction with our financial statements and notes thereto appearing in this Form 10-K.
Overview
The Company has limited operations solely intended to maintain its status as a reporting public shell and has sustained substantial operating losses in recent years resulting in a substantial accumulated deficit of $1,125,606 as at November 30, 2019.
Critical Accounting Policies
Based on the Company’s current level of limited operations, the Company does not believe it has any critical accounting policies or estimates at this time.
Results of Operations - Year Ended November 30, 2019 Compared to the Year Ended November 30, 2018
General and Administrative
General and administrative expenses consist primarily of public company compliance expenses, including legal and accounting expenses. General and administrative expenses for the year ended November 30, 2019 increased 7.6%, or $2,561, to $36,093 from $33,532 for the year ended November 30, 2018. The higher expenses were primarily due to the increase in EDGAR filing expenses.
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Capital Resources and Liquidity
The Company does not currently have any cash or have any other significant assets. However, the Company believes that, based on its oral commitment from its President and majority shareholder to fund the Company’s operating activities at its current level of expenditures, it has sufficient resources to meet the anticipated needs of its operations, such as maintaining its required continuous disclosure and reporting requirements with the Securities and Exchange Commission, for the next twelve months, though there can be no assurances to that effect. The Company had no revenues for the year ended November 30, 2019 and its need for capital may change dramatically if it acquires a suitable business opportunity during the next twelve months. Therefore, the Company plans to rely on shareholder loans and the raising of debt or equity capital to continue its operations. There is no assurance the Company will be successful in raising the needed capital.
We have incurred net losses since inception, expect to incur losses in the future associated with the costs of operating as a public company, and may never achieve revenues or profitability unless we complete a successful merger. We have never recognized any revenue from the sale of products or any other source. Our operating losses have had, and will continue to have, an adverse impact on our working capital, total assets and stockholders’ equity. We do not know when or if we will ever generate revenue or become profitable because of the significant uncertainties with respect to our ability to acquire a suitable business opportunity.
Accordingly, in their report dated March 13, 2020, our independent registered public accounting firm expressed substantial doubts as to the Company’s ability to continue as a going concern.
Conflicts of Interest
Certain conflicts of interest have existed and will continue to exist between management, their affiliates and the Company. Management has other interests including business interests to which he devotes his primary attention. Management may continue to do so notwithstanding the fact that management time should be devoted to the business of the Company and in addition, management may negotiate an acquisition resulting in a conflict of interest.
Off-Balance Sheet Arrangements
We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on the Company’s financial conditions, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.
Item 7A.
Item 7A.
Quantitative and Qualitative Disclosures about Market Risk
As a Smaller Reporting Company, we are not required to provide the information required by this item.
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Item 8.
Item 8.
Financial Statements and Supplementary Data
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Report of Independent Registered Public Accounting Firm
To the Board of Directors of
China Elite Information Co., Ltd.:
Opinion on the Financial Statements
We have audited the accompanying balance sheets of China Elite Information Co., Ltd. as of November 30, 2019 and 2018, and the related statements of operations, stockholders’ deficiency, and cash flows for the two years ended November 30, 2019 and 2018, and the related notes. In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of November 30, 2019 and 2018, and the results of its operations and its cash flows for each of the years in the two period ended November 30, 2019, in conformity with accounting principles generally accepted in the United States of America.
Basis of 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 audits. 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 audits, 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 audits 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 audits 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 audits provide a reasonable basis for our opinion.
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company has limited operations and continued net losses. This raises substantial doubt about its ability to continue as a going concern. Management has no current plan in regard to these matters as is also discussed in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
/s/ Keeton CPA
We have served as the Company’s auditor since 2009
Keeton CPA
Henderson, NV
March 13, 2020
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CHINA ELITE INFORMATION CO., LTD.
BALANCE SHEETS
NOVEMBER 30, 2019 AND 2018
The accompanying notes are an integral part of these financial statements.
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CHINA ELITE INFORMATION CO., LTD.
STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED NOVEMBER 30, 2019 AND 2018
The accompanying notes are an integral part of these financial statements.
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CHINA ELITE INFORMATION CO., LTD.
STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIENCY
FOR THE YEARS ENDED NOVEMBER 30, 2019 AND 2018
The accompanying notes are an integral part of these financial statements.
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CHINA ELITE INFORMATION CO., LTD.
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED NOVEMBER 30, 2019 AND 2018
The accompanying notes are an integral part of these financial statements.
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CHINA ELITE INFORMATION CO., LTD.
Notes to Financial Statements
November 30, 2019
(Expressed in U.S. Dollars)
1. Business Formation and Continuance of Operations
Business Formation
China Elite Information Co., Ltd. (formerly known as “Relocate411.com, Inc.” and “Stateside Fundings, Inc.”) was incorporated as a British Virgin Islands International Business Company, pursuant to Section 390 of the Delaware General Corporations Law and the applicable laws of the BVI.
The Company currently is a reporting public shell with limited operations.
The Company has no real property and maintains an office at the offices at c/o DeHeng Chen, LLC, 233 Broadway, Suite 2200, New York, New York 10279.
Going Concern
These financial statements have been prepared in accordance with generally accepted accounting principles in the United States applicable to a going concern, which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business. However, as is evident in these financial statements, Management has considered that the Company has no assets, limited operations and has sustained substantial operating losses in recent years resulting in a substantial accumulated deficit of $1,125,606. For the year ended November 30, 2019, the Company has a net loss of $36,093. As a result of its evaluation of conditions and events, Management has concluded they are of such significance as to raise substantial doubt as to the Company’s ability to meet its financial obligations as they come due and continue as a going concern.
The Company’s cash requirements for working capital have been satisfied for the past several years through loans from its majority shareholder and the Company plans to seek additional capital as needed through shareholder loans and/or a debt or equity financing to continue its operations. The Company’s President, who is also the majority shareholder, has orally agreed to fund its operations for at least the next twelve months. However, Management believes that the Company’s need for capital may change dramatically if it identifies and acquires a suitable business opportunity during that period. In view of these matters, the continued existence of the Company and its ability to succeed in any future operations is dependent upon its ability to meet its financing requirements on a continuing basis.
There can be no assurance that such additional funds will be available for the Company on acceptable terms, if at all. The Company’s ability to achieve these objectives cannot be determined at this time. If the Company is unsuccessful in its endeavors, it may have to cease operations. These financial statements do not include any adjustments that might result from this uncertainty.
Management currently has no specific plan to address these conditions except to continue to maintain its status as a reporting public shell for the foreseeable future.
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CHINA ELITE INFORMATION CO., LTD.
Notes to Financial Statements - (Continued)
2. Significant Accounting Policies
Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates and assumptions.
Fiscal Year End
The Company elected November 30 as its fiscal year end date.
Loss Per Share
Basic loss per share is computed as net loss divided by the weighted average number of shares outstanding during the period in accordance with the Earnings Per Share Topic of FASB ASC. No diluted per share data is presented because there are losses in all periods. In addition, there are no potentially dilutive securities outstanding.
3. Related Party Transactions
Loans from shareholders - Loans from shareholders represent a series of advances from the majority stockholder to fund working capital requirements. There is no note and the amounts are unsecured, interest-free, and repayable on demand. The Company’s President has orally agreed to fund the Company’s operations for at least the next twelve months.
Control of Company - The Company’s President, Chief Executive Officer and majority shareholder owns approximately 83% of the Company’s shares of common stock outstanding as of November 30, 2019 and 2018, and as of the date of issuance of these financial statements.
Director’s compensation - The Company’s sole director also serves as CEO and CFO of the Company, who provides highly limited services to the Company and the value of which is immaterial. During the fiscal year ended November 30, 2019 and 2018, the Company’s sole director received no compensation.
4. Income tax loss carryforwards
There are no income tax loss carryforwards available to the Company where it is required to file tax returns.
END OF FINANCIAL STATEMENTS
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Item 9.
Item 9.
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
None.
Item 9A.
Item 9A.
Controls and Procedures
Evaluation of Disclosure Controls and Procedures
The Company’s Chief Executive Officer and Chief Financial Officer (the “Certifying Officer”) evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report. Based on that evaluation, the Certifying Officer concluded that our disclosure controls and procedures are effective to ensure that information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act of 1934 (the “Exchange Act”) is (a) accumulated and communicated to our management, including our Certifying Officer, as appropriate to allow timely decisions regarding required disclosure; and (b) recorded, processed, summarized and reported, within the time specified in the SEC’s rules and forms. Since that evaluation process was completed, there have been no significant changes in our disclosure controls or in other factors that could significantly affect these controls.
Management’s Report on Internal Control Over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Management assessed the effectiveness of our internal control over financial reporting as of November 30, 2019. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control - Integrated Framework revised in 2013. The COSO framework summarizes each of the components of a company’s internal control system, including (i) the control environment, (ii) risk assessment, (iii) control activities, (iv) information and communication, and (v) monitoring. Based on management’s assessment and those criteria, management believes that, as of November 30, 2019, the Company maintained effective internal control over financial reporting.
This annual report does not include a report of our registered public accounting firm regarding internal control over financial reporting pursuant to rules of the Securities and Exchange Commission that permits us to provide only management’s report in this annual report.
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Changes in Internal Controls over Financial Reporting
There were no changes in the Company’s internal control over financial reporting during the last fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
Item 9B.
Item 9B.
Other Information
None.
PART III
Item 10.
Item 10.
Directors, Executive Officers and Corporate Governance
Directors and Executive Officers
Set forth below is information regarding the sole director and executive officer of the Company:
Mr. Li is CEO, President and a director of the Company. Mr. Li acts as the Chairman and non-executive director of Directel Holdings Limited (“Directel”), a company incorporated in the Cayman Islands and listed on the Growth Enterprise Market of Hong Kong Stock Exchange. Directel is a mobile virtual network operator with operations primarily in Hong Kong. Mr. Li was the Chairman, CEO and executive director of International Elite Ltd. (“International Elite”), a company incorporated in the Cayman Islands and listed on the Main Board of Hong Kong Stock Exchange, and he resigned effective December 28, 2018. International Elite is one of the largest centralized single-call location outsourcing customer service call centers in Guangzhou province of the People’s Republic of China. Mr. Li was the Chairman of the Board, Chief Executive Officer and Secretary of Great Wall Acquisition Corp., a blank check company organized for the purpose of effecting a merger, capital stock exchange, asset acquisition or other similar business combination with a company having its primary operations in the People’s Republic of China, and he resigned effective February 2, 2007. From October 1997 to September 1999, Mr. Li served as a member of the board of directors of UTStarcom, Inc., a publicly traded company listed on the Nasdaq National Market (Symbol: UTSI), which designs, manufactures and markets broadband, narrowband and wireless access technology. During that same period, Mr. Li also served as the chief executive officer of UTStarcom’s subsidiary, UTStarcom Hong Kong Limited.
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Corporate Governance
The Board
During our fiscal year ended November 30, 2019, the Company’s Board consisted of a sole director, Mr. Li. In accordance with the British Virgin Islands Law and the Company’s Memorandum of Association and Articles of Association, the Company’s business and affairs are managed under the direction of the Board.
Meetings of the Board
The Company’s Board consisted of a sole director during the fiscal year ended November 30, 2019, and therefore, no Board meetings were held and there were no resolutions adopted by unanimous written consent.
Committees of the Board
Since the Company’s Board consists of a sole director, the Board did not establish any committees, including, but not limited to a separately-designated standing audit committee. Currently, the Company’s Board of Directors acts as the audit committee. The Company’s sole director, Mr. Li, is not an “audit committee financial expert” within the applicable definition of the Securities and Exchange Commission. The Company will not have an “audit committee financial expert” until the Board is expanded and additional directors are added.
Policy Regarding Director Attendance at Annual Meetings
The Company does not have a formal policy regarding Board attendance at annual meetings and the Company did not hold an annual meeting of shareholders during the year ended November 30, 2019.
Stockholder Communications with the Board
The Board currently does not have a formal process for stockholders to send communications to the Board. Nevertheless, the Board desires that the views of stockholders are heard by the Board and that appropriate responses are provided to stockholders on a timely basis. The Board does not recommend that formal communication procedures be adopted at this time because it believes that informal communications are sufficient to communicate questions, comments and observations that could be useful to the Board. However, stockholders wishing to normally communicate with the Board may send communications directly to our sole director, Mr. Li, at c/o DeHeng Chen, LLC 233 Broadway, Suite 2200, New York, NY, 10279; Attention: Xiaomin Chen, Esq.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Exchange Act requires our directors and executive officers, and persons who own more than 10 percent of our common stock, to file with the SEC initial reports of ownership and reports of changes in ownership, furnishing us with copies of all Section 16(a) forms they file. To the best of our knowledge, based solely on review of the copies of such reports furnished to us, all Section 16(a) filing requirements applicable to our officers and directors were complied with during the year ended November 30, 2019.
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Code of Ethics
We adopted a code of ethics in February 2005, which applies to our principal executive officer, principal financial officer, and principal accounting officer or controller, and/or persons performing similar functions.
Involvement in Certain Legal Proceedings
Our sole director and executive officer has not, during the past ten years:
•
been convicted in a criminal proceeding or been subject to a pending criminal proceeding (excluding traffic violations and other minor offenses);
•
had any bankruptcy petition filed by or against any business of which he or she was a general partner or executive officer, either at the time of the bankruptcy or within two years prior to that time;
•
been subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his or her involvement in any type of business, securities, futures, commodities or banking activities; or
•
been found by a court of competent jurisdiction (in a civil action), the Securities and Exchange Commission or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated.
Item 11.
Item 11.
Executive Compensation
Compensation of Directors and Executive Officers
Mr. Li Kin Shing was appointed as our President, CEO and CFO, effective June 4, 2004, and is currently our sole officer. No compensation was paid to any directors or officers in the fiscal years ended November 30, 2018 and 2019.
We entered into a Consulting Agreement with Darrell Lerner, our former director, officer and 10% holder, effective May 21, 2004. Under the terms of his agreement, Mr. Lerner provided us assistance with certain post-transaction and transaction activities and transition matters in connection with the consummation of transactions whereby Jandah, GWH and GBT purchased an aggregate of 98% of our issued and outstanding capital stock as well as other matters. The Consulting Agreement was a condition to closing of the acquisition by Jandah, GWH and GBT. Pursuant to the Consulting Agreement, Mr. Lerner’s services were retained for a period of six months and Mr. Lerner was paid an aggregate of $150,000 for services rendered under the Consulting Agreement. The Consulting Agreement expired on November 21, 2004 and, by its terms, was not renewed.
Our stockholders may in the future determine to pay our directors’ fees and reimburse our directors for expenses related to their activities.
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Stock Options
We did not grant stock options in the fiscal years ended November 30, 2019 or 2018 to any director or executive officer. No Executive Officer held options during the fiscal years ended November 30, 2019 and 2018. The Company does not have any stock options outstanding.
Executive Employment Contracts
We do not currently have any employment agreements with our sole officer, nor are we planning to execute any such agreement in the future.
Item 12.
Item 12.
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
Principal Stockholders
The following table sets forth certain information, as of March 13, 2020, with respect to persons known to the Company to be the beneficial owners, directly and indirectly, of more than 5% of the Company’s Common shares and beneficial ownership of such Common shares by directors and executive officers of the Company.
(1)
As required by regulations of the SEC, the number of shares in the table includes shares which can be purchased within 60 days, or, shares with respect to which a person may obtain voting power or investment power within 60 days. Also required by such regulations, each percentage reported in the table for these individuals is calculated as though shares that can be purchased within 60 days have been purchased by the respective person or group and are outstanding.
(2)
Under SEC rules, Mr. Li is considered to be the indirect beneficial owner of the shares held by Jandah Management Limited, since he is the sole shareholder of Jandah Management Limited and as such, possesses sole investment and voting power over the Company’s shares held by it.
Changes in Control
We are not aware of any arrangements which may at a subsequent date result in a change in control of the Company.
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Equity Compensation Plan Information
The Company has not adopted any equity compensation plans.
Item 13.
Item 13.
Certain Relationships and Related Transactions, and Director Independence
Director Independence
Because he is also an executive officer, the Company’s sole director does not qualify as an independent director under Rule 10A-3 of the Exchange Act, nor under Nasdaq Listing Rule 5605(a)(2).
Certain Relationships and Related Transactions
As of November 30, 2019, the Company has received unsecured and non-interest bearing loans totaling $845,261 from Jandah Management Limited, of which Mr. Li is the sole shareholder. The loans are due on demand.
Although we have no present intention to do so, we may, in the future, enter into other transactions and agreements relating to our business with our directors, officers, principal stockholders and other affiliates. We intend for all such transactions and agreements to be on terms no less favorable to us than those obtainable from unaffiliated third parties on an arm’s-length basis. In addition, the approval of a majority of our disinterested directors will be required for any such transactions or agreements. As set forth above, we do not anticipate any related party transactions in the next 12 months. Nevertheless, should any related party transactions occur while there are no disinterested board members, Li Kin Shing, our sole director and officer, shall continue to have the sole vote and we shall rely on his integrity, good judgment, and fiduciary duties to make a fair and equitable decision on our behalf and one behalf of our stockholders.
We have no plans to issue any additional securities to management, promoters, affiliates or associates at the present time. If our Board of Directors adopts an employee stock option or pension plan, we may issue additional shares according to the terms of such plan. Although we have a very large amount of authorized but un-issued common stock, we intend to reserve this stock to implement our plan of operations. We may attempt to use shares as consideration, instead of cash. We may issue shares if we engage in a merger or acquisition or we may issue shares as consideration for services rendered to us or in other transactions in the normal course of business. In such a case, an indeterminate amount of unissued stock may be issued by us.
We have no present intention to acquire any assets by any promoter, management or their affiliates or associates.
There are no arrangements or agreements between non-management shareholders and management under which non-management shareholders may directly or indirectly participate in or influence our affairs. In the future, we will present all possible transactions between the Company and its officers, directors or 5% stockholders, and their affiliates to the Board of Directors for its consideration and approval. Any such transaction will require approval by a majority of the directors and such transactions will be on terms no less favorable than those available to disinterested third parties.
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Item 14.
Item 14.
Principal Accountant Fees and Services
The following table is a summary of the fees billed for the audit and other services provided by our independent registered public accounting firms:
Audit Fees. Consists of fees billed and estimated billable for professional services rendered for the audit of our financial statements and review of our interim financial statements included in quarterly reports and services that are normally provided by our auditors in connection with statutory and regulatory filings or engagements, including registration statements and post-effective amendments to previously filed registration statements.
Audit-Related Fees. Consists of fees billed for assurance and related services that are reasonably related to the performance of the audit or review of our financial statements and are not reported under “Audit fees.” These services include employee benefit plan audits, accounting consultations in connection with acquisitions, attestation services that are not required by statute or regulation, and consultations concerning financial accounting and reporting standards.
Tax Fees. Consists of fees billed for professional services for tax compliance, tax advice, and tax planning. These services include assistance regarding federal, state and international tax compliance, tax audit defense, mergers and acquisitions, and international tax planning.
All Other Fees. No other fees have been billed for products and services billed by our accountants.
Audit Committee Pre-Approval Policies and Procedures
Our Board, which consists of one director, does not have an Audit Committee. The Company’s current policy is that the sole director pre-approves all audit and non-audit services that are to be performed and fees to be charged by our independent auditor, Keeton CPA, to assure that the provision of these services does not impair the independence of such auditor. The sole director pre-approved of all audit services and fees of our independent auditor, Keeton CPA, for the year ended November 30, 2019. Our independent auditors did not provide us with any non-audit services during the year ended November 30, 2019.
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PART IV
Item 15.
Item 15.
Exhibits, Financial Statement Schedules
The following documents are filed as part of this report:
Financial Statements and Financial Statement Schedules
The financial statements are included in Item 8 of this Form 10-K.
Exhibits Required by Item 601 of Regulation S-K
#
Filed herewith.
*
Filed as an exhibit to the Current Report on Form 8-K, dated August 12, 2004, filed on August 17, 2004 and incorporated herein by reference.
**
Filed as an exhibit to the Current Report on Form 8-K, dated May 21, 2004, filed on May 25, 2004 and incorporated herein by reference.
***
Filed as an exhibit to the Form 10-KSB for the fiscal year ended November 30, 2004, filed on March 15, 2005 and incorporated herein by reference.
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SIGNATURES
Pursuant to the requirements of Sections 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
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 date indicated.
Signature
Title
Date
/s/ Li Kin Shing
President, CEO and Director
March 13, 2020
Li Kin Shing
(Principal Executive Officer and Principal Financial and Accounting Officer)