The accompanying notes
are an integral part of these condensed consolidated financial statements.
The accompanying notes
are an integral part of these condensed consolidated financial statements.
Notes to the Condensed
Consolidated Financial Statements
(Unaudited)
NOTE 1 – ORGANIZATION AND PRINCIPAL
ACTIVITIES
Asia Equity Exchange Group, Inc. (the “Company”
or “AEEX”) is a Nevada corporation incorporated on July 15, 2013, under the name “I In The Sky, Inc.” (“SYYF”).
The Company filed a name change to AEEX with the state of Nevada on July 22, 2015. It is based in Hong Kong, the People’s
Republic of China. The accounting and reporting policies of the Company conform to accounting principles generally accepted in
the United States of America, and the Company’s fiscal year ends on December 31.
The Company’s original business plan
was to manufacture and market low cost GPS tracking devices and software to businesses and families. However this business was
not successful and the Company had no revenues generated from its business until April 12, 2016 when it completed the reverse acquisition
of Asia Equity Exchange Group Company Limited (“AEEGCL”).
On November 30, 2015, the Company executed
a Sale and Purchase Agreement (the “Purchase Agreement”) to acquire 100% of the shares and assets of AEEGCL (the “Acquisition”).
Pursuant to the Purchase Agreement, the Company issued one billion (1,000,000,000) shares of common stock to the owners of AEEGCL.
The Company had a total of 146,000,000 shares of common stock outstanding immediately prior to Closing. After the Closing, the
Company had a total of 1,146,000,000 shares of common stock outstanding, with the AEEGCL Stockholders owning 87.3% of the total
issued and outstanding shares of the Company’s common stock.
The Closing of the transactions contemplated
by the Purchase Agreement took place on April 12, 2016 (“Closing”). As a result, AEEGCL became a wholly-owned subsidiary
of the Company and AEEGCL’s former shareholders own the majority of the Company’s voting stock. The Company’s
previous business plan was terminated and the Company is currently engaged in the business of AEEGCL.
AEEGCL is a company incorporated under the
laws of Samoa on May 29, 2015. It offers an international equity assistance and information service platform designed to provide
listing assistance services, equity investment financing information and public relationship services to enterprises in Asia, mainly
in China. AEEGCL owns 100% of AEEX (HK) International Finance Service Limited (formerly known as Yinfu International Enterprise
Limited, “AEEX HK”), a Hong Kong corporation incorporated on December 22, 2014. AEEX HK owns 100% of Yinfu Guotai Investment
Consultant (Shenzhen) Co. Ltd. (“Yinfu”), a corporation incorporated in the People’s Republic of China (the “PRC”)
on April 15, 2015. Both AEEX HK and Yinfu are engaged in the provision of investment and corporate management consultancy services.
The acquisition of AEEGCL and its subsidiaries
by the Company was accounted for as a reverse merger because on a post-merger basis, the former shareholders of AEEGCL held a majority
of the outstanding common stock of the Company on a voting and fully-diluted basis. As a result, AEEGCL is deemed to be the acquirer
for accounting purposes. Accordingly, the consolidated financial statement data presented are those of AEEGCL, recorded at the
historical basis of AEEGCL, for all periods prior to the Company’s acquisition of AEEGCL on April 12, 2016, and the financial
statements of the historical operations of the consolidated companies from the effective date of the Closing.
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
Basis of Presentation
The interim condensed consolidated financial
statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S.
GAAP”).
The interim condensed consolidated financial
information as of September 30, 2016 and for the three and nine month periods ended September 30, 2016 and 2015 have been prepared
without audit, pursuant to the rules and regulations of the SEC. Certain information and footnote disclosures, which are normally
included in consolidated financial statements prepared in accordance with U.S. GAAP have not been included. These unaudited condensed
consolidated financial statements and notes thereto should be read in conjunction with the audited financial statements of AEEGCL
for the period ended December 31, 2015, which are included in the Current Report on Form 8-K filed with the SEC on March 31, 2016.
In the opinion of management, all adjustments
(which include all significant normal and recurring adjustments) necessary to present a fair statement of the Company’s interim
condensed consolidated financial position as of September 30, 2016, its interim condensed consolidated results of operations and
cash flows for the three and nine month periods ended September 30, 2016 and 2015, as applicable, have been made. The interim results
of operations are not necessarily indicative of the operating results for the full fiscal year or any future periods.
Basis of Consolidation
The consolidated financial statements include
the financial statements of the Company and its subsidiaries. All significant inter-company balances and transactions within the
Company have been eliminated upon consolidation.
Use of Estimates
The preparation of financial statements in
conformity with accounting principles generally accepted in the United States of America 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. The estimates and judgments will also affect the reported amounts for certain revenues
and expenses during the reporting period. Actual results could differ from these good faith estimates and judgments.
Cash and Cash Equivalents
Cash and cash equivalents include cash in banks,
money market funds, and certificates of term deposits with maturities of less than three months from inception, which are readily
convertible to known amounts of cash and which, in the opinion of management, are subject to an insignificant risk of loss in value.
Intangible assets
Intangible assets consist of computer software
and are recorded at cost. Amortization is calculated using the straight line method over the estimated useful life of the computer
software, which is 5 years.
Property, plant and equipment
Property, plant and equipment are recorded
at cost. Depreciation is calculated using the straight line method over the estimated useful lives of the assets. The useful lives
are as follows:
Office equipment
|
|
5 years
|
Motor vehicles
|
|
5 years
|
Maintenance and repairs are charged to operations
as incurred. Expenditures which substantially increase the useful lives of the related assets are capitalized. When properties
are disposed of, the related costs and accumulated depreciation are removed from the accounts and any gain or loss is reported
in the period the transaction takes place.
Impairment of long-lived assets
The long-lived assets held and used by the
Company are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of assets may
not be recoverable. It is reasonably possible that these assets could become impaired as a result of technology or other industry
changes. Determination of recoverability of assets to be held and used is by comparing the carrying amount of an asset to future
net undiscounted cash flows to be generated by the assets. If such assets are considered to be impaired, the impairment to be recognized
is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed
of are reported at the lower of the carrying amount or fair value less costs to sell. During the periods presented, the Company
did not impair any plant and equipment.
Income tax
The Company accounts for income taxes under
the provisions of ASC Topic 740 “Accounting for Income Taxes.” Under ASC Topic 740, deferred tax assets and liabilities
are determined based on the difference between the financial statement carrying amounts and the tax bases of assets and liabilities
using enacted tax rates in effect in the years in which the differences are expected to reverse.
The provision for income tax is based on the
results for the period as adjusted for items, which are non-assessable or disallowed. It is calculated using tax rates that have
been enacted or substantively enacted at the balance sheet date. Deferred tax is accounted for using the balance sheet liability
method in respect of temporary differences arising from differences between the carrying amount of assets and liabilities in the
financial statements and the corresponding tax basis used in the computation of assessable tax profit. In principle, deferred tax
liabilities are recognized for all taxable temporary differences, and deferred tax assets are recognized to the extent that it
is probable that taxable profit will be available against which deductible temporary differences can be utilized.
Deferred income taxes are calculated at the
tax rates that are expected to apply to the period when the asset is realized or the liability is settled. Deferred tax is charged
or credited in the income statement, except when it related to items credited or charged directly to equity, in which case the
deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when they relate to income taxes levied
by the same taxation authority and the Company intends to settle its current tax assets and liabilities on a net basis.
ASC Topic 740 also prescribes a more-likely-than-not
threshold for financial statement recognition and measurement of a tax position taken, or for one expected to be taken, in a tax
return. ASC Topic 740 also provides guidance related to, among other things, classification, accounting for interest and penalties
associated with tax positions, and disclosure requirements. Any interest and penalties accrued related to unrecognized tax benefits
will be recorded as tax expense.
Fair value of financial instruments
The Company follows
ASC 820,
“Fair Value Measurements and Disclosures,”
which defines fair value as the exchange price that would
be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset
or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure
fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. A fair value hierarchy based
on three levels of inputs, of which the first two are considered observable and the last is considered unobservable, is used to
measure fair value:
|
Level 1:
|
Valuations for assets and liabilities traded in active markets from readily available pricing sources such as quoted prices in active markets for identical assets or liabilities.
|
|
|
|
|
Level 2:
|
Observable inputs (other than Level 1 quoted prices) such as quoted prices in active markets for similar assets or liabilities, quoted prices in markets that are not active for identical or similar assets or liabilities, or other inputs that are observable or can be corroborated by observable market data.
|
|
|
|
|
Level 3:
|
Unobservable inputs that are supported by little or no market activity and that are significant to determining the fair value of the assets or liabilities, including pricing models, discounted cash flow methodologies and similar techniques.
|
The carrying values
of our financial instruments, including cash and cash equivalents, balances with directors and related parties, other receivables
and other payables approximate their fair value due to the short maturities of these financial instruments. The Company did not
have financial assets or liabilities that are measured at fair value on a recurring basis as of September 30, 2016 or December
31, 2015.
Revenue recognition
The Company recognizes revenue from the sale
of products and services in accordance with ASC 605, “Revenue Recognition.” Revenue will be recognized only when all
of the following criteria are met: persuasive evidence for an agreement exists, delivery has occurred or services have been provided,
the price or fee is fixed or determinable, and collection is reasonably assured.
Earnings per share
The Company has adopted ASC Topic 260,
“Earnings
per Share,”
(“EPS”) which requires presentation of basic EPS on the face of the income statement for all
entities with complex capital structures and requires a reconciliation of the numerator and denominator of the basic EPS computation.
In the accompanying financial statements, basic loss per share is computed by dividing net loss by the weighted average number
of shares of common stock outstanding during the period. As of September 30, 2016 and December 31, 2015, there was no dilutive
security outstanding.
Comprehensive income
Comprehensive income is defined to include
all changes in equity except those resulting from investments by owners and distributions to owners. Among other disclosures, all
items that are required to be recognized under current accounting standards as components of comprehensive income are required
to be reported in a financial statement that is presented with the same prominence as other financial statements. Comprehensive
income includes net income and the foreign currency translation gain, net of tax.
Segment reporting
ASC Topic 280, “Segment Reporting,”
requires use of the “management approach” model for segment reporting. The management approach model is based on the
way a company’s management organizes segments within the company for making operating decisions and assessing performance.
Reportable segments are based on products and services, geography, legal structure, management structure, or any other manner in
which management disaggregates a company. Management determined that the Company’s operations constitute a single reportable
segment in accordance with ASC 280. The Company operates exclusively in one business segment: the operations of an equity information
service platform designed to provide equity investment financing information to all enterprises in Asia.
Foreign currency translation
The accompanying consolidated financial statements
are presented in United States Dollar (USD). The functional currency of the Company is USD. The functional currency of AEEGCL,
AEEX HK and Yinfu are USD, Hong Kong Dollar (HKD) and Renminbi (RMB), respectively. Capital accounts are translated into USD from
HKD at their historical exchange rates when the capital transactions occurred. Assets and liabilities are translated at the exchange
rates as of balance sheet date. Income and expenditures are translated at the average exchange rate of the period. The translation
rates are as follows:
|
|
Three months ended
September 30,
|
|
|
Nine months ended
September 30,
|
|
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average HKD : US$ exchange rate in the period
|
|
|
0.1289
|
|
|
|
0.1290
|
|
|
|
0.1288
|
|
|
|
0.1290
|
|
Spot HKD : US$ exchange rate as at the period end
|
|
|
0.1289
|
|
|
|
0.1290
|
|
|
|
0.1289
|
|
|
|
0.1290
|
|
Average RMB : US$ exchange rate in the period
|
|
|
0.1501
|
|
|
|
0.1586
|
|
|
|
0.1520
|
|
|
|
0.1601
|
|
Spot RMB : US$ exchange rate as at the period end
|
|
|
0.1500
|
|
|
|
0.1613
|
|
|
|
0.1500
|
|
|
|
0.1613
|
|
Economic and political risk
The Company’s major operations are conducted
in the PRC. Accordingly, the political, economic, and legal environments in the PRC, as well as the general state of the PRC’s
economy may influence the Company’s business, financial condition, and results of operations.
The Company’s major operations in the
PRC are subject to special considerations and significant risks not typically associated with companies in North America and Western
Europe. These include risks associated with, among others, the political, economic, and legal environment. The Company’s
results may be adversely affected by changes in governmental policies with respect to laws and regulations, anti-inflationary measures,
and rates and methods of taxation, among other things.
Concentration
of credit risk
Cash includes cash
at banks and demand deposits in accounts maintained with banks within the PRC. Total cash in these banks as of September 30, 2016
amounted to $14,237, none of which is covered by insurance. The Company has not experienced any losses in such accounts and believes
it is not exposed to any risks to its cash in bank accounts.
The Company performs
ongoing credit evaluations of customers and has not experienced any material losses to date. The Company has not experienced any
significant difficulty in collecting its accounts receivable in the past and is not aware of any financial difficulties of its
major customers.
Net loss per share of common stock
The Company has adopted ASC Topic 260,
“Earnings
per Share,”
(“EPS”) which requires presentation of basic EPS on the face of the income statement for all
entities with complex capital structures and requires a reconciliation of the numerator and denominator of the basic EPS computation.
In the accompanying financial statements, basic earnings (loss) per share is computed by dividing net loss by the weighted average
number of shares of common stock outstanding during the period.
|
|
Three Months Ended
|
|
|
Nine Months Ended
|
|
|
|
September 30, 2016
|
|
|
September 30, 2015
|
|
|
September 30, 2016
|
|
|
September 30, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) profit
|
|
$
|
(8,963
|
)
|
|
$
|
15,679
|
|
|
$
|
(359,167
|
)
|
|
$
|
3,024
|
|
Weighted average common shares outstanding (basic and diluted)
|
|
|
1,146,000,000
|
|
|
|
1,000,000,000
|
|
|
|
1,091,649,635
|
|
|
|
1,000,000,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) profit per common share, basic and diluted
|
|
$
|
(0.00
|
)
|
|
$
|
0.00
|
|
|
$
|
(0.00
|
)
|
|
$
|
0.00
|
|
The Company has no potentially dilutive securities,
such as options or warrants, currently issued and outstanding.
Advertising costs
The Company follows ASC 720, “
Advertising
Costs,”
and expenses costs as incurred. No advertising costs were incurred for the three and nine months ended September
30, 2016 and 2015.
Related parties
The Company follows ASC 850,
“Related
Party Disclosures,”
for the identification of related parties and disclosure of related party transactions. See note
8.
Commitments and contingencies
The Company follows ASC 45020
, “Loss
Contingencies
,” to report accounting for contingencies. Liabilities for loss contingencies arising from claims, assessments,
litigation, fines and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount
of the assessment can be reasonably estimated. There were no commitments or contingencies as of September 30, 2016 and December
31, 2015.
Recent accounting pronouncements
Management has considered all recent accounting
pronouncements issued, and believes that these recent pronouncements will not have a material effect on the Company’s financial
statements.
NOTE 3 – GOING CONCERN
The accompanying financial statements have
been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the
liquidation of liabilities in the normal course of business. For the nine months ended September 30, 2016, the Company has a net
loss of $359,167, and an accumulated deficit of $1,495,192 and a net deficit of $373,947 as of September 30, 2016. The Company
plans to fund the operations through equity financing arrangements, which may be insufficient to fund the Company’s capital
expenditures, working capital and other cash requirements. Also, there can be no assurance that the Company will be successful
in obtaining financing.
These factors, among others, raise substantial
doubt about the Company’s ability to continue as a going concern. The accompanying financial statements do not include any
adjustments that might result from the outcome of this uncertainty related to the Company’s ability to continue as a going
concern.
NOTE 4 – PREPAYMENTS
The amounts of $14,260 and $23,298 as at September
30, 2016 and December 31, 2015, respectively, primarily included prepayments to a third party for consultancy services of $13,572
and $23,298, respectively.
NOTE 5 – INTANGIBLE ASSETS
|
|
September 30, 2016
|
|
|
December 31, 2015
|
|
|
|
|
|
|
|
|
Computer software
|
|
$
|
7,303
|
|
|
$
|
-
|
|
Accumulated amortization
|
|
|
(796
|
)
|
|
|
-
|
|
|
|
$
|
6,507
|
|
|
$
|
-
|
|
Amortization expense for the three and nine
months ended September 30, 2016 amounted to $252 and $806, respectively.
NOTE 6 – PLANT AND EQUIPMENT
|
|
September 30, 2016
|
|
|
December 31, 2015
|
|
|
|
|
|
|
|
|
Office equipment
|
|
$
|
19,428
|
|
|
$
|
20,409
|
|
Motor vehicle
|
|
|
28,109
|
|
|
|
-
|
|
|
|
|
47,537
|
|
|
|
20,409
|
|
Accumulated depreciation
|
|
|
(10,050
|
)
|
|
|
(2,207
|
)
|
|
|
$
|
37,487
|
|
|
$
|
18,202
|
|
Depreciation expense for the three and nine
months ended September 30, 2016 amounted to $2,848 and $7,987, respectively. Depreciation expense for the three and nine months
ended September 30, 2015 amounted to $827 and $1,361, respectively.
NOTE 7 – OTHER PAYABLES
|
|
September 30, 2016
|
|
|
December 31, 2015
|
|
|
|
|
|
|
|
|
Accrued charges to third parties
|
|
$
|
1,500
|
|
|
$
|
16,346
|
|
Payables to suppliers of plant and equipment
|
|
|
-
|
|
|
|
47,241
|
|
Salaries and wages accrued to employees
|
|
|
8,916
|
|
|
|
5,879
|
|
Other payables
|
|
|
522
|
|
|
|
-
|
|
|
|
$
|
10,938
|
|
|
$
|
69,466
|
|
NOTE 8 – RELATED PARTY TRANSACTIONS
The amount due from a related party of $4,496
as of September 30, 2016 represented a temporary advance to a related company. Mr. Liu Jun, the Company’s President and Chief
Executive Officer (“Mr. Liu”) is a supervisor of this related company. The amount is unsecured, interest free and has
no fixed terms of repayment.
The amount due from a director of $14,284 as
of December 31, 2015 represented a temporary advance to Mr. Liu. The amount was unsecured, interest free and fully repaid in 2016.
The amount due to a related party of $120,736
as of September 30, 2016 represented advances from a related company. The beneficial holder of a 17.45% equity interest in the
Company is a supervisor of this related company. The amount is unsecured, interest free and has no fixed terms of repayment.
The amount due to a director of $369,830 as
of September 30, 2016 represented advances from Mr. Liu. The amount is unsecured, interest free and has no fixed terms of repayment.
NOTE 9 – EQUITY
Preferred Stock
The Company has authorized 1,000,000 preferred
shares with a par value of $0.001 per share. The Board of Directors are authorized to divide the authorized shares of Preferred
Stock into one or more series, each of which shall be so designated as to distinguish the shares thereof from the shares of all
other series and classes. As of September 30, 2016, the Company does not have any issued shares of preferred stock and has not
designated any shares for issuance.
Common Stock
The Company has authorized 3,000,000,000 common
shares with a par value of $0.001 per share. Each common share entitles the holder to one vote, in person or proxy, on any matter
on which action of the stockholders of the corporation is sought.
On July 8, 2015, the Board of Directors authorized
a ten for one (10:1) forward stock split, which was effectuated upon the filing of the Company’s amended Articles of Incorporation.
The amended Articles of Incorporation were filed with the state of Nevada on July 22, 2015. All relevant information relating to
numbers of shares and per share information have been retrospectively adjusted to reflect the forward stock split for all periods
presented.
Reserve fund
In accordance with the relevant laws and regulations
in the PRC, the Company’s subsidiary in the PRC is required to transfer 10% of their profits after tax to a reserve fund
until the reserve fund reaches 50% of the registered capital of the subsidiary. The reserve fund is non-distributable.
NOTE 10 – PROVISION FOR INCOME TAXES
United States
The Company is incorporated in the State of
Nevada and is subject to the U.S. federal tax and state statutory tax rates up to 34% and 0%, respectively. No provision for income
taxes in the United States has been made as the Company had no taxable income for the three and nine months ended September 30,
2015 and 2016.
Hong Kong
AEEX HK is subject to Hong Kong profits tax
at a rate of 16.5%, and did not have any assessable profits arising in or derived from Hong Kong for the three and nine months
ended September 30, 2015 and 2016 and accordingly no provision for Hong Kong profits tax was made in these periods.
PRC
Yinfu is a PRC operating company and is subject
to PRC Enterprise Income Tax. Pursuant to the PRC New Enterprise Income Tax Law, Enterprise Income Tax is generally imposed at
a statutory rate of 25%.
The Company provides for income taxes under
ASC 740,
“Income Taxes.”
Under the asset and liability method of ASC 740, deferred tax assets and liabilities
are recorded based on the differences between the financial statement and tax basis of assets and liabilities and the tax rates
in effect when these differences are expected to reverse. A valuation allowance is provided for certain deferred tax assets if
it is more likely than not that the Company will not realize tax assets through future operations.
As of September 30, 2016 and December 31, 2015,
the Company had no material unrecognized tax benefits which would favorably affect the effective income tax rates in future periods
and does not believe that there will be any significant increases or decreases of unrecognized tax benefits within the next twelve
months. No interest or penalties relating to income tax matters have been imposed on the Company during the three and nine months
ended September 30, 2016 and 2015, and no provision for interest and penalties is deemed necessary as of September 30, 2016 and
December 31, 2015.
According to the PRC Tax Administration and
Collection Law, the statute of limitations is three years if the underpayment of taxes is due to computational errors made by the
taxpayer or its withholding agent. The statute of limitations extends to five years under special circumstances, which are not
clearly defined. In the case of a related party transaction, the statute of limitations is ten years. There is no statute of limitations
in the case of tax evasion.
The provision for income taxes differs from
the amounts, which would be provided by applying the statutory income tax rate of 34% to the loss before provision for income taxes
for the following reasons:
|
|
Three months ended
September 30,
|
|
|
Nine months ended
September 30,
|
|
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) profit for the period
|
|
$
|
(8,963
|
)
|
|
$
|
15,679
|
|
|
$
|
(363,281
|
)
|
|
$
|
3,024
|
|
Income tax at the statutory tax rate of 34%
|
|
|
(3,047
|
)
|
|
|
5,331
|
|
|
|
(123,515
|
)
|
|
|
1,028
|
|
Effect of different tax jurisdictions
|
|
|
(12,168
|
)
|
|
|
(1,348
|
)
|
|
|
26,459
|
|
|
|
(203
|
)
|
Non-deductible expenses
|
|
|
-
|
|
|
|
134
|
|
|
|
-
|
|
|
|
134
|
|
Change in valuation allowance
|
|
|
15,215
|
|
|
|
(3,158
|
)
|
|
|
97,056
|
|
|
|
-
|
|
Under provision in current year
|
|
|
-
|
|
|
|
(959
|
)
|
|
|
-
|
|
|
|
(959
|
)
|
Over provision in prior years
|
|
|
-
|
|
|
|
-
|
|
|
|
4,114
|
|
|
|
-
|
|
Income tax credit for the period
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
4,114
|
|
|
$
|
-
|
|
NOTE 11 – COMMITMENTS AND CONTINGENCIES
The Company has entered into a lease agreement
for office in Shenzhen, the PRC, with a 3 year term, commencing on April 10, 2016 and expiring on April 9, 2019. The monthly rental
was RMB126,586 for the first year, with a 6% increase for the second year, and a further 7% increase for the third year. In 2016,
the Company also paid rental expenses for the staff quarters in Hong Kong. Total rental expense for the three and nine months ended
September 30, 2016 was $67,902 and $131,857, respectively. The rental expense is recorded on a straight-line basis over the term
of the lease.
The total minimum future lease payments are
as follows:
12 months ending September 30,
|
|
Amount
|
|
2017
|
|
$
|
232,144
|
|
2018
|
|
|
245,228
|
|
2019
|
|
|
132,342
|
|
2020
|
|
|
-
|
|
2021
|
|
|
-
|
|
Thereafter
|
|
|
-
|
|
Total
|
|
$
|
609,714
|
|
NOTE 12 – SUBSEQUENT EVENTS
Management has evaluated subsequent events
through the date these consolidated financial statements were issued, and concluded that no subsequent events required disclosure
in the financial statements.