UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

☒   ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended September 30, 2016

☐ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______________ to ______________

333-199967

Commission file number

TIANHE UNION HOLDINGS LIMITED

(Exact name registrant as specified in its charter)

Nevada   47-1549749
(State or other jurisdiction of
incorporation or organization) 		  (I.R.S. Employer
Identification No.)
     

40 Wall Street, 28th Floor, Unit 2851

New York, NY 10005

  10005
(Address of principal executive offices)   (Zip Code)

 

Registrant’s telephone number, including area code: +646-512-5855

Securities registered under Section 12(b) of the Exchange Act:
     
Title of each class   Name of each exchange on which registered
None   None
     
Securities registered under Section 12(g) of the Exchange Act:
Common Stock, par value $.001
(Title of class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐   No  ☒

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes ☒   No ☐

Check whether the issuer (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☐  No  ☒

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or such shorter period that the registrant was required to submit and post such files. Yes ☐  No ☒

Check if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-K contained in this form, and no disclosure will be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  ☒

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a small reporting company. See definitions of “large accelerated filer”, “accelerated filer”, and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check One):

Large Accelerated Filer  ☐ Accelerated Filer ☐ 
Non-accelerated Filer  ☐ Smaller Reporting Company ☒ 

Emerging Growth Company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Aggregate market value of the Common Stock held by non-affiliates of the Company as of March 31, 2015: N/A 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☒  No ☐

(ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS)

Check whether the issuer has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of securities under a plan confirmed by a court. Yes ☐  No ☐

As of April 26, 2017, the registrant had 28,807,500 shares of common stock outstanding.

 

 

 

 

 

TABLE OF CONTENTS

 

PART I  
     
Item 1. Business. 1
Item 1A. Risk Factors. 4
Item 1B. Unresolved Staff Comments. 4
Item 2. Properties. 4
Item 3. Legal Proceedings. 4
Item 4. Mine Safety Disclosures. 4
     
PART II  
     
Item 5. Market For Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. 5
Item 6. Selected Financial Data. 5
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations. 5
Item 7A. Quantitative and Qualitative Disclosures About Market Risk. 6
Item 8. Financial Statements and Supplementary Data. 7
Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure. 8
Item 9A. Controls and Procedures. 8
Item 9B. Other Information. 9
     
PART III  
     
Item 10. Directors, Executive Officers, and Corporate Governance. 10
Item 11. Executive Compensation. 12
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters. 12
Item 13. Certain Relationships and Related Transactions, and Director Independence. 13
Item 14. Principal Accounting Fees and Services. 13
     
PART IV  
     
Item 15. Exhibits and Financial Statement Schedules. 13
     
SIGNATURES 15

 

 

 

FORWARD-LOOKING STATEMENTS

 

This annual report contains forward-looking statements. These statements relate to future events or our future financial performance. These statements often can be identified by the use of terms such as "may," "will," "expect," "believe," "anticipate," "estimate," "approximate" or "continue," or the negative thereof. We intend that such forward-looking statements be subject to the safe harbors for such statements. We wish to caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. Any forward-looking statements represent management's best judgment as to what may occur in the future. However, forward-looking statements are subject to risks, uncertainties and important factors beyond our control that could cause actual results and events to differ materially from historical results of operations and events and those presently anticipated or projected. We disclaim any obligation subsequently to revise any forward-looking statements to reflect events or circumstances after the date of such statement or to reflect the occurrence of anticipated or unanticipated events.

 

Our financial statements are stated in United States Dollars (US$) and are prepared in accordance with United States Generally Accepted Accounting Principles.

 

In this annual report, unless otherwise specified, all dollar amounts are expressed in United States dollars and all references to “common shares” refer to the common shares in our capital stock.

 

As used in this annual report, the terms “we”, “us”, “our” and “our company” refer to Tianhe Union Holdings Limited (formerly known as LISSOME TRADE CORP.), unless otherwise indicated.

 

 

 

PART I

 

Item 1. Description of Business.

 

Corporate Background

 

We were incorporated in the State of Nevada on May 9, 2014 under the name LISSOME TRADE CORP.

 

We originally planned to engage in the distribution of metal cookware made from stainless steel from China to the markets of Europe and Commonwealth of Independent States (CIS) countries. However, in connection with a change of control transaction that closed on August 28, 2015, we appointed a new executive management team and changed our planned business operations.

 

Corporate Development in Fiscal Year Ended September 30, 2016

 

On March 30, 2015, the Company contemplated a Share Exchange Agreement (the “Share Exchange Agreement”) by and among GLOBAL INTERNATIONAL HOLDINGS LTD. (“BVI1”), a British Virgin Islands corporation, its wholly owned subsidiary GLOBAL TECHNOLOGY CO., LTD. (“BVI2”), a British Virgin Islands corporation, which owns 100% of HUATIAN GLOBAL LIMITED (“HGL”), a Hong Kong corporation, which owns 100% of TIANHE GROUP (HK) LIMITED (“THGL”), a Hong Kong corporation, which owns 100% of JIERUN CONSULTING MANAGEMENT CO., LTD. (“WFOE”) a foreign investment enterprise organized under the laws of the People’s Republic of China (“PRC”), which had entered into various contractual agreements known as variable interest entity (“VIE”) agreements with ANHUI AVI-TRIP TECHNOLOGY CO., LTD. (“Avi-Trip”), a corporation incorporated on October 15, 2014, under the laws of the PRC. The VIE agreements provide WFOE with management control and rights to the profits of Avi-Trip. The VIE agreements include: (1) an Exclusive Service Agreement by and between WFOE and Avi-Trip, entitling WOFE to receive substantially all of the economic benefits of Avi-Trip in consideration for services provided by WFOE to Avi-Trip; (2) a Call Option Agreement by and among the shareholders of Avi-Trip, Jie Wei Wei and Han Yanliang, allowing WFOE to acquire all of Avi-Trip’s shares as permitted by PRC law; (3) a Voting Rights Proxy Agreement providing WFOE with the all of the voting rights of Avi-Trip’s shareholders; and (4) an Equity Pledge Agreement pledging the shares in Avi-Trip to WFOE.

 

Pursuant to the contemplated Share Exchange Agreement, the Company issued to BVI1 and its designees 50,000,000 newly issued shares of the Company’s common stock, par value $.001 per share (“Common Stock”), and a note convertible into 150,000,000 shares of Common Stock as consideration for ownership in BVI2 and its subsidiaries HGL, THGL, WFOE, and the VIE agreements between WFOE and Avi-Trip.

 

As of December 31, 2015, Avi-Trip had registered and paid in capital of $8,188,707 (RMB 50,000,000). Zhihui Chen was its authorized representative. Avi-Trip provided business to business software platform for travel agents to transact flight tickets and book hotel rooms. As of the date of this report Avi-Trip had ceased operations.

 

BVI1 never instructed the secretary and authorized agent to effectuate a change of registered shareholder of BVI2 from BVI1 being the sole shareholder to the Company being the sole shareholder. Additionally, the Company was unable to exercise control over BVI2, HGL, THGL, WFOE, and Avi-Trip subsequent to the execution of the Share Exchange Agreement. Furthermore, the Company was neither able to secure substantive control over the use and disposition of the assets of BVI2, HGL, THGL, WFOE and Avi-Trip nor exercise control over the accounting and finance department of BVI2, HGL, THGL, WFOE, and Avi-Trip in order to procure relevant financial information for financial reporting purposes; accordingly, the Company was unable to timely file Form 10-Qs for the quarters ended March 31, 2016, and June 30, 2016, and Form 10-K for the fiscal year ended September 30, 2016.

 

  1  

 

 

Disposition and Loss

 

As a result of the Company’s inability to exercise control over Avi-Trip, on July 19, 2016, on the recommendation of the Company’s board of directors (the “Board”), a majority of holders of the Company’s Common Stock voted to terminate the VIE agreements between WFOE and Avi-Trip, the termination became effective August 29, 2016. The Company also will not pursue the director of BVI1 to effectuate the change of ownership of BVI2 from BVI1 to the Company. In connection with the termination of the VIE agreements, certain shareholders representing 30,722,500 shares of Common Stock, in connection with the share issuance pursuant to the Share Exchange Agreement, agreed to return their shares of Common Stock to the Company for cancellation and convertible note holder also agreed to return their notes to the Company for cancellation. Concurrently, Mr. Yang Jie resigned from his positions as Chairman of the Board, President and Chief Executive Officer of the Company. Ms. Weiwei Jie and Ms. Fengyu Yi also resigned as members of the Board, which resignations were made in connection with the Company’s termination of the VIE agreements.

 

As of the date of this report, 30,722,500 shares of Common Stock and the note convertible into 150 million shares of Common Stock in connection with the Share Exchange Agreement have been returned and cancelled.

 

Plan of Operations

 

Our principal business objective for the next 12 months and beyond such time will be to achieve long-term growth potential through acquisition of a business rather than immediate, short-term earnings.

 

The analysis of new business opportunities will be undertaken by or under the supervision of Qiliang Zheng, our President and Chief Executive Officer. Our company has flexibility in seeking, analyzing and participating in potential business opportunities. In our efforts to analyze business opportunities, we will consider the following factors:

  

  ● Potential for growth, indicated by new technology, anticipated market expansion or new products;

  

  ● Competitive position as compared to other firms of similar size and experience within the industry segment as well as within the industry as a whole;
     
  ● Strength and diversity of management, either in place or scheduled for recruitment;
     
  ● Capital requirements and anticipated availability of required funds, to be provided by the Company or from operations, through the sale of additional securities, through joint ventures or similar arrangements or from other sources;
     
  ● The cost of participation by our company as compared to the perceived tangible and intangible values and potentials;
     
  ● The extent to which the business opportunity can be advanced;
     
  ● The accessibility of required management expertise, personnel, raw materials, services, professional assistance and other required items; and
     
  ● Other relevant factors.

 

We do not currently engage in any business activities that provide cash flow. We intend to sell our common shares to investors to raise funds for our operating and investing cash needs. Prior to us successfully raising funds through selling our common shares, we expect our operating costs will be paid with money to be loaned to or invested in us by our stockholders or management. During the next 12 months we anticipate incurring costs related to filing of Exchange Act reports and consummating an acquisition.

 

We believe we will be able to meet these costs through funds to be loaned by or invested in us by our stockholders, management or other investors.

 

We are in the development stage and have negative working capital, negative stockholders’ equity and have not earned any revenues as of date. These conditions raise substantial doubt about our ability to continue as a going concern. We are currently devoting our efforts to locating new products and acquisition candidates. Our ability to continue as a going concern is dependent upon our ability to develop additional sources of capital, locate and complete a merger with another company, and ultimately, achieve profitable operations.

 

  2  

 

 

Any target business that is selected may be a financially unstable company or an entity in its early stages of development or growth, including entities without established records of sales or earnings. In that event, we will be subject to numerous risks inherent in the business and operations of financially unstable and early stage or potential emerging growth companies. In addition, we may effect a business acquisition with an entity in an industry characterized by a high level of risk, and, although our management will endeavor to evaluate the risks inherent in a particular target business, there can be no assurance that we will properly ascertain or assess all significant risks.

 

Our management anticipates that it will likely be able to effect only one business acquisition, primarily due to our limited financing and the dilution of interest for present and prospective shareholders, which is likely to occur as a result of our management’s plan to offer a controlling interest to a target business in order to achieve a tax-free reorganization. This lack of diversification should be considered a substantial risk in investing in us, because it will not permit us to offset potential losses from one venture against gains from another.

 

We anticipate that the process of selection of a business acquisition will be complex and extremely risky. Because of general economic conditions, rapid technological advances being made in some industries and shortages of available capital, our management believes that there are numerous firms seeking even the limited additional capital which we will have and/or the perceived benefits of becoming a publicly traded corporation. Such perceived benefits of becoming a publicly traded corporation include, among other things, facilitating or improving the terms on which additional equity financing may be obtained, providing liquidity for the principals of and investors in a business, creating a means for providing incentive stock options or similar benefits to key employees, and offering greater flexibility in structuring acquisitions, joint ventures and the like through the issuance of stock. Potentially available business acquisition may occur at various stages of development, all of which will make the task of comparative investigation and analysis of such business opportunities extremely difficult and complex.

 

Competition

 

Our primary goal is the acquisition of a target company or business seeking the perceived advantages of being a publicly held corporation. The Company is in a highly competitive market for a small number of business opportunities which could reduce the likelihood of consummating a successful business combination. A large number of established and well-financed entities, including small public companies and venture capital firms, are active in mergers and acquisitions of companies that may be desirable target candidates for us. Nearly all these entities have significantly greater financial resources, technical expertise and managerial capabilities than we do; consequently, we will be at a competitive disadvantage in identifying possible business opportunities and successfully completing a business combination. These competitive factors may reduce the likelihood of our identifying and consummating a successful business combination.

  

Patent and Trademarks

 

We currently do not own any patents, trademarks or licenses of any kind.

 

Government Regulations

 

There are no government approvals necessary to conduct our current business.

 

Employees

 

We presently have no employees apart from our management. Our officers and director are engaged in outside business activities and we anticipate that they will devote to our business very limited time until the acquisition of a successful business opportunity has been identified. We expect no significant changes in the number of our employees other than such changes, if any, incident to a business combination. 

 

  3  

 

 

Item 1A. Risk Factors.

 

Not applicable.

 

Item 1B. Unresolved Staff Comments.

 

Not applicable.

 

Item 2. Properties.

 

The Company neither rents nor owns any properties. The Company utilizes the office space and equipment of its officers and directors at no cost. The Company currently has no policy with respect to investments or interests in real estate, real estate mortgages or securities of, or interests in, persons primarily engaged in real estate activities.

 

Item 3. Legal Proceedings.

 

Presently, there are not any material pending legal proceedings to which the Company is a party or as to which any of the Company’s property is subject to, and no such proceedings are known to the Company to be threatened or contemplated against it.

 

Item 4. Mine Safety Disclosures.

 

Not applicable.

 

  4  

 

 

PART II

 

Item 5. Market for Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

 

Market Information

 

The Company's Common Stock obtained its ticker LSOM on April 23, 2015. On September 22, 2015 in connection with the change in the Company’s name, its ticker was changed to TUAA. Its shares of common stock are currently on OTC Pink. The table below sets forth the reported high and low bid prices for the two year period ended September 30, 2016 on a quarterly basis. There was no trading record prior to the quarter ended September 30, 2015. No data is available from OTC Markets after June 30, 2016 due to the Company has been delinquent in providing current information.

 

Per Share Common Stock Bid Prices by Quarter*

 

    High*     Low*  
             
Quarter Ended September 30, 2016   $ N/A     $ N/A  
Quarter Ended June 30, 2016     20.00 (1)     2.50  
Quarter Ended March 31, 2016     4.95       1.09  
Quarter Ended December 31, 2015     2.00       0.83  
Quarter Ended September 30, 2015     3.00       0.88  

 

(1) Based on the number from OTC Markets indicates the close price on May 16, 2016.  No trading were made thereafter.

 

Holders

 

As of April 26, 2017, we had 65 stockholders of record.

 

Dividends

 

The Company has not paid any cash dividends to date and does not anticipate or contemplate paying dividends in the foreseeable future. It is the present intention of management to utilize all available funds for the development of the Company's business.

 

Securities Authorized for Issuance Under Equity Compensation Plans

 

None.

 

Recent Sales of Unregistered Securities

 

None, other than those reported under the current report on Form 8-K filed with the SEC on April 1, 2016.

 

Item 6. Selected Financial Data.

 

Not applicable. 

 

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

 

The following discussion should be read in conjunction with our financial statements, including the notes thereto, appearing elsewhere in this annual report. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward looking statements. Our audited financial statements are stated in United States Dollars and are prepared in accordance with United States Generally Accepted Accounting Principles.

 

  5  

 

 

General

 

Lissome Trade Corp. was incorporated in the State of Nevada on May 9, 2014. We were formed to engage in the distribution of metal cookware made from stainless steel from China to the markets of Europe and Commonwealth of Independent States (CIS) countries. In connection with a change of control transaction that closed on August 28, 2015, we appointed a new executive management team and changed our planned business operations.

 

RESULTS OF OPERATIONS

 

There’s no revenue in this period. 

 

Year ended September 30, 2016 compared to the year ended September 30, 2015

 

Our net loss for the year ended September 30, 2016 was $95,595,347 compared to $31,831 for the year ended September 30, 2015. During the year ended September 30, 2016, we have not generated any revenue.

 

During the year ended September 30, 2016, we incurred general and administrative expenses and professional fees of $171,722. During the year ended September 30, 2015, we incurred general and administrative expenses of $50,438. General and administrative and professional expenses were generally related to corporate overhead, financial and administrative contracted services, such as legal and accounting, developmental costs, and marketing expenses.

  

LIQUIDITY AND CAPITAL RESOURCES

 

As of September 30, 2016

 

As of September 30, 2016, our current assets were $241,949 compared to $30,167 as of September 30, 2015. As of September 30, 2016, our current liabilities were $413,681 compared to $ 30,177 as of September 30, 2015. Current liabilities were composed of related party payables of $410,200.

 

Stockholders’ equity decreased from a deficit of $10 as of September 30, 2015, to a deficit of $171,732 as of September 30, 2016.

 

Cash Flows from Operating Activities

 

We have not generated positive cash flows from operating activities. For the year ended September 30, 2016, net cash flows used in operating activities was $168,241, consisting of a net loss of $95,595,347 adjustment as a result from investment loss $95,423,625 and increased accrued liabilities of $3,481.

 

Cash Flows from Financing Activities

 

For the year ended September 30, 2016, net cash provided by financing activities was $380,023, consisting of $380,023 in proceeds from the loan from one of our directors.

 

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 current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.

 

GOING CONCERN

 

The independent auditors' report accompanying our audited September 30, 2016 financial statements contains an explanatory paragraph expressing substantial doubt about our ability to continue as a going concern. The financial statements have been prepared based on the assumption that we will continue as a going concern, which assumption contemplates that we will realize our assets and satisfy our liabilities and commitments in the ordinary course of business.

 

Item 7A. Quantitative and Qualitative Disclosure About Market Risk.

 

Not applicable.

 

  6  

 

  

Item 8. Financial Statements and Supplementary Data.  


 

 

 

 

 

 

 

 

 

 

 

Tianhe Union Holdings Limited

(formerly known as Lissome Trade Corp.)

Financial Statements

As of September 30, 2016 and 2015

 

 

 

 

 

 

 

 

 

 

 

 

 

  7  

 

 

Content   Page
     
Report of Independent Registered Public Accounting Firm   F-2
     
Balance Sheets   F-3
     
Statements of Operations   F-4
     
Statements of Changes in Stockholders' Deficiency   F-5
     
Statements of Cash Flows   F-6
     
Notes to Financial Statements   F-7 - F-14

 

  F- 1  

 

 

 

To the Board of Directors and
Stockholders of Tianhe Union Holdings Limited

 

We have audited the accompanying balance sheet of Tianhe Union Holdings Limited (the “Company”) as of September 30, 2016 and 2015, as well as the related statements of operations, stockholders’ equity, and cash flows for each year in the two-year period ended September 30, 2016. The Company’s management is responsible for the accuracy of these financial statements. Our responsibility is to, based on our audits, express our opinion regarding these financial statements.

 

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). These standards require that we plan and perform audits to obtain reasonable assurances about whether the Company’s financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal controls over the Company’s financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. Our audits also included examining, on a test basis, evidence supporting the amounts and disclosures in the Company’s financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the Company’s financial statements. We believe that our audits provide a reasonable basis for our opinion.

 

In our opinion, the Company’s financial statements for the periods referred to above present fairly, in all material respects, the Company’s financial position as of September 30, 2016 and 2015, and the results of its operations and its cash flows for each year in the two-year period ended September 30, 2016, in conformity with accounting principles generally accepted in the United States of America.

 

The accompanying financial statements have been prepared based on the assumption that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company incurred substantial losses in previous years, which raises substantial doubt about its ability to continue as a going concern. Management’s plans regarding these matters are described in Note 2 to the financial statements. The financial statements do not account for possible adjustments resulting from the resolution of these uncertainties.

 

San Mateo, California WWC, P.C.
April 28, 2017 Certified Public Accountants

 

  F- 2  

 

 

Tianhe Union Holdings Limited

Balance Sheets

As of September 30, 2016 and 2015

(Stated in U.S. Dollars)

 

    September 30,     September 30,  
    2016     2015  
ASSETS            
             
Current assets            
Cash and Cash Equivalents   $ 241,949     $ 30,167  
Total assets   $ 241,949     $ 30,167  
                 
LIABILITIES AND STOCKHOLDERS’ DEFICIENCY                
                 
Current liabilities                
Related Party payables   $ 410,200     $ 30,177  
Accrued liabilities     3,481       -  
Total liabilities     413,681       30,177  
                 
Stockholders’ deficiency                
Common stock, $0.001 par value: 75,000,000 shares authorized, 28,807,500 and 9,530,000 shares issued and outstanding as of September 30, 2016 and 2015, respectively.     28,808       9,530  
Additional paid-in capital     95,427,117       22,770  
Accumulated deficit     (95,627,657 )     (32,310 )
Total stockholders’ deficiency     (171,732 )     (10 )
                 
Total liabilities and stockholders’ deficiency   $ 241,949     $ 30,167  

 

The accompanying notes are an integral part of these financial statements

 

  F- 3  

 

 

Tianhe Union Holdings Limited

Statements of Operations

For the years ended September 30, 2016 and 2015

(Stated in U.S. Dollars)

 

    Year ended     Year ended  
    September 30,     September 30,  
    2016     2015  
             
Revenue   $ -     $ -  
                 
General and administrative expenses     171,722       50,438  
                 
Loss from operations     (171,722 )     (50,438 )
                 
Other income     -       18,607  

Investment loss - contemplated share exchange

    (95,423,625 )     -  
                 
Loss before income tax     (95,595,347 )     (31,831 )
                 
Income tax     -       -  
                 
Net loss   $ (95,595,347 )   $ (31,831 )
                 
Loss per share                
-         Basic   $ (4.97 )   $ (0.00 )
-         Diluted   $ (4.97 )   $ (0.00 )
                 
Weighted average number of shares                
-         Basic     19,247,973       8,446,023  
-         Diluted     19,247,973       8,446,023  

 

The accompanying notes are an integral part of these financial statements

 

  F- 4  

 

 

Tianhe Union Holdings Limited

Statements of Changes in Stockholders’ Deficiency

For the years ended September 30, 2016 and 2015

(Stated in U.S. Dollars)

 

    Common           Additional           Total  
    Stock     Common     Paid-in     Accumulated     Stockholders’  
    Outstanding     Stock     Capital     Deficit     Deficiency  
                               
Balance at October 1, 2014     7,000,000       7,000       -       (479 )     6,521  
                                         
Increase in capital     2,530,000       2,530       22,770       -       25,300  
Net Loss for the year     -       -       -       (31,831 )     (31,831 )
                                      -  
Balance at September 30, 2015     9,530,000     $ 9,530     $ 22,770     $ (32,310 )   $ (10 )
                                         
Balance at October 1, 2015     9,530,000       9,530       22,770       (32,310 )     (10 )
                                         
Investment in BVI2 group (note 1)     50,000,000       50,000       247,450,000       -       247,500,000  
Shares cancelled     (30,722,500 )     (30,722 )     (152,045,653 )     -       (152,076,375 )
Net Loss for the year     -       -       -       (95,595,347 )     (95,595,347 )
Foreign currency translation adjustment     -       -       -       -       -  
                                         
Balance at September 30, 2016     28,807,500     $ 28,808     $ 95,427,117     $ (95,627,657 )   $ (171,732 )

 

The accompanying notes are an integral part of these financial statements

 

  F- 5  

 

 

Tianhe Union Holdings Limited

Statements of Cash Flows

For the years ended September 30, 2016 and 2015

(Stated in U.S. Dollars)

 

    Year ended     Year ended  
    September 30,     September 30,  
    2016     2015  
             
Cash flows from operating activities            
Net loss   $ (95,595,347 )   $ (31,831 )
Adjustments to reconcile net income to cash generated by operating activities:                
Adjustment as a result from investment loss     95,423,625       -  
Changes in operating assets and liabilities                
Increase in accrued liabilities     3,481       -  
Cash flows used in operating activities     (168,241 )     (31,831 )
                 
Cash flows from financing activities                
Proceeds from issuance of stock     -       25,300  
Proceeds from loan from director     380,023       29,635  
Cash flows provided by financing activities     380,023       54,935  
                 
Increase in cash and cash equivalents     211,782       23,104  
Cash and cash equivalents – Beginning of period     30,167       7,063  
Cash and cash equivalents – End of period   $ 241,949     $ 30,167  

 

The accompanying notes are an integral part of these financial statements

 

  F- 6  

 

 

Tianhe Union Holdings Limited

Notes to Financial Statements

(Stated in U.S. Dollars)

 

1.            NATURE OF OPERATION AND ORGANIZATION HISTORY

 

Tianhe Union Holdings Limited (the “Company”) was incorporated in Nevada on May 9, 2014. The Company currently does not have any operations.

 

Reverse Merger and Share Exchange Agreement

 

On March 30, 2015, the Company contemplated a Share Exchange Agreement (the “Share Exchange Agreement”) by and among GLOBAL INTERNATIONAL HOLDINGS LTD. (“BVI1”), a British Virgin Islands corporation, its wholly owned subsidiary GLOBAL TECHNOLOGY CO., LTD. (“BVI2”), a British Virgin Islands corporation, which owns 100% of Huatian Global Limited (“HGL”), a Hong Kong corporation, which owns 100% of Tianhe Group (HK) Limited (“THGL”), a Hong Kong corporation, which owns 100% of Jierun Consulting Management Co., Ltd. (“WFOE”) a foreign investment enterprise organized under the laws of the People’s Republic of China (“PRC”), which had entered into various contractual agreements known as variable interest entity (“VIE”) agreements with Anhui Avi-Trip Technology Co., Ltd. (“Avi-Trip”), a corporation incorporated on October 15, 2014, under the laws of the PRC. The VIE agreements provide WFOE with management control and rights to the profits of Avi-Trip. The VIE agreements include: (1) an Exclusive Service Agreement by and between WFOE and Avi-Trip, entitling WOFE to receive substantially all of the economic benefits of Avi-Trip in consideration for services provided by WFOE to Avi-Trip; (2) a Call Option Agreement by and among the shareholders of Avi-Trip, Jie Wei Wei and Han Yanliang, allowing WFOE to acquire all of Avi-Trip’s shares as permitted by PRC law; (3) a Voting Rights Proxy Agreement providing WFOE with the all of the voting rights of Avi-Trip’s shareholders; and (4) an Equity Pledge Agreement pledging the shares in Avi-Trip to WFOE.

 

Pursuant to the contemplated Share Exchange Agreement, the Company issued to BVI1 and its designees 50,000,000 newly issued shares of the Company’s common stock, par value $.001 per share (“Common Stock”), and a note convertible into 150,000,000 shares of Common Stock as consideration for ownership in BVI2 and its subsidiaries HGL, THGL, WFOE, and the VIE agreements between WFOE and Avi-Trip.

 

As of December 31, 2015, Avi-Trip had registered and paid in capital of $8,188,707 (RMB 50,000,000). Zhihui Chen was its authorized representative. Avi-Trip provided business to business software platform for travel agents to transact flight tickets and book hotel rooms. As of the date of this report Avi-Trip had ceased operations.

 

BVI1 never instructed the secretary and authorized agent to effectuate a change of registered shareholder of BVI2 from BVI1 being the sole shareholder to the Company being the sole shareholder. Additionally, the Company was unable to exercise control over BVI2, HGL, THGL, WFOE, and Avi-Trip subsequent to the execution of the Share Exchange Agreement. Furthermore, the Company was neither able to secure substantive control over the use and disposition of the assets of BVI2, HGL, THGL, WFOE and Avi-Trip nor exercise control over the accounting and finance department of BVI2, HGL, THGL, WFOE, and Avi-Trip in order to procure relevant financial information for financial reporting purposes; accordingly, the Company was unable to timely file Form 10-Qs for the quarters ended March 31, 2016, June 30, 2016, and December 31, 2016, and Form 10-K for the fiscal year ended September 30, 2016.

 

  F- 7  

 

 

Tianhe Union Holdings Limited

Notes to Financial Statements

(Stated in U.S. Dollars)

 

Disposition and Loss

 

As a result of the Company’s inability to exercise control over Avi-Trip, on July 19, 2016, on the recommendation of the Company’s board of directors (the “Board”), a majority of holders of the Company’s Common Stock voted to terminate the VIE agreements between WFOE and Avi-Trip, the termination became effective August 29, 2016. The Company also will not pursue the director of BVI1 to effectuate the change of ownership of BVI2 from BVI1 to the Company. In connection with the termination of the VIE agreements, certain shareholders representing 30,722,500 shares of Common Stock, in connection with the share issuance pursuant to the Share Exchange Agreement, agreed to return their shares of Common Stock to the Company for cancellation and convertible note holder also agreed to return their notes to the Company for cancellation. Concurrently, Mr. Yang Jie resigned from his positions as Chairman of the Board, President and Chief Executive Officer of the Company. Ms. Weiwei Jie and Ms. Fengyu Yi also resigned as members of the Board, which resignations were made in connection with the Company’s termination of the VIE agreements.

 

For the 19,277,500 shares that were issued as part of the Share Exchange Agreement on March 30, 2016, and that were not returned to the Company for cancellation, valued at $4.95 per share, the closing price of the Company stock on March 30, 2016, an amount of $95,423,625 was accounted for by the Company as a loss related to the contemplated share exchange transaction; Company management has determined that it should account for the loss during the quarter ended March 31, 2016, although the termination of the agreement became effective on August 29, 2016, subsequent to the end of that reporting period. The Company believes that this was a material subsequent event that affected the presentation of the Company’s financial position at March 31, 2016, and that required a retroactive adjustment to its financial statements for that reporting period.

 

As of the date of this report, 30,722,500 shares of Common Stock and the note convertible into 150 million shares of Common Stock in connection with the Share Exchange Agreement have been returned and cancelled.

 

2.           SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

(a) Method of Accounting

 

The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission.

 

(b) Development Stage Company

 

The Company is a development stage company as defined by section 915-10-20 of the Financial Accounting Standards Board (the “FASB”) Accounting Standards Codification. The Company is devoting substantially all of its efforts on establishing its business and its planned principal operations have not yet commenced. All losses accumulated since inception have been considered to be part of the Company's development stage activities.

 

The Company has elected to adopt the early application of Accounting Standards Update No. 2014-10, Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements. Subsequent to adoption, the Company no longer presents or discloses inception-to-date information and other remaining disclosure requirements of Topic 915.

 

  F- 8  

 

 

Tianhe Union Holdings Limited

Notes to Financial Statements

(Stated in U.S. Dollars)

 

(c) Going Concern

 

The financial statements have been prepared on a going concern basis, which assumes the Company will be able to realize its assets and discharge its liabilities in the normal course of business for the foreseeable future. The Company has incurred losses since its inception on May 9, 2014, resulting in an accumulated deficit of $95,627,657 as of September 30, 2016, and further losses may be incurred during the continued development of its business. Accordingly, there is substantial doubt regarding the Company’s ability to continue as a going concern.

 

The ability to continue as a going concern is dependent upon the Company generating profitable operations, making investments with positive returns in the future, and/or obtaining the financing necessary 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 existing cash on hand and loans from directors and/or the private placement of Common Stock. Management has not made adjustments to the financial statements, or used an alternative basis of accounting, such as the liquidation basis, in preparing these financial statements. Management has not performed assessments individually, or in the aggregate, of the factors that give rise to the substantial doubt of the Company continuing as a going concern, or how to mitigate those factors.  

 

(d) Use of Estimates

 

The preparation of financial statements in conformity with generally accepted accounting principles requires Company management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates.

 

(e) Cash and Cash Equivalents

 

For purposes of the 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 bank accounts are deposited in insured institutions. The funds are insured up to $250,000. As of September 30, 2016, the Company's bank deposits did not exceed the insured amounts.

 

(f) Basic and Diluted Income (Loss) Per Share

 

The Company computes 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 loss available to holders of our Common Stock by the weighted average number of outstanding shares of Common Stock during the period. Diluted loss per share gives effect to all dilutive potential shares of Common Stock outstanding during the period. Dilutive loss per share excludes all potential issuances of shares of Common Stock if their effect is anti-dilutive. Except for the note that is convertible into 150 million shares of the Company’s Common Stock, there were no potentially dilutive debt or equity securities outstanding during the period from the inception (May 9, 2014) of the Company through September 30, 2016.

 

  F- 9  

 

 

Tianhe Union Holdings Limited

Notes to Financial Statements

(Stated in U.S. Dollars)

 

(g) Dividends

 

The Company has not adopted any policies regarding payment of dividends. No dividends have been paid during any of the reported periods.

 

(h) Impairment of Long-Lived Assets

 

The Company, when applicable, continually monitors events and changes in circumstances that could indicate that carrying amounts of long-lived assets may not be recoverable. When such events or changes in circumstances are present, the Company assesses the recoverability of long-lived assets by determining whether the carrying value of such assets will be recovered through undiscounted expected future cash flows. If the total of the future cash flows is less than the carrying amount of those assets, the Company recognizes an impairment loss based on the excess of the carrying amount over the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or the fair value less costs to sell.

 

(i) Revenue Recognition

 

The Company recognizes revenue when products are fully delivered or services have been provided and collection is reasonably assured. No revenue has been earned since the inception.

 

(j) Stock-Based Compensation

 

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.

 

As of September 30, 2016, the Company has not issued any stock-based payments to its employees.

 

(k) Income Taxes

 

The Company follows the asset and liability method of accounting for income taxes. Under this method, deferred income tax assets and liabilities are recognized for the estimated tax consequences attributable to differences between financial statement carrying values and their respective income tax basis (temporary differences). The effect on deferred income tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

 

(l) Comprehensive income

 

The Company uses FASB ASC Topic 220, “Reporting 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. For the periods presented, the Company does not have any item that is required to be presented as a component of comprehensive income. As a result, a statement of comprehensive income is not required to be presented.

 

  F- 10  

 

 

Tianhe Union Holdings Limited

Notes to Financial Statements

(Stated in U.S. Dollars)

 

(m) Recent accounting pronouncements

 

In November 2015, the FASB issued ASU 2015-17, "Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes". The amendments in ASU 2015-17 eliminate the current requirement for organizations to present deferred tax liabilities and assets as current and noncurrent in a classified balance sheet. Instead, organizations will be required to classify all deferred tax assets and liabilities as noncurrent. The amendments in the ASU are effective for public business entities for financial statements issued for annual periods beginning after December 15, 2016, and for interim periods within those annual periods. The amendments may be applied prospectively to all deferred tax liabilities and assets or retrospectively to all periods presented.

 

On January 5, 2016, the FASB issued ASU 2016-01, “Financial Instruments—Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities”, which amends U.S. GAAP guidance on the classification and measurement of financial instruments. Although the ASU retains many current requirements, it significantly revises an entity’s accounting related to (1) the classification and measurement of investments in equity securities and (2) the presentation of certain fair value changes for financial liabilities measured at fair value. The ASU also amends certain disclosure requirements associated with the fair value of financial instruments.

 

On March 15, 2016, the FASB issued ASU 2016-07 “Investments—Equity Method and Joint Ventures (Topic 323): Simplifying the Transition to the Equity Method of Accounting”, which simplifies the equity method of accounting by eliminating the requirement to retrospectively apply the equity method to an investment that subsequently qualifies for such accounting as a result of an increase in the level of ownership interest or degree of influence. Consequently, when an investment qualifies for the equity method (as a result of an increase in the level of ownership interest or degree of influence), the cost of acquiring the additional interest in the investee would be added to the current basis of the investor’s previously held interest and the equity method would be applied subsequently from the date on which the investor obtains the ability to exercise significant influence over the investee. The ASU further requires that unrealized holding gains or losses in accumulated other comprehensive income related to an available-for-sale security that becomes eligible for the equity method be recognized in earnings as of the date on which the investment qualifies for the equity method.

 

The guidance in the ASU is effective for all entities for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years; early adoption is permitted for all entities. Entities are required to apply the guidance prospectively to increases in the level of ownership interest or degree of influence occurring after the ASU’s effective date. Additional transition disclosures are not required upon adoption.

 

The new standard is effective for fiscal years and interim periods within those fiscal years beginning after December 15, 2017.

 

The Company has reviewed all the recently issued, but not yet effective, accounting pronouncements and it does not believe that the future adoption of any such pronouncements may be expected to cause a material impact on its financial condition or the results of its operations.

 

  F- 11  

 

 

Tianhe Union Holdings Limited

Notes to Financial Statements

(Stated in U.S. Dollars)

 

3.           RELATED PARTY TRANSACTIONS

 

A certain former director of the Company was owed $8,542 at September 30, 2015; however, the Company underwent a change of control when majority ownership was transferred to a new majority shareholder. Pursuant to the agreement between the previous majority shareholder and new majority shareholder, the previous majority shareholder would assume all obligations owed by the Company up until the date of the ownership is transferred, including payables owed to the former director. Accordingly, the debt owed to the former director was written off and the Company recognized a one-time gain of $8,542, which is included as gain on change of control in the Company’s results of operations during the year ended September 30, 2015.

 

The outstanding balance of $410,200 as of September 30, 2016, was owed to a director who advanced funds to the Company to fund general corporate activities. The advances were non-interest bearing, due upon demand and unsecured. The director has resigned from the Company on July 25, 2016.

 

On December 31, 2016, the director agreed to waive his creditor’s right against the company in the amount of $410,200.

 

4.           COMMON STOCK

 

The Company has authorized 75,000,000 shares of Common Stock, par value of $ 0.001 per share. In August 2014, the Company issued 5,000,000 shares of Common Stock at $0.001 per share for total proceeds of $5,000. On September 5, 2014, the Company issued 2,000,000 shares of Common Stock at $0.001 per share for total proceeds of $2,000. In February and March 2015, the Company issued 2,530,000 shares of Common Stock at $0.01 per share for total proceeds of $25,300.

 

On March 30, 2016, the Company issued 50,000,000 shares of Common Stock in connection with the acquisition as discussed in Note 1.  The Company subsequently cancelled 30,722,500 shares as result of the transaction being unsuccessfully consummated.

 

As of September 30, 2016, after giving effect for the above cancellation of shares, the Company had 28,807,500 shares of Common Stock issued and outstanding. 

 

5.           OTHER INCOME

 

Other income for the year ended September 30, 2015 is comprised of the following:

 

      For the years ended
September 30, 		 
      2016     2015  
               
  Waiver of related party payable (see note 3)   $ -     $ 8,542  
  Waiver of obligation to deliver service or product     -       9,990  
  Waiver of other miscellaneous payable     -       75  
      $ -     $ 18,607  

 

  F- 12  

 

 

Tianhe Union Holdings Limited

Notes to Financial Statements

(Stated in U.S. Dollars)

 

On January 2, 2015, the Company received deferred revenue in the amount of $5,000 for products to be delivered at a later date. In June 2015, the Company received deferred revenue in the amount of $4,990 for products to be delivered at a later date. The Company’s former majority shareholder, upon disposition of his ownership, assumed all obligations, including the delivery of products and services related to unearned revenue. As of September 30, 2015, the Company was no longer liable to deliver any products or services under previous sales commitments; accordingly, the Company recorded a one-time gain of $9,990 as part of gain in change of control, which was included on the Company’s result of operations as other income for the year ended September 30, 2015.

 

6.           INCOME TAX

 

The Company is subject to US Federal tax laws. The Company has not recognized an income tax benefit for its operating losses based on uncertainties concerning its ability to generate taxable income in future periods. The tax benefit for the periods presented is offset by a valuation allowance established against deferred tax assets arising from the net operating losses and other temporary differences, the realization of which could not be considered more likely than not. Further, the benefit from utilization of NOL carryforwards could be subject to limitations due to material ownership changes that could occur in the Company as it continues to raise additional capital. Based on such limitations, the Company has significant NOLs for which realization of tax benefits is uncertain. In future periods, tax benefits and related deferred tax assets will be recognized when management considers realization of such amounts to be more likely than not.

 

As of September 30, 2016 and 2015, the Company has accumulated net operating losses of $95,627,657 and $32,310, respectively. The deferred tax assets will begin to expire in 2025.

 

The net losses before income taxes and its provision for income taxes as follows:

 

      For the years ended September 30,  
      2016     2015  
               
  Net loss before income tax   $ (95,595,347 )   $ (31,831 )
                   
  Tax expenses (benefit) at the statutory tax rate     (32,502,418 )     (10,823 )
                   
  Tax effects of:                
  Valuation allowance     32,502,418       10,823  
                   
  Income tax benefit   $ -     $ -  

 

  F- 13  

 

 

Tianhe Union Holdings Limited

Notes to Financial Statements

(Stated in U.S. Dollars)

 

Deferred tax asset is calculated based on the statutory average rate of 34%. A 100% valuation was taken as the realization of the NOL is more likely than not.

 

      As of September 30,  
      2016     2015  
  Deferred tax asset:            
               
  Net operating losses (NOLs ) carryforwards:     32,513,403       10,985  
  Valuation allowance     (32,513,403 )     (10,985 )
  Deferred tax assets, net:     -       -  

 

7.           LOSS PER SHARE

 

     

For the years ended

September 30,

 
      2016     2015  
  Loss per share numerator            
  Loss for the year attributable to owners of the Company   $ (95,595,347 )   $ (31,831 )
                   
  Diluted loss per share numerator                
  Loss for the year attributable to owners of the Company   $ (95,595,347 )   $ (31,831 )
                   
  Basic loss per share denominator                
  Original shares:     9,530,000       7,000,000  
  Additions from actual events:                
  - Issuance of common stock, weighted     9,717,973       1,675,082  
  Basic weighted average shares outstanding     19,247,973       8,675,082  
                   
  Diluted loss per share denominator                
  Basic weighted average shares outstanding     19,247,973       8,675,082  
  Diluted weighted average shares outstanding     19,247,973       8,675,082  
                   
  Loss per share                
  - Basic   $ (4.97 )   $ (0.00 )
  - Diluted   $ (4.97 )   $ (0.00 )
                   
  Weighted average shares outstanding                
  - Basic     19,247,973       8,675,082  
  - Diluted     19,247,973       8,675,082  

 

For the periods presented, there is no dilutive securities that could potentially dilute loss per shares that is not included in the computation because the effect was antidilutive.

 

8.           SUBSEQUENT EVENTS

 

As of the date of this report, 30,722,500 shares of Common Stock and the note convertible into 150 million shares of Common Stock in connection with the Share Exchange Agreement have been returned and cancelled.

 

On December 31, 2016, a former director agreed to waive his creditor’s rights in the amount of $410,200 owed to him by the Company.

 

Except for the event detailed above regarding the cancellation of shares and convertible note, the Company has evaluated subsequent events from September 30, 2016, through the date the financial statements were available to be issued and has determined that there were no subsequent events after September 30, 2016, other than the for which disclosure is required.

 

  F- 14  

 

 

Item 9. Changes In and Disagreements with Accountants on Accounting and Financial Disclosure.

 

None.

 

Item 9A. Controls and Procedures.

 

Evaluation of Disclosure Controls and Procedures.

 

We maintain "disclosure controls and procedures," as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the "Exchange Act"), that are designed to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in Securities and Exchange Commission rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating our disclosure controls and procedures, management recognized that disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the disclosure controls and procedures are met. Additionally, in designing disclosure controls and procedures, our management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible disclosure controls and procedures. The design of any disclosure controls and procedures also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.

 

As of September 30, 2016, we carried out an evaluation, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective in ensuring that information required to be disclosed by us in our periodic reports is recorded, processed, summarized and reported, within the time periods specified for each report and that such information is not accumulated and communicated to our management, including our principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

 

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 Exchange Act. The Company's 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 U.S. generally accepted accounting principles.

 

The Company's internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company's assets that could have a material effect on the consolidated financial statements.

 

All internal control systems, no matter how well designed, have inherent limitations, so that no evaluation of controls can provide absolute assurance that all control issues are detected. 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. Therefore, any current evaluation of controls cannot and should not be projected to future periods.

 

  8  

 

 

Management conducted an assessment of the effectiveness of our system of internal control over financial reporting as of September 30, 2016, the last day of our fiscal year 2016. This assessment was based on criteria established in the framework Internal Control—Integrated Framework (2013), issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) and included an evaluation of elements such as the design and operating effectiveness of key financial reporting controls, process documentation, accounting policies, and our overall control environment. Based on management's evaluation under the 2013 COSO framework, management concluded that the Company's internal controls over financial reporting were not effective as of September 30, 2016.

 

A material weakness is a deficiency or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely basis. We have identified the following material weaknesses.

 

1.        As of September 30, 2016, we did not maintain effective controls over the control environment. Specifically, we have not developed a framework for accounting policies and procedures. Since these entity level programs have a pervasive effect across the organization, management has determined that these circumstances constitute a material weakness.

 

2.        As of September 30, 2016, we did not maintain effective controls over financial statement disclosure. Specifically, controls were not designed and in place to ensure that all disclosures required were originally addressed in our financial statements. Accordingly, management has determined that this control deficiency constitutes a material weakness.

 

Changes in Internal Controls.

 

During the three months ended September 30, 2016, there were no changes in our internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Rule 13a-15 or Rule 15d-15 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

 

Item 9B. Other Information.

 

None.

 

  9  

 

 

PART III

 

Item 10. Directors, Executive Officers, Promoters, Control Persons and Corporate Governance; Compliance with Section 16(a) of the Exchange Act.

 

Our directors and executive officers, as well as their ages and the positions they held as of September 30, 2016, are set forth below. Our directors hold office until our next annual meeting of stockholders and until their successors in office are elected and qualified. All of our officers serve at the discretion of our Board of Directors. There are no family relationships among our executive officers and directors.

 

Name   Age   Position
Qiliang Zheng   41   President, Chief Executive Officer and Chairman of the Board
Ming Yi   36   Director & Chief Financial Office
Xinqian Zhang   26   Director

 

Qiliang Zheng, President, Chief Executive Officer and Chairman of the Board Mr. Zheng has served as the Chairman of ShengSheng Wood Industry Co., Ltd. since May 2004. As a founder of ShengSheng Wood Industry Co., Ltd., Mr. Zheng managed the sales, designing and installing technology, and decorative wood moulding process for a variety of imported and domestic produced wooden material, craftworks, solid wood furniture and so on. From June 2001 to November 2003, Mr. Zheng served as the Sales Manager and General Manager at Zhuijiang Home Appliance Co., Ltd. From April 1999 till January 2001, Mr. Zheng served as the Sales Manager at Wulin Motor Limited Company of Qingyuan. Mr. Zheng held a junior college degree at Guangzhou Nanyang Technological Vocational College.

 

Ming Yi, Chief Financial Officer and Director Mr. Yi has extensive experiences in finance, business administration and public accounting in diverse industries including retail/wholesale distribution, financial services and manufacturing. Mr. Yi has gained tremendous international finance and regulatory experience setting up companies and commercial operations. Mr. Yi has served as an accountant at N.G. Australia Pty Ltd. during 2004 to 2006, and senior accountant at Ernst & Young from 2006-2009. Mr. Yi served as a senior manager at Qi He CPA Ltd., a financial advisory firm, and the chief financial officer at China Bio-Energy Corp. from 2011 to 2015. Start from 2016, Mr. Yi served as the chief financial officer at Anhui Avi-Trip Co., Ltd. Mr. Yi is responsible for establishing stronger financial reporting compliance for the Company’s U.S. capital markets, enhancing cost controls, introducing tax, international credit and collections, developing IR capabilities and multi-company financial accounting and reporting systems.

  

Xinqian Zhang, Director and Secretary of the Board From January 2013 to December 2014, Ms. Zhang served as an accounting research and teaching assistant of the University of Massachusetts, Boston, and the fund administrator of the global service department of State Street, a U.S.-based financial services firm. Ms. Zhang holds a dual B.S. in Business Management from Dongbei University of Finance and Economics and the University of Surrey, and an M.S. in accounting from the University of Massachusetts, Boston.

 

Employees.

 

As of the date hereof, the Company has no employees.

 

Committees of the Board of Directors

 

We are currently quoted on the OTC Pink under the symbol “TUAA.” The OTCPK does not have any requirements for establishing any committees. For this reason, we have not established any committees. All functions of an audit committee, nominating committee and compensation committee are and have been performed by our board of directors.

 

Our Board believes that, considering our size, decisions relating to director nominations can be made on a case-by-case basis by all members of the Board without the formality of a nominating committee or a nominating committee charter. To date, we have not engaged third parties to identify or evaluate or assist in identifying potential nominees, although we reserve the right to do so in the future.

 

  10  

 

 

The Board does not have an express policy with regard to the consideration of any director candidates recommended by shareholders since the Board believes that it can adequately evaluate any such nominees on a case-by-case basis; however, the Board will evaluate shareholder-recommended candidates under the same criteria as internally generated candidates. Although the Board does not currently have any formal minimum criteria for nominees, substantial relevant business and industry experience would generally be considered important, as would the ability to attend and prepare for board, committee and shareholder meetings. Any candidate must state in advance his or her willingness and interest in serving on the board of directors.

 

The Company has no qualified financial expert at this time because it has not been able to hire a qualified candidate. Further, the Company believes that it has inadequate financial resources at this time to hire such an expert.  

 

Involvement in Certain Legal Proceedings

 

To our knowledge, during the past ten years, none of our directors, executive officers, promoters, control persons, or nominees has been:

 

  ● the subject of any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time;

 

  ● convicted in a criminal proceeding or is subject to a pending criminal proceeding (excluding traffic violations and other minor offenses);

 

  ● 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 involvement in any type of business, securities or banking activities; or

 

  ● found by a court of competent jurisdiction (in a civil action), the Commission or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law.

  

Code of Ethics

 

We have not adopted a Code of Business Conduct and Ethics that applies to our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions because of the small number of persons involved in the management of the Company.

 

Compliance with Section 16(a) of the Exchange Act

 

Our directors and executive officers, and persons who beneficially own more than 10% of a registered class of our equity securities are not subject to the reporting obligations under Section 16(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) because the Company does not have its securities registered under Section 12 of the Exchange Act

 

Board Leadership Structure and Role in Risk Oversight

 

Due to the small size and early stage of the Company, and its status as a shell company, we have not adopted a formal policy on whether the Chairman and Chief Executive Officer positions should be separate or combined. Mr. Qiliang Zheng serves as our President, Chief Executive Officer and Chairman of the Board.

 

Our board of directors is primarily responsible for overseeing our risk management processes on behalf of our board of directors. The board of directors receives and reviews periodic reports from management, auditors, legal counsel, and others, as considered appropriate regarding our company’s assessment of risks. The board of directors focuses on the most significant risks facing our company and our company’s general risk management strategy, and ensures that risks undertaken by our Company are consistent with the board’s appetite for risk. While the board oversees our company’s risk management, management is responsible for day-to-day risk management processes. We believe this division of responsibilities is the most effective approach for addressing the risks facing our company and that our board leadership structure supports this approach.

 

  11  

 

 

Item 11. Executive Compensation

 

Currently, our officers and directors are serving without compensation. They are reimbursed for any out-of-pocket expenses that they incurs on our behalf. In the future, we may approve payment of salaries for officers and directors, but currently, no such plans have been approved.

 

Grants of Plan-Based Awards and Outstanding Equity Awards at Fiscal Year-End

 

We do not have any equity incentive plans under which to grant awards.

 

Employment Agreements

 

We do not currently have any written employment agreements with any of our directors and officers.

 

Retirement/Resignation Plans

 

We do not currently have any plans or arrangements in place regarding the payment to any of our executive officers following such person’s retirement or resignation.

 

Director Compensation

 

We have not paid our directors fees in the past for attending board meetings. In the future, we may adopt a policy of paying independent directors a fee for their attendance at board and committee meetings. We reimburse each director for reasonable travel expenses related to such director’s attendance at board of directors and committee meetings.

   

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

 

The following tables set forth information on the beneficial ownership of our Common Stock as of April 17, 2017, based on the current beneficial ownership of our Common Stock by the individuals who are our executive officers and directors and greater than 5% stockholders. Beneficial ownership is determined according to rules of the SEC governing the determination of beneficial ownership of securities. A person is deemed to be a beneficial owner of any securities for which that person has a right to acquire beneficial ownership within 60 days.

 

Name and Address of Beneficial Owner (1)  

Number of Shares  

and Nature

of Beneficial

Ownership

   

Percent of

Common

Stock

Outstanding

 
             
Zaixian Wang     7,000,000       11.76 %
Qiliang Zheng     0       -  
Xinqian Zhang     0       -  
Ming Yi     25,000             *
All directors and executive officers as a group (4 persons)     0       -  

 

(1)

Unless otherwise indicated, the business address of each beneficial owner is c/o 40 Wall Street, 28th Floor, Unit 2851, New York, NY 10005

 

* Less than 1%

 

  12  

 

 

Item 13. Certain Relationships and Related Transactions and Director Independence.

 

Certain Relationships and Related Transactions

 

There were no transactions to which we have, or any of our subsidiaries has been a party, in which the amount involved in the transaction exceeded $120,000 and in which any of our directors or executive officers or holders (or immediate family members of holders) of more than five percent of our capital stock had or will have a direct or indirect material interest.

 

Director Independence

 

Our securities are quoted on the OTC Pink tier of the OTC Markets Group inter-dealer quotation and trading system, which does not have any director independence requirements. Once we engage further directors and officers, we will develop a definition of independence and examine the composition of our Board of Directors with regard to this definition. 

 

Item 14. Principal Accounting Fees and Services.

 

Audit Fees

 

For the years ended September 30, 2016 and 2015, we were billed approximately $25,000 and $5,000, respectively, for professional services rendered for the audit and reviews of our financial statements. 

 

Other Audit Related Fees

 

For the years ended September 30, 2016 and 2015, we were not billed for professional services rendered to other audit related fees.

 

Tax Fees

 

For the years ended September 30, 2016 and 2015, we were not billed for professional services rendered for tax compliance, tax advice, and tax planning.

 

All Other Fees

 

We did not incur any other fees related to services rendered by our principal accountant for the years ended September 30, 2016 and 2015.

 

The Company does not currently have a separate audit committee. Rather, the whole board serves as the audit committee. Our board has reviewed and approved the above fees for all of the services described in items (1), , and believes such fees are compatible with the independent registered public accountants’ independence.

 

Item 15.  Exhibits and Financial Statement Schedules.

 

The following documents are filed as a part of this report or incorporated herein by reference:

 

(1) Our Financial Statements are listed on page F-1 of this Annual Report.

 

(2) Financial Statement Schedules:

 

None

 

(3) Exhibits:

 

  13  

 

 

The following documents are included as exhibits to this Annual Report:

 

Exhibit No.   Title of Document
     
3.1   Articles of Incorporation (incorporated by reference to Exhibit 3.1 of the Company’s Registration Statement on Form S-1, filed with the SEC on November 6, 2014).
     
3.2   Bylaws (incorporated by reference to Exhibit 3.2 of the Company’s Registration Statement on Form S-1, filed with the SEC on November 6, 2014).
     
3.3   Articles of Merger filed with the Secretary of State of Nevada on September 8, 2015 (incorporated by reference to Exhibit 3.1 of the Company’s Current Report on Form 8-K, filed with the SEC on September 22, 2015).
     
4.1   Convertible Note (incorporated by reference to Exhibit 4.1 of the Company’s Current Report on Form 8-K, filed with the SEC on April 1, 2016), cancelled as of the date of this report.
     
10.1   Share Exchange Agreement dated March 30, 2016, by and among the Company, Global International Holdings Ltd. and Global Technology Co., Ltd. (incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K, filed with the SEC on April 1, 2016).
     
10.2   English translation of the Management and Consulting Service Agreement dated February 16, 2016, by and between Anhui Avi-trip Technology Co., Ltd. and  Jierun Consulting Management (Shenzhen) Co., Ltd . (incorporated by reference to Exhibit 10.2 of the Company’s Current Report on Form 8-K, filed with the SEC on April 1, 2016).
     
10.3   English translation of the Option Agreement dated February 16, 2016, by and among Jierun Consulting Management (Shenzhen) Co., Ltd. , Anhui Avi-trip Technology Co., Ltd. , and the two shareholders of Anhui Avi-trip Technology Co., Ltd. (incorporated by reference to Exhibit 10.3 of the Company’s Current Report on Form 8-K, filed with the SEC on April 1, 2016).
     
10.4   English translation of the Equity Pledge Agreement dated February 16, 2016, by and among Jierun Consulting Management (Shenzhen) Co., Ltd., Anhui Avi-trip Technology Co., Ltd., and the two shareholders of Anhui Avi-trip Technology Co., Ltd. (incorporated by reference to Exhibit 10.4 of the Company’s Current Report on Form 8-K, filed with the SEC on April 1, 2016).
     
10.5   English translation of the Shareholders Voting Rights Proxy Agreement dated February 16, 2016, by and among Jierun Consulting Management (Shenzhen) Co., Ltd. , Anhui Avi-trip Technology Co., Ltd. , and the two shareholders of Anhui Avi-trip Technology Co., Ltd. (incorporated by reference to Exhibit 10.5 of the Company’s Current Report on Form 8-K, filed with the SEC on April 1, 2016).
     
10.6   Termination Agreement on Management and Consulting Services Agreement (incorporated by reference to Exhibit A of the Company’s Information Statement on Schedule 14C filed with the SEC on August 9, 2016).
     
10.7   Termination Agreement on Option Agreement (incorporated by reference to Exhibit B of the Company’s Information Statement on Schedule 14C filed with the SEC on August 9, 2016).
     
10.8   Termination Agreement on Voting Right Proxy Agreement (incorporated by reference to Exhibit C of the Company’s Information Statement on Schedule 14C filed with the SEC on August 9, 2016).
     
10.9   Termination Agreement on Equity Pledge Agreement (incorporated by reference to Exhibit D of the Company’s Information Statement on Schedule 14C filed with the SEC on August 9, 2016).
     
31.1   Certification of the Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).
     
31.2   Certification of the Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).
     
32.1   Certification of Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. § 1350, as Adopted Pursuant to § 906 of the Sarbanes-Oxley Act of 2002 (filed herewith).
     
101.INS   XBRL Instance Document
101.SCH   XBRL Taxonomy Extension Schema Document
101.CAL   XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF   XBRL Taxonomy Extension Definition Linkbase Document
101.LAB   XBRL Taxonomy Extension Label Linkbase Document
101.PRE   XBRL Taxonomy Extension Presentation Linkbase Document

 

  14  

 

 

SIGNATURES

 

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

  TIANHE UNION HOLDINGS LIMITED
     
Date: April 28, 2017 By: /s/ Qiliang Zheng
    Qiliang Zheng
    President and Chief Executive 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   Position   Date
         
/s/ Qiliang Zheng   President, Chief Executive Officer,   April 28, 2017
Qiliang Zheng   Chairman of the Board of Directors

(principal executive officer)

   
         

/s/ Ming Yi

  Chief Financial Officer (principal financial   April 28, 2017
Ming Yi   officer and principal accounting officer)    
         
/s/ Xinqian Zhang   Director   April 28, 2017
Xinqian Zhang        

 

 

15

 

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