UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10
Amendment No. 10
Date of Amendment No. 10:
July
31,
2017
Date of Amendment No. 9:
June
20,
2017
Date of Amendment No. 8: April 14,
2017
Date of Amendment No. 7: February
13, 2017
Date of Amendment No. 6: February
1, 2017
Date of Amendment No. 5: December
6, 2016
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Date of Amendment No. 4: November
2, 2016
Date of Amendment No. 3: November
2, 2016
Date of Amendment No. 2: October 18,
2016
Date of Amendment No. 1: October 4,
2016
Date of Original Filing: September
30, 2016
General Form for Registration of Securities
Pursuant to Section 12(b) or (g) of the
Securities Exchange Act of 1934
ATI MODULAR TECHNOLOGY CORP.
(Exact name of registrant as specified in its charter)
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Nevada
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81-3131497
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(State or Other Jurisdiction of
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(I.R.S. Employer
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Incorporation or Organization)
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Identification No.)
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c/o Alton Perkins
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4700 Homewood Court, Suite 100, Raleigh, North Carolina
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27609
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(Address of Principal Executive Offices)
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(Zip Code)
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Registrants telephone number, including
area code: (888) 406-2713
Send all correspondence to:
Alton Perkins
4700 Homewood Court
Suite 100
Raleigh, North Carolina 27609
Telephone/Facsimile: (888) 406-2713
Email: ap@atimodular.com
Copies to
:
Anthony R. Paesano
Paesano Akkashian Apkarian, P.C.
7457 Franklin Road
Suite 200
Bloomfield Hills, Michigan 48301
Telephone: (248) 792-6886
Email: apaesano@paalawfirm.com
Securities to be registered under Section
12(b) of the Act: None
Securities to be registered under Section
12(g) of the Exchange Act:
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Title of each class to be
so registered
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Name of Exchange on which each
class is to be registered
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Common Stock, $.0001
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N/A
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Indicate by check mark whether
the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of large accelerated filer, accelerated filer and smaller reporting company in Rule 12b-2 of the Exchange Act.
(Check one):
Large accelerated filer
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Accelerated filer
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Non-accelerated filer
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Smaller reporting company
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(Do not check if a smaller reporting company)
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We are filing this
General Form for Registration of Securities on Form 10 to register our common stock, par value $0.0001 per share (the Common Stock),
pursuant to Section 12(g) of the Securities Exchange Act of 1934, as amended (the Exchange Act). Unless otherwise noted, referenced
in this registration statement to ATI Modular or the Company, or pronouns such as, we, our or us refers to ATI Modular Technology
Corp. Once this registration statement is deemed effective, we will be subject to the requirements of Regulation 13A under the
Exchange Act, which will require us to file annual reports on Form 10-K, quarterly reports on Form 10-Q, and current reports on
Form 8-K, and we will be required to comply with all other obligations of the Exchange Act applicable to issuers filing registration
statements pursuant to Section 12(g) of the Exchange Act.
EXPLANATORY NOTE
On September
30, 2016, the Company filed its registration information on Form 10. The Company has since responded to comments provided
by the Securities and Exchange Commission (“SEC”), resulting in nine (9) prior amendments to date. These amendments also
outlined changes in the Companys articles of incorporation and agreements entered into by the Company.
This Tenth
Amendment to the Companys Form 10 updates the Companys financial information and addresses the questions raised in SECs comment
letter dated June 28, 2017. As referenced herein, the term Form 10 shall refer to the Companys Tenth Amendment to its Form
10 Information.
FORWARD LOOKING STATEMENTS
Special Note Regarding Forward-Looking
Statements
Information included or incorporated
by reference in this registration statement on Form 10 contains forward-looking statements. All forward-looking statements are
inherently uncertain as they are based on current expectations and assumptions concerning future events or future performance of
the Company. Readers are cautioned not to place undue reliance on these forward-looking statements, which are only predictions
and speak only as of the date hereof. Forward-looking statements may contain the words believes, project, expects, anticipates,
estimates, forecasts, intends, strategy, plan, may, will, would, will be, will continue, will likely result, and similar expressions,
and are subject to numerous known and unknown risks and uncertainties. Additionally, statements relating to implementation of business
strategy, future financial performance, acquisition strategies, capital raising transactions, performance of contractual obligations,
and similar statements may contain forward-looking statements. In evaluating such statements, prospective investors and shareholders
should carefully review various risks and uncertainties identified in this Report, including the matters set forth under the captions
Risk Factors and in the Companys other SEC filings. These risks and uncertainties could cause the Companys actual results to differ
materially from those indicated in the forward-looking statements. The Company disclaims any obligation to update or publicly announce
revisions to any forward-looking statements to reflect future events or developments.
Although forward-looking statements
in this registration statement on Form 10 reflect the good faith judgment of our management, such statements can only be based
on facts and factors currently known by us. Consequently, forward-looking statements are inherently subject to risks and uncertainties,
and actual results and outcomes may differ materially from the results and outcomes discussed in or anticipated by the forward-looking
statements. Factors that could cause or contribute to such differences in results and outcomes include, without limitation, those
specifically addressed under the heading Risk Factors Related to Our Business below, as well as those discussed elsewhere in this
Form 10. Readers are urged not to place undue reliance on these forward-looking statements, which speak only as of the date of
this Form 10. We file reports with the Securities and Exchange Commission (“SEC”). You can read and copy any materials we file with
the SEC at the SECs Public Reference Room, 100 F. Street, NE, Washington, D.C. 20549. You can obtain additional information about
the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. In addition, the SEC maintains an Internet site
(www.sec.gov) that contains reports, proxy and information statements, and other information regarding issuers that file electronically
with the SEC, including us.
We disclaim any obligation to revise
or update any forward-looking statements in order to reflect any event or circumstance that may arise after the date of this registration
statement on Form 10. Readers are urged to carefully review and consider the various disclosures made throughout the entirety of
this Form 10, which attempt to advise interested parties of the risks and factors that may affect our business, financial condition,
results of operations and prospects.
Item 1. Description of Business.
(a) General Development of Business
We are an
operating company engaged in the development and the exporting of modular energy efficient technology and processes that
allow government and private enterprises in China to use US-based methods for creating modular spaces, facilities, and
properties. We are in the business of all aspects of modular construction, including but not limited to, (a) the furtherance
of modular construction technology, education and development in developed and undeveloped countries, (b) acquisition and/or
installation of construction equipment, materials, furnishings, adware, insulation, flooring, roofing, wiring, plumbing,
heating and air conditioning, and landscaping, and (c) other businesses directly or tangentially related to these lines of
services, including assisting businesses and entrepreneurs in securing naming, licensing or promotional rights, driving
internet and media traffic, increasing visibility of product and name recognition, and other services. As with any business
plan that is aspirational in nature, there is no assurance we will be able to accomplish all of our objectives or that we
will be able to meet our financing needs to accomplish our objectives. We believe that we are a shell company, as defined
under Rule 12b-2 of the Exchange Act. Our CIK number is 0001697426, and we have selected December 31 as our fiscal year.
In China, the modular
construction industry is new and in its very early stages. There are only three other competitors, and those competitors are based
in China. None of the competitors are from the United States. We believe that it is recognized that United States modular technology
is more advanced than our Chinese counterparts, and the technology is recognized as the gold standard. The construction industry
in China, as a whole, has a mandate to immediately start developing modular technology with cities and provinces developing modular
construction plans and targets to construct modular in both the public as well as private sectors. Most communities have milestones
and are creating official policies on modular construction with the actual percentage of production mandated by particular target
dates.
In our view, our
position is strong. We have been sought out by three separate governments in China to assist their communities in developing their
modular industry based upon United States technology. We have experience in the construction sector in China and the United States,
and thus we believe we have the leverage in assembling experts in the modular industry to assist in delivery of goods, services,
equipment, technology, and know-how all under the moniker of Made in the USA.
We are concluding
registering our subsidiary in China and shortly expect to announce the physical location of our offices in China as well as our
plant and other operating facilities. Our principal executive offices are located at 4700 Homewood Court, Suite 100 in Raleigh,
North Carolina. We are registered as a foreign business entity in the State of North Carolina. We lease the office space from Yilaime
Corporation, a Nevada corporation doing business in North Carolina, and a related party to the Company, as set forth below.
The Company was
incorporated on January 2, 1969 as United Gold & Silver Co. (“UGS”). On February 17, 1971, UGS merged with Lucky Irish Silver,
Inc., a Montana corporation, and Deep Creek Mines, Inc., a Washington corporation, in which the surviving entitys name remained
USG. On November 29, 1999, USG merged with Auto America, Inc., (“Auto America”), a Delaware corporation, through the filing of Articles
of Merger resulting in the surviving entity changing its name from USG to Auto America. From 2002 to 2007, the State of Washington
automatically filed numerous Certificates of Administrative Dissolutions for Auto America for failure to file annual reports. On
May 14, 2007, Auto America filed its final Application of Reinstatement resulting in restoring the Company to good standing. Also,
on May 14, 2007, Auto America filed Amended Articles of Incorporation changing its name to Charter Equities, Inc. (“Charter Equities”).
Charter Equities converted to an Arizona corporation on January 23, 2008. Shortly thereafter, the Company converted to Nevada corporation
and changed its name to Global Recycle Energy, Inc. We amended our articles of incorporation on June 27, 2016, changing our name
to ATI Modular Technology Corp.
(b) Description of Registrants Plan
of Operation
As of the filing
of this Registration Statement, we are in the first quarter of our fiscal year. Our focus at this time is on performing our duties
and obligations under a series of pending operational agreements, discussed below.
As set forth below,
the Company intends on relying on other businesses controlled by our sole director and officer, and beneficial owner of the majority
shares of common stock in the Company Alton Perkins, in implementing its business plan.
Mr. Perkins
is the control person of Yilaime Corporation, AmericaTowne and AXP Holding Corporation. At this time, the purpose of the
Company is to service the construction and related technology needs of AmericaTowne under AmericaTownes agreements with the
Shexian County Investment Promotion Bureau in developing an AmericaTowne community in the Hanwang mountains in Shexian,
China. The Company also intends on supporting these services in other AmericaTowne ventures at the invitation of the Xiamen
Longyan City Chamber of Commerce, Xiamen/Longyan China and the Xiamen City Growth Planning Agency in developing an
AmericaTowne Community and an International School in Longyan County China.
The related export
services rendered to the Company in the implementation of its business plan cannot be provided by AmericaTowne or through the AmericaTowne
relationship. In order to avoid conflicts of interest, Mr. Perkins is of the opinion that there must be a separate and distinct
agreement between, in this case, the Company and AXP Holding Corporation. Furthermore, although other similar IC-DISC entities
exist, the Company is able to obtain better terms and conditions from AXP Holding Corporation in light of Mr. Perkins control of
AXP Holding Corporation.
AmericaTownes Board
of Directors determined that operating and controlling a separate but related entity focused on the development and the exporting
of modular energy efficient technology and processes for government and private enterprises in China would be more prudent from
a risk mitigation and operational standpoint than providing these services under the AmericaTowne business plan. Furthermore, the
intent of the Company is to expand its services and relationships to other similar endeavors in projects not related to AmericaTowne,
thus the need to maintain and operate a separate entity.
Cooperative Agreement
AmericaTowne, Inc. and Shexian County Investment Promotion Bureau
On June 21, 2016,
AmericaTowne, the controlling shareholder of the Company by virtue of its majority ownership of common stock in the Company, entered
into a Cooperative Agreement with the Shexian County Investment Promotion Bureau (the “Shexian County Bureau”) out of Shexian, China
(hereinafter, the “AT/Shexian Cooperative Agreement”). The AT/Shexian Cooperative Agreement relates to the construction of an AmericaTowne
location in advancing tourism in the Hanwang mountains.
Under the terms
of the AT/Shexian Cooperative Agreement, AmericaTowne and the Shexian County Bureau have agreed to a strategic partnership wherein
the Shexian County Bureau intends to invest local resources to AmericaTowne for construction of an AmericaTowne community. In consideration,
AmericaTowne intends on investing funds towards the development of the AmericaTowne community. AmericaTowne will be obligated to
bear any and all applicable taxes and the projected investment by AmericaTowne into the development of the AmericaTowne community
is estimated to be $30,000,000. It is anticipated that the definitive agreement will set forth a detailed projection and proforma
associated with the use of funds. There is no guarantee that AmericaTowne will be able to raise this capital in the event a definitive
agreement is executed. Furthermore, AmericaTownes ability to raise the necessary capital and to perform obligations under any definitive
agreement might be materially affected in the event the Company is not able to perform any of its obligations under any future
definitive agreement with the Shexian County Bureau.
Cooperative Agreement
ATI Modular and Shexian County Investment Promotion Bureau
The Company is controlled
by AmericaTowne by virtue of the AmericaTownes majority ownership of common stock. On June 21, 2016, the Company agreed to participate
with the Shexian County Bureau in building local modular construction, researching technology and intelligent systems related thereto,
and servicing the full lifecycle of modular construction in the locale through the execution of the Cooperative Agreement (the
“ATI Modular/Shexian Cooperative Agreement”).
Pursuant
to future negotiations and more definitive agreements, ATI Modular has agreed to purchase the requisite equipment and
technology in performing under the ATI Modular/Shexian Cooperative Agreement. In consideration for the services provided by
ATI Modular, the Shexian County Bureau has agreed to be responsible for providing factories and land, and other resources and
manpower in developing the modular construction. The Company has also agreed to exercise its best efforts in raising
approximately $30,000,000 in furthering the parties collective interests under the ATI Modular/Shexian Cooperative Agreement.
These funds would be allocated towards different operating costs than the funds necessary for AmericaTowne to perform under
the AT/Shexian Cooperative Agreement. It is anticipated that the definitive agreement will set forth a detailed projection
and proforma associated with the use of funds. The Company and the Shexian County Bureau have agreed to continue to cooperate
in good faith in executing and further agreements needed in furthering their respective objectives. However, notwithstanding
this intent, the Companys ability to perform might be materially affected in the event AmericaTowne is not able to meet its
obligations in furthering any future definitive agreement with the Shexian County Bureau.
Investment and
Cooperation Agreement for ATI Modular Green Building Manufacturing Project (Jiangnan)
On September 8,
2016, the Company entered into the Investment and Cooperation Agreement for ATI Modular Green Building Manufacturing Project (“Jiangnan
Agreement”) with the Jiangnan Industry Zone in Anhui Province (“Jiangnan”). Under the Jiangnan Agreement, the Company agreed, among
other things, to manufacture and install modular buildings, and provide research into the development of green building module
manufacturing. The Jiangnan Agreement was not a definitive agreement. Rather, it memorialized the parties future intent as to the
subject matter therein.
On December 28,
2016, the Company and Jiangnan entered into the American ATI Modular Technology Company Project Investment Agreement (the “Investment
Agreement”), which superseded the Jiangnan Agreement. Under the Investment Agreement, Jiangnan and the Company agreed to the construction
of the Companys green, modular building and related technology under the project name Modular Plant Production Base. The Investment
Agreement calls for the Company will rent buildings, factories and rental houses from Jiangnan, or its related-party - Jiangnan
Construction & Development Co., Ltd. (“Jiangnan Construction”), with a total acreage of approximately 244,776 square meters (approximately
2,634,747 square feet) for purposes of advancing the Companys modular construction, technology and research, and with a chosen
location within this area for the Companys global company offices. The Company will retain its offices in the United States. In
the event the Company does not occupy the rented facilities in one-year, Jiangnan may place other tenants in the buildings for
unrelated projects. The rental rate is as follows per square meter, per month: (a) 9 Chinese Yuan (approximately $1.29 USD) for
single-storied factory buildings, (b) 7 Chinese Yuan (approximately $1.01 USD) for multi-storied factory buildings, (c) 6 Chinese
Yuan (approximately $.86 USD) for two-storied buildings, (d) 5 Chinese Yuan (approximately $.75 USD) for three-storied buildings
and public rental, and (e) 10 Chinese Yuan (approximately $1.38 USD) for commercial housing. The first twenty-seven months is rent
free.
Pursuant to the Investment Agreement, the lease term for the property the Company will utilize will be ten (10) years.
The Company intends on entering into a formal lease agreement with Jiangnan, however said lease has not been finalized. The Company
will finalize the separate lease agreement once it completes the foreign entity registration process.
The initial deposit
of 330,000 Chinese Yuan (approximately $48,000 USD) is due upon the Companys registration as a foreign entity with the Chinese
government. This amount may be applied to the Companys rental obligations. The Company has agreed to further capitalize the operation
with 396,000,000 Chinese Yuan (approximately $57,000,000 USD) with 79,200,000 Chinese Yuan (approximately $11,000,000 USD) by December
31, 2017.
The capitalization
under the Investment Agreement is, in part, the Companys responsibility. However, the Company and Jiangnan have agreed to certain
provisions to mitigate against financing risks, including, but not limited to: (a) access upon request by the Company to local
bank loans in the Anhui Province and United States Exim Bank, (b) equity fund insertion up to $3,000,000 USD, and (c) contribution
by Jiangnan up to $2,900,000 upon meeting conditions in the Investment Agreement.
The Companys majority
and controlling shareholder, ATI, has no financial obligations under the Investment Agreement. However, ATIs director, officer
and control person by virtue of his beneficial ownership of more than 51% of the issued and outstanding shares of common stock
is Alton Perkins. Mr. Perkins is also the beneficial owner of the controlling interest in the Company by virtue of his ownership
in ATI, and he is the Companys sole director and officer. As a result, Mr. Perkins might elect to vote ATIs shares, or exercise
his rights as the sole member of the Board of Directors of ATI, to loan funds from AmericaTowne to the Company to satisfy the capital
requirements under the Investment Agreement. If this occurred, the loaned funds would become a related-party debt to the Company.
There are no current plans or intentions by Mr. Perkins to facilitate such a loan.
Investment and
Cooperation Agreement for ATI Modular Green Building Manufacturing Project (Yongan)
On September 9,
2016, the Company entered into the Investment and Cooperation Agreement for ATI Modular Green Building Manufacturing Project with
the Yongan government in the Fujian province (the “Yongan Agreement”). Under the Yongan Agreement, similar to the Jiangnan Agreement,
the Company has agreed to manufacture and install modular buildings, and provide research into the development of green building
module manufacturing. The Company has agreed to provide appropriate technology and intelligent systems in providing modular building
lifecycle services. The location of the planned project is Yongan city in the Fujian province, China. The parties have projected
a cost of $30,000,000.
The Company has
agreed to grant the Yongan government audit, access, supervision, inspection and other rights. The Yongan government has agreed
to coordinate any and all necessary services in securing benefits associated with the Company being a foreign investment enterprise,
including but not limited to, providing the site for the manufacturing facility, tax relief, access to financing and a Project
Headquarter for the Company, which is defined in the Yongan Agreement.
The Yongan Agreement
is not a definitive agreement; rather, it is a memorialization of the parties future intent as to the subject matter therein. The
Companys business plans and objectives could be impaired in the event the parties do not reach a definitive agreement. . The Company
is responsible for financing and providing any necessary facilities inside any factory plant. There is no guarantee that the Company
can secure such financing or develop the necessary facilities.
Sales and Support Services Agreement
(Yilaime Corporation)
On June 27,
2016, we entered into a Sales and Support Services Agreement with Yilaime Corporation, a Nevada corporation (“Yilaime”). Yilaime
is the holder of the majority of issued and outstanding shares of common stock in AmericaTowne, Inc. (“ATI”), a Delaware corporation
and fully-reporting company with the United States Securities and Exchange Commission. Mr. Perkins is also the Trustee of the
Alton & Xiang Mei Lin Perkins Family Trust (“Perkins Trust”) and the AXP Nevada Asset Protection Trust 1 (“AXP”),
which holds 5,100,367 and 120,000 shares, respectively, of the issued and outstanding common stock in ATI. Mr. Perkins is the
beneficial owner of 20,674,484 shares of ATI, which equals 90.11% of issued and outstanding shares. Mr. Perkins is the beneficial
owner of the majority and controlling interest in the Company through his direct holdings, and beneficial holdings through Yilaime,
AXP and the Perkins Trust. ATI, Perkins Trust and Mr. Perkins beneficially own 110,117,593 shares, or 86%, of the Companys common
stock.
Under
the Services Agreement, Yilaime will provide the Company with marketing, sales, and support services in the Company’s pursuit
of modular business in China in exchange for a commission equal to ten percent (10%) of the gross amount of monies procured for
the Company through Yilaime’s services. In consideration of the right to receive this commission, Yilaime has agreed to
pay the Company a quarterly fee of $250,000. The Services Agreement is set to expire on
June
10, 2020
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Yilaime is obligated
to provide support services only in a manner that is deemed commercially acceptable by Yilaime and Yilaime has the sole right to
determine the means, manner and method by which services will be provided and at the time and location of its choosing. Furthermore,
as the control person of Yilaime, Mr. Perkins might make decisions he deems are in the best interests of Yilaime, which might be
to the detriment of the goals and objectives of the Company.
Modular Construction
& Technology Services Agreement (AmericaTowne)
On June 28, 2016,
we entered into a Modular Construction & Technology Services Agreement (the “Modular Services Agreement”) with AmericaTowne Inc.
(“ATI”), a Delaware corporation and fully-reporting company with the United States Securities and Exchange Commission (the “SEC”).
The impetus behind the Modular Services Agreement was the Companys Cooperative Agreement with the Shexian County Government, China.
Under the Cooperative Agreement, ATI and the Shexian County Bureau have agreed to a partnership in furthering the development of
an AmericaTowne community in the Hanwang mountains, Shexian, China. In addition, ATI, at the invitation of the Xiamen Longyan City
Chamber of Commerce, Xiamen/Longyan China and the Xiamen City Growth Planning Agency plan to pursue the development of an AmericaTowne
Community and an International School in Longyan County China.
Under the Modular
Services Agreement, ATI Modular shall provide the
research, development, training and modular
technology in a manner deemed commercially acceptable by ATI based on its commercially reasonable requirements, plans and specifications,
which shall be agreed upon in advance of any substantial and material construction.
ATI will pay the Company a quarterly
fee of $125,000 per quarter. The initial fee under the Modular Services Agreement with AmericaTowne was recorded as a related-party
receivable upon its execution.. The Services Agreement is set to expire on June 10, 2020, absent early termination for breach thereof
by either party. ATI retains an option to extend the term under its sole discretion until June 10, 2025 by providing written notice
to the Company by March 10, 2019.
Interest Charge
Domestic International Sales Agreement (AXP Holding Corporation)
On June 29, 2016,
we entered into an IC-DISC Service Provider Agreement with AXP Holding Corporation, a Nevada corporation (“AXP Holding”) and related
party to the Company through Mr. Perkins control of AXP Holding. AXP Holding is an Interest Charge - Domestic International Sales
Corporation, or IC-DISC. AXP IC-DISC tax-exempt status was authorized and approved by the United States Department of the Treasury,
Internal Revenue Service. As an IC-DISC, AXP Holding may, under certain conditions, act as a sister corporation to entities and
provide services to assist a company in obtaining lower tax rates on export income. In addition to the export tax savings provided
by AXP, AXP can provide an additional array of services including promoting the Companys export activities, purchasing receivables
from the Company at a discount through a factoring relationship, and providing the Company with working capital loans.
The term under the
IC-DISC Service Provider Agreement is set to expire on December 6, 2019, absent early termination for breach thereof by either
party. AXP retains the right to extend the term, exercising its sole discretion, to December 6, 2024 by providing written notice
to the Company by November 6, 2019. AXP has agreed to a non-compete and non-circumvent in providing the services under the IC-DISC
Service Provider Agreement.
The Company
has agreed to pay AXP a commission fee up to the greater of 50% of the Companys export net income or 4% of the Companys
export gross receipts. The Company will determine the exact amount and the method of payment of the commission fee. The
commission fee shall be paid at the option of the Company periodically throughout the year, but no later than December 31 on
annual basis. If there is no commission fee due to no export sales, the Company will pay AXP an export service fee of
$50,000. The export service fee, if any, is due on or before December 31 on an annual basis.
In addition, for
referring businesses from the Companys Export Platform or Community, AXP agrees to pay the Company 25% of each Sales Export Service
Fee charged and received as an IC-DISC Commission from each Exporter or Licensee resulting from participating in the Export Platform
or Community. This fee is called a Group Export Consulting Fee in the IC-DISC Service Provider Agreement, and is due no later than
fifteen business days after receipt from the Exporter or Licensee, but no later than December 31 on an annual basis. For illustrative
purposes, if AXP receives and or charges an Exporter 50% of its net export sales as a commission, and that value is $100,000, AXP
would owe the Company 25%, or $25,000. Furthermore, during the term, the Company shall pay AXP a flat fee of $5,000 per transaction
for purchasing receivables from the Company, plus an interest rate for such factoring at the prime rate plus one-percent.
The Company is in
the early stages of its operations, and many of its plans and objectives are aspirational in nature, and thus might never come
to fruition. At this time, the Company plans to retain engineering and architectural firms based in the United States who have
extensive experience in developing modular structures in the United States, China and other foreign locations based on market demand,
which has not been thoroughly researched to date. The Company has been focused on obtaining quotes, negotiating formal engagements
and researching all aspects of the modular construction industry. While the infrastructure is still in the developmental stage,
the Company is confident that it has the experience, or access to those with experience, in the modular construction field.
The Company plans
on engaging in onsite placement and delivery of modular structures. Mr. Perkins has extensive experience in operating business
in China. One of the reasons that Mr. Perkins was sought out and invited to participate in developing the modular industry in China
is that he was the co-chairman of a construction company in China - Yilaime Foreign Partnership in Henghsui China. His experience
with Yilaime Foreign Partnership allows ATI Modular to call on local companies in China as well as modular companies and experts
in the United States to help provide on-site services. Yilaime Foreign Partnership is not a related party to the Company, ATI,
Yilaime or AXP.
In addition, the
Company recently joined the Modular Building Institute in Charlottesville, Virginia. In September of 2016, Mr. Perkins attended
the Institutes annual exposition in order to line up available suppliers, and experts in the modular construction field.
We intend on offering
support services in all phases of modular construction. Our approach will be to focus on exporting United States based technology,
services and equipment, and general know-how. Exporters in our related company, AmericaTowne, are experienced in the modular field
and we plan on allowing those experienced exporters to participate in various levels of our program.
The Company currently
does not have a principal supplier of raw materials. The Company has identified potential sources of raw materials in the United
States through its membership in the Modular Building Institute. One of our primary challenges will be pricing the source of raw
materials and delivery to China. We are also looking to potential raw material sources in China.
To operate within
China, the Company requires approval of government officials in China. In both cases where the Company has signed Cooperative Agreements
(and in the case of the Shexian Agreement), and at the invitation of the local government, we have the approval to register and
conduct business.
Employees
The
Company currently has two full-time employees.
Emerging Growth Company
We are an emerging
growth company under the JOBS Act. We shall continue to be deemed an emerging growth company until the earliest of:
(a) the last day of the fiscal
year of the issuer during which it had total annual gross revenues of $1,000,000,000 (as such amount is indexed for inflation every
5 years by the Commission to reflect the change in the Consumer Price Index for All Urban Consumers published by the Bureau of
Labor Statistics, setting the threshold to the nearest 1,000,000) or more;
(b) the last day of the fiscal
year of the issuer following the fifth anniversary of the date of the first sale of common equity securities of the issuer pursuant
to an effective IPO registration statement;
(c) the date on which such
issuer has, during the previous 3-year period, issued more than $1,000,000,000 in non-convertible debt; or
(d) the date on which such
issuer is deemed to be a large accelerated filer, as defined in section 240.12b-2 of title 17, Code of Federal Regulations, or
any successor thereto.
As an emerging growth
company we are exempt from Section 404(b) of Sarbanes Oxley. Section 404(a) requires Issuers to publish information in their annual
reports concerning the scope and adequacy of the internal control structure and procedures for financial reporting. This statement
shall also assess the effectiveness of such internal controls and procedures. Section 404(b) requires that the registered accounting
firm shall, in the same report, attest to and report on the assessment on the effectiveness of the internal control structure and
procedures for financial reporting.
As an emerging growth
company we are also exempt from Section 14A (a) and (b) of the Securities Exchange Act of 1934 which require the shareholder approval
of executive compensation and golden parachutes. We have elected to use the extended transition period for complying with new or
revised accounting standards under Section 102(b)(2) of the Jobs Act, that allows us to delay the adoption of new or revised accounting
standards that have different effective dates for public and private companies until those standards apply to private companies.
As a result of this election, our financial statements may not be comparable to companies that comply with public company effective
dates.
Going Concern
Our auditor has
expressed substantial doubt about your ability to continue as a going concern. Our net loss after provision for income tax is $3,693,
and we do not have sufficient revenue to cover any further losses that may occur.
As a shell company,
the Company and its shareholders are subject to certain consequences, challenges and risks. All of the presently outstanding shares
of common stock are restricted securities as defined under Rule 144 promulgated under the Securities Act and may only be sold pursuant
to an effective registration statement or an exemption from registration, if available. The SEC has adopted final rules amending
Rule 144 which became effective on February 15, 2008. These final rules may be found at: www.sec.gov/rules/final/2007/33-8869.pdf.
Pursuant to the
new Rule 144, one year must elapse from the time a shell company, as defined in Rule 405, ceases to be shell company and files
Form 10 information with the SEC, before a restricted shareholder can resell their holdings in reliance on Rule 144. Form 10 information
is equivalent to information that a company would be required to file if it were registering a class of securities on Form 10 under
the Securities and Exchange Act of 1934 (the “Exchange Act”).
Under the amended
Rule 144, restricted or unrestricted securities, that were initially issued by a reporting or non-reporting shell company or an
Issuer that has at any time previously a reporting or non-reporting shell company as defined in Rule 405, can only be resold in
reliance on Rule 144 if the following conditions are met: (1) the issuer of the securities that was formerly a reporting or non-reporting
shell company has ceased to be a shell company; (2) the issuer of the securities is subject to the reporting requirements of Section
13 or 15(d) of the Exchange Act; (3) the issuer of the securities has filed all reports and material required to be filed under
Section 13 or 15(d) of the Exchange Act, as applicable, during the preceding twelve months (or shorter period that the Issuer was
required to file such reports and materials), other than Form 8-K reports and (4) at least one year has elapsed from the time the
issuer filed the current Form 10 type information with the SEC reflecting its status as an entity that is not a shell company.
At the present time,
the Company is classified as a shell company as defined in Rule 12b-2 of the Exchange Act. As such, all restricted securities presently
held by the affiliates or control persons of the Company may not be resold in reliance on Rule 144 until: (1) the Company files
Form 10 information with the SEC when it ceases to be a shell company; (2) the Company has filed all reports as required by Section
13 and 15(d) of the Securities Act for twelve consecutive months; and (3) one year has elapsed from the time the Company files
the current Form 10 type information with the SEC reflecting its status as an entity that is not a shell company.
There can be no
assurance that we will ever meet these conditions and any purchases of our shares are subject to these restrictions on resale.
A purchase of our shares may never be available for resale as we cannot be assured we will ever lose our shell company status.
Item 1A. Risk Factors.
As a smaller reporting
company, we are not required to provide the information required by this item.
Item 2. Financial Information.
Managements Discussion and Analysis of Financial Condition
and Results of Operation.
You should read the following discussion
of our financial condition and results of operations together with the audited financial statements and the notes to the audited
financial statements included in this Registration Statement on Form 10. This discussion contains forward-looking statements that
reflect our plans, estimates and beliefs. Our actual results may differ materially from those anticipated in these forward-looking
statements.
We qualify as an "emerging growth
company" under the JOBS Act. As a result, we are permitted to, and intend to, rely on exemptions from certain disclosure requirements.
For so long as we are an emerging growth company, we will not be required to:
-
have an auditor report on our internal
controls over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act;
-
comply with any requirement that may
be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor's
report providing additional information about the audit and the financial statements (i.e., an auditor discussion and analysis);
-
submit certain executive compensation
matters to shareholder advisory votes, such as "say-on-pay" and "say-on-frequency;" and
-
disclose certain executive compensation
related items such as the correlation between executive compensation and performance and comparisons of the CEO's compensation
to median employee compensation.
In addition, Section 107 of the JOBS
Act also provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B)
of the Securities Act for complying with new or revised accounting standards. In other words, an emerging growth company can delay
the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected
to take advantage of the benefits of this extended transition period. Our financial statements may therefore not be comparable
to those of companies that comply with such new or revised accounting standards.
The Company is in the early stages of
its operations, and many of its plans and objectives are aspirational in nature, and thus might never come to fruition. At this
time, the Company plans to retain engineering and architectural firms based in the United States who have extensive experience
in developing modular structures in the United States, China and other foreign locations based on market demand, which has not
been thoroughly researched to date. The Company has been focused on obtaining quotes, negotiating formal engagements and researching
all aspects of the modular construction industry. While the infrastructure is still in the developmental stage, the Company is
confident that it has the experience, or access to those with experience, in the modular construction field.
The Company plans on engaging in onsite
placement and delivery of modular structures. Mr. Perkins has extensive experience in operating business in China. One of the reasons
that Mr. Perkins was sought out and invited to participate in developing the modular industry in China is that he was the co-chairman
of a construction company in China - Yilaime Foreign Partnership in Henghsui China. His experience with Yilaime Foreign Partnership
allows ATI Modular to call on local companies in China as well as modular companies and experts in the United States to help provide
on-site services. Yilaime Foreign Partnership is not a related party to the Company, ATI, Yilaime or AXP.
In addition, the Company recently joined
the Modular Building Institute in Charlottesville, Virginia. In September of 2016, Mr. Perkins attended the Institutes annual exposition
in order to line up available suppliers, and experts in the modular construction field.
We intend on offering support services
in all phases of modular construction. Our approach will be to focus on exporting United States based technology, services and
equipment, and general know-how. Exporters in our related company, AmericaTowne, are experienced in the modular field and we plan
on allowing those experienced exporters to participate in various levels of our program.
The Company currently does not have
a principal supplier of raw materials. The Company has identified potential sources of raw materials in the United States through
its membership in the Modular Building Institute. One of our primary challenges will be pricing the source of raw materials and
delivery to China. We are also looking to potential raw material sources in China.
To operate within China, the Company
requires approval of government officials in China. In both cases where the Company has signed Cooperative Agreements (and in the
case of the Shexian Agreement), and at the invitation of the local government, we have the approval to register and conduct business.
Fiscal Year
Our fiscal year ends December 31.
Results of Operations for the
Six Months Ended June, 2017 and 2016
Our operating results for the six
months ended June 30, 2017 and 2016 are summarized as follows:
|
|
Six
Months Ended
|
|
|
June
30, 2017
|
|
June
30, 2016
|
Revenue
|
|
$
|
250,000
|
|
|
$
|
125,000
|
|
Cost
of Revenues
|
|
$
|
|
|
|
$
|
|
|
Operating
Expenses
|
|
$
|
204,404
|
|
|
|
27,902
|
|
|
|
|
|
|
|
|
|
|
Net
Income (Loss)
|
|
$
|
38,757
|
|
|
$
|
100,957
|
|
Revenues
During the second quarter
of 2017, the Company generated revenue of $250,000. The Company's revenues came from related parties for services rendered $250,000
for the service rights agreement with AmericaTowne. We can make no assurances that we will find commercial success in any of our
revenue producing contracts. Our revenues, thus far, rely entirely on related parties. We are a new company and thus have very
limited experience in sales expectations and forecasting. We also have not fully discovered any seasonality to our business as
we began operations in the second quarter of 2016.
Operating Expenses
Our expenses for the first
six months ended June 30, 2017 and 2016 are outlined in the table below:
|
|
Six
Months Ended
|
|
|
June
30, 2017
|
|
June
30, 2016
|
General
and Administrative
|
|
$
|
204,404
|
|
|
$
|
27,902
|
|
|
|
|
|
|
|
|
|
|
Total
Operating Expenses
|
|
$
|
204,404
|
|
|
$
|
27,902
|
|
Our operating expenses are
largely attributable to administrative expenses related to our reporting requirements as a public company and implementation of
our business plan.
Net Income
As a result of our operations, the Company reported
net income before tax obligations of $38,757 for the second quarter of 2017.
Liquidity and Capital Resources
Working Capital
|
|
June
30, 2017
|
|
December
31, 2016
|
Current
Total Assets
|
|
$
|
1,122,039
|
|
|
$
|
712,793
|
|
Current
Total Liabilities
|
|
$
|
830,143
|
|
|
$
|
534,086
|
|
|
|
|
|
|
|
|
|
|
Working
Capital
|
|
$
|
291,896
|
|
|
$
|
178,707
|
|
Cash Flow
|
|
Six
Months Ended
|
|
|
June
30, 2017
|
|
June
30, 2016
|
Net
Cash Provided by Operating Activities
|
|
$
|
98,539
|
|
|
$
|
4,156
|
|
Net
Cash Used in Investing Activities
|
|
$
|
861
|
|
|
$
|
4,156
|
|
Nat
Cash Provided by Financing Activities
|
|
$
|
22,499
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
Increase/Decrease
in Cash
|
|
$
|
120,178
|
|
|
$
|
-
|
|
Cash Used in Operating Activities
We have $98,539 and $4,156 net cash used in
operating activities for the six months ended June 30, 2017 and 2016, respectively. The increase is mainly due to increase in
deferred revenue.
Cash Used in Investing Activities
For the six months ended June 30, 2017 and
2016, we spent $861 and $4,156 on purchasing fixed assets, respectively.
Cash Provided by Financing Activities
We received $22,499 from issuance of stock for
the six months ended June 30, 2017.
Results of Operations
through December 31, 2016
Our operating results
are summarized as follows:
|
|
For
the Six Months Ended
|
|
For
the Years Ended
|
|
|
December
31
|
|
June
30
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
250,000
|
|
|
|
|
|
|
$
|
125,000
|
|
|
|
|
|
Operating
Expenses
|
|
$
|
352,510
|
|
|
$
|
4,650
|
|
|
$
|
132,552
|
|
|
$
|
3,859
|
|
Net
Income (Loss)
|
|
$
|
102,510
|
|
|
($
|
4,650
|
)
|
|
($
|
7,552
|
)
|
|
($
|
3,859
|
)
|
Pursuant to
the Company's Service Agreements, the Company recognized $250,000 with AmericaTowne for the six months ended December 31, 2016.
For six months ended December 31, 2016 and 2015, there was no cost of revenues.
We can make
no assurances that we will find commercial success in any of our revenue producing contracts. We are a new company and thus have
very limited experience in sales expectations and forecasting. We also have not fully discovered any seasonality to our business
as we began operations in the first quarter of 2016.
The Company discloses that all revenues
recorded and reflected in this annual report are related to service agreements with related parties. Specifically, the Company
has entered into agreements with AmericaTowne as described above and incorporated herein by reference. The Company is controlled
by one of its related parties, AmericaTowne, by virtue of AmericaTowne holding a majority of the Companys issued and outstanding
restricted common stock.
Operating Expenses
Our operating
expenses are largely attributable to office, rent and professional fees related to our reporting requirements as a public company
and implementation of our business plan. For the six months ended December 31, 2016 our operating expenses were $352,510, while
the operating expenses for the years ending June 30, 2016 and June 30, 2015 were $132,552 and $3,859, respectively.
Net Income
As a result of
our operations, for the six months ended December 31, 2016, the Company reported net income after provision for income tax of
$102,510. Compared to the years ended June 30, 2016 and June 30, 2015, our net income was ($3,693) and ($3,859), respectively.
The increase in our net income is due to starting our business plan and generating revenues from related parties in relation to
services provided pursuant to certain contracts, as explained above.
Liquidity and
Capital Resources
Working Capital
|
|
December
31
|
|
June
30
|
|
June
30
|
|
|
2016
|
|
2016
|
|
2015
|
|
|
(Restated)
|
|
(Restated)
|
|
|
|
|
|
|
|
|
|
Current
Assets
|
|
$
|
712,793
|
|
|
|
137,991
|
|
|
|
|
|
Current
Liabilities
|
|
$
|
534,085
|
|
|
$
|
49,699
|
|
|
$
|
3,859
|
|
Working
Capital (Deficit)
|
|
$
|
178,708
|
|
|
$
|
88,292
|
|
|
$
|
(3,859
|
)
|
On December 31,
2016, June 30, 2016 and June 30, 2015, we have working capital (deficit) of $178,708, $88,292 and ($3,859), respectively. This
increase in working capital is due to implementing our initial business plans.
Cash
Flow
|
|
For
the Six Months Ended
|
|
For
the Year Ended
|
|
|
December
31
|
|
June
30
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
cash provided by (used in) operating activities
|
|
$
|
(48,243
|
)
|
|
|
|
|
|
$
|
4,156
|
|
|
|
|
|
Cash
used in investing activities
|
|
$
|
2,540
|
|
|
|
|
|
|
$
|
4,156
|
|
|
|
|
|
Cash
provided by financing activities
|
|
$
|
145,049
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Increase
(Decrease) in cash
|
|
$
|
94,266
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Provided
by (Used in) Operating Activities
Compared to prior
periods, the increase in cash used in operating activities for the six months ended December 31, 2016 is mainly due to increase
in accounts receivable.
Cash Used in Investing
Activities
We spent $2,540 on
fixed assets for the six months ended December 31, 2016, as compared to $4,156, $0 for the years ended June 30, 2016 and June 30,
2015, and $0 for the six months ended December 31, 2015.
Cash Provided
by Financing Activities
Compared to prior
periods, the increase in cash provided by financing activities for the six months ended December 31, 2016 is due to proceeds from
issuance of common stock.
As of December 31,
2016, the Company had enough cash including receivables to operate its business at the current level for the next twelve months,
but insufficient cash to achieve our business goals and initiatives set forth above. To address the cash situation, the Company
continues to manage its cash accounts and receivables closely.
To date, we have
been able to meet all our account payable obligations within a five to ten-day window. If required, we can extend this window to
improve our cash flow position. Additionally, we have a plan to increase sales. There is no assurance that we will be able to maintain
this level of operations.
The success of our
business plan beyond the next twelve months is contingent upon us growing our business, keeping costs down, increasing revenue
and obtaining additional equity and/or debt financing. We intend to fund operations through our pro-active efforts to monitor receivables,
and debt and/or equity financing arrangements, which may be insufficient to fund our capital expenditures, working capital, or
other cash requirements. We do have a commitment from Chizhou government to provide cash infusions and or loan guarantees as we
complete our operations in China. Other than Chizhou, we do not have any formal commitments or arrangements for the sales of stock
or the advancement or loan of funds at this time. There is no assurance that such additional financing will be available to us
on acceptable terms, or at all or that our receivable plan will be effective in the future.
Plan of Operation
and Cash Requirements
The Company anticipates
that its expenses over the next twelve months will be approximately $5,000,000 as described in the table below. These estimates
may change significantly depending on the nature of our business activities and our ability to raise capital from our shareholders
or other sources.
Description
|
Potential Completion Date
|
Estimated Expenses $
|
Initial Plant and Operations Set-up
|
12 months
|
250,000
|
Salaries
|
12 months
|
300,000
|
Utility expenses
|
12 months
|
50,000
|
Investor relations costs
|
12 months
|
50,000
|
Marketing expenses
|
12 months
|
100,000
|
Professional fees
|
12 months
|
150,000
|
Other administrative expenses
|
12 months
|
100,000
|
Equipment Purchases
|
12 months
|
4,000,000
|
Total
|
|
5,000,000
|
Our other administrative
expenses for the year will consist primarily of transfer agent fees, bank and interest charges and general office expenses. The
professional fees are related to our regulatory filings throughout the year and include legal, accounting and auditing fees. The
equipment purchases and plant set-up are related to the materially definitive agreement with Jiangnan.
Based on our planned
expenditures, we will require approximately $5,000,000 to proceed with our business plan over the next twelve months. If we secure
less than the full amount of financing that we require, we will not be able to carry out our complete business plan and we will
be forced to proceed with a scaled back business plan based on our available financial resources.
We intend to raise
the balance of our cash requirements for the next twelve months pursuant to our agreement with Jiangnan by accessing upon request
bank loans, bank guarantees and equity funding. Additionally, we may have private placements, shareholder loans or possibly a registered
public offering (either self-underwritten or through a broker-dealer). If we are unsuccessful in raising enough money through such
efforts, we may review other financing possibilities such as bank loans. At this time, other than our agreement with Jiangnan we
do not have a commitment from any third-party to provide us with financing. There is no assurance that any financing will be available
to us or if available, on terms that will be acceptable to us.
Even though we plan
to raise capital through equity or debt financing, we believe that the latter may not be a viable alternative for funding our operations,
as we do not have sufficient tangible assets to secure any such financing. We anticipate that any additional funding will be in
the form of equity financing from the sale of our common stock. At the close of 2016, we are considering financing arrangements
for our common stock. However, the arrangements are not final and we cannot provide any assurance that we will be able to raise
sufficient funds from the sale of our common stock to finance our operations. In the absence of such financing, we may be forced
to abandon our business plan.
Off-Balance Sheet Arrangements
We have not entered into 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 and would
be considered material to investors.
Item 3. Properties.
We currently do
not own any properties. We rent office space and equipment from Yilaime for $2,500 per month. 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 4. Security Ownership of Certain
Beneficial Owners and Management
The following table
sets forth the ownership of our common stock by each person known by us to be the beneficial owner of more than 5% of our outstanding
common stock as a group as of December 31, 2016. There are not any pending arrangements that may cause a change in control.
The information presented below has been presented in accordance with the rules of the SEC and is not necessarily indicative of
ownership for any other purpose.
A person is deemed
to be a beneficial owner of a security if that person has or shares the power to vote or direct the voting of the security or the power
to dispose or direct the disposition of the security. A person is deemed to own beneficially any security as to which such person
has the right to acquire sole or shared voting or investment power within 60 days through the conversion or exercise of any convertible
security, warrant, option or other right. More than one person may be deemed to be a beneficial owner of the same securities. The
percentage of beneficial ownership by any person as of a particular date is calculated by dividing the number of shares beneficially
owned by such person, which includes the number of shares as to which such person has the right to acquire voting or investment
power within 60 days, by the sum of the number of shares outstanding as of such date plus the number of shares as to which such
person has the right to acquire voting or investment power within 60 days. Consequently, the denominator used for calculating such
percentage may be different for each beneficial owner.
Name and Address
(1)
|
|
Amount and Nature of
Beneficial Ownership
|
|
Percentage of Class
(2)
|
|
|
Alton Perkins
(3)
|
|
110,117,593
(4)
|
|
86.8%
|
|
|
|
|
|
|
_________________
|
|
|
(1)
|
The address for the person named in the table above is c/o the Company.
|
|
|
|
|
|
|
(2)
|
Based on 126,740,708 shares outstanding as of the date of this Registration Statement.
|
|
|
|
|
|
|
(3)
|
Alton Perkins is Chief Executive Officer, Chief Financial Officer, Secretary and Director of the Company.
|
|
|
|
|
|
|
|
|
|
(4)
|
Individually, and through Yilaime and Perkins Trust
|
|
|
|
|
|
|
|
|
This table is based
upon information derived from our stock records. We believe that each of the shareholders named in this table has sole or shared
voting and investment power with respect to the shares indicated as beneficially owned.
Item 5. Directors and Executive Officers.
(a) Identification of Directors
and Executive Officers.
Our officers and directors and additional
information concerning them are as follows:
Name
|
|
Age
|
|
Position(s)
|
|
|
|
|
|
Alton Perkins
|
|
65
|
|
Chief Executive, Secretary, Treasurer and Director
|
Alton Perkins
Sole Director and Officer
.
Mr. Perkins
has been the Chairman of the Board, Chief Executive Officer, Chief Financial Officer, Treasurer and Secretary of the Company since
the change in control event on June 27, 2016. Mr. Perkins serves in these same capacities for ATI, Yilaime, Yilaime NC and AXP
Holding. Mr. Perkins is a former decorated Air Force Officer and Missile Launch Officer with 22 years of military service, who
graduated from the University of Southern Illinois with a B.S. in Business Administration and a M.B.A. from the University of North
Dakota. Between 1988 and 1997, he held CEO positions with start-up companies in the jet fuels, defense contracting, construction,
business consulting and development, and real estate industries. Between 1997 and 2009, Mr. Perkins served as the CEO and Chief
Technology Officer for internet, childcare operations, media, and realty development companies. From 2009 to the present, Mr. Perkins
has served as Chairman of Yilaime and its related entities ATI, Yilaime NC and AXP Holding. Mr. Perkins has expertise in conducting
business in China. Living and working in China studying Chinese consumer habits, working with Chinese entrepreneurs and government
agencies, he developed the AmericaTowne and AmericaStreet concepts.
Mr. Perkins lived
in China between September 1, 2010 and April 28, 2012. He worked for the Yilaime Foreign Invested Partnership in Hengshui, China
between September 19, 2010 and December 30, 2012. In addition to serving as Co-Chair of Yilaime Foreign Invested Partnership in
China, an entity focused on real estate development, he served as a chief consultant to a major Chinese chemical company responsible
for funding and technology transfer, and coordinated business with USA based auditors, DOW Chemical and USA Exim Bank. In addition,
Mr. Perkins is the recently appointed sole director and officer of ATI Nationwide Holding Corp., f/k/a EXA, Inc., a Florida corporation
(“ATI Nationwide”). The Companys largest shareholder ATI, closed on the purchase of the majority and controlling interest of ATI
Nationwide on October 13, 2016. ATI Nationwide is listed on the OTC:Pinks as ATIN. No Company funds were used to purchase ATIs
interest in ATI Nationwide.
Mr. Perkins is subject
to a Desist and Refrain Order dated March 21, 2008 (the “Order”) issued by the State of Californias Business, Transportation and
Housing Agency, Department of Corporations (the “Department”). In 2003, Mr. Perkins had been the Chief Executive Officer of Sunburst
Holding Corporation (“Sunburst”). The Department alleged that in May of 2003, Sunburst and Mr. Perkins offered and sold securities
through general solicitation to finance art-related activities. The Department alleged that Sunburst and Mr. Perkins omitted material
facts, and more specifically, that Mr. Perkins had pled no contest to felony counts related to an indictment for fraudulent misappropriation
of funds in a fiduciary capacity in Maryland, and had received a five-year suspended sentence.
The
Department was of the opinion that investments offered and sold by Sunburst and Mr. Perkins constituted securities, which
were subject to qualification under the California law, and that the securities were offered without being qualified, and
were not exempt, in violation of California law. The Department ordered Sunburst and Mr. Perkins to desist and refrain from
the further offer or sale of securities in California unless and until qualification has been made under the law or unless
exempt. The Department also ordered that Sunburst and Mr. Perkins to desist and refrain from offering or selling or buying or
offering to buy securities in California, including but not limited to stock, by means of any written or oral communication
which includes an untrue statement of a material fact or omits to state a material fact necessary in order to make the
statements made, in light of the circumstances under which they are made, not misleading (discussed below). Mr. Perkins did
not agree with the proposed order and filed a complaint with the Department. Mr. Perkins complaint was based on the fact that
the shares in question were subject to a Registration statement filed by Sunburst and the shares were not required to be
qualified and or authorized by the State of California since the shares had been appropriately registered with the SEC.
Mr. Perkins has
been in compliance with the Order since issuance. The Order is not related in any manner with respect to the Company or its related
parties. To the extent the Order was entered (i.e. only copy available for inspection by management is an unsigned version), there
is no restriction on Mr. Perkins from engaging in an offering in California provided he complies with the appropriate disclosures
and laws. The Company is not aware of any similar orders in any other jurisdiction.
The Company further
discloses that the aforementioned Order references the failure of Mr. Perkins to disclose his eleven (11) pleas of nolo contendere
in the Circuit Court for Prince Georges County, Maryland, for fraudulent misappropriation by a fiduciary in connection with a real
estate transaction unrelated to the Company or its subsidiaries. On or about March 10, 2000, Mr. Perkins had been arraigned on
eleven counts of fraudulent misappropriation by a fiduciary. The alleged misappropriation occurred on or about November 24, 1999
(i.e. the date set by the Court as the offense date). Mr. Perkins pled nolo contendere on August 31, 2000 without any admission
or finding of guilt. Mr. Perkins was and had been given a five-year suspended sentence, which has since expired. Mr. Perkins disclosed
to the Company that he had subsequently obtained a judgment out of the Superior Court of Mecklenburg County in North Carolina in
the amount of $125,000 against an individual who defamed him and published false comments related to his nolo contendere plea.
The company further discloses that the state of Virginia Division of Securities conducted an investigation into the matter. After
careful review of the matter and applicable law, they concluded that no action was warranted and stated that the matter is closed.
(b) Significant
Employees. None
(c) Family Relationships.
Mr. Perkins wife, Xiang Mei Lin Perkins, is a beneficiary under the Perkins Trust.
(d) Involvement
in Certain Legal Proceedings.
Except as otherwise
disclosed, no officer, director, or persons nominated for such positions, promoter or significant employee has been involved in
the last ten years in any of the following:
|
|
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;
|
|
|
|
|
|
Any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offenses);
|
|
|
|
|
|
Being 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; and
|
|
|
|
|
|
Being 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, and the judgment has not been reversed, suspended, or vacated.
|
(e) The Board
of Directors acts as the Audit Committee and the Board has no separate committees. 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. The Company intends to continue to search for a qualified
individual for hire.
(f) Code of Ethics.
We do not currently have a code of ethics.
Prior Blank Check Company Experience
Mr. Perkins is the only member of management
who has served as an officer or director of a prior blank check company.
Name
|
|
Filing Date Registration
Statement
|
|
Operating
Status
|
|
SEC File
Number
|
|
Pending Business
Combinations
|
|
Additional
Information
|
|
|
|
|
|
|
|
|
|
|
|
AmericaTowne, Inc.
|
|
May 12, 2015
|
|
Effective November 5, 2015
|
|
000-55206
|
|
None
|
|
None
|
ATI Nationwide Holding Corp.
|
|
N/A
|
|
Shell Company
|
|
000-1591387
|
|
None
|
|
None
|
Mr. Perkins beneficial
ownership in ATI is set forth in this Registration Statement. ATI, formerly known as Alpine 5, Inc., filed its Form 10-12G/A on
June 13, 2014. ATI ceased to be a blank check company on March 3, 2015 upon the Commission having no further comment on ATIs disclosures
on Form 8-K, Item 5.06 (Change in Shell Status). ATI is publicly reporting with the Commission. ATI is engaged in exporting and
consulting in the exporting of American made goods, products and services to China and Africa through strategic relationships in
China and in the United States.
ATIs aim is to provide
upper and middle-income consumers in China with Made In The USA goods and services allowing customers to experience the United
States culture and lifestyle. In order to facilitate these objectives, ATI plans on creating a 50-plus acre plot consisting of
small businesses, hotel, villas, senior care facilities, a theme park and performing arts center all located on specific acreage
in China depicting American lifestyle and the American experience. This is commonly referred to by ATI as the AmericaTowne Community
concept.
The development of the AmericaTowne
Community is aspirational in nature. There are barriers to entry that make it difficult for entrants into the industry including,
but not limited, to the socio-political environment in China. Although the Company provides different types of services and intends
on providing a variety of products through its contractual relationships, the key notable competitors are China HGS Real Estate
Inc. (HGSH) and China Housing & Land Development, Inc. (CHLN), and Xinyuan Real Estate Co., Ltd (XIN), and IFM Investments
Limited (CTC). As ATI develops its business model further, it expects additional competitors to service and the competitive picture
to become clearer.
ATI is the majority
and controlling shareholder of ATI Nationwide Holding Corp., a Florida corporation (“ATI Nationwide”). ATI Nationwide is formerly
known as EXA, Inc. ATI Nationwide recently had its Notice of Corporate Action with FINRA approved, formally changing ATI Nationwides
name and changing its symbol from EXAI to ATIN. ATI acquired the controlling interest in ATI Nationwide through a private stock
acquisition with Carson Holdings, LLC, a Utah limited liability company, and Joseph C. Passalaqua, an individual, which closed
on October, 7 2016. ATI Nationwide is a blank check company; however, through ATIs performance under the Master Joint Venture and
Operational Agreement with Nationwide Microfinance Limited, a Ghanaian corporation, which has been disclosed by ATI on Form 8-K
dated July 14, 2016, ATI Nationwide is in the process of taking necessary steps to cease being a blank check company; however,
there is no guarantee that it will be able to cease being a blank check company.
Item 6. Executive Compensation.
On July 1, 2016,
the Company entered into an Employment Agreement with Mr. Perkins to serve as the Companys Chairman of the Board, President, Chief
Executive Officer, Chief Financial Officer, Treasurer and Secretary (the “Employment Agreement”). The term of the Employment Agreement
is five years with successive one-year option terms. In consideration his services under the Employment Agreement, the Company
issued 10,000,000 shares of restricted common stock to Mr. Perkins designee the Perkins Trust, which is allowed for under Section
3.2 of the Employment Agreement.
The stock issuance
is subject to certain lock-up provisions in the Employment Agreement, which are more thoroughly set forth in the enclosed exhibit.
Until the Company acquires additional capital, it is not anticipated that Mr. Perkins, or any future officer or director will receive
compensation from the Company other than reimbursement for out-of-pocket expenses incurred on behalf of the Company. In addition
to this issuance, the Company agreed to issue Mr. Perkins, or his authorized designee, an option to purchase up to 5,000,000 shares
of common stock of the Company per year at any time prior to the conclusion of the first year of the Employment Agreement, i.e.
prior to 365 days after execution of the Employment Agreement, at a price of 1.5% per share of the closing price of the Companys
stock quoted on a major exchange or OTC Market one business day before purchase, and annually thereafter for a total of 5 consecutive
years. The shares purchased under this option are subject to all rights and lock-up restrictions set forth in the Employment Agreement.
Mr. Perkins, who
is also a director, officer and control person of ATI, intends to devote very limited time to our affairs. Other than as set forth
above, the Company has no stock option, retirement, pension, or profit sharing programs for the benefit of directors, officers
or other employees, but our sole officer and director may recommend adoption of one or more such programs in the future. The Company
does not have a standing compensation committee or a committee performing similar functions, since the Board of Directors has determined
not to compensate the officer and director.
Item 7. Certain Relationships and
Related Transactions, and Director Independence.
The Company has
not entered into, nor does it have plans to enter into, any related party transaction in excess of $120,000 since the beginning
of its last year, i.e. since July 1, 2016. For those related party transactions entered into the preceding fiscal year, i.e. prior
to July 1, 2016, we incorporate those disclosures set forth in Item 1(b). For these transactions, as disclosed above, Mr. Perkins
has a direct and indirect material interest in our performance of those related-party transactions by virtue of his beneficial,
and controlling, ownership in ATI, Yilaime and AXP Holding. The approximate dollar amount on an annual basis is: (a) Sales and
Support Services Agreement with Yilaime is $1,000,000, (b) Modular Construction & Technology Services Agreement with ATI is
$500,000, and (c) IC-DISC Service Provider Agreement with AXP Holding is a minimum of $50,000, and could exceed approximately $200,000
based on performance. Mr. Perkins approximate dollar value of the amount of the related party transactions is $1,550,000, not accounting
for profit or loss.
We do not have a
policy or procedures in place for the review, approval or ratification of any related-party transaction, other than, written consent
in lieu of the meeting of the Board of Directors or shareholders, as the case may be, for the given transaction. The related party
transactions set forth in Item 1(b) were approved by the Board of Directors, but not approved pursuant to any written policy or
procedure. Our internal controls in the review, approval or ratification of related party transactions are not sufficient. The
Company has no disclosures regarding promoters since none have been used over the past five years. The Companys parent entity ATI,
owns 86% of the common shares of the Company, and thus has control over the affairs of the Company.
Mr. Perkins
is involved in other business activities and may, in the future, become involved in other business opportunities. These other
businesses might be vendors or service providers to the Company, e.g. ATI, Yilaime and AXP Holding, or might take more of Mr.
Perkins time in providing director and officer services to the Company. Furthermore, a conflict of interest might arise if
Mr. Perkins other business activities coincide with an event of the Company. As a result, Mr. Perkins would have to evaluate
and act on a conflict in selecting between the Company and his other business interests. The Company has not formulated a
policy for resolution of any conflict of interest.
We do not have director
independence under Item 407(a) of Regulation S-K. Pursuant to Article XI of the Companys Bylaws, no contract or transaction shall
be void or
voidable
if such contract or transaction is
between
the corporation
and one
or more of its Director or Officers, or between the
corporation and any other corporation, partnership, association, or other organization in which one or
more
of its Directors or Officers, are directors or officers, or have a financial interest, when such Director or Officer is
present at or participates in the meeting of the Board, or the
committee
of the shareholders
which authorizes the contract or transaction or his, her or
their
votes are counted
for
such purpose,
if:
(a) the
material
facts as to his, her or
t
heir
relationship
or interest and as to the contract or transaction are disclosed or are
known to the Board of Directors or the committee and are noted in the
minutes
of such
meeting, and the Board or
committee
in
good
faith authorizes
the
c
ontract or transaction by the
affirmative
votes
of
a
majority of
the
disinterested
Directors,
even though the disinterested
Directors
be less than a
quorum;
or
(b) the
material
facts as to his, her or their relationship or relationships or interest or
interests and as to the contract or transaction are disclosed or are known
to
the
shareholders entitled to vote
thereon,
and
the
contract or transaction is specifically approved in
good
faith
by
vote
of the shareholders; or
(c) the
contract or transaction is fair as to the Corporation as of the time it is authorized, approved or ratified, by the Board of Directors,
a committee of the shareholders; or
(d) the
fact of the common directorship, office or financial interest is not disclosed or known to the Director or Officer at the time
the transaction is
brought
before the Board of Directors of the Corporation for such
action.
Such interested Directors may be
counted
when
determining
the presence of a quorum at the Board of Directors' or
committee
meeting
authorizing
the
contract
or
transaction.
Item 8. Legal Proceedings.
None.
Item 9. Market Price of and Dividends
on the Registrants Common Equity and Related Stockholder Matters.
There is no established
public trading market for the Companys common shares. Prior to June 27, 2016, the Company was incorporated as Global Recycle Energy,
Inc. (GREI). On June 27, 2016, the Company amended its Articles of Incorporation with the State of Nevada to change the name of
the Company to ATI Modular Technology Corporation. On June 12, 2017, FINRA approved the name change to ATI Modular Technology Corp
and symbol change to ATMO. The Company is subject to Alternative Reporting Standards. The range of high and low bid information
for the Companys common shares for each full quarterly period within the two most recent fiscal years, and any subsequent interim
period for which financial statements are included, or as required under Article 3 of Regulation S-X, is as follows:
|
7/1/15-9/30/15
|
10/1/15-12/31/15
|
1/1/16-3/31/16
|
4/1/16-6/30/16
|
7/1/16-9/30/16
|
10/1/16-12/31/16
|
1/1/17-3/31/17
|
4/1/17-6/30/17
|
High
|
0.3
|
0.14
|
0.44
|
0.4
|
9.74
|
8.95
|
9.39
|
8.25
|
Low
|
0.01
|
0.09
|
0.1
|
0.15
|
0.4
|
7.5
|
5.25
|
0.35
|
As of September
26, 2016, there are approximately 172 record holders of our common stock with an aggregate of 126,075,716 shares issued and outstanding.
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 Companys business.
We have no securities authorized for issuance under any Equity Compensation Plans.
OTC has discontinued
the display of the Companys quotes. The Company is currently listed by FINRA as a Caveat Emptor security and public interest concern
with the OTC. The potential reasons for this categorization are set forth at http://www.otcmarkets.com/stock/GREI/quote, even though
no specific reason has been stated by OTC.
Item 10. Recent Sales of Unregistered
Securities.
Within the past
three years, the Company issued a total of 111,157,621 shares of unregistered securities. In 2016, the Company had issued 100,000,000
shares to Joseph Arcaro (“Arcaro”) for services rendered in the amount of $100,000. ATI subsequently purchased these shares on June
2, 2016 in a private transaction without solicitation or through the use of a broker or intermediary. As a condition of closing
the Stock Purchase Agreement with Arcaro, Arcaro facilitated the cancellation of 500,000 shares of the Companys common stock previously
issued in 2016 for rights under an oil lease. The Company has no further rights, title or interest in the oil lease.
In 2016,
the Company issued 657,621 shares of common stock at the aggregate price of $.22 per share. Additionally, the Company issued
10,000,000 shares of common stock to the Perkins Trust as compensation for Alton Perkins, pursuant to his employment
agreement. In the six months ending June 30, 2017, the Company issued 7,371 shares of common stock at the average price of
$3.05 per share.
For all issuances,
the Company relied on Section 4(2) of the Securities Act of 1933, as amended. We believe that Section 4(2) was available because
neither of the issuances involved underwriters, underwriting discounts or commissions; restrictive legends had been placed on
the certificates; no sales were made by general solicitation; and the issuances were made to an accredited investor in consideration
of a release of a debt obligation. As of the most recent practicable date, there are 126,740,708 shares of common stock issued
and outstanding.
Item 11. Description of Registrants
Securities to be Registered
.
Common Stock
The Company has
500,000,000 shares of authorized common stock (CUSIP# 00215H 103), of which, as of the end of its fiscal year had 126,075,716 issued
and outstanding. Of the amount of issued and outstanding, ATI owned a total of 100,000,000 shares as a result of the closing of
the Stock Purchase Agreement on June 6, 2016 with Arcaro, above.
Between June 13,
2016 and September 13, 2016, Mr. Perkins purchased on the open market, as trustee of the Alton & Xiang Mei Lin Perkins Family
Trust (the “Perkins Trust”), with a tax identification number of 46-7513804, and individually, 15,964 shares and 101,629 shares,
respectively, of the Companys common stock at the average per share price of $1.91 and $.89, respectively. Perkins and Perkins
Trust used personal funds for the purchase. The total number of shares issued and outstanding as of the date of this Registration
Statement equals 126,740,708. ATI, Perkins Trust and Perkins beneficially own 110,117,593 shares, or 86%, of the Companys common
stock.
The holders of our
common stock have equal ratable rights to dividends from funds legally available if and when declared by our board of directors;
are entitled to share ratably in all of our assets available for distribution to holders of common stock upon liquidation, dissolution
or winding up of our affairs; do not have preemptive, subscription or conversion rights and there are no redemption or sinking
fund provisions or rights; and are entitled to one non-cumulative vote per share on all matters on which stockholders may vote.
All shares of common stock now outstanding are fully paid and non-assessable and are fully paid for and non-assessable. As
of the date of this prospectus, we have not paid any cash dividends to stockholders. The declaration of any future cash dividend
will be at the discretion of our board of directors and will depend upon our earnings, if any, our capital requirements and financial
position and our general economic condition. It is our intention not to pay any cash dividends in the foreseeable future,
but rather to reinvest earnings, if any, in our business operations. We refer you to our Articles of Incorporation, Bylaws and
the applicable statutes of the State of Nevada for a more complete description of the rights and liabilities of holders of our
securities.
Preferred stock
We do not have a class of preferred stock.
Anti-takeover provisions
There are no Nevada anti-takeover provisions
that may have the effect of delaying or preventing a change in control.
Reports
We will be required
to file reports with the SEC under section 15(d) of the Securities Act and the reports will be filed electronically. The
reports we will be required to file are Forms 10-K, 10-Q, and 8-K. You may read copies of any materials we file with the
SEC at the SEC's Public Reference Room at 100 F Street, N.E., Room 1580, Washington, D.C. 20549. You may obtain information
on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC also maintains an Internet site
that will contain copies of the reports we file electronically. The address for the Internet site is www.sec.gov.
Stock Transfer Agent
The Companys Transfer
Agent is Pacific Stock Transfer Co. (www.pacificstocktransfer.com) located at 6725 Via Austin Parkway, Suite 300 in Las Vegas,
Nevada 89119 (telephone number (800) 785-7782).
(b) Debt Securities.
None
(c) Other Securities to be Registered.
None
Item 12. Indemnification of Directors
and Officers.
Section 78.7502
of the Nevada Revised Statutes empowers Nevada corporations to indemnify their officers and directors and further states that the
indemnification provided by Section 78.7502 shall not be deemed exclusive of any other rights to which those seeking indemnification
may be entitled under the articles of incorporation or any bylaw, agreement, vote of stockholders or disinterested directors or
otherwise, both as to action in an official capacity and as to action in another capacity while holding such office; thus, Section
78.7502 does not by itself limit the extent to which the Company may indemnify persons serving as its officers and directors. At
this time, neither the Companys Articles of Incorporation nor its Bylaws provide indemnity.
The Board of Directors
of the Company may conclude that, to retain and attract talented and experienced individuals to serve as officers and directors
of the Company and to encourage such individuals to take the business risks necessary for the success of the Company, it is necessary
for the Company to contractually indemnify its officers and directors, and to assume for itself liability for expenses and damages
in connection with claims against such officers and directors in connection with their service to the Company, and has further
concluded that the failure to provide such contractual indemnification could result in great harm to the Company and its stockholders.
We believe that
the future amendment to our Bylaws to include indemnification provisions might be necessary to attract and retain qualified persons
as directors and officers. Insofar as indemnification for liabilities arising under the Securities Act of 1933 may eventually be
permitted under our Bylaws to directors, officers or persons controlling the Company pursuant to provisions of the State of Nevada,
we have been informed that, in the opinion of the SEC, such indemnification is against public policy as expressed in the Act and
is, therefore, unenforceable.
Item 13. Financial Statements
and Supplementary Data.
We set forth below
a list of our audited financial statements included in this Registration Statement on Form 10. The financial statements follow
page 19 of this Registration Statement on Form 10.
Item 14. Changes in and Disagreements with Accountants
on Accounting and Financial Disclosure.
There are not and
have not been any disagreements between the Company and its accountants on any matter of accounting principles, practices or financial
statement disclosure.
Item 15. Financial Statements and Exhibits.
(a) Financial Statements.
The financial statements
and related notes are included as part of this Registration Statement on Form 10 as indexed in the appendix on page F-1 through
F-6.
(b) Exhibits.
|
|
|
Incorporated by reference
|
|
Exhibit
|
Exhibit Description
|
Filed herewith
|
Form
|
Period ending
|
Exhibit
|
Filing date
|
|
3.1
|
Articles of Incorporation
|
X
|
|
|
|
|
|
3.2
|
Amended Articles of Incorporation - Increase in Shares
|
X
|
|
|
|
|
|
3.3
|
Amended Articles of Incorporation - Name change
|
X
|
|
|
|
|
|
3.4
|
By-laws
|
X
|
|
|
|
|
|
4.1
|
Specimen Stock Certificate
|
X
|
|
|
|
|
|
4.2
|
Stock Purchase Agreement (Arcaro)
|
X
|
|
|
|
|
|
10.1
|
Cooperative Agreement between ATI Modular and Shexian County Investment Promotion Bureau
|
X
|
|
|
|
|
|
10.2
|
Cooperative Agreement between AmericaTowne and Shexian County Investment Promotion Bureau
|
X
|
|
|
|
|
|
10.3
|
Sales and Support Services Agreement (Yilaime)
|
X
|
|
|
|
|
|
10.4
|
Modular Construction & Technology Services Agreement (ATI)
|
X
|
|
|
|
|
|
10.5
|
IC-DISC Service Provider Agreement (AXP Holding)
|
X
|
|
|
|
|
|
10.6
|
Investment and Cooperation Agreement for ATI Modular Green Building Manufacturing Project, Yongan Agreement
|
X
|
|
|
|
|
|
10.7
|
Investment and Cooperation Agreement for ATI Modular Green Building Manufacturing Project, Chizou Jiangnan Agreement
|
X
|
|
|
|
|
|
10.8
|
Employment Agreement (Perkins)
|
X
|
|
|
|
|
|
10.9
|
Amendment to Articles of Incorporation (Fiscal Year)
|
X
|
|
|
|
|
|
10.10
|
Amendment to Articles of Incorporation (Authorized Shares)
|
X
|
|
|
|
|
|
10.11
|
Definitive
ATI Modular Agreement
|
X
|
|
|
|
|
|
23.1
|
Consent of Independent Auditors
|
X
|
|
|
|
|
|
SIGNATURES
Pursuant to the
requirements of Section 12 of the Securities Exchange Act of 1934, the registrant has duly caused this registration statement to
be signed on its behalf by the undersigned, thereunto duly authorized.
|
|
|
Date:
July 31, 2017
|
|
ATI MODULAR TECHNOLOGY CORP.
|
|
|
|
|
By:
|
/s/ Alton Perkins
|
|
|
Alton Perkins, President, Secretary, and Treasurer
|
ATI Modular
Technology Corp
Balance Sheets
|
|
June 30
|
|
December 31
|
|
|
2017
|
|
2016
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
|
Current assets
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
214,444
|
|
|
$
|
94,266
|
|
Accounts receivable, net - related parties
|
|
|
793,418
|
|
|
|
458,755
|
|
Other receivables - related parties
|
|
|
114,177
|
|
|
|
159,772
|
|
Total Current Assets
|
|
|
1,122,039
|
|
|
|
712,793
|
|
|
|
|
|
|
|
|
|
|
Office Equipment Furniture & Fixtures
|
|
|
4,349
|
|
|
|
6,280
|
|
|
|
|
|
|
|
|
|
|
Total Assets
|
|
$
|
1,126,388
|
|
|
$
|
719,073
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Stockholders' Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current Liabilities
|
|
|
|
|
|
|
|
|
Accounts payable and accrued expenses
|
|
$
|
68,917
|
|
|
$
|
209,699
|
|
Deposit from customers
|
|
|
—
|
|
|
|
—
|
|
Deferred Revenue
|
|
|
754,387
|
|
|
|
324,387
|
|
Income tax payable
|
|
|
6,839
|
|
|
|
—
|
|
Total Current Liabilities
|
|
|
830,143
|
|
|
|
534,086
|
|
|
|
|
|
|
|
|
|
|
Total Liabilities
|
|
|
830,143
|
|
|
|
534,086
|
|
|
|
|
|
|
|
|
|
|
Commitments and Contingencies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders' Equity
|
|
|
|
|
|
|
|
|
Common stock, $0.001 par value, 500,000,000 shares authorized;
|
|
|
|
|
|
|
|
|
126,740,708 and 126,733,337 shares issued and outstanding
|
|
|
126,741
|
|
|
|
126,733
|
|
Common stock subscribed
|
|
|
1,000
|
|
|
|
982
|
|
Additional paid in capital
|
|
|
896,318
|
|
|
|
833,363
|
|
Deferred compensation
|
|
|
(400,000
|
)
|
|
|
(450,000
|
)
|
Receivable for issuance of stock
|
|
|
(207,480
|
)
|
|
|
(167,000
|
)
|
Retained Earnings
|
|
|
(120,334
|
)
|
|
|
(159,091
|
)
|
Total stockholders' equity
|
|
|
296,245
|
|
|
|
184,987
|
|
Total liabilities and stockholders' equity
|
|
$
|
1,126,388
|
|
|
$
|
719,073
|
|
|
|
|
|
|
|
|
|
See Notes to Financial Statements
|
ATI Modular Technology Corp
|
Statements of Operations
|
(Unaudited)
|
|
|
For the three months ended
|
|
For the six months ended
|
|
|
June 30
|
|
June 30
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Revenues - related parties
|
|
$
|
125,000
|
|
|
$
|
125,000
|
|
|
$
|
250,000
|
|
|
$
|
125,000
|
|
Cost of revenues - related parties
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Gross profit
|
|
|
125,000
|
|
|
|
125,000
|
|
|
|
250,000
|
|
|
|
125,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General and administrative
|
|
|
94,169
|
|
|
|
27,452
|
|
|
|
204,404
|
|
|
|
27,902
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) from operation
|
|
|
30,831
|
|
|
|
97,548.00
|
|
|
|
45,596
|
|
|
|
97,098
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Income
|
|
|
—
|
|
|
|
3,859
|
|
|
|
—
|
|
|
|
3,859
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) from operation before taxes
|
|
|
30,831
|
|
|
|
101,407
|
|
|
|
45,596
|
|
|
|
100,957
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for income taxes
|
|
|
4,624
|
|
|
|
—
|
|
|
|
6,839
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
$
|
26,207
|
|
|
$
|
101,407
|
|
|
$
|
38,757
|
|
|
$
|
100,957
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (Loss) per common share-basic and diluted
|
|
$
|
0.00
|
|
|
$
|
0.00
|
|
|
$
|
0.00
|
|
|
$
|
0.00
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of common
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
shares outstanding basic and diluted
|
|
|
126,740,708
|
|
|
|
116,075,716
|
|
|
|
126,739,461
|
|
|
|
116,075,716
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See Notes to Financial Statements
ATI Modular Technology Corp
|
Statements of Cash Flows
|
(Unaudited)
|
|
|
|
|
|
|
|
For the Six Months Ended
|
|
|
June 30
|
|
|
2017
|
|
2016
|
|
|
|
|
|
Operating Activities
|
|
|
|
|
|
|
|
|
Net income (loss) of the period
|
|
$
|
38,757
|
|
|
$
|
100,957
|
|
Adjustments to reconcile net loss from operations
|
|
|
|
|
|
|
|
|
Bad debt expense
|
|
|
17,614
|
|
|
|
6,250
|
|
Depreciation
|
|
|
2,792
|
|
|
|
—
|
|
Shares issued for services
|
|
|
—
|
|
|
|
—
|
|
Amortization on deferred compensation
|
|
|
50,000
|
|
|
|
—
|
|
Changes in Operating Assets and Liabilities
|
|
|
|
|
|
|
|
|
Accounts receivable
|
|
|
(352,276
|
)
|
|
|
(125,000
|
)
|
Other receivables
|
|
|
45,596
|
|
|
|
—
|
|
Advances to officers
|
|
|
—
|
|
|
|
(19,241
|
)
|
Accounts payable and accrued expenses
|
|
|
(140,782
|
)
|
|
|
19,699
|
|
Due to related parties
|
|
|
—
|
|
|
|
8,509
|
|
Deposit from customers
|
|
|
—
|
|
|
|
30,000
|
|
Deferred revenue
|
|
|
430,000
|
|
|
|
—
|
|
Income tax payable
|
|
|
6,839
|
|
|
|
—
|
|
Net cash provided by operating activities
|
|
|
98,539
|
|
|
|
4,156
|
|
|
|
|
|
|
|
|
|
|
Investing Activities
|
|
|
|
|
|
|
|
|
Purchase of fixed assets
|
|
|
(861
|
)
|
|
|
(4,156
|
)
|
Net cash used in investing activities
|
|
|
(861
|
)
|
|
|
(4,156
|
)
|
|
|
|
|
|
|
|
|
|
Financing Activities
|
|
|
|
|
|
|
|
|
Proceeds from issuance of stock
|
|
|
22,499
|
|
|
|
—
|
|
Net cash provided by financing activities
|
|
|
22,499
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in cash and equivalents
|
|
|
120,178
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
Cash and equivalents at beginning of the period
|
|
|
94,266
|
|
|
|
—
|
|
Cash and equivalents at end of the period
|
|
$
|
214,444
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
Supplemental cash flow information:
|
|
|
|
|
|
|
|
|
Interest paid
|
|
$
|
—
|
|
|
$
|
—
|
|
Income taxes paid
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See Notes to Financial Statements
ATI Modular Technology
Corp.
Notes to Financial Statements
(Unaudited)
NOTE 1. ORGANIZATION AND DESCRIPTION OF BUSINESS
ATI
Modular Technology Corp., defined above and herein as the “Company” formerly Global Recycle Energy, Inc., was incorporated
under the laws of the State of Nevada on March 7, 2008. The Company is engaged in the development and the exporting of modular
energy efficient technology and processes that allow government and private enterprises in China to use US-based methods for creating
modular spaces, facilities, and properties. As with any business plan that is aspirational in nature, there is no assurance we
will be able to accomplish all our objective or that we will be able to meet our financing needs to accomplish our objectives.
The
Company is an operating company engaged in the development and the exporting of modular energy efficient and smart technology and
processes that allow government and private enterprises in China and elsewhere to use US-based methods for creating modular spaces,
facilities, and properties. The Company is in the business of all aspects of modular and smart construction, including but not
limited to, (a) the furtherance of modular and smart construction technology, education, development and production in developed
and undeveloped countries, (b) acquisition and/or installation of construction equipment, materials, furnishings, hardware, insulation,
flooring, roofing, wiring, plumbing, heating and air conditioning, and landscaping, and (c) other businesses directly or tangentially
related to these lines of services, including assisting businesses and entrepreneurs in securing naming, licensing or promotional
rights, driving internet and media traffic, increasing visibility of product and name recognition, and other services.
Our
principal executive offices are located at 4700 Homewood Court, Suite 100 in Raleigh, North Carolina. We are registered as a foreign
business entity in the State of North Carolina. We lease the office space from Yilaime Corporation, a Nevada corporation doing
business in North Carolina, and a related party to the Company, as set forth below. Our physical location for our operations in
China along with a manufacturing facility is Anhui Province Jiangnan Industrial Concentration Zone New Energy Industry Park A1,
A2, A5 Plant Chizhou City, Anhui Province, China. The Company has registering its wholly owned subsidiary Anhui Ao De Xin Modular
Building Technology Co. Ltd. in Jiangnan Industry Zone, Chizhou, China.
The
Company entered an Investment and Cooperation Agreement with the Jiangnan Industry Zone in Anhui Province, China dated September
8, 2016 (the “Jiangnan Cooperation Agreement”). On December 28, 2016, the Company entered the definitive agreement,
American ATI Modular Technology Company Project Investment Agreement (the “Investment Agreement”) with the Administrative
Committee, Jiangnan Industry Zone in Anhui Province. The Investment Agreement superseded the Jiangnan Cooperation Agreement. Under
the Investment Agreement, the Administrative Committee of Jiangnan Industrial Concentration Zone of Anhui Province (hereinafter,
“Jiangnan”) and the Company have agreed to the construction of the Company’s green, modular building and related
technology under the project name “Modular Plant Production Base.”
Under
the Investment Agreement, the Company has agreed to manufacture and install modular buildings, and provide research into the development
of green building module manufacturing using US based technology. The Company has agreed to provide appropriate technology and
intelligent systems in providing modular building lifecycle services. In addition, to modular and smart technology, the Company
and Jiangnan has agreed to establish: 1) a modular development institute research and training center; 2) an entrepreneurial incubator;
3) an engineering technology research center; 4) an industrial design center; 5) a post-doctoral workstations and engineering laboratories;
and 6) an international student intern summer work program. Where possible the Company’s aim is to increase US exports by
using American based technology, equipment and services. (Strategy).
The Company presented to Anhui Project
to United States Ex-Im Bank, which provided a Letter of Interest in providing support for the Project. Additionally, pursuant to
its agreement with Chizhou government, Chizhou preliminarily agreed to provide support for EX-IM funding either by a guarantee
or local bank support. Although no loan application has been submitted management is under the impression that subject to meeting
Ex-Im Bank’s standard underwriting requirements, there is a possibility of loans, and other funding including working capital
and insurance. Going forward, we plan on working with Ex-Im to seek insurance and funding for the Chizhou operations. There is
no assurance that funding and or insurance will be obtained.
The Company entered the Modular Services
Agreement with AmericaTowne, a related party and the majority and controlling shareholder of the Company, to support AmericaTowne’s
obligations under the Shexian Agreement in designing, installing and manufacturing American modular technology for use in all government
and private buildings throughout Shexian County, and elsewhere in China. The terms and conditions of the Modular Services Agreement
with AmericaTowne and the Shexian Agreement are set forth above.
Also, the Company has entered the Yongan
and Shexian Agreements to pursue the development of business opportunities involving modular technology and investments, and business
development. While we plan to have robust operations in the United States and international locations, we expect the bulk of our
operations and revenue will come from China.
China's economy and its government impact
our revenues and operations. While the Company has an agreement in place with the government of Jiangnan as well as the approval
by government officials in Shexian and Yongan China to operate facilities there is no assurance that we will operate the facilities
successfully. Additionally, the Company will need government approval in other locations in China to operate other aspects of our
business plan. There is no assurance that we will be successful in obtaining approvals from government entities in other locations
to operate other aspects of our business plan. Finally, Mr. Perkins, as a control person of each entity – AmericaTowne and
the Company, might elect to forego certain obligations of AmericaTowne under other Corporative Agreements currently in place or
not enter more definitive agreements with Governments in China and elsewhere, which in turn, could impact the Company’s ability
to meet its business plan set forth herein.
NOTE
2.
SUMMARY
OF
SIGNIFICANT
ACCOUNTING
POLICIES
Basis of Presentation
These financial statements
have been prepared in accordance with generally accepted accounting principles in the United States of America ("U.S. GAAP”).
Interim Financial Statements
These interim
unaudited financial statements have been prepared in accordance with accounting principles generally accepted in the United
States for interim financial information. They do not include all the information and footnotes required by generally
accepted accounting principles for complete financial statements. Therefore, these financial statements should be read in
conjunction with the Company's audited financial statements and notes thereto contained in its report on Form 10-K for the
transition period ended December 31, 2016.
The financial statements
included herein are unaudited; however, they contain all normal recurring accruals and adjustments that, in the opinion of management,
are necessary to present fairly the Company's financial position at June 30, 2017, and the results of its operations and cash flows
for the six months ended June 30, 2017. The results of operations for the period ended June 30, 2017 are not necessarily indicative
of the results to be expected for future quarters or the full year.
Accounting Method
The Company's financial
statements are prepared using the accrual method of accounting. The Company has elected a fiscal year ending on December 31.
Use of Estimates
The preparation of financial
statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the reporting period. In the opinion of management, all adjustments
necessary in order to make the financial statements not misleading have been included. Actual results could differ from those estimates.
Financial Instruments
The carrying amount reported
in the balance sheet for cash, accounts receivable, accounts payable, accrued expenses, interest payable and short-term notes payable
approximate fair value because of the immediate or short- term maturity of these financial instruments.
Cash Equivalents
The Company considers
all highly liquid investments with maturity of three months or less when purchased to be cash equivalents.
Accounts Receivable
Accounts' receivable are
stated at the amount management expects to collect from outstanding balances. Management provides for probable uncollected amounts
through a charge to earnings and a credit to an allowance for bad debts based on its assessment of the current status of individual
accounts. Balances that are still outstanding after management has used reasonable collection efforts are written off through a
charge to the allowance for bad debts and a credit to accounts receivable.
Our bad debt policy is
determined by the Company's periodic review of each account receivable for reasonable assurance of collection. Factors considered
are the customer's financial condition, past payment history if any, any conversations with the customer about the customer's financial
conditions and any other extenuating circumstances. Based upon the above factors the Company makes a determination whether the
receivable are reasonable.
Concentration of Credit Risk
Financial
instruments that potentially subject the Company to a significant concentration of credit risk consist primarily of cash and
cash equivalents. The Company maintains deposits in federally insured financial institutions in excess of federally insured
limits. However, management believes the Company is not exposed to significant credit risk due to the financial position of
the depository institutions in which those deposits are held.
Property, Plant, and Equipment
Property, plant and equipment
are initially recognized recorded at cost. Gains or losses on disposals are reflected as gain or loss in the period of disposal.
The cost of improvements that extend the life of plant and equipment are capitalized. These capitalized costs may include structural
improvements, equipment and fixtures. All ordinary repairs and maintenance costs are expensed as incurred.
Depreciation for financial
reporting purposes is provided using the straight-line method over the estimated useful lives of the assets:
For the six months ended
June 30, 2017 and 2016 depreciation expense is $2,792 and $0, respectively.
Income Taxes
Income taxes
are
provided in
accordance
with Statement
of
Financial Accounting Standards ASC
740
Accounting for Income Taxes. A
deferred
tax
asset
or
liability is recorded
for all temporary differences
between
financial and tax reporting and net operating
loss
carry
forwards.
Deferred
tax expense
(benefit) results from
the net
change during
the
year
of
deferred
tax
assets
and liabilities.
Deferred
tax
assets
are reduced
by
a
valuation allowance when, in
the
opinion
of
management, it is
more
likely
than
not
that some
portion of
all
the
deferred
tax
assets
will be
realized.
Deferred
tax
assets
and liabilities
are
adjusted for
the effects of
changes
in tax
laws
and
rates
on
the
date
of
enactment.
The Company
was
established under
the
laws
of
the
State of
Nevada
and is subject to U.S.
federal
income tax and
Nevada
state income tax, if any.
Deferred
income tax
assets
and liabilities are
computed
for differences between
the
financial statement and tax
bases
of
assets
and liabilities that
will result in future taxable
or
deductible
amounts
and
are based
on
enacted
tax
laws
and
rates
applicable to
the
periods in which
the differences
are expected
to
affect
taxable income.
Valuation
allowances
are
established when
necessary
to reduce
deferred income tax
assets to
the amount
expected
to
be
realized
.
Earnings per Share
In February 1997, the
FASB issued ASC 260, "Earnings per Share", which specifies the computation, presentation and disclosure requirements
for earnings (loss) per share for entities with publicly held common stock. ASC 260 supersedes the provisions of APB No. 15, and
requires the presentation of basic earnings (loss) per share and diluted earnings (loss) per share. The Company has adopted the
provisions of ASC 260 effective (inception).
Basic earnings or net
loss per share amounts are computed by dividing the net income or loss by the weighted average number of common shares outstanding.
Diluted earnings per share are the same as basic earnings per share due to the lack of dilutive items in the Company.
At June 30, 2017 and December
31, 2016, no potentially dilutive shares were outstanding.
Impact of New Accounting Standards
The Company does not expect
the adoption of recently issued accounting pronouncements to have a significant impact on the Company's results of operations,
financial position, or cash flow.
Revenue Recognition
The Company's revenue
recognition policies comply with FASB ASC Topic 605. The Company follows paragraph 605-10-S99-1 of the FASB Accounting Standards
Codification for revenue recognition. The Company will recognize revenue when it is realized or realizable and earned. The Company
considers revenue realized or realizable and earned when all the following criteria are met: (i) persuasive evidence of an arrangement
exists, (ii) the product has been shipped or the services have been rendered to the customer, (iii) the sales price is fixed or
determinable, and (iv) collectability is reasonably assured.
The Company does not provide
unconditional right of return, price protection or any other concessions to its customers.
There were no sales returns
and allowances from inception to June 30, 2017.
NOTE 3. GOING CONCERN
The Company's financial
statements are prepared using accounting principles generally accepted in the United States of America applicable to a going concern
that contemplates the realization of assets and liquidation of liabilities in the normal course of business.
The Company is still in
development stage and has not created sufficient revenue to cover any operating losses it may incur. Management's plans include
the raising of capital through the equity markets to fund future operations, seeking additional acquisitions, and generating of
revenue through our business. However, there can be no assurances the Company will be successful in its efforts to secure additional
equity financing and obtaining sufficient revenue producing contracts. These factors raise substantial doubt about the Company's
ability to continue as a going concern. The financial statements do not include any adjustments relating to the recoverability
and classification of recorded asset amounts, or amounts and classification of liabilities that might result from this uncertainty.
NOTE 4. ACCOUNT RECEIVABLES – RELATED
PARTIES
The nature of the accounts
receivable for June 30, 2017 in the amount of $835,177 are for modular construction and technology services and utilization of
anticipated modular construction technology by ATI pursuant to the Modular Construction & Technology Services Agreement between
ATI and the Company dated June 28, 2016 (hereinafter, the “ATI Services Agreement”) and for the Sales and Support Services
Agreement with Yilaime on June 27, 2016 (the “Yilaime Services Agreement”). On June 30, 2017, the Company's allowance
for bad debt is $41,759 which provides a net receivable balance of $793,418.
Accounts receivable consist
of the following:
|
|
June 30
2017
|
|
Dec 31
2016
|
|
|
|
|
|
Accounts receivable related parties
|
|
|
835,177
|
|
|
|
482,900
|
|
Less: Allowance for doubtful accounts
|
|
|
(41,759
|
)
|
|
|
(24,145
|
)
|
Accounts receivable, net
|
|
$
|
793,418
|
|
|
$
|
458,755
|
|
Bad debt expense was $17,614
and $6,250 for the quarter ended June 30, 2017 and 2016, respectively.
NOTE 5. DEFERRED REVENUE
The Company receives $250,000
quarterly fee from Yilaime for Sales and Support Services Agreement. In accordance with ASC 605-50-45, the Company defers and recognizes
as a reduction to the future costs for quarterly fee. For the six months June 30, 2017, $500,000 fee from exclusive agreement incurred;
$754,387 is booked deferred revenue as current liability on June 30, 2017 and $70,000 went against cost charged by Yilaime.
NOTE 6. SHAREHOLDER'S EQUITY
The stockholders' equity
section of the Company contains the following classes of capital stock as of June 30, 2017:
Common stock, $ 0.001
par value: 500,000,000 shares authorized; 126,740,708 shares issued and outstanding;
Preferred stock, none:
0 shares authorized; but not issued and outstanding.
NOTE 7. STOCK BASED COMPENSATION
The Company entered into
an employment lock-up agreement on July 1, 2016 with Alton Perkins to serve as the Chairman of the Board, President, Chief Executive
Officer, Chief Financial Officer and Secretary. The term of Mr. Perkins' agreement is five years with the Company retaining an
option to extend in one-year periods. In consideration for Mr. Perkins' services, the Company has agreed to issue to his designee,
the Alton & Xiang Mei Lin Perkins Family Trust, 10,000,000 shares of common stock. The Company may elect in the future to include
money compensation to Mr. Perkins or his designee for his services provided there is sufficient cash flow.
For the six months ended
June 30, 2017, $50,000 of stock compensation was charged to operating expenses and $400,000 was recorded as deferred compensation
on June 30, 2017.
NOTE 8. RELATED PARTIES TRANSACTIONS
The Company intends
on relying on other businesses controlled by our sole director and officer, and beneficial owner of the majority shares of common
stock in the Company – Alton Perkins, in implementing its business plan.
Mr. Perkins is the
control person of Yilaime Corporation, AmericaTowne and AXP Holding Corporation. At this time, the purpose of the Company is to
service the construction and related technology needs of AmericaTowne under AmericaTowne’s agreements with the Shexian County
Investment Promotion Bureau in developing an AmericaTowne community in the Hanwang mountains in Shexian, China. The Company also
intends on supporting these services in other AmericaTowne ventures at the invitation of the Xiamen Longyan City Chamber of Commerce,
Xiamen/Longyan China and the Xiamen City Growth Planning Agency in developing an AmericaTowne Community and an International School
in Longyan County China.
The related export
services rendered to the Company in the implementation of its business plan cannot be provided by AmericaTowne or through the AmericaTowne
relationship. In order to avoid conflicts of interest, Mr. Perkins is of the opinion that there must be a separate and distinct
agreement between, in this case, the Company and AXP Holding Corporation. Furthermore, although other similar IC-DISC entities
exist, the Company is able to obtain better terms and conditions from AXP Holding Corporation in light of Mr. Perkins’ control
of AXP Holding Corporation.
AmericaTowne’s
Board of Directors determined that operating and controlling a separate but related entity focused on the development and the exporting
of modular energy efficient technology and processes for government and private enterprises in China would be more prudent from
a risk mitigation and operational standpoint than providing these services under the AmericaTowne business plan. Furthermore, the
intent of the Company is to expand its services and relationships to other similar endeavors in projects not related to AmericaTowne,
thus the need to maintain and operate a separate entity.
Cooperative Agreement
(Shexian County Government, China)
The Company’s
majority and controlling shareholder – AmericaTowne, is a party under the Cooperative Agreement with the Shexian County Investment
Promotion Bureau (the “Shexian Agreement”). Under the Shexian Agreement, AmericaTowne and the Shexian County Bureau
have agreed to a partnership in furthering the development of an AmericaTowne community in the Hanwang mountains. Although not
definitive at this time, the parties have agreed that, in consideration for AmericaTowne’s investment of approximately $30,000,000
into the development, plus any additional tax paid to the local government, where applicable, the Shexian County Bureau will dedicate
local resources, including land (which AmericaTowne would be required to obtain rights through local bid invitation), and participation
with AmericaTowne in an agreed upon equity split through a future definitive agreement.
The Company will be
providing construction and technology services to AmericaTowne in facilitating AmericaTowne’s obligations under the Shexian
Agreement. The Company’s ability to generate revenue under its agreement with AmericaTowne could be impaired in the event
AmericaTowne is not able to meet its obligations under the Shexian Agreement. Furthermore, Mr. Perkins, as a control person of
each entity, might elect to forego certain obligations of AmericaTowne under the Shexian Agreement or not enter into a more definitive
agreement with the Shexian County Bureau, which in turn, could impact the Company’s ability to meet its business plan set
forth herein.
Sales and Support
Services Agreement (Yilaime Corporation)
On June 27,
2016, we entered into a Sales and Support Services Agreement with Yilaime Corporation, a Nevada corporation
(“Yilaime”). Yilaime is controlled by Alton Perkins, who is our sole director and officer. Yilaime, and another
related-party – Yilaime Corporation of NC, Inc. (“Yilaime NC”), are the holders of the majority of issued
and outstanding shares of common stock in AmericaTowne, Inc. (“ATI”), a Delaware corporation and fully-reporting
company with the United States Securities and Exchange Commission (the “SEC”). Mr. Perkins is also the Trustee of
the Alton & Xiang Mei Lin Perkins Family Trust (“Perkins Trust”) and the AXP Nevada Asset Protection Trust 1
(“AXP”), which holds 5,100,367 and 120,000 shares, respectively, of the issued and outstanding common stock in
ATI. Mr. Perkins is the beneficial owner of 20,674,484 shares of ATI, which equals 90.11% of issued and outstanding shares.
Mr. Perkins is the beneficial owner of the majority and controlling interest in the Company through his direct holdings, and
beneficial holdings through Yilaime, AXP and the Perkins Trust. ATI, Perkins Trust and Mr. Perkins beneficially own
110,117,593 shares, or 86%, of the Company’s common stock.
Under the Services
Agreement, Yilaime will provide the Company with marketing, sales and support services in the Company’s pursuit of ATI Modular
business in China in consideration of a commission equal to 10% of the gross amount of monies procured for the Company through
Yilaime’s services. In consideration of the right to receive this commission, Yilaime has agreed to pay the Company a quarterly
fee of $250,000 starting on July 1, 2016. The Services Agreement is set to expire on June 10, 2020, absent early termination for
breach thereof by either party. Yilaime retains an option to extend the term under its sole discretion until June 10, 2025 by providing
written notice to the Company by March 10, 2019. Yilaime has agreed to be the Company’s exclusive independent contractor
in providing the services in the Services Agreement, and has agreed to a non-compete and non-circumvent agreement.
Yilaime is obligated
to provide support services only in a manner that is deemed commercially acceptable by Yilaime and Yilaime has the sole right to
determine the means, manner and method by which services will be provided and at the time and location of its choosing. Furthermore,
as the control person of Yilaime, Mr. Perkins might make decisions he deems are in the best interests of Yilaime, which might be
to the detriment of the goals and objectives of the Company.
Modular Construction
& Technology Services Agreement (AmericaTowne)
On June 28, 2016, we
entered into a Modular Construction & Technology Services Agreement (the “Modular Services Agreement”) with AmericaTowne
Inc. (“ATI”), a Delaware corporation and fully-reporting company with the United States Securities and Exchange Commission
(the “SEC”). The impetus behind the Modular Services Agreement was the Company’s Cooperative Agreement with the
Shexian County Government, China. Under the Cooperative Agreement, ATI and the Shexian County Bureau have agreed to a partnership
in furthering the development of an AmericaTowne community in the Hanwang mountains, Shexian, China. In addition, ATI, at the invitation
of the Xiamen Longyan City Chamber of Commerce, Xiamen/Longyan China and the Xiamen City Growth Planning Agency plan to pursue
the development of an AmericaTowne Community and an International School in Longyan County China.
Under the Modular Services
Agreement, ATI Modular shall provide the
research, development, training and modular technology
in a manner deemed commercially acceptable by ATI based on its commercially reasonable requirements, plans and specifications,
which shall be agreed upon in advance of any substantial and material construction.
ATI will pay the Company a quarterly
fee of $125,000 per quarter. The initial fee was paid upon signing the Modular Services Agreement. The Services Agreement is set
to expire on June 10, 2020, absent early termination for breach thereof by either party. ATI retains an option to extend the term
under its sole discretion until June 10, 2025 by providing written notice to the Company by March 10, 2019. Yilaime has agreed
to be the Company’s exclusive independent contractor in providing the services in the Services Agreement, and has agreed
to a non-compete and non-circumvent agreement.
Interest Charge
– Domestic International Sales Agreement (AXP Holding Corporation)
On June 29,
2016, we entered into an IC-DISC Service Provider Agreement with AXP Holding Corporation, a Nevada corporation (“AXP
Holding”) and related party to the Company through Mr. Perkins control of AXP Holding. AXP Holding is an Interest
Charge - Domestic International Sales Corporation, or “IC-DISC”. AXP IC-DISC tax-exempt status was authorized and
approved by the United States Department of the Treasury, Internal Revenue Service. As an IC-DISC, AXP Holding may, under
certain conditions, act as a sister corporation to entities and provide services to assist a company in obtaining lower tax
rates on export income. In addition to the export tax savings provided by AXP, AXP can provide an additional array of
services including promoting the Company’s export activities, purchasing receivables from the Company at a discount
through a factoring relationship, and providing the Company with working capital loans.
The term under the
IC-DISC Service Provider Agreement is set to expire on December 6, 2019, absent early termination for breach thereof by either
party. AXP retains the right to extend the term, exercising its sole discretion, to December 6, 2024 by providing written notice
to the Company by November 6, 2019. AXP has agreed to a non-compete and non-circumvent in providing the services under the IC-DISC
Service Provider Agreement.
The Company has agreed
to pay AXP a commission fee up to the greater of 50% of the Company’s export net income or 4% of the Company’s export
gross receipts. The Company will determine the exact amount and the method of payment of the commission fee. The commission fee
shall be paid at the option of the Company periodically throughout the year, but no later than December 31 on annual basis. If
there is no commission fee due to no export sales, the Company will pay AXP an export service fee of $50,000. The export service
fee, if any, is due on or before December 31 on an annual basis.
In addition, for referring
businesses from the Company’s “Export Platform” or “Community,” AXP agrees to pay the Company 25%
of each “Sales Export Service Fee” charged and received as an “IC-DISC Commission” from each Exporter or
Licensee resulting from participating in the Export Platform or Community. This fee is called a “Group Export Consulting
Fee” in the IC-DISC Service Provider Agreement, and is due no later than fifteen business days after receipt from the Exporter
or Licensee, but no later than December 31 on an annual basis. For illustrative purposes, if AXP receives and or charges an Exporter
50% of its net export sales as a commission, and that value is $100,000, AXP would owe the Company 25%, or $25,000. Furthermore,
during the term, the Company shall pay AXP a flat fee of $5,000 per transaction for purchasing receivables from the Company, plus
an interest rate for such factoring at the prime rate plus one-percent.
The Company recognizes
and confirms the requirements in ACS 850-10-50-6 to disclose all related party transactions between the Company and related party
transactions and or relationships.
The Company also leases
office space from Yilaime for $2,500/month.
Pursuant to ASC 850-10-50-6,
the Company makes the following transaction disclosures for the six months ended or as of June 30, 2017:
For Statement of Operations:
|
(a)
|
$250,000 in revenues for ATI Services Agreements with the Company;
|
|
(b)
|
$15,000 for general and administrative expenses for rent expenses the Company paid to Yilaime towards its lease agreement;
|
|
(c)
|
$45,597 of compensation expense for AXP Holding Corp charges for DISC.
|
|
(d)
|
$50,000 and $0 for general and administrative operating expenses recorded as stock compensation for respective employment agreements;
|
|
(e)
|
$3,477 for general and administrative expenses for commissions and fees
|
For Balance Sheets on June 30, 2017 and December
31, 2016:
|
(a)
|
$192,364 and $60,088 net account receivables ATI owes to the Company;
|
|
(b)
|
$601,055 and $398,668 net account receivables Yilaime owes to the Company;
|
|
(c)
|
$114,177 and $159,772 prepayments to AXP Holding Corp;
|
|
(d)
|
$754,387 and $324,387 deferred revenue-Yilaime;
|
|
(e)
|
$63,717 and 198,000 as accounts payable to Anhui Ao De Xin Modular Construction Technology Co., Ltd.;
|
|
(f)
|
400,000 and 450,000 as deferred compensation pursuant to respective employment agreements.
|
NOTE 9. INCOME TAXES
Deferred income taxes reflect
the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes
and the amounts used for income tax purposes.
Significant components of income tax expense for the
six months ended June 30, 2017 and 2016 are as follows
|
|
|
|
|
|
|
For the Six Months Ended
|
|
|
June 30, 2017
|
|
June 30, 2016
|
Current tax expense
|
|
$
|
6,839
|
|
|
$
|
—
|
|
Deferred tax expense
|
|
|
—
|
|
|
|
—
|
|
Tax expense (benefit)
|
|
$
|
6,839
|
|
|
$
|
—
|
|
The Company had $6,839 and $0 of income tax liability as
of June 30, 2017 and December 31, 2016, respectively.
ATI Modular Technology Corp.
(FKA Global Recycle Energy, Inc.)
FINANCIAL
STATEMENTS
As of December 31, 2016 and 2015
And For the Year Ended December 31,
2016 and 2015
REPORT OF INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM
To the Board of Directors and Stockholders of
ATI Modular Technology Corp.
We have audited the accompanying balance
sheets of ATI Modular Technology Corp. as of December 31, 2016, June 30, 2016 and June 30, 2015 and the related statement of operations,
stockholders’ equity, and cash flows for the six months ended December 31, 2016 and for each of the years in the two-year
period ended June 30, 2016. ATI Modular Technology Corp.’s management is responsible for these financial statements. Our
responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance
with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan
and perform the audits to obtain reasonable assurance about whether the 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 control over 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. An audit also includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall consolidated financial statement presentation. We believe
that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements
referred to above present fairly, in all material respects, the financial position of ATI Modular Technology Corp. as of December
31, 2016, June 30, 2016 and June 30, 2015, and the results of operations and cash flows for the six months ended December 31, 2016
and for each of the years in the two-year period ended June 30, 2016 in conformity with accounting principles generally accepted
in the United States of America.
The accompanying financial statements
have been prepared assuming that the Company will continue as a going concern. As discussed in Note 3 to the financial statements,
The Company is still in development stage and has not created sufficient revenue to cover any operating losses it may incur, which
raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans concerning this
matter are also described in Note 3. The accompanying financial statements do not include any adjustments that might result from
the outcome of this uncertainty.
As
discussed in Note 2 to the financial statements, the financial statements for the six months ended December 31, 2016 and for the
year ended June 30, 2016 have been restated to correct a misstatement.
/s/Yichien Yeh, CPA
Yichien Yeh, CPA
Oakland Gardens, New York
July 16, 2017
ATI Modular Technology Corp
|
Balance Sheets
|
|
|
December 31
|
|
June 30
|
|
June 30
|
|
|
2016
|
|
2016
|
|
2015
|
|
|
(Restated)
|
|
(Restated)
|
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
94,266
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Accounts receivable, net - related parties
|
|
|
458,755
|
|
|
|
118,750
|
|
|
|
—
|
|
Other receivables - related parties
|
|
|
159,772
|
|
|
|
—
|
|
|
|
—
|
|
Advances to officers
|
|
|
—
|
|
|
|
19,241
|
|
|
|
—
|
|
Total Current Assets
|
|
|
712,793
|
|
|
|
137,991
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Office Equipment Furniture & Fixtures
|
|
|
6,280
|
|
|
|
4,156
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Assets
|
|
$
|
719,073
|
|
|
$
|
142,147
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Stockholders' Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable and accrued expenses
|
|
$
|
209,699
|
|
|
$
|
19,699
|
|
|
$
|
3,859
|
|
Deposit from customers
|
|
|
—
|
|
|
|
30,000
|
|
|
|
—
|
|
Deferred Revenue
|
|
|
324,387
|
|
|
|
—
|
|
|
|
—
|
|
Income tax payable
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Total Current Liabilities
|
|
|
534,086
|
|
|
|
49,699
|
|
|
|
3,859
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Liabilities
|
|
|
534,086
|
|
|
|
49,699
|
|
|
|
3,859
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commitments and Contingencies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders' Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock,$0.001 par value, 500,000,000 shares authorized;
|
|
|
|
|
|
|
|
|
|
|
|
|
126,733,337, 116,075,716 and 16,075,716 shares issued and
|
|
|
|
|
|
|
|
|
|
|
|
|
outstanding, respectively.
|
|
|
126,733
|
|
|
|
116,076
|
|
|
|
16,076
|
|
Common stock subscribed
|
|
|
982
|
|
|
|
—
|
|
|
|
—
|
|
Additional paid in capital
|
|
|
833,363
|
|
|
|
32,953
|
|
|
|
32,953
|
|
Deferred compensation
|
|
|
(450,000
|
)
|
|
|
—
|
|
|
|
—
|
|
Receivable for issuance of stock
|
|
|
(167,000
|
)
|
|
|
—
|
|
|
|
—
|
|
Retained Earnings
|
|
|
(159,091
|
)
|
|
|
(56,581
|
)
|
|
|
(52,888
|
)
|
Total stockholders' equity
|
|
|
184,988
|
|
|
|
92,448
|
|
|
|
(3,859
|
)
|
Total liabilities and stockholders' equity
|
|
$
|
719,074
|
|
|
$
|
142,147
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See Notes to Financial Statements
|
ATI Modular Technology Corp
|
Statements of Operations
|
|
|
|
|
|
|
|
|
|
|
|
For the Six Months Ended
|
|
For the Years Ended
|
|
|
December 31
|
|
June 30
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
(Restated)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues - related parties
|
|
$
|
250,000
|
|
|
$
|
—
|
|
|
$
|
125,000
|
|
|
$
|
—
|
|
Cost of revenues - related parties
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Gross profit
|
|
|
250,000
|
|
|
|
—
|
|
|
|
125,000
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General and administrative
|
|
|
352,510
|
|
|
|
4,650
|
|
|
|
132,552
|
|
|
|
3,859
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) from operation
|
|
|
(102,510
|
)
|
|
|
(4,650
|
)
|
|
|
(7,552
|
)
|
|
|
(3,859
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Income
|
|
|
—
|
|
|
|
—
|
|
|
|
3,859
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) from operation before taxes
|
|
|
(102,510
|
)
|
|
|
(4,650
|
)
|
|
|
(3,693
|
)
|
|
|
(3,859
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for income taxes
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
$
|
(102,510
|
)
|
|
$
|
(4,650
|
)
|
|
$
|
(3,693
|
)
|
|
$
|
(3,859
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (Loss) per common share-basic and diluted
|
|
$
|
0.00
|
|
|
$
|
(0.00
|
)
|
|
$
|
(0.00
|
)
|
|
$
|
(0.00
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of common
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
shares outstanding basic and diluted
|
|
|
121,171,157
|
|
|
|
16,075,716
|
|
|
|
16,075,716
|
|
|
|
16,075,716
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See Notes to Financial Statements
|
ATI Modular Technology Corp
Statements of Changes in Stockholders' Equity
(Restated)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common
|
|
Additional
|
|
|
|
Receivable
|
|
|
|
|
|
|
Common Stock
|
|
Stock
|
|
Paid-In
|
|
Deferred
|
|
for Issuance
|
|
Retained
|
|
|
|
|
Shares
|
|
Amount
|
|
Sunscribed
|
|
Capital
|
|
Compensation
|
|
of Stock
|
|
Earnings
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, June 30, 2014
|
|
|
16,075,716
|
|
|
$
|
16,076
|
|
|
$
|
—
|
|
|
$
|
32,953
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(49,029
|
)
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss for the year ended June 30, 2015
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(3,859
|
)
|
|
|
(3,859
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, June 30, 2015
|
|
|
16,075,716
|
|
|
$
|
16,076
|
|
|
$
|
—
|
|
|
$
|
32,953
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(52,888
|
)
|
|
$
|
(3,859
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares issued for services
|
|
|
100,000,000
|
|
|
|
100,000
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
100,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss for the year ended June 30, 2016
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(3,693
|
)
|
|
|
(3,693
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, June 30, 2016
|
|
|
116,075,716
|
|
|
$
|
116,076
|
|
|
$
|
—
|
|
|
$
|
32,953
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(56,581
|
)
|
|
$
|
92,448
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares issued for proceeds
|
|
|
657,621
|
|
|
|
657
|
|
|
|
982
|
|
|
|
310,410
|
|
|
|
—
|
|
|
|
(167,000
|
)
|
|
|
—
|
|
|
|
145,049
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares issued for services
|
|
|
10,000,000
|
|
|
|
10,000
|
|
|
|
—
|
|
|
|
490,000
|
|
|
|
(500,000
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of Deferred Compensation
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
50,000
|
|
|
|
—
|
|
|
|
—
|
|
|
|
50,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income for the period ended December 31, 2016
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(102,510
|
)
|
|
|
(102,510
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, December 31, 2016
|
|
|
126,733,337
|
|
|
$
|
126,733
|
|
|
$
|
982
|
|
|
$
|
833,363
|
|
|
$
|
(450,000
|
)
|
|
$
|
(167,000
|
)
|
|
$
|
(159,091
|
)
|
|
$
|
(184,987
|
)
|
See Notes to
Financial Statements
ATI Modular Technology Corp
Statements of Cash Flows
|
|
For the Six Months Ended December 31
|
For the Year Ended
June 30
|
|
|
2016
|
|
2015
|
2016
|
|
2015
|
|
|
(Restated)
|
|
(Unaudited)
|
|
|
|
Operating Activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss of the period
|
|
$
|
(102,510
|
)
|
|
$
|
(4,650
|
)
|
$
|
(3,693
|
)
|
|
|
(3,859
|
)
|
Adjustments to reconcile net loss from operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bad debt expense
|
|
|
17,895
|
|
|
|
—
|
|
|
6,250
|
|
|
|
—
|
|
Depreciation
|
|
|
416
|
|
|
|
—
|
|
|
—
|
|
|
|
—
|
|
Shares issued for services
|
|
|
—
|
|
|
|
—
|
|
|
100,000
|
|
|
|
—
|
|
Amortization on deferred compensation
|
|
|
50,000
|
|
|
|
—
|
|
|
—
|
|
|
|
—
|
|
Changes in Operating Assets and Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts receivable
|
|
|
(357,900
|
)
|
|
|
—
|
|
|
(125,000
|
)
|
|
|
—
|
|
Other receivables
|
|
|
(159,772
|
)
|
|
|
—
|
|
|
—
|
|
|
|
—
|
|
Advances to officers
|
|
|
19,241
|
|
|
|
—
|
|
|
(19,241
|
)
|
|
|
—
|
|
Accounts payable and accrued expenses
|
|
|
190,000
|
|
|
|
4,650
|
|
|
15,840
|
|
|
|
3,859
|
|
Deposit from customers
|
|
|
(30,000
|
)
|
|
|
—
|
|
|
30,000
|
|
|
|
—
|
|
Deferred Revenue
|
|
|
324,387
|
|
|
|
—
|
|
|
—
|
|
|
|
—
|
|
Income tax payable
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
|
—
|
|
Net cash used in operating activities
|
|
|
(48,243
|
)
|
|
|
—
|
|
|
4,156
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investing Activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchase of fixed assets
|
|
|
(2,540
|
)
|
|
|
—
|
|
|
(4,156
|
)
|
|
|
—
|
|
Net cash used in investing activities
|
|
|
(2,540
|
)
|
|
|
—
|
|
|
(4,156
|
)
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financing Activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from issuance of stock
|
|
|
145,049
|
|
|
|
—
|
|
|
—
|
|
|
|
—
|
|
Net cash provided by financing activities
|
|
|
145,049
|
|
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in cash and equivalents
|
|
|
94,266
|
|
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and equivalents at beginning of the period
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
|
—
|
|
Cash and equivalents at end of the period
|
|
$
|
94,266
|
|
|
$
|
—
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental cash flow information:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest paid
|
|
$
|
—
|
|
|
$
|
—
|
|
$
|
—
|
|
|
$
|
—
|
|
Income taxes paid
|
|
$
|
—
|
|
|
$
|
—
|
|
$
|
—
|
|
|
$
|
—
|
|
See Notes to Financial Statements
|
ATI
MODULAR TECHNOLOGY CORP
Notes to Financial Statements
NOTE 1. ORGANIZATION
AND DESCRIPTION OF BUSINESS
ATI Modular Technology
Corp., defined above and herein as the “Company” formerly Global Recycle Energy, Inc., was incorporated under the laws
of the State of Nevada on March 7, 2008. The Company is engaged in the development and the exporting of modular energy efficient
technology and processes that allow government and private enterprises in China to use US-based methods for creating modular spaces,
facilities, and properties. As with any business plan that is aspirational in nature, there is no assurance we will be able to
accomplish all our objective or that we will be able to meet our financing needs to accomplish our objectives.
The Company is an
operating company engaged in the development and the exporting of modular energy efficient and smart technology and processes that
allow government and private enterprises in China and elsewhere to use US-based methods for creating modular spaces, facilities,
and properties. The Company is in the business of all aspects of modular and smart construction, including but not limited to,
(a) the furtherance of modular and smart construction technology, education, development and production in developed and undeveloped
countries, (b) acquisition and/or installation of construction equipment, materials, furnishings, hardware, insulation, flooring,
roofing, wiring, plumbing, heating and air conditioning, and landscaping, and (c) other businesses directly or tangentially related
to these lines of services, including assisting businesses and entrepreneurs in securing naming, licensing or promotional rights,
driving internet and media traffic, increasing visibility of product and name recognition, and other services.
Our principal executive
offices are located at 4700 Homewood Court, Suite 100 in Raleigh, North Carolina. We are registered as a foreign business entity
in the State of North Carolina. We lease the office space from Yilaime Corporation, a Nevada corporation doing business in North
Carolina, and a related party to the Company, as set forth below. Our physical location for our operations in China along with
a manufacturing facility is Jiangnan Industry Zone, Chizhou City, Anhui Province, China. In carrying out its business plan the
Company is in the process of registering its wholly owned subsidiary Anhui Ao De Xin Modular Building Technology Co. Ltd. in Jiangnan
Industry Zone, Chizhou, China.
The Company entered
an Investment and Cooperation Agreement with the Jiangnan Industry Zone in Anhui Province, China dated September 8, 2016 (the “Jiangnan
Cooperation Agreement”). On December 28, 2016, the Company entered the definitive agreement, American ATI Modular Technology
Company Project Investment Agreement (the “Investment Agreement”) with the Administrative Committee, Jiangnan Industry
Zone in Anhui Province. The Investment Agreement superseded the Jiangnan Cooperation Agreement. Under the Investment Agreement,
the Administrative Committee of Jiangnan Industrial Concentration Zone of Anhui Province (hereinafter, “Jiangnan”)
and the Company have agreed to the construction of the Company’s green, modular building and related technology under the
project name “Modular Plant Production Base.”
Under the
Investment Agreement, the Company has agreed to manufacture and install modular buildings, and provide research into the
development of green building module manufacturing using US based technology. The Company has agreed to provide appropriate
technology and intelligent systems in providing modular building lifecycle services. In addition, to modular and smart
technology, the Company and Jiangnan has agreed to establish: 1) a modular development institute research and training
center; 2) an entrepreneurial incubator; 3) an engineering technology research center; 4) an industrial design center; 5) a
post-doctoral workstations and engineering laboratories; and 6) an international student intern summer work program. Where
possible the Company’s aim is to increase US exports by using American based technology, equipment and services.
(Strategy)
The Company entered
the Modular Services Agreement with AmericaTowne, a related party and the majority and controlling shareholder of the Company,
to support AmericaTowne’s obligations under the Shexian Agreement in designing, installing and manufacturing American modular
technology for use in all government and private buildings throughout Shexian County, and elsewhere in China. The terms and conditions
of the Modular Services Agreement with AmericaTowne and the Shexian Agreement are set forth above.
Also, the Company
has entered the Yongan and Shexian Agreements to pursue the development of business opportunities involving modular technology
and investments, and business development. While we plan to have robust operations in the United States and international locations,
we expect the bulk of our operations and revenue will come from China.
China's economy and
its government impact our revenues and operations. While the Company has an agreement in place with the government of Jiangnan
as well as the approval by government officials in Shexian and Yongan China to operate facilities there is no assurance that we
will operate the facilities successfully. Additionally, the Company will need government approval in other locations in China to
operate other aspects of our business plan. There is no assurance that we will be successful in obtaining approvals from government
entities in other locations to operate other aspects of our business plan. Finally, Mr. Perkins, as a control person of each entity
– AmericaTowne and the Company, might elect to forego certain obligations of AmericaTowne under other Corporative Agreements
currently in place or not enter more definitive agreements with Governments in China and elsewhere, which in turn, could impact
the Company’s ability to meet its business plan set forth herein.
NOTE 2. SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
These financial statements
have been prepared in accordance with generally accepted accounting principles in the United States of America ("U.S. GAAP").
On May 9, 2017, the
Company reported that it had reached a determination to restate its previously filed financial statements for the six months ended
December 31, 2016 and for the year ended June 30, 2016. The restatement had no effect on net income for the six months ended December
31, 2016 and for the year ended June 30, 2016. The restatement relates to revoke application of pushdown accounting in accordance
with ASC 805-20-15-4.
On July 1,
2017, the Company reported that it had reached a determination to restate its previously filed financial statements for the
six months ended December 31, 2016 and for the year ended June 30, 2016. The restatement decrease net income of $186,933 for
the six months ended December 31, 2016. For the year ended June 30, 2016, the restatement had no effect on net income. The
restatement relates to defer and recognize as a reduction to the future costs for quarterly fee from exclusivity arrangements
in accordance with ASC 605-50-45.
The following summarizes
the effects of restatement:
|
Previously Reported
|
Adjustment
|
Restated
|
Goodwill:
|
|
|
|
12/31/2016
|
$206,992
|
(206,992)
|
$-
|
6/30/2016
|
$206,992
|
(206,992)
|
$-
|
Additional paid in capital:
|
|
|
|
12/31/2016
|
$1,040,355
|
(206,992)
|
$833,363
|
6/30/2016
|
$239,945
|
(206,992)
|
$32,953
|
Deferred Revenue:
|
|
|
|
12/31/2016
|
$-
|
324,387
|
$324,387
|
Income tax payable:
|
|
|
|
12/31/2016
|
$26,516
|
(26,516)
|
$-
|
Other receivables – related parties
|
|
|
|
12/31/2016
|
$48,834
|
110,938
|
$159,772
|
Revenue-related parties:
|
|
|
|
12/31/2016
|
$750,000
|
(500,000)
|
$250,000
|
Cost of revenues-related parties:
|
|
|
|
12/31/2016
|
$175,613
|
(175,613)
|
$-
|
General and administrative expenses:
|
|
|
|
12/31/2016
|
$463,448
|
(110,938)
|
$352,510
|
Provision for income taxes:
|
|
|
|
12/31/2016
|
$26,516
|
(26,516)
|
$-
|
Change in Fiscal
Year End
The Company
has filed its Form 8-K on January 31 of 2017 to change the Company's fiscal year end from June 30 to December 31. As a result
of this change, the Company is filing a Transition Report on Form 10-K for the six-month transition period ended December
31, 2016. References to any of the Company’s fiscal years mean the fiscal year ending December 31 of that calendar
year.
Use of Estimates
The preparation of
financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses during the reporting period. In the opinion of management,
all adjustments necessary in order to make the financial statements not misleading have been included. Actual results could differ
from those estimates.
Financial Instruments
The carrying amount reported in the balance
sheet for cash, accounts receivable, accounts payable, accrued expenses, interest payable and short-term notes payable approximate
fair value because of the immediate or short-term maturity of these financial instruments.
Cash Equivalents
The Company considers
all highly liquid investments with maturity of three months or less when purchased to be cash equivalents.
Concentration of
Credit Risk
Financial instruments
that potentially subject the Company to a significant concentration of credit risk consist primarily of cash and cash equivalents.
The Company maintains deposits in federally insured financial institutions in excess of federally insured limits. However, management
believes the Company is not exposed to significant credit risk due to the financial position of the depository institutions in
which those deposits are held.
Property, Plant,
and Equipment
Property, plant and
equipment are initially recognized recorded at cost. Gains or losses on disposals are reflected as gain or loss in the period of
disposal. The cost of improvements that extend the life of plant and equipment are capitalized. These capitalized costs may include
structural improvements, equipment and fixtures. All ordinary repairs and maintenance costs are expensed as incurred.
Depreciation for
financial reporting purposes is provided using the straight-line method over the estimated useful lives of the assets:
For the six
month ended December 31, 2016 and 2015, depreciation expense is $416 is $0, respectively. For the years ended June 30, 2016
and 2015, depreciation expense is $0. For the years ended June 30, 2016 and 2015, the Company’s effective income tax
rate is 0% resulting from full provision of allowance valuation on deferred tax assets from the Company’s net loss.
Income Taxes
Income taxes are
provided in accordance with Statement of Financial Accounting Standards ASC 740 Accounting for Income Taxes. A deferred tax asset
or liability is recorded for all temporary differences between financial and tax reporting and net operating loss carry forwards.
Deferred tax expense (benefit) results from the net change during the year of deferred tax assets and liabilities. Deferred tax
assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion of
all of the deferred tax assets will be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in
tax laws and rates on the date of enactment.
The Company was established
under the laws of the State of Nevada and is subject to U.S. federal income tax and Nevada state income tax, if any. Deferred income
tax assets and liabilities are computed for differences between the financial statement and tax bases of assets and liabilities
that will result in future taxable or deductible amounts and are based on enacted tax laws and rates applicable to the periods
in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred
income tax assets to the amount expected to be realized.
For the six months
ended December 31, 2016 and for the years ended June 30, 2016 and 2015, the Company’s effective income tax rate is 0% resulting
from full provision of allowance valuation on deferred tax assets from the Company’s net loss.
Earnings per Share
In February 1997,
the FASB issued ASC 260, "Earnings per Share", which specifies the computation, presentation and disclosure requirements
for earnings (loss) per share for entities with publicly held common stock. ASC 260 supersedes the provisions of APB No. 15, and
requires the presentation of basic earnings (loss) per share and diluted earnings (loss) per share. The Company has adopted the
provisions of ASC 260 effective (inception).
Basic earnings and
net loss per share amounts are computed by dividing the net income by the weighted average number of common shares outstanding.
Diluted earnings per share are the same as basic earnings per share due to the lack of dilutive items in the Company.
Segment Information
The standard, "Disclosures
about Segments of an Enterprise and Related Information", codified with ASC 280, requires certain financial and supplementary
information to be disclosed on an annual and interim basis for each reportable segment of an enterprise. The Company believes that
it operates in business segment of marketing and sales in China while the Company's general administration function is performed
in the United States. On December 31, 2016, all assets and liabilities are located in the United States where the income and expense
has been incurred since inception to December 31, 2016.
Impact of New Accounting
Standards
The Company does
not expect the adoption of recently issued accounting pronouncements to have a significant impact on the Company's results of operations,
financial position, or cash flow.
Revenue Recognition
The Company's revenue recognition policies
comply with FASB ASC Topic 605. The Company follows paragraph 60510S991 of the FASB Accounting Standards Codification for revenue
recognition. The Company will recognize revenue when it is realized or realizable and earned. The Company considers revenue realized
or realizable and earned when all of the following criteria are met: (i) persuasive evidence of an arrangement exists, (ii) the
product has been shipped or the services have been rendered to the customer, (iii) the sales price is fixed or determinable, and
(iv) collectability is reasonably assured.
The Company does not provide unconditional
right of return, price protection or any other concessions to its customers.
There were no sales returns and allowances
from inception to December 31, 2016.
In the first step of the review process,
we compare the estimated fair value of the reporting unit with its carrying value. If the estimated fair value of the reporting
unit exceeds its carrying amount, no further analysis is needed. If the estimated fair value of the reporting unit is less than
its carrying amount, we proceed to the second step of the review process to calculate the implied fair value of the reporting unit
goodwill in order to determine whether any impairment is required. We calculate the implied fair value of the reporting unit goodwill
by allocating the estimated fair value of the reporting unit to all of the assets and liabilities of the reporting unit as if the
reporting unit had been acquired in a business combination. If the carrying value of the reporting unit’s goodwill exceeds
the implied fair value of the goodwill, we recognize an impairment loss for that excess amount. In allocating the estimated fair
value of the reporting unit to all of the assets and liabilities of the reporting unit, we use industry and market data, as well
as knowledge of the industry and our past experiences.
We base our calculation of the estimated
fair value of a reporting unit on the income approach. For the income approach, we use internally developed discounted cash flow
models that include, among others, the following assumptions: projections of revenues and expenses and related cash flows based
on assumed long-term growth rates and demand trends; expected future investments to grow new units; and estimated discount
rates. We base these assumptions on our historical data and experience, third-party appraisals, industry projections, micro and
macro general economic condition projections, and our expectations.
We have had no goodwill impairment charges
for the six months ended December 31, 2016, the estimated fair value of each of our reporting units exceeded its' respective carrying
amount by more than 100 percent based on our models and assumptions.
NOTE 3. GOING CONCERN
The Company's financial statements are
prepared using accounting principles generally accepted in the United States of America applicable to a going concern that contemplates
the realization of assets and liquidation of liabilities in the normal course of business.
The Company is still in development stage
and has not created sufficient revenue to cover any operating losses it may incur. Management's plans include the raising of capital
through the equity markets to fund future operations, seeking additional acquisitions, and generating of revenue through our business.
However, there can be no assurances the Company will be successful in its efforts to secure additional equity financing and obtaining
sufficient revenue producing contracts. These factors raise substantial doubt about the Company's ability to continue as a going
concern. The financial statements do not include any adjustments relating to the recoverability and classification of recorded
asset amounts, or amounts and classification of liabilities that might result from this uncertainty.
NOTE 4. ACCOUNT RECEIVABLES
– RELATED PARTIES
The nature of the
accounts receivable for December 31, 2016 in the amount of $63,250 are for modular construction and technology services and utilization
of anticipated modular construction technology by AmericaTowne pursuant to the Modular Construction & Technology Services Agreement
between AmericaTowne and the Company dated June 28, 2016 (hereinafter, the “ATI Services Agreement”) and $419,650 for
the Sales and Support Services Agreement with Yilaime on June 27, 2016 (the “Yilaime Services Agreement”). On December
31, 2016, the Company's allowance for bad debt is $24,145, which provides a net receivable balance of $458,755.
The nature of the
accounts receivable for June 30, 2017 in the amount of $125,000 are for Modular Construction and Technology Services and utilization
of anticipated modular construction technology. The Company’s allowance for bad debt is $6,250, which provides a net receivable
balance of $118,750.
Accounts receivable
consist of the following:
|
31-Dec
|
30-June
|
30-June
|
|
2016
|
2016
|
2015
|
Accounts receivable- related parties
|
482,900
|
125,000
|
0
|
Less: Allowance for doubtful accounts
|
(24,145)
|
(6,250)
|
0
|
Accounts receivable, net
|
458,755
|
118,750
|
0
|
Bad debt expense
was $17,895 and $0 for the six months ended December 31, 2016 and 2015, respectively. Bad debt expense was $6,250 and $0 for the
fiscal year ended June 30, 2016 and for June 30, 2015 respectively.
Allowance for bad
debt policy
Our bad debt
policy is determined by the Company's periodic review of each account receivable for reasonable assurance of collection.
Factors considered are the exporter's financial condition, past payment history if any, any conversations with the exporter
about the exporter's financial conditions and any other extenuating circumstances. Based upon the above factors the Company
makes a determination whether the receivable is reasonable assured of collection. Based upon our review if required we adjust
the allowance for bad debt. As of December 31, 2016, June 30, 2016, and June 30, 2015, based upon our limited history, our
allowance for bad debt is just above bad debt we anticipate will be written off for the year.
NOTE 5. DEFERRED
REVENUE
The Company receives
$250,000 quarterly fee from Yilaime for Sales and Support Services Agreement. In accordance with ASC 605-50-45, the Company defers
and recognizes as a reduction to the future costs for quarterly fee. For the six months December 31, 2016, $500,000 fee from exclusive
agreement incurred; $324,387 is booked deferred revenue as current liability on December 31, 2016 and $175,613 went against cost
charged by Yilaime.
NOTE 6. SHAREHOLDER'S
EQUITY
The stockholders'
equity section of the Company contains the following classes of capital stock:
Common stock, $ 0.001
par value: 500,000,000 shares authorized; 126,733,337, 116,075,716 and 16,075,716 shares issued and outstanding as of December
31, 2016, June 31, 2016 and June 30, 2015, respectively; Preferred stock, none: 0 shares authorized; but not issued and outstanding.
NOTE 7. STOCK BASED
COMPENSATION
The Company entered
into an employment lock-up agreement on July 1, 2016 with Alton Perkins to serve as the Chairman of the Board, President, Chief
Executive Officer, Chief Financial Officer and Secretary. The term of Mr. Perkins' agreement is five years with the Company retaining
an option to extend in one-year periods. In consideration for Mr. Perkins' services, the Company has agreed to issue to his designee,
the Alton & Xiang Mei Lin Perkins Family Trust, 10,000,000 shares of common stock. The Company may elect in the future to include
money compensation to Mr. Perkins or his designee for his services provided there is sufficient cash flow.
For the six months
ended December 31, 2016, $50,000 of stock compensation was charged to operating expenses and $450,000 was recorded as deferred
compensation on December 31, 2016.
NOTE 8. RELATED PARTIES TRANSACTIONS
The Company intends on relying on other
businesses controlled by our sole director and officer, and beneficial owner of the majority shares of common stock in the Company
– Alton Perkins, in implementing its business plan.
Mr. Perkins is the control person of Yilaime
Corporation, AmericaTowne and AXP Holding Corporation. At this time, the purpose of the Company is to service the construction
and related technology needs of AmericaTowne under AmericaTowne’s agreements with the Shexian County Investment Promotion
Bureau in developing an AmericaTowne community in the Hanwang mountains in Shexian, China. The Company also intends on supporting
these services in other AmericaTowne ventures at the invitation of the Xiamen Longyan City Chamber of Commerce, Xiamen/Longyan
China and the Xiamen City Growth Planning Agency in developing an AmericaTowne Community and an International School in Longyan
County China.
The related export services rendered to
the Company in the implementation of its business plan cannot be provided by AmericaTowne or through the AmericaTowne relationship.
In order to avoid conflicts of interest, Mr. Perkins is of the opinion that there must be a separate and distinct agreement between,
in this case, the Company and AXP Holding Corporation. Furthermore, although other similar IC-DISC entities exist, the Company
is able to obtain better terms and conditions from AXP Holding Corporation in light of Mr. Perkins’ control of AXP Holding
Corporation.
AmericaTowne’s Board of Directors
determined that operating and controlling a separate but related entity focused on the development and the exporting of modular
energy efficient technology and processes for government and private enterprises in China would be more prudent from a risk mitigation
and operational standpoint than providing these services under the AmericaTowne business plan. Furthermore, the intent of the Company
is to expand its services and relationships to other similar endeavors in projects not related to AmericaTowne, thus the need to
maintain and operate a separate entity.
Cooperative Agreement (Shexian County
Government, China)
The Company’s majority and controlling
shareholder – AmericaTowne, is a party under the Cooperative Agreement with the Shexian County Investment Promotion Bureau
(the “Shexian Agreement”). Under the Shexian Agreement, AmericaTowne and the Shexian County Bureau have agreed to a
partnership in furthering the development of an AmericaTowne community in the Hanwang mountains. Although not definitive at this
time, the parties have agreed that, in consideration for AmericaTowne’s investment of approximately $30,000,000 into the
development, plus any additional tax paid to the local government, where applicable, the Shexian County Bureau will dedicate local
resources, including land (which AmericaTowne would be required to obtain rights through local bid invitation), and participation
with AmericaTowne in an agreed upon equity split through a future definitive agreement.
The Company will be providing construction
and technology services to AmericaTowne in facilitating AmericaTowne’s obligations under the Shexian Agreement. The Company’s
ability to generate revenue under its agreement with AmericaTowne could be impaired in the event AmericaTowne is not able to meet
its obligations under the Shexian Agreement. Furthermore, Mr. Perkins, as a control person of each entity, might elect to forego
certain obligations of AmericaTowne under the Shexian Agreement or not enter into a more definitive agreement with the Shexian
County Bureau, which in turn, could impact the Company’s ability to meet its business plan set forth herein.
Sales and Support Services Agreement (Yilaime
Corporation)
On June 27, 2016, we entered into a Sales
and Support Services Agreement with Yilaime Corporation, a Nevada corporation (“Yilaime”). Yilaime is controlled by
Alton Perkins, who is our sole director and officer. Yilaime holds the majority of issued and outstanding shares of common stock
in AmericaTowne, Inc. (“ATI”), a Delaware corporation and fully-reporting company with the United States Securities
and Exchange Commission (the “SEC”). Mr. Perkins is also the Trustee of the Alton & Xiang Mei Lin Perkins Family
Trust (“Perkins Trust”) and the AXP Nevada Asset Protection Trust 1 (“AXP”), which holds 5,100,367 and
120,000 shares, respectively, of the issued and outstanding common stock in ATI. Mr. Perkins is the beneficial owner of 20,674,484
shares of ATI, which equals 90.11% of issued and outstanding shares. Mr. Perkins is the beneficial owner of the majority and controlling
interest in the Company through his direct holdings, and beneficial holdings through Yilaime, AXP and the Perkins Trust. ATI, Perkins
Trust and Mr. Perkins beneficially own 110,117,593 shares, or 86%, of the Company’s common stock.
Under the Services Agreement, Yilaime
will provide the Company with marketing, sales and support services in the Company’s pursuit of ATI Modular business in China
in consideration of a commission equal to 10% of the gross amount of monies procured for the Company through Yilaime’s services.
In consideration of the right to receive this commission, Yilaime has agreed to pay the Company a quarterly fee of $250,000 starting
on July 1, 2016. The Services Agreement is set to expire on June 10, 2020, absent early termination for breach thereof by either
party. Yilaime retains an option to extend the term under its sole discretion until June 10, 2025 by providing written notice to
the Company by March 10, 2019. Yilaime has agreed to be the Company’s exclusive independent contractor in providing the services
in the Services Agreement, and has agreed to a non-compete and non-circumvent agreement.
Yilaime is obligated to provide support
services only in a manner that is deemed commercially acceptable by Yilaime and Yilaime has the sole right to determine the means,
manner and method by which services will be provided and at the time and location of its choosing. Furthermore, as the control
person of Yilaime, Mr. Perkins might make decisions he deems are in the best interests of Yilaime, which might be to the detriment
of the goals and objectives of the Company.
Modular Construction & Technology
Services Agreement (AmericaTowne)
On June 28, 2016, we entered into a Modular
Construction & Technology Services Agreement (the “Modular Services Agreement”) with AmericaTowne Inc. (“ATI”),
a Delaware corporation and fully-reporting company with the United States Securities and Exchange Commission (the “SEC”).
The impetus behind the Modular Services Agreement was the Company’s Cooperative Agreement with the Shexian County Government,
China. Under the Cooperative Agreement, ATI and the Shexian County Bureau have agreed to a partnership in furthering the development
of an AmericaTowne community in the Hanwang mountains, Shexian, China. In addition, ATI, at the invitation of the Xiamen Longyan
City Chamber of Commerce, Xiamen/Longyan China and the Xiamen City Growth Planning Agency plan to pursue the development of an
AmericaTowne Community and an International School in Longyan County China.
Under the Modular Services Agreement,
ATI Modular shall provide the research, development, training and modular technology in a manner deemed commercially acceptable
by ATI based on its commercially reasonable requirements, plans and specifications, which shall be agreed upon in advance of any
substantial and material construction. ATI will pay the Company a quarterly fee of $125,000 per quarter. The initial fee was paid
upon signing the Modular Services Agreement. The Services Agreement is set to expire on June 10, 2020, absent early termination
for breach thereof by either party. ATI retains an option to extend the term under its sole discretion until June 10, 2025 by providing
written notice to the Company by March 10, 2019. Yilaime has agreed to be the Company’s exclusive independent contractor
in providing the services in the Services Agreement, and has agreed to a non-compete and non-circumvent agreement.
Interest Charge – Domestic International
Sales Agreement (AXP Holding Corporation)
On June 29, 2016, we entered into
an IC-DISC Service Provider Agreement with AXP Holding Corporation, a Nevada corporation (“AXP Holding”) and
related party to the Company through Mr. Perkins control of AXP Holding. AXP Holding is an Interest Charge - Domestic
International Sales Corporation, or “IC-DISC”. AXP IC-DISC tax-exempt status was authorized and approved by the
United States Department of the Treasury, Internal Revenue Service. As an IC-DISC, AXP Holding may, under certain conditions,
act as a sister corporation to entities and provide services to assist a company in obtaining lower tax rates on export
income. In addition to the export tax savings provided by AXP, AXP can provide an additional array of services including
promoting the Company’s export activities, purchasing receivables from the Company at a discount through a factoring
relationship, and providing the Company with working capital loans.
The term under the IC-DISC Service Provider
Agreement is set to expire on December 6, 2019, absent early termination for breach thereof by either party. AXP retains the right
to extend the term, exercising its sole discretion, to December 6, 2024 by providing written notice to the Company by November
6, 2019. AXP has agreed to a non-compete and non-circumvent in providing the services under the IC-DISC Service Provider Agreement.
The Company has agreed to pay AXP a commission
fee up to the greater of 50% of the Company’s export net income or 4% of the Company’s export gross receipts. The Company
will determine the exact amount and the method of payment of the commission fee. The commission fee shall be paid at the option
of the Company periodically throughout the year, but no later than December 31 on annual basis. If there is no commission fee due
to no export sales, the Company will pay AXP an export service fee of $50,000. The export service fee, if any, is due on or before
December 31 on an annual basis.
In addition, for referring businesses
from the Company’s “Export Platform” or “Community,” AXP agrees to pay the Company 25% of each “Sales
Export Service Fee” charged and received as an “IC-DISC Commission” from each Exporter or Licensee resulting
from participating in the Export Platform or Community. This fee is called a “Group Export Consulting Fee” in the IC-DISC
Service Provider Agreement, and is due no later than fifteen business days after receipt from the Exporter or Licensee, but no
later than December 31 on an annual basis. For illustrative purposes, if AXP receives and or charges an Exporter 50% of its net
export sales as a commission, and that value is $100,000, AXP would owe the Company 25%, or $25,000. Furthermore, during the term,
the Company shall pay AXP a flat fee of $5,000 per transaction for purchasing receivables from the Company, plus an interest rate
for such factoring at the prime rate plus one-percent.
In addition, Joseph Arcaro is the Company’s
prior Chief Executive Officer, Chief Financial Officer, Secretary and Chairman of the Board of Directors.
The Company recognizes and confirms the
requirements in ACS 850 10506 to disclose all related party transactions between the Company and related party transactions and
or relationships.
Pursuant to ASC 850-10-50-6,
the Company makes the following transaction disclosures:
The Company also
leases office space from Yilaime for $2,500/month.
Operating Statement
Related Party Transactions (for the six months ending December 31, 2016 and 2015; for the years ended June 30, 2016 and 2015).
(a) $15,000, $0, $2,500 and $0 for
general and administrative expenses for rent expenses the Company paid to Yilaime towards its lease agreement.
(b) $250,000, $0, $125,000 and $0
in revenues for ATI Services Agreements with the Company
(c) $50,000, $0, $0 and $0 for general
and administrative operating expenses recorded as stock compensation for respective employment agreements;
(d) $3,334, $0, $0 and $0 for general
and administrative expenses for commissions and fees;
(e) $198,000, $0, $0 and $0 for
operational expense for Anhui Ao De Xin Modular Construction Technology Co., Ltd.
(f) $0, $0, $100,000 and $0 of compensation
expense by issuing 100,000,000 shares to Joseph Arcaro.
(g) $0, $0, $3,859 and $0 other income of debt forgiveness
from Joseph Arcaro
Balance Sheet Related Party Transactions
(on December 31, 2016, June 30, 2016 and June 30, 2015)
(a) $60,088, 118,750 and $0 net
account receivables ATI owes to the Company;
(b) $398,668, $0 and $0 net account
receivables Yilaime owes to the Company;
(c) $159,772, $0 and $0 prepayments
to AXP Holding Corp; and
(d) $198,000, $0 and $0 as accounts
payable to Anhui Ao De Xin Modular Construction Technology Co., Ltd.; and
(e) $450,000, $0 and $0 as deferred
compensation pursuant to respective employment agreements.
(f) $0, $19,241 and $0 advances
to officers-Alton Perkins
(g) $0, $30,000 and $0 deposit from
customers- Yilaime.
(h) $324,387, 0 and $0 deferred revenue-Yilaime