UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-K

 

(Mark One)

 

x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the fiscal year ended: December 31, 2019

 

or

 

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from ___________ to ___________

 

Commission file number: 000-55319

 

RESORT SAVERS, INC.

(Exact name of registrant as specified in its charter)

  

Nevada

 

46-1993448

(State or other jurisdiction of incorporation or organization)

 

(I.R.S. Employer Identification No.)

 

Level 11, Tower 4, Puchong Financial Corporate Centre (PFCC)

 Jalan Puteri 1/2, Bandar Puteri, 47100 Puchong, Malaysia

(Address of principal executive office)

 

Registrant’s telephone number, including area code:

 +60 3 8600 0313

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

None

N/A

N/A

 

Securities registered pursuant to Section 12(g) of the Act: Common Stock, par value $0.0001

 

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

 

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

 

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the last 90 days. Yes ☒     No ☐

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registration statement was required to submit such files). Yes ☒     No ☐

 

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ☐

 

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

 

Large accelerated filer

Accelerated filer

Non-accelerated filer

x

Smaller reporting company

x

 

Emerging growth company

x

 

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

 

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

 

The aggregate market value of the voting and non-voting common equity held by non-affiliates on March 30, 2020 was 2,209,881 shares at $28.50 per share, or $62,981,608.50.

 

Indicate the number of shares outstanding of each of the registrant’s classes of common stock as of the latest practicable date: 5,209,881 shares, par value $0.0001 per share, as of March 30, 2020.

 

DOCUMENTS INCORPORATED BY REFERENCE

 

None.

 

 
 

 

 

 

Cautionary Note Regarding Forward-Looking Statements

 

This Annual Report on Form 10-K contains “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Because they discuss future events or conditions, forward-looking statements may include words such as “anticipate,” “believe,” “estimate,” “intend,” “could,” “should,” “would,” “may,” “seek,” “plan,” “might,” “will,” “pursue,” “expect,” “predict,” “project,” “goals,” “strategy,” “future,” “likely,” “forecast,” “potential,” “continue,” negatives thereof or similar references to future periods. Examples of forward-looking statements include, among others, statements we make regarding future acquisition or merger targets, business strategies, macro-economic and sector-specific trends, future cash flows, financing plans, plans and objectives of management and any other statements which are not statements of historical facts.

 

Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on our current beliefs, expectations and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. Our actual future results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not rely on any of these forward-looking statements. Important factors that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements include, among others, inability to successfully conclude acquisitions of target companies or assets which are reasonably capable of generating positive cash flow in the near future, legal and regulatory changes in the jurisdictions in which we operate, volatility or decline in our stock price, mismanagement of our subsidiaries by local managers, potential fluctuation of our quarterly and annual financial and operational results, rapid adverse changes in markets, decline in demand for our goods and services, insufficient revenues to cover our operating costs and such other factors as discussed in the sections “Business” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” within this Annual Report on Form 10-K.

 

Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.

 

All references in this Annual Report on Form 10-K to the “Company,” “Resort Savers,” “RSSV,” “we,” “us” or “our” are to Resort Savers, Inc.

 

 
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Part I

 

Item 1. Business.

 

Resort Savers, Inc. was incorporated in the State of Nevada on June 25, 2012. At formation, the Company was authorized to issue 100,000,000 shares of common stock, par value $0.0001 per share (“Common Stock”), and 15,000,000 shares of preferred stock, par value $0.0001 per share (“Preferred Stock”).

 

On July 3, 2018, the Company’s board of directors (the “Board of Directors”) approved a change in our fiscal year end from January 31 to December 31. The Company now operates on a fiscal year ending on December 31. Resort Savers has limited cash on hand. Resort Savers has never declared bankruptcy, been in receivership, or been involved in any kind of legal proceeding.

 

On August 1, 2014, a change of control of the Company occurred, whereby a controlling interest in the Company was sold by Michelle LaCour, our former President, Chief Executive Officer, Chief Financial Officer, Treasurer and Director and a former 5% stockholder, and James LaCour, our former Secretary and Director and a former 5% stockholder, to the following: (1) Zhou Gui Bin (236,733 shares at a purchase price of $0.20 per share); (2) Zhou Wei (236,733 shares at a purchase price of $0.20 per share); and (3) Zong Xin International Investment Holdings Co. LTD (“Zong Xin”) (1,636,734 shares at a purchase price of $0.20 per share). On August 11, 2014, in connection with the transfer of shares described in this paragraph, Ms. LaCour and Mr. LaCour resigned from each of their roles as officers and Directors of the Company, and they were replaced by Zhou Gui Bin as President, CEO and Director, and Zhou Wei as Treasurer, CFO, Secretary and Director.

 

On September 25, 2014 the Company effected a forward ten-for-one (10-for-1) stock split on its Common Stock, having the equivalent effect of issuing an additional nine shares of Common Stock for each share of Common Stock outstanding immediately prior to the effective date of the forward stock split. All share and per share information has been retroactively restated for financial presentation of prior periods.

 

Amendment to Articles of Incorporation

 

On October 9, 2015, the Company amended its Articles of Incorporation to increase the maximum number of authorized shares of Common Stock to 1,000,000,000 shares. The Company did not amend the amount of authorized shares of Preferred Stock or par values for Common Stock or Preferred Stock.

 

Change of Management

 

On February 9, 2018, concurrently with the execution of the Admall Exchange Agreement and the Dusun Termination Agreement, Zhou Gui Bin resigned from his positions as President, CEO, Secretary and Director of the Company, and Zhou Wei resigned from his positions as Treasurer, CFO and Director of the Company. The departing Directors approved, by written consent in lieu of special meeting of the Board of Directors, the appointment of Mr. Ding-Shin “DS” Chang and Mr. Boon Jin “Patrick” Tan as the new Directors of the Company and submitted such appointment for approval and ratification by the Company’s stockholders. The Company’s departing Directors also appointed Mr. Ding-Shin “DS” Chang as the Company’s President and CEO, Mr. Boon Jin “Patrick” Tan as the Company’s Treasurer and CFO, and Mr. Liang-Yu “Jacky” Chang as the Company’s Secretary, all of whom are to serve on an at-will basis until their resignation or removal by the Board of Directors.

 

 
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Change in Fiscal Year End; Change to Bylaws; Reverse Stock Split; Corporate Name Change

 

On July 3, 2018, our Board of Directors approved a change in our fiscal year end from January 31 to December 31. The Company now operates on a fiscal year ending on December 31. The Company changed its bylaws to reflect the change in fiscal year end.

 

Contemporaneously with the change in fiscal year end, our Board of Directors approved a reverse one-for-thirty (1-for-30) stock split of the Company’s issued and outstanding Common Stock and a change of corporate name from “Resort Savers, Inc.” to “SCGI Group Holding, Inc.” (the “Name Change”). Following these corporate approvals, the management of the Company delayed implementation of the reserve stock split and corporate name change, and management never submitted an Issuer Company-Related Action Notification Form (“Notification Form”) with the Financial Industry Regulatory Authority (“FINRA”) to effect such actions.

 

On July 15, 2019, the Board of Directors approved a reverse one-for-one hundred (1-for-100) stock split (the “Reverse Split”) of the Company’s issued and outstanding Common Stock. The Reverse Split will have no effect on the number of authorized Common Stock of the Company, nor will it affect the authorized or issued and outstanding shares of its Preferred Stock, since the Company has no shares of Preferred Stock issued or outstanding. The Reverse Split will be effective following a review by FINRA, which the Company anticipates will be approximately thirty to sixty days following submission of a Notification Form with FINRA, which occurred on July 23, 2019. Upon effectiveness of the Reverse Split, the Company intends to file a Certificate of Change with the Nevada Secretary of State, pursuant to Nevada Revised Statute (“NRS”) 78.209. The Reverse Split was approved by the Board of Directors and the stockholders of the Company on July 15, 2019. The record date for the Reverse Split is July 30, 2019. For more information on the Reverse Split, please refer to the Company’s Current Report on Form 8-K, which was filed with the U.S. Securities and Exchange Commission (“SEC”) on July 22, 2019.

 

On July 15, 2019, the Board of Directors and the stockholders of the Company, each by executing a written consent, approved of an amended and restated articles of incorporation (the “Restated Articles”), which contain the Name Change. The officers of the Company intended to filed the Restated Articles with the Nevada Secretary of State following review of the Notification Form by FINRA. For more information on the Name Change, please refer to the Company’s Current Report on Form 8-K, which was filed with the SEC on July 22, 2019.

 

On August 14, 2019, the Board of Directors and the stockholders of the Company, each by executing a written consent, voted to abandon the Name Change and Restated Articles. However, the Company proceeded with and implemented the Reverse Split. The Company submitted an amended notification to FINRA for abandonment of the Name Change and Restated Articles, and received approval from FINRA for the reverse split. The Reverse Split was effective on September 16, 2019.

 

Business Operations.

 

The Company has engaged in the following business activities, through the listed subsidiary entities:

 

Worx America, Inc.

 

From January 2015 through March 2015, the Company, by and through its wholly owned subsidiary, Xing Rui International Investment Holding Group Co., Ltd. (“Xing Rui”), acquired 20,068,750 shares of common stock (representing 20% of the issued and outstanding common stock) of Worx America, Inc. (“Worx”), a private company based in Houston, Texas, in exchange for $1,650,000 cash and 1,000,000 shares of common stock of Borneo Resource Investments Ltd. (“BRNE”) with a value of $350,000. Specifically, on January 28, 2015, the Company paid $350,000 cash in exchange for 5,403,728 common shares of Worx, on March 20, 2015, the Company paid $1,300,000 cash and transferred 1,000,000 shares of common stock of BRNE in exchange for 14,665,022 common shares of Worx. The Company accounted for this investment using the equity method, with an initial cost of $2,000,000.

 

Worx designed automated solutions for industrial, environmental and energy industries to improve efficiency and systems output. The Worx automated robotic tank cleaning system was intended to reduce tank cleaning time, reduce or eliminate the need for personnel to enter tanks, and may reduce the volume of solvents used to clean a tank.

 

On June 6, 2016, Worx sold all of its assets (“Asset Sale”), including, but not limited to, its technologies and intellectual property, to Bay WorxRail, LLC (“Bay WorxRail”) for $1,000,000 (“Purchase Price”), subject to a holdback of $250,000 of the Purchase Price, pursuant to the terms set forth in that certain Asset Purchase Agreement, dated June 6, 2016, among Worx, Bay WorxRail, and Michael Zilai, as majority stockholder of Worx. The Company reviewed Worx’s financial condition at July 31, 2016 and concluded that as a result of the Asset Sale there is a 100% impairment loss related to the Company’s investment in Worx, and recorded an impairment loss of $1,907,308, for the year ended January 31, 2017. At present, the Company’s carrying value of its Worx investment is $0.

 

 
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Shenzhen Amuli Industrial Development Co. Ltd.

 

On October 1, 2015, the Company issued 3,033,926 shares of its Common Stock to Xu Xiao Yun in exchange for sixty percent (60%) of Shenzhen Amuli Industrial Development Co. Ltd., a PRC corporation (“Amuli”). The equity of Amuli that was transferred by Xu Xiao Yun was held by Huaxin Changrong (Shenzhen) Technology Service Co., Ltd. (“Huaxin”), which was formed by Xing Rui for the purpose of holding the equity of Amuli and other PRC subsidiaries. The purchase price was valued $2,400,000.

 

On November 19, 2018, the Company disposed of its partial ownership interest in Amuli by causing Huaxin and Amuli to enter into a Share Purchase Agreement (the “Amuli Disposition Agreement”) with Ms. An Wenhui, a citizen of the PRC and minority shareholder of Amuli (the “Purchaser”), pursuant to which, among other things and subject to the terms and conditions contained therein, Huaxin sold its sixty percent (60%) Amuli equity stake (the “Amuli Shares”) to the Purchaser (the “Amuli Disposition”). Pursuant to the Amuli Disposition Agreement, in exchange for the Amuli Shares, the Purchaser paid to Huaxin a cash price of $1 or the equivalent thereof in Chinese Yuan (the “Purchase Price”). Our Board of Directors approved the Amuli Disposition Agreement, the Amuli Disposition and the Purchase Price, because among other reasons the Board of Directors believed that Amuli would not produce significant future income or cash flow. The Amuli Disposition Agreement contains substantially fewer representations and warranties in comparison to other agreements entered into by the Company and its subsidiaries. Additionally, the closing of the Amuli Disposition occurred contemporaneously with the signing of the Amuli Disposition Agreement, which resulted in little or no covenants or closing conditions imposed on the parties. As a result, Amuli is no longer a partially-owned subsidiary of the Company.

 

Beijing Yandong Tieshan Oil Products Co., Ltd.

 

On January 29, 2016, the Company entered into an exchange agreement (the “Tieshan Oil Exchange Agreement”) with Mr. Yang Baojin (“Mr. Yang”), a citizen of the PRC, and the Company’s subsidiary Huaxin. Mr. Yang was the president and majority owner of Beijing Yandong Tieshan Oil Products Co., Ltd. (“Tieshan Oil”). Pursuant to the Tieshan Oil Exchange Agreement, the Company issued 4,800,000 shares of its Common Stock to Mr. Yang, who delivered to Huaxin an ownership interest in Tieshan Oil such that Huaxin at the time of closing owned 51% of all ownership interests in Tieshan Oil (the “Tieshan Oil Exchange”). The Company held 1,200,000 shares of its Common Stock in escrow (the “Escrow Shares”) to issue to Mr. Yang twelve months following the closing of the Tieshan Oil Exchange, in connection with the successful performance of certain covenants by Mr. Yang. The Company did not issue the Escrow Shares to Mr. Yang in connection with the Tieshan Oil Exchange.

 

On May 16, 2018, the Company completed its acquisition of Tieshan Oil by entering into a second share exchange agreement (the “Second Tieshan Oil Exchange Agreement”) with Mr. Yang. Pursuant to the Second Tieshan Oil Exchange Agreement, the Company, through Huaxin, agreed to acquire the remaining 49% of Tieshan Oil held by Mr. Yang, in exchange for the issuance to Mr. Yang of 16,000,000 shares of the Company’s Common Stock (the “Tieshan Oil Acquisition”). The Tieshan Oil Acquisition closed simultaneously with the execution of the Second Tieshan Oil Exchange Agreement.

 

Apart from the Tieshan Oil Acquisition, neither the Company nor Huaxin has a material relationship with either Mr. Yang or Tieshan Oil.

 

A description of the products, services, principal market and distribution methods of Tieshan Oil can be found within this Part I, Item 2 under the heading “Principal Products, Services and Their Markets.”

 

Abandonment of Plans to Acquire Dusun Eco Resort (2005) Sdn. Bhd.

 

On December 7, 2017, the Company entered into a Share Exchange Agreement (the “Dusun Exchange Agreement”) with Dusun Eco Resort (2005) Sdn. Bhd., a limited liability company registered under the laws of Malaysia (“Dusun Eco”), and the shareholders of Dusun Eco (the “Dusun Sellers”), by which the Company agreed to acquire all of the issued and outstanding stock of Dusun Eco in exchange for the issuance of 400,000,000 shares of the Company’s Common Stock. After further review of the due diligence materials related to the Exchange, our Board of Directors felt that it was in the Company’s best interest to terminate the Dusun Exchange Agreement. On February 9, 2018, the Company, Dusun Eco and the Dusun Sellers entered into a Termination of Share Exchange Agreement (the “Dusun Termination Agreement”), by which the Company, Dusun Eco and the Dusun Sellers agreed to terminate the Dusun Exchange Agreement with no legal consequence to any of the parties to the Dusun Exchange Agreement.

 

Admall Sdn. Bhd.

 

On February 9, 2018, the Company entered into a Share Exchange Agreement (the “Admall Exchange Agreement”) with Admall Sdn. Bhd., a limited liability company incorporated in Malaysia (“Admall”), and each of Admall’s shareholders (collectively, the “Admall Sellers”), pursuant to which the Company acquired from the Admall Sellers all outstanding equity interests of Admall in exchange for 400,000,000 shares of Common Stock of the Company (the “Admall Acquisition”). On May 16, 2018, the Company closed the Admall Acquisition.

 

 
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Concurrently with the execution of the Admall Exchange Agreement, our Board of Directors appointed Mr. Boon Jin “Patrick” Tan to be the treasurer, CFO and Director of the Company. Mr. Tan is the founder and director of Admall. Apart from the appointment of Mr. Tan as Director and officer of the Company, and the transactions pursuant to the Admall Exchange Agreement, the Company did not have a prior material relationship with Admall or any of the Admall Sellers.

 

A description of the products, services, principal market and distribution methods of Admall can be found within this Part I, Item 2 under the heading “Principal Products, Services and Their Markets.”

 

Principal Products, Services and Their Markets

 

As described above in Part I, Item 1A, we have ownership interests in two operating entities: Tieshan Oil and Admall.

 

Beijing Yandong Tieshan Oil Products Co., Ltd.

 

Tieshan Oil acquires a variety of chemical products and compounds that are extracted and processed from crude oil and hydrocarbons. Tieshan Oil acts as an intermediary broker of methyl tert-butyl ether, mineral oil, paraffin oil, petrolatum liquids, alcohol based liquid fuel, trimethylpentane, pentane foamer, natural gasoline, xylene dimethylbenzene, aromatics solvent, and other chemical products and compounds. It identifies sources of supply and purchasers of these chemical products and compounds, and Tieshan Oil principally engages in the trading of these oil, gas and lubricant products within the PRC. Since it’s incorporation, Tieshan Oil has had a number of clients for these brokered products, including two gasoline operators in China, YanDongPetrol Group and YanDon Hao Teng. All of its clients are licensed gasoline operators. While this is a dynamic market, subject to fluctuations and unexpected changes brought on by a variety of political and market matters, Tieshan Oil has successfully managed the impact of these factors and remains an important part of the oil refining industry in Beijing, PRC.

 

Admall Sdn. Bhd.

 

Admall provides nutrition consultancy services and training. Admall also sells health, nutrition, and supplement products through an online store. Headquartered in Malaysia, Admall provides its services and sells its products in Southeast Asia, China, Hong Kong, Taiwan, and Korea. Utilizing technology, Admall delivers its services and sells its products via internet and e-commerce applications. Admall’s services include personal training, life coaching, and total life enhancement programmes, all centered around its “BE the BEST” platform. Admall has partnered with educational institutions, e-commerce platforms, nutritional development groups, and wellness service providers to expand the marketing and delivery of its services, training, and product sales.

 

We also continue to actively seek additional global investment opportunities in emerging companies with products that have potential for expanding regional and international sales and revenues.

 

Competitive Business Conditions and Strategy; Our Position in the Industry

 

In addition to the operating entities and businesses described above, we are actively involved in the acquisition of businesses which we believe will generate cash within an acceptable time horizon, and we primarily use our capital stock as consideration in such acquisitions. We face many competitors in the strategic investment and acquisition sector, including private equity funds, sovereign wealth and pension funds, corporate conglomerates, single family offices and multi-family offices, asset management firms, corporate acquirors which are strategically positioned in industries competitive with ours, and other small-cap public companies which primarily use equity securities to finance investments and acquisitions. In the latter category, barriers to entry are extremely low, and we face intense competition to source investment targets and to close investments. Our competitors have significantly greater financial and marketing resources than we do, including sufficient cash to pay consideration for acquisitions. There are no assurances that our efforts to compete in the marketplace will be successful or that we will continue to be able to compete with other funds, companies or other sources of capital to secure competitive acquisition targets and consummate future transactions.

 

Patents, Trademarks, Licenses, Agreements or Contracts

 

There are no aspects of our business plan which require a patent, trademark, or product license. We have not entered into any vendor agreements or contracts that give or could give rise to any obligations or concessions.

 

Research and Development Activities and Costs

 

We have spent no time on specialized research and development activities and have no plans to undertake any research or development in the future.

 

 
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Number of Employees

 

Resort Savers, including its subsidiaries, has 20 full-time employees and we do not anticipate hiring more employees in the near future. None of our Officers and/or Directors have signed any employment agreement, or any other agreement containing provisions related to financial remuneration for services, with the Company.

 

Reports to Security Holders

 

The public may read and copy any materials filed with the SEC at the SEC’s Public Reference Room at 100 F Street NE, Washington, DC 20549. The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC maintains an Internet site that contains reports and other electronic information regarding Resort Savers, Inc. and filed with the SEC at http://www.sec.gov.

 

Emerging Growth Company and Smaller Reporting Company Status

 

Emerging Growth Company

 

We are an “emerging growth company” as defined in Section 2(a)(19) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). As such, we are eligible to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies” including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”), reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a non-binding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. We intend to take advantage of all of these exemptions.

 

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, and delay compliance with new or revised accounting standards until those standards are applicable to private companies. We have elected to take advantage of the benefits of this extended transition period.

 

We could be an emerging growth company until the last day of the first fiscal year following the fifth anniversary of our the registration of our first common equity offering, although circumstances could cause us to lose that status earlier if our annual revenues exceed $1.07 billion, if we issue more than $1.0 billion in non- convertible debt in any three-year period or if we become a “large accelerated filer” as defined in Rule 12b-2 under the Exchange Act.

 

Smaller Reporting Company

 

We also qualify as a “smaller reporting company” under Rule 12b-2 of the Exchange Act, which is defined as a company with a public equity float of less than $250 million. To the extent that we remain a smaller reporting company at such time as are no longer an emerging growth company, we will still have reduced disclosure requirements for our public filings, some of which are similar to those of an emerging growth company, including not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act and the reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements.

 

Item 1A. Risk Factors

 

As a “smaller reporting company,” we are not required to provide the information required by this Item.

 

Item 1B. Unresolved Staff Comments.

 

None.

 

Item 2. Properties.

 

Resort Savers’ principal business and corporate address is Level 11, Tower 4, Puchong Financial Corporate Centre (PFCC), Jalan Puteri 1/2, Bandar Puteri, 47100 Puchong, Malaysia. The telephone number at our corporate address is +603 8600 0313. Other than this mailing address, Resort Savers as a holding company does not currently maintain any physical or other office facilities, and we do not anticipate the need for maintaining office facilities at any time in the foreseeable future. The Company pays no rent or other fees for the use of the mailing address as this address is used virtually full-time by activities of a shareholder of the Company.

 

We do not currently have any investments or other interests in any real estate, nor do we have investments or an interest in any real estate mortgages or securities of persons engaged in real estate activities.

 

Item 3. Legal Proceedings.

 

We are not involved in any pending legal proceeding nor are we aware of any pending or threatened litigation against us.

 

Item 4. Mine Safety Disclosures.

 

Not applicable.

 

 
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PART II

 

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

 

Market Information

 

Our Common Stock is not traded on any exchange but is currently available for trading in the over-the-counter market and is quoted on the OTCQB operated by the OTC Markets Group, Inc. under the symbol “RSSV.” Trading in stocks quoted on these markets is often thin and is characterized by wide fluctuations in trading prices due to many factors that may have little to do with a company’s operations or business prospects.

 

Over the counter securities are not listed or traded on the floor of an organized national or regional stock exchange. Instead, these securities transactions are conducted through a telephone and computer network connecting dealers in stocks. Over the counter issuers are traditionally smaller companies that do not meet the financial and other listing requirements of a regional or national stock exchange.

 

Trades in our Common Stock may be subject to Rule 15g-9 of the Exchange Act, which imposes requirements on broker/dealers who sell securities subject to the rule to persons other than established customers and accredited investors. For transactions covered by the rule, broker/dealers must make a special suitability determination for purchasers of the securities and receive the purchaser’s written agreement to the transaction before the sale.

 

The SEC also has rules that regulate broker/dealer practices in connection with transactions in “penny stocks.” Penny stocks generally are equity securities with a price of less than $5.00 (other than securities listed on certain national exchanges, provided that the current price and volume information with respect to transactions in that security is provided by the applicable exchange or system). The penny stock rules require a broker/dealer, before effecting a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document prepared by the SEC that provides information about penny stocks and the nature and level of risks in the penny stock market. The broker/dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker/dealer and its salesperson in the transaction, and monthly account statements showing the market value of each penny stock held in the customer’s account. The bid and offer quotations, and the broker/dealer and salesperson compensation information, must be given to the customer orally or in writing before effecting the transaction, and must be given to the customer in writing before or with the customer’s confirmation. These disclosure requirements may have the effect of reducing the level of trading activity in the secondary market for shares of our Common Stock. As a result of these rules, investors may find it difficult to sell their shares.

  

Set forth below are the range of high and low bid quotations for the periods indicated as reported by the OTC Markets Group, for the previous two years. The market quotations reflect inter-dealer prices, without retail mark-up, mark-down or commissions and may not necessarily represent actual transactions.

 

 

Quarter Ended

 

High

 

 

Low

 

December 31, 2019

 

$ 4.00

 

 

$ 1.53

 

September 30, 2019

 

$ 31.00

 

 

$ 3.25

 

June 30, 2019

 

$ 28.50

 

 

$ 18.00

 

March 31, 2019

 

$ 30.00

 

 

$ 15.00

 

 

 

 

 

 

 

 

Quarter Ended

 

High

 

 

Low

 

December 31, 2018

 

$ 27.51

 

 

$ 16.00

 

September 30, 2018

 

$ 26.00

 

 

$ 13.00

 

June 30, 2018

 

$ 25.55

 

 

$ 11.00

 

March 31, 2018

 

$ 32.00

 

 

$ 21.99

 

 

On March 30, 2020, the closing price of our Common Stock as reported by the OTC Markets was $0.88 per share.

 

As of March 30, 2020, there were approximately 235 stockholders of record and an aggregate of 5,209,881 shares of our Common Stock were issued and outstanding.

 

Dividend Policy

 

The Company does not anticipate paying dividends on our Common Stock at any time in the foreseeable future. Our Board of Directors currently plans to retain any earnings for the development and expansion of the Company s business. Any future determination as to the payment of dividends will be at the discretion of the Board of Directors and will depend on a number of factors including future earnings, capital requirements, financial conditions and such other factors as the Board of Directors may deem relevant.

 

 
8

 

 

  

Equity Compensation Plan Information

 

We do not have in effect any compensation plans under which our equity securities are authorized for issuance and we do not have any outstanding stock options.

 

Recent Sales of Unregistered Securities; Use of Proceeds from Registered Securities

 

The Company did not issue or sell any equity securities during our fiscal year ended December 31, 2019 or the period of time from the end of such fiscal year until the date of filing this Annual Report on Form 10-K. For a description of securities issued as consideration for the acquisition of equity interests in Worx, Amuli, Tieshan Oil and Admall, please refer to Part I, Item 1 of this Annual Report on Form 10-K.

 

Purchase of Equity Securities by the Issuer and Affiliated Purchasers

 

We did not purchase any of our shares of Common Stock or other securities during our fiscal year ended December 31, 2019.

 

Description of Securities and Certain Rights of Holders of Common Stock

 

Our authorized capital stock consists of 100,000,000 shares of Common Stock, and 15,000,000 shares of Preferred Stock. As of March 30, 2020, there were approximately 235 stockholders of record and an aggregate of 5,209,881shares of our Common Stock were issued and outstanding. Holders of our Common Stock are entitled to one vote for each share on all matters submitted to a stockholder vote.

 

Holders of our Common Stock:

 

·

have equal ratable rights to dividends from funds legally available, therefore, when, as and if declared by our Board of Directors,

 

 

·

are entitled to share in all of our assets available for distribution to holders of Common Stock upon liquidation, dissolution or winding up of our affairs, and

 

 

·

do not have preemptive, subscription or conversion rights, and there are no redemption or sinking fund provisions or rights.

 

Holders of shares of our Common Stock do not have cumulative voting rights, meaning that the holders of the majority of the outstanding shares, voting for the election of Directors, can elect all of the Directors to be elected, and, in such event, the holders of the remaining shares will not be able to elect any of our Directors.

 

Historically, 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, our general economic conditions, and other pertinent conditions. It is our present intention not to pay any cash dividends in the foreseeable future, but rather to reinvest earnings, if any, in our business operations.

 

Item 6. Selected Financial Data.

 

As a “smaller reporting company,” we are not required to provide the information required by this Item.

 

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

 

Management’s Discussion and Analysis contains various “forward looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, regarding future events or the future financial performance of the Company that involve risks and uncertainties. Certain statements included in this Form 10–K, including, without limitation, statements related to anticipated cash flow sources and uses, and words including but not limited to “anticipates”, “believes”, “plans”, “expects”, “future” and similar statements or expressions, identify forward looking statements. Any forward looking statements herein are subject to certain risks and uncertainties in the Company’s business, including but not limited to, reliance on key customers and competition in its markets, market demand, product performance, technological developments, maintenance of relationships with key suppliers and difficulties of hiring or retaining key personnel, all of which may be beyond the control of the Company. The Company’s actual results could differ materially from those anticipated in these forward looking statements as a result of certain factors, including those set forth therein.

 

Management’s Discussion and Analysis of Consolidated Results of Financial Condition and Results of Operations (“MD&A”) should be read in conjunction with the consolidated financial statements included herein. In addition, you are urged to read this report in conjunction with the risk factors described herein.

 

We have ownership interests in two operating entities: Tieshan Oil and Admall.

 

 
9

 

 

 

Beijing Yandong Tieshan Oil Products Co., Ltd.

 

Tieshan Oil acquires a variety of chemical products and compounds that are extracted and processed from crude oil and hydrocarbons. Tieshan Oil acts as an intermediary broker of methyl tert-butyl ether, mineral oil, paraffin oil, petrolatum liquids, alcohol based liquid fuel, trimethylpentane, pentane foamer, natural gasoline, xylene dimethylbenzene, aromatics solvent, and other chemical products and compounds. It identifies sources of supply and purchasers of these chemical products and compounds, and Tieshan Oil principally engages in the trading of these oil, gas and lubricant products within the PRC. Since it’s incorporation, Tieshan Oil has had a number of clients for these brokered products, including two gasoline operators in China, YanDongPetrol Group and YanDon Hao Teng. All of its clients are licensed gasoline operators. While this is a dynamic market, subject to fluctuations and unexpected changes brought on by a variety of political and market matters, Tieshan Oil has successfully managed the impact of these factors and remains an important part of the oil refining industry in Beijing, PRC.

 

Admall Sdn. Bhd.

 

Admall provides nutrition consultancy services and training. Admall also sells health, nutrition, and supplement products through an online store. Headquartered in Malaysia, Admall provides its services and sells its products in Southeast Asia, China, Hong Kong, Taiwan, and Korea. Utilizing technology, Admall delivers its services and sells its products via internet and e-commerce applications. Admall’s services include personal training, life coaching, and total life enhancement programmes, all centered around its “BE the BEST” platform. Admall has partnered with educational institutions, e-commerce platforms, nutritional development groups, and wellness service providers to expand the marketing and delivery of its services, training, and product sales.

 

We also continue to actively seek additional global investment opportunities in emerging companies with products that have potential for expanding regional and international sales and revenues.

 

Competitive Business Conditions and Strategy; Our Position in the Industry

 

In addition to the operating entities and businesses described above, we are actively involved in the acquisition of businesses which we believe will generate cash within an acceptable time horizon, and we primarily use our capital stock as consideration in such acquisitions. We face many competitors in the strategic investment and acquisition sector, including private equity funds, sovereign wealth and pension funds, corporate conglomerates, single family offices and multi-family offices, asset management firms, corporate acquirors which are strategically positioned in industries competitive with ours, and other small-cap public companies which primarily use equity securities to finance investments and acquisitions. In the latter category, barriers to entry are extremely low, and we face intense competition to source investment targets and to close investments. Our competitors have significantly greater financial and marketing resources than we do, including sufficient cash to pay consideration for acquisitions. There are no assurances that our efforts to compete in the marketplace will be successful or that we will continue to be able to compete with other funds, companies or other sources of capital to secure competitive acquisition targets and consummate future transactions.

 

Results of Operations

 

Our operations for the year ended December 31, 2019 and 2018 are outlined below:

 

Year ended December 31, 2019 compared to year ended December 31, 2018

 

 

 

Year Ended

 

 

 

 

 

December 31,

 

 

Change

 

 

 

2019

 

 

2018

 

 

Amount

 

Revenue

 

$ 29,787,188

 

 

$ 37,070,832

 

 

$ (7,283,644 )

Cost of Goods Sold

 

$ 28,270,026

 

 

$ 35,219,165

 

 

$ (6,949,139 )

Gross profit

 

$ 1,517,162

 

 

$ 1,851,667

 

 

$ (334,505 )

Operating expenses

 

$ 859,121

 

 

$ 723,598

 

 

$ 135,523

 

Other income

 

$ 309,360

 

 

$ 84,670

 

 

$ 224,690

 

Gain from discontinued operations

 

$ -

 

 

$ 457,533

 

 

$ (457,533 )

Net income

 

$ 663,422

 

 

$ 1,433,509

 

 

$ (770,087 )

 

The revenue for the year ended December 31, 2019 decreased by $7,283,644 to $29,787,188 compared with the same period in 2018. The decrease is mainly due to incident decrease in sales in this period.

 

Cost of goods sold for the year ended December 31, 2019 decreased by $6,949,139 to $28,270,026 compared with the same period in 2018. The decrease is mainly due to decrease in revenue in this period.

 

Net income for the year ended December 31, 2019 was $663,442 compared to $1,433,509 in the same period in 2018. The change is mainly due to decrease in sales and gross profit and gain from discontinued operations.

 

 
10

 

 

 

For the year ended December 31, 2019 and 2018 our results of operations segment, are as follows:

 

Year Ended December 31, 2019

 

Holding

Company

 

 

Oil and

gas

 

 

Nutritional Services

 

 

Total

Consolidated

 

Revenue

 

$ -

 

 

$ 29,273,552

 

 

$ 513,636

 

 

$ 29,787,188

 

Cost of goods sold

 

 

-

 

 

 

(27,845,382 )

 

 

(424,644 )

 

 

(28,270,026 )

Operating expenses

 

 

(160,678 )

 

 

(70,878 )

 

 

(627,565 )

 

 

(859,121 )

Other income (expenses)

 

 

(227,408 )

 

 

(28,863 )

 

 

565,631

 

 

 

309,360

 

Provision for income taxes

 

 

-

 

 

 

(326,443 )

 

 

22,464

 

 

 

(303,979 )

Net income (loss)

 

$ (388,086 )

 

$ 1,001,986

 

 

$ 49,522

 

 

$ 663,422

 

 

Year Ended December 31, 2018

 

Holding

Company

 

 

Oil and

Gas

 

 

Nutritional

Services

 

 

Health Beverage - Discontinued Operations

 

 

Total

Consolidated

 

Revenue

 

$ -

 

 

$ 35,988,326

 

 

$ 1,082,506

 

 

$ -

 

 

$ 37,070,832

 

Cost of goods sold

 

 

-

 

 

 

(34,949,798 )

 

 

(269,367 )

 

 

-

 

 

 

(35,219,165 )

Operating expenses

 

 

(102,186 )

 

 

(43,027 )

 

 

(578,385 )

 

 

-

 

 

 

(723,598 )

Other income (expenses)

 

 

(73,179 )

 

 

(17,793 )

 

 

175,642

 

 

 

-

 

 

 

84,670

 

Provision for income taxes

 

 

(1,653 )

 

 

(221,084 )

 

 

(14,026 )

 

 

-

 

 

 

(236,763 )

Loss from discontinued operations

 

 

-

 

 

 

-

 

 

 

-

 

 

 

457,533

 

 

 

457,533

 

Net income (loss)

 

$ (177,018 )

 

$ 756,624

 

 

$ 396,370

 

 

$ 457,533

 

 

$ 1,433,509

 

 

Holding Company

 

Operating expense mainly consists of professional fees for ongoing regulatory requirements. The decrease in operating expense is primarily due to a decrease in legal fees.

 

Other expense mainly consists of interest expense and change in fair value of derivative liability from convertible notes.

 

Oil and Gas

 

 

 

Year Ended

 

 

 

 

 

December 31,

 

 

Change

 

 

 

2019

 

 

2018

 

 

Amount

 

Revenue

 

$ 29,273,552

 

 

$ 35,988,326

 

 

$ (6,714,774 )

Cost of goods sold

 

$ (27,845,382 )

 

$ (34,949,798 )

 

$ 7,104,416

 

Gross profit

 

$ 1,428,170

 

 

$ 1,038,528

 

 

$ 389,642

 

Operating expenses

 

$ (70,878 )

 

$ (43,027 )

 

$ (27,851 )

Other expense

 

$ (28,863 )

 

$ (17,793 )

 

$ (11,070 )

Provision for income taxes

 

$ (326,443 )

 

$ (221,084 )

 

$ (105,359 )

Net income

 

$ 1,001,986

 

 

$ 756,624

 

 

$ 245,362

 

 

The decrease in revenue is primarily due to a decrease in the demand of oil manufacture. The decrease in cost of goods sold is primarily due to a decrease in revenue. The percentage of gross profit increased from 2.9% in 2018 to 4.8% in 2019 is primarily due to an increase in sales price.

 

Nutritional Services

 

 

 

Year Ended

 

 

 

 

 

December 31,

 

 

Change

 

 

 

2019

 

 

2018

 

 

Amount

 

Revenue

 

$ 513,636

 

 

$ 1,082,506

 

 

$ (568,870 )

Cost of goods sold

 

$ (424,644 )

 

$ (269,367 )

 

$ (155,277 )

Gross profit

 

$ 88,992

 

 

$ 813,139

 

 

$ (724,147 )

Operating expenses

 

$ (627,565 )

 

$ (578,385 )

 

$ (49,180 )

Other income

 

$ 565,631

 

 

$ 175,642

 

 

$ 389,989

 

Provision for income taxes

 

$ -

 

 

$ (14,026 )

 

$ 14,026

 

Net income

 

$ 27,058

 

 

$ 396,370

 

 

$ (369,312 )

 

 
11

 

 

 

Liquidity and Capital Resources

 

The following table provides selected financial data about our company as of December 31, 2019 and 2018, respectively.

 

Working Capital

 

The following table provides selected financial data about our company as of December 31, 2019 and 2018, respectively.

 

 

 

December 31,

 

 

December 31,

 

 

Change

 

 

 

2019

 

 

2018

 

 

Amount

 

Cash

 

$ 277,629

 

 

$ 257,391

 

 

$ 20,238

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current Assets

 

$ 8,934,627

 

 

$ 39,865,557

 

 

$ (30,930,930 )

Current Liabilities

 

$ 2,341,177

 

 

$ 34,090,839

 

 

$ (31,749,662 )

Working Capital

 

$ 6,593,450

 

 

$ 5,774,718

 

 

$ 818,732

 

 

The increase in working capital was primarily attributed to a decrease in current liabilities offset by a decrease in current assets. The decrease in current assets was primarily attributed to a decrease in accounts receivable offset by an increase in inventory. The decrease in current liabilities was primarily attributed to a decrease in accounts payable and due to related partied offset by an increase in derivative liabilities.

 

Cash Flow

 

 

 

Year Ended

 

 

 

 

 

December 31,

 

 

Change

 

 

 

2019

 

 

2018

 

 

Amount

 

Cash Flows provided by operating activities

 

$ 492,144

 

 

$ 612,496

 

 

$ (120,352 )

Cash Flows provided by (used in) investing activities

 

$ (614 )

 

$ 54,344

 

 

$ (54,958 )

Cash Flows used in financing activities

 

$ (469,480 )

 

$ (110,478 )

 

$ (359,002 )

Effects on changes in foreign exchange rate

 

$ (1,812 )

 

$ (301,272 )

 

$ 299,460

 

Net change in cash during period

 

$ 20,238

 

 

$ 255,090

 

 

$ (234,852 )

 

Cash Flow from Operating Activities

 

During the year ended December 31, 2019, our Company generated $492,144 in operating activities, compared to $612,496 used in operating activities during the year ended December 31, 2018. The decrease in cash provided by operation activities is primarily due to a decrease in net income.

 

Cash Flow from Investing Activities

 

During the year ended December 31, 2019 and 2018, we used $614 in investing activities and received $53,344 from investing activities, respectively. For the year ended December 31, 2019, the Company used $1,586 for the purchase of property. For the year ended December 31, 2018, the Company received $88,738 from the business acquisition and $4,661 from disposal of property and equipment and used $587 for the purchase of property and equipment and $38,468 for disposal of subsidiary.

 

Cash Flow from Financing Activities

 

During the year ended December 31, 2019 and 2018, our Company used $469,480 and $110,478 in financing activities, respectively. For the year ended December 31, 2019, the Company received $310,000 from convertible notes and $214,846 from loans from related parties, and repaid loans from related parties for $994,326. For the year ended December 31, 2018, the Company received $890,732 from loans from related parties and repaid short-term loan for $934,800 and loans from related parties for $66,410.

 

 
12

 

 

 

Plan of Operation

 

Since the inception of the Company, we have incurred significant losses and relied upon capital raised from affiliates and third parties. The Company makes investments and acquisitions into a diverse range of markets and industries throughout the world.

 

In light of our acquisitions of Tieshan Oil and Admall, we anticipate generating additional revenues from the operations of these entities during the next 12 months. Notwithstanding these facts, in light of our ongoing expenses, our management cannot provide any assurances that such revenue will be sufficient to cover all of our expenses or that our Company will ever operate profitably.

 

During the next year of operations, our officers and Directors will also provide their labor at no charge. We have hired 20 total staff across all of our subsidiaries and do not anticipate hiring any more staff in the next 12 months of operation.

 

We are a public entity, subject to the reporting requirements of the Exchange Act. We will incur ongoing expenses associated with professional fees for accounting, legal and a host of other expenses for annual reports and proxy statements. We estimate that these accounting, legal and other professional costs would be a minimum of $100,000 in the next year and will be higher, in the following years, if our business volume and activity increases. Increased business activity could greatly increase our professional fees for reporting requirements and this could have a significant impact on future operating costs. The difference between having the ability to sustain our cash flow requirements over the next twelve months and the need for additional outside funding will depend on how fast we can generate sales revenue.

 

Limited Operating History; Need for Additional Capital

 

We cannot guarantee we will be successful in our business operations. Our business is subject to risks inherent in the establishment of a new business enterprise, including limited capital resources and possible cost overruns due to the price and cost increases in supplies and services.

 

If we are unable to meet our needs for cash from either our operations, or possible alternative sources, then we may be unable to continue, develop, or expand our operations.

 

Off-Balance Sheet Arrangements

 

We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.

 

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

 

As a “smaller reporting company”, we are not required to provide the information required by this Item.

 

Item 8. Financial Statements and Supplementary Data.

 

The consolidated financial statements and Report of Independent Registered Public Accounting Firm are listed in the “Index to Consolidated Financial Statements” on page F-1 and included on pages F-2 through F-17, immediately following the signature page of this Annual Report.

 

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

 

None in the preceding 12 months.

 

 

13

 

 

 

Item 9A. Controls and Procedures.

 

Evaluation of Disclosure Controls and Procedures

 

Under the supervision and with the participation of our senior management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, as of the end of the period covered by this Annual Report on Form 10-K (the “Evaluation Date”). Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded as of the Evaluation Date that our disclosure controls and procedures were not effective such that the information relating to us required to be disclosed in our Securities and Exchange Commission (“SEC”) reports (i) is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and (ii) is accumulated and communicated to our management, including our Chief Executive Officer and chief financial officer, as appropriate to allow timely decisions regarding required disclosure.

 

Management’s Annual Report on Internal Control Over Financial Reporting

 

Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance of achieving their control objectives. With the participation of our Chief Executive and Financial Officer, our management conducted an evaluation of the effectiveness of our internal control over financial reporting as of December 31, 2018 based on the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control – Integrated Framework (2013). Based upon such evaluation, our management concluded that we did not maintain effective internal control over financial reporting as of December 31, 2019 based on the COSO framework criteria, as more fully described below. This was due to deficiencies that existed in the design or operation of our internal controls over financial reporting that adversely affected our internal controls and that may be considered to be material weaknesses.

 

The matters involving internal controls and procedures that our management considered to be material weaknesses under the standards of the PCAOB were: (1) lack of a functioning audit committee, (2) lack of a majority of outside directors on our Board of Directors, resulting in ineffective oversight in the establishment and monitoring of required internal controls and procedures; (3) inadequate segregation of duties consistent with control objectives; (4) management of subsidiary companies who do not possess a mature understanding of U.S. GAAP or U.S. securities laws; and (5) management dominated by a small group of individuals without adequate compensating controls. The aforementioned material weaknesses were identified by our Chief Executive and Financial Officer in connection with the review of our financial statements as of December 31, 2018.

 

Management believes that the material weaknesses set forth above did not have an effect on our financial results. However, management believes that the lack of a functioning audit committee and the lack of a majority of outside Directors on our Board of Directors results in ineffective oversight in the establishment and monitoring of required internal controls and procedures, which could result in a material misstatement in our financial statements in future periods.

 

This Annual Report on Form 10-K does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our registered public accounting firm pursuant to an exemption for non-accelerated filers from the internal control audit requirements of Section 404(b) of the Sarbanes-Oxley Act of 2002.

 

Changes in Internal Control Over Financial Reporting

 

There have been no changes in our internal control over financial reporting that occurred during the year ended December 31, 2019 that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.

 

Item 9B. Other Information.

 

None.

 

 
14

 

 

 

PART III

 

Item 10. Directors, Executive Officers and Corporate Governance

 

All Directors of the Company hold office until the next annual meeting of the security holders or until their successors have been elected and qualified. The officers of the Company are appointed by the Board of Directors and hold office until their death, resignation or removal from office. The Directors and Executive Officers, their ages, positions held, and duration as such, are as follows:

 

Name

 

Position Held with the Company

 

Age

 

Date First Elected or Appointed

Ding-Shin “DS” Chang

 

President, CEO, Director

 

50

 

February 9, 2018

Boon Jin “Patrick” Tan

 

Treasurer, CFO, Director

 

49

 

February 9, 2018

Liang-Yu “Jacky” Chang

 

Secretary

 

44

 

February 9, 2018

 

 

 

 

 

 

 

Business Experience

 

 

 

 

The following is a brief account of the education and business experience during at least the past five years of each current Director, Executive Officer and key employee of the Company, indicating the person’s principal occupation during that period, and the name and principal business of the organization in which such occupation and employment were carried out.

 

Mr. Ding-Shin “DS” Chang has since 2016 owned and operated his own financial services company, SGCI, with offices in Paris, London, Frankfurt, Hong Kong and Beijing, providing consulting services in the areas of lease financing, term financing, project financing, investment funds, fund management, corporate restructuring, and company reorganization. In 2013, he became the Vice-Chairman at a French financial group, a listing sponsor for NYSE-Euronext. His clients included companies from different countries across the globe. He worked for 16 years as a financial specialist and corporate Director serving the IT industry. Mr. Chang’s international professional career has spanned over 25 years, and he is fluent in French, English, and Mandarin Chinese.

 

Dr. Boon-Jin “Patrick” Tan founded Admall in 2015 and serves as its chairman. Mr. Tan specializes in corporate branding and identity and has many years of experience researching the human brain and cognition in the context of applied marketing, advertising and branding. Mr. Tan received the Asia Pacific Entrepreneurship Award in 2008 and has been awarded honorary degrees by Shenzhen University (China), Victoria University (Hong Kong), Carlton College (USA), California University School of International Business Studies (USA) and Sabi University (France). He was granted the honorary title of Dato’ Sri in 2016, by the Sultan of Pahang.

 

Mr. Liang-Yu “Jacky” Chang specializes in investor relations in connection with initial public offerings in the United States, the People’s Republic of China and Taiwan. He has held positions with Taiwan’s Chip Hope (8084:TT) and J Touch Corporation (TPE:3584), and United States listed companies GIA Investments Corp. (OTCMKTS:GIAI) and Nownews Digital Media Technology Co. Ltd. (OTCMKTS:NDMT). From 2015 to 2017 Mr. Chang served as Vice President of Asia for Marechal & Associates Limited, and since 2017 he has served Vice President for the German company, SGCI Corporate Finance GmbH.

 

Employment Agreements

 

We have no formal employment agreements with any of our employees, Directors or officers.

 

 
15

 

 

 

Family Relationships

 

None.

 

Involvement in Certain Legal Proceedings

 

None of our Directors, Executive Officers, promoters or control persons has been involved in any of the following events during the past 10 years:

 

1.A petition under the Federal bankruptcy laws or any state insolvency law was filed by or against, or a receiver, fiscal agent or similar officer was appointed by a court for the business or property of such person, or any partnership in which he was a general partner at or within two years before the time of such filing, or any corporation or business association of which he was an Executive Officer at or within two years before the time of such filing;

 

2. Such person was convicted in a criminal proceeding or is a named subject of a pending criminal proceeding (excluding traffic violations and other minor offenses);

 

3. Such person was the subject of any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining him from, or otherwise limiting, the following activities:

 

i. Acting as a futures commission merchant, introducing broker, commodity trading advisor, commodity pool operator, floor broker, leverage transaction merchant, any other person regulated by the Commodity Futures Trading Commission, or an associated person of any of the foregoing, or as an investment adviser, underwriter, broker or dealer in securities, or as an affiliated person, Director or employee of any investment company, bank, savings and loan association or insurance company, or engaging in or continuing any conduct or practice in connection with such activity

 

ii. Engaging in any type of business practice; or

iii. Engaging in any activity in connection with the purchase or sale of any security or commodity or in connection with any violation of Federal or State securities laws or Federal commodities laws;

 

4. Such person was the subject of any order, judgment or decree, not subsequently reversed, suspended or vacated, of any Federal or State authority barring, suspending or otherwise limiting for more than 60 days the right of such person to engage in any activity described in paragraph (f)(3)(i) of this section, or to be associated with persons engaged in any such activity;

 

5. Such person was found by a court of competent jurisdiction in a civil action or by the Commission to have violated any Federal or State securities law, and the judgment in such civil action or finding by the Commission has not been subsequently reversed, suspended, or vacated;

 

6. Such person was found by a court of competent jurisdiction in a civil action or by the Commodity Futures Trading Commission to have violated any Federal commodities law, and the judgment in such civil action or finding by the Commodity Futures Trading Commission has not been subsequently reversed, suspended or vacated;

 

7. Such person was the subject of, or a party to, any Federal or State judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended or vacated, relating to an alleged violation of:

 

i. Any Federal or State securities or commodities law or regulation; or

 

ii. Any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition order; or

 

iii. Any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or

 

8. Such person was the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the Exchange Act (15 U.S.C. 78c(a)(26))), any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act (7 U.S.C. 1(a)(29))), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member.

 

 
16

 

 

 

Compliance with Section 16(a) of the Exchange Act .

 

Section 16(a) of the Exchange Act requires the Company’s Directors, Executive Officers and persons who own more than ten percent of a registered class of the Company’s equity securities (“10% holders”), to file with the SEC initial reports of ownership and reports of changes in ownership of Common Stock and other equity securities of the Company. Directors, officers and 10% holders are required by SEC regulation to furnish the Company with copies of all of the Section 16(a) reports they file.

 

Based solely on a review of reports furnished to the Company or written representations from the Company’s Directors and Executive Officers, there are no known incidents of non-compliance for the reporting year.

 

Code of Ethics

 

We have adopted a corporate code of ethics. We believe our code of ethics is reasonably designed to deter wrongdoing and promote honest and ethical conduct; provide full, fair, accurate, timely and understandable disclosure in public reports; comply with applicable laws; ensure prompt internal reporting of code violations; and provide accountability for adherence to the code. The Company will provide to any person, without charge and upon request, a copy of the code of ethics. Any such request must be made in writing to the Company at Level 11, Tower 4, Puchong Financial Corporate Centre (PFCC), Jalan Puteri 1/2, Bandar Puteri, 47100 Puchong, Malaysia.

 

Board and Committee Meetings

 

Our Board of Directors currently consists of two members, Mr. Ding-Shin “DS” Chang and Mr. Boon Jin “Patrick” Tan. The Board of Directors held no formal meetings during the year ended December 31, 2019. Until the Company develops a more comprehensive Board of Directors, all proceedings will be conducted by resolutions consented to in writing by all the Directors and filed with the minutes of the proceedings of the Directors. Such resolutions consented to in writing by the Directors entitled to vote on that resolution at a meeting of the Directors are, according to the Nevada General Corporate Law and our Bylaws, as valid and effective as if they had been passed at a meeting of the Directors duly called and held.

 

Nomination Process

 

During the year ended December 31, 2019, we did not effect any material changes to the procedures by which our shareholders may recommend nominees to our Board of Directors. Our Board of Directors does not have a policy with regards to the consideration of any Director candidates recommended by our shareholders. Our Board of Directors has determined that it is in the best position to evaluate our company’s requirements as well as the qualifications of each candidate when the Board of Directors considers a nominee for a position on our Board of Directors. If shareholders wish to recommend candidates directly to our Board of Directors, they may do so by sending communications to the President of our Company at the address on the cover of this Annual Report on Form 10-K.

 

Audit Committee

 

Currently the Company does not have an Audit Committee. The Company intends to appoint audit, compensation and other applicable committee members as it identifies individuals with pertinent expertise.

 

Audit Committee Financial Expert

 

Our Board of Directors does not have a member that qualifies as an “audit committee financial expert” as defined in Item 407(d)(5)(ii) of Regulation S-K. The Company intends to appoint audit, compensation and other applicable committee members as it identifies individuals with pertinent expertise.

 

Item 11. Executive Compensation.

 

The particulars of the compensation paid to the following persons:

 

(a) our Principal Executive Officer;

 

(b) each of our two most highly compensated Executive Officers who were serving as Executive Officers at the end of the year ended December 31, 2019, and

 

(c) up to two additional individuals for whom disclosure would have been provided under (b) but for the fact that the individual was not serving as our Executive Officer at the end of the year ended December 31, 2019.

 

who we will collectively refer to as the named Executive Officers of the Company, are set out in the following summary compensation table, except that no disclosure is provided for any named Executive Officer, other than the Principal Executive Officers, whose total compensation did not exceed $100,000 for the respective fiscal year.

 

 
17

 

 

 

2019 SUMMARY COMPENSATION TABLE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-Equity

 

 

Change in Pension Value and Nonqualified

Deferred

 

 

 

 

 

 

 

Name and Principal

 

 

 

 

Salary

 

 

Bonus

 

 

Stock

Awards

 

 

Option

Awards

 

 

Incentive Plan

Compensation

 

 

Compensation

Earnings

 

 

All Other

Compensation

 

 

Total

 

Position

 

 

Year

 

($)

 

 

($)

 

 

($)

 

 

($)

 

 

($)

 

 

($)

 

 

($)

 

 

($)

 

Ding-Shin Chang,

 

“DS”

 

2019

 

 

0

 

 

 

0

 

 

 

0

 

 

 

0

 

 

 

0

 

 

 

0

 

 

 

0

 

 

 

0

 

President, Director

 

CEO,

 

2018

 

 

0

 

 

 

0

 

 

 

0

 

 

 

0

 

 

 

0

 

 

 

0

 

 

 

0

 

 

 

0

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Boon Jin Tan,

 

“Patrick”

 

2019

 

 

0

 

 

 

0

 

 

 

0

 

 

 

0

 

 

 

0

 

 

 

0

 

 

 

0

 

 

 

0

 

Treasurer, Director

 

CFO,

 

2018

 

 

0

 

 

 

0

 

 

 

0

 

 

 

0

 

 

 

0

 

 

 

0

 

 

 

0

 

 

 

0

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liang-Yu Chang,

 

“Jacky”

 

2019

 

 

0

 

 

 

0

 

 

 

0

 

 

 

0

 

 

 

0

 

 

 

0

 

 

 

0

 

 

 

0

 

Secretary

 

 

 

2018

 

 

0

 

 

 

0

 

 

 

0

 

 

 

0

 

 

 

0

 

 

 

0

 

 

 

0

 

 

 

0

 

 

There are no arrangements or plans in which we provide pension, retirement or similar benefits for Directors or Executive Officers. Our Directors and Executive Officers may receive share options at the discretion of our Board of Directors in the future. We do not have any material bonus or profit-sharing plans pursuant to which cash or non-cash compensation is or may be paid to our Directors or Executive Officers, except that share options may be granted at the discretion of our Board of Directors.

 

Grants of Plan-Based Awards

 

There were no grants of plan-based awards during the year ended December 31, 2019.

 

Outstanding Equity Awards at Fiscal Year End

 

There were no outstanding equity awards at the year ended December 31, 2019.

 

Option Exercises and Stock Vested

 

During our fiscal year ended December 31, 2019, there were no options exercised by our named officer.

 

Compensation of Directors

 

We do not have any agreements for compensating our Directors for their services in their capacity as Directors.

 

Pension, Retirement or Similar Benefit Plans

 

There are no arrangements or plans in which we provide pension, retirement or similar benefits for Directors or Executive Officers. We have no material bonus or profit-sharing plans pursuant to which cash or non-cash compensation is or may be paid to our Directors or Executive Officers, except that stock options may be granted at the discretion of the Board of Directors or a committee thereof.

 

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

 

The following table sets forth, as of March 30, 2020 certain information with respect to the beneficial ownership of our common shares by each shareholder known by us to be the beneficial owner of more than 5% of our common shares, as well as by each of our current Directors and Executive Officers as a group. Each person has sole voting and investment power with respect to the shares of Common Stock, except as otherwise indicated. Beneficial ownership consists of a direct interest in the shares of Common Stock, except as otherwise indicated.

 

 
18

 

 

 

Under Rule 13d-3, a beneficial owner of a security includes any person who, directly or indirectly, through any contract, arrangement, understanding, relationship, or otherwise has or shares: (i) voting power, which includes the power to vote, or to direct the voting of shares; and (ii) investment power, which includes the power to dispose or direct the disposition of shares. Certain shares may be deemed to be beneficially owned by more than one person (if, for example, persons share the power to vote or the power to dispose of the shares). In addition, shares are deemed to be beneficially owned by a person if the person has the right to acquire the shares (for example, upon exercise of an option) within 60 days of the date as of which the information is provided. In computing the percentage ownership of any person, the amount of shares outstanding is deemed to include the amount of shares beneficially owned by such person (and only such person) by reason of these acquisition rights. As a result, the percentage of outstanding shares of any person as shown in this table does not necessarily reflect the person’s actual ownership or voting power with respect to the number of shares of Common Stock actually outstanding on March 30, 2020. As of March 30, 2020, there were 5,209,881 shares of our company’s Common Stock issued and outstanding.

 

Name and Address of Beneficial Owner

 

Amount and Nature

of Beneficial

Ownership

 

 

Percentage of

Class (1)

 

Ding-Shin “DS” Chang (2)

 

 

-

 

 

 

-

 

Boon Jin “Patrick” Tan (3)

 

 

1,000,000

 

 

 

19 %

Liang-Yu “Jacky” Chang (4)

 

 

30,000

 

 

 

1 %

 

 

 

 

 

 

 

 

 

Directors and Executive Officers as a Group (3 persons)

 

 

1,030,000

 

 

 

20 %

 

 

 

 

 

 

 

 

 

5% or greater shareholders

 

 

 

 

 

 

 

 

Hasangwangmu (5)

 

 

820,000

 

 

 

16 %

Sanarco Life & Wellness SA (6)

 

 

500,183

 

 

 

9.6 %

Wolfpack Consulting Limited (7)

 

 

1,150,000

 

 

 

22 %

____________

(1) Percentages are calculated based on 5,209,881 shares of the Company’s Common Stock issued and outstanding on March 30, 2020.

(2) Address at 12 Rue de Lorraine 92300, Levallois-Perret, France.

(3) Address at D-15-05 Menara Mitraland, Jalan Pju 5/1, Kota Damansara, 47810 Selangor, Malaysia.

(4) Address at 2F, No. 63, Sec 6, Xinhai Road, Taipei, Taiwan.

(5) Address at Room C, 15/F, Ritz Plaza, 122 Austin Road, Tsim Sha Tsui, Kowloon, Hong Kong SAR, China.

(6) Address at 15, Rue du Fort Bourbon, Luxembourg, Luxembourg L-1249 B222894.

(7) Address at 5720 Plover Court, Richmond, BC, Canada V7E 4K2.

 

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

 

Revenue and Expense

 

During the year ended December 31, 2019 and 2018, the Company recorded revenue of $29,273,551 and $32,273,533 and cost of goods sold from a related party of $25,985,112 and $34,949,798 and general and administrative expense of $13,101 and $14,690 from the entity who was a related party until September 30, 2019, respectively. Due to a reduction of influence to this entity, the Company determined this entity was no more related party since October 1, 2019. As of December 31, 2019 and 2018, the Company had accounts receivable of $0 and $37,055,058 and account payable of $0 and $31,536,276, which are included in account receivable and accounts payable, respectively

 

Due from related party

 

As of December 31, 2019 and 2018, the Company recorded due from related parties of $0 and $155,075, respectively. The loan is non-interest bearing and due on demand.

 

Due to related party

 

As of December 31, 2019 and 2018, the Company recorded due to related parties as follows. The loan is non-interest bearing and due on demand.

 

 

 

December 31,

 

 

December 31,

 

 

 

2019

 

 

2018

 

Loan from director

 

$ 142,480

 

 

$ 1,022,775

 

Loan from related parties

 

 

111,101

 

 

 

92,930

 

 

 

$ 253,581

 

 

$ 1,115,705

 

 

 
19

 

 

 

Contribution

 

During the year ended December 31, 2018, related parties, who are shareholders of the Company, forgave debt, in the amount of $58,450 for payments made on behalf of the Company for operating expenses. The amount has been recognized as a contribution to capital.

 

During the year ended December 31, 2018, $100,000 originally recorded as a contribution to capital was cancelled and recorded as a convertible note payable (Note 12).

 

Director Independence

 

The Company does not have a separately designated nominating committee of our Board of Directors. None of our directors is deemed to be independent, as such term is defined in the listing standards of The Nasdaq Stock Market, Inc. (“Nasdaq”).

 

Item 14. Principal Accounting Fees and Services.

  

 

 

Year Ended

December 31,

 

 

Year Ended

December 31,

 

 

 

2019

 

 

2018

 

Audit Fees

 

$ 50,000

 

 

$ 45,000

 

Audit Related Fees

 

$ 18,000

 

 

$ 6,000

 

Tax Fees

 

$ -

 

 

$ -

 

All Other Fees

 

$ -

 

 

$ -

 

Total

 

$ 68,000

 

 

$ 51,000

 

  

Our Board of Directors pre-approves all services provided by our independent auditors. All of the above services and fees were reviewed and approved by the Board of Directors either before or after the respective services were rendered.

 

Our Board of Directors has considered the nature and amount of fees billed by our independent auditors and believes that the provision of services for activities unrelated to the audit is compatible with maintaining our independent auditors’ independence.

 

 
20

 

 

 

PART IV

 

Item 15. Exhibits, Financial Statement Schedules

 

The following exhibits are included as part of this report:

 

Exhibit

 

 

 

Incorporated by Reference

Number

 

Exhibit Description

 

Form

 

Exhibit

 

Filing Date

 

 

 

 

21.1*

 

Subsidiaries of the Registrant.

 

 

 

 

 

 

 

31.1*

 

Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer.

 

 

 

 

 

 

 

31.2*

 

Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer.

 

 

 

 

 

 

 

32.1*

 

Rule 1350 Certifications of Chief Executive Officer and Chief Financial Officer.

 

 

 

 

 

 

 

101.INS*

 

XBRL Instance Document.

 

 

 

 

 

 

 

101.SCH*

 

XBRL Taxonomy Extension Schema Document.

 

 

 

 

 

 

 

101.CAL*

 

XBRL Taxonomy Extension Calculation Linkbase Document.

 

 

 

 

 

 

 

101.DEF*

 

XBRL Taxonomy Extension Definition Linkbase Document.

 

 

 

 

 

 

 

101.LAB*

 

XBRL Taxonomy Extension Label Linkbase Document.

 

 

 

 

 

 

 

101.PRE*

 

XBRL Taxonomy Extension Presentation Linkbase Document.

 

 

 

______________

 

 

 

 

* Filed herewith.

 

 

 

 

 
21

 

 

 

SIGNATURES

 

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

  

RESORT SAVERS, INC.

(Registrant)

 

Dated: April 6, 2020

By: /s/ DS Chang

Ding-Shin “DS” Chang

President, CEO

(Principal Executive Officer)

 

Dated: April 6, 2020

By: /s/ Patrick Tan

Boon Jin “Patrick” Tan

Chief Financial Officer

(Principal Financial and Accounting Officer)

 

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

 

Dated: April 6, 2020

By: /s/ DS Chang

Ding-Shin “DS” Chang

President, Chief Executive Officer and Director

 

Dated: April 6, 2020

By: /s/ Patrick Tan

Boon Jin “Patrick” Tan

Treasurer, Chief Financial Officer and Director

 

 
22

 

 

 

INDEX TO THE AUDITED FINANCIAL STATEMENTS

 

Years Ended December 31, 2019 and 2018

 

TABLE OF CONTENTS

 

 

Page

 

Report of Independent Registered Public Accounting Firm

F-2

 

Consolidated Balance Sheets

F-3

 

Consolidated Statements of Operations and Other Comprehensive Income

F-4

 

Consolidated Statements of Stockholders’ Equity

F-5

 

Consolidated Statements of Cash Flows

F-6

 

Notes to the Consolidated Financial Statements

F-7

 

 
F-1

 

Table of Contents

 

 

 

 

TOTAL ASIA ASSOCIATES PLT

(AF002128 & LLP0016837-LCA)

A Firm registered with US PCAOB and Malaysian MIA

Block C-3-1, Megan Avenue 1, 189, Off Jalan Tun Razak,

50400, Kuala Lumpur.

Tel: (603) 2733 9989

 

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

To the Shareholders and Board of Directors of Resort Savers, Inc.

Level 11, Tower 4 (PFCC)

Jalan Puteri 1/2

Puchong N8 47100

Malaysia

 

Opinion on the Financial Statements

 

We have audited the accompanying consolidated balance sheets of Resort Savers, Inc. (“the Company”) as of December 31, 2019 and 2018, and the related consolidated statements of operations and comprehensive loss, stockholders’ equity, and cash flows for the year ended December 31, 2019 and 2018, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2019 and 2018, and the results of its operations and its cash flows for each of two years in the year ended December 31, 2019 and 2018, in conformity with accounting principles generally accepted in the United States of America.

  

Basis for Opinion

 

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

 

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

 

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall consolidated financial statements presentation. We believe that our audit provides a reasonable basis for our opinion.

 

The 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’s income from operations and no operation raise substantial doubt about its ability to continue as a going concern. Management’s plans regarding those matters also are described in Note 3. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

/s/ Total Asia Associates PLT                                                                                  

TOTAL ASIA ASSOCIATES PLT

 

We have served as the Company’s auditor since 2018.

 

Kuala Lumpur, Malaysia

 

Date: April 4, 2020

 

 
F-2

 

Table of Contents

 

RESORT SAVERS, INC.

Consolidated Balance Sheets

  

 

 

December 31,

 

 

December 31,

 

 

 

2019

 

 

2018

 

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

 

Current Assets

 

 

 

 

 

 

Cash and cash equivalents

 

$ 277,629

 

 

$ 257,391

 

Accounts receivable, net

 

 

548,281

 

 

 

38,165,057

 

Inventory

 

 

7,225,155

 

 

 

1,245,759

 

Other current assets

 

 

883,562

 

 

 

42,275

 

Due from related parties

 

 

-

 

 

 

155,075

 

Total Current Assets

 

 

8,934,627

 

 

 

39,865,557

 

Property and Equipment, net

 

 

466,316

 

 

 

551,548

 

Goodwill

 

 

3,199,594

 

 

 

3,199,594

 

TOTAL ASSETS

 

$ 12,600,537

 

 

$ 43,616,699

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS' EQUITY

 

 

 

 

 

 

 

 

Current Liabilities

 

 

 

 

 

 

 

 

Accounts payable

 

$ 1,461,971

 

 

$ 32,593,531

 

Accrued liabilities and other payables

 

 

85,834

 

 

 

95,458

 

Convertible notes, net of unamortized discounts

 

 

19,864

 

 

 

-

 

Deferred revenue

 

 

-

 

 

 

56,416

 

Due to related parties

 

 

253,581

 

 

 

1,115,705

 

Derivative liabilities

 

 

356,395

 

 

 

-

 

Tax payable

 

 

163,532

 

 

 

229,729

 

Total Current Liabilities

 

 

2,341,177

 

 

 

34,090,839

 

 

 

 

 

 

 

 

 

 

Convertible notes non-current, net of unamortized discounts

 

 

155,570

 

 

 

-

 

Deferred tax liabilities

 

 

18,035

 

 

 

40,349

 

TOTAL LIABILITIES

 

 

2,514,782

 

 

 

34,131,188

 

 

 

 

 

 

 

 

 

 

COMMITMENTS AND CONTINGENCIES

 

 

-

 

 

 

-

 

 

 

 

 

 

 

 

 

 

SHAREHOLDERSS’ EQUITY

 

 

 

 

 

 

 

 

Preferred stock, $0.0001 par value; 15,000,000 shares authorized; no shares issued and outstanding

 

 

-

 

 

 

-

 

Common stock, $0.0001 par value; 1,000,000,000 shares authorized; 5,209,881 shares issued and outstanding

 

 

521

 

 

 

521

 

Additional paid-in capital

 

 

8,936,263

 

 

 

8,936,263

 

Retained earnings

 

 

1,654,947

 

 

 

991,525

 

Accumulated other comprehensive loss

 

 

(505,976 )

 

 

(442,798 )

Total shareholders’ equity

 

 

10,085,755

 

 

 

9,485,511

 

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

 

$ 12,600,537

 

 

$ 43,616,699

 

 

The notes are an integral part of these consolidated financial statements.

 

 
F-3

 

Table of Contents
 

RESORT SAVERS, INC.

Consolidated Statements of Operations and Other Comprehensive Income

 

 

 

Year Ended

 

 

 

December 31,

 

 

 

2019

 

 

2018

 

 

 

 

 

 

 

 

Revenue

 

$ 29,787,188

 

 

$ 37,070,832

 

Cost of goods sold

 

 

28,270,026

 

 

 

35,219,165

 

Gross Profit

 

 

1,517,162

 

 

 

1,851,667

 

 

 

 

 

 

 

 

 

 

Operating Expenses

 

 

 

 

 

 

 

 

General and administrative

 

 

656,541

 

 

 

655,618

 

Professional fees

 

 

202,580

 

 

 

67,980

 

Total Operating Expenses

 

 

859,121

 

 

 

723,598

 

 

 

 

 

 

 

 

 

 

Income From Operations

 

 

658,041

 

 

 

1,128,069

 

 

 

 

 

 

 

 

 

 

Other Income (Expense)

 

 

 

 

 

 

 

 

Other income

 

 

565,631

 

 

 

206,927

 

Other loss

 

 

(28,863 )

 

 

(34,137 )

Interest expense

 

 

(26,013 )

 

 

(88,120 )

Change in fair value of derivative liabilities

 

 

(201,395 )

 

 

-

 

Total Other Income

 

 

309,360

 

 

 

84,670

 

 

 

 

 

 

 

 

 

 

Income Before Income Taxes

 

 

967,401

 

 

 

1,212,739

 

Provision for income taxes

 

 

(303,979 )

 

 

(236,763 )

Income from continuing operations

 

 

663,422

 

 

 

975,976

 

 

 

 

 

 

 

 

 

 

Discontinued Operations

 

 

 

 

 

 

 

 

Gain from disposal of subsidiary

 

 

-

 

 

 

508,501

 

Loss from discontinued operations, net of income taxes

 

 

-

 

 

 

(50,968 )

Net income from discontinued operations

 

 

-

 

 

 

457,533

 

 

 

 

 

 

 

 

 

 

Net Income

 

 

663,422

 

 

 

1,433,509

 

Net loss attributable to the non-controlling interest

 

 

-

 

 

 

22,359

 

Net Income Attributable to the Shareholders of Resort Savers, Inc.

 

$ 663,422

 

 

$ 1,455,868

 

 

 

 

 

 

 

 

 

 

Other Comprehensive Income

 

 

 

 

 

 

 

 

Foreign currency translation adjustments

 

 

(63,178 )

 

 

(399,377 )

Realized foreign currency translation

 

 

-

 

 

 

(23,701 )

Total Comprehensive Income

 

 

600,244

 

 

 

1,010,431

 

Comprehensive (income) attributable to the non-controlling interest

 

 

-

 

 

 

(12,554 )

Total Comprehensive Income Attributable to The Shareholders of Resort Savers, Inc.

 

$ 600,244

 

 

$ 997,877

 

 

 

 

 

 

 

 

 

 

Basic Gain per Common Share

 

 

 

 

 

 

 

 

Gain from Continuing operations

 

$ 0.13

 

 

$ 0.21

 

Loss from Discontinued operations

 

$ -

 

 

$ 0.10

 

 

 

 

 

 

 

 

 

 

Diluted Gain per Common Share

 

 

 

 

 

 

 

 

Gain from Continuing operations

 

$ 0.16

 

 

$ 0.21

 

Loss from Discontinued operations

 

$ -

 

 

$ 0.10

 

 

 

 

 

 

 

 

 

 

Basic Weighted Average Common Shares Outstanding

 

 

5,209,881

 

 

 

4,596,144

 

Diluted Weighted Average Common Shares Outstanding

 

 

5,334,095

 

 

 

4,596,144

 

 

The notes are an integral part of these consolidated financial statements.

 

 
F-4

 

Table of Contents

 

RESORT SAVERS, INC.

Consolidated Statements of Stockholders’ Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other

 

 

 

 

 

 

 

 

 

Common Stock

 

 

Additional

 

 

Retained

 

 

Comprehensive

 

 

 

 

 

Total

 

 

 

Number of Shares

 

 

Amount

 

 

Paid-in

Capital

 

 

Earnings

(Deficit)

 

 

Income

(loss)

 

 

Noncontrolling

Interest

 

 

Stockholders'

Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance - December 31, 2017

 

 

4,000,000

 

 

$ 400

 

 

$ 1,206,075

 

 

$ (464,343 )

 

$ 15,193

 

 

$ -

 

 

$ 757,325

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Recapitalization

 

 

909,881

 

 

 

91

 

 

 

7,582,248

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

7,582,339

 

Common shares for conversion of debt

 

 

300,000

 

 

 

30

 

 

 

99,970

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

100,000

 

Cancellation of debt forgiveness

 

 

-

 

 

 

-

 

 

 

(100,000 )

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(100,000 )

Debt forgiven by related parties

 

 

-

 

 

 

-

 

 

 

58,450

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

58,450

 

Beneficial conversion feature

 

 

-

 

 

 

-

 

 

 

100,000

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

100,000

 

Disposal of subsidiary

 

 

-

 

 

 

-

 

 

 

(10,480 )

 

 

-

 

 

 

(23,701 )

 

 

(12,554 )

 

 

(46,735 )

Net income (loss)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

1,455,868

 

 

 

-

 

 

 

(22,359 )

 

 

1,433,509

 

Other comprehensive income (loss)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(434,290 )

 

 

34,913

 

 

 

(399,377 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance - December 31, 2018

 

 

5,209,881

 

 

$ 521

 

 

$ 8,936,263

 

 

$ 991,525

 

 

$ (442,798 )

 

$ -

 

 

$ 9,485,511

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

 

-

 

 

 

-

 

 

 

 

 

 

 

663,422

 

 

 

-

 

 

 

-

 

 

 

663,422

 

Other comprehensive loss

 

 

-

 

 

 

-

 

 

 

 

 

 

 

-

 

 

 

(63,178 )

 

 

-

 

 

 

(63,178 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance - December 31, 2019

 

 

5,209,881

 

 

$ 521

 

 

$ 8,936,263

 

 

$ 1,654,947

 

 

$ (505,976 )

 

$ -

 

 

$ 10,085,755

 

 

The notes are an integral part of these consolidated financial statements.

 

 
F-5

 

Table of Contents
 

RESORT SAVERS, INC.

Consolidated Statements of Cash Flows

 

 

 

Year Ended

 

 

 

December 31,

 

 

 

2019

 

 

2018

 

CASH FLOWS FROM OPERATING ACTIVITIES

 

 

 

 

 

 

Net income

 

$ 663,422

 

 

$ 1,433,509

 

Adjustments to reconcile net loss to net cash from operating activities:

 

 

 

 

 

 

 

 

Depreciation

 

 

90,204

 

 

 

106,315

 

Loss on disposal of plant and equipment

 

 

-

 

 

 

31,836

 

Impairment loss on plant and equipment

 

 

-

 

 

 

65,476

 

Amortization of debt discount

 

 

20,434

 

 

 

100,000

 

Change in fair value of derivative liabilities

 

 

201,395

 

 

 

-

 

Gain on disposal of subsidiary

 

 

-

 

 

 

(508,501 )

Provision (benefit) for deferred taxes

 

 

(22,504 )

 

 

-

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

Amount due from related parties

 

 

158,860

 

 

 

(12,540,360 )

Accounts receivable

 

 

37,455,222

 

 

 

(1,151,006 )

Inventories

 

 

(5,996,384 )

 

 

85,953

 

Other current assets

 

 

(848,757 )

 

 

-

 

Accounts payable

 

 

(31,016,802 )

 

 

12,821,826

 

Deferred revenue

 

 

(56,408 )

 

 

(390,454 )

Tax payable

 

 

(64,769 )

 

 

153,971

 

Accrued liabilities and other payable

 

 

(91,769 )

 

 

403,931

 

Net cash provided by operating activities

 

 

492,144

 

 

 

612,496

 

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM INVESTING ACTIVITIES

 

 

 

 

 

 

 

 

Cash received through business acquisition

 

 

-

 

 

 

88,738

 

Disposal of subsidiary

 

 

-

 

 

 

(38,468 )

Purchase of property and equipment

 

 

(614 )

 

 

(587 )

Proceeds from disposal of property and equipment

 

 

-

 

 

 

4,661

 

Net cash (used in) provided by investing activities

 

 

(614 )

 

 

54,344

 

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES

 

 

 

 

 

 

 

 

Repayment of short-term loan

 

 

-

 

 

 

(934,800 )

Proceeds from convertible notes

 

 

310,000

 

 

 

-

 

Loans from related parties

 

 

214,846

 

 

 

890,732

 

Repayments of loans from related parties

 

 

(994,326 )

 

 

(66,410 )

Net cash used in financing activities

 

 

(469,480 )

 

 

(110,478 )

 

 

 

 

 

 

 

 

 

Effects on changes in foreign exchange rate

 

 

(1,812 )

 

 

(301,272 )

 

 

 

 

 

 

 

 

 

Net change in cash and cash equivalents

 

 

20,238

 

 

 

255,090

 

Cash and cash equivalents - beginning of period

 

 

257,391

 

 

 

2,301

 

Cash and cash equivalents - end of period

 

$ 277,629

 

 

$ 257,391

 

 

 

 

 

 

 

 

 

 

Supplemental Cash Flow Disclosures

 

 

 

 

 

 

 

 

Cash paid for interest

 

$ -

 

 

$ -

 

Cash paid for income taxes

 

$ 380,242

 

 

$ -

 

 

 

 

 

 

 

 

 

 

Non-Cash Investing and Financing Activity:

 

 

 

 

 

 

 

 

Debt forgiveness by related party

 

$ -

 

 

$ 58,450

 

Common stock issued for conversion of debt

 

$ -

 

 

$ 100,000

 

Beneficial conversion feature

 

$ -

 

 

$ 100,000

 

Derivative liability recognized as debt discount

 

$ 155,000

 

 

$ -

 

 

The notes are an integral part of these consolidated financial statements.

 

 
F-6

 

Table of Contents

 

RESORT SAVERS, INC.

Notes to the Consolidated Financial Statements

December 31, 2019 and 2018

Expressed in United States Dollars

 

NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS

 

Resort Savers, Inc. (“we,” “us,” “our,” the “Company,” “Resort Savers” or “RSSV”) is a Nevada corporation incorporated on June 25, 2012. It is based in Puchong, Malaysia. The accounting and reporting policies of the Company conform to accounting principles generally accepted in the United States of America, and the Company’s fiscal year end is December 31.

 

The Company makes investments and acquisitions into sound, transparent markets and industries throughout the world. The Company is principally engaged in the trading of oil, gas and lubricant, as well as an agricultural business and provides nutrition consultancy services and training as well as selling health products through an online store.

 

Reverse split

 

On July 15, 2019, the board of directors (the “Board”) of Resort Savers, Inc., a Nevada corporation (the “Company”), approved a reverse one-for-one hundred (1-for-100) stock split (the “Reverse Split”) of the Company’s issued and outstanding common stock, par value $0.0001 per share (the “Common Stock”). The Reverse Split had no effect on the number of authorized common stock of the Company, nor did it affect the authorized or issued and outstanding shares of preferred stock, par value $0.0001 per share, since the Company has no shares of preferred stock issued or outstanding. The Reverse Split was approved by FINRA and was effective on September 16, 2019.

 

All share and per share information in these financial statements retroactively reflect this reverse stock split.

 

Admall Share Exchange and Recapitalization

 

Admall Sdn. Bhd.

 

On May 16, 2018, the Company closed the acquisition of Admall Sdn. Bhd., a limited liability company incorporated in Malaysia (“Admall”) by way of share exchange (the “Admall Acquisition”). The Company effected the Admall Acquisition pursuant to the terms of that certain Share Exchange Agreement (the “Admall Agreement”), dated February 9, 2018, by and between the Company, Admall, and Mr. Boon Jin “Patrick” Tan, an individual who prior to the closing of the Admall Acquisition held 100% of the outstanding equity interests of Admall. See Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Securities Exchange Commission on February 9, 2018, which is incorporated herein by reference, for a detailed description of the Admall Agreement.

 

At the closing of the Admall Acquisition, the Company acquired 100% of the outstanding equity interests of Admall from Mr. Tan, and the Company issued 400,000,000 shares of its common stock, par value $0.0001 per share (“Common Stock”) to Mr. Tan, which at the time of closing represented approximately 81.47% of the Company’s issued and outstanding Common Stock. As a result, Mr. Tan became a stockholder of the Company and Admall became a wholly-owned subsidiary of the Company. For federal income tax purposes, the Admall Acquisition was intended to qualify as a tax-free reorganization under the provisions of Section 368(a) of the Internal Revenue Code of 1986, as amended.

 

For financial accounting purposes, the Admall Agreement has been accounted for as a reverse acquisition by Admall and resulted in a recapitalization of the Company, with Admall being the accounting acquirer and the Company as the acquired entity. The consummation of the Admall Agreement resulted in a change of control of RSSV. Accordingly, the historical financial statements prior to the acquisition are those of the accounting acquirer, Admall, and have been prepared to give retroactive effect to the reverse acquisition completed on May 16, 2018 and represent the operations of Admall.

 

As a result of the above, these consolidated financial statements represent Admall as the accounting acquirer (legal acquiree) and RSSV, from May 16, 2018 forward, as the accounting acquiree (legal acquirer), and the legal capital stock (number and type of equity interests issued) is that of RSSV, the legal parent, in accordance with guidance on reverse acquisitions accounted for as a business combination. Therefore, the Company recognized goodwill of $3,199,594.

 

 
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Table of Contents

 

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Basis of Presentation

 

The Financial Statements and related disclosures have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The Financial Statements have been prepared using the accrual basis of accounting in accordance with Generally Accepted Accounting Principles (“GAAP”) of the United States and presented in US dollars.

 

The amounts shown in these financial statements for periods prior to May 16, 2018 are those of Admall. For the period from May 16, 2018 through December 31, 2018, the amounts shown in these financial statements are the consolidated results of the Company including its wholly owned subsidiary, Admall.

 

Principles of Consolidation

 

At December 31, 2019, the principal subsidiaries of the Company were listed as follows:

 

Entity Name

 

Acquisition

Date

 

Ownership

 

Jurisdiction

 

Investments

Held By

 

Nature of

Operation

 

Fiscal

Year

 

Admall Sdn. Bhd.

 

May 16,

2018

 

100

%

 

Malaysia

 

RSSV

 

Nutritional

Services

 

December 31

 

Xing Rui International Investment Holding Group Co., Ltd.

(“Xing Rui”)

 

December 22,

2014

 

100

%

 

Seychelles

 

RSSV

 

Holding

Company

 

January 31

 

Xing Rui International Investment Group Ltd.

(“Xing Rui HK”)

 

December 22,

2014

 

100

%

 

Hong Kong,

the PRC

 

Xing Rui

 

Holding

Company

 

January 31

 

Huaxin Changrong (Shenzhen) Technology Service Co., Ltd.

(“Huaxin”) *

 

August 27,

2015

 

100

%

 

the PRC

 

Xing Rui

 

Holding

Company

 

December 31

 

Beijing Yandong Tieshan Oil Products Co., Ltd.

(“Tieshan Oil”) *

 

January 29,

2016

 

51

%

 

the PRC

 

Huaxin

 

Trading of

oil products

 

December 31

 

May 16, 2018

 

49

%

_____________ 

*

The English names used are translated only.

 

These consolidated financial statements include the accounts of the Company and its subsidiaries. All material intercompany balances and transactions have been eliminated.

 

Use of Estimates and Assumptions

 

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. The estimates and judgments will also affect the reported amounts for certain revenues and expenses during the reporting period. Actual results could differ from these good faith estimates and judgments.

 

 
F-8

 

Table of Contents

 

Foreign Currency Translation and Re-measurement

 

The Company translates its foreign operations to U.S. dollars in accordance with ASC 830, “Foreign Currency Matters”.

 

The Company’s functional currency and reporting currency is the U.S. dollar, and our subsidiaries’ functional currency is the Chinese Yuan Renminbi (“CNY”), Malaysian Ringgit (“MYR”) and Hong Kong Dollar (“HKD”).

 

The translate its records into U.S. dollar as follows:

 

 

Assets and liabilities at the rate of exchange in effect at the balance sheet date

 

Equities at historical rate

 

Revenue and expense items at the average rate of exchange prevailing during the period

 

Concentrations of Credit Risk

 

The Company’s financial instruments that are exposed to concentrations of credit risk primarily consist of its cash and cash equivalents, and accounts receivable. The Company places its cash and cash equivalents with financial institutions of high credit worthiness. At times, its cash and cash equivalents with a particular financial institution may exceed any applicable government insurance limits. The Company also reviews its accounts receivable in a timely manner. The Company’s management plans to assess the financial strength and credit worthiness of any parties to which it extends funds, and as such, it believes that any associated credit risk exposures are limited.

 

Tieshan Oil

 

During the year ended December 31, 2019 and 2018, one customer, who was a related party, accounted for 98% of revenues from related party, respectively.

 

As of December 31, 2019 and 2018, one customer accounted for approximately 99% and 98% of accounts receivable and two vendors accounted for approximately 0% and 96% of accounts payable, respectively.

 

Financial Instruments

 

The Company’s financial instruments consist primarily of cash and cash equivalents, accounts receivable, prepaid expenses and deposits, amount due from related parties, accounts payable and accrued liabilities, short-term loan, deferred revenue and due to related parties. The carrying amounts of such financial instruments approximate their respective estimated fair value due to the short-term maturities and approximate market interest rates of these instruments.

 

Inventory

 

Inventories, consisting of raw material, are primarily accounted for using the first-in-first-out (“FIFO”) method of accounting. Inventories are measured at the lower of cost and net realizable value. The Company estimates the net realizable value of inventories based on an assessment of expected sales prices. Demand levels and pricing competition could change from time to time. If such factors result in an adverse effect on the Company’s products, the Company might be required to reduce the value of its inventories.

 

 
F-9

 

Table of Contents

 

Property and equipment

 

Fixed assets are recorded at cost. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets. The useful lives are as follows:

 

Computer and software

5 years

 

Furniture and fittings

6 years

 

Office equipment

4 years

 

Plant and machinery

5 ~ 10 years

 

Renovation

3.3 years

 

 

Maintenance and repairs are charged to operations as incurred. Expenditures which substantially increase the useful lives of the related assets are capitalized. When properties are disposed of, the related costs and accumulated depreciation are removed from the accounts and any gain or loss is reported in the period the transaction takes place.

 

Accounting for the impairment of long-lived assets

 

The long-lived assets held and used by the Company are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of assets may not be recoverable. It is reasonably possible that these assets could become impaired as a result of technology or other industry changes. Determination of recoverability of assets to be held and used is by comparing the carrying amount of an asset to future net undiscounted cash flows to be generated by the assets. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell. During the year ended December 31, 2019 and 2018, the Company did not impair any long-lived assets.

 

Revenue Recognition

 

Revenues are recognized when control of the promised goods or services are transferred to a customer, in an amount that reflects the consideration that the Company expects to receive in exchange for those goods or services. The Company applies the following five steps in order to determine the appropriate amount of revenue to be recognized as it fulfills its obligations under each of its agreements:

 

 

identify the contract with a customer;

 

identify the performance obligations in the contract;

 

determine the transaction price;

 

allocate the transaction price to performance obligations in the contract; and

 

recognize revenue as the performance obligation is satisfied.

 

 
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Table of Contents

 

Deferred Revenue

 

The company has entered into agreements where the services to be performed extends beyond the current operating cycle. For these agreements, the company records a long-term obligation and recognizes revenue over the period of the agreement as the services are rendered.

 

Deferred revenue at December 31, 2019 and 2018, was $0 and $56,416, respectively.

 

Income Taxes and Deferred Taxes

 

Tax expense in profit or loss comprises current and deferred tax. Current tax and deferred tax are recognized in profit or loss except to the extent that it relates to a business combination or items recognized directly in equity or other comprehensive income.

 

Deferred tax is recognized using the liability method for all temporary differences between the carrying amounts of assets and liabilities in the statement of financial position and their tax bases. Deferred tax is not recognized for the temporary differences arising from the initial recognition of goodwill, the initial recognition of assets and liabilities in a transaction which is not a business combination and that affects neither accounting nor taxable profit or loss. Deferred tax is measured at the tax rates that are expected to be applied to the temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the end of the reporting period.

 

Financial Instruments and Fair Value Measurements

 

As defined in ASC 820” Fair Value Measurements,” fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). The Company utilizes market data or assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market corroborated, or generally unobservable. The Company classifies fair value balances based on the observability of those inputs. ASC 820 establishes a fair value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurement) and the lowest priority to unobservable inputs (level 3 measurement).

 

Derivative Financial Instruments

 

The Company does not use derivative instruments to hedge exposures to cash flow, market or foreign currency risks. We evaluate all of our financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the statements of operations. For stock-based derivative financial instruments, the Company used a Black Scholes valuation model to value the derivative instruments at inception and on subsequent valuation dates. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement or conversion of the instrument could be required within twelve (12) months of the balance sheet date.

 

 
F-11

 

Table of Contents

  

Earnings Per Share of Common Stock

 

The Company has adopted ASC Topic 260, “Earnings per Share,” (“EPS”) which requires presentation of basic EPS on the face of the income statement for all entities with complex capital structures and requires a reconciliation of the numerator and denominator of the basic EPS computation. In the accompanying financial statements, basic earnings per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period.

 

For the year ended December 31, 2019 and 2018, the following common stock equivalents were included in the computation of diluted net income per share.

 

 

 

Year Ended

 

 

 

December 31,

 

 

 

2019

 

 

2018

 

Convertible notes

 

 

199,334

 

 

 

-

 

Warrant

 

 

112,500

 

 

 

-

 

Total

 

 

311,834

 

 

 

-

 

 

Recent Accounting Pronouncements

 

Management has considered all recent accounting pronouncements issued since the last audit of our financial statements. The Company’s management believes that these recent pronouncements will not have a material effect on the Company’s financial statements.

 

NOTE 3 - GOING CONCERN

 

The Company’s financial statements are prepared using GAAP applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has not yet had sufficient revenues to cover its operating cost, and requires additional capital to commence its operating plan. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease operations. These factors raise substantial doubt about its ability to continue as a going concern.

 

In order to continue as a going concern, the Company will need, among other things, additional capital resources. Management’s plan to obtain such resources for the Company include: sales of equity instruments; traditional financing, such as loans; and obtaining capital from management and significant stockholders sufficient to meet its minimal operating expenses. However, management cannot provide any assurance that the Company will be successful in accomplishing any of its plans.

 

There is no assurance that the Company will be able to obtain sufficient additional funds when needed or that such funds, if available, will be obtainable on terms satisfactory to the Company. In addition, profitability will ultimately depend upon the level of revenues received from business operations. However, there is no assurance that the Company will attain profitability. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

 

 
F-12

 

Table of Contents

 

NOTE 4 – ACCOUNTS RECEIVABLE

 

The Company has performed an analysis on all of its accounts receivable and determined that all amounts are collectible by the Company. As such, all accounts receivable are reflected as a current asset and no allowance for bad debt has been recorded as of December 31, 2019 and 2018. As at December 31, 2019 and 2018, the Company had accounts receivable of $548,281 and $38,165,057, respectively and trade receivables from customers which was related to the Company of $0 and $37,055,058, which are included in accounts receivable.

 

NOTE 5 – INVENTORIES

 

At December 31, 2019 and 2018, Inventories consisted of the following:

 

 

 

December 31,

 

 

December 31,

 

 

 

2019

 

 

2018

 

 

 

 

 

 

 

 

Finished goods

 

$ 7,225,155

 

 

$ 1,245,759

 

 

NOTE 6 – PLANT AND EQUIPMENT

 

At December 31, 2019 and 2018, Plant and equipment consisted of the following:

 

 

 

December 31,

 

 

December 31,

 

 

 

2019

 

 

2018

 

Cost:

 

 

 

 

 

 

Computer and software

 

$ 77,995

 

 

$ 77,157

 

Furniture and fittings

 

 

4,369

 

 

 

4,322

 

Office equipment

 

 

5,863

 

 

 

5,186

 

Plant and machinery

 

 

780,904

 

 

 

773,618

 

 

 

 

869,131

 

 

 

860,283

 

Less: accumulated depreciation

 

 

(402,815 )

 

 

(308,735 )

Equipment, net

 

$ 466,316

 

 

$ 551,548

 

 

During the year ended December 31, 2019 and 2018, the Company recorded depreciation of $90,204 and $106,315, respectively.

 

During the year ended December 31, 2019 and 2018, the Company acquired assets of $614 and $587, respectively, and sold assets for $0 and $4,661, respectively and recorded loss on sales of assets of $0 and $31,836, respectively.

 

During the year ended December 31, 2019 and 2018, the Company recorded an impairment loss of $0 and $65,476, respectively.

 

 
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NOTE 7 – ACCRUED LIABILITIES AND OTHER PAYABLE

 

At December 31, 2019 and 2018, accrued liabilities and other payable consisted of the following:

 

 

 

December 31,

 

 

December 31,

 

 

 

2019

 

 

2018

 

Accrued expenses

 

$ -

 

 

$ 45,000

 

Accrued salary

 

 

18,761

 

 

 

-

 

Accrued interest

 

 

5,579

 

 

 

-

 

Deposit received

 

 

10,759

 

 

 

-

 

Other payables

 

 

50,735

 

 

 

50,458

 

 

 

$ 85,834

 

 

$ 95,458

 

 

NOTE 8 – SHORT-TERM LOAN

 

There are no provisions in the Company’s bank borrowings that would accelerate repayment of debt as a result of a change in credit ratings or a material adverse change in the Company’s business.

 

The interest rate is 0.5% per month. The loan is secured by 48.83% shares of Tieshan Oil held by Mr. Yang Baojin (“Mr. Yang”). The Loan was due on October 7, 2017. The Company believes that the carrying value of the equity interest in Tieshan Oil, which is a financial instrument, and which has been pledged by Mr. Yang as collateral for the loan is sufficient to underlie the loan, and the Company has not been requested to add any additional credit enhancements.

 

During the year ended December 31, 2018, the Company repaid $934,800 (RMB 6,000,000). On December 31, 2019 and 2018, the Company had a short-term loan balance of $0.

 

NOTE 9 – CONVERTIBLE NOTE

 

At December 31, 2019 and 2018, convertible loans consisted of the following:

 

 

 

December 31,

 

 

December 31,

 

 

 

2019

 

 

2018

 

Convertible Notes - originated in September 18, 2019

 

$ 158,000

 

 

$ -

 

Convertible Notes - originated in November 20, 2019

 

 

125,000

 

 

 

-

 

Convertible Notes - originated in November 22, 2019

 

 

55,000

 

 

 

-

 

Total convertible notes payable

 

 

338,000

 

 

 

-

 

Less: Unamortized debt discount

 

 

(162,566 )

 

 

-

 

Total convertible notes

 

 

175,434

 

 

 

-

 

Less: current portion of convertible notes

 

 

19,864

 

 

 

-

 

Long-term convertible notes

 

$ 155,570

 

 

$ -

 

 

For the year ended December 31, 2019 and 2018, the interest expense on convertible notes was $5,579 and $0, and amortization of discount, including interest expense, of $20,434 and $100,000, $0, respectively. As of December 31, 2019 and 2018, the accrued interest was $5,579 and $0, respectively.

 

 
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Convertible Notes – Issued during the year ended December 31, 2019

 

During the year ended December 31, 2019, the Company issued a total principal amount of $338,000 convertible notes for cash proceeds of $310,000. The convertible notes were also provided with a total of 112,500 warrants. The terms of convertible notes are summarized as follows:

 

 

Term: 12 months - 18 months;

 

Annual interest rates: 8% - 10%;

 

Convertible at the option of the holders at any time or 180 days from issuance.

 

Conversion prices are based on discounted (35% - 40% discount) lowest trading prices of the Company’s shares during various periods prior to conversion. Certain note has a fixed conversion price of $1.

 

The Company determined that the conversion feature met the definition of a liability in accordance with ASC Topic No. 815-40, “Derivatives and Hedging - Contracts in Entity’s Own Stock” and therefore bifurcated the embedded conversion option once the note becomes convertible and accounted for it as a derivative liability. The fair value of the conversion feature was recorded as a debt discount and amortized to interest expense over the term of the note.

 

The Company valued the conversion feature using the Black Scholes valuation model. The fair value of the derivative liability for all the notes that became convertible, including the notes issued in prior years, during the year ended December 31, 2019 amounted to $546,727. $155,000 of the value assigned to the derivative liability was recognized as a debt discount to the notes while the balance of $391,727 was recognized as a “day 1” derivative loss.

 

Convertible Notes – Issued during the year ended December 31, 2018

 

On May 21, 2018, the Company issued the convertible note of $100,000 with a conversion price of one-third of one cent to the related party to repay related party contribution. The convertible note is non-bearing interest and due on May 21, 2019. The Company recorded a discount on the convertible note due to a beneficial conversion feature of $100,000.

 

On May 30, 2018, the note was fully converted into 30,000,000 shares of common stock.

 

NOTE 10 – WARRANTS

 

A summary of activity regarding warrants issued as follows:

 

 

 

Warrants Outstanding

 

 

 

 

 

Weighted Average

 

 

 

Shares

 

 

Exercise Price

 

 

 

 

 

 

 

 

Outstanding, December 31, 2018

 

 

-

 

 

$ -

 

Granted

 

 

112,500

 

 

 

1.67

 

Reset feature

 

 

-

 

 

 

-

 

Exercised

 

 

-

 

 

 

-

 

Forfeited/canceled

 

 

-

 

 

 

-

 

Outstanding, December 31, 2019

 

 

112,500

 

 

$ 1.67

 

 

During the year ended December 31, 2019, the Company issued warrants with convertible notes. Each warrant is immediately exercisable into one share of common stock at a price ranging from $1.25 to $5.00 per share. The warrants will expire on the three (3) year anniversary of the issuance date.

 

The Company determined that the warrants qualify for derivative accounting due to the reset feature of warrants, which led to no explicit limit to the number of shares to be delivered upon future settlement of the exercised warrants (See Note 11).

 

 
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The following table summarizes information relating to outstanding and exercisable warrants as of December 31, 2019.

 

Warrants Outstanding

Warrants Exercisable

Number of

Contractual life

 

Number of

 

Shares

(in years)

Exercise Price

Shares

Exercise Price

100,000

2.89

$

1.25

100,000

$

1.25

12,500

2.90

$

5.00

12,500

$

5.00

 

Aggregate intrinsic value is the sum of the amounts by which the quoted market price of the Company’s stock exceeded the exercise price of the warrants at December 31, 2019 for those warrants for which the quoted market price was in excess of the exercise price (“in-the-money” warrants). The intrinsic value of the warrants as of December 31, 2019 is $7,000.

 

NOTE 11 – DERIVATIVE LIABILITIES

 

The Company analyzed the conversion option for derivative accounting consideration under ASC 815, “Derivatives and Hedging, and hedging,” and determined that the instrument should be classified as a liability since the conversion option becomes effective at issuance resulting in there being no explicit limit to the number of shares to be delivered upon settlement of the above conversion options.

 

ASC 815 requires we assess the fair market value of derivative liability at the end of each reporting period and recognize any change in the fair market value as other income or expense item.

 

The Company determined our derivative liabilities to be a Level 3 fair value measurement and used the Black-Scholes pricing model to calculate the fair value as of December 31, 2019. The Black-Scholes model requires six basic data inputs: the exercise or strike price, time to expiration, the risk-free interest rate, the current stock price, the estimated volatility of the stock price in the future, and the dividend rate. Changes to these inputs could produce a significantly higher or lower fair value measurement. The fair value of each convertible note and warrant is estimated using the Black-Scholes valuation model. The following weighted-average assumptions were used in the December 31, 2019 and 2018:

 

 

 

Year Ended

 

 

Year ended

 

 

 

December 31,

 

 

December 31,

 

 

 

2019

 

 

2018

 

Expected term

 

0.89 - 3.00 years

 

 

 

-

 

Expected average volatility

 

175% - 272%

 

 

 

-

 

Expected dividend yield

 

 

-

 

 

 

-

 

Risk-free interest rate

 

1.55% - 1.62%

 

 

 

-

 

 

The following table summarizes the changes in the derivative liabilities during the year ended December 31, 2019:

 

Fair Value Measurements Using Significant Observable Inputs (Level 3)

 

 

 

 

 

Balance - December 31, 2018

 

$ -

 

Addition of new derivatives recognized as debt discounts

 

 

155,000

 

Addition of new derivatives recognized as loss on derivatives

 

 

391,727

 

Gain on change in fair value of the derivative

 

 

(190,332 )

Balance - December 31, 2019

 

$ 356,395

 

 

 
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The following table summarizes the loss on derivative liability included in the income statement for the year ended December 31, 2019 sand 2018, respectively.

 

 

 

Year Ended

 

 

 

December 31,

 

 

 

2019

 

 

2018

 

Day one loss due to derivative liabilities on convertible notes

 

$ 391,727

 

 

$ -

 

Gain on change in fair value of the derivative liabilities

 

 

(190,332 )

 

 

-

 

Loss on change in the fair value of derivative liabilities

 

$ 201,395

 

 

$ -

 

 

NOTE 12 - STOCKHOLDERS’ EQUITY

 

The capitalization of the Company consists of the following classes of capital stock as of September 30, 2018:

 

Preferred Stock

 

The Company has authorized 15,000,000 shares of preferred stock with a par value of $0.0001 per share. The Board of Directors are authorized to divide the authorized shares of Preferred Stock into one or more series, each of which shall be so designated as to distinguish the shares thereof from the shares of all other series and classes. No shares of preferred stock have been issued.

 

Common Stock

 

The Company has authorized 1,000,000,000 shares of common stock with a par value of $0.0001 per share. Each common share entitles the holder to one vote, in person or proxy, on any matter on which action of the stockholders of the corporation is sought.

 

During the year ended December 31, 2019, there were no issuances of common stock.

 

During the year ended December 31, 2018, the Company issued 30,000,000 shares of common stock for conversion of debt of $100,000.

 

Additional Paid-In Capital

 

During the year ended December 31, 2019 and 2018, related parties contributed additional paid-in capital in the amount of $0 and $58,450, respectively, to fund operating expenses and related party contribution of $0 and $100,000 was cancelled (see Note 13).

 

NOTE 13 – RELATED PARTY TRANSACTIONS

 

Revenue and Expense

 

During the year ended December 31, 2019 and 2018, the Company recorded revenue of $29,273,551 and $32,273,533 and cost of goods sold from a related party of $25,985,112 and $34,949,798 and general and administrative expense of $13,101 and $14,690 from the entity who was a related party until September 30, 2019, respectively. Due to a reduction of influence to this entity, the Company determined this entity was no more related party since October 1, 2019. As of December 31, 2019 and 2018, the Company had accounts receivable of $0 and $37,055,058 and account payable of $0 and $31,536,276, which are included in account receivable and accounts payable, respectively

 

Due from related party

 

As of December 31, 2019 and 2018, the Company recorded due from related parties of $0 and $155,075, respectively. The loan is non-interest bearing and due on demand.

 

 
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Due to related party

 

As of December 31, 2019 and 2018, the Company recorded due to related parties as follows. The loan is non-interest bearing and due on demand.

 

 

 

December 31,

 

 

December 31,

 

 

 

2019

 

 

2018

 

Loan from director

 

$ 142,480

 

 

$ 1,022,775

 

Loan from related parties

 

 

111,101

 

 

 

92,930

 

 

 

$ 253,581

 

 

$ 1,115,705

 

 

Contribution

 

During the year ended December 31, 2018, related parties, who are shareholders of the Company, forgave debt, in the amount of $58,450 for payments made on behalf of the Company for operating expenses. The amount has been recognized as a contribution to capital.

 

During the year ended December 31, 2018, $100,000 originally recorded as a contribution to capital was cancelled and recorded as a convertible note payable (Note 12).

 

NOTE 14 – INCOME TAXES

 

The Company operates in the United States and its wholly-owned subsidiaries operate in Malaysia, Hong Kong and China and files tax returns in these jurisdictions.

 

Income (loss) from continuing operations before income tax expense (benefit) is as follows:

 

 

 

Year Ended

 

 

 

December 31,

 

 

 

2019

 

 

2018

 

Tax jurisdiction from:

 

 

 

 

 

 

United States

 

$ (382,680 )

 

$ (165,692 )

Foreign

 

 

1,350,081

 

 

 

1,378,431

 

Loss before income taxes

 

$ 967,401

 

 

$ 1,212,739

 

 

Income tax provision is as follows:

 

 

 

Year Ended

 

 

 

December 31,

 

 

 

2019

 

 

2018

 

Tax jurisdiction from:

 

 

 

 

 

 

United States

 

$ -

 

 

$ -

 

Foreign

 

 

303,979

 

 

 

236,763

 

Income taxes

 

$ 303,979

 

 

$ 236,763

 

 

 
F-18

 

Table of Contents

 

 

 

December 31,

 

 

 

2019

 

 

2018

 

Deferred tax assets:

 

 

 

 

 

 

NOL carryforwards

 

 

 

 

 

 

United States

 

 

47,574

 

 

 

13,795

 

Foreign

 

 

4,161

 

 

 

4,161

 

Total

 

 

51,735

 

 

 

17,956

 

Less: valuation allowance

 

 

(51,735 )

 

 

(17,956 )

Net deferred tax asset

 

 

-

 

 

 

-

 

  

 

 

December 31,

 

 

 

2019

 

 

2018

 

Deferred tax liabilities:

 

 

 

 

 

 

NOL carryforwards

 

 

 

 

 

 

United States

 

 

-

 

 

 

-

 

Foreign

 

 

18,035

 

 

 

40,349

 

Total

 

 

18,035

 

 

 

40,349

 

Less: valuation allowance

 

 

-

 

 

 

-

 

Net deferred tax liabilities

 

 

18,035

 

 

 

40,349

 

 

The expected approximate income tax rate for 2019 and 2018, for United States is 21%, Hong Kong is 16.5%, the PRC is 25%, and Malaysia is 17% and 18%. The total income tax benefit differs from the expected income tax benefit principally due to the valuation allowance recorded against the deferred tax assets which are principally comprised of net operating losses (“NOLs”) and deferred tax liabilities.

 

The Company applies the authoritative accounting guidance under ASC 740 for the recognition, measurement, classification and disclosure of uncertain tax positions taken or expected to be taken in a tax return. The Company provided a full valuation allowance against its deferred tax assets as of December 31, 2019 and 2018. This valuation allowance reflects the estimate that it is more likely than not that the net deferred tax assets may not be realized.

 

The Company has approximately $251,000 of U.S. and foreign carryforwards, the tax effect of which is approximately $51,700 as of December 31, 2019.

 

The U. S. NOL carryforwards are subject to certain limitations due to the change in control of the Company pursuant to Internal Revenue Code Section 382. The Company has not performed a study to determine if the NOL carryforwards are subject to these Section 382 limitations. In addition, the Company has foreign NOLs. The Company is still evaluating the impact of a change in stock ownership and the potential limitation of foreign NOLs.

 

A valuation allowance is recorded on certain deferred tax assets if it has been determined it is more likely than not that all or a portion of these assets will not be realized. The Company has recorded a full valuation allowance of $51,735and $17,956 for deferred tax assets existing as of December 31, 2019 and 2018, respectively. The valuation allowance as of December 31, 2019 and 2018 is attributable to NOL carryforwards in the United States and foreign jurisdictions.

 

 
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Table of Contents

 

NOTE 15 - SEGMENTED INFORMATION

 

At December 31, 2019, the Company operates in two industry segments, health beverage and oil and gas, and two geographic segments, Malaysia and China, where majority current assets and equipment are located.

 

At December 31, 2019 and 2018, segment assets and liabilities were as follows:

 

December 31, 2019

 

Holding

Company

 

 

Oil and

 gas

 

 

Nutritional

 Services

 

 

Total

 Consolidated

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

Current assets

 

$ 198,916

 

 

$ 6,413,082

 

 

$ 2,322,629

 

 

$ 8,934,627

 

Non-current assets

 

 

3,199,594

 

 

 

-

 

 

 

466,316

 

 

 

3,665,910

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current liabilities

 

 

594,891

 

 

 

168,739

 

 

 

1,577,547

 

 

 

2,341,177

 

Long term liabilities

 

 

-

 

 

 

-

 

 

 

18,035

 

 

 

18,035

 

Net assets

 

$ 2,803,619

 

 

$ 6,244,343

 

 

$ 1,193,363

 

 

$ 10,241,325

 

 

December 31, 2018

 

Holding

Company

 

 

Oil and Gas

 

 

Nutritional

Services

 

 

Health beverage - Discontinued Operation

 

 

Total

Consolidated

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current assets

 

$ 3,545

 

 

$ 38,020,730

 

 

$ 1,841,282

 

 

$ -

 

 

$ 39,865,557

 

Non-current assets

 

 

1,219,807

 

 

 

1,981,195

 

 

 

550,140

 

 

 

-

 

 

 

3,751,142

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current liabilities

 

 

167,010

 

 

 

32,703,644

 

 

 

1,220,185

 

 

 

-

 

 

 

34,090,839

 

Long term liabilities

 

 

-

 

 

 

-

 

 

 

40,349

 

 

 

-

 

 

 

40,349

 

Net assets (liabilities)

 

$ 1,056,342

 

 

$ 7,298,281

 

 

$ 1,130,888

 

 

$ -

 

 

$ 9,485,511

 

 

For the year ended December 31, 2019 and 2018, segment revenue and net income (loss) were as follows:

 

Year Ended December 31, 2019

 

Holding

Company

 

 

Oil and

gas

 

 

Nutritional

Services

 

 

Total

Consolidated

 

Revenue

 

$ -

 

 

$ 29,273,552

 

 

$ 513,636

 

 

$ 29,787,188

 

Cost of goods sold

 

 

-

 

 

 

(27,845,382 )

 

 

(424,644 )

 

 

(28,270,026 )

Operating expenses

 

 

(160,678 )

 

 

(70,878 )

 

 

(627,565 )

 

 

(859,121 )

Other income (expenses)

 

 

(227,408 )

 

 

(28,863 )

 

 

565,631

 

 

 

309,360

 

Provision for income taxes

 

 

-

 

 

 

(326,443 )

 

 

22,464

 

 

 

(303,979 )

Net income (loss)

 

$ (388,086 )

 

$ 1,001,986

 

 

$ 49,522

 

 

$ 663,422

 

 

 
F-20

 

Table of Contents

 

Year Ended December 31, 2018

 

Holding

Company

 

 

Oil and Gas

 

 

Nutritional

Services

 

 

Health Beverage - Discontinued Operations

 

 

Total

Consolidated

 

Revenue

 

$ -

 

 

$ 35,988,326

 

 

$ 1,082,506

 

 

$ -

 

 

$ 37,070,832

 

Cost of goods sold

 

 

-

 

 

 

(34,949,798 )

 

 

(269,367 )

 

 

-

 

 

 

(35,219,165 )

Operating expenses

 

 

(102,186 )

 

 

(43,027 )

 

 

(578,385 )

 

 

-

 

 

 

(723,598 )

Other income (expenses)

 

 

(73,179 )

 

 

(17,793 )

 

 

175,642

 

 

 

-

 

 

 

84,670

 

Provision for income taxes

 

 

(1,653 )

 

 

(221,084 )

 

 

(14,026 )

 

 

-

 

 

 

(236,763 )

Loss from discontinued operations

 

 

-

 

 

 

-

 

 

 

-

 

 

 

457,533

 

 

 

457,533

 

Net income (loss)

 

$ (177,018 )

 

$ 756,624

 

 

$ 396,370

 

 

$ 457,533

 

 

$ 1,433,509

 

 

NOTE 16 – DISCONTINUED OPERATIONS

 

On November 19, 2018, the Company entered into the share purchase agreement to sell 60% of the total issued and outstanding equity of Shenzhen Amuli Industrial Development Co. Ltd. (“Amuli”). In exchange for the shares, the Company received a purchase price of $1 (7 Chinese Yuan). The Purchaser shall become the majority equity owner of the Amuli and the Company shall have no further interest in Amuli.

 

During the year ended December 31, 2018, the Company recorded a gain on disposal of $464,305. The disposal of Amuli qualified as a discontinued operation of the Company and accordingly, the Company has excluded results of Amuli’s operations from its Consolidated Statements of Operations and Comprehensive Loss to present this business in discontinued operations.

 

The following table shows the results of operations of Amuli for the year ended December 31, 2019 and 2018 which are included in the loss from discontinued operations:

 

 

 

For the Year Ended

 

 

 

December 31,

 

 

 

2019

 

 

2018

 

Revenue

 

$ -

 

 

$ 1,916

 

General and administrative

 

 

-

 

 

 

(52,876 )

Total Other Income Expenses

 

 

-

 

 

 

(8 )

Loss from discontinued operations

 

$ -

 

 

$ (50,968 )

 

 
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The following table summarizes the carrying amounts of the assets and liabilities held for sale as of November 19, 2018,

 

 

 

November 19,

 

 

 

2018

 

Cash and cash equivalents

 

$ 38,468

 

Accounts receivable

 

 

4,736

 

Total Current assets

 

 

43,204

 

Total Assets

 

$ 43,204

 

 

 

 

 

 

Accrued liabilities and other payable

 

$ 457,190

 

Total Current Liabilities

 

$ 457,190

 

Total Liabilities

 

$ 457,190

 

 

 

 

 

 

Net assets and liabilities

 

$ (413,986 )

Consideration received on disposal

 

 

1

 

Recycling of accumulated other comprehensive income

 

 

(71,482 )

Contribution by related party

 

 

(10,480 )

Non-contorting interest

 

 

(12,554 )

Gain on disposal

 

$ 508,501

 

  

NOTE 17 – COMMITMENTS AND CONTINGENCIES

 

In March 2016, the Company entered into office lease agreement. The initial monthly fee was MYR 1,700 and the initial term was 2 years. The Company extended the contract to April 2019 and the monthly fee was amended to MYR 1,800. During the year ended December 31, 2019 and 2018, the Company recorded rent expense of $1,738 and $5,278, respectively.

 

In September 2018, the Company entered into tenancy agreement. The initial monthly fee was MYR 3,500 and the term was 1 year. The Company extended the contract to December 2019. The tenant shall have the option to renew this agreement for a further period of 1 year. During the year ended December 31, 2019 and 2018, the Company recorded rent expense of $10,139 and $1,734, respectively.

 

As of December 31, 2019, the Company has not extended these leases and has no future lease payments.

 

NOTE 18 - SUBSEQUENT EVENTS

 

On February 24, 2020 Resort Savers, Inc. entered into a Purchase Agreement (the “Agreement”) with Mr. Liu FaKuan (“Seller”), the sole owner of Henan Wandi Mining Product Development Co., Ltd. (“Wandi”), a corporation organized in the People’s Republic of China (“PRC”), pursuant to which, among other things and subject to the terms and conditions contained therein, the Company will effect an acquisition of Wandi by acquiring from the Seller all outstanding equity interests of Wandi (the “Acquisition”). Wandi owns 49% of a coal mine known as You Zhou Shenhuo Kuanfa Mining Company Ltd., (the “Mine”), together with Zhengzhou Yuzhong Coal Industry Co., Ltd. (a State-owned enterprise), which owns 51% of the coal mine. Notwithstanding these ownership interests, Wandi is entitled to 100% of the performance derived from the operation of the Mine. Pursuant to the Agreement, in exchange for all of the outstanding shares of Wandi, the Company shall issue 60,000,000 restricted common shares of stock of the Company to the Seller upon the Closing of the Agreement.

 

 
F-22

 

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