Note 1 –
Organization and Basis of presentation
Organization
AJ Greentech Holdings
Ltd. is a Nevada corporation incorporated on August 30, 2006, under the name Gateway Certifications, Inc. On November 16, 2009,
our corporate name was changed to American Jianye Greentech Holdings, Ltd. and on February 13, 2014, our corporate name was changed
to AJ Greentech Holdings, Ltd.
From November
2009 until October 2013, through our China subsidiaries, we were engaged in design, marketing and distributing of alcohol base
clean fuel that are designed to use less fossil fuel and have less pollution than traditional fuel.
On October 31,
2013, pursuant to agreements with one of our former directors, we transferred the stock in our China subsidiaries to the former
director in exchange for cancellation of debt totaling $240,000. As a result of the transfer of the subsidiaries, we were no longer
engaged in the China cleanfuel business. We transferred the stock of the China subsidiaries because we felt that, it not our best
interest to continue China cleanfuel business as a result of our decreasing revenue, continued losses and inability to raise capital
for our business.
On October 31,
2013, Chu Li An acquired, for nominal consideration, 8,000,000 shares of common stock from the director who acquired the subsidiaries
and 12,778,399 shares of common stock from The Chairman, who was also a director. On November 1, 2013, Chu Li An and the Company
entered into a loan agreement pursuant to which the Chu Li An agreed to lend us $100,000 initially with future loan amount up
to $1,000,000, for which we will issue our 6% demand promissory note in the principal amount of $100,000. As of March 31, 2017,
the note has not been issued.
On November 18,
2013, we entered into agreement pursuant to which we issued to Chu Li An and her BVI company, our sole director and chief executive
officer, 180,000,000 shares of common stock, in consideration of the cancellation of debt due to Chu Li An in the amount of $180,000.
On November 30,
2013, the Company entered into an agreement to acquire all of the issued and outstanding stock of Jin Chih International, Ltd.,
a Taiwan corporation, from its sole owner Chu Li An for five million shares of the Company’s common stock. As of March 31,
2017, the stock has not been issued.
As a result of
the above transactions, we carry out the electronic products and general cargo trading and related consulting service business
through our subsidiary named Jin Chih International, Ltd in Taiwan. We still plan to focus on providing greentech products outside
of China in future. Even though the company has disposed China branches, the company's new management will continue to expand
the current green energy and technology business in the United States and globally, at the same time to explore many other green
and renewable energy such as solar, wind power, sea power by signing licensing agreement or joint venture with other research
institutes .
Basis of presentation
The accompanying
consolidated financial statements of AJ Greentech Holdings Ltd. (the “Company”) have been prepared in accordance with
accounting principles generally accepted in the United States of America (“US GAAP”).
NOTE 2 –
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Use of Estimates
The preparation
of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure
of contingent assets and liabilities at the date of the consolidated financial statements and the amount of revenues and expenses
during the reporting periods. Management makes these estimates using the best information available at the time the estimates
are made. However, actual results could differ materially from those results.
Segment Information
ASC 280 requires
companies to report information about operating segment in interim and annual financial statements. It also requires segment disclosures
about products and services geographic and major customers. The Company has determined that it does not have any separately reportable
operating segments.
Accounts Receivable
and Allowance for Doubtful Accounts
Accounts receivable
are recorded at the invoiced amount, net of an allowance for doubtful accounts. The Company follows paragraph 310-10-50-9 of the
FASB Accounting Standards Codification to estimate the allowance for doubtful accounts. The Company performs on-going credit evaluations
of its customers and adjusts credit limits based upon payment history and the customer’s current credit worthiness, as determined
by the review of their current credit information; and determines the allowance for doubtful accounts based on historical write-off
experience, customer specific facts and economic conditions.
Outstanding account
balances are reviewed individually for collectability. The allowance for doubtful accounts is the Company’s best estimate
of the amount of probable credit losses in the Company’s existing accounts receivable. Bad debt expense is included in general
and administrative expenses, if any. Pursuant to paragraph 310-10-50-2 of the FASB Accounting Standards Codification account balances
are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered
remote. The Company has adopted paragraph 310-10-50-6 of the FASB Accounting Standards Codification and determine when receivables
are past due or delinquent based on how recently payments have been received.
Inventories
The Company values
inventories, consisting of raw materials, packaging material and finished goods, at the lower of cost or market. Cost is determined
on the first-in and first-out (“FIFO”) method for raw materials and packaging materials and the weighted average cost
method for finished goods. Cost of finished goods comprises direct labor, direct materials, direct production cost and an allocated
portion of production overhead. The Company reduces inventories for the diminution of value, resulting from product obsolescence,
damage or other issues affecting marketability, equal to the difference between the cost of the inventory and its estimated market
value. Factors utilized in the determination of estimated market value include (i) current sales data and historical return rates,
(ii) estimates of future demand, (iii) competitive pricing pressures, (iv)new product introductions, (v) product expiration dates,
and (vi) component and packaging obsolescence.
The Company evaluates
its current level of inventories considering historical sales and other factors and, based on this evaluation, classify inventory
markdowns in the income statement as a component of cost of goods sold pursuant to Paragraph 420-10-S99 of the FASB Accounting
Standards Codification to adjust inventories to net realizable value. These markdowns are estimates, which could vary significantly
from actual requirements if future economic conditions, customer demand or competition differ from expectations. Other significant
estimates include the allocation of variable and fixed production overheads. While variable production overheads are allocated
to each unit of production on the basis of actual use of production facilities, the allocation of fixed production overhead to
the costs of conversion is based on the normal capacity of the Company’s production facilities, and recognizes abnormal
idle facility expenses as current period charges. Certain costs, including categories of indirect materials, indirect labor and
other indirect manufacturing costs which are included in the overhead pools are estimated. The management of the Company determines
its normal capacity based upon the amount of operating hours of the manufacturing machinery and equipment in a reporting period.
As of March 31,
2017, the inventory value was $697,108.
Revenue Recognition
The Company’s
revenue recognition policies are in compliance with ASC 605 (Originally issued as Staff Accounting Bulletin (SAB) 104). Revenue
is recognized at the date of shipment to customers when a formal arrangement exists, the price is fixed or determinable, the delivery
is completed, no other significant obligations of the Company exist and collectability is reasonably assured. Payments received
before all of the relevant criteria for revenue recognition are satisfied are recorded as unearned revenue. Discounts provided
to customers by the Company at the time of sale are recognized as a reduction in sales as the products are sold. Sales taxes are
not recorded as a component of sales.
The Company derives
its revenues from sales contracts with customers with revenues being generated upon the shipment of merchandise. Persuasive evidence
of an arrangement is demonstrated via sales invoice or contract; product delivery is evidenced by warehouse shipping log as well
as a signed acknowledgement of receipt from the customers or a signed bill of lading from the third party trucking company and
title transfers upon shipment, based on free on board (“FOB”) warehouse terms; the sales price to the customer is
fixed upon acceptance of the signed purchase order or contract and there is no separate sales rebate, discount, or volume incentive.
When the Company recognizes revenue, no provisions are made for returns because, historically, there have been very few sales
returns and adjustments that have impacted the ultimate collection of revenues.
The Company markets
and distributes electronic products and general cargo for automobile use and follows Section 605-45-45 (formerly EITF 99-19) (“ASC
Section 605-45-45”) of the FASB Accounting Standards Codification for revenue recognition to report revenue gross as a principal
for its sales since the Company (1) acts as principal in the transaction, (2) takes title to the products, (3) has risks and rewards
of ownership, such as the risk of loss for collection, delivery, or returns, and (4) does not act as an agent or broker (including
performing services, in substance, as an agent or broker) with compensation on a commission or fee basis on its sales. The management
of the Company determined that the Company should report revenue based on the gross amount billed to a customer when considering
each of the following eight (8) indicators of gross revenue reporting listed in ASC Paragraph 605-45-45-4 through 605-45-45-14
as specified (1) The entity is the primary obligor in the arrangement — The Company signs a product sales agreement with
its customer and represents in writing that the Company is responsible for fulfillment, including the acceptability of the product(s)
or service(s) ordered or purchased by the customer; (2) The entity has general inventory risk (before customer order is placed
or upon customer return); (3) The entity has latitude in establishing price — The Company has reasonable latitude, within
economic constraints, to establish the exchange price with a customer for the product or service; (4) The entity changes the product
or performs part of the service— The Company developed a method for blending the raw materials in its manufacturing process,
through its proprietary technology, catalysts can be mixed with fuel and alcohols to become a finished product to be sold after
pumping and piping; (5) The entity has discretion in supplier selection — The Company has multiple suppliers for the products
ordered by a customer and discretion to select the supplier that will provide the product(s) or service(s) ordered by a customer;
(6) The entity is involved in the determination of product or service specifications — The Company determines the nature,
type, characteristics, or specifications of the product(s) or service(s) ordered by the customer; (7) The entity has physical
loss inventory risk of purchased inventories after customer order; and (8) The entity has credit risk — The Company is responsible
for collecting the sales price from its customer but must pay the amount owed to its supplier after the supplier performs, regardless
of whether the sales price is fully collected. Net sales of products represent the invoiced value of goods, net of value added
taxes (“VAT”). The Company is subject to VAT which is levied on all of the Company’s products at the rate of
5% on the invoiced value of sales. Sales or Output VAT is borne by customers in addition to the invoiced value of sales and Purchase
or Input VAT is borne by the Company in addition to the invoiced value of purchases to the extent not refunded for export sales.
Fair Value
of Financial Instruments
The fair values
of the Company’s accrued expenses and other current liabilities approximate their carrying values due to the relatively
short maturities of these instruments. The carrying value of the Company’s short and long term debt approximates fair value
based on management’s best estimate of the interest rates that would be available for similar debt obligations having similar
terms at the balance sheet date.
Impairment
of Long-Lived Assets
The Company accounts
for the impairment and disposition of long-lived assets in accordance with ASC 360, Property, Plant and Equipment. The Company
periodically evaluates long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying
value of an asset may not be recoverable. If the estimated future cash flows (undiscounted and without interest charges) from
the use of an asset were less than the carrying value, a write-down would be recorded to reduce the related asset to its estimated
fair value.
The assumptions
used by management in determining the future cash flows are critical. In the event these expected cash flows are not realized,
future impairment losses may be recorded.
Income Taxes
The Company accounts
for income taxes in accordance with ASC 740, Income Taxes, which requires that the Company recognize deferred tax liabilities
and assets based on the differences between the financial statement carrying amounts and the tax basis of assets and liabilities,
using enacted tax rates in effect in the years the differences are expected to reverse. Deferred income tax benefit (expense)
results from the change in net deferred tax assets or deferred tax liabilities. A valuation allowance is recorded when, in the
opinion of management, it is more likely than not that some or all of any deferred tax assets will not be realized.
The Company adopted
ASC 740-10-25, Income Taxes- Overall-Recognition, on January 1, 2007, which provides criteria for the recognition, measurement,
presentation and disclosure of uncertain tax position. The Company must recognize the tax benefit from an uncertain tax position
only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on
the technical merits of the position. The tax benefits recognized in the financial statements from such a position are measured
based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate resolution. The Company did
not recognize any additional liabilities for uncertain tax positions as a result of the implementation of ASC 740-10-25.
Net Income
(Loss) per Share
The Company calculates
its basic and diluted earnings per share in accordance with ASC 260. Basic earnings per share are calculated by dividing net income
by the weighted average number of common shares outstanding for the period. Diluted earnings per share are calculated by adjusting
the weighted average outstanding shares to assume conversion of all potentially dilutive warrants and options and convertible
securities.
Translation
Adjustment
The Company’s
financial statements are presented in the U.S. dollar ($), which is the Company’s reporting and functional currency. The
functional currency of the Company’s subsidiaries is TWD. Transactions in foreign currencies are initially recorded at the
functional currency rate prevailing at the date of transaction. Any differences between the initially recorded amount and the
settlement amount are recorded as a gain or loss on foreign currency transaction in the consolidated statements of operations.
Monetary assets and liabilities denominated in foreign currency are translated at the functional currency rate of exchange prevailing
at the balance sheet date. Any differences are taken to profit or loss as a gain or loss on foreign currency translation in the
statements of operations.
In accordance
with ASC 830, Foreign Currency Matters, the Company translates the assets and liabilities into U.S. dollars using the rate of
exchange prevailing at the balance sheet date and the statements of operations and cash flows are translated at an average rate
during the reporting period. Adjustments resulting from the translation from TWD into U.S. dollar are recorded in stockholders’
equity as part of accumulated other comprehensive income. The exchange rates used for the financial statements in accordance with
ASC 830, Foreign Currency Matters, are as follows:
Average
Rate for the three months ended on:
|
March
31, 2017
|
March
31, 2016
|
Taiwan
dollar (TWD)
|
1
|
1
|
United
States dollar ($)
|
0.0329
|
0.0302
|
|
|
|
Exchange
Rate at
|
March
31, 2017
|
March
31, 2016
|
Taiwan
dollar (TWD)
|
1
|
1
|
United
States dollar ($)
|
0.03098
|
0.0310
|
|
|
|
Comprehensive
Income (Loss)
Comprehensive
income (loss) includes accumulated foreign currency translation gains and losses with respect to the spun-off entities and the
operating entity in Taiwan.
Recently Issued
Accounting Pronouncements
In August 2014,
the FASB issued the FASB Accounting Standards Update No. 2014-15
“Presentation of Financial Statements—Going Concern
(Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (“ASU 2014-15”).
In connection
with preparing financial statements for each annual and interim reporting period, an entity’s management should evaluate
whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the entity’s ability
to continue as a going concern within one year after the date that the
financial statements are issued
(or within one year
after the date that the
financial statements are available to be issued
when applicable).
Management’s
evaluation should be based on relevant conditions and events that are known and reasonably knowable at the date that the
financial
statements are issued
(or at the date that the
financial statements are available to be issued
when applicable). Substantial
doubt about an entity’s ability to continue as a going concern exists when relevant conditions and events, considered in
the aggregate, indicate that it is probable that the entity will be unable to meet its obligations as they become due within one
year after the date that the financial statements are issued (or available to be issued). The term
probable
is used consistently
with its use in Topic 450, Contingencies.
When management
identifies conditions or events that raise substantial doubt about an entity’s ability to continue as a going concern, management
should consider whether its plans that are intended to mitigate those relevant conditions or events will alleviate the substantial
doubt. The mitigating effect of management’s plans should be considered only to the extent that (1) it is probable that
the plans will be effectively implemented and, if so, (2) it is probable that the plans will mitigate the conditions or events
that raise substantial doubt about the entity’s ability to continue as a going concern.
If conditions
or events raise substantial doubt about an entity’s ability to continue as a going concern, but the substantial doubt is
alleviated as a result of consideration of management’s plans, the entity should disclose information that enables users
of the financial statements to understand all of the following (or refer to similar information disclosed elsewhere in the footnotes):
|
a.
|
Principal
conditions or events that raised substantial doubt about the entity’s ability to
continue as a going concern (before consideration of management’s plans).
|
|
b.
|
Management’s
evaluation of the significance of those conditions or events in relation to the entity’s
ability to meet its obligations.
|
|
c.
|
Management’s
plans that alleviated substantial doubt about the entity’s ability to continue
as a going concern.
|
If conditions
or events raise substantial doubt about an entity’s ability to continue as a going concern, and substantial doubt is not
alleviated after consideration of management’s plans, an entity should include a statement in the footnotes indicating that
there is
substantial doubt about the entity’s ability to continue as a going
concern
within one year after
the date that the financial statements are issued (or available to be issued). Additionally, the entity should disclose information
that enables users of the financial statements to understand all of the following:
|
a.
|
Principal
conditions or events that raise substantial doubt about the entity’s ability to
continue as a going concern.
|
|
b.
|
Management’s
evaluation of the significance of those conditions or events in relation to the entity’s
ability to meet its obligations.
|
|
c.
|
Management’s
plans that are intended to mitigate the conditions or events that raise substantial doubt
about the entity’s ability to continue as a going concern.
|
The amendments
in this Update are effective for the annual period ending after December 15, 2016, and for annual periods and interim periods
thereafter. Early application is permitted.
Management does
not believe that any recently issued, but not yet effective accounting pronouncements, when adopted, will have a material effect
on the accompanying financial statements.
Note 3 –
Going Concern
There are no assurances
that the Company will be able to either (1) achieve a level of revenues adequate to generate sufficient cash flow from operations;
or (2) obtain additional financing through either private placement, public offerings and/or bank financing necessary to support
the Company’s working capital requirements. To the extent that funds generated from any private placements, public offering
and/or bank financing are insufficient to support the Company’s working capital requirements, the Company will have to raise
additional working capital from additional financing. No assurance can be given that additional financing will be available, or
if available, will be on terms acceptable to the Company. If adequate working capital is not available, the Company may not be
able continue its operations.
These conditions
raise substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include
any adjustments relating to the recoverability and classification of asset carrying amounts or the amount and classification of
liabilities that might be necessary should the Company be unable to continue as a going concern.
Note 4 – Accounts Receivable
Accounts receivable at March 31, 2017
and December 31, 2016 consisted of the following:
|
|
|
March
31, 2017
|
|
|
|
December
31, 2016
|
|
|
|
|
(Unaudited)
|
|
|
|
(Audited)
|
|
Accounts receivable
|
|
$
|
3,992,444
|
|
|
$
|
1,418,999
|
|
Allowance for doubtful accounts
|
|
|
87,590
|
|
|
|
87,590
|
|
Total:
|
|
$
|
3,904,854
|
|
|
$
|
1,331,409
|
|
In January 2017,
the company has entered into a license and distribution agreement with Wealthy Link Technology Corporation, whare the latter shall
obtain license under the company’s software and related services for the purposes of re-selling and distribution. As of
March 31, 2017, the accounts receivable balance from Wealthy Link Technology Corporation was $2,818,000.
Note 5 –
Intangible Assets
On 1/1/2016,
the Company purchased the DMS technology from Xinyahang Gufen Youxian Gongsi(“Xinyahang”) for $128,176 and 500,000
shares of common stock of AJGH (OTCQB). Also on 10/1/2016, the company entered into two year agreement with Xinyahang to provide
design service for the DMS system. The design price was $50,172.
Intangible assets,
stated at cost, less accumulated depreciation at March 31, 2017 and December 31, 2016 consisted of the following:
|
|
March 31, 2017
|
|
December 31, 2016
|
|
|
(Unaudited)
|
|
(Audited)
|
Intangible
assets
|
|
|
178,348
|
|
|
|
178,348
|
|
Total
:
|
|
|
178,348
|
|
|
|
178,348
|
|
Less:
Accumulated depreciation
|
|
|
(41,700
|
)
|
|
|
(32,206
|
)
|
Total
|
|
$
|
136,648
|
|
|
$
|
146,142
|
|
For
the three months ended March 31, 2017 and 2016, the Company recorded amortization expense of $9,494 and $0, respectively.
Note 6 – Property, Plant and
Equipment
Property, plant and equipment, stated
at cost, less accumulated depreciation at March 31, 2017 and December 31, 2016 consisted of the following:
|
|
|
March
31, 2017
|
|
|
|
December
31, 2016
|
|
|
|
|
(Unaudited)
|
|
|
|
(Audited)
|
|
Land
|
|
$
|
—
|
|
|
$
|
—
|
|
Buildings
|
|
|
—
|
|
|
|
—
|
|
Office equipment
|
|
|
9,435
|
|
|
|
9,435
|
|
Less: Accumulated depreciation
|
|
|
882
|
|
|
|
545
|
|
Total:
|
|
$
|
8,553
|
|
|
$
|
8,890
|
|
For the three months ended March 31,
2017 and 2016, the Company recorded depreciation expense of $882 and $0, respectively.
Note 7 – Prepayments and other
current assets
|
|
March 31, 2017
|
|
December 31, 2016
|
|
|
(Unaudited)
|
|
(Audited)
|
Advance on purchase
|
|
$
|
—
|
|
|
$
|
—
|
|
Prepayments
|
|
|
—
|
|
|
|
1,032
|
|
|
|
$
|
—
|
|
|
$
|
1,032
|
|
Note 8 – Borrowing
|
|
|
March
31, 2017 (Unaudited)
|
|
|
|
Term
|
|
|
|
Int.
Rate/
Year
|
|
Cathay United Bank
|
|
|
52,640
|
|
|
|
|
|
|
|
5.28
|
%
|
Long term debt: amount payable within 1 year
|
|
|
|
|
|
|
|
|
|
|
|
|
First Commercial Bank Ltd.
|
|
|
36,580
|
|
|
|
|
|
|
|
5.07
|
%
|
Taiwan Business Bank Ltd.
|
|
|
52,640
|
|
|
|
|
|
|
|
3.60
|
%
|
Bank of Panshin
|
|
|
46,332
|
|
|
|
|
|
|
|
3.67
|
%
|
Sunny Bank Ltd.
|
|
|
200,730
|
|
|
|
|
|
|
|
3.49
|
%
|
Total:
|
|
$
|
388,923
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December
31, 2016 (Audited)
|
|
|
|
Term
|
|
|
|
Int.
Rate/
Year
|
|
Guo Tai Shi Hua Bank
|
|
|
59,791
|
|
|
|
Dec
18,2016 to
Dec 18, 2017.
|
|
|
|
5.28
|
%
|
Long term debt: amount payable within 1 year
|
|
|
|
|
|
|
|
|
|
|
|
|
First Commercial Bank Ltd.
|
|
|
45,047
|
|
|
|
Dec
30,2016 to
Dec 30, 2017
|
|
|
|
5.07
|
%
|
Taiwan Business Bank Ltd.
|
|
|
56,260
|
|
|
|
Dec
25,2016 to
Dec 24, 2017.
|
|
|
|
3.60
|
%
|
Bank of Panshin
|
|
|
45,829
|
|
|
|
Dec
10,2016 to
Dec 10, 2017.
|
|
|
|
3.67
|
%
|
Sunny Bank Ltd.
|
|
|
220,241
|
|
|
|
Dec
21,2016 to
Dec 21, 2017.
|
|
|
|
3.49
|
%
|
Total:
|
|
$
|
427,168
|
|
|
|
|
|
|
|
|
|
The long term
debt should be repaid as equal principal by month. The long term debt -the term less than 1 year represented the amount should
be repaid within 1 year.
NOTE 9 – RELATED PARTY TRANSACTIONS
The total amount
advance from related parties consisted of the advance from shareholders for the investment, working capital and the expense. The
balance was $136,541 and $268,141 as of March 31, 2017 and December 31, 2016, respectively.
NOTE 10 – LONG TERM DEBT
|
|
|
March
31, 2017 (Unaudited)
|
|
|
Term
|
|
|
Int.
Rate/
Year
|
|
Taiwan Business Bank Ltd.
|
|
|
131,600
|
|
|
Sept 25, 2015 to Sept 25, 2020.
|
|
|
3.60
|
%
|
Bank of Panshin
|
|
|
13,168
|
|
|
June 10, 2015 to June 10, 2018.
|
|
|
3.67
|
%
|
Sunny Bank Ltd.
|
|
|
161,983
|
|
|
Jan 21, 2015 to August 5, 2019.
|
|
|
3.49
|
%
|
First Commercial Bank Ltd.
|
|
|
119,144
|
|
|
Jan 30, 2016 to Jan 30, 2021.
|
|
|
5.07
|
%
|
Total
|
|
$
|
425,895
|
|
|
|
|
|
|
|
|
|
|
December
31, 2016 (Audited)
|
|
|
Term
|
|
|
Int.
Rate/
Year
|
|
Taiwan Business Bank Ltd.
|
|
|
129,620
|
|
|
Sept 25, 2015 to Sept 25, 2020.
|
|
|
3.60
|
%
|
Sunny Bank Ltd.
|
|
|
8,507
|
|
|
Jan 21, 2015 to Jan 21, 2018.
|
|
|
3.49
|
%
|
Bank of Panshin
|
|
|
21,107
|
|
|
June 10, 2015 to June 10, 2018.
|
|
|
3.67
|
%
|
Sunny Bank Ltd.
|
|
|
164,023
|
|
|
August 5, 2016 to August 5, 2019.
|
|
|
3.49
|
%
|
First Commercial Bank Ltd.
|
|
|
110,200
|
|
|
Jan 30, 2016 to Jan 30, 2021.
|
|
|
5.07
|
%
|
Total
|
|
$
|
433,457
|
|
|
|
|
|
|
|
NOTE 11 – TAXES PAYABLE
|
|
March
31, 2017
|
|
December
31, 2016
|
|
|
(Unaudited)
|
|
(Audited)
|
Income tax payable
|
|
$
|
10,499
|
|
|
$
|
3,204
|
|
Value added tax payable
|
|
|
—
|
|
|
|
213
|
|
Total
:
|
|
$
|
10,499
|
|
|
$
|
3,417
|
|
NOTE 12 – INCOME TAXES
The Company did
not provide any current or deferred U.S. federal income tax provision or benefit for any of the periods presented because the
Company has experienced operating losses for U.S. federal income tax purposes since inception. When it is more likely than not
that a tax asset cannot be realized through future income the Company must allow for this future tax benefit. The operating subsidiary
is organized and located in the Taiwan and does not conduct any business in the United States. Taxation on profits earned in the
Taiwan has been calculated on the estimated assessable profits for the year at the rates of taxation prevailing in the Taiwan
where the Company operates after taking into account the benefits from any special tax credits or “tax holidays” allowed
in the county of operations.
In accordance
with the relevant tax laws in the Taiwan, the Company statutory rate were 17% and 17% for the quarter ended March 31, 2017 and
year ended December 31, 2016, respectively.
The components
of the income tax (benefit) expense are as follows:
|
|
The three
months ended
March 31, 2017
(Unaudited)
|
|
The year
ended
December 31, 2016
(Audited)
|
Current provision
|
|
$
|
7,740
|
|
|
$
|
3,204
|
|
Deferred provision (benefit)
|
|
|
—
|
|
|
|
—
|
|
Total:
|
|
$
|
7,740
|
|
|
$
|
—
|
|
NOTE 13 –
COMMON STOCK
On April 7, 2014,
the shareholder, Chu Li An contributed $165,500 capital to the Company.
On June 30, 2015,
the Company made a reverse split of its common stock at the rate of 1 for 1500.
On July 10, 2015,
the Company issued 50,000,000 shares with a par value of $0.001 per share for cash. The cash was finally offset with debt cancel
due to shareholder.
On July 10, 2015,
the Company issued 800,000 shares with a par value of $0.001 per share in exchange for consulting services.
On August 6, 2015,
the Company issued 5,000,000 shares with a par value of $0.001 per share and 2,500,000 shares with a par value of $0.01 per share
for cash. The cash was finally offset with debt cancel due to shareholder.
On April 4, 2016,
the Company issued 5,000 shares to two investors with a par value of $4.00 per share for cash.
On May 10, 2016,
the Company issued 3,333 shares to director Chu,Li-An, in exchange for cancellation of debt.
On May 10, 2016,
the Company issued 2,000 shares to an investor with a par value of $4.00 per share for cash.
On May 10, 2016,
the Company issued 3,000 shares to an investor with a par value of $5.00 per share for cash.
On May 10, 2016,
the Company issued 21,000 shares to an investor with a par value of $4.76 per share for cash.
On June 28, 2016,
the Company issued 1,250 shares to an investor with a par value of $2.40 per share for cash.
On July 12, 2016,
the Company issued 500,000 shares to a Xinyahang Electronics Co. Ltd. Taiwan, as part of the payment for technology transfer and
purchase of DMS platform technology.
On July 12, 2016,
the Company issued total 1600 shares to six investors with a par value of $10.00 per share for cash.
On July 12, 2016,
the Company issued 700 shares to an investor with a par value of $12.00 per share for cash.
On July 15, 2016,
the Company issued 2,000 shares to consultant Kuo, Yu-chieh to offset for consulting fees payable, no cash payment received.
On August 8, 2016,
the Company issued 200 shares to an investor with a par value of $14.00 per share for cash.
On September 6,
2016, the Company issued 2400 shares to an investor with a par value of $14.00 per share for cash.
On October 31,
2016, the Company issued 400 shares to three investors with a par value of $14 per share for Cash.
The
Company’s capitalization is 394,500,000 common shares with a par value of $0.001 per share. There are a total
of 58,985,937 and 58,985,937 common shares issued and outstanding at March 31, 2017 and December 31, 2016. No preferred
shares have been authorized or issued.
NOTE 14 –
FOREIGN OPERATIONS
Operations
Substantially
all of the Company’s operations are carried out and all of its assets are located in the Taiwan. Accordingly, the Company’s
business, financial condition and results of operations may be influenced by the political, economic and legal environments in
the Taiwan. The Company’s business may be influenced by changes in governmental policies with respect to laws and regulations,
monetary policies, anti-inflationary measures, currency fluctuation and remittances and methods of taxation, among other things.
Dividends and
Reserves
Under the laws
of the Taiwan, net income after taxation can only be distributed as dividends after appropriation has been made for the following:
(i) cumulative prior years’ losses, if any; (ii) allocations to the “Statutory Surplus Reserve” of at least
10% of net income after tax, as determined under Taiwan accounting rules and regulations, until the fund amounts to 50% of the
Company’s registered capital; (iii) allocations of 5-10% of income after tax, as determined under Taiwan accounting rules
and regulations, to the Company’s “Statutory Common Welfare Fund”, which is established for the purpose of providing
employee facilities and other collective benefits to employees in PRC; and (iv) allocations to any discretionary surplus reserve,
if approved by stockholders.
As of March 31,
2017, the Company had no Statutory Surplus Reserve and the Statutory Common Welfare Fund established and segregated in retained
earnings.
NOTE 15 - COMMITMENT
AND CONTINGENCIES
The Company had bank loans. Based on
the contract agreement, the future minimum repayments required for the coming years are as follows:
|
Periods
ending March 31:
|
|
|
|
|
|
|
2018
|
|
|
$
|
388,922
|
|
|
2019
|
|
|
|
208,098
|
|
|
2020
|
|
|
$
|
145,492
|
|
|
2021
|
|
|
$
|
72,305
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
$
|
814,817
|
|
The Company did not have other significant
capital commitments or significant guarantees as of March 31, 2017, respectively.
NOTE 16 –SUBSEQUENT EVENTS
The
company is under negotiations with Nanjing City, China government to provide the government with securities management hardware
and all related software and other management services. The initial orders shall be for 300,000 units, and could add up to 10,000,000
units for long-term.
We have also initiated
our new mobile UBI apps and its field testing has begun. So far, the testing is progressing very positively, generating the quality
of accelerometer data needed for accurate scoring
.
We have also begun establishing
connections with various insurance companies, vehicle fleet companies, and motorists for further testing and introduction of our
new mobile UBI apps.