UNITED
STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
SCHEDULE
14A
PROXY
STATEMENT PURSUANT TO SECTION 14(A) OF THE
SECURITIES
EXCHANGE ACT OF 1934
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Filed by the Registrant
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Filed by a Party
other than the Registrant
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Check
the appropriate box:
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Preliminary
Proxy Statement
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Confidential, For
Use of the Commission Only (As Permitted by Rule 14a-6(e)(2))
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Definitive Proxy
Statement
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Definitive Additional
Materials
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Soliciting Material
Pursuant to § 240.14a-12
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VITAXEL
GROUP LIMITED
(Name
of Registrant as Specified In Its Charter)
(Name
of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment
of Filing Fee (Check the appropriate box):
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No
fee required
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Fee
computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
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(1)
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Title of each class
of securities to which transaction applies:
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(2)
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Aggregate number
of securities to which transaction applies:
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(3)
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Per unit price
or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing
fee is calculated and state how it was determined):
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(4)
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Proposed maximum
aggregate value of transaction:
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(5)
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Total fee paid:
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Fee
paid previously with preliminary materials.
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Check box if any
part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of
its filing.
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(1)
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Amount Previously
Paid:
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(2)
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Form, Schedule
or Registration Statement No.:
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(3)
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Filing Party:
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(4)
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Dated Filed:
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VITAXEL
GROUP LIMITED
NOTICE
OF ANNUAL MEETING OF STOCKHOLDERS
An
Annual Meeting of Stockholders (the “Meeting”) of Vitaxel Group Limited (the “Company”) will be held on
July 27, 2018, at 10:00 a.m. at the offices of The Crone Law Group, 9665 Wilshire Boulevard, Suite 895, Beverly Hills, California
90212. At the Meeting the stockholders of the Company will be requested to vote on the following matters:
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1.
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to
elect five directors to the Company’s Board of Directors to hold office until the next annual meeting;
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2.
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to
authorize the amendment of our Articles of Incorporation for the purpose of increasing the authorized capital of the Company
from seventy million (70,000,000) shares of common stock, $0.0001 par value per share, to two hundred million (200,000,000)
shares of common stock, $0.0001 par value per share;
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3.
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to approve a non-binding advisory resolution
supporting the compensation of our executive officers;
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4.
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to approve a non-binding advisory vote
regarding the frequency of future non-binding advisory votes relating to future named executive officer compensation; and
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5.
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any other matters or other business as may properly
come up for vote at the Meeting or any adjournments or postponements thereof
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The
foregoing items of business are more fully described in the Proxy Statement accompanying this notice.
The
Board of Directors has fixed the close of business on June 6, 2018 as the record date (the “Record Date”) for the
determination of stockholders entitled to notice of, and to vote at, the Meeting and at any adjournment thereof. If you are a
record holder on the Record Date, you are eligible to vote with respect to these matters either personally or at the Meeting.
All
stockholders are cordially invited to attend the Meeting in person. Your vote is important. Your shares can be voted at the Meeting
only if you are present in person or represented by proxy. If you are not planning to attend the Meeting, we urge you to authorize
your proxy in advance. You may authorize your vote by proxy over the Internet through Broadridge Investor Communications their
website, https: www.proxyvote.com by clicking on the “Proxy Voting/Proxy Material Request/Internet Access” button.
If you complete your proxy electronically over the Internet you do not need to return a proxy card. If you hold your shares beneficially
in street name through a nominee, you should follow the instructions you receive from your nominee to vote these shares.
WHETHER
OR NOT YOU PLAN ON ATTENDING THE MEETING IN PERSON, PLEASE VOTE AS PROMPTLY AS POSSIBLE TO ENSURE THAT YOUR VOTE IS COUNTED.
VITAXEL
GROUP LIMITED
Wisma
Ho Wah Genting, No. 35
Jalan
Maharajalela, 50150 Kuala Lumpur, Malaysia
PROXY
STATEMENT FOR THE COMPANY’S
ANNUAL
MEETING OF STOCKHOLDERS
TO
BE HELD ON JULY 27, 2018
QUESTIONS
AND ANSWERS ABOUT THESE PROXY MATERIALS
These
questions do not, and are not intended to, address all the questions that may be important to you. You should carefully read the
entire Proxy Statement as well as the documents incorporated by reference in this Proxy Statement.
Why
am I receiving these proxy materials?
The
proxy materials describe the proposals on which our Board of Directors would like you, as a stockholder, to vote in favor of at
the Meeting. It provides you with information on these proposals so that you can make an informed decision. We intend to mail
a Notice of Internet Availability of Proxy Materials (the “Notice”) to all stockholders of record entitled to vote
at the Meeting.
Who
can vote at the Meeting?
Stockholders
who owned shares of common stock of the Company, par value $0.0001 per share (the “Common Stock”), as of the close
of business on June 6, 2018 (the “Record Date”), may attend and vote at the Meeting. Each share held on the Record
Date is entitled to one vote. There were 54,087,903 shares of Common Stock outstanding as of the Record Date.
What
is the proxy card?
The
proxy card enables you to appoint the person named therein as your representative to vote your shares at the Meeting, and to provide
specific instructions as to how you wish your shares to be voted. By completing and returning the proxy card, you are authorizing
this person to vote your shares at the Meeting in accordance with your instructions on the proxy card. By providing specific voting
instructions for each proposal identified on the proxy card, your shares will be voted in accordance with your wishes whether
or not you attend the Meeting. Even if you plan to attend the Meeting, we suggest that you complete and return your proxy card
before the Meeting date just in case your plans change. If a proposal comes up for vote at the Meeting that is not on the proxy
card, your appointed representative will vote your shares, under your proxy, according to their best judgment.
What
matters am I voting on?
You
are being asked to vote on (i) the election of five directors to the Company’s Board of Directors, (ii) the amendment to
our Articles of Incorporation to increase the authorized capital of the Company from seventy million (70,000,000) shares of common
stock to two hundred million (200,000,000) shares of common stock, (iii) the approval of a non-binding advisory resolution supporting
the compensation of our officers and (iv) the approval of a non-binding advisory vote regarding the frequency of future non-binding
advisory votes relating to future named executive officer compensation.
What
is the difference between holding shares as a stockholder of record and holding shares as a beneficial owner?
Most
of our stockholders hold their shares in an account at a brokerage firm, bank, broker dealer or other nominee holder, rather than
holding share certificates in their own name. As summarized below, there are some distinctions between shares held of record and
those owned beneficially.
Stockholder
of Record
If
on the Record Date, your shares were registered directly in your name with our transfer agent, Globex Transfer, LLC, then you
are a stockholder of record who may vote at the Meeting. As the stockholder of record, you have the right to direct the voting
of your shares by returning the enclosed proxy card to us or to vote in person at the Meeting. Whether or not you plan to attend
the Meeting, please complete, date and sign the enclosed proxy card and provide specific voting instructions to ensure that your
shares will be voted at the Meeting.
Beneficial
Owner
If
on the Record Date, your shares were held in an account at a brokerage firm, bank, broker-dealer or other similar organization,
you are considered the beneficial owner of shares held “in street name”, and the Notice is being forwarded to you
by that organization. The organization holding your account is considered the stockholder of record for purposes of voting at
the Meeting. As the beneficial owner, you have the right to instruct your nominee holder on how to vote your shares and to attend
the Meeting. However, since you are not the stockholder of record, you may not vote these shares in person at the Meeting unless
you receive a valid proxy from your brokerage firm, bank, broker dealer or other nominee holder. To obtain a valid proxy, you
must make a special request of your brokerage firm, bank, broker dealer or other nominee holder. If you do not make this request,
you can still vote by completing your proxy card and delivering the proxy card to your nominee holder; however, you will not be
able to vote in person at the Meeting.
How
do I vote?
A.
Stockholders of record (also called registered stockholders) may vote by any of the
following methods:
1.
By mail: if you request or receive proxy materials by mail, you may vote by completing the proxy card with your voting instructions
and returning it in the postage-paid envelope provided.
If
we receive your proxy card prior to the Meeting date and you have marked your voting instructions on the proxy card, your shares
will be voted:
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as
your proxy representative may determine in their discretion with respect to any other matters properly presented for a vote
at the Meeting.
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If
you return a signed proxy card, but do not provide specific voting instructions for each proposal, your shares will be voted by
your proxy representative in the manner recommended by the Chairman of the Board of Directors on all matters presented in
the Proxy Statement and as the proxy representative may determine in his discretion with respect to any other matters properly
presented for a vote at the Meeting.
2.
By Internet: read the proxy materials and follow the instructions provided in the Notice.
3.
By toll-free telephone: read the proxy materials and call the toll-free number provided for in the proxy voting instructions.
4.
In person at the Meeting.
B. Beneficial
Stockholders (shares held in “street name”). If your shares are held in the name of a broker, bank, broker dealer
or other nominee holder of record, follow the voting instructions you receive from the holder of record to vote your shares. You
must provide specific voting instructions to your broker, bank, broker dealer or other nominee holder of record in order for your
shares to be voted in the proposal for election of directors.
If
you are a beneficial owner of shares held in street name, you may vote by any of the following methods:
1.
By Mail: If you request or receive printed copies of the proxy materials by mail, you may vote by completing the proxy card with
your voting instructions and returning it to your broker, bank, broker dealer or other nominee holder of record prior to the Meeting.
2.
By Internet. You may vote via the Internet by following the instructions provided in the Notice mailed to you by your nominee
holder.
3.
By toll-free telephone. You may vote by calling the toll-free telephone number found in the proxy voting instructions.
4.
In Person. If you are a beneficial owner of shares held in street name and you wish to vote in person at the Meeting, you must
obtain a valid proxy from the nominee organization that holds your shares.
Why
did I receive a Notice in the mail regarding the Internet availability of proxy materials instead of a full set of proxy materials?
Pursuant
to rules adopted by the Securities and Exchange Commission (“SEC”), the Company has elected to provide access to its
proxy materials over the Internet. Accordingly, the Company is sending such Notice to the Company’s stockholders of record
and beneficial owners. All stockholders will have the ability to access the proxy materials on the website referred to in the
Notice or request to receive a printed set of the proxy materials. Instructions on how to access the proxy materials over the
Internet or to request a printed copy may be found in the Notice. In addition, stockholders may request to receive proxy materials
in printed form by mail or electronically by email on an ongoing basis. The Board encourages you to take advantage of the availability
of the proxy materials on the Internet.
What
does it mean if I receive more than one proxy card?
If
your shares are registered differently or are held in more than one account, you will receive more than one proxy card. Please
sign and return all proxy cards to ensure that all of your shares are voted.
May
I revoke my proxy?
Any
stockholder giving a proxy has the power to revoke it at any time before it is exercised. The proxy may be revoked by filing an
instrument of revocation or a duly executed proxy bearing a later date with the Company’s Chief Financial Officer at our
principal executive offices located at Wisma Ho Wah Genting, No. 35, Jalan Maharajalela, 50150, Kuala Lumpur, Malaysia. The proxy
may also be revoked by attending the meeting and voting in person. If it is not revoked, the proxy will be voted at the meeting
in accordance with the stockholder’s instructions indicated on the proxy card.
If no instructions are indicated, the
proxy will be voted in accordance with the judgment of the proxy representation with respect to all matters brought before the
Meeting or any adjournments thereof.
Will
my shares be voted if I do not sign and return my proxy card?
If
your shares are held in street name or in your name and you do not sign and return your proxy card, your shares will not be voted
unless you vote in person at the Meeting.
What
is a quorum and what constitutes a quorum?
A
“quorum” is the number of shares that must be present, in person or by proxy, in order for business to be conducted
at the Meeting. The required quorum for the Meeting is the presence, in person or by proxy, of the holders of a majority of the
shares entitled to vote as of the Record Date. As of such date, there were 54,087,903 shares issued and outstanding. Accordingly,
a quorum will be present for the Meeting if an aggregate of at least 27,043,952 shares are present in person or by proxy at the
Meeting.
How
many votes are required to approve the nominees to the Board?
Directors
are elected by a plurality of the votes cast in the election. The five nominees for director who receive the most votes will be
elected. This is called a “plurality”. Any shares that are not voted, whether by abstention, broker non-votes or otherwise,
will not affect the election of directors, except to the extent that the failure to vote for an individual will result in another
individual receiving a larger proportion of the votes cast. If you indicate “withhold authority to vote” for a particular
nominee on your proxy card, your vote will not count either for or against the nominee.
How
many votes are required to approve the amendment to our Articles of Incorporation to increase the authorized share capital?
The
approval of an amendment to our Articles of Incorporation to increase the authorized share capital from 70,000,000 shares to 200,000,000
shares requires the affirmative vote by the holders of a majority of shares that are present in person or by proxy at the Meeting,
so long as a quorum is established at the Meeting. If you abstain from voting, your abstention will not count as a vote cast for
or against the proposal.
How
many votes are required to approve the non-binding proposals to approve the advisory resolution (i) supporting the compensation
of our executive officers and (ii) regarding the frequency of future non-binding advisory votes relating to future named executive
officer compensation?
The
approvals of both non-binding proposals require the affirmative vote by the holders of a majority of shares that are present in
person or by proxy at the Meeting, so long as a quorum is established at the Meeting. If you abstain from voting, your abstention
will not count as a vote cast for or against the proposal.
With
respect to both of these proposals, the advisory votes in respect to executive compensation will neither be binding on the Company
or Board of Directors, nor will they create or imply any change in the fiduciary duties of or impose any additional fiduciary
duties on, the Company or the Board of Directors. However, the Board of Director values the opinions expressed by the stockholders
in these advisory votes and will consider the outcome of these votes in determining its compensation policies.
Where
do I find the voting results of the Meeting?
We
plan to announce preliminary voting results at the Meeting. We will also file a Current Report on Form 8-K with the Securities
and Exchange Commission within four business days of the Meeting disclosing the final voting results.
Who
is paying for this proxy’s solicitation process?
The
enclosed proxy is solicited by the Board on behalf of the Company, and the Company is paying for the entire cost of the proxy
solicitation process. Copies of the proxy material will be given to banks, brokerage houses and other institutions that hold shares
that are beneficially owned by others. Upon request, we will reimburse these banks, brokerage houses and other institutions for
their reasonable out-of-pocket expenses in forwarding these proxy materials to the stockholders who are the beneficial owners.
Original solicitation of proxies by mail may be supplemented by telephone, facsimile or personal solicitation by our directors,
officers, or other employees.
Who
can help answer my questions?
You
can contact our corporate headquarters, at (603) 2143-2889, or send a letter to: Vitaxel Group Limited, Wisma Ho Wah Genting,
No. 35, Jalan Maharajalela, 50150, Kuala Lumpur, Malaysia, Attention: Chief Financial Officer, with any questions about proposals
described in this Proxy Statement or how to execute your vote.
VITAXEL
GROUP LIMITED
Wisma
Ho Wah Genting, No. 35
Jalan
Maharajalela, 50150 Kuala Lumpur, Malaysia
PROXY
STATEMENT
This
Proxy Statement is furnished in connection with the solicitation of proxies by the Board of Directors of Vitaxel Group Limited
(the “Company”), for use at the Annual Meeting of Stockholders of the Company (the “Meeting”) to be held
at The Crone Law Group, 9665 Wilshire Boulevard, Suite 895, Beverly Hills, California 90212, or any adjournment thereof.
At
the Meeting the stockholders of the Company will be requested to vote on the following matters:
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1.
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to
elect five directors to the Company’s Board of Directors to hold office until the next annual meeting;
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2.
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to
authorize the amendment of our Articles of Incorporation for the purpose of increasing the authorized capital of the Company
from seventy million (70,000,000) shares of common stock, $0.0001 par value per share, to two hundred million (200,000,000)
shares of common stock, $0.0001 par value per share;
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3.
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to approve a non-binding advisory resolution
supporting the compensation of our executive officers;
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4.
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to approve a non-binding advisory vote
regarding the frequency of future non-binding advisory votes relating to future named executive officer compensation;
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5.
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any other matters or other business as may properly
come up for vote at the Meeting or any adjournments or postponements thereof
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The
foregoing items of business are more fully described in the Proxy Statement accompanying this notice.
The
Board of Directors has fixed the close of business on June 6, 2018 as the record date (the “Record Date”) for the
determination of stockholders entitled to notice of, and to vote at, the Meeting and at any adjournment thereof. If you are a
record holder on the Record Date, you are eligible to vote with respect to these matters either personally or at the Meeting.
All
stockholders are cordially invited to attend the Meeting in person. Your vote is important. Your shares can be voted at the Meeting
only if you are present in person or represented by proxy. If you are not planning to attend the Meeting, we urge you to authorize
your proxy in advance. You may authorize your vote by proxy over the Internet through Broadridge Investor Communications at their
website, https: www.proxyvote.com, by clicking on the “Proxy Voting/Proxy Material Request/Internet Access” button.
If you complete your proxy electronically over the Internet you do not need to return a proxy card. If you hold your shares beneficially
in street name through a nominee, you should follow the instructions you receive from your nominee to vote these shares.
Solicitation
of proxies may be made by directors, officers and other employees of the Company. No additional compensation will be paid for
any such services. This solicitation of proxies is being made by the Board of Directors of the Company. Whether or not you expect
to attend the Meeting in person, and if you request and receive proxy materials by mail, please return your executed proxy card
in the enclosed envelope and the shares represented thereby will be voted in accordance with your instructions.
This
proxy statement and the accompanying form of proxy are being mailed to stockholders on or about June
__
,
2018.
Important
Notice Regarding the Availability of Proxy Materials for the Annual Meeting of Stockholders to be Held on July 27, 2018:
Copies
of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2017, as filed with the Securities and
Exchange Commission (“SEC”), will be furnished without charge to any stockholder upon written request to Vitaxel Group,
Limited, Wisma Ho Wah Genting, No. 35, Jalan Maharajalela, 50150, Kuala Lumpur, Malaysia, Attention: Chief Financial Officer.
This proxy statement and the Company’s 2017 Annual Report on Form 10-K for the fiscal year ended December 31, 2017, as amended,
are available on the SEC’s website at
www.sec.gov
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REVOCABILITY
OF PROXY
Any
stockholder executing a proxy that is solicited has the power to revoke it prior to the voting of the proxy. Revocation may be
made by attending the Meeting and voting the shares of stock in person, or by delivering to the Chief Financial Officer of the
Company at the principal office of the Company prior to the Meeting a written notice of revocation or a later-dated, properly
executed proxy. If it is not revoked, the proxy will be voted at the meeting in accordance with the stockholder’s instructions
indicated on the proxy card.
RECORD
DATE
Stockholders
of record at the close of business on June 6, 2018 (the “Record Date”) will be entitled to vote at the Meeting.
INTERNET
AND ELECTRONIC AVAILABILITY OF PROXY MATERIALS
Under
new rules adopted by the United States Securities and Exchange Commission (the “SEC”), the Company is making this
Proxy Statement and the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2017 available on the
Internet instead of mailing a printed copy of these materials to each stockholder. Stockholders who received a Notice of Internet
Availability of Proxy Materials (the “Notice”) by mail will not receive a printed copy of these materials other than
as described below. Instead, the Notice contains instructions as to how stockholders may access and review all of the important
information contained in the materials on the Internet, including how stockholders may submit proxies by telephone or over the
Internet.
If
you received the Notice by mail and would prefer to receive a printed copy of the Company’s proxy materials, please follow
the instructions for requesting printed copies included in the Notice.
ACTION
TO BE TAKEN UNDER PROXY
In
the case of the Company receiving a signed proxy (“Proxy”) from a registered stockholder containing voting instructions
“FOR” the election of each of the nominated directors, “FOR” the amendment increasing the share capital,
“FOR” the non-binding resolution supporting the compensation of our management, and “FOR” one year as the
frequency of future non-binding advisory votes relating to future named executive officer compensation, the person named in the
Proxy (Lim Wee Kiat) (the “Proxy Representative”), will vote:
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(1)
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FOR
the election of each of the persons named herein as nominees for directors of the Company;
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(2)
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FOR
the amendment to the Articles of Incorporation increasing the number of shares of common
stock which the Company is authorized to issue to two hundred million (200,000,000) shares;
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(3)
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FOR
the non-binding advisory resolution supporting the compensation of our named executive
officers; and
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(4)
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FOR
“one year” as the frequency of future non-binding advisory votes relating
to future named executive officer compensation; and
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(5)
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According
to his judgment on the transaction of such matters or other business as may properly
come up for vote at the Meeting or any adjournments or postponements thereof.
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Please
note that you do not have to vote FOR all the directors; you can vote for each director separately and independent of your vote
for the other directors.
If
the giver of the Proxy provides voting instructions to cast a vote AGAINST any or all of the nominated directors or any of the
proposals, the Proxy Representative will vote such shares accordingly. If you ABSTAIN from voting on a proposal, your abstention
will not count as a vote FOR or AGAINST the proposal. Also, in the case where no specific voting instructions are given to the
Proxy Representative, the Proxy Representative will use his judgment to vote on any other items properly submitted for a vote
at the Meeting.
VOTING
SECURITIES
The
number of shares of Common Stock issued and outstanding as of the Record Date for the Meeting was an aggregate of 54,087,903 shares
issued and outstanding. Accordingly, a quorum will be present for the Meeting if an aggregate of at least 27,043,952 shares are
present in person or by proxy at the Meeting.
A
majority of the outstanding shares present in person or represented by proxy will constitute a “quorum” at the Meeting.
The five nominees for director who receive the most votes will be elected. This is called a “plurality. If you do not vote
for a particular nominee, your vote will not count either for or against such nominee. Nevada law provides that directors be elected
by the plurality of votes cast at a meeting of stockholders except as otherwise provided in the Company’s Articles of Incorporation
or By-Laws. The vote required for the approval to amend the Company’s Articles of Incorporation require approval by an affirmative
majority of the votes cast. The vote required for approval of the two non-binding “say on pay” proposals is an affirmative
majority of the votes cast.
Abstentions
from voting and broker non-votes will operate as neither a vote “FOR” nor a vote “AGAINST” a nominee for
director. Votes on all matters will be counted by a duly appointed inspector of election, whose responsibilities are to ascertain
the number of shares outstanding and the voting power of each, determine the number of shares represented at the Meeting and the
validity of proxies and ballots, count all votes and report the results to the Company.
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The
following table lists, as of May 29, 2018, the number of shares of common stock beneficially owned by (i) each person, entity
or group (as that term is used in Section 13(d)(3) of the Securities Exchange Act of 1934) known to the Company to be the beneficial
owner of more than 5% of the outstanding Common Stock; (ii) each officer and director of the Company; and (iii) all officers and
directors as a group. Information relating to beneficial ownership of Common Stock by our principal stockholders and management
is based upon information furnished by each person using “beneficial ownership” concepts under the rules of the Securities
and Exchange Commission. Under these rules, a person is deemed to be a beneficial owner of a security if that person directly
or indirectly has or shares voting power, which includes the power to vote or direct the voting of the security, or investment
power, which includes the power to dispose or direct the disposition of the security. The person is also deemed to be a beneficial
owner of any security of which that person has a right to acquire beneficial ownership within 60 days. Under the Securities and
Exchange Commission rules, more than one person may be deemed to be a beneficial owner of the same securities, and a person may
be deemed to be a beneficial owner of securities as to which he or she may not have any pecuniary interest. Except as noted below,
each person has sole voting and investment power with respect to the shares.
Unless
otherwise indicated below, the address of each person listed in the table below is c/o Vitaxel Group Limited, Wisma Ho Wah Genting,
No. 35, Jalan Maharajalela, 50150, Kuala Lumpur, Malaysia,
Name and address of beneficial owner
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Amount and
nature of
beneficial
ownership
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Percent
of
class
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Directors and Executive Officers
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Lim Wee Kiat
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7,467,196
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13.81
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%
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Dato Lim Hui Boon
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1,000,000
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1.85
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%
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Leong Yee Ming**
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1,843,621
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3.41
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%
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Kay Wong-Alfariz
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0
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*
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%
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Richard Anzalone
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0
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*
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Lim Wai Khoong
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40,552
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*
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%
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5% Stockholders:
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Lim Ooi Hong(1)
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4,453,071
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8.23
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%
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Lim Chun Yen(2)
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12,263,345
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22.67
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%
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Lim Yi Chin
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2,998,500
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5.54
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%
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|
|
|
|
|
|
All directors and executive officers as a group (6 persons)
|
|
|
10,351,369
|
|
|
|
19.14
|
%
|
*
Less than one percent.
|
(1)
|
Lim
Ooi Hong’s address is No.2A Jalan Setia Tropika u13/20B Setia Eco Park, Selangor,
Shan Alam 40170, Malaysia
|
(2)
Lim Chun Yen’s address is 792 Camenon East Tower, BIK 3B, Gasing Heights Condo, Petaling Jaya, Selangor, 46000,
Malaysia.
(3)
Lim Yi Chin’s address is 11 Jln 6/149K Bandar Baru Sri Petaling, Kuala Lumpur 57100, Malaysia
|
**
As a result of the acquisition by the Company of Grande Legacy which was consummated on
January 3, 2018, we are obligated to issue Leong Yee Ming an additional 37,500,000 shares of common stock. The number provided
above does not include said amount.
Certain
Relationships and Related Transactions
The
following reflects the related party transactions since January 1, 2016 that exceed the lesser of (i) $120,000 or (ii) one percent
of the average of our total assets at year end for the last two completed fiscal years:
In
2015, we entered into a loan agreement with Lim Wee Kiat, our Chairman and Secretary. This loan was unsecured, interest-free and
repayable or demand. As of December 31, 2017 and 2016, the amount due from Lee Wee Kiat was $0 and $1,482, respectively.
In
2015, we entered into a loan agreement with Leong Yee Ming, our Chief Executive Officer. This loan was unsecured, interest-free
and repayable or demand. As of December 31, 2017 and 2016, the amount due from Leong Yee Ming was $0 and $3,945, respectively.
Our
President, Dato Lim Hui Boon, is also the Group President of Ho Wah Genting Sdn Bhd. As of December 31, 2017 and 2016, Ho Wah
Genting Group Sdn Bhd owed the Company $18,149 and $0 respectively. As of December 31, 2017 and 2016, we owed Ho Wah Genting Group
Sdn Bhd $0 and $607,918 respectively, pursuant to a loan agreement. These amounts were unsecured, interest-free and repayable
on demand.
Our
former director, Lim Chun Hoo, is also a member of the board of directors of Ho Wah Genting Holiday Sdn Bhd. As of December 31,
2017, we owed Ho Wah Genting Holiday Sdn Bhd $1,703 pursuant to a loan agreement. We owed Ho Wah Genting Holiday Sdn Bhd $8,807
as of the end of December 31, 2016. These amounts were unsecured, interest-free and repayable on demand. In addition, we recognized
an expense of $127,728 and $110,439 pertaining for event, traveling and accommodation expenses during the year ended December
31, 2017 and 2016, respectively, which was charged to Ho Wah Genting Holiday Sdn. Bhd.
Our
Chairman and Secretary, Lim Wee Kiat, is also on the board of directors of Genting Highlands Taxi Services SDN BHD. We owed Genting
Highlands Taxi Services SDN BHD $11,820 and $16,234 respectively as of December 31, 2017 and 2016 pursuant to a loan agreement.
Our
Chairman and Secretary, Lim Wee Kiat, and our President, Dato Lim Hui Boon, are members of the board of directors of Vitaxel Corp.
(Thailand) Ltd, of which we own 48% of its issued and outstanding shares. In addition, Lim Wee Kiat and Leong Yee Ming, our Chief
Executive Officer, each own one share, or 0.005% of Vitaxel Corp (Thailand) Ltd., and Dato Lim Hui Boon owns 200 shares, or 1.0%
of Vitaxel Corp. (Thailand) Ltd. On August 15, 2016, we signed a license agreement with Vitaxel Corp. (Thailand) Ltd. Under the
terms of this agreement, we granted Vitaxel Corp. (Thailand) Ltd an exclusive, non-transferable, revocable license to use our
trademarks, brands, logos or service marks to market and operate our business and commercialize our online shopping and service
platforms, including but not limited to our online shopping mall known as “Vionmall”, in Thailand for revenue share
of 70% of the net profits for every three-month period. This license agreement was amended on August 21, 2016 to extend the term
from three years with a three (3)-year renewal term to 10 years with a 10-year renewal term. Vitaxel Corp. (Thailand) Ltd paid
us $ for royalties during the year ended December 31, 2017. In addition, the amount due from our associated company, Vitaxel Corp.
(Thailand) Ltd., was $103,024 as of December 31, 2017. These amounts were unsecured, interest-free and repayable on demand.
We
recognized an expense of $19,261 and $20,304 pertaining to rent during the year ended December 31, 2017 and 2016, respectively,
which was paid to its affiliate, Ho Wah Genting Berhad. The operating lease commitment to Ho Wah Genting Berhad as of December
31, 2017 was $19,261.
We
recognized an expense of $32,102 and $74,882 pertaining for website maintenance expense during the year ended December 31, 2017
and 2016, respectively, which was charged by our related company, Beedo Sdn. Bhd.
As
described above, as a result of the consummation of Grande Legacy, we need to issue 37,500,000 shares of common stock to each
of
Lim Hui Sing and Leong Yee Ming.
See
Note 10 to the audited financial statements included in the Annual Report for amounts due to and from associated parties.
PROPOSAL
1 — ELECTION OF DIRECTORS
We
have nominated Lim Wee Kiat, Leong Yee Ming, Kay Wong-Alafriz, Richard Anzalone and Lim Wai Khoong as directors to serve until
the next annual meeting of our stockholders or until their successors are elected. We expect that all of our nominees will be
available for election.
There
is no other arrangement or understanding between any of our directors and any other person pursuant to which any director was
or is to be selected as a director.
We
are not aware of any material proceedings to which any of our directors or executive officers or any associate of any such persons
is a party adverse to us or any of our subsidiaries or has a material interest adverse to us or any of our subsidiaries. None
of our officers or directors has been affiliated with any company that has filed for bankruptcy within the last ten years.
The
following table sets forth the names, ages and positions of our current Board members who are our Board nominees:
Name
|
Age
|
Position(s)
|
|
|
|
Lim Wee Kiat (1)
|
37
|
Chairman (Director), Secretary and Chief Financial
Officer
|
Leong
Yee Ming (1)
|
50
|
Director
and Chief Executive Officer
|
Kay Wong-Alafriz
|
41
|
Director
|
Richard Anzalone
|
56
|
Director
|
Lim Wai Khoong
|
52
|
Director
|
(1)
Lim Wee Kiat and Leong Yee Ming are members of our Operations Committee which oversees our general day to day operations and reports
to our Board of Directors. Dato Lim Hui Boon, our President, serves as Chairman of the Operations Committee.
Our
directors are elected for a term of one year and serve until his or her successor is duly elected and qualified. Each executive
officer serves at the pleasure of the Board.
BACKGROUND
INFORMATION
Directors
are elected to serve until the next annual meeting of stockholders and until their successors are elected and qualified. Directors
are elected by a plurality of the votes cast at the annual meeting of stockholders and hold office until the expiration of the
term for which he or she was elected and until a successor has been elected and qualified.
A
majority of the authorized number of directors constitutes a quorum of the Board of Directors for the transaction of business.
The directors must be present at the meeting to constitute a quorum. However, any action required or permitted to be taken by
the Board of Directors may be taken without a meeting if all members of the Board of Directors individually or collectively consent
in writing to the action.
Executive
officers are appointed by the Board of Directors and serve at its pleasure.
The
principal occupation and business experience during at least the past five years for our directors is as follows:
Lim
Wee Kiat – Chairman of the Board of Directors and Secretary
Lim
Wee Kiat has served as our Chairman of the Board of Directors and Secretary since January 18, 2016, and since August 21, 2017
has served as our Chief Financial Officer. He has more than 10 years business experience with 5 years in the area of multi-level
marketing and management. He has served as a Director and as President for Vitaxel since December 2013. Since June 2010, he has
served as Executive Director for Ho Wah Genting Berhad in Kuala Lumpur, Malaysia (“Ho Wah Genting”), a public Malaysian
corporation where his responsibilities include implementation of strategies, policies and decisions. Since December 2013, he has
served in Kuala Lumpur, Malaysia as Vitaxel’s Chief Executive Officer. From April 2008 until March 2014 he served in Kuala
Lumpur, Malaysia as Executive Director for HWG Tin Mining SDN BHD, a subsidiary of Ho Wah Genting. From June 2011 until August
2013 he served in Kuala Lumpur, Malaysia as a Non-Executive Director for ConnectCounty Holdings Berhad and from February 2014
until December 2014 as its Deputy Chief Executive Officer. He is a graduate of the University of Nottingham (United Kingdom) where
he received a Bachelor of Science Degree in Computing and Information Systems in 2003. Lim Wee Kiat’s expertise in the Company’s
industry led us to conclude that he would be a valuable member of the Board of Directors. As our director, he brings knowledge
and strategic insight to the Board.
Leong
Yee Ming – Chief Executive Officer and Director
Leong
Yee Ming has served as our Chief Executive Officer and as a Director since January 18, 2016. He has more than 30 years of field
and management experience in business, particularly in the network-marketing industry. Since November 2015, he has also served
as the chief executive officer for Vitaxel Sdn. Bhd. From December 2013 until May 2015 he served as Chief Executive Officer for
Grande Life, Inc. and Grand Legacy, Inc., corporations which he co-founded which are engaged in relationship marketing and lifestyle
programs. From February 2011 until November 2013 he was a strategic consultant for MLM Co., in Asia and the United States. From
April 2009 until January 2011 he was a Pioneer Leader/1st Diamond Executive in Kuala Lumpur, Malaysia for Asia – Velocity
International Inc. From May 2005 until January 2009 he was the chief operating officer for Gano iTouchLife Worldwide Inc., a company
which he co-founded in Singapore. From December 2002 until March 2005 he was a Pioneer Leader, International Systems Trainee and
8-Star Distributor for Tiens Health Development SDN BHD in Kuala Lumpur, Malaysia.
Leong Yee Ming’ s
expertise in the Company’s industry led us to conclude that he would be a valuable member of the Board of Directors. As
our director, he brings knowledge and strategic insight to the Board.
Kay
Wong-Alfariz – Director
Kay
Wong-Alafriz has served as our Director since May 15, 2016. Presently, Kay Wong-Alafriz is the chief financial officer of Kabam
Inc. From 2015 through 2016, Kay Wong-Alafriz served as the senior vice president of operations and finance for Mobetize
Corp. (OTC-QB MPAY). From 2008 until 2015, Kay Wong-Alafriz served as a senior Finance Executive for Asian Coast Development (Canada)
Ltd. From 2005 until 2008, Kay Wong-Alafriz served as a Senior Finance Executive for Imperial Parking Corporation. From 2004 until
2005, Kay Wong-Alafriz served as a Process Transformation (Finance, Strategy and Operations) Consultant and Senior Project Director
for Great Canadian Gaming Corporation and Sierra Wireless Inc. From 2001 until 2004, Kay Wong-Alafriz served as the Director of
Airport Improvement Fee Programs for the Vancouver International Airport Authority. Form 1998 until 2001, Kay Wong-Alafriz served
as a Subject Matter Expert for the Investigations Branch and Claims Investigation Section of Worksafe BC. From 1994 until 1998,
Kay Wong-Alafriz served as a Senior Financial Analyst and Expert Witness in Financial Crimes and Methodologies for the Royal Canadian
Mounted Police. Kay Wong-Alafriz presently serves or has served as a board member for Supreme Windows (Calgary) Inc., a family
owned business (2015-present); Blackrock Resources Ltd / Greenpower Motor Company Inc., a publicly traded company on the Toronto
Stock Exchange, TSX Venture Exchange and OTCQB (2010-2015); CVM Minerals Ltd. / Ding He Mining Holdings Ltd, a Stock Exchange
of Hong Kong Limited listed company (2007-2015); Vancouver Community College Foundation Board (2006-present); and Nagacorp Ltd.,
a Stock Exchange of Hong Kong Limited listed company (2003-2009). Kay Wong-Alafriz has been a member of the Institute of Chartered
Accountants of British Columbia (CPA) since 1994, a member of the Institute of Corporate Directors (ICD) Corporate Governance
College since 2006, a member of the Association of Certified Fraud Examiners (CFE) since 1996 and a member of the Institute of
Internal Auditors since 2004.
Kay
Wong-Alfariz’
s expertise in the Company’s industry led us to conclude that he would be a valuable member of the
Board of Directors. As our director, he brings knowledge and strategic insight to the Board.
Richard
Anzalone - Director
Richard
Anzalone has served as our Director since April 3, 2017. Since January 2017, Mr. Anzalone has served as the Global Master Distributor
for Vitaxel SDN BHD, our wholly owned subsidiary. From 2013 to 2016, Mr. Anzalone worked as a distributor at various companies
in the Multi-Level- Marketing industry. Since 2006, Mr. Anzalone has also served as the Chief Executive Officer of Promethean
Corp., a Nevada corporation that manufactures and distributes natural, soy-based candle wax, candle making supplies and other
related products. Mr. Anzalone’s expertise in the Company’s industry led us to conclude that he would be a valuable
member of the Board of Directors. As our director, he brings knowledge and strategic insight to the Board.
Mr.
Anzalone was named in a grand jury indictment dated June 14, 2017 filed by the United States in the Western District of Kentucky,
in which the defendants were charged with conspiracy to commit mail fraud, money laundering and other offenses. Mr. Anzalone was
never a director or officer of the company charged in this matter.
Lim
Wai Khoong - Director
Lim
Wai Khoong has served as our Director since April 3, 2017. In 2016, Mr. Lim helped form Vitaxel Corporation Thailand Co., Limited,
a Thailand registered company of which we own 47.99% of its current issued and outstanding shares. Since July 2016, Mr. Lim has
served as its Chief Executive Officer. Mr. Lim is also a sole-proprietor and founder of Roizy Marketing, a Thai clothing manufacturing
company formed in 1989 that distributes products throughout Thailand, Malaysia, Singapore, Taiwan, Philippine, and Saudi Arabia.
Currently Mr. Lim’s clothing company is supplying garments to the Thai government.
Lim
Wai Khoong’s expertise in the Company’s industry led us to conclude that he would be a valuable member of the Board
of Directors. As our director, he brings knowledge and strategic insight to the Board.
Family
Relationships
Except
for the father and son relationship between Dato Lim Hui Boon, our President, and Lim Wee Kiat, our Chairman of the Board of Directors
and Secretary, there are no family relationships among our directors or executive officers.
Involvement
in Legal Proceedings
Other
than the indictment naming Mr. Anzalone, there are no orders, judgments, or decrees of any governmental agency or administrator,
or of any court of competent jurisdiction, revoking or suspending for cause any license, permit or other authority to engage in
the securities business or in the sale of a particular security or temporarily or permanently restraining any of our officers
or directors from engaging in or continuing any conduct, practice or employment in connection with the purchase or sale of securities,
or convicting such person of any felony or misdemeanor involving a security, or any aspect of the securities business or of theft
or of any felony. Nor are any of the officers or directors of any corporation or entity affiliated with us so enjoined.
Board
Committees
Our
Board of Directors does not currently have a compensation committee or nominating and corporate governance committee because,
due to the Board of Director’s composition and our relatively limited operations, the Board of Directors is able to effectively
manage the issues normally considered by such committees. Our Board of Directors may undertake a review of the need for these
committees in the future.
Audit
Committee and Financial Expert
We
do not have an audit committee financial expert because we believe the cost related to retaining a financial expert at this time
is prohibitive. We have no separate audit committee at this time. The entire Board of Directors oversees our audits and auditing
procedures. Neither of our directors is an “audit committee financial expert” within the meaning of Item 407(d)(5)
of SEC regulation S-K.
Compensation
Committee
We
have no separate compensation committee at this time. The entire Board of Directors oversees the functions which would be performed
by a compensation committee.
Code
of Ethics
We
do not have a Code of Ethics.
Section
16(A) Beneficial Ownership Reporting Compliance
Section
16(a) of the Securities Exchange Act of 1934 requires our executive officers and directors, and persons who beneficially own more
than 10% percent of our equity securities (“Reporting Persons”) to file reports of ownership and changes in ownership
with the Securities and Exchange Commission. Based solely on our review of copies of such reports and representations from
the Reporting Persons, we believe that during the fiscal year ended December 31, 2016, all reporting persons complied with all
applicable Section 16(a) filing requirements except that Lim Wee Kiat filed a late Form 3; Leong Yee Ming filed a late Form 3;
Kay Wong-Alafriz did not file a Form 3; Richard Anzalone did not file a Form 3; Lim Wai Khong did not file a Form 3; Lim Chun
Yen filed a late Form 3 and did not file a Form 4 and Lim Chun Hoo filed a late Form 3 and did not file a Form 4.
THE
BOARD OF DIRECTORS RECOMMENDS A VOTE FOR EACH OF THE FIVE DIRECTOR NOMINEES.
INFORMATION
CONCERNING THE BOARD OF DIRECTORS
During
the fiscal year ended December 31, 2017, the Board acted by written consent on nine occasions. Each of the Company’s incumbent
directors participated in all of such consents.
Policy
Regarding Attendance at Annual Meetings of Stockholders
Our
Board of Directors has not adopted a policy that each director is expected to attend annual meetings of its stockholders. We have
never held an annual meeting of stockholders.
Director
Independence
We
are not currently subject to listing requirements of any national securities exchange or inter-dealer quotation system which has
requirements that a majority of the board of directors be “independent” and, as a result, we are not at this time
required to have our Board of Directors comprised of a majority of “independent directors.” However, we believe that
Kay Wong-Alafriz is an “independent” director as that term is defined in the listing standards of the NASDAQ stock
market and in SEC rules.
Leadership
Structure and Risk Oversight
Currently,
the position of Chief Executive Officer and Chairman of the Board are held by two different individuals. Two of our directors
are members of our Operations Committee, which oversees our general day to day operations and reports to our Board of Directors.
Dato Lim Hui Boon, our President who is not a member of our Board, serves as Chairman of the Operations Committee. Our senior
management manages the risks facing the Company under the oversight and supervision of the Board, including general business risks
such as economic and regulatory risks. Management is responsible for day-to-day oversight of the risk management processes.
The
President has close to twenty years of experience in senior executive general management positions where risk evaluation is required
and continuous. The CEO has twenty years of experience in this industry that requires constant risk evaluation.
Each
member of our management team evaluates the risks of daily decisions, consults with others who may have more experience in a particular
area and acts accordingly.
Risk
management is an integral part of board deliberations and decisions. The industry specific experience of some members is balanced
by the general business experience of others and the accounting expertise of still others. Consequently, deliberations incorporate
different and, sometimes, divergent perspectives that enhance the awareness of particular risks. The board makes policies and
decisions to minimize those risks. There is no effect on the board’s leadership structure.
Stockholder
Communications with Directors
The
Company has no established procedures for stockholders to communicate directly with the Board of Directors. Due to the Company’s
small size, stockholders can contact the Board of Directors by mail at Vitaxel Group Limited, Wisma Ho Wah Genting, No. 35, Jalan
Maharajalela, 50150, Kuala Lumpur, Malaysia, Attention: Board of Directors. All communications made by this means will be received
by the Chairman of the Board.
EXECUTIVE
COMPENSATION
SUMMARY
COMPENSATION TABLE
The
table below summarizes all compensation awarded to, earned by, or paid to our executive officers by any person for all services
rendered in all capacities to us for the last two fiscal years ended on December 31, 2017 and 2016.
SUMMARY
COMPENSATION TABLE
Name and
Principal
Position
|
|
Year
|
|
|
Salary
(US$)
|
|
|
Bonus
(US$)
|
|
|
Stock
Awards
(US$)
(2)
|
|
|
Option
Awards
(#shares)
|
|
|
Non-Equity
Incentive Plan
Compensation
(US$)
|
|
|
Nonqualified
Deferred
Compensation
Earnings (US$)
|
|
|
All Other
Compensation
(US$)
|
|
|
Total
(US$)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Andriy Berezhnyy
|
|
|
2017
|
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
-0-
|
|
(CEO)
(1)
|
|
|
2016
|
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dato Lim Hui Boon
|
|
|
2017
|
|
|
|
-0-
|
|
|
|
46,531
|
|
|
|
1,100,000
|
|
|
|
-0-
|
|
|
|
|
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
1,146,531
|
|
(President)
(2)(3))
|
|
|
2016
|
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lim Wee Kiat
|
|
|
2017
|
|
|
|
43,274
|
|
|
|
23,265
|
|
|
|
1,100,000
|
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
5,193
|
|
|
|
1,171,732
|
|
(Chairman, Secretary and CFO)
(2)(4)(5)
|
|
|
2016
|
|
|
|
17,433
|
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
17,433
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Leong Yee Ming
|
|
|
2017
|
|
|
|
33,502
|
|
|
|
23,265
|
|
|
|
1,100,000
|
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
1,156,767
|
|
(CEO)
(2)
|
|
|
2016
|
|
|
|
49,395
|
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
49,395
|
|
(1)
|
On January 18, 2016, Mr. Berezhnyy resigned as our CEO and director.
|
(2)
|
Reflects compensation received from VXEL.
|
(3)
|
Dato
Lim Hui Boon was appointed President as of March 15, 2016. We intended to compensate Dato Lim Hui Boon at the monthly rate
of 25,000 Ringgit Malaysia (approximately US $6,070) upon his appointment. However, due to weaker performance by the Company,
we made no payments to Dato Lim Hui Boon in 2017.
|
(4)
|
Lim Wee Kiat served as our President from January 18, 2016 to March 15, 2016.
|
(5)
|
Lim Wee Kiat was appointed CFO as of August 21, 2017.
|
|
|
|
|
|
|
We
have no plans in place and have never maintained any plans that provide for the payment of retirement benefits or benefits that
will be paid primarily following retirement including, but not limited to, tax qualified deferred benefit plans, supplemental
executive retirement plans, tax-qualified deferred contribution plans and nonqualified deferred contribution plans.
Except
as indicated below, we have no contracts, agreements, plans or arrangements, whether written or unwritten, that provide for payments
to the named executive officers listed above.
Outstanding
Equity Awards at Fiscal Year-End
We
have one compensation plan approved by our board of directors and stockholders, the 2016 Plan. As of the end of our last completed
fiscal year, we had no outstanding equity awards. See “Description of Securities” below for more information.
In
2017, the Company has granted and issued 1,000,000 shares of common stock of the Company to Dato Lim Hui Boon, President of the
Company; 1,000,000 shares of common stock of the Company to Leong Yee Ming, CEO of the Company; and 1,000,000 shares of common
stock of the Company to Lim Wee Kiat, Chairman of the Board.
Employment
Agreements
On
December 1, 2014 Vitaxel executed a Letter of Appointment with Yee Hing Yip pursuant to which Yee Hing Yip serves as Vitaxel’s
Marketing Director at a salary of RM6,000 per month (approximately US$1,370 per month). Pursuant to the Letter of Appointment,
Yee Hing Yip also receives a mobile phone allowance of RM150 per month, a parking allowance of RM150 per month and a mileage allowance.
He is also eligible to receive performance based bonuses at the discretion of Vitaxel on December 31 of each year of employment.
The Letter of Appointment may be terminated by either party upon one-months’ prior written notice or the payment of one-months’
salary in lieu of notice. During the term of his employment by Vitaxel, Yee Hing Yip may not engage in any employments which conflict
with Vitaxel’s business or interests.
On
March 24, 2015 Vitaxel executed a Letter of Appointment with Lee Wei Boon pursuant to which Lee Wei Boon has served as Vitaxel’s
Finance Manager since May 5, 2015 at a salary of RM8,000 per month (approximately US$1,827 per month). The Letter of Appointment
may be terminated by either party upon three-months’ prior written notice or the payment of three-months’ salary in
lieu of notice. During the term of his employment by Vitaxel, Lee Wei Boon may not engage in any employments which conflict with
Vitaxel’s business or interests.
On
November 1, 2015 Vitaxel entered into a Consulting Services Agreement (the “Consulting Agreement”) with Leong Yee
Ming pursuant to which Leong Yee Ming provides management services. The Consulting Agreement expires July 31, 2016. Pursuant to
the Consulting Agreement, Leong Yee Ming receives a monthly consulting fee of RM12,000 per month (approximately US$2,740 per month)
and an expense allowance of RM2,000 per month. The Consulting Agreement may be terminated by either party by providing the other
with written notice of termination not less than one month prior to the date of termination.
Effective
February 5, 2015, Vitaxel executed a Letter of Appointment with Lim Boon Seng pursuant to which Lim Boon Seng serves as Vitaxel’s
Global Business Development Manager at a monthly salary of RM5,000 (approximately US$1,142 per month). Mr. Lim Boon Seng is also
eligible to receive performance based bonuses at the discretion of Vitaxel on December 31 of each year of employment. The Letter
of Appointment may be terminated by either party upon one-months’ prior written notice or the payment of one-months’
salary in lieu of notice. During the term of his employment by Vitaxel, Lim Boon Seng may not engage in any employments which
conflict with Vitaxel’s business or interests.
Since
April 1, 2014, Lim Wee Kiat has served as a Director and Director of Operations for Vitaxel at a monthly salary of RM5,000 (approximately
US$1,142 per month). Lim Wee Kiat also receives a monthly expense allowance of RM2,000 per month. He is eligible to receive performance
based bonuses at the discretion of Vitaxel on December 31 of each year of employment. Either party may terminate the employment
arrangement by providing the other with three- months’ advance written notice or the payment of three-months’ salary
in lieu of notice. During the term of his employment by Vitaxel, Lim Wee Kiat may not engage in any employments which conflict
with Vitaxel’s business or interests.
On
October 28, 2015, Vionmall executed a Letter of Appointment with Wong Chien Nan pursuant to which Wong Chien Nan has been serving
as Vionmall’s Chief Executive Officer since November 1, 2015 at a monthly salary of RM8,000 per month (approximately US$1,827
per month). Wong Chen Nan also receives gas, travel and communications allowances. The Letter of Appointment may be terminated
by either party upon two months’ prior written notice or the payment of two months’ salary in lieu of notice. During
the term of his employment by Vionmall, Wong Chien Nan may not engage in any employments which conflict with Vionmall’s
business or interests.
None
of the Company’s executive officers have employment agreements directly with the Company, although they may enter into such
agreements in the future.
Director
Compensation
Neither
we, Vitaxel or Vionmall have compensated our directors, in their capacities as such, since our respective formations.
Compensation
Risk Management
We
have not considered the risks associated with our compensation policies and practices for all employees, but management believes
we have designed our compensation policies and practices in a manner that does not create incentives that could lead to excessive
risk taking that would have a material adverse effect on us.
The
Role of Stockholder Say-on-Pay Votes
The
Company is providing its stockholders with the opportunity to cast an advisory vote on executive compensation (a “say-on-pay
proposal”). The Board of Directors will consider the outcome of the Company’s say-on-pay votes when making future
compensation decisions for the named executive officers.
PROPOSAL
2 - AMENDMENT TO ARTICLES OF INCORPORATION TO INCREASE AUTHORIZED SHARES OF COMMON STOCK
The
principal purpose of the proposed amendment to the Articles of Incorporation is to authorize additional shares of common stock.
We are currently obligated to issue 75,000,000 shares of common stock to the two sellers of Grande Legacy Ltd., Lim Hui Sing and
Leong Yee Ming, as described below under the section “Grande Legacy Acquisition”. If the stockholders agree to this
proposal to amend the Articles of Incorporation, we will then be able to issue 37,500,000 shares to each of the two former shareholders
of Grande Legacy. Leong Yee Ming, is the Chief Executive Officer and a director of our Company, and Lim Hui Sing is the brother
of our President, Dato Lim Hui Boon.
Other
than said issuance, the Company currently has no plans to issue any shares of common stock. If the amendment is adopted, we will
have shares available in the event our Board determines that it is necessary and appropriate to raise additional capital through
the sale of equity securities, to acquire another company or its assets, to establish strategic relationships with corporate partners
and/or similar transactions or for other corporate purposes. The availability of additional shares of common stock is particularly
important in the event that our Board needs to undertake any of the foregoing actions on an expedited basis and thus to avoid
the time and expense of seeking shareholder approval in connection with a contemplated issuance of common stock.
The
increase in authorized common stock will not have any immediate effect on the rights of existing shareholders. However, the Board
will have the authority to issue authorized common stock without requiring future shareholder approval of such issuances, except
as may be required by applicable law. To the extent that additional authorized shares are issued in the future, they may decrease
the existing shareholders’ percentage equity ownership and, depending on the price at which they are issued, could be dilutive
to the existing shareholders. The holders of common stock have no preemptive rights and the Board has no plans to grant such rights
with respect to any such shares.
The
text of the proposed Certificate of Amendment to our Articles of Incorporation which contains the increase in the authorized common
stock is attached hereto as
Appendix A
.
Under
our current Articles of Incorporation, as amended, we have the authority to issue 70,000,000 shares of common stock. As of the
Record Date, 54,087,903 shares of common stock were issued and outstanding.
After
taking into consideration our current outstanding equity obligations, in order to have sufficient shares to provide a more favorable
capital structure for such purposes as equity financing, stock-based acquisitions and strategic partnerships which may require
that additional shares be available for issuance, our Board has determined that it is in the best interest of our shareholders
to increase the number of authorized shares of our common stock from 70,000,000 to 200,000,000.The additional common stock to
be authorized will become part of the existing class of common stock and will have the same par value, the same voting rights,
the same rights to dividends and distributions and will be identical in all other respects to the shares of our common stock now
authorized. The Certificate of Amendment will not affect the terms of the outstanding common stock or the rights of the holders
of the common stock. However, increasing the number of authorized shares of common stock may result in potential disadvantages
incidental to issuing such additional stock and thereby increasing the number of outstanding shares of common stock, such as dilution
of the earnings per share, which could have a depressive effect upon the market value of our common stock and an adverse effect
on the voting rights of current holders of our common stock as their percentage ownership in our company would be reduced
.
The
Board believes that the potential benefit of increasing the number of the Company’s authorized shares of common stock outweighs
the potential disadvantages associated with the increase in the authorized shares of common stock. The Board believes
that such increase would provide greater flexibility to pursue corporate transactions and relationships which have the potential
to facilitate the Company’s growth and development and its ability to compete successfully. If we fail to facilitate growth
and development, we may not be able to generate revenues or achieve profitability, and our stockholders may lose their entire
investment in us. Other than a proposed acquisition of a British Virgin Islands company which will require us to issue more shares
than we are currently authorized to issue, the Board does not currently have any plans for additional financings or acquisitions.
If the Board of Directors approves the proposed acquisition, the Company will file a Current Report on Form 8-K disclosing the
terms of the proposed acquisition.
Effects
of Issuing Additional Common Stock
Our
shareholders do not have any preemptive right to subscribe to any additional issue of stock of the Company. Future issuances of
common stock or securities convertible into common stock would have a dilutive effect on our earnings per share, book value per
share and the voting power and interest of current stockholders. In addition, the future prospect of sales of significant amounts
of shares held by our shareholders could affect the market price of our common stock if the marketplace does not adjust to the
increase in shares in the market in an orderly manner and the value of our shareholders’ investment in our company may decrease.
A significant ownership stake held by one party may discourage a potential acquirer from attempting to obtain control of us, which
in turn could reduce our stock price or prevent our shareholders from realizing a premium over our stock price.
Acquisition
of Grande Legacy
We
entered into a Share Sale Agreement (the “Agreement”) effective December 15, 2017 with Lim Hui Sing and Leong Yee
Ming (together, the “Sellers”) and Vitaxel Sdn. Bhd., a wholly-owned subsidiary of the Company (the “Purchaser”),
as described in the Current Report on Form 8-K filed with the Securities and Exchange Commission on December 19, 2017. Pursuant
to the terms of the Agreement, we are to purchase all the shares of Grande Legacy Inc., a British Virgin Islands company (“Grande
Legacy”) from the Sellers. Leong Yee Ming, is the Chief Executive Officer and a director of our Company, and Lim Hui Sing
is the brother of our President, Dato Lim Hui Boon, are the sole shareholders of Grande Legacy. On January 3, 2018 the parties
to the Agreement executed and delivered an amendment (the “Amendment”) to the Agreement which provided that the acquisition
of Grande Legacy shall close upon the completion of the financial statements of Grande Legacy being audited. The Amendment also
provides that the 75,000,000 shares to be issued to the Sellers will be issued within 30 days of the shareholders [of the Company]
authorizing the amendment [to the Articles of Incorporation of the Company increasing the amount of shares that we are authorized
to issue]. Since the audited financial statements of Grande Legacy were delivered on January 21, 2018, the acquisition of Grande
Legacy was consummated on said date.
As
described in the Current Report on Form 8-K filed with the Securities and Exchange Commission on January 22, 2018, pursuant to
the terms of the Agreement, the Sellers sold to the Purchaser all their shares in Grande Legacy so that the Company become the
indirect owner of all of the issued and outstanding shares of the capital stock of Grande Legacy. In consideration for such sale,
we are now contractually obligated to issue to each of the Sellers 37,500,000 shares of tour common stock.
When
the consideration shares are issued to the Sellers, said shares will represent approximately 58.1% of the issued and outstanding
share capital of the Registrant. These shares will be issued in a private placement pursuant to Section 4(2) of the Securities
Act of 1933, as amended, if the shareholders adopt this proposed amendment to the Articles of Incorporation.
Description
of Grande Legacy
Grande
Legacy was incorporated in the British Virgin Island on March 11, 2008 under the name Self Inc. It was originally in the business
of providing consultancy services. Self Inc. changed its name to its current one on November 14, 2014. Since executing the license
agreement with the Company described below, the company has been in the e-commerce multi-level marketing business.
Leong
Yee Ming, the current principal executive officer and a director of the Company, is one of the two shareholders of Grande Legacy.
The other 50% shareholder of Grande Legacy, Lim Hui Sing, is also a director of the Company and the brother of the president of
the Company.
Grande
Legacy originally was established to provide consultancy services to companies that desired to expand its business overseas by
assisting in establishing offices, hiring employees, drafting business plan and conducting business in overseas markets for their
clients. Grand Legacy was also prepared to recommend to its clients the necessary professional parties such as attorneys and accountants
to assist in this area. In conducting the business, Grande Legacy provided a comprehensive recommendation to its clients on various
methods to enter into new territories. Typically, these recommendations and preparation would take from six to nine months.
On
January 5, 2017, Grande Legacy executed a License Agreement with the Company pursuant to which we granted Grande Legacy an exclusive
license in the British Virgin Islands to operate a direct selling, multi-level marketing company offering travel, entertainment,
lifestyle and other products and services. In exchange for the license to use the website, including our online shopping platform,
Grande Legacy can utilize its own marketing strategies to promote the business in the British Virgin Islands.
After
January 5, 2022, Grande Legacy is obligated to pay us, every three months, 55% of the gross revenue it receives minus operating
expenses.
With
the agreement Grande Legacy is now responsible to promote the business to new markets such as United State of America, South Korea,
Japan and any other country which the Company approves.
The
business office of Grand Legacy is situated in Kuala Lumpur, Malaysia. The company recruits and trains team leaders to sell products
offered on its website. Team members are recruited based on their experience and previous achievement. These team leaders can
be situated in any countries and each country may have a few team leaders. This is to ensure that Grande Legacy does not rely
on small amount of team leaders to generate revenue for the Company. Grande Legacy does not pay salaries to the team leaders,
as their compensation is based solely on commission and any bonuses management of Grande Legacy awards in its discretion as a
result of the revenue generated.
Grande
Legacy acquires the travel and entertainment packages which it offers through third parties. Since the cost of promoting these
packages is incurred only when a member books a package, Grande Legacy does not incur any costs in promoting these packages.
Leong
Yee Ming, the current principal executive officer and a director of the Company, is one of the two shareholders of Grande Legacy.
The other 50% shareholder of Grande Legacy, Lim Hui Sing, is also a director of the Company and the brother of the president of
the Company. In addition to the license arrangement between the Company and Grande Legacy described above, Grande Legacy uses
the credit card portal of Vitaxel Snd Bhd., a subsidiary of the Registrant. In addition,Dato Lim Hui Boon, a related party to
a director of Grande Legacy (Lim Hui Sing) is also the President of the Company and Ho Wah Genting Group Ltd. As of September
30, 2017 and December 31, 2016, the amount due to the Dato Lim Hui Boon was $6,708 and $6,644, respectively. Currently there are
no amounts due. Grande Legacy has also made advance payments to Ho Wah Genting Sdn Berhad for marketing and campaign purposes.
The amounts are unsecured, interest-free and repayable on demand.
The
consideration being paid by the Company for the acquisition of all the issued and outstanding stock of Grande Legacy (75,000,000
shares of common stock) was determined by comparing the price/earnings ratio with respect to other multi-level marketing companies
listed in Malaysia and in the United States.
For
all the terms and conditions of the Amendment and the License Agreement, reference is hereby made to such agreements annexed hereto
as Exhibits 10.13 and 10.14, to the Current Report on Form 8-K filed with the Securities and Exchange Commission on January 22,
2018. All statements made herein concerning the foregoing agreements are qualified by reference thereto.
Attached
are the audited financial statements of Grande Legacy for the years ended December 31, 2016 and 2015, unaudited balance sheet
as of September 30, 2017 and unaudited statements of operations and cash flows for the nine months ended September 30, 2017 and
September 30, 2016 and
Unaudited Pro Forma Consolidated Balance Sheet of the Company as of September 30, 2017 and as of 31
December 2016 and the Unaudited Pro Forma Consolidated Statement of Operations and Comprehensive Income for the nine months ended
September 30, 2017 and the year ended December 31, 2016
GRANDE
LEGACY INC
FINANCIAL
STATEMENTS
Table
of Contents
REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To
the Board of Directors and Stockholders of Grande Legacy Inc:
We
have audited the accompanying balance sheets of Grande Legacy Inc. (“the Company”) as of December 31, 2016 and 2015,
and the related statements of operations and comprehensive loss, stockholders’ equity and cash flows for the years then
ended. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We
conducted our audits in accordance with standards of the Public Company Accounting Oversight Board (United States). Those standards
require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In
our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Grande
Legacy Inc as of December 31, 2016 and 2015, and the results of its operations and its cash flows for the years then ended, in
conformity with generally accepted accounting principles in the United States of America.
The
accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed
in Note 3 to the financial statements, the Company’s significant operating losses raise substantial doubt about its ability
to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of
this uncertainty.
/s/
B F Borgers CPA PC
Lakewood,
CO
January
19, 2018
GRANDE
LEGACY INC
BALANCE
SHEETS
(Stated
in US Dollars)
|
|
|
|
|
|
|
|
|
As of
December 31,
2016
|
|
|
As of
December 31,
2015
|
|
|
|
|
|
|
|
|
CURRENT ASSET
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
4,072
|
|
|
$
|
6,466
|
|
Total Current Asset
|
|
|
4,072
|
|
|
|
6,466
|
|
|
|
|
|
|
|
|
|
|
TOTAL
ASSET
|
|
$
|
4,072
|
|
|
$
|
6,466
|
|
|
|
|
|
|
|
|
|
|
CURRENT LIABILITY
|
|
|
|
|
|
|
|
|
Amounts due to related party
|
|
$
|
6,644
|
|
|
$
|
6,648
|
|
Total Current Liability
|
|
|
6,644
|
|
|
|
6,648
|
|
|
|
|
|
|
|
|
|
|
TOTAL LIABILITY
|
|
|
6,644
|
|
|
|
6,648
|
|
|
|
|
|
|
|
|
|
|
Commitments and Contingencies
(Note 5)
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
STOCKHOLDERS’ EQUITY
|
|
|
|
|
|
|
|
|
Common stock, $1 par value, 50,000 shares authorized,
4 shares issued and outstanding
|
|
|
4
|
|
|
|
4
|
|
Accumulated deficit
|
|
|
(2,576
|
)
|
|
|
(186
|
)
|
Total Stockholders’
Equity
|
|
|
(2,572
|
)
|
|
|
(182
|
)
|
|
|
|
|
|
|
|
|
|
TOTAL
LIABILITY AND STOCKHOLDERS’ EQUITY
|
|
$
|
4,072
|
|
|
$
|
6,466
|
|
The
accompanying notes are an integral part of these financial statements.
GRANDE
LEGACY INC
STATEMENTS
OF OPERATIONS AND COMPREHENSIVE LOSS
(Stated
in US Dollars)
|
|
Year
ended
December
31, 2016
|
|
|
Year
ended
December
31, 2015
|
|
|
|
|
|
|
|
|
REVENUE
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
COST OF REVENUE
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
GROSS
LOSS
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
OPERATING EXPENSES
|
|
|
|
|
|
|
|
|
General and administrative
expenses
|
|
|
(2,390
|
)
|
|
|
(186
|
)
|
Total operating expenses,
net
|
|
|
(2,390
|
)
|
|
|
(186
|
)
|
|
|
|
|
|
|
|
|
|
LOSS BEFORE
TAXES
|
|
|
(2,390
|
)
|
|
|
(186
|
)
|
|
|
|
|
|
|
|
|
|
Income
tax expense
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
NET INCOME / (LOSS)
|
|
$
|
(2,390
|
)
|
|
$
|
(186
|
)
|
|
|
|
|
|
|
|
|
|
TOTAL
COMPREHENSIVE LOSS
|
|
$
|
(2,390
|
)
|
|
$
|
(186
|
)
|
|
|
|
|
|
|
|
|
|
Weighted average number of shares outstanding
during the period – basic and diluted
|
|
|
4
|
|
|
|
4
|
|
|
|
|
|
|
|
|
|
|
Net loss per share –
Basic and diluted
|
|
$
|
(598
|
)
|
|
$
|
(47
|
)
|
The
accompanying notes are an integral part of these financial statements.
GRANDE
LEGACY INC
STATEMENTS
OF STOCKHOLDERS’ EQUITY
(Stated
in US Dollars)
|
|
|
|
|
|
|
|
|
|
|
Accumulated
|
|
|
|
|
|
|
Common
|
|
|
|
|
|
other
|
|
|
Total
|
|
|
|
Stock
|
|
|
Accumulated
|
|
|
comprehensive
|
|
|
Stockholders’
|
|
|
|
Shares
|
|
|
Amount
|
|
|
Deficit
|
|
|
income (loss)
|
|
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, December 31, 2014
|
|
|
4
|
|
|
$
|
4
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4
|
|
Net loss
|
|
|
|
|
|
|
—
|
|
|
|
(186
|
)
|
|
|
—
|
|
|
|
(186
|
)
|
Balance, December 31, 2015
|
|
|
4
|
|
|
$
|
4
|
|
|
$
|
(186
|
)
|
|
$
|
—
|
|
|
$
|
(182
|
)
|
Net loss
|
|
|
|
|
|
|
—
|
|
|
|
(2,390
|
)
|
|
|
—
|
|
|
|
(2,390
|
)
|
Balance, December 31, 2016
|
|
|
4
|
|
|
$
|
4
|
|
|
$
|
(2,576
|
)
|
|
$
|
—
|
|
|
$
|
(2,572
|
)
|
The
accompanying notes are an integral part of these financial statements.
GRANDE
LEGACY INC
STATEMENTS
OF CASH FLOWS
(Stated
in US Dollars)
|
|
Year
ended
December
31, 2016
|
|
|
Year
ended
December
31, 2015
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM OPERATING ACTIVITIES
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(2,390
|
)
|
|
$
|
(186
|
)
|
Net cash used in operating
activities
|
|
|
(2,390
|
)
|
|
|
(186
|
)
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM INVESTING ACTIVITIES
|
|
|
|
|
|
|
|
|
Net cash used in investing
activities
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
|
Amount due to related party
|
|
|
(4
|
)
|
|
|
6,648
|
|
Net cash provided by financing
activities
|
|
|
(4
|
)
|
|
|
6,648
|
|
|
|
|
|
|
|
|
|
|
NET (DECREASE) INCREASE IN
CASH AND CASH EQUIVALENTS
|
|
|
(2,394
|
)
|
|
|
6,462
|
|
|
|
|
|
|
|
|
|
|
CASH AND
CASH EQUIVALENTS AT BEGINNING OF YEAR
|
|
|
6,466
|
|
|
|
4
|
|
|
|
|
|
|
|
|
|
|
CASH
AND CASH EQUIVALENTS AT END OF YEAR
|
|
$
|
4,072
|
|
|
$
|
6,466
|
|
|
|
|
|
|
|
|
|
|
SUPPLEMENTAL OF CASH FLOW INFORMATION
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash paid for interest
expenses
|
|
$
|
—
|
|
|
$
|
—
|
|
Cash paid for income tax
|
|
$
|
—
|
|
|
$
|
—
|
|
The
accompanying notes are an integral part of these financial statements.
GRANDE
LEGACY INC
NOTES
TO FINANCIAL STATEMENTS
(In
U.S. dollars)
|
1.
|
ORGANIZATION
AND BUSINESS
|
Grande
Legacy Inc. (“GL”), was incorporated in British Virgin Islands on March 11, 2008. The Company provide consultancy
services to companies that desired to expand its business overseas by assisting in establishing offices, hiring employees, drafting
business plan and conducting business in overseas markets for their clients. The Company is also engaged in the direct selling
industry utilizing the online E-Commerce business model with an emphasis on travel, entertainment and lifestyle products and services.
|
2.
|
SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES
|
Basis
of presentation
The
accompanying financial statements of the Company have been prepared in accordance with accounting principles generally accepted
in the United States of America (“U.S. GAAP”) for interim financial information Article 8 of Regulation S-X.
This
basis of accounting involves the application of accrual accounting and consequently, revenues and gains are recognized when earned,
and expenses and losses are recognized when incurred. The Company’s financial statements are expressed in U.S. dollars.
Use
of estimates
The
preparation of financial statements in conformity with accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect certain reported amounts of assets and liabilities and disclosure
of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses
during the reporting periods. Actual results could differ from those estimates.
Cash
and cash equivalents
Cash
and cash equivalents comprise cash and bank balances, term deposits and other short-term, highly liquid investments that are readily
convertible into cash with insignificant risk of changes in value, against which bank overdraft, if any, are deducted.
Fair
value of financial instruments
FASB
ASC 820, “Fair Value Measurement,” specifies a hierarchy of valuation techniques based upon whether the inputs to
those valuation techniques reflect assumptions other market participants would use based upon market data obtained from independent
sources (observable inputs). In accordance with ASC 820, the following summarizes the fair value hierarchy:
Level
1 Inputs – Unadjusted quoted market prices for identical assets and liabilities in an active market that the Company has
the ability to access.
Level
2 Inputs – Inputs other than the quoted prices in active markets that are observable either directly or indirectly.
Level
3 Inputs – Inputs based on prices or valuation techniques that are both unobservable and significant to the overall fair
value measurements.
ASC
820 requires the use of observable market data, when available, in making fair value measurements. When inputs used to measure
fair value fall within different levels of the hierarchy, the level within which the fair value measurement is categorized is
based on the lowest level input that is significant to the fair value measurements. Valuation techniques used need to maximize
the use of observable inputs and minimize the use of unobservable inputs. As of December31, 2016 and 2015, none of the Company’s
assets and liabilities were required to be reported at fair value on a recurring basis. Carrying values of non-derivative financial
instruments, including cash, accounts receivables, payables and accrued liabilities, approximate their fair values due to the
short term nature of these financial instruments. There were no changes in methods or assumptions during the periods presented.
Revenue
recognition
Product
sales − The Company generally recognizes revenue upon delivery and when both the title and risk and rewards pass to the
independent members or purchasers of the products. Product sales are recognized net of product returns, discounts and taxes. A
reserve for product returns is accrued based on historical experience. No product sales was recorded for the year ended December
31, 2016 and 2015.
Membership
fee − The Company recognizes the membership fee revenue over the term of the membership, which is 12 months. The revenue
will not be recognized until the 10 days cooling-off period is expired. No membership fee sales was recorded for the year ended
December 31, 2016 and 2015.
Loyalty
program
The
Company allocates consideration received from the sale of goods to the goods sold and the redemption points issued that are expected
to be redeemed.
The
consideration allocated to the redemptions points issued is measured at fair value of the redemption points. It is recognized
as a liability (deferred revenue) in the statement of financial position and recognized as revenue when the points are redeemed,
have expired or are no longer expected to be redeemed. The amount of revenue recognized is based on the number of points that
have been redeemed, relative to the number expected to redeem.
As
of December 31, 2016 and 2015, there was no such deferred revenue recorded.
Income
taxes
Current
income taxes are provided for in accordance with the laws of the relevant tax authorities. Deferred income taxes are recognized
when temporary differences exist between the tax bases of assets and liabilities and their reported amounts in the combined financial
statements. Net operating loss carry forwards and credits are applied using enacted statutory tax rates applicable to future years.
Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more-likely-than-not that a
portion of or all of the deferred tax assets will not be realized. The components of the deferred tax assets and liabilities are
individually classified as current and non-current based on their characteristics.
The
impact of an uncertain income tax position on the income tax return is recognized at the largest amount that is more-likely-than-not
to be sustained upon audit by the relevant tax authority. An uncertain income tax position will not be recognized if it has less
than a 50% likelihood of being sustained. Interest and penalties on income taxes are classified as a component of the provisions
for income taxes. The Company did not recognize any income tax as of December 31, 2016, and 2015 due to company being a BVI (British
Virgin Islands) entity, is subject to zero-rated income tax regime.
Comprehensive
loss
ASC
220 “Comprehensive Income”, establishes standards for the reporting and display of comprehensive income and its components
in the financial statements. As of December 31, 2016 and December 31, 2015, the Company does not have items that represented components
of comprehensive income.
Loss
per share
The
loss per share is computed using the weighted average number of shares outstanding during the fiscal years. For the years ended
December 31, 2016 and 2015, there is no dilutive effect due to net loss for the periods.
Recently
issued accounting pronouncements
Revenue
from Contracts with Customers
In
May 2014, the FASB issued ASU 2014-09,
Revenue from Contracts with Customers (Topic 606).
Under the update, revenue will
be recognized based on a five-step model. The core principle of the model is that revenue will be recognized when the transfer
of promised goods or services to customers is made in an amount that reflects the consideration to which the entity expects to
be entitled in exchange for those goods or services. In 2015, the FASB deferred the effective date of the standard to annual and
interim periods beginning after December 15, 2017. Early adoption will be permitted for annual and interim periods beginning after
December 15, 2016. The Company is currently evaluating the impact that adopting this ASU will have on its financial position,
results of operations and cash flows.
The
accompanying financial statements have been prepared assuming the Company will continue as a going concern. The Company has incurred
losses since its inception resulting in an accumulated deficit of $2,576 as of December 31, 2016. The ability to continue as a
going concern is dependent upon the Company generating profitable operations in the future and/or obtaining the necessary financing
to meet its obligations and repay its liabilities arising from normal business operations when they become due.
The
Company expects to finance operations primarily through cash flow from revenue and capital contributions from principal shareholders.
In the event that we require additional funding to finance the growth of the Company’s current and expected future operations
as well as to achieve our strategic objectives, our principal shareholders have indicated the intent and ability to provide additional
equity financing.
These
conditions raise substantial doubt about the Company’s ability to continue as a going concern. The Company’s continuation
as a going concern is dependent on our ability to meet obligations as they become due and to obtain additional equity or alternative
financing required to fund operations until sufficient sources of recurring revenues can be generated. There can be no assurance
that the Company will be successful in its plans described above or in attracting equity or alternative financing on acceptable
terms, or if at all. The financial statements do not include any adjustments that might result from the outcome of this- uncertainty.
|
4.
|
AMOUNT
DUE TO RELATED PARTY
|
|
|
As
of
December
31, 2016
|
|
|
As
of
December
31, 2015
|
|
Amounts due to a related party
|
|
|
|
|
|
|
|
|
Dato Lim Hui
Boon (1)
|
|
$
|
6,644
|
|
|
$
|
6,648
|
|
|
(1)
|
Dato
Lim Hui Boon, a related party to a director of the company, Lim Hui Sing. These amounts,
for working capital purposes, were unsecured, interest-free and repayable on demand.
|
|
5.
|
COMMITMENTS
AND CONTIGENCIES
|
There
was no contract or lease arrangement signed by the company that give rise to any present or future obligations as at December
31, 2016.
In
accordance with FASB ASC 855-10 Subsequent Events, the Company has analysed its operations subsequent event to December 31, 2016
to the date these financial statements were issued, and has determined that the following material subsequent events were necessary
to disclose in these financial statements.
On
January 5, 2017, the Company executed a license agreement with Vitaxel Group Limited (“Vitaxel”), a related company
listed on OTC Market. The agreement grants the Company exclusive use of Vitaxel Marks to operate a Vitaxel Business in countries
other than Malaysia, Singapore and Thailand. Subsequent to year end, the Company has promotes Vitaxel’s direct sales business
in new markets: in United States, Vietnam, Korea and Japan, which has led to significant income generation.
On
December 15, 2017, Vitaxel Group Limited (“Vitaxel”), a related company listed on OTC Market, entered into a Share
Sale Agreement with Lim Hui Sing and Leong Yee Ming (together, the “Sellers”) and Vitaxel Sdn. Bhd., a wholly-owned
subsidiary of the Vitaxel (“Purchaser”). Pursuant to the terms of the Agreement, at the closing for the transaction,
the Sellers will sell to the Purchaser all their shares in the Company, so that the Vitaxel shall become the indirect owner of
all of the issued and outstanding shares of the capital stock of the Company.
GRANDE
LEGACY INC
BALANCE
SHEET
(In
U.S. dollars)
|
|
As of
September 30,
|
|
|
As of
December 31,
|
|
|
|
2017
|
|
|
2016
|
|
|
|
(Unaudited)
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
CURRENT ASSETS
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
525,442
|
|
|
$
|
4,072
|
|
Accounts receivables
|
|
|
25,080
|
|
|
|
—
|
|
Amount due from related companies
|
|
|
991,537
|
|
|
|
—
|
|
Prepayments
|
|
|
25,746
|
|
|
|
—
|
|
Total Current Assets
|
|
|
1,567,805
|
|
|
|
4,072
|
|
|
|
|
|
|
|
|
|
|
TOTAL
ASSETS
|
|
$
|
1,567,805
|
|
|
$
|
4,072
|
|
|
|
|
|
|
|
|
|
|
CURRENT LIABILITIES
|
|
|
|
|
|
|
|
|
Accounts payables
|
|
$
|
689,555
|
|
|
$
|
—
|
|
Amount due to related party
|
|
|
6,708
|
|
|
|
6,644
|
|
Other payables
|
|
|
16,920
|
|
|
|
—
|
|
Total Current Liabilities
|
|
|
713,183
|
|
|
|
6,644
|
|
|
|
|
|
|
|
|
|
|
TOTAL LIABILITIES
|
|
|
713,183
|
|
|
|
6,644
|
|
|
|
|
|
|
|
|
|
|
Commitments and Contingencies
(Note 5)
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
STOCKHOLDERS’ EQUITY
|
|
|
|
|
|
|
|
|
Common stock, $1 par value, 50,000 shares authorized,
4 shares issued and outstanding
|
|
|
4
|
|
|
|
4
|
|
Retained earnings / (Accumulated
deficit)
|
|
|
854,618
|
|
|
|
(2,576
|
)
|
Total Stockholders’
Equity
|
|
|
854,622
|
|
|
|
(2,572
|
)
|
|
|
|
|
|
|
|
|
|
TOTAL
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
$
|
1,567,805
|
|
|
$
|
4,072
|
|
The
accompanying notes are an integral part of these financial statements.
GRANDE
LEGACY INC
STATEMENTS
OF OPERATIONS AND COMPREHENSIVE LOSS
(In
U.S. dollars)
(UNAUDITED)
|
|
Nine
months ended
September
30,
|
|
|
|
2017
|
|
|
2016
|
|
|
|
|
|
|
|
|
REVENUE
|
|
$
|
3,116,210
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
COST
OF REVENUE
|
|
|
(2,095,374
|
)
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
GROSS
LOSS
|
|
|
1,020,836
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
OPERATING
EXPENSES
|
|
|
|
|
|
|
|
|
Selling
expenses
|
|
|
(159,944
|
)
|
|
|
|
|
General
and administrative expenses
|
|
|
(6,583
|
)
|
|
|
(2,298
|
)
|
Total
Operating Expenses
|
|
|
(166,527
|
)
|
|
|
(2,298
|
)
|
|
|
|
|
|
|
|
|
|
INCOME
/ (LOSS) FROM OPERATIONS
|
|
|
854,309
|
|
|
|
(2,298
|
)
|
|
|
|
|
|
|
|
|
|
Other
Income
|
|
|
2,885
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
INCOME
/ (LOSS) BEFORE TAXES
|
|
|
857,194
|
|
|
|
(2,298
|
)
|
|
|
|
|
|
|
|
|
|
Income
tax expense
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
NET
INCOME / (LOSS)
|
|
$
|
857,194
|
|
|
$
|
(2,298
|
)
|
|
|
|
|
|
|
|
|
|
TOTAL
COMPREHENSIVE INCOME / (LOSS)
|
|
$
|
857,194
|
|
|
$
|
(2,298
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
average number of shares outstanding during the period – basic and diluted
|
|
|
4
|
|
|
|
4
|
|
|
|
|
|
|
|
|
|
|
Earnings
/ (Loss) per share – Basic and diluted
|
|
$
|
214,299
|
|
|
$
|
(598
|
)
|
The
accompanying notes are an integral part of these financial statements.
GRANDE
LEGACY INC
STATEMENTS
OF CASH FLOWS
(In
U.S. dollars)
(UNAUDITED)
|
|
Nine months ended September
30
|
|
|
|
2017
|
|
|
2016
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM OPERATING ACTIVITIES
|
|
|
|
|
|
|
|
|
Net income / (loss)
|
|
$
|
857,194
|
|
|
$
|
(2,298
|
)
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
Accounts receivable
|
|
|
(25,080
|
)
|
|
|
—
|
|
Amount due from related parties
|
|
|
(788,986
|
)
|
|
|
—
|
|
Prepayments
|
|
|
(25,746
|
)
|
|
|
—
|
|
Accounts payable
|
|
|
689,555
|
|
|
|
—
|
|
Other payables and accrued
expenses
|
|
|
16,920
|
|
|
|
—
|
|
Net cash generated from (used
in) operating activities
|
|
|
723,857
|
|
|
|
(2,298
|
)
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
|
Amount due from related parties
|
|
|
(202,551
|
)
|
|
|
—
|
|
Amount due to related party
|
|
|
64
|
|
|
|
(4
|
)
|
Net cash provided by financing
activities
|
|
|
(202,487
|
)
|
|
|
(4
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET INCREASE / (DECREASE) IN
CASH AND CASH EQUIVALENTS
|
|
|
521,370
|
|
|
|
(2,302
|
)
|
|
|
|
|
|
|
|
|
|
CASH AND
CASH EQUIVALENTS AT BEGINNING OF YEAR
|
|
|
4,072
|
|
|
|
6,466
|
|
|
|
|
|
|
|
|
|
|
CASH
AND CASH EQUIVALENTS AT END OF YEAR
|
|
$
|
525,442
|
|
|
$
|
4,164
|
|
|
|
|
|
|
|
|
|
|
SUPPLEMENTAL OF CASH FLOW INFORMATION
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash paid for interest
expenses
|
|
$
|
—
|
|
|
$
|
—
|
|
Cash paid for income tax
|
|
$
|
—
|
|
|
$
|
—
|
|
The
accompanying notes are an integral part of these financial statements.
GRANDE
LEGACY INC
NOTES
TO FINANCIAL STATEMENTS
(In
U.S. dollars)
|
1.
|
ORGANIZATION
AND BUSINESS
|
Grande
Legacy Inc. (“GL”), was incorporated in British Virgin Islands on March 11, 2008. The Company is primarily engaged
in the direct selling industry utilizing the online E-Commerce business model with an emphasis on travel, entertainment and lifestyle
products and services.
|
2.
|
SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES
|
Basis
of presentation
The
accompanying financial statements of the Company have been prepared in accordance with accounting principles generally accepted
in the United States of America (“U.S. GAAP”) for interim financial information Article 8 of Regulation S-X.
This
basis of accounting involves the application of accrual accounting and consequently, revenues and gains are recognized when earned,
and expenses and losses are recognized when incurred. The Company’s financial statements are expressed in U.S. dollars.
Use
of estimates
The
preparation of financial statements in conformity with accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect certain reported amounts of assets and liabilities and disclosure
of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses
during the reporting periods. Actual results could differ from those estimates.
Cash
and cash equivalents
Cash
and cash equivalents comprise cash and bank balances, term deposits and other short-term, highly liquid investments that are readily
convertible into cash with insignificant risk of changes in value, against which bank overdraft, if any, are deducted.
Accounts
receivable
Accounts
receivable are recognized and carried at original invoiced amount less an allowance for any potential uncollectible amounts. An
estimate for doubtful debts is made when collection of the full amount is no longer probable. Bad debts are written off as incurred.
The Company generally does not require collateral from its customers. For the period ended September 30, 2017 and December 31,
2016, the Company did not provide any bad debt allowance and did not write off any accounts receivable as bad debts.
Fair
value of financial instruments
FASB
ASC 820, “Fair Value Measurement,” specifies a hierarchy of valuation techniques based upon whether the inputs to
those valuation techniques reflect assumptions other market participants would use based upon market data obtained from independent
sources (observable inputs). In accordance with ASC 820, the following summarizes the fair value hierarchy:
Level
1 Inputs – Unadjusted quoted market prices for identical assets and liabilities in an active market that the Company has
the ability to access.
Level
2 Inputs – Inputs other than the quoted prices in active markets that are observable either directly or indirectly.
Level
3 Inputs – Inputs based on prices or valuation techniques that are both unobservable and significant to the overall fair
value measurements.
ASC
820 requires the use of observable market data, when available, in making fair value measurements. When inputs used to measure
fair value fall within different levels of the hierarchy, the level within which the fair value measurement is categorized is
based on the lowest level input that is significant to the fair value measurements. Valuation techniques used need to maximize
the use of observable inputs and minimize the use of unobservable inputs. As of September 30, 2017 and 2016, none of the Company’s
assets and liabilities were required to be reported at fair value on a recurring basis. Carrying values of non-derivative financial
instruments, including cash, accounts receivables, payables and accrued liabilities, approximate their fair values due to the
short term nature of these financial instruments. There were no changes in methods or assumptions during the periods presented.
Revenue
recognition
Product
sales − The Company generally recognizes revenue upon delivery and when both the title and risk and rewards pass to the
independent members or purchasers of the products. Product sales are recognized net of product returns, discounts and taxes. A
reserve for product returns is accrued based on historical experience. There was no product returns accrued as of September 30,
2017 and December 31, 2016.
Membership
fee − The Company recognizes the membership fee revenue over the term of the membership, which is 12 months. The revenue
will not be recognized until the 10 days cooling-off period is expired. No membership fee sales was recorded as of September 30,
2017 and December 31, 2016 as all membership fees were waived by the Company for the first year.
Loyalty
program
The
Company operates loyalty program which allows customer to accumulate redemption points when they purchase products from the Company.
The redemption points can be used to purchase a selection of products at discounted price or redeem products.
The
Company allocates consideration received from the sale of goods to the goods sold and the redemption points issued that are expected
to be redeemed.
The
consideration allocated to the redemptions points issued is measured at fair value of the redemption points. It is recognized
as a liability (deferred revenue) in the statement of financial position and recognized as revenue when the points are redeemed,
have expired or are no longer expected to be redeemed. The amount of revenue recognized is based on the number of points that
have been redeemed, relative to the number expected to redeem.
As
of September 30, 2017 and December 31, 2016, there was no such deferred revenue recorded.
Income
taxes
We
are subject to income taxes in both British Virgin Islands and foreign jurisdictions. Current income taxes are provided for in
accordance with the laws of the relevant tax authorities. Deferred income taxes are recognized when temporary differences exist
between the tax bases of assets and liabilities and their reported amounts in the financial statements. Net operating loss carry
forwards and credits are applied using enacted statutory tax rates applicable to future years. Deferred tax assets are reduced
by a valuation allowance when, in the opinion of management, it is more-likely-than-not that a portion of or all of the deferred
tax assets will not be realized. The components of the deferred tax assets and liabilities are individually classified as current
and non-current based on their characteristics.
The
impact of an uncertain income tax position on the income tax return is recognized at the largest amount that is more-likely-than-not
to be sustained upon audit by the relevant tax authority. An uncertain income tax position will not be recognized if it has less
than a 50% likelihood of being sustained. Interest and penalties on income taxes are classified as a component of the provisions
for income taxes. The Company did not recognize any income tax as of September 30, 2017 and December 31, 2016, due to company
being a BVI (British Virgin Islands) entity, is subject to zero-rated income tax regime, and did not foresee any foreign taxes
due to all income is of e-commerce.
Comprehensive
loss
ASC
220 “Comprehensive Income”, establishes standards for the reporting and display of comprehensive income and its components
in the financial statements. As of September 30, 2017 and December 31, 2016, the Company does not have items that represented
components of comprehensive income.
Income
/ (Loss) per share
The
loss per share is computed using the weighted average number of shares outstanding during the fiscal years. For the period ended
September 30, 2017 and December 31, 2016, there is no dilutive effect due to net loss for the periods.
Concentration
of Risk
The
Company operate its business globally, other than Malaysia, Singapore and Thailand. The Company generates revenue from sales to
its distributors with no individual distributor accounted for 10% or more of total revenue in the period ended September 30, 2017.
However, the current market concentration as a percent of net sales in the period ended September 30, 2017, were approximately
as follows:
Countries
|
|
Percentage
|
|
Korea
|
|
72
|
%
|
United States
|
|
18
|
%
|
Vietnam
|
|
5
|
%
|
Japan
|
|
5
|
%
|
However,
the Company product concentrated on 1 vendor, Marketing Values Incorporated, that make up to 56% of the purchases in the period
ended September 30, 2017.
Recently
issued accounting pronouncements
Revenue
from Contracts with Customers
In
May 2014, the FASB issued ASU 2014-09,
Revenue from Contracts with Customers (Topic 606).
Under the update, revenue will
be recognized based on a five-step model. The core principle of the model is that revenue will be recognized when the transfer
of promised goods or services to customers is made in an amount that reflects the consideration to which the entity expects to
be entitled in exchange for those goods or services. In 2015, the FASB deferred the effective date of the standard to annual and
interim periods beginning after December 15, 2017. Early adoption will be permitted for annual and interim periods beginning after
December 15, 2016. The Company is currently evaluating the impact that adopting this ASU will have on its financial position,
results of operations and cash flows.
|
|
As
of
September 30,
2017
(Unaudited)
|
|
|
As
of
December 31,
2016
|
|
|
|
|
|
|
|
|
|
|
Prepayments (1)
|
|
$
|
25,746
|
|
|
$
|
—
|
|
|
(1)
|
Prepayments
mainly consist of prepayment for purchase of e-products.
|
|
4.
|
RELATED
PARTIES TRANSACTIONS
|
|
|
As of
September
30,
2017
(Unaudited)
|
|
|
As
of
December 31,
2016
|
|
Amount due
from related parties
|
|
|
|
|
|
|
|
|
Vitaxel Sdn Bhd (1)
(2) (3)
|
|
|
788,986
|
|
|
|
—
|
|
Ho Wah Genting
Group Sdn Berhad (2) (4)
|
|
|
202,551
|
|
|
|
—
|
|
Balance
at end of period/year
|
|
$
|
991,537
|
|
|
$
|
—
|
|
|
|
As of
September 30,
2017
(Unaudited)
|
|
|
As
of
December 31,
2016
|
|
Amount due
to related party
|
|
|
|
|
|
|
|
|
Dato
Lim Hui Boon (2) (5)
|
|
|
6,708
|
|
|
|
6,644
|
|
Balance
at end of period/year
|
|
$
|
6,708
|
|
|
$
|
6,644
|
|
|
(1)
|
A
director of the Company, Leong Yee Ming, is also the CEO Vitaxel Group Ltd, the holding
company of Vitaxel Sdn Bhd.
|
|
(2)
|
Dato
Lim Hui Boon, a related party to a director of the Company, Lim Hui Sing, is the President
of both Ho Wah Genting Group Ltd and Vitaxel Group Ltd, the holding company of Ho Wah
Genting Sdn Berhad and Vitaxel Sdn Bhd respectively. As of September 30, 2017 and December
31, 2016, the amount due to the Dato Lim Hui Boon was $6,708 and $6,644, respectively.
These amounts were settled as of the date of this report.
|
|
(3)
|
On
January 5, 2017, the company executed a license agreement with Vitaxel Group Limited
(“Vitaxel”), a related company listed on OTC Market. The agreement grants
the company exclusive use of Vitaxel Marks to operate a Vitaxel Business in countries
other than Malaysia, Singapore and Thailand. During the period, the company has promotes
Vitaxel’s direct sales business in new markets: in United States, Vietnam, Korea
and Japan, which has led to significant income generation. However, due the company is
still in the process of obtaining online payment gateway for its credit card sales, the
company is currently engaging Vitaxel Sdn Bhd, a wholly-owned subsidiary of Vitaxel,
to collect credit card sales proceeds on behalf. The amounts are unsecured, interest-free
and repayable on demand.
|
|
(4)
|
The
company has made advance payment during the period to Ho Wah Genting Sdn Berhad for marketing
and campaign purposes. The amounts are unsecured, interest-free and repayable on demand.
|
|
5.
|
COMMITMENTS
AND CONTIGENCIES
|
There
was no contract or lease arrangement signed by the company that give rise to any present or future obligations as at September
30, 2017.
On
December 15, 2017, Vitaxel Group Limited (“Vitaxel”), a related company listed on OTC Market, entered into a Share
Sale Agreement with Lim Hui Sing and Leong Yee Ming (together, the “Sellers”) and Vitaxel Sdn. Bhd., a wholly-owned
subsidiary of the Vitaxel (“Purchaser”). Pursuant to the terms of the Agreement, at the closing for the transaction,
the Sellers will sell to the Purchaser all their shares in the company, so that the Vitaxel shall become the indirect owner of
all of the issued and outstanding shares of the capital stock of the company. In consideration for such sale, Vitaxel shall issue
to each of the Sellers 37,500,000 shares of its common stock.
In
accordance with FASB ASC 855-10 Subsequent Events, the Company has analysed its operations subsequent event from September 30,
2017 to the date these financial statements were issued, and has determined that the following material subsequent events were
necessary to disclose in these financial statements.
VITAXEL
GROUP LIMITED
Unaudited
Pro Forma Consolidated Balance Sheets
December
31, 2016
|
|
Vitaxel Group
Limited
|
|
|
Grande Legacy
Inc
|
|
|
Eliminations
|
|
|
Consolidated
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
105,432
|
|
|
$
|
4,072
|
|
|
$
|
—
|
|
|
$
|
109,504
|
|
Accounts receivable
|
|
|
1,944
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1,944
|
|
Inventories
|
|
|
53,913
|
|
|
|
—
|
|
|
|
—
|
|
|
|
53,913
|
|
Amount due from related companies
|
|
|
27,082
|
|
|
|
—
|
|
|
|
—
|
|
|
|
27,082
|
|
Amount due from an associated companies
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Due from director
|
|
|
5,427
|
|
|
|
—
|
|
|
|
—
|
|
|
|
5,427
|
|
Other receivables, prepayments
and other current assets
|
|
|
27,048
|
|
|
|
—
|
|
|
|
—
|
|
|
|
27,048
|
|
Total Current Assets
|
|
|
220,846
|
|
|
|
4,072
|
|
|
|
—
|
|
|
|
224,918
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NON-CURRENT ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property, plant and equipment,
net
|
|
|
194,669
|
|
|
|
—
|
|
|
|
—
|
|
|
|
194,669
|
|
Total Non-Current Assets
|
|
|
194,669
|
|
|
|
—
|
|
|
|
—
|
|
|
|
194,669
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL
ASSETS
|
|
$
|
415,515
|
|
|
$
|
4,072
|
|
|
$
|
—
|
|
|
$
|
419,587
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT LIABILITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amounts due to related companies
|
|
$
|
632,239
|
|
|
$
|
6,644
|
|
|
$
|
—
|
|
|
$
|
638,883
|
|
Amounts due to an associated company
|
|
|
279,219
|
|
|
|
—
|
|
|
|
—
|
|
|
|
279,219
|
|
Commission payables
|
|
|
115,915
|
|
|
|
—
|
|
|
|
—
|
|
|
|
115,915
|
|
Accounts payable
|
|
|
8,251
|
|
|
|
—
|
|
|
|
—
|
|
|
|
8,251
|
|
Accruals and other payables
|
|
|
446,487
|
|
|
|
—
|
|
|
|
—
|
|
|
|
446,487
|
|
Total Current Liabilities
|
|
|
1,482,111
|
|
|
|
6,644
|
|
|
|
—
|
|
|
|
1,488,755
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL LIABILITIES
|
|
|
1,482,111
|
|
|
|
6,644
|
|
|
|
—
|
|
|
|
1,488,755
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
STOCKHOLDERS’ EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock
|
|
|
5,409
|
|
|
|
4
|
|
|
|
—
|
|
|
|
5,403
|
|
Preferred stock
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Additional paid-in capital
|
|
|
1,340,194
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1,340,194
|
|
Accumulated deficit
|
|
|
(2,639,138
|
)
|
|
|
(2,576
|
)
|
|
|
—
|
|
|
|
(2,641,714
|
)
|
Accumulated other comprehensive
(loss) / income
|
|
|
226,939
|
|
|
|
—
|
|
|
|
—
|
|
|
|
226,939
|
|
Total Stockholders’ Equity
|
|
|
(1,066,596
|
)
|
|
|
(2,572
|
)
|
|
|
—
|
|
|
|
(1,069,168
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
$
|
415,515
|
|
|
$
|
4,072
|
|
|
$
|
—
|
|
|
$
|
419,587
|
|
VITAXEL
GROUP LIMITED
Unaudited
Pro Forma Consolidated Statements of Operations and Comprehensive Loss
For
the Year Ended December 31, 2016
|
|
Vitaxel Group
Limited
|
|
|
Grande Legacy
Inc
|
|
|
Eliminations
|
|
|
Consolidated
|
|
REVENUE
|
|
$
|
1,729,802
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,729,802
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
COST OF REVENUE
|
|
|
(1,223,587
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
(1,223,587
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GROSS PROFIT
|
|
|
506,215
|
|
|
|
—
|
|
|
|
—
|
|
|
|
506,215
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING EXPENSES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling expense
|
|
|
(1,595
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
(1,595
|
)
|
General and administrative
expenses
|
|
|
(1,303,948
|
)
|
|
|
(2,390
|
)
|
|
|
—
|
|
|
|
(1,306,338
|
)
|
Total Operating Expenses
|
|
|
(1,305,543
|
)
|
|
|
(2,390
|
)
|
|
|
—
|
|
|
|
(1,307,933
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LOSS FROM OPERATIONS
|
|
|
(799,328
|
)
|
|
|
(2,390
|
)
|
|
|
—
|
|
|
|
(801,718
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INVESTMENT INCOME, NET
|
|
|
36,412
|
|
|
|
—
|
|
|
|
—
|
|
|
|
36,412
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OTHER INCOME/(EXPENSE), NET
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Income
|
|
|
61,020
|
|
|
|
—
|
|
|
|
—
|
|
|
|
61,020
|
|
Other Expense
|
|
|
(21,756
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
(21,756
|
)
|
Total Other Income / (Expense),
net
|
|
|
39,264
|
|
|
|
—
|
|
|
|
—
|
|
|
|
39,264
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET LOSS BEFORE TAXES
|
|
|
(723,652
|
)
|
|
|
(2,390
|
)
|
|
|
—
|
|
|
|
(726,042
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
gain/(loss)
|
|
$
|
(723,652
|
)
|
|
$
|
(2,390
|
)
|
|
$
|
—
|
|
|
$
|
(726,042
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OTHER COMPREHENSIVE (LOSS)/INCOME
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency translation
adjustment
|
|
|
(31,804
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
(31,804
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL
COMPREHENSIVE (LOSS)
|
|
$
|
(755,456
|
)
|
|
$
|
(2,390
|
)
|
|
$
|
—
|
|
|
$
|
(757,846
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of shares outstanding
during the period – basic and diluted
|
|
|
49,364,705
|
|
|
|
—
|
|
|
|
—
|
|
|
|
49,364,705
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per share –
Basic and diluted
|
|
$
|
(0.02
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(0.02
|
)
|
VITAXEL
GROUP LIMITED
Unaudited
Pro Forma Consolidated Balance Sheets
September
30, 2017
|
|
Vitaxel
Group
Limited
|
|
|
Grande Legacy
Inc
|
|
|
Eliminations
|
|
|
Consolidated
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
170,478
|
|
|
$
|
525,442
|
|
|
$
|
—
|
|
|
$
|
695,920
|
|
Accounts receivable
|
|
|
—
|
|
|
|
25,080
|
|
|
|
—
|
|
|
|
25,080
|
|
Inventories
|
|
|
27,417
|
|
|
|
—
|
|
|
|
—
|
|
|
|
27,417
|
|
Amount due from related party
companies
|
|
|
14,866
|
|
|
|
991,537
|
|
|
|
(788,987
|
)
|
|
|
217,416
|
|
Amount due from an associated
companies
|
|
|
112,119
|
|
|
|
—
|
|
|
|
—
|
|
|
|
112,119
|
|
Due from director
|
|
|
1,744
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1,744
|
|
Other receivables,
prepayments and other current assets
|
|
|
28,172
|
|
|
|
25,746
|
|
|
|
—
|
|
|
|
53,918
|
|
Total Current Assets
|
|
|
354,796
|
|
|
|
1,567,805
|
|
|
|
(788,987
|
)
|
|
|
1,133,614
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NON-CURRENT
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property,
plant and equipment, net
|
|
|
214,518
|
|
|
|
—
|
|
|
|
—
|
|
|
|
214,518
|
|
Total Non-Current Assets
|
|
|
214,518
|
|
|
|
—
|
|
|
|
—
|
|
|
|
214,518
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL
ASSETS
|
|
$
|
569,314
|
|
|
$
|
1,567,805
|
|
|
$
|
(788,987
|
)
|
|
$
|
1,348,132
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT
LIABILITIES
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amounts due to related companies
|
|
|
1,527,999
|
|
|
$
|
6,708
|
|
|
$
|
(788,987
|
)
|
|
$
|
745,720
|
|
Amounts due to an associated
company
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Commission payables
|
|
|
146,723
|
|
|
|
—
|
|
|
|
—
|
|
|
|
146,723
|
|
Accounts payable
|
|
|
8,628
|
|
|
|
689,555
|
|
|
|
—
|
|
|
|
698,183
|
|
Accruals
and other payables
|
|
|
660,604
|
|
|
|
16,920
|
|
|
|
—
|
|
|
|
677,524
|
|
Total Current Liabilities
|
|
|
2,343,954
|
|
|
|
713,183
|
|
|
|
(788,987
|
)
|
|
|
2,268,150
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL LIABILITIES
|
|
|
2,343,954
|
|
|
|
713,183
|
|
|
|
(788,987
|
)
|
|
|
2,268,150
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
STOCKHOLDERS’
EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock
|
|
|
5,409
|
|
|
|
4
|
|
|
|
—
|
|
|
|
5,413
|
|
Preferred stock
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Additional paid-in capital
|
|
|
1,340,194
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1,340,194
|
|
Accumulated gain/ (deficit)
|
|
|
(2,983,457
|
)
|
|
|
854,618
|
|
|
|
—
|
|
|
|
(2,128,839
|
)
|
Accumulated
other comprehensive (loss) / income
|
|
|
(136,786
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
(136,786
|
)
|
Total Stockholders’ Equity
|
|
|
(1,774,640
|
)
|
|
|
854,622
|
|
|
|
—
|
|
|
|
(920,018
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
569,314
|
|
|
$
|
1,567,805
|
|
|
$
|
(788,987
|
)
|
|
$
|
1,348,132
|
|
VITAXEL
GROUP LIMITED
Unaudited
Pro Forma Consolidated Statements of Operations and Comprehensive Loss
For
the Nine Months Ended September 30, 2017
|
|
Vitaxel Group
Limited
|
|
|
Grande Legacy
Inc
|
|
|
Eliminations
|
|
|
Consolidated
|
|
REVENUE
|
|
$
|
557,862
|
|
|
$
|
3,116,210
|
|
|
$
|
—
|
|
|
$
|
3,674,072
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
COST OF REVENUE
|
|
|
(236,755
|
)
|
|
|
(2,095,374
|
)
|
|
|
—
|
|
|
|
(2,332,129
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GROSS PROFIT
|
|
|
321,107
|
|
|
|
1,020,836
|
|
|
|
—
|
|
|
|
1,341,943
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING EXPENSES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling expense
|
|
|
(691
|
)
|
|
|
(159,944
|
)
|
|
|
—
|
|
|
|
(160,635
|
)
|
General and administrative
expenses
|
|
|
(1,094,498
|
)
|
|
|
(6,583
|
)
|
|
|
—
|
|
|
|
(1,101,081
|
)
|
Total Operating Expenses
|
|
|
(1,095,189
|
)
|
|
|
(166,527
|
)
|
|
|
—
|
|
|
|
(1,261,716
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LOSS FROM OPERATIONS
|
|
|
(774,082
|
)
|
|
|
854,309
|
|
|
|
—
|
|
|
|
80,227
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INVESTMENT INCOME, NET
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OTHER INCOME/(EXPENSE), NET
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Income
|
|
|
43,830
|
|
|
|
2,885
|
|
|
|
—
|
|
|
|
46,715
|
|
Other Expense
|
|
|
(24,635
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
(24,635
|
)
|
Total Other Income / (Expense),
net
|
|
|
19,195
|
|
|
|
2,885
|
|
|
|
—
|
|
|
|
22,080
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET LOSS BEFORE TAXES
|
|
|
(754,887
|
)
|
|
|
857,194
|
|
|
|
—
|
|
|
|
102,307
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
gain/(loss)
|
|
$
|
(754,887
|
)
|
|
$
|
857,194
|
|
|
$
|
—
|
|
|
$
|
102,307
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OTHER COMPREHENSIVE (LOSS)/INCOME
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency translation
adjustment
|
|
|
(12,019
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
(12,019
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL
COMPREHENSIVE (LOSS)/INCOME
|
|
$
|
(766,906
|
)
|
|
$
|
857,194
|
|
|
$
|
—
|
|
|
$
|
90,288
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of shares outstanding
during the period – basic and diluted
|
|
|
54,087,903
|
|
|
|
—
|
|
|
|
—
|
|
|
|
54,087,903
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per share –
Basic and diluted
|
|
$
|
(0.01
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
THE
BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE AMENDMENT TO INCREASE THE AUTHORIZED SHARE CAPITAL OF COMMON STOCK.
The
Board has approved the amendment to our Articles of Incorporation for the purpose of increasing the authorized capital from 70,000,000
shares of common stock, par value $0. 0001 per share to 200,000,000 shares of common stock, par value $0.0001 per share and authorized
and recommends that shareholders of the Company vote FOR approval of the increase in the number of authorized shares of common
stock.
IN
THE EVENT THAT THIS PROPOSAL NO. 2 IS APPROVED, THE BOARD WILL FILE AN AMENDMENT TO THE COMPANY’S ARTICLES OF INCORPORATION
SUBSTANTIALLY IN THE FORM ATTACHED TO THIS PROXY.
PROPOSAL
3 - APPROVAL OF ADVISORY RESOLUTION SUPPORTING THE COMPENSATION OF OUR EXECUTIVE OFFICERS
General
Pursuant
to the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”), and Section 14A of the Securities
Exchange Act of 1934, as amended, our stockholders are being asked to vote, on an advisory basis, to approve the compensation
of its management team as described in this Proxy Statement. This proposal, commonly known as a “say-on-pay” proposal,
gives the Company’s stockholders the opportunity to express their views on the compensation of the Company’s Named
Executive Officer and the rest of the management team. For purposes of this Proxy Statement, Leong Yee Ming is the sole “Named
Executive Officer”.
Compensation
Program and Philosophy
Our
executive compensation program is designed to attract, reward and retain key employees, including our Named Executive Officer,
who are critical to the Company’s long-term success. Stockholders are urged to read the “Executive Compensation”
section of this Proxy Statement for greater detail about the Company’s executive compensation programs, including information
about the fiscal year 2016 compensation of the Named Executive Officer and the other officers of the Company.
The
stockholders are asked to indicate their support for the compensation of the Company’s Named Executive Officer and the management
team as described in this Proxy Statement by voting in favor of the following resolution:
RESOLVED
,
that the stockholders approve the compensation of the Named Executive Officer of Vitaxel Group Limited, as disclosed in the “Executive
Compensation”, the Summary Compensation Table and the related compensation tables, notes and narrative in the Proxy
Statement for the Company’s 2017 Annual Meeting of Stockholders.
Even
though this say-on-pay vote is advisory and therefore will not be binding on the Company, the Company values the opinions of its
stockholders. Accordingly, to the extent there is a significant vote against the compensation of the Named Executive Officer and
management, the Board of Directors will consider stockholder concerns and will evaluate what actions, if any, may be necessary
or appropriate to address those concerns. You may vote “for,” “against,” or “abstain” from
the proposal to approve on an advisory basis the compensation of our Named Executive Officer and the other current officers of
the Company.
THE
BOARD OF DIRECTORS RECOMMEND A VOTE SUPPORTING THE COMPENSATION OF THE NAMED EXECUTIVE OFFICER AND THE OTHER OFFICERS.
PROPOSAL
4 - APPROVAL OF ADVISORY RESOLUTION SUPPORTING THE COMPENSATION OF MANAGEMENT
General
Pursuant
to the Dodd-Frank Act and Section 14A of the Securities Exchange Act of 1934, as amended, we are also asking our stockholders
to provide their input with regard to the frequency of future advisory “say on pay” votes on the compensation of future
named executive officers, such as the proposal contained in Proposal 4 above. In particular, we seek your input on whether the
advisory vote on executive compensation should occur once every year, every two years or every three years.
After
considering this agenda item, the Board of Directors has determined that an advisory vote on executive compensation every year
is the appropriate interval for conducting and responding to a “say on pay” vote. By providing an advisory vote on
executive compensation every year, stockholders will be able to provide the Company with direct input on its compensation philosophy,
policies and practices after having enough time to view its impact on the Company’s business.
Vote
Required
Pursuant
to this non-binding advisory vote on the frequency of future non-binding advisory votes on named executive officer compensation,
stockholders
will
be able to specify one of four choices for this proposal on the proxy card or voting instruction: one year, two years, three years
or abstain.
Even
though your vote is advisory and therefore will not be binding on the Company, the Board of Directors values the opinions of our
stockholders and will consider the stockholder vote on the frequency of the vote on the future compensation of our future named
executive officers. Nevertheless, the Board of Directors may decide to hold a non-binding advisory vote on future compensation
of future named executive officers more or less frequently than the option voted by the stockholders.
THE
BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ONE YEAR AS THE PREFERRED FREQUENCY FOR THE APPROVAL OF THE NON-BINDING ADVISORY RESOLUTION
OF THE FUTURE COMPENSATION OF THE COMPANY’S FUTURE NAMED EXECUTIVE OFFICERS
.
INFORMATION
ABOUT OUR AUDITORS
Audit
Fees
The
aggregate fees billed in each of the fiscal years ended December 31, 2017 and December 31, 2016 for professional services rendered
by the principal accountant for the audit of our annual financial statements and quarterly review of the financial statements
included in our Form 10-K and Form 8-K, respectively, or services that are normally provided by the accountant in connection with
statutory and regulatory filings or engagements for those fiscal years were $66,500 and $63,500, respectively.
Administration
of the Engagement; Pre-Approval of Audit and Permissible Non-Audit Services
As
we progress in our business plans and add directors, an audit committee will be established. Until then, there are no formal pre-approval
policies and procedures. Nonetheless, the auditors engaged for these services are required to provide and uphold estimates for
the cost of services to be rendered. The only services they provide are for audited statements. The percentage of hours expended
on B F Borgers CPA PC’s engagement to audit our financial statements for the most recent fiscal year that were attributed
to work performed by persons other than the principal accountant’s full-time, permanent employees was 0%.
For
those registered stockholders of the Company that will receive a full set of the proxy materials in the mail, a copy of the Company’s
Annual Report will accompany this Proxy Statement. For those stockholders that will receive only the Notice, this Proxy Statement,
our Annual Report, any amendments to the foregoing materials that are required to be furnished to stockholders, and the proxy
card or voting instruction form will be available at www:proxyvote.com. The Notice contains instructions on how to access the
proxy materials over the Internet and vote online. These materials contain detailed information about the Meeting, the proposals
to be considered, our Board’s nominees for directors and other information concerning the Company.
If
you received only the Notice and would like to receive a copy of the printed proxy materials, we will deliver promptly, upon written
or oral request, a written copy of the Proxy Statement, the Annual Report, proxy card with voting instructions, and any amendments
to the foregoing materials that are required to be furnished to stockholders. A stockholder who wishes to receive written copies
of the proxy materials, now or in the future, may obtain one, without charge, by writing to the Vitaxel Group Limited, Wisma Ho
Wah Genting, No. 35, Jalan Maharajalela, 50150, Kuala Lumpur, Malaysia, by telephoning us at (603) 2143-2889.
STOCKHOLDER
PROPOSALS
Stockholders
who wish to present proposals for inclusion in the Company’s proxy materials for the 2019 Annual Meeting of Stockholders
may do so by following the procedures prescribed in Rule 14a-8 under the Exchange Act. To be eligible, the stockholder proposals
must be received by our Secretary at our principal executive no later than December 1, 2018. Under SEC rules, you must have continuously
held for at least one year prior to the submission of the proposal (and continue to hold through the date of the meeting) shares
of common stock equal to either (a) $2,000 in market value or (b) 1% of our outstanding common stock in order to submit a proposal
which you seek to have included in the Company’s proxy materials. We may, subject to SEC review and guidelines, decline
to include any proposal in our proxy materials.
Stockholders
who wish to make a proposal at the 2018 Annual Meeting of Stockholders, other than one that will be included in our proxy materials,
must notify us no later than December 1, 2018. If a stockholder who wishes to present a proposal fails to notify us by such date,
the proxies that management solicits for the meeting will confer discretionary authority to vote on the stockholder’s proposal
if it is properly brought before the meeting.
INCORPORATION
OF CERTAIN DOCUMENTS BY REFERENCE
The
Securities and Exchange Commission (“SEC”) allows us to “incorporate by reference” into this Proxy Statement
certain of the information we have filed with the SEC. This means that we can disclose important information by referring you
to those documents. All documents that we file with the SEC on or after the date of this Proxy Statement pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), prior to the Annual
Meeting, will be deemed to be incorporated by reference into this Proxy Statement and to be a part of it from the date of filing
of such documents. We are not, however, incorporating by reference any documents or portions thereof, whether specifically listed
below or filed in the future, that are not deemed “filed” with the SEC under its rules and regulations, including
information furnished pursuant to Item 2.02 or 7.01 of a Current Report on Form 8-K. Any statement contained in a document incorporated
or deemed to be incorporated by reference in this Proxy Statement shall be deemed to be modified or superseded for purposes of
this Proxy Statement to the extent that a statement contained in it or in any other subsequently filed document which also is
or is deemed to be incorporated by reference in this Proxy Statement modifies or supersedes such statement. Any such statement
so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Proxy Statement.
We
incorporate by reference the following documents that we have filed with the SEC, and any filings that we make with the SEC in
the future, under Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act, until the Meeting has been held:
|
●
|
Our
Annual Report on Form 10-K for the year ended December 31, 2017 filed with the SEC on April 17, 2018;
|
|
●
|
Our
Current Report on Form 8-K filed on April 25, 2018.
|
|
●
|
Our
Quarterly Report on Form 10-Q/A for the period ended March 31, 2017 filed on May 15,
2018;
|
|
●
|
Our
Quarterly Report on Form 10-Q/A for the period ended March 31, 2017 filed on May 15,
2018; and
|
|
●
|
Our
Quarterly Report on Form 10-Q/A for the period ended March 31, 2017 filed on May 15,
2018.
|
Copies
of any documents incorporated by reference in this Proxy Statement are available free of charge by writing to Vitaxel Group Limited,
Wisma Ho Wah Genting, No. 35, Jalan Maharajalela, 50150, Kuala Lumpur, Malaysia, by telephoning us at (603) 2143-2889.
These
documents, as well as various other reports, proxy statements and other information, may also be inspected and copied at the SEC’s
Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. You may obtain information on the operation of the Public
Reference Room by calling the SEC at 1-800-SEC-0330. The SEC maintains an internet site that contains reports, proxy and information
statements and other information regarding the company and other issuers that file electronically with the SEC. The address of
the SEC’s internet site is www.sec.gov. This information is also available on our website at www.hpev.com. Except as otherwise
stated above, information contained on these websites is not incorporated by reference into and does not constitute a part of
this Proxy Statement.
OTHER
BUSINESS
The
Board of the Company is not aware of any other matters to come before the Meeting. If any other matter should come before the
meeting, the proxy representative will vote the proxy according to his best judgment.
MULTIPLE
STOCKHOLDERS SHARING ONE ADDRESS
IN
ACCORDANCE WITH RULE 14A-3(E)(1) UNDER THE EXCHANGE ACT, ONE PROXY STATEMENT WILL BE DELIVERED TO TWO OR MORE STOCKHOLDERS WHO
SHARE AN ADDRESS, UNLESS WE HAVE RECEIVED CONTRARY INSTRUCTIONS FROM ONE OR MORE OF THE STOCKHOLDERS. WE WILL DELIVER PROMPTLY
UPON WRITTEN OR ORAL REQUEST A SEPARATE COPY OF THE PROXY STATEMENT TO A STOCKHOLDER AT A SHARED ADDRESS TO WHICH A SINGLE COPY
OF THE PROXY STATEMENT WAS DELIVERED. REQUESTS FOR ADDITIONAL COPIES OF THE PROXY STATEMENT, AND REQUESTS THAT IN THE FUTURE SEPARATE
PROXY STATEMENTS BE SENT TO STOCKHOLDERS WHO SHARE AN ADDRESS, SHOULD BE DIRECTED TO VITAXEL GROUP LIMITED, WISMA HO WAH GENTING,
NO. 35, JALAN MAHARAJALELA, 50150, KUALA LUMPUR, MALAYSIA, ATTENTION: CHIEF FINANCIAL OFFICER. IN ADDITION, STOCKHOLDERS WHO SHARE
A SINGLE ADDRESS BUT RECEIVE MULTIPLE COPIES OF THE PROXY STATEMENT MAY REQUEST THAT IN THE FUTURE THEY RECEIVE A SINGLE COPY
BY CONTACTING US AT THE ADDRESS SET FORTH IN THE PRIOR SENTENCE.
A
COPY OF THE COMPANY’S ANNUAL REPORT ON FORM 10-K FOR FISCAL 2017 FILED WITH THE SECURITIES AND EXCHANGE COMMISSION (INCLUDING
RELATED FINANCIAL STATEMENTS AND SCHEDULES), AS AMENDED, IS AVAILABLE TO STOCKHOLDERS WITHOUT CHARGE, UPON WRITTEN REQUEST TO
WISMA HO WAH GENTING, No. 35, JALAN MAHARAJALELA, 50150, KUALA LUMPUR, MALAYSIA, ATTENTION: CHIEF FINANCIAL OFFICER.
|
By
Order of the Board of Directors
|
|
|
|
Lim Wee Kiat
|
|
Chairman of
the Board
|
Kuala
Lumpur, Malaysia
June
__, 2018
VITAXEL
GROUP LIMITED
PROXY
VOTE
BY INTERNET –
www.proxyvote.com
Use
the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 PM Eastern Standard
Time the day before the cut-off date or meeting date. Have your proxy card in hand when you access the web site and follow the
instructions to obtain your records and to create an electronic instruction form.
ELECTRONIC
DELIVERY OF FUTURE SHAREHOLDER COMMUNICATIONS
If
you would like to reduce the costs incurred by Vitaxel Group Limited in mailing proxy materials, you can consent to receiving
all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic
delivery, please follow the insturcitions above to vote using the Internet and, when prompted, indicate that you agree to receive
or access shareholder communications electronically in future years.
VOTE
BY PHONE – 1-800-690-6903
Use
any touch-tone telephone to transmit your voting instructions up to until 11:59 PM Eastern Standard Time the day before the cut-off
date or meeting date. Have your proxy card in hand when you call and then follow the instructions.
VOTE
BY MAIL
Mark,
sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vitaxel Group Limited,
c/o/ Broadridge, 51 Mercedes Way, Edgewood, NY 11717.
PROXY
FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON JUNE 27, 2018. THIS PROXY IS SOLICITED ON BEHALF OF THE CHAIRMAN OF THE BOARD
OF DIRECTORS
The
undersigned hereby acknowledges receipt of Notice of Annual Meeting of Stockholders and Proxy Statement of Vitaxel Group Limited
in connection with the 2018 Annual Meeting to be held on June 27, 2018, and appoints Lim Wee Kiat, proxy with power of substitution,
for and in the name of the undersigned, and hereby authorizes him to represent and to vote, all the shares of common stock of
Vitaxel Group Limited, a Nevada corporation (“Company”), that the undersigned would be entitled to vote, subject to
and in accordance with the terms of the Proxy Statement, at our Annual Meeting of Stockholders (“Annual Meeting”)
on June 27, 2018 and at any adjournments thereof, upon the matters set forth in the Notice of Annual Meeting, hereby revoking
any proxy heretofore given. The proxy holder appointed hereby is further authorized to vote in his discretion upon such other
business as may properly come before the Annual Meeting. This proxy will be voted as specified.
If no direction is made, this
proxy will be voted in favor of proposals 1 and 2, abstain from voting for proposal 3 and for “one year” for proposal
4.
ON
PROPOSAL 1, THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” EACH OF THE DIRECTOR NOMINEES.
ON
PROPOSAL 2, THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” AN INCREASE IN THE AMOUNT OF SHARES OF COMMON STOCK THE
COMPANY IS AUTHORIZED TO ISSUE.
ON
PROPOSAL 3, THE BOARD OF DIRECTORS RECOMMEND A VOTE SUPPORTING THE NAMED EXECUTIVE OFFICER AND THE OTHER OFFICERS.
ON
PROPOSAL 4, THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR “ONE YEAR”.
☒
Please mark your votes as in this example using dark ink only.
1.
The election of the following nominees to the Company’s Board of Directors to serve until the 2019 Annual Meeting of Stockholders:
Lim Wee Kiat, Leong Yee Ming, Kay Wong-Alafriz, Richard Anzalone and Lim Wai Khoong:
FOR
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☐
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all nominees
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(except as marked
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to the contrary below)
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WITHHOLD ☐
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AUTHORITY
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to vote for all
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nominees listed above
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FOR ALL EXCEPT ☐
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Lim Wee Kiat ☐
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Leong Yee Ming ☐
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Kay Wong-Alafriz ☐
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Richard Anzalone ☐
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Lim Wai Khoong ☐
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INSTRUCTION:
To withhold authority to vote for any individual nominee(s), mark “FOR ALL EXCEPT” and check the box next to each
nominee you wish to withhold authority.
2. The
authorization of the amendment to our Articles of Incorporation for the purpose of increasing the authorized capital of the Company
from seventy million (70,000,000) shares of common stock, $0.0001 par value per share, to two hundred million (200,000,000) shares
of common stock, $0.0001 par value per share.
FOR
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AGAINST
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ABSTAIN
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☐
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☐
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☐
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3. The approval of a non-binding advisory proposal approving a resolution supporting the compensation of named executive officers.
FOR
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AGAINST
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ABSTAIN
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☐
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☐
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☐
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3. The approval of a non-binding advisory vote on the frequency of an advisory vote on compensation of named executive officers.
ONE
YEAR
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TWO YEARS
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THREE YEARS
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ABSTAIN
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☐
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☐
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☐
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☐
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In
his discretion, the proxyholder is authorized to vote upon such other business as may properly come before the meeting or any
adjournment thereof, all as set out in the Notice and Proxy Statement relating to the Annual Meeting, receipt of which are hereby
acknowledged.
Please
sign exactly as your name appears and return this proxy card immediately in the enclosed stamped self-addressed envelope.
Signature(s)
____________________ Signature _____________________
Dated:
_________________
NOTE:
Please mark, date and sign exactly as name(s) appear on this proxy and return the proxy card promptly using the enclosed envelope.
If the signer is a corporation, please sign full corporate name by duly authorized officer, giving full title as such. Executors,
administrators, attorneys, trustees, or guardians should state full title or capacity. Joint owners should each sign. If signer
is a partnership, please sign in partnership name by authorized person.