NOTES TO AUDITED FINANCIAL STATEMENTS
FOR THE YEARS ENDED SEPTEMBER 30, 2018 AND 2017
NOTE 1 ORGANIZATION AND NATURE OF BUSINESS
We were incorporated in the State of Nevada on February 26, 2014 under the name Terafox Corp. On December 13, 2017, we changed our name to Star Wealth Group Inc.
From inception until first fiscal quarter of 2016, the Companys principal business consisted of producing flyers, posters and printing images on multiple surfaces, such as glass, leather, plastic, using automated industrial flatbed printing machine.
Effective March 16, 2016, a change of control occurred with respect to the Company. Pursuant to a Securities Purchase Agreement entered into by and among the Company, Mr. Aleksey Gagauz (Seller) and Yik Kei Ong (Buyer, as nominee/agent for Smart Mate Limited, a Republic of Seychelles company), Seller assigned, transferred and conveyed to Buyer, as nominee/agent 4,000,000 shares of common stock of Company (Common Stock). As a result of the transaction, Smart Mate Limited owns 4,000,000 shares of common stock of the Company (or 62% of the total issued and outstanding shares of common stock of the Company).
On the closing of the above transaction, Mr. Gagauz, the sole officer and director of the Company, resigned in all officer capacities from the Company and a new officer and director was appointed.
Similarly, effective immediately after the closing the Company permanently ceased its previous operating activities of producing flyers, posters and printing images on multiple surfaces, such as glass, leather, plastic, using automated industrial flatbed printing machine.
Consequently, the Company is a shell company seeking to merge with another entity with experienced management and opportunities for growth in return for shares of our common stock to create value for our shareholders.
NOTE 2 GOING CONCERN
The accompanying financial statements have been prepared in conformity with generally accepted accounting principles, which contemplate continuation of the Company on a going concern basis which assumes the Company will be able to realize its assets and discharge its liabilities in the normal course of business for the foreseeable future. The Company currently has no business or recurring income which raises substantial doubt about its ability to continue as a going concern.
The ability to continue as a going concern is dependent upon the Companys ability to merger with or acquire 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 come due. There is no assurance that this series of events will be satisfactorily completed.
NOTE 3 SUMMARY OF SIGNIFCANT ACCOUNTING POLICIES
Basis of presentation
The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America.
Accounting Basis
The Company uses the accrual basis of accounting and accounting principles generally accepted in the United States of America (GAAP accounting). The Company has adopted a September 30 fiscal year end.
NOTE 3 SUMMARY OF SIGNIFCANT ACCOUNTING POLICIES (CONTINUED)
Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Cash and Cash Equivalents
The Company considers all highly liquid investments with the original maturities of three months or less to be cash equivalents. The Company had no cash balances at September 30, 2018 and 2017, respectively.
Inventory
Inventories are stated at the lower of cost or market determined on a first-in, first out basis.
Following the termination of all its previous operating activities effective March 13, 2016, the Company transferred its remaining inventory to a former director of the Company.
Fair Value of Financial Instruments
Fair value measurements are determined based on the assumptions that market participants would use in pricing an asset or liability. Accounting Standards Codification (ASC) 820-10 establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. ASC 820 establishes a fair value hierarchy that prioritizes the use of inputs used in valuation methodologies into the following three levels:
Level 1: Quoted prices (unadjusted) for identical assets or liabilities in active markets. A quoted price in an active market provides the most reliable evidence of fair value and must be used to measure fair value whenever available.
Level 2: Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.
Level 3: Significant unobservable inputs which reflect a reporting entitys own assumptions about the assumptions that market participants would use for pricing an asset or liability. For example, level 3 inputs would relate to forecasts of future earnings and cash flows used in a discounted future cash flows method.
As of September 30, 2018, the Companys financial instruments consisted of prepaid expenses, accounts payable, loans due to related parties. The carrying amount of these financial instruments approximates fair value due either to length of maturity or interest rates that approximate prevailing market rates unless otherwise disclosed in these financial statements.
Fixed Assets
Fixed assets are stated at net book value, cost less depreciation. Expenditures for maintenance and repairs are charged to expense as incurred. Additions, major renewals and replacements that increase the propertys useful life are capitalized. Property sold or retired, together with the related accumulated depreciation is removed from the appropriated accounts and the resultant gain or loss is included in net income.
Following the termination of all its previous operating activities effective March 13, 2016, the Company transferred its sole fixed asset to a former officer and director of the Company.
Depreciation is provided using the straight-line method over the estimated useful lives of the asset estimated at 6 years. We had no depreciation expense for the year ended September 30, 2018.
NOTE 3 SUMMARY OF SIGNIFCANT ACCOUNTING POLICIES (CONTINUED)
Accounting for the Impairment of Long-Lived Assets
The Company evaluates long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Upon such an occurrence, recoverability of assets to be held and used is measured by comparing the carrying amount of an asset to forecasted undiscounted net cash flows expected to be generated by the asset. If the carrying amount of the asset exceeds its estimated future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the asset. For long-lived assets held for sale, assets are written down to fair value, less cost to sell. Fair value is determined based on discounted cash flows, appraised values or management's estimates, depending upon the nature of the assets. The Company did not record any impairment charges related to long-lived assets during years ended September 30, 2018 and 2017.
Income Taxes
Income taxes are computed using the asset and liability method. Under the asset and liability method, deferred income tax assets and liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities and are measured using the currently enacted tax rates and laws. A valuation allowance is provided for the amount of deferred tax assets that, based on available evidence, are not expected to be realized.
Revenue Recognition
The Company recognizes revenue in accordance with Accounting Standards Codification No. 605, Revenue Recognition (ASC-605), ASC-605 requires that four basic criteria must be met before revenue can be recognized: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred; (3) the selling price is fixed and determinable; and (4) collectability is reasonably assured. Determination of criteria (3) and (4) are based on managements judgments regarding the fixed nature of the selling prices of the products delivered and the collectability of those amounts. Provisions for discounts and rebates to customers, estimated returns and allowances, and other adjustments are provided for in the same period the related sales are recorded. The Company will defer any revenue for which the product or servicers has not been delivered or provided or is subject to refund until such time that the Company and the customer jointly determine that the product has been delivered or no refund will be required.
Stock-Based Compensation
Stock-based compensation is accounted for at fair value in accordance with ASC Topic 718. To date, the Company has not adopted a stock option plan and has not granted any stock options.
Basic Income (Loss) Per Share
Basic income (loss) per share is calculated by dividing the Companys net loss applicable to common shareholders by the weighted average number of common shares during the period. Diluted earnings per share is calculated by dividing the Companys net income available to common shareholders by the diluted weighted average number of shares outstanding during the year. The diluted weighted average number of shares outstanding is the basic weighted number of shares adjusted for any potentially dilutive debt or equity. There were no such common stock equivalents issued or outstanding during the years ended September 30, 2018 or 2017.
Comprehensive Income
The Company has which established standards for reporting and display of comprehensive income, its components and accumulated balances. When applicable, the Company would disclose this information on its Statement of Stockholders Equity. Comprehensive income comprises equity except those resulting from investments by owners and distributions to owners. The Company has not had any transactions that are required to be reported in other comprehensive income.
Recent Accounting Pronouncements
The Company does not expect the adoption of recently issued, but not yet effective, accounting pronouncements to have a significant impact on the Companys results of operations, financial position or cash flow.
Reclassifications
Certain prior year amounts have been reclassified for comparative purposes to conform to the current-year financial statement presentation. These reclassifications had no effect on previously reported results of operations.
NOTE 4 PREPAID EXPENSES
As of September 30, 2018, the balance of net prepaid expenses was $13,394 (2017 - $9167). Prepaid expenses are comprised of legal fees of $2,561 and $10,833 for OTC fees as of 9/30/18 and for OTC fees of $9,167 as of 9/30/17.
NOTE 5 LOANS FROM RELATED PARTIES
Principal Shareholder and Affiliates
During the year ended September 30, 2018, an affiliate of the Companys current principal shareholder (Smart Mate Limited (Smart Mate)), Mr. Yik Kei Ong advanced a total $62,994 to the Company, and Star Wealth Group Capital Limited, a Hong Kong company (SWCGL), advanced a total of $6,850 to provide working capital for the Company. The advances made by SWCGL were made on behalf of Smart Mate. As of September 30, 2017, there was a prior loan outstanding from Mr. Ong in the amount of $23,465. The loans are unsecured, non-interest bearing and due on demand.
As of September 30, 2018, the Company owes $86,459 and $6,850, respectively to the affiliate to the largest shareholder and the largest shareholder.
On June 5, 2017, a total of $117,682 was owed to Smart Mate by the Company and pursuant to a loan conversion agreement on that date, the parties discharged $116,482 amount in exchange for the issuance 23,297,000 shares of common stock of the Company. After giving effect to the loan conversion, as of September 30, 2017, the Company owed Smart Mate the sum of $1,200, which amount remains outstanding as of September 30, 2018.
NOTE 6 COMMON STOCK
Common Stock
The Company has 75,000,000, $0.001 par value shares of common stock authorized.
During January 2016, the Company issued 285,000 shares of common stock for cash proceeds of $2,759 at $0.01 per share.
During February 2016, the Company issued 1,275,000 shares of common stock for cash proceeds of $12,400 at $0.01 per share.
During March 2016, the Company issued 720,000 shares of common stock for cash proceeds of $7,160 at $0.01 per share.
During April 2016, the Company issued 160,000 shares of common stock for cash proceeds of $1,600 at $0.01 per share.
On June 5, 2017, a total of $116,485 was owed by the Company to its principal shareholder and pursuant to a loan conversion agreement, the parties discharged the entire loan amount in exchange for the issuance of 23,297,000 shares of common stock of the Company.
There were 29,737,000 shares of common stock issued and outstanding as of September 30, 2018 (2017: 29,737,000).
NOTE 6 COMMON STOCK
Additional Paid in Equity
Effective March 16, 2016, following our permanent cessation of our previous operating activities of producing flyers, posters and printing images on multiple surfaces, such as glass, leather, plastic, using automated industrial flatbed printing
machine, we transferred our equipment with a net book value of $9,257 and inventory with a cost of $806 to our former director and former controlling shareholder. As the transfer was to a related party, the loss on the assets transferred has been recognized in additional aid in capital rather than in the income statement
Further, on March 16, 2016, a former officer and director forgave all amounts due to him which amounted to $14,791. The gain on the forgiveness of the loan has been recognized in additional paid in capital rather than in the income statement as the loan was with a related party.
NOTE 7 COMMITMENTS AND CONTINGENCIES
Legal
We were not subject to any legal proceedings during the years ended September 30, 2018 or 2017 and none are threatened or pending to the best our knowledge and belief.
NOTE 8 INCOME TAXES
Operating Losses
As of September 30, 2018, the Company had net operating loss carry forwards of approximately $231,256 (2017 169,628) that may be available to reduce future years taxable income in varying amounts through 2031.
Following the Companys change of control effective May 16, 2016, due to the change in ownership provisions of the Tax Reform Act of 1986, net operating loss carry forwards of approximately $107,142 for Federal income tax reporting purposes may be subject to annual limitations.
Future tax benefits which may arise as a result of these losses have not been recognized in these financial statements, as their realization is determined not likely to occur and accordingly, the Company has recorded a valuation allowance for the deferred tax asset relating to these tax loss carry-forwards.
The provision for Federal income tax at the expected rate of 21% consists of the following:
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|
|
|
|
|
|
Years Ended September 30,
|
|
2018
|
2017
|
Federal income tax (liability) benefit attributable to:
|
|
|
Current Operations
|
$ 12,942
|
$ 18,296
|
Less: brought forward tax losses / (valuation allowance)
|
(12,942)
|
(18,296)
|
Net provision for Federal income taxes
|
$ -
|
$ -
|
NOTE 9 INCOME TAXES
The cumulative tax effect at the expected rate of 21% of significant items comprising our net deferred tax amount is as follows:
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|
|
|
|
|
|
2018
|
2017
|
Deferred tax asset attributable to:
|
|
|
Net operating loss carryover
|
48,564
|
$ 35,622
|
Less: valuation allowance
|
(48,564)
|
(35,622)
|
Net deferred tax asset
|
$ -
|
$ -
|
NOTE 10 SUBSEQUENT EVENTS
22
STAR WEALTH GROUP, INC.
(FKA TERAFOX CORP.)
NOTES TO AUDITED FINANCIAL STATEMENTS
FOR THE YEARS ENDED SEPTEMBER 30, 2018 AND 2017
The Company evaluated subsequent events from January 14, 2019 through the date these financial statements were issued. Other than as disclosed above, there have been no subsequent events after September 30, 2018 for which disclosure is required.
23
Item 9A. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
In connection with the preparation of this annual report, an evaluation was carried out by the Companys management, with the participation of the principal executive officer and the principal financial officer, of the effectiveness of the Companys disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act (Exchange Act) as of September 30, 2018. Disclosure controls and procedures are designed to ensure that information required to be disclosed in reports filed or submitted under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the Commissions rules and forms, and that such information is accumulated and communicated to management, including the principal executive officer and the principal financial officer, to allow timely decisions regarding required disclosures.
Based on that evaluation, the Companys management concluded, as of the end of the period covered by this report, that the Companys disclosure controls and procedures were not effective in recording, processing, summarizing, and reporting information required to be disclosed, within the time periods specified in the Commissions rules and forms, and that such information was not accumulated and communicated to management, including the principal executive officer and the principal financial officer, to allow timely decisions regarding required disclosures.
Managements Report on Internal Control over Financial Reporting
The management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting. The Companys internal control over financial reporting is a process, under the supervision of the principal executive officer and the principal financial officer, designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the Companys financial statements for external purposes in accordance with United States generally accepted accounting principles (GAAP). Internal control over financial reporting includes those policies and procedures that:
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●
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Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the Company
’
s assets;
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●
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Provide reasonable assurance that transactions are recorded as necessary to permit preparation of the financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures are being made only in accordance with authorizations of management and the board of directors; and
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●
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Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company
’
s assets that could have a material effect on the financial statements.
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Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate.
The Companys management conducted an assessment of the effectiveness of our internal control over financial reporting as of September 30, 2018, based on criteria established in Internal Control Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013), which assessment identified material weaknesses in internal control over financial reporting. A material weakness is a control deficiency, or a combination of deficiencies in internal control over financial reporting that creates a reasonable possibility that a material misstatement in annual or interim financial statements will not be prevented or detected on a timely basis. Since the assessment of the effectiveness
24
of our internal control over financial reporting did identify a material weakness, management considers its internal control over financial reporting to be ineffective.
Management has concluded that our internal control over financial reporting had the following deficiency:
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●
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We were unable to maintain any segregation of duties within our business operations due to our reliance on a single individual fulfilling the role of sole officer and director. While this control deficiency did not result in any audit adjustments to our 2017 or 2016 interim or annual financial statements, it could have resulted in a material misstatement that might have been prevented or detected by a segregation of duties. Accordingly, we have determined that this control deficiency constitutes a material weakness.
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To the extent reasonably possible, given our limited resources, our goal is, upon consummation of a merger with a private operating company, to separate the responsibilities of principal executive officer and principal financial officer, intending to rely on two or more individuals. We will also seek to expand our current board of directors to include additional individuals willing to perform directorial functions. Since the recited remedial actions will require that we hire or engage additional personnel, this material weakness may not be overcome in the near term due to our limited financial resources. Until such remedial actions can be realized, we will continue to rely on the advice of outside professionals and consultants.
This annual report does not include an attestation report of our registered public accounting firm regarding our internal controls over financial reporting. Managements report was not subject to attestation by our registered public accounting firm pursuant to Section 404(c) of the Sarbanes-Oxley Act that permit us to provide only managements report in this annual report.
Changes in Internal Controls over Financial Reporting
During the year ended September 30, 2018, there has been no change in internal control over financial reporting that has materially affected, or is reasonably likely to materially affect our internal control over financial reporting.
PART III
Item 10. Directors, Executive Officers and Corporate Governance.
The following table sets forth certain information concerning our officers and directors.
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Name
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Age
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Position
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Bum Chul Kim
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41
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CEO, CFO, Secretary and Treasurer
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Chi Yeuk Lau
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25
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Director
|
Management and Director Biographies:
Bum Chul Kim
. Mr. Kim became our sole officer on February 28, 2017. Mr. Kim has significant experience in all aspects of business management, with concentration in the IT sector. Since March 2016 to the present, he has been Chief Executive Officer of Sinjutech Co, Ltd., an IT provider located in Seoul, Korea. From December 2014 to March 2016, he was Director of Modu & T Co, Ltd, a Trading company located in Seoul, Korea. From February 2006 to February 2009, he was a Director of the Matrix Group, a software company located in Seoul, Korea. Mr. Chul received a BA degree (with honors) from the Shingendai School (Tokyo, Japan) in 2003 and received his BA degree (with honors) in Business in University Canberra (Melbourne, Australia) in 2006.
Chi Yeuk Lau
. Ms. Lau is the sole director of the Company and was appointed in that capacity on August 3, 2016. She was the Companys acting Chief Executive Officer, Chief Financial Officer, Secretary and Treasurer from August 3, 2016 to February 28, 2017, when she resigned in all such capacities. She has extensive public relations, marketing and communication skills. Since January 2012, she has been public relations director for Success Financial Holdings Limited, Hong Kong. She graduated with a Bachelor of Science Degree from Hong Kong Baptist University in 2014.
Family Relationships amongst Directors and Officers:
None
26
Involvement in Certain Legal Proceedings
To the best of our knowledge, none of our directors or executive officers has, during the past ten years, been involved in any legal proceedings described in subparagraph (f) of Item 401 of Regulation S-K.
Significant Employees
We have no significant employees other than our sole officer and director named in this Annual Report.
Code of Business Conduct and Code of Ethics
Our Board of Directors has not adopted a Code of Business Conduct and Ethics because we currently have only one individual serving as our sole officer and an another serving as our sole director.
Nominating Committee
We have not adopted any procedures by which security holders may recommend nominees to our Board of Directors.
Audit and Compensation Committee
The Board of Directors acts as the audit committee and compensation committee. The Company does not have a qualified financial expert at this time because it has not been able to hire a qualified candidate. Further, the Company believes that it has inadequate financial resources at this time to hire such an expert. The Company intends to continue to search for a qualified individual for hire.
Item 11. Executive Compensation.
DIRECTOR AND OFFICER COMPENSATION
The following summary compensation table sets forth all compensation awarded to, earned by, or paid to our sole officer and director by the Company during the years ended September 30, 2018 and 2017 in all capacities:
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Name and Position
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Year
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|
Salary
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|
Bonus
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|
Stock
Award(s)
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|
Option
Awards
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|
All Other
Compensation
|
|
Total
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Bum Chul Kim
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2018
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None
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None
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None
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None
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None
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None
|
CEO, CFO and Treasurer
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|
2017
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|
None
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None
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None
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None
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None
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None
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|
|
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|
|
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|
|
|
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Chi Yeuk Lau
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2018
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None
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None
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None
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None
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None
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None
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Director and Former CEO and CFO
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2017
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None
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None
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None
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None
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None
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|
None
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|
|
|
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The Company's current and former sole officer and director has not received any cash or other remuneration since they were appointed to serve in such capacities. No remuneration of any nature has been paid for on account of services rendered by a director in such capacity. Our sole officer and director intends to devote very limited time to our affairs.
27
We have formulated no plans as to the amounts of future cash compensation. It is possible that, after the Company successfully consummates a business combination with an unaffiliated entity, that entity may desire to employ or retain members of our management for the purposes of providing services to the surviving entity. No retirement, pension, profit sharing, stock option or insurance programs or other similar programs have been adopted by the Company for the benefit of its employees. There are no understandings or agreements regarding compensation our management will receive after a business combination that is required to be disclosed. The Company does not have a standing compensation committee or a committee performing similar functions.
Employment Agreements
We do not have any employment agreements with our sole officer and director.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
The following table sets forth certain information regarding the beneficial ownership of our Common Stock as of December 3, 2018 by (i) each named executive officer, (ii) each member of our Board of Directors, (iii) each person deemed to be the beneficial owner of more than five percent (5%) of any class of our common stock, and (iv) all of our executive officers and directors as a group, based on. 29,737,000 shares of common stock issued and outstanding on such date.
Unless otherwise indicated, each person named in the following table is assumed to have sole voting power and investment power with respect to all shares of our common stock listed as owned by such person. The address of each person is deemed to be the address of the issuer unless otherwise noted. Pursuant to Rule 13d-3 promulgated under the Exchange Act, any securities not outstanding which are subject to warrants, rights or conversion privileges exercisable within 60 days are deemed to be outstanding for purposes of computing the percentage of outstanding securities of the class owned by such person but are not deemed to be outstanding for the purposes of computing the percentage of any other person.
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Name of
Beneficial Owner
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Amount and Nature of Beneficial Owner
|
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|
Percent of Class
|
|
Officers and Directors
Bum Chul Kim
|
|
0
|
|
|
0%
|
|
Chi Yeuk Lau
|
|
|
0
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|
|
|
0%
|
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All officers and directors as a group (2 individuals)
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0
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0%
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Greater than 10% Shareholders
|
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Smart Mate Limited(1)
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25,365,000
|
|
|
|
85.3%
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|
R24 Flat C 5/F
Wah Mow Factory Building
5-7 Ng Fong Street
San Po Kang
Kowloon, Hong Kong
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Wealth Star Management Pte. Ltd.(2)
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1,932,000
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|
|
6.6%
|
|
60 Paya Lebar Road
#08-57G Paya Lebar Square
409051 Singapore
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(1)
|
Tee Kiew Ong and Yik Kei Ong may be deemed the control parties of the shareholder. The two parties are siblings.
|
(2) Pin Yin Choo is the control person of the shareholder.
Item 13. Certain Relationships and Related Transactions, and Director Independence.
On June 5, 2017, the Company and Smart Mate Limited, a Seychelles company and the Companys principal shareholder (Smart Mate), entered into a Loan Conversion Agreement pursuant to Smart Mate converted its outstanding loans to the Company in exchange for common stock of the Company. On Jun
e 5, 2017, a total of $116,485 was owed to the Smart Mate by the Company, and pursuant to the Loan Conversion Agreement, Smart Mate discharged the loan amount in exchange for receiving 23,297,000 shares of common stock of the Company. After giving effect to the loan conversion, as of September 30, 2017, the Company owed Smart Mate the sum of $1,200, which amount remains outstanding as of September 30, 2018.
In addition, apart from the loan conversion described above, during fiscal years ended September 30, 2017 and September 30, 2018, Mr. Yik Kei Ong advanced $62,994 and $23,465, respectively as working capital for the Company Also during fiscal year ended September 30, 2018, Star Wealth Capital Group Limited, a Hong Kong company (SWCGL), advanced a total of $6,850 to provide working capital for the Company. The advances made by SWCGL were made on behalf of Smart Mate. These loans are unsecured, non-interest bearing and due on demand.
Ms. Tee Kiew Ong, the sole shareholder and officer of Smart Mate. Mr. Yik Kei Ong may be deemed a control person of Smart Mate and is the brother of Tee Kiew Ong.
The Company utilizes the office space and equipment of its majority shareholders at no charge and management of the Company determined it to be immaterial.
Except as otherwise indicated herein, there have been no related party transactions, or any other transactions or relationships required to be disclosed pursuant to Item 404 of Regulation S-K.
Director Independence
:
Our Common Stock is currently quoted on the OTC-QB which does not have any director independence requirements. In determining whether our directors are independent, we refer to NASDAQ Stock Market Rule 4200(a)(15) which indicates that a director is not considered to be independent if he or she also is an executive officer or employee of the corporation. Based on those widely-accepted criteria, we have determined that our sole director Chi Yeuk Lau is not independent as he also serves as the sole officer of the Company.
Item 14. Principal Accountant Fees and Services.
Gillespie and Associates, PLLC is the Companys current independent registered public accounting firm.
(1) Audit Fees
The aggregate fees billed for each of the last two fiscal years for professional services rendered by the principal accountant for our audit of annual financial statements and review of financial statements included in our quarterly reports or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for those fiscal years were approximately:
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|
|
|
|
|
|
2018
|
|
$
|
10,500
|
|
|
Michael Gillespie and Associates, PLLC
|
2017
|
|
$
|
10,500
|
|
|
Michael Gillespie and Associates, PLLC
|
(2) Audit-Related Fees
The aggregate fees billed in each of the last two fiscal years for assurance and related services by the principal accountants that are reasonably related to the performance of the audit or review of our financial statements and are not reported in the preceding paragraph:
(3) Tax Fees
The aggregate fees billed in each of the last two fiscal years for professional services rendered by the principal accountant for tax filings was:
|
|
|
2018
|
$ 650
|
Michael Gillespie and Associates, PLLC
|
2017
|
$ 650
|
Michael Gillespie and Associates, PLLC
|
(4) All Other Fees
The aggregate fees billed in each of the last two fiscal years for the products and services provided by the principal accountant, other than the services reported in paragraphs (1), (2), and (3) were:
The percentage of hours expended on the principal accountants engagement to audit our financial statements for the most recent fiscal year that were attributed to work performed by persons other than the principal accountants full time, permanent employees was 0%.
Audit Committees Pre-Approval Process
The Board of Directors acts as the audit committee of the Company, and accordingly, all services are approved by all the members of the Board of Directors.
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