PART
I
Item
1. Business.
Company
History and Recent Developments
Image
Chain Group Limited, Inc.
Image
Chain Group Limited, Inc. (formerly Have Gun Will Travel Entertainment, Inc.) was incorporated under the laws of Nevada on December
18, 2013, and initially sought to create reality television programming. References in this Report to “ICGL”, “Image
Chain”, the “Company”, the “Registrant”, “we”, “our” or “us”
are to Image Chain Group Limited, Inc.
On
May 5, 2015, ICGL entered into a share exchange agreement (the “FDHG Exchange Agreement”) with Fortune Delight Holdings
Group Ltd (“FDHG”) and Wu Jun Rui, on behalf of himself and certain other individuals who were to receive shares of
ICGL pursuant to the FDHG Exchange Agreement (the “FDGH Shareholders”). On the terms and subject to the conditions
set forth in the FDHG Exchange Agreement, on May 5, 2015, Wu Jun Rui transferred all 50,000 shares of FDHG common stock, consisting
of all of the issued and outstanding shares of FDHG, to ICGL in exchange for the issuance to the stockholders of FDHG of 59,620,000
shares of the Company’s common stock, par value $.001 per share (“Common Stock”) and 5,000,000 shares of the
Company’s preferred stock, par value $.001 per share (“Preferred Stock”).
As
a result of the closing of the FDHG Exchange Agreement, FDHG became the Company’s wholly owned subsidiary. FDHG, through
its subsidiaries, manufactured and sold “Image Tea”-branded tea products from its tea garden in Yunnan Province.
On
June 11, 2015, the Company amended its Articles of Incorporation in order to change its name to Image Chain Group Limited, Inc.
and to increase the authorized shares of Common Stock from 70,000,000 to 400,000,000. The name change was undertaken in order
to more closely align with the operations of the Company’s wholly-owned subsidiary, the increase in authorized Common Stock
was undertaken to allow the Company to utilize the newly available shares to raise capital.
On
or about November 15, 2016, FDHG disposed of its ownership of all operating assets, and as a result ICGL became a shell company,
as defined by Rule 12b-2 under the Exchange Act (the “Disposition Event”). The Disposition Event is evidenced by a
bought and sold note stamped by the Inland Revenue Department of Hong Kong, which we believe is a legally binding document.
On
February 13, 2017, the Company filed with the Secretary of State of the State of Nevada a Certificate of Correction (the “Certificate
of Correction”) to correct a mistake made in the Company’s original Articles of Incorporation with regard to the Preferred
Stock issued in connection with the FDHG Exchange Agreement. As a result, ICGL had 395,000,000 shares of Common Stock and 5,000,000
shares of Preferred Stock issued and outstanding. The Company subsequently entered into an agreement pursuant to which the holder
of the Preferred Stock agreed to retire the Preferred Stock in exchange for receiving an equal number of shares of Common Stock
of the Company. As of the date of this Report, that exchange of Preferred Stock for Common Stock has not yet occurred.
On
May 1, 2017, upon recommendation of the Board of Directors, a majority of Image Chain’s common stockholders consented in
writing to amendment of Image Chain’s Articles of Incorporation to (i) effect a reverse stock split on a 1 for 100 stock
split basis from 400,000,000 authorized shares with a par value of $0.001 per share to 4,000,000 authorized shares with a par
value of $0.001, and (ii) after the reverse stock split, to increase the authorized shares of Common Stock from 3,950,000 to 2,000,000,000
shares with a par value of $0.001 per share, and to decrease the authorized shares of Preferred Stock from 50,000 to zero (0).
As of the date of this Report, the reverse stock split and increase in authorized shares have been completed, and the decrease
in shares of Preferred Stock has not yet occurred, as a result 50,000 shares of Preferred Stock are authorized and outstanding.
Image
P2P Trading Group Limited
Image
P2P Trading Group Limited (“Image P2P”), a company organized under the laws of the British Virgin Islands, was incorporated
on April 21, 2015. Asia Grand Will (“AGW”) was incorporated on March 18, 2017 in the Hong Kong SAR. AGW wholly owns
Fuzhi Yuan (Shenzhen) Holdings Limited (“FYSZ”) which was established on June 20, 2017 in the PRC. FYSZ is a wholly
owned foreign entity under PRC law. FYSZ wholly owns Jiangxi Fuzhiyuan Biotechnology Limited (“Fuzhiyuan Biotechnology”),
which was established on January 5, 2013 in the PRC. FYSZ acquired Fuzhiyuan Biotechnology on July 14, 2017. AGW and FYSZ are
intermediary holding companies. Image P2P conducts its operations through Fuzhiyuan Biotechnology. Image P2P acquired AGW on Jul
28, 2017.
The
reorganization of Image P2P and its subsidiaries via the acquisitions detailed above, by and amongst Image P2P and AGW, FYSZ,
and Fuzhiyuan Biotechnology, was accounted for under US GAAP as business combinations under common control.
The
Share Exchange
On
November 14, 2017, Image Chain entered into a share exchange agreement (the “Exchange Agreement”) with Image P2P and
the shareholders of Image P2P (the “Sellers”). Pursuant to the Exchange Agreement, the Sellers transferred all 50,000
shares of Image P2P outstanding common stock to the Company in exchange for 500,000,000 shares of Common Stock (the “Share
Exchange”). As a result of the Share Exchange, Image P2P became the Company’s wholly-owned subsidiary. Image P2P,
through its subsidiaries, is engaged in producing, marketing and selling tea polyphenol products, and is developing for production
tea polyphenol-based products. Image P2P is located in the PRC.
The
Share Exchange has been accounted for as a reverse- merger and recapitalization of Image Chain where Image Chain (the legal acquirer)
is considered the accounting acquiree and Image P2P (the acquiree) is considered the accounting acquirer. As a result of this
transaction, the Company is deemed to be a continuation of the business of Image P2P.
Accordingly,
the accompanying consolidated financial statements are those of the accounting acquirer, Image P2P. The historical stockholders’
equity of the accounting acquirer prior to the share exchange has been retroactively restated as if the Share Exchange occurred
as of the beginning of the first period presented.
As
used in this Report, unless otherwise stated or the context clearly indicates otherwise, the terms “ICGL”, “Image
Chain”, the “Company,” the “Registrant,” “we,” “us” and “our”
refer to Image Chain after having given effect to the acquisition of Image P2P.
Our
authorized capital stock currently consists of 2,000,000,000 shares of Common Stock and 50,000 shares of Preferred Stock. Our
Common Stock is quoted on the OTC Markets under the symbol “ICGL”.
Share
Exchange and disposal of subsidiaries
On
November 28, 2018, the Company entered into a Business Transfer Agreement and Share Exchange Agreement (the “Agreements”)
with a group of the original shareholders of Image P2P (the “Image P2P Shareholding Group”), Image P2P and its subsidiaries.
Pursuant to the Agreements, the Image P2P Shareholding Group will exchange 200,000 common shares of the Company for the one common
share of Asia Grand Will Limited held by Image P2P. Asia Grand Will Limited is the holding company for the Company’s operations
in the PRC. Also pursuant to the Agreements, the Image P2P Shareholding Group, Image P2P and Image P2P’s subsidiaries will
transfer to the Company (i) all of its right, title and interest to the intellectual property, including copyrights, patents,
trademarks, process technology and production know-how, of Image P2P and its subsidiaries, (ii) the exclusive distribution rights
in the PRC and worldwide for all products of Image P2P and its subsidiaries, (iii) the exclusive right to all intellectual property
developed by Image P2P and its subsidiaries in the future and (iv) the exclusive distribution rights in the PRC and worldwide
for all products of Image P2P and its subsidiaries developed in the future.
The
200,000 common shares of the Company returned to Image P2P are recognized as common stock in treasury since Image P2P is a wholly
owned subsidiary of the Company and measured at cost which is the fair value of the common stocks as of the date of the disposal
of subsidiaries.
The
subsidiaries disposed are presented as discontinued operations in this report. Comparatives are reclassified to conform with the
presentation.
Company
Overview
On
November 28, 2018, the Company disposed of Asia Grand Will Limited and its subsidiaries and hence has terminated its business
of tea polyphenol products production and sales.
Currently,
since the Sino-US trade war may affect the enterprises operating in China starting from 2018, the Company has gradually shifted
its market target to Malaysia. It is seeking to develop business in healthy Halal food.
While
we expect to focus on our efforts in the Halal Food License area, we will continue to seek new business opportunities with established
business entities for merger with or acquisition of a target business in order to best protect our shareholder interests. In certain
instances, a target business may wish to become our subsidiary or may wish to contribute assets to us rather than merge. We have
not yet begun negotiations or entered into any definitive agreements in the Halal Food License business, or for any other potential
new business opportunities, and there can be no assurance that we will be able to enter into any definitive agreements.
We
anticipate that the selection of a business opportunity in which to participate will be complex and without certainty of success.
Business opportunities may be available in many different industries and at various stages of development, all of which will make
the task of comparative investigation and analysis of such business opportunities extremely difficult and complex. Business opportunities
that we believe are in the best interests of our company may be scarce, or we may be unable to obtain the ones that we want. We
can provide no assurance that we will be able to locate compatible business opportunities.
Currently,
we do not have a source of revenue. We are not able to fund our cash requirements through our current operations. We have been
reliant on loans by affiliated and non-affiliated parties to provide financial contributions and services to keep our company
operating. Further, we believe that our company may have difficulties raising capital from other sources until we locate a prospective
merger candidate through which we can pursue our plan of operation. If we are unable to secure adequate capital to continue our
acquisition efforts, our shareholders may lose some or all of their investment and our business may fail. We currently have no
written or oral agreement from our majority shareholder to continue to provide financial contributions.
COVID-19
Outbreak
It
is worth highlighting that, on March 16, 2020, Malaysia Prime Minister announced the implementation of Movement Control Order
(“MCO”) under Control of Infectious Diseases Act 1988 and the Police Act 1967 to contain the spread of coronavirus
disease 2019 (“COVID-19”). Pursuant to the declaration, initial phase of the MCO effectively take place from March
18, 2020 to March 31, 2020 for a period of 14 days, and subsequently extended to May 12, 2020 with three 14-day MCO extensions
declared by Malaysia Prime Minister.
Pursuant
to the MCO, all government and private premises except those involved in essential supply of goods and services such as water,
electricity, energy, telecommunications, postal, transportation, irrigation, oil, gas, fuel, lubricants, broadcasting, finance,
banking, health, pharmacy, fire, prison, port, airport, safety, defense, cleaning, retail and food supply should be closed.
On
May 1, 2020, Malaysia Prime Minister announced that Conditional Movement Control Order (“CMCO”), a relaxation of MCO
will replaced existing MCO on May 4, 2020 onwards and scheduled to expire on original 4th MCO expiration date, May 12, 2020. On
May 10, 2020, Malaysia Prime Minister announced that the CMCO will be extended for a period of 4 weeks from May 13, 2020 until
June 9, 2020.
Pursuant
to CMCO, most economic sectors and activities are allowed to operate while observing the business standard operation procedures
such as in our case social distancing and recording the names and telephone numbers of customers and the dates of their visit.
On
June 7, 2020, Malaysia Prime Minister announced that Recovery Movement Control Order (“RMCO”) would take place from
June 10, 2020 to August 31, 2020, while preserving previous allowable economic activity, interstate travelling is now permissible.
On August 28, 2020, Malaysia Prime Minister announced the extension of the RMCO by a further 4 months until 31 December, 2020.
On
October 14, 2020, the National Security Council announced that Selangor, Kuala Lumpur and Putrajaya will be placed under CMCO
for a period of 14 days to October 27, 2020.
On
January 1, 2021, RMCO has been extended until March 31, 2021, following the risk assessment conducted by the Ministry of Health
of Malaysia.
During
the MCO, CMCO and RMCO period, we have minimized the operations and have stopped to seek new business opportunities with established
business entities for merger with or acquisition of a target business. We expect the business activities will be resumed gradually.
Product
and Market Overview
On
November 28, 2018, the Company has disposed Asia Grand Will Limited and its subsidiaries and hence has terminated its business
of tea polyphenol products production and sales.
Since
the Sino-US trade war may affect the enterprises operating in China starting from 2018, the Company has gradually shifted its
market target to Malaysia. It is seeking to develop business in healthy Halal food.
Employees
As
of the date of this Report, our officers and directors are our only employees.
Our
Chief Executive Officer and Chief Operating Officer serve the Company on a part-time basis.
Item
1A. Risk Factors
Not
applicable.
Item
1B. Unresolved Staff Comments
Not
applicable.
Item
2. Properties.
Our
corporate headquarter is located at No. 6, 6-1, 6-2, Jalan BS 10/6, Taman Bukit Serdang, 43300 Seri Kembangan, Selangor, Malaysia,
which is provided to us rent free by our Chief Executive Officer.
Item
3. Legal Proceedings.
As
of the date of this Report, we are not a party to any legal proceedings that could have a material adverse effect on our business,
financial condition or operating results. Further, to our knowledge, no such proceedings have been threatened against us.
Item
4. Mine Safety Disclosures.
Not
applicable.
PART
II
Item
5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.
Market
Information
Our
common stock is quoted on the OTC Markets (“OTC PINK”) under the symbol “ICGL”. The Common Stock was initially
quoted on the OTC PINK on January 3, 2015, however, there has been very limited trading to date, and an active trading market
may never develop.
Holders
As
of the date of this Report there were approximately 483 holders of record of our Common Stock. This does not include an indeterminate
number of persons who hold our Common Stock in brokerage accounts and otherwise in “street name.” As of the date of
this Report, there are 508,539,882 shares of our Common Stock outstanding. There are no options, warrants or other securities
convertible into our Common Stock, other than the 50,000 shares of our Preferred Stock currently outstanding. Our Preferred Stock
currently outstanding are under contract for conversion into 50,000 shares of our Common Stock, representing a conversion basis
of 1 share of Preferred Stock for 1 share of Common Stock.
Dividends
Holders
of Common Stock are entitled to receive such dividends as may be declared by the Company’s Board of Directors. The Company
did not declare or pay dividends during its fiscal years ended December 31, 2020 or 2019.
To
the extent ICGL has any future earnings, it will likely retain earnings to expand corporate operations and not use such earnings
to pay dividends.
Transfer
Agent and Registrar
The
transfer agent and registrar for ICGL’s common stock is Globex Transfer, LLC, 780 Deltona Blvd., Suite 202, Deltona, FL
32725, telephone 813-344-4490.
Repurchases
of Our Securities
None.
Recent
Sales of Unregistered Securities
None.
Indemnification
of Officers and Directors
Our
Bylaws, subject to the provisions of the Nevada Revised Statutes, contain provisions which allow the Company to indemnify any
person against liabilities and other expenses incurred as the result of defending or administering any pending or anticipated
legal issue in connection with service to us if it is determined that person acted in good faith and in a manner which he reasonably
believed was in or not opposed to the best interest of the Company. Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to our director, officer and controlling person, we have been advised that in the opinion of the
SEC, such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable.
Item
6. Selected Financial Data.
Not
applicable.
Item
7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Cautionary
Statements
This
Annual Report on Form 10-K (this “Report”) contains forward-looking statements, including, without limitation, in
the sections captioned “Business,” “Management’s Discussion and Analysis of Financial Condition and Results
of Operations,” and elsewhere. Any and all statements contained in this Report that are not statements of historical fact
may be deemed forward-looking statements. Terms such as “may,” “might,” “would,” “should,”
“could,” “project,” “estimate,” “pro-forma,” “predict,” “potential,”
“strategy,” “anticipate,” “attempt,” “develop,” “plan,” “help,”
“believe,” “continue,” “intend,” “expect,” “future” and terms of similar
import (including the negative of any of the foregoing) may be intended to identify forward-looking statements. However, not all
forward-looking statements may contain one or more of these identifying terms.
Forward-looking
statements in this Report may include, without limitation, statements regarding (i) the plans and objectives of management for
future operations, including plans or objectives relating to the growth of tea polyphenol sales and development of our tea polyphenol-based
products, (ii) the plans or objectives relating to our future business acquisitions, if any, (iii) a projection of income (including
income/loss), earnings (including earnings/loss) per share, capital expenditures, dividends, capital structure or other financial
items, (iv) our future financial performance, including any such statement contained in a discussion and analysis of financial
condition by management or in the results of operations included pursuant to the rules and regulations of the Securities and Exchange
Commission, or the SEC, and (v) the assumptions underlying or relating to any statement described in points (i), (ii), (iii) or
(iv) above.
The
forward-looking statements are not meant to predict or guarantee actual results, performance, events or circumstances and may
not be realized because they are based upon our current projections, plans, objectives, beliefs, expectations, estimates and assumptions
and are subject to a number of risks and uncertainties and other influences, many of which we have no control over. Actual results
and the timing of certain events and circumstances may differ materially from those described by the forward-looking statements
as a result of these risks and uncertainties. Factors that may influence or contribute to the inaccuracy of the forward-looking
statements or cause actual results to differ materially from expected or desired results may include, without limitation:
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volatility
or decline of our stock price;
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potential
fluctuation of quarterly results;
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continued
failure to earn revenues or profits;
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inadequate
capital to continue or expand our business, and inability to raise additional capital or financing to implement our business
plans;
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decline
in demand for our products and services;
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rapid
adverse changes in markets;
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litigation
with or legal claims and allegations by outside parties against us;
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insufficient
revenues to cover operating costs;
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estimates
of our future revenue, expenses, capital requirements and our need for additional financing; and
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Because
the statements are subject to risks and uncertainties, actual results may differ materially from those expressed or implied by
the forward-looking statements. ICGL cautions you not to place undue reliance on the statements, which speak only as of the date
of this Report. The cautionary statements contained or referred to in this section should be considered in connection with any
subsequent written or oral forward-looking statements that ICGL or persons acting on its behalf may issue. ICGL does not undertake
any obligation to review or confirm analysts’ expectations or estimates or to release publicly any revisions to any forward-looking
statements to reflect events or circumstances after the date of this Report, or to reflect the occurrence of unanticipated events,
except as required by law.
Results
of Operations
The
following summary of our results of operations should be read in conjunction with our consolidated financial statements for the
years ended December 31, 2020 and 2019, which are included herein.
Our
operating results for the year ended December 31, 2020 and 2019, and the changes between those periods for the respective items
are summarized as follows:
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Year ended
December 31,
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2020
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2019
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Net revenues
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-
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Operating expenses
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General and administrative expenses
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42,867
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2,916,205
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Total operating expenses
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42,867
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2,916,205
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Loss Before Income Taxes
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(42,867
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)
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(2,916,205
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Provision for Income Taxes
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-
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Net Loss
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(42,867
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(2,916,205
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Other Comprehensive Income
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Foreign currency translation
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-
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-
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Total Comprehensive loss
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(42,867
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)
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(2,916,205
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Loss per share
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Basic and Diluted Loss per Common Share
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(0.00
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(0.01
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Basic and Diluted Weighted Average Common Shares Outstanding
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508,539,882
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508,244,361
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Comparison
of the Years ended December 31, 2020 and 2019
Net
Revenues
Net
revenues were $0 for the years ended December 31, 2020 and 2019.
Operating
Expenses
Our
general and administrative expenses decreased from $2,916,205 for the year ended December 31, 2019 to $42,867 for the year ended
December 31, 2020. The decrease was mainly attributed to minimize of operations in 2020, due to the COVID-19 pandemic.
Net
Loss
Our
net loss decreased from $2,916,205 for the year ended December 31, 2019 to $42,867 for the year ended December 31, 2020. The decrease
was mainly attributed to minimize of operations in 2020, due to the COVID-19 pandemic.
Liquidity
and Capital Resources
Since
the inception of the Company, we have incurred significant net losses and negative cash flows from operations. During the years
ended December 31, 2020 and 2019, we had net losses of $42,867 and $2,916,205, respectively. As of December 31, 2020, we had an
accumulated deficit of $9,442,657. As discussed in our financial statements for the year ended December 31, 2020, these factors
raise substantial doubt about our ability to continue as a going concern.
As
at December 31, 2020, we had cash and cash equivalents of $0. To date, we have financed our operations principally through borrowings
from our related parties. Depending on our future operational results, we may need to conduct one or more equity or debt financings
within the next 12 months.
We
could potentially need our available financial resources sooner than we currently expect, and we may incur additional indebtedness
to meet future financing needs. Adequate additional funding may not be available to us on acceptable terms or at all. In addition,
although we anticipate being able to obtain additional financing through non-dilutive means, we may be unable to do so. Our failure
to raise capital as and when needed could have significant negative consequences for our business, financial condition and results
of operations. Our future capital requirements and the adequacy of available funds will depend on many factors, many of which
are beyond our control.
Related
Party Loans
See
the section of this Report titled “Certain Relationships and Related Transactions” for a discussion of our operating
capital from our related parties. These unsecured loans do not bear interest or fixed dates for repayment.
Operating
Activities
Net
cash provided by operating activities for the year ended December 31, 2020 and 2019 were $0.
Investing
Activities
Net
cash used in investing activities for the year ended December 31, 2020 and 2019 were $0.
Financing
Activities
Net
cash provided by financing activities for the year ended December 31, 2020 and 2019 were $0.
Off-Balance
Sheet Arrangements
During
the years ended December 31, 2020 and 2019, we did not have any off-balance sheet arrangements as defined by applicable SEC regulations.
Critical
Accounting Policies and Estimates.
We
prepare our financial statements in conformity with GAAP, which requires management to make certain estimates and assumptions
and apply judgments. We base our estimates and judgments on historical experience, current trends and other factors that management
believes to be important at the time the financial statements are prepared and actual results could differ from our estimates
and such differences could be material. We have identified below the critical accounting policies which are assumptions made by
management about matters that are highly uncertain and that are of critical importance in the presentation of our financial position,
results of operations and cash flows. Due to the need to make estimates about the effect of matters that are inherently uncertain,
materially different amounts could be reported under different conditions or using different assumptions. On a regular basis,
we review our critical accounting policies and how they are applied in the preparation our financial statements.
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 the reported amounts of assets and liabilities and disclosure
of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses
during the reporting period. Actual results could differ from those estimates.
Item
7A. Quantitative and Qualitative Disclosures About Market Risk.
Not
applicable.
Item
8. Financial Statements and Supplementary Data
The
financial statements required by this item are set forth beginning in Item 15 of this Report on Form 10-K, beginning on page F-1,
and are incorporated herein by reference.
Item
9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.
None.
Item
9A. Controls and Procedures.
Evaluation
of Disclosure Controls and Procedures
Disclosure
controls and procedures are controls and other procedures that are designed to ensure that information we are required to disclose
is recorded, processed, summarized and reported, within the time periods specified in the rules and forms of the Commission. Chiea
Kah Szen, our Principal Executive Officer and Principal Financial Officer, is responsible for establishing and maintaining our
disclosure controls and procedures.
Under
the supervision and with the participation of our management, including the Principal Executive Officer and Principal Financial
Officer, we have evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule
15d-15(e) of the Exchange Act) as of the end of the period covered by this report. Based on that evaluation, the Principal Executive
Officer and Principal Financial Officer have concluded that, as of December 31, 2020, these disclosure controls and procedures
were not effective in ensuring that all information required to be disclosed by us in the reports that we file or submit under
the Exchange Act is: (i) recorded, processed, summarized and reported, within the time periods specified in the Commission’s
rule and forms; and (ii) accumulated and communicated to our management, including our Principal Executive Officer and Principal
Financial Officer, as appropriate to allow timely decisions regarding required disclosure.
The
term “internal control over financial reporting” is defined as a process designed by, or under the supervision of,
the registrant’s principal executive and principal financial officers, or persons performing similar functions, and effected
by the registrant’s board of directors, management and other personnel, to provide reasonable assurance regarding the reliability
of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted
accounting principles and includes those policies and procedures that:
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pertain
to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of
the assets of the registrant;
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provide
reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance
with generally accepted accounting principles, and that receipts and expenditures of the registrant are being made only in
accordance with authorizations of management and directors of the registrant; and
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provide
reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the registrant’s
assets that could have a material effect on the financial statements.
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Management’s
Annual Report on Internal Control over Financial Reporting
Our
management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control
over financial reporting is a process designed by, or under the supervision of, the Principal Executive Officer and Principal
Financial Officer and effected by our Board of Directors, management and other personnel, to provide reasonable assurance regarding
the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally
accepted accounting principles.
The
framework our management uses to evaluate the effectiveness of our internal control over financial reporting is based on the guidance
provided by the Committee of Sponsoring Organizations of the Treadway Commission in its 1992 report: INTERNAL CONTROL - INTEGRATED
FRAMEWORK. Based on our evaluation under the framework described above, our management have concluded that our internal control
over financial reporting was not effective as of December 31, 2020.
The
Company’s internal control over financial reporting is not effective due to a lack of sufficient resources to hire a support
staff in order to separate duties between different individuals. The Company lacks the appropriate personnel to handle all the
varying recording and reporting tasks on a timely basis.
This
Report does not include an attestation report of the Company’s registered public accounting firm regarding internal control
over financial reporting. Management’s report was not subject to attestation requirements by the company’s registered
public accounting firm.
Inherent
Limitations over Internal Controls
ICGL’s
management does not expect that its disclosure controls or its internal control over financial reporting will prevent or detect
all error and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute,
assurance that the control system’s objectives will be met. The design of a control system must reflect the fact that there
are resource constraints, and the benefits of controls must be considered relative to their costs. Further, because of the inherent
limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or
fraud will not occur or that all control issues and instances of fraud, if any, within ICGL have been detected. These inherent
limitations include the realities that judgments in decision making can be faulty and that breakdowns can occur because of simple
error or mistake. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people,
or management override of the controls. The design of any system of controls is based in part on certain assumptions about the
likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all
potential future conditions. Projections of any evaluation of controls effectiveness to future periods are subject to risks. Over
time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies
or procedures.
Our
disclosure controls and procedures are designed to provide reasonable assurance of that our reports will be accurate. Our Principal
Executive Officer and Principal Financial Officer have concluded that our disclosure controls and procedures were not effective,
as of the end of the period covered by this Form 10-K. Our future reports shall also indicate that our disclosure controls and
procedures are designed for this reason and shall indicate the related conclusion by the Principal Executive Officer and Principal
Financial Officer as to their effectiveness.
Changes
in Internal Control Over Financial Reporting
There
have been no changes in our internal control over financial reporting during the fiscal year of 2020 that have materially affected,
or are reasonably likely to materially affect, our internal control over financial reporting.
Item
9B. Other Information.
None.
PART
III
Item
10. Directors, Executive Officers and Corporate Governance.
Identification
of Directors and Executive Officers:
As
of the date of this Report, our Board of Directors consists of one member. The Company has two officers.
|
Name
|
|
Position
Held with the Company
|
|
Age
|
|
Date
First Elected or Appointed
|
|
Chiea
Kah Szen
|
|
President
and Chief Executive Officer
|
|
49
|
|
March
30, 2019
|
|
Chean
Chee Foong
|
|
Chief
Operating Officer
|
|
40
|
|
May
1, 2019
|
|
David
Po
|
|
Treasurer,
Secretary, Director
|
|
59
|
|
May
1, 2017
|
|
Yong
Seng Yip
|
|
Director
|
|
48
|
|
March
30, 2019
(resigned
on April 1, 2020)
|
Chiea
Kah Szen - President and Chief Executive Officer
Mr.
Chiea earns his degree in business administration with major in management and marketing from the Binary University in Malaysia
in 1995.
Mr.
Chiea is the Group Managing Director and Deputy Executive Chairman of Mahiez Alliance Group (M) Bhd since 2012. Mahiez Alliance
Group (M) Bhd is the founder of “Global Halal Initiative” focusing on SMEs products export to China, Japan and the
rest of the world. Mr. Chiea is responsible for the research and to understand thoroughly business trends, market needs, market
demands, market challenges and bilateral trade policies in China, Southeast Asia, Central Asia and Middle East. Mr. Chiea operates
autonomously in all facets of business such as strategic planning, operations, company positioning, business growth, financial
management, managerial tasks and business acumen. Mr. Chiea oversees and maintains company standard operating procedures including
business relations, performances and communication. Mr. Chiea identifies all business opportunities and execute plans strategically
and presents to public at events and trade shows to expand business networks and build relationship.
With
over 20 years of experience in managing companies and strategizing company objectives, business models and business plans, the
Company believes Mr. Chiea’s extensive experience can help to identify business opportunities and analyze market gap in
the industry.
Chean
Chee Foong – Chief Operating Officer
Mr.
Chean studied Computing and Information Technology with specialism in Business Information Systems at Asia Pacific University
of Technology and Innovation (APU) in association with Staffordshire University in year 2000. With Advanced Diploma, he began
his career and since then he gains his knowledge and position by experiences.
Mr.
Chean has been the Chief Executive Officer of Mahiez Alliance Group (M) Bhd since 2012, co-founding the “Global Halal Initiative”
that focus on SME products export to China and beyond. He leds the company operations and strategize the company direction from
bottom-line factors including long-range planning, company product and services management and business development. He is responsible
to oversee and maintain standard operating procedures including business relations, performances and communication. Mr. Chean
provides cross-functional management with board of directors, stakeholders and subsidiary companies including strategic partners,
associates and counterparts in China. He identifies all the business opportunities and strategically execute the planning with
his team.
As
an all-rounder with 18 years of working experience and managerial skills in multi-industries, the Company believes Mr. Chean is
capable to identify business opportunities, designing business model and initiate the strategic planning in the industry.
David
Po - Treasurer, Secretary and Director
Mr.
Po has a distinguished career in international business, with an extensive history of transacting deals between Asia and western
countries, primarily the United States. From 2003 until present, Mr. Po served as Director and Chief Executive Officer of Everbest
Real Estate Services (“Everbest”), a marketing and sales company serving the Japanese, Chinese and Hong Kong markets
for a major U.S.-based residential, multi-family, industrial and commercial real estate development company. Everbest ceased operations
prior to Mr. Po joining the Company. Mr. Po received a Bachelor of Science degree from the University of California, San Diego.
Mr. Po was selected based on his background and history of transacting deals between Asia and western countries, namely the United
States. The Company believes that Mr. Po possesses the attributes necessary to create value for ICGL stockholders by way of sourcing
and executing acquisitions of high quality assets located in the People’s Republic of China and the greater Asia region.
Our
company believes that Mr. Po’s professional background experience gives him the qualifications and skills necessary to serve
as a director and officer of our company.
Employment
Agreements
We
currently do not have employment agreements with any of our executive officers or directors.
Family
Relationships
There
are no family relationships between any of our directors or executive officers.
Term
of Office
All
directors hold office for a one (1) year period and have been duly elected and qualified. There is no agreement with respect to
the election of directors. The Company has not compensated its directors for service on the Board of Directors of ICGL or any
of its subsidiaries or any committee thereof, other than as set forth under “Item 11. Executive Compensation – Director
Compensation” below. Any non-employee director of ICGL or its subsidiaries will be reimbursed for expenses incurred for
attendance at meetings of the Board of Directors and any committee of the Board of Directors, although no such committee has been
established. Each executive officer of ICGL is appointed by and serves at the discretion of the Board of Directors. None of the
officers or directors of ICGL is currently an officer or director of a company required to file reports with the Securities and
Exchange Commission, other than ICGL.
Involvement
in Certain Legal Proceedings
To
our knowledge, no director, nominee for director, or executive officer of the Company has been a party in any legal proceeding
material to an evaluation of his ability or integrity during the past ten years.
Board
Committees
Audit
committee
We
do not have a separately-designated standing audit committee. The Board of Directors performs the functions of an audit committee,
but no written charter governs the actions of the Board of Directors when performing the functions that would generally be performed
by an audit committee. The Board of Directors approves the selection of our independent accountants and meets and interacts with
the independent accountants to discuss issues related to financial reporting. In addition, the Board of Directors reviews the
scope and results of the audit with the independent accountants, reviews with management and the independent accountants our annual
operating results, considers the adequacy of our internal accounting procedures and considers other auditing and accounting matters
including fees to be paid to the independent auditor and the performance of the independent auditor.
Compensation
and Nominations Committees
We
currently have no compensation or nominating committee or other board committee performing equivalent functions. Currently, the
member of our Board of Directors participates in discussions concerning executive officer compensation and nominations to the
Board of Directors.
Compliance
with Section 16(a) of the Exchange Act
Section
16(a) of the Securities Exchange Act of 1934, as amended, requires our executive officers and directors and persons who own more
than 10% of a registered class of our equity securities to file with the SEC initial statements of beneficial ownership, reports
of changes in ownership and annual reports concerning their ownership of our shares of common stock and other equity securities,
on Forms 3, 4 and 5, respectively. Executive officers, directors and greater than 10% shareholders are required by the SEC regulations
to furnish us with copies of all Section 16(a) reports they file.
Based
solely on our review of the copies of such forms received by our company, or written representations from certain reporting persons
that no Form 5s were required for those persons. We believe that, during the fiscal year ended December 31, 2020, all filing requirements
applicable to our officers, directors and greater than 10% beneficial owners as well as our officers, directors and greater than
10% beneficial owners of our subsidiaries were complied with Section 16(a) of the Securities Exchange Act of 1934, as amended.
Shareholder
communications
The
Company does not have a process for security holders to send communications to the board of directors due to the fact that minimal
securities are traded on a stock exchange.
Code
of Conduct and Ethics
We
have adopted a Code of Ethics, as required by sections 406 and 407 of the Sarbanes-Oxley Act of 2002. It has been filed as an
Exhibit to our registration statement on Form S-1 filed on February 5, 2014.
Item
11. Executive Compensation.
Executive
Compensation
The
particulars of the compensation paid to the following persons:
|
|
(a)
|
our
principal executive officer;
|
|
|
|
|
|
|
(b)
|
each
of our two most highly compensated executive officers who were serving as executive officers at the end of the years ended
December 31, 2020 and 2019; and
|
|
|
|
|
|
|
(c)
|
up
to two additional individuals for whom disclosure would have been provided under (b) but for the fact that the individual
was not serving as our executive officer at the end of the years ended December 31, 2020 and 2019, who we will collectively
refer to as the named executive officers of our company, are set out in the following summary compensation table, except that
no disclosure is provided for any named executive officer, other than our principal executive officers, whose total compensation
did not exceed $100,000 for the respective fiscal year:
|
SUMMARY COMPENSATION TABLE
Name
and Principal Position
|
|
Year
|
|
|
Salary
($)
|
|
|
Bonus
($)
|
|
|
Stock Awards
($)
|
|
|
Option Awards
($)
|
|
|
Non-Equity Incentive
Plan Compensa-tion
($)
|
|
|
Change in Pension
Value and Nonqualified Deferred Compensa-tion Earnings
($)
|
|
|
All
Other Compensa-tion
($)
|
|
|
Total
($)
|
|
|
Chiea Kah Szen (1)
|
|
|
2020
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
President and CEO
|
|
|
2019
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Chean Chee
Foong(2)
|
|
|
2020
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
COO
|
|
|
2019
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
David Po(3)
|
|
|
2020
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
Treasurer, Secretary and Director
|
|
|
2019
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
(1)
|
Mr.
Chiea Kah Szen was appointed as CEO and President on March 30, 2019
|
|
(2)
|
Mr.
Chean Chee Foong was appointed COO on May 1, 2019.
|
|
(3)
|
Mr.
David Po resigned as CEO and President on March 30, 2019. But he remains as Treasurer, Secretary and Director.
|
Stock
option plan
We
do not have a stock option plan and we have not issued any warrants, options or other rights to acquire our securities.
Employee
Pension, Profit Sharing or other Retirement Plans
We
do not have a defined benefit, pension plan, profit sharing or other retirement plan, although we may adopt one or more of such
plans in the future.
Outstanding
Equity Awards at Fiscal Year End
The
Company has issued equity awards as below during fiscal year 2019.
Director’s
Compensation
|
Name
|
|
Fee earned or paid in cash
|
|
|
Stock Awards
|
|
|
Option Awards
|
|
|
Non-equity incentive plan compensation
|
|
|
Nonqualified deferred compensation earnings
|
|
|
All other compensation
|
|
|
Total
|
|
|
David Po(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-2020
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
-2019
|
|
|
-
|
|
|
$
|
1,029,600
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
$
|
1,029,600
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Yong Seng Yip(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-2020
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
-2019
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
(1)
|
Mr.
David Po resigned as CEO and President on March 30, 2019. But he remains as Treasurer, Secretary and Director.
|
|
(2)
|
Mr.
Yong Seng Yip resigned as Director on April 1, 2020
|
Item
12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
Beneficial
Ownership of officers, directors and persons holding more than 5% of any class of ICGL’s voting securities.
The
following table sets forth certain information as of the date hereof with respect to the beneficial ownership of our shares of
common stock by (i) each executive officer and director, (ii) all executive officers and directors as a group, and (iii) beneficial
owners of 5% or more of our outstanding Common Stock.
Beneficial
ownership is determined in accordance with the rules of the Securities and Exchange Commission and includes voting or investment
power with respect to securities. Common Stock subject to options, warrants or convertible securities exercisable or convertible
within 60 days as of the date hereof are deemed outstanding for computing the percentage of the person or entity holding such
options, warrants or convertible securities but are not deemed outstanding for computing the percentage of any other person. As
of the date hereof, we had 508,539,882 shares of Common Stock issued and outstanding, including 50,000 shares of Preferred Stock
under contract for exchange into Common Stock.
Unless
otherwise indicated, we believe that all persons named in the table have sole voting and investment power with respect to all
ordinary shares beneficially owned by them. The Company does not maintain any equity compensation plans.
|
|
|
Number of
Shares of
|
|
|
|
|
|
|
|
Common Stock
|
|
|
|
|
|
Name of Beneficial Owner(1)
|
|
Beneficially
Owned
|
|
|
Percentage
of Class
|
|
|
Chiea Kah Szen (i)
|
|
|
-
|
|
|
|
*
|
|
|
Chean Chee Foong (i)
|
|
|
-
|
|
|
|
*
|
|
|
David Po (i)
|
|
|
514,800
|
|
|
|
*
|
|
|
Qiu Peng (iii)
|
|
|
105,800,000
|
|
|
|
20.80
|
%
|
|
Li Mingguang (iii)
|
|
|
128,000,000
|
|
|
|
25.17
|
%
|
|
Pisces Star Overseas Co. Ltd (iii)
|
|
|
30,000,000
|
|
|
|
5.9
|
%
|
|
All Directors and Officers as a Group (3 persons)(ii)
|
|
|
514,800
|
|
|
|
*
|
|
*
Less than 1%.
(1)
In care of Image Chain Group Limited, Inc., No. 6, 6-1, 6-2, Jalan BS 10/6, Taman Bukit Serdang, 43300 Seri Kembangan, Selangor,
Malaysia.
Change
in Control Arrangements
As
of December 31, 2020, there are no arrangements that would result in a change in control of the Company.
Item
13. Certain Relationships and Related Transactions, and Director Independence.
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS
Related
Party Transactions
Related
parties’ relationships are as follows:
|
David
Po
|
|
Director
and a shareholder of the Company
|
During
the year ended December 31, 2019, $1,029,600 services fee was paid to David Po (the Treasurer, Secretary and Chairman of the Board
of Director) with 468,000 shares of common stock at $2.2 per share for his services provided and to be provided for the year ended
December 31, 2019.
During
the year ended December 31, 2020, David Po advanced $3,609 for operating expenses. Amounts due to Mr. Po as of December 31, 2020
and December 31, 2019, were $731,273 and $727,664, respectively.
The
owing to Mr. Po consists of working capital advances and borrowings. These amounts are due on demand and are non-interest bearing.
Director
Independence
We
adhere to the NASDAQ listing standards in determining whether a director is independent. Our board of directors consults with
its counsel to ensure that the board’s determinations are consistent with those rules and all relevant securities and other
laws and regulations regarding the independence of directors. The NASDAQ listing standards define an “independent director”
as a person, other than an executive officer of a company or any other individual having a relationship which, in the opinion
of the issuer’s board of directors, would interfere with the exercise of independent judgment in carrying out the responsibilities
of a director.
Consistent
with these considerations, and considering their positions as executive officers and recent employees of the Company. Our board
operates with 2 directors, we have determined that none of our directors qualifies as an independent director. We do not maintain
a compensation, nominating or audit committee.
Policies
and Procedures for Related Party Transactions
Our
board of directors has adopted a policy, that our executive officers, directors, nominees for election as a director, beneficial
owners of more than 5% of any class of our Common Stock and any members of the immediate family of any of the foregoing persons
are not permitted to enter into a related person transaction with us without the prior consent of our audit committee. Any request
for us to enter into a transaction with an executive officer, director, nominee for election as a director, beneficial owner of
more than 5% of any class of our Common Stock or any member of the immediate family of any of the foregoing persons in which the
amount involved exceeds $120,000 and such person would have a direct or indirect interest must first be presented to our audit
committee for review, consideration and approval. In approving or rejecting any such proposal, our audit committee is to consider
the material facts of the transaction, including, but not limited to, whether the transaction is on terms no less favorable than
terms generally available to an unaffiliated third party under the same or similar circumstances and the extent of the related
person’s interest in the transaction. We did not have a formal review and approval policy for related party transactions
at the time of any of the transactions described above. However, all of the transactions described above were entered into after
presentation, consideration and approval by our board of directors and/or our audit committee.
Item
14. Principal Accounting Fees and Services.
The
following table sets forth the aggregate fees billed to the Company by its independent registered public accounting firms for
the fiscal years ended December 31, 2020 and 2019.
Zia
Masood Kiani & Co.
Accounting
Fees and Services
|
|
|
2020
|
|
|
2019
|
|
|
Audit Fees
|
|
$
|
4,130
|
|
|
$
|
3,935
|
|
|
Audit Related Fees
|
|
|
-
|
|
|
|
-
|
|
|
Tax Fees
|
|
|
-
|
|
|
|
-
|
|
|
All Other Fees
|
|
|
-
|
|
|
|
-
|
|
|
TOTAL
|
|
$
|
4,130
|
|
|
$
|
3,935
|
|
The
category of “Audit Fees” includes fees for our annual audit and services rendered in connection with regulatory filings
with the SEC, such as the issuance of comfort letters and consents.
The
category of “Audit-related Fees” includes employee benefit plan audits, internal control reviews and accounting consultation.
All
above audit services and audit-related services were pre-approved by the Board of Directors, which concluded that the provision
of such services by all parties was compatible with the maintenance of the respective firm’s independence in the conduct
of its audits.
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
1.
THE COMPANY AND PRINCIPAL BUSINESS ACTIVITIES
Business
Image
Chain Group Limited, Inc. (formerly Have Gun Will Travel Entertainment, Inc.) (“ICGL” or the “Company”)
was incorporated under the laws of Nevada on December 18, 2013. From inception through the date of the Share Exchange as defined
below, the Company was an emerging forward-thinking full-service television pre-production company dedicated to the creation of
original concepts and programming with a bold and innovative edge in the reality television space for sale, option and licensure
to independent producers, cable television networks, syndication companies, and other entities. On June 11, 2015, the Company
amended its Articles of Incorporation with the State of Nevada in order to change its name to Image Chain Group Limited, Inc.
and to increase the authorized shares of common stock from 70,000,000 to 400,000,000 (the “Amendments”). The name
change was undertaken in order to more closely align with the operations of the Company’s wholly-owned subsidiary, Fortune
Delight Holdings Group Ltd (“FDHG”). The increase in authorized shares was undertaken to allow the Company to utilize
the newly available shares to raise capital. The board of directors and the stockholders of the Company approved the Amendments
on May 8, 2015.
On
February 13, 2017, the Company filed with the Secretary of State of the State of Nevada a Certificate of Correction (the “Certificate
of Correction”) to correct a mistake made in the Company’s original Articles of Incorporation with regard to the preferred
stock issued in connection with the FDHG Exchange Agreement. As a result, ICGL had 395,000,000 shares of common stock and 5,000,000
shares of preferred stock issued and outstanding. The Company subsequently entered into an agreement pursuant to which the holder
of the preferred stock agreed to retire the preferred stock in exchange for receiving an equal number of shares of common stock
of the Company. As of the date of this Report, that exchange of preferred stock for common stock has not yet occurred.
Effective
May 1, 2017, the Company increased the authorized shares of Common Stock from 3,950,000 to 2,000,000,000 shares with a par value
of $0.001 per share, and to decrease the authorized shares of Preferred Stock from 50,000 to zero (0). As of the date of this
Report, the decrease in shares of Preferred Stock has not yet occurred.
FDHG,
previously, through its wholly-owned operating subsidiaries, was in the business of promoting and distributing its own branded
teas that are grown, harvested, cured, and packaged in the People’s Republic of China (“PRC”). The Company’s
headquarters was previously located in Guangzhou, Guangdong Province, PRC.
Share
Exchange and Reorganization
On
November 14, 2017, the Company entered into a share exchange agreement (the “SEA”) with Image P2P Trading Group Limited
(“Image P2P”) and Image P2P’s shareholders whereby the Company issued 500,000,000 new common shares in exchange
for all of the issued and outstanding ordinary shares of Image P2P, which totaled 50,000. Image P2P is an investment holding company
incorporated and domiciled in the British Virgin Islands.
Share
Exchange and disposal of subsidiaries
On
November 28, 2018, the Company has entered into a Business Transfer Agreement and Share Exchange Agreement (the “Agreements”)
with a group of the original shareholders of Image P2P (the “Image P2P Shareholding Group”), Image P2P and its subsidiaries.
Pursuant to the Agreements, the Image P2P Shareholding Group will exchange 200,000 common shares of the Company for the one common
share of Asia Grand Will Limited held by Image P2P. Asia Grand Will Limited is the holding company for the Company’s operations
in the PRC. Also pursuant to the Agreements, the Image P2P Shareholding Group, Image P2P and Image P2P’s subsidiaries will
transfer to the Company (i) all of its right, title and interest to the intellectual property, including copyrights, patents,
trademarks, process technology and production know-how, of Image P2P and its subsidiaries, (ii) the exclusive distribution rights
in the PRC and worldwide for all products of Image P2P and its subsidiaries, (iii) the exclusive right to all intellectual property
developed by Image P2P and its subsidiaries in the future and (iv) the exclusive distribution rights in the PRC and worldwide
for all products of Image P2P and its subsidiaries developed in the future.
The
200,000 common shares of the Company returned to Image P2P are recognized as common stock in treasury since Image P2P is a wholly
owned subsidiary of the Company, and measured at cost which is the fair value of the common stocks as of the date of the disposal
of subsidiaries.
The
subsidiaries disposed are presented as discontinued operations in this report. Comparatives are reclassified to conform with the
presentation.
The
Company is currently reviewing and revising its future business plans. To date, the Company has not yet identified its future
business plans.
2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis
of presentation
These
accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles
in the United States of America (“U.S. GAAP”).
Certain
reclassifications have been made to the prior period’s consolidated financial statements to conform to the current period’s
presentation.
Principles
of consolidation
The
consolidated financial statements include the accounts of the Company and its subsidiaries. All significant inter-company accounts
and transactions have been eliminated. The consolidated financial statements include 100% of assets, liabilities, and net income
or loss of those wholly-owned subsidiaries.
The
Company’s subsidiaries are listed as follows:
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Name of Company
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Place
of incorporation
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Attributable
equity interest %
|
|
|
Authorized
capital
|
|
Image P2P Trading Group Limited (“Image P2P”)
|
|
British Virgin Islands
|
|
|
100
|
|
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USD 50,000
|
Use
of estimates
In
preparing these consolidated financial statements, management makes estimates and assumptions that affect the reported amounts
of assets and liabilities in the balance sheet and revenues and expenses during the periods reported. Actual results may differ
from these estimates.
Stock-Based
Compensation
The
Company accounts for stock-based compensation for employees and directors in accordance with ASC 718, Compensation (“ASC
718”). ASC 718 requires all share-based payments to employees, including grants of employee stock options, to be recognized
in the statement of operations based on their fair values. Under the provisions of ASC 718, stock-based compensation costs are
measured at the grant date, based on the fair value of the award, and are recognized as expense over the employee’s requisite
service period (generally the vesting period of the equity grant). For an award that is fully vested on the grant date, all compensation
cost would be recognized on the grant date.
The
fair value of the Company’s common stock awards as of the grant date is determined using the observable market price (i.e.
closing price) of the Company’s common stock as of the grant date.
The
Company accounts for stock-based compensation awards issued to non-employees for services, as prescribed by ASC 718-10, at either
the fair value of the services rendered or the instruments issued in exchange for such services, whichever is more readily determinable,
using the measurement date guidelines enumerated in ASU 2018-07.
Income
taxes
Income
taxes are determined in accordance with the provisions of ASC 740, “Income Taxes” (“ASC 740”).
Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences
between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax
assets and liabilities are measured using enacted income tax rates expected to apply to taxable income in the years in which those
temporary differences are expected to be recovered or settled. Any effect on deferred tax assets and liabilities of a change in
tax rates is recognized in income in the period that includes the enactment date.
ASC
740 prescribes a comprehensive model for how companies should recognize, measure, present, and disclose in their financial statements
uncertain tax positions taken or expected to be taken on a tax return. Under ASC 740, tax positions must initially be recognized
in the financial statements when it is more likely than not the position will be sustained upon examination by the tax authorities.
Such tax positions must initially and subsequently be measured as the largest amount of tax benefit that has a greater than 50%
likelihood of being realized upon ultimate settlement with the tax authority assuming full knowledge of the position and relevant
facts.
For
the years ended December 31, 2020 and 2019, the Company did not have any interest and penalties associated with tax positions.
As of December 31, 2020, the Company did not have any significant unrecognized uncertain tax positions.
Financial
instruments
The
carrying value of the Company’s financial instruments (excluding short-term bank borrowing and note payable): cash and cash
equivalents, accounts receivable, accounts payable, amount due to a related party, other payables and accrued liabilities approximate
at their fair values because of the short-term nature of these financial instruments.
The
Company also follows the guidance of the ASC Topic 820-10, “Fair Value Measurements and Disclosures” (“ASC 820-10”),
with respect to financial assets and liabilities that are measured at fair value. ASC 820-10 establishes a three-tier fair value
hierarchy that prioritizes the inputs used in measuring fair value as follows:
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●
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Level
1: Inputs are based upon unadjusted quoted prices for identical instruments traded in active markets;
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●
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Level
2: Inputs are based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments
in markets that are not active, and model-based valuation techniques (e.g. Black-Scholes Option-Pricing model) for which all
significant inputs are observable in the market or can be corroborated by observable market data for substantially the full
term of the assets or liabilities. Where applicable, these models project future cash flows and discount the future amounts
to a present value using market-based observable inputs; and
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|
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●
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Level
3: Inputs are generally unobservable and typically reflect management’s estimates of assumptions that market participants
would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques, including
option pricing models and discounted cash flow models.
|
Fair
value estimates are made at a specific point in time based on relevant market information about the financial instrument. These
estimates are subjective in nature and involve uncertainties and matters of significant judgment and, therefore, cannot be determined
with precision. Changes in assumptions could significantly affect the estimates.
Commitments
and contingencies
The
Company follows ASC 440 & ASC 450, subtopic 450-20 of the FASB Accounting Standards Codification to report accounting for
contingencies and commitments respectively. Certain conditions may exist as of the date the financial statements are issued, which
may result in a loss to the Company, but which will only be resolved when one or more future events occur or fail to occur. The
Company assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss
contingencies related to legal proceedings that are pending against the Company or un-asserted claims that may result in such
proceedings, the Company evaluates the perceived merits of any legal proceedings or un-asserted claims as well as the perceived
merits of the amount of relief sought or expected to be sought therein.
If
the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability
can be estimated, then the estimated liability would be accrued in the Company’s financial statements. If the assessment
indicates that a potentially material loss contingency is not probable but is reasonably possible, or is probable but cannot be
estimated, then the nature of the contingent liability, and an estimate of the range of possible losses, if determinable and material,
would be disclosed.
Loss
contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would
be disclosed. Management does not believe, based upon information available at this time, that these matters will have a material
adverse effect on the Company’s consolidated financial position, results of operations or cash flows. However, there is
no assurance that such matters will not materially and adversely affect the Company’s business, financial position, and
results of operations or cash flows.
Comprehensive
income
Comprehensive
income is defined to include all changes in equity except those resulting from investments by owners and distributions to owners.
Among other disclosures, all items that are required to be recognized under current accounting standards as components of comprehensive
income are required to be reported in a financial statement that is presented with the same prominence as other financial statements.
The Company’s current component of other comprehensive income includes the foreign currency translation adjustment and unrealized
gain or loss.
Foreign
currency translation
Transactions
denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates
prevailing at the dates of the transaction. Monetary assets and liabilities denominated in currencies other than the functional
currency are translated into the functional currency using the applicable exchange rates at the balance sheet dates. The resulting
exchange differences are recorded in the statement of operations.
The
accompanying financial statements are presented in United States dollars (“USD”). The functional currency of the Company
and Image P2P is the USD. In general, for consolidation purposes, assets and liabilities of its subsidiaries whose functional
currency is not the USD are translated into USD, in accordance with ASC 830, “Translation of Financial Statements”,
using the exchange rate on the balance sheet date. Revenues and expenses are translated at average rates prevailing during the
period. The gains and losses resulting from translation of financial statements of foreign subsidiaries are recorded as a separate
component of accumulated other comprehensive income (loss) within the statement of stockholders’ equity.
Treasury
Stock
The
Company records treasury stock at cost.
Earnings
per share
The
Company computes earnings per share (“EPS”) in accordance with ASC Topic 260, “Earnings per share”. Basic
EPS is measured as the income or loss available to common shareholders divided by the weighted average common shares outstanding
for the period. Diluted EPS is similar to basic EPS but presents the dilutive effect on a per share basis of potential common
shares (e.g., convertible securities, options, and warrants) as if they had been converted at the beginning of the periods presented,
or issuance date, if later. Potential common shares that have an anti-dilutive effect (i.e. those that increase income per share
or decrease loss per share) are excluded from the calculation of diluted EPS. For the years ended December 31, 2020 and 2019,
the Company did not have any potentially dilutive securities outstanding.
Reclassifications
Certain
prior period amounts have been reclassified to conform with the current period presentation. However, there are no material or
significant rearrangements or reclassification made during the year.
Recently
Adopted Accounting Standards
In
February 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-02, Leases (“ASC 842”). The guidance
requires lessees to recognize almost all leases on their balance sheet as a right-of-use asset and a lease liability. For income
statement purposes, the FASB retained a dual model, requiring leases to be classified as either operating or finance. Lessor accounting
is similar to the current model, but updated to align with certain changes to the lessee model and the new revenue recognition
standard. Existing sale-leaseback guidance, including guidance for real estate, is replaced with a new model applicable to both
lessees and lessors. ASC 842 is effective for fiscal years beginning after December 15, 2018. The adoption of ASC 842, did not
have a material effect on the Company’s consolidated financial statements.
Management
has considered all recent accounting pronouncements issued. The Company’s management believes that these recent pronouncements
will not have a material effect on the Company’s financial statements.
3.
GOING CONCERN
The
accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern,
which contemplates the realization of assets and the discharge of liabilities in the normal course of business for the foreseeable
future.
As
of December 31, 2020, the Company had an accumulated deficit of $9,442,657 and net loss of $42,867 and net cash used in operations
of $0 for the year ended December 31, 2020. Losses have principally occurred as a result of the substantial resources required
for professional fees and general and administrative expenses associated with our operations. The continuation of the Company
as a going concern through December 31, 2020 is dependent upon the continued financial support from its stockholders or external
financing. Management believes the existing stockholders will provide the additional cash to meet with the Company’s obligations
as they become due. However, there is no assurance that the Company will be successful in securing sufficient funds to sustain
the operations.
These
conditions raise substantial doubt about the Company’s ability to continue as a going concern. These financial statements
do not include any adjustments to reflect the possible future effect on the recoverability and classification of assets or the
amounts and classifications of liabilities that may result from the outcome of these uncertainties. The Company may raise additional
capital through the sale of its equity securities, or through borrowings from financial institutions and related parties. Management
believes that the actions presently being taken to obtain additional funding and implement its strategic plan provides the opportunity
for the Company to continue as a going concern.
4.
INCOME TAXES
The
Company operates in the United States and its wholly-owned subsidiaries operate in British Virgin Islands (“BVI”)
and files tax returns in these jurisdictions.
Loss
from continuing operations before income tax expense (benefit) is as follows:
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|
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For the Years Ended
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December 31,
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|
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2020
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2019
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Loss attributed to United States
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$
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(42,867
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)
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$
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(2,916,205
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)
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Loss attributed to foreign operations
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-
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-
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Loss before income taxes
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$
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(42,867
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)
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$
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(2,916,205
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)
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The
expense (benefit) for income taxes from continuing operations consists of the following components:
United
States of America
The
Tax Act reduces the U.S. statutory corporate tax rate from 35% to 21% for our tax years beginning in 2018, which resulted in the
re-measurement of the federal portion of our deferred tax assets as of December 31, 2020 and 2019 from the 35% to 21% tax rate.
The Company is registered in the State of Nevada and is subject to United States of America tax law. As of December 31, 2020,
the operations in the United States of America incurred $3,596,728 of cumulative net operating losses (NOL’s) which can
be carried forward to offset future taxable income. The NOL carryforwards begin to expire in 2040, if unutilized. The Company
has provided for a full valuation allowance of approximately $755,313 against the deferred tax assets on the expected future tax
benefits from the net operating loss carryforwards as the management believes it is more likely than not that these assets will
not be realized in the future.
British
Virgin Islands
Under
the laws of British Virgin Islands, the Company is not subject to income taxes.
The
following table sets forth the significant components of the aggregate deferred tax assets of the Company as of December 31, 2020
and 2019:
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As of December 31,
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2020
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2019
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Deferred tax assets:
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NOL carryforwards
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|
|
|
|
|
|
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United States
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$
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755,313
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$
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746,311
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|
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Foreign operations
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|
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-
|
|
|
|
-
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|
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Change in valuation allowance
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|
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(755,313
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)
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|
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(746,311
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)
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|
Deferred tax assets
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|
$
|
-
|
|
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$
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-
|
|
Management
believes that it is more likely than not that the deferred tax assets will not be fully realizable in the future. Accordingly,
the Company provided for a full valuation allowance against its deferred tax assets of $755,313 as of December 31, 2020. For the
year ended December 31, 2020, the valuation allowance increased by $9,002, primarily relating to net operating loss carryforwards.
The
Company’s tax returns are subject to examination by United States tax authorities beginning with the year ended December
31, 2013.
5.
RELATED PARTY TRANSACTIONS
Related
parties’ relationships are as follows:
|
David
Po
|
Director
and a shareholder of the Company
|
During
the year ended December 31, 2020, David Po advanced $3,609 for operating expenses. Amounts due to Mr. Po as of December 31, 2020
and 2019, were $731,273 and $727,664, respectively.
The
owing to Mr. Po consists of working capital advances and borrowings. These amounts are due on demand and are non-interest bearing.
6.
STOCKHOLDERS’ EQUITY (DEFICIT)
Preferred
Stock
The
Company is authorized to issue 50,000 shares, with a stated par value of $0.001 per share with such powers, preferences, rights
and restrictions which shall be determined by the Corporation’s Board of Directors in its sole discretion, and which designations
and issuances shall not require the approval of the shareholders of the Corporation.
During
the year ended December 31, 2020, there were no issuances of Preferred Stock.
As
of December 31, 2020 and 2019, 50,000 shares of preferred stock were issued and outstanding.
Common
Stock
The
Company is authorized to issue 2,000,000,000 shares of common stock at a par value of $0.001.
During
the year ended December 31, 2020, there were no issuances of Common Stock.
As
of December 31, 2020 and 2019, 508,539,882 shares of common stock were issued and outstanding.
7.
SUBSEQUENT EVENTS
The
Company has evaluated subsequent events through the date which the financial statements were available to be issued. All subsequent
events requiring recognition as of December 31, 2020 have been incorporated into these financial statements and there are no subsequent
events that require disclosure in accordance with FASB ASC Topic 855, “Subsequent Events.”