(a) Business Development
The Company was organized under the laws of the State of Nevada on
March 8,2021, under Gankit Corporation. The Company was development stage company as an e-commerce
business focused on selling a diverse set of products through its website Gankit.com.
On May 12, 2014, the control
block of stock, 20,000,000 shares of restricted common stock were purchased resulting in a change of control. The Company then ceased
to operate its e-commerce website and abandoned that business model, and re-focused on the development, branding, and distribution of
non-flame smoking devices. The Company changed its name at this time to Nhale, Inc.
Business operations for Nhale Inc. was abandoned by former management
and a custodianship action, as described in the subsequent paragraph, was commenced in 2020. The Company filed its last 10-Q in 2016,
this financial report included liabilities and debts. As of the date of this filing, these liabilities and debts have not been addressed.
On November 24. 2020, the Eighth
District Court of Clark County, Nevada granted the Application for Appointment of Custodian as a result of the absence of a functioning
board of directors and the revocation of the Company’s charter. The order appointed Small Cap Compliance, LLC (“SCC”,
the “Custodian”) custodian with the right to appoint officers and directors, negotiate and compromise debt, execute contracts,
issue stock, and authorize new classes of stock. Rhonda Keaveney is the sole member and control person for Small Cap Compliance, LLC.
The court awarded custodianship to SCC based on the absence of a functioning
board of directors, revocation of the company’s charter, and abandonment of the business. At this time, Rhonda Keaveney was appointed
sole officer and director.
The Company was severely delinquent in filing annual reports for the
Company’s charter. The last annual report was filed on May 31, 2016, on Form 10-K. In addition, the company was subject to Exchange
Act reporting requirements including filing 10-Q’s and 10-Ks. The Company filed its last 10-Q for quarter ending November 30, 2016
and was out of compliance with Exchange Act reporting. SCC attempted to contact the Company’s officers and directors through letters,
emails, and phone calls, with no success.
The Custodian was a shareholder in the Company and applied to the Court
for an Order appointing SCC as the Custodian. This application was for the purpose of reinstating NHLE’s corporate charter to do
business and restoring value to the Company for the benefit of the stockholders.
The Custodian performed the following actions in its capacity as custodian:
| |
· |
Funded any expenses of the company including paying off outstanding liabilities |
| |
· |
Brought the Company back into compliance with the Nevada Secretary of State, resident agent, transfer agent |
| |
· |
Appointed officers and directors and held a shareholders meeting |
The Custodian paid the following expenses
on behalf of the company:
Nevada Secretary of State for reinstatement of the Company, $4,850
Transfer agent, Island Stock Transfer, $13,230
Upon appointment as the Custodian of NHLE
and under its duties stipulated by the Nevada court, SCC took initiative to organize the business of the issuer. As Custodian, the duties
were to conduct daily business, hold shareholder meetings, appoint officers and directors, reinstate the company with the Nevada Secretary
of State. SCC also had authority to enter into contracts and find a suitable merger candidate. SCC was compensated for its role as custodian
in the amount of 500,000 shares of Convertible Series A Preferred Stock. SCC did not receive any additional compensation, in the form
of cash or stock, for custodian services. The custodianship was discharged on April 7 2021.
On January 20, 2021, SCC entered into a Stock
Purchase Agreement with Bridgeview Capital Partners, LLC, whereby Bridgeview Capital Partners, LLC purchased 500,000 shares of Convertible
Series A Preferred Stock for $37,000. These shares represent the controlling block of stock. Ms. Keaveney resigned her position of sole
officer and director and appointed Michael Dobbs as as CEO, Treasurer, Secretary, and Director of the Company.
Bridgeview
Capital Partners, LLC is controlled by Michael Dobbs and Sean Lanci.
Bridgeview Capital Partners, LLC entered into
a Stock Purchas Agreement with Yang Chong Yi whereby Yang Chong Yi purchased 500,000 shares of Convertible Series A Preferred Stock. Michael
Dobbs resigned as sole officer and director and appointed Yang Chong Yi as its CEO, Treasurer, Secretary, and Director of the Company.
We are currently a shell company, as defined
in Rule 405 under the Securities Act of 1933, as amended (the “Securities Act”), and Rule 12b-2.
(b) Business of Issuer
Nhale Inc. is a developmental stage company,
incorporated under the laws of the State of Nevada on June 18, 2012. Our plan of business has not been implemented but will incorporate
the implementation of carbon footprint neutrality and purification through artificial intelligence and emission reduction. Our target
market will be both business and residential and include government agencies, schools, hospitals, health clubs, and family residences.
At present financial revenue has not yet been realized. The Company
hopes to raise capital to fund its business plan.
All statements involving our business plan are forward looking statements
and have not been implemented as of this filing.
The
Company is moving in a new direction, statements made relating to our business plan are forward looking statements and we have no history
of performance. Current management have limited experience in carbon footprint neutrality and purification but is actively looking
for a suitable person to incorporate into the management team.
We feel that our business plan addresses the
need for additional development in carbon reduction and neutrality.
We are in the business of carbon neutrality and air purification and
will incorporate artificial intelligence (“AI”) to achieve our goals.
Ambient air pollution is harmful to the environment and human health,
and is a local, regional, and hemispheric issue. Climate change is a global challenge driven by the observed increase in atmospheric greenhouse
gas concentrations, as a result of emissions from human activities. Most air pollutants (APs) and greenhouse gases (GHGs) are closely
interlinked, once they have common sources, which mainly arise from fuel combustion and industrial processes. Reductions in GHG emissions
can bring ancillary benefits of improved air quality and reduced premature mortality, in addition to slowing climate change. Moreover,
air quality co-benefits on morbidity, mortality, and agriculture could globally offset the costs of climate policy.
Our AI technology will perform air purification and optimization to
reach carbon neutrality. Through our AI we will be able to access substances in the air, thus greatly improving efficiency and reducing
energy consumption/emissions. The company currently plans to select 20 cities in the developed coastal areas and corresponding provincial
capitals as the first phase cities that key services will be launched. The plan is expected to cover 600,000 spaces and benefit more than
2 million people. On this basis, services will be delivered in more cities gradually and the country's first community that focus on people’s
health via respiratory health services. The projects that the company puts emphasis on fully conform to the Chinese government’s
health strategy of establishing a national public health system and doing the work well in disease prevention and treatment. It is also
in line with the international commitment of energy saving, emission reduction and carbon neutrality. It is a project with comprehensive
benefits that meets international social and corporate needs. Our vision incorporates the spirit of social responsibility, not only on
a local community basis but also on a global scale and is generally taken to include
| |
· |
Air purification |
| |
· |
Service a large geographical area including many Chinese provinces |
| |
· |
Create an energy saving through our air purification process |
| |
· |
Carbon neutrality by reducing air pollutants |
| |
· |
Incorporate AI technology to achieve our goals |
The Company intends to implement its business
plan upon raising capital. Subject to available capital, the Company intends to invest in:
Development
| |
· |
Research and development of AI technology to monitor air quality |
Implementation
| |
· |
Promoting local and international understanding and mindfulness |
| |
· |
Actively marketing our drones in local and global markets |
| |
· |
Market to government entities as role models for our product to encourage residential compliance |
The analysis will be undertaken by or under
the supervision of our management. As of the date of this filing, we have not entered into definitive agreements. In our continued efforts
to analyze potential business plan, we intend to consider the following factors:
| |
· |
Potential for growth, indicated by anticipated market expansion or new technology |
| |
· |
Competitive position as compared to other competitors of similar size and experience within the carbon neutrality space, as well as within the industry as a whole |
| |
· |
Strength and diversity of management, and the accessibility of required management expertise, personnel, services, professional assistance, and other required items |
| |
· |
Capital requirements and anticipated availability of required funds, to be provided by the Company or from operations, through the sale of additional securities or convertible debt, through joint ventures or similar arrangements or from other sources; |
| |
· |
The extent to which the business opportunity can be advanced in the marketplace; and |
| |
· |
Other relevant factors |
In applying the foregoing criteria, management
will attempt to analyze all factors and circumstances and make a determination based upon reasonable investigative measures and available
data. Due to our limited capital available for investigation, we may not discover or adequately evaluate adverse facts about the opportunity
to be acquired. Additionally, we will be competing against other entities that may have greater financial, technical, and managerial capabilities
for identifying and completing our business plan.
We are unable to predict when we will, if
ever, identify and implement our business plan. We anticipate that proposed business plan would be made available to us through personal
contacts of our directors, officers and principal stockholders, professional advisors, broker-dealers, venture capitalists, members of
the financial community and others who may present unsolicited proposals. In certain cases, we may agree to pay a finder’s fee or
to otherwise compensate the persons who introduce the Company to business opportunities in which we participate.
As of the time of this filing, the Company
has not implemented its business plan.
We expect that our due diligence will encompass,
among other things, meetings with incumbent management of the target business and inspection of its facilities, as necessary, as well
as a review of financial and other information, which is made available to the Company. This due diligence review will be conducted either
by our management or by third parties we may engage. We anticipate that we may rely on the issuance of our common stock in lieu of cash
payments for services or expenses related to any analysis.
We may incur time and costs required to select
and evaluate our business structure and complete our business plan, which cannot presently be determined with any degree of certainty.
Any costs incurred with respect to the indemnification and evaluation of a prospective international education program that is not ultimately
completed may result in a loss to the Company. These fees may include legal costs, accounting costs, finder’s fees, consultant’s
fees and other related expenses. We have no present arrangements for any of these types of fees.
We anticipate that the investigation of specific
business opportunities and the negotiation, drafting and execution of relevant agreements, disclosure documents and other instruments
will require substantial management time and attention and substantial cost for accountants, attorneys, consultants, and others. Costs
may be incurred in the investigation process, which may not be recoverable. Furthermore, even if an agreement is reached for the participation
in a specific business opportunity, the failure to consummate that transaction may result in a loss to the Company of the related costs
incurred.
Competition
Our
company expects to compete with many countries in the carbon neutrality and air purification industry. In addition, there are several
competitors that are larger and more profitable than NHLE. We expect that the quantity and composition of our competitive environment
will continue to evolve as the industry matures. Additionally, increased competition is possible to the extent that new geographies enter
the marketplace as a result of continued enactment of regulatory and legislative changes. We believe that diligently establishing and
expanding our funding sources will establish us in this emerging industry. Additionally, we expect that establishing our product offerings
on new platforms are factors that mitigate the risk associated with operating in a developing competitive environment. Additionally, the
contemporaneous growth of the industry as a whole will result in new technology within the marketplace, thereby further mitigating the
impact of competition on our future operations and results.
Compliance with government standards
and guidelines will increase development costs and the cost of operating our business. In turn, we may not be able to meet the competitive
price point for our air purification products as dictated by the market and our competitors.
Again,
these are forward looking statements and not an indication of past performance. There is no guarantee that we will be able to implement
our business plan and have no merger candidates as of the time of this filing.
Effect of Existing or Probable Governmental
Regulations on the Business
Upon effectiveness of this Form 10, we will
be subject to the Exchange Act and the Sarbanes-Oxley Act of 2002. Under the Exchange Act, we will be required to file with the SEC annual
reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K. The Sarbanes-Oxley Act creates a strong and independent
accounting oversight board to oversee the conduct of auditors of public companies and to strengthen auditor independence. It also (1)
requires steps be taken to enhance the direct responsibility of senior members of management for financial reporting and for the quality
of financial disclosures made by public companies; (2) establishes clear statutory rules to limit possible conflicts of interest affecting
securities analysts; (3) creates guidelines for audit committee members’ appointment, and compensation and oversight of the work
of public companies’ auditors; (4) prohibits certain insider trading during pension fund blackout periods; and (5) establishes a
federal crime of securities fraud, among other provisions.
We will also be subject to Section 14(a) of
the Exchange Act, which requires all companies with securities registered pursuant to Section 12(g) of the Exchange Act to comply with
the rules and regulations of the SEC regarding proxy solicitations, as outlined in Regulation 14A. Matters submitted to our stockholders
at a special or annual meeting thereof or pursuant to a written consent will require us to provide our stockholders with the information
outlined in Schedules 14A or 14C of Regulation 14A. Preliminary copies of this information must be submitted to the SEC at least 10 days
prior to the date that definitive copies of this information are provided to our stockholders.
Employees
As of June 30, 2021, we had one officer and
director. We anticipate that we will begin to fill out our management team as and when we raise capital to begin implementing our business
plan. In the interim, we will utilize independent consultants to assist with accounting and administrative matters. We currently have
no employment agreements and believe our consulting relationships are satisfactory. We plan to continue to hire independent consultants
from time to time on an as-needed basis.
Risks Relating to Our Business
Our
business plan involves a number of very significant risks. Our future business, operating results and financial condition could be seriously
harmed as a result of the occurrence of any of the following risks. You could lose all or part of your investment due to any of these
risks. You should invest in our common stock only if you can afford to lose your entire investment.
Our officers and directors
reside outside the United States, investors may have limited legal recourse against them including difficulties in enforcing judgments
made against them by U.S. courts. There is neither treaty nor any reciprocal arrangement between China and the United States regarding
recognition or enforcement of civil judgments.
Our Auditor is U.S. based and registered with the PCAOB so Our
Company is Subject to PCAOB Inspections
The Holding Foreign Companies Accountable Act (“HFCAA”)
became law in December 2020 and prohibits foreign companies from listing their securities on U.S.
exchanges if the company has been unavailable for PCAOB inspection or investigation for three consecutive years.
The HFCAA requires the SEC to identify registrants that have
retained a registered public accounting firm to issue an audit report where that registered public
accounting firm has a branch or office that:
| |
· |
Is located in a foreign jurisdiction; and |
| |
· |
The PCAOB has determined that it is unable to inspect or investigate completely because of a position taken by an authority in the foreign jurisdiction |
| |
· |
As reflected on the PCAOB's website, the PCAOB is currently unable to inspect or investigate accounting firms due to a position of the local authority in two jurisdictions: China and Hong Kong |
If a PCAOB auditor is unable to inspect the issuer's public accounting
firm for three consecutive years, the issuer's securities are banned from trade on a national exchange or through other methods. The United
States Senate passed the Accelerating Holding Foreign Companies Accountable Act, which, if enacted, would decrease the number of non-inspection
years from three years to two years. As a result, our securities could be delisted rendering our stock worthless as a result of "non-inspection"
by the PCAOB.
On December 16, 2021, the PCAOB issued a report on its determinations
that if the Board is unable to inspect or investigate completely PCAOB-registered public accounting firms headquartered in mainland China
and in Hong Kong, a Special Administrative Region of the People’s Republic of China (PRC), because of positions taken by PRC authorities
in those jurisdictions, it will suspend trading of the issuer. The Board made these determinations pursuant to PCAOB Rule 6100 which
provides a framework for how the PCAOB fulfills its responsibilities under the Holding Foreign Companies Accountable Act (HFCAA).
On December 16, 2021, the following amendments to the HCFAA were adopted
by the Securities and Exchange Commission:
Consistent with the HFCAA, the final amendments require Commission-Identified
Issuers to submit documentation to the SEC through the EDGAR system on or before its annual report due date that establishes that it is
not owned or controlled by a governmental entity in its public accounting firm’s foreign jurisdiction. The final amendments also
require a Commission-Identified Issuer that is also a “foreign issuer,” as defined in Exchange Act Rule 3b-4, to provide certain
additional specified disclosures in their annual report for itself and its consolidated foreign operating entity or entities, including
any variable-interest entity or similar structure that results in additional foreign entities being consolidated in the registrant’s
financial statements.
The required disclosures include:
| |
· |
During the period covered by the form, the registered public accounting firm has prepared an audit report for the issuer; |
| |
· |
The percentage of the shares of the issuer owned by governmental entities in the foreign jurisdiction in which the issuer is incorporated or otherwise organized; |
| |
· |
Whether governmental entities in the applicable foreign jurisdiction with respect to that registered public accounting firm have a controlling financial interest with respect to the issuer; |
| |
· |
The name of each official of the Chinese Communist Party who is a member of the board of directors of the issuer or the operating entity with respect to the issuer; and |
| |
· |
Whether the articles of incorporation of the issuer (or equivalent organizing document) contains any charter of the Chinese Communist Party, including the text of any such charter. |
The SEC will identify a registrant as a Commission-Identified Issuer
as early as possible after the registrant files its annual report and on a rolling basis. The SEC will “provisionally identify”
a registrant as a Commission-Identified Issuer on the SEC’s website at www.sec.gov/HFCAA. For 15 business days after this provisional
identification, a registrant may email the SEC if it believes it has been incorrectly identified, providing evidence supporting its claim.
After reviewing the information, the registrant will be notified whether the SEC will “conclusively identify” the registrant
as a Commission-Identified Issuer.
A Commission-Identified Issuer is a registrant identified by the SEC
as having filed an annual report with an audit report issued by a registered public accounting firm that is located in a foreign jurisdiction
and that the Public Company Accounting Oversight Board (PCAOB) is unable to inspect or investigate completely because of a position taken
by an authority in that jurisdiction (PCAOB-Identified Firm). The SEC will identify such issuers promptly after the filing of their annual
reports by evaluating whether the annual report contains an audit report signed by a PCAOB-Identified Firm. We may be subject to the HFCAA
if we are identified as a "Commission-Identified Issuer" in accordance with such HFCAA amendments
If the registrant does not contact the SEC to dispute the provisional
identification within 15 business days, the SEC will conclusively identify the registrant as a Commission-Identified Issuer. The SEC will
publish a list on its website identifying Commission-Identified Issuers, indicating the number of years a Commission-Identified Issuer
has been published on the list, and noting whether the Commission-Identified Issuer has been subject to any prior trading prohibitions.
The HFCAA requires the SEC to prohibit the trading of the securities
of certain Commission Identified Issuers on a national securities exchange or through any other method that is within the jurisdiction
of the SEC to regulate, including through over-the-counter trading. As a result, the SEC will impose an initial trading prohibition on
a registrant as soon as practicable after it is conclusively identified as a Commission-Identified Issuer for three consecutive years.
If the SEC ends the initial trading prohibition and, thereafter, the
registrant is again determined to be a Commission-Identified Issuer, the SEC will impose a subsequent trading prohibition on the registrant
for a minimum of five years. To end an initial or subsequent trading prohibition, a Commission-Identified Issuer must certify that it
has retained or will retain a registered public accounting firm that the PCAOB has determined it is able to inspect or investigate. To
make that certification, the Commission-Identified Issuer must file financial statements that include an audit report signed by such a
registered public accounting firm.
Our auditor, BFBorgers CPA PC,
is required to undergo regular inspections by the PCAOB as an auditor of companies that are publicly traded in the United States and a
firm registered with the PCAOB. NHLE will be subject to the HFCAA adopted amendments if it is located within the PRC jurisdiction where
the PCAOB is unable to conduct inspections without the approval of the Chinese government authorities. If our auditor is not inspected
by the PCAOB as specified in the HFCAA, our securities may be prohibited from trading, and this ultimately could result in being delisted.
Our Business is Subject to Numerous
Legal and Regulatory Risks that Could Have an Adverse Impact on Our Contemplated Business.
We are subject to differing and sometimes
conflicting laws and regulations in the various China jurisdictions where we provide our services. As the carbon neutrality and air purification
is still at a relatively early stage of development, new laws and regulations may be adopted from time to time to address new issues that
come to the authorities' attention. In addition, considerable uncertainties still exist with respect to the interpretation and implementation
of existing laws and regulations governing our contemplated business activities. A large number of proposals are before various national,
regional, and local legislative bodies and regulatory entities regarding issues related to our industry or our business model. As we implement
our business plan and expand into new cities or countries or as we add new products and services to our platform, we may become subject
to additional laws and regulations that we are not subject to now. Existing or new laws and regulations could expose us to substantial
liability, including significant expenses necessary to comply with such laws and regulations, and could dampen our growth, which could
adversely affect our business and results of operations.
NHLE may implement the VIE structure as discussed
in the Introductory Comment page. If the PRC rules that the VIE structure is illegal, NHLE would greatly be limited in our ability to
offer or continue to offer securities, which in turn impacts liquidity for investors. Our stock could significantly decline in value or
become worthless.
Risks Related to Access to Information
and Regulatory Oversight
PRC Securities Law state that no overseas securities regulator can
directly conduct investigations or evidence collection activities within the PRC and no entity or individual in China may provide documents
and information relating to securities business activities to overseas regulators without Chinese government approval. The SEC, U.S. Department
of Justice, and other U.S. authorities face substantial challenges in bringing and enforcing actions against China-based Issuers and their
officers and directors. As a result, investors in China-based Issuers may not benefit from a regulatory environment that fosters effective
enforcement of U.S. federal securities laws.
China’s legal system and regulation enforcement could greatly
limit our ability to offer or continue to offer securities, which in turn impacts liquidity for investors. Our stock could significantly
decline in value or become worthless.
Risks Related to the Regulatory Environment
China’s legal system is substantially different from the legal
system in the United States and may raise risks and uncertainties concerning the intent, effect, and enforcement of its laws, rules, and
regulations, including those that restrict the inflow and outflow of foreign capital or provide the Chinese government with significant
authority to exert influence on a China-based Issuer’s ability to conduct business or raise capital. This lack of certainty may
result in the inconsistent and unpredictable interpretation and enforcement of laws, rules, and regulations, which may change quickly.
China-based Issuers face risks related to evolving laws and regulations, which could impede their ability to obtain or maintain permits
or licenses required to conduct business in China. In the absence of required permits or licenses, governmental authorities may impose
material sanctions or penalties on the company. Such actions could significantly limit or completely hinder our ability to offer or continue
to offer securities to investors and cause the value of our securities to significantly decline or be worthless.
Limitations on Shareholder Rights and
Recourse
Legal claims, including federal securities
law claims, against China-based Issuers, or their officers, directors, and gatekeepers, may be difficult or impossible for investors to
pursue in U.S. courts. Even if an investor obtains a judgment in a U.S. court, the investor may be unable to enforce such judgment, particularly
in the case of a China-based Issuer, where the related assets or persons are typically located outside of the United States and in jurisdictions
that may not recognize or enforce U.S. judgments. If an investor is unable to bring a U.S. claim or collect on a U.S. judgment, the investor
may have to rely on legal claims and remedies available in China or other overseas jurisdictions where the China-based Issuer may maintain
assets. The claims and remedies available in these jurisdictions are often significantly different from those available in the United
States and difficult to pursue. An investor could lose their entire investment and incur legal costs if unable to enforce their judgment.
Greater Chinese regulatory oversight
may impact our contemplated business
We are not currently required to comply with regulations and policies
of the Cyberspace Administration of China (CAC) because we have not commenced our business in China.
CAC regulates the collection of personal information, which is recorded
electronically, or in any other form, to recognize the identity of a natural person. In light of greater oversight regarding the collection
of personal information we will be subject to cybersecurity upon execution of our contemplated business plan.
If CAC determines that we have violated any portion of PRC laws and
regulation, our ability to obtain or maintain permits or licenses required to conduct business in China may be affected. In the absence
of required permits or licenses, governmental authorities may impose material sanctions or penalties on the company. Such actions could
significantly limit or completely hinder our ability to offer or continue to offer securities to investors and cause the value of our
securities to significantly decline or be worthless.
Merger & Acquisition Approval
is Required
Under the PRC Anti-monopoly Law, merger & acquisitions that meet
certain turnover thresholds must notify the State Administration for Market Regulation (SAMR) for merger control clearance and may not
be implemented without SAMR’s approval.
NHLE may merge with, or acquire, a target company to commence its contemplated
business operations. If our target business meets the threshold for review by SAMR, we will be required to submit an application for approval.
The SAMR utilizes a substantive test for merger review. The substantive
test takes into consideration the:
| |
· |
Market shares and market control power of the business operators concerned |
| |
· |
Concentration levels of relevant markets |
| |
· |
Impact of the concentration on market entry, technological development, consumers and other relevant operators |
| |
· |
Impact of the concentration on national economic development |
| |
· |
Foreign investment |
As of this time, NHLE is not required to submit an application to SAMR
as we have not identified a merger or acquisition candidate. However, if we locate a suitable merger or acquisition candidate, we may
be required to submit an approval request to SAMR. We don’t anticipate merging with a company that is large enough to trigger anti-monopoly
threshold for review. However, if SAMR denies our application, such actions could significantly limit or completely hinder our ability
to offer, or continue to offer, securities to investors and cause the value of such securities to significantly decline or be worthless.
Risks Related to the Company’s Organizational Structure
Although NHLE has not implemented a VIE structure at this time, the
Company may use this structure once its contemplated business operations have been implemented. The China-based Issuer VIE structures
pose risks to U.S. investors that are not present in other organizational structures. The Chinese government could determine that the
agreements establishing the VIE structure do not comply with Chinese law and regulations, including those related to restrictions on foreign
ownership, which could subject a China-based Issuer to penalties, revocation of business and operating licenses, or forfeiture of ownership
interests. A China-based Issuer’s control over a VIE may also be jeopardized if a natural person who holds the equity interest in
the VIE breaches the terms of the agreements, is subject to legal proceedings, or if any physical instruments, such as chops and seals,
are used without the China-based Issuer’s authorization to enter into contractual arrangements in China.
If we decide to move forward with a VIE structure, our shares may decline
in value or become worthless if we are unable to assert our contractual control rights over the assets of our PRC subsidiaries that conduct
all or substantially all of our operations. These risks or events are only applicable if we decide to implement a VIE structure.
Resale limitations of Rule 144(i) on your shares
According to the Rule 144(i), Rule 144 is not available for the resale
of securities initially issued by either a reporting or non-reporting shell company. Moreover, Rule 144(i)(1)(ii) states that Rule 144
is not available to securities initially issued by an issuer that has been “at any time previously” a reporting or non-reporting
shell company. Rule 144(i)(1)(ii) prohibits shareholders from utilizing Rule 144 to sell their shares in a company that at any time in
its existence was a shell company. However, according to Rule 144(i)(2), an issuer can “cure” its shell status.
To “cure” a company’s current or former shell company
status, the conditions of Rule 144(i)(2) must be satisfied regardless of the time that has elapsed since the public company ceased to
be a shell company and regardless of when the shares were issued. The availability of Rule 144 for resales of shares issued while the
company is a shell company or thereafter may be restricted even after the expiration of the one-year period since it filed its Form 10
information if the company is not current on all of its periodic reports required to be filed within the SEC during the 12 months before
the date of the shareholder’s sale. Thus, the company must file all 10-Qs and 10-K for the preceding 12 months and since the filing
of the Form 10, or Rule 144 is not available for the resale of securities
We have limited assets, have incurred
operating losses, and have no current source of revenue
We have had minimal assets. We do not expect
to generate revenues until we begin to implement our business plan. However, we can provide no assurance that we will produce any material
revenues for our stockholders, or that our business will operate on a profitable basis.
We will, likely, sustain operating expenses
without corresponding revenues, at least until the consummation of our business plan. This may result in our incurring a net operating
loss that will increase unless we consummate a business plan with a profitable business or internally develop our business. We cannot
assure you that we can identify a suitable business combination or successfully internally develop our business, or that any such business
will be profitable at the time of its acquisition by the Company or ever.
Our capital resources may not be sufficient
to meet our capital requirements, and in the absence of additional resources we may have to curtail or cease business operations
We have historically generated negative cash
flow and losses from operations and could experience negative cash flow and losses from operations in the future. Our independent auditors
have included an explanatory paragraph in their report on our financial statements for the fiscal years ended December 31, 2020, and 2019
expressing doubt regarding our ability to continue as a going concern. We currently only have a minimal amount of cash available, which
will not be sufficient to fund our anticipated future operating needs. The Company will need to raise substantial sums to implement its
business plan. There can be no assurance that the Company will be successful in raising funds. To the extent that the Company is unable
to raise funds, we will be required to reduce our planned operations or cease any operations.
We may encounter substantial competition
in our business and our failure to compete effectively may adversely affect our ability to generate revenue
Carbon neutrality through air purification
is an emerging industry. We believe that existing and new competitors will continue to improve in cost control and performance of their
curriculum. We have global competitors, and we will be required to continue to invest in product development and productivity improvements
to compete effectively in our markets. Our competitors could develop a more efficient product or undertake more aggressive and costly
marketing campaigns than ours, which may adversely affect our marketing strategies and could have a material adverse effect on our business,
results of operations and financial condition.
Our major competitors may be better able than
we to successfully endure downturns in our industrial sector. In periods of reduced demand for our product, we can either choose to maintain
market share by reducing our selling prices to meet competition or maintain selling prices, which would likely sacrifice market share.
Sales and overall profitability would be reduced in either case. In addition, we cannot assure you that additional competitors will not
enter our existing markets, or that we will be able to compete successfully against existing or new competition.
Effect of Environmental Laws
We believe that we are in compliance with
all applicable environmental laws, in all material respects. We do not expect future compliance with environmental laws to have a material
adverse effect on our business.
We may not be able to obtain regulatory
approvals for our product
Our business is subject to laws and regulations governing development
of AI for air purification. The Company believes acquisition of already compliant merger candidate will mitigate this risk.
All operating plans have been made in consideration of existing environmental
regulations. Regulations that most affect operations are related to emission reduction technologies of the private corporations we acquire.
We face a number of risks associated
with our business plan, including the possibility that we may incur substantial debt or convertible debt, which could adversely affect
our financial condition
We intend to use reasonable efforts to complete
our business plan. The risks commonly encountered in implementing our business plan is insufficient revenues to offset increased expenses
associated with finding a merger candidate. Failure to raise sufficient capital to carry out our business plan. Additionally, we have
no operations at this time so our expenses are likely to increase, and it is possible that we may incur substantial debt or convertible
debt in order to complete our business plan, which can adversely affect our financial condition. Incurring a substantial amount of debt
or convertible debt may require us to use a significant portion of our cash flow to pay principal and interest on the debt, which will
reduce the amount available to fund working capital, capital expenditures, and other general purposes. Our indebtedness may negatively
impact our ability to operate our business and limit our ability to borrow additional funds by increasing our borrowing costs, and impact
the terms, conditions, and restrictions contained in possible future debt agreements, including the addition of more restrictive covenants;
impact our flexibility in planning for and reacting to changes in our business as covenants and restrictions contained in possible future
debt arrangements may require that we meet certain financial tests and place restrictions on the incurrence of additional indebtedness
and place us at a disadvantage compared to similar companies in our industry that have less debt.
Our future success is highly dependent
on the ability of management to locate and attract suitable business opportunities and our stockholders will not know what business we
will enter into until we consummate a transaction with the approval of our then existing directors and officers
At this time, we have no operations and future
implementation of our business plan is highly speculative, there is a consequent risk of loss of an investment in the Company. The success
of our plan of operations will depend to a great extent on the operations, financial condition and management of future business and internal
development. While management intends to seek businesses opportunities with entities having established operating histories, we cannot
provide any assurance that we will be successful in locating opportunities meeting that criterion. In the event we complete a business
plan, the success of our operations will be dependent upon management, its financial position and numerous other factors beyond our control.
There can be no assurance that we will
successfully consummate a business plan or internally develop a successful business
We are a blank check company and can give
no assurance that we will successfully identify and evaluate suitable business opportunities or that we will successfully implement our
business plan. We cannot guarantee that we will be able to negotiate contracts on favorable terms. No assurances can be given that we
will successfully identify and evaluate suitable business opportunities, that we will conclude a business plan or that we will be able
to develop a successful business. Our management and affiliates will play an integral role in establishing the terms for any future business.
We will incur increased costs as a result
of becoming a reporting company, and given our limited capital resources, such additional costs may have an adverse impact on our profitability.
Following the effectiveness of this Form 10,
we will be an SEC reporting company. The Company currently has no business and no revenue. However, the rules and regulations under the
Exchange Act require a public company to provide periodic reports with interactive data files which will require the Company to engage
legal, accounting and auditing services, and XBRL and EDGAR service providers. The engagement of such services can be costly, and the
Company is likely to incur losses, which may adversely affect the Company’s ability to continue as a going concern. In addition,
the Sarbanes-Oxley Act of 2002, as well as a variety of related rules implemented by the SEC, have required changes in corporate governance
practices and generally increased the disclosure requirements of public companies. For example, as a result of becoming a reporting company,
we will be required to file periodic and current reports and other information with the SEC and we must adopt policies regarding disclosure
controls and procedures and regularly evaluate those controls and process.
The additional costs we will incur in connection
with becoming a reporting company will serve to further stretch our limited capital resources. The expenses incurred for filing periodic
reports and implementing disclosure controls and procedures may be as high as $70,000 USD annually. In other words, due to our limited
resources, we may have to allocate resources away from other productive uses in order to pay any expenses we incur in order to comply
with our obligations as an SEC reporting company. Further, there is no guarantee that we will have sufficient resources to meet our reporting
and filing obligations with the SEC as they come due.
The time and cost of preparing a private
company to become a public reporting company may preclude us from entering into an acquisition or merger with the most attractive private
companies and others
From time to time the Company may come across
target merger companies. These companies may fail to comply with SEC reporting requirements may delay or preclude acquisitions. Sections
13 and 15(d) of the Exchange Act require reporting companies to provide certain information about significant acquisitions, including
certified financial statements for the company acquired, covering one or two years, depending on the relative size of the acquisition.
The time and additional costs that may be incurred by some target entities to prepare these statements may significantly delay or essentially
preclude consummation of an acquisition. Otherwise, suitable acquisition prospects that do not have or are unable to obtain the required
audited statements may be inappropriate for acquisition so long as the reporting requirements of the Exchange Act are applicable.
A Business may result in a change of
control and a change of management.
In conjunction with completion of a business
acquisition, it is anticipated that we may issue an amount of our authorized but unissued common or preferred stock which represents the
majority of the voting power and equity of our capital stock, which would result in stockholders of a target company obtaining a controlling
interest in us. As a condition of the business combination agreement, our current stockholders may agree to sell or transfer all or a
portion of our common stock as to provide the target company with all or majority control. The resulting change in control may result
in removal of our present officers and directors and a corresponding reduction in or elimination of their participation in any future
affairs.
We depend on our officers and the loss of their services would
have an adverse effect on our business
We have officers and directors of the Company that are critical to
our chances for business success. We are dependent on their services to operate our business and the loss of these persons, or any of
them would have an adverse impact on our future operations until such time as he or she could be replaced, if he could be replaced. We
do not have employment contracts or employment agreements with our officers, and we do not carry key man life insurance on their lives.
Because we are significantly smaller than some of our competitors,
we may lack the resources needed to capture market share
The carbon neutrality and air purification industry is highly competitive,
and our business plan has not been implemented and we are smaller in size than some of our competitors. We are at a disadvantage as a
blank check company, we do not have an established business. Many of our competitors have an already established their business, more
established market presence, and substantially greater financial, marketing, and other resources than do we. New competitors may emerge
and may develop new or innovative products that compete with our anticipated future production. No assurance can be given that we will
be able to compete successfully within the international education industry.
Our ability to use our net operating loss carry-forwards and
certain other tax attributes may be limited
We have incurred losses during our history. To the extent that we continue
to generate taxable losses, unused losses will carry forward to offset future taxable income, if any, until such unused losses expire.
Under Sections 382 and 383 of the Internal Revenue Code of 1986, as amended, if a corporation undergoes an “ownership change,”
generally defined as a greater than 50% change (by value) in its equity ownership over a three-year period, the corporation’s ability
to use its pre-change net operating loss carry-forwards, or NOLs, and other pre-change tax attributes (such as research tax credits) to
offset its post-change income may be limited. We may experience ownership changes in the future because of subsequent shifts in our stock
ownership. As a result, if we earn net taxable income, our ability to use our pre-change net operating loss carryforwards to offset U.S.
federal taxable income may be subject to limitations, which could potentially result in increased future tax liability to us. In addition,
at the state level, there may be periods during which the use of NOLs is suspended or otherwise limited, which could accelerate or permanently
increase state taxes owed.
Our ability to hire and retain key personnel
will be an important factor in the success of our business and a failure to hire and retain key personnel may result in our inability
to manage and implement our business plan
Our management has limited experience in the
carbon neutrality and air purification industry and we may not be able to attract and retain the necessary qualified personnel. If we
are unable to retain or to hire qualified personnel as required, we may not be able to adequately manage and implement our business plan.
Legal disputes could have an impact on our Company
We plan to engage in business matters that are common to the business
world that can result in disputations of a legal nature. In the event the Company is ever sued or finds it necessary to bring suit
against others, there is the potential that the results of any such litigation could have an adverse impact on the Company.
Our common stock is quoted on the OTC MARKETS. An investment
in our common stock is risky and there can be no assurance that the price for our stock will not decrease substantially in the future
Our common stock is quoted on the OTC Markets. The market for our stock
has been volatile and has been characterized by large swings in the trading price that do not appear to be directly related to our business
or financial condition. As a result, an investment in our common stock is risky and there can be no assurance that the price for our stock
will not decrease substantially in the future.
Our stock trades below $5.00 per share and is subject to special
sales practice requirements that could have an adverse impact on any trading market that may develop for our stock
If our stock trades below $5.00 per share and is subject to special
sales practice requirements applicable to "penny stocks" which are imposed on broker-dealers who sell low-priced securities
of this type. These rules may be anticipated to affect the ability of broker-dealers to sell our stock, which may in turn be anticipated
to have an adverse impact on the market price for our stock if and when an active trading market should develop.
Our officers, directors and principal stockholders own a large
percentage of our issued and outstanding shares and other stockholders have little or no ability to elect directors or influence corporate
matters
As of August 9, 2021, our officers, directors, and principal stockholders
were deemed to be the beneficial owners of approximately of our 100% issued and outstanding shares of Preferred shares. These shares are
convertible into 500,000,000 shares of common stock and represents 94% of our issued and outstanding common shares. As a result, such
persons can determine the outcome of any actions taken by us that require stockholder approval. For example, they will be able to elect
all of our directors and control the policies and practices of the Company.
Risks Related to Our Shareholders and Shares
of Common Stock
There is presently no public market
for our securities
Our common stock is not currently trading
on any market, and a robust and active trading market may never develop. Because of our current status as a “shell company,”
Rule 144 is not currently available. Future sales of our common stock by existing stockholders pursuant to an effective registration statement
or upon the availability of Rule 144 could adversely affect the market price of our common stock. A shareholder who decides to sell some,
or all, of their shares in a private transaction may be unable to locate persons who are willing to purchase the shares, given the restrictions.
Also, because of the various risk factors described above, the price of the publicly traded common stock may be highly volatile and not
provide the true market price of our common stock.
Our stock is not traded, so you may
be unable to sell your shares at or near the quoted bid prices if you need to sell a significant number of your shares
Even if our stock becomes trading, it is likely
that our common stock will be thinly traded, meaning that the number of persons interested in purchasing our common shares at or near
bid prices at any given time may be relatively small or non-existent. This situation is attributable to a number of factors, including
the fact that we are a small company which is relatively unknown to stock analysts, stock brokers, institutional investors and others
in the investment community that generate or influence sales volume, and that even if we came to the attention of such persons, they tend
to be risk-averse and would be reluctant to follow an unproven company such as ours or purchase or recommend the purchase of our shares
until such time as we became more seasoned and viable. Consequently, there may be periods of several days or more when trading activity
in our shares is minimal or non-existent, as compared to a seasoned issuer which has a large and steady volume of trading activity that
will generally support continuous sales without an adverse effect on share price. We cannot give you any assurance that a broader or more
active public trading market for our common shares will develop or be sustained, or that current trading levels will be sustained. Due
to these conditions, we can give you no assurance that you will be able to sell your shares at or near bid prices or at all if you need
money or otherwise desire to liquidate your shares.
Our common stock is be considered a
“penny stock,” and thereby be subject to additional sale and trading regulations that may make it more difficult to sell
A common stock is a “penny stock”
if it meets one or more of the following conditions (i) the stock trades at a price less than $5.00 per share; (ii) it is not traded on
a “recognized” national exchange; (iii) it is not quoted on the Nasdaq Capital Market, or even if so, has a price less than
$5.00 per share; or (iv) is issued by a company that has been in business less than three years with net tangible assets less than $5
million.
The principal result or effect of being designated
a “penny stock” is that securities broker-dealers participating in sales of our common stock will be subject to the “penny
stock” regulations set forth in Rules 15g-2 through 15g-9 promulgated under the Exchange Act. For example, Rule 15g-2 requires broker-dealers
dealing in penny stocks to provide potential investors with a document disclosing the risks of penny stocks and to obtain a manually signed
and dated written receipt of the document at least two business days before effecting any transaction in a penny stock for the investor’s
account. Moreover, Rule 15g-9 requires broker-dealers in penny stocks to approve the account of any investor for transactions in such
stocks before selling any penny stock to that investor. This procedure requires the broker-dealer to (i) obtain from the investor information
concerning his or her financial situation, investment experience and investment objectives; (ii) reasonably determine, based on that information,
that transactions in penny stocks are suitable for the investor and that the investor has sufficient knowledge and experience as to be
reasonably capable of evaluating the risks of penny stock transactions; (iii) provide the investor with a written statement setting forth
the basis on which the broker-dealer made the determination in (ii) above; and (iv) receive a signed and dated copy of such statement
from the investor, confirming that it accurately reflects the investor’s financial situation, investment experience and investment
objectives. Compliance with these requirements may make it more difficult and time consuming for holders of our common stock to resell
their shares to third parties or to otherwise dispose of them in the market or otherwise.
We may issue more shares in an acquisition
or merger, which will result in substantial dilution
Our Articles of Incorporation, as amended, authorize the Company to
issue an aggregate of 100,000,000 shares of common stock of which 30,000,000 shares are currently outstanding and 1,000,000 shares of
Preferred A Stock are authorized, of which 500,000 shares are outstanding. Any acquisition or merger effected by the Company may result
in the issuance of additional securities without stockholder approval and may result in substantial dilution in the percentage of our
common stock held by our then existing stockholders. Moreover, shares of our common stock issued in any such merger or acquisition transaction
may be valued on an arbitrary or non-arm’s-length basis by our management, resulting in an additional reduction in the percentage
of common stock held by our then existing stockholders. In an acquisition type transaction, our Board of Directors has the power to issue
any, or all, of such authorized but unissued shares without stockholder approval. To the extent that additional shares of common stock
are issued in connection with a business combination or otherwise, dilution to the interests of our stockholders will occur and the rights
of the holders of common stock might be materially adversely affected.
Obtaining additional capital though
the sale of common stock will result in dilution of stockholder interests
We may raise additional funds in the future
by issuing additional shares of common stock or other securities, which may include securities such as convertible debentures, warrants
or preferred stock that are convertible into common stock. Any such sale of common stock or other securities will lead to further dilution
of the equity ownership of existing holders of our common stock. Additionally, the existing conversion rights may hinder future equity
offerings, and the exercise of those conversion rights may have an adverse effect on the value of our stock. If any such conversion rights
are exercised at a price below the then current market price of our shares, then the market price of our stock could decrease upon the
sale of such additional securities. Further, if any such conversion rights are exercised at a price below the price at which any stockholder
purchased shares, then that particular stockholder will experience dilution in his or her investment.
Our directors have the authority to
authorize the issuance of preferred stock
Our Articles of Incorporation, as amended,
authorize the Company to issue an aggregate of 1,000,000 shares of Preferred Stock. Our directors, without further action by our stockholders,
have the authority to issue shares to be determined by our board of directors of Preferred Stock with the relative rights, conversion
rights, voting rights, preferences, special rights, and qualifications as determined by the board without approval by the shareholders.
Any issuance of Preferred Stock could adversely affect the rights of holders of common stock. Additionally, any future issuance of preferred
stock may have the effect of delaying, deferring, or preventing a change in control of the Company without further action by the shareholders
and may adversely affect the voting and other rights of the holders of common stock. Our Board does not intend to seek shareholder approval
prior to any issuance of currently authorized stock, unless otherwise required by law or stock exchange rules.
We have never paid dividends on our
common stock, nor are we likely to pay dividends in the foreseeable future. Therefore, you may not derive any income solely from ownership
of our stock
We have never declared or paid dividends on
our common stock and do not presently intend to pay any dividends in the foreseeable future. We anticipate that any funds available for
payment of dividends will be re-invested into the Company to further our business strategy. This means that your potential for economic
gain from ownership of our stock depends on appreciation of our stock price and will only be realized by a sale of the stock at a price
higher than your purchase price.