10-K 1 sancon_10k-123116.htm ANNUAL REPORT

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

☒	Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

	For the fiscal year ended December 31, 2016

☐	Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

	For the transition period from ______________to ______________

Commission File Number 000-50760

SANCON RESOURCES RECOVERY, INC.

(Exact Name of Registrant as Specified in Its Charter)

State of Nevada, USA

(State or Other Jurisdiction of Incorporation or Organization)

58-2670972

(I.R.S. Employer Identification No.)

602 Nan Fung Tower, Suite 6/F

88 Connaught Road Central

Central District, Hong Kong

(Address of Principal Executive Offices)

N/A

(Zip Code)

+ (852) 2868-0668

(Registrant’s Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class	Name of Each Exchange on Which Registered
None	N/A

Securities registered pursuant to Section 12(g) of the Act:

Common Stock, par value $0.001 per share

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. ☐ Yes ☒ No

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. ☐ Yes ☒ No

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirement for the past 90 days. ☒ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). ☒ Yes ☐ No

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of the registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form10-K ☐ Yes ☒No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.

Large accelerated filer ☐	Accelerated filer ☐
Non-accelerated filer ☐	Smaller Reporting Company ☒

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☒ Yes ☐ No

The aggregate market value of voting stock held by non-affiliates of the registrant as of June 30, 2016 was approximately $541,997 (based upon a closing price of $0.02 per share, as reported on Yahoo Finance). As of December 31, 2016, there were 105,091,254 shares of the registrant’s common stock outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

List hereunder the following documents if incorporated by reference and the Part of the Form 10-K (e.g., Part I, Part II, etc.) into which the document is incorporated: (1) Any annual report to security holders; (2) Any proxy or information statement; and (3) Any prospectus filed pursuant to Rule 424(b) or (c) under the Securities Act of 1933.

None.

TABLE OF CONTENTS

			PAGE
PART I			1

	Item 1	Business	1
	Item 1A	Risk Factors	3
	Item 1B	Unresolved Staff Comments	3
	Item 2	Properties	3
	Item 3	Legal Proceedings	3
	Item 4	Mine Safety Disclosures	3

PART II			4

	Item 5	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	4
	Item 6	Selected Financial Data	5
	Item 7	Management’s Discussion and Analysis of Financial Condition and Results of Operations	5
	Item 7A	Quantitative and Qualitative Disclosures About Market Risk	8
	Item 8	Financial Statements and Supplementary Data	8
	Item 9	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	8
	Item 9A	Controls and Procedures	8
	Item 9B	Other Information	9

PART III			10

	Item 10	Directors, Executive Officers and Corporate Governance	10
	Item 11	Executive Compensation	11
	Item 12	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	12
	Item 13	Certain Relationships and Related Transactions, and Director Independence	13
	Item 14	Principal Accountant Fees and Services	13

PART IV			14

	Item 15	Exhibits, Financial Statement Schedules	14

SIGNATURES			15

EXHIBITS			16

Forward Looking Statements

CAUTIONARY NOTE ABOUT FORWARD-LOOKING STATEMENTS

The information contained in this Report includes some statements that are not purely historical and that are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and as such, may involve risks and uncertainties. These forward-looking statements relate to, among other things, expectations of the business environment in which we operate, perceived opportunities in the market and statements regarding our mission and vision. In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. You can generally identify forward-looking statements as statements containing the words “anticipates,” “believes,” “continue,” “could,” “estimates,” “expects,” “intends,” “may,” “might,” “plans,” “possible,” “potential,” “predicts,” “projects,” “seeks,” “should,” “will,” “would” and similar expressions, or the negatives of such terms, but the absence of these words does not mean that a statement is not forward-looking.

Forward-looking statements involve risks and uncertainties that could cause actual results or outcomes to differ materially from those expressed in the forward-looking statements. The forward-looking statements contained herein are based on various assumptions, many of which are based, in turn, upon further assumptions. Our expectations, beliefs and forward-looking statements are expressed in good faith on the basis of management’s views and assumptions as of the time the statements are made, but there can be no assurance that management’s expectations, beliefs or projections will result or be achieved or accomplished. We disclaim any obligation to update forward-looking statements to reflect events or circumstances after the date hereof.

PART I

ITEM 1. BUSINESS

Business Combination and Corporate Restructuring

Effective May 26, 2006, a business combination occurred between Sancon Recycling Pty Ltd. (“SRPL”) and MKA Capital Inc. (hereinafter referred to as "MKAC"). The combination was effected by MKAC exchange its seventy-five percent (75%) equity stake in MK Aviation, S.A. (hereinafter referred to as "MKA") for one hundred percent (100%) equity stake in SRPL held by Mr. Jack Chen, Mr. Yiu Lo Chung, and associated parties (“the Shareholders”). Meanwhile, the Shareholders exchanged their ownership of seventy-five percent (75%) equity stake in MK Aviation, S.A. with 14,897,215 shares of the Registrant's common stock from Mr. Kraselnick and associated parties. Subsequently MKAC was renamed Sancon Resources Recovery, Inc. (herein below referred to as “the Company” or “Sancon”).

As a result of the merger, there was a change in control of the public entity MKAC. In accordance with SFAS No. 141, SRPL was the acquiring entity. While the transaction is accounted for using the purchase method of accounting, in substance the Agreement is a recapitalization of the Company's capital structure. For accounting purposes, SRPL accounted for the transaction as a reverse acquisition and SRPL is the surviving entity. SRPL did not recognize goodwill or any intangible assets in connection with the transaction.

Effective with the Agreement, the Shareholders owned 14,897,215 shares of MKAC voting common stock or 74.28% of the Registrant's 20,030,370 issued and outstanding voting common stock at the time.

All references to common stock, share and per share amounts had been retroactively restated to reflect the exchange of 100 shares of SRPL common stock for 14,897,215 shares of the MKAC's common stock outstanding immediately prior to the merger as if the exchange had taken place as of the beginning of the earliest period presented.

The accompanying financial statements present the historical financial condition, results of operations and cash flows of Sancon as of December 31, 2016.

Business of the Issuer

Overview of the Company and its Operations

During the period from June 2006 to October 2011, Sancon Resources Recovery, Inc. had been an industrial waste recycling company with operations based in Australia and China. Sancon's main operations and services included industrial waste management consulting, collection and reprocess of recyclable materials such as glass, plastic, cardboard, and paper.

The business operation of the Company was carried out through its subsidiaries listed below. In 2011, the Company divested all its subsidiaries. The status of the subsidiaries as of the year end 2011 is given below.

Registered Name (business is conducted under the registered names)	Domicile	Owner	% held
Sancon Recycling Pty Ltd. (“Sancon AU” hereinafter) Status: The company was under administration and wound up by the directors.	Australia	Sancon		100
Sancon Resources Recovery (Shanghai) Co., Ltd. ("Sancon SH" hereinafter) Status: The shareholding was sold to Mr. Jack Chen on October 31, 2011.	Shanghai	Sancon		70
Crossover Solutions Inc. ("CS" hereinafter) Status: The shareholding was sold to Mr. Jack Chen on October 31, 2011.	British Virgin Island	Sancon		100
Sheng Rong Environment Protection Technology Co., Ltd. (“Shanghai Sheng Rong” hereinafter) Status: The company was owned by Sancon SH which was sold to Mr. Jack Chen on October 31, 2011.	Shanghai	Sancon SH		52

On September 30, 2011, Sancon entered into a Stock Sale and Purchase Agreement to transfer its 70% controlling interest in Sancon Resources Recovery (Shanghai) Co., Ltd. and 100% interest of its associated company Crossover Solutions, Inc to Mr. Jack Chen, the Company’s Chief Executive Officer and Director.

Under the terms of the Agreement, the purchase price was to be settled upon closing of the transaction by returning to the Company a total of 10,100,000 common shares, representing 44% of the total issued and outstanding shares of Sancon. As of October 31, 2011, a total of 10,100,000 shares of Sancon had been received and subsequently cancelled by the Company.

The Company is a controlled corporation with the substantial majority of our shares held by Pontoon Boat Inc. (“Pontoon”), a company registered in the Republic of Vanuatu. Pontoon acquired a 51% common shares of the Company in July 2016. As a result, there can be no assurance that business and/or strategy of the Company will not change over time as a result of Pontoon’s acquisition.

Our Strategy

We do not currently engage in any business activity. Our principal business objective will be to achieve long-term growth potential through a combination with a business rather than immediate, short-term earnings.

We may consider a business which has recently commenced operations, is a developing company in need of additional funds for expansion into new products or markets, is seeking to develop a new product or service, or is an established business which may be experiencing financial or operating difficulties and is in need of additional capital. In the alternative, a business combination may involve the acquisition of, or merger with, a company which does not need substantial additional capital, but which desires to establish a public trading market for its shares, while avoiding, among other things, the time delays, significant expense, and loss of voting control which may occur in a public offering.

Any target business that is selected may be a financially unstable company or an entity in its early stages of development or growth, including entities without established records of sales or earnings. In that event, we will be subject to numerous risks inherent in the business and operations of financially unstable and early stage or potential emerging growth companies.

Our management anticipates that it will likely be able to effect only on business combination, due primarily to our limited financing, and the dilution of interest for current stockholders, which is likely to occur as a result of our management's plan to offer a controlling interest to a target business in order to achieve tax free reorganization.

Because of general economic conditions, rapid technological advances being made in some industries and shortages of available capital, our management believes that there are numerous firms seeking the perceived benefits of becoming a publicly traded corporation. Potentially available business combinations may occur 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.

Evaluation of Business Combinations

Our management intends to concentrate on prospective business combinations that may be brought to its attention through their own efforts, through persons having pre-existing business or personal relationships with members of the Company's management and interested persons referred to the Company by persons having such pre-existing relationships with members of its management or other third parties.

While we have not established definitive criteria for acquisition candidates but intend to focus on Asian-based entities. In analyzing prospective business combinations, our management will also consider such matters as the following:

Available technical, financial, and managerial resources,

Working capital and other financial requirements,

Prospects for the future,

Nature of present and expected competition,

The potential for further research, development, or exploration,

The potential for growth or expansion, and

The potential for profit.

As a part of our investigation, our officers and/or directors will meet personally with management and key personnel, visit and inspect material facilities, check references of management and key personnel, and take other reasonable investigative measures, to the extent of our limited financial resources and management expertise.

Intellectual Property

None.

Employees

As of December 31, 2016, the Company had no employees.

Factors That May Affect Future Results

The Company's ability to execute its business strategy and to sustain its operations depends upon its ability to maintain or procure capital. There can be no absolute assurance the necessary amount of capital will continue to be available to the Company on favorable terms, or at all. The Company's inability to obtain sufficient capital would limit the Company's ability to: (i) acquire new business and (ii) fund its working capital needs. The Company's access to capital may have a material adverse effect on the Company's business, financial condition and/or results of operations.

There can be no absolute assurance the Company will be able to effectively manage its existing or the possible future expansion of its operations, or the Company's systems, procedures or controls will be adequate to support future Company operations. Consequently, the Company's business, financial condition and/or results of operations could be possibly and adversely affected.

The Company does not foresee changes in tax laws for the jurisdictions in which the Company operates. There can be no absolute assurance that changes will not occur, and therefore no absolute assurance such changes will not materially and adversely affect the Company's business, financial condition and future results of operations.

As a public company, Sancon is subject to certain regulatory requirements including, but not limited to, compliance with Section 404 of the Sarbanes-Oxley Act of 2002 ("SOX404"). Such compliance results in significant additional costs to the Company by increased audit and consulting fees, and the time required by management to address the regulations.

ITEM 1A. RISK FACTORS

This information is not required of smaller reporting companies.

ITEM 1B. UNRESOLVED STAFF COMMENTS

Not applicable.

ITEM 2. PROPERTIES

The Company does not own or have any leased property as of December 31, 2016. The corporate office is provided to the Company by Fintel (USA) Limited. Mr. Stephen Tang, the previous CEO and President of the Company, is a principal owner of Fintel (USA) Limited.

ITEM 3. LEGAL PROCEEDINGS

None.

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

The Company’s stock is assigned the symbol SRRY and is quoted and traded on the OTCPK.

The range of low to high closing prices on the OTCPK is shown in the table below (rounded to the nearest cent). This information is taken from MSN Money and CSI. Readers should note OTCPK quotations are a reflection of inter-dealer prices, without retail mark-up, mark-down, or commissions, and may not represent actual transactions.

	Fiscal 2016				Fiscal 2015
Quarter	$ High Closing Price		$ Low Closing Price		$ High Closing Price		$ Low Closing Price
First		0.016		0.003		0.01		0.004
Second		0.024		0.002		0.02		0.010
Third		0.025		0.006		0.02		0.008
Fourth		0.014		0.008		0.01		0.002

Holders of the Company’s Stock

The Company has issued common stock only. On December 31, 2016, the total number of holders of record as according to our transfer agent was approximately 300.

Dividends

We did not pay any cash dividends on our common stock for fiscal year ended on December 31, 2016.

Unregistered Sales of Equity Securities

date	type	amount	person	consideration	transaction
4-Feb-16	Common share	3,000,000	Tang Wai Leong	$6,000	New Subscription of shares
4-Feb-16	Common share	4,000,000	Wong Yee Tat	$8,000	New Subscription of shares
4-Feb-16	Common share	3,500,000	Tam Wai Hung	$7,000	New Subscription of shares
4-Feb-16	Common share	3,500,000	Lam Chi Pan	$7,000	New Subscription of shares
4-Feb-16	Common share	3,500,000	To Hoi Yi	$7,000	New Subscription of shares
4-Feb-16	Common share	3,500,000	Wu Wai Fan	$7,000	New Subscription of shares
4-May-16	Common share	15,771,429	Francis Bok	$55,200	Settlement of director fee from Mar 13, 2014 to Jun 30, 2016
4-May-16	Common share	15,771,429	Stephen Tang	$55,200	Settlement of director fee from Mar 13, 2014 to Jun 30, 2016
4-May-16	Common share	11,040,000	Angel Lai	$27,600	Settlement of secretary fee from Mar 13, 2014 to Jun 30, 2016
4-May-16	Common share	9,288,400	Fintel (USA) Ltd	$23,221	Settlement of accounting fee from Dec 22, 2013 to Jun 30, 2016

The number of shares issued was based on the average closing price of our common shares on the OTCPK during certain periods. The shares were exempt from registration pursuant to Section 4(2) under the Securities Act of 1933, as amended, pursuant to Rule 903, as a sale by the issuer in an offshore transaction. No underwriting or other commissions were paid in connection with the issuance of these shares. No forms of conversion or exercise options are attached to the shares.

ITEM 6. SELECTED FINANCIAL DATA

This information is not required of smaller reporting companies.

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion contains forward-looking statements. Forward looking statements are identified by words and phrases such as “anticipate”, “intend”, “expect” and words and phrases of similar import. We caution investors that forward-looking statements are only predictions based on our current expectations about future events and are not guarantees of future performance. Our actual results, performance or achievements could differ materially from those expressed or implied by the forward-looking statements due to risks, uncertainties and assumptions that are difficult to predict. We encourage you to read carefully the other information provided in this Report and in our other filings with the SEC before deciding to invest in our stock or to maintain or change your investment. We undertake no obligation to revise or update any forward-looking statement for any reason, except as required by law.

You should read this MD&A in conjunction with the Financial Statements and Related Notes in Item 8.

Overview

Sancon Resources Recovery, Inc. was an industrial waste recycling company with operations based in Australia and China. Sancon exported more than 4,000 tons of recycled industrial waste material annually to its processing partners and manufacturers in China. Sancon's main operations and services included industrial waste management consulting, collection and reprocess of recyclable materials such as glass, plastic, cardboard, and paper before its re-entry into manufacture cycles as raw materials. The use of recycled material is both environmentally friendly and is a key part of the competitive manufacturing process to lower costs. Chinese manufacturers are increasingly turning to recycled materials to lower costs. The major customers for Sancon were Chinese manufacturers and recycled material traders such as Pernod Ricard, Hing Yang Hong, which are located mainly in the Chinese provinces of Shanghai, Guangdong, Zhejiang and Fujian.

The business operation of the Company was carried out through its subsidiaries. In 2011, the Company divested all its subsidiaries. The Company currently has no active business activities.

Plan of Operation

The Company is actively looking for acquisition and merger opportunities in growth industries in Asia.

Critical Accounting Policies and Estimates

The preparation of our financial statements in conformity with accounting principles generally accepted in the United States requires us to make estimates and judgments that affect our reported assets, liabilities, revenues, and expenses, and the disclosure of contingent assets and liabilities. We base our estimates and judgments on historical experience and on various other assumptions we believe to be reasonable under the circumstances. Future events, however, may differ markedly from our current expectations and assumptions. While there are a number of significant accounting policies affecting our financial statements; we believe the following critical accounting policies involve the most complex, difficult and subjective estimates and judgments: allowance for doubtful accounts; income taxes; stock-based compensation; asset impairment.

Revenue Recognition

In accordance with generally accepted accounting principles ("GAAP") in the United States, revenue is recognized only when the price is fixed or determinable, persuasive evidence of an arrangement exists, the service is performed, and collection of the resulting receivable is reasonably assured. Noted below are brief descriptions of the product or service revenues that the Company recognizes in the financial statements contained herein.

The Company was organized into two businesses: material recycling and waste management service. Their revenue recognition is as follows:

(1) Material Recycling refers to the activities of collecting and processing of waste materials, then selling them to customers in China. The plant is located in Australia. The revenue is recognized when delivery of the material is occurred and invoice issued.

(2) Waste Management Service refers the activities of providing waste management service with operations located in Shanghai China. The revenue is recognized when service is completed and invoice is issued.

Allowance for doubtful accounts

We maintain an allowance for doubtful accounts to reduce amounts to their estimated realizable value. A considerable amount of judgment is required when we assess the realization of accounts receivables, including assessing the probability of collection and the current credit-worthiness of each customer. If the financial condition of our customers were to deteriorate, resulting in an impairment of their ability to make payments, an additional provision for doubtful accounts could be required. We initially record a provision for doubtful accounts based on our historical experience, and then adjust this provision at the end of each reporting period based on a detailed assessment of our accounts receivable and allowance for doubtful accounts. In estimating the provision for doubtful accounts, we consider: (i) the aging of the accounts receivable; (ii) trends within and ratios involving the age of the accounts receivable; (iii) the customer mix in each of the aging categories and the nature of the receivable; (iv) our historical provision for doubtful accounts; (v) the credit worthiness of the customer; and (vi) the economic conditions of the customer’s industry as well as general economic conditions, among other factors.

Income taxes

We account for income taxes in accordance with SFAS No. 109(ASC 740), Accounting for Income Taxes. SFAS 109 prescribes the use of the liability method. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statement carrying amounts and the tax basis of assets and liabilities. Deferred tax assets and liabilities are measured using the enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. We then assess the likelihood that our deferred tax assets will be recovered from future taxable income and to the extent we believe that recovery is not likely, we establish a valuation allowance. To the extent we establish a valuation allowance, or increase or decrease this allowance in a period, we increase or decrease our income tax provision in our statement of operations. If any of our estimates of our prior period taxable income or loss prove to be incorrect, material differences could impact the amount and timing of income tax benefits or payments for any period. In addition, as a result of the significant change in the Company’s ownership, the Company's future use of its existing net operating losses may be limited.

The Company operated in several countries. As a result, we were subject to numerous domestic and foreign tax jurisdictions and tax agreements and treaties among the various taxing authorities. Our operations in these jurisdictions were taxed on various bases: income before taxes, deemed profits and withholding taxes based on revenue. The calculation of our tax liabilities involved consideration of uncertainties in the application and interpretation of complex tax regulations in a multitude of jurisdictions across our global operations.

We recognize potential liabilities and record tax liabilities for anticipated tax audit issues in the U.S. and other tax jurisdictions based on our estimate of whether, and the extent to which, additional taxes will be due. The tax liabilities are reflected net of realized tax loss carry forwards. We adjust these reserves upon specific events; however, due to the complexity of some of these uncertainties, the ultimate resolution may result in a payment that is different from our current estimate of the tax liabilities. If our estimate of tax liabilities proves to be less than the ultimate assessment, an additional charge to expense would result. If payment of these amounts ultimately proves to be less than the recorded amounts, the reversal of the liabilities would result in tax benefits being recognized in the period when the contingency has been resolved and the liabilities are no longer necessary.

Changes in tax laws, regulations, agreements and treaties, foreign currency exchange restrictions or our level of operations or profitability in each taxing jurisdiction could have an impact upon the amount of income taxes that we provide during any given year.

Stock-Based Compensation

Effective January 1, 2006, the beginning of Sancon's first fiscal quarter of 2006, the Company adopted the fair value recognition provisions of SFAS 123R (ASC 718), using the modified-prospective transition method. Under this transition method, stock-based compensation expense was recognized in the financial statements for granted stock options, since the related purchase discounts exceeded the amount allowed under SFAS 123R(ASC 718) for non-compensatory treatment. Compensation expense recognized included: the estimated expense for stock options granted on and subsequent to January 1, 2006, based on the grant date fair value estimated in accordance with the provisions of SFAS 123R (ASC 718); and the estimated expense for the portion vesting in the period for options granted prior to, but not vested as of January 1, 2006, based on the grant date fair value estimated in accordance with the original provisions of SFAS 123(ASC 718). Results for prior periods have not been restated, as provided for under the modified-prospective method.

On December 5, 2012, the Company entered into a settlement agreement with Dragon Wings for the settlement of the claim by Dragon Wings. In consideration of Sancon's agreement to make the payments in the form of common shares and share options listed in the settlement agreement. The Company would give the option to Dragon Wings to purchase 6,000,000 common shares; the option may be exercised by Dragon Wings in whole or in part, at any time within 5 years from the date of this settlement agreement with the exercise price at US$0.01 per share, with dilution protection and subject to share split adjustment.

For other items paid for by common stock, the value of the transaction is determined by the value of the goods or services received, measured at the time of the transaction. The corresponding stock value, used to determine the number of share to be issued, is the value of the average price for the 20 to 30 days prior to the transaction date.

Asset Impairment

We periodically evaluate the carrying value of other long-lived assets, including, but not limited to, property and equipment and intangible assets, when events and circumstances warrant such a review. The carrying value of a long-lived asset is considered impaired when the anticipated undiscounted cash flows from such asset is less than its carrying value. In that event, a loss is recognized based on the amount by which the carrying value exceeds the fair value of the long-lived asset. Fair value is determined primarily using the anticipated cash flows discounted at a rate commensurate with the risk involved. Significant estimates are utilized to calculate expected future cash flows utilized in impairment analyses. We also utilize judgment to determine other factors within fair value analyses, including the applicable discount rate.

Results of Operations

Two Years Ended December 31, 2016 and 2015

Revenue

The Company had no revenues in 2016 and 2015.

Other Income

We had other income of $1,230 in 2016 and $nil in 2015, attributable to the write-off of amount due to related party.

General and administrative expenses

General and administrative expenses increased to $85,643 for the year 2016, from $74,147 for the year 2015, an increase of $11,496. Of these amounts, $30,000 and $60,000 related to the value of cash compensation to our directors and secretary in each of 2016 and 2015, respectively. In addition, a substantial portion of our expenses for the year ended December 31, 2016 related to accounting service fees, audit fees, and legal and professional service fees, and for the year ended December 31, 2015 related to accounting service fees, audit fees, professional service fees and transfer agent fees.

Income Tax

No income tax was provided for the year 2016 and 2015.

Net loss

The net loss for the year 2016 was $84,413, compared to the net loss of $74,147 in 2015, an increase of $10,266.

Liquidity and Capital Resources

As shown in the accompanying financial statements, the Company had an accumulated loss of $1,219,286 as of December 31, 2016 compared to the accumulated loss of $1,134,873 for the year ended December 31, 2015. There was a working capital deficit of $102,110 on December 31, 2016 and it was $220,918 as of December 31, 2015. It decreased $118,808.

Operating Activities

$203,221 net cash flows used in operating activities for the year 2016 and $nil used for the year 2015, due to a significant decrease in respect of liabilities due to related parties and accrued expenses and other payable in 2016. The liabilities are settled by the issuance of common shares in 2016.

Investing Activities

No net cash was used in investing activities for the year 2016 and 2015. The Company did not purchase any property or equipment in 2016 and 2015.

Financing Activities

$203,221 net cash flows provided by financing activities for the year 2016 and $nil provided for the year 2015. The net cash flows provided for the year 2016 is due to the issuance of common shares.

The Company financed its growth by utilizing cash reserves and loans from directors. Loans from directors were unsecured, and deferred payment term and without interest bearing. The Company’s primary use of funds was for investigating potential merger/acquisition candidates and for working capital.

Inflation

In the opinion of management, inflation has not had a material effect on the Company's financial condition or results of its operations.

Trends and uncertainties

Management believes there are no known trends, events, or uncertainties that could, or reasonably be expected to, adversely affect the Company’s liquidity in the short and long terms, or its net sales, revenues, or income from continuing operations.

Off-Balance Sheet Arrangements

There are no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on the Company’s financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources, that are material to investors.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

This information is not required of smaller reporting companies.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Financial statements are attached hereto following Part IV, Item 15 beginning on Page F-1 of this Annual Report.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

We engaged Dominic K.F. Chan & Co. as our independent accountant on August 20, 2012.

Effective from May 1, 2016, DCAW (CPA) Ltd. has succeeded from Dominic K.F. Chan & Co., the license to audit U.S. public company regulated by PCAOB. The principals and staff of DCAW (CPA) Ltd. are the same auditors and staff who were engaged on the audit of the Company while at Dominic K.F. Chan & Co.

On August 12, 2016, the Company engaged Anthony Kam & Associates Ltd. ("AKAM"), as its new independent registered public accountant. The decision to engage AKAM was recommended and approved by the Company’s Board of Directors.

ITEM 9A. CONTROLS AND PROCEDURES

Under the supervision and with the participation of our management, including our principal executive officer and the principal financial officer, we conducted an evaluation of the effectiveness of the design and operation of its disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as of the end of the period covered by this report (the "Evaluation Date"). Based on this evaluation, our principal executive officer and principal financial officer concluded as of the Evaluation Date, that our disclosure controls and procedures were not effective.

Managements' Annual Report on Internal Control over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting of the Company. Internal control over financial reporting is a process designed by, or under the supervision of, our chief executive and chief financial officers 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.

Our management assessed the effectiveness of the Company’s internal control over financial reporting as of December 2016. The framework used by management in making that assessment was the 2013 version of the criteria set forth in the document entitled “Internal Control-Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission.

Based on our evaluation described above, management has concluded that our internal control over financial reporting was not effective as of December 31, 2016. We have limited resources and we rely heavily on direct management oversight of transactions, along with the use of legal and accounting professionals. As we grow we will hire skilled professionals that will enable us to implement adequate segregation of duties within the internal control framework.

Our management will also implement additional review procedures designed to ensure that the disclosure provided by the Company meets the current requirements of the applicable filing made under the Exchange Act and methodology to review the statements.

This annual 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 our registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit the Company to provide only management’s report in this annual report.

Changes in Internal Control Over Financial Reporting

There was no change in our internal control over financial reporting that occurred during the fiscal year ended December 31, 2016 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

ITEM 9B. OTHER INFORMATION

Effective June 28, 2016, the Board of Directors (the “Board”) of Sancon Resources Recovery, Inc. (the “Company”) increased the size of the Board from two to four directors and elected Ms. HE, Qianying and Mr. KOK, Seng Yeap as directors to fill the newly created vacancy on the Board.

On July 4, 2016, Pontoon Boat Inc. (“Pontoon”) purchased a total of 53,596,540 common shares of the Company at US$0.0017 per share, representing 51% of the Company’s outstanding common shares. The shares were purchased for cash from the following persons:

Name	Number of shares

Wai Hung TAM		3,500,000
Chi Pan LAM		3,500,000
Wai Leong TANG		3,000,000
Yee Tat WONG		4,000,000
Hoi Yi TO		3,500,000
Wai Fan WU		3,500,000
Francis BOK		13,144,867
Stephen TANG		13,144,867
Shuk Har LAI		6,306,806

Pontoon is a limited liability company registered in the Republic of Vanuatu. Pontoon is wholly owned by its director, Mr. KOK Seng Yeap. Mr. KOK is also a director of the Company and he provided the financing to Pontoon to purchase the Company’s shares. The financing is interest free and has no definite repayment schedule.

There is no agreement between Pontoon and its owners and the former Company stockholders regarding election of directors or any other matters.

On September 30, 2016, Stephen Tang and Francis Bok resigned from the Board and their respective executive positions of the Company as part of the Company’s management reorganization. The resignation by each of these individuals did not involve any disagreements with the Company or the management of the Company.

In connection with the departure of the aforementioned individuals the Company’s Board named the following director as current officer:

KOK Seng Yeap (Chief Executive Officer)

PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

Identification and Backgrounds of Directors and Officers

Name	Age		Principal Position	Appointment/Resignation date
Stephen Tang		64	CEO, President, Director	May 21, 2012/September 30, 2016
Francis Bok		50	CFO, Director	May 21, 2012/September 30, 2016
Kok Seng Yeap		63	CEO, Director	June 28, 2016
He Qianying		47	Director	June 28, 2016

Mr. Stephen Tang, Chief Executive Officer, President & Director

Mr. Tang served as our President, Chief Executive Officer and Chairman of our board of directors from May 2012 to September 2016. Mr. Tang is the Chairman of Mega Pacific Capital, Inc., a finance and investment consulting firm since 2005. Mr. Tang was the director and Chairman of Financial Telecom Limited (USA), Inc. (later changed its name to MKA Capital, Inc. then Sancon Resources Recovery, Inc.). Mr. Tang is currently the Vice President of the Hong Kong Information Technology Federation and a director of Professional Commons, a think tank in Hong Kong. Mr. Tang is a graduate of Hong Kong Baptist University and received his MBA from the Asian Institute of Management in Manila, Philippines, in 1976.

Mr. Francis Bok, Chief Financial Officer & Director

Mr. Bok served as a director and Chief Financial Officer of the Company from May 2012 to September 2016. Mr. Bok serves as the chief executive officer of Beyond IVR Limited, an information technology company based in Hong Kong. During 2004, Mr. Bok served as the assistant manager for Kactus Limited, a Hong Kong based mobile content and applications provider. From 2002 until 2004, Mr. Bok was a Manager at Continuous Technologies International Limited in Hong Kong. Mr. Bok received his Bachelor in Mathematics in 1993 from the University of Waterloo, Canada, a Master of Science in 1997 from the University of Hong Kong, and an MBA in 2000 from the City University of Hong Kong.

Mr. Kok Seng Yeap, Chief Executive Officer & Director

Mr. Kok currently serves as the Company’s Director and Chief Executive Officer. In addition to his service with the Company, Dato’ Kok serves in various other capacities, including Chairman, Chief Executive Officer, President, Chief Financial Officer, Secretary and Treasurer at Toga Capital Limited, positions held since August 2015, Chief Executive Officer, President and Chief Financial Officer at Gold Billion Group Holdings Limited, positions held since November 2014, and Associate Director of First Asia Holdings Limited, a position held since November 2013. Dato’ Kok is also the Owner of RichCorp Holdings Ltd and has previously served as Managing Director of NobleCorp Asset Management Ltd and as an advisor for Hengyep International Wealth Management (Hong Kong) and IVP Holding Co. Ltd (Singapore). Dato’ Kok has served as a director of Gold Billion Group Holdings Limited since November 2014 and Kingsburg Holdings Limited since 2012. Dato’ Kok has received qualifications from the Malaysia Insurance Institute and Rockwills Sdn Bhnd, Malaysia. We believe Dato’ Kok’s vast experience in the financial industry qualifies him to service as Vice-Chairman.

Ms. He Qianying, Director

Ms. He currently serves as the Company’s Director. Participate to work since 1991, graduated from Chengdu Qingbaijiang Middle School, present as the chairman of Sichuan Xiangtian Ecological Agriculture Development Co., Ltd. She is responsible in planning, directing, and implementing key strategic commercial initiatives for the organization.

Family relationships

There are no family relationships among any of our directors or executive officers.

Section 16(a) Beneficial Ownership Reporting Compliance

Under Section 16(a) Beneficial Ownership Reporting Compliance, each person who was at any time during the fiscal year, a director, officer, beneficial owner of more than ten percent of any class of equity securities of the Company registered pursuant to section 12 (“reporting person”) is required to file Forms 3, 4, and 5 on a timely basis, during the most recent fiscal year or prior fiscal years. Due to lack of knowledge, the relevant beneficial owners did not file on time. They will file Form 3 and Form 5 shortly.

Code of Ethics

The Company has Standards of Ethical Conduct Policy (“Code of Ethics”) that applies to all employees and directors, including the Chairman, Chief Executive Officer, and Chief Financial Officer.

Committees of our Board of Directors

Audit Committee

We do not have a formal standing audit committee. Rather, audit committee functions are performed by our entire Board of Directors. These functions include: (1) selection and oversight of our independent accountant; (2) establishing procedures for the receipt, retention and treatment of complaints regarding accounting, internal controls and auditing matters; (3) establishing procedures for the confidential, anonymous submission by our employees of concerns regarding accounting and auditing matters; (4) engaging outside advisors; and (5) funding for the outside auditory and outside advisors engagement by the audit committee.

Audit Committee Financial Expert

None of our directors or officers has the qualifications or experience to be considered a financial expert. We believe that the cost related to retaining a financial expert at this time is prohibitive. However, we do intend to appoint an audit committee financial expert in the foreseeable future.

Director Independence

None of the members of our Board of Directors may be deemed to be independent under the standards for independence contained in the NASDAQ Marketplace Rules, Rule 4350(d) and Rule 4200(a)(15).

Compensation Committee

Compensation committee functions are performed by our entire Board of Directors. Our Board of Directors does not have a charter or other formal policies regarding compensation.

Nominating and Corporate Governance Committee

Nominating and Corporate Governance committee functions are performed by our entire Board of Directors. Our Board of Directors does not have a charter or other formal policies regarding director nominations or corporate governance.

Stockholder Communications

Any stockholder may communicate directly to our Board of Directors by sending a letter to our company’s address of record.

	•	encourage their commitment;

	•	motivate superior performance;

	•	facilitate attainment of ownership interests in our company;

	•	align personal interests with those of our stockholders; and

	•	enable them to share in the long-term growth and success of our company.

ITEM 11. EXECUTIVE COMPENSATION

Officers’ compensation

From May 21, 2012 to June 30, 2016, Mr. Stephen Tang and Mr. Francis Bok each receives a salary of $2,000 per month to be paid in shares of the Company’s common stock. Mr. Stephen Tang and Mr. Francis Bok have not been compensated as of December 31, 2016.

Directors’ compensation

The Directors have not been compensated as of December 31, 2016.

Employment Agreement

The Company does not have employment agreements with any of its officers or directors.

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.

Securities authorized for issuance under Equity Compensation Plans

None.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

Security ownership of certain beneficial owners

The following table sets forth as of January 31, 2017, certain information with respect to the Company’s equity securities owned of record or beneficially by (i) each Officer and Director of the Company; (ii) each person who owns beneficially more than five percent (5%) of each class of the Company’s outstanding equity securities; and (iii) all Directors and Executive Officers as a group.

Title of Class	Name and Address of Beneficial Owner ⁽²⁾	Amount and Nature of Beneficial Ownership			Percent of Class ⁽¹⁾
Common Stock	Stephen Tang, CEO, Pres. & Dir.⁽³⁾		17,256,962	⁽⁴⁾		16.4%
Common Stock	Frances Bok, CFO & Dir.⁽³⁾		7,968,562			7.6%
Common Stock	Fintel (USA) Ltd.		9,288,400			8.8%
Common Stock	Pontoon Boat Inc. Rm 1202A, 12/F Empire Centre 68 Mody Road, Tsimshatsui, Kowloon, Hong Kong		53,596,540			51.0%
Common Stock	Kok Seng Yeap, CEO & Dir.		57,803,018	⁽⁵⁾		55.0%
Common Stock	He Qianying, Dir.		–			-%
Common Stock	All Directors and Officers as a Group (2 persons)		57,803,018			55.0%

⁽¹⁾	Unless otherwise indicated, based on 105,091,254 shares of common stock issued and outstanding. Shares of common stock subject to options or warrants currently exercisable or exercisable within 60 days, are deemed outstanding for purposes of computing the percentage of the person holding such options or warrants, but are not deemed outstanding for the purposes of computing the percentage of any other person.

⁽²⁾	Unless indicated otherwise, the address of the shareholder is c/o Sancon Resources Recovery, Inc., 602 Nan Fung Tower, Suite 6/F, 88 Connaught Road central, Central District, Hong Kong.

⁽³⁾	Resigned in September 2016

⁽⁴⁾	Includes 7,968,562 shares of common stock over which Mr. Tang has sole investment and voting control, and 9,288,400 shares of common stock held by Fintel (USA) Ltd., which Mr. Tang may be deemed to own beneficially.

⁽⁵⁾	Includes 4,206,478 shares of common stock over which Mr. Kok has sole investment and voting control, and 53,596,540 shares of common stock held by Pontoon Boat Inc, which Mr. Kok may be deemed to own beneficially.

We are not aware of any person who owns of record, or is known to own beneficially, five percent or more of the outstanding securities of any class of the issuer, other than as set forth above. There are no classes of stock other than common stock issued or outstanding.

There are no current arrangements which will result in a change in control.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

Our directors have advanced funds on an interest-free basis, with no maturity date, from appointment for working. Mr. Kok Seng Yeap advanced $17,400 in 2016 for cash and professional service fees.

As of the date of this Annual Report, we have no standing committees and our entire board of directors serves as our audit and compensation committees. We have determined that none of our directors are independent based on an analysis of the standards for independence set forth in Section 121A of the American Stock Exchange Company Guide. If we undertake to qualify our common stock for quotation in the over-the-counter market, we may need to ensure we meet any eligibility requirements with respect to independent directors.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

The Company’s Board of Directors pre-approved all audit and non-audit services provided to us and during the periods listed below. The Company’s Board approves discrete projects on a case-by-case basis that may have a material effect on our operations and also considers whether proposed services are compatible with the independence of the public accountants.

The following table presents fees for professional services rendered by our auditors for the periods ended December 31, 2016 and 2015:

Services Performed	2016		2015
Audit Fees	$	13,718	$	2,436
Audit-Related Fees		–		–
Tax Fees		–		–
All Other Fees		–		–
Total Fees	$	13,718	$	2,436

PART IV

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES

(a)

The following Exhibits are filed as part of this report.

Exhibit Number	Description of Document

3.1	Articles of Incorporation of Financial Telecom Limited (USA), Inc.
3.2	Amended and Restated Bylaws of Financial Telecom Limited (USA), Inc.
10.1	Agreement between Hong Kong Futures Exchange Limited and Financial Telecom Limited
10.2	Market Service Datafeed Agreement between Stock Exchange Information Services Limited and Financial Telecom Limited
10.3	Option agreement dated December 14, 2004 between Fintel Group Limited and shareholders of Shanghai Longterms Technology Limited.
10.4	Option agreement dated January 5, 2005 between Fintel Group Limited and shareholders of Beijing JCL Technology Commerce Limited.
10.5	Option agreement dated January 20, 2005 between Fintel Group Limited and shareholders of Shanghai Qianhou Computer Technology Limited.
10.6	Independent contractor agreement between Fintel Group Limited and Mr. Sam Chong Keen.
10.7	Independent contractor agreement between Fintel Group Limited and Info Media Company.
10.8	Independent contractor agreement between Fintel Group Limited and China Digital Distribution Limited.
10.9	Sales and purchase agreement dated March 25, 2005 between Fintel Group Limited and shareholders of Enjoy Media Holdings Limited
10.10	Sales and purchase agreement dated April 25, 2005 between Fintel Group Limited and shareholders of Beijing Genial Technology Co. Ltd.
10.11	Option agreement dated March 7, 2005 between Fintel Group Limited and shareholders of Beijing Sinoskyline technology Trading Co. Ltd.
10.12	Settlement agreement dated December 5, 2012 between Sancon Resources Recovery, Inc. and Dragon Wings Communications Limited.
10.13	Notice of Dismissal dated January 11, 2013 issued by the United States Bankruptcy Court, District of Nevada.
10.14	Service Agreement, dated May 31, 2013, between Sancon Resources Recovery, Inc. and Fintel (USA) Ltd.
10.15*		Service Agreement, dated July 20, 2016, between Sancon Resources Recovery, Inc. and Fintel (USA) Ltd.
14.1	Code of Ethics
21.1	Subsidiaries of the registrant
31.1*			Certification of Director and Chief Executive Officer
31.2*			Certification of Director
32.1*			Statement required by 18 U.S.C. Section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002
32.2*			Statement required by 18 U.S.C. Section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002
101			The following materials from the Company’s Annual Report on Form 10-K for the year ended December 31, 2016, formatted in XBRL (eXtensible Business Reporting Language); (i) Balance Sheets at December 31, 2016 and 2015, (ii) Statement of Operations for the years ended December 31, 2016 and 2015, (iii) Statement of Cash Flows for the years ended December 31, 2016 and 2015, and (iv) Notes to Financial Statements.

*Filed herewith.

(1)	Incorporated herein by reference to the registrant’s initial Registration Statement on Form 10-SB (File No. 000-50760) filed on May 13, 2004.
(2)	Incorporated herein by reference to the registrant’s Annual Report on Form 10-KSB (File No. 000-50760) filed April 15, 2005.

(3)	Incorporated herein by reference to the registrant’s Quarterly Report on Form 10-QSB (File No. 000-50760) filed May 6, 2005.
(4)	Incorporated herein by reference to the registrant’s Quarterly Report on Form 10-QSB (File No. 000-50760) filed August 6, 2005.

(5)	Incorporated herein by reference to the registrant’s Current Report on Form 8K/A (File No. 000-50760) filed November 29, 2005.
(6)	Incorporated herein by reference to the registrant’s Current Report on Form 8K/A (File No. 000-50760) filed January 25, 2006.

(7)	Incorporated herein by reference to the registrant’s Proxy Statement (File No. 000-50760) filed December 6, 2005.
(8)	Incorporated herein by reference to the registrant’s Annual Report on Form 10-KSB (File No. 000-50760) filed April 26, 2006.
(9)	Incorporated by reference to the Exhibits to our Form 10-Q filed on May 17, 2016
(10)	Incorporated by reference to the Exhibits to our Form 10-Q filed on May 23, 2016

INDEX TO FINANCIAL STATEMENTS

		Pages

Report of Independent Registered Public Accounting Firm		F-2

Balance Sheets as of December 31, 2016 and 2015		F-3

Statements of Income for the years ended December 31, 2016 and December 31, 2015		F-4

Statements of Stockholders’ Equity for the years ended December 31, 2016 and 2015		F-5

Statements of Cash Flows for the years ended December 31, 2016 and 2015		F-6

Notes to Financial Statements for the years ended December 31, 2016 and 2015		F-7 – F-9

F-1

SANCON RESOURCES RECOVERY, INC.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders of
Sancon Resources Recovery, Inc. (“the Company”)

We have audited the accompanying balance sheets of Sancon Resources Recovery, Inc. (incorporated in the State of Nevada, USA), as at December 31, 2016 and 2015, and the related statements of income, cash flows and stockholders’ equity for the years then ended. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Sancon Resources Recovery, Inc. as at December 31, 2016 and 2015, and the results of its operations and its cash flows for the years then ended in accordance with generally accepted accounting principles in the United States of America.

The company is not required to have nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’s internal controls over financial reporting. Accordingly, we express no such opinion.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 3 to the financial statements, the Company is currently dormant, and has the accumulated deficits as of December 31, 2016 and 2015 and no source of revenue, which raises substantial doubt about its ability to continue as a going concern. Management's plans concerning these matters are also described in Note 3. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ Anthony Kam & Associates Limited

Anthony Kam & Associates Limited

Certified Public Accountants

Hong Kong, China

March 30, 2017

F-2

SANCON RESOURCES RECOVERY, INC.

BALANCE SHEETS

AS OF DECEMBER 31, 2016 AND 2015

(United States dollars, except number of shares, per share data and unless otherwise stated)

	As at
	December 31, 2016			December 31, 2015
Assets
Assets
Current Assets		–			–
Total current assets and total assets	$	–		$	–

Liabilities and Stockholders' Equity

Liabilities
Current liabilities
Due to related parties	$	100,137		$	163,674
Accrued expenses and other payables		1,973			57,244
Total current liability and total liability	$	102,110		$	220,918


Stockholders' equity
Share capital authorized: 500,000,000 common shares, par value $0.001 per share
Issued and outstanding: 105,091,254 shares as of December 31, 2016 (December 31, 2015: 32,219,996 shares)	$	105,091		$	32,220
Additional paid-in capital		923,070			792,720
Share option reserves		89,015			89,015
Accumulated losses		(1,219,286	)		(1,134,873	)
Total stockholders' deficit		(102,110	)		(220,918	)
Total liabilities & stockholders' equity	$	–		$	–

The accompanying notes are an integral part of these audited financial statements

F-3

SANCON RESOURCES RECOVERY, INC.

STATEMENTS OF INCOME

FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015

(United States dollars, except number of shares, per share data and unless otherwise stated)

	For the years ended December 31,
	2016			2015

Revenue	$	–		$	–

Other operating income		1,230			–
General and administrative expenses		(85,643	)		(74,147	)
Operating loss before income taxes		(84,413	)		(74,147	)

Income taxes		–			–

Net loss	$	(84,413	)	$	(74,147	)


Loss per share:
Basic loss per share	$	(0.001	)	$	(0.002	)
Basic weighted average shares outstanding		85,566,565			32,219,996
Diluted loss per share	$	(0.001	)	$	(0.002	)
Diluted weighted average shares outstanding		85,592,300			33,145,175

The accompanying notes are an integral part of these audited financial statements

F-4

SANCON RESOURCES RECOVERY, INC.

STATEMENTS OF STOCKHOLDERS' EQUITY

FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015

(United States dollars, except number of shares, per share data and unless otherwise stated)

	Common Shares		Common Stock		Additional Paid in Capital		Share Option Reserves		Accumulated losses			Total

Balance as of December 31, 2014		32,219,996	$	32,220	$	792,720	$	89,015	$	(1,060,726	)	$	(146,771	)

Net loss for the year		–		–		–		–		(74,147	)		(74,147	)

Balance as of December 31, 2015		32,219,996		32,220		792,720		89,015		(1,134,873	)		(220,918	)

Issuance of common stock		72,871,258		72,871		130,350		–		–			203,221

Net loss for the year		–		–		–		–		(84,413	)		(84,413	)

Balance as of December 31, 2016		105,091,254	$	105,091	$	923,070	$	89,015	$	(1,219,286	)	$	(102,110	)

The accompanying notes are an integral part of these audited financial statements

F-5

SANCON RESOURCES RECOVERY, INC.

STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015

(United States dollars, except number of shares, per share data and unless otherwise stated)

	For the years ended December 31,
	2016			2015

Cash Flows from Operating Activities
Net loss	$	(84,413	)	$	(74,147	)
Adjustments to reconcile net income to net cash flows provided by operating activities:

Share based payment		–			–

Changes in current assets and liabilities, net of business acquisition:
(Increase)/Decrease in other current assets		–			–
(Decrease)/Increase in accrued expenses and other payables		(55,271	)		23,370
Net cash flows used in Operating Activities		(139,684	)		(50,777	)

Cash Flows from Investing Activities
Purchase of property and equipment		–			–
Net cash flows used in Investing Activities		–			–

Cash Flows from Financing Activities
Issuance of shares		203,221			–
Loans from related parties		–			50,777
Settlement of loans from related parties		(63,537	)		–
Net cash flows provided by Financing Activities		139,684			50,777

Effect of exchange rate changes on cash		–			–

Net increase in cash & cash equivalents		–			–

Cash & cash equivalent at start of year		–			–
Cash & cash equivalent at end of year	$	–		$	–

The accompanying notes are an integral part of these audited financial statements

F-6

SANCON RESOURCES RECOVERY, INC.

NOTES TO FINANCIAL STATEMENTS

(United States dollars, except number of shares, per share data and unless otherwise stated)

NOTE 1. ORGANIZATION AND NATURE OF OPERATIONS

Sancon Resources Recovery, Inc. ("Sancon", or "the Company", or "we", or "us") is registered in Nevada. Sancon Resources Recovery, Inc. is an environmental service and waste management company that operates recycling facilities in China and Australia. Sancon specializes in the collection and recovery of industrial and commercial solid wastes such as plastic, paper, cardboard, and glass.

On April 1, 2011, the Company approved an infusion of equity into Sancon Resources Recovery (Shanghai) Co., Ltd. (“Sancon SH”) for a total of $2,000,000, of which Sancon invested $1,400,000 to Sancon SH and the minority shareholder invested $600,000.

On September 15, 2011, one of the subsidiaries, Sancon Recycling Pty. Limited, applied for liquidation.

On October 31, 2011, the Company disposed of its subsidiaries Crossover Solution Inc. (“CS”) and Sancon SH at a consideration of $404,000.

After disposal of all its subsidiaries in the 4^th quarter of 2011, the company currently does not have any business operation.

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Use of Estimates

These financial statements are prepared in accordance with accounting principles accepted generally in the USA. These principles require management to use its best judgment in determining estimates and assumptions that: affect the reported amounts of assets and liabilities; disclosure of contingent assets and liabilities at the date of the financial statements; and the reported amounts of revenues and expenses during the reporting period. Management makes its best estimate of the ultimate outcome for such items based on historical trends and other information available when the financial statements are prepared. Changes in estimates are recognized in accordance with the relevant accounting rules, typically in the period when new information becomes available to management. Actual results in the future could differ from the estimates made in the prior and current periods.

Cash And Cash Equivalents

Cash and cash equivalents include cash in hand and cash in bank accounts mainly used for the business operations with maturities of less than 90 days.

Revenue Recognition

The Company’s revenue recognition policies are in compliance with Staff accounting bulletin (SAB) 104(ASC 605). Sales revenue is recognized when the significant risks and rewards of the ownership of goods have been transferred to the buyers. No revenue is recognized if there are significant uncertainties regarding the recovery of the consideration due, the possible return of goods, or when the amount of revenue and the costs incurred or to be incurred in respect of the transaction cannot be measured reliably.

Earnings Per Share

Basic earnings per share ("EPS") is calculated using net earnings (the numerator) divided by the weighted-average number of shares outstanding (the denominator) during the reporting period. Diluted EPS includes the effect from potentially dilutive securities.

Income Taxes

The Company recognizes deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statement or tax returns. Under this method, deferred tax assets and liabilities are determined based on the difference between financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse.

F-7

SANCON RESOURCES RECOVERY, INC.

NOTES TO FINANCIAL STATEMENTS

(United States dollars, except number of shares, per share data and unless otherwise stated)

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

The Company operates in several countries. As a result, we are subject to numerous domestic and foreign tax jurisdictions and tax agreements and treaties among the various taxing authorities. Our operations in these jurisdictions are taxed on various bases: income before taxes, deemed profits and withholding taxes based on revenue. The calculation of our tax liabilities involves consideration of uncertainties in the application and interpretation of complex tax regulations in a multitude of jurisdictions across our global operations.

We regularly assess our position with regard to individual tax exposures and record liabilities for our uncertain tax positions and related interest and penalties. These accruals reflect management's view of the likely outcomes of current and future audits. The future resolution of these uncertain tax positions may be different from the amounts currently accrued and therefore could impact future tax period expense.

Stock Based Compensation

As of December 31, 2016 and 2015, the Company did not issue any stock options.

Recent pronouncements

The Company has considered all new accounting pronouncements and has concluded that there are no new pronouncements that may have a material impact on results of operations, financial condition, or cash flows, based on current information.

NOTE 3. GOING CONCERN

The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplate continuation of the Company as a going concern. However, after the disposal of its operating subsidiaries in the 4^th quarter of 2011 and became dormant afterwards, the Company has the stockholders’ deficits of $102,110 and $220,918 as of December 31, 2016 and December 31, 2015 respectively. These factors raise substantial doubt about the ability of the Company to continue as a going concern. In this regard, management is proposing to raise any necessary additional funds not provided by operations through loans, additional sales of its common stock or through a possible business combination. There is no assurance that the Company will be successful in raising this additional capital or in achieving profitable operations. The financial statements do not include any adjustments that might result from the outcome of these uncertainties.

NOTE 4. RELATED PARTY TRANSACTIONS

As of December 31, 2016, the Company owed $17,400 and $82,737 to director and shareholder respectively.

As of December 31, 2015, the Company owed $141,931, $1,230 and $20,513 to directors, shareholder and related companies respectively.

On May 4, 2016, (i) 42,582,858 shares of our common stock, valued at $138,000 were issued in lieu of cash compensation for director and secretarial services from March 13, 2014 through June 30, 2016; and (ii) 9,288,400 shares of our common stock, valued at $23,221 were issued in lieu of cash compensation for accounting services from December 22, 2013 through June 30, 2016.

NOTE 5. STOCKHOLDERS’ EQUITY

Common stock

Please refer to Note 4 – Related Party Transactions for the details of changes in share capital for the year ended December 31, 2016.

F-8

SANCON RESOURCES RECOVERY, INC.

NOTES TO FINANCIAL STATEMENTS

(United States dollars, except number of shares, per share data and unless otherwise stated)

NOTE 5. STOCKHOLDERS’ EQUITY (CONTINUED)

Stock options

	As at
	December 31, 2016		December 31, 2015

Loan settled by share option	$	149,015	$	149,015
Par value of the common shares		60,000		60,000
Fair value of share option	$	89,015	$	89,015

NOTE 6. INCOME TAXES

The Company is registered in the State of Nevada. Before the disposal of its operating subsidiaries on October 31, 2011, the Company had operations in primarily four tax jurisdictions the Australia, China, British Virgin Islands and the United States. For certain operations in the United States of America, the Company has incurred net accumulated operating losses for income tax purposes. The Company believes that it is more likely than not that these net accumulated operating losses will not be utilized in the future. Therefore, the Company has provided full valuation allowance for the deferred tax assets arising from the losses from its US public shell as of December 31, 2016 and December 31, 2015.

The components of income before income taxes and non-controlling interest are as follows:

	As at
	December 31, 2016			December 31, 2015

Loss subject to United States	$	(84,413	)	$	(74,147	)
Net loss before income tax and non-controlling interest	$	(84,413	)	$	(74,147	)

United States of America

As of December 31, 2016, the Company in the United States of America had approximately $8,084,031 in net operating loss carry forwards available to offset future taxable income. Federal net operating losses can generally be carried forward 20 years. The Tax Reform Act of 1986 limits the use of net operating loss and tax credit carry forwards in certain situations when changes occur in the stock ownership of a company. In the event the Company has a change in ownership, utilization of carry forwards could be restricted. The deferred tax assets for the United States entity at December 31, 2016 consists mainly of net operating loss carry forwards and were fully reserved as the management believes it is more likely than not that these assets will not be realized in the future.

The following table sets forth the significant components of the net deferred tax assets for operation in the United States of America as of December 31, 2016 and 2015.

	As at
	December 31, 2016			December 31, 2015
Net Operating Loss Carry Forwards	$	8,084,031		$	7,999,618

Total Deferred Tax Assets		2,748,570			2,719,870
Less: Valuation Allowance		(2,748,570	)		(2,719,870	)
Net Deferred Tax Assets	$	–		$	–

As of December 31, 2016, the Company does not have any unrecognized tax benefits and no corresponding interest or penalties. The Company's policy is to record interest and penalties as income tax expense.

F-9

SIGNATURES

Pursuant to the requirements of the Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized on the March 31, 2017.

SANCON RESOURCES RECOVERY, INC.

By: /s/ Kok Seng Yeap

Kok Seng Yeap

Director

(Chief Executive Officer)

In accordance with the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Name	Title	Date

/s/ Kok Seng Yeap Kok Seng Yeap	Director (Chief Executive Officer)	March 31, 2017


/s/ He Qianying He Qianying	Director	March 31, 2017

INDEX TO EXHIBITS

Exhibit No.		Description
3.1		Articles of Incorporation of Financial Telecom Limited (USA), Inc.
3.2		Amended and Restated Bylaws of Financial Telecom Limited (USA), Inc.
10.1		Agreement between Hong Kong Futures Exchange Limited and Financial Telecom Limited
10.2		Market Service Datafeed Agreement between Stock Exchange Information Services Limited and Financial Telecom Limited
10.3		Option agreement dated December 14, 2004 between Fintel Group Limited and shareholders of Shanghai Longterms Technology Limited.
10.4		Option agreement dated January 5, 2005 between Fintel Group Limited and shareholders of Beijing JCL Technology Commerce Limited.
10.5		Option agreement dated January 20, 2005 between Fintel Group Limited and shareholders of Shanghai Qianhou Computer Technology Limited.
10.6		Independent contractor agreement between Fintel Group Limited and Mr. Sam Chong Keen.
10.7		Independent contractor agreement between Fintel Group Limited and Info Media Company.
10.8		Independent contractor agreement between Fintel Group Limited and China Digital Distribution Limited.
10.9		Sales and purchase agreement dated March 25, 2005 between Fintel Group Limited and shareholders of Enjoy Media Holdings Limited
10.10		Sales and purchase agreement dated April 25, 2005 between Fintel Group Limited and shareholders of Beijing Genial Technology Co. Ltd.
10.11		Option agreement dated March 7, 2005 between Fintel Group Limited and shareholders of Beijing Sinoskyline technology Trading Co. Ltd.
10.12		Settlement agreement dated December 5, 2012 between Sancon Resources Recovery, Inc. and Dragon Wings Communications Limited.
10.13		Notice of Dismissal dated January 11, 2013 issued by the United States Bankruptcy Court, District of Nevada.
10.14		Service Agreement, dated May 31, 2013, between Sancon Resources Recovery, Inc. and Fintel (USA) Ltd.
10.15*		Service Agreement, dated July 20, 2016, between Sancon Resources Recovery, Inc. and Fintel (USA) Ltd.
14.1		Code of Ethics
21.1		Subsidiaries of the registrant
31.1*	Certification of Director and Chief Executive Officer
31.2*	Certification of Director
32.1*	Statement required by 18 U.S.C. Section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002
32.2*	Statement required by 18 U.S.C. Section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002
101	The following materials from the Company’s Annual Report on Form 10-K for the year ended December 31, 2016, formatted in XBRL (eXtensible Business Reporting Language); (i) Balance Sheets at December 31, 2016 and 2015, (ii) Statement of Operations for the years ended December 31, 2016 and 2015, (iii) Statement of Cash Flows for the years ended December 31, 2016 and 2015, and (iv) Notes to Financial Statements.

*Filed herewith

(1)	Incorporated herein by reference to the registrant’s initial Registration Statement on Form 10-SB (File No. 000-50760) filed on May 13, 2004.
(2)	Incorporated herein by reference to the registrant’s Annual Report on Form 10-KSB (File No. 000-50760) filed April 15, 2005.

(3)	Incorporated herein by reference to the registrant’s Quarterly Report on Form 10-QSB (File No. 000-50760) filed May 6, 2005.
(4)	Incorporated herein by reference to the registrant’s Quarterly Report on Form 10-QSB (File No. 000-50760) filed August 6, 2005.

(5)	Incorporated herein by reference to the registrant’s Current Report on Form 8K/A (File No. 000-50760) filed November 29, 2005.
(6)	Incorporated herein by reference to the registrant’s Current Report on Form 8K/A (File No. 000-50760) filed January 25, 2006.

(7)	Incorporated herein by reference to the registrant’s Proxy Statement (File No. 000-50760) filed December 6, 2005.
(8)	Incorporated herein by reference to the registrant’s Annual Report on Form 10-KSB (File No. 000-50760) filed April 26, 2006.

(9)	Incorporated by reference to the Exhibits to our Form 10-Q filed on May 17, 2016
(10)	Incorporated by reference to the Exhibits to our Form 10-Q filed on May 23, 2016