0001062993-16-011257.txt : 20160822
0001062993-16-011257.hdr.sgml : 20160822
20160822151524
ACCESSION NUMBER: 0001062993-16-011257
CONFORMED SUBMISSION TYPE: 10-K
PUBLIC DOCUMENT COUNT: 46
CONFORMED PERIOD OF REPORT: 20160430
FILED AS OF DATE: 20160822
DATE AS OF CHANGE: 20160822
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: JOYMAIN INTERNATIONAL DEVELOPMENT GROUP INC.
CENTRAL INDEX KEY: 0001520007
STANDARD INDUSTRIAL CLASSIFICATION: WHOLESALE-HARDWARE & PLUMBING & HEATING EQUIPMENT & SUPPLIES [5070]
IRS NUMBER: 680681552
STATE OF INCORPORATION: NV
FISCAL YEAR END: 0430
FILING VALUES:
FORM TYPE: 10-K
SEC ACT: 1934 Act
SEC FILE NUMBER: 333-174607
FILM NUMBER: 161845130
BUSINESS ADDRESS:
STREET 1: 1450 BROADWAY, 26TH FLOOR
CITY: NEW YORK
STATE: NY
ZIP: 110018
BUSINESS PHONE: 917-512-0839
MAIL ADDRESS:
STREET 1: 1450 BROADWAY, 26TH FLOOR
CITY: NEW YORK
STATE: NY
ZIP: 110018
FORMER COMPANY:
FORMER CONFORMED NAME: ADVENTO, INC.
DATE OF NAME CHANGE: 20110505
10-K
1
form10k.htm
FORM 10-K
Joymain International Development Group Inc.: Form 10-K - Filed by newsfilecorp.com
UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C.
20549
FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended April 30, 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 333-174607
JOYMAIN INTERNATIONAL DEVELOPMENT GROUP
INC. (Exact name of registrant as
specified in its charter)
Nevada
5070
68-0681552
State or jurisdiction of
Primary Standard Industrial
IRS Employer
incorporation
Classification Code Number
Identification Number
or organization
2719 Hollywood Blvd, Hollywood, FL33020 Tel:
1-786-232-3083 (Address, including zip code, and telephone
number, including area code, of registrants principal
executive offices)
Securities registered pursuant to Section 12(b) of the Act:
None
Securities registered pursuant to Section 12(g) of the Act:
None
Indicate by check mark whether the registrant is a well-known
seasoned issuer, as defined in Rule 405 of the Securities Act. Yes [
] No [X]
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 [X]
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for shorter period that the
registrant as required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes
[X] 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-K (§229.405 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 is not contained herein, and will not be
contained, to the best of 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 Form 10-K. [ ]
Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, or a non-accelerated filer. See
definition of "accelerated filer and large accelerated filer" in Rule 12b-2 of
the Exchange Act. (Check one):
Large accelerated filer [ ]
Accelerated filer [ X ]
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 Act) Yes [
] No [X]
The aggregate market value of Common Stock held by non-affiliates of the Registrant on October 26, 2015, the last business day of the registrants most recently completed second fiscal quarter, was $576,346,385 based on a $1.30 which is the average of the bid and asked price of the Common Stock.
As of August 18, 2016, the registrant had 1,120,343,373 shares of
common stock issued and outstanding.
Except as otherwise indicated by the context, references in
this Annual Report on Form 10-K (this Form 10-K) to the
Company, we, us or our are references to the combined business of Joymain
International Development Group Inc. (formerly known as Advento Inc.).
References to China or PRC are
references to the Peoples Republic of China. References to RMB are to Renminbi, the legal currency of China, and all references
to $ and dollar are to the U.S. dollar, the legal currency
of the United States. In this Form 10-K, unless otherwise specified, all dollar
amounts are expressed in United States dollars and all references to common shares refer to the common shares in our capital stock.
Special Note Regarding Forward-Looking Statements
This report contains forward-looking statements and information
that are based on the beliefs of our management as well as assumptions made by
and information currently available to us. Such statements should not be unduly
relied upon. When used in this report, forward-looking statements include, but
are not limited to, the words anticipate, believe, estimate, expect, intend, plan and similar expressions,
as well as statements regarding new and existing products, technologies and
opportunities, statements regarding market and industry segment growth and
demand and acceptance of new and existing products, any projections of sales,
earnings, revenue, margins or other financial items, any statements of the
plans, strategies and objectives of management for future operations, any
statements regarding future economic conditions or performance, uncertainties
related to conducting business in China, any statements of belief or intention,
and any statements or assumptions underlying any of the foregoing. These
statements reflect our current view concerning future events and are subject to
risks, uncertainties and assumptions. There are important factors that could
cause actual results to vary materially from those described in this report as
anticipated, estimated or expected, including, but not limited to: competition
in the industry in which we operate and the impact of such competition on
pricing, revenues and margins, volatility in the securities market due to the
general economic downturn; Securities and Exchange Commission (the SEC) regulations which affect trading in the securities of penny stocks, and other risks and uncertainties. Except as required by
law, we assume no obligation to update any forward-looking statements publicly,
or to update the reasons actual results could differ materially from those
anticipated in any forward- looking statements, even if new information becomes
available in the future. Depending on the market for our stock and other
conditional tests, a specific safe harbor under the Private Securities
Litigation Reform Act of 1995 may be available. Notwithstanding the above,
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) expressly state that the safe
harbor for forward-looking statements does not apply to companies that issue
penny stock. Because we may from time to time be considered to be an issuer of
penny stock, the safe harbor for forward-looking statements may not apply to us
at certain times.
4
PART I
ITEM 1.
BUSINESS
CORPORATE BACKGROUND
We were incorporated in the State of Nevada on August 4, 2010
under the name Advento, Inc.
We originally planned to market and distribute an assortment of
residential and commercial shower cabinets produced by Hangzhou Yongsheng
Holdings Co., Ltd in the European and North American market. However, in
connection with a change of control transaction that closed on March 12, 2013
which is more fully described below under the section below titled Change of Control, we appointed a new executive management team and
changed our planned business operations.
Change in Control
On March 12, 2013, pursuant to the terms of a Share Exchange
Agreement, Mr. Xijian Zhou acquired an aggregate of 750,000,000 shares of our
common stock, representing 82.92% of our issued and outstanding shares as of
March 12, 2013. Effective March 12, 2013, (a) Mr. Liangwei Wang resigned as
president, secretary, treasurer, and director of our company; (b) Mr. Suqun Lin,
was appointed as our sole director, president, secretary and treasurer. Our
company did not receive any proceeds from the transaction. In accordance with
the terms of the agreement our company at the closing of the agreement had no
assets and liabilities. We anticipate to raise additional funding for our
operating costs and business development activities. There is no assurance that
we will be able to successfully raise funds.
Name Change and Increase of Authorized Shares
On March 21, 2013, we received written consent from the holder
of 82.92% of our voting securities and consent from our board of directors
approving the name change of our Company from Advento, Inc. to Joymain
International Development Group Inc. and effecting a forward split of our issued
and outstanding shares on a basis of 300 new shares for 1 old share. Upon the
effectiveness of the forward split, our Companys issued and
outstanding shares of common stock increased from 3,015,000 to 904,500,000
shares of common stock, par value $0.001. The board of directors and
stockholders also approved to increase our Companys authorized
capital from 75,000,000 to 1,500,000,000 shares of common stock, par value
$0.001. The forward split went effective on April 10, 2013 increasing our issued
and outstanding shares of common stock from 3,015,000 to 904,500,000 shares. On
the same day, our name change went effective and our ticker symbol changed from
ADTO to JIDG . Our current CUSIP number
is 48125Q101.
Our Business Plan and Current Status.
We plan to develop, source, market and distribute healthcare
related consumer products in the global market and when practicable, acquire an
existing company or business in the production or distribution of health
consumer goods in the United States. Our principal business objective for the
next 12 months and beyond such time will be to achieve long-term growth
potential through development and distribution of various healthcare related
consumer products and acquisition of a business rather than immediate,
short-term earnings through expending our current product market.
The analysis of new business opportunities will be undertaken
by or under the supervision of our management. Our company has unrestricted
flexibility in seeking, analyzing and participating in potential business
opportunities. In its efforts to analyze business opportunities, we will
consider the following factors:
Potential for growth, indicated by new
technology, anticipated market expansion or new products;
Competitive position as compared to other firms
of similar size and experience within the industry segment as well as
within the industry as a whole;
Strength and diversity of management, either in
place or scheduled for recruitment;
5
Capital requirements and anticipated
availability of required funds, to be provided by the Company or from
operations, through the sale of additional securities, through joint
ventures or similar arrangements or from other sources;
The cost of participation by our company as
compared to the perceived tangible and intangible values and potentials;
The extent to which the business opportunity
can be advanced;
The accessibility of required management
expertise, personnel, raw materials, services, professional assistance and
other required items; and
Other relevant factors.
On June 25, 2014, we entered into a distribution agreement with
Right Fortune to distribute Yolexury and Yolexury Travel Pack, a
health juice product which increases energy and stamina, helps to maintain
healthy cardio vascular function and promotes healthy digestive system.
According to the distribution agreement, we are granted exclusive distribution
rights in the Greater China (Mainland China, Hong Kong, Macao and Taiwan) for
calendar year 2014. In addition, the term of exclusivity will be automatically
renewed annually if we meet the annual Yolexury Minimum Order. The annual
Minimum Order for the calendar year 2014 was 400,000 bottles of 750ml Yolexury,
which we fulfilled as of October 31, 2014. Accordingly, our agreement has been
automatically extended for calendar year 2015. During the years ended April 30,
2016 and 2015, we generated approximately $2.8 million and $1.5 million revenue
through sale of the Yolexury products, respectively. We sell our Yolexury and
Yolexury Travel Pack products on a wholesale basis and grant distribution rights
to a trading company in Hong Kong. This trading company then sells the products
and grants distribution rights via an import/export company to distributors in
mainland China including Nanjing Joymain who sell products to end users and
controlled by our largest shareholder in China. The products are shipped
directly to ports designated by our sole customer, a Hong Kong trading company
from Right Fortune manufacture factory without going through our warehouse to
conserve shipping costs.
6
We expect that by entering into this distribution agreement, we
will start to build up our reputation as a distributor of health products and
consumer goods, and expand our distribution network, which will result in
positive cash flow.
In May 2014, we acquired a HK trading company, Dao Sheng
Trading Limited (Dao Sheng) for HK$10,000. Dao Sheng was
incorporated in December 2013 and had no assets or liabilities at the time of
the acquisition. We also set up Joymain International Intellectual Property
Limited in Hong Kong in May 2014. We consider Hong Kong as an ideal location to
connect to all Asian markets and it provides a comprehensive and advanced legal
system for trading and intellectual property protection.
On May 10, 2014, we entered into a consulting agreement with LP
Funding LLC (LP), pursuant to which LP agrees to render
certain corporate advisory services to us including but not limited to advise us
on our business plan and engagement of the financial markets, and conducts due
diligence on us including discussions with our management and third party
professionals, review of our data and a site visit, and in return, we agree to
pay LP an annual fee of $72,000 and issue a total number of 2,390,000 shares of
common stock.
During the year ended April 30, 2016, we generated
approximately $2.8million of revenue through sale of the Yolexury products to our
sole customer in Hong Kong. Fiscal year 2015 was the first year that we started
selling Yolexury products. We continue to incur substantial
operating loss during fiscal year ended April 30, 2016. These conditions raise substantial doubt about our ability to
continue as a going concern. We are currently devoting our efforts to locate
new products and acquisition candidates. Our ability to continue as a going
concern is dependent upon our ability to generate profitable operations in the future and/or to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due.
We anticipate that the process of developing healthcare related
consumer products and the selection of a business acquisition will be complex
and extremely risky. Because of the worldwide stringent economic conditions,
rapid technological advances being made in some industries and general shortages
of available capital in the market, our management believes that there are
numerous firms seeking even the limited additional capital currently available
in the market which we would like to have and consider the benefits of becoming
a publicly traded corporation. Such perceived benefits of becoming a publicly
traded corporation include, among other things, facilitating or improving the
terms on which additional equity financing may be obtained, providing liquidity
for the principals of and investors in a business, creating a means for
providing incentive stock options or similar benefits to key employees, and
offering greater flexibility in structuring acquisitions, joint ventures and the
like through the issuance of stock. If we are unable to overcome the
difficulties of obtaining additional financing and capital from the market, it
may be extremely difficult for us to secure business acquisitions that could
fuel the organic growth of our business.
Self-underwritten public offering
On July 18, 2014, we filed a registration statement on Form S-1
pursuant to which we sold 145,000 shares of our Common Stock at a fixed price of
$0.07 per share (the Offering). The Offering was conducted
on a self-underwritten, best efforts basis whereby our management and/or
controlling shareholders sold 145,000 shares pursuant to the registration
statement directly to the public, with no commission or other remuneration
payable to them for any shares they may sell. The Form S-1 went effective on
August 1, 2014 and expired on November 28, 2014 (the Public Offering
S-1).
Resale registration statement on Form S-1
On February 11, 2015, we filed a registration statement on Form
S-1 File No. 333-202010 (the Resale S-1) relates to the
resale of up to 51,720,000 shares of our Common Stock including 49,330,000
shares issued at a price of $0.03 per share for a total gross cash proceeds of
$1,479,900 in a private placement transaction closed on July 19, 2014 and
2,390,900 shares issued to LP (sometimes also referred as Consultant in this report), and this registration statement went effective on April 24,
2015.
7
Temporary suspension of trading and Internal
Investigation
On June 15, 2015, trading in our Common Stock was temporarily
suspended by the Securities and Exchange Commission (the Commission) due to unexplained market activity. As a result,
trading in our Common Stock was suspended for the period from 9:30 am EDT on
June 15, 2015, through 11:50 pm EDT on June 26, 2015.
On June 16, 2015, our Board of Directors engaged Hunter Taubman
Fischer LLC to commence an internal investigation (the Internal
Investigation) with regard to the recent rise in the trading price of
our common stock and market activity during a period from April 1, 2015 to June
16, 2015 (the Period in Question). The Internal
Investigation was completed on August 11, 2015.
Some observations reported to our Board of Directors are as
follows:
8
As of August 11, 2015, we have 156,561,019 shares of free
trading Common Stock and 963,782,354 shares of restricted Common Stock,
totaling 1,120,343,373 shares of issued and outstanding Common Stock.
During the Period in Question, the number of shares of
free trading Common Stock increased from 154,654,000 as of April 1, 2015
to 156,296,688 shares as of June 15, 2015, representing an increase of
1,642,688 shares, as reflected in the shareholder lists booked by our
transfer agent. During the Period in Question, the Consultant sold an
aggregate amount of 1,734,279 shares pursuant to the Resale S-1, as
reported by its broker. Although we note there is a slight difference
between the increased amount of the free trading shares (1,642,688) and
the amount of the shares of Common Stock sold by the Consultant
(1,734,279) during the Period in Question, it seem to be reasonable for us
to reach a conclusion that shares sold by the Consultant were or
constituted large part to the shares which were available for resale
during the Period in Question.
We issued a press release on June 13, 2015, stating that
we have not participated in any way or any form of promotion of
our shares; nor do we have knowledge of any promotion that may have
occurred; and there has been no undisclosed development of our
business. The Internal Investigation has not found or identified
any evidence tending to show that our statement made in the press release
dated June 13, 2015, was inaccurate, incomplete, or misleading in any
manner.
As of the date of the completion of the Internal
Investigation, none of our officers, directors or majority shareholders
(or members of their families residing in same home) has purchased, sold,
transferred, or made any contract, arrangement, understanding or
relationship with any other person(s) with respect to any of our
securities.
Mr. Xijian Zhou, our majority and controlling
shareholder, who holds 750,000,000 shares of Common Stock (66.9% of issued
and outstanding as the date of August 11, 2015), is a business man in
China with a great deal of notoriety and has a significant number of
followers and supporters in China. The Internal Investigation notes that
our management believes that demands exist for our Common Stock solely
because Mr. Zhou is the controlling shareholder of the Company. Although
there is a no conclusion as to whether the shares were purchased based on
the confidence in Mr. Zhou by outsiders, the Internal Investigation also
notes its observation of continuous interest and active trading in the
Companys Common Stock after the conclusion of the Suspension,
despite the fact that (i) we operate at a loss as a going concern and (ii)
OTC Markets has discontinued the display of quotes of our Common Stock as
a result of the Suspension.
Trading in our Common Stock is currently suspended. Our Board of Directors and management continue to evaluate the situation.
Competition
Currently, we rely on a sole supplier and sole customer for
supply and sale of Yolexury and Yolexury Travel Pack. Meanwhile, we are devoting
our efforts to locating new healthcare products or consumer goods with high
quality and good reputation and seeking acquisition candidates in the U.S. or
other developed countries. Once we develop new products, we plan to expand our
distribution networks to recruit distributors in China instead of depending on
our current sole customer, a Hong Kong trading company.
Our competitors may have better resources, more varieties of
products and much stronger distribution networks. Changes in economic conditions
affecting our end customers purchasing power can occur unpredictably
which may have significant effects on the sales of our products as our products
are considered high end. We compete directly and indirectly with various other
consumer producers that provides different health benefits. However, we believe
we provide high quality and consistently reliable products that are made in the
U.S. to meet our end customers increasing demand for safe, high
quality, innovative and foreign made products. We are also taking steps to
develop and diversify product lines and expand our distribution channel.
9
Government Regulations
Regarding distribution of consumer goods, the Chinese
government and PRC laws do not require any special and/or additional approvals,
permissions or any other qualifications except for the relevant business
license.
However, for some of our product offerings, the Chinese
government may impose certain regulations on the production, distribution and
sales. As such, we will only select suppliers and distributors who are in
compliance with all laws and regulations as required by the Chinese government,
and who possess all required licenses, permits and approvals as is necessary and
required to do business in China.
The products we sell are required to meet the food safety
requirements of our end customers country. Compliance with the food
safety laws did not have a material effect on the capital expenditures, earnings
or our competitive position in the fiscal 2016. Because these requirements are
subject to change, there can be no guarantee against the possibility of
additional costs of compliance. However, we do not expect that the future
compliance with the government regulations will have a material effect on our
capital expenditures, earnings, or competitive positions in fiscal 2017.
As we currently operate in the U.S., there are no operating
activities in our HK subsidiaries, and we do not have any PRC subsidiary, we are
not subject to China regulations of foreign investment in PRC operating company,
foreign currency exchange, or other regulations applicable to a foreign invested
entity. However, if we choose to commence our operation in China, we may become
subject to those China laws and regulations applicable to a foreign invested
entity.
Employees
We currently have 5 employees included our officers. Our
officers are engaged in outside business activities and are anticipated to
devote limited time to our business until the acquisition of a successful
business opportunity has been identified. Our current officers and director and
any other directors and officers hereafter appointed or elected will devote
their time to our affairs on an as needed basis, this, depending on the
circumstances, could amount to as little as 20 hours per month, or more than 80
hours per month.
Available Information
You are advised to read this Form 10-K in conjunction with
other reports and documents that we file from time to time with the SEC. In
particular, please read our Quarterly Reports on Form 10-Q and Current Reports
on Form 8-K that we file from time to time. You may obtain copies of these
reports directly from us or from the SEC at the SEC's Public Reference Room at
100 F. Street, N.E. Washington, D.C. 20549, and you may obtain information about
obtaining access to the Reference Room by calling the SEC at 1-800-SEC-0330. In
addition, the SEC maintains information for electronic filers at its website
http://www.sec.gov.
10
ITEM 1A. RISK FACTORS
Risks Related to Our Business and Our Industry
We have a limited operating history and a history of
operating losses, and expect to incur significant additional operating losses.
We were incorporated in the State of Nevada on August 4, 2010
under the name Advento, Inc. We plan to develop, source, market and distribute
healthcare related consumer products in the global market and when practicable,
acquire an existing company or business in the production or distribution of
health consumer goods in the United States. Our principal business objective for
the next 12 months and beyond such time will be to achieve long-term growth
potential through development and distribution of various healthcare related
consumer products and acquisition of a business rather than immediate,
short-term earnings through expending our current product market.Moreover, our future prospects must be considered in light of the
uncertainties, risks, expenses, and difficulties frequently encountered by
companies in their early stages of operations and competing in new and rapidly
developing technology areas. We expect to incur substantial additional operating
losses over the next several years as our research, development, and commercial
activities increase. The amount of future losses and when, if ever, we will
achieve profitability are uncertain.
We may not be able to correctly estimate our future
revenues and operating expenses, which could lead to cash shortfalls, and
require us to secure additional financing sooner than planned.
We may not correctly predict the amount or timing of future
revenues and our operating expenses may fluctuate significantly in the future as
a result of a variety of factors, many of which are outside of our control.
These factors include:
our expectations regarding revenues from sales of our
products and services, and from collaborations with third parties;
the time and cost of obtaining any necessary regulatory
approvals;
we may elect to pursue additional research and
development programs as part of our long-term business plan;
the cost and time required to create effective sales and
marketing capabilities and commercialization strategies;
the expenses we incur to maintain and improve our
platform technology;
the costs to attract and retain personnel with the skills
required for effective operations; and
the costs of preparing, filing, prosecuting, defending
and enforcing patent claims and other patent related costs, including
litigation costs and the results of such litigation.
In addition, our budgeted expense levels are based in part on
our expectations concerning future revenues from sales of our products and
services, and from collaborations with third parties. However, we may not
correctly predict the amount or timing of future revenues. In addition, we may
not be able to adjust our operations in a timely manner to compensate for any
unexpected shortfall in our revenues or we may increase our expenses as part of
implementing our long-term business plan. As a result, a significant shortfall
in our budgeted revenues or a significant increase in our planned expenses could
have an immediate and material adverse effect on our business and financial
condition. In such case, we may be required to issue additional equity or debt
securities or enter into other commercial arrangements, including relationships
with corporate and other partners, sooner than anticipated to secure the
additional financial resources to support our development efforts and future
operations.
11
We may need to secure additional financing to support our
long-term business plans.
We may require additional funds to support our long-term
business plans. We expect that we may be required to issue additional equity or
debt securities or enter into other commercial arrangements, including
relationships with corporate and other partners, to secure the additional
financial resources to support our development efforts and to implement our
long-term business plans. Depending upon market conditions, we may not be
successful in raising sufficient additional capital on a timely basis, on
favorable terms, or at all. Additionally, the issuance of additional equity
securities, including securities convertible into or exercisable for our equity
securities, would result in the dilution of the ownership interests of our
present stockholders. If we fail to obtain sufficient additional financing, or
enter into relationships with others that provide additional financial
resources, we may not be able to develop our technology and products in
accordance with our long-term business plan, and we may be required to delay
significantly, reduce the scope of or eliminate one or more of our research or
development programs, downsize our general and administrative infrastructure, or
seek alternative measures to raise additional funds.
We are subject to risks associated with doing business
outside the United States.
We do business with customers outside the United States. We
intend to continue to pursue customers and growth opportunities in international
markets, and we expect that international revenues may account for a significant
percentage of our revenues in the foreseeable future. There are a number of
risks arising from our international business, including those related to:
foreign currency exchange rate fluctuations, potentially
reducing the United States dollars we receive for sale denominated in
foreign currency;
general economic and political conditions in the markets
we operate in;
potential increased costs associated with overlapping tax
structures;
potential trade restrictions and exchange controls;
more limited protection for intellectual property rights
in some countries;
difficulties and costs associated with staffing and
managing foreign operations;
unexpected changes in regulatory requirements;
the difficulties of compliance with a wide variety of
foreign laws and regulations; and
longer accounts receivable cycles in certain foreign
countries, whether due to cultural differences, exchange rate fluctuation
or other factors.
These risks, individually or in the aggregate, could have an
adverse effect on our results of operations and financial condition. For
example, we are subject to compliance with the United States Foreign Corrupt
Practices Act and similar anti-bribery laws, which generally prohibit companies
and their intermediaries from making improper payments to foreign government
officials for the purpose of obtaining or retaining business. While our
employees are required to comply with these laws, we cannot be sure that our
internal policies and procedures will always protect us from violations of these
laws, despite our commitment to legal compliance and corporate ethics. The
occurrence or allegation of these types of risks may adversely affect our
business, performance, prospects, value, financial condition, and results of
operations.
12
Risks Related to Our Common Stock and Liquidity Risks
Our Common Stock has been suspended trading since June 2015 and there is no assurance that our Common Stock will resume trading in the near future.
There is limited trading history in our common stock, and the trading for our common stock has been suspended from OTC market since June 2015. There is no assurance that our common stock will resume trading, or if trading is resumed, we will have an active market in our common stock in the future. As a result, an investor may find it difficult to dispose of our common stock on the timeline and at the volumes they desire. This factor significantly limits the liquidity of our common stock, and may have a material adverse effect on the market price of our common stock and on our ability to raise additional capital.
Compliance with the reporting requirements of federal
securities laws can be expensive.
We are a public reporting company in the United States, and
accordingly, subject to the information and reporting requirements of the
Exchange Act and other federal securities laws, including the compliance
obligations of the Sarbanes-Oxley Act. The costs of complying with the reporting
requirements of the federal securities laws, including preparing and filing
annual and quarterly reports and other information with the SEC and furnishing
audited reports to stockholders, can be substantial.
On June 15, 2015, trading in our Common Stock was temporarily suspended by the Securities and Exchange Commission (the “Commission” ) due to unexplained market activity. As a result, trading in our Common Stock has been suspended since June 15, 2015. On June 16, 2015, our Board of Directors engaged Hunter Taubman Fischer LLC to commence the Internal Investigation. The Internal Investigation was completed on August 11, 2015. In May 2016, we received certain informal inquiry from the Commission regarding trading activity in our common stock and the Company is currently in the process of responding to such inquiry. The inquiry requires that we provide certain categories of documents to the Commission. The Commission indicated in its inquiry that it should not be construed as an indication that any violation of any federal securities laws has occurred or as a reflection upon the merits of any person, company, or securities involved. The inquiry is a confidential non-public fact finding request. It is not possible at this time to predict the outcome of the inquiries, including whether or when any proceedings might be initiated, when these matters may be resolved or what, if any, penalties or other remedies may be imposed. We have been, and intend to continue, voluntarily cooperating fully with the SEC. The scope and outcome of this matter cannot be determined at this time. We have expended significant resources to the Internal Investigation and responding to the Commission’s inquiry. Failure to resolve such matters favorably could harm tradability of our common stock and our reputation significantly and could result in a loss of your investment in our stock.
The price of our common stock may continue to be
volatile, which could lead to losses by investors and costly securities
litigation.
The trading price of our common stock is likely to be highly
volatile and could fluctuate in response to factors such as:
actual or anticipated variations in our operating
results;
regulatory actions regarding our products or services;
reduced government funding for research and development
activities;
announcements by us or our competitors of significant
acquisitions, strategic partnerships, joint ventures or capital
commitments;
adoption of new accounting standards affecting our
industry;
additions or departures of key personnel;
introduction of new products by us or our competitors;
sales of our common stock or other securities in the open
market;
degree of coverage of securities analysts and reports and
recommendations issued by securities analysts regarding our business;
volume fluctuations in the trading of our common stock;
and
other events or factors, many of which are beyond our
control.
The stock market is subject to significant price and volume
fluctuations. In the past, following periods of volatility in the market price
of a companys securities, securities class action litigation has
often been initiated against such a company. Litigation initiated against us,
whether or not successful, could result in substantial costs and diversion of
our managements attention and resources, which could harm our
business and financial condition.
13
Investors may experience dilution of their ownership
interests because of the future issuance of additional shares of our capital
stock.
We are authorized to issue 1,500,000,000 shares of common
stock. As of July 29, 2016, there were an aggregate of 1,120,343,373 shares of
our common stock issued and outstanding on a fully diluted basis and no shares
of preferred stock outstanding. We do not have any exercisable options or
warrants outstanding.
In the future, we may issue additional authorized but
previously unissued equity securities, resulting in the dilution of the
ownership interests of our present stockholders. We may also issue additional
shares of our capital stock or other securities that are convertible into or
exercisable for our capital stock in connection with presently outstanding
warrants, hiring or retaining employees, future acquisitions, future sales of
our securities for capital raising purposes, or for other business purposes. The
future issuance of any such additional shares of capital stock may create
downward pressure on the trading price of our common stock. There can be no
assurance that we will not be required to issue additional shares, warrants or
other convertible securities in the future in conjunction with any capital
raising efforts.
Risks related to Doing Business in the Greater China Area
Our operations are subject to risks associated with
emerging markets.
The Chinese economy is not well
established and is only recently emerging and growing as a significant market
for consumer goods and services. Accordingly, there is no assurance that the
market will continue to grow. Perceived risks associated with investing in the
greater China area, or a general disruption in the development of the greater
Chinas markets could materially and adversely affect the business,
operating results and financial condition of the Company.
The PRC government has the ability to exercise
significant influence and control over our operations in the greater China area.
There can be no assurance that
greater China areas economic, political or legal systems will not
develop in a way that becomes detrimental to our business, results of operations
and financial condition. Our activities may be materially and adversely affected
by changes in the greater Chinas economic and social conditions and
by changes in the policies of the government, such as measures to control
inflation, changes in the rates or method of taxation and the imposition of
additional restrictions on currency conversion.
Additional factors that we may
experience in connection with having operations in China that may adversely
affect our business and results of operations include:
our inability to enforce or obtain a remedy under any
material agreements;
PRC restrictions on foreign investment that could impair
our ability to conduct our business or acquire or contract with other entities
in the future;
restrictions on currency exchange that may limit our ability to use cash
flow most effectively or to repatriate our investment;
fluctuations in currency values;
cultural, language and managerial differences that may reduce our overall
performance; and
political instability in the greater China area.
Cultural, language and managerial differences may
adversely affect our overall performance.
We have experienced difficulties
in assimilating cultural, language and managerial differences with our
subsidiaries in the greater China area. Personnel issues have developed in
consolidating management teams from different cultural backgrounds. In addition,
language translation issues from time to time have caused miscommunications. These factors make the management of
our operations in the greater China area more difficult. Difficulties in
coordinating the efforts of our U.S.-based staff with our China-based management
team may cause our business, operating results and financial condition to be
materially and adversely affected.
14
We may not be able to enforce our rights in the greater
China area given certain features of its legal and judicial system.
Regarding distribution of consumer goods, the Chinese
government and PRC laws do not require any special and/or additional approvals,
permissions or any other qualifications except for the relevant business
license.
However, for some of our product offerings, the Chinese
government may impose certain regulations on the production, distribution and
sales. As such, we will only select suppliers and distributors who are in
compliance with all laws and regulations as required by the Chinese government,
and who possess all required licenses, permits and approvals as is necessary and
required to do business in China.
The products we sold are required to meet the food safety
requirements of our end customers country. Compliance with the food
safety laws did not have a material effect on the capital expenditures, earnings
or our competitive position in the fiscal 2016. Because these requirements are
subject to change, there can be no guarantee against the possibility of
additional costs of compliance. However, we do not expect that the future
compliance with the government regulations will have a material effect on our
capital expenditures, earnings, or competitive positions in fiscal 2017.
As we currently operate in the U.S., there are no operating
activities in our Hong Kong subsidiaries, and we do not have any PRC subsidiary,
we are not subject to China regulations of foreign investment in PRC operating
company, foreign currency exchange, or other regulations applicable to a foreign
invested entity. However, if we choose to commence our operation in China, we
may become subject to those China laws and regulations applicable to a foreign
invested entity.
ITEM 1B. UNRESOLVED STAFF COMMENTS
None.
ITEM 2.
PROPERTIES
Our principal executive office is located at 2719 Hollywood
Blvd. Hollywood, FL 33020. Our telephone number is 1-786-232-3083. We pay a
monthly lease of $100 for the use of the office and the lease can be terminated
with a 30 days advance notice. We do not own any real estate or other
properties.
ITEM 3.
LEGAL PROCEEDINGS
We know of no material, existing or pending legal proceedings
against our company, nor are we involved as a plaintiff in any material
proceeding or pending litigation. There are no proceedings in which any of our
directors, officers or affiliates, or any registered or beneficial stockholder,
is an adverse party or has a material interest adverse to our interest.
ITEM 4.
MINE SAFETY DISCLOSURES
Not applicable.
15
PART II
ITEM 5.
MARKET FOR REGISTRANTS COMMON
EQUITY, RELATED STOCKHOLDERMATTERS AND ISSUER PURCHASES OF EQUITY
SECURITIES
Market Information
Our common stock was quoted on the OTC Bulletin Board under the symbol JIDG until June 14, 2015. On June 15, 2015, trading in our Common Stock was temporarily suspended by the Commission due to unexplained market activity. As a result, trading in our Common Stock has been suspended since then. As a result of the suspension, OTC Markets has discontinued the display of quotes of our common stock. Management continues to evaluate the situation.
High
Low
Fiscal 2016
May 1, 2015 through July 31,
2015
$
8.53
$
0.44
August 1, 2015 through October 31, 2015
$
*
$
*
November 1, 2015through
January 31, 2016
$
*
$
*
February 1, 2016 through April 30, 2016
$
*
$
*
Fiscal 2015
May 1, 2014 through July 31,
2014
$
-
$
-
August 1, 2014 through October 31, 2014
$
-
$
-
November 1, 2014 through
January 31, 2015
$
-
$
-
February 1, 2015 through April 30, 2015
$
4.5
$
0.08
*Trading of the Companys stock was suspended and
there was no active quotation during the period.
Currently there is no public market for our common shares. Our common shares previously traded on the OTC Bulletin Board under the symbol JIDG but OTC Markets has discontinued the quotes of our common shares.
16
Number of Holders
As of July 29, 2016, the 1,120,343,373 issued and outstanding
shares of common stock were held by a total of 897 shareholders record. This
number excludes any estimate by us of the number of beneficial owners of shares
held in street name, the accuracy which cannot be guaranteed.
Our registered transfer agent for our common stock is Island
Stock Transfer, 15500 Roosevelt Boulevard, Suite 301, Clearwater, 33760,
Telephone (727) 289-0010.
Dividends
No cash dividends were paid on our shares of common stock
during the fiscal years ended April 30, 2016 and 2015. We have not paid
dividends since our inception and do not foresee declaring any cash dividends on
our common stock in the foreseeable future.
We do not intend to issue any cash dividends in the future. We
intend to retain earnings, if any, to finance the development expansion of our
business.
However, it is possible that our management may decide to
declare a stock dividend in the future. Our future dividend policy subject to
the discretion of our board of directors and will be contingent upon future
earnings, if any, our financial condition, capital requirements, general
business conditions and other factors.
Recent Sales of Unregistered Securities; Use of Proceeds
from Registered Securities
We did not sell any equity securities which were not registered
under the Securities Act during the fiscal year ended April 30, 2016.
Equity Compensation Plans
We do not have in effect any compensation plans under which our
equity securities are authorized for issuance and we do not any outstanding
stock options.
Purchase of our Equity Securities by the Issuer and
Affiliated Purchasers
We did not purchase any of our shares of common stock or other
securities during our fiscal year ended April 30, 2016.
ITEM 6.
SELECTED FINANCIAL DATA
The following tables set forth certain of our selected
consolidated financial data as of the dates and for the years indicated.
Historical results are not necessarily indicative of the results to be expected
for any future period. The following selected consolidated financial information
was derived from our fiscal year end consolidated financial statements.
Years ended April 30,
2016
2015
2014
Summary of Operations
Revenues
$
2,765,801
$
1,505,516
$
-
Cost of
revenues
2,548,037
1,377,855
-
Gross Profit
217,764
128,661
-
Operating Expenses
(326,572
)
(13,536,491
)
(167,465
)
Other Income
1,111
13,896
1,806
Net loss
$
(107,697
)
$
(13,393,934
)
$
(165,659
)
Basic and Diluted:
Loss per common share
a
$
(0.01
)
a
Balance Sheet Data
Working capital
$
949,394
$
1,056,691
$
1,250,105
Total
assets
$
1,436,681
$
2,533,281
$
1,304,603
Total liabilities
$
486,132
$
1,475,035
$
52,543
a= Less than ($0.01) per share
17
ITEM 7.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION ANDRESULTS OF OPERATIONS
The following discussion should be read in conjunction with
our financial statements, including the notes thereto, appearing elsewhere in
this annual report. Managements Discussion and Analysis of Financial
Condition and Results of Operations (MD&A) includes
comparisons of the years ended April 30, 2016 , 2015 and 2014. The following
discussion contains forward-looking statements that reflect our plans, estimates
and beliefs. Our actual results could differ materially from those discussed in
the forward looking statements. Our audited financial statements are stated in
United States Dollars and are prepared in accordance with United States
Generally Accepted Accounting Principles.
Overview
We were incorporated in the State of Nevada on August 4, 2010
under the name Advento, Inc with an original plan to market and distribute an
assortment of residential and commercial shower cabinets produced by Hanzhou
Yongsheng Holdings Co., Ltd in the European and North American markets. On March
12, 2013, Mr. Xijian Zhou acquired a total of 750,000,000 shares of our common
stock from Mr. Liangwei Wang, a former major shareholder of us, for a total
consideration of $306,680, representing 82.92% of our issued and outstanding
shares as of March 12, 2013 (the Transfer). As of the date
of this report, Mr. Xijian Zhou holds 66.9% of our issued and outstanding
shares. In connection with the change of control, we changed our business
operation plan to develop, source, market and distribute healthcare related
consumer products in the global market and possibly acquire an existing target
company or business in the related field which operates in the United States.
Our principal business objective for the next 12 months and beyond such time
will be to achieve long-term growth potential through development of various
healthcare related consumer products and acquisition of a business rather than
immediate, short-term earnings.
The analysis of new business opportunities will be undertaken
by or under the supervision of our management. Our company has unrestricted
flexibility in seeking, analyzing and participating in potential business
opportunities. In its efforts to analyze business opportunities, we will
consider the following factors:
Potential for growth, indicated by new technology,
anticipated market expansion or new products;
Competitive position as compared to other firms of
similar size and experience within the industry segment as well as within
the industry as a whole;
Strength and diversity of management, either in place or
scheduled for recruitment;
Capital requirements and anticipated availability of
required funds, to be provided by the Company or from operations, through
the sale of additional securities, through joint ventures or similar
arrangements or from other sources;
18
The cost of participation by our company as compared to
the perceived tangible and intangible values and potentials;
The extent to which the business opportunity can be
advanced;
The accessibility of required management expertise,
personnel, raw materials, services, professional assistance and other
required items; and
Other relevant factors.
Recent Events
Business updates
On June 25, 2014, we entered into a distribution agreement with
Right Fortune to distribute Yolexury and Yolexury Travel Pack, a
health juice product which increases energy and stamina, helps to maintain
healthy cardio vascular function and promotes healthy digestive system.
According to the distribution agreement, we are granted exclusive distribution
rights in the Greater China (Mainland China, Hong Kong, Macao and Taiwan) for
calendar year 2014. In addition, the term of exclusivity will be automatically
renewed annually if we meet the annual Yolexury Minimum Order. The annual
Minimum Order for the calendar year 2015 is 400,000 bottles of 750ml Yolexury,
which we have fulfilled as of December 31, 2015.
To facilitate our growth, we acquired a HK trading company, Dao
Sheng Trading Limited for HK$10,000 and set up Joymain International
Intellectual Property Limited in Hong Kong in May 2014. We consider Hong Kong as
an ideal location to connect to all Asian markets and it provides a
comprehensive and advanced legal system for trading and intellectual property
protection. We have not had operating activities in our HK subsidiaries in
fiscal year 2016
We have started generating revenue in the fiscal year 2015.
However, we still continue to incur substantial operating loss. These conditions
raise substantial doubt about our ability to continue as a going concern. We are
currently devoting our efforts to locating new products and acquisition
candidates. Our ability to continue as a going concern is dependent upon our
ability to develop additional sources of capital, to locate and complete a
merger with another company, and ultimately, to achieve profitable operations.
RESULTS OF OPERATIONS
We have just started generating revenue recently and incurred
recurring losses to date. Our financial statements have been prepared assuming
that we will continue as a going concern and, accordingly, do not include
adjustments relating to the recoverability and realization of assets and
classification of liabilities that might be necessary should we be unable to
continue in operation. We expect we will require additional capital to meet our
long term operating requirements. We expect to raise additional capital through,
among other things, the sale of equity or debt securities in funding our planned
business, although no such sales can be guaranteed to occur on terms favorable
to us, if at all. The accompanying condensed consolidated financial statements
do not include any adjustments related to the recoverability or classification of asset-carrying amounts or amounts and
classifications of liabilities that may result should the Company be unable to
continue as a going concern.
19
Consolidated Statement of Operations and Supplemental
Information
Years ended April 30,
Change
Change
2016
$
%
2015
$
%
2014
Revenues
$
2,765,801
$
1,260,285
84
$
1,505,516
$
1,505,516
$
-
Cost of revenues
2,548,037
1,170,182
85
1,377,855
1,377,855
100
-
Gross Profit
217,764
89,103
69
128,661
128,661
100
-
Operating Expenses
General and
administrative expenses
326,572
(91,649
)
(22
)
418,221
250,756
150
167,465
Business development expenses
-
(13,118,270
)
(100
)
13,118,270
13,118,270
100
-
Other Income
1,111
(12,785
)
(92
)
13,896
12,090
669
1,806
Provision for income taxes
-
-
-
-
-
-
-
Net loss
$
(107,697
)
$
(13,286,237
)
(99
)
$
(13,393,934
)
$
13,228,275
7,985
$
(165,659
)
Results of Operations - Year Ended April 30, 2016 as
Compared to Year Ended April 30, 2015
We have limited operational history. Our ability to generate
any revenues in the next 12 months continues to be uncertain.
Revenues. During the year ended April 30, 2016,
we generated $2,765,801 revenue through sale of the Yolexury products to our
sole customer in Hong Kong as compared to $1,505,516 for the year ended April
30, 2015, an increase of $1,260,285 or 84%. We had a full year sales in the year
ended April 30, 2016 as compared to the six months sales in the year ended April
30, 2015. Fiscal year 2015 was the first year we started selling Yolexury
products and we are currently in the process of developing other customers and
products.
Gross Profit. Gross profit amounted to $217,764
for the year ended April 30, 2016 as compared to $128,661 for the year ended
April 30, 2015, an increase of $89,103 or 69%. The increase was due to increase
in sales in fiscal year 2016.
Net Loss. Our net loss for the
fiscal year ended April 30, 2016 was $107,697 compared to a net loss of
$13,393,934 for the year ended April 30, 2015, a decrease of $13,286,237 or 99%.
The decrease in net loss was primarily because we did not incur business
development expenses for the year ended April 30, 2016 as compared to
approximately $13.1 million business development expenses incurred for the year
ended April 30, 2015, and a decrease in professional fees of approximately
$88,000 in fiscal year 2016.
Professional Fees. During the year ended April
30, 2016, we incurred $198,578 of professional fees consisting of auditing,
accounting, business advisory, legal and filing fees associated with the filings
with the Securities and Exchange Commission (SEC) and
internal investigation legal fees. During the year ended April 30, 2015, our
company incurred $286,553 of professional fees consisting of
auditing, accounting, business advisory, legal and filing fees associated with
our companys name change, stock split, and filing of period reports
with SEC. The decrease of $87,955 or approximately 31% was primarily because we
did not incur fees for hiring a financial consultant in fiscal year 2016.
20
Other General and Administrative Expenses. Other
general and administrative expenses totaled $127,994 for the year ended April
30, 2016, as compared to $131,668 for the year ended April 30, 2015, a decrease
of $3,674 or approximately 3%. Other general and administrative expenses for the
years ended April 30, 2016 and 2015 consisted of the following:
Year Ended
Year Ended
April 30, 2016
April 30, 2015
Travel and entertainment
$
13,541
$
12,840
Payroll and related benefits
101,497
108,170
Others
12,956
10,658
Total
$
127,994
$
131,668
Travel and entertainment expense for the year ended April 30,
2016 increased by $4701, or 5%, as compared to the year ended April 30, 2015.
The increase was primarily attributable to the increased spending in our
corporate travels for general business development purposes.
Payroll and related benefits for the year ended April 30, 2016
decreased by $6,673, or 6%, as compared to the year ended April 30, 2015. The
decrease was primarily due to reduced work hours for our part time staff in
fiscal 2016. Other general and administrative expenses for the year ended April
30, 2016 increased by $2,298, or 22% as compared to the year ended April, 30,
2015. The increase was primarily due to the increased office rent in fiscal year
2016.
Business Development Expenses. For the year ended April 30,
2016, we did not have any business development expenses. In January 2015, we issued
a total of 163,978,373 shares of common stock to our thirty four (34)
distribution and development partners. The shares were valued at $0.08 per share
and we recorded stock-based business development expenses of $13,118,270.
Other Income. Other income totaled $1,111 for the
year ended April 30, 2016 primarily consisted of interest income of $955 and other income of $156, which consisted of unrealized loss on marketable securities of $3,624 and other income of $3,780. Other income totaled $13,896
for the year ended April 30, 2015 primarily consisted of interest income of
$1,532 and unrealized gain on marketable securities of $9,857 and other income of $2,507.
Results of Operations - Year Ended April 30, 2015 as
Compared to Year Ended April 30, 2014
Years ended
31April 30,
Increase/
%
2015
2014
(decrease)
change
Revenues
$
1,505,516
$
-
$
1,505,516
N/A
Cost of revenues
1,377,855
-
1,377,855
N/A
Gross Profit
128,661
-
128,661
N/A
Operating Expenses
General and
administrative expenses
418,221
167,465
250,756
150
Business development expenses
13,118,270
-
13,118,270
N/A
Other Income
13,896
1,806
12,090
669
Provision for income taxes
-
-
-
N/A
Net loss
$
(13,393,934
)
$
(165,659
)
$
13,228,275
7,985
21
We have limited operational history. Our ability to generate any revenues in the next 12 months continues to be uncertain.
Revenues. During the year ended April 30, 2015,
we generated $1,506,516 revenue through sale of the Yolexury products to our
sole customer in Hong Kong. Fiscal year 2015 was the first year we started
selling Yolexury products and we are currently in the process of developing
other customers and products. We did not generate any revenues for the year
ended April 30, 2014.
Gross Profit. Gross profit amounted to $128,661
for the year ended April 30, 2015. We did not incur any revenue for the year
ended April 30, 2014.
Net Loss. Our net loss for the fiscal year ended
April 30, 2015 was $13,393,934 compared to a net loss of $165,659 for the year
ended April 30, 2014. The increase in net loss was due to the approximately
$13.1 million business development expenses incurred as a result of the
163,978,373 shares issued to our thirty four (34) distribution and development
partners.
Professional Fees. During the year ended April
30, 2015, we incurred $286,553 of professional fees consisting of auditing,
accounting, business advisory, legal and filing fees associated with the filings
with the Securities and Exchange Commission (SEC). During
the year ended April 30, 2014, our company incurred $113,437 of professional
fees consisting of auditing, accounting, business advisory, legal and filing
fees associated with our companys name change, stock split, and
filing of period reports with SEC. The increase of $173,116 or approximately
152.6% was primarily because of fees incurred for hiring a consultant and
expenses related to the filing of two registration statements in fiscal year
2015.
Other General and Administrative Expenses. Other
general and administrative expenses totaled $131,668 for the year ended April
30, 2015, as compared to $54,028 for the year ended April 30, 2014, an increase
of $77,640 or approximately 143.7%. Other general and administrative expenses
for the years ended April 30, 2015 and 2014 consisted of the following:
Year Ended
Year Ended
April 30, 2015
April 30, 2014
Travel and entertainment
$
12,840
$
17,439
Payroll and related benefits
108,170
33,405
Others
10,658
3,184
Total
$
131,668
$
54,028
22
Travel and entertainment expense for the year ended April 30,
2015 decreased by $4,599, or 26.4%, as compared to the year ended April 30,
2014. The decrease was primarily attributable to the decreased spending in our
travel as we did not have many activities in connection with on-site
communicating and discussing with potential product suppliers and acquiring
potential business targets in the last two quarters of fiscal 2015.
Payroll and related benefits for the year ended April 30, 2015
increased by $74,765, or 223.8%, as compared to the year ended April 30, 2014.
In order to support our business development activities, we hired one employee
and two officers during the year ended April 30, 2015. We only had one employee
in the U.S. and one officer during the year ended April 30, 2014.
Other general and administrative expenses for the year ended
April 30, 2015 increased by $7,474, or 234.7% as compared to the year ended
April, 30, 2014. The increase was caused by the increased business activities.
Business Development Expenses. In January 2015,
we issued a total of 163,978,373 shares of common stock to our thirty four (34)
distribution and development partners. The shares were valued at $0.08 per share
and we recorded stock-based business development expenses of $13,118,270. For
the year ended April 30, 2014, we did not have business development expenses.
Other Income. Other income totaled $13,896 for
the year ended April 30, 2015 primarily consisted of interest income of $1,532
and unrealized gain on marketable securities of $9,857 and other income of $2,507. For the year ended
April 30, 2014, we had interest income of $1,806.
23
Liquidity and Capital Resources
The following table sets forth a summary of our approximate
cash flows for the periods indicated:
As of April 30,
Change
Change
2016
$
%
2015
$
%
2014
Net
cash provided by (used in) operating activities
$
141,012
$
179,455
467
$
(38,443
)
$
(119,295
)
(76
)
$
(157,738
)
Net cash
provided by (used in) investing activities
$
100,409
450,409
129
$
(350,000
)
347,948
16,957
$
(2,052
)
Net
cash (used in) provided by financing activities
$
(3,294
)
(31,172
)
(90
)
$
(34,466
)
(1,496,004
)
(102
)
$
1,461,538
Our cash and cash equivalents is our principal source of
liquidity. At April 30, 2016, our current assets were $1,435,526, compared to
$2,531,726 in current assets as of April 30, 2015. Current assets at April 30, 2016 were comprised
of $1,116,966 in cash, $62,736 in advance to suppliers and $255,824 in
marketable securities which consist of mutual funds as compared to $878,839 in
cash, $1,293,030 in advance to suppliers and $359,857 in marketable securities
which consist of certificates of deposits and mutual funds at April 30 2015. As
of April 30, 2016, our current liabilities were $486,132 as compared to
$1,475,035 at April 30, 2015. Current liabilities at April 30, 2016 were
comprised of $235 in due to related parties, $5,299 in accounts payable,
$428,781 in advance from customers and $51,817 in other payables as compared to
$3,529 in due to related parties, $24,726 in accounts payable, $1,423,031 in
advance from customers and $23,749 in other payables at April 30, 2015.
Stockholders equity was $950,549 as of April 30, 2016
compared to $1,058,246 as of April 30, 2015.
We intend to finance operating costs over the next twelve
months with existing cash on hand and loans from our major shareholder. We will
need to depend on outside capital for our future business developments. Such
outside capital will include proceeds from the issuance of equity securities and
may include commercial borrowing. We cannot guarantee that actions presently
being taken to implement our strategic plans will provide the opportunity for us
to continue our business operations.
Cash Flows Provided By (Used In) Operating Activities
For the year ended April 30, 2016, net cash flow provided by
operating activities was $141,012, which primarily reflected a net loss of
$107,697, and the add-back of non-cash items of depreciation and amortization of
$400, unrealized gain on marketable securities, net of investment management
fees of $3,624 and changes in operating assets and liabilities primarily
consisting of a decrease in advance to suppliers of $1,230,294, a decrease in
accounts payable of $19,427, a decrease in advance from customer of $994,250 and
an increase of other payable of $28,068. For the year ended April 30, 2015, net
cash flow used in operating activities was $38,443 primarily reflecting a net
loss of $13,393,934, and the add-back of non-cash items of depreciation and
amortization of $400, stock compensation to a consultant of $71,700, stock
issued for business development expenses of $13,118,270, expenses paid by
related parties of $8,290 and unrealized gain on marketable securities, net of
investment management fees of $9,857, and changes in operating assets and
liabilities primarily consisting of an increase in advance to suppliers of
$1,293,030, an increase in accounts payable of $12,038, an increase in advance
from customers of $1,423,031, and an increase in other payables of $23,749. For
the fiscal year ended April 30, 2014, net cash flows used in operating
activities was $157,738, consisting of a net loss of $165,659, the add-back of
non-cash item of deprecation of $97, an increase in accounts payable of $6,779,
and a decrease in prepaid expenses of $1,045.
24
Cash Flows Provided By (Used In) Investing Activities
We had proceeds from sell of marketable securities of $100,409
for the year ended April 30, 2016. We purchased marketable securities of
$350,000 for the year ended April 30, 2015. Net cash flow used in investing
activities reflects the purchase of property and equipment of $2,052 for the
year ended April 30, 2014.
Cash Flows from Financing Activities
We have financed our operations primarily from either advances
from related parties or the issuance of equity. During the year ended April 30, 2016, we had repayments to a related party of $3,294. For the year
ended April 30, 2015, we had proceeds from issuance of common stock of $10,150,
received advances from related parties of $60 and made repayment to related
parties of $44,676. For the year ended April 30, 2014, net cash provided by
financing activities was $1,461,538 including advances from related parties of
$60,782, proceeds from issuance of common stock of $1,479,900, and offset by
repayments of shareholders loans of $48,040 and payments of common stock
offering costs of $31,104.
We expect our capital expenditures for the next twelve months
will continue to increase as we expect to incur additional costs for regulatory
compliances purposes and operations. We believe that we will need additional
outside capital investments to meet our anticipated cash requirements for the
next twelve months.
As our current operation generates limited cash flow for us, we
expect to depend on outside capital for our future operations. Such outside
capital may include proceeds from advances from related parties, the issuance of
equity securities and may include commercial borrowing. There can be no
assurance that capital will be available as necessary to meet these development
costs or, if the capital is available, that it will be on terms acceptable to
us.
Critical Accounting Policies
Basis of Presentation.
The consolidated financial statements of the Company have been
prepared in accordance with generally accepted accounting principles in the
United States of America and are presented in US dollars. The Companys consolidated financial statements included the financial statements of its
wholly-owned subsidiaries, Dao Sheng and Joymain International Intellectual
Property Limited. All significant intercompany accounts and transactions have
been eliminated in consolidation.
Going Concern
The consolidated financial statements have been prepared on a
going concern basis which assumes the Company will be able to realize its assets
and discharge its liabilities in the normal course of business for the
foreseeable future. The Company has incurred losses since inception resulting in
an accumulated deficit of $14,606,652 as of April 30, 2016 and further losses
are anticipated in the development of its business, which raise substantial
doubt about the Companys ability to continue as a going concern. The
ability to continue as a going concern is dependent upon the Company generating
profitable operations in the future and/or to obtain the necessary financing to
meet its obligations and repay its liabilities arising from normal business
operations when they come due. Management intends to finance operating costs
over the next twelve months with existing cash on hand and loans from directors
and or sale of common stock.
The Company expects to depend on outside capital
for its future business developments. Such outside capital may include proceeds
from the issuance of equity securities and may include commercial borrowing.
There can be no assurance that capital will be available as necessary to meet
these development costs or, if the capital is available, that it will be on
terms acceptable to the Company.
The issuances of additional equity securities by the Company
may result in a significant dilution in the equity interests of its current
stockholders. Obtaining commercial loans, assuming those loans would be
available, will increase the Company's liabilities and future cash commitments.
However, there can be no assurance that these arrangements will
be sufficient to fund its ongoing capital expenditures, working capital, and
other cash requirements. The outcome of these matters cannot be predicted at
this time.
25
There can be no assurance that any additional financings will
be available to the Company on satisfactory terms and conditions, if at all. In
the event we are unable to continue as a going concern, we may elect or be
required to seek protection from our creditors by filing a voluntary petition in
bankruptcy or may be subject to an involuntary petition in bankruptcy. To date,
management has not considered this alternative, nor does management view it as a
likely occurrence.
The accompanying consolidated financial statements do not
include any adjustments related to the recoverability or classification of
asset-carrying amounts or the amounts and classification of liabilities that may
result should the Company be unable to continue as a going concern.
Cash and Cash Equivalents
The Company considers all highly liquid instruments with a
maturity of three months or less at the time of issuance to be cash equivalents.
The Company maintains cash and cash equivalents with a financial institution in
the U.S. Cash and cash equivalents consisted of cash and money market accounts
at April 30, 2016. Financial instruments that potentially subject the Company to
concentration of credit risk consist of cash accounts in a financial institution
which, at times may exceed the Federal depository insurance coverage of
$250,000. As of April 30, 2016 and 2015, the Company had approximately $867,000
and $629,000 in excess of the federally-insured limits, respectively. The
Company has not experienced losses on these accounts as of the date of this
report.
Use of Estimates and Assumptions
The preparation of consolidated financial statements in
conformity with accounting principles generally accepted in the United States
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the consolidated financial statements and the
reported amounts of revenues and expenses during the reporting period.
Significant estimates include the useful life of property and equipment,
valuation of deferred tax assets, and the value of stock-based compensation.
Actual results could differ from those estimates.
Inventories
Inventories, consisting of the Companys Yoluxey
products, are stated at the lower of cost or market (estimated net realizable
value) utilizing the weighted average method. An allowance is established when
management determines that certain inventories may not be saleable. If inventory
costs exceed expected market value due to obsolescence or quantities in excess
of expected demand, the Company will record reserves for the difference between
the cost and the market value. These reserves are recorded based on estimates.
The Company works with its vendor and customer to arrange the drop shipments for
its inventories and the inventories are shipped directly to the ports designated
by the Companys customer from the manufacture factory without going
through the Companys warehouse to conserve shipping costs. As of
April 30, 2016 and 2015, the Company did not have inventories on hand and there
is no reserve for obsolete or slow-moving inventories necessary.
Advance to Suppliers
The Company periodically makes advances to vendors for
purchases of products for resale, and records these purchases as advance to
suppliers.
Fair Value of Financial Instruments
The Company adopted ASC 820, Fair Value Measurements and
Disclosure (ASC 820) for assets and liabilities measured at
fair value on a recurring basis. ASC 820 establishes a common definition for
fair value to be applied to existing generally accepted accounting principles
that require the use of fair value measurements, establishes a framework for
measuring fair value and expands disclosure about such fair value measurements.
The adoption of ASC 820 did not have an impact on the Companys
financial position or operating results, but did expand certain disclosures.
26
ASC 820 defines fair value as the price that would be received
upon sale of an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date. Additionally, ASC 820
requires the use of valuation techniques that maximize the use of observable
inputs and minimize the use of unobservable inputs. These inputs are prioritized
below:
Level 1: Observable inputs such as quoted market prices in active markets
for identical assets or liabilities
Level 2: Observable market-based inputs or
unobservable inputs that are corroborated by market data
Level 3: Unobservable
inputs for which there is little or no market data, which require the use of the
reporting entitys own assumptions.
The following table sets forth by level within the fair value
hierarchy of the Companys financial assets that were accounted for at
fair value on a recurring basis as of April 30, 2016 and 2015:
April 30, 2016
April 30, 2015
Level 1
Level 2
Level 3
Total
Level 1
Level 2
Level 3
Total
Marketable securities
$
255,824
$
$
$
255,824
$
359,857
$
$
$
359,857
Total assets at fair value
$
255,824
$
$
$
255,824
$
359,857
$
$
$
359,857
The carrying values of prepaid expenses, advance to suppliers,
accounts payables, due to related parties, advance from customer and other
payables approximate their fair values due to the short maturities of these
instruments.
Stock-based Compensation
Stock-based compensation is accounted for
based on the requirements of the Share-Based Payment topic of ASC Topic 718
which requires recognition in the financial statements of the cost of employee
and director services received in exchange for an award of equity instruments
over the period the employee or director is required to perform the services in
exchange for the award (presumptively, the vesting period). The Financial
Accounting Standards Board (FASB) also requires measurement
of the cost of employee and director services received in exchange for an award
based on the grant-date fair value of the award.
Pursuant to ASC Topic 505-50, for share-based payments to
consultants and other third-parties, compensation expense is determined at the
measurement date. The expense is recognized over the
vesting period of the award. Until the measurement date is reached, the total
amount of compensation expense remains uncertain. The Company records
compensation expense based on the fair value of the award at the reporting date.
The awards to consultants and other third-parties are then revalued, or the
total compensation is recalculated, based on the then current fair value, at
each subsequent reporting date.
To date, the Company has not adopted a stock option plan and
has not granted any stock options.
Income Taxes
The Company has adopted Accounting Standards Codification
subtopic 740-10, Income Taxes (ASC 740-10) which requires
the recognition of deferred tax liabilities and assets for the expected future
tax consequences of events that have been included in the financial statement or tax returns. Under
this method, deferred tax liabilities and assets 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. Valuation allowances are recorded to reduce the deferred
tax assets to an amount that it is more likely than not be realized.
27
We apply the provisions of ASC 740-10-50, Accounting
for Uncertainty in Income Taxes, which provides clarification related
to the process associated with accounting for uncertain tax positions recognized
in our consolidated financial statements. Audit periods remain open for review
until the statute of limitations has passed. The completion of review or the
expiration of the statute of limitations for a given audit period could result
in an adjustment to the Companys liability for income taxes. Any such
adjustment could be material to the Companys results of operations
for any given quarterly or annual period based, in part, upon the results of
operations for the given period. As of April 30, 2016, the Company had no
uncertain tax positions, and will continue to evaluate for uncertain positions
in the future.
Basic and Diluted Loss Per Share
The Company computes loss per
share in accordance with ASC-260, Earnings per
Share which requires presentation of both basic and diluted earnings
per share on the face of the statement of operations. Basic loss per share is
computed by dividing net loss available to common shareholders by the weighted
average number of outstanding common shares during the period. Diluted loss per
share gives effect to all dilutive potential common shares outstanding during
the period. Dilutive loss per share excludes all potential common shares if
their effect is anti-dilutive. The Company has no potential dilutive instruments
and accordingly basic loss and diluted loss per share are equal.
Fiscal Periods
The Company's fiscal year end is April 30.
Related Parties
Parties are considered to be related to the Company if the
parties, directly or indirectly, through one or more intermediaries, control,
are controlled by, or are under common control with the Company. Related parties
also include principal owners of the Company, its management, members of the
immediate families of principal owners of the Company and its management and
other parties with which the Company may deal if one party controls or can
significantly influence the management or operating policies of the other to an
extent that one of the transacting parties might be prevented from fully
pursuing its own separate interests. The Company discloses all related party
transactions. All transactions shall be recorded at fair value of the goods or
services exchanged. Property purchased from a related party is recorded at the
cost to the related party and any payment to or on behalf of the related party
in excess of the cost is reflected as a distribution to related party.
Revenue Recognition
Pursuant to the guidance of ASC Topic 605, the Company
recognizes revenue from product sales to its customers when: (1) title and risk
of loss are transferred (in general, these conditions occur at either point of
shipment or point of destination, depending on the terms of sale); (2)
persuasive evidence of an arrangement exists; (3) the Company has no continuing
obligations to the customer; and (4) collection of the related accounts
receivable is reasonably assured.
Advance from Customers
The Company requires its customer to make payments prior to the
products are shipped. Any payments received prior to the products are shipped to
the customers point of destination are recorded as advance from
customers.
Foreign Currency Translation.
The reporting currency of the Company is the U.S. dollar. The
functional currency of the parent company is the U.S. dollar and the functional
currency of the Companys subsidiaries is the Hong Kong Dollar. For
the subsidiaries, whose functional currencies are the Hong Kong Dollar, results of
operations and cash flows are translated at average exchange rates during the
period, assets and liabilities are translated at the unified exchange rate at
the end of the period, and equity is translated at historical exchange rates. As
a result, amounts relating to assets and liabilities reported on the statements
of cash flows may not necessarily agree with the changes in the corresponding
balances on the balance sheets. Translation adjustments resulting from the
process of translating the local currency financial statements into U.S. dollars
are included in determining comprehensive income. Assets and liabilities
denominated in foreign currencies are translated into the functional currency at
the exchange rates prevailing at the balance sheet date with any transaction
gains and losses that arise from exchange rate fluctuations on transactions
denominated in a currency other than the functional currency are included in the
results of operations as incurred. Transactions denominated in foreign
currencies are translated into the functional currency at the exchange rates
prevailing on the transaction dates. During the years ended April 30, 2016, 2015
and 2014, the Companys subsidiaries have no assets or liabilities and
they did not have business activities. There was no cumulative translation
adjustment and no effect of exchange rate changes on cash for the years ended
April 30, 2016, 2015 and 2014.
28
Comprehensive Loss
Comprehensive loss is comprised of net loss and all changes to
the statements of stockholders equity, except those due to investments
by stockholders, changes in paid-in capital and distributions to stockholders.
The Company did not have other comprehensive income (loss) for fiscal years
ended April 30, 2016, 2015 or 2014.
Concentrations of Credit Risk
Financial instruments which potentially subject the Company to
concentrations of credit risk consist principally of cash and marketable
securities. We place our cash with high credit quality financial institutions in
the United States. The Company has not experienced any losses in such accounts
through April 30, 2016.
All of the Companys sales are to one customer whose
ability to pay is dependent upon the industry economics prevailing in these
areas; however, the Company believes that the concentration of credit risk with
respect to sales is limited due to the requirements for the customer to make
payments prior to shipments. The Company also perform ongoing credit evaluations
of its customer to help further reduce potential credit risk. However, if the
Company is not able to increase the number of customers and loses its sole
customer, there will be significant risks for the Company to continue to
generate revenue.
Recent Accounting Pronouncements
In March 2016, the FASB issued ASU 2016-09, "Compensation -
Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment
Accounting". Several aspects of the accounting for share-based payment award
transactions are simplified, including: (a) income tax consequences; (b)
classification of awards as either equity or liabilities; and (c) classification
on the statement of cash flows. The amendments are effective for public
companies for annual periods beginning after December 15, 2016, and interim
periods within those annual periods. Early adoption is permitted for any interim
or annual period. The Company is currently in the process of evaluating the
impact of the adoption on its consolidated financial statements.
In July 2015, The FASB has issued Accounting Standards Update
(ASU) No. 2015-11, Inventory (Topic 330): Simplifying the Measurement of
Inventory. Topic 330, Inventory, currently requires an entity to measure
inventory at the lower of cost or market. Market could be replacement cost, net
realizable value, or net realizable value less an approximately normal profit
margin. The amendments do not apply to inventory that is measured using last-in,
first-out (LIFO) or the retail inventory method. The amendments apply to all
other inventory, which includes inventory that is measured using first-in,
first-out (FIFO) or average cost. An entity should measure in scope inventory at
the lower of cost and net realizable value. Net realizable value is the
estimated selling prices in the ordinary course of business, less reasonably
predictable costs of completion, disposal, and transportation. Subsequent
measurement is unchanged for inventory measured using LIFO or the retail inventory method.
The amendments in this Update more closely align the measurement of inventory in
GAAP with the measurement of inventory in International Financial Reporting
Standards. For public business entities, the amendments are effective for fiscal
years beginning after December 15, 2016, including interim periods within those
fiscal years. For all other entities, the amendments are effective for fiscal
years beginning after December 15, 2016, and interim periods within fiscal years
beginning after December 15, 2017. The amendments should be applied
prospectively with earlier application permitted as of the beginning of an
interim or annual reporting period. The adoption of ASU 2015-11 is not expected
to have a material impact on the Companys consolidated financial
statements.
29
In November 2015, the FASB issued new accounting guidance
regarding the balance sheet classification of deferred income taxes. The primary
objective of this accounting guidance is to classify all deferred income tax
assets and liabilities as noncurrent in a classified statement of financial
position. There was no material impact to results of operations as the result of
adoption of the accounting pronouncement.
There are various other updates recently issued, most of which
represented technical corrections to the accounting literature or application to
specific industries and are not expected to a have a material impact on the
Company's financial position, results of operations or cash flows.
Requirement for Funding
Our cash reserves are not sufficient to meet our obligations
for the next twelve month period. As a result, we will need to seek additional
funding in the near future. We currently do not have a specific plan of how we
will obtain such funding; however, we anticipate that additional funding will be
in the form of equity financing from the sale of shares of our common stock. We
may also seek to obtain short-term loans from our directors or unrelated
parties, although no such arrangements have been made. We do not have any
arrangements in place for any future equity financing.
Material Commitments
As of April 30, 2016, we had no material commitments.
Purchase of Significant Equipment
We do not intend to purchase any significant equipment during
the next twelve months.
Off Balance Sheet Arrangements
We have no off-balance sheet arrangements that have or are
reasonably likely to have a current or future effect on our financial condition,
changes in financial condition, revenues or expenses, results of operations,
liquidity, capital expenditures or capital resources that is material to
stockholders.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
MARKET RISK
Exposure to credit, liquidity,
interest rate and currency risks arises in the normal course of the
Companys business. The Companys exposure to these risks
and the financial risk management policies and practices used by the Company to
manage these risks are described below.
various debt instruments.
30
Interest Rate Risk
We manage our interest rate risk by maintaining an investment
portfolio of trading investments with high credit quality and relatively short
average maturities. These instruments include, but are not limited to,
money-market instruments, bank time deposits, and taxable and tax-advantaged
variable rate and fixed rate obligations of corporations, municipalities, and
national, state, and local government agencies, in accordance with an investment
policy approved by our Board of Directors. These instruments are denominated in
U.S. dollars. The fair market value of our investments as of April 30, 2016 was
approximately $256,000. We also hold cash balances in accounts with a commercial
bank in the United States. These cash balances represent operating balances only
and are invested in short-term time deposits of the local bank.
Many of our investments carry a degree of interest rate risk.
When interest rates fall, our income from investments in variable-rate
securities declines. When interest rates rise, the fair market value of our
investments in fixed-rate securities declines. In addition, our investments in
equity securities are subject to stock market volatility. Due in part to these
factors, our future investment income may fall short of expectations or we may
suffer losses in principal if forced to sell securities, which have seen a
decline in market value due to changes in interest rates. We attempt to mitigate
risk by holding fixed-rate securities to maturity, but, if our liquidity needs
force us to sell fixed-rate securities prior to maturity, we may experience a
loss of principal. We believe that a 10% fluctuation in interest rates would not
have a material effect on our financial condition or results of operations.
Currency Risk
We typically denominate our purchases and sales in U.S.dollars
and our currency risk is minimal.
ITEM 8.
FINANCIAL STATEMENTS AND SUPPLEMENTARY
DATA
31
JOYMAIN INTERNATIONAL DEVELOPMENT GROUP INC. INDEX
TO CONSOLIDATED FINANCIAL STATEMENTS
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Shareholders and Directors Joymain International
Development Group Inc.
We have audited the accompanying consolidated balance sheets of
Joymain International Development Group Inc. (the Company)
as of April 30, 2016 and 2015 and the related consolidated statements of
operations, changes in stockholders equity and cash flows for each of
the three years in the period ended April 30, 2016. These consolidated financial
statements are the responsibility of the Companys management. Our
responsibility is to express an opinion on these consolidated 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 audit to obtain reasonable assurance about
whether the consolidated financial statements are free of material misstatement.
An audit includes examining, on a test basis, evidence supporting the amounts
and disclosures in the consolidated 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 consolidated financial statements referred
to above present fairly, in all material respects, the consolidated financial
position of the Company as of April 30, 2016 and 2015 and the consolidated
results of its operations and its cash flows for each of the three years in the
period ended April 30, 2016, in conformity with accounting principles generally
accepted in the United States of America.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the Company’s internal control over financial reporting as of April 30, 2016, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) and our report dated August 19, 2016 expressed an adverse opinion on the Company’s internal control over financial reporting.
The accompanying consolidated financial statements have been
prepared assuming that the Company will continue as a going concern. As
discussed in Note 2 to the consolidated financial statements, the Company has
incurred significant losses since inception. This condition and among others raise substantial doubt about
the Company's ability to continue as a going concern. Management's plans, with
respect to these matters are also described in Note 2 to the consolidated
financial statements. The consolidated financial statements do not include any
adjustments that might result should the Company be unable to continue as a
going concern.
/s/ RBSM LLP
New York, NY
August 19, 2016
F-2
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Board of Directors and Shareholders Joymain
International Development Group Inc.
We have audited the internal control over financial reporting
of Joymain International Development Group Inc. (the Company) as of April 30, 2016, based on the criteria established in
Internal Control - Integrated Framework (2013) issued by the Committee of
Sponsoring Organizations of the Treadway Commission (COSO). The
Companys management is responsible for maintaining effective internal
control over financial reporting and for its assessment of the effectiveness of
internal control over financial reporting, included in the accompanying
Managements Annual Report on Internal Control over Financial
Reporting, appearing in Item 9A. Our responsibility is to express an opinion on
the Companys internal control over financial reporting based on our
audit.
We conducted our audit in accordance with the standards of the
Public Company Accounting Oversight Board (United States). Those standards
require that we plan and perform the audit to obtain reasonable assurance about
whether the effective internal control over financial reporting was maintained
in all material aspects. Our audit included obtaining an understanding of
internal control over financial reporting, assessing the risk that a material
weakness exists, and testing and evaluating the design and operating
effectiveness of internal control based on the assessed risk. Our audit also
included performing such other procedures as we considered necessary in the
circumstances. We believe that our audit provides a reasonable basis for our
opinion.
A companys internal control over financial reporting
is a process designed 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. A
companys internal control over financial reporting includes those
policies and procedures that (1) pertain to the maintenance of records that, in
reasonable detail, accurately and fairly reflect the transactions and
dispositions of the assets of the Company; (2) provide reasonable assurance that
the transactions are recorded as necessary to permit preparation of financial
statements in accordance with generally accepted accounting principles, and that
receipts and expenditures of the company are being made only in accordance with
authorizations of management and directors of the Company; and (3) provide
reasonable assurance regarding prevention of timely detection of unauthorized
acquisition, use, or disposition of the companys assets that could
have a material effect on the financial statements.
Because of its inherent limitations, internal control over
financial reporting may not prevent or detect misstatements. Also, projections
of any evaluation of effectiveness to future periods are subject to the risks
that controls may become inadequate because of changes in conditions, or that
the degree of compliance with the policies or procedures may deteriorate.
A material weakness is a control deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis. The following material weaknesses have been identified and included in management’s assessment. These material weaknesses are consisting of 1) lack of adequate segregation of duties among accounting, reporting, business and operation functions due to its business size and limited staff, 2) due to the need for more enhance and formalized documentation and procedures regarding the financial closing, reporting and review process to ensure that the application of the Company’s accounting policies and the presentation of disclosures in the Company’s financial statements is adequate; and 3) did not effectively and timely evaluate the impact of the Company’s unaffiliated aggregated market value being in excess of $75 million (reported level of $576 million) as of October 31, 2015 until during the second half of July 2016. As a result, management did not initiate their internal control related documentation, testing and assessment until upon their determination during July 2016, which led to not timely filing the Company’s fiscal year ended April 30, 2016 Annual Report on
the SEC Form 10-K. These material weaknesses were considered in determining the nature, timing, and extent of audit tests applied in our audit of the April 30, 2016’s consolidated financial statements, and this report does not affect our report dated August 19, 2016 on those consolidated financial statements.
In our opinion, because of the effect of the material weakness described above on the achievement of the objectives of the control criteria, Joymain International Development Group Inc. has not maintained effective internal control over financial reporting as of April 30, 2016, based on criteria established in internal control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of Joymain International Development Group Inc. as of April 30, 2016 and 2015, and the related consolidated statements of operations, changes in stockholders’ equity, and cash flows for each of the three years in the period ended April 30, 2016 and our report dated August 19, 2016 expressed an unqualified opinion with an explanatory paragraph on those consolidated financial statements.
/s/ RBSM LLP
New York, NY
August 19, 2016
F-3
JOYMAIN INTERNATIONAL DEVELOPMENT GROUP, INC. CONSOLIDATED
BALANCE SHEETS
April 30
April 30
2016
2015
ASSETS
CURRENT ASSETS:
Cash
$
1,116,966
$
878,839
Advance to suppliers
62,736
1,293,030
Marketable securities
255,824
359,857
TOTAL CURRENT
ASSETS
1,435,526
2,531,726
PROPERTY AND EQUIPMENT - Net
1,155
1,555
TOTAL ASSETS
$
1,436,681
$
2,533,281
LIABILITIES AND
STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable
$
5,299
$
24,726
Due to related parties
235
3,529
Advance from customer
428,781
1,423,031
Other payables
51,817
23,749
TOTAL CURRENT LIABILITIES
486,132
1,475,035
STOCKHOLDERS' EQUITY:
Common stock,1,500,000,000 shares
authorized, par value $0.001, 1,120,343,373 shares issued and
outstanding at April 30, 2016 and 2015, respectively
1,120,343
1,120,343
Additional paid-in
capital
14,436,858
14,436,858
Accumulated deficit
(14,606,652
)
(14,498,955
)
TOTAL
STOCKHOLDERS' EQUITY
950,549
1,058,246
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
$
1,436,681
$
2,533,281
See accompanying notes to consolidated financial statements
F-4
JOYMAIN INTERNATIONAL DEVELOPMENT GROUP, INC.
CONSOLIDATED
STATEMENTS OF OPERATIONS
For the Years
Ended
April 30
2016
2015
2014
REVENUE
$
2,765,801
$
1,506,516
$
-
COST OF REVENUE
2,548,037
1,377,855
-
GROSS PROFIT
217,764
128,661
-
OPERATING EXPENSES
General and
administrative
(326,572
)
(418,221
)
(167,465
)
Business development
expenses
-
(13,118,270
)
-
Total
Operating Expenses
(326,572
)
(13,536,491
)
(167,465
)
LOSS FROM OPERATIONS
(108,808
)
(13,407,830
)
(167,465
)
OTHER INCOME
Interest income
955
1,532
1,806
Other income
156
12,364
-
Total other income
1,111
13,896
1,806
LOSS BEFORE PROVISION FOR
INCOME TAXES
(107,697
)
(13,393,934
)
(165,659
)
PROVISION FOR INCOME TAXES
-
-
NET LOSS
$
(107,697
)
$
(13,393,934
)
$
(165,659
)
BASIC AND DILUTED:
Loss per common share
$
a
$
(0.01
)
$
a
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES
1,120,343,373
996,609,101
954,720,959
a= Less than ($0.01) per share
See accompanying notes to consolidated financial statements
F-5
JOYMAIN INTERNATIONAL DEVELOPMENT GROUP, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN
STOCKHOLDERS' EQUITY For the Years Ended April 30, 2016, 2015 and
2014
Common Stock
Total
Number of
Additional
Accumulated
Stockholders'
Shares
Amount
Paid-in Capital
Deficit
Equity
Balance, April 30, 2013
904,500,000
$
904,500
$
3,785
$
(939,362
)
$
(31,077
)
Common shares sold at $0.03
per share
49,330,000
49,330
1,430,570
-
1,479,900
Common shares offering costs
-
-
(31,104
)
-
(31,104
)
Net loss
-
-
-
(165,659
)
(165,659
)
Balance, April 30, 2014
953,830,000
$
953,830
$
1,403,251
$
(1,105,021
)
$
1,252,060
Shares issued for consulting
expenses at $0.03 per share
2,390,000
2,390
69,310
-
71,700
Common shares sold at
$0.07per share
145,000
145
10,005
-
10,150
Shares issued for bus
develop. expenses at $0.08 per share
163,978,373
163,978
12,954,292
13,118,270
Net loss
-
-
-
(13,393,934
)
(13,393,934
)
Balance, April 30, 2015
1,120,343,373
$
1,120,343
$
14,436,858
$
(14,498,955
)
$
1,058,246
Net loss
-
-
-
(107,697
)
(107,697
)
Balance, April 30, 2016
1,120,343,373
$
1,120,343
$
14,436,858
$
(14,606,652
)
$
950,549
See accompanying notes to consolidated financial statements
F-6
JOYMAIN INTERNATIONAL DEVELOPMENT GROUP, INC.
CONSOLIDATED STATEMENTS OF
CASH FLOWS
For the Years
Ended Ended
April 30,
2016
2015
2014
OPERATING ACTIVITIES:
Net loss
$
(107,697
)
$
(13,393,934
)
$
(165,659
)
Adjustments to
reconcile net loss to
net cash provided by (used in)
operating activities
Depreciation and
amortization
400
400
97
Stock
issued for consulting fees
-
71,700
-
Stock issued for business
development expenses
-
13,118,270
-
Expenses
paid directly by related parties
-
8,290
-
Unrealized loss (gain) on
marketable securities,
net of
investment management fees
3,624
(9,857
)
-
Changes in operating assets and
liabilities
Prepaid
expenses
-
900
1,045
Advance to suppliers
1,230,294
(1,293,030
)
-
Accounts
payable
(19,427
)
12,038
6,779
Advance from customers
(994,250
)
1,423,031
-
Other
payable
28,068
23,749
-
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES
141,012
(38,443
)
(157,738
)
INVESTING ACTIVITIES:
Purchase of property and equipment
-
-
(2,052
)
Purchase of marketable
securities
-
(350,000
)
-
Proceed from sell of marketable
securities
100,409
-
-
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES
100,409
(350,000
)
(2,052
)
FINANCING ACTIVITIES:
Proceeds from issuance
of common stock
-
10,150
1,479,900
Payments of common stock offering costs
-
-
(31,104
)
Repayments to related
parties
(3,294
)
(44,676
)
(48,040
)
Proceeds from related parties
-
60
60,782
NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES
(3,294
)
(34,466
)
1,461,538
Net Increase (Decrease) in Cash
238,127
(422,909
)
1,301,748
Cash, Beginning of Period
878,839
1,301,748
-
CASH, END OF PERIOD
$
1,116,966
$
878,839
$
1,301,748
SUPPLEMENTAL DISCLOSURES OF
CASH FLOW INFORMATION
Cash paid during the period for:
Interest
-
-
-
Income Taxes
-
-
-
See accompanying notes to consolidated financial statements
F-7
JOYMAIN INTERNATIONAL DEVELOPMENT GROUP INC.
Notes to Consolidated Financial Statements April
30, 2016 and 2015
NOTE 1. ORGANIZATION AND BUSINESS OPERATIONS
Joymain International Development Group Inc. (f/k/a Advento,
Inc.) (the Company, we, us, our) was incorporated under the laws of the
State of Nevada, U.S. on August 4, 2010 under the name Advento, Inc. The Company
develops, sources, markets and distributes healthcare related consumer products
in the global market On March 12, 2013, Mr. Xijian Zhou acquired an aggregate of
750,000,000 shares of the Companys common stock, representing 82.92%
of our issued and outstanding shares as of March 12, 2013. Effective March 12,
2013, (a) Mr. Liang Wei Wang resigned as the Companys president,
secretary, treasurer, and director of the Company; (b) Mr. Suqun Lin, was
appointed as the Companys sole director, president, secretary and
treasurer. Effective March 28, 2013, the Nevada Secretary of State accepted for
filing of a Certificate of Amendment to the Companys Articles of
Incorporation to change the Companys name from Advento, Inc. to
Joymain International Development Group Inc. and to increase its authorized
capital from 75,000,000 to 1,500,000,000 shares of common stock, par value of
$0.001. These amendments became effective on April 10, 2013 upon approval from
the Financial Industry Regulatory Authority (FINRA). Also
effective April 10, 2013, pursuant to a 300 new for one (1) old forward split,
the Companys issued and outstanding shares of common stock increased
from 3,015,000 to 904,500,000 shares, par value of $0.001. Information regarding
shares of common stock (except par value per share), discount on stock issued,
and net (loss) income per common share for all periods presented reflects the
three hundred-for-one forward split of the Companys common stock.
In connection with the change of control, the Company changed
its business operation plan to develop, source, market and distribute healthcare
related consumer products in the global market and possibly acquire an existing
target company or business in the related field which operates in the United
States.
In May 2014, The Company acquired a HK trading company, Dao
Sheng Trading Limited (Dao Sheng) for HK$10,000. Dao Sheng
was incorporated in December 2013 and had no assets or liabilities at the time
of the acquisition. The Company also set up Joymain International Intellectual
Property Limited in Hong Kong in May 2014. The Company considers Hong Kong as an
ideal location to connect to all Asian markets and it provides a comprehensive
and advanced legal system for trading and intellectual property protection.
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation.
The consolidated financial statements of the Company have been
prepared in accordance with generally accepted accounting principles in the
United States of America and are presented in US dollars. The Company
s consolidated financial statements included the financial statements of its
wholly-owned subsidiaries, Dao Sheng and Joymain International Intellectual
Property Limited. All significant intercompany accounts and transactions have
been eliminated in consolidation.
Going Concern
The consolidated financial statements have been prepared on a
going concern basis which assumes the Company will be able to realize its assets
and discharge its liabilities in the normal course of business for the
foreseeable future. The Company has incurred losses since inception resulting in
an accumulated deficit of $14,606,652 as of April 30, 2016 and further losses
are anticipated in the development of its business, which raise substantial
doubt about the Companys ability to continue as a going concern. The
ability to continue as a going concern is dependent upon the Company generating
profitable operations in the future and/or to obtain the necessary financing to
meet its obligations and repay its liabilities arising from normal business
operations when they come due. Management intends to finance operating costs
over the next twelve months with existing cash on hand and loans from directors
and or sale of common stock.
F-8
The Company expects to depend on outside capital for its future
business developments. Such outside capital will include proceeds from the
issuance of equity securities and may include commercial borrowing. There can be
no assurance that capital will be available as necessary to meet these
development costs or, if the capital is available, that it will be on terms
acceptable to the Company. The Company has a registration statement on Form S-1,
effective on August 1, 2014, pursuant to which the Company planned to raise up
to $12 million in equity. The registration statement expired on November 28,
2014 and the Company raised $10,150 in the offering.
The issuances of additional equity securities by the Company
may result in a significant dilution in the equity interests of its current
stockholders. Obtaining commercial loans, assuming those loans would be
available, will increase the Company's liabilities and future cash commitments.
However, there can be no assurance that these arrangements will
be sufficient to fund its ongoing capital expenditures, working capital, and
other cash requirements. The outcome of these matters cannot be predicted at
this time.
There can be no assurance that any additional financings will
be available to the Company on satisfactory terms and conditions, if at all. In
the event we are unable to continue as a going concern, we may elect or be
required to seek protection from our creditors by filing a voluntary petition in
bankruptcy or may be subject to an involuntary petition in bankruptcy. To date,
management has not considered this alternative, nor does management view it as a
likely occurrence.
The accompanying consolidated financial statements do not
include any adjustments related to the recoverability or classification of
asset-carrying amounts or the amounts and classification of liabilities that may
result should the Company be unable to continue as a going concern.
Cash and Cash Equivalents
The Company considers all highly liquid instruments with a
maturity of three months or less at the time of issuance to be cash equivalents.
The Company maintains cash and cash equivalents with a financial institution in
the U.S. Cash and cash equivalents consisted of cash and money market accounts
at April 30, 2016. Financial instruments that potentially subject the Company to
concentration of credit risk consist of cash accounts in a financial institution
which, at times may exceed the Federal depository insurance coverage of
$250,000. As of April 30, 2016 and 2015, the Company had approximately $867,000
and $629,000 in excess of the federally-insured limits, respectively. The
Company has not experienced losses on these accounts as of the date of this
report.
Use of Estimates and Assumptions
The preparation of consolidated financial statements in
conformity with accounting principles generally accepted in the United States
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the consolidated financial statements and the
reported amounts of revenues and expenses during the reporting period.
Significant estimates include the useful life of property and equipment,
valuation of deferred tax assets, and the value of stock-based compensation.
Actual results could differ from those estimates.
Inventories
Inventories, consisting of the Companys Yoluxey
products, are stated at the lower of cost or market (estimated net realizable
value) utilizing the weighted average method. An allowance is established when
management determines that certain inventories may not be saleable. If inventory
costs exceed expected market value due to obsolescence or quantities in excess
of expected demand, the Company will record reserves for the difference between
the cost and the market value. These reserves are recorded based on estimates.
The Company works with its vendor and customer to arrange the drop shipments for
its inventories and the inventories are shipped directly to the ports designated
by the Companys customer from the manufacture factory without going
through the Companys warehouse to conserve shipping costs. As of
April 30, 2016 and 2015, the Company did not have inventories on hand and there
is no reserve for obsolete or slow-moving inventories necessary.
F-9
Advance to Suppliers
The Company periodically makes advances to vendors for
purchases of products for resale, and records these purchases as advance to
suppliers.
Fair Value of Financial Instruments
The Company adopted ASC 820, Fair Value Measurements and
Disclosure (ASC 820) for assets and liabilities measured at
fair value on a recurring basis. ASC 820 establishes a common definition for
fair value to be applied to existing generally accepted accounting principles
that require the use of fair value measurements, establishes a framework for
measuring fair value and expands disclosure about such fair value measurements.
The adoption of ASC 820 did not have an impact on the Companys
financial position or operating results, but did expand certain disclosures.
ASC 820 defines fair value as the price that would be received
upon sale of an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date. Additionally, ASC 820
requires the use of valuation techniques that maximize the use of observable
inputs and minimize the use of unobservable inputs. These inputs are prioritized
below:
Level 1: Observable inputs such as quoted market prices
in active markets for identical assets or liabilities Level 2:
Observable market-based inputs or unobservable inputs that are corroborated by
market data
Level 3: Unobservable inputs for which there is little or
no market data, which require the use of the reporting entitys own
assumptions.
The following table sets forth by level within the fair value
hierarchy of the Companys financial assets that were accounted for at
fair value on a recurring basis as of April 30, 2016 and 2015:
April 30, 2016
April 30, 2015
Level 1
Level 2
Level 3
Total
Level 1
Level 2
Level 3
Total
Marketable securities
$
255,824
$
$
$
255,824
$
359,857
$
$
$
359,857
Total assets at fair value
$
255,824
$
$
$
255,824
$
359,857
$
$
$
359,857
The carrying values of prepaid expenses, advance to suppliers,
accounts payables, due to related parties, advance from customer and other
payables approximate their fair values due to the short maturities of these
instruments.
Stock-based Compensation
Stock-based compensation is accounted for based on the
requirements of the Share-Based Payment topic of ASC Topic 718 which requires
recognition in the financial statements of the cost of employee and director
services received in exchange for an award of equity instruments over the period
the employee or director is required to perform the services in exchange for the
award (presumptively, the vesting period). The Financial Accounting Standards
Board (FASB) also requires measurement of the cost of
employee and director services received in exchange for an award based on the
grant-date fair value of the award.
Pursuant to ASC Topic 505-50, for share-based payments to
consultants and other third-parties, compensation expense is determined at the
measurement date. The expense is recognized over the
vesting period of the award. Until the measurement date is reached, the total
amount of compensation expense remains uncertain. The Company records
compensation expense based on the fair value of the award at the reporting date.
The awards to consultants and other third-parties are then revalued, or the
total compensation is recalculated, based on the then current fair value, at
each subsequent reporting date.
To date, the Company has not adopted a stock option plan and
has not granted any stock options.
F-10
Income Taxes
The Company has adopted Accounting Standards Codification
subtopic 740-10, Income Taxes (ASC 740-10) which requires
the recognition of deferred tax liabilities and assets for the expected future
tax consequences of events that have been included in the financial statement or
tax returns. Under this method, deferred tax liabilities and assets 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. Valuation allowances are recorded to
reduce the deferred tax assets to an amount that it is more likely than not be
realized.
We apply the provisions of ASC 740-10-50, Accounting
for Uncertainty in Income Taxes, which provides clarification related
to the process associated with accounting for uncertain tax positions recognized
in our consolidated financial statements. Audit periods remain open for review
until the statute of limitations has passed. The completion of review or the
expiration of the statute of limitations for a given audit period could result
in an adjustment to the Companys liability for income taxes. Any such
adjustment could be material to the Companys results of operations
for any given quarterly or annual period based, in part, upon the results of
operations for the given period. As of April 30, 2016, the Company had no
uncertain tax positions, and will continue to evaluate for uncertain positions
in the future.
Basic and Diluted Loss Per Share
The Company computes loss per share in accordance with
ASC-260, Earnings per Share which
requires presentation of both basic and diluted earnings per share on the face
of the statement of operations. Basic loss per share is computed by dividing net
loss available to common shareholders by the weighted average number of
outstanding common shares during the period. Diluted loss per share gives effect
to all dilutive potential common shares outstanding during the period. Dilutive
loss per share excludes all potential common shares if their effect is
anti-dilutive. The Company has no potential dilutive instruments and accordingly
basic loss and diluted loss per share are equal.
Fiscal Periods
The Company's fiscal year end is April 30.
Related Parties
Parties are considered to be related to the Company if the
parties, directly or indirectly, through one or more intermediaries, control,
are controlled by, or are under common control with the Company. Related parties
also include principal owners of the Company, its management, members of the
immediate families of principal owners of the Company and its management and
other parties with which the Company may deal if one party controls or can
significantly influence the management or operating policies of the other to an
extent that one of the transacting parties might be prevented from fully
pursuing its own separate interests. The Company discloses all related party
transactions. All transactions shall be recorded at fair value of the goods or
services exchanged. Property purchased from a related party is recorded at the
cost to the related party and any payment to or on behalf of the related party
in excess of the cost is reflected as a distribution to related party.
Revenue Recognition
Pursuant to the guidance of ASC Topic 605, the Company
recognizes revenue from product sales to its customers when: (1) title and risk
of loss are transferred (in general, these conditions occur at either point of
shipment or point of destination, depending on the terms of sale); (2)
persuasive evidence of an arrangement exists; (3) the Company has no continuing
obligations to the customer; and (4) collection of the related accounts
receivable is reasonably assured.
F-11
Advance from Customers
The Company requires its customer to make payments prior to the
products are shipped. Any payments received prior to the products are shipped to
the customers point of destination and such advance received are
recorded as advance from customers.
Foreign Currency Translation.
The reporting currency of the Company is the U.S. dollar. The
functional currency of the parent company is the U.S. dollar and the functional
currency of the Companys subsidiaries is the Hong Kong Dollar. For
the subsidiaries, whose functional currencies are the Hong Kong Dollar, results
of operations and cash flows are translated at average exchange rates during the
period, assets and liabilities are translated at the unified exchange rate at
the end of the period, and equity is translated at historical exchange rates. As
a result, amounts relating to assets and liabilities reported on the statements
of cash flows may not necessarily agree with the changes in the corresponding
balances on the balance sheets. Translation adjustments resulting from the
process of translating the local currency financial statements into U.S. dollars
are included in determining comprehensive income. Assets and liabilities
denominated in foreign currencies are translated into the functional currency at
the exchange rates prevailing at the balance sheet date with any transaction
gains and losses that arise from exchange rate fluctuations on transactions
denominated in a currency other than the functional currency are included in the
results of operations as incurred. Transactions denominated in foreign
currencies are translated into the functional currency at the exchange rates
prevailing on the transaction dates. During the year ended April 30, 2016, 2015,
and 2014, the Companys subsidiaries have no assets or liabilities and
they did not have any business activities. There was no cumulative translation
adjustment and no effect of exchange rate changes on cash for the year ended
April 30, 2015 and 2016.
Comprehensive Loss
Comprehensive loss is comprised of net loss and all changes to
the statements of stockholders equity, except those due to investments
by stockholders, changes in paid-in capital and distributions to stockholders.
The Company did not have any other comprehensive gain (loss) for fiscal years
2016, 2015 and 2014.
Concentration of Credit Risk
Financial instruments which potentially subject the Company to
concentrations of credit risk consist principally of cash and marketable
securities. We place our cash with high credit quality financial institutions in
the United States. The Company has not experienced any losses in such accounts
through April 30, 2016.
All of the Companys sales are to one customer whose
ability to pay is dependent upon the industry economics prevailing in these
areas; however, the Company believes that the concentration of credit risk with
respect to sales is limited due to the requirements for the customer to make
payments prior to shipments. The Company also perform ongoing credit evaluations
of its customer to help further reduce potential credit risk. However, if the
Company is not able to increase the number of customers and loses its sole
customer, there will be significant risks for the Company to continue to
generate revenue.
F-12
Recent Accounting Pronouncements
In March 2016, the FASB issued ASU 2016-09, "Compensation -
Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment
Accounting". Several aspects of the accounting for share-based payment award
transactions are simplified, including: (a) income tax consequences; (b)
classification of awards as either equity or liabilities; and (c) classification
on the statement of cash flows. The amendments are effective for public
companies for annual periods beginning after December 15, 2016, and interim
periods within those annual periods. Early adoption is permitted for any interim
or annual period. The Company is currently in the process of evaluating the
impact of the adoption on its consolidated financial statements.
In July 2015, The FASB has issued Accounting Standards Update
(ASU) No. 2015-11, Inventory (Topic 330): Simplifying the Measurement of
Inventory. Topic 330, Inventory, currently requires an entity to measure
inventory at the lower of cost or market. Market could be replacement cost, net
realizable value, or net realizable value less an approximately normal profit
margin. The amendments do not apply to inventory that is measured using last-in,
first-out (LIFO) or the retail inventory method. The amendments apply to all
other inventory, which includes inventory that is measured using first-in,
first-out (FIFO) or average cost. An entity should measure in scope inventory at
the lower of cost and net realizable value. Net realizable value is the
estimated selling prices in the ordinary course of business, less reasonably
predictable costs of completion, disposal, and transportation. Subsequent
measurement is unchanged for inventory measured using LIFO or the retail
inventory method. The amendments in this Update more closely align the
measurement of inventory in GAAP with the measurement of inventory in
International Financial Reporting Standards. For public business entities, the
amendments are effective for fiscal years beginning after December 15, 2016,
including interim periods within those fiscal years. For all other entities, the
amendments are effective for fiscal years beginning after December 15, 2016, and
interim periods within fiscal years beginning after December 15, 2017. The
amendments should be applied prospectively with earlier application permitted as
of the beginning of an interim or annual reporting period. The adoption of ASU
2015-11 is not expected to have a material impact on the Companys
consolidated financial statements.
In November 2015, the FASB issued new accounting guidance
regarding the balance sheet classification of deferred income taxes. The primary
objective of this accounting guidance is to classify all deferred income tax
assets and liabilities as noncurrent in a classified statement of financial
position. There was no material impact to results of operations as the result of
adoption of the accounting pronouncement.
There are various other updates recently issued, most of which
represented technical corrections to the accounting literature or application to
specific industries and are not expected to a have a material impact on the
Company's financial position, results of operations or cash flows.
NOTE 3. MARKETABLE SECURITIES.
Marketable securities consist of certificate of deposits and
mutual funds for which fair values were based on quoted prices in active markets
and were therefore classified within Level 1 of the fair value hierarchy. The
following table is a summary of marketable securities recorded in the
Companys Consolidated Balance Sheets:
April 30, 2016
April 30, 2015
Certificate of deposits
$
-
$
100,409
Mutual funds
255,824
259,448
Total
$
255,824
$
359,857
The Company sold the certificate of deposits upon its
maturity and transferred the proceed / fund to its operating bank account for
working capital purposes during fiscal 2016.
NOTE 4. ADVANCE TO SUPPLIERS AND ADVANCE FROM CUSTOMERS
The Company makes advance payments to suppliers for goods
ordered but yet to be delivered to our customer as it has a drop ship
arrangement between its suppliers and customer. The Company receives advance
payments from customers for goods ordered but yet to be shipped and/or shipped
to its customers point of destination. Advanced payments to suppliers
as of April 30, 2016 and 2015 were $62,736 and $1,293,000, respectively.
Advanced payments from customers as of April 30, 2016 and 2015 were $428,781 and
$1,423,031, respectively.
On June 25, 2014, the Company entered into a distribution
agreement with Right Fortune International Limited (Right
Fortune) to obtain the exclusive distribution right of Yolexury and
Yolexury Travel Pack, a health juice product which increases energy and stamina,
helps to maintain healthy cardio vascular function and promotes healthy
digestive system. The term of exclusivity will be automatically renewed annually
if the Company meets the annual Yolexury Minimum Order Quantities (the
Minimum Order). The annual Minimum Order for calendar year
2015 is 400,000 bottles of 750ml Yolexury, which the Company has fulfilled as of
December 31, 2015. The Company works with its vendor and customer to arrange the
drop shipments for its inventories and the inventories are shipped directly to
the ports designated by the Companys customer from the manufacture
factory without going through the Companys warehouse to conserve
shipping costs.
F-13
NOTE 5. RELATED PARTY TRANSACTIONS
For the years ended April 30, 2016, 2015 and 2014, the
Companys majority shareholder advanced the Company for its working
capital of $0, $60 and $60,782, respectively. For the years ended April 30,
2016, the Company repaid its major shareholder of $3,294, $44,676 and $48,040,
respectively. In addition, the Companys majority shareholder paid
certain payroll expense and other general expenses on behalf of the Company
for total amount of $0, $8,290 and $0 for the years ended April 30, 2016, 2015
and 2014, respectively. The advances are non-interest bearing, due upon demand
and unsecured. At April 30, 2016 and 2015, the Companys due to
related parties amounted to $235 and $3,529, respectively.
NOTE 6. OTHER PAYABLES
Other payables consist of accrued salary and related accrued
expenses. The amounts are expected to be repaid in the form of cash. At April
30, 2016 and 2015, the Companys other payable amounted to $51,817 and
$23,749, respectively.
NOTE 7. STOCKHOLDERS EQUITY (DEFICIT)
The Company has authorized 1,500,000,000 shares of common
stock, par value $0.001 per share. On April 28, 2011, the Company issued
750,000,000 shares of common stock at a price of $0.000003 per share for total
cash proceeds of $2,500. In March and April, 2012, the Company issued
154,500,000 shares of common stock at a price of $0.00016 per share for total
cash proceeds of $25,750. On July 30, 2014, the Company issued a total of
2,390,000 shares of common stock to a consultant. The shares were valued at
$0.03 per share, the fair market value on the date of issuance. During the year
ended April 30, 2015, the Company recorded stock-based compensation of $71,700.
In August 2014, the Company sold a total of 110,000 shares of
common stock at a price of $0.07 per share to two investors. The shares were
sold pursuant to the Companys registration statement on Form S-1,
file number 333-197508, effective on August 1, 2014. The Company did not engage
a placement agent with respect to the sale. The net proceeds received by the
Company from the sale of the shares were $7,700.
In September 2014, the Company sold a total of 35,000 shares of
common stock at a price of $0.07 per share to two investors. The shares were
sold pursuant to the Companys registration statement on Form S-1,
file number 333-197508, effective on August 1, 2014. The Company did not engage
a placement agent with respect to the sale. The net proceeds received by the
Company from the sale of the shares were $2,450. The Form S-1, file number
333-197508, expired on November 28, 2014.
In January, 2015, the Company issued a total of 163,978,373
shares of common stock to its 34 distribution and development partners. The
shares were valued at $0.08 per share, the fair market value on the date of
issuance. The Company recorded stock-based business development expenses of
$13,118,270 for the year ended April 30, 2015.
On February 11, 2015, the Company filed a registration
statement on Form S-1 (the Form S-1) related to the resale
of up to 51,720,000 shares of the Companys common stock (the
Common Stock) including 49,330,000 shares of Common Stock
issued at a price of $0.03 per share for a total gross cash proceeds of
$1,479,900 in a private placement transaction closed on July 19, 2014 and
2,390,000 shares of Common Stock issued pursuant to a consulting agreement date
May 10, 2014 between the Company and LP Funding LLC. The selling stockholders
may sell common stock from time to time in the principal market on which the
stock is traded at the prevailing market price, at prices related to such
prevailing market price, in negotiated transactions or a combination of such
methods of sale. We will not receive any proceeds from the sales by the selling
stockholders. The Form S-1 was declared effective on April 24, 2015.
On June 15, 2015, trading in our Common
Stock was temporarily suspended by the Securities and Exchange Commission (the
Commission) due to recent unexplained market activity. As a
result, trading in our Common Stock was suspended for the period from 9:30 am
EDT on June 15, 2015, through 11:50 pm EDT on June 26, 2015.
On June 16, 2015, our Board of Directors
engaged Hunter Taubman Fischer LLC to commence an internal investigation (the
Internal Investigation) with regard to the recent rise in
the trading price of our common stock and market activity during a period from
April 1, 2015 to June 16, 2015 (the Period in Question).
The Internal Investigation was completed on August 11, 2015. See Temporary suspension of trading and Internal Investigation in Item 1.
Business.
We had 1,120,343,373 shares of common stock issued and
outstanding as of April 30, 2016 and 2015.
NOTE 8. INCOME TAXES
We account for income taxes under ASC 740, Expenses - Income Taxes . ASC 740 requires the recognition of
deferred tax assets and liabilities for both the expected impact of differences
between the financial statements and the tax basis of assets and liabilities,
and for the expected future tax benefit to be derived from tax losses and tax
credit carry forwards. ASC 740 additionally requires the establishment of a
valuation allowance to reflect the likelihood of realization of deferred tax
assets.
F-14
The income tax provision (benefit) for the years ended April
30, 2016, 2015 and 2014 consists of the following:
For the Years Ended April 30,
2016
2015
2014
Expected income tax expense
(benefit) at the
statutory rate of 34%
$
(37,000
)
$
(4,454,000
)
$
(57,000
)
Tax effect of expenses
(benefit) that are not
deductible for income tax
purposes (net of other
amounts deductible for tax purposes)
-
-
-
Change in valuation allowance
37,000
4,454,000
57,000
Provision for income taxes
$
-
$
-
$
-
The Company has a net operating loss (NOL)
carryforward for U.S. income tax purposes aggregating approximately $13,714,000
at April 30, 2016 expiring through the year 2035, subject to the Internal
Revenue Code Section 382, which places a limitation on the amount of taxable
income that can be offset by net operating losses after a change in ownership.
The Company has no Hong Kong NOL for its inactive subsidiaries in Hong Kong as
of April 30, 2016.
Deferred income taxes reflect the net tax effects of temporary
differences between the carrying amounts of assets and liabilities for financial
reporting purposes and the amounts used for income tax purposes. Included in the
deferred tax asset is the aforementioned NOL and the tax benefit associated with
the issuance of stock-based compensation. The realization of the deferred tax
assets is dependent on future taxable income, in addition to the exercise of
stock options; we are not able to predict if such future taxable income will be
more likely than not sufficient to utilize the benefit. As such, we do not
believe the benefit is more likely than not to be realized and we recognize a
full valuation allowance for those deferred tax assets. Our deferred tax assets
as of April 30, 2016 and 2015 are as follows:
As of April 30,
2016
2015
Deferred income tax asset:
Net operating loss carryforwards
$
4,663,000
$
4,626,000
Valuation allowance
(4,663,000
)
(4,626,000
)
Deferred income taxes
$
-
$
-
The increases in the valuation allowance at April 30, 2016 and
2015 from their immediate prior year-end was $37,000 and $4,454,000,
respectively.
The Company has filed its U.S. tax returns through April 30,
2015.
F-15
Our subsidiaries in Hong Kong have no business activities since
inception and are governed by the Income Tax Law of the Hong Kong Special
Administrative Region (HK SAR) and local income tax laws
(the HK SAR Income Tax Law). Pursuant to the HK SAR Income Tax Law,
our Hong Kong subsidiaries are subject to tax at a maximum statutory rate of 17%
(inclusive of state and local income taxes) if in operations.
The provisions of ASC 740 require companies to recognize in
their financial statements the impact of a tax position if that position is more
likely than not to be sustained upon audit, based upon the technical merits of
the position. ASC 740 prescribes a recognition threshold and measurement
attribute for the financial statement recognition and measurement of a tax
position taken or expected to be taken on a tax return. ASC 740 also provides
guidance on derecognition, classification, interest and penalties, accounting in
interim periods and disclosure.
Management does not believe that the Company has any material
uncertain tax positions requiring recognition or measurement in accordance with
the provisions of ASC 740. Accordingly, the adoption of these provisions of ASC
740 did not have a material effect on the Companys financial
statements. The Companys policy is to record interest and penalties
on uncertain tax positions, if any, as income tax expense.
All tax years for the Company remain subject to future
examinations by the applicable taxing authorities.
NOTE 9. COMMITMENTS AND CONTINGENCIES
In May 2016, the Company received certain informal inquiry from the Commission regarding trading activity in our common stock and the Company is currently in the process of responding to such inquiry. The inquiry requires that the Company provide certain categories of documents to the Commission. The Commission indicated in its inquiry that it should not be construed as an indication that any violation of any federal securities laws has occurred or as a reflection upon the merits of any person, company, or securities involved. The inquiry is a confidential non-public fact finding request. It is not possible at this time to predict the outcome of the inquiries, including whether or when any proceedings might be initiated, when these matters may be resolved or what, if any, penalties or other remedies may be imposed. The Company has been, and intend to continue, voluntarily cooperating fully with the SEC. The scope and outcome of this matter cannot be determined at this time. The Company has expended significant resources to the Internal Investigation (see NOTE 7) and responding to the Commission’s inquiry. Failure to resolve such matters favorably could harm tradability of our common stock and our reputation significantly and could result in a loss of your investment in our stock.
NOTE 10. SUBSEQUENT EVENTS
The Company has evaluated subsequent events through the date of the consolidated financial statements were issued and up to the time of filing of the consolidated financial statements with the Securities and Exchange Commission. There are no events that have occurred subsequent to the balance sheet date and through the date of the filing date of this report that would require adjustment to, or disclosure in the accompanying consolidated financial statements, except as disclosed on Note 9, “Commitments and Contingencies”.
F-16
ITEM 9.
CHANGES IN AND DISAGREEMENTS WITH
ACCOUNTANTS ON ACCOUNTING ANDFINANCIAL DISCLOSURE
None
ITEM 9A. CONTROLS AND PROCEDURES
Conclusion Regarding the Effectiveness of Disclosure
Controls and Procedures
Under the supervision and with
the participation of our management, including our Chief Executive officer and
Chief Financial officer, we conducted an evaluation of our disclosure controls
and procedures, as such term is defined under Rule 13a-15(e) promulgated under
the Securities Exchange Act of 1934, as amended (the Exchange
Act). Controls and other procedures that are designed to provide
reasonable assurance that the information that we are required to disclose in
the reports that we file or submit under the Exchange Act is recorded,
processed, summarized and reported within the time periods specified in the
SECs rules and forms, and that such information is accumulated and
communicated to our management, including our Chief Executive Officer and Chief
Financial Officer, as appropriate to allow timely decisions regarding required
disclosure.
Based on this evaluation, our
Chief Executive Officer and Chief Financial Officer concluded that our
disclosure controls and procedures were not effective at the reasonable
assurance level as of April 30, 2016, due to the material weakness in internal
control described below.
We performed additional analyses
and other procedures to ensure that our consolidated financial statements
included in this Annual Report were prepared in accordance with US GAAP. These
measures included, among other things, expansion of our year-end closing
procedures, including the consolidation process, and dedication of significant
internal resources and external consultants to scrutinize account analyses and
reconciliations at a detailed level. As a result, we concluded that the
consolidated financial statements included in this Annual Report present fairly,
in all material respects, our financial position, results of operations and cash
flows for the periods presented in conformity with US GAAP.
32
Management Report on Internal Control Over Financial
Reporting
Our management, under the supervision of our Chief Executive
Officer and Chief Financial Officer, is responsible for establishing and
maintaining adequate internal control over financial reporting to provide
reasonable assurance regarding the reliability of our financial reporting and
the preparation of consolidated financial statements for external purposes in
accordance with U.S. generally accepted accounting principles. Internal control
over financial reporting includes but not limits to those policies and
procedures that (i) pertain to the maintenance of records that in reasonable
detail accurately and fairly reflect the transactions and dispositions of the
assets of the Company; (ii) provide reasonable assurance that transactions are
recorded as necessary to permit preparation of consolidated financial statements
in accordance with U.S. generally accepted accounting principles, and that
receipts and expenditures of the Company are being made only in accordance with
authorizations of management and directors of the Company; and (iii) provide
reasonable assurance regarding prevention or timely detection of unauthorized
acquisition, use, or disposition of the Companys assets that could
have a material effect on the consolidated financial statements.
Any system of internal control, no matter how well designed,
has inherent limitations, including the possibility that a control can be
circumvented or overridden and misstatements due to error or fraud may occur and
not be detected in a timely manner. Also, because of changes in conditions,
internal control effectiveness may vary over time. Accordingly, even an
effective system of internal control will provide only reasonable assurance with
respect to consolidated financial statement preparation. In addition, the design
of any system of controls is based in part on certain assumptions about the
likelihood of future events, and there can be no assurance that any design will
succeed in achieving its stated goals under all potential future conditions.
Over time, controls may become inadequate because of changes in conditions or
deterioration in the degree of compliance with policies or procedures.
Therefore, any current evaluation of controls cannot and should not be projected
to future periods.
Management assessed our internal control over financial
reporting as of the year ended April 30, 2016. In making this assessment,
management used the criteria set forth by the Committee of Sponsoring
Organizations of the Treadway Commission (COSO) in 2013 Internal
Control-Integrated Framework. The 2013 COSO framework summarizes each of the
components of a companys internal control system, including (i) the
control environment, (ii) risk assessment, (iii) control activities, (iv)
information and communication, and (v) monitoring.
Based on management’s assessment using the 2013 COSO framework, management identified material weaknesses over financial reporting consisting of 1) lack of adequate segregation of duties among accounting, reporting, business and operation functions due to its business size and limited staff, 2) due to the need for more enhance and formalized documentation and procedures regarding the financial closing, reporting and review process to ensure that the application of the Company’s accounting policies and the presentation of disclosures in the Company’s financial statements is adequate; and 3) did not effectively and timely evaluate the impact of the Company’s unaffiliated aggregated market value being in excess of $75 million (reported level of $576 million) as of October 31, 2015 until during the second half of July 2016. As a result, management did not initiate their internal control related documentation, testing and assessment until upon their determination during July 2016, which led to not timely filing the Company’s fiscal year ended April 30, 2016 Annual Reprt on
the SEC Form 10-K.. As a result, management has concluded that the Company’s internal control over financial reporting was not effective as of April 30, 2016 to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements for external reporting purposes in accordance with U.S. generally accepted accounting principles.
A material weakness (within the meaning of PCAOB Auditing
Standard No. 5) is a deficiency, or a combination of deficiencies, in internal
control over financial reporting, such that there is a reasonable possibility
that a material misstatement of our annual or interim financial statements will
not be prevented or detected on a timely basis. A significant deficiency is a
deficiency, or a combination of deficiencies, in internal control over financial
reporting that is less severe than a material weakness, yet important enough to
merit attention by those responsible for oversight of the companys
financial reporting.
In light of these material weaknesses, management performed additional analyses and procedures in order to conclude that our consolidated financial statements included in this Annual Report on Form 10-K were fairly stated in accordance with GAAP. Accordingly, management believes that despite our material weaknesses and significant deficiencies identified, our consolidated financial statements for the year ended April 30, 2016 are fairly stated, in all material respects, in accordance with GAAP.
33
Due to our size and nature, segregation of all conflicting
duties may not always be possible and may not be economically feasible. As a
result, we have not been able to take steps to improve our internal controls
over financial reporting during the year ended April 30, 2016. However, to the
extent possible, we continue to evaluate the effectiveness of internal controls
and procedures on an on-going basis. Once our cash flows from operations improve
to a level where we are able to hire additional personnel in financial
reporting, we plan to improve our internal controls and procedures by hiring an
experienced controller and building an internal accounting team with sufficient
in-house expertise in US GAAP reporting. However, due to the limited cash flow
we are currently having, we can not assure you when we will be able to implement
those remediation methods.
Remediation of Material Weakness
Our management has proposed to under taking the following proposed remediation plan and actions:
a.
Management will review the current organization structure and job assignments to minimize the conflict of duties assigned to the same staff. In addition, management will implement compensating controls to mitigate the risks raised from lack of segregation of duties in key accounting and reporting functions.
b.
A formal policy and procedures for identification, authorization, review and approval of accounting transactions as well as appropriate application of accounting policies and presentation of disclosures of the Company’s financial statements will be implemented during the first half of our fiscal year ending April 30, 2017.
Attestation Report of Independent Registered Republic
Accounting Firm
Our independent registered public accounting firm, RBSM LLP,
has issued an audit report with respect to our internal control over financial
reporting, which appears in this Part II, Item 8 of this Annual Report on Form
10-K.
Changes in Internal Control over Financial Reporting
There has been no change in our internal control over financial
reporting identified in connection with our evaluation we conducted of the
effectiveness of our internal control over financial reporting as of April 30,
2016, that occurred during our fourth fiscal quarter that has materially
affected, or is reasonably likely to materially affect, our internal control
over financial reporting.
ITEM 9B. OTHER INFORMATION
None.
PART III
ITEM 10.
DIRECTORS, OFFICERS
AND CORPORATE GOVERNANCE
DIRECTORS AND EXECUTIVE OFFICERS
All directors of our company hold office until the next annual
meeting of the security holders or until their successors have been elected and
qualified. The officers of our company are appointed by our board of directors
and hold office until their death, resignation or removal from office. We do not
have written employment contracts or directorship contracts with our officers
and directors. .
The name and position of our present officers and directors are
set forth below:
Name
Age
Position
Date First Elected orAppointed
Suqun Lin
36
President, Chief Executive
Officer, Secretary and Director
March 12, 2013
Chengjie He
31
Chief Financial Officer
and Treasure
April 1, 2014
Jian Shao
49
Chief Business Development
Officer
April 1, 2014
BIOGRAPHICAL INFORMATION AND BACKGROUND OF OFFICER AND DIRECTOR
34
Suqun Lin - President, Secretary, Chief Executive Officer
and Director
Suqun Lin was appointed as our president, secretary, treasurer
and director on March 12, 2013. Since September 2010, Mr. Lin has been the
senior operating officer, China District, of Nanjing Joymain a company that
specializes in research and development, production and marking of high-tech
health care products and our majority shareholder Mr. Xijian Zhou is a
consultant and involved in making business decisions of that entity. As senior
operating officer, Mr. Lin is responsible for managing the operations,
logistics, customer services, production and procurement departments in the
Peoples Republic of China. Mr. Lin first joined Naijing Joymain as an
administration manager in May 2009 and managed the human resources and office
administration of the company. Mr. Lin was promoted to director of the
presidents office in December 2009 and further promoted to senior
operating officer, China District in December 2010.
From April 2008 to April 2009, Mr. Lin was the Shenzhen branch
manager of Shenzhen Yuelang Science and Technology Development Co., Ltd.,
wherein he managed the business development and public relation affairs in the
Shenzhen area. Mr. Lin graduated from Fuzhou University with a
Bachelors degree in Mechanical Design and Automation.
Chengjie He - Chief Financial Officer and Treasurer
Mr. He has been the Executive Assistant to CEO of Nanjing
Joymainan since March 2013. As Executive Assistant to CEO, Mr. He serves as
liaison to the Board of Directors and the senior management team of Nanjing
Joymain and completes a board variety of administrative tasks for Nanjing
Joymain. He also manages special overseas investment projects for Nanjing
Joymain and monitors various financial reports. From February 2011 to January
2013, Mr. He was the Executive Assistant to the General Manager of United
Industry (Asia) Co. Ltd. (United Industry), a global
household appliance parts supply company. He was responsible for follow-up
activities related to United Industrys investment projects in
Jiangsu, China area and participated in the project negotiations and
relationship management with the local government. He also monitored four
subsidiaries cash flows and administrative activities for United
Industry. From February 2010 to January 2011, Mr. He was Assistant to Chairman
of Nanjing Gianda Construction Investment Group, a construction and real estate
investment company, responsible for planning and coordinating the
Chairmans daily schedule. He was also assigned to co-manage the
financial department and co-monitor cash flow on various construction projects
with the CFO. From June 2006 to January 2008, Mr. He was the Import and Export
assistant at Taizhou Kim-top Electromechanical Ltd. responsible for customer
communication and trade relationship management.
Mr. He holds a Master of Business Administration degree from
Vancouver Island University and a Bachelors degree in Chinese
literature from Suzhou University.
Jian Shao - Chief Business Development Officer
Since July 2009, Mr. Shao has been the Vice President of
Marketing of Nanjing Joymain. As Vice President of Marketing, Mr. Shao is
responsible for developing marketing strategies, product promotions and sales
incentive programs as well as developing new products for launching in the
Peoples Republic of China (PRC). From June 2008
to July 2009, Mr. Shao was the Marketing Director for Shaklee (China) Co. Ltd. a
multi-level marketing company in China, responsible for designing and
implementing marketing programs for nutrition products and household and
personal care products. From August 2007 to May 2008, Mr. Shao was the CEO of
Omnlife China Ltd., a multi-level marketing company in Hefei, Anhui, China. From
November 2004 to August 2007, Mr. Shao was the Marketing Director of Pharmanex
at NuSkin (China) Daily Health Products Co., Ltd. responsible for health food
market programs; he launched Pharmanex products in 2005 and developed product
pipelines for the China market. From 1996 to 2004, Mr. Shao was the Associate
Product Manager of Pfizer Pharmaceutical Ltd. responsible for Zithromax, an
antibiotic medicine, in China. From 1992 to 1995, Mr. Shao was a physician at
Huashan Hospital.
Mr. Shao graduated from Shanghai Medical University with a
Masters degree in Clinical Medicine.
35
Identification of Significant Employees
We have no significant employees, other than Suqun Lin our
president, chief executive officer, secretary, and director, and Chengjie He,
our chief financial officer and treasurer.
Involvement in Certain Legal Proceedings
To the best of our knowledge, none of our directors or
executive officers has, during the past ten years:
1.
been convicted in a criminal proceeding or been subject to a pending
criminal proceeding (excluding traffic violations and other minor
offences);
2.
any bankruptcy petition filed by or against the business or property
of the person, or of any partnership, corporation or business association
of which he was a general partner or executive officer, either at the time
of the bankruptcy filing or within two years prior to that time;
3.
been subject to any order, judgment, or decree, not subsequently
reversed, suspended or vacated, of any court of competent jurisdiction or
federal or state authority, permanently or temporarily enjoining, barring,
suspending or otherwise limiting, his involvement in any type of business,
securities, futures, commodities, investment, banking, savings and loan,
or insurance activities, or to be associated with persons engaged in any
such activity;
4.
been found by a court of competent jurisdiction in a civil action or
by the SEC or the Commodity Futures Trading Commission to have violated a
federal or state securities or commodities law, and the judgment has not
been reversed, suspended, or vacated;
5.
been the subject of, or a party to, any federal or state judicial or
administrative order, judgment, decree, or finding, not subsequently
reversed, suspended or vacated (not including any settlement of a civil
proceeding among private litigants), relating to an alleged violation of
any federal or state securities or commodities law or regulation, any law
or regulation respecting financial institutions or insurance companies
including, but not limited to, a temporary or permanent injunction, order
of disgorgement or restitution, civil money penalty or temporary or
permanent cease-and-desist order, or removal or prohibition order, or any
law or regulation prohibiting mail or wire fraud or fraud in connection
with any business entity; or
6.
been the subject of, or a party to, any sanction or order, not
subsequently reversed, suspended or vacated, of any self-regulatory
organization (as defined in Section 3(a)(26) of the Exchange Act (15
U.S.C. 78c(a)(26)), any registered entity (as defined in Section 1(a)(29)
of the Commodity Exchange Act (7 U.S.C. 1(a)(29)), or any equivalent
exchange, association, entity or organization that has disciplinary
authority over its members or persons associated with a member.
Code of Ethics
Our board of directors has not adopted a code of ethics due to
the fact that we presently only have one director and we are in the development
stage of our operations. We anticipate that we will adopt a code of ethics when
we increase either the number of our directors and officers or the number of our
employees.
Compliance with Section 16(a) of the Securities Exchange Act
of 1934
Our common stock is not registered pursuant to Section 12 of
the Securities Exchange Act of 1934, as amended (the Exchange
Act). Accordingly, our officers, directors, and principal stockholders
are not subject to the beneficial ownership reporting requirements of Section
16(a) of the Exchange Act.
36
AUDIT COMMITTEE
We do not have an audit committee financial expert because we
believe the cost related to retaining a financial expert at this time is
prohibitive. Further, because we have no operations, at the present time, we
believe the services of a financial expert are not warranted.
Committees of the Board
All proceedings of our board of directors were conducted by
resolutions consented to in writing by all the directors and filed with the
minutes of the proceedings of the directors. Such resolutions consented to in
writing by the directors entitled to vote on that resolution at a meeting of the
directors are, according to the corporate laws of the state of Nevada and the
bylaws of our company, as valid and effective as if they had been passed at a
meeting of the directors duly called and held.
Our company currently does not have nominating, compensation
committees or committees performing similar functions nor does our company have
a written nominating, compensation or audit committee charter. Our board of
directors does not believe that it is necessary to have such committees because
it believes that the functions of such committees can be adequately performed by
our directors.
Our company does not have any defined policy or procedure
requirements for shareholders to submit recommendations or nominations for
directors. The directors believe that, given the early stage of our development,
a specific nominating policy would be premature and of little assistance until
our business operations develop to a more advanced level. Our company does not
currently have any specific or minimum criteria for the election of nominees to
the board of directors and we do not have any specific process or procedure for
evaluating such nominees. Our directors assess all candidates, whether submitted
by management or shareholders, and make recommendations for election or
appointment.
A shareholder who wishes to communicate with our board of
directors may do so by directing a written request addressed to our president,
at the address appearing on the first page of this annual report.
We believe that the member of our board of directors is capable
of analyzing and evaluating our consolidated financial statements and
understanding internal controls and procedures for financial reporting. We
believe that retaining an independent director who would qualify as an "audit
committee financial expert" would be overly costly and burdensome and is not
warranted in our circumstances given the early stages of our development and the
fact that we have not generated any material revenues to date. In addition, we
currently do not have nominating, compensation or audit committees or committees
performing similar functions nor do we have a written nominating, compensation
or audit committee charter. Our board of directors does not believe that it is
necessary to have such committees because it believes the functions of such
committees can be adequately performed by our board of directors.
ITEM 11.
EXECUTIVE
COMPENSATION
Compensation Discussion and Analysis
Compensation Objectives
We operate in a highly
competitive and rapidly changing industry. The key objectives of our executive
compensation programs are to:
Supervise and review the affairs of the Company as they
relate to the compensation and benefits of executive officers and
directors of the Company.
Perform any other activities consistent with the
Companys Amended and Restated Memorandum and Articles of
Association and governing law, as the Committee or the Board deems
necessary or appropriate.
37
Our Compensation Program
In carrying out its objectives,
our Board shall review all components of executive and director compensation for
consistency with our compensation philosophy and with the interests of our
shareholders.
The compensation program is
designed to reward each individual named executive officer for his or her
contribution to the advancement of our overall performance and execution of our
goals, ideas and objectives. It is designed to reward and encourage exceptional
performance at the individual level in the areas of organization, creativity and
responsibility while supporting our core values and ambitions. This in turn
aligns the interest of our executive officers with the interests of our
shareholders, and thus with our interests.
Determining Executive Compensation
Our Board generally reviews and
approves the compensation program for executive officers annually after the
close of each year. Reviewing the compensation program at such time allows the
Board to consider the overall performance of the past year and the financial and
operating plans for the upcoming year in determining the compensation program
for the upcoming year.
A named executive
officers base salary is determined by an assessment of his sustained
performance against individual job responsibilities, including, where
appropriate, the impact of his performance on our business results, current
salary in relation to the salary range designated for the job, experience and
mastery, and potential for advancement. Although we do not engage in
benchmarking, the Board may also consider compensation levels with comparable
positions in the industry to evaluate the total compensation decisions that it
makes for our officers.
Role of Executive Officers in Determining Executive
Compensation
The Board reviews and determines
the compensation for our chief officers, which is based on various factors, such
as level of responsibility and contributions to our performance
The Board shall review on at
least an annual basis the scope of responsibilities of the Board and the
Boards performance of its duties.
Employment Agreements
We have not entered into
employment agreements with our senior executive officers. Our Board may adjust
base salaries annually to reflect increases in the cost of living, but it has
not done so to date. An executives base salary may also be increased
if the executives workload substantially increases as a result of our
business expansion. In addition, an executives base salary may be
correspondingly adjusted if the salaries of all of our other employees are
adjusted.
Suqun Lin. We have not
entered into an employment agreement with Mr. Lin, our chief executive officer.
Mr. Zhuo and the Company have mutually agreed to an annual compensation of
USD$10,000. Bonuses will be determined by us in our sole discretion and will be
approved by our Board. Mr. Lin is eligible for participation in any standard
employee benefit plan of the Company that currently exists or may be adopted by
the Company in the future, but not limited to, any retirement plan, and travel
holiday policy.
38
Chenjie He. We have not
entered into an employment agreement with Mr. He, our chief financial officer.
Mr. He and the Company have mutually agreed to an annual compensation of
USD$9,000. Bonuses will be determined by us in our sole discretion and will be
approved by our Board. Mr. He is eligible for participation in any standard
employee benefit plan of the Company that currently exists or may be adopted by
the Company in the future, but not limited to, any retirement plan, and travel
holiday policy.
Jian Shao. We have not
entered into an employment agreement with Mr. Shao, our chief business
development officer. Mr. Shao and the Company have mutually agreed to an annual
compensation of USD$9,000. Bonuses will be determined by us in our sole
discretion and will be approved by our Board. Mr. Shao is eligible for
participation in any standard employee benefit plan of the Company that
currently exists or may be adopted by the Company in the future, but not limited
to, any retirement plan, and travel holiday policy.
Summary Compensation of Named Executive Officers
The particulars of the compensation paid to the following
persons:
(a)
principal executive officer;
(b)
each of our two most highly compensated executive officers who were
serving as executive officers at the end of the years our ended April 30,
2016 ,2015 and 2014; and
(c)
up to two additional individuals for whom disclosure would have been
provided under (b) but for the fact that the individual was not serving as
our executive officer at the end of the years ended April 30, 2016 ,2015
and 2014;
who we will collectively refer to as the named executive
officers of our company, are set out in the following summary compensation
table, except that no disclosure is provided for any named executive officer,
other than our principal executive officers, whose total compensation did not
exceed $100,000 for the respective fiscal year:
SUMMARY COMPENSATION TABLE
Name and Principal Position
Year
Salary ($)
Bonus ($)
Stock Awards ($)
Option Awards ($)
Non-Equity Incentive Plan
Compensation ($)
Nonqualified Deferred
Compensation Earnings ($)
All Other
Compensation ($)
Total ($)
Suqun Lin(1)
2016
10,000
0
0
0
0
0
0
10,000
President,
2015
10,000
0
0
0
0
0
0
10,000
ChiefExecutiveOfficer,SecretaryandDirector
2014
833
0
0
0
0
0
0
833
Chengjie He(2)
2016
9,000
0
0
0
0
0
0
9,000
Chief
2015
9,000
0
0
0
0
0
0
9,000
FinancialOfficer andTreasurer
2014
750
0
0
0
0
0
0
750
Jian
Shao(2)
2016
9,000
0
0
0
0
0
0
9,000
Chief
2015
9,000
0
0
0
0
0
0
9,000
BusinessDevelopmentOfficer
2014
750
0
0
0
0
0
0
750
39
(1)
Appointed on March 12, 2013. The Company modified its compensation
policy and started to compensate Mr. Lin on April 1, 2014.
(2)
Appointed on April 1, 2014.
There are no current employment agreements between our company
and our three officers. The compensation discussed herein addresses all
compensation awarded to, earned by, or paid to our named executive officer.
There are no other stock option plans, retirement, pension, or profit sharing
plans for the benefit of our officers and directors other than as described
herein.
Outstanding Equity Awards at 2016 Fiscal Year End
As of April 30, 2016, there were
no outstanding equity awards for our named executive officers.
Long-Term Incentive Plans
There are no arrangements or
plans in which we provide pension, retirement or similar benefits for directors
or executive officers. Although we do not have a formal broad based bonus plan,
we may award bonuses on case-by-case basis depending on the terms of specific of
employment agreements and other arrangements based on our financial performance
as well as the executives performance which are determined by the
Board in its sole discretion. We do not have any material bonus or profit
sharing plans pursuant to which cash or non-cash compensation is or may be paid
to our directors or executive officers, except that stock options may be granted
at the discretion of our Compensation Committee.
As of the date of this 10K, we
have no compensatory plan or arrangement with respect to any officer that
results or will result in the payment of compensation in any form from the
resignation, retirement or any other termination of employment of such
officers employment with our company, from a change in control of our
company or a change in such officers responsibilities following a
change in control where the value of such compensation exceeds $60,000 per
executive officer.
Director Compensation
We did not pay compensation to
any non-employee directors during the fiscal year 2016.
We do not pay our directors in
connection with attending individual Board meetings, but we reimburse our
directors for expenses incurred in connection with such meetings.
40
Pension, Retirement or Similar Benefit Plans
There are no arrangements or plans in which we provide pension,
retirement or similar benefits for directors or executive officers. We have no
material bonus or profit sharing plans pursuant to which cash or non-cash
compensation is or may be paid to our directors or executive officers, except
that stock options may be granted at the discretion of the board of directors or
a committee thereof.
Indebtedness of Directors, Senior Officers, Executive
Officers and Other Management
None of our directors or executive officers or any associate or
affiliate of our company during the last two fiscal years, is or has been
indebted to our company by way of guarantee, support agreement, letter of credit
or other similar agreement or understanding currently outstanding.
ITEM 12.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENTAND RELATED STOCKHOLDER MATTERS
The following table provides certain information regarding the
ownership of our common stock, as of July 28, 2016 by:
-
each of our executive officers;
-
each director;
-
each person known to us to own more than 5% of
our outstanding common stock; and
-
all of our executive officers and directors and
as a group.
Name and Address
of
Amount and Nature of
Title
Beneficial Owner
Beneficial
Ownership(1)
Percentage
of Class
Common Stock
Suqun Lin(2)
Nil
0%
No. 30 N. Zhongshan Road, Floor
40,
shares of common stock
Guluo District, Nanjing , Jiangsu
Province, P.R.C. 210008
Common Stock
Xijian Zhou
677,000,000(3)
60.4%
No. 30 N. Zhongshan Road, Floor
38,
shares of common stock (direct)
Common Stock
Chengjie He
No. 30 N. Zhongshan Road, Floor
38,
Nil
0%
Guluo District, Nanjing
shares of common stock
Jiangsu Province, P.R.C. 210008
(1)
The number and percentage of shares beneficially owned is determined
under rules of the SEC and the information is not necessarily indicative
of beneficial ownership for any other purpose. Under such rules,
beneficial ownership includes any shares as to which the individual has
sole or shared voting power or investment power and also any shares which
the individual has the right to acquire within 60 days through the
exercise of any stock option or other right. The persons named in the
table have sole voting and investment power with respect to all shares of
common stock shown as beneficially owned by them, subject to community
property laws where applicable and the information contained in the
footnotes to this table.
41
(2)
Suqun Lin is our president, secretary, Chief Executive Officer and
director.
(3)
The percent of class is based on 1,120,343,373 shares of common stock
issued and outstanding as of April 30, 2016.
CHANGES IN CONTROL
On March 12, 2013, pursuant to the terms of a share exchange
agreement, Mr. Xijian Zhou acquired an aggregate of 750,000,000 shares of our
common stock, representing 82.92% of our issued and outstanding shares as of
March 12, 2013. Effective March 12, 2013, (a) Mr. Liang Wei Wang resigned as
president, secretary, treasurer, and director of our company; (b) Mr. Suqun Lin,
was appointed as our sole director, president, secretary and treasurer. Our
company did not receive any proceeds from the transaction. In accordance with
the terms of the agreement our company at the closing of the agreement had no
assets and liabilities.
42
ITEM 13.
CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS; AND DIRECTORINDEPENDENCE
We have not entered into any transaction since the beginning of
the last fiscal year with any director, executive officer, director nominee, 5%
or more shareholder, nor have we entered into transaction with any member of the
immediate families of the foregoing person (including spouse, parents, children,
siblings, and in-laws) or is any such transaction proposed, except as follows:
For the year ended April 30, 2016, the Companys
majority shareholder did not advanced the Company for general expenses and the
Company made repayments of shareholders advances in the amount of
$3,294. For the year ended April 30, 2015, the Companys majority
shareholder advanced the Company $8,290 for general expenses and professional
fees and the Company repaid the major shareholder $44,676. The advances are
non-interest bearing, due upon demand and unsecured. For the year ended April 30, 2014, the Companys majority shareholder advanced the Company $60,782 for general expenses and professional fees and the Company repaid the major shareholder $48,040. The advances are non-interest bearing, due upon demand and unsecured. At April 30, 2016 and 2015,
the Companys due to related parties amounted to $235 and $3,529,
respectively.
Director Independence
Presently, we are not currently listed on a securities exchange
that requires us to comply with director independence requirements. In
determining whether our directors are independent, however, we intend to comply
with the rules of NASDAQ. The board of directors will also consult with counsel
to ensure that the boards of directors determinations are consistent
with those rules and all relevant securities and other laws and regulations
regarding the independence of directors, including those adopted under the
Sarbanes-Oxley Act of 2002 with respect to the independence of audit committee
members. Nasdaq Listing Rule 5605(a)(2)defines an independent
director generally as a person other than an Executive Officer or
employee of the Company or any other individual having a relationship which, in
the opinion of the Company's board of directors, would interfere with the
exercise of independent judgment in carrying out the responsibilities of a
director. We currently act with only one director and have determined that he is
not an independent director as defined in NASDAQ
Marketplace Rule 4200(a)(15).
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
The following table sets forth the fees billed by our principal
independent accountants, RBSM LLP, for of our last three fiscal years for the
categories of services indicated.
Years Ended
April 30, 2016
April 30, 2015
April 30, 2014
Audit Fees
$ 37,000
$ 18,000
$ 8,000
Audit Related Fees
4,000
8,000
-
Tax Fees
6,000
5,000
-
All Other Fees
-
-
-
Total
$ 47,000
$ 31,000
$ 8,000
Audit fees. Consists of fees billed for the audit of our
annual financial statements, review of our Form 10-K, review of our interim
financial statements included in our Form 10-Q and services that are normally
provided by the accountant in connection with year-end statutory and regulatory
filings or engagements.
Audit-related fees. Consists of fees billed for
assurance and related services that are reasonably related to the performance of
the audit or review of our financial statements and are not reported under
Audit Fees, review of our Form S-1 filings and services
that are normally provided by the accountant in connection with non-year-end
statutory and regulatory filings or engagements.
43
Tax fees. Consists of professional services rendered by
a company aligned with our principal accountant for tax compliance, tax advice
and tax planning.
Other fees. The services provided by our accountants
within this category consisted of advice and other services relating to SEC
matters, registration statement review, accounting issues and client
conferences.
Our board of directors pre-approves all services provided by
our independent auditors. All of the above services and fees were reviewed and
approved by the board of directors either before or after the respective
services were rendered.
Our board of directors has considered the nature and amount of
fees billed by our independent auditors and believes that the provision of
services for activities unrelated to the audit is compatible with maintaining
our independent auditors independence.
44
PART IV
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
(a)
Financial Statements
(1)
Financial statements for our company are listed in the index under
Item 8 of this document;
(2)
All financial statement schedules are omitted because they are not
applicable, not material or the required information is shown in the
financial statements or notes thereto.
(b)
Exhibits
Exhibit
Description
Number
(3)
(i) Articles of
Incorporation; (ii) Bylaws
3.1
Articles of Incorporation (incorporated by
reference to our Registration Statement on Form S-1 filed on May 31, 2011)
3.2
Bylaws (incorporated by
reference to our Registration Statement on Form S-1 filed on May 31, 2011)
3.3
Certificate of Amendment (incorporated by
reference to our Current Report on Form 8-K filed on April 11, 2013)
(10)
Material Contracts
10.1
Consultant Agreement between the Company and LP
Funding, LLC dated May 10, 2014 (incorporated by reference to our Current
Report on Form 10-Q filed on September 12, 2014)
In accordance with Section 13 or 15(d) of the Exchange Act, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized
Joymain International Development Group Inc.
Dated: August 22, 2016
By: /s/ Suqun Lin
Suqun Lin
President, Chief Executive Officer,
Secretary and Director
Pursuant to the requirements of 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.Each person
whose signature appears below hereby authorizes Suqun Lin as his true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution
for him or her and in his or her name, place and stead, in any and all
capacities to sign any and all amendments to this report, and to file the same,
with all exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission.
Signature
Title
Date
/s/ Suqun Lin
President, Chief Executive Officer
August 22, 2016
Suqun Lin
Secretary and Director
/s/ Chengjie He
Chief Financial Officer and
August 22, 2016
Chengjie He
Treasurer
( Principal Accounting Officer)
/s/Jian Shao
Jian Shao
Chief Business Development Officer
August 22, 2016
46
EX-31.1
2
exhibit31-1.htm
EXHIBIT 31.1
Joymain International Development Group Inc.: Exhibit 31.1 - Filed by newsfilecorp.com
EXHIBIT 31.1
CERTIFICATION PURSUANT TO 18 U.S.C. ss 1350, AS
ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Suqun Lin, certify that:
1. I have reviewed this annual
report on Form 10-K of Joymain International Development Group Inc.;
2. Based on my knowledge,
this report does not contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading with respect
to the period covered by this report;
3. Based on my knowledge,
the financial statements, and other financial information included in this
report, fairly present in all material respects the financial condition, results
of operations and cash flows of the registrant as of, and for, the periods
presented in this report;
4. The registrant's other
certifying officer(s) and I are responsible for establishing and maintaining
disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e)
and 15d-15(e)) and internal control over financial reporting (as defined in
Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a)
Designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our supervision,
to ensure that material information relating to the registrant, including
its consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this report is being
prepared;
(b)
Designed such internal control over financial reporting, or caused
such internal control over financial reporting to be designed under our
supervision, 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;
(c)
Evaluated the effectiveness of the registrant's disclosure controls
and procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the end of
the period covered by this report based on such evaluation; and
(d)
Disclosed in this report any change in the registrant's internal
control over financial reporting that occurred during the registrant's
most recent fiscal quarter (the registrant's fourth fiscal quarter in the
case of an annual report) that has materially affected, or is reasonably
likely to materially affect, the registrant's internal control over
financial reporting; and
5. The registrant's other
certifying officer(s) and I have disclosed, based on our most recent evaluation
of internal control over financial reporting, to the registrant's auditors and
the audit committee of the registrant's board of directors (or persons
performing the equivalent functions):
(a)
All significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant's ability to record,
process, summarize and report financial information; and
(b)
Any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal control
over financial reporting.
Date: August 22, 2016
/s/ Suqun
Lin
Suqun Lin
President, Chief Executive Officer, Secretary and
Director
EX-31.2
3
exhibit31-2.htm
EXHIBIT 31.2
Joymain International Development Group Inc.: Exhibit 31.2 - Filed by newsfilecorp.com
EXHIBIT 31.2
CERTIFICATION PURSUANT TO 18 U.S.C. ss 1350, AS
ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Chengjie He, certify that:
1. I have reviewed this annual
report on Form 10-K of Joymain International Development Group Inc.;
2. Based on my knowledge,
this report does not contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading with respect
to the period covered by this report;
3. Based on my knowledge,
the financial statements, and other financial information included in this
report, fairly present in all material respects the financial condition, results
of operations and cash flows of the registrant as of, and for, the periods
presented in this report;
4. The registrant's other
certifying officer(s) and I are responsible for establishing and maintaining
disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e)
and 15d-15(e)) and internal control over financial reporting (as defined in
Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a)
Designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our supervision,
to ensure that material information relating to the registrant, including
its consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this report is being
prepared;
(b)
Designed such internal control over financial reporting, or caused
such internal control over financial reporting to be designed under our
supervision, 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;
(c)
Evaluated the effectiveness of the registrant's disclosure controls
and procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the end of
the period covered by this report based on such evaluation; and
(d)
Disclosed in this report any change in the registrant's internal
control over financial reporting that occurred during the registrant's
most recent fiscal quarter (the registrant's fourth fiscal quarter in the
case of an annual report) that has materially affected, or is reasonably
likely to materially affect, the registrant's internal control over
financial reporting; and
5. The registrant's other
certifying officer(s) and I have disclosed, based on our most recent evaluation
of internal control over financial reporting, to the registrant's auditors and
the audit committee of the registrant's board of directors (or persons
performing the equivalent functions):
(a)
All significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant's ability to record,
process, summarize and report financial information; and
(b)
Any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal control
over financial reporting.
Date: August 22, 2016
/s/ Chengjie
He
Chengjie He
Principal Financial Officer, Treasurer and Principal
Accounting Officer
EX-32.1
4
exhibit32-1.htm
EXHIBIT 32.1
Joymain International Development Group Inc.: Exhibit 32.1 - Filed by newsfilecorp.com
EXHIBIT 32.1
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED
PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
I, Suqun Lin, chief executive officer of Joymain International
Development Group Inc. (the “ Company”), and I, Chengjie He,
chief financial officer of the Company, hereby certify, pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002, that:
(1)
the Annual Report on Form 10-K of the Company for the year ended April
30, 2016 (the "Report") fully complies with the requirements of Section
13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)
the information contained in the Report fairly presents, in all
material respects, the financial condition and results of operations of
Joymain International Development Group Inc.
Dated: August 22, 2016
/s/
Suqun Lin
Suqun Lin
President, Chief Executive Officer, Secretary
and
Director
Joymain International Development Group Inc.
/s/
Chengjie He
Chengjie He
Principal Financial Officer and Principal
Accounting Officer
Joymain International Development Group Inc.
A signed original of this written statement required by Section
906, or other document authenticating, acknowledging, or otherwise adopting the
signature that appears in typed form within the electronic version of this
written statement required by Section 906, has been provided to Joymain
International Development Group Inc. and will be retained by Joymain
International Development Group Inc. and furnished to the Securities and
Exchange Commission or its staff upon request.
EX-101.INS
5
jigd-20160430.xml
XBRL INSTANCE FILE
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<b>NOTE 1. ORGANIZATION AND BUSINESS OPERATIONS</b>
</p>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">
Joymain International Development Group Inc. (f/k/a Advento, Inc.) (“the Company”, “we", “ us”, “our”) was incorporated under the laws of the State of Nevada, U.S. on August 4, 2010 under the name Advento, Inc. The Company develops, sources, markets and distributes healthcare related consumer products in the global market On March 12, 2013, Mr. Xijian Zhou acquired an aggregate of
750,000,000
shares of the Company’ s common stock, representing
82.92% of our issued and outstanding shares as of March 12, 2013. Effective March 12, 2013, (a) Mr. Liang Wei Wang resigned as the Company’ s president, secretary, treasurer, and director of the Company; (b) Mr. Suqun Lin, was appointed as the Company’ s sole director, president, secretary and treasurer. Effective March 28, 2013, the Nevada Secretary of State accepted for filing of a Certificate of Amendment to the Company’ s Articles of Incorporation to change the Company’ s name from Advento, Inc. to Joymain International Development Group Inc. and to increase its authorized capital from
75,000,000
to
1,500,000,000
shares of common stock, par value of $0.001. These amendments became effective on April 10, 2013 upon approval from the Financial Industry Regulatory Authority (“FINRA”). Also effective April 10, 2013, pursuant to a
300
new for one (1) old forward split, the Company’ s issued and outstanding shares of common stock increased from
3,015,000
to
904,500,000
shares, par value of $0.001. Information regarding shares of common stock (except par value per share), discount on stock issued, and net (loss) income per common share for all periods presented reflects the three hundred-for-one forward split of the Company’ s common stock.
</p>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">In connection with the change of control, the Company changed its business operation plan to develop, source, market and distribute healthcare related consumer products in the global market and possibly acquire an existing target company or business in the related field which operates in the United States.</p>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">
In May 2014, The Company acquired a HK trading company, Dao Sheng Trading Limited (“Dao Sheng”) for HK$10,000. Dao Sheng was incorporated in December 2013 and had no assets or liabilities at the time of the acquisition. The Company also set up Joymain International Intellectual Property Limited in Hong Kong in May 2014. The Company considers Hong Kong as an ideal location to connect to all Asian markets and it provides a comprehensive and advanced legal system for trading and intellectual property protection.
</p>7500000000.82927500000015000000000.00130030150009045000000.00110000<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">
<b>NOTE 2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES</b>
</p>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">
<b>Basis of Presentation.</b>
</p>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">The consolidated financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America and are presented in US dollars. The Company’s consolidated financial statements included the financial statements of its wholly-owned subsidiaries, Dao Sheng and Joymain International Intellectual Property Limited. All significant intercompany accounts and transactions have been eliminated in consolidation.</p>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">
<b>Going Concern</b>
</p>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">
The consolidated financial statements have been prepared on a going concern basis which assumes the Company will be able to realize its assets and discharge its liabilities in the normal course of business for the foreseeable future. The Company has incurred losses since inception resulting in an accumulated deficit of $14,606,652
as of April 30, 2016 and further losses are anticipated in the development of its business, which raise substantial doubt about the Company’ s ability to continue as a going concern. The ability to continue as a going concern is dependent upon the Company generating profitable operations in the future and/or to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. Management intends to finance operating costs over the next twelve months with existing cash on hand and loans from directors and or sale of common stock.
</p>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">
The Company expects to depend on outside capital for its future business developments. Such outside capital will include proceeds from the issuance of equity securities and may include commercial borrowing. There can be no assurance that capital will be available as necessary to meet these development costs or, if the capital is available, that it will be on terms acceptable to the Company. The Company has a registration statement on Form S-1, effective on August 1, 2014, pursuant to which the Company planned to raise up to $12
million in equity. The registration statement expired on November 28, 2014 and the Company raised $10,150
in the offering.
</p>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">The issuances of additional equity securities by the Company may result in a significant dilution in the equity interests of its current stockholders. Obtaining commercial loans, assuming those loans would be available, will increase the Company's liabilities and future cash commitments.</p>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">However, there can be no assurance that these arrangements will be sufficient to fund its ongoing capital expenditures, working capital, and other cash requirements. The outcome of these matters cannot be predicted at this time.</p>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">There can be no assurance that any additional financings will be available to the Company on satisfactory terms and conditions, if at all. In the event we are unable to continue as a going concern, we may elect or be required to seek protection from our creditors by filing a voluntary petition in bankruptcy or may be subject to an involuntary petition in bankruptcy. To date, management has not considered this alternative, nor does management view it as a likely occurrence.</p>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">The accompanying consolidated financial statements do not include any adjustments related to the recoverability or classification of asset-carrying amounts or the amounts and classification of liabilities that may result should the Company be unable to continue as a going concern.</p>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">
<b>Cash and Cash Equivalents</b>
</p>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">
The Company considers all highly liquid instruments with a maturity of three months or less at the time of issuance to be cash equivalents. The Company maintains cash and cash equivalents with a financial institution in the U.S. Cash and cash equivalents consisted of cash and money market accounts at April 30, 2016. Financial instruments that potentially subject the Company to concentration of credit risk consist of cash accounts in a financial institution which, at times may exceed the Federal depository insurance coverage of $250,000. As of April 30, 2016 and 2015, the Company had approximately $867,000
and $629,000
in excess of the federally-insured limits, respectively. The Company has not experienced losses on these accounts as of the date of this report.
</p>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">
<b>Use of Estimates and Assumptions</b>
</p>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates include the useful life of property and equipment, valuation of deferred tax assets, and the value of stock-based compensation. Actual results could differ from those estimates.</p>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">
<b>Inventories</b>
</p>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">Inventories, consisting of the Company’ s Yoluxey products, are stated at the lower of cost or market (estimated net realizable value) utilizing the weighted average method. An allowance is established when management determines that certain inventories may not be saleable. If inventory costs exceed expected market value due to obsolescence or quantities in excess of expected demand, the Company will record reserves for the difference between the cost and the market value. These reserves are recorded based on estimates. The Company works with its vendor and customer to arrange the drop shipments for its inventories and the inventories are shipped directly to the ports designated by the Company’ s customer from the manufacture factory without going through the Company’ s warehouse to conserve shipping costs. As of April 30, 2016 and 2015, the Company did not have inventories on hand and there is no reserve for obsolete or slow-moving inventories necessary.</p>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">
<b>Advance to Suppliers</b>
</p>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">The Company periodically makes advances to vendors for purchases of products for resale, and records these purchases as advance to suppliers.</p>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">
<b>Fair Value of Financial Instruments</b>
</p>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">The Company adopted ASC 820, Fair Value Measurements and Disclosure (“ASC 820”) for assets and liabilities measured at fair value on a recurring basis. ASC 820 establishes a common definition for fair value to be applied to existing generally accepted accounting principles that require the use of fair value measurements, establishes a framework for measuring fair value and expands disclosure about such fair value measurements. The adoption of ASC 820 did not have an impact on the Company’ s financial position or operating results, but did expand certain disclosures.</p>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">ASC 820 defines fair value as the price that would be received upon sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Additionally, ASC 820 requires the use of valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. These inputs are prioritized below:</p>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">
 Level 1: Observable inputs such as quoted market prices in active markets for identical assets or liabilities
<br/>
 Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data
<br/>
 Level 3: Unobservable inputs for which there is little or no market data, which require the use of the reporting entity’ s own assumptions.
</p>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">The following table sets forth by level within the fair value hierarchy of the Company’ s financial assets that were accounted for at fair value on a recurring basis as of April 30, 2016 and 2015:</p>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr valign="top">
<td align="center" nowrap="nowrap" valign="bottom"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="8%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="center" colspan="4" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="19%">
<b>April 30, 2016</b>
</td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="8%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="8%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="center" colspan="4" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="19%">
<b>April 30, 2015</b>
</td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="8%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td align="center" nowrap="nowrap" valign="bottom"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="8%">
<b>Level 1</b>
</td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="8%">
<b>Level 2</b>
</td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="8%">
<b>Level 3</b>
</td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="8%">
<b>Total</b>
</td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="8%">
<b>Level 1</b>
</td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="8%">
<b>Level 2</b>
</td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="8%">
<b>Level 3</b>
</td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="8%">
<b>Total</b>
</td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td>
</tr>
<tr>
<td align="center" nowrap="nowrap" valign="bottom"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="8%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="8%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="8%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="8%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="8%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="8%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="8%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="8%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#e6efff" valign="bottom">Marketable securities</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="8%">
255,824
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="8%">
 
—
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="8%">
 
—
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="8%">
255,824
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="8%">
359,857
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="8%">
 
—
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="8%">
 
—
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="8%">
359,857
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td align="left" valign="bottom">Total assets at fair value</td>
<td align="left" valign="bottom" width="1%">$</td>
<td align="right" valign="bottom" width="8%">
255,824
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%">$</td>
<td align="right" valign="bottom" width="8%">
 
—
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%">$</td>
<td align="right" valign="bottom" width="8%">
 
—
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%">$</td>
<td align="right" valign="bottom" width="8%">
255,824
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%">$</td>
<td align="right" valign="bottom" width="8%">
359,857
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%">$</td>
<td align="right" valign="bottom" width="8%">
 
—
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%">$</td>
<td align="right" valign="bottom" width="8%">
 
—
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%">$</td>
<td align="right" valign="bottom" width="8%">
359,857
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
</table>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">The carrying values of prepaid expenses, advance to suppliers, accounts payables, due to related parties, advance from customer and other payables approximate their fair values due to the short maturities of these instruments.</p>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">
<b>Stock-based Compensation</b>
</p>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">Stock-based compensation is accounted for based on the requirements of the Share-Based Payment topic of ASC Topic 718 which requires recognition in the financial statements of the cost of employee and director services received in exchange for an award of equity instruments over the period the employee or director is required to perform the services in exchange for the award (presumptively, the vesting period). The Financial Accounting Standards Board (“FASB”) also requires measurement of the cost of employee and director services received in exchange for an award based on the grant-date fair value of the award.</p>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">Pursuant to ASC Topic 505-50, for share-based payments to consultants and other third-parties, compensation expense is determined at the “measurement date.” The expense is recognized over the vesting period of the award. Until the measurement date is reached, the total amount of compensation expense remains uncertain. The Company records compensation expense based on the fair value of the award at the reporting date. The awards to consultants and other third-parties are then revalued, or the total compensation is recalculated, based on the then current fair value, at each subsequent reporting date.</p>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">To date, the Company has not adopted a stock option plan and has not granted any stock options.</p>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">
<b>Income Taxes</b>
</p>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">The Company has adopted Accounting Standards Codification subtopic 740-10, Income Taxes (“ASC 740-10") which requires the recognition of deferred tax liabilities and assets for the expected future tax consequences of events that have been included in the financial statement or tax returns. Under this method, deferred tax liabilities and assets 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. Valuation allowances are recorded to reduce the deferred tax assets to an amount that it is more likely than not be realized.</p>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">We apply the provisions of ASC 740-10-50, “Accounting for Uncertainty in Income Taxes”, which provides clarification related to the process associated with accounting for uncertain tax positions recognized in our consolidated financial statements. Audit periods remain open for review until the statute of limitations has passed. The completion of review or the expiration of the statute of limitations for a given audit period could result in an adjustment to the Company’ s liability for income taxes. Any such adjustment could be material to the Company’ s results of operations for any given quarterly or annual period based, in part, upon the results of operations for the given period. As of April 30, 2016, the Company had no uncertain tax positions, and will continue to evaluate for uncertain positions in the future.</p>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">
<b>Basic and Diluted Loss Per Share</b>
</p>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">The Company computes loss per share in accordance with “ASC-260”, “Earnings per Share” which requires presentation of both basic and diluted earnings per share on the face of the statement of operations. Basic loss per share is computed by dividing net loss available to common shareholders by the weighted average number of outstanding common shares during the period. Diluted loss per share gives effect to all dilutive potential common shares outstanding during the period. Dilutive loss per share excludes all potential common shares if their effect is anti-dilutive. The Company has no potential dilutive instruments and accordingly basic loss and diluted loss per share are equal.</p>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">
<b>Fiscal Periods</b>
</p>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">The Company's fiscal year end is April 30.</p>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">
<b>Related Parties</b>
</p>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">Parties are considered to be related to the Company if the parties, directly or indirectly, through one or more intermediaries, control, are controlled by, or are under common control with the Company. Related parties also include principal owners of the Company, its management, members of the immediate families of principal owners of the Company and its management and other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. The Company discloses all related party transactions. All transactions shall be recorded at fair value of the goods or services exchanged. Property purchased from a related party is recorded at the cost to the related party and any payment to or on behalf of the related party in excess of the cost is reflected as a distribution to related party.</p>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">
<b>Revenue Recognition</b>
</p>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">Pursuant to the guidance of ASC Topic 605, the Company recognizes revenue from product sales to its customers when: (1) title and risk of loss are transferred (in general, these conditions occur at either point of shipment or point of destination, depending on the terms of sale); (2) persuasive evidence of an arrangement exists; (3) the Company has no continuing obligations to the customer; and (4) collection of the related accounts receivable is reasonably assured.</p>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">
<b>Advance from Customers</b>
</p>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">The Company requires its customer to make payments prior to the products are shipped. Any payments received prior to the products are shipped to the customer’ s point of destination and such advance received are recorded as advance from customers.</p>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">
<b>Foreign Currency Translation.</b>
</p>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">The reporting currency of the Company is the U.S. dollar. The functional currency of the parent company is the U.S. dollar and the functional currency of the Company’ s subsidiaries is the Hong Kong Dollar. For the subsidiaries, whose functional currencies are the Hong Kong Dollar, results of operations and cash flows are translated at average exchange rates during the period, assets and liabilities are translated at the unified exchange rate at the end of the period, and equity is translated at historical exchange rates. As a result, amounts relating to assets and liabilities reported on the statements of cash flows may not necessarily agree with the changes in the corresponding balances on the balance sheets. Translation adjustments resulting from the process of translating the local currency financial statements into U.S. dollars are included in determining comprehensive income. Assets and liabilities denominated in foreign currencies are translated into the functional currency at the exchange rates prevailing at the balance sheet date with any transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in the results of operations as incurred. Transactions denominated in foreign currencies are translated into the functional currency at the exchange rates prevailing on the transaction dates. During the year ended April 30, 2016, 2015, and 2014, the Company’ s subsidiaries have no assets or liabilities and they did not have any business activities. There was no cumulative translation adjustment and no effect of exchange rate changes on cash for the year ended April 30, 2015 and 2016.</p>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">
<b>Comprehensive Loss</b>
</p>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">Comprehensive loss is comprised of net loss and all changes to the statements of stockholders’ equity, except those due to investments by stockholders, changes in paid-in capital and distributions to stockholders. The Company did not have any other comprehensive gain (loss) for fiscal years 2016, 2015 and 2014.</p>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">
<b>Concentration of Credit Risk</b>
</p>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">Financial instruments which potentially subject the Company to concentrations of credit risk consist principally of cash and marketable securities. We place our cash with high credit quality financial institutions in the United States. The Company has not experienced any losses in such accounts through April 30, 2016.</p>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">All of the Company’ s sales are to one customer whose ability to pay is dependent upon the industry economics prevailing in these areas; however, the Company believes that the concentration of credit risk with respect to sales is limited due to the requirements for the customer to make payments prior to shipments. The Company also perform ongoing credit evaluations of its customer to help further reduce potential credit risk. However, if the Company is not able to increase the number of customers and loses its sole customer, there will be significant risks for the Company to continue to generate revenue.</p>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">
<b>Recent Accounting Pronouncements</b>
</p>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">
In March 2016, the FASB issued ASU 2016-09, "
<i>Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting</i>
". Several aspects of the accounting for share-based payment award transactions are simplified, including: (a) income tax consequences; (b) classification of awards as either equity or liabilities; and (c) classification on the statement of cash flows. The amendments are effective for public companies for annual periods beginning after December 15, 2016, and interim periods within those annual periods. Early adoption is permitted for any interim or annual period. The Company is currently in the process of evaluating the impact of the adoption on its consolidated financial statements.
</p>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">
In July 2015, The FASB has issued Accounting Standards Update (ASU) No. 2015-11,
<i>Inventory (Topic 330): Simplifying the Measurement of Inventory.</i>
Topic 330, Inventory, currently requires an entity to measure inventory at the lower of cost or market. Market could be replacement cost, net realizable value, or net realizable value less an approximately normal profit margin. The amendments do not apply to inventory that is measured using last-in, first-out (LIFO) or the retail inventory method. The amendments apply to all other inventory, which includes inventory that is measured using first-in, first-out (FIFO) or average cost. An entity should measure in scope inventory at the lower of cost and net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. Subsequent measurement is unchanged for inventory measured using LIFO or the retail inventory method. The amendments in this Update more closely align the measurement of inventory in GAAP with the measurement of inventory in International Financial Reporting Standards. For public business entities, the amendments are effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2016, and interim periods within fiscal years beginning after December 15, 2017. The amendments should be applied prospectively with earlier application permitted as of the beginning of an interim or annual reporting period. The adoption of ASU 2015-11 is not expected to have a material impact on the Company’ s consolidated financial statements.
</p>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">In November 2015, the FASB issued new accounting guidance regarding the balance sheet classification of deferred income taxes. The primary objective of this accounting guidance is to classify all deferred income tax assets and liabilities as noncurrent in a classified statement of financial position. There was no material impact to results of operations as the result of adoption of the accounting pronouncement.</p>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">There are various other updates recently issued, most of which represented technical corrections to the accounting literature or application to specific industries and are not expected to a have a material impact on the Company's financial position, results of operations or cash flows.</p><p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">
<b>Basis of Presentation.</b>
</p>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">The consolidated financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America and are presented in US dollars. The Company’s consolidated financial statements included the financial statements of its wholly-owned subsidiaries, Dao Sheng and Joymain International Intellectual Property Limited. All significant intercompany accounts and transactions have been eliminated in consolidation.</p><p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">
<b>Going Concern</b>
</p>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">
The consolidated financial statements have been prepared on a going concern basis which assumes the Company will be able to realize its assets and discharge its liabilities in the normal course of business for the foreseeable future. The Company has incurred losses since inception resulting in an accumulated deficit of $14,606,652
as of April 30, 2016 and further losses are anticipated in the development of its business, which raise substantial doubt about the Company’ s ability to continue as a going concern. The ability to continue as a going concern is dependent upon the Company generating profitable operations in the future and/or to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. Management intends to finance operating costs over the next twelve months with existing cash on hand and loans from directors and or sale of common stock.
</p>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">
The Company expects to depend on outside capital for its future business developments. Such outside capital will include proceeds from the issuance of equity securities and may include commercial borrowing. There can be no assurance that capital will be available as necessary to meet these development costs or, if the capital is available, that it will be on terms acceptable to the Company. The Company has a registration statement on Form S-1, effective on August 1, 2014, pursuant to which the Company planned to raise up to $12
million in equity. The registration statement expired on November 28, 2014 and the Company raised $10,150
in the offering.
</p>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">The issuances of additional equity securities by the Company may result in a significant dilution in the equity interests of its current stockholders. Obtaining commercial loans, assuming those loans would be available, will increase the Company's liabilities and future cash commitments.</p>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">However, there can be no assurance that these arrangements will be sufficient to fund its ongoing capital expenditures, working capital, and other cash requirements. The outcome of these matters cannot be predicted at this time.</p>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">There can be no assurance that any additional financings will be available to the Company on satisfactory terms and conditions, if at all. In the event we are unable to continue as a going concern, we may elect or be required to seek protection from our creditors by filing a voluntary petition in bankruptcy or may be subject to an involuntary petition in bankruptcy. To date, management has not considered this alternative, nor does management view it as a likely occurrence.</p>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">The accompanying consolidated financial statements do not include any adjustments related to the recoverability or classification of asset-carrying amounts or the amounts and classification of liabilities that may result should the Company be unable to continue as a going concern.</p><p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">
<b>Cash and Cash Equivalents</b>
</p>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">
The Company considers all highly liquid instruments with a maturity of three months or less at the time of issuance to be cash equivalents. The Company maintains cash and cash equivalents with a financial institution in the U.S. Cash and cash equivalents consisted of cash and money market accounts at April 30, 2016. Financial instruments that potentially subject the Company to concentration of credit risk consist of cash accounts in a financial institution which, at times may exceed the Federal depository insurance coverage of $250,000. As of April 30, 2016 and 2015, the Company had approximately $867,000
and $629,000
in excess of the federally-insured limits, respectively. The Company has not experienced losses on these accounts as of the date of this report.
</p><p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">
<b>Use of Estimates and Assumptions</b>
</p>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates include the useful life of property and equipment, valuation of deferred tax assets, and the value of stock-based compensation. Actual results could differ from those estimates.</p><p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">
<b>Inventories</b>
</p>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">Inventories, consisting of the Company’ s Yoluxey products, are stated at the lower of cost or market (estimated net realizable value) utilizing the weighted average method. An allowance is established when management determines that certain inventories may not be saleable. If inventory costs exceed expected market value due to obsolescence or quantities in excess of expected demand, the Company will record reserves for the difference between the cost and the market value. These reserves are recorded based on estimates. The Company works with its vendor and customer to arrange the drop shipments for its inventories and the inventories are shipped directly to the ports designated by the Company’ s customer from the manufacture factory without going through the Company’ s warehouse to conserve shipping costs. As of April 30, 2016 and 2015, the Company did not have inventories on hand and there is no reserve for obsolete or slow-moving inventories necessary.</p><p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">
<b>Advance to Suppliers</b>
</p>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">The Company periodically makes advances to vendors for purchases of products for resale, and records these purchases as advance to suppliers.</p><p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">
<b>Fair Value of Financial Instruments</b>
</p>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">The Company adopted ASC 820, Fair Value Measurements and Disclosure (“ASC 820”) for assets and liabilities measured at fair value on a recurring basis. ASC 820 establishes a common definition for fair value to be applied to existing generally accepted accounting principles that require the use of fair value measurements, establishes a framework for measuring fair value and expands disclosure about such fair value measurements. The adoption of ASC 820 did not have an impact on the Company’ s financial position or operating results, but did expand certain disclosures.</p>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">ASC 820 defines fair value as the price that would be received upon sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Additionally, ASC 820 requires the use of valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. These inputs are prioritized below:</p>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">
 Level 1: Observable inputs such as quoted market prices in active markets for identical assets or liabilities
<br/>
 Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data
<br/>
 Level 3: Unobservable inputs for which there is little or no market data, which require the use of the reporting entity’ s own assumptions.
</p>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">The following table sets forth by level within the fair value hierarchy of the Company’ s financial assets that were accounted for at fair value on a recurring basis as of April 30, 2016 and 2015:</p>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr valign="top">
<td align="center" nowrap="nowrap" valign="bottom"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="8%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="center" colspan="4" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="19%">
<b>April 30, 2016</b>
</td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="8%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="8%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="center" colspan="4" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="19%">
<b>April 30, 2015</b>
</td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="8%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td align="center" nowrap="nowrap" valign="bottom"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="8%">
<b>Level 1</b>
</td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="8%">
<b>Level 2</b>
</td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="8%">
<b>Level 3</b>
</td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="8%">
<b>Total</b>
</td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="8%">
<b>Level 1</b>
</td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="8%">
<b>Level 2</b>
</td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="8%">
<b>Level 3</b>
</td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="8%">
<b>Total</b>
</td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td>
</tr>
<tr>
<td align="center" nowrap="nowrap" valign="bottom"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="8%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="8%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="8%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="8%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="8%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="8%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="8%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="8%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#e6efff" valign="bottom">Marketable securities</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="8%">
255,824
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="8%">
 
—
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="8%">
 
—
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="8%">
255,824
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="8%">
359,857
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="8%">
 
—
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="8%">
 
—
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="8%">
359,857
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td align="left" valign="bottom">Total assets at fair value</td>
<td align="left" valign="bottom" width="1%">$</td>
<td align="right" valign="bottom" width="8%">
255,824
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%">$</td>
<td align="right" valign="bottom" width="8%">
 
—
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%">$</td>
<td align="right" valign="bottom" width="8%">
 
—
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%">$</td>
<td align="right" valign="bottom" width="8%">
255,824
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%">$</td>
<td align="right" valign="bottom" width="8%">
359,857
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%">$</td>
<td align="right" valign="bottom" width="8%">
 
—
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%">$</td>
<td align="right" valign="bottom" width="8%">
 
—
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%">$</td>
<td align="right" valign="bottom" width="8%">
359,857
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
</table>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">The carrying values of prepaid expenses, advance to suppliers, accounts payables, due to related parties, advance from customer and other payables approximate their fair values due to the short maturities of these instruments.</p><p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">
<b>Stock-based Compensation</b>
</p>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">Stock-based compensation is accounted for based on the requirements of the Share-Based Payment topic of ASC Topic 718 which requires recognition in the financial statements of the cost of employee and director services received in exchange for an award of equity instruments over the period the employee or director is required to perform the services in exchange for the award (presumptively, the vesting period). The Financial Accounting Standards Board (“FASB”) also requires measurement of the cost of employee and director services received in exchange for an award based on the grant-date fair value of the award.</p>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">Pursuant to ASC Topic 505-50, for share-based payments to consultants and other third-parties, compensation expense is determined at the “measurement date.” The expense is recognized over the vesting period of the award. Until the measurement date is reached, the total amount of compensation expense remains uncertain. The Company records compensation expense based on the fair value of the award at the reporting date. The awards to consultants and other third-parties are then revalued, or the total compensation is recalculated, based on the then current fair value, at each subsequent reporting date.</p>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">To date, the Company has not adopted a stock option plan and has not granted any stock options.</p><p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">
<b>Income Taxes</b>
</p>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">The Company has adopted Accounting Standards Codification subtopic 740-10, Income Taxes (“ASC 740-10") which requires the recognition of deferred tax liabilities and assets for the expected future tax consequences of events that have been included in the financial statement or tax returns. Under this method, deferred tax liabilities and assets 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. Valuation allowances are recorded to reduce the deferred tax assets to an amount that it is more likely than not be realized.</p>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">We apply the provisions of ASC 740-10-50, “Accounting for Uncertainty in Income Taxes”, which provides clarification related to the process associated with accounting for uncertain tax positions recognized in our consolidated financial statements. Audit periods remain open for review until the statute of limitations has passed. The completion of review or the expiration of the statute of limitations for a given audit period could result in an adjustment to the Company’ s liability for income taxes. Any such adjustment could be material to the Company’ s results of operations for any given quarterly or annual period based, in part, upon the results of operations for the given period. As of April 30, 2016, the Company had no uncertain tax positions, and will continue to evaluate for uncertain positions in the future.</p><p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">
<b>Basic and Diluted Loss Per Share</b>
</p>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">The Company computes loss per share in accordance with “ASC-260”, “Earnings per Share” which requires presentation of both basic and diluted earnings per share on the face of the statement of operations. Basic loss per share is computed by dividing net loss available to common shareholders by the weighted average number of outstanding common shares during the period. Diluted loss per share gives effect to all dilutive potential common shares outstanding during the period. Dilutive loss per share excludes all potential common shares if their effect is anti-dilutive. The Company has no potential dilutive instruments and accordingly basic loss and diluted loss per share are equal.</p><p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">
<b>Fiscal Periods</b>
</p>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">The Company's fiscal year end is April 30.</p><p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">
<b>Related Parties</b>
</p>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">Parties are considered to be related to the Company if the parties, directly or indirectly, through one or more intermediaries, control, are controlled by, or are under common control with the Company. Related parties also include principal owners of the Company, its management, members of the immediate families of principal owners of the Company and its management and other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. The Company discloses all related party transactions. All transactions shall be recorded at fair value of the goods or services exchanged. Property purchased from a related party is recorded at the cost to the related party and any payment to or on behalf of the related party in excess of the cost is reflected as a distribution to related party.</p><p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">
<b>Revenue Recognition</b>
</p>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">Pursuant to the guidance of ASC Topic 605, the Company recognizes revenue from product sales to its customers when: (1) title and risk of loss are transferred (in general, these conditions occur at either point of shipment or point of destination, depending on the terms of sale); (2) persuasive evidence of an arrangement exists; (3) the Company has no continuing obligations to the customer; and (4) collection of the related accounts receivable is reasonably assured.</p><p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">
<b>Advance from Customers</b>
</p>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">The Company requires its customer to make payments prior to the products are shipped. Any payments received prior to the products are shipped to the customer’ s point of destination and such advance received are recorded as advance from customers.</p><p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">
<b>Foreign Currency Translation.</b>
</p>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">The reporting currency of the Company is the U.S. dollar. The functional currency of the parent company is the U.S. dollar and the functional currency of the Company’ s subsidiaries is the Hong Kong Dollar. For the subsidiaries, whose functional currencies are the Hong Kong Dollar, results of operations and cash flows are translated at average exchange rates during the period, assets and liabilities are translated at the unified exchange rate at the end of the period, and equity is translated at historical exchange rates. As a result, amounts relating to assets and liabilities reported on the statements of cash flows may not necessarily agree with the changes in the corresponding balances on the balance sheets. Translation adjustments resulting from the process of translating the local currency financial statements into U.S. dollars are included in determining comprehensive income. Assets and liabilities denominated in foreign currencies are translated into the functional currency at the exchange rates prevailing at the balance sheet date with any transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in the results of operations as incurred. Transactions denominated in foreign currencies are translated into the functional currency at the exchange rates prevailing on the transaction dates. During the year ended April 30, 2016, 2015, and 2014, the Company’ s subsidiaries have no assets or liabilities and they did not have any business activities. There was no cumulative translation adjustment and no effect of exchange rate changes on cash for the year ended April 30, 2015 and 2016.</p><p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">
<b>Comprehensive Loss</b>
</p>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">Comprehensive loss is comprised of net loss and all changes to the statements of stockholders’ equity, except those due to investments by stockholders, changes in paid-in capital and distributions to stockholders. The Company did not have any other comprehensive gain (loss) for fiscal years 2016, 2015 and 2014.</p><p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">
<b>Concentration of Credit Risk</b>
</p>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">Financial instruments which potentially subject the Company to concentrations of credit risk consist principally of cash and marketable securities. We place our cash with high credit quality financial institutions in the United States. The Company has not experienced any losses in such accounts through April 30, 2016.</p>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">All of the Company’ s sales are to one customer whose ability to pay is dependent upon the industry economics prevailing in these areas; however, the Company believes that the concentration of credit risk with respect to sales is limited due to the requirements for the customer to make payments prior to shipments. The Company also perform ongoing credit evaluations of its customer to help further reduce potential credit risk. However, if the Company is not able to increase the number of customers and loses its sole customer, there will be significant risks for the Company to continue to generate revenue.</p><p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">
<b>Recent Accounting Pronouncements</b>
</p>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">
In March 2016, the FASB issued ASU 2016-09, "
<i>Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting</i>
". Several aspects of the accounting for share-based payment award transactions are simplified, including: (a) income tax consequences; (b) classification of awards as either equity or liabilities; and (c) classification on the statement of cash flows. The amendments are effective for public companies for annual periods beginning after December 15, 2016, and interim periods within those annual periods. Early adoption is permitted for any interim or annual period. The Company is currently in the process of evaluating the impact of the adoption on its consolidated financial statements.
</p>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">
In July 2015, The FASB has issued Accounting Standards Update (ASU) No. 2015-11,
<i>Inventory (Topic 330): Simplifying the Measurement of Inventory.</i>
Topic 330, Inventory, currently requires an entity to measure inventory at the lower of cost or market. Market could be replacement cost, net realizable value, or net realizable value less an approximately normal profit margin. The amendments do not apply to inventory that is measured using last-in, first-out (LIFO) or the retail inventory method. The amendments apply to all other inventory, which includes inventory that is measured using first-in, first-out (FIFO) or average cost. An entity should measure in scope inventory at the lower of cost and net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. Subsequent measurement is unchanged for inventory measured using LIFO or the retail inventory method. The amendments in this Update more closely align the measurement of inventory in GAAP with the measurement of inventory in International Financial Reporting Standards. For public business entities, the amendments are effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2016, and interim periods within fiscal years beginning after December 15, 2017. The amendments should be applied prospectively with earlier application permitted as of the beginning of an interim or annual reporting period. The adoption of ASU 2015-11 is not expected to have a material impact on the Company’ s consolidated financial statements.
</p>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">In November 2015, the FASB issued new accounting guidance regarding the balance sheet classification of deferred income taxes. The primary objective of this accounting guidance is to classify all deferred income tax assets and liabilities as noncurrent in a classified statement of financial position. There was no material impact to results of operations as the result of adoption of the accounting pronouncement.</p>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">There are various other updates recently issued, most of which represented technical corrections to the accounting literature or application to specific industries and are not expected to a have a material impact on the Company's financial position, results of operations or cash flows.</p><table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr valign="top">
<td align="center" nowrap="nowrap" valign="bottom"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="8%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="center" colspan="4" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="19%">
<b>April 30, 2016</b>
</td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="8%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="8%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="center" colspan="4" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="19%">
<b>April 30, 2015</b>
</td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="8%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td align="center" nowrap="nowrap" valign="bottom"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="8%">
<b>Level 1</b>
</td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="8%">
<b>Level 2</b>
</td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="8%">
<b>Level 3</b>
</td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="8%">
<b>Total</b>
</td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="8%">
<b>Level 1</b>
</td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="8%">
<b>Level 2</b>
</td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="8%">
<b>Level 3</b>
</td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="8%">
<b>Total</b>
</td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td>
</tr>
<tr>
<td align="center" nowrap="nowrap" valign="bottom"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="8%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="8%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="8%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="8%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="8%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="8%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="8%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="8%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#e6efff" valign="bottom">Marketable securities</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="8%">
255,824
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="8%">
 
—
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="8%">
 
—
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="8%">
255,824
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="8%">
359,857
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="8%">
 
—
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="8%">
 
—
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="8%">
359,857
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td align="left" valign="bottom">Total assets at fair value</td>
<td align="left" valign="bottom" width="1%">$</td>
<td align="right" valign="bottom" width="8%">
255,824
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%">$</td>
<td align="right" valign="bottom" width="8%">
 
—
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%">$</td>
<td align="right" valign="bottom" width="8%">
 
—
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%">$</td>
<td align="right" valign="bottom" width="8%">
255,824
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%">$</td>
<td align="right" valign="bottom" width="8%">
359,857
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%">$</td>
<td align="right" valign="bottom" width="8%">
 
—
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%">$</td>
<td align="right" valign="bottom" width="8%">
 
—
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%">$</td>
<td align="right" valign="bottom" width="8%">
359,857
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
</table>255824003598570025582400255824359857003598571200000010150250000867000629000<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">
<b>NOTE 3. MARKETABLE SECURITIES.</b>
</p>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">Marketable securities consist of certificate of deposits and mutual funds for which fair values were based on quoted prices in active markets and were therefore classified within Level 1 of the fair value hierarchy. The following table is a summary of marketable securities recorded in the Company’s Consolidated Balance Sheets:</p>
<div align="center">
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr valign="top">
<td align="center" nowrap="nowrap" valign="bottom"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="12%">
<b>April 30, 2016</b>
</td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="12%">
<b>April 30, 2015</b>
</td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#e6efff" valign="bottom">Certificate of deposits</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
 
-
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
100,409
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td align="left" valign="bottom">Mutual funds</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
255,824
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
259,448
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#e6efff" valign="bottom">         Total</td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" valign="bottom" width="12%">
255,824
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" valign="bottom" width="12%">
359,857
</td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" valign="bottom" width="2%"> </td>
</tr>
</table>
</div>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">
<b>The Company sold the certificate of deposits upon its maturity and transferred the proceed / fund to its operating bank account for working capital purposes during fiscal 2016.</b>
</p><table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr valign="top">
<td align="center" nowrap="nowrap" valign="bottom"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="12%">
<b>April 30, 2016</b>
</td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="12%">
<b>April 30, 2015</b>
</td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#e6efff" valign="bottom">Certificate of deposits</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
 
-
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
100,409
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td align="left" valign="bottom">Mutual funds</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
255,824
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
259,448
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#e6efff" valign="bottom">         Total</td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" valign="bottom" width="12%">
255,824
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" valign="bottom" width="12%">
359,857
</td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" valign="bottom" width="2%"> </td>
</tr>
</table>0100409255824259448<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">
<b>NOTE 4. ADVANCE TO SUPPLIERS AND ADVANCE FROM CUSTOMERS</b>
</p>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">
The Company makes advance payments to suppliers for goods ordered but yet to be delivered to our customer as it has a drop ship arrangement between its suppliers and customer. The Company receives advance payments from customers for goods ordered but yet to be shipped and/or shipped to its customers’ point of destination. Advanced payments to suppliers as of April 30, 2016 and 2015 were $62,736
and $1,293,030, respectively. Advanced payments from customers as of April 30, 2016 and 2015 were $428,781
and $1,423,031, respectively.
</p>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">
On June 25, 2014, the Company entered into a distribution agreement with Right Fortune International Limited (“Right Fortune”) to obtain the exclusive distribution right of Yolexury and Yolexury Travel Pack, a health juice product which increases energy and stamina, helps to maintain healthy cardio vascular function and promotes healthy digestive system. The term of exclusivity will be automatically renewed annually if the Company meets the annual Yolexury Minimum Order Quantities (the “Minimum Order”). The annual Minimum Order for calendar year 2015 is
400,000
bottles of 750ml Yolexury, which the Company has fulfilled as of December 31, 2015. The Company works with its vendor and customer to arrange the drop shipments for its inventories and the inventories are shipped directly to the ports designated by the Company’ s customer from the manufacture factory without going through the Company’ s warehouse to conserve shipping costs.
</p>400000<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">
<b>NOTE 5. RELATED PARTY TRANSACTIONS</b>
</p>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">
For the years ended April 30, 2016, 2015 and 2014, the Company’ s majority shareholder advanced the Company for its working capital of $0, $60
and $60,782, respectively. For the years ended April 30, 2016, the Company repaid its major shareholder of $3,294, $44,676
and $48,040, respectively. In addition, the Company’s majority shareholder paid certain payroll expense and other general expenses on behalf of the Company for total amount of $0, $8,290
and $0
for the years ended April 30, 2016, 2015 and 2014, respectively. The advances are non-interest bearing, due upon demand and unsecured. At April 30, 2016 and 2015, the Company’s due to related parties amounted to $235
and $3,529, respectively.
</p>06060782329444676480400829002353529<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">
<strong>N</strong>
<b>OTE 6. OTHER PAYABLES</b>
</p>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">
Other payables consist of accrued salary and related accrued expenses. The amounts are expected to be repaid in the form of cash. At April 30, 2016 and 2015, the Company’s other payable amounted to $51,817
and $23,749, respectively.
</p><p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">
<b>NOTE 7. STOCKHOLDERS’ EQUITY (DEFICIT)</b>
</p>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">
The Company has authorized
1,500,000,000
shares of common stock, par value $0.001
per share. On April 28, 2011, the Company issued
750,000,000
shares of common stock at a price of $0.000003
per share for total cash proceeds of $2,500. In March and April, 2012, the Company issued
154,500,000
shares of common stock at a price of $0.00016
per share for total cash proceeds of $25,750. On July 30, 2014, the Company issued a total of
2,390,000
shares of common stock to a consultant. The shares were valued at $0.03
per share, the fair market value on the date of issuance. During the year ended April 30, 2015, the Company recorded stock-based compensation of $71,700.
</p>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">
In August 2014, the Company sold a total of
110,000
shares of common stock at a price of $0.07
per share to two investors. The shares were sold pursuant to the Company’ s registration statement on Form S-1, file number
333
-
197508, effective on August 1, 2014. The Company did not engage a placement agent with respect to the sale. The net proceeds received by the Company from the sale of the shares were $7,700.
</p>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">
In September 2014, the Company sold a total of
35,000
shares of common stock at a price of $0.07
per share to two investors. The shares were sold pursuant to the Company’ s registration statement on Form S-1, file number
333
-
197508, effective on August 1, 2014. The Company did not engage a placement agent with respect to the sale. The net proceeds received by the Company from the sale of the shares were $2,450. The Form S-1, file number
333
-
197508, expired on November 28, 2014.
</p>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">
In January, 2015, the Company issued a total of
163,978,373
shares of common stock to its
34
distribution and development partners. The shares were valued at $0.08
per share, the fair market value on the date of issuance. The Company recorded stock-based business development expenses of $13,118,270
for the year ended April 30, 2015.
</p>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">
On February 11, 2015, the Company filed a registration statement on Form S-1 (the “Form S-1”) related to the resale of up to
51,720,000
shares of the Company’ s common stock (the “Common Stock”) including
49,330,000
shares of Common Stock issued at a price of $0.03
per share for a total gross cash proceeds of $1,479,900
in a private placement transaction closed on July 19, 2014 and
2,390,000
shares of Common Stock issued pursuant to a consulting agreement date May 10, 2014 between the Company and LP Funding LLC. The selling stockholders may sell common stock from time to time in the principal market on which the stock is traded at the prevailing market price, at prices related to such prevailing market price, in negotiated transactions or a combination of such methods of sale. We will not receive any proceeds from the sales by the selling stockholders. The Form S-1 was declared effective on April 24, 2015.
</p>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">On June 15, 2015, trading in our Common Stock was temporarily suspended by the Securities and Exchange Commission (the “Commission”) due to recent unexplained market activity. As a result, trading in our Common Stock was suspended for the period from 9:30 am EDT on June 15, 2015, through 11:50 pm EDT on June 26, 2015.</p>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">On June 16, 2015, our Board of Directors engaged Hunter Taubman Fischer LLC to commence an internal investigation (the “Internal Investigation”) with regard to the recent rise in the trading price of our common stock and market activity during a period from April 1, 2015 to June 16, 2015 (the “Period in Question”). The Internal Investigation was completed on August 11, 2015. See “Temporary suspension of trading and Internal Investigation” in Item 1. Business.</p>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">
We had
1,120,343,373
shares of common stock issued and outstanding as of April 30, 2016 and 2015.
</p>7500000000.00000325001545000000.000162575023900000.03717001100000.077700350000.0724501639783730.0851720000493300000.0314799002390000<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">
<b>NOTE 8. INCOME TAXES</b>
</p>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">
We account for income taxes under ASC 740, “
<i>Expenses - Income Taxes</i>
”. ASC 740 requires the recognition of deferred tax assets and liabilities for both the expected impact of differences between the financial statements and the tax basis of assets and liabilities, and for the expected future tax benefit to be derived from tax losses and tax credit carry forwards. ASC 740 additionally requires the establishment of a valuation allowance to reflect the likelihood of realization of deferred tax assets.
</p>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">The income tax provision (benefit) for the years ended April 30, 2016, 2015 and 2014 consists of the following:</p>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif; width: 1136px; height: 184px;">
<tr valign="top">
<td align="left" nowrap="nowrap" style="width: 595px;" valign="bottom"> </td>
<td align="left" nowrap="nowrap" style="border-bottom: 1px solid rgb(0, 0, 0); width: 16px;" valign="bottom" width="1%"> </td>
<td align="center" colspan="7" nowrap="nowrap" style="border-bottom: 1px solid rgb(0, 0, 0); width: 136px;" valign="bottom" width="12%">
<font size="2">
<font size="2">For the Years Ended April 30,</font>
</font>
</td>
<td align="left" nowrap="nowrap" style="border-bottom: 1px solid rgb(0, 0, 0); width: 7px;" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td align="left" nowrap="nowrap" style="width: 595px;" valign="bottom"> </td>
<td align="left" nowrap="nowrap" style="border-bottom: 1px solid rgb(0, 0, 0); width: 16px;" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" style="border-bottom: 1px solid rgb(0, 0, 0); width: 136px;" valign="bottom" width="12%">2016</td>
<td align="center" nowrap="nowrap" style="width: 21px;" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" style="border-bottom: 1px solid rgb(0, 0, 0); width: 14px;" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" style="border-bottom: 1px solid rgb(0, 0, 0); width: 152px;" valign="bottom" width="12%">2015</td>
<td align="left" nowrap="nowrap" style="width: 14px;" valign="bottom" width="2%"> </td>
<td nowrap="nowrap" style="border-bottom: 1px solid rgb(0, 0, 0); width: 13px; text-align: center;" valign="bottom" width="2%"> </td>
<td nowrap="nowrap" style="border-bottom: 1px solid rgb(0, 0, 0); width: 154px; text-align: center;" valign="bottom" width="2%">2014</td>
<td align="left" nowrap="nowrap" style="border-bottom: 1px solid rgb(0, 0, 0); width: 7px;" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#e6efff" style="width: 595px;" valign="bottom">
Expected income tax expense (benefit) 
<br/>
       at the statutory rate of
34%
</td>
<td align="left" bgcolor="#e6efff" style="width: 16px;" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" style="width: 136px;" valign="bottom" width="12%">
(37,000
</td>
<td align="left" bgcolor="#e6efff" style="width: 21px;" valign="bottom" width="2%">)</td>
<td align="left" bgcolor="#e6efff" style="width: 14px;" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" style="width: 152px;" valign="bottom" width="12%">
(4,454,000
</td>
<td align="left" bgcolor="#e6efff" style="width: 14px;" valign="bottom" width="2%">)</td>
<td align="left" bgcolor="#e6efff" style="width: 13px;" valign="bottom" width="2%">$</td>
<td bgcolor="#e6efff" style="width: 154px; text-align: right;" valign="bottom" width="2%">
(57,000
</td>
<td align="left" bgcolor="#e6efff" style="width: 7px;" valign="bottom" width="2%">)</td>
</tr>
<tr>
<td style="width: 595px;" valign="bottom"> </td>
<td style="width: 16px;" valign="bottom" width="1%"> </td>
<td style="width: 136px;" valign="bottom" width="12%"> </td>
<td style="width: 21px;" valign="bottom" width="2%"> </td>
<td style="width: 14px;" valign="bottom" width="1%"> </td>
<td style="width: 152px;" valign="bottom" width="12%"> </td>
<td style="width: 14px;" valign="bottom" width="2%"> </td>
<td style="width: 13px;" valign="bottom" width="2%"> </td>
<td style="width: 154px;" valign="bottom" width="2%"> </td>
<td style="width: 7px;" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#e6efff" style="width: 595px;" valign="bottom">
Tax effect of expenses (benefit) 
<br/>
       that are not deductible for income tax purposes 
<br/>
       (net of other amounts deductible for tax purposes)
</td>
<td align="left" bgcolor="#e6efff" style="width: 16px;" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" style="width: 136px;" valign="bottom" width="12%">
-
</td>
<td align="left" bgcolor="#e6efff" style="width: 21px;" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" style="width: 14px;" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" style="width: 152px;" valign="bottom" width="12%">
-
</td>
<td align="left" bgcolor="#e6efff" style="width: 14px;" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" style="width: 13px;" valign="bottom" width="2%"> </td>
<td bgcolor="#e6efff" style="width: 154px; text-align: right;" valign="bottom" width="2%">
-
</td>
<td align="left" bgcolor="#e6efff" style="width: 7px;" valign="bottom" width="2%"> </td>
</tr>
<tr>
<td style="width: 595px;" valign="bottom"> </td>
<td style="width: 16px;" valign="bottom" width="1%"> </td>
<td style="width: 136px;" valign="bottom" width="12%"> </td>
<td style="width: 21px;" valign="bottom" width="2%"> </td>
<td style="width: 14px;" valign="bottom" width="1%"> </td>
<td style="width: 152px;" valign="bottom" width="12%"> </td>
<td style="width: 14px;" valign="bottom" width="2%"> </td>
<td style="width: 13px;" valign="bottom" width="2%"> </td>
<td style="width: 154px;" valign="bottom" width="2%"> </td>
<td style="width: 7px;" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#e6efff" style="width: 595px;" valign="bottom">Change in valuation allowance</td>
<td align="left" bgcolor="#e6efff" style="border-bottom: 1px solid rgb(0, 0, 0); width: 16px;" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" style="border-bottom: 1px solid rgb(0, 0, 0); width: 136px;" valign="bottom" width="12%">
37,000
</td>
<td align="left" bgcolor="#e6efff" style="width: 21px;" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" style="border-bottom: 1px solid rgb(0, 0, 0); width: 14px;" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" style="border-bottom: 1px solid rgb(0, 0, 0); width: 152px;" valign="bottom" width="12%">
4,454,000
</td>
<td align="left" bgcolor="#e6efff" style="width: 14px;" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" style="border-bottom: 1px solid rgb(0, 0, 0); width: 13px;" valign="bottom" width="2%"> </td>
<td bgcolor="#e6efff" style="border-bottom: 1px solid rgb(0, 0, 0); width: 154px; text-align: right;" valign="bottom" width="2%">
57,000
</td>
<td align="left" bgcolor="#e6efff" style="border-bottom: 1px solid rgb(0, 0, 0); width: 7px;" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td align="left" style="width: 595px;" valign="bottom">Provision for income taxes</td>
<td align="left" style="border-bottom: 3px double rgb(0, 0, 0); width: 16px;" valign="bottom" width="1%">$</td>
<td align="right" style="border-bottom: 3px double rgb(0, 0, 0); width: 136px;" valign="bottom" width="12%">
 
-
</td>
<td align="left" style="width: 21px;" valign="bottom" width="2%"> </td>
<td align="left" style="border-bottom: 3px double rgb(0, 0, 0); width: 14px;" valign="bottom" width="1%">$</td>
<td align="right" style="border-bottom: 3px double rgb(0, 0, 0); width: 152px;" valign="bottom" width="12%">
 
-
</td>
<td align="left" style="width: 14px;" valign="bottom" width="2%"> </td>
<td align="left" style="border-bottom: 3px double rgb(0, 0, 0); width: 13px;" valign="bottom" width="2%">$</td>
<td style="border-bottom: 3px double rgb(0, 0, 0); width: 154px; text-align: right;" valign="bottom" width="2%">
-
</td>
<td align="left" style="border-bottom: 3px double rgb(0, 0, 0); width: 7px;" valign="bottom" width="2%"> </td>
</tr>
</table>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">
The Company has a net operating loss (“NOL”) carryforward for U.S. income tax purposes aggregating approximately $13,714,000
at April 30, 2016 expiring through the year 2035, subject to the Internal Revenue Code Section 382, which places a limitation on the amount of taxable income that can be offset by net operating losses after a change in ownership. The Company has no Hong Kong NOL for its inactive subsidiaries in Hong Kong as of April 30, 2016.
</p>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Included in the deferred tax asset is the aforementioned NOL and the tax benefit associated with the issuance of stock-based compensation. The realization of the deferred tax assets is dependent on future taxable income, in addition to the exercise of stock options; we are not able to predict if such future taxable income will be more likely than not sufficient to utilize the benefit. As such, we do not believe the benefit is more likely than not to be realized and we recognize a full valuation allowance for those deferred tax assets. Our deferred tax assets as of April 30, 2016 and 2015 are as follows:</p>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr>
<td align="center" nowrap="nowrap" valign="bottom"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="center" colspan="4" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="27%">
<p style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">
<font size="2">
<font size="2">As of April 30,</font>
</font>
</p>
</td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td align="center" nowrap="nowrap" valign="bottom"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">2016</td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">2015</td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#e6efff" valign="bottom">Deferred income tax asset:</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="12%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="12%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td align="left" valign="bottom">Net operating loss carryforwards</td>
<td align="left" valign="bottom" width="1%">$</td>
<td align="right" valign="bottom" width="12%">
4,663,000
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%">$</td>
<td align="right" valign="bottom" width="12%">
4,626,000
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#e6efff" valign="bottom">Valuation allowance</td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">
(4,663,000
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%">)</td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">
(4,626,000
</td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%">)</td>
</tr>
<tr valign="top">
<td align="left" valign="bottom">Deferred income taxes</td>
<td align="left" style="BORDER-BOTTOM: #000000 3px double" valign="bottom" width="1%">$</td>
<td align="right" style="BORDER-BOTTOM: #000000 3px double" valign="bottom" width="12%">
 
-
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" style="BORDER-BOTTOM: #000000 3px double" valign="bottom" width="1%">$</td>
<td align="right" style="BORDER-BOTTOM: #000000 3px double" valign="bottom" width="12%">
 
-
</td>
<td align="left" style="BORDER-BOTTOM: #000000 3px double" valign="bottom" width="2%"> </td>
</tr>
</table>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">
The increases in the valuation allowance at April 30, 2016 and 2015 from their immediate prior year-end was $37,000
and $4,454,000, respectively.
</p>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">The Company has filed its U.S. tax returns through April 30, 2015.</p>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">
Our subsidiaries in Hong Kong have no business activities since inception and are governed by the Income Tax Law of the Hong Kong Special Administrative Region (“HK SAR”) and local income tax laws (the HK SAR Income Tax Law”). Pursuant to the HK SAR Income Tax Law, our Hong Kong subsidiaries are subject to tax at a maximum statutory rate of
17% (inclusive of state and local income taxes) if in operations.
</p>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">The provisions of ASC 740 require companies to recognize in their financial statements the impact of a tax position if that position is more likely than not to be sustained upon audit, based upon the technical merits of the position. ASC 740 prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken on a tax return. ASC 740 also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods and disclosure.</p>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">Management does not believe that the Company has any material uncertain tax positions requiring recognition or measurement in accordance with the provisions of ASC 740. Accordingly, the adoption of these provisions of ASC 740 did not have a material effect on the Company’s financial statements. The Company’s policy is to record interest and penalties on uncertain tax positions, if any, as income tax expense.</p>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">All tax years for the Company remain subject to future examinations by the applicable taxing authorities.</p><table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif; width: 1136px; height: 184px;">
<tr valign="top">
<td align="left" nowrap="nowrap" style="width: 595px;" valign="bottom"> </td>
<td align="left" nowrap="nowrap" style="border-bottom: 1px solid rgb(0, 0, 0); width: 16px;" valign="bottom" width="1%"> </td>
<td align="center" colspan="7" nowrap="nowrap" style="border-bottom: 1px solid rgb(0, 0, 0); width: 136px;" valign="bottom" width="12%">
<font size="2">
<font size="2">For the Years Ended April 30,</font>
</font>
</td>
<td align="left" nowrap="nowrap" style="border-bottom: 1px solid rgb(0, 0, 0); width: 7px;" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td align="left" nowrap="nowrap" style="width: 595px;" valign="bottom"> </td>
<td align="left" nowrap="nowrap" style="border-bottom: 1px solid rgb(0, 0, 0); width: 16px;" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" style="border-bottom: 1px solid rgb(0, 0, 0); width: 136px;" valign="bottom" width="12%">2016</td>
<td align="center" nowrap="nowrap" style="width: 21px;" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" style="border-bottom: 1px solid rgb(0, 0, 0); width: 14px;" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" style="border-bottom: 1px solid rgb(0, 0, 0); width: 152px;" valign="bottom" width="12%">2015</td>
<td align="left" nowrap="nowrap" style="width: 14px;" valign="bottom" width="2%"> </td>
<td nowrap="nowrap" style="border-bottom: 1px solid rgb(0, 0, 0); width: 13px; text-align: center;" valign="bottom" width="2%"> </td>
<td nowrap="nowrap" style="border-bottom: 1px solid rgb(0, 0, 0); width: 154px; text-align: center;" valign="bottom" width="2%">2014</td>
<td align="left" nowrap="nowrap" style="border-bottom: 1px solid rgb(0, 0, 0); width: 7px;" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#e6efff" style="width: 595px;" valign="bottom">
Expected income tax expense (benefit) 
<br/>
       at the statutory rate of
34%
</td>
<td align="left" bgcolor="#e6efff" style="width: 16px;" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" style="width: 136px;" valign="bottom" width="12%">
(37,000
</td>
<td align="left" bgcolor="#e6efff" style="width: 21px;" valign="bottom" width="2%">)</td>
<td align="left" bgcolor="#e6efff" style="width: 14px;" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" style="width: 152px;" valign="bottom" width="12%">
(4,454,000
</td>
<td align="left" bgcolor="#e6efff" style="width: 14px;" valign="bottom" width="2%">)</td>
<td align="left" bgcolor="#e6efff" style="width: 13px;" valign="bottom" width="2%">$</td>
<td bgcolor="#e6efff" style="width: 154px; text-align: right;" valign="bottom" width="2%">
(57,000
</td>
<td align="left" bgcolor="#e6efff" style="width: 7px;" valign="bottom" width="2%">)</td>
</tr>
<tr>
<td style="width: 595px;" valign="bottom"> </td>
<td style="width: 16px;" valign="bottom" width="1%"> </td>
<td style="width: 136px;" valign="bottom" width="12%"> </td>
<td style="width: 21px;" valign="bottom" width="2%"> </td>
<td style="width: 14px;" valign="bottom" width="1%"> </td>
<td style="width: 152px;" valign="bottom" width="12%"> </td>
<td style="width: 14px;" valign="bottom" width="2%"> </td>
<td style="width: 13px;" valign="bottom" width="2%"> </td>
<td style="width: 154px;" valign="bottom" width="2%"> </td>
<td style="width: 7px;" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#e6efff" style="width: 595px;" valign="bottom">
Tax effect of expenses (benefit) 
<br/>
       that are not deductible for income tax purposes 
<br/>
       (net of other amounts deductible for tax purposes)
</td>
<td align="left" bgcolor="#e6efff" style="width: 16px;" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" style="width: 136px;" valign="bottom" width="12%">
-
</td>
<td align="left" bgcolor="#e6efff" style="width: 21px;" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" style="width: 14px;" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" style="width: 152px;" valign="bottom" width="12%">
-
</td>
<td align="left" bgcolor="#e6efff" style="width: 14px;" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" style="width: 13px;" valign="bottom" width="2%"> </td>
<td bgcolor="#e6efff" style="width: 154px; text-align: right;" valign="bottom" width="2%">
-
</td>
<td align="left" bgcolor="#e6efff" style="width: 7px;" valign="bottom" width="2%"> </td>
</tr>
<tr>
<td style="width: 595px;" valign="bottom"> </td>
<td style="width: 16px;" valign="bottom" width="1%"> </td>
<td style="width: 136px;" valign="bottom" width="12%"> </td>
<td style="width: 21px;" valign="bottom" width="2%"> </td>
<td style="width: 14px;" valign="bottom" width="1%"> </td>
<td style="width: 152px;" valign="bottom" width="12%"> </td>
<td style="width: 14px;" valign="bottom" width="2%"> </td>
<td style="width: 13px;" valign="bottom" width="2%"> </td>
<td style="width: 154px;" valign="bottom" width="2%"> </td>
<td style="width: 7px;" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#e6efff" style="width: 595px;" valign="bottom">Change in valuation allowance</td>
<td align="left" bgcolor="#e6efff" style="border-bottom: 1px solid rgb(0, 0, 0); width: 16px;" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" style="border-bottom: 1px solid rgb(0, 0, 0); width: 136px;" valign="bottom" width="12%">
37,000
</td>
<td align="left" bgcolor="#e6efff" style="width: 21px;" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" style="border-bottom: 1px solid rgb(0, 0, 0); width: 14px;" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" style="border-bottom: 1px solid rgb(0, 0, 0); width: 152px;" valign="bottom" width="12%">
4,454,000
</td>
<td align="left" bgcolor="#e6efff" style="width: 14px;" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" style="border-bottom: 1px solid rgb(0, 0, 0); width: 13px;" valign="bottom" width="2%"> </td>
<td bgcolor="#e6efff" style="border-bottom: 1px solid rgb(0, 0, 0); width: 154px; text-align: right;" valign="bottom" width="2%">
57,000
</td>
<td align="left" bgcolor="#e6efff" style="border-bottom: 1px solid rgb(0, 0, 0); width: 7px;" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td align="left" style="width: 595px;" valign="bottom">Provision for income taxes</td>
<td align="left" style="border-bottom: 3px double rgb(0, 0, 0); width: 16px;" valign="bottom" width="1%">$</td>
<td align="right" style="border-bottom: 3px double rgb(0, 0, 0); width: 136px;" valign="bottom" width="12%">
 
-
</td>
<td align="left" style="width: 21px;" valign="bottom" width="2%"> </td>
<td align="left" style="border-bottom: 3px double rgb(0, 0, 0); width: 14px;" valign="bottom" width="1%">$</td>
<td align="right" style="border-bottom: 3px double rgb(0, 0, 0); width: 152px;" valign="bottom" width="12%">
 
-
</td>
<td align="left" style="width: 14px;" valign="bottom" width="2%"> </td>
<td align="left" style="border-bottom: 3px double rgb(0, 0, 0); width: 13px;" valign="bottom" width="2%">$</td>
<td style="border-bottom: 3px double rgb(0, 0, 0); width: 154px; text-align: right;" valign="bottom" width="2%">
-
</td>
<td align="left" style="border-bottom: 3px double rgb(0, 0, 0); width: 7px;" valign="bottom" width="2%"> </td>
</tr>
</table>0.34-37000-4454000-570000037000445400057000<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr>
<td align="center" nowrap="nowrap" valign="bottom"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="center" colspan="4" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="27%">
<p style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">
<font size="2">
<font size="2">As of April 30,</font>
</font>
</p>
</td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td align="center" nowrap="nowrap" valign="bottom"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">2016</td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">2015</td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#e6efff" valign="bottom">Deferred income tax asset:</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="12%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="12%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td align="left" valign="bottom">Net operating loss carryforwards</td>
<td align="left" valign="bottom" width="1%">$</td>
<td align="right" valign="bottom" width="12%">
4,663,000
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%">$</td>
<td align="right" valign="bottom" width="12%">
4,626,000
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#e6efff" valign="bottom">Valuation allowance</td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">
(4,663,000
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%">)</td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">
(4,626,000
</td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%">)</td>
</tr>
<tr valign="top">
<td align="left" valign="bottom">Deferred income taxes</td>
<td align="left" style="BORDER-BOTTOM: #000000 3px double" valign="bottom" width="1%">$</td>
<td align="right" style="BORDER-BOTTOM: #000000 3px double" valign="bottom" width="12%">
 
-
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" style="BORDER-BOTTOM: #000000 3px double" valign="bottom" width="1%">$</td>
<td align="right" style="BORDER-BOTTOM: #000000 3px double" valign="bottom" width="12%">
 
-
</td>
<td align="left" style="BORDER-BOTTOM: #000000 3px double" valign="bottom" width="2%"> </td>
</tr>
</table>466300046260004663000462600000137140000.17<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">
<b>NOTE 9. COMMITMENTS AND CONTINGENCIES</b>
</p>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">In May 2016, the Company received certain informal inquiry from the Commission regarding trading activity in our common stock and the Company is currently in the process of responding to such inquiry. The inquiry requires that the Company provide certain categories of documents to the Commission. The Commission indicated in its inquiry that it should not be construed as an indication that any violation of any federal securities laws has occurred or as a reflection upon the merits of any person, company, or securities involved. The inquiry is a confidential non-public fact finding request. It is not possible at this time to predict the outcome of the inquiries, including whether or when any proceedings might be initiated, when these matters may be resolved or what, if any, penalties or other remedies may be imposed. The Company has been, and intend to continue, voluntarily cooperating fully with the SEC. The scope and outcome of this matter cannot be determined at this time. The Company has expended significant resources to the Internal Investigation (see NOTE 7) and responding to the Commission’s inquiry. Failure to resolve such matters favorably could harm tradability of our common stock and our reputation significantly and could result in a loss of your investment in our stock.</p><p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">
<b>NOTE 10. SUBSEQUENT EVENTS</b>
</p>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">The Company has evaluated subsequent events through the date of the consolidated financial statements were issued and up to the time of filing of the consolidated financial statements with the Securities and Exchange Commission.</p>EX-101.SCH
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Document and Entity Information [Abstract]Document and Entity Information [Abstract]Statement [Table]Legal Entity [Axis]Entity [Domain]Statement [Line Items]Document TypeAmendment FlagAmendment DescriptionDocument Period End DateTrading SymbolEntity Registrant NameEntity Central Index KeyCurrent Fiscal Year End DateEntity Filer CategoryEntity Common Stock, Shares OutstandingEntity Current Reporting StatusEntity Voluntary FilersEntity Well Known Seasoned IssuerEntity Public FloatDocument Fiscal Year FocusDocument Fiscal Period FocusStatement of Financial Position [Abstract]ASSETSCURRENT ASSETS:CashAdvance to suppliersMarketable securitiesTOTAL CURRENT ASSETSPROPERTY AND EQUIPMENT - NetTOTAL ASSETSLIABILITIES AND STOCKHOLDERS' EQUITYCURRENT LIABILITIES:Accounts payableDue to related partiesAdvance from customerOther payablesTOTAL CURRENT LIABILITIESCommitments and ContingenciesSTOCKHOLDERS' EQUITY:Common stock,1,500,000,000 shares authorized, par value $0.001, 1,120,343,373 shares issued 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net cash provided by (used in) operating activitiesDepreciation and amortizationStock issued for consulting feesStock issued for business development expensesStock issued for business development expensesExpenses paid directly by related partiesUnrealized loss (gain) on marketable securities, net of investment management feesChanges in operating assets and liabilitiesPrepaid expensesAdvance to suppliersAdvance to suppliersAccounts payableAdvance from customersOther payableNET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIESINVESTING ACTIVITIES:Purchase of property and equipmentPurchase of marketable securitiesProceed from sell of marketable securitiesNET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIESFINANCING ACTIVITIES:Proceeds from issuance of common stockRepayments to related partiesProceeds from related partiesNET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIESNet Increase (Decrease) in CashCash, Beginning of PeriodCASH, END OF PERIODSUPPLEMENTAL DISCLOSURES OF CASH FLOW 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payablesSubsidiary, Sale of Stock [Axis]Sale of Stock, Name of Transaction [Domain]Private Placement [Member]Common Stock issued pursuant to a consulting agreement [Member]Common Stock issued pursuant to a consulting agreementCommon stock, resale sharesStock Issued During Period, Shares, Issued for CashStock Issued During Period, Shares, Issued for CashEquity Issuance, Per Share AmountEquity Issuance, Per Share AmountStock Issued During Period, Value, Issued for CashStock Issued During Period, Value, Issued for CashStock issued during the periodProceeds from Issuance of Private PlacementForgiveness of debtPayments of Stock Issuance CostsStock issued for services, sharesStock-based compensationStock issued for business development expensesCommon Stock, Shares, IssuedCommon Stock, Shares, OutstandingRange [Axis]Range [Domain]Maximum [Member]Minimum [Member]Increase in valuation allowanceEffective Income Tax Rate Reconciliation, at Federal Statutory Income Tax RateFair Value, Hierarchy [Axis]Fair Value Hierarchy [Domain]Level 1 [Member]Level 2 [Member]Level 3 [Member]Marketable securitiesTotal assets at fair valueInvestment Type [Axis]Investments [Domain]Certificates of Deposit [Member]Mutual Funds [Member]Marketable SecuritiesStatutory income tax rateExpected income tax expense (benefit) at the statutory rate of 34%Expected income tax expense (benefit) at the statutory rate of 34%Tax effect of expenses (benefit) that are not deductible for income tax purposes (net of other amounts deductible for tax purposes)Change in valuation allowanceProvision for income taxesDeferred income tax asset:Net operating loss carryforwardsValuation allowanceDeferred income taxesASSETSTOTAL CURRENT ASSETSTOTAL ASSETSTOTAL CURRENT LIABILITIESTOTAL STOCKHOLDERS' EQUITYTOTAL LIABILITIES AND STOCKHOLDERS' EQUITYGROSS PROFITGeneral and administrativeBusiness Development ExpensesTotal Operating ExpensesLOSS FROM OPERATIONSOther (expense) income (OtherIncome)Total other (expense) incomeLOSS BEFORE PROVISION FOR INCOME TAXESNET LOSSCommon Shares Sold At Three Per ShareCommon Shares Sold At Three Per Share SharesCommon shares offering costsShares Issued For Consulting Expenses At Three Per ShareShares Issued For Consulting Expenses At Three Per Share SharesCommon Shares Sold At Seven Per ShareCommon Shares Sold At Seven Per Share SharesShares Issued For Bus Develop Expenses At Eight Per ShareShares Issued For Bus Develop Expenses At Eight Per Share SharesStock Issued For Business Development ExpensesUnrealized loss (gain) on marketable securities, net of investment management feesPrepaid expensesIncrease Decrease Increase Decrease In Advance To SuppliersAccounts payable (IncreaseDecreaseInAccountsPayable)Advance from customersOther payableNET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIESPurchase of property and equipmentPurchase of marketable securitiesProceed from sell of marketable securitiesNET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIESRepayments to related 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This is focus fiscal period of the document report. For a first quarter 2006 quarterly report, which may also provide financial information from prior periods, the first fiscal quarter should be given as the fiscal period focus. Values: FY, Q1, Q2, Q3, Q4, H1, H2, M9, T1, T2, T3, M8, CY.
This is focus fiscal year of the document report in CCYY format. For a 2006 annual report, which may also provide financial information from prior periods, fiscal 2006 should be given as the fiscal year focus. Example: 2006.
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Indicate number of shares or other units outstanding of each of registrant's classes of capital or common stock or other ownership interests, if and as stated on cover of related periodic report. Where multiple classes or units exist define each class/interest by adding class of stock items such as Common Class A [Member], Common Class B [Member] or Partnership Interest [Member] onto the Instrument [Domain] of the Entity Listings, Instrument.
Indicate "Yes" or "No" whether registrants (1) have filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that registrants were required to file such reports), and (2) have been subject to such filing requirements for the past 90 days. This information should be based on the registrant's current or most recent filing containing the related disclosure.
Indicate whether the registrant is one of the following: (1) Large Accelerated Filer, (2) Accelerated Filer, (3) Non-accelerated Filer, (4) Smaller Reporting Company (Non-accelerated) or (5) Smaller Reporting Accelerated Filer. Definitions of these categories are stated in Rule 12b-2 of the Exchange Act. This information should be based on the registrant's current or most recent filing containing the related disclosure.
State aggregate market value of voting and non-voting common equity held by non-affiliates computed by reference to price at which the common equity was last sold, or average bid and asked price of such common equity, as of the last business day of registrant's most recently completed second fiscal quarter. The public float should be reported on the cover page of the registrants form 10K.
Indicate "Yes" or "No" if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Is used on Form Type: 10-K, 10-Q, 8-K, 20-F, 6-K, 10-K/A, 10-Q/A, 20-F/A, 6-K/A, N-CSR, N-Q, N-1A.
Carrying value as of the balance sheet date of liabilities incurred (and for which invoices have typically been received) and payable to vendors for goods and services received that are used in an entity's business. Used to reflect the current portion of the liabilities (due within one year or within the normal operating cycle if longer).
Excess of issue price over par or stated value of the entity's capital stock and amounts received from other transactions involving the entity's stock or stockholders. Includes adjustments to additional paid in capital. Some examples of such adjustments include recording the issuance of debt with a beneficial conversion feature and certain tax consequences of equity instruments awarded to employees. Use this element for the aggregate amount of additional paid-in capital associated with common and preferred stock. For additional paid-in capital associated with only common stock, use the element additional paid in capital, common stock. For additional paid-in capital associated with only preferred stock, use the element additional paid in capital, preferred stock.
Carrying value of capitalized payments made in advance for inventory that is expected to be received within one year or the normal operating cycle, if longer.
Sum of the carrying amounts as of the balance sheet date of all assets that are recognized. Assets are probable future economic benefits obtained or controlled by an entity as a result of past transactions or events.
Sum of the carrying amounts as of the balance sheet date of all assets that are expected to be realized in cash, sold, or consumed within one year (or the normal operating cycle, if longer). Assets are probable future economic benefits obtained or controlled by an entity as a result of past transactions or events.
Amount of short-term, highly liquid investments that are both readily convertible to known amounts of cash and so near their maturity that they present insignificant risk of changes in value because of changes in interest rates. Excludes cash and cash equivalents within disposal group and discontinued operation.
Aggregate par or stated value of issued nonredeemable common stock (or common stock redeemable solely at the option of the issuer). This item includes treasury stock repurchased by the entity. Note: elements for number of nonredeemable common shares, par value and other disclosure concepts are in another section within stockholders' equity.
Carrying amount as of the balance sheet date of obligations due all related parties. For classified balance sheets, represents the current portion of such liabilities (due within one year or within the normal operating cycle if longer).
Total obligations incurred as part of normal operations that are expected to be paid during the following twelve months or within one business cycle, if longer.
Carrying value of the current portion of notes payable which were initially due after one year or beyond the normal operating cycle, if longer, and which are not otherwise defined in the taxonomy.
Amount after accumulated depreciation, depletion and amortization of physical assets used in the normal conduct of business to produce goods and services and not intended for resale. Examples include, but are not limited to, land, buildings, machinery and equipment, office equipment, and furniture and fixtures.
Total of all stockholders' equity (deficit) items, net of receivables from officers, directors, owners, and affiliates of the entity which are attributable to the parent. The amount of the economic entity's stockholders' equity attributable to the parent excludes the amount of stockholders' equity which is allocable to that ownership interest in subsidiary equity which is not attributable to the parent (noncontrolling interest, minority interest). This excludes temporary equity and is sometimes called permanent equity.
Total number of common shares of an entity that have been sold or granted to shareholders (includes common shares that were issued, repurchased and remain in the treasury). These shares represent capital invested by the firm's shareholders and owners, and may be all or only a portion of the number of shares authorized. Shares issued include shares outstanding and shares held in the treasury.
Business development involves the development of products and services, their delivery, design and their implementation. Business development includes a number of techniques designed to grow an economic enterprise. Such techniques include, but are not limited to, assessments of marketing opportunities and target markets, intelligence gathering on customers and competitors, generating leads for possible sales, follow-up sales activity, formal proposal writing and business model design. Business development involves evaluating a business and then realizing its full potential, using such tools as marketing, sales, information management and customer service.
The amount of net income or loss for the period per each share in instances when basic and diluted earnings per share are the same amount and reported as a single line item on the face of the financial statements. Basic earnings per share is the amount of net income or loss for the period per each share of common stock or unit outstanding during the reporting period. Diluted earnings per share includes the amount of net income or loss for the period available to each share of common stock or common unit outstanding during the reporting period and to each share or unit that would have been outstanding assuming the issuance of common shares or units for all dilutive potential common shares or units outstanding during the reporting period.
The aggregate total of expenses of managing and administering the affairs of an entity, including affiliates of the reporting entity, which are not directly or indirectly associated with the manufacture, sale or creation of a product or product line.
Sum of operating profit and nonoperating income or expense before Income or Loss from equity method investments, income taxes, extraordinary items, and noncontrolling interest.
The aggregate amount of income or expense from ancillary business-related activities (that is to say, excluding major activities considered part of the normal operations of the business).
Generally recurring costs associated with normal operations except for the portion of these expenses which can be clearly related to production and included in cost of sales or services. Includes selling, general and administrative expense.
Amount of revenue recognized from goods sold, services rendered, insurance premiums, or other activities that constitute an earning process. Includes, but is not limited to, investment and interest income before deduction of interest expense when recognized as a component of revenue, and sales and trading gain (loss).
Number of shares of stock issued as of the balance sheet date, including shares that had been issued and were previously outstanding but which are now held in the treasury.
Total of all stockholders' equity (deficit) items, net of receivables from officers, directors, owners, and affiliates of the entity which are attributable to the parent. The amount of the economic entity's stockholders' equity attributable to the parent excludes the amount of stockholders' equity which is allocable to that ownership interest in subsidiary equity which is not attributable to the parent (noncontrolling interest, minority interest). This excludes temporary equity and is sometimes called permanent equity.
Amount of currency on hand as well as demand deposits with banks or financial institutions. Includes other kinds of accounts that have the general characteristics of demand deposits. Also includes short-term, highly liquid investments that are both readily convertible to known amounts of cash and so near their maturity that they present insignificant risk of changes in value because of changes in interest rates. Excludes cash and cash equivalents within disposal group and discontinued operation.
Amount of increase (decrease) in cash and cash equivalents. Cash and cash equivalents are the amount of currency on hand as well as demand deposits with banks or financial institutions. Includes other kinds of accounts that have the general characteristics of demand deposits. Also includes short-term, highly liquid investments that are both readily convertible to known amounts of cash and so near their maturity that they present insignificant risk of changes in value because of changes in interest rates. Includes effect from exchange rate changes.
The current period expense charged against earnings on long-lived, physical assets not used in production, and which are not intended for resale, to allocate or recognize the cost of such assets over their useful lives; or to record the reduction in book value of an intangible asset over the benefit period of such asset; or to reflect consumption during the period of an asset that is not used in production.
The increase (decrease) during the reporting period in the aggregate amount of liabilities incurred (and for which invoices have typically been received) and payable to vendors for goods and services received that are used in an entity's business.
The increase (decrease) during the reporting period in other obligations due by the reporting entity that are payable within one year (or one business cycle), not otherwise defined in the taxonomy.
The increase (decrease) during the reporting period in the amount of outstanding money paid in advance for goods or services that bring economic benefits for future periods.
The aggregate net change in the difference between the fair value and the carrying value, or in the comparative fair values, of marketable securities categorized as trading held at each balance sheet date, that was included in earnings for the period, which may have arisen from (a) securities classified as trading, (b) the unrealized holding gain (loss) on held-to-maturity securities transferred to the trading security category, and (c) the cumulative unrealized gain (loss) which was included in other comprehensive income (a separate component of shareholders' equity) on available-for-sale securities transferred to trading securities during the period.
Amount of cash inflow (outflow) from financing activities, including discontinued operations. Financing activity cash flows include obtaining resources from owners and providing them with a return on, and a return of, their investment; borrowing money and repaying amounts borrowed, or settling the obligation; and obtaining and paying for other resources obtained from creditors on long-term credit.
Amount of cash inflow (outflow) from investing activities, including discontinued operations. Investing activity cash flows include making and collecting loans and acquiring and disposing of debt or equity instruments and property, plant, and equipment and other productive assets.
Amount of cash inflow (outflow) from operating activities, including discontinued operations. Operating activity cash flows include transactions, adjustments, and changes in value not defined as investing or financing activities.
The cash outflow associated with the acquisition of long-lived, physical assets that are used in the normal conduct of business to produce goods and services and not intended for resale; includes cash outflows to pay for construction of self-constructed assets.
The cash inflow from a long-term borrowing made from related parties where one party can exercise control or significant influence over another party; including affiliates, owners or officers and their immediate families, pension trusts, and so forth. Alternate caption: Proceeds from Advances from Affiliates.
The cash inflow associated with the aggregate amount received by the entity through sale or maturity of marketable securities (held-to-maturity or available-for-sale) during the period.
The cash outflow for the payment of a long-term borrowing made from a related party where one party can exercise control or significant influence over another party; including affiliates, owners or officers and their immediate families, pension trusts, and so forth. Alternate caption: Payments for Advances from Affiliates.
Joymain International Development Group Inc. (f/k/a Advento, Inc.) (“the Company”, “we", “ us”, “our”) was incorporated under the laws of the State of Nevada, U.S. on August 4, 2010 under the name Advento, Inc. The Company develops, sources, markets and distributes healthcare related consumer products in the global market On March 12, 2013, Mr. Xijian Zhou acquired an aggregate of
750,000,000
shares of the Company’ s common stock, representing
82.92% of our issued and outstanding shares as of March 12, 2013. Effective March 12, 2013, (a) Mr. Liang Wei Wang resigned as the Company’ s president, secretary, treasurer, and director of the Company; (b) Mr. Suqun Lin, was appointed as the Company’ s sole director, president, secretary and treasurer. Effective March 28, 2013, the Nevada Secretary of State accepted for filing of a Certificate of Amendment to the Company’ s Articles of Incorporation to change the Company’ s name from Advento, Inc. to Joymain International Development Group Inc. and to increase its authorized capital from
75,000,000
to
1,500,000,000
shares of common stock, par value of $0.001. These amendments became effective on April 10, 2013 upon approval from the Financial Industry Regulatory Authority (“FINRA”). Also effective April 10, 2013, pursuant to a
300
new for one (1) old forward split, the Company’ s issued and outstanding shares of common stock increased from
3,015,000
to
904,500,000
shares, par value of $0.001. Information regarding shares of common stock (except par value per share), discount on stock issued, and net (loss) income per common share for all periods presented reflects the three hundred-for-one forward split of the Company’ s common stock.
In connection with the change of control, the Company changed its business operation plan to develop, source, market and distribute healthcare related consumer products in the global market and possibly acquire an existing target company or business in the related field which operates in the United States.
In May 2014, The Company acquired a HK trading company, Dao Sheng Trading Limited (“Dao Sheng”) for HK$10,000. Dao Sheng was incorporated in December 2013 and had no assets or liabilities at the time of the acquisition. The Company also set up Joymain International Intellectual Property Limited in Hong Kong in May 2014. The Company considers Hong Kong as an ideal location to connect to all Asian markets and it provides a comprehensive and advanced legal system for trading and intellectual property protection.
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation.
The consolidated financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America and are presented in US dollars. The Company’s consolidated financial statements included the financial statements of its wholly-owned subsidiaries, Dao Sheng and Joymain International Intellectual Property Limited. All significant intercompany accounts and transactions have been eliminated in consolidation.
Going Concern
The consolidated financial statements have been prepared on a going concern basis which assumes the Company will be able to realize its assets and discharge its liabilities in the normal course of business for the foreseeable future. The Company has incurred losses since inception resulting in an accumulated deficit of $14,606,652
as of April 30, 2016 and further losses are anticipated in the development of its business, which raise substantial doubt about the Company’ s ability to continue as a going concern. The ability to continue as a going concern is dependent upon the Company generating profitable operations in the future and/or to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. Management intends to finance operating costs over the next twelve months with existing cash on hand and loans from directors and or sale of common stock.
The Company expects to depend on outside capital for its future business developments. Such outside capital will include proceeds from the issuance of equity securities and may include commercial borrowing. There can be no assurance that capital will be available as necessary to meet these development costs or, if the capital is available, that it will be on terms acceptable to the Company. The Company has a registration statement on Form S-1, effective on August 1, 2014, pursuant to which the Company planned to raise up to $12
million in equity. The registration statement expired on November 28, 2014 and the Company raised $10,150
in the offering.
The issuances of additional equity securities by the Company may result in a significant dilution in the equity interests of its current stockholders. Obtaining commercial loans, assuming those loans would be available, will increase the Company's liabilities and future cash commitments.
However, there can be no assurance that these arrangements will be sufficient to fund its ongoing capital expenditures, working capital, and other cash requirements. The outcome of these matters cannot be predicted at this time.
There can be no assurance that any additional financings will be available to the Company on satisfactory terms and conditions, if at all. In the event we are unable to continue as a going concern, we may elect or be required to seek protection from our creditors by filing a voluntary petition in bankruptcy or may be subject to an involuntary petition in bankruptcy. To date, management has not considered this alternative, nor does management view it as a likely occurrence.
The accompanying consolidated financial statements do not include any adjustments related to the recoverability or classification of asset-carrying amounts or the amounts and classification of liabilities that may result should the Company be unable to continue as a going concern.
Cash and Cash Equivalents
The Company considers all highly liquid instruments with a maturity of three months or less at the time of issuance to be cash equivalents. The Company maintains cash and cash equivalents with a financial institution in the U.S. Cash and cash equivalents consisted of cash and money market accounts at April 30, 2016. Financial instruments that potentially subject the Company to concentration of credit risk consist of cash accounts in a financial institution which, at times may exceed the Federal depository insurance coverage of $250,000. As of April 30, 2016 and 2015, the Company had approximately $867,000
and $629,000
in excess of the federally-insured limits, respectively. The Company has not experienced losses on these accounts as of the date of this report.
Use of Estimates and Assumptions
The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates include the useful life of property and equipment, valuation of deferred tax assets, and the value of stock-based compensation. Actual results could differ from those estimates.
Inventories
Inventories, consisting of the Company’ s Yoluxey products, are stated at the lower of cost or market (estimated net realizable value) utilizing the weighted average method. An allowance is established when management determines that certain inventories may not be saleable. If inventory costs exceed expected market value due to obsolescence or quantities in excess of expected demand, the Company will record reserves for the difference between the cost and the market value. These reserves are recorded based on estimates. The Company works with its vendor and customer to arrange the drop shipments for its inventories and the inventories are shipped directly to the ports designated by the Company’ s customer from the manufacture factory without going through the Company’ s warehouse to conserve shipping costs. As of April 30, 2016 and 2015, the Company did not have inventories on hand and there is no reserve for obsolete or slow-moving inventories necessary.
Advance to Suppliers
The Company periodically makes advances to vendors for purchases of products for resale, and records these purchases as advance to suppliers.
Fair Value of Financial Instruments
The Company adopted ASC 820, Fair Value Measurements and Disclosure (“ASC 820”) for assets and liabilities measured at fair value on a recurring basis. ASC 820 establishes a common definition for fair value to be applied to existing generally accepted accounting principles that require the use of fair value measurements, establishes a framework for measuring fair value and expands disclosure about such fair value measurements. The adoption of ASC 820 did not have an impact on the Company’ s financial position or operating results, but did expand certain disclosures.
ASC 820 defines fair value as the price that would be received upon sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Additionally, ASC 820 requires the use of valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. These inputs are prioritized below:
Level 1: Observable inputs such as quoted market prices in active markets for identical assets or liabilities
Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data
Level 3: Unobservable inputs for which there is little or no market data, which require the use of the reporting entity’ s own assumptions.
The following table sets forth by level within the fair value hierarchy of the Company’ s financial assets that were accounted for at fair value on a recurring basis as of April 30, 2016 and 2015:
April 30, 2016
April 30, 2015
Level 1
Level 2
Level 3
Total
Level 1
Level 2
Level 3
Total
Marketable securities
$
255,824
$
—
$
—
$
255,824
$
359,857
$
—
$
—
$
359,857
Total assets at fair value
$
255,824
$
—
$
—
$
255,824
$
359,857
$
—
$
—
$
359,857
The carrying values of prepaid expenses, advance to suppliers, accounts payables, due to related parties, advance from customer and other payables approximate their fair values due to the short maturities of these instruments.
Stock-based Compensation
Stock-based compensation is accounted for based on the requirements of the Share-Based Payment topic of ASC Topic 718 which requires recognition in the financial statements of the cost of employee and director services received in exchange for an award of equity instruments over the period the employee or director is required to perform the services in exchange for the award (presumptively, the vesting period). The Financial Accounting Standards Board (“FASB”) also requires measurement of the cost of employee and director services received in exchange for an award based on the grant-date fair value of the award.
Pursuant to ASC Topic 505-50, for share-based payments to consultants and other third-parties, compensation expense is determined at the “measurement date.” The expense is recognized over the vesting period of the award. Until the measurement date is reached, the total amount of compensation expense remains uncertain. The Company records compensation expense based on the fair value of the award at the reporting date. The awards to consultants and other third-parties are then revalued, or the total compensation is recalculated, based on the then current fair value, at each subsequent reporting date.
To date, the Company has not adopted a stock option plan and has not granted any stock options.
Income Taxes
The Company has adopted Accounting Standards Codification subtopic 740-10, Income Taxes (“ASC 740-10") which requires the recognition of deferred tax liabilities and assets for the expected future tax consequences of events that have been included in the financial statement or tax returns. Under this method, deferred tax liabilities and assets 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. Valuation allowances are recorded to reduce the deferred tax assets to an amount that it is more likely than not be realized.
We apply the provisions of ASC 740-10-50, “Accounting for Uncertainty in Income Taxes”, which provides clarification related to the process associated with accounting for uncertain tax positions recognized in our consolidated financial statements. Audit periods remain open for review until the statute of limitations has passed. The completion of review or the expiration of the statute of limitations for a given audit period could result in an adjustment to the Company’ s liability for income taxes. Any such adjustment could be material to the Company’ s results of operations for any given quarterly or annual period based, in part, upon the results of operations for the given period. As of April 30, 2016, the Company had no uncertain tax positions, and will continue to evaluate for uncertain positions in the future.
Basic and Diluted Loss Per Share
The Company computes loss per share in accordance with “ASC-260”, “Earnings per Share” which requires presentation of both basic and diluted earnings per share on the face of the statement of operations. Basic loss per share is computed by dividing net loss available to common shareholders by the weighted average number of outstanding common shares during the period. Diluted loss per share gives effect to all dilutive potential common shares outstanding during the period. Dilutive loss per share excludes all potential common shares if their effect is anti-dilutive. The Company has no potential dilutive instruments and accordingly basic loss and diluted loss per share are equal.
Fiscal Periods
The Company's fiscal year end is April 30.
Related Parties
Parties are considered to be related to the Company if the parties, directly or indirectly, through one or more intermediaries, control, are controlled by, or are under common control with the Company. Related parties also include principal owners of the Company, its management, members of the immediate families of principal owners of the Company and its management and other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. The Company discloses all related party transactions. All transactions shall be recorded at fair value of the goods or services exchanged. Property purchased from a related party is recorded at the cost to the related party and any payment to or on behalf of the related party in excess of the cost is reflected as a distribution to related party.
Revenue Recognition
Pursuant to the guidance of ASC Topic 605, the Company recognizes revenue from product sales to its customers when: (1) title and risk of loss are transferred (in general, these conditions occur at either point of shipment or point of destination, depending on the terms of sale); (2) persuasive evidence of an arrangement exists; (3) the Company has no continuing obligations to the customer; and (4) collection of the related accounts receivable is reasonably assured.
Advance from Customers
The Company requires its customer to make payments prior to the products are shipped. Any payments received prior to the products are shipped to the customer’ s point of destination and such advance received are recorded as advance from customers.
Foreign Currency Translation.
The reporting currency of the Company is the U.S. dollar. The functional currency of the parent company is the U.S. dollar and the functional currency of the Company’ s subsidiaries is the Hong Kong Dollar. For the subsidiaries, whose functional currencies are the Hong Kong Dollar, results of operations and cash flows are translated at average exchange rates during the period, assets and liabilities are translated at the unified exchange rate at the end of the period, and equity is translated at historical exchange rates. As a result, amounts relating to assets and liabilities reported on the statements of cash flows may not necessarily agree with the changes in the corresponding balances on the balance sheets. Translation adjustments resulting from the process of translating the local currency financial statements into U.S. dollars are included in determining comprehensive income. Assets and liabilities denominated in foreign currencies are translated into the functional currency at the exchange rates prevailing at the balance sheet date with any transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in the results of operations as incurred. Transactions denominated in foreign currencies are translated into the functional currency at the exchange rates prevailing on the transaction dates. During the year ended April 30, 2016, 2015, and 2014, the Company’ s subsidiaries have no assets or liabilities and they did not have any business activities. There was no cumulative translation adjustment and no effect of exchange rate changes on cash for the year ended April 30, 2015 and 2016.
Comprehensive Loss
Comprehensive loss is comprised of net loss and all changes to the statements of stockholders’ equity, except those due to investments by stockholders, changes in paid-in capital and distributions to stockholders. The Company did not have any other comprehensive gain (loss) for fiscal years 2016, 2015 and 2014.
Concentration of Credit Risk
Financial instruments which potentially subject the Company to concentrations of credit risk consist principally of cash and marketable securities. We place our cash with high credit quality financial institutions in the United States. The Company has not experienced any losses in such accounts through April 30, 2016.
All of the Company’ s sales are to one customer whose ability to pay is dependent upon the industry economics prevailing in these areas; however, the Company believes that the concentration of credit risk with respect to sales is limited due to the requirements for the customer to make payments prior to shipments. The Company also perform ongoing credit evaluations of its customer to help further reduce potential credit risk. However, if the Company is not able to increase the number of customers and loses its sole customer, there will be significant risks for the Company to continue to generate revenue.
Recent Accounting Pronouncements
In March 2016, the FASB issued ASU 2016-09, "
Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting
". Several aspects of the accounting for share-based payment award transactions are simplified, including: (a) income tax consequences; (b) classification of awards as either equity or liabilities; and (c) classification on the statement of cash flows. The amendments are effective for public companies for annual periods beginning after December 15, 2016, and interim periods within those annual periods. Early adoption is permitted for any interim or annual period. The Company is currently in the process of evaluating the impact of the adoption on its consolidated financial statements.
In July 2015, The FASB has issued Accounting Standards Update (ASU) No. 2015-11,
Inventory (Topic 330): Simplifying the Measurement of Inventory.
Topic 330, Inventory, currently requires an entity to measure inventory at the lower of cost or market. Market could be replacement cost, net realizable value, or net realizable value less an approximately normal profit margin. The amendments do not apply to inventory that is measured using last-in, first-out (LIFO) or the retail inventory method. The amendments apply to all other inventory, which includes inventory that is measured using first-in, first-out (FIFO) or average cost. An entity should measure in scope inventory at the lower of cost and net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. Subsequent measurement is unchanged for inventory measured using LIFO or the retail inventory method. The amendments in this Update more closely align the measurement of inventory in GAAP with the measurement of inventory in International Financial Reporting Standards. For public business entities, the amendments are effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2016, and interim periods within fiscal years beginning after December 15, 2017. The amendments should be applied prospectively with earlier application permitted as of the beginning of an interim or annual reporting period. The adoption of ASU 2015-11 is not expected to have a material impact on the Company’ s consolidated financial statements.
In November 2015, the FASB issued new accounting guidance regarding the balance sheet classification of deferred income taxes. The primary objective of this accounting guidance is to classify all deferred income tax assets and liabilities as noncurrent in a classified statement of financial position. There was no material impact to results of operations as the result of adoption of the accounting pronouncement.
There are various other updates recently issued, most of which represented technical corrections to the accounting literature or application to specific industries and are not expected to a have a material impact on the Company's financial position, results of operations or cash flows.
Marketable securities consist of certificate of deposits and mutual funds for which fair values were based on quoted prices in active markets and were therefore classified within Level 1 of the fair value hierarchy. The following table is a summary of marketable securities recorded in the Company’s Consolidated Balance Sheets:
April 30, 2016
April 30, 2015
Certificate of deposits
$
-
$
100,409
Mutual funds
255,824
259,448
Total
$
255,824
$
359,857
The Company sold the certificate of deposits upon its maturity and transferred the proceed / fund to its operating bank account for working capital purposes during fiscal 2016.
The entire disclosure for investment holdings. This includes the long positions of investments for the entity. It contains investments in affiliated and unaffiliated issuers. The investments include securities and non securities (i.e. commodities and futures contracts).
NOTE 4. ADVANCE TO SUPPLIERS AND ADVANCE FROM CUSTOMERS
The Company makes advance payments to suppliers for goods ordered but yet to be delivered to our customer as it has a drop ship arrangement between its suppliers and customer. The Company receives advance payments from customers for goods ordered but yet to be shipped and/or shipped to its customers’ point of destination. Advanced payments to suppliers as of April 30, 2016 and 2015 were $62,736
and $1,293,030, respectively. Advanced payments from customers as of April 30, 2016 and 2015 were $428,781
and $1,423,031, respectively.
On June 25, 2014, the Company entered into a distribution agreement with Right Fortune International Limited (“Right Fortune”) to obtain the exclusive distribution right of Yolexury and Yolexury Travel Pack, a health juice product which increases energy and stamina, helps to maintain healthy cardio vascular function and promotes healthy digestive system. The term of exclusivity will be automatically renewed annually if the Company meets the annual Yolexury Minimum Order Quantities (the “Minimum Order”). The annual Minimum Order for calendar year 2015 is
400,000
bottles of 750ml Yolexury, which the Company has fulfilled as of December 31, 2015. The Company works with its vendor and customer to arrange the drop shipments for its inventories and the inventories are shipped directly to the ports designated by the Company’ s customer from the manufacture factory without going through the Company’ s warehouse to conserve shipping costs.
For the years ended April 30, 2016, 2015 and 2014, the Company’ s majority shareholder advanced the Company for its working capital of $0, $60
and $60,782, respectively. For the years ended April 30, 2016, the Company repaid its major shareholder of $3,294, $44,676
and $48,040, respectively. In addition, the Company’s majority shareholder paid certain payroll expense and other general expenses on behalf of the Company for total amount of $0, $8,290
and $0
for the years ended April 30, 2016, 2015 and 2014, respectively. The advances are non-interest bearing, due upon demand and unsecured. At April 30, 2016 and 2015, the Company’s due to related parties amounted to $235
and $3,529, respectively.
The entire disclosure for related party transactions. Examples of related party transactions include transactions between (a) a parent company and its subsidiary; (b) subsidiaries of a common parent; (c) and entity and its principal owners; and (d) affiliates.
Other payables consist of accrued salary and related accrued expenses. The amounts are expected to be repaid in the form of cash. At April 30, 2016 and 2015, the Company’s other payable amounted to $51,817
and $23,749, respectively.
The Company has authorized
1,500,000,000
shares of common stock, par value $0.001
per share. On April 28, 2011, the Company issued
750,000,000
shares of common stock at a price of $0.000003
per share for total cash proceeds of $2,500. In March and April, 2012, the Company issued
154,500,000
shares of common stock at a price of $0.00016
per share for total cash proceeds of $25,750. On July 30, 2014, the Company issued a total of
2,390,000
shares of common stock to a consultant. The shares were valued at $0.03
per share, the fair market value on the date of issuance. During the year ended April 30, 2015, the Company recorded stock-based compensation of $71,700.
In August 2014, the Company sold a total of
110,000
shares of common stock at a price of $0.07
per share to two investors. The shares were sold pursuant to the Company’ s registration statement on Form S-1, file number
333
-
197508, effective on August 1, 2014. The Company did not engage a placement agent with respect to the sale. The net proceeds received by the Company from the sale of the shares were $7,700.
In September 2014, the Company sold a total of
35,000
shares of common stock at a price of $0.07
per share to two investors. The shares were sold pursuant to the Company’ s registration statement on Form S-1, file number
333
-
197508, effective on August 1, 2014. The Company did not engage a placement agent with respect to the sale. The net proceeds received by the Company from the sale of the shares were $2,450. The Form S-1, file number
333
-
197508, expired on November 28, 2014.
In January, 2015, the Company issued a total of
163,978,373
shares of common stock to its
34
distribution and development partners. The shares were valued at $0.08
per share, the fair market value on the date of issuance. The Company recorded stock-based business development expenses of $13,118,270
for the year ended April 30, 2015.
On February 11, 2015, the Company filed a registration statement on Form S-1 (the “Form S-1”) related to the resale of up to
51,720,000
shares of the Company’ s common stock (the “Common Stock”) including
49,330,000
shares of Common Stock issued at a price of $0.03
per share for a total gross cash proceeds of $1,479,900
in a private placement transaction closed on July 19, 2014 and
2,390,000
shares of Common Stock issued pursuant to a consulting agreement date May 10, 2014 between the Company and LP Funding LLC. The selling stockholders may sell common stock from time to time in the principal market on which the stock is traded at the prevailing market price, at prices related to such prevailing market price, in negotiated transactions or a combination of such methods of sale. We will not receive any proceeds from the sales by the selling stockholders. The Form S-1 was declared effective on April 24, 2015.
On June 15, 2015, trading in our Common Stock was temporarily suspended by the Securities and Exchange Commission (the “Commission”) due to recent unexplained market activity. As a result, trading in our Common Stock was suspended for the period from 9:30 am EDT on June 15, 2015, through 11:50 pm EDT on June 26, 2015.
On June 16, 2015, our Board of Directors engaged Hunter Taubman Fischer LLC to commence an internal investigation (the “Internal Investigation”) with regard to the recent rise in the trading price of our common stock and market activity during a period from April 1, 2015 to June 16, 2015 (the “Period in Question”). The Internal Investigation was completed on August 11, 2015. See “Temporary suspension of trading and Internal Investigation” in Item 1. Business.
We had
1,120,343,373
shares of common stock issued and outstanding as of April 30, 2016 and 2015.
The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income.
We account for income taxes under ASC 740, “
Expenses - Income Taxes
”. ASC 740 requires the recognition of deferred tax assets and liabilities for both the expected impact of differences between the financial statements and the tax basis of assets and liabilities, and for the expected future tax benefit to be derived from tax losses and tax credit carry forwards. ASC 740 additionally requires the establishment of a valuation allowance to reflect the likelihood of realization of deferred tax assets.
The income tax provision (benefit) for the years ended April 30, 2016, 2015 and 2014 consists of the following:
For the Years Ended April 30,
2016
2015
2014
Expected income tax expense (benefit)
at the statutory rate of
34%
$
(37,000
)
$
(4,454,000
)
$
(57,000
)
Tax effect of expenses (benefit)
that are not deductible for income tax purposes
(net of other amounts deductible for tax purposes)
-
-
-
Change in valuation allowance
37,000
4,454,000
57,000
Provision for income taxes
$
-
$
-
$
-
The Company has a net operating loss (“NOL”) carryforward for U.S. income tax purposes aggregating approximately $13,714,000
at April 30, 2016 expiring through the year 2035, subject to the Internal Revenue Code Section 382, which places a limitation on the amount of taxable income that can be offset by net operating losses after a change in ownership. The Company has no Hong Kong NOL for its inactive subsidiaries in Hong Kong as of April 30, 2016.
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Included in the deferred tax asset is the aforementioned NOL and the tax benefit associated with the issuance of stock-based compensation. The realization of the deferred tax assets is dependent on future taxable income, in addition to the exercise of stock options; we are not able to predict if such future taxable income will be more likely than not sufficient to utilize the benefit. As such, we do not believe the benefit is more likely than not to be realized and we recognize a full valuation allowance for those deferred tax assets. Our deferred tax assets as of April 30, 2016 and 2015 are as follows:
As of April 30,
2016
2015
Deferred income tax asset:
Net operating loss carryforwards
$
4,663,000
$
4,626,000
Valuation allowance
(4,663,000
)
(4,626,000
)
Deferred income taxes
$
-
$
-
The increases in the valuation allowance at April 30, 2016 and 2015 from their immediate prior year-end was $37,000
and $4,454,000, respectively.
The Company has filed its U.S. tax returns through April 30, 2015.
Our subsidiaries in Hong Kong have no business activities since inception and are governed by the Income Tax Law of the Hong Kong Special Administrative Region (“HK SAR”) and local income tax laws (the HK SAR Income Tax Law”). Pursuant to the HK SAR Income Tax Law, our Hong Kong subsidiaries are subject to tax at a maximum statutory rate of
17% (inclusive of state and local income taxes) if in operations.
The provisions of ASC 740 require companies to recognize in their financial statements the impact of a tax position if that position is more likely than not to be sustained upon audit, based upon the technical merits of the position. ASC 740 prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken on a tax return. ASC 740 also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods and disclosure.
Management does not believe that the Company has any material uncertain tax positions requiring recognition or measurement in accordance with the provisions of ASC 740. Accordingly, the adoption of these provisions of ASC 740 did not have a material effect on the Company’s financial statements. The Company’s policy is to record interest and penalties on uncertain tax positions, if any, as income tax expense.
All tax years for the Company remain subject to future examinations by the applicable taxing authorities.
The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.
In May 2016, the Company received certain informal inquiry from the Commission regarding trading activity in our common stock and the Company is currently in the process of responding to such inquiry. The inquiry requires that the Company provide certain categories of documents to the Commission. The Commission indicated in its inquiry that it should not be construed as an indication that any violation of any federal securities laws has occurred or as a reflection upon the merits of any person, company, or securities involved. The inquiry is a confidential non-public fact finding request. It is not possible at this time to predict the outcome of the inquiries, including whether or when any proceedings might be initiated, when these matters may be resolved or what, if any, penalties or other remedies may be imposed. The Company has been, and intend to continue, voluntarily cooperating fully with the SEC. The scope and outcome of this matter cannot be determined at this time. The Company has expended significant resources to the Internal Investigation (see NOTE 7) and responding to the Commission’s inquiry. Failure to resolve such matters favorably could harm tradability of our common stock and our reputation significantly and could result in a loss of your investment in our stock.
The Company has evaluated subsequent events through the date of the consolidated financial statements were issued and up to the time of filing of the consolidated financial statements with the Securities and Exchange Commission.
The entire disclosure for significant events or transactions that occurred after the balance sheet date through the date the financial statements were issued or the date the financial statements were available to be issued. Examples include: the sale of a capital stock issue, purchase of a business, settlement of litigation, catastrophic loss, significant foreign exchange rate changes, loans to insiders or affiliates, and transactions not in the ordinary course of business.
The consolidated financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America and are presented in US dollars. The Company’s consolidated financial statements included the financial statements of its wholly-owned subsidiaries, Dao Sheng and Joymain International Intellectual Property Limited. All significant intercompany accounts and transactions have been eliminated in consolidation.
The consolidated financial statements have been prepared on a going concern basis which assumes the Company will be able to realize its assets and discharge its liabilities in the normal course of business for the foreseeable future. The Company has incurred losses since inception resulting in an accumulated deficit of $14,606,652
as of April 30, 2016 and further losses are anticipated in the development of its business, which raise substantial doubt about the Company’ s ability to continue as a going concern. The ability to continue as a going concern is dependent upon the Company generating profitable operations in the future and/or to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. Management intends to finance operating costs over the next twelve months with existing cash on hand and loans from directors and or sale of common stock.
The Company expects to depend on outside capital for its future business developments. Such outside capital will include proceeds from the issuance of equity securities and may include commercial borrowing. There can be no assurance that capital will be available as necessary to meet these development costs or, if the capital is available, that it will be on terms acceptable to the Company. The Company has a registration statement on Form S-1, effective on August 1, 2014, pursuant to which the Company planned to raise up to $12
million in equity. The registration statement expired on November 28, 2014 and the Company raised $10,150
in the offering.
The issuances of additional equity securities by the Company may result in a significant dilution in the equity interests of its current stockholders. Obtaining commercial loans, assuming those loans would be available, will increase the Company's liabilities and future cash commitments.
However, there can be no assurance that these arrangements will be sufficient to fund its ongoing capital expenditures, working capital, and other cash requirements. The outcome of these matters cannot be predicted at this time.
There can be no assurance that any additional financings will be available to the Company on satisfactory terms and conditions, if at all. In the event we are unable to continue as a going concern, we may elect or be required to seek protection from our creditors by filing a voluntary petition in bankruptcy or may be subject to an involuntary petition in bankruptcy. To date, management has not considered this alternative, nor does management view it as a likely occurrence.
The accompanying consolidated financial statements do not include any adjustments related to the recoverability or classification of asset-carrying amounts or the amounts and classification of liabilities that may result should the Company be unable to continue as a going concern.
The Company considers all highly liquid instruments with a maturity of three months or less at the time of issuance to be cash equivalents. The Company maintains cash and cash equivalents with a financial institution in the U.S. Cash and cash equivalents consisted of cash and money market accounts at April 30, 2016. Financial instruments that potentially subject the Company to concentration of credit risk consist of cash accounts in a financial institution which, at times may exceed the Federal depository insurance coverage of $250,000. As of April 30, 2016 and 2015, the Company had approximately $867,000
and $629,000
in excess of the federally-insured limits, respectively. The Company has not experienced losses on these accounts as of the date of this report.
The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates include the useful life of property and equipment, valuation of deferred tax assets, and the value of stock-based compensation. Actual results could differ from those estimates.
Inventories, consisting of the Company’ s Yoluxey products, are stated at the lower of cost or market (estimated net realizable value) utilizing the weighted average method. An allowance is established when management determines that certain inventories may not be saleable. If inventory costs exceed expected market value due to obsolescence or quantities in excess of expected demand, the Company will record reserves for the difference between the cost and the market value. These reserves are recorded based on estimates. The Company works with its vendor and customer to arrange the drop shipments for its inventories and the inventories are shipped directly to the ports designated by the Company’ s customer from the manufacture factory without going through the Company’ s warehouse to conserve shipping costs. As of April 30, 2016 and 2015, the Company did not have inventories on hand and there is no reserve for obsolete or slow-moving inventories necessary.
The Company adopted ASC 820, Fair Value Measurements and Disclosure (“ASC 820”) for assets and liabilities measured at fair value on a recurring basis. ASC 820 establishes a common definition for fair value to be applied to existing generally accepted accounting principles that require the use of fair value measurements, establishes a framework for measuring fair value and expands disclosure about such fair value measurements. The adoption of ASC 820 did not have an impact on the Company’ s financial position or operating results, but did expand certain disclosures.
ASC 820 defines fair value as the price that would be received upon sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Additionally, ASC 820 requires the use of valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. These inputs are prioritized below:
Level 1: Observable inputs such as quoted market prices in active markets for identical assets or liabilities
Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data
Level 3: Unobservable inputs for which there is little or no market data, which require the use of the reporting entity’ s own assumptions.
The following table sets forth by level within the fair value hierarchy of the Company’ s financial assets that were accounted for at fair value on a recurring basis as of April 30, 2016 and 2015:
April 30, 2016
April 30, 2015
Level 1
Level 2
Level 3
Total
Level 1
Level 2
Level 3
Total
Marketable securities
$
255,824
$
—
$
—
$
255,824
$
359,857
$
—
$
—
$
359,857
Total assets at fair value
$
255,824
$
—
$
—
$
255,824
$
359,857
$
—
$
—
$
359,857
The carrying values of prepaid expenses, advance to suppliers, accounts payables, due to related parties, advance from customer and other payables approximate their fair values due to the short maturities of these instruments.
Stock-based compensation is accounted for based on the requirements of the Share-Based Payment topic of ASC Topic 718 which requires recognition in the financial statements of the cost of employee and director services received in exchange for an award of equity instruments over the period the employee or director is required to perform the services in exchange for the award (presumptively, the vesting period). The Financial Accounting Standards Board (“FASB”) also requires measurement of the cost of employee and director services received in exchange for an award based on the grant-date fair value of the award.
Pursuant to ASC Topic 505-50, for share-based payments to consultants and other third-parties, compensation expense is determined at the “measurement date.” The expense is recognized over the vesting period of the award. Until the measurement date is reached, the total amount of compensation expense remains uncertain. The Company records compensation expense based on the fair value of the award at the reporting date. The awards to consultants and other third-parties are then revalued, or the total compensation is recalculated, based on the then current fair value, at each subsequent reporting date.
To date, the Company has not adopted a stock option plan and has not granted any stock options.
The Company has adopted Accounting Standards Codification subtopic 740-10, Income Taxes (“ASC 740-10") which requires the recognition of deferred tax liabilities and assets for the expected future tax consequences of events that have been included in the financial statement or tax returns. Under this method, deferred tax liabilities and assets 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. Valuation allowances are recorded to reduce the deferred tax assets to an amount that it is more likely than not be realized.
We apply the provisions of ASC 740-10-50, “Accounting for Uncertainty in Income Taxes”, which provides clarification related to the process associated with accounting for uncertain tax positions recognized in our consolidated financial statements. Audit periods remain open for review until the statute of limitations has passed. The completion of review or the expiration of the statute of limitations for a given audit period could result in an adjustment to the Company’ s liability for income taxes. Any such adjustment could be material to the Company’ s results of operations for any given quarterly or annual period based, in part, upon the results of operations for the given period. As of April 30, 2016, the Company had no uncertain tax positions, and will continue to evaluate for uncertain positions in the future.
The Company computes loss per share in accordance with “ASC-260”, “Earnings per Share” which requires presentation of both basic and diluted earnings per share on the face of the statement of operations. Basic loss per share is computed by dividing net loss available to common shareholders by the weighted average number of outstanding common shares during the period. Diluted loss per share gives effect to all dilutive potential common shares outstanding during the period. Dilutive loss per share excludes all potential common shares if their effect is anti-dilutive. The Company has no potential dilutive instruments and accordingly basic loss and diluted loss per share are equal.
Parties are considered to be related to the Company if the parties, directly or indirectly, through one or more intermediaries, control, are controlled by, or are under common control with the Company. Related parties also include principal owners of the Company, its management, members of the immediate families of principal owners of the Company and its management and other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. The Company discloses all related party transactions. All transactions shall be recorded at fair value of the goods or services exchanged. Property purchased from a related party is recorded at the cost to the related party and any payment to or on behalf of the related party in excess of the cost is reflected as a distribution to related party.
Pursuant to the guidance of ASC Topic 605, the Company recognizes revenue from product sales to its customers when: (1) title and risk of loss are transferred (in general, these conditions occur at either point of shipment or point of destination, depending on the terms of sale); (2) persuasive evidence of an arrangement exists; (3) the Company has no continuing obligations to the customer; and (4) collection of the related accounts receivable is reasonably assured.
The Company requires its customer to make payments prior to the products are shipped. Any payments received prior to the products are shipped to the customer’ s point of destination and such advance received are recorded as advance from customers.
The reporting currency of the Company is the U.S. dollar. The functional currency of the parent company is the U.S. dollar and the functional currency of the Company’ s subsidiaries is the Hong Kong Dollar. For the subsidiaries, whose functional currencies are the Hong Kong Dollar, results of operations and cash flows are translated at average exchange rates during the period, assets and liabilities are translated at the unified exchange rate at the end of the period, and equity is translated at historical exchange rates. As a result, amounts relating to assets and liabilities reported on the statements of cash flows may not necessarily agree with the changes in the corresponding balances on the balance sheets. Translation adjustments resulting from the process of translating the local currency financial statements into U.S. dollars are included in determining comprehensive income. Assets and liabilities denominated in foreign currencies are translated into the functional currency at the exchange rates prevailing at the balance sheet date with any transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in the results of operations as incurred. Transactions denominated in foreign currencies are translated into the functional currency at the exchange rates prevailing on the transaction dates. During the year ended April 30, 2016, 2015, and 2014, the Company’ s subsidiaries have no assets or liabilities and they did not have any business activities. There was no cumulative translation adjustment and no effect of exchange rate changes on cash for the year ended April 30, 2015 and 2016.
Comprehensive loss is comprised of net loss and all changes to the statements of stockholders’ equity, except those due to investments by stockholders, changes in paid-in capital and distributions to stockholders. The Company did not have any other comprehensive gain (loss) for fiscal years 2016, 2015 and 2014.
Financial instruments which potentially subject the Company to concentrations of credit risk consist principally of cash and marketable securities. We place our cash with high credit quality financial institutions in the United States. The Company has not experienced any losses in such accounts through April 30, 2016.
All of the Company’ s sales are to one customer whose ability to pay is dependent upon the industry economics prevailing in these areas; however, the Company believes that the concentration of credit risk with respect to sales is limited due to the requirements for the customer to make payments prior to shipments. The Company also perform ongoing credit evaluations of its customer to help further reduce potential credit risk. However, if the Company is not able to increase the number of customers and loses its sole customer, there will be significant risks for the Company to continue to generate revenue.
In March 2016, the FASB issued ASU 2016-09, "
Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting
". Several aspects of the accounting for share-based payment award transactions are simplified, including: (a) income tax consequences; (b) classification of awards as either equity or liabilities; and (c) classification on the statement of cash flows. The amendments are effective for public companies for annual periods beginning after December 15, 2016, and interim periods within those annual periods. Early adoption is permitted for any interim or annual period. The Company is currently in the process of evaluating the impact of the adoption on its consolidated financial statements.
In July 2015, The FASB has issued Accounting Standards Update (ASU) No. 2015-11,
Inventory (Topic 330): Simplifying the Measurement of Inventory.
Topic 330, Inventory, currently requires an entity to measure inventory at the lower of cost or market. Market could be replacement cost, net realizable value, or net realizable value less an approximately normal profit margin. The amendments do not apply to inventory that is measured using last-in, first-out (LIFO) or the retail inventory method. The amendments apply to all other inventory, which includes inventory that is measured using first-in, first-out (FIFO) or average cost. An entity should measure in scope inventory at the lower of cost and net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. Subsequent measurement is unchanged for inventory measured using LIFO or the retail inventory method. The amendments in this Update more closely align the measurement of inventory in GAAP with the measurement of inventory in International Financial Reporting Standards. For public business entities, the amendments are effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2016, and interim periods within fiscal years beginning after December 15, 2017. The amendments should be applied prospectively with earlier application permitted as of the beginning of an interim or annual reporting period. The adoption of ASU 2015-11 is not expected to have a material impact on the Company’ s consolidated financial statements.
In November 2015, the FASB issued new accounting guidance regarding the balance sheet classification of deferred income taxes. The primary objective of this accounting guidance is to classify all deferred income tax assets and liabilities as noncurrent in a classified statement of financial position. There was no material impact to results of operations as the result of adoption of the accounting pronouncement.
There are various other updates recently issued, most of which represented technical corrections to the accounting literature or application to specific industries and are not expected to a have a material impact on the Company's financial position, results of operations or cash flows.
Disclosure of accounting policy for basis of accounting, or basis of presentation, used to prepare the financial statements (for example, US Generally Accepted Accounting Principles, Other Comprehensive Basis of Accounting, IFRS).
Disclosure of accounting policy for cash and cash equivalents, including the policy for determining which items are treated as cash equivalents. Other information that may be disclosed includes (1) the nature of any restrictions on the entity's use of its cash and cash equivalents, (2) whether the entity's cash and cash equivalents are insured or expose the entity to credit risk, (3) the classification of any negative balance accounts (overdrafts), and (4) the carrying basis of cash equivalents (for example, at cost) and whether the carrying amount of cash equivalents approximates fair value.
Disclosure of accounting policy for salaries, bonuses, incentive awards, postretirement and postemployment benefits granted to employees, including equity-based arrangements; discloses methodologies for measurement, and the bases for recognizing related assets and liabilities and recognizing and reporting compensation expense.
Disclosure of accounting policy for computing basic and diluted earnings or loss per share for each class of common stock and participating security. Addresses all significant policy factors, including any antidilutive items that have been excluded from the computation and takes into account stock dividends, splits and reverse splits that occur after the balance sheet date of the latest reporting period but before the issuance of the financial statements.
Disclosure of accounting policy for determining an entity's fiscal year or other fiscal period. This disclosure may include identification of the fiscal period end-date, the length of the fiscal period, any reporting period lag between the entity and its subsidiaries, or equity investees. If a reporting lag exists, the closing date of the entity having a different period end is generally noted, along with an explanation of the necessity for using different closing dates. Any intervening events that materially affect the entity's financial position or results of operations are generally also disclosed.
Disclosure of accounting policy for (1) transactions denominated in a currency other than the reporting enterprise's functional currency, (2) translating foreign currency financial statements that are incorporated into the financial statements of the reporting enterprise by consolidation, combination, or the equity method of accounting, and (3) remeasurement of the financial statements of a foreign reporting enterprise in a hyperinflationary economy.
Disclosure of accounting policy for income taxes, which may include its accounting policies for recognizing and measuring deferred tax assets and liabilities and related valuation allowances, recognizing investment tax credits, operating loss carryforwards, tax credit carryforwards, and other carryforwards, methodologies for determining its effective income tax rate and the characterization of interest and penalties in the financial statements.
Disclosure of accounting policy for major classes of inventories, bases of stating inventories (for example, lower of cost or market), methods by which amounts are added and removed from inventory classes (for example, FIFO, LIFO, or average cost), loss recognition on impairment of inventories, and situations in which inventories are stated above cost. If inventory is carried at cost, this disclosure includes the nature of the cost elements included in inventory.
Disclosure of accounting policy pertaining to new accounting pronouncements that may impact the entity's financial reporting. Includes, but is not limited to, quantification of the expected or actual impact.
Disclosure of accounting policy for revenue recognition. If the entity has different policies for different types of revenue transactions, the policy for each material type of transaction is generally disclosed. If a sales transaction has multiple element arrangements (for example, delivery of multiple products, services or the rights to use assets) the disclosure may indicate the accounting policy for each unit of accounting as well as how units of accounting are determined and valued. The disclosure may encompass important judgment as to appropriateness of principles related to recognition of revenue. The disclosure also may indicate the entity's treatment of any unearned or deferred revenue that arises from the transaction.
Disclosure of accounting policy for stock option and stock incentive plans. This disclosure may include (1) the types of stock option or incentive plans sponsored by the entity (2) the groups that participate in (or are covered by) each plan (3) significant plan provisions and (4) how stock compensation is measured, and the methodologies and significant assumptions used to determine that measurement.
Disclosure of accounting policy for the use of estimates in the preparation of financial statements in conformity with generally accepted accounting principles.
Tabular disclosure of the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined) which are not recognized in the financial statements (off-balance sheet) because they fail to meet some other criterion for recognition.
Tabular disclosure of the components of income tax expense attributable to continuing operations for each year presented including, but not limited to: current tax expense (benefit), deferred tax expense (benefit), investment tax credits, government grants, the benefits of operating loss carryforwards, tax expense that results from allocating certain tax benefits either directly to contributed capital or to reduce goodwill or other noncurrent intangible assets of an acquired entity, adjustments of a deferred tax liability or asset for enacted changes in tax laws or rates or a change in the tax status of the entity, and adjustments of the beginning-of-the-year balances of a valuation allowance because of a change in circumstances that causes a change in judgment about the realizability of the related deferred tax asset in future years.
Tabular disclosure of the components of net deferred tax asset or liability recognized in an entity's statement of financial position, including the following: the total of all deferred tax liabilities, the total of all deferred tax assets, the total valuation allowance recognized for deferred tax assets.
Carrying value of capitalized payments made in advance for inventory that is expected to be received within one year or the normal operating cycle, if longer.
Portion of the carrying amount as of the balance sheet date of obligations due all related parties that is payable after one year or beyond the normal operating cycle if longer.
The cash outflow for the payment of a long-term borrowing made from a related party where one party can exercise control or significant influence over another party; including affiliates, owners or officers and their immediate families, pension trusts, and so forth. Alternate caption: Payments for Advances from Affiliates.
Carrying value of the current portion of notes payable which were initially due after one year or beyond the normal operating cycle, if longer, and which are not otherwise defined in the taxonomy.
Total number of shares of other common stock instruments held by shareholders, such as exchangeable shares. May be all or portion of the number of common shares authorized.
Total number of common shares of an entity that have been sold or granted to shareholders (includes common shares that were issued, repurchased and remain in the treasury). These shares represent capital invested by the firm's shareholders and owners, and may be all or only a portion of the number of shares authorized. Shares issued include shares outstanding and shares held in the treasury.
The aggregate amount of noncash, equity-based employee remuneration. This may include the value of stock or unit options, amortization of restricted stock or units, and adjustment for officers' compensation. As noncash, this element is an add back when calculating net cash generated by operating activities using the indirect method.
Number of shares issued in lieu of cash for services contributed to the entity. Number of shares includes, but is not limited to, shares issued for services contributed by vendors and founders.