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EX-31.2 - HOLLYWOOD ENTERTAINMENT EDU HOLDING, INC. | v181226_ex31-2.htm |
EX-31.1 - HOLLYWOOD ENTERTAINMENT EDU HOLDING, INC. | v181226_ex31-1.htm |
EX-32.1 - HOLLYWOOD ENTERTAINMENT EDU HOLDING, INC. | v181226_ex32-1.htm |
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
10-K
(Mark
One)
x ANNUAL
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
For the
fiscal year ended: December
31, 2009
¨ TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
For the
transition period from ____________ to _____________
Commission
File No. 000-53069
HOLLYWOOD
ENTERTAINMENT EDU HOLDING, INC.
(formerly
known as China Environment Holdings, Inc.)
(Name of
registrant as specified in its charter)
Delaware
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26-1702585
|
|
(State
or other jurisdiction of incorporation or
organization)
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(I.R.S.
Employer Identification
No.)
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9660
Flair Drive, Suite 408
El Monte,
CA 91731
(Address
of Principal Executive Offices)
310-990-2590
(Registrant’s
Telephone Number, Including Area Code)
Securities
registered pursuant to Section 12(b) of the Exchange Act:
Title of each class
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|
Name of each exchange on which registered
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None
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None
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Securities
registered pursuant to Section 12(g) of the Exchange Act: common stock, par
value $.00001 per share
Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in
Rule 405 of the Securities Act. Yes
¨
No 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 such shorter period that the registrant was 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 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, a non-accelerated filer, or a smaller reporting
company. See the definitions of “large accelerated filer,”
“accelerated filer” and “smaller reporting company” in Rule 12b-2 of the
Exchange Act.
Accelerated
Filer ¨
|
||
Non-Accelerated
Filer ¨
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¨(Do
not check if a smaller reporting company)
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Smaller
reporting company x
|
Indicate
by check mark whether registrant is a shell company (as defined in Rule 12b-2 of
the Act). Yes x No
¨
As of
June 30, 2009 (the last business day of the registrant’s most recently completed
second fiscal quarter), the aggregate market value of the shares of the
Registrant’s common stock held by non-affiliates (based upon the closing price
of such shares as quoted on the Electronic Bulletin Board maintained by the
National Association of Securities Dealers, Inc.) could not be
determined.
There
were a total of 52,000,000 shares of the registrant’s common stock outstanding
as of April 15 , 2010.
Documents
Incorporated by Reference:
None.
TABLE
OF CONTENTS
PART
I
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ITEM
1.
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BUSINESS
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1
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ITEM
1A.
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RISK
FACTORS
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6
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ITEM
1B.
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UNRESOLVED
STAFF COMMENTS
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11
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ITEM
2.
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PROPERTIES
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11
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ITEM
3.
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LEGAL
PROCEEDINGS
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11
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ITEM
4.
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SUBMISSION
OF MATTERS TO A VOTE OF SECURITY HOLDERS
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11
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PART
II
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||
ITEM
5.
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MARKET
FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER
PURCHASES OF EQUITY SECURITIES
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11
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ITEM
6.
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SELECTED
FINANCIAL DATA
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12
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ITEM
7.
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MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
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12
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ITEM
7A.
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QUANTITATIVE
AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
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15
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ITEM
8.
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FINANCIAL
STATEMENTS AND SUPPLEMENTARY DATA
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15
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ITEM
9.
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CHANGES
IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE
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16
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ITEM
9A(T)
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CONTROLS
AND PROCEDURES
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16
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ITEM
9B.
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OTHER
INFORMATION
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17
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PART
III
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||
ITEM
10.
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DIRECTORS,
EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
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18
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ITEM
11.
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EXECUTIVE
COMPENSATION
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19
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ITEM
12.
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SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
STOCKHOLDER MATTERS
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19
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ITEM
13.
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CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE
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20
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ITEM
14.
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PRINCIPAL
ACCOUNTING FEES AND SERVICES
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21
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PART
IV
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||
ITEM
15.
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EXHIBITS,
FINANCIAL STATEMENT SCHEDULES
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21
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INTRODUCTORY
COMMENTS
Special
Note Regarding Forward Looking Statements
This
annual report on Form 10-K, including the following “Management’s Discussion and
Analysis of Financial Condition and Results of Operations,” contains
forward-looking statements within the meaning of Section 27A of the Securities
Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934,
as amended. Such statements include, among others, those concerning our expected
financial performance and strategic and operational plans, as well as all
assumptions, expectations, predictions, intentions or beliefs about future
events. You are cautioned that any such forward-looking statements are not
guarantees of future performance and that a number of risks and uncertainties
could cause actual results of the Company to differ materially from those
anticipated, expressed or implied in the forward-looking statements. The words
“believe,” “expect,” “anticipate,” “project,” “targets,” “optimistic,” “intend,”
“aim,” “will” or similar expressions are intended to identify forward-looking
statements. All statements other than statements of historical fact are
statements that could be deemed forward-looking statements. Risks and
uncertainties that could cause actual results to differ materially from those
anticipated are discussed in Item 1A. “Risk Factors.”
Readers
are urged to carefully review and consider the various disclosures made by us in
this report and our other filings with the SEC. These reports attempt to advise
interested parties of the risks and factors that may affect our business,
financial condition and results of operations and prospects. The forward-looking
statements made in this Report speak only as of the date hereof and we disclaim
any obligation to provide updates, revisions or amendments to any
forward-looking statements to reflect changes in our expectations or future
events.
Use
of Terms
Except as
otherwise indicated by the context, all references in this annual report to (i)
the “Company,” “we,” “us” and “our” are to HOLLYWOOD ENTERTAINMENT EDU HOLDING,
INC , a Delaware corporation; (ii) “SEC” are to the Securities and Exchange
Commission; (iii) “Securities Act” are to the Securities Act of 1933, as
amended; (iv) “Exchange Act” are to the Securities Exchange Act of 1934, as
amended; and (v) “U.S. dollar,” “$” and “US$” are to the legal currency of the
United States.
PART
I
ITEM
1.
|
BUSINESS.
|
Our
History and Background
We were
incorporated in the State of Delaware on November 8, 2007. Since inception, we
have been engaged in organizational efforts and obtaining initial financing. We
were formed as a vehicle to pursue a business combination through the
acquisition of, or merger with, an operating business. Since the effectiveness
of our registration statement on Form 10-SB, we have focused our efforts on
identifying a possible business combination.
Overview
of Our Business
We are
currently a shell company that intends to enter into a business combination with
one or more privately held businesses. Management believes that we will be
attractive to privately held operating companies interested in becoming publicly
traded by means of a business combination with us, without offering their own
securities to the public. We will not be restricted in our search for business
combination candidates to any particular geographical area, industry or industry
segment, and may enter into a combination with a private business engaged in any
line of business. Management’s discretion is, as a practical matter, unlimited
in the selection of a combination candidate.
If we
effect a business combination with any entity unaffiliated with our current
management, our current officers and directors probably will resign their
directorships and officer positions with us in connection with our consummation
of a business combination (see “Form of Acquisition” below). In such an
instance, our current management will not have any control over the conduct of
our business following the completion of a business combination.
1
It is
anticipated that prospective business opportunities will come to our attention
from various sources, including our management, professional advisors such as
attorneys and accountants, securities broker-dealers, venture capitalists,
members of the financial community, and others who may present unsolicited
proposals. There are no plans to use advertisements, notices or any general
solicitation in the search for combination candidates.
Pre-Combination
Activities
We are a
“blank check” company, defined as an inactive, public company with nominal
assets and liabilities. With these characteristics, management believes that we
will be attractive to privately held companies interested in becoming publicly
traded by means of a business combination with us, without offering their own
securities to the public. The term “business combination” (or “combination”)
means the result of (i) a statutory merger of a combination candidate into or
its consolidation with us or our wholly owned subsidiary that would be formed
for the purpose of the merger or consolidation, (ii) the exchange of our
securities for the assets or outstanding equity securities of a privately held
business, or (iii) the sale of securities by us for cash or other value to a
business entity or individual, and similar transactions.
A
combination may be structured in one of the foregoing ways or in any other form
which will result in the combined entity being a publicly held corporation. It
is unlikely that any proposed combination will be submitted for the approval of
our stockholders prior to consummation. Pending negotiation and consummation of
a combination, we anticipate that we will have no business activities or sources
of revenues and will incur no significant expenses or liabilities other than
expenses related to ongoing filings required by the Exchange Act, or related to
the negotiation and consummation of a combination.
We will
not be restricted in our search for business combination candidates to any
particular geographical area, industry or industry segment, and may enter into a
combination with a private business engaged in any line of business, including
service, finance, mining, manufacturing, real estate, oil and gas, distribution,
transportation, medical, communications, high technology, biotechnology or any
other. Management’s discretion is, as a practical matter, unlimited in the
selection of a combination candidate. Our management will seek combination
candidates in the United States and other countries, as available time permits,
through existing associations and by word of mouth.
There is
no assurance that we will be successful in locating a suitable combination
candidate or in concluding a business combination on terms acceptable to us. Our
board of directors has not established a time limitation by which we must
consummate a suitable combination; however, if we are unable to consummate a
suitable combination within a reasonable period, such period to be determined at
the discretion of our board of directors, the board of directors will probably
recommend that we liquidate and dissolve. It is anticipated that we will not be
able to diversify, but will essentially be limited to one such venture because
of our lack of capital. This lack of diversification will not permit us to
offset potential losses from one acquisition against profits from another, and
should be considered an adverse factor affecting any decision to purchase our
securities.
Our board
of directors has the authority and discretion to complete certain combinations
without submitting them to the stockholders for their prior approval. Our
stockholders should not anticipate that they will have any meaningful
opportunity to consider or vote upon any candidate selected by our management
for acquisition. Generally, the prior approval of our stockholders will be
required for any statutory merger of us with or into another company, but
stockholder approval will not be required if the following requirements are met:
(1) our certificate of incorporation will not change as a result of the merger;
and (2) following the merger, each person who was our stockholder immediately
prior to the merger will on the effective date of the merger continue to hold
the same number of shares, with identical designations, preferences, limitations
and relative rights. Stockholder approval also will not be required as to any
“short-form merger,” meaning the merger into us of a company in which we already
own 90% or more of the equity securities. Moreover, in the event that a business
combination occurs in the form of a stock-for-stock exchange or the issuance of
stock to purchase assets, the approval of our stockholders will not be required
by law so long as we acquire the shares or assets of the other
company.
2
Combination
Suitability Standards
The
analysis of new business opportunities has and will be undertaken by or under
the supervision of our management. To a large extent, a decision to participate
in a specific combination may be made upon management’s analysis of the quality
of the candidate company’s management and personnel, the anticipated
acceptability of new products or marketing concepts, the merit of technological
changes, the perceived benefit the candidate will derive from becoming a
publicly held entity, and numerous other factors which are difficult, if not
impossible, to objectively quantify or analyze. In many instances, it is
anticipated that the historical operations of a specific candidate may not
necessarily be indicative of the potential for the future because of the
possible need to shift marketing approaches substantially, expand significantly,
change product emphasis, change or substantially augment management, or make
other changes. We will be dependent upon the owners and management of a
candidate to identify any such problems which may exist and to implement, or be
primarily responsible for the implementation of, required changes. Because we
may participate in a business combination with a newly organized candidate or
with a candidate which is entering a new phase of growth, it should be
emphasized that we will incur further risks, because management in many
instances will not have proved its abilities or effectiveness, the eventual
market for the candidate's products or services will likely not be established,
and the candidate may not be profitable when acquired.
Otherwise,
we anticipate that we may consider, among other things, the following
factors:
|
·
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Potential
for growth, indicated by new technology, anticipated market expansion or
new products;
|
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·
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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;
|
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·
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Strength
and diversity of management, either in place or scheduled for
recruitment;
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·
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Capital
requirements and anticipated availability of required funds, to be
provided by us or from operations, through the sale of additional
securities, through joint ventures or similar arrangements or from other
sources;
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·
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The
cost of participation by us as compared to the perceived tangible and
intangible values and potentials;
|
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·
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The
extent to which the business opportunity can be
advanced;
|
|
·
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The
accessibility of required management expertise, personnel, raw materials,
services, professional assistance and other required items;
and
|
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·
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Other
relevant factors.
|
No one of
the factors described above will be controlling in the selection of a candidate.
Potentially available candidates may occur in many different industries and at
various stages of development, all of which will make the task of comparative
investigation and analysis of such business opportunities extremely difficult
and complex. It should be recognized that, because of our limited capital
available for investigation, we may not discover or adequately evaluate adverse
facts about the opportunity to be acquired. We cannot predict when we may
participate in a business combination. We expect, however, that the analysis of
specific proposals and the selection of a candidate may take several months or
more.
Form
of Acquisition
It is
likely that we will acquire our participation in a business opportunity through
the issuance of common stock or other of our securities. Although the terms of
any such transaction cannot be predicted, it should be noted that in certain
circumstances the criteria for determining whether or not an acquisition is a
so-called “tax free” reorganization under the Internal Revenue Code of 1986,
depends upon the issuance to the stockholders of the acquired company of a
controlling interest (i.e. 80% or more) of the common stock of the combined
entities immediately following the reorganization. If a transaction were
structured to take advantage of these provisions rather than other “tax free”
provisions provided under the Internal Revenue Code, our current stockholders
would retain in the aggregate 20% or less of the total issued and outstanding
shares. This could result in substantial additional dilution in the equity of
those who were our stockholders prior to such reorganization. Any such issuance
of additional shares might also be done simultaneously with a sale or transfer
of shares representing a controlling interest in us by the current officers,
directors and principal stockholders.
It is
anticipated that any new securities issued in any reorganization would be issued
in reliance upon exemptions, if any are available, from registration under
applicable federal and state securities laws. In some circumstances, however, as
a negotiated element of the transaction, we may agree to register such
securities either at the time the transaction is consummated, or under certain
conditions or at specified times thereafter. The issuance of substantial
additional securities and their potential sale into any trading market that
might develop in our securities may have a depressive effect upon such
market.
3
We will
participate in a business opportunity only after the negotiation and execution
of a written agreement. Although the terms of such agreement cannot be
predicted, generally such an agreement would require specific representations
and warranties by all of the parties thereto, specify certain events of default,
detail the terms of closing and the conditions which must be satisfied by each
of the parties thereto prior to such closing, outline the manner of bearing
costs if the transaction is not closed, set forth remedies upon default, and
include miscellaneous other terms.
It is
anticipated that the investigation of specific business opportunities and the
negotiation, drafting and execution of relevant agreements, disclosure documents
and other instruments will require substantial management time and attention and
substantial costs for accountants, attorneys and others. If a decision is made
not to participate in a specific business opportunity, the costs theretofore
incurred in the related investigation would not be recoverable. Moreover,
because many providers of goods and services require compensation at the time or
soon after the goods and services are provided, our inability to pay until an
indeterminate future time may make it impossible to procure goods and
services.
Post
Combination Activities
Management
anticipates that, following consummation of a combination, control of us will
change as a result of the issuance of additional common stock to the
stockholders of the business acquired in the combination. Once ownership control
has changed, it is likely that the new controlling stockholders will call a
meeting for the purpose of replacing our incumbent directors with candidates of
their own, and that the new directors will then replace the incumbent officers
with their own nominees. Rule 14f-1 under the Exchange Act requires that, if in
connection with a business combination or sale of our control there should arise
any arrangement or understanding for a change in a majority of our directors and
the change in the board of directors is not approved in advance by our
stockholders at a stockholder meeting, then none of the new directors may take
office until at least ten (10) days after an information statement has been
filed with the SEC and sent to our stockholders. The information statement
furnished must as a practical matter include the information required by Items
6(a), (d) and (e), 7 and 8 of Schedule 14A of Regulation 14A in a proxy
statement.
Following
consummation of a combination, management anticipates that we will file a
current report on Form 8-K with the Commission which discloses among other
things the date and manner of the combination, material terms of the definitive
agreement, the assets and consideration involved, the identity of the person or
persons from whom the assets or other property was acquired, changes in
management and biographies of the new directors and executive officers, identity
of principal stockholders following the combination, and contains the required
financial statements. Such a Form 8-K report also will be required to include
all information that is required to be disclosed under a Form 10 relating to the
target company.
Use
of Consultants and Finders
Our
management might hire and pay an outside consultant to assist in the
investigation and selection of candidates, and might pay a finder’s fee to a
person who introduces a candidate with which we complete a combination. Since
our management has no current plans to use any outside consultants or finders to
assist in the investigation and selection of candidates, no policies have been
adopted regarding use of consultants or finders, the criteria to be used in
selecting such consultants or finders, the services to be provided, the term of
service, or the structure or amount of fees that may be paid to them. However,
because of our limited resources, it is likely that any such fee we agree to pay
would be paid in stock and not in cash.
It is
possible that compensation in the form of common stock, options, warrants or
other of our securities, cash or any combination thereof, may be paid to outside
consultants or finders. None of our securities will be paid to our officers,
directors or promoters or any of their respective affiliates in the form of
finder’s fees. Any payments of cash to a consultant or finder would be made by
the business acquired or persons affiliated or associated with it, and not by
us. It is possible that the payment of such compensation may become a factor in
any negotiations for our acquisition of a business opportunity. Any such
negotiations and compensation may present conflicts of interest between the
interests of persons seeking compensation and those of our stockholders, and
there is no assurance that any such conflicts will be resolved in favor of our
stockholders.
4
State
Securities Laws and Considerations
Section
18 of the Securities Act provides that no law, rule, regulation, order or
administrative action of any state may require registration or qualification of
securities or securities transactions that involve the sale of a “covered
security”. The term “covered security” is defined in Section 18 to include among
other things transactions by “any person not an issuer, underwriter or dealer”,
(in other words, secondary transactions in securities already outstanding) that
are exempted from registration by Section 4(1) of the Securities Act, provided
the issuer of the security is a “reporting company,” meaning that it files
reports with the SEC pursuant to Section 13 or 15(d) of the Exchange
Act.
Section
18 preserves the authority of the states to require certain limited notice
filings by issuers and to collect fees as to certain categories of covered
securities, specifically including Section 4(1) secondary transactions in the
securities of reporting companies. Section 18 expressly provides, however, that
a state may not “directly or indirectly prohibit, limit, or impose conditions
based on the merits of such offering or issuer, upon the offer or sale of any
(covered) security.” This provision prohibits states from requiring registration
or qualification of securities of an Exchange Act reporting company which is
current in its filings with the SEC.
The
states generally are free to enact legislation or adopt rules that prohibit
secondary trading in the securities of “blank check” companies like us. Section
18 of the Securities Act, however, preempts state law as to covered securities
of reporting companies. Thus, while the states may require certain limited
notice filings and payment of filing fees by us as a precondition to secondary
trading of our shares in those states, they cannot, so long as we are a
reporting issuer, prohibit, limit or condition trading of our securities based
on the fact that we are or ever were a blank check company. We will comply with
such state limited notice filings as may be necessary in regard to secondary
trading. At this time, our stock is not actively traded in any market, and an
active market in our common stock is not expected to arise, if ever, until after
completion of a business combination.
No
Investment Company Act Regulation
Prior to
completing a combination, we will not engage in the business of investing or
reinvesting in, or owning, holding or trading in securities, or otherwise
engaging in activities which would cause us to be classified as an “investment
company” under the Investment Company Act of 1940, as amended, or the Investment
Company Act. To avoid becoming an investment company, not more than 40% of the
value of our assets (excluding government securities and cash and cash
equivalents) may consist of “investment securities”, which is defined to include
all securities other than U.S. government securities and securities of
majority-owned subsidiaries. Because we will not own less than a majority of any
assets or business acquired, we will not be regulated as an investment company.
We will not pursue any combination unless it will result in our owning at least
a majority interest in the business acquired.
Recent
Developments
On
December 18, 2009, our President, Hollis Liu, contributed additional capital in
the amount of $300 and received in exchange 30,000,000 additional shares of
common stock. On December 29, 2009 Alan J. Bailey became a Director and Chief
Financial Officer and received 2,000,000 shares of common stock .
Competition
We face
vast competition from other shell companies with the same objectives. We are in
a highly competitive market for a small number of business opportunities which
could reduce the likelihood of consummating a successful business combination. A
large number of established and well-financed entities, including small public
companies and venture capital firms, are active in mergers and acquisitions of
companies that may be desirable target candidates for us. Nearly all these
entities have significantly greater financial resources, technical expertise and
managerial capabilities than we do; consequently, we will be at a competitive
disadvantage in identifying possible business opportunities and successfully
completing a business combination. These competitive factors may reduce the
likelihood of our identifying and consummating a successful business
combination.
5
Employees
We have
no employees other than our officers who devote only a limited amount of time to
our business.
ITEM 1A.
|
RISK
FACTORS.
|
You
should carefully review and consider the following risks as well as all other
information contained in this report, including our financial statements and the
notes to those statements. The following risks and uncertainties are not the
only ones facing us. Additional risks and uncertainties of which we are
currently unaware or which we believe are not material also could materially
adversely affect our business, financial condition, results of operations, or
cash flows. To the extent any of the information contained in this annual report
constitutes forward-looking information, the risk factors set forth below are
cautionary statements identifying important factors that could cause our actual
results for various financial reporting periods to differ materially from those
expressed in any forward-looking statements made by or on our behalf and could
materially adversely effect our financial condition, results of operations or
cash flows.
There
may be conflicts of interest as a result of our management being involved with
other blank check shell companies which may result in decisions that are adverse
to our business.
Conflicts
of interest and non-arms length transactions may arise in the future. Conflicts
of interest create the risk that management may have an incentive to act
adversely to the interests of the Company. The terms of a business combination
may include terms like the retention of our current officers and directors as
officers and directors of the successor company in the business combination. The
terms of a business combination may provide for a payment by cash or otherwise
to members of our management team for the purchase or retirement of all or part
of our common stock that is held by them or for services rendered incident to or
following a business combination. Our management team would directly benefit
from this type of employment or payment. These benefits may influence our
management team's choice of a target company. Our certificate of incorporation
provides that we may indemnify our officers and/or directors for liabilities,
which can include liabilities arising under the securities laws. Therefore, our
assets could be used or attached to satisfy any liabilities subject to this
indemnification.
Our
management is currently or in the future may become, involved with other blank
check shell companies, and in our pursuit of business combinations, conflicts
with such other companies may arise. If we desire to take advantage of the same
opportunities as such other blank check shell companies, then those members of
management that are affiliated with both companies would abstain from voting
upon the opportunity. In the event of identical officers and directors, the
officers and directors will arbitrarily determine which company will be entitled
to proceed with the proposed transaction. These conflicts may result in
management decisions that could negatively affect our operations and potentially
result in the loss of opportunities.
We have a limited operating
history and no revenues
or earnings from operations.
We have a
limited operating history and no revenues or earnings from operations since
inception. We have no significant assets or financial resources. We will, in all
likelihood, sustain operating expenses without corresponding revenues, at least
until the consummation of a merger or other business combination with a private
company. This may result in our incurring a net operating loss that will
increase unless we consummate a business combination with a profitable business.
We cannot assure you that we can identify a suitable business opportunity and
consummate a business combination, or that any such business will be profitable
at the time of its acquisition by us or ever.
Since our
inception on November 8, 2007 through December 31, 2009, we have incurred a net
loss of $(12,285). We expect that we will incur losses at least until we
complete a merger or other business combination with an operating business and
perhaps after such a combination as well. There can be no assurance that we will
complete a merger or other business combination with an operating business or
that we will ever be profitable.
6
We
face a number of risks associated with potential acquisitions.
We intend
to use reasonable efforts to complete a merger or other business combination
with an operating business. Such combination will be accompanied by risks
commonly encountered in acquisitions, including, but not limited to,
difficulties in integrating the operations, technologies, products and personnel
of the acquired companies and insufficient revenues to offset increased expenses
associated with acquisitions. Failure to manage and successfully integrate
acquisitions we make could harm our business, our strategy and our operating
results in a material way.
There
is competition for those private companies suitable for a merger transaction of
the type contemplated by management.
We are in
a highly competitive market for a small number of business opportunities which
could reduce the likelihood of consummating a successful business combination.
We are, and will continue to be, an insignificant participant in the business of
seeking mergers with, joint ventures with and acquisitions of small private and
public entities. A large number of established and well-financed entities,
including small public companies and venture capital firms, are active in
mergers and acquisitions of companies that may be desirable target candidates
for us. Nearly all these entities have significantly greater financial
resources, technical expertise and managerial capabilities than we do;
consequently, we will be at a competitive disadvantage in identifying possible
business opportunities and successfully completing a business combination. These
competitive factors may reduce the likelihood of our identifying and
consummating a successful business combination.
Our
proposed operations are purely speculative. Future success is highly dependent
on the ability of management to locate and attract a suitable acquisition. There
can be no assurance that we will successfully consummate a business
combination.
The
nature of our operations is highly speculative, and there is a consequent risk
of loss of your investment. The success of our plan of operation will depend to
a great extent on the operations, financial condition and management of the
identified business opportunity. While management intends to seek business
combination(s) with entities having established operating histories, we cannot
assure you that we will be successful in locating candidates meeting these
criteria. In the event we complete a business combination, the success of our
proposed plan of operation will depend to a great extent on the operations,
financial condition and management of the identified target company and numerous
other factors beyond our control. We can give no assurances that we will
successfully identify and evaluate suitable business opportunities, negotiate a
business combination on favorable terms, or that we will conclude a business
combination.
Our
management team does not devote its full time to our business and operations
which may adversely impact our ability to identify a suitable acquisition
candidate.
Our
officers and directors, who serve only on a part-time basis, have had limited
experience in the business activities contemplated by us, yet we will be solely
dependent on them. We lack the funds or other incentive to hire full-time
experienced management. Each of our management members has other employment or
business interests to which he devotes his primary attention and will continue
to do so, devoting time to us only on an as-needed basis. This limited
commitment may adversely impact our ability to identify and consummate a
successful business combination.
The
time and cost of preparing a private company to become a public reporting
company may preclude us from entering into a merger or acquisition with the most
attractive private companies.
Target
companies that fail to comply with SEC reporting requirements may delay or
preclude acquisition. Sections 13 and 15(d) of the Exchange Act require
reporting companies to provide certain information about significant
acquisitions, including certified financial statements for the company acquired,
covering one, two, or three years, depending on the relative size of the
acquisition. The time and additional costs that may be incurred by some target
entities to prepare these statements may significantly delay or essentially
preclude consummation of an acquisition. Otherwise suitable acquisition
prospects that do not have or are unable to obtain the required audited
statements may be inappropriate for acquisition so long as the reporting
requirements of the Exchange Act are applicable.
7
We
may be subject to further government regulation which would adversely affect our
operations.
Although
we are subject to the reporting requirements under the Exchange Act, management
believes we are not subject to regulation under the Investment Company Act since
we are not engaged in the business of investing or trading in securities. If we
engage in business combinations which result in our holding passive investment
interests in a number of entities, we could be subject to regulation under the
Investment Company Act. If so, we would be required to register as an investment
company and could be expected to incur significant registration and compliance
costs. We have obtained no formal determination from the SEC as to our status
under the Investment Company Act and, consequently, violation of the Investment
Company Act could subject us to material adverse consequences.
Any
potential acquisition or merger with a foreign company may subject us to
additional risks.
If we
enter into a business combination with a foreign company, we will be subject to
risks inherent in business operations outside of the United States. These risks
include, for example, currency fluctuations, regulatory problems, punitive
tariffs, unstable local tax policies, trade embargoes, risks related to shipment
of raw materials and finished goods across national borders and cultural and
language differences. Foreign economies may differ favorably or unfavorably from
the United States economy in growth of gross national product, rate of
inflation, market development, rate of savings, and capital investment, resource
self-sufficiency and balance of payments positions, and in other
respects.
We
may be subject to certain tax consequences in our business, which may increase
our cost of doing business.
Federal
and state tax consequences will, in all likelihood, be major considerations in
any business combination that we may undertake. We may not be able to structure
our acquisition to result in tax-free treatment for the companies or their
stockholders, which could deter third parties from entering into certain
business combinations with us or result in being taxed on consideration received
in a transaction. Currently, a transaction may be structured so as to result in
tax-free treatment to both companies, as prescribed by various federal and state
tax provisions. We intend to structure any business combination so as to
minimize the federal and state tax consequences to both us and the target
entity; however, we cannot guarantee that the business combination will meet the
statutory requirements of a tax-free reorganization or that the parties will
obtain the intended tax-free treatment upon a transfer of stock or assets. A
non-qualifying reorganization could result in the imposition of both federal and
state taxes that may have an adverse effect on both parties to the
transaction.
Because
we may seek to complete a business combination through a “reverse merger,”
following such a transaction we may not be able to attract the attention of
major brokerage firms.
Additional
risks may exist since we expect to assist a privately held business to become
public through a “reverse merger.” Securities analysts of major brokerage firms
may not provide coverage of our Company since there is no incentive to brokerage
firms to recommend the purchase of our common stock. No assurance can be given
that brokerage firms will want to conduct any secondary offerings on behalf of
our post-merger company in the future.
There
is not now, and there may not ever be, an active market for our common stock and
we cannot assure you that the common stock will become liquid or that it will be
listed on a securities exchange
There
currently is no market for our common stock. We plan to list our common stock as
soon as practicable. However, we cannot assure you that we will be able to meet
the initial listing standards of any stock exchange, or that we will be able to
maintain any such listing. In this venue, however, an investor may find it
difficult to obtain accurate quotations as to the market value of the common
stock and trading of our common stock may be extremely sporadic. For example,
several days may pass before any shares may be traded. A more active market for
the common stock may never develop. In addition, if we failed to meet the
criteria set forth in SEC regulations, various requirements would be imposed by
law on broker-dealers who sell our securities to persons other than established
customers and accredited investors. Consequently, such regulations may deter
broker-dealers from recommending or selling the common stock, which may further
affect its liquidity. This would also make it more difficult for us to raise
additional capital.
8
We
cannot assure you that following a business combination with an operating
business, our common stock will be listed on NASDAQ or any other securities
exchange; and if listed we may be subject to penny stock rules.
Following
a business combination, we may seek the listing of our common stock on NASDAQ or
the American Stock Exchange. However, we cannot assure you that following such a
transaction, we will be able to meet the initial listing standards of either of
those or any other stock exchange, or that we will be able to maintain a listing
of common stock on either of those or any other stock exchange. After completing
a business combination, until our common stock is listed on the NASDAQ or
another stock exchange, we expect that our common stock would be eligible to
trade on the OTC Bulletin Board, another over-the-counter quotation system, or
on the “pink sheets,” where our stockholders may find it more difficult to
dispose of shares or obtain accurate quotations as to the market value of our
common stock.
In
addition, after such listing, our securities may be classified as penny stock.
The SEC has adopted Rule 15g-9 which establishes the definition of a "penny
stock," for purposes relevant to us, as any equity security that has a market
price of less than $5.00 per share or with an exercise price of less than $5.00
per share whose securities are admitted to quotation but do not trade on the
Nasdaq Capital Market or on a national securities exchange. For any transaction
involving a penny stock, unless exempt, the rules require delivery of a document
to investors stating the risks, special suitability inquiry, regular reporting
and other requirements. Prices for penny stocks are often not available and
investors are often unable to sell this stock. Consequently, such rule may deter
broker-dealers from recommending or selling our common stock, which may further
affect its liquidity. This would also make it more difficult for us to raise
additional capital following a business combination.
All
our issued and outstanding capital stock is owned and controlled by our
Officers.
Our
officers currently own all of our issued and outstanding capital stock, and
therefore controls our operations and will have the ability to control all
matters submitted to stockholders for approval, including:
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·
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election
of our board of directors;
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|
·
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removal
of any directors;
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·
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amendment
of our Certificate of Incorporation or Bylaws;
and
|
|
·
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adoption
of measures that could delay or prevent a change in control or impede a
merger, takeover or other business
combination.
|
These
stockholders thus have complete control over our management and affairs.
Accordingly, their ownership may have the effect of impeding a merger,
consolidation, takeover or other business consolidation, or discouraging a
potential acquirer from making a tender offer for our common stock, which may
further affect its liquidity.
Our
stockholders may have a minority interest in the Company following a merger or
other business combination with an operating business.
If we
consummate a merger or business combination with a company with a value in
excess of the value of our Company and issue shares of common stock to the
stockholders of such company as consideration for merging with us, our
stockholders would own less than 50% of the Company after the business
combination. The stockholders of the acquired company would therefore be able to
control the election of our board of directors and control our
Company.
We
have never paid dividends on our common stock.
We have
never paid dividends on our common stock and do not presently intend to pay any
dividends in the foreseeable future. We anticipate that any funds available for
payment of dividends will be re-invested into the Company to further its
business strategy.
We
intend to issue more shares in a merger or acquisition, which will result in
substantial dilution.
Our
Certificate of Incorporation authorizes the issuance of a maximum of 100,000,000
shares of common stock. Any merger or acquisition effected by us may result in
the issuance of additional securities without stockholder approval and the
substantial dilution in the percentage of common stock held by our then existing
stockholders. Moreover, the common stock issued in any such merger or
acquisition transaction may be valued on an arbitrary or non-arm’s-length basis
by our management, resulting in an additional reduction in the percentage of
common stock held by our current stockholders. Our board of directors has the
power to issue any or all of such authorized but unissued shares without
stockholder approval. To the extent that additional shares of common stock or
preferred stock are issued in connection with a business combination or
otherwise, dilution to the interests of our stockholders will occur and the
rights of the holder of common stock might be materially and adversely
affected.
9
There
are issues impacting liquidity of our securities with respect to the SEC’s
review of a future resale registration statement.
Since
shares of our common stock issued prior to a business combination or reverse
merger cannot currently, nor will they for a considerable period of time after
we complete a business combination, be available to be offered, sold, pledged or
otherwise transferred without being registered pursuant to the Securities Act,
we will likely file a resale registration statement on Form S-1, or some other
available form, to register for resale such shares of our common stock. We
cannot control this future registration process in all respects as some matters
are outside our control. Even if we are successful in causing the effectiveness
of the resale registration statement, there can be no assurances that the
occurrence of subsequent events may not preclude our ability to maintain the
effectiveness of the registration statement. Any of the foregoing items could
have adverse effects on the liquidity of our shares of our common
stock.
In
addition, the SEC has recently disclosed that it has developed internal informal
guidelines concerning the use of a resale registration statement to register the
securities issued to certain investors in private investment in public equity
(PIPE) transactions, where the issuer has a market capitalization of less than
$75 million and, in general, does not qualify to file a Registration Statement
on Form S-3 to register its securities. The SEC has taken the position that
these smaller issuers may not be able to rely on Rule 415 under the Securities
Act, or Rule 415, which generally permits the offer and sale of securities on a
continued or delayed basis over a period of time, but instead would require that
the issuer offer and sell such securities in a direct or “primary” public
offering, at a fixed price, if the facts and circumstances are such that the SEC
believes the investors seeking to have their shares registered are underwriters
and/or affiliates of the issuer. It appears that the SEC in most cases will
permit a registration for resale of up to one third of the total number of
shares of common stock then currently owned by persons who are not affiliates of
such issuer and, in some cases, a larger percentage depending on the facts and
circumstances. Staff members also have indicated that an issuer in most cases
will have to wait until the later of six months after effectiveness of the first
registration or such time as substantially all securities registered in the
first registration are sold before filing a subsequent registration on behalf of
the same investors. Since, following a reverse merger or business combination,
we may have little or no tradable shares of common stock, it is unclear as to
how many, if any, shares of common stock the SEC will permit us to register for
resale, but SEC staff members have indicated a willingness to consider a higher
percentage in connection with registrations following reverse mergers with shell
companies such as the Company. The SEC may require as a condition to the
declaration of effectiveness of a resale registration statement that we reduce
or “cut back” the number of shares of common stock to be registered in such
registration statement. The result of the foregoing is that a stockholder’s
liquidity in common stock may be adversely affected in the event the SEC
requires a cut back of the securities as a condition to allow us to rely on Rule
415 with respect to a resale registration statement, or, if the SEC requires us
to file a primary registration statement.
In
order to grow at the pace expected by management, we will require additional
capital to support our long-term business plan. If we are unable to obtain
additional capital in future years, we may be unable to proceed with our
long-term business plan and we may be forced to curtail or cease our operation
or further business expansion.
We will
require additional working capital to support our long-term business plan, which
includes identifying suitable targets for horizontal or vertical mergers or
acquisitions, so as to enhance the overall productivity and benefit from
economies of scale. After a suitable business combination, our working capital
requirements and the cash flow provided by future operating activities, if any,
will vary greatly from quarter to quarter, depending on the volume of business
during the period and payment terms with our customers. Due to the current
global financial crisis, we may not be able to obtain adequate levels of
additional financing, whether through equity financing, debt financing or other
sources. To raise funds, we may need to issue new equities or bonds which could
result in additional dilution to our shareholders, and additional financings
could result in significant dilution to our earnings per share or the issuance
of securities with rights superior to our current outstanding securities or
contain covenants that would restrict our operations and strategy. In addition,
we may grant registration rights to investors purchasing our equity or debt
securities in the future. If we are unable to raise additional financing, we may
be unable to implement our long-term business plan, develop or enhance new
products and services, take advantage of future opportunities or respond to
competitive pressures on a timely basis, if at all. In addition, a lack of
additional financing could force us to substantially curtail or cease
operations. The current global credit crisis is making it difficult, if not
impossible, for companies to obtain financing for acquisitions and operational
growth. There is no indication when this credit crisis will abate. Accordingly,
we cannot assure you that we will be able to obtain such third party financing
on terms favorable to us or at all. The current global credit crisis is making
it difficult, if not impossible, for companies to obtain financing for
acquisitions and operational growth. There is no indication when this credit
crisis will abate. Accordingly, we cannot assure you that we will be able to
obtain such third party financing on terms favorable to us or at
all.
10
ITEM 1B.
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UNRESOLVED STAFF
COMMENTS.
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Not
Applicable.
ITEM 2.
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PROPERTIES.
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We
neither rent nor own any properties. We utilize the office space and equipment
at no cost. Management estimates such amounts to be immaterial. We currently
have no policy with respect to investments or interests in real estate, real
estate mortgages or securities of, or interests in, persons primarily engaged in
real estate activities.
ITEM 3.
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LEGAL
PROCEEDINGS.
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From time
to time, we may become involved in various lawsuits and legal proceedings which
arise in the ordinary course of business. However, litigation is subject to
inherent uncertainties and an adverse result in these or other matters may arise
from time to time that may harm our business. We are currently not aware of any
such legal proceedings or claims that we believe will have a material adverse
affect on our business, financial condition or operating results.
ITEM 4.
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SUBMISSION OF MATTERS TO A VOTE
OF SECURITY HOLDERS.
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No
matters were submitted during the fourth quarter of our 2009 fiscal year to a
vote of security holders, through the solicitation of proxies or
otherwise.
PART
II
ITEM 5.
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MARKET FOR REGISTRANT’S COMMON
EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY
SECURITIES.
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Market
Information
There
currently is no market for our common stock. Following a business combination,
we may seek the listing of our common stock on NASDAQ, the American Stock
Exchange or another stock exchange. However, we cannot assure you that we will
be able to meet the initial listing standards of any stock exchange, or that we
will be able to maintain any such listing. Until our common stock is listed on
an exchange, we expect that it would be eligible to be quoted in the
over-the-counter bulletin board maintained by the Financial Industry Regulatory
Authority. In this venue, however, an investor may find it difficult to obtain
accurate quotations as to the market value of the common stock and trading of
our common stock may be extremely sporadic. For example, several days may pass
before any shares may be traded. A more active market for the common stock may
never develop. In addition, if we failed to meet the criteria set forth in SEC
regulations, various requirements would be imposed by law on broker-dealers who
sell our securities to persons other than established customers and accredited
investors. Consequently, such regulations may deter broker-dealers from
recommending or selling the common stock, which may further affect its liquidity
and could make it more difficult for us to raise additional
capital.
11
Approximate
Number of Holders of Our common stock
As of
April 15, 2010 , there were 2 stockholders of record of our common
stock.
Dividends
We have
never declared or paid a cash dividend. Any future decisions regarding dividends
will be made by our board of directors. We currently intend to retain and use
any future earnings for the development and expansion of our business and do not
anticipate paying any cash dividends in the foreseeable future. Our board of
directors has complete discretion on whether to pay dividends, subject to the
approval of our stockholders. Even if our board of directors decides to pay
dividends, the form, frequency and amount will depend upon our future operations
and earnings, capital requirements and surplus, general financial condition,
contractual restrictions and other factors that the board of directors may deem
relevant.
Securities
Authorized for Issuance Under 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 have any outstanding stock
options.
Recent
Sales of Unregistered Securities
On March
25, 2009, our sole officer and director, Hollis Liu, contributed additional
capital in the amount of $180 for state required filing fees and received in
exchange 18,000,000 additional shares of common stock. On December 18, 2009, our
President, Hollis Liu, contributed additional capital in the amount of $300 and
received in exchange 30,000,000 additional shares of common stock. On December
29,2009 Alan J. Bailey became a Director and Chief Financial Officer and
received 2,000,000 shares of common stock .
Purchases
of Our Equity Securities
No
repurchases of our common stock were made during the fourth quarter of our
fiscal year ended December 31, 2009.
ITEM
6.
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SELECTED
FINANCIAL DATA.
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Not
Applicable.
ITEM
7.
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MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS.
|
The
following management’s discussion and analysis should be read in conjunction
with our financial statements and the notes thereto and the other financial
information appearing elsewhere in this report. In addition to historical
information, the following discussion contains certain forward-looking
information. See “Special Note Regarding Forward Looking Statements” above for
certain information concerning those forward looking statements. Our financial
statements are prepared in U.S. dollars and in accordance with U.S.
GAAP.
Overview
of Our Business
We were
incorporated in the State of Delaware on November 8, 2007. Since inception, we
have been engaged in organizational efforts and obtaining initial financing. We
were formed as a vehicle to pursue a business combination through the
acquisition of, or merger with, an operating business. Since the effectiveness
of our registration statement on Form 10-SB, we have focused our efforts on
identifying a possible business combination.
We are
currently a shell company that intends to enter into a business combination with
one or more privately held businesses. Management believes that we will be
attractive to privately held operating companies interested in becoming publicly
traded by means of a business combination with us, without offering their own
securities to the public. We will not be restricted in our search for business
combination candidates to any particular geographical area, industry or industry
segment, and may enter into a combination with a private business engaged in any
line of business. Management’s discretion is, as a practical matter, unlimited
in the selection of a combination candidate.
12
Recent
Developments
On
December 18, 2009, our President, Hollis Liu, contributed additional capital in
the amount of $300 and received in exchange 30,000,000 additional shares of
common stock. On December 29,2009 Alan J. Bailey became a Director and Chief
Financial Officer and received 2,000,000 shares of common stock .
On
January 18,2010 Ji Li,
Ph.D. was appointed as special Cultural and Creative Advisor to the Board of
Directors and Dee Bruce Sun, Ph.D was appointed as special Senior Capital
Management Advisor to the Board of Directors.
Plan
of Operation
We have
not realized any revenues from operations since our inception, and our plan of
operation for the next twelve months is to locate a suitable acquisition or
merger candidate and consummate a business combination. We may need additional
cash advances from our stockholders or loans from other parties to pay for
operating expenses until we consummate a merger or business combination with a
privately-held operating company. Although it is currently anticipated that we
can satisfy our cash requirements with additional cash advances or loans from
other parties, if needed, for at least the next twelve months, we can provide no
assurance that we can continue to satisfy our cash requirements for such
period.
Since our
formation on November 8, 2007, our purpose has been to effect a business
combination with an operating business which we believe has significant growth
potential. We are currently considered to be a “blank check” company in as much
as we have no specific business plans, no operations, revenues or employees. We
currently have no definitive agreements or understanding with any prospective
business combination candidates and have not targeted any business for
investigation and evaluation nor are there any assurances that we will find a
suitable business with which to combine. The implementation of our business
objectives is wholly contingent upon a business combination and/or the
successful sale of securities in the Company.
As a
result of our limited resources, we expect to effect only a single business
combination. Accordingly, the prospects for our success will be entirely
dependent upon the future performance of a single business. Unlike certain
entities that have the resources to consummate several business combinations or
entities operating in multiple industries or multiple segments of a single
industry, we will not have the resources to diversify our operations or benefit
from the possible spreading of risks or offsetting of losses. A target business
may be dependent upon the development or market acceptance of a single or
limited number of products, processes or services, in which case there will be
an even higher risk that the target business will not prove to be commercially
viable.
Our
officers are only required to devote a very limited portion of their time to our
affairs on a part-time or as-needed basis. We expect to use outside consultants,
advisors, attorneys and accountants as necessary, none of which will be hired on
a retainer basis. We do not anticipate hiring any full-time employees so long as
we are seeking and evaluating business opportunities.
We expect
our present management to play no managerial role in the Company following a
merger or business combination. Although we intend to scrutinize closely the
management of a prospective target business in connection with our evaluation of
a business combination with a target business, our assessment of management may
be incorrect. We cannot assure you that we will find a suitable business with
which to combine.
Results
of Operations
We have
not conducted any active operations since inception, except for our efforts to
locate a suitable acquisition or merger transaction. No revenue has been
generated by the Company during such period, and it is unlikely that we will
have any revenues unless we are able to effect an acquisition of or merger with
another operating company, of which there can be no assurance.
13
Since
inception on November 8, 2007, we had no revenues and incurred a net loss of
$(12,285). All general and administrative expenses of $(12,285) related
primarily to accounting, legal and miscellaneous general and administrative fees
that are applicable to all public companies.
Liquidity
and Capital Resources
We had no
cash on hand at December 31, 2009 and have no cash to meet ongoing expenses or
debts that may accumulate. As of December 31, 2009, we had an accumulated
deficit of $(12,285).
We have
no commitment for any capital expenditure and foresee none. However, we will
incur routine fees and expenses incident to our reporting duties as a public
company, and we will incur expenses in finding and investigating possible
acquisitions and other fees and expenses in the event we make an acquisition or
attempts but are unable to complete an acquisition. Our cash requirements for
the next twelve months are relatively modest, principally legal, accounting
expenses and other expenses relating to making the filings required under the
Exchange Act. Any travel, lodging or other expenses which may arise related to
finding, investigating and attempting to complete a business combination with
one or more potential acquisitions could also amount to thousands of
dollars.
Our
current management has informally agreed to continue rendering services to us
and to not demand compensation unless and until we complete an acquisition. The
terms of any such payment will have to be negotiated with the principals of any
business acquired. The existence and amounts of our debt may make it more
difficult to complete, or prevent completion of, a desirable
acquisition.
We will
only be able to pay our future debts and meet operating expenses by raising
additional funds, acquiring a profitable company or otherwise generating
positive cash flow. As a practical matter, we are unlikely to generate positive
cash flow by any means other than acquiring a company with such cash flow. We
believe that management members or stockholders will loan funds to us as needed
for operations prior to completion of an acquisition. Management and
stockholders are not obligated to provide funds to us, however, and it is not
certain they will always want or be financially able to do so. Our stockholders
and management members who advance money to us to cover operating expenses will
expect to be reimbursed, either by us or by the company acquired, prior to or at
the time of completing a combination. We have no intention of borrowing money to
reimburse or pay salaries to any of our officers, directors or stockholders or
their affiliates. There currently are no plans to sell additional securities to
raise capital, although sales of securities may be necessary to obtain needed
funds. Our current management has agreed to continue their services to us and to
accrue sums owed them for services and expenses and expect payment reimbursement
only.
Should
existing management or stockholders refuse to advance needed funds, however, we
would be forced to turn to outside parties to either loan money to us or buy our
securities. There is no assurance whatever that we will be able to raise
necessary funds from outside sources. Such a lack of funds could result in
severe consequences to us, including among others:
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·
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failure to make timely filings
with the SEC as required by the Exchange Act, which could result in fines
and penalties to us under the Exchange
Act;
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curtailing or eliminating our
ability to locate and perform suitable investigations of potential
acquisitions; or
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inability to complete a desirable
acquisition due to lack of funds to pay legal and accounting fees and
acquisition-related expenses
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We hope
to require potential candidate companies to deposit funds with us that we can
use to defray professional fees and travel, lodging and other due diligence
expenses incurred by our management related to finding and investigating a
candidate company and negotiating and consummating a business combination. There
is no assurance that any potential candidate will agree to make such a
deposit.
14
Critical
Accounting Policies
The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires our management to make
assumptions, estimates and judgments that affect the amounts reported, including
the notes thereto, and related disclosures of commitments and contingencies, if
any. We have identified certain accounting policies that are significant to the
preparation of our financial statements. These accounting policies are important
for an understanding of our financial condition and results of operation.
Critical accounting policies are those that are most important to the portrayal
of our financial conditions and results of operations and require management’s
difficult, subjective, or complex judgment, often as a result of the need to
make estimates about the effect of matters that are inherently uncertain and may
change in subsequent periods. Certain accounting estimates are particularly
sensitive because of their significance to financial statements and because of
the possibility that future events affecting the estimate may differ
significantly from management's current judgments. We believe the following
critical accounting policies involve the most significant estimates and
judgments used in the preparation of our financial statements.
Income
Taxes. We utilize the liability method of accounting for income taxes.
Under the liability method, deferred tax assets and liabilities are determined
based on the differences between financial reporting basis and tax basis of the
assets and liabilities and are measured using enacted tax rates that will be in
effect when the differences are expected to reverse. An allowance against
deferred tax assets is recognized, when it is more likely than not, that such
tax benefits will not be realized.
Loss per Common
Share. Basic loss per share is calculated using the weighted-average
number of common shares outstanding during each period. Diluted loss per share
includes potentially dilutive securities such as outstanding options and
warrants, using various methods such as the treasury stock or modified treasury
stock method in the determination of dilutive shares outstanding during each
period. We do not have any potentially dilutive instruments.
Fair Value of
Financial Instruments. The carrying value of current assets and
liabilities approximate fair value due to their short term nature.
Recent
Accounting Pronouncements
The Company does not expect the adoption of recently issued
accounting pronouncements to have a significant impact on the Company’s results
of operations, financial position , or cash flow.
Off
Balance Sheet Arrangements
We do not
have any 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 or capital
expenditures or capital resources that is material to an investor in our
securities.
ITEM
7A.
|
QUANTITATIVE
AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK.
|
Not
Applicable.
ITEM
8.
|
FINANCIAL
STATEMENTS AND SUPPLEMENTARY DATA.
|
The
financial statements required by this item begin on page F-1
hereof.
15
ITEM 9.
|
CHANGES IN AND DISAGREEMENTS WITH
ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE.
|
None.
ITEM9A(T).
|
CONTROLS AND
PROCEDURES.
|
Disclosure
Controls and Procedures
We
maintain disclosure controls and procedures (as defined in Rule 13a-15(e) under
the Exchange Act) that are designed to ensure that information that would be
required to be disclosed in Exchange Act reports is recorded, processed,
summarized and reported within the time period specified in the SEC’s rules and
forms, and that such information is accumulated and communicated to our
management, including to our Chief Executive Officer and Chief Financial
Officer, as appropriate, to allow timely decisions regarding required
disclosure.
As
required by Rule 13a-15 under the Exchange Act, our management evaluated the
effectiveness of the design and operation of our disclosure controls and
procedures as of December 31, 2009. Based on our assessment, our management
determined that, as of December 31, 2009, and as of the date that the evaluation
of the effectiveness of our disclosure controls and procedures was completed,
our disclosure controls and procedures were effective to satisfy the objectives
for which they are intended.
Internal
Controls over Financial Reporting
Management’s
Annual Report on Internal Control over Financial Reporting.
Our
management is responsible for establishing and maintaining adequate internal
control over financial reporting for the Company. Internal control over
financial reporting refers to the process designed by, or under the supervision
of, our Chief Executive Officer and Chief Financial Officer, and effected by our
board of directors, management and other personnel, to provide reasonable
assurance regarding the reliability of our financial reporting and the
preparation of financial statements for external purposes in accordance with
U.S. GAAP, and 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 our assets; (2) provide reasonable
assurance that transactions are recorded as necessary to permit preparation of
financial statements in accordance with U.S. GAAP, and that our receipts and
expenditures are being made only in accordance with the authorization of our
management and directors; and (3) provide reasonable assurance regarding
prevention or timely detection of unauthorized acquisition, use or disposition
of our assets that could have a material effect on the financial
statements.
Our
management assessed the effectiveness of our internal control over financial
reporting as of December 31, 2009. In making this assessment, management used
the framework set forth in the report entitled Internal Control - Integrated
Framework issued by the Committee of Sponsoring Organizations of the Treadway
Commission. Based on that evaluation, our management concluded that our internal
control over financial reporting is effective, as of December 31,
2009.
This
annual report does not include an attestation report of our registered public
accounting firm regarding internal control over financial reporting.
Management’s report was not subject to attestation by our registered public
accounting firm pursuant to temporary rules of the SEC that permit the Company
to provide only management’s report in this annual report.
Changes
in Internal Controls over Financial Reporting.
During
the fiscal year ended December 31, 2009, there were no changes in our internal
control over financial reporting identified in connection with the evaluation
performed during the fiscal year covered by this report that has materially
affected, or is reasonably likely to materially affect, our internal control
over financial reporting.
16
ITEM 9B.
|
OTHER
INFORMATION.
|
None.
17
PART
III
ITEM
10.
|
DIRECTORS,
EXECUTIVE OFFICERS AND CORPORATE
GOVERNANCE.
|
Directors
and Executive Officers
The
following sets forth the name and position of each of our current executive
officers and directors.
NAME
|
AGE
|
POSITION
|
||
Hollis
Liu
|
40
|
President,
Secretary and Director
|
||
Alan
J Bailey
|
62
|
Chief
Financial Officer and
Director
|
Ms. Liu
is the President of HIPAC, Inc., Principal of Hollywood Int’l Movie & TV
Arts Institute.
Hollis
Liu is an outstanding vocalist and accomplishment professor in the field of
vocal education and training.
Alan. J
Bailey has been a senior executive in the entertainment industry for
approximately 35 years, and is a director and senior officer of several new
media businesses. He is a Fellow of the UK Institute of Chartered
Accountants.
Except as
noted above, there are no agreements or understandings for any of our executive
officers or directors to resign at the request of another person and no officer
or director is acting on behalf of, nor will any of them act at the direction
of, any other person. Directors are elected until their successors are duly
elected and qualified.
Family
Relationships
There are
no family relationships among any of our officers and directors.
Involvement
in Certain Legal Proceedings
To the
best of our knowledge, none of our directors or executive officers has been
convicted in a criminal proceeding, excluding traffic violations or similar
misdemeanors, or has been a party to any judicial or administrative proceeding
during the past five years that resulted in a judgment, decree or final order
enjoining the person from future violations of, or prohibiting activities
subject to, federal or state securities laws, or a finding of any violation of
federal or state securities laws, except for matters that were dismissed without
sanction or settlement. Except as set forth in our discussion below in “Certain
Relationships and Related Transactions, and Director Independence,” none of our
directors, director nominees or executive officers has been involved in any
transactions with us or any of our directors, executive officers, affiliates or
associates which are required to be disclosed pursuant to the rules and
regulations of the SEC.
Promoters
and Certain Control Persons
We did
not have any promoters at any time during the past five fiscal
years.
Section
16(A) Beneficial Ownership Reporting Compliance
Under
U.S. securities laws, directors, certain executive officers and persons holding
more than 10% of our common stock must report their initial ownership of the
common stock, and any changes in that ownership, to the SEC. The SEC has
designated specific due dates for these reports. Ms. Hollis Liu, our sole
director, officer and stockholder, did file her Initial Statement of Beneficial
Ownership of Securities on Form 3 by the due date. No other reports were
required to be filed in fiscal year 2009.
Code
of Ethics
We have
adopted a Code of Ethics and an Insider Trading Policy as of January 18,
2010.
Material
Changes to Director Nomination Procedures
There
have been no material changes to the procedures by which stockholders may
recommend nominees to our board of directors since such procedures were last
disclosed.
18
Audit
Committee and Audit Committee Financial Expert
We
established a standing audit committee and an audit committee charter on January
18, 2010 together with an insider trader policy. Our Audit Committee consists of
Hollis Liu (Chair) and Alan J. Bailey.
ITEM
11.
|
EXECUTIVE
COMPENSATION.
|
Summary
Compensation – 2009 and 2008
For the
year ended December 31, 2009, and through the date of this report, we have not
paid any executive officer or director any cash or cash equivalent compensation.
We have no agreements or understandings, express or implied, with any director
or executive officer concerning employment or cash or other compensation for
services. We will undoubtedly pay compensation to officers and other employees
should we succeed in acquiring a business that has funds available to pay such
compensation.
Outstanding
Equity Awards at Fiscal Year End
Except
for the grant of 2,000,000 common shares on December 29,2009 to our Chief
Financial Officer, none of our other executive officers received any equity
awards, including, options, restricted stock or other equity incentives during
the fiscal year ended December 31, 2009.
Compensation
of Directors
During
the fiscal year ended December 31, 2009, there were no fees earned or paid in
cash for services to our directors and no stock or stock options or other equity
incentives were awarded to our directors. We have no standard arrangements in
place to compensate our directors for their service as directors or as members
of any committee of directors. In the future, if we retain non-employee
directors, we may decide to compensate them for their service to us as directors
and members of committees.
ITEM
12.
|
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
STOCKHOLDER MATTERS.
|
Security
Ownership of Certain Beneficial Owners and Management
The
following table sets forth, as of April 15,2010, certain information with
respect to the beneficial ownership of our common stock by (i) each director and
executive officer, (ii) each person known by us to be the beneficial owner of
five percent or more of the outstanding shares of common stock, and (iii) all
directors and executive officers as a group. Unless otherwise specified, the
address of each of the persons set forth below is in care of the Company at 9660
Flair Drive, Suite 408, El Monte, CA 91731
Name & Address of Beneficial
Owner
|
Office, If Any
|
Title of Class
|
Amount and Nature
of Beneficial
Ownership(1)
|
Percent of
Class(2)
|
|||||
Officers
and Directors
|
|||||||||
Alan
J.Bailey
|
Chief
Financial Officer
and
Director
|
Common
Stock,
$.00001
par value
|
2,000,000
|
4
|
% | ||||
Hollis
Liu
|
President,
Secretary and
Director
|
Common
Stock,
$.00001
par value
|
50,000,000
|
96
|
% | ||||
All
officers and directors as a group
(1 person named above) |
Common
Stock,
$.00001
par value
|
52,000,000
|
100
|
% | |||||
5%
Security Holders
|
|||||||||
Hollis
Liu
|
Common
Stock,
$.00001
par value
|
50,000,000
|
100
|
% |
19
(1)
|
Beneficial Ownership is
determined in accordance with the rules of the SEC and generally includes
voting or investment power with respect to securities. Except as noted
below, each of the beneficial owners listed above has direct ownership of
and sole voting power and investment power with respect to the shares of
our common stock.
|
(2)
|
As of April 15 , 2010, a total of
52,,000,000 shares of our common stock are considered to be outstanding
pursuant to SEC Rule 13d-3(d)(1). For each Beneficial Owner above, any
options exercisable within 60 days have been included in the
denominator.
|
Changes
in Control
On March
3, 2009, Hollis Liu purchased 2,000,000 shares of common stock from Ming Xu, the
then sole shareholder, officer and director of the Company, in a private
purchase transaction. On March 25,2009 and on December 18,2009 Hollis Liu was
issued with 18,000,000 and 30,000,000 common stock respectively, and on December
29,2009 Alan J. Bailey was issued 2,000,000 common stock.
Securities
Authorized for Issuances under 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 have any outstanding stock
options.
ITEM 13.
|
CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS, AND DIRECTOR
INDEPENDENCE.
|
Related
Party Transactions
The
following includes a summary of transactions since the beginning of the 2008
fiscal year, or any currently proposed transaction, in which we were or are to
be a participant and the amount involved that exceeded or exceeds the lesser of
$120,000 or one percent of the average of our total assets at year-end for the
last two completed fiscal years, and in which any related person had or will
have a direct or indirect material interest (other than compensation described
under Item 11. “Executive Compensation”). We believe the terms obtained or
consideration that we paid or received, as applicable, in connection with the
transactions described below were comparable to terms available or the amounts
that would be paid or received, as applicable, in arm’s-length
transactions.
On
February 18, 2009, we entered into a share exchange agreement, or Share Exchange
Agreement, with Hollis Liu and Ming Xu, our sole director, officer and
stockholder. Under the Share Exchange Agreement, Ming Xu sold 2,000,000 shares
of Common Stock to Hollis Liu and resigned as our sole officer and director.
Hollis Liu was elected as the sole officer and director effective March 3,
2009.
On March
25, 2009, our President, Secretary and director, Hollis Liu, contributed
additional capital in the amount of $180 for state required filing fees and
received in exchange 18,000,000 additional shares of common stock and was issued
30,000,000 additional shares of common stock on December 18,2009. On December
29,2009 our Chief Financial Officer and Director, Alan J. Bailey was issued with
2,000,000 common stock. Please see our disclosure under Item 7 “Management’s
Discussion and Analysis of Financial Condition and Results of Operations” and
“Recent Developments” for more details regarding the Share Exchange
Agreement.
Except as
set forth in our discussion above, none of our directors, director nominees or
executive officers has been involved in any transactions with us or any of our
directors, executive officers, affiliates or associates which are required to be
disclosed pursuant to the rules and regulations of the SEC.
20
Director
Independence
We
currently do not have any independent directors, as the term “independent” is
defined by the rules of the Nasdaq Stock Market.
ITEM 14.
|
PRINCIPAL ACCOUNTING FEES AND
SERVICES.
|
Independent
Auditors’ Fees
The
following is a summary of the fees billed to the Company for professional
services rendered for the fiscal year ended December 31, 2009 and
2008:
2009
|
2008
|
|||||||
Audit
Fees
|
$ | 3,000 | $ | 3,000 | ||||
Audit-Related
Fees
|
- | - | ||||||
Tax
Fees
|
- | - | ||||||
All
Other Fees
|
- | - | ||||||
TOTAL
|
$ | 3,000 | $ | 3,000 |
EFP
Rotenberg LLP is successor by merger to Rotenberg & Co, LLP has served as
our independent registered public accounting firm since inception on November 7,
2007.
“Audit
Fees” consisted of fees billed for professional services rendered by the
principal accountant for the audit of our annual financial statements and review
of the financial statements included in our Form 10-Q or services that are
normally provided by the accountant in connection with statutory and regulatory
filings or engagements.
“Audit-Related
Fees” consisted of fees billed for assurance and related services by the
principal accountant that were reasonably related to the performance of the
audit or review of our financial statements and are not reported under the
paragraph captioned “Audit Fees” above.
“Tax
Fees” consisted of fees billed for professional services rendered by the
principal accountant for tax compliance, tax advice, and tax
planning.
“All
Other Fees” consisted of fees billed for products and services provided by the
principal accountant, other than the services reported above under other
captions of this Item 14.
Pre-Approval
Policies and Procedures
Under the
Sarbanes-Oxley Act of 2002, all audit and non-audit services performed by our
auditors must be approved in advance by our board of directors to assure that
such services do not impair the auditors’ independence from us. In accordance
with its policies and procedures, our board of directors pre-approved the audit
service performed by EFP Rotenberg LLP for our financial statements as of
and for the year ended December 31, 2009.
PART
IV
ITEM 15.
|
EXHIBITS, FINANCIAL STATEMENT
SCHEDULES.
|
Financial
Statements and Schedules
The
financial statements are set forth under Item 8 of this annual report on Form
10-K. Financial statement schedules have been omitted since they are either not
required, not applicable, or the information is otherwise included.
Exhibit
List
The
following exhibits are filed as part of this report or incorporated by
reference.
21
Exhibit No.
|
Description
|
|
31.1*
|
Certifications
of Principal Executive Officer Pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002
|
|
31.2*
|
Certifications
of Principal Financial and Accounting Officer Pursuant to Section 302
of the Sarbanes-Oxley Act of 2002
|
|
32.1*
|
Certifications
of Principal Executive Officer and Principal Financial and Accounting
Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of
2002
|
*Filed
herewith.
22
HOLLYWOOD
ENTERTAINMENT EDU HOLDING, INC
(FORMERLY
KNOWN AS CHINA ENVIRONMENT HOLDINGS, INC.).
INDEX
TO FINANCIAL STATEMENTS
Contents
|
Page
|
|
Report
of Independent Registered Public Accounting Firm
|
F-1
|
|
Balance
Sheets as of December 31, 2009 and 2008
|
F-2
|
|
Statements
of Operations for the Years Ended December 31, 2009 and 2008 and the
Period from November 8, 2007 (Inception) through December 31,
2009
|
F-3
|
|
Statements
of Changes in Stockholders’ Deficit for the Period from November 8, 2007
(Inception) through December 31, 2009
|
F-4
|
|
Statements
of Cash Flows for the Years Ended December 31, 2009 and 2008 and the
Period from November 8, 2007 (Inception) through December 31,
2009
|
F-5
|
|
Notes
to Financial Statements
|
F-6
|
23
REPORT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the
Board of Directors and Stockholders of
Hollywood
Entertainment EDU Holding, Inc.
(A
Development Stage Company)
We have
audited the accompanying balance sheets of Hollywood Entertainment EDU Holding,
Inc. (A Development Stage Company) as of December 31, 2009 and 2008, and the
related statements of operations, changes in stockholder’s deficit, and cash
flows for the year ended December 31, 2009 and for the period from date of
inception (November 8, 2007) through December 31, 2009. China Environment
Holdings, Inc.’s management is responsible for these financial statements. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We
conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audits to obtain reasonable assurance about whether the
financial statements are free of material misstatement. The company is not
required to have, nor were we engaged to perform, an audit of its internal
control over financial reporting. Our audit included consideration of internal
control over financial reporting as a basis for designing audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the company’s internal control over financial
reporting. Accordingly, we express no such opinion. An audit also includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Hollywood Entertainment EDU
Holding, Inc. (formerly known as China Environment Holdings, Inc.) as of
December 31, 2009 and 2008, and the results of its operations and its cash flows
for the year ended December 31, 2009 and for the period from date of inception
(November 8, 2007) through December 31, 2009 in conformity with accounting
principles generally accepted in the United States of America.
The
accompanying financial statements have been prepared assuming that the Company
will continue as a going concern. As discussed in Note 3 to the financial
statements, the Company’s inability to establish a source of revenue raises
substantial doubt about its ability to continue as a going concern. The
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.
Rochester,
New York
April 15,
2010
F-1
HOLLYWOOD ENTERTAINMENT EDU HOLDING,
INC.
(A
Development Stage Company)
Balance
Sheets
December
31, 2009
|
December 31,
|
December 31,
|
||||||
|
2009
|
2008
|
||||||
Assets:
|
||||||||
Current
Assets:
|
$ | $ | ||||||
Cash
|
- | - | ||||||
Total
Current Assets
|
- | - | ||||||
TOTAL
ASSETS
|
$ | - | $ | - | ||||
LIABILITIES
AND STOCKHOLDERS’ DEFICIT:
|
||||||||
Current
Liabilities:
|
$ | $ | ||||||
Accounts
payable and accrued expenses
|
3,200 | - | ||||||
Advances
from Officer
|
5,565 | 1,788 | ||||||
Total
Current Liabilities
|
8,765 | 1,788 | ||||||
TOTAL
LIABILITIES
|
8,765 | 1,788 | ||||||
Stockholders’
Deficit:
|
||||||||
Common
stock, $.00001 par value, authorized 100,000,000 shares 52,000,000 issued
and outstanding at Dec.31,2009 (2,000,000 issued and outstanding at
Dec.31,2008)
|
520 | 20 | ||||||
Additional
paid in capital
|
3,000 | 3,000 | ||||||
Deficit
accumulated during the development stage
|
(12,285 | ) | (4,808 | ) | ||||
Total
Stockholders’ Deficit
|
(8,765 | ) | (1,788 | ) | ||||
TOTAL
LIABILITIES AND STOCKHOLDERS DEFICIT
|
$ | - | $ | - |
The
accompanying notes are an integral part of these financial
statements.
F-2
HOLLYWOOD ENTERTAINMENT EDU HOLDING,
INC.
(A
Development Stage Company)
Statements
of Operations
Period From Date of Inception
|
||||||||||||
For the Years Ended
|
(November 8, 2007)
|
|||||||||||
December
31
|
Through
|
|||||||||||
2009
|
2008
|
December
31, 2009
|
||||||||||
Revenues
|
$ | — | $ | — | $ | — | ||||||
Expenses
|
||||||||||||
General
and Administrative
|
7,477 | 3,000 | 12,285 | |||||||||
Total
Expenses
|
$ | 7,477 | $ | 3,000 | $ | 12,285 | ||||||
Net
Loss
|
$ | (7,477 | ) | $ | (3,000 | ) | $ | (12,285 | ) | |||
Loss
per Share - Basic and Diluted
|
$ | (0.00 |
)
|
$ | (0.00 | ) | $ | (0.00 | ) | |||
Weighted
Average Common Shares Outstanding
|
9,352,496 | 2,000,000 | 6,504,170 |
The
accompanying notes are an integral part of these financial
statements.
F-3
HOLLYWOOD ENTERTAINMENT EDU HOLDING,
INC.
(A
Development Stage Company)
Statements
of Changes in Stockholders’ Deficit
For
the Period November 8, 2007 (Inception) through December 31, 2009
Common Stock
|
||||||||||||||||||||
|
Number of
Shares
|
Amount
|
Additional
Paid in
Capital
|
Accumulated
(Deficit)
During the
Development
Stage
|
Total
Stockholders’
Deficit
|
|||||||||||||||
Inception -
November 8, 2007
|
-
|
$
|
-
|
$
|
-
|
$ |
-
|
$
|
-
|
|||||||||||
Issuance
of Stock to founder
|
2,000,000
|
20
|
-
|
-
|
20
|
|||||||||||||||
Net
Loss
|
-
|
-
|
-
|
(4,808
|
)
|
(4,808
|
) | |||||||||||||
Additional
Paid In Capital
|
-
|
-
|
3,000
|
-
|
3,000
|
|||||||||||||||
Balance
December 31, 2008
|
2,000,000
|
20
|
3,000
|
(4,808
|
)
|
(1,788
|
) | |||||||||||||
Net
Loss
|
-
|
-
|
-
|
(7,477
|
) |
(7,477
|
) | |||||||||||||
Issuance
of Stock to officers
|
50,000,000
|
500
|
-
|
-
|
500
|
|||||||||||||||
Balance-
December 31, 2009
|
52,000,000
|
520
|
3,000
|
(12,285
|
) |
(8,765
|
) |
The
accompanying notes are an integral part of these financial
statements.
F-4
HOLLYWOOD ENTERTAINMENT EDU HOLDING,
INC.
(A
Development Stage Company)
Statements
of Cash Flows
|
Period From
|
|||||||||||
|
Date of Inception
|
|||||||||||
|
For the Years Ended
|
(November 8, 2007)
|
||||||||||
|
December
31,
|
Through
|
||||||||||
|
2009
|
2008
|
December
31,2009
|
|||||||||
Cash
Flows from Operating Activities
|
||||||||||||
Net
Loss
|
$ | (7,477 | ) | $ | (3,000 | ) | $ | (12,285 | ) | |||
Non
Cash Adjustments:
|
||||||||||||
Common
Stock Issued in Lieu of Expenses paid
|
20 | — | 20 | |||||||||
Change
in Accrued Expenses
|
3,200 | - | 3,200 | |||||||||
Net
Cash Flows from Operating Activities
|
(4,257 | ) | (3,000 | ) | (9,045 | ) | ||||||
Net
Cash Flows from Investing Activities
|
— | — | — | |||||||||
Cash
Flows from Financing Activities
|
||||||||||||
Advances
from Officer
|
3,777 | - | 5,565 | |||||||||
Issuance
of Stock to Officer
|
480 | 480 | ||||||||||
Additional
Paid-In Capital
|
- | 3,000 | 3,000 | |||||||||
Net Cash from Financing Activities | 4,247 | 3,000 | 9,045 | |||||||||
Net
Change in Cash and Cash Equivalents
|
— | — | — | |||||||||
Cash
and Cash Equivalents - Beginning of Period
|
— | — | — | |||||||||
Cash
and Cash Equivalents - End of Period
|
$ | — | $ | — | $ | — | ||||||
Cash
Paid During the Period for:
|
||||||||||||
Interest
|
$ | — | $ | — | $ | — | ||||||
Income
Taxes
|
$ | — | $ | — | $ | — |
The
accompanying notes are an integral part of these financial
statements.
F-5
HOLLYWOOD ENTERTAINMENT EDU HOLDING,
INC.
(A
Development Stage Company)
Notes
to Financial Statements
December
31, 2009
Note 1 - Development Stage
Company:
Nature of
Operations
HOLLYWOOD
ENTERTAINMENT EDU HOLDING, INC (“the Company”) , a development stage company,
was incorporated in the State of Delaware on November 8, 2007 . The Company is
looking to acquire an existing company or acquire the technology or enter into
cooperation agreements with learning and educational institutions for training
programs to begin operations.
As a
blank check company, the Company’s business is to pursue a business combination
through acquisition, or merger with, an existing company. No assurances can be
given that the Company will be successful in locating or negotiating with any
target company.
Since
inception, the Company has been engaged in organizational efforts.
Note 2 - Summary of
Significant Accounting Policies:
The
accompanying financial statements are prepared in accordance with accounting
principles generally accepted in the United States. Significant accounting
policies follow:
Method of Accounting:
These financial statements are prepared on the accrual basis of
accounting in confirmity with accounting principles generally accepted in the
United States of America
Use of Estimates: The
preparation of financial statements in conformity with generally accepted
accounting principles of the United States of America requires management to
make estimates and assumptions that affect the amounts of assets and liabilities
and disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the year.
However, actual results may differ from the estimates.
Development Stage:
The Company has operated as a development stage enterprise since its
inception by devoting substantially all of its efforts to financial planning,
raising capital, research and development , and developing markets for its
services. The Company prepares its financial statements in accordance with the
requirements of FASB ASC 915 ( Prior authoritative literature Statement of
Financial Accounting Standards No.7,”Accounting and Reporting by Development
Stage Enterprises”).
Organizational Costs:
Organizational costs represent management, consulting, legal, accounting, and
filing fees incurred to date in the formation of the company. Organizational
costs are expenses as incurred in accordance with FASB ASC 720-15( Prior
authoritative literature Statement of Position 98-5,”Reporting on the Costs of
Start-Up Activities”).
F-6
HOLLYWOOD
ENTERTAINMENT EDU HOLDING, INC
(A
Development Stage Company)
Notes
to Financial Statements
December
31, 2009
Income Taxes: The
Company accounts for income taxes in accordance with FASB ASC 740-10 (Prior
authoritative literature Statement of Financial Accounting Standards No.109,
“Accounting for Income Taxes”), using the asset and liability approach, which
requires recognition of deferred tax liabilities and assets for the expected
future tax consequences of temporary differences between the carrying amounts
and the tax basis of such assets and liabilities. . The method utilizes enacted
statutory tax rates in effect for the year in which temporary differences are
expected to reverse and gives immediate effect to changes in income tax rates
upon enactment. Deferred tax assets are recognized, net of any valuation
allowance, for temporary differences and net operating loss and tax credit carry
forwards. Deferred income tax expense represents the change in net deferred
assets and liability balances.
Net loss per Common
Share: The Company computes net loss per share in accordance with FASB
ASC 260-10 (Prior authoritative literature : SFAS No.128, Earnings per Share and
SEC Staff Accounting Bulletin No.98) . Under the provisions of ASC 260-10, basic
net loss per share is computed by dividing the net loss available to common
stockholders for the period by the weighted average number of shares of common
stock outstanding during the period. The calculation of diluted net loss per
share gives effect to common stock equivalents; however , potential common
shares are excluded if their effect is anti-dilutive.
Fair Value of Financial
Instruments: The FASB ASC 320-12-65 (Prior authoritative literature: SFAS
No. 107, “Disclosures about Fair Value of Financial Instruments”), requires the
determination of fair value of the Company’s financial assets and liabilities.
The estimated fair values of financial instruments were determined by management
using available market information and appropriate valuation methodologies. The
carrying amounts of financial instruments including cash and advances from
officer approximate their fair value because of their short
maturities..
Note 3 - Going
Concern:
The
accompanying financial statements have been prepared assuming that the Company
will continue as a going concern, which contemplates the recoverability of
assets and the satisfaction of liabilities in the normal course of
business.
The
Company has had no revenue and has incurred accumulated net losses from November
8, 2007 (inception) through the period ended December 31, 2009 of $12,285. In
addition, the Company’s development activities since inception have been
financially sustained through equity financing and advances from an
officer.
The
ability of the Company to continue as a going concern is dependent upon its
ability to find a suitable acquisition/merger candidate, raise additional
capital from the sale of common stock, and receive additional paid-in capital
from its shareholder and, ultimately, the achievement of significant operating
revenues. The accompanying financial statements do not include any adjustments
that might be required should the Company be unable to recover the value of its
assets or satisfy its liabilities.
F-7
HOLLYWOOD ENTERTAINMENT EDU HOLDING,
INC.
(A
Development Stage Company)
Notes
to Financial Statements
December
31, 2009
Note 4 – Shareholder’s
Equity:
Holders
of shares of common stock shall be entitled to cast one vote for each common
share held at all stockholder’s meetings for all purposes, including the
election of directors. The common stock does not have cumulative voting
rights.
No holder
of shares of stock shall be entitled as a matter of right to subscribe for or
purchase or receive any part of any new or additional issue of shares of stock
of any class, or of securities convertible into shares of stock of any class,
whether now hereafter authorized or whether issued for money, for consideration
other than money, or by way of dividend.
Note 5 - Income
Taxes:
No
current provision or benefit for federal income taxes has been recorded for the
year ended December 31, 2009 or for any period from inception through December
31, 2009 as the Company has no taxable income or loss.
Note 6 - Related Party
Transactions:
The
Company utilizes the office space and equipment provided through an officer at
no cost. Management estimates such amounts to be immaterial.
Note 7 – Recent
Pronouncements:
The
Company does not expect the adoption of recently issued accounting
pronouncements to have a significant impact on the Company’s results of
operations, financial position , or cash flow.
Note 8 – Subsequent
Events:
Subsequent evcnts were evaluated through April 15,
2009, the date the financial statements were
issued.
F-8
SIGNATURES
In
accordance with section 13 or 15(d) of the Securities Exchange Act of 1934, the
Registrant caused this Report on Form 10-K to be signed on its behalf by the
undersigned, thereto duly authorized individual.
Date:
April 15, 2010
HOLLYWOOD
ENTERTAINMENT EDU
HOLDING,
INC
|
||
By:
|
/s/ Hollis
Liu
|
|
Hollis
Liu
|
||
President
|
In
accordance with the Securities Exchange Act of 1934, this report has been signed
below by the following persons on behalf of the Registrant and in the capacities
and on the dates indicated.
Signature
|
Title
|
Date
|
|||
/s/
Hollis Liu
|
President,
Secretary and Director
|
April
15 , 2010
|
|||
Hollis
Liu
|
(Principal
Executive Officer)
|
||||
/s/
Alan J. Bailey
|
Chief
Financial Officer and Director
|
April
15 , 2010
|
|||
Alan
J. Bailey
|