Attached files
file | filename |
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EX-3.2 - Zhong Wen International Holding Co., Ltd. | v192461_ex3-2.htm |
EX-3.1 - Zhong Wen International Holding Co., Ltd. | v192461_ex3-1.htm |
EX-5.1 - Zhong Wen International Holding Co., Ltd. | v192461_ex5-1.htm |
EX-23.1 - Zhong Wen International Holding Co., Ltd. | v192461_ex23-1.htm |
EX-10.1 - Zhong Wen International Holding Co., Ltd. | v192461_ex10-1.htm |
EX-3.1(A) - Zhong Wen International Holding Co., Ltd. | v192461_ex3-1a.htm |
As
filed with the Securities and Exchange Commission on August __,
2010
Registration
No. 333-167663
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington, D.C.
20549
Pre-Effective
Amendment No. 1
Form S-1
REGISTRATION
STATEMENT
UNDER
THE
SECURITIES ACT OF 1933
ZHONG
WEN INTERNATIONAL HOLDING CO., LTD.
Delaware
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3569
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Applied
For
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(State
or other jurisdiction of
incorporation
or organization)
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(Primary
Standard Industrial
Classification
Code Number)
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(I.R.S.
Employer
Identification
No.)
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(Address,
including zip code, and telephone number, including area code, of registrant’s
principal executive offices)
Zhong Wen
International Holding Co., Ltd.
Room
1101, 11/F., Shun Kwong Commercial Building, No.8 Des Vouex Road West, Hong
Kong
852-253
03798 .
(Name,
address, including zip code, and telephone number, including area code, of agent
for service)
The
Corporation Trust Company
1209
Orange Street
Wilmington,
Delaware 19801
302.658.7581
Copies
to:
The Law
Office of Stephen E. Rounds
1544 York
Street, Suite 110
Denver,
Colorado 80206
T.
303.377.6997 F. 303.377.0231
Approximate date of commencement of
proposed sale to public: As soon as practicable after the effective date
of this Registration Statement.
If any
of the securities being registered on this Form are to be offered on a delayed
or continuous basis pursuant to Rule 415 under the Securities Act of 1933,
check the following box. x
If this
Form is filed to register additional securities for an offering pursuant to
Rule 462(b) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. ¨
If this
Form is a post-effective amendment filed pursuant to Rule 462(c) under the
Securities Act, check the following box and list the Securities Act registration
statement number of the earlier effective registration statement for the same
offering. ¨
If this
Form is a post-effective amendment filed pursuant to Rule 462(d) under the
Securities Act, check the following box and list the Securities Act registration
statement number of the earlier effective registration statement for the same
offering. ¨
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. (Check
one):
Large accelerated
filer ¨
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Accelerated
filer ¨
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Non-accelerated filer ¨
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Smaller reporting
company x
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|||
(Do not check if a smaller reporting company)
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CALCULATION
OF REGISTRATION FEE
Title of Each Class of Securities
to be Registered
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Amount to be
Registered(1)(3)
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Proposed Maximum
Offering
Price per share(2)
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Proposed Maximum
Aggregate Offering
price(1)(2)
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Amount of
Registration Fee
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||||||||||||
Common Stock, par value $.001 per
share
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578,000
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$
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0.25
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$
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144,500
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$
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10.30
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(1) There
is no market for our common stock. Estimated in accordance with Rule 457(g) of
the Securities Act of 1933 solely to compute the registration fee.
(2)
Calculated under Section 6(b) of the Securities Act of 1933 as $71.30 for each
$1,000,000 of the maximum aggregate offering price.
(3)
Represents shares of our common stock being registered for resale that have been
issued to the selling shareholders named in this registration
statement.
We
will amend this registration statement on such date or dates as may be necessary
to delay our effective date until we will file a further amendment which
specifically states that this Registration Statement shall thereafter become
effective in accordance with Section 8(a) of the Securities Act of 1933 or until
this Registration Statement will become effective on such date as the Securities
and Exchange Commission, in accordance with Section 8(a) may
determine.
The
information in this Prospectus is not complete and may be changed. Our selling
shareholders may not sell these securities until the registration statement that
includes this Prospectus is declared effective by the Securities and Exchange
Commission. This Prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy these securities, nor shall the selling
shareholders sell any of these securities in any state where such an offer or
solicitation would be unlawful before registration or qualification under such
state’s securities laws.
SUBJECT
TO COMPLETION, DATED August 6, 2010
ZHONG WEN
INTERNATIONAL HOLDING CO., LTD.
578,000
Shares of Common Stock
Our
selling shareholders are offering up to 578,000 shares of common stock. The
selling shareholders will offer their shares at $0.25 per share until the
Company’s shares are quoted on the Over the Counter Bulletin Board (“OTC
Bulletin Board”), if ever, and thereafter at prevailing market prices or
privately negotiated prices. We will not receive proceeds from the sale of
shares from the selling shareholders.
Prior to
this offering, there has been no market for our securities. Our common stock is
not listed on any national securities exchange or the NASDAQ stock market, nor
is it quoted on OTC Bulletin Board or any other quotation medium. A registered
broker-dealer has submitted an application for a quotation of our common stock
on the OTC Bulletin Board; however, there is no assurance that our securities
will ever become qualified for quotation on the OTC Bulletin
Board. There is no assurance that the selling shareholders will sell
their shares or that a market for our shares will ever develop, even if our
shares are quoted on the OTC Bulletin Board.
This
offering is highly speculative and these securities involve a high degree of
risk and should be considered only by persons who can afford the loss of their
entire investment. See “Risk Factors” beginning on page 6.
Neither
the Securities and Exchange Commission nor any state securities commission has
approved or disapproved of these securities or passed upon the accuracy or
adequacy of this Prospectus. Any representation to the contrary is a criminal
offense.
The
date of this Prospectus is August __, 2010.
You
should rely only on the information contained in this Prospectus. We have not
authorized anyone to provide you with different information. We are not making
an offer to sell these securities in any jurisdiction where the offer or sale is
not permitted. You should assume that the information in this Prospectus is
accurate as of the date on the front of this Prospectus.
i
TABLE OF
CONTENTS
SUMMARY
INFORMATION
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2
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RISK
FACTORS
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4
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NOTE
REGARDING FORWARD LOOKING STATEMENTS
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8
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USE
OF PROCEEDS
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8
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DETERMINATION
OF OFFERING PRICE
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9
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DILUTION
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9
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SELLING
SHAREHOLDERS
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9
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PLAN
OF DISTRIBUTION
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10
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LEGAL
PROCEEDINGS
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11
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DESCRIPTION
OF SECURITIES
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11
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EXPERTS
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12
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LEGAL
MATTERS
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12
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DISCLOSURE
OF COMMISSION POSITION ON INDEMNIFICATION FOR SECURITIES
LIABILITIES
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12
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DESCRIPTION
OF BUSINESS
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13
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MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS;
PLAN OF OPERATIONS
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16
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TRANSACTIONS
WITH RELATED PERSONS, PROMOTERS AND CERTAIN CONTROL
PERSONS
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17
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MARKET
FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
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18
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DIRECTORS,
EXECUTIVE OFFICERS, PROMOTERS, AND CONTROL PERSONS
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19
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SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
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20
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EXECUTIVE
COMPENSATION
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20
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WHERE
YOU CAN FIND MORE INFORMATION
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21
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FINANCIAL
STATEMENTS
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F-1
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ii
PROSPECTUS
SUMMARY
This
summary only highlights selected information contained in greater detail
elsewhere in this Prospectus. This summary may not contain all the information
that you should consider before investing in our common stock. You should read
the entire Prospectus, including “Risk Factors” beginning on page 6, and the
financial information beginning on page F-1, before making an investment
decision.
Corporate
Information
The
Company was incorporated in Delaware on May 24, 2010. Our current
address is at Room 1101, 11/F, Shun Kwong Commercial Building, No.8 Des
Vouex Road West , Hong Kong, telephone 852 -253 03798 .
Business
and Structure
The
business of the Company is product procurement for the construction industry,
and project consultation for construction projects. Initially, for
the procurement side of the business, Hong Kong Zhongwenbo International Group
Company Limited (“ Zhongwenbo,” a
company organized under Hong Kong law on June 23, 2010), entered into a Sales
Agency Agreement on June 23, 2010, with Shandong Zhongwen Industrial Group
Company Limited (the “ SZIG ”), a limited
liability company established under the laws of the People’s Republic of China
(the “PRC ”).
Zhongwenbo is a wholly-owned subsidiary of the Company.
Under
the Sales Agency Agreement, Zhongwenbo is the exclusive global agent for SZIG,
except for the PRC and Brazil (although the agency territory allows sales in the
Special Administration Regions of Hong Kong and Macau, and the Territory of
Taiwan). Zhongwenbo will be paid a commission of five percent of the net sales
value of the SZIG products it sells. See “Business - Sales Agency
Agreement” below. We have targeted certain developing countries in
Southeast Asia for initial marketing efforts.
The
Company is a start-up enterprise with no revenues or pending product or service
sales, or working capital as of August 6, 2010. Though we
have commenced operations, we will have to fully develop and initiate a
marketing plan to develop a prospective customer base. Please see
“Business – Marketing” below. Because we now have nominal assets and
nominal operations, we currently are a “shell company” as that
term is defined in SEC rules and regulations. We expect this status
to change as we fully implement our business plan, but we
cannot predict when, if ever, we will cease to be a shell company. Please see
“Business – Specific Business Plan for the Next Twelve Months and Description of
Operations,” below. We do not consider the Company to be a “blank
check company” as that term is defined in the SEC’s Rule 419. We do
not have any intention to engage in a reverse merger with any entity in an
industry unrelated to our business. Further,
our business plan does not contemplate engaging in a merger or acquisition with
an unidentified company or companies, or any other entity or
person."
There is
currently no market for our common stock.
The
Offering
General
Selling
shareholders are offering up to 578,000 shares of our common stock, initially at
$0.25 per share, and thereafter (if the Company’s shares are quoted on the OTC
Bulletin Board), at prevailing market prices or privately negotiated
prices.
For
the first 12 months after the date of this Prospectus, and pending receipt (if
any) of proceeds from sale of SZIG’s products, we will need significant amounts
of additional capital to initiate and sustain full operations, and fulfill our
future filing obligations under the Securities Exchange Act of 1934 (the “1934
Act”). Please refer to the risk factors captioned We will need significant additional
capital, which we may be unable to obtain; should we fail to obtain sufficient
financing, the business will be adversely affected,” and We will need additional capital to
meet our public company reporting requirements.
To the
extent revenues are not sufficient to meet our needs, we anticipate funds will
be provided by short-term loans to the Company from Chinese banks (guaranteed by
Mr. Sun Hongyi, an officer and director of the Company), and/or sale of
additional shares to current shareholders, including Mr. Sun
Hongyi. Resale of such additional shares would not be covered by this
Prospectus. See “Management’s Discussion and Analysis of Financial
Condition and Results of Operations.” We also may sell shares to new
investors, but in this regard, please see the risk factor “The Company may be in competition
with the selling shareholders if the Company seeks additional capital from new
investors.”
Purpose of This
Offering
The
purpose of this offering is to offer existing shareholders (other than officers
and directors) the opportunity to benefit from a trading market, if one develops
in response to the Company’s future performance. Depending on the
level of market interest, the Company may consider selling additional shares to
new investors to help fund working capital requirements and expand the scope of
business. Any additional shares would be sold as restricted
securities under the SEC’s Rule 144. However, because we are
a shell company, new investors would not be able to sell their shares under Rule
144 until after we file “Form 10 Information” with the SEC. Please see
“Number of Shares That Could Be Sold Under Rule 144”
below.
-2-
You
should note that there is no assurance that:
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·
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our securities will ever become
qualified for quotation on the OTC Bulletin Board;
or
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·
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that the selling shareholders
will sell their shares; or
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·
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that a market for our shares will
develop even if our shares are quoted on the OTC Bulletin
Board.
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To be
quoted on the OTC Bulletin Board, a market maker must file an application on our
behalf to make a market for our common stock. The absence of a public market for
our common stock may make it difficult for you to sell your shares of our common
stock.
Our
shares will be “penny stocks” as that term is generally defined in the 1934 Act
and will be subject to rules that impose sales practice and disclosure
requirements on broker-dealers who engage in certain transactions involving a
penny stock. Because of these regulations, broker-dealers may encounter
difficulties in their attempt to sell the shares, which may negatively affect
the ability of selling shareholders or persons who purchase from them, and/or
reduce trading activity and prices. Therefore, our shareholders will, in all
likelihood, find it difficult to sell their securities.
Number
of Shares That Could be Sold Under Rule 144
The
Company has 4,000,000 shares issued and outstanding, of which 578,000 shares are
held by persons not affiliated with the Company (and who are named as selling
security holders in this Prospectus), and 3,422,000 shares are held by three
affiliates (the officers and one director of the Company), who are not selling
security holders in this Prospectus. Assuming that at the time
of sale, the Company (i) has 4,000,000 shares issued and outstanding; (ii) has
become subject to the reporting requirements of the 1934 Act, and has filed all
reports required to be filed thereunder (other than Reports on Form 8-K) during
the period it was required to file such reports; and (iii) has filed current
“Form 10 Information” with the SEC reflecting the Company’s status as an entity
that is no longer a “shell company,” then beginning one year after the Form 10
Information has been filed, (a) each affiliate may sell pursuant to
the SEC’s Rule 144, in any three month period beginning after that date, such
number of shares which does not exceed 40,000 shares; and (b) each non-affiliate
may sell all of his shares, without limitation on the number of shares which can
be sold. “Form 10 Information” is defined in Rule 144(i)(3) to mean
the information required by the SEC’s Form 10 under the 1934
Act, However, this information can be provided in any filing the
Company makes with the SEC.
Resale
by any person of shares purchased from the Company after the date of this
Prospectus, also will be subject to Rule 144 as summarized above, provided that
a minimum period of six months has elapsed after the shares were paid for and
issued.
Financial
Summary
The
following summary data is qualified by reference to the financial statements and
notes thereto included elsewhere in the Prospectus. The Company’s
fiscal year ends on December 31, 2010. The following information
reflects financial information as of June 15, 2010 and for the period from
inception (May 24, 2010) to June 15, 2010.
Statement of Operations
Data
For the
Period
May 24, 2010
(Inception) to
June 15, 2010
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||||
Revenue
from operations
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$
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—
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Total
costs and expenses
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68,783
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Net
loss for the period
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$
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(68,783
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)
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Net
loss per weighted share, basic and fully diluted
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$
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(0.172
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)
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Weighted
average shares outstanding
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400,000
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-3-
Balance Sheet
Data
As of
June 15, 2010
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||||
Current
assets
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$
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36,217
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Working
capital
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$
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(28,783
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)
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Total
assets
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$
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36,217
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Total
liabilities
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$
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65,000
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Total
stockholders’ equity
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$
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(28,783
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)
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Use
of Proceeds
The
Company will not receive any proceeds from sale of the shares by the Selling
Shareholders, and
such proceeds will not be loand to the Company or used by such persons to buy
more shares in the Company. All costs related to the
preparation and filing of the registration statement (of which this Prospectus
is a part) are being paid by the Company.
Description
of our Common Stock
The
Company was organized as a Delaware corporation on May 24, 2010, with authority
to issue 1,000,000 shares of common stock, $0.001 par value. No
preferred shares were authorized to be issued. As of June 15, 2010,
400,000 shares were issued and outstanding. On July 21, 2010, the
authorized stock was increased to 6,000,000 shares, and the existing 400,000
shares were forward split (on a 10 for 1 basis) into 4,000,000 shares ($0.001
par value per share). This forward split was approved to facilitate
the development of a trading market in the shares (if our shares are quoted on
the OTC BB) after the date of this Prospectus, and the authorized number of
shares was increased to accommodate the forward split and have additional shares
available for future issuance, if needed. As of the date of
this Prospectus, there are 4,000,000 shares of common stock issued and
outstanding. See “Description of our Securities,”
below.
RISK
FACTORS
Purchasing
our stock is a speculative investment. You should carefully consider the
following risks in evaluating the other information in this Prospectus. The
risks described below are the only ones we believe are material as of the date
of this Prospectus. If any of the following risks actually occur, our business,
financial condition or results of operations could be materially adversely
affected and the value of our common stock, if quoted, could decline, or you may
lose all or part of your investment.
Risks Related to the
Business
Our
independent auditors have expressed doubt about our ability to continue as a
going concern, which may hinder our ability to obtain future financing and
negatively impact the value of your investment in our shares.
Our
independent auditors have stated that our financial statements have been
prepared assuming that we will continue as a going concern. We have sustained
operating losses since inception and our anticipated cash needs extend beyond
current resources. As of the date of this Prospectus, we have accrued
organizational expenses of $65,000 and have a negative working capital of
$(28,783). See “Management’s Discussion and Analysis of
Financial Condition and Results of Operations,” below. The Company
does not have a reliable source of future funding and we currently have no
revenue sources. Although our shareholders have indicated continuing
financial support for the company (see Note 1 to the Financial Statements
included with this Prospectus), our continued existence is dependent upon our
obtaining necessary funds or generating a sufficient revenue source. As a result
of this going concern qualification, we may encounter difficulties in obtaining
debt or equity financing or in obtaining financing on favorable terms. These and
other factors create an uncertainty about our ability to continue as a going
concern, which may cause you to lose your entire investment in our
shares.
The
Company was organized on May 24, 2010. Because the Company has nominal
operations and nominal assets, it is a shell company as that term is defined in
SEC rules and regulations. The Company may not become
profitable.
To
date, our business has been the development of a business plan and the
negotiation and
execution of a Sales Agency Agreement with a manufacturer of building
construction machinery, located in the PRC, and
limited marketing of the machinery. See “Business – Sales Agency
Agreement.” We also intend to offer project consulting services to the
construction industry but have not developed a specific marketing plan for this
activity. As of
the date of this Prospectus, we have earned no commissions on sales or fees for
consulting services. We will need additional funds to develop and
implement a comprehensive
marketing plan, as the costs thereof will not be borne by the
manufacturing company, and for other purposes. Please see the next
risk factor “We will need
significant additional capital, which we may be unable to obtain; should we fail
to obtain sufficient financing, the business will be adversely
affected.” Therefore, you have no historical performance upon
which to evaluate our business prospects. Accordingly, before investing, you
should consider the challenges, expenses and difficulties that we will face as a
development stage company.
-4-
We
will need significant additional capital, which we may be unable to obtain;
should we fail to obtain sufficient financing, the business will be adversely
affected.
The
Company estimates that up to $350,000 of working capital will be needed over the
next twelve months to implement a marketing program under the Sales Agency
Agreement, sustain operations, and pay the costs of being a public
company. Mr. Sun
Hongyi (an officer and director and principal sharheolder) has agreed to loan
the Company $100,000 (for one year, without interest) by about September 1,
2010, which would reduce our estimated capital requirements to $250,000 for the
next twelve months. However, banks may be unwilling to loan
additional capital, even with Mr. Sun Hongyi’s personal guarantee to the banks,
and current shareholders and/or new investors may be unwilling to buy common
shares. Additionally, seeking capital from new investors could be
difficult (please see the risk factor captioned The Company may be in competition
with the selling shareholders if the Company seeks additional capital from new
investors). If we are unable to obtain financing in the
amounts needed or on terms acceptable to us, the Company’s ability to sustain
operations and meet its legal obligations as a public company, will be adversely
affected. See “Management’s Discussion and Analysis of Financial
Condition and Results of Operations; Plan of Operations,” below, and the next
risk factor “We will need
additional capital to meet our public company reporting
requirements.”
In
addition, to enhance the commercial relationship with SZIG, we may guarantee,
for the benefit of SZIG, a customer’s contract to purchase a SZIG product. The
value to the Company, in terms of furthering the business relationship with
SZIG, is not predicted. However, if we are required to honor a
guarantee, our capital resources at the time would be negatively
impacted. If we were called to honor the guarantee, but be unable to
fund it, our relationship with SZIG could be impaired and could result in SZIG
terminating the Sales Agency Agreement.
We
will need additional capital to meet our public company reporting
requirements.
After
the effective date of this Prospectus, the Company will register its class of
common stock under Section 12(g) of the 1934 Act. The legal
obligations to file periodic reports and otherwise comply with registration are
extensive and compliance is expensive. We will have to obtain funds
to pay compliance costs, in addition to the capital needed to run the
business. Failure to comply with the reporting and other requirements
of registration could result in the SEC de-listing the common stock, which would
automatically result in loss of the Company’s trading privileges on the OTC BB,
which, in turn, would make it very difficult for investors to sell their
stock. Please see the “Plan of Operation” portion of “Management’s
Discussion and Analysis of Financial Condition and Results of Operations,”
below.
The
Company may be in competition with the selling shareholders if the Company seeks
additional capital from new investors.
If we
are unable to raise enough working capital from current shareholders (including
Mr. Sun Hongyi) buying more shares from the Company, and/or from bank loans
guaranteed by Mr. Sun Hongyi, we may try to sell shares to new
investors. However, because potential investors could buy stock in the
public market (if one develops, which is not assured) from the selling
shareholders named in this Prospectus, the Company, in effect, could be
competing with the selling shareholders for new investor
capital. While it is possible the Company could offer shares to prospective new investors
at a discount to market prices, this could present a conflict of
interest for the Board of Directors due to the dilution which the current
shareholders would experience, and could prevent the Company from raising
capital from new investors. In any event, the fact that Rule 144
will be unavailable to new investors for a year after we file “Form 10
Information” with the SEC, will make it even more difficult to sell new
shares. Please see “Number of Shares That Could Be Sold Under Rule 144”
below.
The
Company will face formidable competition in the market for machinery used in
building construction.
There are
numerous companies that manufacture machinery for the building construction
industry. Some of SZIG’s competitors’ products have an overall design
and capacity which are functionally similar to those made by SZIG (our principal
under the Sales Agency Agreement). Some of these companies are based in the PRC,
others are located in Japan, Korea and other countries in Asia, and still others
are based in North America and the European Union. Many of these
competitors have established distribution and/or sales agent networks, and
provide financing to purchasers. It will be difficult for us to make
any meaningful penetration into the global market. Additionally, the
Agreement precludes us from operating in Brazil and the PRC, which are large
markets for products such as those made by SZIG.
Our
business could be adversely affected by downturns in the construction
industry.
The
global economic crisis is a persistent threat to the construction
industry. Construction activity has increased significantly in the
PRC, but (with limited exceptions) that country is outside our territory under
the Sales Agency Agreement. Although we believe SZIG’s products are
very competitive in design and cost against non-PRC based manufacturers, the
construction industry’s recovery in our territory is dependent on the cost of
capital to project developers and contractors. Continued capital
constraints will make our business more difficult, despite the cost advantages
of SZIG’s products.
-5-
Our
shareholders will have limited or no input on management decisions.
Mr.
Sun Hongyi, President, CEO and a director, owns 85% of our stock.
Therefore, as a minority shareholder, you will have no or limited say in
management of the Company. Unless you are willing to entrust all aspects of our
business and operations to our officers, you should not invest in the
shares.
The
Company’s business will be substantially dependent on SZIG.
The
Company’s business presently is dependent on one source – SZIG. Our present
business focus is on marketing SZIG products. Under the Sales Agency
Agreement, we are precluded from marketing or otherwise being involved with
products made by other companies. We would be directly and
adversely impacted if competitive pressures and/or PRC or global economic
conditions (including those related to currency fluctuations between the RMB
currency in the PRC and US dollars or the Euro, that increase product prices),
adversely affect SZIG’s operations, increase the prices of its products, or lead
to delayed delivery of products. Additionally, the Agreement has a
term of two years, continuing thereafter unless either party elects to
terminate. There is no assurance the Agreement would continue past
two years, which means we will have a limited period of time to develop the
marketing plan and generate revenues sufficient to persuade SZIG to continue the
Agreement past its primary term.
Should
we lose the services of our key executives, the business would be negatively
impacted.
We depend
upon the services of our key executives, Mr. Sun Hongyi, President and CEO, who
has significant experience in the marketing of industrial machinery made in the
PRC, Mr. Shen Peng, Secretary, who has general administration experience, and
Mr. Sin Qihua, Treasurer, who has worked as an accountant in the mining
sector. We do not maintain key man life insurance on these men, and
the Company does not have employment agreements with any of
them. Should we lose their services, it not likely we would be able
to replace them with equally competent and experienced personnel, particularly
in view of the Company’s limited capitalization.
Risks Related to Doing
Business in China
Certain
important certificates, permits, and licenses are subject to PRC governmental
control and renewal, and the failure to obtain renewal would adversely impact
our business.
Doing
business in the PRC is subject to compliance with numerous permits and
licenses. Our licenses and permits, and those required of SZIG, must
be complied with and renewed periodically. During the application or
renewal process, businesses will be evaluated and re-evaluated by the
appropriate governmental authorities and must comply with the prevailing
standards and regulations, which may change from time to time. In the event that
we or SZIG are not able to obtain or renew the certificates, permits and
licenses, all or part of our and/or SZIG’s PRC operations may be suspended by
the government, which would have a material adverse effect on our business and
financial condition. Furthermore, if escalating compliance costs associated with
governmental standards and regulations restrict or prohibit any part of our or
SZIG’s operations, it may adversely affect our results of operations and
profitability.
Uncertainties
with respect to the PRC legal system could limit the legal protections available
to you and us.
We
presently conduct substantially all of our business through our operating
subsidiary Hongkong Zhongwenbo International Group Company Limited, a Hong Kong
company (referred to in this Prospectus as “Zhongwenbo”). In the
future, we may organize a subsidiary of Zhongwenbo, as a “wholly foreign owned
enterprise” (sometimes referred to as a “WFOE”) under PRC law in order to
benefit from certain pro-business policies in the PRC. See “Business –
Introduction,” below. However, whether or not we establish a WFOE, our
operations generally will be subject to laws and regulations applicable to
foreign invested enterprises in China. The PRC legal system is based on written
statutes, and prior court decisions may be cited for reference but have limited
precedential value. Since 1979, a series of new PRC laws and regulations have
significantly enhanced the protections afforded to intellectual property rights
and various forms of foreign investments in China. However, since these laws and
regulations are relatively new and the PRC legal system continues to rapidly
evolve, the interpretations of many laws, regulations and rules are not always
uniform and enforcement of these laws, regulations and rules involve
uncertainties, which may limit legal protections available to you and us. In
addition, any litigation in China may be protracted and result in substantial
costs and diversion of resources and management attention.
-6-
As
our operating subsidiary, and all of our assets, are located outside the United
States, it will be extremely difficult to acquire jurisdiction and enforce
liabilities against the Company and our officers, directors and assets based in
China.
Although
the Company is a Delaware corporation, all our officers and directors reside
outside of the United States. and all our assets will be located outside the
United States. As a result, it may be difficult or impossible to effect service
of process within the United States upon our directors or officers and our
subsidiary Zhongwenbo, or enforce against any of them court judgments obtained
in United States’ courts, including judgments relating to United States federal
securities laws. In addition, there is uncertainty as to whether the courts of
the PRC or Hong Kong would recognize or enforce judgments of United States’
courts obtained against us predicated upon the civil liability provisions of the
securities laws of the United States, or have jurisdiction to hear original
actions brought in the United States predicated upon the securities laws of the
United States. Furthermore, because all of our assets presently are located in
Hong Kong, it would also be extremely difficult to access those assets to
satisfy an award entered against us in United States court.
We
may be unable to establish and maintain an effective system of internal control
over financial reporting, and as a result we may be unable to accurately report
our financial results or prevent fraud.
Hong
Kong and the PRC historically have been deficient in western style management,
governance and financial reporting concepts and practices, and other control
systems. Our current management has little experience with western style
management, governance and financial reporting concepts and practices, and we
may have difficulty in hiring and retaining a sufficient number of qualified
employees to work in Hong Kong or the PRC. As a result of these factors, and
especially given that we will be (upon registration with the SEC under the
Securities Exchange Act of 1934) a publicly listed company in the U.S. and
subject to regulation as such, we may experience difficulty in establishing
management, governance, legal and financial controls, collecting financial data
and preparing financial statements, books of account and corporate records, and
instituting business practices that meet western standards. We may have
difficulty establishing adequate management, governance, legal and financial
controls in Hong Kong (and in the PRC if we organize a subsidiary WFOE (see
above)), where operations will be conducted through our wholly-owned subsidiary
Zhongwenbo (or a WOFE owned by Zhongwenbo).
Therefore,
we may, in turn, experience difficulties in implementing and maintaining
adequate internal controls as required under Section 404 of the
Sarbanes-Oxley Act of 2002 and other applicable laws, rules and regulations.
This may result in significant deficiencies or material weaknesses in our
internal controls which could impact the reliability of our financial statements
and prevent us from complying with SEC rules and regulations and the
requirements of the Sarbanes-Oxley Act of 2002. Any such deficiencies,
weaknesses or lack of compliance could have a materially adverse effect on our
business and the public announcement of such deficiencies could adversely impact
our stock price.
Risks Related to this
Offering
We have arbitrarily
determined the offering price and terms of the common stock shares being offered
through this Prospectus.
The
twenty-five cents ($0.25) offering price of the common stock shares has been
arbitrarily determined and bears no relationship to our assets or book value, or
other investment or valuation criteria. No independent counsel or appraiser
has valued our common stock shares. Accordingly, there is no basis upon which to
determine whether the offering price is indicative of the real underlying value,
if any, of the shares offered by the selling shareholders.
The common stock shares
being offered in this Prospectus are an illiquid investment, and there are risks
associated with investing in companies trading on the over-the-counter bulletin
board.
There is
presently no market for the common stock shares that the selling shareholders
are offering, and we cannot be certain that a public market will become
available, or that there will be sufficient liquidity to allow for their sale or
transferability within the near future, or at all. Although we intend to obtain
a quotation on the OTC Bulletin Board, there is no assurance that we will be
successful. Even if we are successful, there is no assurance that a
sufficiently active market will develop to sell your shares. Accordingly, the
purchase of the shares must be considered a long term investment and only for
investors who can tolerate the loss of their entire investment.
In
addition to the risks of investing in our stock, there are separate risks
associated with investing in and trading the stock of companies listed on the
OTC BB, including:
|
·
|
Absence
of listing standards. Companies listed on NASDAQ or national
stock exchanges have to maintain strict standards of corporate governance
(a majority of independent directors, and audit, compensation, and
nominating committees comprised of independent directors), a minimum stock
price, and various matters which have to be approved by
shareholders. OTC BB traded companies are not subject to such
standards.
|
|
·
|
Inefficient
trading and lower liquidity. Stockholders of OTC BB companies
frequently have difficulty in getting buy/sell orders filled promptly,
and/or at expected prices.
|
|
·
|
Lower
trading volume. Though some OTC BB companies experience
occasional periods of heavy trading, many OTC BB companies have lower
trading volume, which contributes to the illiquidity of investing in such
companies.
|
-7-
For
more detailed information, please see “OTC Bulletin Board Considerations”
below.
Because we do not expect to
pay dividends for the foreseeable future, investors seeking cash dividends
should not purchase our common stock.
We intend
to retain future earnings, if any, to finance our business. As a result, we do
not anticipate paying any cash dividends in the foreseeable future. Our payment
of any future dividends will be at the sole discretion of our Board of Directors
after considering whether we have generated sufficient revenues, our financial
condition, operating results, cash needs, growth plans and other factors.
Accordingly, investors that are seeking cash dividends should not purchase our
common stock.
Because we will be subject
to the “Penny Stock” rules once our shares are quoted on the over-the-counter
bulletin board, the level of trading activity in our stock may be
reduced.
Broker-dealer
practices in connection with transactions in “penny stocks” are regulated by
penny stock rules adopted by the SEC. Penny stocks generally are equity
securities with a price of less than $5.00 (other than securities registered on
some national securities exchanges or quoted on Nasdaq). The penny stock rules
require a broker-dealer, prior to a transaction in a penny stock not otherwise
exempt from the rules, to deliver a standardized risk disclosure document that
provides information about penny stocks and the nature and level of risks in the
penny stock market. The broker-dealer also must provide the customer with
current bid and offer quotations for the penny stock, the compensation of the
broker-dealer and its salesperson in the transaction, and, if the broker-dealer
is the sole market maker, the broker-dealer must disclose this fact and the
broker-dealer’s presumed control over the market, and monthly account statements
showing the market value of each penny stock held in the customer’s account. In
addition, broker-dealers who sell these securities to persons other than
established customers and “accredited investors” must make a special written
determination that the penny stock is a suitable investment for the purchaser
and receive the purchaser’s written agreement to the transaction. Consequently,
these requirements may have the effect of reducing the level of trading
activity, if any, in the secondary market for a security subject to the penny
stock rules, and investors in our common stock may find it difficult to sell
their shares.
NOTE
REGARDING FORWARD-LOOKING STATEMENTS
We have
made statements in this Prospectus, including under “Prospectus Summary,” “Risk
Factors,” “Management’s Discussion and Analysis of Financial Condition and
Results of Operations; Plan of Operations,” “Business” and elsewhere that
constitute forward-looking statements. Forward-looking statements involve risks
and uncertainties, such as statements about our plans, objectives, expectations,
assumptions or future events. In some cases, you can identify forward-looking
statements by terminology such as “anticipate,” “estimate,” “plan,” “project,”
“continuing,” “ongoing,” “expect,” “we believe,” “we intend,” “may,” “should,”
“will,” “could” and similar expressions denoting uncertainty or an action that
may, will or is expected to occur in the future. These statements involve
estimates, assumptions, known and unknown risks, uncertainties and other factors
that could cause actual results to differ materially from any future results,
performances or achievements expressed or implied by the forward-looking
statements.
Examples
of forward-looking statements include:
|
·
|
the timing of the development of
future products;
|
|
·
|
projections of revenue, earnings,
capital structure and other financial
items;
|
|
·
|
statements of our plans and
objectives;
|
|
·
|
statements regarding the
capabilities of our business
operations;
|
|
·
|
statements of expected future
economic performance;
|
|
·
|
statements regarding competition
in our market; and
|
|
·
|
assumptions underlying statements
regarding us or our
business.
|
The
ultimate correctness of these forward-looking statements depends upon a number
of known and unknown risks and events. We discuss our known material risks under
the heading “Risk Factors” above. Many factors could cause our actual results to
differ materially from the forward-looking statements. The forward-looking
statements speak only as of the date on which they are made, and, except as
required by law, we undertake no obligation to update any forward-looking
statement to reflect events or circumstances after the date on which the
statement is made or to reflect the occurrence of unanticipated events. In
addition, we cannot assess the impact of each factor on our business or the
extent to which any factor, or combination of factors, may cause actual results
to differ materially from those contained in any forward-looking
statements.
USE
OF PROCEEDS
We
will not receive any proceeds from the sale of shares offered by the selling
shareholders, and
such proceeds will not be loaned to the Company or used by such persons to buy
more shares in the Company. For an explanation of why we have filed this
Prospectus, please see “Prospectus Summary - The Offering – Purpose of This
Offering.”
-8-
DETERMINATION
OF OFFERING PRICE
We have
arbitrarily determined the offering price and it does not bear any relationship
to our assets, results of operations, or book value, or to any other generally
accepted valuation criteria. Prior to this offering, there has been no market
for our securities. In order to assure that selling shareholders will offer
their shares at $0.25 per share until our shares are quoted on the OTC Bulletin
Board, we will notify our shareholders and our Transfer Agent that no sales will
be allowed prior to the date our shares are quoted on the OTC Bulletin Board
without proof of the selling price.
DILUTION
Not
applicable. We are not offering any shares in this registration statement. All
shares are being registered on behalf of the selling shareholders.
SELLING
SHAREHOLDERS
The
selling shareholders named below (17 of our total of 20 shareholders) are
selling the securities. None of our three officers (one of whom is the sole
director) are selling shareholders under this Prospectus. The table
assumes that all of the securities indicated will be sold in this offering.
However, any or all of the securities listed below may be retained by any of the
selling shareholders. We are registering a total of 578,000 Shares, which
represents all of the shares held by the selling shareholders and 14.5% of the
4,000,000 shares issued and outstanding as of August 6, 2010.
We
believe that the selling shareholders listed in the table have sole voting and
investment powers regarding the securities indicated. We will not receive any
proceeds from the sale of the securities by the selling
shareholders. None of our selling shareholders is or has been
affiliated with the Company or any broker-dealer.
Total Shares
|
Shares
|
Percent
|
Percent
|
|||||||||||||
Name
|
Owned
|
Registered
|
Before Offering
|
After Offering
|
||||||||||||
Duan
Wenbo
|
120,000
|
120,000
|
3.00
|
%
|
-0-
|
|||||||||||
Duan
Zhongwei
|
40,000
|
40,000
|
*
|
-0-
|
||||||||||||
Li
Xinlian
|
36,000
|
36,000
|
*
|
-0-
|
||||||||||||
Tian
Huchang
|
2,000
|
2,000
|
*
|
-0-
|
||||||||||||
Liu
Jinhai
|
2,000
|
2,000
|
*
|
-0-
|
||||||||||||
Yue
Guangren
|
2,000
|
2,000
|
*
|
-0-
|
||||||||||||
Duan
Wenhua
|
2,000
|
2,000
|
*
|
-0-
|
||||||||||||
Liu
Hengzhi
|
2,000
|
2,000
|
*
|
-0-
|
||||||||||||
Duan
Wenguang
|
2,000
|
2,000
|
*
|
-0-
|
||||||||||||
Li
Huaifu
|
2,000
|
2,000
|
*
|
-0-
|
||||||||||||
Liu
Taishan
|
2,000
|
2,000
|
*
|
-0-
|
||||||||||||
Chen
Yubo
|
2,000
|
2,000
|
*
|
-0-
|
||||||||||||
Liu
Yongjiang
|
2,000
|
2,000
|
*
|
-0-
|
||||||||||||
Sun
Lizhong
|
2,000
|
2,000
|
*
|
-0-
|
||||||||||||
Star
Wealth Development
|
||||||||||||||||
Limited(1)
|
160,000
|
160,000
|
4.00
|
%
|
-0-
|
|||||||||||
Sparkle
Fame
|
||||||||||||||||
Investments
Limited(2)
|
120,000
|
120,000
|
3.00
|
%
|
-0-
|
|||||||||||
Starise
Consultants Limited(3)
|
80,000
|
80,000
|
2.00
|
%
|
-0-
|
|||||||||||
578,000
|
578,000
|
14.50
|
%
|
-0-
|
-9-
(1)
|
Mr. Wong Hin Wing is president
and sole shareholder of Star Wealth Development Limited. He is
not related to any other shareholders of the Company, nor is he a
shareholder in SZIG. He is the husband of Poon Wing
Ha.
|
(2)
|
Ms. Poon Wing Ha is the
president and sole shareholder of Sparkle Fame Investments
Limited. She is not related to any other shareholders of the
Company, nor is she a shareholder in SZIG. Her husband is Mr.
Wong Hin Wing.
|
(3)
|
Ms. Xu Lijuan is the president
and sole shareholder of Starise Consultants Limited. She is not
related to any other shareholders of the Company, nor is she a shareholder
in SZIG.
|
*
Assuming sale of all shares registered hereunder.
State Laws Concerning
Trading
Our
common stock holders and persons who desire to purchase our common stock shares
in any trading market that may develop should be aware that there may be
significant state law restrictions upon the ability of investors to resell our
shares. Accordingly, even if we are successful in having the Shares available
for trading on the OTCBB, investors should consider any secondary market for our
securities to be a limited one. We intend to seek coverage and publication of
information about us in an accepted publication which permits a “manual
exemption”. This manual exemption permits a security to be distributed in a
particular state without being registered if the company issuing the security
has a listing for that security in a securities manual recognized by the state.
However, it is not enough for the security to be listed in a recognized manual.
The listing entry must contain: (1) the names of issuers, officers, and
directors; (2) an issuer’s balance sheet; and (3) a profit and loss
statement for either the fiscal year preceding the balance sheet or for the most
recent fiscal year of operations. We may be unable to secure a listing
containing all of this information. Furthermore, the manual exemption is a non
issuer exemption restricted to secondary trading transactions, making it
unavailable for issuers selling newly issued securities. Most of the accepted
manuals are those published in Standard and Poor’s, Moody’s Investor Service,
Fitch’s Investment Service, and Best’s Insurance Reports and many states
expressly recognize these manuals, a smaller number of states declare that they
“recognize securities manuals” but do not specify the recognized manuals. The
following states do not have any provisions and therefore do not expressly
recognize the manual exemption: Alabama, Georgia, Illinois, Kentucky, Louisiana,
Montana, South Dakota, Tennessee, Vermont and Wisconsin.
PLAN
OF DISTRIBUTION
Our
common stock is currently not quoted on any market. No market may ever develop
for our common stock, or if developed, may not be sustained in the future.
Accordingly, our shares should be considered illiquid, which inhibits investors’
ability to resell their shares.
Selling shareholders are
offering up to 158,600 shares of common stock. The selling shareholders will
offer their shares at $0.25 per share until our shares are quoted on the OTC
Bulletin Board, if ever, and thereafter at prevailing market prices or privately
negotiated prices. We will not receive proceeds from the sale of shares from the
selling shareholders.
The
securities offered by this Prospectus will be sold by the selling shareholders.
We are not aware of any underwriting arrangements that have been entered into by
the selling shareholders. The distribution of the securities by the selling
shareholders may be effected in one or more transactions that may take place in
the over-the-counter market, including broker’s transactions or privately
negotiated transactions. The selling shareholders will act independently of us
in making decisions with respect to the timing, manner, and size of each sale or
sale related transfer. A Selling Shareholder may also resell all of any portion
of the Shares which qualify for sale pursuant to Rule 144 under the Securities
Act rather than pursuant to this Prospectus.
The
selling shareholders may pledge all or a portion of the securities owned as
collateral for margin accounts or in loan transactions, and the securities may
be resold according to the terms of such pledges, margin accounts or loan
transactions. Upon default by such selling shareholders, the pledge in such loan
transaction would have the same rights of sale as the selling shareholders under
this Prospectus. After our securities are qualified for quotation on the OTC
Bulletin Board, the selling shareholders may also transfer securities owned in
other ways not involving market makers or established trading markets, including
directly by gift, distribution, or other transfer without consideration, and
upon any such transfer the transferee would have the same rights of sale as such
selling shareholders under this Prospectus.
Our
common stock is not listed on any national securities exchange or the NASDAQ
stock market, nor is it quoted on the OTC Bulletin Board or any other quotation
medium. A registered broker-dealer has submitted an application for a quotation
of our common stock on the OTC Bulletin Board, and following the effective date
of the registration statement (of which this Prospectus is a part), we will file
a Form 8-A under the Securities Exchange Act of 1934 to register the Company’s
common stock under such Act. However, there is no assurance that our
securities will ever become qualified for quotation on the OTC Bulletin
Board.
-10-
In
addition to the above, each of the selling shareholders will be affected by the
applicable provisions of the Securities Exchange Act of 1934, including, without
limitation, Regulation M, which may limit the timing of purchases and sales of
any of the securities by the selling shareholders or any such other
person.
We have
instructed our selling shareholders that they may not purchase any of our
securities while they are selling shares under the registration
statement.
Upon such
registration statement being declared effective, the selling shareholders may
offer and sell their shares from time to time until all of the shares registered
are sold; however, this offering may not extend beyond two years from the
initial effective date of the registration statement.
There can
be no assurances that the selling shareholders will sell any or all of the
securities. In various states, the securities may not be sold unless these
securities have been registered or qualified for sale in such state or an
exemption from registration or qualification is available and is complied
with.
All of
the foregoing may affect the marketability of our securities. We will pay all
the fees and expenses associated with the registration of resale of the
securities covered by this Prospectus.
Should
any substantial change occur regarding the status or other matters concerning
the selling shareholders or us, we will file a post-effective amendment to the
registration statement disclosing such matters.
OTC
Bulletin Board Considerations
To be
quoted on the OTC Bulletin Board, a market maker must file an application on our
behalf in order to make a market for our common stock. We anticipate that after
this registration statement is declared effective, market makers will enter
“piggyback” quotes and our securities will thereafter trade on the OTC Bulletin
Board.
The OTC Bulletin Board is
separate and distinct from the NASDAQ stock market. NASDAQ has no business
relationship with issuers of securities quoted on the OTC Bulletin Board. The
SEC’s order handling rules, which apply to NASDAQ-listed securities, do not
apply to securities quoted on the OTC Bulletin Board.
Although
the NASDAQ stock market has rigorous listing standards to ensure the high
quality of its issuers, and can delist issuers for not meeting those standards,
the OTC Bulletin Board has no listing standards. Rather, it is the market maker
who chooses to quote a security on the system, files the application, and is
obligated to comply with keeping information about the issuer in its files.
FINRA cannot deny an application by a market maker to quote the stock of a
company. The only requirement for inclusion in the OTC Bulletin Board is that
the issuer be current in its SEC reporting requirements, and that the issuer
obligate itself to file periodic reports and otherwise comply with those
provisions of the 1934 Act applicable to it. Investors may have greater
difficulty in getting orders filled because it is anticipated that if our stock
trades on a public market, it will trade on the OTC Bulletin Board rather than
on NASDAQ. Investors’ orders may be filled at a price much different than
expected when an order is placed. Trading activity in general is not conducted
as efficiently and effectively as with NASDAQ-listed securities. Investors must
contact a broker-dealer to trade OTC Bulletin Board securities. Investors do not
have direct access to the bulletin board service. For bulletin board securities,
there only has to be one market maker.
OTC
Bulletin Board transactions are conducted almost entirely manually. Because
there are no automated systems for negotiating trades on the Bulletin Board,
they are conducted by telephone. In times of heavy market volume, the
limitations of this process may result in a significant increase in the time it
takes to execute investor orders. Therefore, when investors place market orders
for an order to buy or sell a specific number of shares at the current market
price, the price of a stock may go up or down significantly during the lapse of
time between placing a market order and getting execution.
Because
OTC Bulletin Board stocks are usually not followed by analysts, there may be
lower trading volume than for NASDAQ-listed securities.
LEGAL
PROCEEDINGS
We are
not aware of any pending or threatened legal proceedings in which we or our
assets are involved.
DESCRIPTION
OF SECURITIES
The
following description is a summary of the material terms of the provisions of
our Certificate of Incorporation, as amended, and Bylaws. Because we
have adopted short-form Certificate of Incorporation, the summary of certain
matters reflects the application of certain provisions in the Delaware General
Corporation Law where articles of incorporation do not otherwise
provide. The Certificate of Incorporation and Bylaws have been filed
as exhibits to the registration statement of which this Prospectus is a
part.
-11-
Common
Stock
We
have 6,000,000 authorized shares of common stock with $0.001 par value. As
of the date of this Prospectus, there are 4,000,000 shares of common stock
issued and outstanding. All shares are equal to each other with respect to
voting, liquidation and dividend rights. Holders of voting shares are entitled
to one vote for each share that they own at any shareholders’
meeting.
Each
share of common stock entitles the holder to one vote, either in person or by
proxy, at meetings of shareholders. The holders are not permitted to vote their
shares cumulatively. The vote of the holders of a majority of the issued and
outstanding shares of common stock entitled to vote thereon is sufficient to
authorize, affirm, ratify or consent to such act or action, except as otherwise
provided by law. Accordingly, the shareholders of our common stock who hold, in
the aggregate, more than fifty percent of the total voting rights can elect all
of our directors and, in such event, the holders of the remaining minority
shares will not be able to elect any of the such directors.
Holders
of common stock are entitled to receive ratably such dividends, if any, as may
be declared by the Board of Directors out of funds legally
available.
We have
not paid any dividends since our inception, and we presently anticipate that all
earnings, if any, will be retained for development of our business. Any future
disposition of dividends will be at the discretion of our Board of Directors and
will depend upon, among other things, our future earnings, operating and
financial condition, capital requirements, and other factors.
No options or warrants to
purchase common stock are outstanding.
Holders
of our common stock have no preemptive rights or other subscription rights,
conversion rights, redemption or sinking fund provisions. Upon our liquidation,
dissolution or winding up, the holders of our common stock will be entitled to
share ratably in the net assets legally available for distribution to
shareholders after the payment of all of our debts and other liabilities. There
are not any provisions in our Articles of Incorporation or our Bylaws that would
prevent or delay change in our control. There is no conversion, preemptive or
other subscription rights or privileges with respect to any shares.
Preferred
Stock
The
Company is not authorized to issue preferred stock.
EXPERTS
Our
balance sheet as of June 15, 2010 and the related statement of operations,
stockholders’ deficit, and cash flows for the period from May 24, 2010
(inception) to June 15, 2010 were audited by HLB Hodgson Impey Cheng Chartered
Accountants and Certified Public Accountants, and are included in this
Prospectus in reliance upon their experience in accounting and
auditing.
LEGAL
MATTERS
The
legality of the shares offered under the registration statement of which this
Prospectus is a part is being passed upon by the Law Office of Stephen E.
Rounds, Denver, Colorado.
DISCLOSURE
OF COMMISSION POSITION
ON
INDEMNIFICATION FOR SECURITIES LIABILITIES
The
Delaware General Corporation Law contain provisions which allow corporations to
indemnify any person against liabilities and other expenses incurred as the
result of defending or administering any pending or anticipated legal issue in
connection with service to us if it is determined that person acted in good
faith and in a manner which he reasonably believed was in the best interest of
the corporation. Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to our directors, officers and
controlling persons, we have been advised that in the opinion of the Securities
and Exchange Commission, such indemnification is against public policy as
expressed in the Securities Act of 1933 and is, therefore,
unenforceable.
-12-
BUSINESS
Introduction
We
were incorporated in Delaware on May 24, 2010, at which time we commenced
operations. We are a development stage company. We have not earned
any revenues, or sold any products or services, as of the date of this
Prospectus. Our corporate structure is as set forth
below.
Zhong
Wen International Holding Co., Ltd.
[a
Delaware corporation,
referred
to as the “Company” in this Prospectus]
Hongkong
Zhongwenbo
International
Group Company Limited
[a Hong
Kong company,
referred
to as “ Zhongwenbo,
”
wholly-owned
by the Company]
In the
near future, we may organize a wholly foreign-owned enterprise (a “ WFOE ”) under PRC
law, which would be a wholly-owned subsidiary of Zhongwenbo (our current
wholly-owned subsidiary), and cause Zhongwenbo to assign its rights under the
Sales Agency Agreement (see below) to the WFOE. This strategy would
be in compliance with PRC law and allow Zhongwenbo, and therefore the Company,
to benefit from certain pro-business policies in the PRC. We do not expect this
piece of corporate reorganization to adversely impact the Company.
The
Company’s business is selling, as agent under a Sales Agency Agreement with
Shandong Zhongwen Industrial Group Co. Limited (“ SZIG, ” a PRC
company), machinery for construction projects, and the providing of related
consulting services to the construction industry.
SZIG
(organized in 1958, and located at Damu Village, Miaozi Town, Qingzhou City,
Shandong Province. PRC) is engaged principally in the mining and sale of iron
ore, precision casting, and the manufacture of construction equipment
(concrete mixing plants, concrete pumps, tower cranes, concrete mixers and
batchers, cement loaders, and similar products). Its products are
sold in nearly 30 cities and provinces in the PRC, and also are exported to the
Middle East, the European Union, the United States, Africa, and other
areas. SZIG’s principal facilities cover approximately 1,300 acres
(including a building of 100,000 square meters), with approximately 1,500
employees, of whom 56 are middle management and eight are senior
engineers.
Specific
Business Plan for the Next Twelve Months, and Description of
Operations
For
the period from August 1, 2010 to August 1, 2011, we will implement our business
plan as follows:
Three
months ended November 1, 2010:
|
Lease
office space and create an Internet website for marketing (in
September 2010), hire two or more employees, and hire
country-by-country sales managers (to be paid by a share of our commission
payment stream from SZIG). Employee
and manager hires in this period may be limited to one or two of
the ten “ASEAN” countries. Develop printed and Internet
marketing materials, commence
marketing, and establish relationships with construction contractor
trade groups and equipment rental companies, on a country-by-country
basis.
|
Six
months ended February 1, 2011:
|
Expand
activities to more countries in the ASEAN group. Engage
country-by-country marketing groups as needed to supplement our local
sales managers. Attend construction contractor exhibitions on a
country-by-country basis, and organize and staff booths featuring
SZIG products and services. Develop marketing materials for
construction consulting services, to be offered in parallel with purchases
of SZIG products. Hire additional employees, and possibly consultants, as
needed. Contacts in additional countries in the ASEAN group
will be developed as warranted. Warranty service arrangements,
and training seminars (to introduce prospective customers to SZIG
products) will be made in countries where prospective sales warrant the
effort.
|
-13-
Nine
months ended May 1, 2011:
|
Continued
expansion of the business into more ASEAN
countries.
|
Twelve
Months ended August 1, 2011:
|
Continue
and refine the above efforts.
|
Operations
will supervised by Mr. Sun Hongyi. He is contacting companies known
to him in the construction business and construction equipment rental business,
in several of the targeted countries, to introduce the Company, SZIG’s products,
and the Company’s services. His work
in this respect will be continuing throughout the 12 month period, and
thereafter. We anticipate Mr. Sun Hongyi will continue
to devote all of his time to the Company. Expanded
m arketing
efforts will begin in mid-
August 2010, focusing first on creating the Company website, then
communicating with prospective customers and particularly industry trade groups,
to establish initial relationships. In the second and subsequent
quarterly periods, Mr. Sun Hongyi, and the employees and consultants we will be
engaging over the period, will travel to the various targeted markets to firm up
the relationships, prospect for new leads, and attend trade group
exhibitions. All employees will devote
their full time to the Company's business.
The
Company's daily operations generally will consist of constant communications
back and forth (by Internet and telephone) between personnel (including local
sales managers as hired), and trade group and other contacts, and prospective
customers in the markets, to develop a real time data base on the construction
industry in each country. Information will be compiled and updated regularly on
local financial conditions, specific current and projected new equipment
purchases, and competitors' market share. Personnel also will be in very
frequent contact with SZIG about changing market conditions, product pricing and
delivery times, whether products should be modified for local needs, and
competitors' ambitions in the targeted countries. We also will be working with
SZIG to set up and monitor equipment training programs for customers, as well as
warranty service programs.
We
expect that Mr. Sun Hongyi and other employees will travel to the targeted
countries on a regular basis to liase with local sales managers, attend trade
industry exhibitions, and continue developing relationships with prospective
customers. In addition, because our markets are in developing countries,
contacts will be developed with out-of-country banks and other financial
institutions (including but not limited to China Export & Credit Insurance
Company (see "Competition" below)) to set up alternative financing sources for
prospective customers.
Additionally,
during the first quarterly period, we will implement an internal controls system
and keep books and records sufficient to prepare financial and other information
for the timely filing of periodic reports under the 1934 Act. We may
hire a part-time person with financial training and experience to serve as Chief
Financial Officer, replacing Mr. Sun Hongyi who currently serves in this
capacity. We
believe that the forgoing specific business plan, and description of
operations, support
our view that we do not consider the Company to be a “blank check
company” under the SEC’s Rule 419.
Sales
Agency Agreement
As of
June 23, 2010, Zhongwenbo (referred to below as the “Agent ”) entered into
a Sales Agency Agreement with SZIG. The following summarizes
the material provisions of the Sales Agency Agreement; the Agreement has been
filed as an exhibit to the registration statement of which this Prospectus is a
part.
SZIG
sells approximately 2,000 Tower Cranes, 70 to 80 Concrete Mixing Stations, and
approximately 80 sets of Concrete Pumps annually, almost all in the PRC and
Brazil. SZIG entered into the Agreement with Zhongwenbo to
establish sales in a number of the developing countries in the “ASEAN” region in
Southeast Asia (Singapore, Brunei Darussalam, Malaysia, Thailand, the
Philippines, Indonesia, Myanmar (Burma), Laos, Cambodia, and Vietnam), without
bearing the cost of setting up a marketing program.
Agency, Territory and
Term: The Agent is the exclusive agent for sale of designated SZIG
products, in all areas except Brazil and the PRC, though Hong Kong, Macau and
Taiwan are not excluded (which areas as so limited are referred to as the “Territory”), for a
period of two years. After expiration of the primary term, the
Agreement will continue until terminated by either party.
Termination: Either
party may terminate the Agreement after notice to the other of breach of terms,
subject to a 30 day cure period, Termination also may be
effected by a party if the other party ceases business, enters into an
arrangement with creditors, or enters into insolvency proceedings.
Products and
Compensation: The Agreement specifies the SZIG products which the Agent
may sell in the Territory (prices below are subject to change in SZIG’s
discretion).
Tower
Crane – Model No. QTC 63C – An upper-slewing fixed type light crane, suitable
for many industrial and civil applications. Average price
approximately $47, 250.
Concrete
Mixing Station – Model No. HZS HLS - A set of batching machines to mix concrete
material for construction. Average price approximately
$242,950.
Concrete
Pump – Model No. HBT 80 – A concrete pump which is widely used in infrastructure
and building construction. Average price approximately
$4,100.
SZIG is
to pay the Agent a commission equal to five percent of the net sales value of
each product sold (equal to amount charged the customer less value added or
other tax included in the sales price). At Agent’s election, it may
guarantee to SZIG the performance of a customer’s purchase order, but a
guarantee shall not cover customer’s performance failure caused by SZIG’s
default.
-14-
Marketing and Local
Compliance : All costs and expenses of the Agent’s marketing SZIG’s
products in the Territory will be borne by the Agent, and all promotional and
advertising materials are subject to SZIG’s approval. The Agent will
be responsible for obtaining local permits and licenses its
activities.
Consulting
Services
We intend
to offer consulting services to prospective customers for the SZIG products, and
possibly other customers, in the construction industry. These
services would relate to the analysis and integration of planning the costs and
components of a project, as well as procurement of material and equipment.
The scope and cost of services will be tailored to each
engagement.
Marketing
The
Company’s marketing strategy will target those companies engaged in the civil
and commercial construction industry in the Territory, with particular initial
attention focused on the developing countries of Vietnam, Indonesia, Qatar, and
Sri Lanka, which are within the ASEAN region (see above). These
countries are believed to be attractive markets due to a history of successful
business relationships with Chinese companies. Further, these
countries have significant potential for growth in the construction sector but
have very few, if any, local construction machinery
manufacturers. Over time, we hope to expand our countries of
interest.
Targeted
customers will consist primarily of local building contractors and construction
equipment rental companies. As of the date of this Prospectus, two
prospective companies (Vinh Son Construction Equipment & Partners, in
Vietnam, and PT Slnarfajar Multiteknik, in Indonesia) have contacted us and
expressed strong interest in our SZIG products.
Additional
marketing efforts will concentrate on the Internet, with a Company website (to
be developed in
September 2010), as well as attending construction-sector
exhibitions in the countries. We also expect to hire a sales manager
(to be compensated mostly by a commission on our product sales, which we would
pay out of commissions we receive from SZIG) for each country, to establish
connections with local companies. Local sales agencies may be engaged
as well.
Competition
We
believe our principal competitors in the
targeted countries are the three largest construction machinery
manufacturers in China (Sanyi Ahonggong, Ahonglian Zhongke, and Fangyan Group).
All these companies have rights granted by the PRC (as does
SZIG), to export products, including equipment which is, in general,
functionally equivalent to SZIG’s products, Additionally, these
companies all offer prospective customers the option of having the standard
equipment tailored to specific needs. However, their prices are in
the range of 70% higher than SZIG’s prices. SZIG has been in business
for over 50 years and its engineering staff also can customize products to
specific needs, but still sell for up to 70% less than the
competition. Our initial target countries do not have significant, or
any, sales by our competitors, so we deem these potential markets as possessing
relatively low to non-existent barriers to market penetration.
Added
competitive advantages, particularly in our initially targeted country markets,
is our ability to offer free training of the customer’s technical personnel, and
the ability of customers to buy equipment on the installment plan, with payments
guaranteed by China Export & Credit Insurance Company (which may be of
particular interest to rental companies so they can match purchase payments with
rental income over a period of time). We also offer on-site
warranty service through local personnel we would engage for the purpose; the
costs of such service would be funded by SZIG through us.
Employees
We
have three employees at present: Mr. Sun Hongyi, President and Chief Executive
Officer , and Chief Financial Officer; Mr. Shen Peng, Secretary; and Mr. Sun
Qihua, Treasurer. Each of these persons devotes full time to the
Company. We will hire additional employees and/or retain consultants as stated
in “Specific Business Plan for the Next Twelve Months, and Description of
Operations” above, and thereafter, as needed depending on business
volume. We also intend to engage commissioned sales managers in
targeted countries (see above).
Office
Facilities
The
Company intends to lease office space (in
September 2010) for approximately $2,000 per month, either on a monthly
or annual basis, located in Hong Kong. We do not have a lease in
place as of the date of this Prospectus.
-15-
MANAGEMENT’S
DISCUSSION AND ANALYSIS OF
FINANCIAL
CONDITION AND RESULTS OF OPERATIONS;
PLAN
OF OPERATIONS
Cautionary
Statement
The
following discussion and analysis should be read in conjunction with the balance
sheet as of June 15, 2010 and the financial statements for the period May 24,
2010 (Inception) to June 15, 2010, included in this Prospectus.
The
discussion and analysis contains forward-looking statements, based on current
expectations with respect to future events and financial performance and
operating results, which statements are subject to risks and uncertainties,
including but not limited to those discussed below and elsewhere in this
Prospectus that could cause actual results to differ from the results
contemplated by these forward looking statements. We urge you to carefully
consider all of the information set forth in this Prospectus, including “Risk
Factors.”
Overview
We are
an early stage development business and we do not expect to generate significant
revenues, if ever, until the first quarter of 2011. We are currently focused on
and committed to developing sales of certain construction industry machinery, as
agent under a Sales Agency Agreement with Shandong Zhongwen Industrial Group Co.
Limited (“ SZIG
”). Although
we commenced limited operations after June 15, 2010, the operations before
such date and to the date of this Prospectus are nominal, and we have only
nominal assets. Accordingly, the Company is a shell company, as that term
is defined in SEC rules and regulations, and will retain such status until such
time, if ever, as we increase the level of operations and have more than nominal
assets.
In
order to commence revenue generating operations, we will need to develop
and initiate a formal marketing
strategy and begin selling SZIG products. We also will have to
initiate marketing of consulting services to the civil and commercial
construction industry, which is expected to include some the same companies to
be targeted for selling SZIG products.
Results of
operations
For
the period from May 24, 2010 (Inception) to June 15, 2010, we have not generated
any revenues and incurred a net loss of $3,718. During this period,
our expenses related to organization of the Company and preparation of our
business plan and negotiation of terms of the Sales Agency Agreement with SZIG
(this
Agreement was executed as of June 23, 2010).
Liquidity
At
June 15, 2010, we had $36,217 of current assets, classified as “prepayment,
deposits and other receivables” on the balance sheet. Share capital
(4,000,000 shares issued for $0.01 per share as of June 12, 2010) provided
$40,000 cash, all of which was transferred to the trust account maintained by
our United States securities counsel, for organizational costs, legal fees, and
other expenses related to setting up the Company, as well as legal fees for the
preparation and filing of the registration statement of which this Prospectus
forms a part. As of June 15, 2010, $3,783.00 had been paid from the
trust account, for incorporation of the Company in Delaware. The
$36,217.00 in the trust account as of June 15, 2010 is being used,
subject to the Company’s prior approval, for payment of legal fees and other
costs related to the filing of the registration statement.
At
June 15, 2010, we had $65,000 in “other payables and accruals” on the balance
sheet. These are comprised of $40,000 (which is the estimated legal
fees which the Company will have incurred for the preparation and filing of the
registration statement), and $25,000.00 for audit fees associated with the
financial statements included in this Prospectus.
Contractual
Obligations
At June
15, 2010, we had no debt or capital lease or purchase obligations or long term
liabilities, and no operating lease obligations.
Going
Concern
We have
incurred net losses and losses from operations and we expect that we will
continue to have negative cash flows as we implement our business plan. There
can be no assurance that our continuing efforts to execute our business plan
will be successful and that we will be able to continue as a going concern. The
accompanying consolidated financial statements have been prepared in conformity
with accounting principles generally accepted in the United States of America,
which contemplate our continuation as a going concern.
We
currently do not have cash to sustain operations for the next twelve months and
we will require additional financing in order to execute the business plan and
continue as a going concern. The recent economic downturn and related credit and
financial market crisis may adversely affect our ability to obtain financing,
conduct our operations and realize opportunities to sell products. In the event
that financing does not materialize, we may be unable to continue as a going
concern.
Critical
Accounting Policies
Our
critical accounting policies, including the assumptions and judgments underlying
them, are disclosed in the Notes to the Financial Statements.
-16-
Uncertainties and
Trends
Our
operations and possible revenues principally are dependent upon signing up
customers to buy SZIG’s machinery products, and to a lesser extent, on engaging
parties for our consulting services.
Off-balance Sheet
Arrangements
We do not
have any off-balance sheet arrangements.
Plan
of Operations
Our
Plan of Operations for the twelve months following the date of this Prospectus
is contingent upon receiving financing in the approximate amount of $ 350,000 ,
which would be applied as set forth below. Except for Mr. Sun
Hongyiu’s agreement to loan the Company $100,000 on about September 1, 2010
(for one year, without interest), which, if received, would lower our working
capital requirements to approximately $250,000, we have no
commitments or assurances that we will successful in obtaining adequate
financing.
General
Administrative Expenses
|
$80,000
- Office lease (12 months at approximately $2,000 per month); purchase or
lease of telecommunication and computer equipment(approximately $ 23,000
); office furniture (approximately ($18,600 ); and an additional
(secretarial) employee (approximately $ 1,200
monthly).
|
|
The
preceding allocations will be reduced to the extent needed to hire
employees and consultants.
|
||
Marketing
|
$77,000
- Travel and entertainment (approximately $62,000 ), and advertising
(approximately $ 15,000 ).
|
|
Other
|
$193,000 -
Professional fees ($150,000(1));
Miscellaneous ($43,000)
|
|
Total
|
$
350
,000
|
The
foregoing estimate assumes no revenues in the twelve month
period.
(1)
|
Professional
fees are estimated to be in the range of $93,000 for legal and other
professional fees, including accounting services, associated with
compliance with Hong Kong and PRC law and regulations, and with doing
business in the various foreign countries targeted for our marketing
effort. An additional amount in the range of $100,000 is
allocated for fees and costs for public company compliance with the
reporting requirements of the 1934 Act – including $30,000 for legal fees
and third-party costs to file periodic reports and other documents with
the SEC (on the SEC’s Edgar system); $8,000 to establish an internal
controls system under section 404 of the Sarbanes-Oxley Act of 2002, and
$50,000 for an audit of year-end financial statements of the Company, to
be included with the Annual Report on form 10-K, and audit firm review of
unaudited financial statements to be included in the Quarterly Reports on
Form 10-Q. Actual expenditures may vary from these
estimates.
|
To the
extent we do not have revenues in the twelve month period, we will need working
capital to meet the budget. The Company will attempt to obtain
short-term loans from Chinese banks, with Mr. Sun Hongyi personal guarantee of
repayment, and in addition may attempt to sell additional shares to current
shareholders and/or new investors. We may not be successful in
obtaining capital in the required amounts. In these regards, please
see the risk factors captioned We will need significant additional
capital, which we may be unable to obtain; should we fail to obtain sufficient
financing, the business will be adversely affected; and The Company may be in competition
with the selling shareholders if the Company seeks additional capital from new
investors.
TRANSACTIONS
WITH RELATED PERSONS, PROMOTERS
AND
CERTAIN CONTROL PERSONS
We
sold 4,000,000 shares of restricted common stock to our President, Chief
Executive Officer and Chief Financial Officer (and sole director), our
Treasurer, and our Secretary, and other persons, at a price of $0.01 per
share. The price to the officers was not negotiated at arms-length,
however, the other investors paid the same price per share. The
officers (and sole director) bought shares as follows:
Mr.
Sun Hongyi - President, Chief Executive Officer and Chief Financial Officer (and
sole director) - 3,414,000 shares for $34,140.00;
Mr.
Sun Qihua - Treasurer - 4,000 shares for $40.00; and Mr.
Shen Peng – Secretary – 4,000 shares for $40.00.
-17-
MARKET
FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
Market
Information
There is
no established public trading market for our securities and a regular trading
market may not develop, or if developed, may not be sustained. A shareholder in
all likelihood, therefore, will not be able to resell his or her securities
should he or he desire to do so. We have no plans, proposals,
arrangements, or understandings with any person with regard to the development
of a trading market in any of our securities.
Penny
Stock Considerations
Our
shares will be “penny stocks” as that term is generally defined in the
Securities Exchange Act of 1934 to mean equity securities with a price of less
than $5.00. Our shares thus will be subject to rules that impose sales practice
and disclosure requirements on broker-dealers who engage in certain transactions
involving a penny stock.
Under the
penny stock regulations, a broker-dealer selling a penny stock to anyone other
than an established customer or accredited investor must make a special
suitability determination regarding the purchaser and must receive the
purchaser’s written consent to the transaction prior to the sale. Generally, an
individual with a net worth in excess of $1,000,000 or annual income exceeding
$200,000 individually or $300,000 together with his or her spouse is considered
an accredited investor. In addition, under the penny stock regulations the
broker-dealer is required to:
|
·
|
Deliver, prior to any transaction
involving a penny stock, a disclosure schedule prepared by the Securities
and Exchange Commission relating to the penny stock market, unless the
broker-dealer or the transaction is otherwise
exempt;
|
|
·
|
Disclose commissions payable to
the broker-dealer and our registered representatives and current bid and
offer quotations for the
securities;
|
|
·
|
Send monthly statements
disclosing recent price information pertaining to the penny stock held in
a customer’s account, the account’s value and information regarding the
limited market in penny stocks;
and
|
|
·
|
Make a special written
determination that the penny stock is a suitable investment for the
purchaser and receive the purchaser’s written agreement to the
transaction, prior to conducting any penny stock transaction in the
customer’s account.
|
Because
of these regulations, broker-dealers may encounter difficulties in their attempt
to sell shares of our common stock, which may affect the ability of selling
shareholders or other holders to sell their shares in the secondary market and
have the effect of reducing the level of trading activity in the secondary
market. These additional sales practice and disclosure requirements could impede
the sale of our securities, if our securities become publicly traded. In
addition, the liquidity for our securities may be decreased, with a
corresponding decrease in the price of our securities. Our shares in all
probability will be subject to such penny stock rules and our shareholders will,
in all likelihood, find it difficult to sell their securities.
Holders
As of the
date of this Prospectus, we have 20 holders of record of our common
stock.
Dividend
Policy
Holders
of our common stock are entitled to dividends if declared by our Board of
Directors out of funds legally available for payment of dividends. From our
inception to the date of this Prospectus, we have not declared any cash
dividends on our common stock since and do we not anticipate paying such
dividends in the foreseeable future. We plan to retain any future earnings for
use in our business. Any decisions as to future payments of dividends will
depend on our earnings and financial position and such other facts, as the Board
of Directors deems relevant.
Equity
Compensation Plans
As of the
date of this Prospectus, we do not have any equity compensation
plans.
Transfer
Agent and Registrar
The
transfer agent and registrar for our common stock is Computershare Trust
Company, N.A., with principal offices at 250 Royall Street, Canton,
Massachusetts 02021.
Reports
to Shareholders
As a
result of the registration statement (of which this Prospectus is a part)
becoming effective, we will be required under Section 15(d) of the
Securities Exchange Act of 1934 to file periodic and Form 8-K reports with the
Securities and Exchange Commission through December 31, 2010, including a
Form 10-K for the year ended December 31, 2010. However, upon
the registration statement being declared effective, we will file a Form 8-A
with the Securities and Exchange Commission to register our common stock under
Section 12(g) of the 1934 Act, and, pursuant to such registration, we will be
required to continue filing such reports, as well as proxy or information
statements under Section 14 of the 1934 Act, and our officers, directors, and
more-than-ten percent shareholders will be required to file ownership reports
under Section 16 of the 1934 Act.
-18-
DIRECTORS,
EXECUTIVE OFFICERS, PROMOTERS, AND CONTROL PERSONS
Our Board
of Directors elects our executive officers annually. A majority vote of the
directors who are in office is required to fill vacancies. Each director shall
serve until his successor is elected and qualified, or until his earlier
resignation or removal. Our Bylaws require only one director, however,
additional director positions may be created by the Board of Directors at any
time. Election of each director requires a plurality of the votes
cast.
Name
|
Age
|
Office
|
||
Mr.
Sun Hongyi
|
41
|
From
inception of the Company, President, Chief Executive Officer, Chief
Financial Officer , Director
|
||
Mr.
Sun Qihua
|
28
|
From
inception of the Company, Treasurer
|
||
Mr.
Shen Peng
|
|
25
|
|
From
inception of the Company,
Secretary
|
Mr. Sun Hongyi has 23 years of
experience as Deputy Technical Manager at Qingzhou Tongli Machinery Co. Ltd, in
the areas of research and development, and the manufacturing and distribution of
machinery for building construction and construction of various
infrastructures. He received his MBA in July 2009 from the Market
Economy Academy at Peking University. Mr. Sun Hongyi’s 23 years of
experience in the international business product sales side of Qingzhou Tongli
Machinery (which makes and sells a broad range of industrial machinery including
equipment for building and infrastructure construction), qualifies him to lead
the Company’s strategy to sell SZIG’s products. See “Business -
Markets” and “Business - Marketing Strategy.”
Mr. Sun Qihua was an
accountant at Quingzhou Haozhang Foundry Co. Ltd. from July 2004 until inception
of the Company. He attended the Qingzhou Accounting Polytechnic
School from 1998 to 2000.
Mr. Shen Peng was Corporate
Secretary for Quingzhou Huaxia Zhongwen Mining Co. Ltd. from October 2006 to
inception of the Company. He received a degree in Finance from the
School of Economic and Management, Shandong Institute of Light Industry, in July
2006, having been a student from August 2003 to July 2006.
None
of our officers or directors have acted as “promoters” of or had a controlling
interest in other companies that have made any filings with the
SEC.
Family
Relationships and Other Matters
There are
no family relationships among or between any of our officers and the
director.
Corporate
Governance and Board Committees
Our
Board of Directors has not established audit, executive compensation, or
nominating committees as standing committees or other board committee
performing equivalent functions. We will organize these committees at
such time, if ever, as the Company should apply for listing on Nasdaq or a
national securities exchange, but the Company may organize these committees
without making or anticipating making an application for such a listing. The
listing requirements for Nasdaq (which we would follow, unless different
requirements apply for a national securities exchange listing) require a
majority of the board of directors of a company to be “independent
directors,” In general, a person other than an executive officer or
employee of a company or any other individual having a relationship which, in
the opinion of the board of directors, would interfere with the exercise of
independent judgment in carrying out the responsibilities of a director, cannot
be deemed “independent.” Regardless of the foregoing general rule, the following
disqualify a director from consideration as independent: Employment by the
company in the past three years, and acceptance by him (or by a family member)
of more than $120,000 in any 12 consecutive months within the past three years
(except for service as a director).
Additionally,
all the members of the company’s audit, compensation and nominating committees
must be independent, and additional requirements apply to member of the audit
committee under the SEC’s Rule 10A-3(b)(1). If a company does not set
up separate committees, the functions required of such committees have to be
exercised only by independent directors meeting these requirements, as
applicable.
-19-
The
sole director, Mr. Sun Hongyi, is not independent.
Code
of Ethics
We have
not yet adopted a Code of Ethics.
SECURITY
OWNERSHIP OF CERTAIN
BENEFICIAL
OWNERS AND MANAGEMENT
The
following tables set forth the ownership of our common stock by each person
known by us to be the beneficial owner of more than five percent of our
outstanding voting securities, our directors, our executive officers, and our
executive officers and directors as a group. To the best of our knowledge, the
persons named have sole voting and investment power with respect to such
shares.
Name
|
Position
|
Shares Owned (Percentage of Outstanding Shares)
|
||
Mr.
Sun Hongyi
|
President,
Chief
|
3,414,000
(85.35%)
|
||
Executive
Officer,
|
||||
Chief
Financial
|
||||
Officer
, Director
|
||||
Mr.
Sun Qihua
|
Treasurer
|
4,000 (less
than one percent)
|
||
Mr.
Shen Peng
|
Secretary
|
4,000 (less
than one percent)
|
||
Officers
and Directors
|
||||
as
a Group (three persons)
|
3,422,000 (85.55%)
|
EXECUTIVE
COMPENSATION
Summary
Compensation Table
The table
below summarizes all compensation awarded to, earned by, or paid to our
Principal Executive Officer, and our two most highly compensated executive
officers other than our CEO who occupied such position as of the date of this
Prospectus (we have not completed a fiscal year), for all services rendered in
all capacities to us for the period from inception (May 24, 2010) to June 15,
2010. The Company does not have employment agreements with any of the persons
named below (and does not presently to enter into such agreements with any such
persons), and does not pay them salary or other compensation at the present
time.
Name and
Position
|
Year*
|
Salary
($)
|
Bonus
($)
|
Stock
awards
($)
|
Option
awards
($)
|
Non-equity
incentive plan
compensation
($)
|
Change in pension value
and nonqualified deferred
compensation earnings
($)
|
All other
compensation
($)
|
Total
($)
|
|||||||||||||||||||||||||
(a)
|
(b)
|
(c)
|
(d)
|
(e)
|
(f)
|
(g)
|
(h)
|
(i)
|
(j)
|
|||||||||||||||||||||||||
Sun
Hongyi
Pres.,
CEO, CFO ,
Director
|
*
|
-0-
|
-0-
|
-0-
|
-0-
|
-0-
|
-0-
|
-0-
|
-0-
|
|||||||||||||||||||||||||
SunQihua,
Treasurer
|
*
|
-0-
|
-0-
|
-0-
|
-0-
|
-0-
|
-0-
|
-0-
|
-0-
|
|||||||||||||||||||||||||
Shen
Peng,
Secretary
|
*
|
-0-
|
-0-
|
-0-
|
-0-
|
-0-
|
-0-
|
-0-
|
-0-
|
* For
period from inception (May 24, 2010) to June 15, 2010
Code
of Ethics
We have
not yet adopted a Code of Ethics.
Option
Grants
We did
not grant any options or stock appreciation rights to our named executive
officers or directors from our inception to the date of this Prospectus. As of
the date of this Prospectus, we did not have any stock option
plans.
-20-
Compensation
of Directors
Our
directors did not receive any compensation for their services as directors from
our inception to the date of this Prospectus. We have no formal plan for
compensating our directors for their services in the future in their capacity as
directors.
Pension,
Retirement or Similar Benefit Plans
There are
no arrangements or plans in which we provide pension, retirement or similar
benefits to directors or executive officers. We have no material bonus or
profit sharing plans in which cash or non-cash compensation is or may be paid to
our directors or executive officers, except for employment agreements with our
executive officers, which provide that our executive officers may be awarded
bonuses awarded by our Board of Directors.
Compensation
Committee
We do not
currently have a compensation committee of the Board of Directors or a committee
performing similar functions.
WHERE
YOU CAN FIND ADDITIONAL INFORMATION
We have
filed with the Securities and Exchange Commission a registration statement on
Form S-1. This Prospectus does not contain all of the information set forth in
the registration statement. Following the effective date of the
registration statement, and the filing of the Form 8-A as described above, we
will file periodic reports and make other filings.
The
registration statement and exhibits filed therewith (and filings made after the
Company is registered under the 1934 Act) may be inspected, without charge, and
copies may be obtained at prescribed rates, at the SEC’s Public Reference Room
at 100 F St., N.E., Washington, D.C. 20549. The public may obtain information on
the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330.
The registration statement and other information filed with the SEC are also
available at the web site maintained by the SEC at
http://www.sec.gov.
-21-
REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The
Board of Directors and Shareholders of
Zhong
Wen International Holding Co., Ltd.
We
have audited the accompanying balance sheet of Zhong Wen International Holding
Co., Ltd. (the “Company”) as of June 15, 2010, and the related statements of
income, shareholders’ equity and comprehensive income, cash flows for the period
from May 24, 2010 (date of incorporation) to June 15, 2010. These financial
statements are the responsibility of the Company’s management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We
conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the 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 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 the management, as well as evaluating the overall financial
statement presentation. We believe that our audit 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 the Company as of June 15, 2010,
and the results of its operations and their cash flows for period ended June 15,
2010, in conformity with accounting principles generally accepted in the United
States of America.
The
accompanying consolidated financial statements were prepared assuming the
Company will continue as a going concern. As more fully described in
Note 1, the Company has incurred operating losses and has a working capital
deficiency. These conditions raise substantial doubt about the
Company’s ability to continue as a going concern. The financial statements do
not include any adjustments to reflect the possible future effects on the
recoverability and classification of assets or the amounts and classification of
liabilities that may result from the outcome of this
uncertainty.
/s/
HLB Hodgson Impey Cheng
Chartered
Accountants
Certified
Public Accountants
Hong
Kong
August
3, 2010
F-1
ZHONG WEN INTERNATIONAL
HOLDING CO., LTD.
(A DEVELOPMENT STAGE
COMPANY)
BALANCE
SHEET
AS
OF JUNE 15,
|
2010
|
||||
ASSETS
|
||||
Current
assets:
|
||||
Prepayment,
deposits and other receivables
|
$ | 36,217 | ||
Total
current assets
|
36,217 | |||
TOTAL
ASSETS
|
$ | 36,217 | ||
LIABILITIES
AND SHAREHOLDERS’ EQUITY
|
||||
Current
liabilities:
|
||||
Other
payables and accruals
|
$ | 65,000 | ||
Total
current liabilities
|
65,000 | |||
TOTAL
LIABILITIES
|
65,000 | |||
Commitments
and Contingencies
|
||||
Shareholders'
equity
|
||||
Common
stock
|
||||
Authorized:
6,000,000 shares, par value $0.001
|
||||
Issued
and outstanding: 4,000,000 shares at June 15, 2010
|
4,000 | |||
Additional
paid-in-capital
|
36,000 | |||
Accumulated
deficits
|
(68,783 | ) | ||
TOTAL
SHAREHOLDERS’ EQUITY
|
(28,783 | ) | ||
TOTAL
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
$ | 36,217 |
The
accompanying notes are an integral part of these financial
statements.
F-2
ZHONG WEN INTERNATIONAL
HOLDING CO., LTD.
(A DEVELOPMENT STAGE
COMPANY)
STATEMENT
OF INCOME AND COMPREHENSIVE INCOME
FOR
THE PERIOD FROM MAY 24, 2010 (DATE OF INCORPORATION) TO JUNE 15,
2010
|
2010
|
||||
General
and administrative expenses
|
$ | (68,783 | ) | |
Operating
loss
|
(68,783 | ) | ||
Loss
before noncontrolling interests and income taxes
|
(68,783 | ) | ||
Provision
for income taxes
|
- | |||
Net
loss
|
$ | (68,783 | ) | |
Loss
per share
|
||||
Basic
|
$ | (0.017 | ) | |
Diluted
|
$ | (0.017 | ) | |
Weighted
average number of common stock outstanding
|
||||
Basic
|
4,000,000 | |||
Diluted
|
4,000,000 |
The
accompanying notes are an integral part of these financial
statements.
F-3
ZHONG WEN INTERNATIONAL
HOLDING CO., LTD.
(A DEVELOPMENT STAGE
COMPANY)
STATEMENT
OF SHAREHOLDERS’ EQUITY
FROM
MAY 24, 2010 (DATE OF INCORPORATION) TO JUNE 15,
2010
|
Common stock
|
Additional
|
Total
|
||||||||||||||||||
paid-in
|
Accumulated
|
shareholders’
|
||||||||||||||||||
Shares
|
Amount
|
capital
|
deficit
|
equity
|
||||||||||||||||
Balance
at May 24, 2010 (date of incorporation)
|
- | $ | - | $ | - | $ | - | $ | - | |||||||||||
Issue
of shares
|
4,000,000 | 4,000 | 36,000 | - | 40,000 | |||||||||||||||
Comprehensive
loss
|
- | - | - | (68,783 | ) | (68,783 | ) | |||||||||||||
Balance
at June 15, 2010
|
4,000,000 | $ | 4,000 | $ | 36,000 | $ | (68,783 | ) | $ | (28,783 | ) |
The
accompanying notes are an integral part of these financial
statements
F-4
ZHONG
WEN INTERNATIONAL HOLDING CO., LTD.
(A
DEVELOPMENT STAGE COMPANY)
STATEMENT
OF CASH FLOWS
FROM
MAY 24, 2010 (DATE OF INCORPORATION) TO JUNE 15,
2010
|
Cash
flows from operating activities:
|
||||
Net
loss
|
$ | (68,783 | ) | |
Changes
in operating assets and liabilities:
|
||||
Prepayment,
deposits and other receivables
|
(36,217 | ) | ||
Other
payables and accrued expenses
|
65,000 | |||
Net
cash used in operating activities
|
(40,000 | ) | ||
Cash
flows from financing activities:
|
||||
Proceeds
from issue of shares
|
40,000 | |||
Net
cash provided by financing activities
|
40,000 | |||
Increase
in cash and cash equivalents
|
- | |||
Cash
and cash equivalents at beginning of period
|
- | |||
Cash
and cash equivalents at end of period
|
$ | - |
The
accompanying notes are an integral part of these financial
statements.
F-5
ZHONG WEN INTERNATIONAL
HOLDING CO., LTD.
(A DEVELOPMENT STAGE
COMPANY)
NOTES
TO FINANCIAL STATEMENTS
FROM
MAY 24, 2010 (DATE OF INCORPORATION TO JUNE 15,
2010)
|
NOTE
1. NATURE OF BUSINESS
Nature
of Business
Zhong
Wen International Holding Co., Ltd. (the “Company”) was incorporated in the
State of Delaware on May 24, 2010. The Company is not engaged in any business
activities and has had no meaningful operations or held income producing assets
since incorporation.
Going
Concern Uncertainty
The
accompanying financial statements were prepared in conformity with accounting
principles generally accepted in the United States (“US GAAP”), which
contemplate continuation of the Company as a going concern. As of June 15, 2010,
the Company did not have any cash and cash equivalents. The Company estimates
that its cash and cash equivalents will fund its operations through the
financial support from the shareholders. The shareholders have indicated their
continuing support to enable the Company to meet its obligations to third
parties as and when they fall due and to continue as a going concern. This
projection is based on the Company’s current cost structure and the Company’s
current expectations regarding operating expenses and anticipated revenues. If
the Company is unable to obtain additional funds, it will not be able to sustain
its operations and would be required to cease its operations and/or seek
bankruptcy protection. Given the difficult current economic environment, the
Company believes it will be difficult to raise additional funds and there can be
no assurance as to the availability of additional financing or the terms upon
which additional financing may be available. As a result of these conditions,
there is substantial doubt regarding the Company’s ability to continue as a
going concern. The accompanying financial statements do not include any
adjustments to reflect the possible future effects on the recoverability and
classification of assets or the amounts and classification of liabilities that
may result from the possible inability of the Company to continue as a going
concern.
NOTE
2. SUMMARY OF PRINCIPAL ACCOUNTING POLICIES
Basis
of presentation
The
financial statements represent the accounts of the Company. The financial
statements have been prepared in conformity with US GAAP.
Use
of estimates
The
preparation of the financial statements in conformity with US GAAP requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities, the disclosure of contingent liabilities at the date of
the financial statements, and the reported amounts of revenue and expenses
during the reporting period. Actual results could differ from these
estimates.
Earnings
per share
Basic
earnings per share is computed by dividing net operating results for the
reporting period attributable to common shareholders by the weighted average
number of common shares outstanding during the period. Diluted earnings per
share is calculated by dividing net operating results for the reporting period
attributable to common shareholders by the weighted average number of common
shares outstanding and the dilutive effect of common stock
equivalents.
F-6
Cash
and cash equivalents
The
Company considers all highly liquid investments with an original maturity date
of three months or less to be cash equivalents.
Fair
value of financial instruments
The
carrying amount of certain of the Company’s financial instruments, including
cash and cash equivalents, other payables and accrued expenses, approximates
fair value due to their relatively short maturity.
Related
party transactions
A
related party is generally defined as (i) any person that holds 10% or more of
the Company’s securities and their immediate families, (ii) the Company’s
management, (iii) someone that directly or indirectly controls, is controlled by
or is under common control with the Company, or (iv) anyone who can
significantly influence the management or operating decisions of the Company. A
transaction is considered to be a related party transaction when there is a
transfer of resources or obligations between related parties.
NOTE
3. RECENT ACCOUNTING PRONOUNCEMENTS
(a)
Recent accounting pronouncements adopted
In
June 2009, the FASB issued a standard that established the FASB ASC and
amended the hierarchy of generally accepted accounting principles (GAAP) such
that the ASC became the single source of authoritative nongovernmental U.S.
GAAP. The ASC did not change current U.S. GAAP, but was intended to simplify
user access to all authoritative U.S. GAAP by providing all the authoritative
literature related to a particular topic in one place. All previously existing
accounting standard documents were superseded and all other accounting
literature not included in the ASC is considered non-authoritative. New
accounting standards issued subsequent to June 30, 2009 are communicated by
the FASB through Accounting Standards Updates (“ASUs”). For the Company, the ASC
was effective July 1, 2009. This standard did not have an impact on the
Company’s results of operations or financial condition. However, throughout the
notes to the financial statements references that were previously made to
various former authoritative U.S. GAAP pronouncements were changed to coincide
with the appropriate section of the ASC.
(b)
Recent accounting pronouncements not yet effective
In
January 2010, the FASB issued ASU No. 2010-6, Improving Disclosures
About Fair Value Measurements, that amends existing disclosure requirements
under ASC 820 by adding required disclosures about items transferring into and
out of levels 1 and 2 in the fair value hierarchy; adding separate disclosures
about purchase, sales, issuances, and settlements relative to level 3
measurements; and clarifying, among other things, the existing fair value
disclosures about the level of disaggregation. For the Company, this ASU is
effective for the first quarter of 2010, except for the requirement to provide
level 3 activity of purchases, sales, issuances, and settlements on a gross
basis, which is effective beginning the first quarter of 2011. Since this
standard impacts disclosure requirements only, its adoption will not have a
material impact on the Company’s results of operations or financial
condition.
Other
recent accounting pronouncements issued by the FASB, and the SEC did not or are
not believed by management to have a material impact on the Company's present or
future financial statements.
NOTE
4. PROVISION FOR INCOME TAXES
Deferred
tax assets
The
source of significant temporary difference that gives rise to the deferred tax
asset is as follows:
F-7
For the period
from May 24,
2010 to June
15, 2010
|
||||
Deferred
tax assets:
|
||||
Tax
losses carryforwards
|
$ | 24,074 | ||
Less:
valuation allowance
|
(24,074 | ) | ||
Net
deferred tax assets
|
$ | - |
In
assessing the realizability of deferred tax assets, management considers whether
it is more likely than not that all of the assets will not be realized. The
ultimate realization of deferred tax assets is dependent upon the generation of
future taxable income in each tax jurisdiction during the periods in which
temporary differences in those jurisdictions become deductible. Management
considers the projected future taxable income and tax planning strategies in
making this assessment.
The
Company has provided valuation allowances of $24,074 in respect of federal net
operating loss which it does not expect to utilize.
Gross
deferred tax assets at June 15, 2010 were reduced by valuation allowance of
$24,074. The total valuation allowance increased by $24,074 and such increase
was attributable to the tax effect on federal net operating loss incurred for
the period ended June 15, 2010 of $24,074 at the federal tax rate of
35%.
F-8
Income
taxes
A
reconciliation of the provision for income tax calculated using the statutory
federal income tax rate and state and local income tax rate to the Company’s
provision for income taxes for the period ended June 15, 2010 is as
follows:
Provision
for income taxes at statutory rate of 35%
|
$ | (24,074 | ) | |
Changes
in valuation allowance
|
24,074 | |||
Income
taxes
|
$ | - |
NOTE
5. SHAREHOLDERS’ EQUITY
General
The
Company’s total authorized capital at June 15, 2010, is 6,000,000 shares of
which 6,000,000 shares are common stock of par value $0.001.
On
July 20, 2010, the Company effected a ten for one forward stock split (without
change in fair value) , from 400,000 shares to 4,000,000 shares, pursuant to
which each outstanding share of common stock, par value $0.001, were
automatically converted into ten share of common stock, par value $0.001 (the
“Forward Stock Split”). All of the share number, share prices and per-share
amounts have been adjusted, on a retroactive basis, to reflect the effect of the
Forward Stock Split.
NOTE
6. COMMITMENTS AND CONTINGENT LIABILITIES
Operating
Lease Commitments
As of
June 15, 2010, the Company did not have any significant operating lease
commitment.
NOTE
7. SUBSEQUENT EVENTS
The
Company evaluated all events or transactions through the date of the financial
statements were issued. During this period, other than those
disclosed above, the Company did not have any material subsequent events that
impacted the financial statements.
End
of financial statements.
F-9
PART
II
INFORMATION
NOT REQUIRED IN PROSPECTUS
INDEMNIFICATION
Pursuant
to Section 145 of the Delaware Corporation Code, the Company, as a Delaware
corporation, has the power to indemnify any person made a party to any lawsuit
by reason of being a director or officer of a corporation, or serving at the
request of the corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise against
expenses (including attorneys’ fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. Our Bylaws provide that
the Company shall indemnify its directors and officers to the fullest extent
permitted by Delaware law.
With
regard to the foregoing provisions, we have been advised that in the opinion of
the Securities and Exchange Commission, such indemnification is against public
policy as expressed in the Securities Act of 1933, as amended, and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by us of expenses incurred or paid by a
director, officer or controlling person of the Company in the successful defense
of any action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, we will,
unless in the opinion of our counsel the matter has been settled by a
controlling precedent, submit to a court of appropriate jurisdiction the
question of whether such indemnification by us is against public policy as
expressed in the Securities Act of 1933, as amended, and will be governed by the
final adjudication of such case.
OTHER
EXPENSES OF ISSUANCE AND DISTRIBUTION
The
following table is an itemization of all expenses, without consideration to
future contingencies, incurred or expected to be incurred by the Company in
connection with the issuance of the securities being offered by this Prospectus.
Items marked with an asterisk (*) represent estimated expenses. We have
agreed to pay all the costs and expenses of this offering. Selling shareholders
will pay no offering expenses.
ITEM
|
AMOUNT
|
|||
SEC
Registration Fee
|
$
|
10.00
|
||
Legal
Fees and Expenses*
|
$
|
40,000.00
|
||
Accounting
Fees and Expenses*
|
$
|
5,000.00
|
||
Miscellaneous*
|
0
|
|||
Total*
|
$
|
45.013.00
|
*
Estimated
RECENT
SALES OF UNREGISTERED SECURITIES
On
June 10, 2010, the Company sold 400,000 shares of common stock to 20 persons,
for a price of $0.10 per share, for aggregate cash proceeds of
$40,000.00. Seventeen of the investors are citizens of and resident
in the PRC; three of the investors are entities organized under the laws of
jurisdictions outside the United States, with the officers and shareholder of
each such entity being citizens of and resident in the PRC. All
shares were issued as restricted securities as that term is defined in Rule
144. The 400,000 shares were forward split on a 10 for 1 basis (into
4,000,000 shares) in July 2010. No additional consideration was paid
by the shareholders in connection with the forward split
The
Company claims the exemption available under section 4(2) of the 1933
Act. No general solicitation was used in the offering; each investor
had a previous relationship with the officers of the Company; each investor was
provided, prior to the event of sale, all information about the Company
sufficient for the making of an informed investment decision; and the offering
was conducted only in the PRC. No commission or other compensation
was paid by anyone in connection with the offering.
-22-
EXHIBITS
Exhibit
Number
|
Description
|
|
3.1
|
Certificate
of Incorporation.
|
|
3.1(a) |
Amendment
to Certificate of Incorporation
|
|
3.2
|
Bylaws
|
|
5.1
|
Legal
Opinion of the Law Office of Stephen E. Rounds
|
|
10.1
|
Sales
Agency Agreement
|
|
23.1
|
Consent
of HLB Hodgson Impey Cheng Chartered Accountants and Certified Public
Accountants
|
|
23.2
|
Consent
of the Law Office of Stephen E. Rounds (included in Exhibit
5.1)
|
UNDERTAKINGS
The
undersigned registrant hereby undertakes:
|
1.
|
To file, during any period in
which offers or sales are being made, a post-effective amendment to this
registration statement:
|
|
i.
|
To include any Prospectus
required by section 10(a)(3) of the Securities Act of
1933;
|
|
ii.
|
To reflect in the Prospectus any
facts or events arising after the effective date of the registration
statement (or the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental change in the
information set forth in the registration statement. Notwithstanding the
foregoing, any increase or decrease in volume of securities offered (if
the total dollar value of securities offered would not exceed that which
was registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of
Prospectus filed with the Commission pursuant to Rule 424(b) if, in the
aggregate, the changes in volume and price represent no more than 20%
change in the maximum aggregate offering price set forth in the
“Calculation of Registration Fee” table in the effective registration
statement.
|
iii.
|
To include any material
information with respect to the plan of distribution not previously
disclosed in the registration statement or any material change to such
information in the registration
statement;
|
|
2.
|
That, for the purpose of
determining any liability under the Securities Act of 1933, each such
post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial bona fide
offering thereof.
|
|
3.
|
To remove from registration by
means of a post-effective amendment any of the securities being registered
which remain unsold at the termination of the
offering.
|
|
4.
|
That, for the purpose of
determining liability of the registrant under the Securities Act of 1933
to any purchaser in the initial distribution of the securities: The
undersigned registrant undertakes that in a primary offering of securities
of the undersigned registrant pursuant to this registration statement,
regardless of the underwriting method used to sell the securities to the
purchaser, if the securities are offered or sold to such purchaser by
means of any of the following communications, the undersigned registrant
will be a seller to the purchaser and will be considered to offer or sell
such securities to such
purchaser:
|
|
i.
|
Any preliminary Prospectus or
Prospectus of the undersigned registrant relating to the offering required
to be filed pursuant to Rule
424;
|
|
ii.
|
Any free writing Prospectus
relating to the offering prepared by or on behalf of the undersigned
registrant or used or referred to by the undersigned
registrant;
|
-23-
iii.
|
The
portion of any other free writing Prospectus relating to the offering
containing material information about the undersigned registrant or its
securities provided by or on behalf of the undersigned registrant;
and
|
iv.
|
Any
other communication that is an offer in the offering made by the
undersigned registrant to the
purchaser.
|
|
5.
|
That,
for the purpose of determining liability under the Securities Act of 1933
to any purchaser: Each Prospectus filed pursuant to Rule 424(b) as part of
a registration statement relating to an offering, other than registration
statements relying on Rule 430B or other than Prospectuses filed in
reliance on Rule 430A, shall be deemed to be part of and included in the
registration statement as of the date it is first used after
effectiveness. Provided, however, that no statement made in a registration
statement or Prospectus that is part of the registration statement or made
in a document incorporated or deemed incorporated by reference into the
registration statement or Prospectus that is part of the registration
statement will, as to a purchaser with a time of contract of sale prior to
such first use, supersede or modify any statement that was made in the
registration statement or Prospectus that was part of the registration
statement or made in any such document immediately prior to such date of
first use.
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6.
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Insofar
as indemnification for liabilities arising under the Securities Act of
1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment
by the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
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SIGNATURES
Pursuant
to the requirements of the Securities Act of 1933, the registrant has duly
caused this pre-effective amendment number 1 to the registration statement to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of Hong Kong, on August 6, 2010.
Zhong
Wen International Holding Co., Ltd.
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(Registrant)
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By:/s/
Sun Hongyi
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Sun
Hongyi,
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President,
Chief Executive Officer,
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and
Chief Financial
Officer
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Pursuant
to the requirements of the Securities Act of 1933, this registration
statement was signed by the following persons in the capacities and on the dates
stated:
August
6, 2010
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/s/
Sun Hongyi,
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Sole
Director
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