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EX-32.1 - CERTIFICATION PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT - One2one Living Corpf10k2011ex32i_jinmimi.htm
EX-32.2 - CERTIFICATION PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT - One2one Living Corpf10k2011ex32ii_jinmimi.htm
EX-31.2 - CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT - One2one Living Corpf10k2011ex31ii_jinmimi.htm
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EX-31.1 - CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT - One2one Living Corpf10k2011ex31i_jinmimi.htm


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_______________
 
FORM 10-K
_______________
 
x    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Fiscal Year Ended December 31, 2011
 
o   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from ______to______.
 
JINMIMI NETWORK INC.
 (Exact name of registrant as specified in Charter)
 
NEVADA
 
333-156950
 
20-4281128
(State or other jurisdiction of
incorporation or organization)
 
(Commission File No.)
 
(IRS Employee Identification No.)

2121 S. Hiawassee Road Suite 4640
Orlando FL 32835
(Address of Principal Executive Offices)
  
     + 416889-8276
 (Issuer Telephone number)
 


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

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

Indicate by check whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the issuer was required to file such reports), and (2)has been subject to such filing requirements for the past 90 days.Yes x   No o
 
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes o    No x

Indicate by check mark if disclosure of delinquent filers pursuant to Rule 405 of Regulation S-K (§229.405) is not contained herein, and will not be contained, to the best of the registrant’s knowledge, in any definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.    x

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company filer.  See definition of “accelerated filer” and “large accelerated filer” in Rule 12b-2 of the Exchange Act (Check one):
 
Large Accelerated Filer o
Accelerated Filer o     
Non-Accelerated Filer o
Smaller Reporting Company x
 
Indicate by check mark whether the registrant is a shell company as defined in Rule 12b-2 of the Exchange Act. Yes x   No  o

State the issuer's revenues for its most recent fiscal year. $0

State the aggregate market value of the voting stock held by non-affiliates computed by reference to the price at which the stock was sold, or the average bid and ask prices of such stock as of a specified date within 60 days $8,190,000.
State the number of shares outstanding of each of the issuer’s classes of common equity, as of April 16, 2012:  87,150,000 shares of Common Stock. 
 
DOCUMENTS INCORPORATED BY REFERENCE

A description of "Documents Incorporated by Reference" is contained in Part III, Item 13.
 
 
 

 
 
JINMIMI NETWORK, INC.

TABLE OF CONTENTS

Page
PART I
 
 
     
Item 1.
Business
3
Item 1A.
Risk Factors
4
Item 1B.
Unresolved Staff Comments
4
Item 2.
Properties
4
Item 3.
Legal Proceedings
4
Item 4.
Mine Safety Disclosures
4
     
PART II
   
     
Item 5.
Market for Registrant’s Common Equity,  Related Stockholders Matters and Issuer Purchases of Equity Securities
4
Item 6.
Selected Financial Data
5
Item 7.
Management's Discussion and Analysis of Financial Condition and Results of Operations
5
Item 7A.
Quantitative and Qualitative Disclosures About Market Risk
10
Item 8.
Financial Statements and Supplementary Data
10
Item 9.
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
10
Item 9A.
Controls and Procedures
10
Item 9B.
Other Information
11
     
PART III
   
     
Item 10.
Directors, Executive Officers and Corporate Governance
11
Item 11.
Executive Compensation
12
Item 12.
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
13
Item 13.
Certain Relationships and Related Transactions, and Director Independence
13
Item 14.
Principal Accounting Fees and Services
13
     
PART IV
   
     
Item 15.
Exhibits, Financial Statement Schedules
15
     
Signatures
 
 
 
 

 
 
FORWARD LOOKING STATEMENTS

This annual report contains forward-looking statements.  Forward-looking statements are projections of events, revenues, income, future economic performance or management’s plans and objectives for our future operations.  In some cases, you can identify forward-looking statements by terminology such as “may”, “should”, “expects”, “plans”, “anticipates”, “believes”, “estimates”, “predicts”, “potential”, or “continue” or the negative of these terms or other comparable terminology.  These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks in the section entitled “Risk Factors” and the risks set out below, any of which may cause our or our industry’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.  These risks include, by way of example and not in limitation:

·  
the uncertainty of profitability based upon our history of losses;
·  
risks related to failure to obtain adequate financing on a timely basis and on acceptable terms to continue as going concern;
·  
risks related to our international operations and currency exchange fluctuations, and
·  
other risks and uncertainties related to our business plan and business strategy.

This list is not an exhaustive list of the factors that may affect any of our forward-looking statements.  These and other factors should be considered carefully and readers should not place undue reliance on our forward-looking statements.  Forward looking statements are made based on management’s beliefs, estimates and opinions on the date the statements are made and we undertake no obligation to update forward-looking statements if these beliefs, estimates and opinions or other circumstances should change.  Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements.  Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.

References in this annual report to “we”, “us”, “our”, the “Company” refer to Jinmimi Network Inc., unless otherwise indicated.

References to China or the PRC refer to the People’s Republic of China.

Our financial statements are in United States dollars (US$) and are prepared in accordance with United States Generally Accepted Accounting Principles.  All references to “common stock” refer to common shares in our capital stock.

PART I

ITEM 1.                      BUSINESS

Jinmimi Network Inc. (the “Company”) was incorporated under the laws of the State of Nevada on November 13, 2008.  The Company has no substantial operations or assets; however, it is working hard to develop new business opportunities, such as developing investment consulting services and actively looking for new business partners.

In January 2009, the Company entered into a Share Purchase Agreement (“Purchase Agreement”) with Hong Kong Active Choice Limited (“HKAC”), a limited liability company established under the laws of Hong Kong, with its principle places of business at Unite 8/F, Wing Yee Comm Bldg, 5 Wing Kut St., Sheung Wan, HK, and the shareholders of HKAC (individually, a “HKAC Stockholder”), and collectively, the “HKAC Stockholders”).  Pursuant to the Purchase Agreement, the Company acquired 100% of the common stock of HKAC, par value HKD1.00 per share (the ‘HKAC Shares”), from HKAC and HKAC Shareholders, for a purchase price of $438,975 by delivery of our promissory note.  As a result, HKAC and its subsidiary, Chuangding Investment Consultant (Shenzhen) Co., Ltd., a limited liability company established under the laws of PRC (“Chuangding”), became our wholly-owned subsidiaries.

In January 2009, we completed a Regulation D rule 506 and/or Regulation S offering in which we sold 4,000,000 shares of common stock to 40 investors, at a price per share of $0.025 per share for an aggregate offering price of $100,000.

Prior to September 16, 2010, our operations were limited to Chuangding’s 100% ownership interest of Shenzhen Jinmimi under a long-term management consultancy agreement t (the “Management Consultancy Agreement”).   On September 16, 2010 Chuangding entered into a mutual Termination of Management Consultancy Agreement with Shenzhen Jinmimi (the “Termination Agreement”).  Pursuant to the terms of the Termination Agreement, both parties released each other from all duties, obligations, covenants, and representations under or arising out of the Management Consultancy Agreement and Xi Li and Silky Road International Group Limited were appointed as the successor of the Management Consultancy Agreement (collectively, the “Successor”).  In addition, the Successor also agreed to cancel the promissory notes issued to them by Jinmimi Network, In., the Company.  From then on, Shenzhen Jinmimi is no longer a deemed subsidiary (Variable Interest Entity) of the Company and should be deconsolidated from the Company’s financial statement.  As of December 31, 2011, the Company had closed down its subsidiaries and is no conducting business in those entities.
 
 
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Based on our financial history since inception, our auditor has expressed substantial doubt as to our ability to continue as a going concern.  For the year ended December 31, 2011, the Company has not generated revenue yet and has incurred an accumulated deficit $711,403.  As of December 31, 2010, the Company’s shareholders and former shareholder gave up their rights to claim on the loans from shareholders and former shareholder of $438,247. After this transaction, the Company’s current assets exceed its current liabilities by $18,343. These conditions raise substantial doubt about our ability to continue as a going concern.

We have not yet been involved in bankruptcy, receivership or similar proceeding. We have not been involved in any material reclassification, merger, consolidation, or purchase or sale of a significant amount of assets not in the ordinary course of business.

Employees

As of April 16, 2012, we have no full time employees.

ITEM 1A.                      RISK FACTORS

We are a smaller reporting company as defined by rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

ITEM 1B.                      UNRESOLVED STAFF COMMENTS

None.

ITEM 2.                      PROPERTIES.

We currently share office space at no charge at 10th Floor, Chinese Plaza of Tea, Jingtian Road, Futian District, Shenzhen, China through the office of Shenzhen Jinmimi which used to be our VIE before September 16, 2010. We have no fixed assets after the termination of contractual agreement with Shenzhen Jinmimi.  We have no other properties and at this time have no agreements to acquire any properties in the future.

ITEM 3.                      LEGAL PROCEEDINGS.

We are currently not involved in any litigation that we believe could have a material adverse effect on our financial condition or results of operations. There is no action, suite, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the executive officers of our company or any of our subsidiaries, threatened against or affecting our company, our common stock, any of our subsidiaries or of our companies or our subsidiaries’ officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect.

ITEM 4.                      MINE SAFETY DISCLOSURES .

Not applicable.

PART II

ITEM 5.                      MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASE S OF EQUITY SECURITIES .

Market Information
 
Our common stock is traded on the OTCBB under the symbol JINM.  There can be no assurance that a liquid market for our securities will ever develop.  Transfer of our common stock may also be restricted under the securities or blue sky laws of various states and foreign jurisdictions.  Consequently, investors may not be able to liquidate their investments and should be prepared to hold the common stock for an indefinite period of time.

Holders of Our Common Stock

As of the date of this filing, we have 109 shareholders of our common stock.

Stock Option Grants

To date, we have not granted any stock options.

 
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Transfer Agent and Registrar

Holladay Stock Transfer is currently the transfer agent and registrar for our common stock.  Its address is 2939 North 67th Place Scottsdale, Arizona  85251.  Its phone number is (480) 481-3940.

Dividends

To date, we have not declared or paid any dividends on our common stock. We currently do not anticipate paying any cash dividends in the foreseeable future on our common stock, when issued pursuant to this offering.  Although we intend to retain our earnings, if any, to finance the exploration and growth of our business, our Board of Directors will have the discretion to declare and pay dividends in the future.

Payment of dividends in the future will depend upon our earnings, capital requirements, and other factors, which our Board of Directors may deem relevant.

Securities Authorized for Issuance Under Equity Compensation Plans

We presently do not have any equity based or other long-term incentive programs. In the future, we may adopt and establish an equity-based or other long-term incentive plan if it is in the best interest of the Company and our stockholders to do so.

ITEM 6.                      SELECTED FINANCIAL DATA.

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

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

This form 10-K contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.  For this purpose any statements contained in this Form 10-K that are not statements of historical fact may be deemed to be forward-looking statements.  Without limiting the foregoing, words such as “may”, “will”, “expect”, “believe”, “anticipate”, “estimate” or “continue” or comparable terminology are intended to identify forward-looking statements.  These statements by their nature involve substantial risks and uncertainties, and actual results may differ materially depending on a variety of factors, many of which are not within our control.  These factors include by are not limited to economic conditions generally and in the industries in which we may participate; competition within our chosen industry, including competition from much larger competitors; technological advances and failure to successfully develop business relationships.

Business Overview

We are incorporated under the laws of the state of Nevada on November 13, 2008.  On September 16, 2010 we changed our business activities from value-added information service provider through the Internet in PRC to an investment consulting service provider and approaching the investors directly.  The economy in China is developing dramatically in adverse years and many investors are looking for opportunities in PRC to maximum the capital value.  The company can provide investment consulting services to targeted clients who wish to invest in PRC.  Based on client’s demand through an objective, comprehensive and scientific analysis about the market risk and strength of targeted enterprise, we can provide a business plan or fund raising proposal to clients to enhance the investment successful rate and capital usage efficiency.

Based on our financial history since inception, our auditor has expressed substantial doubt as to our ability to continue as a going concern.  As reflected in the accompanying financial statements, as of December 31, 2011, we had an accumulated deficit totaling $711,403.  These raise substantial doubts about our ability to continue as a going concern.

Limited Operating History

We are a development stage company incorporated in November 2008, and as such had minimal operating revenues to date. Further, we have no significant assets and no current earnings. The success of our company is dependent upon the extent to which it will gain market share.  All financial information and financial projections and other assumptions made by us are speculative and, while based on management’s best estimates of projected sales levels, operational costs, consumer preferences, and the general economic and competitive health of our company in the image consultant marketplace, there can be no assurance that we will operate profitably or remain solvent.
 
 
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Results of Operations

For the year ended December 31, 2011, we had $0 net revenues.  Our operating expenses are $75,088.  We incurred a net loss of $89,311.

Our auditor has expressed substantial doubt as to whether we will be able to continue to operate as a “going concern” due to the fact that the company has had no revenue since inception and will need to raise capital to further its operations.  We believe we can satisfy our cash requirements to continue to operate over the next twelve months even if we are unable to obtain additional funding or our revenues significantly improve.  However, we will need to raise additional funds or generate revenues to pursue our plan of operations.  There is no guarantee that we will be able to raise additional funds and if we are unsuccessful in raising the funds, we may be forced to close our business operations.

Liquidity and Capital Resources

As of  December 31, 2011, we had cash of $163.  We believe we can satisfy our cash requirements for the next twelve months with our current cash.  We may require additional funds to continue our operation.

Off Balance Sheet Arrangements

We do not have any off-balance sheet arrangements that we are required to disclose pursuant to these regulations.  In the ordinary course of business, we enter into operating lease commitments, purchase commitments and other contractual obligations.  These transactions are recognized in our financial statements in accordance with generally accepted accounting principles in the United States.

We do not have any off-balance sheet arrangements, financings, or other relationships with unconsolidated entities or other persons, also known as “special purpose entities” (SPEs).

Critical Accounting Policies


ASC Update (“ASU”) No. 2010-01, Equity (Topic 505): Accounting for Distributions to Shareholders with Components of Stock and Case.  This update clarifies that the stock portion of a distribution to shareholders that allows them to elect to receive cash or stock with a potential limitation on the total amount of case that all shareholders can elect to receive in the aggregate is considered a share issuance that is reflected in earnings per share prospectively and is not a stock dividend.  This ASU codified the consensus reached in EITF Issue No. 09-E “Accounting for Stock Dividends, Including Distributions to Shareholders with Components of Stock and Cash.”  ASU 2010-01 is effective for interim and annual periods ending on or after December 15, 2009, and should be applied on a retrospective basis.  The adoption of this update did not have any material impact on the Company’s financial statements.

ASC Update (“ASU”) No. 2010-02, Consolidation (Topics 810) – Accounting and Reporting for Decreases in Ownership of a Subsidiary – A Scope Clarification.  This update provides guidance for non-controlling interests and changes in ownership interest of a subsidiary.  An entity is required to deconsolidate a subsidiary when the entity ceases to have a controlling financial interest in the subsidiary.  Upon deconsolidation of a subsidiary, an entity recognizes a gain or loss on the transaction and measures any retained investment in the subsidiary at fair value.  The gain or loss includes any gain or loss associated with the difference between the fair value of the retained investment in the subsidiary and its carrying amount at the date of the subsidiary is deconsolidated.  In contrast, an entity is required to account for a decrease in its ownership that does not result in a change of control of the subsidiary as an equity transaction.  The adoption of this update did not have any material impact on the Company’s financial statements.

In August 2009, the FASB issued ASC Update No. 2009-05, Fair Value Measurements and Disclosures (Topic 820):  Measuring Liabilities at Fair Value (“ASC Update No. 2009-05”).   This update amends ASC 820, Fair Value Measurements and Disclosures and provides further guidance on measuring the fair value of a liability.  The guidance establishes the types of valuation techniques to be used to value a liability when a quoted market price in an active market for the identical liability is not available, such as the use of an identical or similar liability when traded as an asset.  The guidance also further clarifies that a quoted price in an active market for the identical liability at the measurement date and the quoted price for the identical liability when traded as an asset in an active market when no adjustments to the quoted price of the asset are required are both Level 1 fair value measurements.  If adjustments are required to be applied to the quoted price, it results in a level 2 or fair value measurement.  The guidance provided in the update is effective for the first reporting period (Including interim periods) beginning after issuance.  The Company does not expect that the implementation of SC Update No. 2009-5 will have a material effect on its financial position or results of operations.

ASC Update (“ASU”) No. 2010-09, Subsequent Events (Topic 855):  Amendments to Certain Recognition and Disclosure Requirements.  This update is to remove the requirement for an SEC filer to disclose a date through which subsequent events have been evaluated in both issued and revised financial statements.  Revised financial statements include financial statements revised as a result of either correction or an error or retrospective application of U.S. GAAP.  The FASB also clarified that if the financial statements have been revised, then an entity that is not an SEC filer should disclose both the date that the financial statements were issued or available to be issued and the date the revised financial statements were issued or available to be issued.  The FASB believes these amendments remove potential conflicts with the SEC’s literature.
 
 
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In addition, the amendments in the ASU requires an entity that is a conduit bond obligor for conduit debt securities that are traded in a public market to evaluate subsequent events through the date of issuance of this financial statements and must disclose such date.  All of the amendments in the ASU were effective upon issuance (February 24, 2010) except for the use of the issued date for conduit deb obligors.  That amendment is effective for interim or annual periods ending after June 15, 2010.

ASC Update (“ASU”) No. 2010-10 Consolidations (Topic 810):  Amendments for Certain Investment Funds.  This update is to defer the effective date of certain amendments to the consolidation requirements of FASB Accounting Standards Codification TM (Codification) Topic 810, Consolidation, resulting from the issuance of FASB Accounting Standard No. 167, Amendments to FASB Interpretation 46(R).  Specifically, the amendments to the consolidation requirements of Topic 810 resulting from the issuance of Statement 167 deferred for a reporting entity’s interest in an entity:

·  
That has all the attributes of an investment company; or
·  
For which it is industry practice to apply measurement principles for financial reporting purposes that are consistent with those followed by investment companies.

The ASU does not defer the disclosure requirements in the Statement 167 amendment to Topic 810.  The amendments in this ASU are effective as of the beginning of a reporting entity’s first annual period that begins after November 15, 2009, and for interim for interim periods within that first annual reporting period.  Early application is not permitted.
 
ASC Update (“ASU”) No. 2010-22, Accounting for Various Topics.  This update amends various SEC paragraphs in the FASB Accounting Standards Codification based on external comments received and the issuance of Staff Accounting bulletin (SAB) No. 112 which amends or rescinds portion of certain SAB topics.  SAB 112 was issued to bring existing SEC guidance into conformity with ASC 805 “Business Combination” and ASC 810 “Consolidation”.  The adoption of this update did not have any material impact on the Company’s financial statements.

ASC Update (“ASU”) No. 2010-29, Business Combination (Topic 805):  Disclosure of Supplementary Pro Forma Information for Business Combinations.  This update reflects the decision reached in EITF Issue No 10-G.  The amendments in this ASU affect any public entity as defined by Topic 805, Business Combinations that enters into business combinations that are material on an individual or aggregate basis.  The amendments in this ASU specify that if a public entity presents comparative financial statements, the entity should disclosure revenue and earnings of the combined entity as though the business combination(s) that occurred during the current year had occurred as of the beginning of the comparable prior annual reporting period only.  The amendments also expand the supplemental pro formal disclosures to include a description of the nature and amount of materials, nonrecurring pro forma adjustments directly attributable to the business combination included in the reported pro forma revenue and earnings.  The amendments are effective prospectively for business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2010.  Early adoption is permitted.

Other accounting standards that have been issued or proposed by the FASB or other standard-setting bodies that do not require adoption until a future date are not expected to have a material impact on the Company’s financial statements upon adoption.

In April 2011, the FASB issued ASU 2011-02, “A Creditor’s Determination of Whether a Restructuring is a Troubled Debt Restructuring”, which clarifies when creditors should classify loan  modifications as troubled debt restructurings. The guidance is effective for interim and annual periods beginning on or after June 15, 2011, and applies retrospectively to restructurings occurring on or after the beginning of the year. The guidance on measuring the impairment of a receivable restructured in a troubled debt restructuring is effective on a prospective basis. A provision in ASU 2011-02 also ends the FASB’s deferral of the additional disclosures about troubled debt restructurings as required by ASU 2010-20. The adoption of ASU 2011-02 is not expected to have a material impact on the Company’s financial condition or results of operations.
 
In April 2011, the FASB issued ASU 2011-03, Consideration of Effective Control on Repurchase Agreements, which deals with the accounting for repurchase agreements and other agreements that both entitle and obligate a transferor to repurchase or redeem financial assets before their maturity. ASU 2011-03 changes the rules for determining when these transactions should be accounted for as financings, as opposed to sales. The guidance in ASU 2011-03 is effective for the first interim or annual period beginning on or after December 15, 2011. The guidance should be applied prospectively to transactions or modifications of existing transactions that occur on or after the effective date. Early adoption is not permitted. The adoption of ASU 2011-03 is not expected to have a material impact on the Company’s financial condition or results of operation.
 
 
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In May 2011, the FASB issued ASU 2011-04, Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and International Financial Reporting Standards (“IFRS”). ASU 2011-04 clarifies some existing concepts, eliminates wording differences between U.S. GAAP and IFRS, and in some limited cases, changes some principles to achieve convergence between U.S. GAAP and IFRS. ASU 2011-04 results in a consistent definition of fair value and common requirements for measurement of and disclosure about fair value between U.S. GAAP and IFRS. ASU 2011-04 also expands the disclosures for fair value measurements that are estimated using significant unobservable (Level 3) inputs. ASU 2011-04 will be effective for the Company beginning after December 15, 2011. The Company does not expect the adoption of ASU 2011-04 to have a material effect on its operating results or financial position.
 
In June 2011, the Financial Accounting Standard Board (“FASB”) issued Accounting Standard Update (“ASU”) 2011-05, Presentation of Comprehensive Income, which requires an entity to present the total of comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive income, or in two separate but consecutive statements. ASU 2011-05 eliminates the option to present components of other comprehensive income as part of the statement of equity. ASU 2011-05 will be effective for the Company beginning after December 15, 2011. The Company does not expect the adoption of ASU 2011-05 to have a material effect on its operating results or financial position. However, it will impact the presentation of comprehensive income.
 
In July 2011, the FASB has issued Accounting Standards Update (ASU) No. 2011-06, Other Expenses (Topic 720): Fees Paid to the Federal Government by Health Insurers. This ASU amends the FASB Accounting Standards CodificationTM (Codification) to provide guidance about how health insurers should recognize and classify in their income statements fees mandated by the "Patient Protection and Affordable Care Act," as amended by the "Health Care and Education Reconciliation Act." ASU 2011-06 represents a consensus of the EITF on Issue No. 10-H, “Fees Paid to the Federal Government by Health Insurers.” ASU 2011-06 requires that the liability for the fee be estimated and recorded in full once the entity provides qualifying health insurance in the applicable calendar year in which the fee is payable with a corresponding deferred cost that is amortized to expense using a straight-line method of allocation unless another method better allocates the fee over the calendar year that it is payable.
 
ASU 2011-06 is effective for calendar years beginning after December 31, 2013, when the fee initially becomes effective.
 
In July 2011, the FASB has issued Accounting Standards Update (ASU) No. 2011-07, Health Care Entities (Topic 954): Presentation and Disclosure of Patient Service Revenue, Provision for Bad Debts, and the Allowance for Doubtful Accounts for Certain Health Care Entities. The ASU represents a consensus of the EITF on Issue No. 09-H, “Health Care Entities: Presentation and Disclosure of Net Revenue, Provision for Bad Debts, and the Allowance for Doubtful Accounts.” The amendments in this ASU require certain health care entities to change the presentation in their statement of operations by reclassifying the provision for bad debts associated with patient service revenue from an operating expense to a deduction from patient service revenue (net of contractual allowances and discounts). Additionally, those health care entities are required to provide enhanced disclosure about their policies for recognizing revenue and assessing bad debts. The amendments also require disclosures of patient service revenue (net of contractual allowances and discounts) as well as qualitative and quantitative information about changes in the allowance for doubtful accounts. For public entities, the amendments in this ASU are effective for fiscal years and interim periods within those fiscal years beginning after December 15, 2011, with early adoption permitted. For nonpublic entities, the amendments are effective for the first annual period ending after December 15, 2012, and interim and annual periods thereafter, with early adoption permitted. The amendments to the presentation of the provision for bad debts related to patient service revenue in the statement of operations should be applied retrospectively to all prior periods presented. The disclosures required by the amendments in this ASU should be provided for the period of adoption and subsequent reporting periods.
 
 
8

 
 
In September 2011, the FASB has issued Accounting Standards Update (ASU) No. 2011-08, Intangibles—Goodwill and Other (Topic 350): Testing Goodwill for Impairment. ASU 2011-08 is intended to simplify how entities, both public and nonpublic, test goodwill for impairment. ASU 2011-08 permits an entity to first assess qualitative factors to determine whether it is "more likely than not" that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test described in Topic 350, Intangibles-Goodwill and Other. The more-likely-than-not threshold is defined as having a likelihood of more than 50%. ASU 2011-08 is effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011. Early adoption is permitted, including for annual and interim goodwill impairment tests performed as of a date before September 15, 2011, if an entity’s financial statements for the most recent annual or interim period have not yet been issued or, for nonpublic entities, have not yet been made available for issuance.
 
In September 2011, the FASB has issued Accounting Standards Update (ASU) No. 2011-09, Compensation-Retirement Benefits-Multiemployer Plans (Subtopic 715-80): Disclosures about an Employer’s Participation in a Multiemployer Plan. ASU 2011-09 is intended to address concerns from various users of financial statements on the lack of transparency about an employer’s participation in a multiemployer pension plan. Users of financial statements have requested additional disclosure to increase awareness of the commitments and risks involved with participating in multiemployer pension plans. The amendments in this ASU will require additional disclosures about an employer’s participation in a multiemployer pension plan. Previously, disclosures were limited primarily to the historical contributions made to the plans. ASU 2011-09 applies to nongovernmental entities that participate in multiemployer plans. For public entities, ASU 2011-09 is effective for annual periods for fiscal years ending after December 15, 2011. For nonpublic entities, ASU 2011-09 is effective for annual periods for fiscal years ending after December 15, 2012. Early adoption is permissible for both public and nonpublic entities. ASU 2011-09 should be applied retrospectively for all prior periods presented.
 
In December 2011, the FASB has issued Accounting Standards Update (ASU) No. 2011-10, Property, Plant, and Equipment (Topic 360): Derecognition of in Substance Real Estate-a Scope Clarification. ASU No. 2011-10 is intended to resolve the diversity in practice about whether the guidance in Subtopic 360-20, Property, Plant, and Equipment—Real Estate Sales, applies to a parent that ceases to have a controlling financial interest (as described in Subtopic 810-10, Consolidation—Overall) in a subsidiary that is in substance real estate as a result of default on the subsidiary’s nonrecourse debt. This Update does not address whether the guidance in Subtopic 360-20 would apply to other circumstances when a parent ceases to have a controlling financial interest in a subsidiary that is in substance real estate. ASU 2011-10 should be applied on a prospective basis to deconsolidation events occurring after the effective date; with prior periods not adjusted even if the reporting entity has continuing involvement with previously derecognized in substance real estate entities. For public entities, ASU 2011-10 is effective for fiscal years, and interim periods within those years, beginning on or after June 15, 2012. For nonpublic entities, ASU 2011-10 is effective for fiscal years ending after December 15, 2013, and interim and annual periods thereafter. Early adoption is permitted
 
In December 2011, the FASB has issued Accounting Standards Update (ASU) No. 2011-11, Balance Sheet (Topic 210): Disclosures about Offsetting Assets and Liabilities. ASU No. 2011-11 is intended to provide enhanced disclosures that will enable users of its financial statements to evaluate the effect or potential effect of netting arrangements on an entity’s financial position. This includes the effect or potential effect of rights of setoff associated with an entity’s recognized assets and recognized liabilities within the scope of this Update. The amendments require enhanced disclosures by requiring improved information about financial instruments and derivative instruments that are either (1) offset in accordance with either Section 210-20-45 or Section 815-10-45 or (2) subject to an enforceable master netting arrangement or similar agreement, irrespective of whether they are offset in accordance with either Section 210-20-45 or Section 815-10-45. An entity is required to apply the amendments for annual reporting periods beginning on or after January 1, 2013, and interim periods within those annual periods. An entity should provide the disclosures required by those amendments retrospectively for all comparative periods presented.
 
In December 2011, the FASB has issued Accounting Standards Update (ASU) No. 2011-12, Comprehensive Income (Topic 220): Deferral of the Effective Date for Amendments to the  Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income in Accounting Standards Update No. 2011-05. ASU No. 2011-11 is intended to supersede certain pending paragraphs in Accounting Standards Update No. 2011-05,Comprehensive Income (Topic 220): Presentation of Comprehensive Income, to effectively defer only those changes in Update 2011-05 that relate to the presentation of reclassification adjustments out of accumulated other comprehensive income. The amendments will be temporary to allow the Board time to redeliberate the presentation requirements for reclassifications out of accumulated other comprehensive income for annual and interim financial statements for public, private, and non-profit entities. All other requirements in ASU No. 2011-05 are not affected by ASU No. 2011-12, including the requirement to report comprehensive income either in a single continuous financial statement or in two separate but consecutive financial statements. Public entities should apply these requirements for fiscal years, and interim periods within those years, beginning after December 15, 2011. Nonpublic entities should begin applying these requirements for fiscal years ending after December 15, 2012, and interim and annual periods thereafter.
 
 
9

 
 
ITEM 7A.                      QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

ITEM 8.                      FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

The financial statements start from F-1.

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

Our independent registered public accountant is Albert Wong & Co.  We do not presently intend to change accountants.  At no time have there been any disagreements with such accountants regarding any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure.

ITEM 9A.                      CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Pursuant to Rule 13a-15(b) under the Securities Exchange Act of 1934 (“Exchange Act”), the Company carried out an evaluation, with the participation of the Company’s management, including the Company’s Chief Executive Office (“CEO”) and Chief Financial officer (“CFO”) (the Company’s principle financial and accounting office), of the effectiveness of the Company’s disclosure controls and procedures (as defined under Rule 13a-15€ under the Exchange Act) as of the end of the period covered by this report.  Based upon that evaluation, the Company’s CEO and CFO concluded that the Company’s disclosure controls and procedures are effective to ensure that information required to be disclosed by the Company in the reports that the Company files or submits under the Exchange Act, is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms, and that such information is accumulated an communicated to the Company’s management, including the Company’s CEO and CFO, as appropriate, to allow timely decisions regarding required disclosure.

Management’s Annual Report on Internal Control Over Financial Reporting.

The management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting for the Company. Our internal control system was designed to, in general, provide reasonable assurance to the Company’s management and board regarding the preparation and fair presentation of published financial statements, but because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.  Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Our management assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2011.  The framework used by management in making that assessment was the criteria set forth in the document entitled “Internal Control – Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway commission.  Based on that assessment, our management has determined that as of December 31, 2011, the Company’s internal control over financial reporting was effective for the purposes for which it is intended.

This annual report does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reportings.  Management’s report was not subject to attestation by the Company’s registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit the Company to provide only management’s report in this annual report.

Changes in Internal Control over Financial Reporting

No change in our system of internal control over financial reporting occurred during the period covered by this report, fourth quarter of the fiscal year ended December 31, 2011 that has materially affected, or is reasonable likely to materially affect, our internal control over financial reporting.

Cautionary Statement
 
This report on Form 10-K and the documents or information incorporated by reference herein contain forward-looking statements within the meaning of the federal securities laws. These forward-looking statements include, among others, the following:

 
·
our growth strategies;
 
 
10

 
 
 
·
anticipated trends in our business;
 
 
·
our ability to make or integrate acquisitions;
 
 
·
our liquidity and ability to finance our products,
 
 
·
acquisition and development strategies;
 
 
·
market conditions in the implant industry;
 
 
·
the impact of government regulation;

We identify forward-looking statements by use of terms such as "may," "will," "expect," "anticipate," "estimate," "hope," "plan," "believe," "predict," "envision," "intend," "will," "continue," "potential," "should," "confident," "could" and similar words and expressions, although some forward-looking statements may be expressed differently. You should be aware that our actual results could differ materially from those contained in the forward-looking statements. You should consider carefully the statements under the "Risk Factors" section of this report and other sections of this report which describe factors that could cause our actual results to differ from those set forth in the forward-looking statements.

Forward-looking statements speak only as of the date of this report or the date of any document incorporated by reference in this report. Except to the extent required by applicable law or regulation, we do not undertake any obligation to update forward-looking statements to reflect events or circumstances after the date of this report or to reflect the occurrence of unanticipated events.

ITEM 9B.                      OTHER INFORMATION

None.
 
PART III
 
ITEM 10 - DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.
 
Executive Officers and Directors

Below are the names and certain information regarding the Company’s executive officers and directors:
 
         
Name:
 
Age
 
Title
Brian Cohen
 
45
 
Director, CEO and CFO

Directors are elected to serve until the next annual meeting of stockholders and until their successors are elected and qualified.

Currently, directors are not compensated for their services, although their expenses in attending meetings are reimbursed. Officers are elected by the Board of Directors and serve until their successors are appointed by the Board of Directors. Biographical resumes of each officer and director are set forth below.

On November 3, 2011, Deng Zhang resigned all of his director and officer positions.  

On November 3, 2011, Brian Cohen was appointed as CEO, Secretary, CFO and director.

Brian Cohen, Director

Mr. Cohen has a Bachelor of Arts from York University in Toronto, Ontario and has been an account manager and contract manager for rL Solutions in Toronto, Ontario for the past four years. Prior to that, Mr. Cohen was responsible for business development and account management at TGO Consulting Inc. in Markham, Ontario. Mr. Cohen brings to the Company extensive and exceptional experience in entrepreneurial business to business development and has over 12 years of successful sales and pre-sales in the information technology industry.
 
 
11

 

Board Committees

The Company currently has not established any committees of the Board of Directors.

Involvement in Certain Legal Proceedings

To the best of our knowledge, none of our directors or executive officers have been convicted in a criminal proceeding, excluding traffic violations or similar misdemeanors, or has been a party to any judicial or administrative proceeding during the past five years that resulted in a judgment, decree or final order enjoining the person from future violations of, or prohibiting activities subject to, federal or state securities laws, or a finding of any violation of federal or state securities laws, except for matters that were dismissed without sanction or settlement.  Except as set forth in our discussion below in “Certain Relationships and Related Transactions,” none of our directors, director nominees or executive officers has been involved in any transactions with us or any of our directors, executive officers, affiliates or associates which are required to be disclosed pursuant to the rules and regulations of the SEC.

Code of Ethics and Conduct

We currently do not have a code of ethics that applies to our officer and sole director, including our Chief Executive Officer and senior executives.
 
ITEM 11 - EXECUTIVE COMPENSATION
 
The following tables set forth certain information about compensation paid, earned or accrued for services by our President and all other executive officers (collectively, the “Named Executive Officers”) in the fiscal years ended December 31, 2011 and 2010.

Summary Compensation Table

Name and Principal Position
 
Year
 
Salary ($)
   
Bonus ($)
   
Stock Awards
($)*
   
Option Awards
 ($)*
   
Non-Equity Incentive Plan Compensation ($)
   
Nonqualified Deferred Compensation ($)
   
All Other Compensation
($)
   
Total ($)
 
Brian Cohen;
 
2011
    -0-       -0-       -0-       -0-       -0-       -0-       -0-       -0-  
President, Secretary, Treasurer and Director (1)
 
2010
    -0-       -0-       -0-       -0-       -0-       -0-       -0-       -0-  
                                                                     
Deng Zhang;
 
2011
    -0-       -0-       -0-       -0-       -0-       -0-       -0-       -0-  
President, CEO and Chairman of the Board of Directors(2)
 
2010
    -0-       1,000       -0-       -0-       -0-       -0-       -0-       1,000  
                                                                     
Jiangkun Shi;
 
2011
    -0-       -0-       -0-       -0-       -0-       -0-       -0-       -0-  
CFO and Treasurer (3)
 
2010
    -0-       800       -0-       -0-       -0-       -0-       -0-       800  
                                                                     
Ping Zhao
 
2011
    -0-       -0-       -0-       -0-       -0-       -0-       -0-       -0-  
Secretary (4)
 
2010
    -0-       650       -0-       -0-       -0-       -0-       -0-       650  

Employment Agreements

We presently do not have any employment agreements or other compensation arrangements with Brian Cohen

Compensation of Directors
 
We do not pay our directors any fees or other compensation for acting as directors. We have not paid any fees or other compensation to any of our directors for acting as directors to date.

Stock Option Grants

We did not grant any stock options to any of our directors and officers during our most recent fiscal year ended December 31, 2011. We have not granted any stock options to any of our directors and officers since the end of our most recent fiscal year on December 31, 2011.

 
12

 
 
 Exercises of Stock Options and Year-End Option Values

 None of our directors or officers exercised any stock options (i) during our most recent fiscal year ended December 31, 2011, or (ii) since the end of our most recent fiscal year on December 31, 2011.

Outstanding Stock Options

None of our directors or officers held any options to purchase any shares of our common stock.
 
ITEM 12 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The following table sets forth information regarding the beneficial ownership of our common stock on December 31, 2011 based on 87,150,000 shares outstanding on such date, by (i) each person known by us to be the beneficial owner of more than five percent (5%) of our outstanding shares of common stock, (ii) each of our directors, (iii) each of our executive officers, and (iv) by our directors and executive officers as a group. Each person named in the table, has sole voting and investment power with respect to all shares shown as beneficially owned by such person and can be contacted at our address as indicated below.

Title of Class
Name of
Beneficial Owner
 
Shares of
Common Stock
   
Percent of Class
 
               
Common Stock
Brian Cohen (1)
33 Forest Wood
Toronto Ontario Canada M5N 2V8
 
   
45,150,000
     
51.81
%
                   
Common Stock
Directors and Officers
   
45,150,000
     
51.81
%
                   
 
(1)
Officer, director.  

Changes in Control

On November 3, 2011, Brian Cohen, our sole officer and director, acquired 45,150,000 shares of the Company’s common stock in a private transaction from the two former majority shareholders.
 
There are currently no arrangements which may result in a change in control of the Company.

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

Certain Relationships and Related Transactions

Our President advanced $29,500 to the Company for the year ended December 31, 2011.

Director Independence

We are not subject to listing requirements of any national securities exchange or inter-dealer quotation system which has requirements that a majority of the board of directors be “independent” and, as a result, we are not at this time required to have our Board comprised of a majority of “Independent Directors.”

ITEM 14 - PRINCIPAL ACCOUNTING FEES AND SERVICES.

Audit Fees

The aggregate fees billed to us by our principal accountant for services rendered during the fiscal years ended December 31, 2011 and December 31, 2010 are set forth in the table below:
 
Fee Category
 
Fiscal year ended
December 31, 2011
   
Fiscal year ended
December 31, 2010
 
Audit fees (1)
  $ 15,600     $ 14,500  
Audit-related fees (2)
    0       0  
Tax fees (3)
    0       0  
All other fees (4)
    0       0  
Total fees
  $ 15,600     $ 14,500  
 
 
13

 
 
(1)
Audit fees consists of fees incurred for professional services rendered for the audit of consolidated financial statements, for reviews of our interim consolidated financial statements included in our quarterly reports on Form 10-Q and for services that are normally provided in connection with statutory or regulatory filings or engagements.
 
(2)
Audit-related fees consist of fees billed for professional services that are reasonably related to the performance of the audit or review of our consolidated financial statements, but are not reported under “Audit fees.”
 
(3)
Tax fees consist of fees billed for professional services relating to tax compliance, tax planning, and tax advice.
 
(4)
All other fees consist of fees billed for all other services.

Audit Committee’s Pre-Approval Practice

Insomuch as we do not have an audit committee, our board of directors performs the functions of an audit committee. Section 10A(i) of the Exchange Act prohibits our auditors from performing audit services for us as well as any services not considered to be “audit services” unless such services are pre-approved by the board of directors (in lieu of the audit committee) or unless the services meet certain de minimis standards.
 
 
14

 
 
PART IV
 
ITEM 15 - EXHIBITS

The following Exhibits are being filed with this Annual Report on Form 10K:
 
Exhibit
   
Number
 
Description of Exhibit
     
3.1(1)
   
Articles of Incorporation
       
3.2(1)
   
By-Laws
       
31.1 
   
Section 302 Certification of Chief Executive Officer
       
31.2 
   
Section 302 Certification of Chief Financial Officer
       
32.1 
   
Section 906 Certification of Chief Executive Officer
       
32.2 
   
Section 906 Certification of Chief Financial Officer
 
(1)
Filed as an exhibit to our registration statement on Form S-1 filed with the Commission on January 26, 2009.
 
 
15

 
 
SIGNATURES

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

Dated: April 16, 2012
 
 
JINMIMI NETWORK INC.
 
       
 
By:
/s/ Brian Cohen  
   
Brian Cohen
 
   
Chief Executive Officer
 
       

 
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities indicated on April 16, 2012.
 
     
       
 
By:
/s/ Brian Cohen  
   
Brian Cohen 
 
   
Director, Chief Executive Officer
 
   
Chief Financial Officer (Principal Financial
 
   
Officer), Treasurer, Principal Accounting Officer, Secretary
 
 
 
 
16

 
 


JINMIMI NETWORK INC.

CONSOLIDATED FINANCIAL STATEMENTS
FOR THE TWELVE MONTHS ENDED DECEMBER 31, 2011
(Stated in US Dollars)(Audited)
 
 
 

 
 
JINMIMI NETWORK INC.
 
CONTENTS PAGES
   
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
F-1
   
CONSOLIDATED BALANCE SHEETS
F-2 - F-3
   
CONSOLIDATED STATEMENTS OF OPERATION AND  COMPREHENSIVE LOSS
F-4
   
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
F-5
   
CONSOLIDATED STATEMENTS OF CASH FLOWS
F-6
   
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
F-7 - F-21
 
 
 

 
 
ALBERT WONG & CO.
CERTIFIED PUBLIC ACCOUNTANTS
7th Floor, Nan Dao Commercial Building
359-361 Queen’s Road Central
Hong Kong
Tel : 2851 7954
Fax: 2545 4086
 
ALBERT WONG
B.Soc., Sc., ACA., LL.B., CPA(Practising)
 
The board of directors and shareholders of
Jinmimi Network Inc. (“the Company”)
 
Report of Independent Registered Public Accounting Firm
 
We have audited the accompanying consolidated balance sheets of Jinmimi Network Inc. as of December 31, 2011 and 2010, and the related consolidated statements of income and comprehensive income, stockholders' equity and cash flows for the years then ended. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audit.
 
We conducted our audit in accordance with 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. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
 
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of Jinmimi Network Inc. as of December 31, 2011 and 2010 and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.
 
The Company's financial statements are prepared using the generally accepted accounting principles applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has accumulatedlosses of $714,093 for the year ended December 31, 2011. These factors as discussed in Note 2 to the financial statements, raises substantial doubt about the Company's ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
 
  /s/ Albert Wong & Co.
Hong Kong, China  
Albert Wong & Co
April 16, 2012  
Certified Public Accountants
 
 
F-1

 
 
JINMIMI NETWORK INC.
 
CONSOLIDATED BALANCE SHEETS
AS AT DECEMBER 31, 2011 AND  2010
(Stated in US Dollars)(Audited)
 
         
December 31,
   
December 31,
 
         
2011
   
2010
 
   
Note
   
(Audited)
   
(Audited)
 
ASSETS
                 
 Current assets
                 
Cash and cash equivalents
        $ 163     $ 18,350  
Subscription receivables
          2,000       2,000  
Amount due from a director
    5       -       16,837  
Rental deposits
            -       455  
Prepaid expenses
            14,352       45,370  
                         
                         
Total current assets
          $ 16,515     $ 83,012  
    Goodwill
    6       -       -  
    Property, plant and equipment, net
    7       -       -  
TOTAL ASSETS
          $ 16,515     $ 83,012  
                         
LIABILITIES AND
                       
STOCKHOLDERS’ EQUITY
                       
Accruals
          $ 8,000     $ 14,984  
Amount due to a director
    8       29,500       273  
                         
                         
TOTAL LIABILITIES
          $ 37,500     $ 15,257  
                         
Commitments and contingencies
          $ -     $ -  
 
See accompanying notes to consolidated financial statements
 
 
F-2

 
 
JINMIMI NETWORK INC.
 
CONSOLIDATED BALANCE SHEETS (Continued)
AS AT DECEMBER 31, 2011 AND 2010
(Stated in US Dollars)(Audited)
 
   
December 31,
   
December 31,
 
   
2011
   
2010
 
   
(Audited)
   
(Audited)
 
STOCKHOLDERS’ EQUITY
           
Common stock at $0.0001 par value;
           
110,000,000 shares authorized;
           
87,150,000 and 24,000,000 issued and
           
outstanding  at December 31, 2011
           
and 2010
  $ 8,715     $ 2,400  
Additional paid-in capital
    680,828       687,143  
Accumulated loss
    (714,093 )     (624,782 )
Accumulated other comprehensive
               
income
    3,565       2,994  
                 
                 
    $ (20,985 )   $ 67,755  
                 
                 
TOTAL LIABILITIES AND
               
STOCKHOLDERS’ EQUITY
  $ 16,515     $ 83,012  
                 
 
See accompanying notes to consolidated financial statements
 
 
F-3

 
 
JINMIMI NETWORK INC.
 
CONSOLIDATED STATEMENTS OF OPERATION AND  COMPREHENSIVE LOSS
FOR THE PERIOD FROM NOVEMBER 13, 2008 (INCEPTION) TO DECEMBER 31,2011
(Stated in US Dollars)(Audited)
 
         
 
Twelve months ended
December 31
   
For the period from November 13 2008 (inception) to
December 31,
 
         
2011
   
2010
   
2011
 
   
Note
                   
Net revenues
        $ -     $ -     $ 4,785  
Cost of net revenues
          -       -       (5,841 )
                               
                               
Gross profit
        $ -     $ -     $ (1,056 )
Operating expenses:
                             
General and administrative
          (75,088 )     (111,353 )     (342,380 )
                               
                               
Operating loss
        $ (75,088 )   $ (111,353 )   $ (343,436 )
Net investment income
          -       5,287       5,287  
Other expense
          -       (82,113 )     (82,113 )
Interest income
          -       20       7,875  
Loss on deconsolidation
          (14,223 )     (287,483 )     (301,706 )
 
                             
                               
Loss before income taxes
        $ (89,311 )   $ (475,642 )   $ (714,093 )
Income taxes
    11       -       -       -  
                                 
                                 
Net loss
          $ (89,311 )   $ (475,642 )   $ (714,093 )
Foreign currency translation adjustment
            571       2,223       3,565  
                                 
                                 
Comprehensive loss
          $ (88,740 )   $ (473,419 )   $ (710,528 )
                                 
                                 
Net loss per share:
                               
-Basic and diluted
    9     $ (0.0024 )   $ (0.0198 )   $ (0.0254 )
                                 
Weighted average number of common stock
                               
-Basic and diluted
    9       37,546,712       24,000,000       28,154,462  
                                 
 
See accompanying notes to consolidated financial statement
 
 
F-4

 
 
JINMIMI NETWORK INC.
     
       
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
     
FOR THE PERIOD FROM NOVEMBER 13, 2008 (INCEPTION) TO DECEMBER 31, 2011
     
(Stated in US Dollars)(Audited)
     
 
                                 
Accumulated
       
               
Additional
   
Stock
         
other
       
   
Number of
   
Common
   
paid-in
   
dividends
   
Accumulated
   
comprehensive
       
   
shares
   
stock
   
capital
   
distributable
   
loss
   
income
   
Total
 
                                           
Issuance of common stock
    20,000,000     $ 2,000     $ -     $ -     $ -     $ -     $ 2,000  
                                                         
Balance, December 31, 2008
    20,000,000     $ 2,000     $ -     $ -     $ -     $ -     $ 2,000  
                                                         
                                                         
Balance, January 1, 2009
    20,000,000     $ 2,000     $ -     $ -     $ -     $ -     $ 2,000  
Issuance of common stock
    4,000,000       400       99,600       -       -       -       100,000  
Net loss
    -       -       -       -       (130,683 )     -       (130,683 )
Foreign currency translation adjustment
    -       -       -       -       -       301       301  
                                                         
                                                         
Balance, December 31, 2009
    24,000,000     $ 2,400     $ 99,600     $ -     $ (130,683 )   $ 301     $ (28,382 )
                                                         
                                                         
Balance, January 1, 2010
    24,000,000     $ 2,400     $ 99,600     $ -     $ (130,683 )   $ 301     $ (28,382 )
Shareholder’s contribution
    -       -       587,543       -       -       -       587,543  
Net loss
    -       -       -       -       (494,099 )     -       (494,099 )
Foreign currency translation adjustment
    -       -       -       -       -       2,693       2,693  
                                                         
                                                         
Balance, December  31, 2010
    24,000,000     $ 2,400     $ 687,143     $ -     $ (624,782 )   $ 2,994     $ 67,755  
                                                         
Balance, January 1, 2011
    24,000,000     $ 2,400     $ 687,143     $ -     $ (624,782 )   $ 2,994     $ 67,755  
Cancellation of shares on August 31, 2011
    (15,700,000 )     (1,570 )     1,570       -               -       -  
Stock split provision
                    (7,885 )     7,885               -       -  
Stock payable on October 5, 2011
    78,850,000       7,885               (7,885 )                        
Net loss
    -       -       -       -       (89,311 )     -       (89,311 )
Foreign currency translation adjustment
    -       -       -       -       -       571       571  
                                                         
                                                         
Balance, December 31, 2011
    87,150,000     $ 8,715     $ 680,828     $ -     $ (714,093 )   $ 3,564     $ (20,985 )
                                                         
 
See accompanying notes to consolidated financial statement
 
 
F-5

 
 
JINMIMI NETWORK INC.
 
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE PERIOD FROM NOVEMBER 13, 2008 (INCEPTION) TO DECEMBER 31, 2011
(Stated in US Dollars)(Audited)
 
   
Twelve months
ended December 31
   
For the period from November 13, 2008 (inception) to
December 31,
 
   
2011
   
2010
   
2011
 
Cash flows from operating activities
                 
   Net loss
  $ (89,311 )   $ (494,099 )   $ (714,093 )
      Depreciation
    -       764       1,656  
     Sale of plant and equipment
    -       4,069       4,069  
     Good will
    -       187,081       187,081  
     Additional paid in capital
    -       587,543       587,543  
     Amount due to shareholder
    -       (220,084 )     (220,084 )
     Other payables
    -       (220,987 )     (220,987 )
     Accounts receivable
    -       2,446       -  
Advance to employees
    -       73       -  
Adjustments to reconcile net income to net
                       
cash provided by operating activities:
                       
Amount due from a director
    -       (16,804 )     (5,119 )
Amount due to a director
    29,500       -       29,500  
Rental deposits
    -       1,008       277  
Prepaid expenses
    31,018       38,337       (14,343 )
Accruals
    8,000       10,462       21,882  
Other loans
    -       -       146,753  
                         
                         
Net cash used in operating activities
  $ (20,793 )   $ (120,191 )   $ (195,865 )
                         
                         
Cash flows from investing activities
                       
     Acquisition of subsidiary
  $ -     $ -     $ (52,814 )
     Purchases of trading securities
    -       2,851       (1,840 )
                         
                         
Net cash used in investing activities
  $ -     $ 2,851     $ (54,654 )
                         
Cash flows from financing activities
                       
Issue of capital
  $ -     $ -     $ 100,000  
Amount due to a shareholder
    -       -       145,877  
                         
                         
 Net cash provided by financing activities
  $ -     $ -     $ 245,877  
                         
                         
Net cash and cash equivalents (used) sourced
  $ (20,793 )   $ (117,340 )   $ (4,642 )
                         
Effect of foreign currency translation on cash
                       
and cash equivalents
    2,606       1,931       4,805  
Cash and cash equivalents-beginning of period
    18,350       133,759       -  
                         
                         
Cash and cash equivalents–end of period
  $ 163     $ 18,350     $ 163  
                         
 
See accompanying notes to consolidated financial statements

 
F-6

 

JINMIMI NETWORK INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE TWELVE MONTHS ENDED DECEMBER 31, 2011 AND 2010
(Stated in US Dollars)(Audited)

1.     ORGANIZATION AND PRINCIPAL ACTIVITIES

Jinmimi Network Inc. (the “Company”) was incorporated under the laws of the State of Nevada on November 13, 2008. The Company was a shell company with no substantial operations or assets.

Active Choice Limited (“HKAC”) was incorporated under the laws of Hong Kong with limited liability on September 26, 2008. HKAC has only nominal operations.
 
On January 6, 2009, HKAC acquired 100% of the shareholdings of Chuangding, a Shenzhen company incorporated under the laws of the People’s Republic of China on December 4, 2008, and Chuangding’s contractual controlled operating company,  Jinmimi Network Technology Limited Company (“Shenzhen Jinmimi”) which was a PRC limited company established on August 4, 2008, for a consideration $147,500.

On January 14, 2009, the Company entered into a Purchase Agreement with HKAC and HKAC Shareholders, for a purchase price of $438,975 by delivery of promissory note. As a result, HKAC and its subsidiary, Chuangding, became the wholly-owned subsidiaries of the Company.

On September 16, 2010, the Company entered into a Termination of Management Consultancy Agreement with Shenzhen Jinmimi Networks Company Limited (“Shenzhen Jinmimi”) owing to unfeasible and unreasonable expenses and delay. From then on, Shenzhen Jinmimi is no longer a deemed subsidiary (Variable Interest Entity) of the Company and should be deconsolidated from the Company’s financial statement.

The Company and its subsidiaries (hereinafter, collectively referred to as “the Group”) were the online media company and value-added information service provider in the PRC before September 16, 2010. Afterwards, it undertakes investment consulting services for variety of Mainland China business organizations and owners.

On August 31, 2011, the shareholders of the Company surrendered 15,700,000 common shares to the Company for cancellation.

 
F-7

 
 
JINMIMI NETWORK INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE TWELVE MONTHS ENDED DECEMBER 31, 2011 AND 2010
(Stated in US Dollars)(Audited)
 
2.     UNCERTAINTY OF ABILITY TO CONTINUE AS A GOING CONCERN

The Company's financial statements are prepared using the generally accepted accounting principles applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has not generated significant revenues since inception and is unlikely to generate significant earnings in the immediate or foreseeable future. The continuation of the Company as a going concern is dependent upon the ability of the Company to obtain necessary equity financing to continue operations and the attainment of profitable operations. The management will seek to raise funds from shareholders.

For the twelve months then ended December 31, 2011, the Company has not generated revenue yet and has incurred an accumulated deficit $714,093. As of December 31, 2011, its current liabilities exceed its current assets by $20,985, which may not be sufficient to pay for the operating expenses in next 12 months. These financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. These factors noted above raise substantial doubts regarding the Company's ability to continue as a going concern.


3.     SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a)  Method of accounting

The Group maintains its general ledger and journals with the accrual method of accounting for financial reporting purposes.  The financial statements and notes are representations of management.  Accounting policies adopted by the Group conform to generally accepted accounting principles in the United States of America (“US GAAP”) and have been consistently applied in the presentation of financial statements.

The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. This basis of accounting differs in certain material respects from that used for the preparation of the books of account of the Group’s principal subsidiaries, which are prepared in accordance with the accounting principles and the relevant financial regulations applicable to enterprises with limited liabilities established in the PRC and Hong Kong, the accounting standards used in the places of their domicile. The accompanying condensed interim consolidated financial statements reflect necessary adjustments not recorded in the books of account of the Company's subsidiaries to present them in conformity with US GAAP.

 
F-8

 
 
JINMIMI NETWORK INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE TWELVE MONTHS ENDED DECEMBER 31, 2011 AND 2010
(Stated in US Dollars)(Audited)

3.     SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
 
(b)  Principles of consolidation
The Company consolidates its subsidiaries and the entities it controls through a majority voting interest or otherwise, including entities that are variable interest entities (“VIEs”) for which the Company is the primary beneficiary pursuant to Accounting Standards Codification (“ASC”) No. 810, “Consolidation” (“ACS 810”).  The provisions of ASC 810 have been applied respectively to all periods presented in the consolidated financial statements.

Subsidiary

The Company consolidates its wholly owned subsidiaries, Active Choice Limited, Chuangding Investment Consultant (Shenzhen) Co., Ltd as of December 31, 2010. The management determined to write-off these two subsidiaries and closed down their business as of December 31, 2011. The deemed variable interest entity was deconsolidated on September 16, 2010 in accordance with termination agreement. The following sets forth information about the wholly owned subsidiaries:

Name of Subsidiary
 
Place & Date of Incorporation
 
Equity Interest Attributable to the Company (%)
 
Registered Capital ($)
 
Issued Capital (HKD)
 
Registered Capital
(RMB)
#Active Choice Limited (“HKAC”)
 
Hong Kong/
September 26, 2008
 
100
 
$1,290
 
HKD10,000
 
-
                     
#Chuangding Investment Consultant (Shenzhen) Co., Ltd (“Chuangding”)
 
PRC/
December 4, 2008
 
100
 
$146,056
 
-
 
RMB1,000,000
                     
*Shenzhen Jinmimi Network Technology Limited Company (“Shenzhen Jinmimi”)
 
PRC/August 4, 2008
 
Deemed control
 
$291,864
 
-
 
RMB 2,000,000
                     
   
*Note : Deemed variable interest entity was deconsolidated on September 16, 2010
   
#Note:  The management decides to write off  the investment of subsidiaries on November 3, 2011
 
(c)  Use of estimates

The preparation of the financial statements in conformity with generally accepted accounting principles in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Management makes these estimates using the best information available at the time the estimates are made; however actual results could differ materially from those estimates.

 
F-9

 
 
JINMIMI NETWORK INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE TWELVE MONTHS ENDED DECEMBER 31, 2011 AND 2010
(Stated in US Dollars)(Audited)

3.  
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

(d)  Economic and political risks

The Group’s operations are conducted in the PRC. Accordingly, the Group’s business, financial condition and results of operations may be influenced by the political, economic and legal environment in the PRC, and by the general state of the PRC economy.
 
The Group’s operations in the PRC are subject to special considerations and significant risks not typically associated with companies in North America and Western Europe. These include risks associated with, among others, the political, economic and legal environment and foreign currency exchange. The Group’s results may be adversely affected by changes in the political and social conditions in the PRC, and by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion, remittances abroad, and rates and methods of taxation, among other things.
 
(e)  Property, plant and equipment

Plant and equipment are carried at cost less accumulated depreciation.  Depreciation is provided over their estimated useful lives, using the straight-line method. Estimated useful lives of the plant and equipment are as follows:

 
Office equipment
5 years  

The cost and related accumulated depreciation of assets sold or otherwise retired are eliminated from the accounts and any gain or loss is included in the statement of income.

(f)  Goodwill
Goodwill represents the excess of the cost of an acquisition over the fair value of the net acquired identifiable assets at the date of acquisition. Goodwill is included in intangible assets and no amortization is provided.

Goodwill is tested annually for impairment. See Note 6 for impairment of goodwill.

(g)  Accounting for the impairment of long-lived assets
The Group periodically evaluates the carrying value of long-lived assets to be held and used, including intangible assets subject to amortization, when events and circumstances warrant such a review, pursuant to the guidelines established in ASC No. 360, “Property, Plant and Equipment”. The carrying value of a long-lived asset is considered impaired when the anticipated undiscounted cash flow from such asset is separately identifiable and is less than its carrying value. In that event, a loss is recognized based on the amount by which the carrying value exceeds the fair market value of the long-lived asset. Fair market value is determined primarily using the anticipated cash flows discounted at a rate commensurate with the risk involved. Losses on long-lived assets to be disposed of are determined in a similar manner, except that fair market values are reduced for the cost to dispose.

During the reporting periods, there was no impairment loss.
 
 
F-10

 

JINMIMI NETWORK INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE TWELVE MONTHS ENDED DECEMBER 31, 2011 AND 2010
(Stated in US Dollars)(Audited)

3.     SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)


(h)  Foreign currency translation
 
The accompanying financial statements are presented in United States dollars. The functional currencies of the Group are Hong Kong dollars (HKD) and the Renminbi (RMB). The financial statements are translated into United States dollars from HKD and RMB at year-end exchange rates as to assets and liabilities and average exchange rates as to revenues and expenses. Capital accounts are translated at their historical exchange rates when the capital transactions occurred.

The exchange rates used to translate amounts in HKD and RMB into USD for the purposes of preparing the consolidated financial statements were as follows:

   
DECEMBER 31,
2011
   
DECEMBER 31,
2010
 
Twelve months ended
           
USD : RMB exchange rate
    6.3555       6.5918  
Average twelve months ended
               
USD : RMB exchange rate
    6.4554       6.7605  
Twelve months ended
               
USD : HKD exchange rate
    7.7711       7.7822  
Average twelve months ended
               
USD : HKD exchange rate
    7.7839       7.7682  

The RMB is not freely convertible into foreign currency and all foreign exchange transactions must take place through authorized institutions.  No representation is made that the RMB amounts could have been, or could be, converted into USD at the rates used in translation.  In addition, the current foreign exchange control policies applicable in PRC also restrict the transfer of assets or dividends outside the PRC.
 
(i)  Cash and cash equivalents

The Group considers all highly liquid investments purchased with original maturities of twelve months or less to be cash equivalents. The Group maintains bank accounts in Hong Kong and the PRC. Since the management closed down the subsidiaries in Hong Kong and the PRC, the cash balance of the subsidiaries has been written off as a loss.

 
F-11

 

JINMIMI NETWORK INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE TWELVE MONTHS ENDED DECEMBER 31, 2011 AND 2010
(Stated in US Dollars)(Audited)

3.     SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

(j)  Leases

The Group did not have a lease that met the criteria of a capital lease. Leases that do not qualify as a capital lease are classified as an operating lease. Operating lease rental payments included in selling expenses for the twelve months end December 31, 2011 and 2010 were nil and $7,885 respectively.
 
(k)  Advertising

The Group expensed all advertising costs as incurred.  Advertising expenses included in the general and administrative expense for the twelve months ended December 31, 2011 and 2010 were nil and $2,756 respectively.
 
(l)  Income taxes

The Group accounts for income taxes using an asset and liability approach and allows for recognition of deferred tax benefits in future years.  Under the asset and liability approach, deferred taxes are provided for the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.  A valuation allowance is provided for deferred tax assets if it is more likely than not these items will either expire before the Group is able to realize their benefits, or that future realization is uncertain.

The Group is operating in the PRC, and in accordance with the relevant tax laws and regulations of PRC, the enterprise income tax rate for the twelve months ended December 31, 2011 and 2010 are 25%.
 
(m)  Cash and concentration of risk

Cash includes cash on hand and demand deposits in accounts maintained within Hong Kong and the PRC.  Total cash in these banks at December 31, 2011 and 2010 amounted to $2,805 and $18,350 respectively, of which no deposits are covered by Federal Depository Insured Commission.  The Group has not experienced any losses in such accounts and believes it is not exposed to any risk on its cash in bank accounts.
 
(n)  Comprehensive income

Comprehensive income is defined to include all changes in equity except those resulting from investments by owners and distributions to owners.  Among other disclosures, all items that are required to be recognized under current accounting standards as components of comprehensive income are required to be reported in a financial statement that is presented with the same prominence as other financial statements.  The Group’s current component of other comprehensive income is the foreign currency translation adjustment.

 
F-12

 

JINMIMI NETWORK INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE TWELVE MONTHS ENDED DECEMBER 31, 2011 AND 2010
(Stated in US Dollars)(Audited)

3.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
 
(o)  Treasury stock
 
Treasury stock consists of the Company’s own stock which has been issued, subsequently reacquired by the Company, and not yet reissued or cancelled. 15,700,000 common shares were reacquired and cancelled by the Company. The constructive retirement method was adopted that the aggregate par value of reacquired shares is charged to the common stock account.
 
(p)  Stock dividends and stock splits

Stock dividends represent neither an actual distribution of the assets of the Company nor a promise to distribute those assets. Stock dividend is not considered a legal liability or a taxable transaction.  The stock dividends have been processed by Financial Industry Regulatory Authority (“FINRA”) as a stock split of one-for-10.5 shares and therefore the Company will record this as stock split. The record date for this transaction was September 26, 2011 and the payable date was October 5, 2011. The Company will round-up fractional shares and the additional shares will be mailed out to shareholders of record. On October 5, 2011, the common stock was increased from 8,300,000 shares to 87,150,000 shares.
 
(q)  Earnings per share

Basic earnings per share, which includes no dilution, is computed by dividing income available to common stockholders by the weighted-average number of shares outstanding for the period. In contrast, diluted earnings per share consider the potential dilution that could occur from other financial increase the total number of outstanding shares of common stock.

(r)  Recently implemented standards

In January 2011, the FASB issued ASU 2011-01, “Receivables (Topic 310): Deferral of the Effective Date of Disclosures about Troubled Debt Restructurings in Update No. 2010-20”, which temporarily delay the effective date of the disclosures about troubled debt restructurings in ASU No. 2010-20, Receivables (Topic 310): Disclosures about the Credit Quality of Financing Receivables and the Allowance for Credit Losses, for public entities. The delay is intended to allow the FASB time to complete its deliberations on what constitutes a troubled debt restructuring. The effective date of the new disclosures about troubled debt restructurings for public entities and the guidance for determining what constitutes a troubled debt restructuring will then be coordinated. Currently, that guidance is anticipated to be effective for interim and annual periods ending after June 15, 2011.

The deferral in ASU 2011-01 is effective January 19, 2011 (date of issuance).

 
F-13

 

 
JINMIMI NETWORK INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE TWELVE MONTHS ENDED DECEMBER 31, 2011 AND 2010
(Stated in US Dollars)(Audited)

3.     SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

In April 2011, the FASB issued ASU 2011-02, “A Creditor’s Determination of Whether a Restructuring is a Troubled Debt Restructuring”, which clarifies when creditors should classify loan modifications as troubled debt restructurings. The guidance is effective for interim and annual periods beginning on or after June 15, 2011, and applies retrospectively to restructurings occurring on or after the beginning of the year. The guidance on measuring the impairment of a receivable restructured in a troubled debt restructuring is effective on a prospective basis. A provision in ASU 2011-02 also ends the FASB’s deferral of the additional disclosures about troubled debt restructurings as required by ASU 2010-20. The adoption of ASU 2011-02 is not expected to have a material impact on the Company’s financial condition or results of operations.
 
In April 2011, the FASB issued ASU 2011-03, Consideration of Effective Control on Repurchase Agreements, which deals with the accounting for repurchase agreements and other agreements that both entitle and obligate a transferor to repurchase or redeem financial assets before their maturity. ASU 2011-03 changes the rules for determining when these transactions should be accounted for as financings, as opposed to sales. The guidance in ASU 2011-03 is effective for the first interim or annual period beginning on or after December 15, 2011. The guidance should be applied prospectively to transactions or modifications of existing transactions that occur on or after the effective date. Early adoption is not permitted. The adoption of ASU 2011-03 is not expected to have a material impact on the Company’s financial condition or results of operation.

In May 2011, the FASB issued ASU 2011-04, Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and International Financial Reporting Standards (“IFRS”). ASU 2011-04 clarifies some existing concepts, eliminates wording differences between U.S. GAAP and IFRS, and in some limited cases, changes some principles to achieve convergence between U.S. GAAP and IFRS. ASU 2011-04 results in a consistent definition of fair value and common requirements for measurement of and disclosure about fair value between U.S. GAAP and IFRS. ASU 2011-04 also expands the disclosures for fair value measurements that are estimated using significant unobservable (Level 3) inputs. ASU 2011-04 will be effective for the Company beginning after December 15, 2011. The Company does not expect the adoption of ASU 2011-04 to have a material effect on its operating results or financial position.

In June 2011, the Financial Accounting Standard Board (“FASB”) issued Accounting Standard Update (“ASU”) 2011-05, Presentation of Comprehensive Income, which requires an entity to present the total of comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive income, or in two separate but consecutive statements. ASU 2011-05 eliminates the option to present components of other comprehensive income as part of the statement of equity. ASU 2011-05 will be effective for the Company beginning after December 15, 2011. The Company does not expect the adoption of ASU 2011-05 to have a material effect on its operating results or financial position. However, it will impact the presentation of comprehensive income.

 
F-14

 
 
JINMIMI NETWORK INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE TWELVE MONTHS ENDED DECEMBER 31, 2011 AND 2010
(Stated in US Dollars)(Audited)

3.     SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

In July 2011, the FASB has issued Accounting Standards Update (ASU) No. 2011-06, Other Expenses (Topic 720): Fees Paid to the Federal Government by Health Insurers. This ASU amends the FASB Accounting Standards CodificationTM (Codification) to provide guidance about how health insurers should recognize and classify in their income statements fees mandated by the "Patient Protection and Affordable Care Act," as amended by the "Health Care and Education Reconciliation Act." ASU 2011-06 represents a consensus of the EITF on Issue No. 10-H, “Fees Paid to the Federal Government by Health Insurers.” ASU 2011-06 requires that the liability for the fee be estimated and recorded in full once the entity provides qualifying health insurance in the applicable calendar year in which the fee is payable with a corresponding deferred cost that is amortized to expense using a straight-line method of allocation unless another method better allocates the fee over the calendar year that it is payable.

ASU 2011-06 is effective for calendar years beginning after December 31, 2013, when the fee initially becomes effective.

In July 2011, the FASB has issued Accounting Standards Update (ASU) No. 2011-07, Health Care Entities (Topic 954): Presentation and Disclosure of Patient Service Revenue, Provision for Bad Debts, and the Allowance for Doubtful Accounts for Certain Health Care Entities. The ASU represents a consensus of the EITF on Issue No. 09-H, “Health Care Entities: Presentation and Disclosure of Net Revenue, Provision for Bad Debts, and the Allowance for Doubtful Accounts.” The amendments in this ASU require certain health care entities to change the presentation in their statement of operations by reclassifying the provision for bad debts associated with patient service revenue from an operating expense to a deduction from patient service revenue (net of contractual allowances and discounts). Additionally, those health care entities are required to provide enhanced disclosure about their policies for recognizing revenue and assessing bad debts. The amendments also require disclosures of patient service revenue (net of contractual allowances and discounts) as well as qualitative and quantitative information about changes in the allowance for doubtful accounts. For public entities, the amendments in this ASU are effective for fiscal years and interim periods within those fiscal years beginning after December 15, 2011, with early adoption permitted. For nonpublic entities, the amendments are effective for the first annual period ending after December 15, 2012, and interim and annual periods thereafter, with early adoption permitted. The amendments to the presentation of the provision for bad debts related to patient service revenue in the statement of operations should be applied retrospectively to all prior periods presented. The disclosures required by the amendments in this ASU should be provided for the period of adoption and subsequent reporting periods.

 
F-15

 

JINMIMI NETWORK INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE TWELVE MONTHS ENDED DECEMBER 31, 2011 AND 2010
(Stated in US Dollars)(Audited)

3.     SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

In September 2011, the FASB has issued Accounting Standards Update (ASU) No. 2011-08, Intangibles—Goodwill and Other (Topic 350): Testing Goodwill for Impairment. ASU 2011-08 is intended to simplify how entities, both public and nonpublic, test goodwill for impairment. ASU 2011-08 permits an entity to first assess qualitative factors to determine whether it is "more likely than not" that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test described in Topic 350, Intangibles-Goodwill and Other. The more-likely-than-not threshold is defined as having a likelihood of more than 50%. ASU 2011-08 is effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011. Early adoption is permitted, including for annual and interim goodwill impairment tests performed as of a date before September 15, 2011, if an entity’s financial statements for the most recent annual or interim period have not yet been issued or, for nonpublic entities, have not yet been made available for issuance.

In September 2011, the FASB has issued Accounting Standards Update (ASU) No. 2011-09, Compensation-Retirement Benefits-Multiemployer Plans (Subtopic 715-80): Disclosures about an Employer’s Participation in a Multiemployer Plan. ASU 2011-09 is intended to address concerns from various users of financial statements on the lack of transparency about an employer’s participation in a multiemployer pension plan. Users of financial statements have requested additional disclosure to increase awareness of the commitments and risks involved with participating in multiemployer pension plans. The amendments in this ASU will require additional disclosures about an employer’s participation in a multiemployer pension plan. Previously, disclosures were limited primarily to the historical contributions made to the plans. ASU 2011-09 applies to nongovernmental entities that participate in multiemployer plans. For public entities, ASU 2011-09 is effective for annual periods for fiscal years ending after December 15, 2011. For nonpublic entities, ASU 2011-09 is effective for annual periods for fiscal years ending after December 15, 2012. Early adoption is permissible for both public and nonpublic entities. ASU 2011-09 should be applied retrospectively for all prior periods presented.

In December 2011, the FASB has issued Accounting Standards Update (ASU) No. 2011-10, Property, Plant, and Equipment (Topic 360): Derecognition of in Substance Real Estate-a Scope Clarification. ASU No. 2011-10 is intended to resolve the diversity in practice about whether the guidance in Subtopic 360-20, Property, Plant, and Equipment—Real Estate Sales, applies to a parent that ceases to have a controlling financial interest (as described in Subtopic 810-10, Consolidation—Overall) in a subsidiary that is in substance real estate as a result of default on the subsidiary’s nonrecourse debt. This Update does not address whether the guidance in Subtopic 360-20 would apply to other circumstances when a parent ceases to have a controlling financial interest in a subsidiary that is in substance real estate. ASU 2011-10 should be applied on a prospective basis to deconsolidation events occurring after the effective date; with prior periods not adjusted even if the reporting entity has continuing involvement with previously derecognized in substance real estate entities. For public entities, ASU 2011-10 is effective for fiscal years, and interim periods within those years, beginning on or after June 15, 2012. For nonpublic entities, ASU 2011-10 is effective for fiscal years ending after December 15, 2013, and interim and annual periods thereafter. Early adoption is permitted.

 
F-16

 

JINMIMI NETWORK INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE TWELVE MONTHS ENDED DECEMBER 31, 2011 AND 2010
(Stated in US Dollars)(Audited)

3.     SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

In December 2011, the FASB has issued Accounting Standards Update (ASU) No. 2011-11, Balance Sheet (Topic 210): Disclosures about Offsetting Assets and Liabilities. ASU No. 2011-11 is intended to provide enhanced disclosures that will enable users of its financial statements to evaluate the effect or potential effect of netting arrangements on an entity’s financial position. This includes the effect or potential effect of rights of setoff associated with an entity’s recognized assets and recognized liabilities within the scope of this Update. The amendments require enhanced disclosures by requiring improved information about financial instruments and derivative instruments that are either (1) offset in accordance with either Section 210-20-45 or Section 815-10-45 or (2) subject to an enforceable master netting arrangement or similar agreement, irrespective of whether they are offset in accordance with either Section 210-20-45 or Section 815-10-45. An entity is required to apply the amendments for annual reporting periods beginning on or after January 1, 2013, and interim periods within those annual periods. An entity should provide the disclosures required by those amendments retrospectively for all comparative periods presented.
 
In December 2011, the FASB has issued Accounting Standards Update (ASU) No. 2011-12, Comprehensive Income (Topic 220): Deferral of the Effective Date for Amendments to the  Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income in Accounting Standards Update No. 2011-05. ASU No. 2011-11 is intended to supersede certain pending paragraphs in Accounting Standards Update No. 2011-05,Comprehensive Income (Topic 220): Presentation of Comprehensive Income, to effectively defer only those changes in Update 2011-05 that relate to the presentation of reclassification adjustments out of accumulated other comprehensive income. The amendments will be temporary to allow the Board time to redeliberate the presentation requirements for reclassifications out of accumulated other comprehensive income for annual and interim financial statements for public, private, and non-profit entities. All other requirements in ASU No. 2011-05 are not affected by ASU No. 2011-12, including the requirement to report comprehensive income either in a single continuous financial statement or in two separate but consecutive financial statements. Public entities should apply these requirements for fiscal years, and interim periods within those years, beginning after December 15, 2011. Nonpublic entities should begin applying these requirements for fiscal years ending after December 15, 2012, and interim and annual periods thereafter.

 
F-17

 

JINMIMI NETWORK INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE TWELVE MONTHS ENDED DECEMBER 31, 2011 AND 2010
(Stated in US Dollars)(Audited)

4.     CONCENTRATIONS OF CREDIT RISK AND  MAJOR CUSTOMERS

Financial instruments which potentially expose the Group to concentrations of credit risk, consists of cash and trade receivables as of December 31, 2011 and 2010. The Group performs ongoing evaluations of its cash position and credit evaluations to ensure collections and minimize losses.

As of December 31, 2011 and 2010, the Group’s bank deposits were placed with banks in Hong Kong and the PRC where there is currently no rule or regulation in place for obligatory insurance of bank accounts.

For the twelve months ended December 31, 2011 and 2010, the Group did not generate any revenue and as of December 31, 2011 there was no additional trade receivable.

The maximum amount of loss due to credit risk that the Group would incur if the counter parties to the financial instruments failed to perform is represented the carrying amount of each financial asset in the balance sheet.

Normally the Group does not obtain collateral from customers or debtors.

As at December 31, 2011 and 2010, no customer accounted for 10% of the Group’s revenue and trade receivables.

5.     AMOUNT DUE FROM A DIRECTOR

Amount due from a director is unsecured, interest-free, and repayable on demand.

6.     GOODWILL

On January 14, 2009, the Company acquired 100% interest of HKAC for $438,975. Including in this acquisition was the primary beneficiary status of HKAC derived from a Variable Interest Entity, Shenzhen Jinmimi Technology Company Limited. Goodwill represents the excess of the cost of the purchases over the fair value of the net acquired identifiable assets at the date of acquisition. The goodwill was derived from the primary beneficiary status of VIE, Shenzhen Jinmimi Technology Company Limited, which comprised of the actual operation and assets and liabilities. The entire goodwill has been written off when the Company performed the deconsolidation of Shenzhen Jinmimi Technology Company Limited according to the Termination of Management Consultancy Agreement signed on September 16, 2010.

 
F-18

 

JINMIMI NETWORK INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE TWELVE MONTHS ENDED DECEMBER 31, 2011 AND 2010
(Stated in US Dollars)(Audited)

7.     PROPERTY, PLANT AND  EQUIPMENT, NET
 
Details of property, plant and equipment are as follows:

   
December 31, 2011
   
December 31, 2010
 
At cost
           
Office equipment
  $ -     $ 5,183  
Less: accumulated depreciation
    -       (1,807 )
                 
                 
    $ -     $ 3,376  
     Deconsolidation adjustment
    -       (3,376 )
      -       -  
                 
 
Depreciation expense included in the general and administrative expenses for the twelve months ended December 31, 2011 and 2010 were nil and $764 respectively.

8.     AMOUNT DUE TO A DIRECTOR

Amount due to a director is unsecured, interest-free, and repayable on demand.
 
9.     LOSS PER SHARE

The calculation of the basic and diluted loss per share attributable to the common stock holders is based on the following data:

   
For the twelve months ended December 31,
 
   
2011
   
2010
 
Loss:
           
Loss for the purpose of basic and
           
dilutive earnings per share
  $ (89,311 )   $ (475,642 )
                 
                 
                 
Loss per share – Basic and Diluted
 
  $ (0.0024 )   $ (0.0198 )
Number of shares:
               
                 
Weighted average number of
               
common stock for the purpose of basic
               
and dilutive earnings per share
    37,546,712       24,000,000  
                 
                 

 
F-19

 
 
JINMIMI NETWORK INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE TWELVE MONTHS ENDED DECEMBER 31, 2011 AND 2010
(Stated in US Dollars)(Audited)

10.   FAIR VALUE OF FINANCIAL INSTRUMENTS

The fair value of a financial instrument is the amount at which the instrument could be exchanged in a current transaction between willing parties. The carrying amounts of financial assets and liabilities, such as cash and cash equivalents, trade receivables, amount due from a director, other receivables, amount due to a shareholder and other payables, approximate their fair values because of the short maturity of these instruments and market rates of interest.
 
11.   INCOME TAXES

(a)  
The Company, being registered in the State of Nevada whereas its subsidiary, HKAC being incorporated in Hong Kong is not subject to any income tax as the U.S. Holding company and Hong Kong subsidiary does not generate any positive income. The Company has conducted all of its business through its PRC subsidiary, Chuangding, is subject to the PRC’s Enterprise Income Tax (“EIT”). Pursuant to the PRC Income Tax Laws, EIT is generally imposed at 25%.

A reconciliation between the income tax computed at the U.S. statutory rate and the Group’s provision for income tax is as follows:

   
For the twelve months ended December 31
 
   
2011
   
2010
 
             
U.S. statutory rate
    34 %     34 %
Foreign income not recognized in the U.S.
    (34 %)     (34 %)
PRC Enterprise Income Tax
    25 %     25 %
                 
                 
Provision for income tax
    25 %     25 %
                 

(b)  
PRC EIT rate was 25% for the twelve months ended December 31, 2011 and 2010.

No income before income taxes for the twelve months ended December 31, 2011 and 2010 were attributed to the subsidiary with operations in China. No income taxes related to China income for the twelve months ended December 31, 2011 and 2010.

(c)  
No deferred tax has been provided as there are no material temporary differences arising for the twelve months ended December 31, 2011 and 2010.

The Company did not have any interest and penalty recognized in the income statements for the twelve months ended December 31, 2011 and 2010 or balance sheet as of December 31, 2011 and 2010. The Company did not have uncertainty tax positions or events leading to uncertainty tax position within the next 12 months. The Company’s 2009, 2010 and 2011 U.S. Corporation Income Tax Return are subject to U.S. Internal Revenue Service examination and the Company’s, 2009/2010, 2010/11 and 2011/12  Hong Kong Corporations Profits Tax Return filing are subject to Hong Kong Inland Revenue Department examination. The Company’s 2008, 2009, 2010 and 2011 China Enterprise Income Tax Returns are subject to State Administration of Taxation examination.

 
F-20

 
 
JINMIMI NETWORK INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE TWELVE MONTHS ENDED DECEMBER 31, 2011 AND 2010
(Stated in US Dollars)(Audited)
 
12.  COMMON STOCK

The Company declared a stock dividend of 9.5 shares for each share of common stock on September 26, 2011 and executed on October 5, 2011. The company will round-up fractional shares and the additional shares will be mailed out to shareholders of record.

On November 3, 2011, the Company’s two controlling shareholders, Liu Changze and Li Xi, sold their shares to Brian Cohen and then Brian Cohen is representing 51.8% of the Company’s interest and appointed as a new director of the Company.


13.  SUBSEQUENT EVENTS

On March 6, 2012, the Company offered and sold 500,000 shares of common stock of the Company at a purchase price of $0.50 per share, for aggregate proceeds of $250,000. 

The Company has evaluated all other subsequent events through April 16, 2012 except aforementioned subsequent event, the date these consolidated financial statements were issued, and determined that there were no other subsequent events or transactions that require recognition or disclosures in the financial statements.

 
 
 
F-21