Exhibit 99.5

 

 

 

 

 

 

 

 

 

 

 

  

SHENZHEN QIANHAI EXCE-CARD COMPANY LIMITED

 

audited Financial statements

 

December 31, 2014 and 2013

 

(STATED IN U.S. DOLLARS)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SHENZHEN QIANHAI EXCE-CARD COMPANY LIMITED

 

 

CONTENTS		PAGES
Report of Independent Registered Public Accounting Firm		1
Balance SheetS		2
STATEMENTS OF OPERATIONS		3
STATEMENTS OF COMPREHENSIVE LOSS
STATEMENTS OF STOCKHOLDERS' EQUITY		4
STATEMENTS OF CASH FLOWS		5
Notes to financial statements		6 – 16

 

  

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

  

To:   Board of Directors and Stockholders of

         Shenzhen Qianhai Exce-card Company Limited

 

We have audited the accompanying balance sheets of Shenzhen Qianhai Exce-card Company Limited as of December 31, 2014 and 2013 and the related statements of operations and comprehensive loss, stockholders' equity and cash flows for the years then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.

 

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the 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 financial statements referred to above present fairly, in all material respects, the financial position of Shenzhen Qianhai Exce-card Company Limited as of December 31, 2014 and 2013 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.

 

San Mateo, California

WWC, P.C.

September 16, 2015

Certified Public Accountants

 

  

SHENZHEN QIANHAI EXCE-CARD COMPANY LIMITED

AUDITED BALANCE SHEETS

AS OF DECEMBER 31, 2014 AND 2013

(STATED IN US DOLLARS)

 

		2014				2013
ASSETS
Current assets
Cash and cash equivalents		$	71,205			$	-
Accounts and other receivables, net			325,811				-
Due from related parties			1,629,062				-
Total current assets			2,026,078				-
Property, plant and equipment, net			29,146				-
TOTAL ASSETS		$	2,055,224			$	-
LIABILITIES AND EQUITY
Current liabilities
Accounts and other payables			315,747				-
Taxes payable			2,023				-
Due to related parties			331,408				-
Accrued liabilities			29,146				-
Total current liabilities			678,323				-
TOTAL LIABILITIES			678,323				-
COMMITMENTS AND CONTINGENCIES
EQUITY STOCKHOLDERS' EQUITY
Registered capital			1,629,062				-
Accumulated deficit			(251,968	)			-
Accumulated other comprehensive loss			(193	)			-
TOTAL STOCKHOLDERS' EQUITY			1,376,901				-
TOTAL LIABILITIES AND EQUITY		$	2,055,224			$	-

 

See Notes to Financial Statements and Accountants’ Report

 

  

SHENZHEN QIANHAI EXCE-CARD COMPANY LIMITED

AUDITED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

FOR THE YEARS ENDED DECEMBER 31, 2014 AND 2013

(STATED IN US DOLLARS)

 

		2014				2013
Net revenues		$	-			$	-
Cost of sales			-				-
Gross profit			-				-
General and administrative expenses			486,225				-
Loss from operations			(487,818	)			-
Other income and (expenses)
Other income			245,582
Other expense			-				-
Interest income			234				-
Other income (expense), net			245,816				-
Loss before income taxes			(240,409	)			-
Income taxes			11,559				-
Net loss		$	(251,968	)		$	-
Other comprehensive loss:
Foreign currency translation gain/(loss)			(193	)			-
Comprehensive loss		$	(252,161	)		$	-

 

See Notes to Financial Statements and Accountants’ Report

SHENZHEN QIANHAI EXCE-CARD COMPANY LIMITED

AUDITED STATEMENTS OF STOCKHOLDERS' EQUITY

FOR THE YEARS ENDED DECEMBER 31, 2014 AND 2013

(STATED IN US DOLLARS)

 

										Accumulated
										Other				Total
		Registered				Accumulated				Comprehensive				Stockholders'
		Capital				Deficit				Loss				Equity
Balance, January 1, 2013			-				-				-				-
Net loss			-				-				-				-
Balance, December 31, 2013		$	-			$	-			$	-			$	-
Balance, January 1, 2014			-				-				-				-
Increase in registered capital			1,629,062				-				-				1,629,062
Net loss			-				(251,968	)			-				(251,968	)
Foreign currency translation adjustment			-				-				(193	)			(193	)
Balance, December 31, 2014		$	1,629,062			$	(251,968	)		$	(193	)		$	1,376,901

 

See Notes to Financial Statements and Accountants’ Report

 

SHENZHEN QIANHAI EXCE-CARD COMPANY LIMITED

AUDITED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 2014 AND 2013

(STATED IN US DOLLARS)

 

		2014				2013
Cash flows from operating activities:
Net loss		$	(251,968	)		$	-
Adjustments to reconcile net loss to cash provided by operating activities:
Increase in other receivable			(325,563	)			-
Increase in amounts due from related parties			(1,627,816	)			-
Increase in accounts payable			315,504				-
Increase in amounts due to related parties			331,155				-
Increase in taxes payable			2,022				-
Net cash used in operating activities			(1,556,666	)			-
Cash flows from investing activities:
Increase in leased equipment			(29,123	)			-
Net cash used in investing activities			(29,123	)			-
Cash flows from financing activities:
Increase in lease obligation			29,123				-
Paid-up capital			1,627,816				-
Net cash provided by financing activities			1,656,939				-
Net increase in cash and equivalents			71,105				-
Effect of exchange rate changes on cash & equivalents			55				-
Cash and equivalents, beginning of period			-				-
Cash and equivalents, end of period		$	71,205			$	-
SUPPLEMENTARY DISCLOSURES:
Interest received		$	234			$	-
Interest paid		$	-			$	-
Income tax paid		$	9,537			$	-

 

See Notes to Financial Statements and Accountants’ Report

 

 

SHENZHEN QIANHAI EXCE-CARD COMPANY LIMITED

NOTES TO FINANCIAL STATEMENTS

AS OF AND FOR THE YEARS ENDED DECEMBER 31, 2014 AND 2013

(STATED IN US DOLLARS)

 

1.

ORGANIZATION AND PRINCIAL ACTIVIITES

 

Business

 

Shenzhen Qianhai Exce-Card Technology Company Limited (“the Company”) is a limited company incorporated on November 11, 2013 in Shenzhen, People’s Republic of China (“PRC”). The Company is in the business of design, development, and proliferation of next generation debit and credit cards for financial institutions employing innovative secured encryption technology transmitted via audio wave technology; the Company has partnered with China Union Pay and China Construction Bank under a pilot program to develop and market to the to end using bank customers and business operators to adopt these next generation of cards by developing point of sale and commercial interfaces via software and other solutions to generate demand for these cards as a value-added alternative to current generation debit and credit cards. The Company is owned by the following shareholders Bao, Shanshan, in 100%, respectively. The Company has registered and paid up capital of RMB 10 million. The Company is a development stage company with revenues derived from peripheral non-recurring services. The Company has determined that its products are commercially viable indicated by its strategic partnership with China Union Pay and China Construction Bank.

 

Basis of Presentation

 

The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“US GAAP”).

 

2.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

(a)

Method of Accounting

 

The Company 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 Company conform to generally accepted accounting principles in the United States of America and have been consistently applied in the presentation of financial statements.

 

 

SHENZHEN QIANHAI EXCE-CARD COMPANY LIMITED

NOTES TO FINANCIAL STATEMENTS

AS OF AND FOR THE YEARS ENDED DECEMBER 31, 2014 AND 2013

(STATED IN US DOLLARS)

 

(b)

Economic and Political Risks

 

The Company’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, legal environment and foreign currency exchange. The Company’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, restriction on international remittances, and rates and methods of taxation, among other things.

 

(c)

Use of Estimates

 

In preparing financial statements in conformity with accounting principles generally accepted in the United States of America, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the dates of the financial statements, as well as the reported amounts of revenues and expenses during the reporting years. These accounts and estimates include, but are not limited to, the estimation on useful lives of property, plant and equipment. Actual results could differ from those estimates.

 

(d)

Cash and Cash Equivalents

 

Cash and cash equivalents include cash in hand and cash in time deposits, certificates of deposit and all highly liquid debt instruments with original maturities of three months or less.  As of December 31, 2014 and 2013, cash and cash equivalents were mainly denominated in RMB and were placed with banks in the PRC.  These cash and cash equivalents may not be freely convertible into foreign currencies and the remittance of these funds out of the PRC may be subjected to exchange control restrictions imposed by the PRC government. 

 

(e)

Accounts and Other Receivables

 

Accounts and other receivables are recognized and carried at the original invoice amount less allowance for any uncollectible amounts. An allowance for doubtful accounts is made when recovery of the full amount is doubtful.

 

 

SHENZHEN QIANHAI EXCE-CARD COMPANY LIMITED

NOTES TO FINANCIAL STATEMENTS

AS OF AND FOR THE YEARS ENDED DECEMBER 31, 2014 AND 2013

(STATED IN US DOLLARS)

 

(f)

Inventories

 

Inventories are stated at the lower of cost or market value. Cost is computed using specific cost method and includes all costs of purchase and other costs incurred in bringing the inventories to their present location and condition. Market value is determined by reference to the sales proceeds of items sold in the ordinary course of business or estimates based on prevailing market conditions.

 

(g)

Accounting for Impairment of Long-Lived Assets

 

The Company adopts Accounting Standards Codification (“ASC”) 360, “Accounting for the Impairment or Disposal of Long-Live Assets”, which addresses financial accounting and reporting for the impairment or disposal of long-lived assets. The Company periodically evaluates the carrying value of long-lived assets to be held and used in accordance with ASC 360 which requires impairment losses to be recorded on long-lived assets used in operations when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than the assets’ carrying amounts. In that event, a loss is recognized based on the amount by which the carrying amount exceeds the fair market value of the long-lived assets.

 

The long-lived assets held and used by the Company are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of assets may not be recoverable. It is reasonably possible that these assets could become impaired as a result of technology or other industry changes. Recoverability of assets to be held and used is determined by comparing the carrying amount of an asset to future net undiscounted cash flows to be generated by the assets.

 

If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell. During the reporting periods, there was no impairment loss.

 

(h)

Revenue Recognition

 

The Company’s revenue recognition policies are in compliance with Staff Accounting Bulletin (“SAB”) 104, included in the Codification as ASC 605, Revenue Recognition. Sales revenue is recognized at the date of shipment to customers when a formal arrangement exists, the price is fixed or determinable, the delivery is completed, no other significant obligations of the Company exist and collectability is reasonably assured. Payments received before all of the relevant criteria for revenue recognition are satisfied, would be recorded as unearned revenue.

 

Revenue reported is net of value-added tax and sales discounts.

 

 

SHENZHEN QIANHAI EXCE-CARD COMPANY LIMITED

NOTES TO FINANCIAL STATEMENTS

AS OF AND FOR THE YEARS ENDED DECEMBER 31, 2014 AND 2013

(STATED IN US DOLLARS)

 

(i)

Cost of Sales

 

The Company’s cost of sales is comprised of the inbound acquisition cost of packaged finished goods for resale and business taxes recognized upon sales of goods.

 

(j)

Selling Expenses

  

Selling expenses are comprised of salaries for the sales force, client entertainment, commissions, advertising, and travel and lodging expenses.

 

(k)

General & Administrative Expenses

 

General and administrative expenses include executive compensation, general overhead such as the finance department and administrative staff, depreciation, office rental and utilities.

 

(l)

Advertising

 

The Company expensed all advertising costs as incurred.

 

(m)

Foreign Currency Translation

 

The Company maintains its financial statements in the functional currencies on Chinese Renminbi (RMB). Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency at rates of exchange prevailing at the balance sheet dates. Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchanges rates prevailing at the dates of the transaction. Exchange gains or losses arising from foreign currency transactions are included in the determination of net income for the respective periods.

 

 

SHENZHEN QIANHAI EXCE-CARD COMPANY LIMITED

NOTES TO FINANCIAL STATEMENTS

AS OF AND FOR THE YEARS ENDED DECEMBER 31, 2014 AND 2013

(STATED IN US DOLLARS)

 

For financial reporting purposes, the financial statements of the Company, which are prepared using the functional currency, have been translated into United States dollars. Assets and liabilities are translated at the exchange rates at the balance sheet dates and revenue and expenses are translated at the average exchange rates and stockholders’ equity is translated at historical exchange rates. Translation adjustments are not included in determining net loss but are included in foreign exchange adjustment to other comprehensive loss, a component of stockholders’ equity.

 

	Exchange Rates			12/31/2014				12/31/2013
	Period end RMB : US$ exchange rate			6.1385				6.1104
	Average period RMB : US$ exchange rate			6.1432				6.1905

 

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 US$ at the rates used in translation.

 

(n)

Income Taxes

 

The Company adopts SFAS No. 109, Accounting for Income Taxes, included in the Codification as ASC 740, Income Taxes, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.

 

The Company adopted the provisions of FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes (“FIN 48”), included in the Codification as ASC 740, Income Taxes. The topic addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under ASC 740, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement. ASC 740 also provides guidance on de-recognition, classification, interest and penalties on income taxes, accounting in interim periods and requires increased disclosures.

 

 

SHENZHEN QIANHAI EXCE-CARD COMPANY LIMITED

NOTES TO FINANCIAL STATEMENTS

AS OF AND FOR THE YEARS ENDED DECEMBER 31, 2014 AND 2013

(STATED IN US DOLLARS)

 

(o)

Statutory Reserve

 

Statutory reserve refers to the amount appropriated from the net income in accordance with PRC laws or regulations, which can be used to recover losses and increase capital, as approved, and, are to be used to expand production or operations. PRC laws prescribe that an enterprise operating at a profit, must appropriate, on an annual basis, from its earnings, an amount to the statutory reserve to be used for future company development. Such an appropriation is made until the reserve reaches a maximum equal to 50% of the enterprise’s registered capital.

 

(p)

Fair Value of Financial Instruments

 

For certain of the Company’s financial instruments, including cash and equivalents, accounts and other receivables, accounts and other payables, accrued liabilities and short-term debt, the carrying amounts approximate their fair values due to their short maturities. ASC Topic 820, “Fair Value Measurements and Disclosures,” requires disclosure of the fair value of financial instruments held by the Company. ASC Topic 825, “Financial Instruments,” defines fair value, and establishes a three-level valuation hierarchy for disclosures of fair value measurement that enhances disclosure requirements for fair value measures. The carrying amounts reported in the balance sheets for receivables and current liabilities each qualify as financial instruments and are a reasonable estimate of their fair values because of the short period of time between the origination of such instruments and their expected realization and their current market rate of interest. The three levels of valuation hierarchy are defined as follows:

 

●

Level 1 inputs to the valuation methodology are quoted prices for identical assets or liabilities in active markets.

 

●

Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.

 

●

Level 3 inputs to the valuation methodology are unobservable and significant to the fair value measurement.

 

The Company analyzes all financial instruments with features of both liabilities and equity under ASC 480, “Distinguishing Liabilities from Equity,” and ASC 815.

 

The Company's financial instruments include cash and equivalents, accounts receivable, and accounts payable. Cash and cash equivalents consist deposits financial institutions with original maturities of three months or less. Management estimates the carrying amounts of the non-related party financial instruments approximate their fair values due to their short-term nature.

 

 

SHENZHEN QIANHAI EXCE-CARD COMPANY LIMITED

NOTES TO FINANCIAL STATEMENTS

AS OF AND FOR THE YEARS ENDED DECEMBER 31, 2014 AND 2013

(STATED IN US DOLLARS)

 

(q)

Other Comprehensive Income

 

The Company’s functional currency is the Renminbi (“RMB”). For financial reporting purposes, RMB were translated into United States Dollars ("USD" or “$”) as the reporting currency. Assets and liabilities are translated at the exchange rate in effect at the balance sheet date. Revenues and expenses are translated at the average rate of exchange prevailing during the reporting period. Translation adjustments arising from the use of different exchange rates from period to period are included as a component of stockholders' equity as "Accumulated other comprehensive income". Gains and losses resulting from foreign currency transactions are included in income.

 

The Company uses FASB ASC Topic 220, “Reporting Comprehensive Income”. Comprehensive loss is comprised of net loss and all changes to the statements of stockholders’ equity, except for changes in paid-in capital and distributions to stockholders due to investments by stockholders.

 

(r)

Recent Accounting Pronouncements

 

In January 2015, The FASB issued ASU No. 2015-01, “Income Statement— Extraordinary and Unusual Items (Subtopic 225-20)”.This Update eliminates from GAAP the concept of extraordinary items. Subtopic 225-20, Income Statement—Extraordinary and Unusual Items, required that an entity separately classify, present, and disclose extraordinary events and transactions. Presently, an event or transaction is presumed to be an ordinary and usual activity of the reporting entity unless evidence clearly supports its classification as an extraordinary item. Paragraph 225-20-45-2 contains the following criteria that must both be met for extraordinary classification:

 

1.

Unusual nature. The underlying event or transaction should possess a high degree of abnormality and be of a type clearly unrelated to, or only incidentally related to, the ordinary and typical activities of the entity, taking into account the environment in which the entity operates.

 

2.

Infrequency of occurrence. The underlying event or transaction should be of a type that would not reasonably be expected to recur in the foreseeable future, taking into account the environment in which the entity operates.

 

 

SHENZHEN QIANHAI EXCE-CARD COMPANY LIMITED

NOTES TO FINANCIAL STATEMENTS

AS OF AND FOR THE YEARS ENDED DECEMBER 31, 2014 AND 2013

(STATED IN US DOLLARS)

 

If an event or transaction meets the criteria for extraordinary classification, an entity is required to segregate the extraordinary item from the results of ordinary operations and show the item separately in the income statement, net of tax after income from continuing operations. The entity also is required to disclose applicable income taxes and either present or disclose earnings-per-share data applicable to the extraordinary item.

 

The amendments in this Update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. A reporting entity may apply the amendments prospectively. A reporting entity also may apply the amendments retrospectively to all prior periods presented in the financial statements. Early adoption is permitted provided that the guidance is applied from the beginning of the fiscal year of adoption. The effective date is the same for both public business entities and all other entities.

 

The Company adopted ASU No. 2015-01 prospectively and has applied it to the presentation of the financial statements.

 

As of December 31, 2014, there are no other recently issued accounting standards not yet adopted that would or could have a material effect on the Company’s consolidated financial statements.

 

(s)

Contingencies

 

Certain conditions may exist as of the date the consolidated financial statements are issued, which may result in a loss to the Company but which will only be resolved when one or more future events occur or fail to occur. The Company’s management assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or un-asserted claims that may result in such proceedings, the Company’s management evaluates the perceived merits of any legal proceedings or un-asserted claims as well as the perceived merits of the amount of relief sought or expected to be sought.

 

If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s consolidated financial statements. If the assessment indicates that a potential material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss if determinable and material would be disclosed.

 

Loss contingencies considered to be remote by management are generally not disclosed unless they involve guarantees, in which case the guarantee would be disclosed.

 

 

SHENZHEN QIANHAI EXCE-CARD COMPANY LIMITED

NOTES TO FINANCIAL STATEMENTS

AS OF AND FOR THE YEARS ENDED DECEMBER 31, 2014 AND 2013

(STATED IN US DOLLARS)

 

3.

ACCOUNTS AND OTHER RECEIVABLES

 

Accounts receivable and other receivables consisted of the following as of December 31, 2014 and 2013:

 

			2014				2013
	Other Receivables		$	325,812			$	-
	Less: Allowance for doubtful accounts			-				-
	Accounts and other receivable, net		$	325,812			$	-

  

4.

DUE FROM RELATED PARTIES

 

Due from related parties consisted of the following as of December 31, 2014 and 2013:

 

			2014				2013
	Due from Xiang, Zuyue		$	1,629,062			$	-
			$	1,629,062			$	-

 

The amount due from Xiang, Zuyue is unsecured and does not bear interest. The Company has not determined a specific due for when the amount is to be repaid. Xiang, Zuyue is the Chief Executive Officer of the Company. Management believes this amount is recoverable.

 

5.

PROPERTY PLANT AND EQUIPMENT

 

Plant and equipment consisted of the following as of December 31, 2014 and 2013:

 

			Estimated
			Useful Lives		2014				2013
	Machinery equipment		3-5 years		$	29,146			$	-
	less: Accumulated depreciation					-				-
	Property, plant and equipment, net				$	29,146			$	-

 

There was no depreciation expenses for the years ended December 31, 2014 and 2013, respectively.

 

 

SHENZHEN QIANHAI EXCE-CARD COMPANY LIMITED

NOTES TO FINANCIAL STATEMENTS

AS OF AND FOR THE YEARS ENDED DECEMBER 31, 2014 AND 2013

(STATED IN US DOLLARS)

 

6.

INCOME TAX

 

The Company was incorporated in PRC and all its operations are in the PRC. The corporate income tax rate is 25%. The Company generated net losses from its operations in the PRC for the years ended December 31, 2014 and 2013, and no income tax provision has been recorded for the years. The Company did not recognize any deferred tax assets as results of operating losses because the Company is uncertain when the Company will generate profits to utilize such potential deferred tax assets.

  

7.

OTHER COMPREHENSIVE INCOME

 

Balance of related after-tax components comprising accumulated other comprehensive income included in stockholders’ equity as of December 31, 2014 and 2013 were as follows:

 

			2014				2013
	Accumulated other comprehensive loss, beginning of year		$	-			$	-
	Cumulative translation adjustment			(193	)			-
	Accumulated other comprehensive loss, end of year		$	(193	)		$	-

  

8.

CONCENTRATION OF RISK

 

As of the date of this report, the Company had a single supplier for all of its plant and equipment.

 

As of the date of this report, the Company had a single supplier located in France for certain critical components to its card product. Should the Company be unable to retain this supplier, it could be adversely material impact the Company’s financial position and future results of operations.

 

 

SHENZHEN QIANHAI EXCE-CARD COMPANY LIMITED

NOTES TO FINANCIAL STATEMENTS

AS OF AND FOR THE YEARS ENDED DECEMBER 31, 2014 AND 2013

(STATED IN US DOLLARS)

 

9.

SUBSEQUENT EVENT

 

Change in ownership

 

On January 28, 2015, the Company’s entire ownership was transferred from Bao, Shanshan to Xiang, Zuyue for a consideration of RMB 10,000,000 (approximate US $ 1,629,062). Simultaneously, Xiang, Zuyue transferred 40% of ownership to Li, Na for a consideration of RMB 4,000,000 (approximately US $651,625).

 

On July 24, 2015, the Company’s entire ownership was transferred collectively from Xiang, Zuyue and Li, Na to Guangzhou Yuzhi Information Technology Co. Ltd. for a consideration of RMB 10,000,000 (approximately US $ 1,629,062).

 

Establishment of subsidiary

 

On March 16, 2015, the Company incorporated a Chinese limited liability company, Guangzhou Rongsheng Information Technology Co. Ltd. (“Rongsheng”) as its wholly-owned subsidiary. Rongsheng has an authorized capital of RMB 1,000,000. As of the date of this report, Rongsheng has not been capitalized.

 

 

 

16