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EX-32.1 - CERTIFICATION - 5V Inc.f10k2015ex32i_5vinc.htm
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U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549 

Form 10-K

(Mark One) 

 ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 

For the fiscal year ended September 30, 2015 

 TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 

For the transition period from ______________ to ______________

 

Commission File Number 000-54175

 

 

5V, Inc.

(Exact name of registrant as specified in its charter)

 

Delaware   27-3828846

(State or other jurisdiction of 

incorporation or organization)

 

(I.R.S. Employer

Identification No.)

 Floor 12, Building 5, Zhongchuang Plaza,
No.396, Tongjiang Zhong Road, Xinbei District
Changzhou City, Jiangshu Province, China

 

(Address of principal executive offices) 

 

+86-13510608355

 

(Registrant’s telephone number, including area code) 

Not applicable 

Securities registered under Section 12(b) of the Exchange Act:

None.

Securities registered under Section 12(g) of the Exchange Act:

Common Stock, $0.0001 par value per share

 

(Title of Class)

Check whether the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.  Yes ☐    No ☒ 

Check whether the registrant is required to file reports pursuant to Section 13 or 15(d) of the Exchange Act. Yes ☒    No ☐ 

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 registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒    No ☐ 

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 ☐    No ☒ 

Check if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-K (§229.405 of this chapter) contained herein, and no disclosure will be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. Yes ☐    No ☒ 

Check whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one): 

Large Accelerated Filer Accelerated Filer 
Non-accelerated Filer Smaller Reporting Company
(Do not check if a smaller reporting company.)    

Check whether the issuer is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes ☒    No ☐ 

As of March 31, 2015, the last business day of the registrant’s most recently completed second fiscal quarter, and as of the date hereof there were no non-affiliate holders of common stock of the Company and there is no trading market for the Company’s common stock. 

As of January 7, 2016, there were 100,000,000 shares of common stock, par value $.0001, outstanding. 

 

 

 

 

 

FORWARD-LOOKING STATEMENTS

 

Certain statements made in this Annual Report on Form 10-K are “forward-looking statements” (within the meaning of the Private Securities Litigation Reform Act of 1995) regarding the plans and objectives of management for future operations. Such statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements of 5V, Inc. (the “Company”) to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. The forward-looking statements included herein are based on current expectations that involve numerous risks and uncertainties. The Company's plans and objectives are based, in part, on assumptions involving the continued expansion of business. Assumptions relating to the foregoing involve judgments with respect to, among other things, future economic, competitive and market conditions and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond the control of the Company. Although the Company believes its assumptions underlying the forward-looking statements are reasonable, any of the assumptions could prove inaccurate and, therefore, there can be no assurance the forward-looking statements included in this Report will prove to be accurate. In light of the significant uncertainties inherent in the forward-looking statements included herein, the inclusion of such information should not be regarded as a representation by the Company or any other person that the objectives and plans of the Company will be achieved.

 

 

 

 

PART I

 

Item 1. Description of Business.

 

5V, Inc. (the "Company") was incorporated in the State of Delaware on February 19, 2010 under the name “China Gate Acquisition Corp. 1” and maintained its principal executive office at 745 E. Valley Blvd. #326, San Gabriel, CA 91776, which address is a rented mailbox. The Company was organized as a vehicle to investigate and, if such investigation warrants, acquire a target company or business seeking the perceived advantages of being a publicly held corporation. The Company filed a registration statement on Form 10 with the U.S. Securities and Exchange Commission (the “SEC”) on November 9, 2010, and since its effectiveness, the Company has focused its efforts to identify a possible business combination. The Company selected September 30 as its fiscal year end.

 

On May 3, 2011, the Company completed a merger (the "Merger") pursuant to which the Company's wholly owned subsidiary, 5V, Inc. a Delaware corporation was merged with and into the Company.  In connection with the Merger, the Company adopted the name “5V Inc.” by filing a Certificate of Ownership and Merger with the Office of Secretary of State of Delaware.

 

On August 24, 2012, in connection with the terms and conditions of a Securities Purchase Agreement, dated August 24, 2012(the "Purchase Agreement"), Jun Jiang and Xiong Wu purchased all of the issued and outstanding shares of common stock of the Company.  In connection with the terms and conditions of the Purchase Agreement, Chi Wu resigned (i) as President, Secretary, and all other officer positions of the Company, effective upon the closing of the transaction contemplated in the Purchase Agreement, and (ii) as director of the Company, effective ten (10) days following the filing of an Information Statement on Schedule 14f-1 and mailing to Company shareholders (the “Effective Time”) with respect to the change in a majority of the board of directors. Concurrent with the Closing, the board of directors of the Company (the "Board") (i) appointed Jun Jiang to serve as Chairman of the Board, President and a director of the Company effective immediately following the Closing, (ii) appointed Xiong Wu to serve as Executive Vice President and a director of the Company effective as of the Effective Time and (iii) appointed Jingquan Lu to serve as Vice President, Secretary and Treasurer of the Company effective as of the Closing Date.

 

On October 30, 2013, we, 5-V Holding Limited, a British Virgin Islands company (“5V BVI”) and the shareholders of 5V BVI (the “5V BVI Shareholders”) entered into a share exchange agreement (the “Share Exchange Agreement”). The transaction pursuant to the Share Exchange Agreement was consummated on October 30, 2013. Pursuant to the Share Exchange Agreement, the Company acquired 5V BVI and its indirectly wholly owned subsidiary Shanghai BNC Biotechnology Co., Ltd. (“WFOE”), a wholly foreign owned enterprise incorporated under the laws of the People’s Republic of China (“PRC”).  WFOE plans to engage in the research, sale and after-market service of herb diet nutritional supplement and skin-care product in China.  Currently, WFOE does not have any operations. The Company acquired all of the outstanding equity securities of 5V BVI from the 5V BVI Shareholders; and the 5V BVI Shareholders transferred and contributed all of their shares in 5V BVI to the Company.  In exchange, the Company issued to 5V BVI Shareholders an aggregate of 92,500,000 newly issued shares of common stock of the Company.

 

The Company is currently considered to be a "blank check" company. The U.S. Securities and Exchange Commission (the “SEC”) defines those companies as "any development stage company that is issuing a penny stock, within the meaning of Section 3 (a)(51) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and that has no specific business plan or purpose, or has indicated that its business plan is to merge with an unidentified company or companies." Under SEC Rule 12b-2 under the Exchange Act, the Company also qualifies as a “shell company,” because it has no or nominal assets (other than cash) and no or nominal operations.  Many states have enacted statutes, rules and regulations limiting the sale of securities of "blank check" companies in their respective jurisdictions. Management does not intend to undertake any efforts to cause a market to develop in our securities, either debt or equity, until we have successfully concluded a business combination. The Company intends to comply with the periodic reporting requirements of the Exchange Act for so long as it is subject to those requirements.

 

 3 

 

 

The Company was organized as a vehicle to investigate and, if such investigation warrants, acquire a target company or business seeking the perceived advantages of being a publicly held corporation. The Company’s principal business objective for the next 12 months and beyond such time will be to achieve long-term growth potential through a combination with a business rather than immediate, short-term earnings. The Company will not restrict its potential candidate target companies to any specific business, industry or geographical location and, thus, may acquire any type of business.

 

The analysis of new business opportunities will be undertaken by or under the supervision of our management. As of this date, the Company has not entered into any definitive agreement with any party regarding business opportunities for the Company. The Company has unrestricted flexibility in seeking, analyzing and participating in potential business opportunities. In its efforts to analyze potential acquisition targets, the Company will consider the following kinds of factors:

 

  (a) Potential for growth, indicated by new technology, anticipated market expansion or new products;
   
  (b) Competitive position as compared to other firms of similar size and experience within the industry segment as well as within the industry as whole;

  

  (c) Strength and diversity of management, either in place or scheduled for recruitment;
   
  (d) Capital requirements and anticipated availability of required funds, to be provided by the Company or from operations, through the sale of additional securities, through joint ventures or similar arrangements or from other sources;
   
  (e) The cost of participation by the Company as compared to the perceived tangible and intangible values and potentials;
   
  (f) The extent to which the business opportunity can be advanced;
   
  (g) The accessibility of required management expertise, personnel, raw materials, services, professional assistance and other required items; and
   
  (h) Other relevant factors.

 

In applying the foregoing criteria, no one of which will be controlling, management will attempt to analyze all factors and circumstances and make a determination based upon reasonable investigative measures and available data. Potentially available business opportunities may occur in many different industries, and at various stages of development, all of which will make the task of comparative investigation and analysis of such business opportunities extremely difficult and complex. Due to the Company's limited capital available for investigation, the Company may not discover or adequately evaluate adverse facts about the opportunity to be acquired.

 

COMPETITION

 

In identifying, evaluating and selecting a target business, we may encounter intense competition from other entities having a business objective similar to ours. There are numerous “public shell” companies either actively or passively seeking operating businesses with which to merge in addition to a large number of “blank check” companies formed and capitalized specifically to acquire operating businesses. Additionally, we are subject to competition from other companies looking to expand their operations through the acquisition of a target business. Many of these entities are well established and have extensive experience identifying and effecting business combinations directly or through affiliates. Many of these competitors possess greater technical, human and other resources than us and our financial resources will be relatively limited when contrasted with those of many of these competitors. Our ability to compete in acquiring certain sizable target businesses is limited by our available financial resources. This inherent competitive limitation gives others an advantage in pursuing the acquisition of a target business. Further, our outstanding warrants and the future dilution they potentially represent may not be viewed favorably by certain target businesses.

 

 4 

 

 

Any of these factors may place us at a competitive disadvantage in successfully negotiating a business combination. Our management believes, however, that our status as a public entity and potential access to the United States public equity markets may give us a competitive advantage over privately-held entities with a business objective similar to ours to acquire a target business on favorable terms.

 

If we succeed in effecting a business combination, there will be, in all likelihood, intense competition from competitors of the target business. Many of our target business’ competitors are likely to be significantly larger and have far greater financial and other resources. Some of these competitors may be divisions or subsidiaries of large, diversified companies that have access to financial resources of their respective parent companies. Our target business may not be able to compete effectively with these companies or maintain them as customers while competing with them on other projects. In addition, it is likely that our target business will face significant competition from smaller companies that have specialized capabilities in similar areas. We cannot accurately predict how our target business’ competitive position may be affected by changing economic conditions, customer requirements or technical developments. We cannot assure you that, subsequent to a business combination, we will have the resources to compete effectively.

 

FORM OF ACQUISITION

 

The manner in which the Company participates in an opportunity will depend upon the nature of the opportunity, the respective needs and desires of the Company and the promoters of the opportunity, and the relative negotiating strength of the Company and such promoters.

 

It is likely that the Company will acquire its participation in a business opportunity through the issuance of common stock or other securities of the Company. Although the terms of any such transaction cannot be predicted, it should be noted that in certain circumstances the criteria for determining whether or not an acquisition is a so-called "tax free" reorganization under Section 368(a)(1) of the Internal Revenue Code of 1986, as amended (the "Code") depends upon whether the owners of the acquired business own 80% or more of the voting stock of the surviving entity. If a transaction were structured to take advantage of these provisions rather than other "tax free" provisions provided under the Code, all prior stockholders would in such circumstances retain 20% or less of the total issued and outstanding shares of the surviving entity. Under other circumstances, depending upon the relative negotiating strength of the parties, prior stockholders may retain substantially less than 20% of the total issued and outstanding shares of the surviving entity. This could result in substantial additional dilution to the equity of those who were stockholders of the Company prior to such reorganization.

 

The present stockholders of the Company will likely not have control of a majority of the voting securities of the Company following a reorganization transaction. As part of such a transaction, all or a majority of the Company's directors may resign and one or more new directors may be appointed without any vote by stockholders.

 

In the case of an acquisition, the transaction may be accomplished upon the sole determination of management without any vote or approval by stockholders. In the case of a statutory merger or consolidation directly involving the Company, it will likely be necessary to call a stockholders' meeting and obtain the approval of the holders of a majority of the outstanding securities. The necessity to obtain such stockholder approval may result in delay and additional expense in the consummation of any proposed transaction and will also give rise to certain appraisal rights to dissenting stockholders. Most likely, management will seek to structure any such transaction so as not to require stockholder approval.

 

It is anticipated that the investigation of specific business opportunities and the negotiation, drafting and execution of relevant agreements, disclosure documents and other instruments will require substantial management time and attention and substantial cost for accountants, attorneys and others. If a decision is made not to participate in a specific business opportunity, the costs theretofore incurred in the related investigation might not be recoverable. Furthermore, even if an agreement is reached for the participation in a specific business opportunity, the failure to consummate that transaction may result in the loss to the Registrant of the related costs incurred.

 

 5 

 

 

We presently have no employees apart from our management. Our officers and directors are engaged in outside business activities and anticipates that he will devote very limited time to our business until the acquisition of a successful business opportunity has been identified. We expect no significant changes in the number of our employees other than such changes, if any, incident to a business combination.

 

Item 1ARisk Factors.

 

As a “smaller reporting company” as defined by Item 10 of Regulation S-K, the Company is not required to provide this information.

 

Item 1B.  Unresolved Staff Comments.

 

As a “smaller reporting company” as defined by Item 10 of Regulation S-K, the Company is not required to provide this information.

 

Item 2.    Description of Property.

 

The Company neither rents nor owns any properties. The Company utilizes the office space and equipment of its management at no cost. Management estimates such amounts to be immaterial. The Company currently has no policy with respect to investments or interests in real estate, real estate mortgages or securities of, or interests in, persons primarily engaged in real estate activities.

 

Item 3.    Legal Proceedings.

 

To the best knowledge of our management, there are presently no material pending legal proceedings to which the Company, any executive officer, any owner of record or beneficially of more than five percent of any class of voting securities is a party or as to which any of its property is subject, and no such proceedings are known to the Company to be threatened or contemplated against it.

 

Item 4.    Mine Safety Disclosures.

 

Not Applicable.

 

 6 

 

 

PART II

 

Item 5.    Market for Common Equity, Related Stockholder Matters and Small Business Issuer Purchases of Equity Securities.

 

Common Stock

 

Our Certificate of Incorporation authorizes the issuance of up to 400,000,000 shares of common stock, par value $.0001 per share (the “Common Stock”).  The Common Stock is not listed nor quoted on any publicly-traded market.  As of September 30, 2015, there are 27 holders of record of the Common Stock.

 

Preferred Stock

 

Our Certificate of Incorporation authorizes the issuance of up to 10,000,000 shares of preferred stock, par value $.0001 per share (the “Preferred Stock”).  The Company has not yet issued any of its preferred stock.

 

Dividend Policy

 

The Company has not declared or paid any cash dividends on its common stock and does not intend to declare or pay any cash dividend in the foreseeable future. The payment of dividends, if any, is within the discretion of the Board of Directors and will depend on the Company’s earnings, if any, its capital requirements and financial condition and such other factors as the Board of Directors may consider.

 

Securities Authorized for Issuance under Equity Compensation Plans

 

The Company does not have any equity compensation plans or any individual compensation arrangements with respect to its common stock or preferred stock. The issuance of any of our common or preferred stock is within the discretion of our Board of Directors, which has the power to issue any or all of our authorized but unissued shares without stockholder approval.

 

Recent Sales of Unregistered Securities

 

The Company did not sell any equity securities that were not registered under the Securities Act during the quarter ended September 30, 2015 or the subsequent period.

 

No securities have been issued for services. Neither the Company nor any person acting on its behalf offered or sold the securities by means of any form of general solicitation or general advertising. No services were performed by any purchaser as consideration for the shares issued.

 

Issuer Purchases of Equity Securities

 

None.

 

Item 6.    Selected Financial Data.

 

As a “smaller reporting company” as defined by Item 10 of Regulation S-K, the Company is not required to provide this information.

 

Item 7.    Management’s Discussion and Analysis of Financial Condition and Results of Operation.

 

The Company was organized as a vehicle to investigate and, if such investigation warrants, acquire a target company or business seeking the perceived advantages of being a publicly held corporation. Our principal business objective for the next twelve months and beyond such time will be to achieve long-term growth potential through a combination with a business rather than immediate, short-term earnings. The Company will not restrict our potential candidate target companies to any specific business, industry or geographical location and, thus, may acquire any type of business.

 

 7 

 

 

The Company currently does not engage in any business activities that provide cash flow.  During the next twelve months we anticipate incurring costs related to:

 

  (i) filing Exchange Act reports,
     
  (ii) WFOE’S compliance with Chinese laws and regulations, and
     
  (iii)  investigating, analyzing and consummating an acquisition.

 

We believe we will be able to meet these costs through deferral of fees by certain service providers and additional amounts, as necessary, to be loaned to or invested in us by our stockholders, management or other investors. As of the date of the period covered by this report, the Company has no assets. There are no assurances that the Company will be able to secure any additional funding as needed.  Currently, however, our ability to continue as a going concern is dependent upon our ability to generate future profitable operations and/or to obtain the necessary financing to meet our obligations and repay our liabilities arising from normal business operations when they come due.  Our ability to continue as a going concern is also dependent on our ability to find a suitable target company and enter into a possible reverse merger with such company. Management’s plan includes obtaining additional funds by equity financing and/or related party advances, however there is no assurance of additional funding being available.

 

The Company may consider acquiring a business which has recently commenced operations, is a developing company in need of additional funds for expansion into new products or markets, is seeking to develop a new product or service, or is an established business which may be experiencing financial or operating difficulties and is in need of additional capital. In the alternative, a business combination may involve the acquisition of, or merger with, a company which does not need substantial additional capital but which desires to establish a public trading market for its shares while avoiding, among other things, the time delays, significant expense, and loss of voting control which may occur in a public offering.

 

Any target business that is selected may be a financially unstable company or an entity in its early stages of development or growth, including entities without established records of sales or earnings. In that event, we will be subject to numerous risks inherent in the business and operations of financially unstable and early stage or potential emerging growth companies. In addition, we may effect a business combination with an entity in an industry characterized by a high level of risk, and, although our management will endeavor to evaluate the risks inherent in a particular target business, there can be no assurance that we will properly ascertain or assess all significant risks. Our management anticipates that it will likely be able to effect only one business combination, due primarily to our limited financing and the dilution of interest for present and prospective stockholders, which is likely to occur as a result of our management’s plan to offer a controlling interest to a target business in order to achieve a tax-free reorganization. This lack of diversification should be considered a substantial risk in investing in us, because it will not permit us to offset potential losses from one venture against gains from another.

 

The Company anticipates that the selection of a business combination will be complex and extremely risky. Through information obtained from industry publications and professionals, our management believes that there are numerous firms seeking the perceived benefits of becoming a publicly traded corporation. Such perceived benefits of becoming a publicly traded corporation include, among other things, facilitating or improving the terms on which additional equity financing may be obtained, providing liquidity for the principals of and investors in a business, creating a means for providing incentive stock options or similar benefits to key employees, and offering greater flexibility in structuring acquisitions, joint ventures and the like through the issuance of stock. Potentially available business combinations may occur in many different industries and at various stages of development, all of which will make the task of comparative investigation and analysis of such business opportunities extremely difficult and complex. We do not currently intend to retain any entity to act as a “finder” to identify and analyze the merits of potential target businesses.

 

 8 

 

 

Liquidity and Capital Resources

 

As of September 30, 2015, the Company had cash of $1,975, as compared to $1,974 as of September 30, 2014.The Company’s liabilities as of September 30, 2015 were $205,381, comprised of $17,357 in accounts payable and 188,024 in short-term advances from a related party. This compares with total liabilities of $152,814, comprised of $3,332 in accounts payable and $149,482 in short-term advances from a related party, as of September 30, 2014. The Company can provide no assurance that it can continue to satisfy its cash requirements for at least the next twelve months.

 

The following is a summary of the Company's cash flows provided by (used in) operating, investing, and financing activities for the years ended September 30, 2015 and 2014.

 

   Fiscal Year
Ended
September 30,
2015
   Fiscal Year
Ended
September 30,
2014
 
Net Cash (Used in) Operating Activities  $(39,226)  $(53,844)
Net Cash (Used in) Investing Activities   -    - 
Net Cash Provided by Financing Activities   39,227    25,353 
Net Increase (Decrease) in Cash and Cash Equivalents  $1   $(28,491)

 

The Company has nominal assets and has generated no revenues since inception. The Company is also dependent upon the receipt of capital investment or other financing to fund its ongoing operations and to execute its business plan of seeking a combination with a private operating company. In addition, the Company is dependent upon certain related parties to provide continued funding and capital resources. If continued funding and capital resources are unavailable at reasonable terms, the Company may not be able to implement its plan of operations.

 

Results of Operations

 

The Company has not conducted any active operations since inception, except for its efforts to locate suitable acquisition candidates. No revenue has been generated by the Company from February 19, 2010 (Inception) to September 30, 2015. It is unlikely the Company will have any revenues unless it is able to effect an acquisition or merger with an operating company, of which there can be no assurance. It is management's assertion that these circumstances may hinder the Company's ability to continue as a going concern. The Company’s plan of operation for the next twelve months shall be to continue its efforts to locate suitable acquisition candidates.

  

For the fiscal year ended September 30, 2015 and 2014, the Company had general and administrative expenses $51,066 and $48,243 comprised of legal, filing, accounting, audit, and other professional service fees incurred in relation to the filing of the Company’s annual and quarterly reports in connection with its reporting obligations and therefore generated a net loss of $51,066 and $48,243, respectively.

 

Off-Balance Sheet Arrangements

 

The Company does not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on the Company’s financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.  

 

Contractual Obligations

 

As a “smaller reporting company” as defined by Item 10 of Regulation S-K, the Company is not required to provide this information.

 

Item 7A.  Quantitative and Qualitative Disclosures about Market Risk.

 

As a “smaller reporting company” as defined by Item 10 of Regulation S-K, the Company is not required to provide this information.

 

 9 

 

 

Item 8.    Financial Statements and Supplementary Data.

 

 

 

5V, INC. AND SUBSIDIARIES

 

FINANCIAL STATEMENTS

 

At September 30, 2015 and 2014 and

for the Years ended September 30, 2015 and 2014

 

 

 

 F-1 

 

 

5V, INC. AND SUBSIDIARIES

 

INDEX

 

  PAGE
   
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM F-3
   
CONSOLIDATED BALANCE SHEETS F-4
   
CONSOLIDATED STATEMENTS OF OPERATIONS F-5
   
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' DEFICIT F-6
   
CONSOLIDATED STATEMENTS OF CASH FLOWS F-7
   
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS F-8 - F-18

 

 F-2 

 

 

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

To the Board of Directors and Stockholders of

5V, Inc.

 

We have audited the accompanying balance sheets of 5V, Inc. as of September 30, 2015 and 2014, and the related statements of income, comprehensive income, stockholders’ equity, and cash flows for each of the years in the two-year period ended September 30, 2015. 5V, Inc.’s management is responsible for these financial statements. Our responsibility is to express an opinion on these financial statements based on our audits.

 

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

 

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of 5V, Inc. as of September 30, 2015 and 2014, and the results of its operations and its cash flows for each of the years in the two-year period ended September 30, 2015, in conformity with accounting principles generally accepted in the United States of America.

 

The accompanying financial statements have been prepared assuming that 5V, Inc. will continue as a going concern. As discussed in Note 3 to the financial statements, these conditions raise substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 3. The financial statements do not include any adjustments relating to the recoverability and classification of asset carrying amounts or the amount and classification of liabilities that might result should the Company be unable to continue as a going concern.

 

/s/ Jimmy P. Lee, CPA PC

Astoria, NY

January 8, 2016

 

 F-3 

 

 

5V, Inc and Subsidiaries

Consolidated Balance Sheets

(Audited)

 

   September 30, 2015   September 30, 2014 
      

(Restated)

 
ASSETS        
Current Assets        
Cash and cash equivalents  $1,975   $1,974 
Prepaid expenses   1,500    - 
Total Current Assets   3,475    1,974 
Total Assets  $3,475   $1,974 
           
LIABILITIES AND STOCKHOLDERS' EQUITY          
Current Liabilities          
Accounts payable and accrued expenses  $17,357   $3,332 
Due to related parties   188,024    149,482 
Total Current Liabilities   205,381    152,814 
Total Liabilities   205,381    152,814 
           
Commitments & contingencies   -    - 
           
Stockholders' Deficit          
Common stock, $0.0001 par value, 400,000,000 shares authorized; 100,000,000 shares issued at September 30, 2015 and 2014, respectively   10,000    10,000 
Additional paid-in capital   42,037    42,037 
Subscription receivables   (51,287)   (51,287)
Accumulated loss   (202,656)   (151,590)
Total stockholders' deficit   (201,906)   (150,840)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT  $3,475   $1,974 

 

The accompanying notes are an integral part of these financial statements

 

 F-4 

 

 

5V, Inc and Subsidiaries

Consolidated Statements of Operations

(Audited)

 

   For the Years Ended 
   September 30, 2015   September 30, 2014 
       (Restated) 
Revenues  $-   $- 
Cost of sales   -    - 
Gross margin   -    - 
           
Operating expenses          
General and administrative expenses   51,067    48,246 
Total Operating Expenses   51,067    48,246 
           
Income (Loss) from operation   (51,067)   (48,246)
           
Other income          
Interest income, net   1    3 
Total other income   1    3 
           
Income before income tax   (51,066)   (48,243)
           
Income tax   -    - 
           
Net loss   (51,066)   (48,243)
           
Foreign currency translation adjustment   -    - 
           
Comprehensive loss  $(51,066)  $(48,243)
           
Common Shares Outstanding, basic and diluted   100,000,000    92,650,685 
           
Net loss per share          
Basic and diluted  $0.0005   $0.0005 

 

The accompanying notes are an integral part of these financial statements

 

 F-5 

 

 

5V, Inc and Subsidiaries

Consolidated Statements of Changes in Stockholders' Deficit

For the years ended September 30, 2015 and 2014

(Audited)

 

   Common Stock   Additional                 
   $0.0001 Par Value   Paid-in   Subscriptions   Comprehensive   Accumulated     
   Shares   Amount   Capital   Receivables   Income   Earnings   Totals 
Balances at September 30, 2013   7,500,000   $750   $51,287   $(51,287)  $-   $(103,347)  $(102,597)
Issuance of common stock for acquisition of subsidiary   92,500,000    9,250    (9,250)        -         - 
Net loss                            (48,243)   (48,243)
Balances at September 30, 2014 (Restated)   100,000,000   $10,000   $42,037   $(51,287)  $-   $(151,590)  $(150,840)
Net loss                            (51,066)   (51,066)
Balances at September 30, 2015   100,000,000   $10,000   $42,037   $(51,287)  $-   $(202,656)  $(201,906)

  

The accompanying notes are an integral part of these financial statements

 

 F-6 

 

 

5V, Inc and Subsidiaries

Consolidated Statements of Cash Flows

(Audited)

 

   For the Years Ended 
   September 30, 2015   September 30, 2014 
       (Restated) 
Cash flows from operating activities        
Net loss  $(51,066)  $(48,243)
Changes in operating assets and liabilities:          
Prepaid expenses   (1,500)   - 
Accounts payable and accrued expenses   13,340    (5,601)
Net cash used in operating activities   (39,226)   (53,844)
           
Cash flows from financing activities          
Proceeds from related party   39,227    25,353 
Net cash provided by financing activities   39,227    25,353 
           
NET INCREASE (DECREASE) IN CASH   1    (28,491)
           
CASH          
Beginning of period   1,974    30,465 
End of period  $1,975   $1,974 
          
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION          
CASH PAID FOR:          
Interest  $-   $- 
Income Taxes  $-   $- 

 

The accompanying notes are an integral part of these financial statements

 

 F-7 

 

 

5V, INC. AND SUBSIDIARIES

 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

Note 1- ORGANIZATION AND BUSINESS
   
  5V Inc. (the “Company”), formerly China Gate Acquisition Corp. 1, was organized on February 19, 2010 as a Delaware corporation with fiscal year ending September 30. The Company is a shell with no business activity whose purpose is to seek out and attract partners for possible merger or acquisition.
   
  On April 28, 2011, the China Gate Acquisition Corp. 1 incorporated a wholly-owned subsidiary under the name “5V Inc.” under the laws of the State of Delaware.
   
  On May 3, 2011, the Company effectuated a merger (the “Merger”) pursuant to which its wholly-owned subsidiary, 5V Inc. (“5V”) merged with and into the Company, with the Company continuing as the surviving corporation and the officer and directors of the Corporation replacing the sole officer and director of 5V. On the same day, the Company changed its name from “China Gate Acquisition Corp. 1” to “5V Inc.” by filing a Certificate of Ownership and Merger with the Office of Secretary of State of Delaware.
   
  On August 24, 2012, Jun Jiang and Xiong Wu (collectively the “Purchasers”) purchased all of the issued and outstanding shares of common stocks of the Company’s existing shareholders (the “Sellers”) for an aggregate purchase of $250,000. As a result of the consummation of the transaction, the Purchasers collectively own 100% of the Company’s outstanding common stock, resulting in no liability owed to the original shareholders (the “Sellers”) thereafter.
   
  On September 30, 2012, the Company’s Board of Directors and shareholders approved an increase in the authorized shares of common stocks from 100,000,000 to 400,000,000. The amendment to the Company’s Certificate of Incorporation was filed with the Secretary of State of Delaware on April 16, 2013.
   
  On October 30, 2013, the Company, 5-V Holding Limited, a British Virgin Islands company (“5V BVI”) and the shareholders of 5V BVI (the “5V BVI Shareholders”) entered into a share exchange agreement (the “Share Exchange Agreement”). Pursuant to the Share Exchange Agreement, the Company agreed to acquire 100% of the issued and outstanding shares of 5V BVI from the 5V BVI Shareholders in exchange for the issuance of 92,500,000 shares of the Company’s common stock, par value $0.0001 per share (the “Common Stock”) to 5V BVI Shareholders. The 5V BVI Shareholders agreed to exchange each share of their 5V BVI shares for 2,000 5V DE Shares. The transaction pursuant to the Share Exchange Agreement is hereby referred to as the Share Exchange.  The Share Exchange was consummated on October 30, 2013 (the “Closing Date”).  As a result of the Share Exchange, 5V BVI will become a wholly-owned subsidiary of the Company.
   
  5V BVI was incorporated in the British Virgin Islands (“BVI”) on April 20, 2011, as a BVI Business Company under the BVI Business Companies Act, 2004. 5V BVI was organized to provide business services and financing to emerging growth entities.  

 

 F-8 

 

  

5V, INC. AND SUBSIDIARIES

 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

Note 1- ORGANIZATION AND BUSINESS (continued)
   
  On May 6, 2011, 5V BVI incorporated a wholly-owned subsidiary named “5V Group Limited” in Hong Kong under the Companies Ordinance as a limited liability company. 5V Group Limited is a shell with no business activity and whose purpose is to seek out and attract partners for possible merger or acquisition.
   
  On March 12, 2013, 5V Group Limited established a wholly-owned subsidiary named "Shanghai BNC Biotechnology Co., Ltd." ("Shanghai BNC") in the People's Republic of China ("PRC') as a limited liability company under the Company Laws of PRC. Shanghai BNC plans to engage in the research, sale and after-market service of herb diet nutritional supplement and skin-care product in China.
   
  5V Inc., 5-V Holding limited, 5V Group Limited, and Shanghai BNC are hereafter referred to as the “Company”, which structure is summarized in the following chart.

 

 

 

 F-9 

 

 

5V, INC. AND SUBSIDIARIES

 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

Note 2- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
   
  Basis of Presentation
   
  The accompanying financial statements have been prepared on the accrual basis of accounting in accordance with generally accepted accounting principles in the United States of America ("US GAAP") and are presented in U.S. dollars.
   
  The consolidated financial statements include the accounts of the Company and all its wholly-owned subsidiaries which require consolidation.  Inter-company transactions have been eliminated in consolidation.
   
  Certain amounts in the prior year's consolidated financial statements and notes have been revised to conform to the current year presentation.
   
  Subsequent Events
   
  In preparing the accompanying financial statements, we evaluated the period from the balance sheet date through the date the financial statements were issued for material subsequent events requiring recognition or disclosure. No such events were identified for this period.

 

 F-10 

 

 

 5V, INC. AND SUBSIDIARIES

 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

Note 2- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
   
  Use of Estimates
   
  The preparation of financial statements in conformity with accounting principles generally accepted 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 period.  Actual results could differ from those estimates.
   
  Cash and Cash Equivalents
   
  In accordance with FASB ASC Topic 230-10-50-6, “Statement of Cash Flows”, the Company considers all highly liquid debt instruments with a maturity of three months or less when purchased to be cash equivalents.
   
  Property, plant and equipment
   
  Property, plant and equipment, are stated at cost less depreciation and amortization and accumulated impairment loss. Cost represents the purchase price of the asset and other costs incurred to bring the asset into its existing use. Maintenance, repairs and betterments, including replacement of minor items, are charged to expense; major additions to physical properties are capitalized.
   
  Depreciation of property, plant and equipment is calculated based on cost, less their estimated residual value, if any, using the straight-line method over their estimated useful lives.
   
  Upon sale or retirement of property, plant and equipment, the related cost and accumulated depreciation are removed from the accounts and any gain or loss is reflect in operation.
   
  The estimated useful lives of the assets are as follows:
   
  Office equipment and furniture                                         3-5 years

 

 F-11 

 

 

5V, INC. AND SUBSIDIARIES

 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

Note 2- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
   
  Impairment of Long-life Assets
   
  Long-lived assets and certain identifiable intangibles are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future net cash flows expected to be generated by the asset. 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.
   
  Revenue Recognition
   
 

The Company recognizes revenue when the earnings process is complete, both significant risks and rewards of ownership are transferred or services have been rendered and accepted, the selling price is fixed or determinable, and collectability is reasonably assured.

   
  The Company did not generate any revenues since inception. 

 

 F-12 

 

 

5V, INC. AND SUBSIDIARIES

 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

Note 2- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
   
  Income Taxes
   
  The Company accounts for income taxes in accordance with FASB ASC Topic 740 which requires that deferred tax assets and liabilities be recognized for future tax consequences attributable to differences between financial statement carrying amounts of existing assets and liabilities and their respective tax bases.  In Addition, FASB ASC 740 requires recognition of future tax benefits, such as carry forwards, to the extent that realization of such benefits is more likely than not and that a valuation allowance be provided when it is more likely than not that some portion of the deferred tax asset will not be realized.
   
  The Company has accumulated deficiency in its operation.  Because there is no certainty that we will realize taxable income in the future, we did no record any deferred tax benefit as a result of these losses.
   
  The Company accounts for income taxes in interim periods in accordance with FASB ASC 740-270, "Interim Reporting". The Company has determined an estimated annual effect tax rate. The rate will be revised, if necessary, as of the end of each successive interim period during the Company’s fiscal year to its best current estimate. The estimated annual effective tax rate is applied to the year-to-date ordinary income (or loss) at the end of the interim period.
   
  Fair Value of Measurements
   
  The Company adopted the guidance of FASB ASC 820 for fair value measurements which clarifies the definition of fair value, prescribes methods for measuring fair value, and establishes a fair value hierarchy to classify the inputs used in measuring fair value as follows:

 

  Level 1: Inputs are unadjusted quoted prices in active markets for identical assets or liabilities available at the measurement date.
     
  Level 2: Inputs are unadjusted quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, inputs other then quoted prices that are observable, and inputs derived from or corroborated by observable market data.
     
  Level 3: Inputs are unobservable Inputs which reflect the reporting entity’s own assumptions on what assumptions the market participants would use in pricing the asset or liability based on the best available information.
   
  The carrying amounts reported in the balance sheets for cash and accrued expenses approximate their fair market value based on the short-term maturity of these instruments. The Company did not identify any assets or liabilities that are required to be presented on the balance sheets at fair value in accordance with the accounting guidance.

 

 F-13 

 

 

5V, INC. AND SUBSIDIARIES

 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

Note 2- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
   
  Basic and Diluted Loss per Share
   
  The Company reports loss per share in accordance with FASB ASC 260 “Earnings per share”. The Company’s basic earnings per share are computed using the weighted average number of shares outstanding for the periods presented. Diluted earnings per share are computed based on the assumption that any dilutive options or warrants were converted or exercised. Dilution is computed by applying the treasury stock method. Under this method, the Company’s outstanding stock warrants are assumed to be exercised, and funds thus obtained were assumed to be used to purchase common stock at the average market price during the period. There were no dilutive instruments outstanding during the years ended September 30, 2014 and 2013. However, if present, a separate computation of diluted loss per share would not have been presented, as these common stock equivalents would have been anti-dilutive due to the Company's net loss.
   
  Comprehensive Income
   
FASB ASC 220, “Comprehensive Income", establishes standards for reporting and display of comprehensive income, its components and accumulated balances. Comprehensive income as defined includes all changes in equity during a period from non-owner sources.
   
Segment Reporting
   
FASB ASC 820 “Segments Reporting” establishes standards for reporting information about operating segments on a basis consistent with the Company’s internal organization structure as well as information about geographical areas, business segments and major customers in financial statements. The Company currently operates in one principal business segment.
   
Related Parties
   
Parties are considered to be related to the Company if the parties, directly or indirectly, through one or more intermediaries, control, are controlled by, or are under common control with the Company. Related parties also include principal owners of the Company, its management, members of the immediate families of principal owners of the Company and its management and other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. The Company discloses all related party transactions. All transactions shall be recorded at fair value of the goods or services exchanged. Property purchased from a related party is recorded at the cost to the related party and any payment to or on behalf of the related party in excess of the cost is reflected as a distribution to related party.

 

 F-14 

 

  

5V, INC. AND SUBSIDIARIES

 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

Note 2- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
   
  Recent Accounting Pronouncements
   

In July 2015, the FASB issued ASU No. 2015-11, Simplifying the Measurement of Inventory, which modifies existing requirements regarding measuring inventory at the lower of cost or market. Under existing standards, the market amount requires consideration of replacement cost, net realizable value (NRV), and NRV less an approximately normal profit margin. The new ASU replaces market with NRV, defined as estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. This eliminates the need to determine and consider replacement cost or NRV less an approximately normal profit margin when measuring inventory. The amendments are effective for the annual period ending after December 15, 2016, and for annual and interim periods thereafter. Early application is permitted. The Company is currently assessing this ASU’s impacts on the Company’s consolidated results of operations and financial condition.
  
In February 2015, FASB issued ASU No. 2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis. The new consolidation standard changes the way reporting enterprises evaluate whether (a) they should consolidate limited partnerships and similar entities, (b) fees paid to a decision maker or service provider are variable interests in a VIE, and (c) variable interests in a VIE held by related parties of the reporting enterprise require the reporting enterprise to consolidate the VIE. The guidance is effective for public business entities for annual and interim periods in fiscal years beginning after December 15, 2015. Early adoption is allowed, including early adoption in an interim period. A reporting entity may apply a modified retrospective approach by recording a cumulative-effect adjustment to equity as of the beginning of the fiscal year of adoption or may apply the amendments retrospectively. The Company is currently assessing the impact of the adoption of this guidance on the consolidated financial statements.
  
In August 2014, the Financial Accounting Standards Board issued ASU No. 2014-15, Presentation of Financial Statements— Going Concern (Subtopic 205-40). This standard is intended to define management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related footnote disclosures. The amendments contained in this ASU apply to all companies and not-for-profit organizations. The amendments are effective for the annual period ending after December 15, 2016, and for annual and interim periods thereafter. Early application is permitted. The Company is currently assessing this ASU’s impact on the Company’s consolidated results of operations and financial condition.
  
In June 2014, the FASB issued ASU No. 2014-10, Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements, Including an Amendment to Variable Interest Entities Guidance in Topic 810, Consolidation. The amendments in this Update remove the definition of a development stage entity from the Master Glossary of the Accounting Standards Codification, thereby removing the financial reporting distinction between development stage entities and other reporting entities from U.S. GAAP. For public business entities, those amendments are effective for annual reporting periods beginning after December 15, 2014, and interim periods therein. Early application of each of the amendments is permitted for any annual reporting period or interim period for which the entity’s financial statements have not yet been issued (public business entities) or made available for issuance (other entities). Upon adoption, entities will no longer present or disclose any information required by Topic 915. The Company adopted this ASU as early application for the financial statements of the period from July 8, 2013 (inception) to December 31, 2013.
  
The Company believes that there were no other accounting standards recently issued that had or are expected to have a material impact on our financial position or results of operations.

 

 F-15 

 

 

5V, INC. AND SUBSIDIARIES

 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

Note 3- GOING CONCERN

 

The accompanying financial statements were prepared in conformity with U.S. GAAP, which contemplates continuation of the Company as a going concern and depends upon the Company’s ability to establish itself as a profitable business. The Company has an accumulated loss since inception of $202,656, including net operating loss of $51,066 and $48,246 for the years ended September 30, 2015 and 2014, respectively. As of September 30, 2015, the Company has a shareholders' deficit of $201,906, and a working capital deficit of $201,906, which is not sufficient to finance its business for the next twelve months. Due to the start-up nature of the Company, the Company expects to incur additional losses in the immediate future. The Company’s ability to continue as a going concern is dependent upon its ability to generate future profitable operations and/or obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they become due. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. To date, the Company’s cash flow requirements have been primarily met through advances from shareholders.
   
  The Company is planning on obtaining financing either through issuance of equity or debt. To the extent that funds generated from any private placements, public offerings and/or bank financing are insufficient, the Company will have to raise additional working capital through other channels.

 

Note 4- RESTATEMENTS

 

The Company made corrections to the prior year's financial statements to properly reflect the omitted expenses paid by related party to be consistent with the current year. Certain amounts in the prior year’s financial statements have been reclassified to conform to the current period presentation. These reclassifications had no effect on reported net income or losses.
  
The following tables present the effect of the correction discussed above and adjustments on selected line items of our previously reported financial statements as of and for the years ended September 30, 2014.

 

  Balance Sheet  September 30, 2014 
     Previously         
     Reported   Adjustments   Restated  
  Accounts payable and accrued expenses    2,660    672    3,332 
  Due to related parties    148,845    637    149,482 
  Additional paid-in capital    40,534    1,503    42,037 
  Deficit accumulated during development stage    (148,778)   (2,812)   (151,590)

 

  Statement of Operations  For the Year Ended September 30, 2014 
     Previously         
     Reported   Adjustments   Restated 
  Professional fees    41,918    (41,918)   - 
  Other general and administrative expenses    5,016    46,051    51,067 
  Interest income    -    1    1 
                  

 

  Statement of Cash Flows  For the Year Ended September 30, 2014 
     Previously         
     Reported   Adjustments   Restated 
  Net loss    (46,934)   (1,309)   (48,243)
  Company expenses paid by related parties    11,267    (11,267)   - 
  Accounts payable and accrued expenses    7,176    (12,777)   (5,601)
  Proceeds from acquisition of 5-V Holding Limited    30,465    (30,465)   - 
  Proceeds from related party    -    25,353    25,353 
  Cash at beginning of period   -    30,465    30,465 

  

Note 5- COMMON STOCK AND PREFERRED STOCK
   
  The Company has authority to issue 410,000,000 shares of capital stock. These shares are divided into two classes with 400,000,000 shares designated as common stock at $0.0001 par value and 10,000,000 shares designated as preferred stock at $0.0001 par value. As of September 31, 2015, the Company has no preferred stocks issued and outstanding, and has issued and outstanding of 100,000,000 shares of common stock at par value of $0.0001 per share.
   
  Upon formation of the Company., 7,500,000 shares of common stock were issued to two funders for $750.
   
  On October 30, 2013, the Company issued 92,500,000 shares of common stocks to acquire 100% of 5-V Holding Limited and its subsidiaries

 

 F-16 

 

  

5V, INC. AND SUBSIDIARIES

 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

Note 6- ADVANCE FROM A RELATED PARTY
   
  One of the Company’s stockholders advanced funds to the Company to cover legal, audit, and filing fees, general office administration and other expenses. The advances are unsecured, no interest bearing, and payable upon demand. On August 24, 2012, Jun Jiang and Xiong Wu purchased all of the issued and outstanding shares of common stocks of the Company from the then existing shareholders. Concurrently with the transaction, the Sellers agreed to transfer to the Purchasers all of their claims on advances to the Company.
   
  Advance from a related party consist of the following:

 

     September 30,   September 30, 
     2015   2014 
           
  Jiang, Jun, CEO of the Company  $188,024   $149,482 
        Total accounts payable and accrued expenses  $188,024   $149,482 

 

Note 7- OFFICE RENTAL EXPENSE
   
  From time to time, our officers and directors provide office space to us for free. However, we have not reached a formal lease agreement with any officer as of the date of this filing. The office rental expense were $0 and $0 for the year ended September 30, 2014 and 2013, respectively.

  

Note 8- INCOME TAX
   
  The Company has operating losses that may be applied against future taxable income. The potential tax benefits arising from these losses carry forwards, which expire beginning the year 2030, are offset by a valuation allowance due to the uncertainty of profitable operations in the future. The cumulative net operating loss carry forward as of September 30, 2015 and 2014 was $202,656 and $151,590, respectively. The statutory tax rate for fiscal years 2014 and 2013 is 35%. The significant components of the deferred tax assets as of September 30, 2015 and 2014 are as follows:

  

     September 30,   September 30, 
     2015   2014 
           
  Losses carry forwards  $70,930   $53,057 
  Less-Valuation allowance   (70,930)   (53,057)
        Total net deferred tax assets  $-   $- 

 

 F-17 

 

 

5V, INC. AND SUBSIDIARIES

 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

Note 9- COMMITMENTS AND CONTINGENCIES
   
  Control by principal stockholder/officer
   
  The chief executive officer owns beneficially and in the aggregate, the majority of the voting power of the Company. Accordingly, the chief executive officer has the ability to control the approval of most corporate actions, including approving significant expenses, increasing the authorized capital stock and the dissolution, merger or sale of the Company's assets.
   
  Economic and Political Risks
   
  The Company faces a number of risks and challenges not typically associated with companies in North America and Western Europe, since its assets exist solely in the PRC, and its revenues are derived from its operations therein. The PRC is a developing country with an early stage market economic system, overshadowed by the state. Its political and economic systems are very different from the more developed countries and are in a state of change. The PRC also faces many social, economic and political challenges that may produce major shocks and instabilities and even crises, in both its domestic arena and in its relationships with other countries, including the United States. Such shocks, instabilities and crises may in turn significantly and negatively affect the Company's performance.

 

 F-18 

 

 

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

 

On August 6, 2015, the Company dismissed its independent registered public accounting firm, Keith K. Zhen (“Zhen”).  The dismissal was approved by the Board of Directors (the “Board”) of the Company.

 

In  connection  with the audit of the fiscal years ended September 30, 2014 and 2013 and through the date hereof, there were (i) no disagreements with Zhen on any matter of accounting  principles or practices,  financial statement  disclosure, or auditing scope or procedure, which disagreements if not  resolved  to the  satisfaction  of Zhen would  have caused them to make reference to the subject matter of the disagreement(s) in connection with their report; (2) no "reportable events" as such term is defined in Item 304(a)(1)(v) of Regulation S-K except certain material weaknesses in the internal controls over financial reporting as disclosed in the Form 10-K for the fiscal year ended September 30, 2013.

 

Zhen’s report on the financial statements of the Company for the years ended September 30, 2014 and 2013 did not contain an adverse opinion or a disclaimer of opinion, nor were they qualified or modified as to uncertainty, audit scope, or accounting principles.

 

On August 6, 2015, the Company engaged Jimmy P. Lee CPA PC (“Lee”) as the Company’s independent registered public accountant effective immediately.  The engagement was approved by the Board.  Prior to August 9, 2015, the Company did not consult with Lee regarding (1) the application of accounting principles to a specified transaction, (2) the type of audit opinion that might be rendered on the Company’s financial statements, (3) written or oral advice provided that would be an important factor considered by the Company in reaching a decision as to an accounting, auditing or financial reporting issue, or (4) any matter that was the subject of a disagreement between the Company and its predecessor auditor as described in Item 304(a)(1)(iv) or a reportable event as described in Item 304(a)(1)(v) of Regulation S-K.

 

The Company has authorized Zhen to respond fully to any inquiries of Lee.

 

There are not and have not been any disagreements between the Company and its accountants on any matter of accounting principles, practices or financial statement disclosure.

  

Item 9A. Controls and Procedures.

 

Evaluation of Disclosure Controls and Procedures

 

The Company’s management is responsible for establishing and maintaining a system of disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act) that is designed 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 Commission’s rules and forms.  Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer’s management, including its principal executive officer or officers and principal financial officer or officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

 

In accordance with Exchange Act Rules 13a-15 and 15d-15, an evaluation was completed under the supervision and with the participation of the Company’s management, including the Company’s sole officer and director, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures as of the end of the period covered by this Annual Report. Based on that evaluation, the Company’s officers and directors concluded that the Company’s disclosure controls and procedures as of September 30, 2015 were effective in providing reasonable assurance that information required to be disclosed in the Company’s reports filed or submitted under the Exchange Act was recorded, processed, summarized, and reported within the time periods specified in the Commission’s rules and forms.

 

 10 

 

 

Evaluation of Internal Controls and Procedures

 

Our management is also responsible for establishing and maintaining adequate internal control over financial reporting.  The Company’s internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

 

Our internal control over financial reporting includes those policies and procedures that:

 

Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company;
   
Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of the Company’s management and directors; and
   
Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.

 

As of September 30, 2015, we carried out an evaluation of the effectiveness of our internal control over financial reporting based on the framework in "Internal Control-Integrated Framework" issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on our evaluation, our management concluded that our internal control over financial reporting was effective as of September 30, 2015.

 

 This annual report does not include an attestation report of the Company’s registered public accounting firm regarding internal controls over financial reporting.  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 Controls over Financial Reporting

 

There have been no significant changes to the Company’s internal controls over financial reporting that occurred during our last fiscal quarter of the year ended September 30, 2015, that materially affected, or were reasonably likely to materially affect, our internal controls over financial reporting.

 

Item 9B. Other Information.

 

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PART III

 

Item 10. Directors, Executive Officers, Promoters and Control Persons; Compliance With Section 16(a) of the Exchange Act.

 

(a)  Identification of Directors and Executive Officers.  The following table sets forth certain information regarding the Company’s directors and executive officers:

 

Name   Age   Position
Jun Jiang   50   President and Chairman
Jingquan Lu   51   Vice President, Secretary, Treasurer and Director

 

The term of office of each director expires at our annual meeting of stockholders or until their successors are duly elected and qualified.  Directors are not compensated for serving as such. Officers are elected by and serve at the discretion of the Board of Directors.

 

Jun Jiang, has served as our Chairman, President, CEO and a director since August 24, 2012 and as the CEO and director of Beijing BNC Health Technology Co. Ltd. since March, 2007. Beijing BNC Health Technology Co. Ltd. is a leading herbal based health products and natural organic skincare products company. Mr. Jiang served as the Executive Director of Beijing HuakeHongzhang Health Technology Co. Ltd. from October 2005 to March 2007 responsible for technology development. From July 2004 to October 2005, June Jiang served as the President of Beijing Duoweite Biotech Co. Ltd., a health products company. As a director of the Company, Ms. Jiang’s past experiences in the health products business will be beneficial to the company.

 

Jingquan Lu, has served as our Vice President, Secretary and Treasurer since August 24, 2012 and as General Manager of Beijing BNC Health Technology Co. Ltd. since 2011.From 2007-2010, he was marketing manager of Jiangsu Dadi Group. From 2005 to 2007, he was marketing manager of Anhui Fengexin Pharmaceutical Corp.

 

(b)   Significant Employees.

 

As of the date hereof, the Company has no significant employees.

 

(c)   Family Relationships.

 

There are no family relationships among directors, executive officers, or persons nominated or chosen by the issuer to become directors or executive officers.

 

(d)   Involvement in Certain Legal Proceedings.

 

There have been no events under any bankruptcy act, no criminal proceedings and no judgments, injunctions, orders or decrees material to the evaluation of the ability and integrity of any director, executive officer, promoter or control person of the Company during the past five years.

 

Compliance with Section 16(a) of the Exchange Act

 

Section 16(a) of the Exchange Act requires the Company’s directors and officers, and persons who beneficially own more than 10% of a registered class of the Company’s equity securities, to file reports of beneficial ownership and changes in beneficial ownership of the Company’s securities with the SEC on Forms 3, 4 and 5. Officers, directors and greater than 10% stockholders are required by SEC regulation to furnish the Company with copies of all Section 16(a) forms they file.

 

Based solely on our review of the reports filed with the SEC, we believe that all persons subject to Section 16(a) of the Exchange Act timely filed all required reports during the 2015 fiscal year. 

 

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Nominating Committee

 

We have not adopted any procedures by which security holders may recommend nominees to our Board of Directors.

 

Audit Committee

 

The Board of Directors acts as the audit committee. The Company does not have a qualified financial expert at this time because it has not been able to hire a qualified candidate. Further, the Company believes that it has inadequate financial resources at this time to hire such an expert.  The Company intends to continue to search for a qualified individual for hire.

 

Item 11. Executive Compensation.

 

The following table sets forth all of the compensation awarded to, earned by, or paid by paid by the Company to each of our named executive officer and directors for the fiscal years ended September 30, 2015 and 2014.

 

Name and Position   Year   Salary  Option
Awards
  All other
Compensation
  Total
Jun Jiang
President and Chairman
   

2015

2014

   None
None
  None
None
  None
None
  None
None
Xiong Wu
Former Executive Vice President and Director
   

2015

2014

   None
None
  None
None
  None
None
  None
None
Jingquan Lu
Vice President, Secretary, Treasurer and Director
   

2015

2014

   None
None
  None
None
  None
None
  None
None
Chi Wu
Former President, Former  Secretary and
   

2015

2014

   None
None
  None
None
  None
None
  None
None
Former Sole Director                 

 

The Company's officers and directors have not received any cash or other compensation since inception.  They will not receive any compensation until the consummation of an acquisition.  No compensation of any nature has been paid for on account of services rendered by a director in such capacity.  Our officers and directors intend to devote very limited time to our affairs.

 

It is possible that, after the Company successfully consummates a business combination with an unaffiliated entity, that entity may desire to employ or retain members of our management for the purposes of providing services to the surviving entity.

 

No retirement, pension, profit sharing, stock option or insurance programs or other similar programs have been adopted by the Company for the benefit of its employees.

 

There are no understandings or agreements regarding compensation our management will receive after a business combination.

 

The Company does not have a standing compensation committee or a committee performing similar functions, since the Board of Directors has determined not to compensate the officers and directors until such time that the Company completes a reverse merger or business combination.

 

Employment Agreements

 

The Company is not a party to any employment agreements.

 

 13 

 

 

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

 

(a)           The following tables set forth certain information as of the date of this annual report regarding (i) each person known by the Company to be the beneficial owner of more than 5% of the outstanding shares of Common Stock, (ii) each director, nominee and executive officer of the Company and (iii) all officers and directors as a group.

 

Name and Address of Beneficial Owner 

Amount and

Nature of

Beneficial

Ownership(1)

  

Percent of

Class(2)

 
Jun Jiang
President and Chairman
7th Floor, West Tower, Four Points Sheraton Hotel, Futian, Shenzhen, China
   43,441,500    43.4%
           
Jingquan Lu
Vice President, Secretary and Treasurer
7th Floor, West Tower, Four Points Sheraton Hotel, Futian, Shenzhen, China
   20,000,000    20%
           
WANG Yu Hua   5,945,600    5.94%
           
WU Xue   5,267,200    5.27%
           
All Officers and Directors as a group (2 individuals)   74,654,000    74.65%

 

(1) Beneficial Ownership is determined in accordance with the rules of the SEC and generally includes voting or investment power with respect to securities. Each of the beneficial owners listed above has direct ownership of and sole voting power and investment power with respect to our Common Stock.
   
(2) Based on 100,000,000 shares of Common Stock issued and outstanding as of January 7, 2016.

 

The Company currently has not authorized any compensation plans or individual compensation arrangements.

 

Item 13. Certain Relationships and Related Transactions.

 

The Company utilizes the office space and equipment of its officers and sole director at no cost.  Management estimates such costs to be immaterial.

 

Chi Wu, one of the Company’s prior principal stockholders and sole director and officer, advanced $28,814 to the Company as of September 30, 2011. Jun Jiang, the Company’s current principal stockholder and director and officer, advanced $188,024 to the Company as of September 30, 2015. Both advances to the Company are used to cover legal, audit, and filing fees, general office administration and other expenses. The advances are unsecured, with no interest, payable upon demand. No principal amount was repaid to such related parties for the past two years. On August 24, 2012, Jun Jiang and Xiong Wu purchased all of the issued and outstanding shares of common stocks of the Company’s existing shareholders. Concurrently with the transaction, Chi Wu transferred to Jun Jiang all of his claims on the advances to the Company.

 

Except as otherwise indicated herein, there have been no other related party transactions, or any other transactions or relationships required to be disclosed pursuant to Item 404 and Item 407(a) of Regulation S-K.

 

 14 

 

 

Item 14.  Principal Accounting Fees and Services

 

Zhen was the Company’s independent registered public accounting firm until they were dismissed by the Company on August 6, 2015. On the same day Lee was appointed to serve as the Company’s independent registered public accounting.

 

Audit Fees  

 

The aggregate fees billed by Zhen for professional services rendered for the audit of our annual financial statements and review of financial statements included in our periodic reports or services that are normally provided in connection with statutory and regulatory filings were $7,000 for the fiscal year ended September 30, 2014.

 

The aggregate fees billed by Lee for professional services rendered for the audit of our annual financial statements and review of financial statements included in our periodic reports or services that are normally provided in connection with statutory and regulatory filings were $7,500 for the fiscal year ended September 30, 2015 and $3,000 for the fiscal year ended September 30, 2014.

 

Audit-Related Fees

 

There were no fees billed by Zhen for assurance and related services that are reasonably related to the performance of the audit or review of the Company’s financial statements for the fiscal years ended September 30, 2014.

 

There were no fees billed by Lee for assurance and related services that are reasonably related to the performance of the audit or review of the Company’s financial statements for the fiscal year ended September 30, 2015.

 

Tax Fees

 

There were no fees billed by Zhen for professional services for tax compliance, tax advice, and tax planning for each of the fiscal years ended September 30, 2014.

 

There were no fees billed by Lee for professional services for tax compliance, tax advice, and tax planning for the fiscal year ended September 30, 2015.

 

All Other Fees

 

There were no fees billed by Zhen for other products and services for the fiscal years ended September 30, 2014.

 

There were no fees billed by Lee for other products and services for the fiscal year ended September 30, 2015.

 

Audit Committee’s Pre-Approval Process

 

The Board of Directors acts as the audit committee of the Company, and accordingly, all services are approved by the Board of Directors.

 

 15 

 

 

Part IV

 

Item 15. Exhibits, Financial Statement Schedules

 

(a)  The audited financial statements are included in Item 8 of this annual report on Form 10-K.

 

(b) Index to Exhibits required by Item 601 of Regulation S-K.

 

Exhibit   Description
     
*   3.1   Certificate of Incorporation, as filed with the Delaware Secretary of State on February 19, 2010.
     
*   3.2   By-laws.
     
** 3.3   Certificate of Ownership and Merger filed with the Office of Secretary of State of Delaware on May 3, 2011.
     
3.4   Certificate of Amendment of Certificate of Incorporation (filed herein)
     
31.1   Certification of the Company’s Principal Executive Officer and Principal Financial and Accounting Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, with respect to the registrant’s Annual Report on Form 10-K for the year ended September 30, 2011.
     
+32.1   Certification of the Company’s Principal Executive Officer and Principal Financial and Accounting Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
     
101.INS   XBRL Instance Document
     
101.SCH   XBRL Taxonomy Extension Schema
     
101.CAL   XBRL Taxonomy Extension Calculation Linkbase
     
101.DEF   XBRL Taxonomy Extension Definition Linkbase
     
101.LAB   XBRL Taxonomy Extension Label Linkbase
     
101.PRE   XBRL Taxonomy Extension Presentation Linkbase
     

 

*   Filed as an exhibit to the Company’s Registration Statement on Form 10-SB, as filed with the Securities and Exchange Commission on July 20, 2007, and incorporated herein by this reference.
     
**   Filed as an Exhibit to the Company's Form 8-K Filed with the Securities and Exchange Commission on May 6, 2011.
     
+   In accordance with the SEC Release 33-8238, deemed being furnished and not filed.

 

 16 

 

 

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.

 

  5V, INC.
     
Dated: January 13, 2016 By: /s/ Jun Jiang
    Jun Jiang
    President
    Duly Authorized Officer
    Principal Executive officer
    Principal Financial and Accounting 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 and on the dates indicated.

 

Dated: January 13, 2016 By: /s/ Jun Jiang
    Jun Jiang
    President and Chairman
    Principal Executive officer
    Principal Financial and Accounting Officer

 

 

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