Attached files
| file | filename |
|---|---|
| EX-32.1 - CERTIFICATION - US VR Global.com Inc. | f10k2016ex32i_bolygrouphold.htm |
| EX-31.1 - CERTIFICATION - US VR Global.com Inc. | f10k2016ex31i_bolygrouphold.htm |
UNITED STATES
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 December 31, 2016
or
☐ 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: 000-50413
Boly Group Holdings Corp
(f/k/a Safco Investment Holding Corp.)
(Exact name of registrant as specified in its charter)
| DELAWARE | 98-0407797 | |
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
| 923 E. Valley Blvd, Suite 103B, San Gabriel, CA | 91776 | |
| (Address of principal executive offices) | (Zip Code) |
(626) 307-2273
Registrant’s telephone number, including area code
| Securities registered pursuant to Section 12(b) of the Exchange Act: | ||
| Title of each class: | Name of each exchange on which registered: | |
| None | None | |
| Securities registered pursuant to Section 12(g) of the Exchange Act: | ||
Common Stock, par value $.001 (Title of class) | ||
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☒ No ☐
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ 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 ☒
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference Part III of this Form 10-K or any amendment to this Form 10-K. ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ☐ | Accelerated filer | ☐ |
| Non-accelerated filer | ☐ | Smaller reporting company | ☒ |
| (Do not check if a smaller reporting company) | |||
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☒ No ☐
There was no active public
trading market as of the last business day of the Company’s second fiscal quarter, so there was no aggregate market value
of common stock held by non-affiliates.
As of March 28, 2017, the registrant had 325,744 shares of its common stock, no par value
per share, outstanding.
TABLE OF CONTENTS
CAUTIONARY NOTE REGARDING FORWARD LOOKING STATEMENTS
This Annual Report on Form 10-K contains “forward-looking statements”. Forward-looking statements discuss matters that are not historical facts. Because they discuss future events or conditions, forward-looking statements may include words such as “anticipate,” “believe,” “estimate,” “intend,” “could,” “should,” “would,” “may,” “seek,” “plan,” “might,” “will,” “expect,” “anticipate,” “predict,” “project,” “forecast,” “potential,” “continue” negatives thereof or similar expressions. Forward-looking statements speak only as of the date they are made, are based on various underlying assumptions and current expectations about the future and are not guarantees. Such statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, level of activity, performance or achievement to be materially different from the results of operations or plans expressed or implied by such forward-looking statements.
We cannot predict all of the risks and uncertainties. Accordingly, such information should not be regarded as representations that the results or conditions described in such statements or that our objectives and plans will be achieved and we do not assume any responsibility for the accuracy or completeness of any of these forward-looking statements. These forward-looking statements are found at various places throughout this Annual Report on Form 10-K and include information concerning possible or assumed future results of our operations, including statements about potential acquisition or merger targets; business strategies; future cash flows; financing plans; plans and objectives of management; any other statements regarding future acquisitions, future cash needs, future operations, business plans and future financial results, and any other statements that are not historical facts.
These forward-looking statements represent our intentions, plans, expectations, assumptions and beliefs about future events and are subject to risks, uncertainties and other factors. Many of those factors are outside of our control and could cause actual results to differ materially from the results expressed or implied by those forward-looking statements. In light of these risks, uncertainties and assumptions, the events described in the forward-looking statements might not occur or might occur to a different extent or at a different time than we have described. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of the Annual Report on Form 10-K. All subsequent written and oral forward-looking statements concerning other matters addressed in this Annual Report on Form 10-K and attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this Annual Report on Form 10-K.
Except to the extent required by law, we undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, a change in events, conditions, circumstances or assumptions underlying such statements, or otherwise.
Overview
We were incorporated in the State of Delaware in September 2003 as 355, Inc. In January 2010, we changed our name to Ace Consulting Management, Inc. to reflect our new business operations and commence operations as a developmental stage company. Our business is in a very early stage of development. To date, we have not generated meaningful revenues and our limited assets consist solely of cash. Historically we have not complied with our current reporting requirements under the Securities Exchange Act of 1934 and our auditor has expressed substantial doubt about our ability to continue as a going concern.
We commenced providing small to medium sized business-consulting services. We currently have a limited number of clients but we intend to pursue additional business relationships with small to medium sized businesses in China, the Pacific Rim and United States.
Today's ever-changing global business environment requires organizations to continuously adapt to market dynamics. Rapidly changing external realities such as technological changes, globalization, aggressive industry consolidation, shifting governmental regulations, increasing cost pressures, and evolving workforce demographics require strategy aligned operating models and organization strategies to ensure the right organization design and capabilities are in place and operating effectively to compete and win.
We plan to develop a niche for Cross-Cultural Corporate consulting for companies located in China and the US. We look to assist Chinese companies in utilizing U.S. knowhow and technology in order to enhance their local competitiveness in China. Likewise, we seek to enhance the global competitiveness of Chinese and American firms seeking to establish a presence overseas.
Our mission is to bridge U.S. and Chinese businesses in various fields to grow our consulting business. We currently advise Chinese corporations planning mergers, acquisitions, spin-outs, divestitures, or joint ventures to extend business to U.S. With added new Director has enhanced company’s connection and vast experience in China and South Asia region, the company is looking into opportunities to cooperate or partner with wide range of business to explore business opportunity covering area in Hitech and mining sectors.
Change in Control
Pursuant to the terms of the Stock Purchase Agreements (“Stock Purchase Agreements”) dated July 30, 2014 between the Company, the majority shareholders of the Company (the “Sellers”) and certain buyers (the “Purchasers”), the Purchasers purchased from the Sellers, 293,169 shares of common stock of the Company, representing approximately 90% of the issued and outstanding shares of the Company, for an aggregate purchase price of $500,000 (the “Purchase Price”). As of the date hereof, $300,000 has been paid and the balance to pay before December 31, 2016 or sooner at a mutually agreed date.
Effective July 30, 2014, Mr. Jen resigned as President, Chief Executive Officer and Chief Financial Officer of the Company. He will remain as a member of the Board of Directors of the Company. In addition, Mr. Tickel resigned from the Board of Directors of the Company. On the same day, the Company appointed Henry Lee to serve as the President, Chief Executive Officer, Chief Financial Officer and a member of the Board of Directors.
1
On September 30, 2014, the Company filed Articles of Amendment to the Articles of Incorporation, and changed its name from ACE Consulting Management, Inc. to Safco Investment Holding Corp., and to increase the number of authorized shares of capital stock to 100,000,000 shares of common stock; $0.001 par value and 30,000,000 shares of preferred stock S0.001 par value.
On November 30, 2016, the Company appointed Mr. Jen (former officer of the corporation) to serve as the President, Chief Executive Officer, Chief Financial Officer and a member of the Board of Directors. Company also appointed Mr. Xiaoxiong Zhang as Director of the company. On December 16, 2016, the Company filed Articles of Amendment to the Articles of Incorporation, and changed its name from Safco Investment Holding Corp. to Boly Group Holdings Corp. With return of Mr. Alex Jen, our former CEO, our business strategy is to provide wide range of consulting services to small to medium sized businesses as before. With Mr. Xiaoxiong Zhang’s connection and vast experience in China and South Asia region. The company is looking into opportunity to cooperate or partner with wide range of business to explore business opportunity for the company covering area in Hitech and mining sectors.
On December 16, 2016, the Company filed a Certificate of Amendment to its Articles of Incorporation (the “Amendment”) to effectuate a one-for-one hundred (1-for-100) reverse stock split whereby every one hundred (100) shares of the Company’s common stock, $0.001 par value per share (the “Common Stock”), shall be converted into one (1) share of Common Stock. The filing of the Amendment followed (i) the approval by the Company’s stockholders holding a majority of the Common Stock by unanimous written consent in lieu of a special meeting of shareholders of an amendment to the Company’s Certificate of Incorporation to effect a reverse stock split of its Common Stock, at a ratio of 1-for-100 and (ii) the approval by the Company’s Board of the specific 1-for-100 ratio.
On December 16, 2016, the Company, filed the Amendment to increase the total authorized stock which the Company shall have the authority to issue from one hundred million (100,000,000) to two hundred million (200,000,000) shares of common stock, par value $0.001 per share.
Business Strategy
We intend to build an international cross-cultural consulting firm for Chinese-American Businesses by nurturing relationships between United States and China.
Our current business strategy and our business strategy for the future are to provide cross-cultural business consulting services. We plan to undertake these services by initially examining a client’s corporate structure looking towards a way to streamline its operations, organization, or reporting structures. Once a structure is ascertained we will then design, develop and implement systems, procedures and controls to improve our client’s efficiencies and profitability. The company is looking into opportunities to cooperate or partner with wide range of business to explore business ventures covering area in Hitech and mining sectors through strategy of merger and acquisition if opportunities approached.
As part of our consulting services, we will help our clients identify business objectives and create and prioritize a portfolio of initiatives to increase the profitability and efficiency of their businesses. Our business strategy for accomplishing this objective includes attracting and retaining outstanding professionals on an as needed basis, developing long-term client relationships, enhancing and extending our service offerings while building our corporate image.
We may deliver our services through the services of Alex Jen, our sole officer and Directors or through the use of outside consultants with varied backgrounds in business strategy, operational, financial, and organizational management experience. Dr. Alex Jen has cross-cultural and business backgrounds spanning two continents. He has worked for conglomerates with multiple divisions, including FMC and Proctor Gamble. Dr. Jen is of Chinese descent, is fluent in Mandarin and English, he is able to provide a broad project management, engineering experience to clients.
With Director Mr. Xiaoxiong Zhang’s business connection and vast experience in China and South Asia region. The company is looking into opportunity to cooperate or partner with wide range of business to explore business opportunity for the company.
2
Marketing Strategy
The business development of the Company has been limited to referrals to date. We rely to a significant extent on the initial efforts of Dr. Alex Jen, President, to market our services. As we generate additional working capital we will shift our dependence to new officers and principals, employees and outside consultants retained by us to market our services. We will encourage our consultants to generate new business from both existing and new clients, and reward our consultants with increased compensation and promotions for obtaining new business. In pursuing new business, we will focus on emphasizing our reputation and experience and with respect to our search for potential business consulting opportunities includes referrals from consultants, advisors, venture capitalists, members of the financial community and others who may present management with unsolicited proposals.
Consulting Industry and Competition
The business consulting industry in the United States and China is intensely competitive, highly fragmented and subject to rapid change. In general, there are few barriers to entry into our markets, and we expect to face additional competition from new entrants into the business consulting industries. We believe that the principal competitive factors in our market to be reputation, analytical ability, industry experience, service and price. We compete primarily with other business and management consulting firms, specialized or industry specific consulting firms, the consulting practices of large accounting firms and the internal professional resources of existing and potential clients. Furthermore, many of our competitors have international reputations as well as significantly greater personnel, financial, managerial, technical and marketing resources than we do. In addition, many of our competitors also have a significantly greater geographic presence than we do. We may be unable to compete successfully with our existing competitors or with any new competitors.
Intellectual Property
We do not own or license any intellectual property rights.
Government Regulation
Although government regulation does not impact our management consulting business directly with the exception of payroll taxes on the state and federal levels, we anticipate that our clients who engage in segments of business which involve an exposure to the Internet may have an impact. We are observing that laws and regulations directly applicable to Internet communications, commerce and marketing are becoming more prevalent. If any of these laws hinders the growth in use of the Internet generally or decreases for the acceptance of the Internet as a medium for communication, commerce and marketing, our prospects business may suffer materially. The United States Congress has enacted Internet laws regarding children’s privacy, copyrights and taxation. Other laws and regulations may be adopted covering issues such as user privacy, pricing, content, taxation and quality of products and services. State and foreign governments might attempt to regulate Internet transmissions or levy sales or other taxes relating to Internet activity. It may take years to determine whether and how existing laws such as those governing intellectual property, privacy, libel and taxation apply to the Internet and Internet advertising and marketing services. In addition, the growth and development of the market for Internet commerce may prompt calls for more stringent consumer protection laws, both in the United States and abroad, that may impose additional burdens on companies conducting business over the Internet.
Employees
As of December 31, 2016, we had no full-time employees. Our officer and directors spend approximately 30 hours per week on Company matters. We may employ additional people as we continue to implement our plan of operation.
3
Smaller reporting companies are not required to provide the information required by this item.
ITEM 1B. UNRESOLVED STAFF COMMENTS
Smaller reporting companies are not required to provide the information required by this item.
Our principal executive office is located at 923 E. Valley Blvd, Suite 103B, San Gabriel, CA 91776 and our telephone number is (626) 307-2273. Office space is provided by Alex Jen, President of the Company at no cost.
We believe our current facilities are sufficient for our current needs and will be adequate, or that suitable additional or substitute space will be available on commercially reasonable terms, for the foreseeable future.
The Company is currently not involved in any litigation that the Company believes could have a materially adverse effect on the Company’s financial condition or results of operations. There is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or other body pending or, to the knowledge of the executive officers of the Company or any of the Company’s subsidiaries, threatened against or affecting the Company, the Company’s Common Stock, any of the Company’s subsidiaries or the Company’s or the Company’s subsidiaries’ officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect.
ITEM 4. MINE SAFETY DISCLOSURES.
Not Applicable.
4
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.
| (a) | Market Information |
The Company’s common stock is currently trading on the OTC bulletin Board under symbol SIHC. Our stock is thinly traded and there is no active trading market developed for our shares of common stock.
| (b) | Holders |
As of March 28, 2017, we had approximately 77 holders of our common stock.
| (c) | Dividends |
To date, we have not declared or paid any dividends on our common stock. We currently do not anticipate paying any cash dividends in the foreseeable future on our common stock. Although we intend to retain our earnings, if any, to finance the exploration and growth of our business, our Board of Directors has the discretion to declare and pay dividends in the future.
Payment of dividends in the future will depend upon our earnings, capital requirements, and any other factors that our Board of Directors deems relevant.
d) Securities Authorized for Issuance under Equity Compensation Plan
We do not have securities authorized for issuance under any equity compensation plan.
Recent Sales of Unregistered Securities
None.
Rule 10B-18 Transactions
During the year ended December 31, 2016, there were no repurchases of the Company’s common stock by the Company
ITEM 6. SELECTED FINANCIAL DATA.
Smaller reporting companies are not required to provide the information required by this item.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION.
You should read the following discussion together with our financial statements and the related notes included elsewhere in this annual report on Form 10-K. This discussion contains forward-looking statements that are based on our current expectations, estimates and projections about our business and operations. Our actual results may differ materially from those currently anticipated and expressed in such forward-looking statements.
General
We are a business consulting firm that applies our services to a broad range of clients that will enable companies to effectively increase profitability as well as advance the development of their businesses. We provide advice for clients involved in many matters and general corporate strategies.
We derive revenues principally from professional services rendered by our employee. In most instances, we charge clients on a time-and-materials basis and recognize revenues in the period when we provide our services. We charge consultants’ time at hourly rates and on a per project basis. However, in the future, as we retain the services of additional outside employee consultants with differing skills, our hourly rates may vary from consultant to consultant depending on a consultant’s position, experience and expertise, and other factors. Outside experts will not bill clients directly for their services as all of the billing will be done through our office. As a result, we will generate substantially all of our own professional services fees from the work of our own full-time consultants. Factors that affect our professional services fees include the number and scope of client engagements, the number of consultants employed by us, the consultants’ billing rates, and the number of hours worked by the consultants.
On July 30, 2014, the Company, the former majority shareholders of the Company (the “Sellers”) and certain buyers (the “Purchasers”) entered into a stock purchase agreement (the “Stock Purchase Agreement”), whereby the Purchasers purchased from the Sellers, 293,169 shares of common stock, par value $0.001 per share, of the Company, representing approximately 90% of the issued and outstanding shares of the Company, for an aggregate purchase price of $500,000 (the “Purchase Price”). As of the date hereof, $300,000 has been paid and the balance to pay before December 31, 2016 or sooner at a mutually agreed date.
5
In connection with the Stock Purchase Agreement, on July 30, 2014, Alex Jen submitted to the Company a resignation letter pursuant to which he resigned as the President, Chief Executive Officer and Chief Financial Officer of the Company effectively immediately. He remains as a member of the Board of Directors of the Company. In addition, Gary A. Tickel resigned from the Board of Directors of the Company. Mr. Jen’s and Mr. Tickel’s resignations were not a result of any disagreements relating to the Company’s operations, policies or practices.
On July 30, 2014, the Board of Directors of the Company accepted the resignations of Mr. Jen and Mr. Tickel and appointed Henry Lee to serve as the President, Chief Executive Officer, Chief Financial Officer and a member of the Board of Directors.
On September 30, 2014, we filed an amendment to our Certificate of Incorporation to change the Company’s name to Safco Investment Holding Corp., and to increase the number of authorized shares of capital stock to 100,000,000 shares of common stock; $0.001 par value and 30,000,000 shares of preferred stock S0.001 par value.
On November 30, 2016, the Company appointed Mr. Jen (former officer of the corporation) to serve as the President, Chief Executive Officer, Chief Financial Officer and a member of the Board of Directors. Company also appointed Mr. Xiaoxiong Zhang as Director of the company.
On December 16, 2016, the Company filed Articles of Amendment to the Articles of Incorporation, and changed its name from Safco Investment Holding Corp. to Boly Group Holdings Corp. The Company filed a Certificate of Amendment to its Articles of Incorporation (the “Amendment”) to effectuate a one-for-one hundred (1-for-100) reverse stock split whereby every one hundred (100) shares of the Company’s common stock, $0.001 par value per share (the “Common Stock”), shall be converted into one (1) share of Common Stock. The filing of the Amendment followed (i) the approval by the Company’s stockholders holding a majority of the Common Stock by unanimous written consent in lieu of a special meeting of shareholders of an amendment to the Company’s Certificate of Incorporation to effect a reverse stock split of its Common Stock, at a ratio of 1-for-100and (ii) the approval by the Company’s Board of the specific 1-for-100 ratio.
On December 16, 2016, the Company, filed the Amendment to increase the total authorized stock which the Company shall have the authority to issue from one hundred million (100,000,000) to two hundred million (200,000,000) shares of common stock, par value $0.001 per share.
Plan of Operation
We have commenced limited operations and will require additional capital to recruit personnel to operate business and to implement our business plan.
Our current business is generated through referrals. We plan to initiate marketing efforts through a variety of venues for our future business including trade associations, chambers of commerce and alumni associations.
We seek to become a bridge between China and the U.S., with our business background and extensive knowledge we can assist China companies to acquire U.S. technology or equipment to facilitate and implement their existing business in China.
In the next 12 months if we are unable to satisfy our cash requirements, our major shareholders have indicated that they are willing to loan additional funds to the Company to cover any shortfalls, although there is no written agreement or guarantee.
We plan to raise funds through equity financing in the next 12 months. If we successfully raise the funds, it will be used for our operations and to invest in potential joint venture or acquisition.
6
Results of Operation
Our Company had the following comparative results from operations for the fiscal years ended December 31, 2016 and 2015:
| 1. | Gross revenue of $0 in 2016 as compared with gross revenue of $0 in 2015. |
| 2. | Operating expenses of $30,504 in 2016 as compared with operating expenses of $33,159 in 2015. |
| 3. | Net loss of $31,326 in 2016 as compared to a loss of $33,981 in 2015. |
Liquidity and Capital Resources
Our financial condition as of December 31, 2016 and 2015 is summarized as follows:
Working Capital Deficit:
| December 31, 2016 | December 31, 2015 | |||||||
| Current assets | $ | 3,264 | $ | 10,217 | ||||
| Current liabilities | (68,798 | ) | (44,425 | ) | ||||
| Working capital deficit | $ | (65,534 | ) | $ | (34,208 | ) | ||
Cash Flows:
| Year Ended December 31 | ||||||||
| 2016 | 2015 | |||||||
| Cash used in operating activities | $ | (35,696 | ) | $ | (29,049 | ) | ||
| Cash provided by financing activities | 26,195 | 36,819 | ||||||
| Net change in cash | $ | (9,501 | ) | $ | 7,770 | |||
We have incurred recurring losses from operations, and utilized cash flow in operating activities since inception, and we have no recurring source of revenue. As of December 31, 2016, we have stockholders’ deficit of $65,534. These factors, among others, raise substantial doubt about our ability to continue as a going concern.
Management’s plan to support the Company in operations and to maintain its business strategy is to raise funds through public offerings and to rely on officers and directors to perform essential functions with minimal compensation. If we do not raise all of the money we need from public offerings, we will have to find alternative sources, such as a private placement of securities or loans or advances from our officers, directors or others. Such additional financing may not become available on acceptable terms and there can be no assurance that any additional financing that the Company does obtain will be sufficient to meet its needs in the long term. Even if the Company is able to obtain additional financing, it may contain undue restrictions on our operations, in the case of debt financing; or cause substantial dilution for our stockholders, in the case of equity financing.
Off Balance Sheet Arrangements
As of December 31, 2016, we do not have any off-balance sheet arrangements.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
Smaller reporting companies are not required to provide the information required by this item.
7
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Boly Group Holdings Corp
(Formerly Safco Investment Holding Corp.)
December 31, 2016 and 2015
Index to the Financial Statements
8
REPORT OF INDEPENDENT REGISTERED ACCOUNTING FIRM
To the Board of Directors and Stockholders
Boly Group Holdings Corp.
(Formerly Safco Investment Holding Corp.)
We have audited the accompanying balance sheets of Boly Group Holdings Corp., formerly Safco Investment Holding Corp., (the “Company”) as of December 31, 2016 and 2015, and the related statements of operations, changes in stockholders’ deficit, 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. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by 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 the Company as of December 31, 2016 and 2015, and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 3 to the financial statements, the Company has experienced recurring operating losses and negative operating cash flows operations, and has no source of recurring revenue as of December 31, 2016. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 3 to the financial statements. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
/s/ Weinberg & Company, P.A.
Weinberg & Company, P.A.
Los Angeles, California
March 29, 2017
F-1
(Formerly Safco Investment Holding Corp)
Balance Sheets
| December 31, 2016 | December 31, 2015 | ||||||||||
| ASSETS | |||||||||||
| CURRENT ASSETS: | |||||||||||
| Cash | $ | 716 | $ | 10,217 | |||||||
| Prepaid expenses | 2,548 | - | |||||||||
| Total Current Assets | 3,264 | 10,217 | |||||||||
| Total Assets | $ | 3,264 | $ | 10,217 | |||||||
| LIABILITIES AND STOCKHOLDERS' DEFICIT | |||||||||||
| CURRENT LIABILITIES: | |||||||||||
| Accounts payable and accrued expenses | $ | 3,385 | $ | 5,207 | |||||||
| Advances from shareholders | 59,254 | 39,218 | |||||||||
| Advances from related party | 6,159 | - | |||||||||
| Total Current Liabilities | 68,798 | 44,425 | |||||||||
| STOCKHOLDERS' DEFICIT: | |||||||||||
| Preferred stock at $0.001 par value: 30,000,000 shares authorized; none issued or outstanding | - | - | |||||||||
| Common stock par value $0.001: 200,000,000 shares authorized; 325,744 shares issued and outstanding | 326 | 326 | |||||||||
| Additional paid-in capital | 1,664,282 | 1,664,282 | |||||||||
| Accumulated deficit | (1,730,142 | ) | (1,698,816 | ) | |||||||
| Total Stockholders' Deficit | (65,534 | ) | (34,208 | ) | |||||||
| Total Liabilities and Stockholders' Deficit | $ | 3,264 | $ | 10,217 | |||||||
See accompanying notes to the financial statements
F-2
(Formerly Safco Investment Holding Corp)
Statements of Operations
| For the Year | For the Year | |||||||
| Ended | Ended | |||||||
| December 31, 2016 | December 31, 2015 | |||||||
| Net revenues | $ | - | $ | - | ||||
| Operating expenses | ||||||||
| Professional fees | 28,247 | 32,333 | ||||||
| General and administrative expenses | 2,257 | 826 | ||||||
| Total operating expenses | 30,504 | 33,159 | ||||||
| Loss from operations | (30,504 | ) | (33,159 | ) | ||||
| Income tax provision | 822 | 822 | ||||||
| Net loss | $ | (31,326 | ) | $ | (33,981 | ) | ||
| Net loss per common share - Basic and diluted: | $ | (0.10 | ) | $ | (0.10 | ) | ||
| Weighted average common shares outstanding - basic and diluted | 325,744 | 325,744 | ||||||
See accompanying notes to the financial statements
F-3
(Formerly Safco Investment Holding Corp)
Statements of Changes in Stockholders' Deficit
For the years ended December 31, 2016 and 2015
| Common Stock, Par Value $0.001 | Additional | Total | ||||||||||||||||||
| Number of Shares | Amount | Paid-in Capital | Accumulated Deficit | Stockholders' Deficit | ||||||||||||||||
| Balance, December 31, 2014 | 325,744 | $ | 326 | $ | 1,663,681 | $ | (1,664,835 | ) | $ | (828 | ) | |||||||||
| Contributed Capital | - | - | 601 | - | 601 | |||||||||||||||
| Net loss | - | - | - | (33,981 | ) | (33,981 | ) | |||||||||||||
| Balance, December 31, 2015 | 325,744 | 326 | 1,664,282 | (1,698,816 | ) | (34,208 | ) | |||||||||||||
| Net loss | - | - | - | (31,326 | ) | (31,326 | ) | |||||||||||||
| Balance, December 31, 2016 | 325,744 | $ | 326 | $ | 1,664,282 | $ | (1,730,142 | ) | $ | (65,534 | ) | |||||||||
See accompanying notes to the financial statements
F-4
(Formerly Safco Investment Holding Corp)
Statements of Cash Flows
| For the Year | For the Year | |||||||
| Ended | Ended | |||||||
| December 31, 2016 | December 31, 2015 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
| Net loss | $ | (31,326 | ) | $ | (33,981 | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities | ||||||||
| Changes in operating assets and liabilities: | ||||||||
| Prepaid expenses | (2,548 | ) | - | |||||
| Accounts payable and accrued expenses | (1,822 | ) | 4,932 | |||||
| NET CASH USED IN OPERATING ACTIVITIES | (35,696 | ) | (29,049 | ) | ||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
| Advances from shareholders | 20,036 | 38,617 | ||||||
| Advances from related party | 6,159 | |||||||
| Repayment of advance from former shareholders | - | (2,399 | ) | |||||
| Capital contribution-Stockholder's payment for accrued expenses | - | 601 | ||||||
| NET CASH PROVIDED BY FINANCING ACTIVITIES | 26,195 | 36,819 | ||||||
| NET CHANGE IN CASH | (9,501 | ) | 7,770 | |||||
| Cash at beginning of period | 10,217 | 2,447 | ||||||
| Cash at end of period | $ | 716 | $ | 10,217 | ||||
| SUPPLEMENTAL DISCLOSURE OF CASH FLOWS INFORMATION: | ||||||||
| Interest paid | $ | - | $ | - | ||||
| Income tax paid | $ | 800 | $ | 800 | ||||
See accompanying notes to the financial statements
F-5
(Formerly Safco Investment Holding Corp)
December 31, 2016 and 2015
Notes to the Financial Statements
Note 1 - Organization and Operations
Boly Group Holdings Corp (formerly Safco Investment Corp or the “Company”) was incorporated on September 19, 2003 under the laws of the State of Delaware. The Company engages in consulting to corporations to improve growth strategies, performance enhancement and maximization of shareholder value.
On July 30, 2014, the Company, the former majority shareholders of the Company (the “Sellers”) and Pan Asia Holdings Corp. (the“Purchasers”) entered into a stock purchase agreement (the “Stock Purchase Agreement”), whereby the Purchasers purchased from the Sellers 293,169 shares of common stock, par value $0.001 per share, of the Company, representing approximately 90% of the issued and outstanding shares of the Company, for an aggregate purchase price of $500,000 (the “Purchase Price”). Through September 30, 2016, $300,000 has been paid and the balance was to be paid before December 31, 2016 or sooner at a mutually agreed date. On October 14th, 2016, Purchaser failed to pay balance of $200,000 to Seller, Purchasers and Sellers mutually agreed to terminate the Securities Purchase Agreement, and the Purchasers returned 205,218 shares to the Sellers.
The 205,218 shares returned by the Purchasers were reissued to Chi Jen Chen, a related party to the Seller. This transaction constituted a change of control in the registrant.
Effective November 30, 2016, Mr. Henry Lee resigned as President, Chief Executive Officer and Chief Financial Officer of the Company. On the same day, the Company appointed Mr. Alex Jen (former officer of the corporation) to serve as the President, Chief Executive Officer, Chief Financial Officer and a member of the Board of Directors.
On December 16, 2016, the Company filed Articles of Amendment to the Articles of Incorporation to (i)changed its name from Safco Investment Holding Corp. to Boly Group Holdings Corp., and (ii) to increase the total authorized stock which the Company shall have the authority to issue from one hundred million (100,000,000) to two hundred million (200,000,000) shares of common stock, par value $0.001 per share.
On December 16, 2016, the Company also effected a 1-for-100 reverse stock split of its common shares. All share and per share amounts have been retroactively restated to reflect the split as if it had occurred as of the earliest period presented.
Note 2 - Summary of Significant Accounting Policies
The Management of the Company is responsible for the selection and use of appropriate accounting policies and the appropriateness of accounting policies and their application. Critical accounting policies and practices are those that are both most important to the portrayal of the Company’s financial condition and results and require management’s most difficult, subjective, or complex judgments, often as a result of the need to make estimates about the effects of matters that are inherently uncertain. The Company’s significant and critical accounting policies and practices are disclosed below as required by generally accepted accounting principles.
Management Estimates
The preparation of financial statements in conformity with generally accepted accounting principles 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. Significant estimates reflected in the financial statements include, but are not limited to, reserves for uncollectible accounts, valuation of deferred tax assets, and share-based compensation costs. Changes in facts and circumstances may result in revised estimates. Actual results could differ from those estimates.
F-6
Fair Value of Financial Instruments
The Company follows paragraph 820-10-35-37 of the FASB Accounting Standards Codification (“Paragraph 820-10-35-37”) to measure the fair value of its financial instruments and paragraph 825-10-50-10 of the FASB Accounting Standards Codification for disclosures about fair value of its financial instruments. Paragraph 820-10-35-37 establishes a framework for measuring fair value in accounting principles generally accepted in the United States of America (U.S. GAAP), and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, Paragraph 820-10-35-37 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels. The three (3) levels of fair value hierarchy defined by Paragraph 820-10-35-37 are described below:
| Level 1 | Quoted market prices available in active markets for identical assets or liabilities as of the reporting date. | |
| Level 2 | Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date. | |
| Level 3 | Pricing inputs that are generally observable inputs and not corroborated by market data. |
Financial assets are considered Level 3 when their fair values are determined using pricing models, discounted cash flow methodologies or similar techniques and at least one significant model assumption or input is unobservable.
The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. If the inputs used to measure the financial assets and liabilities fall within more than one level described above, the categorization is based on the lowest level input that is significant to the fair value measurement of the instrument.
The carrying amounts of the Company’s financial assets and liabilities, such as cash and accrued expenses approximate their fair values because of the short maturity of these instruments.
Transactions involving related parties cannot be presumed to be carried out on an arm's-length basis, as the requisite conditions of competitive, free-market dealings may not exist. Representations about transactions with related parties, if made, shall not imply that the related party transactions were consummated on terms equivalent to those that prevail in arm's-length transactions unless such representations can be substantiated.
Revenue Recognition
The Company follows paragraph 605-10-S99-1 of the FASB Accounting Standards Codification for revenue recognition. The Company will recognize revenue when it is realized or realizable and earned. The Company considers revenue realized or realizable and earned when all of the following criteria are met: (i) persuasive evidence of an arrangement exists, (ii) the product has been shipped or the services have been rendered to the customer, (iii) the sales price is fixed or determinable, and (iv) collectability is reasonably assured. The Company derived no revenue during the years ending December 31, 2016 and 2015.
Stock-Based Compensation
The Company periodically issues stock options and warrants to employees and non-employees in capital raising transactions, for services and for financing costs. The Company accounts for share-based payments under the guidance as set forth in the Share-Based Payment Topic of the FASB Accounting Standards Codification, which requires the measurement and recognition of compensation expense for all share-based payment awards made to employees, officers, directors, and consultants, including employee stock options, based on estimated fair values. The Company estimates the fair value of share-based payment awards to employees and directors on the date of grant using an option-pricing model, and the value of the portion of the award that is ultimately expected to vest is recognized as expense over the required service period in the Company's Statements of Operations. The Company accounts for stock option and warrant grants issued and vesting to non-employees in accordance with the authoritative guidance where the value of the stock compensation is based upon the measurement date as determined at either a) the date at which a performance commitment is reached, or b) the date at which the necessary performance to earn the equity instruments is complete. Stock-based compensation is based on awards ultimately expected to vest and is reduced for estimated forfeitures. Forfeitures are estimated at the time of grant and revised, as necessary, in subsequent periods if actual forfeitures differ from those estimates.
The fair value of the Company’s stock option and warrant grants are estimated using the Black-Scholes-Merton Option Pricing model, which uses certain assumptions related to risk-free interest rates, expected volatility, expected life of the stock options or warrants, and future dividends. Compensation expense is recorded based upon the value derived from the Black-Scholes-Merton Option Pricing model, and based on actual experience. The assumptions used in the Black-Scholes-Merton Option Pricing model could materially affect compensation expense recorded in future periods.
Income Taxes
The Company uses an asset and liability approach for financial accounting and reporting for income taxes that allows recognition and measurement of deferred tax assets based upon the likelihood of realization of tax benefits in future years. Under the asset and liability approach, deferred taxes are provided for the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. A valuation allowance is provided for deferred tax assets if it is more likely than not these items will either expire before the Company is able to realize their benefits, or that future deductibility is uncertain. The Company’s policy is to recognize interest and/or penalties related to income tax matters in income tax expense.
F-7
Net Income (Loss) per Common Share
Basic earnings (loss) per share is computed by dividing the net income (loss) applicable to Common Stockholders by the weighted average number of shares of Common Stock outstanding during the year. Diluted earnings (loss) per share is computed by dividing the net income (loss) applicable to Common Stockholders by the weighted average number of common shares outstanding plus the number of additional common shares that would have been outstanding if all dilutive potential common shares had been issued, using the treasury stock method. Potential common shares are excluded from the computation if their effect is anti-dilutive.
There were no potentially outstanding dilutive common shares for the reporting periods ended December 31, 2016 and 2015.
Recently Issued Accounting Pronouncements
Management does not believe that any recently issued, but not yet effective accounting pronouncements, when adopted, will have a material effect on the accompanying financial statements.
Note 3 - Going Concern
The accompanying financial statements have been prepared under the assumption that the Company will continue as a going concern. Such assumption contemplates the realization of assets and satisfaction of liabilities in the normal course of business. We have incurred recurring losses from operations, and utilized cash flow in operating activities since inception, and we have no recurring source of revenue. As of December 31, 2016, we have stockholders’ deficit of $65,534. These factors, among others, raise substantial doubt about our ability to continue as a going concern within one year after the date that the financial statements are issued. The accompanying financial statements do not include any adjustments that might be necessary should we be unable to continue as a going concern.
Management’s plan to support the Company in operations and to maintain its business strategy is to raise funds through public offerings and to rely on officers and directors to perform essential functions with minimal compensation. If we do not raise all of the money we need from public offerings, we will have to find alternative sources, such as a private placement of securities or loans or advances from our officers, directors or others. Such additional financing may not become available on acceptable terms and there can be no assurance that any additional financing that the Company does obtain will be sufficient to meet its needs in the long term. Even if the Company is able to obtain additional financing, it may contain undue restrictions on our operations, in the case of debt financing; or cause substantial dilution for our stockholders, in the case of equity financing.
Note 4 - Related Party Transactions
Advances from Shareholder
From time to time, a related party of the Company advances funds to the Company for working capital purpose. Those advances are unsecured, non-interest bearing and due on demand.
In November 2011, a former stockholder of the Company advanced $3,000 to the Company for working capital purposes, $2,399 of which was repaid back and $601 was re-classed as contribution of capital in the period ending December 31, 2015.
As of December 31, 2015, the Company had outstanding amounts owed to a shareholder for $39,218 for advances made to the Company for working capital purposes. During 2016, the shareholder advanced additional amounts to the Company for $20,036. As of December 31, 2016, the amount owed to the shareholder had a balance of $59,254.
Advances from Related Party
As of December 31, 2016, a related party of the Company advanced $6,159 to the Company for working capital purposes. These advances are unsecured, non-interest bearing and due on demand.
F-8
Free Office Space
The Company has been provided office space by an officer of the Company at no cost. The management determined that such cost is nominal and did not recognize the rent expense in its financial statements.
Note 5 - Deferred Tax Assets and Income Tax Provision
Deferred Tax Assets
At December 31, 2016, the Company had net operating loss (“NOL”) carry–forwards for Federal income tax purposes of $1,730,142 that may be offset against future taxable income through 2036. No tax benefit has been reported with respect to these net operating loss carry-forwards because the Company believes that the realization of the Company’s net deferred tax assets of approximately $588,248 was not considered more likely than not and accordingly, the potential tax benefits of the net loss carry-forwards are offset by a full valuation allowance.
Deferred tax assets consist primarily of the tax effect of NOL carry-forwards. The Company has provided a full valuation allowance on the deferred tax assets because of the uncertainty regarding the probability of its realization. The valuation allowance increased $10,651 and $11,553 for the reporting periods ended December 31, 2016 and 2015, respectively.
Components of deferred tax assets in the balance sheets are as follows:
| December 31, 2016 | December 31, 2015 | |||||||
| Net deferred tax assets – non-current: | ||||||||
| Expected income tax benefit from NOL carry-forwards | $ | 588,248 | $ | 577,597 | ||||
| Less valuation allowance | (588,248 | ) | (577,597 | ) | ||||
| Deferred tax assets, net of valuation allowance | $ | - | $ | - | ||||
Income Tax Provision in the Statements of Operations
A reconciliation of the federal statutory income tax rate and the effective income tax rate as a percentage of income before income tax provision is as follows:
| For the reporting period ended December 31, 2016 | For the reporting period ended December 31, 2015 | |||||||
| Federal statutory income tax rate | 34.0 | % | 34.0 | % | ||||
| Change in valuation allowance on net operating loss carry-forwards | (34.0 | ) | (34.0 | ) | ||||
| Effective income tax rate | 0.0 | % | 0.0 | % | ||||
F-9
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
| (1) | Previous Independent Registered Public Accounting Firm | |
| (i) | On March 28, 2016, the Company dismissed its independent registered public accounting firm, Li and Company, PC (“LICO”). | |
| (ii) | The reports of LICO on the financial statements of the Company as of December 31, 2014 and 2013, and the related statements of operations, comprehensive loss, changes in stockholders’ deficiency, and cash flows for the two years then ended December 31, 2014 and 2013 did not contain an adverse opinion or disclaimer of opinion and were not qualified or modified as to uncertainty, audit scope or accounting principles other than an explanatory paragraph as to a going concern. | |
| (iii) | The decision to change independent registered public accounting firm was recommended and approved by the Board of Directors of the Company. | |
| (iv) | During the Company’s two most recent fiscal years ended December 31, 2014 and 2013 and any subsequent interim periods through March 28, 2016, the date of dismissal, (a) there were no disagreements with LICO 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 LICO, would have caused it to make reference thereto in its reports on the financial statements for such years and (b) there were no “reportable events” as described in Item 304(a)(1)(v) of Regulation S-K. | |
| (v) | On March 28, 2016 the Company provided LICO with a copy of this Current Report and has requested that it furnish the Company with a letter addressed to the U.S. Securities and Exchange Commission stating whether it agrees with the above statements. A copy of such letter is attached as Exhibit 16.1 to the Current Report on Form 8-K filed with the SEC on April 1, 2016. | |
| (2) | New Independent Registered Public Accounting Firm | |
| On March 28, 2016, the Board of Directors of the Company engaged Weinberg & Company (“Weinberg”) as its new independent registered public accounting firm to audit and review the Company’s financial statements. During the two most recent fiscal years ended December 31, 2014 and 2013 and any subsequent interim periods through the date hereof prior to the engagement of Weinberg, neither the Company, nor someone on its behalf, has consulted Weinberg regarding: | ||
| (i) | either: the application of accounting principles to a specified transaction, either completed or proposed; or the type of audit opinion that might be rendered on the Company’s consolidated financial statements, and either a written report was provided to the Company or oral advice was provided that the new independent registered public accounting firm concluded was an important factor considered by the Company in reaching a decision as to the accounting, auditing or financial reporting issue; or | |
| (ii) | any matter that was either the subject of a disagreement as defined in paragraph 304(a)(1)(iv) of Regulation S-K or a reportable event as described in paragraph 304(a)(1)(v) of Regulation S-K. | |
ITEM 9A. CONTROLS AND PROCEDURES.
Evaluation of Disclosure Controls and Procedures
Pursuant to Rule 13a-15(b) under the Securities Exchange Act of 1934 (“Exchange Act”), the Company carried out an evaluation, with the participation of the Company’s management, including the Company’s Chief Executive Officer and Chief Financial Officer (the Company’s principal executive officer and principal financial officer), of the effectiveness of the Company’s disclosure controls and procedures (as defined under Rule 13a-15(e) under the Exchange Act) as of the end of the period covered by this report. Based on that evaluation, the President and Chief Executive Officer and Chief Financial Officer concluded that, as of the end of the period covered by this report, the Company’s disclosure controls and procedures were not effective to ensure that information required to be included in our periodic SEC filings is recorded, processed, summarized, and reported within the time periods specified in the SEC rules and forms, due to the material weaknesses identified below.
9
Management's Annual Report on Internal Control Over Financial Reporting.
As of December 31, 2016, management assessed the effectiveness of our internal control over financial reporting. The Company’s management is responsible for establishing and maintaining adequate internal control over financial reporting for the Company. Internal control over financial reporting is defined in Rule 13a-15(f) or 15d-15(f) promulgated under the Securities Exchange Act of 1934, as amended, as a process designed by, or under the supervision of, the Company’s President, Chief Executive Officer and Chief Financial Officer and effected by the Company’s Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP in the United States of America and includes those policies and procedures that:
| ● | Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect our transactions and dispositions of our assets; |
| ● | Provide reasonable assurance our transactions are recorded as necessary to permit preparation of our financial statements in accordance with GAAP, and that receipts and expenditures are being made only in accordance with authorizations of our 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 statement. |
In evaluating the effectiveness of our internal control over financial reporting, our management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control – Integrated Framework (2013 framework). Based on that evaluation, our President, Chief Executive Officer and Chief Financial Officer who also serves as our principal accounting officer, concluded that, during the period covered by this report, such internal controls and procedures were ineffective to detect the inappropriate application of US GAAP rules as more fully described below.
This was due to deficiencies that existed in the design or operation of our internal controls over financial reporting that adversely affected our internal controls and that amounted to be material weaknesses.
The matters involving internal controls and procedures that our management considered to be material weaknesses under the standards of the Public Company Accounting Oversight Board were: (i) lack of a functioning audit committee due to a lack of a majority of independent members and a lack of a majority of outside directors on our board of directors, resulting in ineffective oversight in the establishment and monitoring of required internal controls and procedures; (ii) inadequate segregation of duties consistent with control objectives; and (iii) ineffective controls over period end financial disclosure and reporting processes. The aforementioned material weaknesses were identified by our President, Chief Executive Officer and Chief Financial Officer, in connection with the review of our financial statements as of December 31, 2016.
Management believes that the lack of a functioning audit committee and the lack of a majority of outside directors on our board of directors results in ineffective oversight in the establishment and monitoring of required internal controls and procedures, which could result in a material misstatement in our financial statements in future periods.
Our management has begun evaluating remedies to reduce these deficiencies. However, we will not be able to implement any remedial measures, such as appointing independent members on our board of directors, until we have sufficient fund to do so.
Changes in Internal Controls over financial reporting
No change in our internal control over financial reporting occurred during the fourth fiscal quarter of the year ended December 31, 2016 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
None.
10
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.
Directors and Executive Officers
The following sets forth information about our directors and executive officers as of the date of this report:
| Name | Age | Positions and Offices Held | ||
| Alex Jen | 76 | President, Chief Executive Officer, Chief Financial Officer and Director | ||
| Xiaoxiong Zhang | 46 | Director |
Alex Jen, Ph.D., has served as the Director of the Company since inception. Dr. Jen served as President of Omni Consultant Ltd starting in December 2002 doing consulting work for Chinese firms exporting merchandise to the United States until his resignation in December 2004. He has extensive experiences in the development, manufacturing and marketing of new products in the pharmaceutical, consumer chemicals, foods, and electronic industries. He has held various positions at FMC Corporation from 1971 to 1972 as Development Engineer, Abbott Laboratories from 1972 to 1976 as Project Manager, Proctor and Gamble Company and Clorox from 1976 to 1992 as Project Engineer, and Fortron/Source Corporation from 1992 to 2002 as Vice President of China Operations. Dr. Jen received his Ph.D. in Chemical Engineering from the University of Massachusetts at Amherst in 1968. Dr. Jen is of Chinese descent and provides a broad project management, engineering and certification background from both continents.
Xiaoxiong Zhang previously served as a consultant at China Youth Travel Industry (HK) Limited from January 2016 to present. Mr. Zhang also previously held a consultant position at Orient Equal International Group Limited from 2010 to 2015 where he served as an investment manager in Hong Kong. Mr. Zhang is a graduate of Tsinghua University where he majored in Economics. Mr. Zhang has vast investment experience in China, especially focused in high tech investment and real estate investment in China and the South East Asia region.
Term of Office
Our directors hold office until the next annual general meeting of our stockholders and until their successors have been duly elected and qualified or until removed from office in accordance with our bylaws. Our officers are elected by and serve at the discretion of the board of directors.
Family Relationships
There are no family relationships between any of our directors or executive officers.
Certain Legal Proceedings
To our knowledge, no director, nominee for director, or executive officer of the Company has been a party in any legal proceeding material to an evaluation of his ability or integrity during the past ten years.
Potential Conflicts of Interest
We are not aware of any current or potential conflicts of interest with our director or executive officer.
Board Committees
We have not formed an Audit Committee, Compensation Committee or Nominating and Corporate Governance Committee as of the filing of this Annual Report. Our Board of Directors performs the principal functions of an Audit Committee. We currently do not have an audit committee financial expert on our Board of Directors. We believe that an audit committee financial expert is not required because the cost of hiring an audit committee financial expert to act as one of our directors and to be a member of an Audit Committee outweighs the benefits of having an audit committee financial expert at this time.
We do not have a financial expert serving on the Board of Directors or employed as an officer based on management’s belief that the cost of obtaining the services of a person who meets the criteria for a financial expert under Item 401(e) of Regulation S-B is beyond its limited financial resources and the financial skills of such an expert are simply not required or necessary for us to maintain effective internal controls and procedures for financial reporting in light of the limited scope and simplicity of accounting issues raised in its financial statements at this stage of its development.
11
Code of Ethics
The company has adopted a Code of Ethics applicable to its Principal Executive Officer and Principal Financial Officer. A copy of our Code of Ethics is available without charge, to any person desiring a copy of the Code of Business Conduct and Ethics, by written request to us at our principal offices.
ITEM 11. EXECUTIVE COMPENSATION
The following summary compensation table sets forth all compensation awarded to, earned by, or paid to the named executive officers paid by us during the years ended December 31, 2016 and December 31, 2015.
SUMMARY COMPENSATION TABLE
| Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock Awards ($) | Option Awards ($) | Non-Equity Incentive Plan Compensation ($) | Non-Qualified Deferred Compensation Earnings ($) | All Other Compensation ($) | Totals ($) | |||||||||||||||||||||||||||
| Alex Jen, Chief Executive Officer Chief Financial | 2016 | $ | 0 | 0 | 0 | 0 | 0 | 0 | $ | 0 | $ | 0 | ||||||||||||||||||||||||
| Officer | 2015 | $ | 0 | 0 | 0 | 0 | 0 | 0 | $ | 0 | $ | 0 | ||||||||||||||||||||||||
| Henry Lee, Chief Executive Officer and Chief | 2016 | $ | 0 | 0 | 0 | 0 | 0 | 0 | $ | 0 | $ | 0 | ||||||||||||||||||||||||
| Financial Officer | 2015 | $ | 0 | 0 | 0 | 0 | 0 | 0 | $ | 0 | $ | 0 | ||||||||||||||||||||||||
Employment Agreements
We do not have any employment agreements in place with our sole officer or directors.
Outstanding Equity Awards at Fiscal Year End
None of our executive officers received any equity awards, including, options, restricted stock or other equity incentives during the fiscal year ended December 31, 2016.
Compensation of Directors
Our directors do not receive any compensation for their services as directors. The Board of Directors has the authority to fix the compensation of directors. No amounts have been paid to, or accrued to, directors in such capacity.
12
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information as of the date hereof with respect to the beneficial ownership of our ordinary shares, the sole outstanding class of our voting securities, by (i) each stockholder known to be the beneficial owner of 5% or more of the outstanding ordinary shares of the Company, (ii) each executive officer and director, and (iii) all executive officers and directors as a group. Beneficial ownership is determined in accordance with the rules of the Securities and Exchange Commission and generally includes voting or investment power with respect to securities. ordinary shares subject to options, warrants or convertible securities exercisable or convertible within 60 days as of the date hereof are deemed outstanding for computing the percentage of the person or entity holding such options, warrants or convertible securities but are not deemed outstanding for computing the percentage of any other person and is based on 325,744 ordinary shares issued and outstanding as of March 28, 2017.
| Name | Number of Shares Beneficially Owned | Percent of Class (1) | ||||||
| Chi Jen Chen 14 FL,Funan Road Kaohsiung City, Taiwan | 205,218 | 63 | % | |||||
| Pan Asia Holding Corp. 8FL, No. 167 Chang An E. Road., Sec 2 Taipei, Taiwan | 23,454 | (2) | 7.2 | % | ||||
| Alex Jen, Director 711 N. 1st Avenue Arcadia, California 91006 | 1,200 | (3) | 0.004 | % | ||||
| Rostar International Holdings Ltd. Unit D, 5/F, No.430-436 Nathan Road Kowloon, Hong Kong | 23,454 | (4) | 7.20 | % | ||||
| Ting-Wei Lee 4 FL, No.4 Alley 35, Lane 179 Nei Hu Road., Sec.2 Taipei, Taiwan | 17,590 | 5.40 | % | |||||
| Esther Pranolo 2115 Sherwood Rd San Marino, Ca 91108 | 17,774 | 5.50 | % | |||||
| All Executive Officers and Directors as a group (1 person) | 1,200 | 0.004 | % | |||||
| (1) | Applicable percentage ownership is based on 325,744 shares of Common Stock outstanding as of March 28, 2017. |
| (2) | Henry Lee has the sole voting and dispositive control over these securities. |
| (3) | Alex Jen, our Chief Executive Officer, Chief Financial Officer and Director, has sole voting and dispositive control over these securities.
|
| (4) | Chang Jung Lee has sole voting and dispositive control over these securities. |
13
Changes in Control
We are not aware of any arrangements that may result in “changes in control” as that term is defined by the provisions of Item 403(c) of Regulation S-K.
ITEM 13. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.
Other than compensation arrangements, the following is a description of transactions to which we were a participant or will be a participant to, in which:
| ● | the amounts involved exceeded or will exceed the lesser of 1% of our total assets or $120,000; and | |
| ● | any of our directors, executive officers or holders of more than 5% of our capital stock, or any member of the immediate family of the foregoing persons, had or will have a direct or indirect material interest. |
Advances from Related Party
As of December 31, 2016, a related party of the Company had advanced $6,159 to the Company for working capital purposes. These advances are unsecured, non-interest bearing and due on demand.
Advances from Current Shareholder
From time to time, a shareholder of the Company had advance funds to the Company for working capital purpose. Those advances are unsecured, non-interest bearing and due on demand.
As of December 31, 2016, a stockholder of the Company had advanced $59,254 to the Company for working capital purposes. These funds are unsecured, non-interest bearing and due on demand.
Free Office Space
The Company has been provided office space by an officer of the Company at no cost.
14
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
Audit Fees
The aggregate fees billed for each of the last two fiscal years for professional services rendered by the principal accountant for the audit of the Company’s annual financial statements and review of financial statements included in the Company’s Form 10-K or 10-Q or services that are normally provided by the accountant in connection with statutory and regulatory filings was approximately $12,000 and $11,000 for the fiscal years ended December 31, 2016 and 2015, respectively.
Audit Related Fees
The Company has been provided office space by an officer of the Company at no cost. The management determined that such cost is nominal and did not recognize the rent expense in its financial statements.
There were no fees for audit related services for the years ended December 31, 2016 and 2015.
Tax Fees
For the Company’s fiscal years ended December 31, 2016 and 2015, we were not billed for professional services rendered for tax compliance, tax advice, and tax planning.
All Other Fees
The Company did not incur any other fees related to services rendered by our principal accountant for the fiscal years ended December 31, 2016 and 2015.
Effective May 6, 2003, the Securities and Exchange Commission adopted rules that require that before our auditor is engaged by us to render any auditing or permitted non-audit related service, the engagement be:
- approved by our audit committee; or
- entered into pursuant to pre-approval policies and procedures established by the audit committee, provided the policies and procedures are detailed as to the particular service, the audit committee is informed of each service, and such policies and procedures do not include delegation of the audit committee's responsibilities to management.
We do not have an audit committee. Our entire board of directors pre-approves all services provided by our independent auditors.
All of the above services and fees were reviewed and approved by the entire board of directors before the respective services were rendered.
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ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES.
a) Documents filed as part of this Annual Report
1. Financial Statements
2. Financial Statement Schedules
3. Exhibits
| Exhibits # | Title | |
| 3.1 | Certificate Of Incorporation (Incorporated by reference to Form 10SB filed on October 9, 2003.) | |
| 3.2 | Certificate Of Amendment Of Certificate Of Incorporation (Incorporated by reference to Form S-1 filed on September 16, 2010.) | |
| 3.3 | Certificate of Amendment of Certificate of Incorporation, dated September 30, 2014. (Incorporated by reference to the Quarter Report on Form 10-Q filed on November 13, 2014.) | |
| 3.4 | Certificate of Amendment of Certificate of Incorporation, dated December 16, 2016. (Incorporated by reference to the Current Report on Form 8-K filed on January 13, 2017.) | |
| 3.5 | By-Laws (Incorporated by reference to Form 10SB filed on October 9, 2003.) | |
| 14.1 | Code of Ethics (Incorporated by reference to Form 10-KSB filed on March 22, 2005.) | |
| 31.1* | Certification of Principal Executive Officer and Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |
| 32.1+ | Certification of Principal Executive Officer and Principal Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | |
| 101.INS* | XBRL Instance Document | |
| 101.SCH* | XBRL Taxonomy Extension Schema Document | |
| 101.CAL* | XBRL Taxonomy Extension Calculation Linkbase Document | |
| 101.LAB* | XBRL Taxonomy Extension Label Linkbase Document | |
| 101.PRE* | XBRL Taxonomy Extension Presentation Linkbase Document | |
| 101.DEF* | XBRL Taxonomy Extension Definition Linkbase Document |
| * | Filed herewith |
| + | In accordance with the SEC Release 33-8238, deemed being furnished and not filed. |
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Pursuant to the requirement of Section 13 or 15(d) of the Securities Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| Boly Group Holdings Corp. | ||
| By: | /s/ Alex Jen | |
Alex Jen Chief Executive Officer and Chief Financial Officer (Duly Authorized Officer, Principal Executive Officer and Principal Financial Officer) | ||
| Date: | March 29, 2017 | |
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.
| Name | Title | Date | ||
| /s/ Alex Jen | Chief Executive Officer, Chief | March 29, 2017 | ||
| Alex Jen | Financial Officer, and Chairman of the Board of Directors (Principal Executive Officer and Principal Financial Officer) |
|||
| /s/ Xiaoxiong Zhang | Director | March 29, 2017 | ||
| Xiaoxiong Zhang |
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