Attached files

file filename
EX-32.1 - VW WIN CENTURY INC.ex32_1.htm
EX-31.1 - VW WIN CENTURY INC.ex31_1.htm

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
 
FORM 10-K
 
[X]
ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the fiscal year ended December 31, 2016
 
[_]
TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
 
For the transition period from ____________ to ______________
 
Commission file number: 333-139117
 
VW Win Century Inc.
(Exact name of registrant as specified in its charter)
 
Nevada
80-0961484
(State or other jurisdiction of incorporation or organization)
(IRS Employer Identification No.)
 
2575 McCabe Way, Suite 100
Irvine, CA 92614
(Address of principal executive offices)
 
(415) 250-4566
(Registrant's telephone number)
 
SECURITIES REGISTERED PURSUANT TO SECTION 12(B)
OF THE EXCHANGE ACT:
None
 
SECURITIES REGISTERED PURSUANT TO SECTION 12(G)
OF THE EXCHANGE ACT:
None
 
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Yes [_] No [X]
 
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 [X]
 
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities 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 [X] No [_]
 
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, 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 [X]
 
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 in Part III of this Form 10-K or any amendment to this Form 10-K.              [X]
 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. 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 [X]
 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.
Yes [_] No [X]
 
The aggregate market value of the issuer's voting and non-voting common equity held by non-affiliates as of June 30, 2016 was approximately $169,349 based upon the closing price of the common stock as quoted by the Over-the-Counter Bulletin Board (the "OTC Bulletin Board").
 
The number of shares of the issuer's Class A common stock outstanding as of April 14, 2017, was 175,507,169 shares, par value $0.001 per share.
 
 
 
 




VW WIN CENTURY, INC.
FORM 10-K
Fiscal Year Ended December 31, 2016
 
INDEX
 
 
 
 
Page
PART 1
ITEM 1
 
Business
2
ITEM 1A
 
Risk Factors
4
ITEM 1B
 
Unresolved Staff Comments
4
ITEM 2
 
Properties
4
ITEM 3
 
Legal Proceedings
4
ITEM 4
 
Mine Safety Disclosures
4
PART II
ITEM 5
 
Market for Registrant's Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities
5
ITEM 6
 
Selected Financial Data
5
ITEM 7
 
Management's Discussion and Analysis of Financial Condition and Results of Operations
5
ITEM 7A
 
Quantitative and Qualitative Disclosures About Market Risk
8
ITEM 8
 
Financial Statements and Supplementary Data
9
ITEM 9
 
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
10
ITEM 9A
 
Controls and Procedures
10
ITEM 9B
 
Other Information
11
PART III
ITEM 10
 
Directors, Executive Officers, and Corporate Governance
12
ITEM 11
 
Executive Compensation
13
ITEM 12
 
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
14
ITEM 13
 
Certain Relationships and Related Transactions, and Director Independence
15
ITEM 14
 
Principal Accounting Fees and Services
16
ITEM 15
 
Exhibits, Financial Statement Schedules
17
SIGNATURES
 
 
18
 
 
 
 
 
- 1 -



PART I

ITEM 1. BUSINESS
 
CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS
 
All statements in this discussion that are not historical are forward-looking statements. Statements preceded by, followed by or that otherwise include the words "believes", "expects", "anticipates", "intends", "projects", "estimates", "plans", "may increase", "may fluctuate" and similar expressions or future or conditional verbs such as "should", "would", "may" and "could" are generally forward-looking in nature and not historical facts. These forward-looking statements were based on various factors and were derived utilizing numerous important assumptions and other important factors that could cause actual results to differ materially from those in the forward-looking statements. Forward-looking statements include the information concerning our future financial performance, business strategy, projected plans and objectives. These factors include, among others, the factors set forth below under the heading "risk factors." Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Most of these factors are difficult to predict accurately and are generally beyond our control. We are under no obligation to publicly update any of the forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events, except as otherwise provided by law. Readers are cautioned not to place undue reliance on these forward-looking statements. References in this form 10-K, unless another date is stated, are to December 31, 2016. As used herein, the "Company," "VW Win," "we," "us," "our" and words of similar meaning refer to VW Win Century, Inc., unless otherwise stated, or the context suggests otherwise.
 
Forward-looking statements involve inherent risks and uncertainties, and important factors (many of which are beyond our control) that could cause actual results to differ materially from those set forth in the forward-looking statements include the following:
 
 
·
volatility or decline of our stock price;
 
·
low trading volume and illiquidity of our common stock, and application of the SEC's penny stock rules;
 
·
potential fluctuation in quarterly results;
 
·
our failure to earn revenues;
 
·
material defaults on monetary obligations owed us, resulting in unexpected losses;
 
·
dissipation of existing assets and failure to acquire or grow a new business;
 
·
litigation, disputes and legal claims involving outside parties;
 
·
risks related to our ability to be listed on a national securities exchange and meeting listing requirements;
 
·
risks related to our recently announced acquisition, our ability to finance the acquisition;
 
·
risks associated with our ability to raise necessary capital to continue as a going concern; and
 
·
other risks set forth below under "risk factors" and included from time to time in our filings with the Commission.



- 2 -




 
We have based these forward-looking statements on our current expectations and assumptions about future events. While our management considers these expectations and assumptions to be reasonable, they are inherently subject to significant business, economic, competitive, regulatory and other risks and uncertainties, most of which are difficult to predict and many of which are beyond our control. Accordingly, results actually achieved may differ materially from expected results in these statements. Forward-looking statements speak only as of the date they are made. You should consider carefully the statements in "Item 1A. Risk Factors" and other sections of this report, which describe factors that could cause our actual results to differ from those set forth in the forward-looking statements.

Readers are urged not to place undue reliance on these forward-looking statements, which speak only as of the date of this report. We assume no obligation to update any forward-looking statements in order to reflect any event or circumstance that may arise after the date of this report, other than as may be required by applicable law or regulation. Readers are urged to carefully review and consider the various disclosures made by us in our reports filed with the United States Securities and Exchange Commission (the "SEC") which attempt to advise interested parties of the risks and factors that may affect our business, financial condition, results of operation and cash flows. If one or more of these risks or uncertainties materialize, or if the underlying assumptions prove incorrect, our actual results may vary materially from those expected or projected.
 
Business Overview
 
VW Win Century Inc. (the "Company"), a Nevada corporation, was formed on March 3, 2013, as Cooling Technology Solutions, Inc. ("CTS"), a wholly-owned subsidiary of Epazz, Inc. ("Epazz"), an Illinois corporation. On September 19, 2013, the Company amended its Articles of Incorporation to change the name from Cooling Technology Solutions, Inc. to Z Fridge, Inc. and was renamed FlexFridge, Inc. on May 29, 2014.  On September 12, 2016, FlexFridge Inc., an Illinois corporation filed Articles of Merger with the Illinois Secretary of State whereby it entered into a statutory merger with its wholly-owned subsidiary, VW Win Century Inc. pursuant to Illinois Business Corporation Act Section 11.05. The effect of such merger is that the Company was the surviving entity and changed its name to "VW Win Century Inc." On March 7, 2017, the Company was domiciled in the State of Nevada and its wholly-owned subsidiary of the same name, which was incorporated on June 4, 2016, was consolidated with the Company and the Company was deemed the surviving corporation.

The Company has obtained a non-provisional patent for its intended product design and is moving forward with plans to form strategic alliances to produce and market such products covered by the patent.
 
On September 7, 2013, the sole Director, and majority shareholder, holding over two thirds of the voting power of the Corporation's Class A and Class B Common Stock of Epazz, voted to approve the spin-off and stock dividend of Z Fridge, whereby each of Epazz' shareholders of record on September 15, 2013 received 1 share of Z Fridge for each 10 shares of Epazz Class A Common Stock as distributed on November 21, 2013.
 
FlexFridge received a patent on the technology on December 22, 2015. The patent number is US 9217598. On December 29, 2015, Epazz transferred ownership of Patent to FlexFridge for a promissory note of $250,000 for 10 years with a 15% interest rate.
 
Since the transfer of the patent was a related party transaction the value of patent does not yet display a value on the balance sheet. According to US GAAP, legal costs when defending a patent can be capitalized. Therefore, over time the value of the patent may be realized. A patent is an intangible asset.
 
On December 22, 2015, United State Patent and Trademark office issued the Foldable Mini-Fridge patent 9,217,598 B2 to Shaun Passley, PhD. Epazz was the assignee of the patent. On December 29, 2015, Epazz transferred the Patent to FlexFridge for a promissory note of $250,000 for 10 years with a 15% interest rate. Since the transfer of the patent was a related party transaction the value of patent remaines at its historical cost of $0. The difference between the fair value of the note and the historical cost of the patent was expensed as a loss on patent acquisition during 2015.
 
 


- 3 -





On or about August 26, 2016, Shaun Passley, our former officer and director sold an aggregate of Two Hundred Sixty Two Million Nine Hundred Nine Thousand Two Hundred and Fifty Five (262,909,255) pre-split shares (525,819 post-split shares) of the Class A Common Stock of the FlexFridge to TeikKeng Goh in a private transaction. As a result of the purchase, TeikKeng Goh became the majority shareholder of our Company and beneficially owned stock representing 75.45% of the issued and outstanding Class A Common Shares. In addition, Mr. Passley also sold Sixty Million (60,000,000) shares of Class B Common Stock and Twenty Million (20,000,000) shares of Series A Preferred Stock to TeikKeng Goh, representing all of the issued and outstanding shares of those series and classes.

Following the sale of all of his shares of capital stock, effective as of August 31, 2016, Shaun Passley, the sole member of our board of directors, President, Chief Executive Officer, Treasurer, Chief Financial Officer and Secretary of the Company, resigned from these positions with the Company. Upon appointment, the newly constituted board of directors accepted Mr. Passley's resignations, effective immediately. The board of directors appointed TeikKeng Goh and SeeKuy Tan to fill vacancies on the board with TeikKeng Goh serving as Chairman. The board of directors appointed SeeKuy Tan as President, Chief Executive Officer, Treasurer and Chief Financial Officer and Kathleen Mary Johnston as Secretary of the Company.


On October 5, 2016, VW Win, entered into Securities Purchase Agreement with TeikKeng Goh, whereby the Company agreed to sell to Mr. Goh 99 million restricted shares the Company's Class A Common Stock for a total purchase price of $10,000. An independent valuation of shares issued was completed and it was determined the value of shares issued over the value received was $3,314,802.  Accordingly, an expense for $3,314,802 was recorded to general and administrative expenses during the period ended December 31, 2016.

 
ITEM 1A. RISK FACTORS
 
Any investment in our common stock involves a high degree of risk. Investors should carefully consider the risks described below and all of the information contained in this report before deciding whether to make an equity investment in our Company. Our business, financial condition or results of operations could be materially adversely affected by these risks if any of them actually occur. Some of these factors have affected our financial condition and operating results in the past or are currently affecting us.

 
ITEM 1B. UNRESOLVED STAFF COMMENTS
 
None.

 
ITEM 2. PROPERTIES
 
None.

 
ITEM 3. LEGAL PROCEEDINGS
 
From time to time, we may become party to litigation or other legal proceedings that we consider to be a part of the ordinary course of our business. We are not currently involved in legal proceedings that could reasonably be expected to have a material adverse effect on our business, prospects, financial condition or results of operations. We may become involved in material legal proceedings in the future.

 
ITEM 4. MINE SAFETY DISCLOSURES
 
Mine safety disclosures are not applicable.
 
 


- 4 -






PART II
 
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
 
(a) Market Information
 
The Company's Series A Common Stock is quoted on the OTCQB under the symbol "VWIN" as maintained by the OTC Markets Group Inc.
 
 
ITEM 6. SELECTED FINANCIAL DATA
 
Not required.
 
 
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 
BUSINESS OVERVIEW
 
FlexFridge is a patented foldable mini-fridge. FlexFridge was designed to allow students, campers, hotels and businesses to have a big mini-fridge in their dorm rooms, RVs, hotel rooms, or offices. FlexFridge is easy to transport and is easy to setup.
 
The company contacted several mini fridge manufacturers in order to help bring the product to market.  In our initial contacts, we received interest from four manufacturers. We are in discussions with two of the four on how to best partner to bring the product to market. The second option is to manufacture the product ourselves. The company hired an assistant to contact offshore manufacturers. The company has been working with an engineering service company to source the parts in order to manufacture the product. Based on their estimates, the product can be manufactured in a few months. The engineering service company has already conducted tests on the product. The company has been in contact with UL (Underwriters Laboratories), which is a certification body for consumer products. We are currently exploring the requirements to be UL (Underwriters Laboratories) certified.
 
The Company has contacted a several hotels to get initial feedback. Based on the information from the engineering service company, we can have the fridges available to the hotels and businesses by the summer of 2016. Our business model for hotels is for them to enter into a revenue sharing agreement in order to share in the rental fees for mini-fridges. The Company will maintain ownership of the mini-fridges at each business location. The commercial version will have a tracking system to keep track of the rental.
 
Product Development
 
The concept of FlexFridge was conceived on March 2011. The concept was that people needed a better way to transport mini-fridges. Dr. Passley believed that a flexible refrigerator would allow people to transport the mini-fridges much easier than before. Dr. Passley filed a provisional patent in August 2011.  Below is the summary of the invention.
 
The flexible refrigerator may be folded up and stored when not in use and may be inflated with air in a useable second position.  The flexible refrigerator may have an interior for storing beverages and/or food while in the useable position.  A separating wall within the interior of the device may allow the user to obtain two different temperature zones.  A plurality of holes on the exterior surface of the device may allow the flow of air from the exterior of the refrigerator to the interior of the device.
 
Advantages of the present device includes providing a flexible refrigerator which is easy to transport, easy to store and environmentally friendly. Other advantages of the present device includes, providing a flexible refrigerator which can be molded to fit the contents for which the device stores as well as multiple compartments and different temperature zones.
 
 

 

- 5 -

 

 

The initial prototype was a bag at the end of a cooling device in order to store the food when it was expanded and collapse the bag when it was empty. The problem with the initial prototype, was it used a zip in order to close the bag. The initial prototype was functional, however, it was not cold enough to store milk products. Dr. Passley hired an industrial designer in order to design a better FlexFridge in September 2011. The design was completed in October 2011. Dr. Passley then hired an engineering firm in order to develop the FlexFridge. Dr. Passley filed the provisional patent for the new design in February 2013.  In March 2013, FlexFridge, Inc. previously known as Cooling Technology Solutions, Inc. as a wholly-owned subsidiary of Epazz, Inc. Epazz, Inc. filed a non-provisional patent on FlexFridge in February 26, 2014.  This filing made FlexFridge a patent technology with a serial number of 14/190683. FlexFridge has identified a manufacturing partner to produce the fridges. The company expects to sign the manufacturing agreement in the second quarter of 2016. The company expects to be producing the product in the second or third quarter of 2016. FlexFridge is currently seeking a partner to focus on market development in the consumer and industrial markets.
 
Business Model
 
The Company will solicit businesses and colleges to enter into a revenue sharing agreement in order to share in the rental fees for mini-fridges guests or students during their visit. The Company will maintain ownership of the mini-fridges at each business location. The commercial version of FlexFridge will be more durable than the consumer version. The commercial version will have a tracking system to keep track of the rental.
 
The consumer version will be sold outright or will be leased through the Company's website. The Company believes that many users of the fridge would only need the fridge for a short period of time, a few days or a whole school year which is about 9 months. The consumer will rent the fridge through the Company's website, providing a deposit for the fridge. The company will then ship the fridge to the consumer and at the end of the rental period, the consumer will send the fridge back. The Company will then refund the deposit minus the rental fee. The Company has already received some interest from the public.
 
PLAN OF OPERATION
 
During the next 12 months, we plan to develop our Project Flex product, which consists of a patent foldable mini-fridge that has yet to be developed, and continue to pursue growth through additional acquisitions. We believe we can satisfy our cash requirements for the next three months with our current cash on hand and revenues generated from our operations. As such, continuing operations and completion of our plan of operation are contingent on finding additional sources of capital. We cannot assure investors that adequate revenues will be generated. In the absence of our projected revenues, we may be unable to proceed with our plan of operations. Even without significant revenues or additional funding within the next several months, we still anticipate being able to continue with our present activities, but we may require financing to potentially achieve our goals of growing our operations and increasing our revenues.
 
RESULTS OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2016, AS COMPARED TO YEAR ENDED DECEMBER 31, 2015:
 
 
 
For the Year Ended
       
 
 
December 31,
   
Increase /
 
 
 
2016
   
2015
   
(Decrease)
 
Revenues
 
$
   
$
   
$
 
 
                       
General and Administrative
   
3,743,336
     
3,848
     
3,739,489
 
Salaries and Wages
   
52,000
     
88,557
     
(36,557
)
Depreciation Expense
   
272
     
-
     
272
 
Patent Related Expenses
   
-
     
780
     
(780
)
Total Operating Expenses
   
3,795,608
     
93,185
     
3,702,423
 
 
                       
Net Operating Loss
   
(3,795,608
)
   
(93,185
)
   
3,689,419
 
 Interest Expense
   
54,212
     
-
     
54,212
 
Loss on patent acquisition
   
-
     
250,000
     
(250,000
)
 
                       
Net Loss
 
$
(3,849,820
)
 
$
(343,185
)
 
$
3,506,635
 
 
 
 

 

- 6 -



 
Revenues:
 
The company experienced no revenue for neither the year ended December 31, 2016 or December 31, 2015.
 
General and Administrative:
 
General and administrative expenses increased to $3,743,336 for the year ended December 31, 2016 as compared to $3,848 for the same 2015 period. The increase in general and administrative expense is due mainly to incurring an expense in the amount of $3,314,802 as a result of issuing 99 million shares to our Chairman of the Board for a cash purchase price of $10,000.
 
Salaries and Wages:
 
Salaries and wages for the year ended December 31, 2016 of $52,000, compared to salaries and wages expense during the year ended December 31, 2015, of $88,557. The decrease in salaries and wages was due to the fact that our President and Chairman did not take any salary during the last four (4) months of the year.
 
Patent Related Expenses:
 
The Company did not incur any patent related expenses in the year ended December 31, 2016. Patent related expenses of $780 were incurred in the year ended December 31, 2015. These costs were paid for through a non-cash advance from Epazz, Inc. Additional patent costs are not expected.
 
Net Operating Loss:
 
Total operating expenses for the year ended December 31, 2016 were $3,795,608, compared to $93,185 for the year ended December 31, 2015, an increase of $3,702,423. The increase in operating loss was due to the expense associated with selling 99 million shares to our Chairman for $10,000, as described above under "General and Administrative".
 
Loss on Patent Acquisition:
 
The Company incurred a loss on patent acquisition during the years ended December 31, 2016 and 2015 of $0 and $250,000. The Company purchased patent US 9,217,598 B2 for the FlexFridge product from Epazz, Inc. during the fourth quarter 2015 for a note payable of $250,000. The difference of $250,000 between the note value and patent value was expensed as a loss on patent acquisition during the period.
 
Net Loss:
 
The Company had a net loss of $3,849,820 for the year ended December 31, 2016, as compared to $343,185 for the year ended December 31, 2015, an increase of $3,506,635. The increase in net loss was due to the expense associated with selling 99 million shares to our Chairman for $10,000, as described above under "General and Administrative".
.
 


- 7 -





LIQUIDITY AND CAPITAL RESOURCES
 
The following table summarizes total assets, accumulated deficit, stockholders' deficit and working capital at December 31, 2016 compared to December 31, 2015.
 
 
 
December 31,
   
December 31,
 
 
 
2016
   
2015
 
Total Assets
 
$
34,096
   
$
112
 
 
               
Total Liabilities
 
$
827,146
   
$
284,856
 
 
               
Accumulated Deficit
 
$
(4,223,121
)
 
$
(373,301
)
 
               
Total Equity
 
$
(793,050
)
 
$
(284,744
)
 
               
Working Deficit
 
$
(543,050
)
 
$
(284,744
)
 
 
The Company had total current assets of $24,411 as of December 31, 2016, consisting of cash and $14,784 in other current assets. The company had total current assets of $112 as of December 31, 2015, consisting only of cash.
 
Total liabilities as of December 31, 2016 and December 31, 2015 were $814,142 and $284,856, respectively.
 
The Company had working deficit of $(543,050) and a total accumulated deficit of $(793,050) as of December 31, 2016.
 
The Company had net cash provided by operating activities of $9,472 for the year ended December 31, 2016.
 
The Company used $9,957 in investing activities for the year ended December 31, 2016, compared to nil for the prior year.

The Company had net cash of $10,000 provided from financing activities for the year ended December 31, 2016, compared to nil for the prior year.
 

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
 
Pursuant to Item 305(e) of Regulation S-K (§ 229.305(e)), the Company is not required to provide the information required by this Item as it is a "smaller reporting company," as defined by Rule 229.10(f)(1).

 
 
- 8 -

 
 
ITEM 8. FINANCIAL STATEMENTS ADD SUPPLEMENTARY DATA
 

 
VW WIN CENTURY, INC.
INDEX TO FINANCIAL STATEMENTS


 
Page
Annual Financial Statements
 
 
Report of Independent Registered Public Accounting Firm
F-1
 
Balance Sheets as of December 31, 2016 and 2015
F-2
 
Statements of Operations for the years ended December 31, 2016 and 2015
F-3
 
Statements of Cash Flows for the years ended December 31, 2016 and 2015
F-4
 
Statements of Shareholders' Equity for the years ended December 31, 2016 and 2015
F-5
 
Notes to Financial Statements
F-6
 
 
 
 
- 9 -

 

 

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM


 
To the Board of Directors and
Stockholders of VW Win Century, Inc.

We have audited the accompanying balance sheet of VW Win Century, Inc. (the "Company") of December 31, 2016 and 2015, and the related statement of operations, stockholders' equity (deficit), and cash flows for the years ended December 31, 2016 and 2015.  The Company'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 audit provides 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 VW Win Century, Inc. as of December 31, 2016 and 2015, and the results of its operations and its cash flows for the years ended December 31, 2016 and 2015, 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 2 to the financial statements, the Company has incurred recurring operating losses and negative cash flows from operations and is dependent on additional financing to fund operations. 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 described in Note 2 to the financial statements. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ M&K CPAS, PLLC
www.mkacpas.com
Houston, Texas
April 28, 2017
 
 
 

 
F-1


 
 
 
VW WIN CENTURY, INC.
BALANCE SHEETS
 
 
 
December 31,
   
December 31,
 
 
 
2016
   
2015
 
Assets
           
Current assets:
           
Cash
 
$
9,627
   
$
112
 
Other current assets
   
14,784
     
 
Total current assets
   
24,411
     
112
 
Property and equipment, net
   
9,685
     
 
Total assets
 
$
34,096
   
$
112
 
 
               
Liabilities and Stockholders' Equity (Deficit)
               
Current liabilities:
               
Accounts payable
 
$
14,054
   
$
 
Accounts payable – related party
   
525,592
     
34,856
 
Interest payable – related party
   
37,500
     
 
         Total current liabilities
   
577,146
     
34,856
 
Note payable – related party
   
250,000
     
250,000
 
Total liabilities
   
827,146
     
284,856
 
 
               
Stockholders' deficit:
               
Convertible preferred stock, Series A, $0.0001 par value, 20,000,000 shares authorized, zero and 20,000,000 shares issued and outstanding, respectively
   
     
2,000
 
Convertible preferred stock, Series B, $0.0001 par value, 20,000,000 shares authorized, zero and 20,000,000 shares issued and outstanding, respectively
   
     
2,000
 
Common stock, Class A, $0.0001 par value, 1,000,000,000 shares authorized, 175,507,169 shares and 691,222 issued and outstanding, respectively
   
17,551
     
69
 
Common stock, Class B, $0.0001 par value, 60,000,000 shares authorized, 60,000,000 shares issued and outstanding
   
6,000
     
6,000
 
Additional paid in capital
   
3,406,520
     
78,488
 
Accumulated deficit
   
(4,223,121
)
   
(373,301
)
Total stockholders' deficit
   
(793,050
)
   
(284,744
)
 
               
Total liabilities and stockholders' deficit
 
$
34,096
   
$
112
 
 
 
 
See accompanying notes to financial statements.
 
 
 
F-2

 
 
 
VW WIN CENTURY, INC.
STATEMENTS OF OPERATIONS
 
 
 
For the Year Ended
 
 
 
December 31,
 
 
 
2016
   
2015
 
 
           
Revenue
 
$
   
$
 
 
               
Expenses:
               
General and administrative
   
3,743,336
     
3,848
 
Salaries and wages
   
52,000
     
88,557
 
Depreciation expense
   
272
     
 
Patent related expenses
   
     
780
 
Total operating expenses
   
3,795,608
     
93,185
 
 
               
Net operating loss
   
(3,795,608
)
   
(93,185
)
 
               
Other expenses
               
Interest expense
   
(54,212
)
   
 
Loss on patent acquisition
   
     
(250,000
)
Total other expenses
   
(54,212
)
   
(250,000
)
 
               
Net loss
 
$
(3,849,820
)
 
$
(343,185
)
 
               
Weighted average number of common shares outstanding - basic and fully diluted
   
33,192,448
     
691,222
 
 
               
Net loss per share - basic and fully diluted
 
$
(0.12
)
   
(0.50
)

 
 
See accompanying notes to financial statements.
 
 
 
 
F-3


 
 
 
VW WIN CENTURY, INC.
STATEMENTS OF SHAREHOLDERS' EQUITY
 
 
 
 
   
Convertible Preferred
   
Convertible Preferred
   
Common Stock,
   
Convertible
Common Stock
   
Additional
         
Total
 
   
Stock, Series A
   
Stock, Series B
   
Class A
   
Class B
   
Paid-in
   
Accumulated
   
Stockholders'
 
   
Shares
   
Amount
   
Shares
   
Amount
   
Shares
   
Amount
   
Shares
   
Amount
   
Capital
   
(Deficit)
   
(Deficit)
 
Balance, December 31, 2014
   
   
$
     
   
$
     
691,222
   
$
69
     
   
$
   
$
(69
)
 
$
(30,116
)
 
$
(30,116
)
Shares issued for services,
    related parties
   
20,000,000
     
2,000
     
20,000,000
     
2,000
     
     
     
60,000,000
     
6,000
     
78,557
     
     
88,557
 
Net loss for the year ended
    December 31, 2015
   
     
     
     
     
     
     
     
     
     
(343,185
)
   
(343,185
)
Balance, December 31, 2015
   
20,000,000
     
2,000
     
20,000,000
     
2,000
     
691,222
     
69
     
60,000,000
     
6,000
     
78,488
     
(373,301
)
   
(284,744
)
Shares issued for cash and stock-based compensation
   
     
     
     
     
99,000,000
     
9,900
     
     
     
3,314,902
     
     
3,324,802
 
Preferred Stock cancellation
   
     
     
(16,000,000
)
   
(1,600
)
   
     
     
     
     
1,600
     
     
 
Series A Preferred Stock conversion
    to Class A Common Stock
   
(20,000,000
)
   
(2,000
)
   
     
     
59,840,566
     
5,984
     
     
     
(3,984
)
   
     
 
Series B Preferred Stock conversion
    to Class A Common Stock
   
     
     
(4,000,000
)
   
(400
)
   
15,957,484
     
1,596
     
     
     
(1,196
)
   
     
 
Imputed interest expense
   
     
     
     
     
     
     
     
     
16,712
     
     
16,712
 
Net loss for the year ended
    December 31, 2016
   
     
     
     
     
     
     
     
     
     
(3,849,820
)
   
(3,849,820
)
Balance, December 31, 2016
   
   
$
     
   
$
     
175,507,169
   
$
17,551
     
60,000,000
   
$
6,000
   
$
3,406,520
   
$
(4,223,121
)
 
$
(793,050
)
 

 
See accompanying notes to financial statements.
 
 
 
F-4


 
 
 
VW WIN CENTURY, INC.
STATEMENTS OF CASH FLOWS
 
 
 
 
For the Year Ended
 
 
 
December 31,
 
 
 
2016
   
2015
 
Cash flows from operating activities
           
Net loss
 
$
(3,849,820
)
 
$
(343,185
)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
               
    Depreciation Expense
   
272
     
 
    Stock based compensation
   
3,314,802
     
88,557
 
    Loss on Patent Acquisition
   
     
250,000
 
    Imputed interest expense on Accounts payable – related party
   
16,712
     
 
Increase (decrease) in liabilities:
               
Other current assets
   
(14,784
)
   
 
Accounts payable
   
14,054
     
4,720
 
Accounts payable – related party
   
490,736
     
 
Interest payable
   
37,500
     
 
Net cash provided by (used in) operating activities
   
9,472
     
92
 
 
               
Cash flows from investing activities
               
Purchase of equipment
   
(9,957
)
   
 
Net cash used in investing activities
   
(9,957
)
   
 
 
               
Cash flows from financing activities
               
Stock sold for cash
   
10,000
     
 
Net cash provided by financing activities
   
10,000
     
 
 
               
Net increase (decrease) in cash
   
9,515
     
92
 
Cash - beginning
   
112
     
20
 
Cash - ending
 
$
9,627
   
$
112
 
 
               
Supplemental disclosures:
               
Interest paid
 
$
   
$
 
Income taxes paid
 
$
   
$
 
 
               
Non-cash investing and financing activities:
               
Conversion of Preferred Stock, Series A to Common Stock, Class A
 
$
5,984
   
$
 
Conversion of Preferred Stock, Series B to Common Stock, Class A
 
$
1,596
   
$
 
Cancellation of Preferred Stock, Series B
 
$
1,600
   
$
 
 
 

See accompanying notes to financial statements.
 
 
 
 
F-5

 
 
 
 
VW WIN CENTURY, INC.
 NOTES TO FINANCIAL STATEMENTS


Note 1 – Basis of Presentation and Summary of Significant Accounting Policies

Nature of Business and Organization
VW Win Century, Inc. ("VW Win Century" or the "Company"), a Nevada corporation, was formed on March 3, 2013 as Cooling Technology Solutions, Inc. ("CTS"), an Illinois corporation and wholly-owned subsidiary of Epazz, Inc. ("Epazz"), an Illinois corporation. On September 19, 2013, the Company amended its Articles of Incorporation to change the name from Cooling Technology Solutions, Inc. to Z Fridge, Inc. and was renamed Flexfridge, Inc. on May 29, 2014 and further renamed on September 12, 2016 to VW Win Century, Inc.  The Company then changed its domicile from Illinois to Nevada.
 
On September 7, 2013, the sole Director, and majority shareholder, holding over two thirds of the voting power of the Corporation's Class A and Class B Common Stock of Epazz, voted to approve the spin-off and stock dividend of Z Fridge, whereby each of Epazz' shareholders of record on September 15, 2013 received 1 share of Z Fridge for each 10 shares of Epazz Class A Common Stock as distributed on November 21, 2013.

On or about August 26, 2016, Shaun Passley, our former officer and director sold an aggregate of two hundred sixty two million, nine hundred nine thousand, two hundred and fifty-five (262,909,255) shares of the ClasA Common Stock of the Company (or 525,819 shares on a post-reverse split basis) to Teik Keng Goh in a private transaction.   As a result of the purchase, Teik Keng Goh became the majority shareholder of our Company and beneficially owned stock representing 75.45% of the issued and outstanding Class A Common Shares. In addition, Mr. Passley also sold sixty million (60,000,000) shares of Class B Common Stock and twenty million (20,000,000) shares of Series A Preferred Stock to Teik Keng Goh, representing all of the issued and outstanding shares of those series and classes.

Effective as of August 31, 2016, our board of directors appointed Teik Keng Goh and See Kuy Tan to fill vacancies on the board with Teik Keng Goh serving as Chairman.  The board of directors appointed See Kuy Tan as President, Chief Executive Officer, Treasurer and Chief Financial Officer and Kathleen Mary Johnston as Secretary of the Company.  The forgoing individuals will serve in their respective positions until their earlier resignation or removal.  Under the leadership of Teik Keng Goh, the Company intends to focus on existing opportunities in the Asian market that have above average operating margins, sustainable growth, and undervalued assets.

Basis of Accounting
Our financial statements are prepared using the accrual method of accounting as generally accepted in the United States of America (U.S. GAAP) and the rules of the Securities and Exchange Commission (SEC).  These statements reflect all adjustments, consisting of normal recurring adjustments, which in the opinion of management are necessary for fair presentation of the information contained therein.
 
Reclassifications
Certain amounts in the financial statements of the prior year have been reclassified to conform to the presentation of the current year for comparative purposes.
 
Use of 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 amount of revenues and expenses during the reporting period. Actual results could differ from those estimates.
 
Cash and Cash Equivalents
VW Win Century maintains cash balances in non-interest-bearing transaction accounts, which do not currently exceed federally insured limits. For the purpose of the statements of cash flows, all highly liquid investments with an original maturity of three months or less are considered to be cash equivalents. There were no cash equivalents on hand at December 31, 2016 or 2015.
 
 
 
 
F-6

 

 

VW WIN CENTURY, INC.
 NOTES TO FINANCIAL STATEMENTS


Property and Equipment
Equipment is recorded at its acquisition cost, which includes the costs to bring the equipment to the condition and location for its intended use, and equipment is depreciated using the straight-line method over the estimated useful life of the related asset as follows:
 
Furniture and fixtures
 
5 years
Computers and equipment
 
3-5 years
Website development
 
3 years
Leasehold improvements
 
5 years
 
Amortization of leasehold improvements is computed using the straight-line method over the shorter of the remaining lease term or the estimated useful lives of the improvements.
 
Assets held under capital leases are recorded at the lower of the net present value of the minimum lease payments or the fair value of the leased asset at the inception of the lease. Amortization expense is computed using the straight-line method over the useful lives of the assets due to transfer of ownership after the lease term has expired.
 
Maintenance and repairs will be charged to expense as incurred. Significant renewals and betterments will be capitalized. At the time of retirement or other disposition of equipment, the cost and accumulated depreciation will be removed from the accounts and the resulting gain or loss, if any, will be reflected in operations.
 
Property and equipment are evaluated for impairment whenever impairment indicators are prevalent. The Company will assess the recoverability of equipment by determining whether the depreciation and amortization of these assets over their remaining life can be recovered through projected undiscounted future cash flows. The amount of equipment impairment, if any, will be measured based on fair value and is charged to operations in the period in which such impairment is determined by management.

Fair Value of Financial Instruments
Under FASB ASC 820-10-05, the Financial Accounting Standards Board establishes a framework for measuring fair value in generally accepted accounting principles and expands disclosures about fair value measurements. This Statement reaffirms that fair value is the relevant measurement attribute. The adoption of this standard did not have a material effect on the Company's financial statements as reflected herein. The carrying amounts of cash, accounts payable and accrued expenses reported on the balance sheets are estimated by management to approximate fair value primarily due to the short term nature of the instruments.
 
Patent Rights and Applications
VW Win Century acquired a patent on the technology on December 22, 2015. The patent number is US 9,217,598 B2. On December 29, 2015, Epazz transferred ownership of this patent to VW Win Century for a promissory note of $250,000 for 10 years with a 15% interest rate. Since the transfer of the patent was a related party transaction the value of patent included in the balance sheet is at its historical cost of zero. As the fair value of the promissory note exceeded the value of the patent, the difference of $250,000 was recorded as a loss on patent acquisition during the year ended December 31, 2015.

Patent rights and applications costs include the acquisition costs and costs incurred for the filing of patents. Patent rights and applications are amortized on a straight-line basis over the legal life of the patent rights beginning at the time the patents are approved. Patent costs for unsuccessful patent applications are expensed when the application is terminated. We elected to expense our patent costs, which totaled $277,641 for the period from March 4, 2013 (Inception) through December 31, 2016.  No additional costs are expected to be incurred.

Income Taxes
The Company recognizes deferred tax assets and liabilities based on differences between the financial reporting and tax bases of assets and liabilities using the enacted tax rates and laws that are expected to be in effect when the differences are expected to be recovered. The Company provides a valuation allowance for deferred tax assets for which it does not consider realization of such assets to be more likely than not.
 
 
 

F-7

 

 

VW WIN CENTURY, INC.
 NOTES TO FINANCIAL STATEMENTS


 
Basic and Diluted Loss per Share
The basic net loss per common share is computed by dividing the net loss by the weighted average number of common shares outstanding. Diluted net loss per common share is computed by dividing the net loss adjusted on an "as if converted" basis, by the weighted average number of common shares outstanding plus potential dilutive securities. For the period presented, there were no outstanding potential common stock equivalents and therefore basic and diluted earnings per share result in the same figure.
 
Stock-Based Compensation
The Company adopted FASB guidance on stock based compensation upon inception on March 3, 2013. Under FASB ASC 718-10-30-2, all share-based payments to employees, including grants of employee stock options, are to be recognized in the income statement based on their fair values. Pro forma disclosure is no longer an alternative. In January 2015, the company issued 20,000,000 shares of Series A Preferred Stock for $70,654, 20,000,000 shares of Series B Preferred Stock for $12,076 and 60,000,000 shares of Class B Common Stock for $5,827 for services rendered.

On October 5, 2016, the Company entered into a Securities Purchase Agreement with Teik Keng Goh, the Chairman of the Company's Board of Directors, for the purchase of a total of 99,000,000 restricted shares of the Company's Class A Common Stock for a total purchase price of $10,000, which is a cost per share of $0.000101.  An independent valuation of shares issued was completed and it was determined the value of shares issued over the value received was $3,314,802.  Accordingly, an expense for $3,314,802 was recorded to general and administrative expenses during the period ended December 31, 2016.

Uncertain Tax Positions
Effective upon inception on March 3, 2013, the Company adopted new standards for accounting for uncertainty in income taxes. These standards prescribe a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. These standards also provide guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition.
 
Various taxing authorities periodically audit the Company's income tax returns. These audits include questions regarding the Company's tax filing positions, including the timing and amount of deductions and the allocation of income to various tax jurisdictions. In evaluating the exposures connected with these various tax filing positions, including state and local taxes, the Company records allowances for probable exposures. A number of years may elapse before a particular matter, for which an allowance has been established, is audited and fully resolved. The Company has not yet undergone an examination by any taxing authorities.
 
The assessment of the Company's tax position relies on the judgment of management to estimate the exposures associated with the Company's various filing positions. As of December 31, 2016 and 2015, the Company had no uncertain tax positions.

Leased corporate office
The Company signed a one-year lease for its corporate office from August 1, 2016 through July 31, 2016.  Lease payments are $7,142 per month.  Minimum lease payments during 2017 are $49,992.

Recent Accounting Pronouncements
The Company continually assesses any new accounting pronouncements to determine their applicability to the Company. Where it is determined that a new accounting pronouncement affects the Company's financial reporting, the Company undertakes a study to determine the consequence of the change to its financial statements and assures that there are proper controls in place to ascertain that the Company's financials properly reflect the change. The Company currently does not have any recent accounting pronouncements that they are studying and feel may be applicable.

 
Note 2 – Going Concern
 
As shown in the accompanying financial statements, the Company has incurred recurring losses from operations resulting in an accumulated deficit of $4,223,121, as of December 31, 2016. The Company's current liabilities exceeded its current assets by $552,735. These factors raise substantial doubt about the Company's ability to continue as a going concern.
 
 
 
 

F-8


 

 
VW WIN CENTURY, INC.
 NOTES TO FINANCIAL STATEMENTS


 
The financial statements do not include any adjustments that might result from the outcome of any uncertainty as to the Company's ability to continue as a going concern. These financial statements also do not include any adjustments relating to the recoverability and classification of recorded asset amounts, or amounts and classifications of liabilities that might be necessary should the Company be unable to continue as a going concern.

 
Note 3 – Related Parties

Note payable
On December 31, 2015, the Company incurred a $250,000 note payable to Epazz, Inc., a company controlled by a related party Shaun Passley (former officer and director), for a patent licensing agreement. Interest expense is incurred at a 15% annual rate on principal.  Interest expense for the year ended December 31, 2016 was $37,500. The note payable liability can be satisfied by transferring the patent rights, disclosed in Note 1 to Epazz, Inc.

Accounts payable
The Company occasionally had borrowed funds from Epazz, Inc. to fund operating activities. These borrowings of $34,827 and $34,856 at December 31, 2016 and December 31, 2015, respectively are reflected in Accounts payable.  Accrued interest of $37,500 at December 31, 2016 associated with the aforementioned $250,000 note payable to Epazz, Inc. is included in Interest payable.

Accounts payable – related party
The Company occasionally borrows funds from Teik Keng Goh to fund operating activities. These borrowings of $440,765 at December 31, 2016 are reflected in Accounts payable.  There were no borrowings from Teik Keng Goh as of December 31, 2015. In addition, a $50,000 payable to SeeKuy Tan for services rendered from August 1, 2016 through December 31, 2016 is included in Accounts payable – related party as of December 31, 2016. The Company did not have an account payable to Kuy Tan as of December 31, 2015.

Imputed interest expense on Accounts payable – related party was $16,712 and $-0- for the periods ended December 31, 2016 and 2015, respectively.

Shares of Series A Preferred Stock Issued to Related Parties Pursuant to a Services Rendered
On January 13, 2015, the Company issued 20,000,000 shares of Series A Preferred Stock to Shaun Passley, the president of the company for management services. The total fair value of the Series A Preferred stock was $70,654 based on an independent valuation on the date of grant. On or about August 26, 2016 Mr. Passley sold Twenty Million (20,000,000) shares of Series A Preferred Stock to Teik Keng Goh, representing all of the issued and outstanding shares of Series A Preferred Stock.

Shares of Series B Preferred Stock Issued to Related Parties Pursuant to a Services Rendered
On January 13, 2015, the Company issued 16,000,000 shares of Series B Preferred Stock to Epazz, Inc. a corporation controlled by the president of the company for offices services. The total fair value of the Series B Preferred Stock was $9,661 based on an independent valuation on the date of grant. Effective October 19, 2016, the Company approved the cancellation of 16,000,000 share of Series B Preferred Stock, pursuant to receiving a notice received from Epazz, Inc.
 
On January 13, 2015, the Company issued 1,998,000 shares of Series B Preferred Stock to GG Mars Capital Inc. a related party at the time for financing services. The total fair value of the Series B Preferred Stock was $1,206 based on an independent valuation on the date of grant.
 
On January 13, 2015, the Company issued 1,998,000 shares of Series B Preferred Stock to Star Financial Corporation a related party at the time for financing services. The total fair value of the Series B Preferred Stock was $1,206 based on an independent valuation on the date of grant.
 
On January 13, 2015, the Company issued 4,000 shares of Series B Preferred Stock to Craig Passley a related party at the time for management services. The total fair value of the Series B Preferred Stock was $2 based on an independent valuation on the date of grant.
 
 
 

 
F-9



VW WIN CENTURY, INC.
 NOTES TO FINANCIAL STATEMENTS



Shares of Class A Common Stock Issued to Related Parties Pursuant to a Stock Distribution
On or about August 26, 2016, Shaun Passley, our former officer and director sold an aggregate of Two Hundred Sixty Two Million Nine Hundred Nine Thousand Two Hundred and Fifty Five (262,909,255) shares of the Class A Common Stock of the Company (or Five Hundred Twenty Five Thousand Eight Hundred Nineteen Thousand (525,819) shares on a post-reverse split basis) to Teik Keng Goh in a private transaction. As a result of the purchase, Teik Keng Goh became the majority shareholder of our Company and beneficially owned stock representing 75.45% of the issued and outstanding Class A Common Shares. In addition, Mr. Passley also sold Sixty Million (60,000,000) shares of Class B Common Stock and Twenty Million (20,000,000) shares of Series A Preferred Stock to Teik Keng Goh, representing all of the issued and outstanding shares of those series and classes. Shaun Passley has no remaining ownership in the Company.

Shares of Class A Common Stock Issued to Related Parties Pursuant to a Securities Purchase Agreement
On October 5, 2016, the Company entered into a Securities Purchase Agreement with Teik Keng Goh, the Chairman of the Company's Board of Directors, for the purchase of a total of 99,000,000 restricted shares of the Company's Class A Common Stock for a total purchase price of $10,000, which is a cost per share of $0.000101.  An independent valuation of shares issued was completed and it was determined the value of shares issued over the value received was $3,314,802.  Accordingly, an expense for $3,314,802 was recorded to general and administrative expenses during the period ended December 31, 2016.

Shares of Class B Common Stock Issued to Related Parties Pursuant to a Services Rendered
On January 13, 2015, the Company issued 60,000,000 shares of Class B Common Stock to Shaun Passley, the president of the company at that time for product development services. The total fair value of the Class B Common Stock was $5,827 based on an independent valuation on the date of grant. On or about August 26, 2016 Mr. Passley sold Sixty Million (60,000,000) shares of Class B Common Stock to Teik Keng Goh, representing all of the issued and outstanding shares of Class B Common Stock.

Series A Preferred Stock Conversion to Class A Common Stock
On November 14, 2016, Teik Keng Goh, being the sole holder of outstanding Series A Preferred Stock, provided a Notice of Election to Convert indicating his desire to convert 20,000,000 shares of Series A Preferred Stock into shares of Class A Common Stock.  The Series A Preferred Stock is convertible, at the option of the holder into shares of the Company's Class A Common Stock, with five business days' notice into 60% of the total number of then issued and outstanding shares of Class A Common Stock. The Company issued 59,840,566 shares of Class A Common Stock for the conversion of all the Series A Preferred Stock.

Series B Preferred Stock Conversion to Class A Common Stock
On November 17, 2016, Teik Keng Goh, being the sole holder of the remaining outstanding Series B Preferred Stock, provided a Notice of Election to Convert indicating his desire to convert 4,000,000 shares of Series B Preferred Stock into shares of Class A Common Stock. The Series B Preferred Stock is convertible, at the option of the holder into shares of the Company's Class A Common Stock, with five business days' notice into 10% of the total number of then issued and outstanding shares of Class A Common Stock. The Company issued 15,957,484 shares of Class A Common Stock for the conversion of Series B Preferred Stock.

 
Note 4 – Fair Value of Financial Instruments
 
Under FASB ASC 820-10-5, fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (an exit price). The standard outlines a valuation framework and creates a fair value hierarchy in order to increase the consistency and comparability of fair value measurements and the related disclosures. Under GAAP, certain assets and liabilities must be measured at fair value, and FASB ASC 820-10-50 details the disclosures that are required for items measured at fair value.
 
The Company does not have any financial instruments that must be measured under the new fair value standard. The Company's financial assets and liabilities are measured using inputs from the three levels of the fair value hierarchy. The three levels are as follows:
 
 
 
 

F-10




VW WIN CENTURY, INC.
 NOTES TO FINANCIAL STATEMENTS


Level 1 - Inputs are unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date.
 
Level 2 - Inputs include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates, yield curves, etc.), and inputs that are derived principally from or corroborated by observable market data by correlation or other means (market corroborated inputs).
 
Level 3 - Unobservable inputs that reflect our assumptions about the assumptions that market participants would use in pricing the asset or liability.
  
The following schedule summarizes the valuation of financial instruments at fair value on a non-recurring basis in the balance sheets as of December 31, 2015 and 2016, respectively:

  
 
Fair Value Measurements at December 31, 2015
 
 
 
Level 1
   
Level 2
   
Level 3
 
Assets
                 
Cash
 
$
112
   
$
   
$
 
Total assets
   
112
     
     
 
Liabilities
                       
Accounts payable – related party
   
     
34,856
     
 
Long term note payable – related party
   
     
250,000
     
 
Total Liabilities
   
     
284,856
     
 
 Total
 
$
112
   
$
(284,856
)
 
$
 
 
 
 
 
Fair Value Measurements at December 31, 2016
 
 
 
Level 1
   
Level 2
   
Level 3
 
Assets
                 
Cash
 
$
9,627
   
$
   
$
 
Total assets
   
9,627
     
     
 
Liabilities
                       
Accounts payable
   
     
14,054
     
 
Accounts payable – related party
   
     
525,592
     
 
Interest payable
   
     
37,500
     
 
Long term note payable
   
     
250,000
     
 
Total Liabilities
   
     
827,146
     
 
 Total
 
$
9,627
   
$
(827,146
)
 
$
 
 
 
There were no transfers of financial assets or liabilities between Level 1 and Level 2 inputs for the period from December 31, 2015 through December 31, 2016.
 
Level 2 liabilities consist of intercompany debt arrangements. No fair value adjustment was necessary during the period from December 31, 2015 through December 31, 2016.
 
 
 
  

F-11




VW WIN CENTURY, INC.
 NOTES TO FINANCIAL STATEMENTS


Note 5 – Other Current Assets
 
As of December 31, 2016 and 2015 other current assets included the following:
 
 
December 31,
 
December 31,
 
 
2016
 
2015
 
Prepaid office rent
 
$
7,584
   
$
 
Security deposits
   
7,200
     
 
 
 
$
14,784
   
$
 
 
 
Note 6 – Property and Equipment
 
Property and Equipment consists of the following at December 31, 2016 and 2015, respectively:
 
 
 
December 31,
   
December 31,
 
 
 
2016
   
2015
 
Furniture and fixtures
 
$
2,974
   
$
 
Website development
   
4,200
     
 
Leasehold improvements
   
2,783
     
 
 
   
9,957
     
 
Less accumulated depreciation and amortization
   
(272
)
   
 
 
 
$
9,685
   
$
 
 
Depreciation expense totaled $272 and -0- for the years ended December 31, 2016 and 2015, respectively.


Note 7 – Income Taxes
 
The Company accounts for income taxes under FASB ASC 740-10, which requires use of the liability method. FASB ASC 740-10-25 provides that deferred tax assets and liabilities are recorded based on the differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes, referred to as temporary differences.
 
For the period from March 3, 2013 (Inception) through December 31, 2016, the Company incurred a net operating loss and, accordingly, no provision for income taxes has been recorded. In addition, no benefit for income taxes has been recorded due to the uncertainty of the realization of any tax assets. At December 31, 2016, the Company had approximately $540,046 of federal net operating losses. The net operating loss carry forwards, if not utilized, will begin to expire in 2034.
 
The components of the Company's deferred tax asset are as follows:
 
 
December 31,
 
December 31,
 
 
2016
 
2015
 
Deferred tax assets:
 
 
 
 
Net operating loss carry forwards
 
$
(553,050
)
 
$
(34,744
)
 
 
 
 
 
 
 
 
 
Net deferred tax assets before valuation allowance
 
 
193,567
 
 
$
12,160
 
Less: Valuation allowance
 
 
(193,567
)
 
 
(12,160
)
Net deferred tax assets
 
$
 
 
$
 
 
 
 
 
 
F-12

 
 
 
 
VW WIN CENTURY, INC.
 NOTES TO FINANCIAL STATEMENTS
 

Based on the available objective evidence, including the Company's history of losses, management believes it is more likely than not that the net deferred tax assets will not be fully realizable. Accordingly, the Company provided for a full valuation allowance against its net deferred tax assets at December 31, 2016.
 
A reconciliation between the amounts of income tax benefit determined by applying the applicable U.S. and State statutory income tax rate to pre-tax loss is as follows:
 
 
December 31,
 
 
December 31,
 
 
2016
 
 
2015
 
 
     
 
 
 
 
Federal and state statutory rate
 
35
%
 
 
35
%
Change in valuation allowance on deferred tax assets
 
(35)
%
 
 
(35)
%

In accordance with FASB ASC 740, the Company has evaluated its tax positions and determined there are no uncertain tax positions.
 
 
Note 8 – Long-Term Debt

On December 29, 2015, the Company entered into a $250,000, 10 year, promissory note with an interest rate of 15%, payable to Epazz, Inc. for the purchase of US Patent 9,217,598 B2. Total long-term debt outstanding as of December 31, 2015 and 2016 consists of this note.  Accrued interest associated with this note of $37,500 and $-0- was recorded as of December 31, 2016 and 2015, respectively.
 

Note 9 – Stockholder's Equity (Deficit)
 
On November 14, 2013, the Board of Directors, consisting solely of the Company's majority shareholder at the time, amended the Article of Incorporation to change the par value and number of authorized shares of each class of common and series of preferred stock, in addition to the modification of the attributes and dividends. The disclosures herein reflect these modifications and the changes to the par value have been retroactively reflected throughout.
 
Convertible Preferred Stock, Series A
The Company has 20,000,000 authorized shares of $0.0001 par value Series A Convertible Preferred Stock ("Series A Preferred Stock"). The Series A Preferred Stock accrues dividends equal to 1.5% of the Company's revenues per quarter, beginning on January 1st of any calendar year in which the Company has generated revenue over $2 million, and an additional 24% of the Company's net income beginning on January 1st of any calendar year in which the Company has generated net income over $2 million. The dividends are payable at the discretion of the Company, provided that any unpaid dividends accrue until paid. The Series A Preferred Stock includes a liquidation preference equal to $0.0001 per share, plus any accrued and unpaid dividends. The Series A Preferred Stock is convertible, at the option of the holder into shares of the Company's Class A Common Stock, with five business days' notice into 60% of the total number of then issued and outstanding shares of Class A Common Stock. The Series A Preferred Stock has limited voting rights, relating solely to matters which adversely affect the rights of the Series A Preferred Stock holders. The Company shall reserve and keep available out of its authorized but unissued shares of Class A Common Stock such number of shares sufficient to effect the conversions.
 
Convertible Preferred Stock, Series B
The Company has 20,000,000 authorized shares of $0.0001 par value Series B Convertible Preferred Stock ("Series B Preferred Stock"). The Series B Preferred Stock accrues dividends equal to 1.5% of the Company's revenues per quarter, beginning on January 1st of any calendar year in which the Company has generated revenue over $1 million, and an additional 6% of the Company's net income beginning on January 1st of any calendar year in which the Company has generated net income over $2 million. The dividends are payable at the discretion of the Company, provided that any unpaid dividends accrue until paid. The Series B Preferred Stock includes a liquidation preference equal to $0.0001 per share, plus any accrued and unpaid dividends. The Series B Preferred Stock is convertible, at the option of the holder into shares of the Company's Class A Common Stock, with five business days' notice into 10% of the total number of then issued and outstanding shares of Class A Common Stock, provided that no conversion will take place until all holders of the Series B Preferred Stock consent to such conversion. The Series B Preferred Stock has limited voting rights, relating solely to matters which adversely affect the rights of the Series B Preferred Stock holders. The Company shall reserve and keep available out of its authorized but unissued shares of Class A Common Stock such number of shares sufficient to effect the conversions.
 
 
 

F-13



VW WIN CENTURY, INC.
 NOTES TO FINANCIAL STATEMENTS


Common Stock, Class A
The Company has 1 billion authorized shares of $0.0001 par value Class A Common Stock.
 
Stock Distribution
On November 21, 2013, Epazz, Inc. distributed 345,610,950 (or 691,222 shares on a post-reverse split basis) shares of the class A common stock of the Company among Epazz, Inc.'s shareholders pursuant to the spin-off of the Company from Epazz, Inc. Each shareholder of record on September 15, 2013 was issued one share of Z Fridge, Inc. class A common stock for each share of Epazz, Inc. class A common stock owned by the shareholder. A total of 297,385,702 (or 594,771 shares on a post-reverse split basis) of these shares were issued to related parties representing approximately 86% of the total shares issued.

On July 6, 2016, the stockholders of VW Win Century, Inc. ("VW Win Century" or the "Company") voted to approve an amendment (the "Amendment") to VW Win Century's Articles of Incorporation which authorized the Board of Directors to effect a one-to-five hundred reverse stock split of VW Win Century's class A common stock, par value $0.0001 per share ("Class A Common Stock").  Immediately thereafter, the Company filed a notice of corporate action with the Financial Industry Regulatory Authority ("FINRA").  The Amendment was approved by the holders of the Company's capital stock as follows: Class A Common Stock with 262,909,255 votes or 76% approving, Class B Common Stock 120,000,000,000 votes or 100% approving, Series A Convertible Preferred Stock 20,000,000 votes or 100% approving and Series B Convertible Preferred Stock 20,000,000 votes or 100% approving. At the effective of August 11, 2016, each five hundred shares of Class A Common Stock outstanding was combined into a single share of Class A Common Stock with any resulting fractional shares rounded up to the next whole share and with odd lots being rounded up to 100 shares. The Company issued 10,270 shares associated with odd lots being rounded up to 100 shares. The total number of shares of Common Stock authorized and the par value under VW Win Century's Amended Articles of Incorporation was not affected.

The shareholders and Board of Directors determined that the aforementioned reverse stock split would be in the best interests of the Company and its shareholders because it will provide the Company with an opportunity to "up list" its Class A Common Stock from a "fully reporting pink" status to "fully reporting QB" status in its primary market with OTC Markets.
 
On or about August 26, 2016, Shaun Passley, our former officer and director sold an aggregate of Two Hundred Sixty Two Million Nine Hundred Nine Thousand Two Hundred and Fifty Five (262,909,255) shares of the Class A Common Stock of the Company (or 525,819 shares on a post-reverse split basis) to Teik Keng Goh in a private transaction.   As a result of the purchase, Teik Keng Goh became the majority shareholder of our Company and beneficially owned stock representing 75.45% of the issued and outstanding Class A Common Shares. In addition, Mr. Passley also sold Sixty Million (60,000,000) shares of Class B Common Stock and Twenty Million (20,000,000) shares of Series A Preferred Stock to Teik Keng Goh, representing all of the issued and outstanding shares of those series and classes.

On October 5, 2016, the Company entered into a Securities Purchase Agreement with Teik Keng Goh, the Chairman of the Company's Board of Directors, for the purchase of a total of 99,000,000 restricted shares of the Company's Class A Common Stock for a total purchase price of $10,000, which is a cost per share of $0.000101. An independent valuation of shares issued was completed and it was determined the value of shares issued over the value received was $3,314,802.  Accordingly, an expense for $3,314,802 was recorded to general and administrative expenses during the period ended December 31, 2016.

Convertible Common Stock, Class B
The Company has 60,000,000 authorized shares of $0.0001 par value Convertible Class B Common Stock, convertible at the option of the holder into shares of the Company's Class A Common Stock on a 1:1 basis. The Convertible Class B Common Stock carries preferential voting rights of 2,000 votes to each Class A Common Stock vote (2,000:1). The Company shall reserve and keep available out of its authorized but unissued shares of Class A Common Stock such number of shares sufficient to effect the conversions.

On January 13, 2015, the Company issued 60,000,000 shares of Class B Common Stock to Shaun Passley, the president of the company at that time for product development services. The total fair value of the Class B Common Stock was $5,827 based on an independent valuation on the date of grant. On or about August 26, 2016 Mr. Passley sold Sixty Million (60,000,000) shares of Class B Common Stock to Teik Keng Goh, representing all of the issued and outstanding shares of Class B Common Stock.
 
 
 

 

F-14



VW WIN CENTURY, INC.
 NOTES TO FINANCIAL STATEMENTS


Preferred Stock Issuance  
On January 13, 2015, the Company issued 20,000,000 shares of Series A Preferred Stock to Shaun Passley, the president of the company for management services. The total fair value of the Series A Preferred stock was $70,654 based on an independent valuation on the date of grant. On or about August 26, 2016 Mr. Passley sold Twenty Million (20,000,000) shares of Series A Preferred Stock to Teik Keng Goh, representing all of the issued and outstanding shares of Series A Preferred Stock.
 
On January 13, 2015, the Company issued 16,000,000 shares of Series B Preferred Stock to Epazz, Inc. a corporation controlled by the president of the company for offices services. The total fair value of the Series B Preferred Stock was $9,661 based on an independent valuation on the date of grant. Effective October 19, 2016, the Company approved the cancellation of 16,000,000 share of Series B Preferred Stock, pursuant to receiving a notice received from Epazz, Inc.
 
On January 13, 2015, the Company issued 1,998,000 shares of Series B Preferred Stock to GG Mars Capital Inc. a related party for financing services. The total fair value of the Series B Preferred Stock was $1,206 based on an independent valuation on the date of grant.
 
On January 13, 2015, the Company issued 1,998,000 shares of Series B Preferred Stock to Star Financial Corporation a related party for financing services. The total fair value of the Series B Preferred Stock was $1,206 based on an independent valuation on the date of grant.
 
On January 13, 2015, the Company issued 4,000 shares of Series B Preferred Stock to Craig Passley a related party for management services. The total fair value of the Series B Preferred Stock was $2 based on an independent valuation on the date of grant.

Preferred Stock Conversions to Class A Common Stock
On November 14, 2016, Teik Keng Goh, being the sole holder of outstanding Series A Preferred Stock, provided a Notice of Election to Convert indicating his desire to convert 20,000,000 shares of Series A Preferred Stock into shares of Class A Common Stock.  The Series A Preferred Stock is convertible, at the option of the holder into shares of the Company's Class A Common Stock, with five business days' notice into 60% of the total number of then issued and outstanding shares of Class A Common Stock. The Company issued 59,840,566 shares of Class A Common Stock for the conversion of Series A Preferred Stock.

On November 17, 2016, Teik Keng Goh, being the sole holder of the remaining outstanding Series B Preferred Stock, provided a Notice of Election to Convert indicating his desire to convert 4,000,000 shares of Series B Preferred Stock into shares of Class A Common Stock. The Series B Preferred Stock is convertible, at the option of the holder into shares of the Company's Class A Common Stock, with five business days' notice into 10% of the total number of then issued and outstanding shares of Class A Common Stock. The Company issued 15,957,484 shares of Class A Common Stock for the conversion of Series B Preferred Stock.
 

Note 10 – Subsequent Events

There are no subsequent events to report.
 
 
 
F-15

 


ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
 
None
 
ITEM 9A. CONTROLS AND PROCEDURES
 
Evaluation of Disclosure Controls and Procedures
 
We carried out an evaluation, under the supervision and with the participation of our management, including our principal executive officer, of the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rules 13a – 15(c) and 15d – 15(e)). Based upon that evaluation, our principal executive officer concluded that, as of the end of the period covered in this report, our disclosure controls and procedures were not effective to ensure that information required to be disclosed in reports filed under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the required time periods and is accumulated and communicated to our management, including our principal executive officer, as appropriate to allow timely decisions regarding required disclosure.
 
Inherent Limitations of Internal Controls
 
Our Principal Executive Officer does not expect that our disclosure controls or internal controls will prevent all error and all fraud. Although our disclosure controls and procedures were designed to provide reasonable assurance of achieving their objectives, a control system, no matter how well conceived and operated, can provide only reasonable, not absolute assurance that the objectives of the system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented if there exists in an individual a desire to do so. There can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.

Management's Report on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rule 13a-15(f) under the Exchange Act. Our management assessed the effectiveness of our internal control over financial reporting as of December 31, 2016. In making this assessment, 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 upon this evaluation, management concluded that our internal control over financial reporting was not effective as of December 31, 2016 for the following reasons.

·
The Company does not have an independent board of directors or audit committee or adequate segregation of duties due to the limited nature and resources of the Company;
·
The Company does not have in place a policy and procedures to identify, approve, monitor or approve related party transactions or relationships;
·
All of our financial reporting and review of critical accounting areas and disclosures and material non-standard transactions is carried out by our financial reporting consultant; and
·
Inadequate closing process to ensure all material misstatements are corrected in the financial statements. This was evidenced by the fact that there were audit adjustments and restatements of the financial statements.
 
 

 

10






We intend to rectify these weaknesses by implementing an independent board of directors and hiring of additional accounting personnel once we have sufficient resources available.
This annual report does not include an attestation report of the Company's registered public accounting firm regarding internal control 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 Control over Financial Reporting
 
There were no changes in our internal control over financial reporting, other than those stated above, during our most recent quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 
ITEM 9B. OTHER INFORMATION
 
None.
 
 
- 11 -


PART III
 
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
 
Directors and Executive Officers
 
Our executive officers and director and their ages as of March 14, 2016 are as follows:
 
NAME
 
AGE
 
 
POSITION
 
 
 
 
 
 
 
Goh TeikKeng
 
 
40
 
 
President, Chief Executive Officer, Chief Financial Officer and Member of the Board
Tan SeeKuy
 
 
59
 
 
Chairman of the Board of Directors.
Kathleen Johnston
   
70
   
Secretary
 
Set forth below is a brief description of the background and business experience of our executive officers and director.
 
Goh TeikKeng
 
On December 1, 2010, Dato' Seri TeikKeng Goh formed the Century Dynasty International Group, located in China, which has implemented a diversified business model, including trading and marketing, caviar cosmetics, gasoline fuel pills, sturgeon theme parks, pension/retirement membership cards, coal mining, licensed lottery. He still serves as President of Dynasty International Group.
 
Tan SeeKuy 

Dr. SeeKuy Tan was appointed as the Company's Chief Executive Officer on August 31, 2016. In January 2016 Mr. Tan was appointed President of EmcoHanover Group, a company located in the Asian Pacific Region. From 2010 to 2015 Mr. Tan served as the CEO of Glo Holdings in Irvine, California. Mr. Tan was conferred a Doctorate in Business Administration by the Midwest Missouri University in 2007.

Kathleen Johnston

Prior to becoming the secretary of the Company, Kathleen Johnston owned and operated Teleservice/Telesystems and Travelogia.com in Concord and Irvine, California from 1991 to 2014. She was responsible for the marketing and investor relations as well as a trainer and motivator for several regions throughout the United States.
The Board of Directors and Committees
 
Our Board of Directors does not maintain a separate audit, nominating or compensation committee. Functions customarily performed by such committees are performed by our Board of Directors as a whole. Our director is elected annually and holds office until our next annual meeting of the shareholders and until his successors are elected and qualified. Officers will hold their positions at the pleasure of the Board of Directors, absent any employment agreement. Our officers and director may receive compensation as determined by us from time to time by vote of the Board of Directors. Such compensation might be in the form of stock options. Directors may be reimbursed by the Company for expenses incurred in attending meetings of the Board of Directors. Vacancies in the Board are filled by majority vote of the remaining director(s).
 
Independence of Directors
 
We are not required to have independent members of our Board of Directors, and do not anticipate having independent directors until such time as we are required to do so.
 
 


- 12 -



 
Involvement in Certain Legal Proceedings
 
No executive officer or director of the Company has been the subject of any order, judgment, or decree of any court of competent jurisdiction, or any regulatory agency permanently or temporarily enjoining, barring suspending or otherwise limiting him from acting as an investment advisor, underwriter, broker or dealer in the securities industry, or as an affiliated person, director or employee of an investment company, bank, savings and loan association, or insurance company or from engaging in or continuing any conduct or practice in connection with any such activity or in connection with the purchase or sale of any securities.
 
No executive officer or director of the Company has been convicted in any criminal proceeding (excluding traffic violations) or is the subject of a criminal proceeding which is currently pending.
 
No current executive officer or director of the Company is the subject of any pending legal proceedings.
 
 
ITEM 11. EXECUTIVE COMPENSATION
 
Stock Option Grants
 
We have not granted any stock options to our executive officers since our incorporation.
 
Employment Agreements
 
COMPENSATION DISCUSSION AND ANALYSIS
 
Director Compensation
 
Our Board of Directors, currently consisting of SeeKuy Tan and TeikKeng Goh, does not currently receive any consideration for their service as a member of the Board of Directors. The Board of Directors reserves the right in the future to award the members of the Board of Directors cash or stock based consideration for their services to the Company, which awards, if granted shall be in the sole determination of the Board of Directors.
 
Summary Compensation Table
 
The following table sets forth the compensation of our executive officers for the years ended December 31, 2016, 2015 and 2014, respectively:
 
           
Stock
 
All Other
    
Name and Principal Position
 
Year
 
Salary
 
Awards
 
Compensation
 
Total
SeeKuy Tan, President, Chief Financial Office and member of the Board
 
2016
 
-0-
 
-0-
   
-0-
 
-0-
 
Shaun Passley, Ph.D.,(1)
 
 2016
 
-0-
 
-0-
   
-0-
 
-0-
 
   
  2015
 
-0-
 
88,557
  (2)
 
-0-
 
88,557
 
Chief Executive Officer, Chief Financial Officer, and Chairman of the Board of Directors
 
 2014
 
-0-
 
-0-
   
-0-
 
-0-
 
 
                             
 
(1)
The Company had no executive officers who made more than $100,000 in total compensation for the years ended December 31, 2016, 2015 or 2014.
(2)
On January 21, 2015, the Company issued 60,000,000 of Common B Stock, 20,000,000 of Preferred A Stock and 20,000,000 of Preferred B Stock to the Company's CEO in exchange for management services.
 
 
 

 
- 13 -




 
CORPORATE GOVERNANCE
 
The Company promotes accountability for adherence to honest and ethical conduct; endeavors to provide full, fair, accurate, timely and understandable disclosure in reports and documents that the Company files with the Securities and Exchange Commission (the "SEC") and in other public communications made by the Company; and strives to be compliant with applicable governmental laws, rules and regulations. The Company has not formally adopted a written code of business conduct and ethics that governs the Company's employees, officers and directors as the Company is not required to do so.
 
In lieu of an Audit Committee, the Company's Board of Directors is responsible for reviewing and making recommendations concerning the selection of outside auditors, reviewing the scope, results and effectiveness of the annual audit of the Company's financial statements and other services provided by the Company's independent public accountants. The Board of Directors reviews the Company's internal accounting controls, practices and policies.

 
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The following table presents information, to the best of our knowledge, about the beneficial ownership of our common stock on April 14, 2017, held by those persons known to beneficially own more than 5% of our capital stock and by our directors and executive officers. The percentage of beneficial ownership for the following table is based on 175,507,169 shares of Class A Common Stock issued and outstanding, 60,000,000 shares of our Convertible Class B Common Stock issued and outstanding (which each vote 2,000 voting shares) issued and outstanding as of April 14, 2017.
 
Beneficial ownership is determined in accordance with the rules of the Securities and Exchange Commission and does not necessarily indicate beneficial ownership for any other purpose. Under these rules, beneficial ownership includes those shares of common stock over which the stockholder has sole or shared voting or investment power. It also includes (unless footnoted) shares of common stock that the stockholder has a right to acquire within 60 days after March 14, 2016, through the exercise of any option, warrant or other right (including the conversion of the preferred stock). The percentage ownership of the outstanding common stock, however, is based on the assumption, expressly required by the rules of the Securities and Exchange Commission, that only the person or entity whose ownership is being reported has converted options, warrants or other convertible securities into shares of our common stock, unless otherwise stated. Inclusion of shares in the table does not, however, constitute an admission that the named stockholder is a direct or indirect beneficial owner of those shares. Unless otherwise indicated, (i) each person or entity named in the table has sole voting power and investment power (or shares that power with that person's spouse) with respect to all shares of capital stock listed as owned by that person or entity, and (ii) the address of each person or entity named in the table is c/o VW Win Century, Inc., 2575 McCabe Way, Suite 100, Irvine, CA 92614.
 
 
 
 

- 14 -


 

 

 
  
 
Class A
 
 
Convertible Class B
 
 
 
 
Common Stock
 
 
 
Common Stock
 
 
 
 
Number of
 
 
 
% of
 
 
 
Number of
 
 
 
% of
 
 
 
Total Voting
 
Name of Beneficial Owner(1)
 
 
Shares
 
 
 
Class
 
 
 
Shares
 
 
 
Class(2)
 
 
 
Shares
 
Officers and Directors: 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
SeeKuy Tan
   
0
     
0%
     
0
     
0%
     
0
 
TeikKeng Goh
 
 
159,366,385
     
90.803%
 
 
 
60,000,000
 
 
 
100%
 
 
 
120,000,000,000
 
                              
 
(1) Except as indicated in the footnotes to this table and pursuant to applicable community property laws, the persons named in the table have sole voting and investment power with respect to all securities owned by such person.
 
(2) Percentage of beneficial ownership is based upon 60,000,000 shares of Convertible Class B Common Stock outstanding as of April 14, 2017. Each share of Convertible Class B Common Stock votes 2,000 voting shares on all shareholder matters and converts at the option of the holder thereof into Class A Common Stock on a one-for-one basis.

 
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, DIRECTOR INDEPENDENCE
 
Related Party Debt Financing Arrangements
 
The Company has a debt payable to Epazz, Inc., of $ 37,500 as of December 2016 and $34,856 as of December 31, 2015, and $440,765 is owed to TeikKeng Goh, Chairman of the Board, and $50,000 is payable to SeeKuy Tan, our President, as of December 31, 2016.
 
On December 29, 2015, the Company entered into a $250,000 10 year, promissory note with an interest rate of 15%, payable to Epazz, Inc. for the purchase of US Patent 9,217,598 B2.
 
Related Party Equity Issuances
 
On January 21, 2015, the Company issued 20,000,000 shares of Series A Preferred Stock to Shaun Passley, the president of the company for management services. The total fair value of the Series A Preferred stock was $70,654 based on an independent valuation on the date of grant.
 
On January 21, 2015, the Company issued 16,000,000 shares of Series B Preferred Stock to Epazz, Inc. a corporation controlled by the president of the company for offices services. The total fair value of the Series B Preferred Stock was $9,661 based on an independent valuation on the date of grant.
 
On January 21, 2015, the Company issued 1,998,000 shares of Series B Preferred Stock to GG Mars Capital Inc. a related party for financing services. The total fair value of the Series B Preferred Stock was $1,206 based on an independent valuation on the date of grant.
 
On January 21, 2015, the Company issued 1,998,000 shares of Series B Preferred Stock to Star Financial Corporation a related party for financing services. The total fair value of the Series B Preferred Stock was $1,206 based on an independent valuation on the date of grant.
 
On January 21, 2015, the Company issued 4,000 shares of Series B Preferred Stock to Craig Passley a related party for management services. The total fair value of the Series B Preferred Stock was $2 based on an independent valuation on the date of grant.
 
 
 
 
 

- 15 -


 

 

 
On January 21, 2015, the Company issued 60,000,000 shares of Class B Common Stock to Shaun Passley, the president of the company for product development services. The total fair value of the Class B Common Stock was $5,827 based on an independent valuation on the date of grant.
 
On August 26, 2016, Shaun Passley, our former officer and director agreed to cancel and return to treasury 16,000,000 shares of Series B Preferred Stock.

On October 5, 2016, the Company issued 99,000,000 shares of its Class A Common Stock to Mr. TeikKeng Goh for $10,000. An independent valuation of shares issued was completed and it was determined the value of shares issued over the value received was $3,314,802.  Accordingly, an expense for $3,314,802 was recorded to general and administrative expenses during the period ended December 31, 2016.

On November 14, 2016, Mr. TeikKeng Goh exercised his right to convert his twenty million (20,000,000) shares of Series A Preferred Stock into 59,840,566 shares of Class A Common Stock.

On November 17, 2016, Mr. Ahmad Hizar Bin Zainol Abidin exercised his right to convert his four million (4,000,000) shares of Series B Preferred Stock into 15,957,484 shares of Class A Common Stock.

Dividends Payable
 
None.

 
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
 
The following table shows the fees paid or accrued for the audit and other services provided by our independent auditors for 2016 and 2015.
 
 
 
2016
   
2015
 
Audit fees:
           
M&K CPAS, PLLC
 
$
10,750
   
$
3,500
 
Audit-related fees:
               
M&K CPAS, PLLC
   
     
 
Tax fees:
               
M&K CPAS, PLLC
   
     
 
All other fees:
   
     
 
Total fees paid or accrued to our principal accountant
 
$
10,750
   
$
3,500
 
 
We do not have an Audit Committee. Our board of directors acted as the Company's Audit Committee during the fiscal years ended 2016, recommending a firm of independent certified public accountants to audit the annual financial statements; reviewing the independent auditors' independence, the financial statements and their audit report; and reviewing management's administration of the system of internal accounting controls.
 
Audit Fees: Consist of the aggregate fees, including expenses, billed by the Company's principal accountants for professional services rendered for the audit of the Company's financial statements and for the review of the Company's financial information included in its quarterly reports or services that are normally provided in connection with statutory and regulatory filings or engagements.
 
 
 
 

- 16 -




 
Audit Related Fees: Consist of the aggregate fees, including expenses, billed by principal accountants for assurance and related services reasonably related to the performance of the Company's audit or review of the Company's financial statements.
 
Tax Fees: Consist of the aggregate fees, including expenses, billed by principal accountants for tax compliance, tax advice and tax planning.
 
PART IV
 
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
 
 
 
 
Incorporated by reference
Exhibit
Exhibit Description
Filed herewith
Form
Period ending
Exhibit
Filing
date
Articles of Incorporation**
 
 
 
 
 
Amendment of Articles**
 
 
 
 
 
Bylaws of FlexFridge, Inc.**
 
 
 
 
 
Certifications pursuant to Rule 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
*
 
 
 
 
Certifications pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
*
 
 
 
 
101.SCH
XBRL Schema Document
*
 
 
 
 
101.CAL
XBRL Calculation Linkbase Document
*
 
 
 
 
101.DEF
XBRL Definition Linkbase Document
*
 
 
 
 
101.LAB
XBRL Labels Linkbase Document
*
 
 
 
 
101.PRE
XBRL Presentation Linkbase Document
*
 
 
 
 
 
______________
 
*    Filed herewith.
** Previously filed.
 
 
 
- 17 -

 
 
 
SIGNATURES
 
In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
 
VW Win Century, Inc.
 
 
Dated: April 28, 2017
By: __/s/ SeeKuy Tan_______________________
 
SeeKuy Tan
 
President, Treasurer and Director
(Principal Executive Officer, Principal Financial Officer, Principal Accounting Officer)
   
   
   
Dated: April 28, 2017
By: _/s/ TeikKeng Goh________________________
 
TeikKeng Goh
 
Chairman of the Board

 
 
 
 
 
 
- 18 -