UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 10-K

 

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

 

For the fiscal year ended December 31, 2019

 

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

 

For the transition period from ___________ to _____________

 

Commission file number: 000-55326

 

IMAGE CHAIN GROUP LIMITED, INC.

(Exact name of registrant as specified in its charter)

 

Nevada		46-4333787
(State or other jurisdiction of incorporation or organization)		IRS Employer (Identification No.)

 

Room 501 – 5th Floor, Bonham Centre, No. 79-85 Bonham Strand Sheung Wan, Hong Kong, China		N/A
(Address of principal executive offices)		(Zip Code)

 

Registrant’s telephone number, including area code: (852) 3188-2700

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
N/A		N/A		N/A

 

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

 

Common Stock, $0.001 par value

 

Indicate by checkmark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes [  ] No [X]

 

Indicate by checkmark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes [  ] No [X]

 

Indicate by checkmark whether the registrant has (1) 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 checkmark whether the registrant has submitted electronically 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 [X] No [  ]

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

	Large accelerated filer	[  ]	Accelerated filer	[  ]
	Non-accelerated filer	[  ]	Smaller reporting company	[X]
			Emerging Growth Company	[X]

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [  ]

 

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 voting and non-voting common equity held by non-affiliate of the registrant as of June 30, 2019 was approximately $24,666,733 based on the closing price on June 30, 2019.

 

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS

 

Check whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Exchange Act after the distribution of securities under a plan confirmed by a court. Yes [  ] No [  ]

 

APPLICABLE ONLY TO CORPORATE ISSUERS

 

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

 

508,539,882 common shares issued and outstanding as of February 18, 2020.

 

DOCUMENTS INCORPORATED BY REFERENCE

 

None.

 

 

 

TABLE OF CONTENTS

 

		Page
PART I
Item 1.	Business	3
Item 2.	Properties	6
Item 3.	Legal Proceeding	6
Item 4.	Mine Safety Disclosures	6
PART II
Item 5.	Market for the Registrant’s Common Equity and Related Stockholder Matters and Issuer Purchases of Equity Securities	6
Item 6.	Selected Financial Data	7
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	7
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	10
Item 8.	Financial Statements and Supplementary Data	10
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	11
Item 9A.	Controls and Procedures	11
Item 9B.	Other Information	12
PART III
Item 10.	Directors and Executive Officers and Corporate Governance	13
Item 11.	Executive Compensation	15
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters	17
Item 13.	Certain Relationships and Related Transactions, and Director Independence	18
Item 14.	Principal Accounting Fees and Services	19
PART IV
Item 15.	Exhibits, Financial Statements Schedules	20
Item 16.	Form 10-K Summary	21
SIGNATURES		22

 

 

PART I

 

Item 1. Business.

 

Company History and Recent Developments

 

Image Chain Group Limited, Inc.

 

Image Chain Group Limited, Inc. (formerly Have Gun Will Travel Entertainment, Inc.) was incorporated under the laws of Nevada on December 18, 2013, and initially sought to create reality television programming. References in this Report to “ICGL”, “Image Chain”, the “Company”, the “Registrant”, “we”, “our” or “us” are to Image Chain Group Limited, Inc.

 

On May 5, 2015, ICGL entered into a share exchange agreement (the “FDHG Exchange Agreement”) with Fortune Delight Holdings Group Ltd (“FDHG”) and Wu Jun Rui, on behalf of himself and certain other individuals who were to receive shares of ICGL pursuant to the FDHG Exchange Agreement (the “FDGH Shareholders”). On the terms and subject to the conditions set forth in the FDHG Exchange Agreement, on May 5, 2015, Wu Jun Rui transferred all 50,000 shares of FDHG common stock, consisting of all of the issued and outstanding shares of FDHG, to ICGL in exchange for the issuance to the stockholders of FDHG of 59,620,000 shares of the Company’s common stock, par value $.001 per share (“Common Stock”) and 5,000,000 shares of the Company’s preferred stock, par value $.001 per share (“Preferred Stock”).

 

As a result of the closing of the FDHG Exchange Agreement, FDHG became the Company’s wholly owned subsidiary. FDHG, through its subsidiaries, manufactured and sold “Image Tea”-branded tea products from its tea garden in Yunnan Province.

 

On June 11, 2015, the Company amended its Articles of Incorporation in order to change its name to Image Chain Group Limited, Inc. and to increase the authorized shares of Common Stock from 70,000,000 to 400,000,000. The name change was undertaken in order to more closely align with the operations of the Company’s wholly-owned subsidiary, the increase in authorized Common Stock was undertaken to allow the Company to utilize the newly available shares to raise capital.

 

On or about November 15, 2016, FDHG disposed of its ownership of all operating assets, and as a result ICGL became a shell company, as defined by Rule 12b-2 under the Exchange Act (the “Disposition Event”). The Disposition Event is evidenced by a bought and sold note stamped by the Inland Revenue Department of Hong Kong, which we believe is a legally binding document.

 

On February 13, 2017, the Company filed with the Secretary of State of the State of Nevada a Certificate of Correction (the “Certificate of Correction”) to correct a mistake made in the Company’s original Articles of Incorporation with regard to the Preferred Stock issued in connection with the FDHG Exchange Agreement. As a result, ICGL had 395,000,000 shares of Common Stock and 5,000,000 shares of Preferred Stock issued and outstanding. The Company subsequently entered into an agreement pursuant to which the holder of the Preferred Stock agreed to retire the Preferred Stock in exchange for receiving an equal number of shares of Common Stock of the Company. As of the date of this Report, that exchange of Preferred Stock for Common Stock has not yet occurred.

 

On May 1, 2017, upon recommendation of the Board of Directors, a majority of Image Chain’s common stockholders consented in writing to amendment of Image Chain’s Articles of Incorporation to (i) effect a reverse stock split on a 1 for 100 stock split basis from 400,000,000 authorized shares with a par value of $0.001 per share to 4,000,000 authorized shares with a par value of $0.001, and (ii) after the reverse stock split, to increase the authorized shares of Common Stock from 3,950,000 to 2,000,000,000 shares with a par value of $0.001 per share, and to decrease the authorized shares of Preferred Stock from 50,000 to zero (0). As of the date of this Report, the reverse stock split and increase in authorized shares have been completed, and the decrease in shares of Preferred Stock has not yet occurred, as a result 50,000 shares of Preferred Stock are authorized and outstanding.

 

 

Image P2P Trading Group Limited

 

Image P2P Trading Group Limited (“Image P2P”), a company organized under the laws of the British Virgin Islands, was incorporated on April 21, 2015. Asia Grand Will (“AGW”) was incorporated on March 18, 2017 in the Hong Kong SAR. AGW wholly owns Fuzhi Yuan (Shenzhen) Holdings Limited (“FYSZ”) which was established on June 20, 2017 in the PRC. FYSZ is a wholly owned foreign entity under PRC law. FYSZ wholly owns Jiangxi Fuzhiyuan Biotechnology Limited (“Fuzhiyuan Biotechnology”), which was established on January 5, 2013 in the PRC. FYSZ acquired Fuzhiyuan Biotechnology on July 14, 2017. AGW and FYSZ are intermediary holding companies. Image P2P conducts its operations through Fuzhiyuan Biotechnology. Image P2P acquired AGW on Jul 28, 2017.

 

The reorganization of Image P2P and its subsidiaries via the acquisitions detailed above, by and amongst Image P2P and AGW, FYSZ, and Fuzhiyuan Biotechnology, was accounted for under US GAAP as business combinations under common control.

 

The Share Exchange

 

On November 14, 2017, Image Chain entered into a share exchange agreement (the “Exchange Agreement”) with Image P2P and the shareholders of Image P2P (the “Sellers”). Pursuant to the Exchange Agreement, the Sellers transferred all 50,000 shares of Image P2P outstanding common stock to the Company in exchange for 500,000,000 shares of Common Stock (the “Share Exchange”). As a result of the Share Exchange, Image P2P became the Company’s wholly-owned subsidiary. Image P2P, through its subsidiaries, is engaged in producing, marketing and selling tea polyphenol products, and is developing for production tea polyphenol-based products. Image P2P is located in the PRC.

 

The Share Exchange has been accounted for as a reverse- merger and recapitalization of Image Chain where Image Chain (the legal acquirer) is considered the accounting acquiree and Image P2P (the acquiree) is considered the accounting acquirer. As a result of this transaction, the Company is deemed to be a continuation of the business of Image P2P.

 

Accordingly, the accompanying consolidated financial statements are those of the accounting acquirer, Image P2P. The historical stockholders’ equity of the accounting acquirer prior to the share exchange has been retroactively restated as if the Share Exchange occurred as of the beginning of the first period presented.

 

As used in this Report, unless otherwise stated or the context clearly indicates otherwise, the terms “ICGL”, “Image Chain”, the “Company,” the “Registrant,” “we,” “us” and “our” refer to Image Chain after having given effect to the acquisition of Image P2P.

 

Our authorized capital stock currently consists of 2,000,000,000 shares of Common Stock and 50,000 shares of Preferred Stock. Our Common Stock is quoted on the OTC Markets under the symbol “ICGL”.

 

Share Exchange and disposal of subsidiaries

 

On November 28, 2018, the Company entered into a Business Transfer Agreement and Share Exchange Agreement (the “Agreements”) with a group of the original shareholders of Image P2P (the “Image P2P Shareholding Group”), Image P2P and its subsidiaries. Pursuant to the Agreements, the Image P2P Shareholding Group will exchange 200,000 common shares of the Company for the one common share of Asia Grand Will Limited held by Image P2P. Asia Grand Will Limited is the holding company for the Company’s operations in the PRC. Also pursuant to the Agreements, the Image P2P Shareholding Group, Image P2P and Image P2P’s subsidiaries will transfer to the Company (i) all of its right, title and interest to the intellectual property, including copyrights, patents, trademarks, process technology and production know-how, of Image P2P and its subsidiaries, (ii) the exclusive distribution rights in the PRC and worldwide for all products of Image P2P and its subsidiaries, (iii) the exclusive right to all intellectual property developed by Image P2P and its subsidiaries in the future and (iv) the exclusive distribution rights in the PRC and worldwide for all products of Image P2P and its subsidiaries developed in the future.

 

 

The 200,000 common shares of the Company returned to Image P2P are recognized as common stock in treasury since Image P2P is a wholly owned subsidiary of the Company and measured at cost which is the fair value of the common stocks as of the date of the disposal of subsidiaries.

 

The subsidiaries disposed are presented as discontinued operations in this report. Comparatives are reclassified to conform with the presentation.

 

The Company is currently reviewing and revising its future business plans. To date, the Company has not yet identified its future business plans.

 

Company Overview

 

On November 28, 2018, the Company disposed of Asia Grand Will Limited and its subsidiaries and hence has terminated its business of tea polyphenol products production and sales.

 

Since the Sino-US trade war may affect the enterprises operating in China starting from 2018, the Company has gradually shifted its market target to Malaysia. It is seeking to develop business in healthy Halal food.

 

While we expect to focus on our efforts in the Halal Food License area, we will continue to seek new business opportunities with established business entities for merger with or acquisition of a target business in order to best protect our shareholder interests. In certain instances, a target business may wish to become our subsidiary or may wish to contribute assets to us rather than merge. We have not yet begun negotiations or entered into any definitive agreements in the Halal Food License business, or for any other potential new business opportunities, and there can be no assurance that we will be able to enter into any definitive agreements.

 

We anticipate that the selection of a business opportunity in which to participate will be complex and without certainty of success. Business opportunities may be available in many different industries and at various stages of development, all of which will make the task of comparative investigation and analysis of such business opportunities extremely difficult and complex. Business opportunities that we believe are in the best interests of our company may be scarce, or we may be unable to obtain the ones that we want. We can provide no assurance that we will be able to locate compatible business opportunities.

 

Currently, we do not have a source of revenue. We are not able to fund our cash requirements through our current operations. We have been reliant on loans by affiliated and non-affiliated parties to provide financial contributions and services to keep our company operating. Further, we believe that our company may have difficulties raising capital from other sources until we locate a prospective merger candidate through which we can pursue our plan of operation. If we are unable to secure adequate capital to continue our acquisition efforts, our shareholders may lose some or all of their investment and our business may fail. We currently have no written or oral agreement from our majority shareholder to continue to provide financial contributions.

 

Product and Market Overview

 

On November 28, 2018, the Company has disposed Asia Grand Will Limited and its subsidiaries and hence has terminated its business of tea polyphenol products production and sales.

 

Since the Sino-US trade war may affect the enterprises operating in China starting from 2018, the Company has gradually shifted its market target to Malaysia. It is seeking to develop business in healthy Halal food.

 

Employees

 

As of the date of this Report, our officers and directors are our only employees.

 

Our Chief Executive Officer and Chief Operating Officer serve the Company on a part-time basis.

 

Item 1A. Risk Factors

 

Not applicable.

 

 

Item 1B. Unresolved Staff Comments

 

Not applicable.

 

Item 2. Properties.

 

Our corporate headquarter is located at Room 501, 5/F, Bonham Centre, No. 79-85, Bonham Strand, Sheung Wan, Hong Kong, China, where we lease approximately 2,500 square feet of office space under a lease that expires in March 31, 2020. Our monthly lease payment for this office space is approximately $3,500. We believe the leased premise is sufficient to meet the immediate needs of our corporate headquarter. Subject to the new lease terms with landlord, or else we may find a new premise as our corporate headquarter.

 

Item 3. Legal Proceedings.

 

As of the date of this Report, we are not a party to any legal proceedings that could have a material adverse effect on our business, financial condition or operating results. Further, to our knowledge, no such proceedings have been threatened against us.

 

Item 4. Mine Safety Disclosures.

 

Not applicable.

 

PART II

 

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

 

Market Information

 

Our common stock is quoted on the OTC Markets (“OTC PINK”) under the symbol “ICGL”. The Common Stock was initially quoted on the OTC PINK on January 3, 2015, however, there has been very limited trading to date, and an active trading market may never develop.

 

Holders

 

As of the date of this Report there were approximately 483 holders of record of our Common Stock. This does not include an indeterminate number of persons who hold our Common Stock in brokerage accounts and otherwise in “street name.” As of the date of this Report, there are 508,539,882 shares of our Common Stock outstanding. There are no options, warrants or other securities convertible into our Common Stock, other than the 50,000 shares of our Preferred Stock currently outstanding. Our Preferred Stock currently outstanding are under contract for conversion into 50,000 shares of our Common Stock, representing a conversion basis of 1 share of Preferred Stock for 1 share of Common Stock.

 

Dividends

 

Holders of Common Stock are entitled to receive such dividends as may be declared by the Company’s Board of Directors. The Company did not declare or pay dividends during its fiscal years ended December 31, 2019 or 2018.

 

To the extent ICGL has any future earnings, it will likely retain earnings to expand corporate operations and not use such earnings to pay dividends.

 

Transfer Agent and Registrar

 

The transfer agent and registrar for ICGL’s common stock is Globex Transfer, LLC, 780 Deltona Blvd., Suite 202, Deltona, FL 32725, telephone 813-344-4490.

 

Repurchases of Our Securities

 

None.

 

 

Recent Sales of Unregistered Securities

 

All unregistered sale of equity securities were reported in a Current Report on Form 8-K filed with SEC on March 28, 2019.

 

Indemnification of Officers and Directors

 

Our Bylaws, subject to the provisions of the Nevada Revised Statutes, contain provisions which allow the Company to indemnify any person against liabilities and other expenses incurred as the result of defending or administering any pending or anticipated legal issue in connection with service to us if it is determined that person acted in good faith and in a manner which he reasonably believed was in or not opposed to the best interest of the Company. Insofar as indemnification for liabilities arising under the Securities Act may be permitted to our director, officer and controlling person, we have been advised that in the opinion of the SEC, such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable.

 

Item 6. Selected Financial Data.

 

Not applicable.

 

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

 

Cautionary Statements

 

This Annual Report on Form 10-K (this “Report”) contains forward-looking statements, including, without limitation, in the sections captioned “Business,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and elsewhere. Any and all statements contained in this Report that are not statements of historical fact may be deemed forward-looking statements. Terms such as “may,” “might,” “would,” “should,” “could,” “project,” “estimate,” “pro-forma,” “predict,” “potential,” “strategy,” “anticipate,” “attempt,” “develop,” “plan,” “help,” “believe,” “continue,” “intend,” “expect,” “future” and terms of similar import (including the negative of any of the foregoing) may be intended to identify forward-looking statements. However, not all forward-looking statements may contain one or more of these identifying terms.

 

Forward-looking statements in this Report may include, without limitation, statements regarding (i) the plans and objectives of management for future operations, including plans or objectives relating to the growth of tea polyphenol sales and development of our tea polyphenol-based products, (ii) the plans or objectives relating to our future business acquisitions, if any, (iii) a projection of income (including income/loss), earnings (including earnings/loss) per share, capital expenditures, dividends, capital structure or other financial items, (iv) our future financial performance, including any such statement contained in a discussion and analysis of financial condition by management or in the results of operations included pursuant to the rules and regulations of the Securities and Exchange Commission, or the SEC, and (v) the assumptions underlying or relating to any statement described in points (i), (ii), (iii) or (iv) above.

 

The forward-looking statements are not meant to predict or guarantee actual results, performance, events or circumstances and may not be realized because they are based upon our current projections, plans, objectives, beliefs, expectations, estimates and assumptions and are subject to a number of risks and uncertainties and other influences, many of which we have no control over. Actual results and the timing of certain events and circumstances may differ materially from those described by the forward-looking statements as a result of these risks and uncertainties. Factors that may influence or contribute to the inaccuracy of the forward-looking statements or cause actual results to differ materially from expected or desired results may include, without limitation:

 

	●	volatility or decline of our stock price;
	●	potential fluctuation of quarterly results;
	●	continued failure to earn revenues or profits;
	●	inadequate capital to continue or expand our business, and inability to raise additional capital or financing to implement our business plans;
	●	decline in demand for our products and services;
	●	rapid adverse changes in markets;
	●	litigation with or legal claims and allegations by outside parties against us;
	●	insufficient revenues to cover operating costs;
	●	estimates of our future revenue, expenses, capital requirements and our need for additional financing; and

 

 

Because the statements are subject to risks and uncertainties, actual results may differ materially from those expressed or implied by the forward-looking statements. ICGL cautions you not to place undue reliance on the statements, which speak only as of the date of this Report. The cautionary statements contained or referred to in this section should be considered in connection with any subsequent written or oral forward-looking statements that ICGL or persons acting on its behalf may issue. ICGL does not undertake any obligation to review or confirm analysts’ expectations or estimates or to release publicly any revisions to any forward-looking statements to reflect events or circumstances after the date of this Report, or to reflect the occurrence of unanticipated events, except as required by law.

 

Results of Operations

 

The following summary of our results of operations should be read in conjunction with our consolidated financial statements for the years ended December 31, 2019 and 2018, which are included herein.

 

Our operating results for the year ended December 31, 2019 and 2018, and the changes between those periods for the respective items are summarized as follows:

 

		Year ended December 31,
		2019				2018
Net revenues			-				-
Operating expenses
General and administrative expenses			2,916,205				231,598
Total operating expenses			2,916,205				231,598
Operating loss			(2,916,205	)			(231,598	)
Other income (expense)			-				-
Loss Before Income Taxes			(2,916,205	)			(231,598	)
Provision for Income Taxes			-				-
Net loss from continuing operations			(2,916,205	)			(231,598	)
Loss from discontinued operations
Loss from disposal of subsidiaries			-				(958,231	)
Loss from discontinued operations, net of tax			-				(647,723	)
Net Loss from discontinued operations			-				(1,605,954	)
Net Loss			(2,916,205	)			(1,837,552	)
Other Comprehensive Income
Foreign currency translation gain from discontinued operations			-				21,849
Realized foreign currency translation			-				368,397
Total Comprehensive loss			(2,916,205	)			(1,447,306	)
Loss per share
Basic and Diluted Loss per Common Share			(0.01	)			(0.01	)
Basic and Diluted Weighted Average Common Shares Outstanding			508,244,361				507,270,882

 

Comparison of the Years ended December 31, 2019 and 2018

 

Net Revenues

 

Net revenues were $0 for the years ended December 31, 2019 and 2018. During the year ended 2018, we disposed of our tea polyphenol production and revenues related to these operations are now included as discontinued operations for 2018

 

 

Operating Expenses

 

Our general and administrative expenses increased from $231,598 for the year ended December 31, 2018 to $2,916,205 for the year ended December 31, 2019. The increase was mainly attributed to salaries paid by shares of $2,791,800 in this period, which was absent in the same period in 2018.

 

Loss from discontinued operations

 

For the year ended December 31, 2018, loss from discontinued operations of $1,605,954 consisted of the results of operations of the disposed subsidiaries of $647,723 and loss from disposal of subsidiaries of $958,231. There was no loss from discontinued operations for the year ended December 31, 2019.

 

Other Comprehensive Income

 

We had foreign currency translation gain from discontinued operations of $21,849 for the year ended December 31, 2018. The variation in foreign currency gain or loss was tied directly to the fluctuation in value of the Renminbi and Hong Kong dollar, our functional currencies, to the US dollar, the currency used for reporting our US GAAP operating results. For the year ended December 31, 2018, we also had realized foreign currency translation gain of $368,397 due to disposal of subsidiaries in 2018.

 

For the year ended December 31, 2019, we do not have any foreign currency translation gain or loss as the functional currency and reporting currency are in US dollar.

 

Liquidity and Capital Resources

 

Since the inception of our operating subsidiary Fuzhiyuan Biotechnology in 2013, we have incurred significant net losses and negative cash flows from operations. During the years ended December 31, 2018 and 2019, we had net losses of $1,837,552 and $2,916,205, respectively. At December 31, 2019, we had an accumulated deficit of $9,399,790 and amounts due to related parties of $727,664. As discussed in our audit report for the year ended December 31, 2019, these factors raise substantial doubt about our ability to continue as a going concern.

 

As at December 31, 2019, we had cash and cash equivalents of $0. To date, we have financed our operations principally through borrowings from our related parties. Depending on our future operational results, we may need to conduct one or more equity or debt financings within the next 12 months.

 

We could potentially need our available financial resources sooner than we currently expect, and we may incur additional indebtedness to meet future financing needs. Adequate additional funding may not be available to us on acceptable terms or at all. In addition, although we anticipate being able to obtain additional financing through non-dilutive means, we may be unable to do so. Our failure to raise capital as and when needed could have significant negative consequences for our business, financial condition and results of operations. Our future capital requirements and the adequacy of available funds will depend on many factors, many of which are beyond our control.

 

Related Party Loans

 

See the section of this Report titled “Certain Relationships and Related Transactions” for a discussion of our operating capital from our related parties. These unsecured loans do not bear interest or fixed dates for repayment.

 

 

Operating Activities

 

During the year ended December 31, 2019, net cash used in operating activities used was $0, a decrease from $111,734 net cash used in operating activities for the year ended December 31, 2018. The decrease in cash used was due primarily to disposal of subsidiaries on November 28, 2018.

 

Investing Activities

 

Net cash used in investing activities for the year ended December 31, 2019 was $0, compared to $163,779 net cash used in investing activities for the year ended December 31, 2018. The decrease in cash used was due primarily to disposal of subsidiaries on November 28, 2018.

 

Financing Activities

 

Net cash provided by financing activities for the year ended December 31, 2019 of $0, compared to $211,478 net cash provided by financing activities for the year ended December 31, 2018. The decrease in cash provided was due primarily to disposal of subsidiaries on November 28, 2018.

 

Off-Balance Sheet Arrangements

 

During the years ended December 31, 2019 and 2018, we did not have any off-balance sheet arrangements as defined by applicable SEC regulations.

 

Critical Accounting Policies and Estimates.

 

We prepare our financial statements in conformity with GAAP, which requires management to make certain estimates and assumptions and apply judgments. We base our estimates and judgments on historical experience, current trends and other factors that management believes to be important at the time the financial statements are prepared and actual results could differ from our estimates and such differences could be material. We have identified below the critical accounting policies which are assumptions made by management about matters that are highly uncertain and that are of critical importance in the presentation of our financial position, results of operations and cash flows. Due to the need to make estimates about the effect of matters that are inherently uncertain, materially different amounts could be reported under different conditions or using different assumptions. On a regular basis, we review our critical accounting policies and how they are applied in the preparation our financial statements.

 

Use of Estimates

 

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

 

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

 

Not applicable.

 

Item 8. Financial Statements and Supplementary Data

 

The financial statements required by this item are set forth beginning in Item 15 of this Report on Form 10-K, beginning on page F-1, and are incorporated herein by reference.

 

 

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

 

The disclosure with respect to the change in our accountants required under this section was previously reported as such term is defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended, on a Current Report on Form 8-K filed with the Securities and Exchange Commission on January 22, 2020. As previously disclosed, there were no disagreements or any reportable events to disclose.

 

Item 9A. Controls and Procedures.

 

Evaluation of Disclosure Controls and Procedures

 

Disclosure controls and procedures are controls and other procedures that are designed to ensure that information we are required to disclose is recorded, processed, summarized and reported, within the time periods specified in the rules and forms of the Commission. Chiea Kah Szen, our Principal Executive Officer and Principal Financial Officer, is responsible for establishing and maintaining our disclosure controls and procedures.

 

Under the supervision and with the participation of our management, including the Principal Executive Officer and Principal Financial Officer, we have evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) of the Exchange Act) as of the end of the period covered by this report. Based on that evaluation, the Principal Executive Officer and Principal Financial Officer have concluded that, as of December 31, 2019, these disclosure controls and procedures were not effective in ensuring that all information required to be disclosed by us in the reports that we file or submit under the Exchange Act is: (i) recorded, processed, summarized and reported, within the time periods specified in the Commission’s rule and forms; and (ii) accumulated and communicated to our management, including our Principal Executive Officer and Principal Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

 

The term “internal control over financial reporting” is defined as a process designed by, or under the supervision of, the registrant’s principal executive and principal financial officers, or persons performing similar functions, and effected by the registrant’s board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that:

 

●	pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the registrant;

 

●	provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the registrant are being made only in accordance with authorizations of management and directors of the registrant; and
●	provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the registrant’s assets that could have a material effect on the financial statements.

 

 

Management’s Annual Report on Internal Control over Financial Reporting

 

Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is a process designed by, or under the supervision of, the Principal Executive Officer and Principal Financial Officer and effected by our Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

 

The framework our management uses to evaluate the effectiveness of our internal control over financial reporting is based on the guidance provided by the Committee of Sponsoring Organizations of the Treadway Commission in its 1992 report: INTERNAL CONTROL - INTEGRATED FRAMEWORK. Based on our evaluation under the framework described above, our management have concluded that our internal control over financial reporting was not effective as of December 31, 2019.

 

The Company’s internal control over financial reporting is not effective due to a lack of sufficient resources to hire a support staff in order to separate duties between different individuals. The Company lacks the appropriate personnel to handle all the varying recording and reporting tasks on a timely basis.

 

This 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 requirements by the company’s registered public accounting firm.

 

Inherent Limitations over Internal Controls

 

ICGL’s management does not expect that its disclosure controls or its internal control over financial reporting will prevent or detect all error and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. 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. Further, because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, within ICGL 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. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people, or management override of the controls. The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Projections of any evaluation of controls effectiveness to future periods are subject to risks. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies or procedures.

 

Our disclosure controls and procedures are designed to provide reasonable assurance of that our reports will be accurate. Our Principal Executive Officer and Principal Financial Officer have concluded that our disclosure controls and procedures were not effective, as of the end of the period covered by this Form 10-K. Our future reports shall also indicate that our disclosure controls and procedures are designed for this reason and shall indicate the related conclusion by the Principal Executive Officer and Principal Financial Officer as to their effectiveness.

 

Changes in Internal Control Over Financial Reporting

 

There have been no changes in our internal control over financial reporting during the fiscal year of 2019 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

Item 9B. Other Information.

 

None

 

 

PART III

 

Item 10. Directors, Executive Officers and Corporate Governance.

 

Identification of Directors and Executive Officers:

 

As of the date of this Report, our Board of Directors consists of two members. The Company has two officers.

 

Name		Position Held with the Company		Age		Date First Elected or Appointed
Chiea Kah Szen		President and Chief Executive Officer		48		March 30, 2019
Chean Chee Foong		Chief Operating Officer		39		May 1, 2019
Yong Seng Yip		Director		47		March 30, 2019
David Po		Treasurer, Secretary, Director		58		May 1, 2017
Jonathan Ka Kit Tam		Chief Financial Officer, Assistant Secretary, Director		48		August 6, 2017 (resigned on March 30, 2019)
Kwok Kwong Fu		Chief Operating Officer and Director		66		July 17, 2018 (resigned on March 30, 2019)

 

Chiea Kah Szen - President and Chief Executive Officer

 

Mr. Chiea earns his degree in business administration with major in management and marketing from the Binary University in Malaysia in 1995.

 

Mr. Chiea is the Group Managing Director and Deputy Executive Chairman of Mahiez Alliance Group (M) Bhd since 2012. Mahiez Alliance Group (M) Bhd is the founder of “Global Halal Initiative” focusing on SMEs products export to China, Japan and the rest of the world. Mr. Chiea is responsible for the research and to understand thoroughly business trends, market needs, market demands, market challenges and bilateral trade policies in China, Southeast Asia, Central Asia and Middle East. Mr. Chiea operates autonomously in all facets of business such as strategic planning, operations, company positioning, business growth, financial management, managerial tasks and business acumen. Mr. Chiea oversees and maintains company standard operating procedures including business relations, performances and communication. Mr. Chiea identifies all business opportunities and execute plans strategically and presents to public at events and trade shows to expand business networks and build relationship.

 

With over 20 years of experience in managing companies and strategizing company objectives, business models and business plans, the Company believes Mr. Chiea’s extensive experience can help to identify business opportunities and analyze market gap in the industry.

 

Chean Chee Foong – Chief Operating Officer

 

Mr. Chean studied Computing and Information Technology with specialism in Business Information Systems at Asia Pacific University of Technology and Innovation (APU) in association with Staffordshire University in year 2000. With Advanced Diploma, he began his career and since then he gains his knowledge and position by experiences.

 

Mr. Chean has been the Chief Executive Officer of Mahiez Alliance Group (M) Bhd since 2012, co-founding the “Global Halal Initiative” that focus on SME products export to China and beyond. He leds the company operations and strategize the company direction from bottom-line factors including long-range planning, company product and services management and business development. He is responsible to oversee and maintain standard operating procedures including business relations, performances and communication. Mr. Chean provides cross-functional management with board of directors, stakeholders and subsidiary companies including strategic partners, associates and counterparts in China. He identifies all the business opportunities and strategically execute the planning with his team.

 

As an all-rounder with 18 years of working experience and managerial skills in multi-industries, the Company believes Mr. Chean is capable to identify business opportunities, designing business model and initiate the strategic planning in the industry.

 

Yong Seng Yip - Director

 

Mr. Yong earns his diploma in electronic & electrical engineering from the Jaya Diri Institute Technology in Malaysia in 1992.

 

Mr. Yong is Chairman and CEO of Fung Yuan Resources Sdn Bhd since 2016. Fung Yuan Resources Sdn Bhd is a company with business in cultivating of seaweed and manufacturing seaweed enzyme. Mr. Yong is responsible for the corporate finance and marketing development of the company and continue to seek for the expansion opportunities in different countries. Mr. Yong is also the Chairman and CEO of Pearl Concept Ltd since 2009. Pearl Concept Ltd is a company with mining business in Papua New Guinea. Mr. Yong is responsible for the projects management and internal control of the company.

 

Apart from the above, Mr. Yong acts as non-executive president of Malaysia-China Chamber of Entrepreneur in Kuala Lumpur while at the same time is also holding the position as the Non-Executive Chairman of Mahiez Alliance Group (M) Bhd.

 

The Company believes Mr. Yong’s extensive experience in the corporate finance and marketing will assist the fund raising and improve the Company’s financial capital and branding in the industry.

 

David Po - Treasurer, Secretary and Director

 

Mr. Po has a distinguished career in international business, with an extensive history of transacting deals between Asia and western countries, primarily the United States. From 2003 until present, Mr. Po served as Director and Chief Executive Officer of Everbest Real Estate Services (“Everbest”), a marketing and sales company serving the Japanese, Chinese and Hong Kong markets for a major U.S.-based residential, multi-family, industrial and commercial real estate development company. Everbest ceased operations prior to Mr. Po joining the Company. Mr. Po received a Bachelor of Science degree from the University of California, San Diego. Mr. Po was selected based on his background and history of transacting deals between Asia and western countries, namely the United States. The Company believes that Mr. Po possesses the attributes necessary to create value for ICGL stockholders by way of sourcing and executing acquisitions of high quality assets located in the People’s Republic of China and the greater Asia region.

 

Our company believes that Mr. Po’s professional background experience gives him the qualifications and skills necessary to serve as a director and officer of our company.

 

 

Employment Agreements

 

We currently do not have employment agreements with any of our executive officers or directors.

 

Family Relationships

 

There are no family relationships between any of our directors or executive officers.

 

Term of Office

 

All directors hold office for a one (1) year period and have been duly elected and qualified. There is no agreement with respect to the election of directors. The Company has not compensated its directors for service on the Board of Directors of ICGL or any of its subsidiaries or any committee thereof, other than as set forth under “Item 11. Executive Compensation – Director Compensation” below. Any non-employee director of ICGL or its subsidiaries will be reimbursed for expenses incurred for attendance at meetings of the Board of Directors and any committee of the Board of Directors, although no such committee has been established. Each executive officer of ICGL is appointed by and serves at the discretion of the Board of Directors. None of the officers or directors of ICGL is currently an officer or director of a company required to file reports with the Securities and Exchange Commission, other than ICGL.

 

Involvement in Certain Legal Proceedings

 

To our knowledge, no director, nominee for director, or executive officer of the Company has been a party in any legal proceeding material to an evaluation of his ability or integrity during the past ten years.

 

Board Committees

 

Audit committee

 

We do not have a separately-designated standing audit committee. The Board of Directors performs the functions of an audit committee, but no written charter governs the actions of the Board of Directors when performing the functions that would generally be performed by an audit committee. The Board of Directors approves the selection of our independent accountants and meets and interacts with the independent accountants to discuss issues related to financial reporting. In addition, the Board of Directors reviews the scope and results of the audit with the independent accountants, reviews with management and the independent accountants our annual operating results, considers the adequacy of our internal accounting procedures and considers other auditing and accounting matters including fees to be paid to the independent auditor and the performance of the independent auditor.

 

Compensation and Nominations Committees

 

We currently have no compensation or nominating committee or other board committee performing equivalent functions. Currently, the member of our Board of Directors participates in discussions concerning executive officer compensation and nominations to the Board of Directors.

 

 

Compliance with Section 16(a) of the Exchange Act

 

Section 16(a) of the Securities Exchange Act of 1934, as amended, requires our executive officers and directors and persons who own more than 10% of a registered class of our equity securities to file with the SEC initial statements of beneficial ownership, reports of changes in ownership and annual reports concerning their ownership of our shares of common stock and other equity securities, on Forms 3, 4 and 5, respectively. Executive officers, directors and greater than 10% shareholders are required by the SEC regulations to furnish us with copies of all Section 16(a) reports they file.

 

Based solely on our review of the copies of such forms received by our company, or written representations from certain reporting persons that no Form 5s were required for those persons, we believe that, during the fiscal year ended December 31, 2019, all filing requirements applicable to our officers, directors and greater than 10% beneficial owners as well as our officers, directors and greater than 10% beneficial owners of our subsidiaries were complied with, with the exception of the following:

 

Name		Number of Late Reports				Number of Transactions Not Reported on a Timely Basis				Failure to File Requested Forms
David Po(1)			0				0				1
Qiu Peng(1)			0				0				1

 

(1)	The insider has not filed a Form 4, Statement of Changes in Beneficial Ownership of Securities.

 

Shareholder communications

 

The Company does not have a process for security holders to send communications to the board of directors due to the fact that minimal securities are traded on a stock exchange.

 

Code of Conduct and Ethics

 

We have adopted a Code of Ethics, as required by sections 406 and 407 of the Sarbanes-Oxley Act of 2002. It has been filed as an Exhibit to our registration statement on Form S-1 filed on February 5, 2014.

 

Item 11. Executive Compensation.

 

Executive Compensation

 

The particulars of the compensation paid to the following persons:

 

	(a)	our principal executive officer;
	(b)	each of our two most highly compensated executive officers who were serving as executive officers at the end of the years ended December 31, 2019 and 2018; and
	(c)	up to two additional individuals for whom disclosure would have been provided under (b) but for the fact that the individual was not serving as our executive officer at the end of the years ended December 31, 2019 and 2018, who we will collectively refer to as the named executive officers of our company, are set out in the following summary compensation table, except that no disclosure is provided for any named executive officer, other than our principal executive officers, whose total compensation did not exceed $100,000 for the respective fiscal year:

 

 

SUMMARY COMPENSATION TABLE
Name and Principal Position			Year				Salary ($)				Bonus ($)				Stock Awards ($)				Option Awards ($)				Non-Equity Incentive Plan Compensa-tion ($)				Change in Pension Value and Nonqualified Deferred Compensa-tion Earnings ($)				All Other Compensa-tion ($)				Total ($)
Chiea Kah Szen (1)			2019				-				-				-				-				-				-				-				-
President and CEO			2018				-				-				-				-				-				-				-				-
Chean Chee Foong(2)			2019				-				-				-				-				-				-				-				-
COO			2018				-				-				-				-				-				-				-				-
David Po(3)			2019				-				-				-				-				-				-				-				-
Treasurer, Secretary and Director			2018				-				-				-				-				-				-				-				-
Jonathan Ka Kit Tam(4)			2019				-				-				-				-				-				-				-				-
CFO, Assistant Secretary and Director			2018				-				-				-				-				-				-				-				-
Kwok Kong Fu(5)			2019				-				-				-				-				-				-				-				-
COO and Director			2018				-				-				-				-				-				-				-				-

 

(1)	Mr. Chiea Kah Szen was appointed as CEO and President on March 30, 2019
(2)	Mr. Chean Chee Foong was appointed COO on May 1, 2019.
(3)	Mr. David Po resigned as CEO and President on March 30, 2019. But he remains as Treasurer, Secretary and Director.
(4)	Dr. Jonathan Ka Kit Tam resigned as CFO, Assistant Secretary and Director on March 30, 2019.
(5)	Mr. Kwok Kong Fu resigned as COO and Director on March 30, 2019.

 

Stock option plan

 

We do not have a stock option plan and we have not issued any warrants, options or other rights to acquire our securities.

 

Employee Pension, Profit Sharing or other Retirement Plans

 

We do not have a defined benefit, pension plan, profit sharing or other retirement plan, although we may adopt one or more of such plans in the future.

 

Outstanding Equity Awards at Fiscal Year End

 

The company has not issued equity awards as below during fiscal years 2019 and 2018.

 

Director’s Compensation

 

Name		Fee earned or paid in cash				Stock Awards				Option Awards				Non-equity incentive plan compensation				Nonqualified deferred compensation earnings				All other compensation				Total
David Po(1)
-2019			-			$	1,029,600				-				-				-				-			$	1,029,600
-2018			-				-				-				-				-				-				-
Yong Seng Yip(2)
-2019			-				-				-				-				-				-				-
-2018			-				-				-				-				-				-				-
Jonathan Ka Kit Tam(3)
-2019			-			$	52,800				-				-				-				-			$	52,800
-2018			-				-				-				-				-				-				-
Kwok Kwong Fu(4)
-2019			-				-				-				-				-				-				-
-2018			-				-				-				-				-				-				-

 

(1)	Mr. David Po resigned as CEO and President on March 30, 2019. But he remains as Treasurer, Secretary and Director.
(2)	Mr. Yong Seng Yip was appointed as Director on March 30, 2019
(3)	Dr. Jonathan Ka Kit resigned as CFO, Assistant Secretary and Director on March 30, 2019.
(4)	Mr. Kwok Kong Fu resigned as COO and Director on March 30, 2019.

 

 

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

 

Beneficial Ownership of officers, directors and persons holding more than 5% of any class of ICGL’s voting securities.

 

The following table sets forth certain information as of the date hereof with respect to the beneficial ownership of our shares of common stock by (i) each executive officer and director, (ii) all executive officers and directors as a group, and (iii) beneficial owners of 5% or more of our outstanding Common Stock.

 

Beneficial ownership is determined in accordance with the rules of the Securities and Exchange Commission and includes voting or investment power with respect to securities. Common Stock subject to options, warrants or convertible securities exercisable or convertible within 60 days as of the date hereof are deemed outstanding for computing the percentage of the person or entity holding such options, warrants or convertible securities but are not deemed outstanding for computing the percentage of any other person. As of the date hereof, we had 508,539,882 shares of Common Stock issued and outstanding, including 50,000 shares of Preferred Stock under contract for exchange into Common Stock.

 

Unless otherwise indicated, we believe that all persons named in the table have sole voting and investment power with respect to all ordinary shares beneficially owned by them. The Company does not maintain any equity compensation plans.

 

		Number of Shares of
		Common Stock				Percentage
Name of Beneficial Owner(1)		Beneficially Owned				of Class
Chiea Kah Szen (i)			-				*
Chean Chee Foong (i)			-				*
Yong Seng Yip (i)			-				*
David Po (i)			514,800				*
Qiu Peng (iii)			105,800,000				20.80	%
Li Mingguang (iii)			128,000,000				25.17	%
Pisces Star Overseas Co. Ltd (iii)			30,000,000				5.9	%
All Directors and Officers as a Group (4 persons)(ii)			514,800				*

 

* Less than 1%.

 

(1) In care of Image Chain Group Limited, Inc., Room 501, 5/F, Bonham Centre, No. 79-85, Bonham Strand, Sheung Wan, Hong Kong, China

 

Change in Control Arrangements

 

As of December 31, 2019, there are no arrangements that would result in a change in control of the Company.

 

 

Item 13. Certain Relationships and Related Transactions, and Director Independence.

 

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

 

Related Party Transactions

 

Related parties’ relationships are as follows:

 

David Po		Director and a shareholder of the Company
Jonathan Ka Kit Tam		Former CFO and Director of the Company

 

During the year ended December 31, 2019, $1,029,600 services fee was paid to David Po (the Treasurer, Secretary and Chairman of the Board of Director) with 468,000 shares of common stock and $52,800 services fee was paid to Jonathan Ka Kit Tam (former Chief Financial Officer and Director, resigned on March 30, 2019) with 24,000 shares of common stock at $2.2 per share for their services provided and to be provided for the year ended December 31, 2019.

 

During the year ended December 31, 2019, David Po advanced $85,601 for operating expenses. Amounts due to Mr. Po as of December 31, 2019 and December 31, 2018, were $727,664 and $642,063, respectively.

 

The owing to Mr. Po consists of working capital advances and borrowings. These amounts are due on demand and are non-interest bearing.

 

On November 28, 2018, the Image P2P Shareholding Group has exchanged 200,000 common shares of the Company for the one common share of Asia Grand Will Limited held by Image P2P. Asia Grand Will Limited is the holding company for the Company’s operations in the PRC. Effectively, the Company has sold its operations in the PRC to the Image P2P Shareholding Group with the consideration of 200,000 common shares of the Company in return. The common shares have $0 fair value as of November 28, 2018. Asia Grand Will Limited has net asset value of $589,835 and accumulated other comprehensive income of $368,397 prior to disposal, totaled $958,231. Accordingly, a loss of disposal of subsidiary of $958,231 is recognized in the consolidated statements of operations and comprehensive loss.

 

Office Lease

 

Our corporate headquarter is located at Room 501, 5/F, Bonham Centre, No. 79-85, Bonham Strand, Sheung Wan, Hong Kong, China, where we lease approximately 2,500 square feet of office space under a lease that expires in March 31, 2020. Our monthly lease payment for this office space is approximately $3,500. We believe the leased premise is sufficient to meet the immediate needs of our corporate headquarter. Subject to the new lease terms with landlord, or else we may find a new premise as our corporate headquarter.

 

Director Independence

 

We adhere to the NASDAQ listing standards in determining whether a director is independent. Our board of directors consults with its counsel to ensure that the board’s determinations are consistent with those rules and all relevant securities and other laws and regulations regarding the independence of directors. The NASDAQ listing standards define an “independent director” as a person, other than an executive officer of a company or any other individual having a relationship which, in the opinion of the issuer’s board of directors, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director.

 

Consistent with these considerations, and considering their positions as executive officers and recent employees of the Company. Our board operates with 2 directors, we have determined that none of our directors qualifies as an independent director. We do not maintain a compensation, nominating or audit committee.

 

Policies and Procedures for Related Party Transactions

 

Our board of directors has adopted a policy, that our executive officers, directors, nominees for election as a director, beneficial owners of more than 5% of any class of our Common Stock and any members of the immediate family of any of the foregoing persons are not permitted to enter into a related person transaction with us without the prior consent of our audit committee. Any request for us to enter into a transaction with an executive officer, director, nominee for election as a director, beneficial owner of more than 5% of any class of our Common Stock or any member of the immediate family of any of the foregoing persons in which the amount involved exceeds $120,000 and such person would have a direct or indirect interest must first be presented to our audit committee for review, consideration and approval. In approving or rejecting any such proposal, our audit committee is to consider the material facts of the transaction, including, but not limited to, whether the transaction is on terms no less favorable than terms generally available to an unaffiliated third party under the same or similar circumstances and the extent of the related person’s interest in the transaction. We did not have a formal review and approval policy for related party transactions at the time of any of the transactions described above. However, all of the transactions described above were entered into after presentation, consideration and approval by our board of directors and/or our audit committee.

 

 

Item 14. Principal Accounting Fees and Services.

 

The following table sets forth the aggregate fees billed to the Company by its independent registered public accounting firms for the fiscal years ended December 31, 2019 and 2018. On January 20, 2020, we have engaged Zia Masood Kiani & Co. (“ZMK”) as its principal accountant and dismissed BF Borgers CPA PC (“Borgers”) from that role. The change in the Company’s principal accountant was approved by our board of directors. The accounting fees and services charged by ZMK and Borgers for 2019 and 2018 are shown separately in the following two tables.

 

Zia Masood Kiani & Co.

 

Accounting Fees and Services

 

		2019				2018
Audit Fees		$	3,935			$	-
Audit Related Fees			-				-
Tax Fees			-				-
All Other Fees			-				-
TOTAL		$	3,935			$	-

 

BF Borgers CPA PC

 

Accounting Fees and Services

 

		2019				2018
Audit Fees		$	20,000			$	95,000
Audit Related Fees			-				-
Tax Fees			-				-
All Other Fees			-				-
TOTAL		$	20,000			$	95,000

 

The category of “Audit Fees” includes fees for our annual audit and services rendered in connection with regulatory filings with the SEC, such as the issuance of comfort letters and consents.

 

The category of “Audit-related Fees” includes employee benefit plan audits, internal control reviews and accounting consultation.

 

All above audit services and audit-related services were pre-approved by the Board of Directors, which concluded that the provision of such services by all parties was compatible with the maintenance of the respective firm’s independence in the conduct of its audits.

 

 

PART IV

 

Item 15. Exhibits, Financial Statement Schedules.

 

a) The following documents are filed as part of this Report on Form 10-K:

 

1. Financial Statements

 

CONTENTS		PAGES
REPORTS OF REGISTERED INDEPENDENT PUBLIC ACCOUNTING FIRMS		F-1
CONSOLIDATED Balance Sheets		F-3
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS		F-4
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)		F-5
CONSOLIDATED STATEMENTS OF CASH FLOWS		F-6
Notes to CONSOLIDATED financial statements		F-7

 

2. Financial Statement Schedules

 

All other schedules are omitted because they are not required or the required information is included in the financial statements or notes thereto.

 

 

3. The following exhibits are filed as part of this Report on Form 10-K

 

Exhibit Number		Description		Incorporated by Reference
				Form		Exhibit		Filing Date
(3)		(i) Articles of Incorporation (ii) Bylaws
3.1		Articles of Incorporation		S-1		3.1		05/02/2014
3.2		By-laws		S-1		3.2		05/02/2014
3.3		Certificate of Amendment		8-K		3.1		06/12/2015
3.4		Certificate of Correction of the Articles of Incorporation		8-K		3.1		02/14/2017
3.5		Certificate of Change		8-K/A		3.4		12/28/2017
(14)		Code of Ethics
14.1		Code of Ethics		S-1		14.1		05/02/2014
(21)		Subsidiaries of the Registrant
21.1*		Subsidiaries of the Registrant
(31)		Rule 13a-14 (d)/15d-14(d) Certifications
31.1*		Section 302 Certification by the Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer
(32)		Section 1350 Certifications
32.1*		Section 906 Certification by the Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer
101		Interactive Data File
101.INS**		XBRL Instance Document
101.SCH**		XBRL Taxonomy Extension Schema Document
101.CAL**		XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF**		XBRL Taxonomy Extension Definition Linkbase Document
101.LAB**		XBRL Taxonomy Extension Label Linkbase Document
101.PRE**		XBRL Taxonomy Extension Presentation Linkbase Document

 

*	Filed herewith.
**	XBRL Information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.

 

Item 16. Form 10-K Summary

 

None.

 

 

SIGNATURES

 

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

 

	IMAGE CHAIN GROUP LIMITED, INC.
	(Registrant)
Dated: February 18, 2020	/s/ Chiea Kah Szen
	Chiea Kah Szen
	President and Chief Executive Officer
	(Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer)

 

 

INDEX TO FINANCIAL STATEMENTS

 

CONTENTS		PAGES
REPORTS OF REGISTERED INDEPENDENT PUBLIC ACCOUNTING FIRMS		F-1
CONSOLIDATED Balance Sheets		F-3
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS		F-4
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (deficit)		F-5
CONSOLIDATED STATEMENTS OF CASH FLOWS		F-6
Notes to CONSOLIDATED financial statements		F-7

 

 

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

To the shareholders and the Board of Directors of Image Chain Group Limited Inc.

 

Opinion on the Financial Statements

 

We have audited the accompanying consolidated balance sheets of Image Chain Group Limited Inc. (“the Company”) as of December 31, 2019, and the related consolidated statements of operations, stockholders’ equity, and cash flows, and the related notes (collectively referred to as the “financial statements”). In our opinion, the 2019 financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2019, and the results of its operations and its cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America.

 

The financial statements of the Company as of December 31, 2018, were audited by other auditors whose report dated March 25, 2019, expressed an unqualified opinion on those statements.

 

Material Uncertainty Relating to Going Concern

 

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 3 to the consolidated financial statements, the Company has suffered recurring losses from operations and has a net capital deficiency that raise substantial doubt about the its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 3 to the consolidated financial statements. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. Our opinion is not modified with respect to this matter.

 

Basis for Opinion

 

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

 

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting 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.

 

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.

 

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

 

/s/ Zia Masood Kiani & Co.

Zia Masood Kiani & Co.

(Chartered Accountants)

 

We have served as the Company’s auditor since 2020.

 

Islamabad, Pakistan

 

Date: February 14, 2020

 

 

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

To the shareholders and the board of directors of Image Chain Group Limited, Inc.

 

Opinion on the Financial Statements

 

We have audited the accompanying consolidated balance sheet of Image Chain Group Limited, Inc. (the “Company”) as of December 31, 2018, the related statement of operations, stockholders’ equity (deficit), and cash flows for the year then ended, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2018, and the results of its operations and its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States.

 

Basis for Opinion

 

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

 

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

 

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.

 

Substantial Doubt about the Company’s Ability to Continue as a Going Concern

 

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 3 to the financial statements, the Company’s significant operating losses raise substantial doubt about its ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

/s/ BF Borgers CPA PC
BF Borgers CPA PC

 

We have served as the Company’s auditor since 2018

Lakewood, CO

March 25, 2019

 

 

IMAGE CHAIN GROUP LIMITED, INC.

Consolidated Balance Sheets

 

		December 31, 2019				December 31, 2018
ASSETS
Current assets
Cash and cash equivalents		$	-			$	-
Total Current assets			-				-
Total Assets		$	-			$	-
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current Liabilities
Accrued liabilities and other payables		$	39,171			$	367
Due to related party			727,664				642,063
Total Current Liabilities			766,835				642,430
Total Liabilities			766,835				642,430
Stockholders’ Deficit
Preferred Stock, $0.001 par value, 50,000 shares authorized, issued and outstanding			50				50
Common stock, $0.001 par value, 2,000,000,000 shares authorized, 508,539,882 and 507,270,882 issued as of December 31, 2019 and December 31, 2018, respectively			508,540				507,271
Additional paid in capital			8,124,365				5,333,834
Accumulated deficit			(9,399,790	)			(6,483,585	)
Total Stockholders’ Deficit			(766,835	)			(642,430	)
Total Liabilities and Stockholders’ Deficit		$	-			$	-

 

See accompanying notes to the consolidated financial statements

 

 

IMAGE CHAIN GROUP LIMITED, INC.

Consolidated Statements of Operations and Comprehensive Loss

 

		For the years ended
		December 31,
		2019				2018
Revenue		$	-			$	-
Operating Expenses
General and administrative expenses			2,916,205				231,598
Total Operating Expenses			2,916,205				231,598
Loss Before Income Taxes			(2,916,205	)			(231,598	)
Provision for income taxes			-				-
Net Loss from continuing operations		$	(2,916,205	)		$	(231,598	)
Loss from discontinued operations
Loss from disposal of subsidiaries			-				(958,231	)
Loss from discontinued operations, net of tax			-				(647,723	)
Net Loss from discontinued operations			-				(1,605,954	)
Net Loss			(2,916,205	)			(1,837,552	)
Other Comprehensive Income
Foreign currency translation gain from discontinued operations			-				21,849
Realized foreign currency translation			-				368,397
Total Comprehensive Loss		$	(2,916,205	)		$	(1,447,306	)
Basic and Diluted Loss per Common Share		$	(0.01	)		$	(0.00	)
Basic and Diluted Weighted Average Common Shares Outstanding		$	508,244,361			$	507,270,882

 

See accompanying notes to the consolidated financial statements

 

 

IMAGE CHAIN GROUP LIMITED, INC.

Consolidated Statements of Stockholders’ Equity (Deficit)

For the years ended December 31, 2019 and 2018

 

																										Accumulated												Total
		Preferred Stock								Common Stock								Additional Paid in				Accumulated				other comprehensive				Treasury Stock								Stockholders’ Equity
		Shares				Amount				Shares				Amount				Capital				Deficit				loss				Shares				Amount				(Deficit)
Balance, December 31, 2017			50,000			$	50				507,270,882			$	507,271			$	5,333,834			$	(4,646,033	)		$	(390,246	)			-			$	-			$	804,876
Realization upon disposal of subsidiaries			-				-				-				-				-				-				368,397				-				-				368,397
Treasury stock purchases			-				-				(200,000	)			-				-				-				-				200,000				-				-
Foreign currency translation gain			-				-				-				-				-				-				21,849				-				-				21,849
Net loss			-				-				-				-				-				(1,837,552	)			-				-				-				(1,837,552	)
Balance, December 31, 2018			50,000			$	50				507,070,882			$	507,271			$	5,333,834			$	(6,483,585	)		$	-				200,000			$	-			$	(642,430	)
Common stocks issued for services			-				-				1,269,000				1,269				2,790,531				-				-				-				-				2,791,800
Net loss			-				-				-				-				-				(2,916,205	)			-				-				-				(2,916,205	)
Balance, December 31, 2019			50,000			$	50				508,339,882			$	508,540			$	8,124,365			$	(9,399,790	)		$	-				200,000			$	-			$	(766,835	)

 

See accompanying notes to the consolidated financial statements

 

 

IMAGE CHAIN GROUP LIMITED, INC.

Consolidated Statements of Cash Flows

 

		For the years ended
		December 31,
		2019				2018
Cash flows from operating activities
Net loss		$	(2,916,205	)		$	(1,837,552	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Amortization of intangible assets			-				50,236
Depreciation of fixed assets			-				221,226
Loss on disposal of subsidiaries			-				958,231
Salaries paid by shares			2,791,800				-
Expenses paid by related party			85,601				-
Changes in operating assets and liabilities:
Accounts receivables			-				85,170
Inventories			-				49,593
Advances and prepayments to suppliers			-				(57,844	)
Accounts payables			-				238,422
Accrued liabilities and other payables			38,804				180,784
Net cash used in operating activities			-				(111,734	)
Cash flows from investing activities
Disposal of subsidiary			-				(16,332	)
Purchase of plant and equipment			-				(147,447	)
Net cash used in investing activities			-				(163,779	)
Cash flows from financing activities
Repayment of bank borrowings			-				(19,752	)
Proceeds from related parties			-				231,230
Net cash provided by financing activities			-				211,478
Effect of foreign currency translation on cash and cash equivalents			-				(821	)
Net decrease of cash and cash equivalents			-				(64,856	)
Cash and cash equivalents–beginning of period			-				64,856
Cash and cash equivalents–end of period		$	-			$	-
Supplementary cash flow information:
Interest paid		$	-			$	146,070
Income taxes paid		$	-			$	-
NON-CASH INVESTING AND FINANCING ACTIVITIES
Common stock issued for services		$	2,791,800			$	-

 

See accompanying notes to the consolidated financial statements

 

 

IMAGE CHAIN GROUP LIMITED, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

1. THE COMPANY AND PRINCIPAL BUSINESS ACTIVITIES

 

Business

 

Image Chain Group Limited, Inc. (formerly Have Gun Will Travel Entertainment, Inc.) (“ICGL” or the “Company”) was incorporated under the laws of Nevada on December 18, 2013. From inception through the date of the Share Exchange as defined below, the Company was an emerging forward-thinking full-service television pre-production company dedicated to the creation of original concepts and programming with a bold and innovative edge in the reality television space for sale, option and licensure to independent producers, cable television networks, syndication companies, and other entities. On June 11, 2015, the Company amended its Articles of Incorporation with the State of Nevada in order to change its name to Image Chain Group Limited, Inc. and to increase the authorized shares of common stock from 70,000,000 to 400,000,000 (the “Amendments”). The name change was undertaken in order to more closely align with the operations of the Company’s wholly-owned subsidiary, Fortune Delight Holdings Group Ltd (“FDHG”). The increase in authorized shares was undertaken to allow the Company to utilize the newly available shares to raise capital. The board of directors and the stockholders of the Company approved the Amendments on May 8, 2015.

 

On February 13, 2017, the Company filed with the Secretary of State of the State of Nevada a Certificate of Correction (the “Certificate of Correction”) to correct a mistake made in the Company’s original Articles of Incorporation with regard to the preferred stock issued in connection with the FDHG Exchange Agreement. As a result, ICGL had 395,000,000 shares of common stock and 5,000,000 shares of preferred stock issued and outstanding. The Company subsequently entered into an agreement pursuant to which the holder of the preferred stock agreed to retire the preferred stock in exchange for receiving an equal number of shares of common stock of the Company. As of the date of this Report, that exchange of preferred stock for common stock has not yet occurred.

 

Effective May 1, 2017, the Company increased the authorized shares of Common Stock from 3,950,000 to 2,000,000,000 shares with a par value of $0.001 per share, and to decrease the authorized shares of Preferred Stock from 50,000 to zero (0). As of the date of this Report, the decrease in shares of Preferred Stock has not yet occurred.

 

FDHG, previously, through its wholly-owned operating subsidiaries, was in the business of promoting and distributing its own branded teas that are grown, harvested, cured, and packaged in the People’s Republic of China (“PRC”). The Company’s headquarters was previously located in Guangzhou, Guangdong Province, PRC.

 

Share Exchange and Reorganization

 

On November 14, 2017, the Company entered into a share exchange agreement (the “SEA”) with Image P2P Trading Group Limited (“Image P2P”) and Image P2P’s shareholders whereby the Company issued 500,000,000 new common shares in exchange for all of the issued and outstanding ordinary shares of Image P2P, which totaled 50,000. Image P2P is an investment holding company incorporated and domiciled in the British Virgin Islands.

 

Share Exchange and disposal of subsidiaries

 

On November 28, 2018, the Company has entered into a Business Transfer Agreement and Share Exchange Agreement (the “Agreements”) with a group of the original shareholders of Image P2P (the “Image P2P Shareholding Group”), Image P2P and its subsidiaries. Pursuant to the Agreements, the Image P2P Shareholding Group will exchange 200,000 common shares of the Company for the one common share of Asia Grand Will Limited held by Image P2P. Asia Grand Will Limited is the holding company for the Company’s operations in the PRC. Also pursuant to the Agreements, the Image P2P Shareholding Group, Image P2P and Image P2P’s subsidiaries will transfer to the Company (i) all of its right, title and interest to the intellectual property, including copyrights, patents, trademarks, process technology and production know-how, of Image P2P and its subsidiaries, (ii) the exclusive distribution rights in the PRC and worldwide for all products of Image P2P and its subsidiaries, (iii) the exclusive right to all intellectual property developed by Image P2P and its subsidiaries in the future and (iv) the exclusive distribution rights in the PRC and worldwide for all products of Image P2P and its subsidiaries developed in the future.

 

The 200,000 common shares of the Company returned to Image P2P are recognized as common stock in treasury since Image P2P is a wholly owned subsidiary of the Company, and measured at cost which is the fair value of the common stocks as of the date of the disposal of subsidiaries.

 

The subsidiaries disposed are presented as discontinued operations in this report. Comparatives are reclassified to conform with the presentation.

 

The Company is currently reviewing and revising its future business plans. To date, the Company has not yet identified its future business plans.

 

 

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Basis of presentation

 

These accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”).

 

Certain reclassifications have been made to the prior period’s consolidated financial statements to conform to the current period’s presentation.

 

Principles of consolidation

 

The consolidated financial statements include the accounts of the Company and its subsidiaries. All significant inter-company accounts and transactions have been eliminated. The consolidated financial statements include 100% of assets, liabilities, and net income or loss of those wholly-owned subsidiaries.

 

The Company’s subsidiaries are listed as follows:

 

Name of Company		Place of incorporation		Attributable equity interest %				Authorized capital
Image P2P Trading Group Limited (“Image P2P”)		British Virgin Islands			100			USD 50,000

 

Use of estimates

 

In preparing these consolidated financial statements, management makes estimates and assumptions that affect the reported amounts of assets and liabilities in the balance sheet and revenues and expenses during the periods reported. Actual results may differ from these estimates.

 

Stock-Based Compensation

 

The Company accounts for stock-based compensation for employees and directors in accordance with ASC 718, Compensation (“ASC 718”). ASC 718 requires all share-based payments to employees, including grants of employee stock options, to be recognized in the statement of operations based on their fair values. Under the provisions of ASC 718, stock-based compensation costs are measured at the grant date, based on the fair value of the award, and are recognized as expense over the employee’s requisite service period (generally the vesting period of the equity grant). For an award that is fully vested on the grant date, all compensation cost would be recognized on the grant date.

 

The fair value of the Company’s common stock awards as of the grant date is determined using the observable market price (i.e. closing price) of the Company’s common stock as of the grant date.

 

The Company accounts for stock-based compensation awards issued to non-employees for services, as prescribed by ASC 718-10, at either the fair value of the services rendered or the instruments issued in exchange for such services, whichever is more readily determinable, using the measurement date guidelines enumerated in ASU 2018-07.

 

Income taxes

 

Income taxes are determined in accordance with the provisions of ASC 740, “Income Taxes” (“ASC 740”). Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted income tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Any effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

 

ASC 740 prescribes a comprehensive model for how companies should recognize, measure, present, and disclose in their financial statements uncertain tax positions taken or expected to be taken on a tax return. Under ASC 740, tax positions must initially be recognized in the financial statements when it is more likely than not the position will be sustained upon examination by the tax authorities. Such tax positions must initially and subsequently be measured as the largest amount of tax benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the tax authority assuming full knowledge of the position and relevant facts.

 

For the years ended December 31, 2019 and 2018, the Company did not have any interest and penalties associated with tax positions. As of December 31, 2019, the Company did not have any significant unrecognized uncertain tax positions.

 

 

Financial instruments

 

The carrying value of the Company’s financial instruments (excluding short-term bank borrowing and note payable): cash and cash equivalents, accounts receivable, accounts payable, amount due to a related party, other payables and accrued liabilities approximate at their fair values because of the short-term nature of these financial instruments.

 

The Company also follows the guidance of the ASC Topic 820-10, “Fair Value Measurements and Disclosures” (“ASC 820-10”), with respect to financial assets and liabilities that are measured at fair value. ASC 820-10 establishes a three-tier fair value hierarchy that prioritizes the inputs used in measuring fair value as follows:

 

●	Level 1: Inputs are based upon unadjusted quoted prices for identical instruments traded in active markets;
●	Level 2: Inputs are based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques (e.g. Black-Scholes Option-Pricing model) for which all significant inputs are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Where applicable, these models project future cash flows and discount the future amounts to a present value using market-based observable inputs; and
●	Level 3: Inputs are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques, including option pricing models and discounted cash flow models.

 

Fair value estimates are made at a specific point in time based on relevant market information about the financial instrument. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and, therefore, cannot be determined with precision. Changes in assumptions could significantly affect the estimates.

 

Commitments and contingencies

 

The Company follows ASC 440 & ASC 450, subtopic 450-20 of the FASB Accounting Standards Codification to report accounting for contingencies and commitments respectively. Certain conditions may exist as of the date the financial statements are issued, which may result in a loss to the Company, but which will only be resolved when one or more future events occur or fail to occur. The Company assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or un-asserted claims that may result in such proceedings, the Company evaluates the perceived merits of any legal proceedings or un-asserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein.

 

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

 

 

Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed. Management does not believe, based upon information available at this time, that these matters will have a material adverse effect on the Company’s consolidated financial position, results of operations or cash flows. However, there is no assurance that such matters will not materially and adversely affect the Company’s business, financial position, and results of operations or cash flows.

 

Comprehensive income

 

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

 

Foreign currency translation

 

Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transaction. Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency using the applicable exchange rates at the balance sheet dates. The resulting exchange differences are recorded in the statement of operations.

 

The accompanying financial statements are presented in United States dollars (“USD”). The functional currency of the Company and Image P2P is the USD. The functional currency of Asia Grand Will Limited (“AGWL”) is the Hong Kong dollar (“HKD”). The functional currency of Fuzhi Yuan (Shenzhen) Holdings Limited (“FZHL”) and Jiangxi Fu Zhi Yuan Biotechnology Co., Limited (“FZY”) is the Renminbi (“RMB”). AGWL, FZHL and FZY have been classified as discontinued operations and have been disposed in the year 2018.

 

In general, for consolidation purposes, assets and liabilities of its subsidiaries whose functional currency is not the USD are translated into USD, in accordance with ASC 830, “Translation of Financial Statements”, using the exchange rate on the balance sheet date. Revenues and expenses are translated at average rates prevailing during the period. The gains and losses resulting from translation of financial statements of foreign subsidiaries are recorded as a separate component of accumulated other comprehensive income (loss) within the statement of stockholders’ equity.

 

Exchange Rates		12/31/2019				12/31/2018
Spot rate 1 RMB : US$ exchange rate			N/A				0.1454
Average year 1 RMB : US$ exchange rate			N/A				0.1514
Year end 1 HKD : US$ exchange rate			0.129				0.129
Average year 1 HKD : US$ exchange rate			0.129				0.129

 

The RMB is not freely convertible into foreign currency and all foreign exchange transactions must take place through authorized institutions. No representation is made that the RMB amounts could have been, or could be, converted into USD at the rates used in translation.

 

Treasury Stock

 

The Company records treasury stock at cost.

 

Earnings per share

 

The Company computes earnings per share (“EPS”) in accordance with ASC Topic 260, “Earnings per share”. Basic EPS is measured as the income or loss available to common shareholders divided by the weighted average common shares outstanding for the period. Diluted EPS is similar to basic EPS but presents the dilutive effect on a per share basis of potential common shares (e.g., convertible securities, options, and warrants) as if they had been converted at the beginning of the periods presented, or issuance date, if later. Potential common shares that have an anti-dilutive effect (i.e. those that increase income per share or decrease loss per share) are excluded from the calculation of diluted EPS. For the years ended December 31, 2019 and 2018, the Company did not have any potentially dilutive securities outstanding.

 

Reclassifications

 

Certain prior period amounts have been reclassified to conform with the current period presentation. However, there are no material or significant rearrangements or reclassification made during the year.

 

 

Recently Adopted Accounting Standards

 

In February 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-02, Leases (“ASC 842”). The guidance requires lessees to recognize almost all leases on their balance sheet as a right-of-use asset and a lease liability. For income statement purposes, the FASB retained a dual model, requiring leases to be classified as either operating or finance. Lessor accounting is similar to the current model, but updated to align with certain changes to the lessee model and the new revenue recognition standard. Existing sale-leaseback guidance, including guidance for real estate, is replaced with a new model applicable to both lessees and lessors. ASC 842 is effective for fiscal years beginning after December 15, 2018. The adoption of ASC 842, did not have a material effect on the Company’s consolidated financial statements.

 

Management has considered all recent accounting pronouncements issued. The Company’s management believes that these recent pronouncements will not have a material effect on the Company’s financial statements.

 

3. GOING CONCERN

 

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the discharge of liabilities in the normal course of business for the foreseeable future.

 

As of December 31, 2019, the Company had an accumulated deficit of $9,399,790 and net loss of $2,916,205 and net cash used in operations of $0 for the year ended December 31, 2019. Losses have principally occurred as a result of the substantial resources required for professional fees and general and administrative expenses associated with our operations. The continuation of the Company as a going concern through December 31, 2020 is dependent upon the continued financial support from its stockholders or external financing. Management believes the existing stockholders will provide the additional cash to meet with the Company’s obligations as they become due. However, there is no assurance that the Company will be successful in securing sufficient funds to sustain the operations.

 

These conditions raise substantial doubt about the Company’s ability to continue as a going concern. These financial statements do not include any adjustments to reflect the possible future effect on the recoverability and classification of assets or the amounts and classifications of liabilities that may result from the outcome of these uncertainties. The Company may raise additional capital through the sale of its equity securities, or through borrowings from financial institutions and related parties. Management believes that the actions presently being taken to obtain additional funding and implement its strategic plan provides the opportunity for the Company to continue as a going concern.

 

4. DISPOSAL OF SUBSIDIARIES

 

On November 28, 2018, the Company has entered into a Business Transfer Agreement and Share Exchange Agreement (the “Agreements”) with a group of the original shareholders of Image P2P (the “Image P2P Shareholding Group”), Image P2P and its subsidiaries. Pursuant to the Agreements, the Image P2P Shareholding Group will exchange 200,000 common shares of the Company for the one common share of Asia Grand Will Limited held by Image P2P. Asia Grand Will Limited is the holding company for the Company’s operations in the PRC. Also pursuant to the Agreements, the Image P2P Shareholding Group, Image P2P and Image P2P’s subsidiaries will transfer to the Company (i) all of its right, title and interest to the intellectual property, including copyrights, patents, trademarks, process technology and production know-how, of Image P2P and its subsidiaries, (ii) the exclusive distribution rights in the PRC and worldwide for all products of Image P2P and its subsidiaries, (iii) the exclusive right to all intellectual property developed by Image P2P and its subsidiaries in the future and (iv) the exclusive distribution rights in the PRC and worldwide for all products of Image P2P and its subsidiaries developed in the future.

 

Pursuant to the share exchange agreement, the Company transferred all of the subsidiary shares to the Image P2P Shareholding Group and received 200,000 common shares of the Company in return.

 

The Company has no continuing involvement in the operations of Asia Grand Will Limited. The disposal of Asia Grand Will Limited qualified as a discontinued operation of the Company and accordingly, the Company has excluded results of Asia Grand Will Limited’s operations from its Consolidated Statements of Operations and Comprehensive Loss to present this business in discontinued operations.

 

 

The following table shows the results of operations of Asia Grand Will Limited for the years ended December 31, 2019 and 2018 which are included in the loss from discontinued operations:

 

		Years Ended December 31,
		2019				2018
Sales		$	-			$	250,980
Cost of sales			-				433,190
Gross loss			-				(182,210	)
Selling and marketing expenses			-				46,032
General and administrative expenses			-				292,880
Operating loss			-				(521,123	)
Government subsidy			-				20,539
Interest income			-				-
Other expenses			-				(50	)
Interest expense			-				(146,562	)
Loss before taxes			-				(647,196	)
Income tax expense			-				(528	)
Net loss		$	-			$	(647,724	)

 

The following table shows the carrying amounts of the major classes of assets and liabilities associated with Asia Grand Will Limited as of November 28, 2018:

 

		November 28, 2018
Cash and cash equivalents		$	16,332
Accounts receivable, net			26,411
Inventories			26,416
Advances and prepayment to suppliers			64,599
Prepaid taxes and taxes recoverable			93,489
Total Current assets		$	227,247
Plant and equipment, net			10,328,609
Construction in progress and prepayment for equipment			472,261
Intangible assets, net			443,520
Other assets			132,967
Total Non-current Assets		$	11,377,356
Short-term bank loans			2,138,455
Long-term bank loans – current portion			431,430
Accounts payable			1,009,386
Accrued liabilities and other payables			1,490,365
Customers advances and deposits			55,165
Due to related parties			4,231,072
Total Current Liabilities		$	9,355,873
Loans payable			1,658,896
Total Non-current Liabilities		$	1,658,896
Net assets and liabilities		$	589,835
Consideration received on disposal			-
Recycling of accumulated other comprehensive income			368,397
Loss on disposal		$	958,231

 

 

5. INCOME TAXES

 

The Company operates in the United States and its wholly-owned subsidiaries operate in British Virgin Islands (“BVI”) and files tax returns in these jurisdictions.

 

Loss from continuing operations before income tax expense (benefit) is as follows:

 

		For the Years Ended
		December 31,
		2019				2018
Loss attributed to United States		$	(2,916,205	)		$	(231,597	)
Loss attributed to discontinued and foreign operations			-				(1,605,427	)
Loss before income taxes		$	(2,916,205	)		$	(1,837,024	)

 

The expense (benefit) for income taxes from continuing operations consists of the following components:

 

United States of America

 

The Tax Act reduces the U.S. statutory corporate tax rate from 35% to 21% for our tax years beginning in 2018, which resulted in the re-measurement of the federal portion of our deferred tax assets as of December 31, 2019 and 2018 from the 35% to 21% tax rate. The Company is registered in the State of Nevada and is subject to United States of America tax law. As of December 31, 2019, the operations in the United States of America incurred $3,553,861 of cumulative net operating losses (NOL’s) which can be carried forward to offset future taxable income. The NOL carryforwards begin to expire in 2039, if unutilized. The Company has provided for a full valuation allowance of approximately $746,311 against the deferred tax assets on the expected future tax benefits from the net operating loss carryforwards as the management believes it is more likely than not that these assets will not be realized in the future.

 

British Virgin Islands

 

Under the laws of British Virgin Islands, the Company is not subject to income taxes.

 

The following table sets forth the significant components of the aggregate deferred tax assets of the Company as of December 31, 2019 and 2018:

 

		As of December 31,
		2019				2018
Deferred tax assets:
NOL carryforwards
United States		$	746,311			$	647,475
Foreign			-				-
Foreign – discontinued operations			-				1,121,965
Change in valuation allowance			(746,311	)			(1,769,440	)
Deferred tax assets		$	-			$	-

 

Management believes that it is more likely than not that the deferred tax assets will not be fully realizable in the future. Accordingly, the Company provided for a full valuation allowance against its deferred tax assets of $746,311 as of December 31, 2019. For the year ended December 31, 2019, the valuation allowance decreased by $1,023,129, primarily relating to net operating loss carryforwards from the discontinued operations.

 

The Company’s tax returns are subject to examination by United States tax authorities beginning with the year ended December 31, 2013.

 

 

6. RELATED PARTY TRANSACTIONS

 

Related parties’ relationships are as follows:

 

David Po		Director and a shareholder of the Company
Jonathan Ka Kit Tam		Former CFO and Director of the Company

 

During the year ended December 31, 2019, $1,029,600 services fee was paid to David Po (the Treasurer, Secretary and Chairman of the Board of Director) with 468,000 shares of common stock and $52,800 services fee was paid to Jonathan Ka Kit Tam (former Chief Financial Officer and Director, resigned on March 30, 2019) with 24,000 shares of common stock at $2.2 per share for their services provided and to be provided for the year ended December 31, 2019.

 

During the year ended December 31, 2019, David Po advanced $85,601 for operating expenses. Amounts due to Mr. Po as of December 31, 2019 and December 31, 2018, were $727,664 and $642,063, respectively.

 

The owing to Mr. Po consists of working capital advances and borrowings. These amounts are due on demand and are non-interest bearing.

 

On November 28, 2018, the Image P2P Shareholding Group has exchanged 200,000 common shares of the Company for the one common share of Asia Grand Will Limited held by Image P2P. Asia Grand Will Limited is the holding company for the Company’s operations in the PRC. Effectively, the Company has sold its operations in the PRC to the Image P2P Shareholding Group with the consideration of 200,000 common shares of the Company in return. The common shares have $0 fair value as of November 28, 2018. Asia Grand Will Limited has net asset value of $589,835 and accumulated other comprehensive income of $368,397 prior to disposal, totaled $958,231. Accordingly, a loss of disposal of subsidiary of $958,231 is recognized in the consolidated statements of operations and comprehensive loss.

 

7. STOCKHOLDERS’ (DEFICIT)

 

Preferred Stock

 

The Company is authorized to issue 50,000 shares, with a stated par value of $0.001 per share with such powers, preferences, rights and restrictions which shall be determined by the Corporation’s Board of Directors in its sole discretion, and which designations and issuances shall not require the approval of the shareholders of the Corporation.

 

During the year ended December 31, 2019, there were no issuances of Preferred Stock.

 

As of December 31, 2019 and 2018, 50,000 shares of preferred stock were issued and outstanding.

 

Common Stock

 

The Company is authorized to issue 2,000,000,000 shares of common stock at a par value of $0.001.

 

Under the fair value recognition provisions of ASC 718-10, share-based compensation cost is estimated at the grant date based on the fair value of the award and is recognized as expense, net of estimated pre-vesting forfeitures, ratably over the vesting period of the award. When the awards are fully vested on the grant date, all compensation cost would be recognized on the grant date.

 

During the year ended December 31, 2019, the Company has issued 1,269,000 shares of common stock to certain related and unrelated parties for their services provided and to be provided for the year ended December 31, 2019 at $2.2 per share (closing price as of the grant date), value of total $2,791,800 which was fully vested and expensed in this period.

 

As of December 31, 2019 and 2018, 508,539,882 and 507,270,882 shares of common stock were issued, respectively.

 

8. SUBSEQUENT EVENTS

 

The Company has evaluated subsequent events through the date which the financial statements were available to be issued. All subsequent events requiring recognition as of December 31, 2019 have been incorporated into these financial statements and there are no subsequent events that require disclosure in accordance with FASB ASC Topic 855, “Subsequent Events.”