AIFARM, LTD. - FORM 10-K

Attached files

file	filename
EX-32.2 - CERTIFICATE PURSUANT TO SECTION 18 U.S.C. PURSUANT TO SECTION 906 OF THE SARBANE - AIFARM, LTD.	exhibit_32-2.htm
EX-32.1 - CERTIFICATE PURSUANT TO SECTION 18 U.S.C. PURSUANT TO SECTION 906 OF THE SARBANE - AIFARM, LTD.	exhibit_32-1.htm
EX-31.2 - CERTIFICATION PURSUANT TO RULE 13A-14(A)/15D-14(A) CERTIFICATIONS SECTION 302 OF - AIFARM, LTD.	exhibit_31-2.htm
EX-31.1 - CERTIFICATION PURSUANT TO RULE 13A-14(A)/15D-14(A) CERTIFICATIONS SECTION 302 OF - AIFARM, LTD.	exhibit_31-1.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

☒	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: 333-207095

AIFARM, Ltd.

(Exact Name of Registrant as Specified in Its Charter)

Nevada	47-3444723
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)

Unit 503, 5/F, Silvercord Tower 2,

30 Canton Road, TST,

Kowloon, Hong Kong.

(Address of Principal Executive Offices and Zip Code)

(852) 91235575

Registrant’s telephone number, including area code)

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

(Title of Each Class)	(Name of Each Exchange on Which Registered)
Common Stock, par value $0.001 per share	Over the Counter Electronic Bulletin Board

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

None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the 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 ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ☐

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

Large accelerated filer	☐	Accelerated filer	☐

Non-accelerated filer	☐ (Do not check if a smaller reporting company)	Smaller reporting company	☒

		Emerging Growth Company	☐

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 Act). Yes ☐ No ☒

State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant’s most recently completed second fiscal quarter: Approximately $1,556,702.

As of May 13, 2020, there were 692,997 shares of the registrant’s common stock outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

Certain documents contained in our Registration Statement on Form S-1, as amended, SEC File No. 333-207095, and declared effective on November 12, 2015, are hereby incorporated by reference.

TABLE OF CONTENTS



	Page
PART I	5

Item 1. Business	5

Item 1A. Risk Factors	6

Item 1B. Unresolved Staff Comments	6

Item 2. Properties	6

Item 3. Legal Proceedings	6

Item 4. Mine Safety Disclosures	6

PART II	7

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	7

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	11

IItem 8. Financial Statements and Supplementary Data	11

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	12

Item 10. Directors, Executive Officers and Corporate Governance	12

Item 11. Executive Compensation	14

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	15

Item 13. Certain Relationships and Related Transactions, and Director Independence	15

Item 14. Principal Accountant Fees and Services	16

PART IV	17

Item 15. Exhibits and Financial Statement Schedules	17

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Annual Report on Form 10-K contains “forward-looking statements” that involve substantial risks and uncertainties. The statements contained in this Annual Report on Form 10-K that are not purely historical are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act, including, but not limited to, statements regarding our expectations, beliefs, intentions, strategies, future operations, future financial position, future revenue, projected expenses, and plans and objectives of management. In some cases, you can identify forward-looking statements by terms such as “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “project,” “will,” “would,” “should,” “could,” “can,” “predict,” “potential,” “continue,” “objective,” or the negative of these terms, and similar expressions intended to identify forward-looking statements. However, not all forward-looking statements contain these identifying words. These forward-looking statements reflect our current views about future events and involve known risks, uncertainties, and other factors that may cause our actual results, levels of activity, performance, or achievement to be materially different from those expressed or implied by the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those identified below, and those discussed in the section entitled “Risk Factors” included in this Annual Report on Form 10-K. Furthermore, such forward-looking statements speak only as of the date of this Annual Report on Form 10-K. Except as required by law, we undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date of such statements. We qualify all of our forward-looking statements by these cautionary statements. In addition, the industry in which we operate is subject to a high degree of uncertainty and risk due to a variety of factors, including those described in the section entitled “Risk Factors.” These and other factors could cause our results to differ materially from those expressed in this Annual Report on Form 10-K.

Unless otherwise indicated, information contained in this Annual Report on Form 10-K concerning our industry and the markets in which we operate, including our general expectations and market position, market opportunity, and market size, is based on information from various sources, on assumptions that we have made that are based on those data and other similar sources, and on our knowledge of the markets forour services. This data involves a number of assumptions and limitations, and you are cautioned not to give undue weight to such estimates. In addition, projections, assumptions, and estimates of our future performance and the future performance of the industry in which we operate are necessarily subject to a high degree of uncertainty and risk due to a variety of factors, including those described in the section entitled “Risk Factors” and elsewhere in this Annual Report on Form 10-K. These and other factors could cause results to differ materially from those expressed in the estimates made by third parties and by us.

Unless the context otherwise requires, references in this Annual Report on Form 10-K to the “company,” “our company,” “we,” “us,” and “our” refer to Eco Energy Tech Asia, Ltd. and, when appropriate, its subsidiaries.

PART I

ITEM 1.

BUSINESS

Overview

AIFarm, Ltd., formerly Eco Energy Tech Asia, Ltd. (the “Company” “we” or “us”) is a development stage company. We were incorporated under the laws of the state of Nevada on January 20, 2015. To date we have not generated any revenues. We have developed a proprietary growing system that designs and builds custom biodomes ranging in size appropriate for global commercial agricultural concerns as well as small local producers; delivering greater yields per meter than traditional single level greenhouse operations resulting from our multi-tier/multi-level growing system which permits us to grow a greater number of plants. Our fiscal year end is December 31.

On February 27, 2015, we entered into a Share Exchange Agreement to acquire 100% of the outstanding capital stock of Eco Energy Tech Asia, Ltd. (“EETA”), a Hong Kong corporation formed on December 27, 2012. Pursuant to the Share Exchange Agreement, we issued 20,000,000 shares of our common stock to the sole shareholder of EETA in exchange for 1,000,000 ordinary shares of EETA. The sole shareholder of EETA, Yuen May Cheung, is also our Chief Executive Officer, President and sole Director. EETA is also the owner of 92.4% of the common stock of 7582919 Canada, Inc., a corporation originally formed pursuant to the laws of British Columbia, Canada on June 21, 2010, as Renergy Foods Canada, Inc. On March 6, 2012, Renergy Foods Canada, Inc. changed its name to NuAgri, Inc. On October 1, 2013, NuAgri, Inc. changed its name to 7582919 Canada, Inc.

On November 8, 2019, the Company filed an Amendment to its Certificate of Incorporation (the “Amendment”) with the Nevada Secretary of State changing the name of the Company to AIFarm, Ltd. The Amendment was approved by written consent of the majority of the Company’s shareholders on August 20, 2019. The Company filed an Issuer Notification Form with FINRA which processed the name change effective January 21, 2020. FINRA advised the Company’s ticker symbol is temporarily changed to EYTHD as of January 21, 2020, and after twenty (20) business days, the new ticker symbol shall be AIFM.

On August 20, 2019, a majority of the Company’s shareholders approved a reverse stock split of 1:100 of the Company’s outstanding common stock. The Company filed an Issuer Notification Form with FINRA which processed the reverse stock split as of January 21, 2020.

We have developed a proprietary growing system that designs and builds custom biodomes ranging in size appropriate for global commercial agricultural concerns as well as small local producers; delivering greater yields per meter than traditional single level greenhouse operations as a result of our multi-tie/multi-level system which permits us to grow a greater number of plants. By avoiding a traditional, low-profit commoditized monoculture environment, we can increase profitability by selling a higher yielding and diversified range of high-profit niche produce.

Our proprietary biodomes are environmentally friendly and can be located anywhere, including in the most climatically inhospitable areas. The Company’s technologies provide the ability to grow high margin produce for twelve (12) months of the year, with faster growing times and cost-effective energy management. As a result, clients will experience faster capital payback, enhanced profitability and compelling, consistent revenue growth.

Eco Energy Tech Asia, Ltd. was initially established as a technological solution providing enterprise, through intense research and development, a proprietary growing system that builds and develops custom biodomes with diverse sizes for global agricultural use, especially for the smallholder farmers. This innovative product promises greater agriproduct returns over the conventional single level greenhouse operations. This operation permits multistage/multi-phase planting systems which encourages growing and monitoring diverse plants. Furthermore, this connotes our anticipation and preparation for the Connected Crop Solution in 2019 where Digital Agricultural Ecosystem is feasible.

As of 2019, we have diversified into the creation of two major innovative advancements in the market through the combination of digital technologies such big data analytics, Internet of Things (IoT), visualization capabilities and more informed knowledge concerning the industry to AIFarm Digital Agriculture Service and Aifarm Connected Crop Solution. The essence of this towards the advancement of large-scale agricultural production.

The farmers are better enhanced using AiFarm Digital Agriculture Service to collect and cross-correlate a number of data in an attempt to help them in making an informed and efficient business operation decisions so that ROI can be achieved and improved agricultural product.

Our product, AiFarm Connected, is essential especially for Crop Solution farmers in developing countries, who consist of a majorly of small scale farmers, as it will encourage the productivity of the field agents through the efforts of agro-input providers as a result of the production of improved fertilizers, pesticides, and seed rates, which would be customized for each farmer per their land needs. This is with the ultimate goal of improving productivity.

For the farmers to be in tandem with the latest informational update, we anticipate to design and implement two technologies – IoT and drones for synchronous data exchange between the systems.

We have also completed development of our new websites at www.AIfarm.com. We have also initiated discussions with Microgreen, Ltd. With respect for testing our systems.

Property and Facilities

Our Hong Kong business office is located at Unit 503, 5F Silvercord Tower 2, 30 Canton Road, TST, Kowloon, Hong Kong. This office is provided to us by our Chief Executive Officer, President and Director, Yuen May Cheung, at no cost to our Company.

Environmental Regulations

Environmental regulations have had no materially adverse effect on our operations to date, but no assurance can be given that environmental regulations will not, in the future, result in a curtailment of service or otherwise have a materially adverse effect on our business, financial condition or results of operation. Public interest in the protection of the environment has increased dramatically in recent years. The trend of more expansive and stricter environmental legislation and regulations could continue. To the extent that laws are enacted or other governmental action is taken that imposes environmental protection requirements that result in increased costs, our business and prospects could be adversely affected.

Patents, Trademarks and Licenses

We currently do not have any patents or trademarks; and we are not party to any license, franchise, concession, or royalty agreements or any labor contracts.

Employees

In addition to our three (3) executive officers, we currently have five (5) part time employees.

We file reports with the SEC, including Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and any other filings required by the SEC. The public may read and copy any materials we file with, or furnish to, the SEC at the SEC’s Public Reference Room at 100 F Street, NE, Washington, DC 20549. The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC maintains an Internet site at www.sec.gov that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC.

ITEM 1A.

RISK FACTORS

This information is not required as a result of our status as a “small business issuer.”

ITEM 1B.

UNRESOLVED STAFF COMMENTS

We have no unresolved staff comments.

ITEM 2.

PROPERTIES

ITEM 3.

LEGAL PROCEEDINGS

As of the date of this report, we know of no material pending legal proceedings to which we are a party or of which any of our property is the subject. There are no proceedings in which any of our directors, executive officers or affiliates, or any registered or beneficial stockholder, is an adverse party or has a material interest adverse to our interest.

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 has been quoted on the Pink Sheets under the symbol "AIFM”.

The market for our common stock is limited and can be volatile. The following table sets forth the high and low bid prices relating to our common stock on the OTCQB on a quarterly basis for the periods indicated, as reported by OTC Markets Group. The quotations reflect interdealer prices, without retail markup, markdown or commission, and may not represent actual transactions.

Year Ended December 31, 2018	High	Low
Quarter ended March 31, 2018	$1.70	$5.20
Quarter ended June 30, 2018	$1.80	$2.10
Quarter ended September 30, 2018	$5.90	$2.25
Quarter ended December 31, 2018	$4.00	$2.20
Year Ended December 31, 2019
Quarter ended March 31, 2019	$3.50	$2.20
Quarter ended June 30, 2019	$4.00	$1.40
Quarter ended September 30, 2019	$2.30	$1.50
Quarter ended December 31, 2019	$2.50	$1.10

The last reported bid price of our common stock on the Pink Sheets on April 28, 2020, was $0.11.

Dividend Policy

We have never declared or paid, and do not anticipate declaring or paying in the foreseeable future, any cash dividends on our capital stock. Any future determination as to the declaration and payment of dividends, if any, will be at the discretion of our board of directors and will depend on then existing conditions, including our operating results, financial condition, contractual restrictions, capital requirements, business prospects, and other factors our board of directors may deem relevant.

Equity Compensation Plan Information

None

Recent Sales of Unregistered Securities

During the year ended December 31, 2019, the Company issued 111,034 shares of common stock for proceeds of $506,918, of which $5,250 was recorded as share subscriptions receivable as at December 31, 2019.

On October 27, 2019, the Company issued 60,000 shares of common stock with a fair value of $120,000 to settle $60,000 owed to the President of the Company. This resulted in a gain on settlement of debt of $60,000.

Issuer Purchases of Equity Securities

None

ITEM 6.

SELECTED FINANCIAL DATA

Not Applicable

ITEM 7.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and results of operations should be read together with our consolidated financial statements and accompanying notes appearing elsewhere in this Annual Report on Form 10-K. This discussion contains forward-looking statements, based upon our current expectations and related to future events and our future financial performance, that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth elsewhere in this Annual Report on Form 10-K.

Plan of Operations

Company Summary

Our Business

For the farmers to be in tandem with the latest informational update, we anticipate to design and implement two technologies – IoT and drones for synchronous data exchange between the systems.

We have also completed development of our new website at www.AIfarm.com. We have also initiated discussions with Microgreen, Ltd. With respect for testing our systems.

Expenditures

The following chart provides an overview of our budgeted expenditures by significant area of activity over the next twelve (12) months, assuming we are able to attract sufficient debt or equity financing. There can be no assurance that we will be able to attract financing and we may be required to scale back operations accordingly.

The following table outlines the planned use of working capital and does not take Inventory expenses into account. If we are able to attract sufficient debt or equity financing and are successful in securing manufacturing facilities for Drones Design and are able to secure orders, we will need to secure inventory financing. There can be no assurance that such financing will be available to us, and our inability to obtain such financing would materially impact our ability to execute our business plan as outlined in this Report.

	Months 1-3	Months 2-6	Months 7-9	Months 10-12	Total
Loans	$5,000	$5,000	$5,000	$5,000	$20,000
Supplies	$20,000	$20,000	$20,000	$20,000	$80,000
Utilities	$12,000	$15,000	$17,000	$20,000	$64,000
Accounting	$5,000	$5,000	$5,000	$10,000	$25,000
Legal	$10,000	$10,000	$10,000	$10,000	$40,000
Auditing	$5,000	$5,000	$5,000	$10,000	$25,000
CFO	$15,000	$15,000	$15,000	$15,000	$60,000
VP Sales	$18,000	$21,000	$21,000	$21,000	$81,000
Consulting	$10,000	$10,000	$10,000	$10,000	$40,000
Project Management	$12,000	$12,000	$12,000	$12,000	$48,000
Product Development	$50,000	$40,000	$40,000	$40,000	$170,000
Engineering	$30,000	$30,000	$15,000	$15,000	$90,000
Mechanical	$50,000	$50,000	$30,000	$30,000	$160,000
Electrical	$30,000	$40,000	$40,000	$50,000	$160,000
Software	$30,000	$40,000	$50,000	$60,000	$180,000
Marketing	$30,000	$30,000	$40,000	$40,000	$140,000
Advertising	$50,000	$80,000	$100,000	$150,000	$380,000
Promotion	$50,000	$60,000	$80,000	$120,000	$310,000
Investor Relations	$60,000	$80,000	$100,000	$150,000	$390,000
Total Expenditures	$562,000	$648,000	$705,000	$878,000	$2,793,000

Milestones

Months 1 through 3

During the first three (3) months we plan to:

● Shift our office of operation from China to USA

● Change the Company name to AIFarm, Ltd. To reflect our new business direction as set forth in our DEF Schedule 14C Information Statement filed on September 9, 2019.

● Initiate a 1:100 reverse split of our outstanding common stock as set forth in our DEF Schedule 14C Information Statement filed on September 9, 2019.

● As the first phase of operation, the development of agricultural ecosystem would be prioritized.

● There would be tendering of the application of Cropest TM as a trademark in North America for its approval.

● There would be the design and manufacturing of two farm IoT products. They are drone and weather station devices. An industrial engineer will be hired as the production manager.

Months 4 through 6

During the following three (3) months, we expect to achieve the following:

● Completion of the USA administrative office by hiring competent staffs to have a team.

● The commencement of the second phase of the development of the agriculture ecosystem.

● The new website of our company, Cropest would be launched.

● Weather station device and moisture soil system would be developed for the two Farm IoT products.

Months 7 through 9

During the following three (3) months, we expect to achieve the following:

● Ensure that the second phase of the development of Cropest ecosystem is achieved

● Ensure that the analysis garnered from the system, Cropest is tested in terms of its functionality

● Testing on the software system of DronesEnsure that the entire network around the globe could be accessed. It is noteworthy to state that there are over 5,000 weather stations that we as a company operate.

● Ensure that the two Farm IoT products – weather station device and moisture system are developed

● Ensure that the sales team and well trained in an attempt to maximally function at the first stage of the system

Months 10 through 12

● Towards the development of agricultural ecosystem, in the third phase, there would be artificial intelligence analysis of the system.

● In a bid to get early feedback and to integrate the necessary ones, more farm owners would be exposed to the demo test in the early state of its development.

● The commencement of the sales of the Drone system and software, using the online platforms.

● Complete the development of both Farm IoT products, i.e. the weather station and the moisture system.

● Aligning the sales team for conference and online marketing to ensure maximum returns

We do not currently have any arrangements for financing and we can provide no assurance to investors we will be able to find such financing. There can be no assurance that additional financing will be available to us, or on terms that are acceptable. Consequently, we may not be able to proceed with our intended business plans or complete the development and commercialization of our product.

Liquidity and Results of Operations

Comparison of the Year Ended Results – For the Years Ended December 31, 2018 and December 31, 2019

For the year ended December 31, 2019, the Company had a net loss of $547,097 compared to $110,575 for the year ended December 31, 2018.

Expenses

Total expenses increased to $487,134 for the year ended December 31,2019, as compared to $85,297 for the year ended December 31,2018. The increase is mainly due to $412,740 in consulting fees compared to $19,635 in the prior year.

Liquidity and Capital Resources

As at December 31, 2019, the Company current assets of $88,274 and current liabilities of $3,481,646 for a working capital deficit of $3,393,372 (2018 – 3,493,602).

During the year ended December 31, 2019, the Company issued 111,034 shares of common stock for proceeds of $501,668, of which $5,250 was recoded as share subscriptions receivable as at December 31,2019.

We require additional financing to pay for our current obligations and future capital expenditures. The primary sources of funding for such requirements are expected to be from raising equity and/or debt financing.

We anticipate that our future liquidity requirements will arise from the need to fund our growth, pay our current obligations and future capital expenditures. The primary sources of funding for such requirements are expected to be cash generated from operations and raising additional funds from private sources and/or debt financing.

Going Concern Consideration

Our independent auditors included an explanatory paragraph in their report on the accompanying financial statements expressing substantial doubt about our ability to continue as a going concern. Our financial statements contain additional note disclosures describing the circumstances that lead to this disclosure by our independent auditors.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements.

Critical Accounting Policies

The preparation of our financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, and expenses and related disclosures about contingent assets and liabilities. We base these estimates and assumptions on historical experience and on various other information and assumptions that are believed to be reasonable under the circumstance. Estimates and assumptions about future events and their effects cannot be perceived with certainty and, accordingly, these estimates may change as additional information is obtained, as more experience is acquired, as our operating environment changes and as new events occur. Our critical accounting policies are listed in the notes to our audited financial statements included in of this report on Form 10-K.

ITEM 7A.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable.

ITEM 8.

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Reference is made to our consolidated financial statements, the notes thereto, and the report thereon, commencing on page F-1 of this Annual Report on Form 10-K, which consolidated financial statements, notes, and report are incorporated herein by reference.

ITEM 9.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

Not applicable

ITEM 9A.

CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, as of the end of the period covered by this Annual Report on Form 10-K. Based on such evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of such date, our disclosure controls and procedures were effective.

Management’s Annual Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rule 13a-15(f) under the Exchange Act, to provide reasonable assurance regarding the reliability of our financial reporting and the preparation of financial statements for external purposes in accordance with GAAP.

Due to its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate due to changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we evaluated the effectiveness of our internal control over financial reporting using the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control—Integrated Framework (2013). Based on such evaluation, our management concluded that our internal control over financial reporting was not effective as of December 31, 2019.

Management assessed the effectiveness of our company’s internal control over financial reporting as of evaluation date and identified the following material weaknesses:

	-	Lack of proper segregation of duties due to limited personnel;
	-	Lack of a formal review process that includes multiple levels of review from adequate personnel with requisite expertise.
	-	Lack of written policies and procedures for accounting and financial reporting.

We do not have a functioning audit committee or outside directors on our board of directors, resulting in ineffective oversight in the establishment and monitoring of required internal controls and procedures.

Management is committed to improving its internal controls and will: (1) continue to use third party specialists to address shortfalls in staffing and to assist our company with accounting and finance responsibilities, (2) increase the frequency of independent reconciliations of significant accounts which will mitigate the lack of segregation of duties until there are sufficient personnel, and (3) may consider appointing outside directors and audit committee members in the future.

Management, including our chief executive officer (our principal executive officer) and our chief financial officer (our principal financial officer and principal accounting officer), has discussed the material weakness noted above with our independent registered public accounting firm. Due to the nature of this material weakness, there is a more than remote likelihood that misstatements which could be material to the annual or interim financial statements could occur that would not be prevented or detected

This Annual Report on Form 10-K does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Our management’s report was not subject to attestation by our independent registered public accounting firm pursuant to rules of the SEC that permit us to provide only management’s report in this Annual Report on Form 10-K.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting identified by management’s evaluation pursuant to Rules 13a-15(d) or 15d-15(d) of the Exchange Act during the most recent fiscal quarter that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Limitations on Effectiveness of Controls and Procedures

Our management, including our Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure controls and procedures or our internal controls over financial reporting will prevent all error and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues, misstatements, errors, and instances of fraud, if any, within our company have been or will be prevented or detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur becauseof simple error or mistake. Controls also can be circumvented by the individual acts of some persons, by collusion of two or more people, or by 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, internal controls may become inadequate as a result of changes in conditions, or through the deterioration of the degree of compliance with policies or procedures.

ITEM 9B.

OTHER INFORMATION

None

PART III

ITEM 10.

DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

The name, age and position of each of our directors and executive officers are as follows:

Name	Age	Position

Yuen May Cheung	54	Chief Executive Officer, President and Director

Philip K.H. Chan	43	Chief Financial Officer (Appointed March 16, 2016)

Yuen May Cheung, Age 54, Chief Executive Officer, President and Director

Ms. Cheung, is our founder and our Chief Executive Officer, President and sole Director and has served in in such capacities since our inception in January of 2015. She has also served as Chief Executive Officer and President of our subsidiaries, EETA, since its inception in 2012, and 7582919 Canada, Inc, since its inception in 2010. Ms. Cheung currently devotes her full working time to the management and operations of our Company. Ms. Cheung was the co-founder of GuangNing ChangRong Bamboo & Wood Handicraft Products Co. Ltd, a factory and manufacturer, served as Director and owned by Ms. Cheung, since 2007, Ms. Cheung served as Director of Zhong Cui Investments Ltd., a marketing company, owned by Ms. Cheung since 2006. Ms. Cheung provides hands-on leadership, strategic direction and operations management with a focus on business development, exceptional quality management and fiscal accountability. Ms. Cheung attended Centennial College in Toronto, Canada from 1989-1991 where she received a Certificate of Accounting, and she also attended Chui Hai College in Hong Kong from 1984-1988 where she received a degree in Business Management. Ms. Cheung does not, and has not served as an officer or director of any other company required to file reports with the Securities and Exchange Commission.

Philip K.H. Chan, Age 43, Chief Financial Officer

From December 2012, until the present, Mr. Chan served as Executive Director for Willing International Capital (Shanghai) Co. Ltd. Willing International Capital is a consulting firm that provides financial advisory and accountancy services. From April 2011, until June 2012, Mr. Chan served as Vice President of Finance for Search Media Holdings, Ltd., a company listed on AMEX under the symbol “IDI”, and a leading nationwide multi-platform media company and one of the largest operators of integrated outdoor billboard and in-elevator advertising networks in China. From April, 2006 until March 2011, Mr. Chan initially served as Financial Controller and thereafter promoted to Financial Controller of Xinhua Sports & Entertainment (HK) Limited is a wholly-owned subsidiary of Xinhua Sports & Entertainment Limited, a China's leading diversified financial and entertainment media company, listed on the Nasdaq Global Market under the symbol "XSEL" on March 9, 2007. From June, 2004 until April, 2006, Mr. Chan served as Analyst, Business Area Controlling for Deutshe Bank AG, Hong Kong Branch where he was responsible for the integrity of the books and records and provision of financial information thereof for the relevant business line, involving the ongoing review and development of systems and processes to enable this to occur in an efficient and orderly manner. From November, 2000 until May, 2005, Mr. Chan served as Audit Department Accountant and was thereafter promoted to Audit Department Assistant Manager for the KPMG where he gained 3 years of audit experience in various industries. He also led teams of 3 to 10 persons to perform audit, IPO and due diligence. From September, 1999 through November, 2000, Mr. Chan was employed as a Staff Accountant for the firm of Deloitte Touche Tohmastu, where he took part in client engagements of varying sizes in different industries. He was responsible for revised voucher forms, audit planning and assisting in audit assignments and gained significant exposure in listed companies. Mr. Chan attended the University of Hong Kong from 1996 through 1999 where he earned a Bachelor of Business Administration Degree in Accounting and Finance. He is a member in good standing of the Association of Chartered Certified Accountants, the Hong Kong Society of Accountants and the Hong Kong Society of Financial Analysists. Except as set forth above, Mr. Chan has not served as an executive officer or director of any other company required to file reports with the Securities and Exchange Commission.

Board Composition

Our Bylaws provide that the Board of Directors shall consist of no less than 1, but not more than 9 directors. Each director serves until his successor is elected and qualified.

Committees of the Board of Directors

We do not presently have a separately constituted audit committee, compensation committee, nominating committee, executive committee or any other committees of our Board of Directors. Nor do we have an audit committee “financial expert.” As such, our entire Board of Directors acts as our audit committee and handles matters related to compensation and nominations of directors.

Potential Conflicts of Interest

Since we do not have an audit or compensation committee comprised of independent directors, the functions that would have been performed by such committees are performed by our directors. Thus, there is a potential conflict of interest in that our directors and officers have the authority to determine issues concerning management compensation and audit issues that may affect management decisions. We are not aware of any other conflicts of interest with any of our executives or directors.

Director Independence

We are not subject to listing requirements of any national securities exchange or national securities association and, as a result, we are not at this time required to have our board comprised of a majority of “independent directors.” Our determination of independence of directors is made using the definition of “independent director” contained in Rule 4200(a) (15) of the Marketplace Rules of the NASDAQ Stock Market (“NASDAQ”), even though such definitions do not currently apply to us because we are not listed on NASDAQ. We have determined that none of our directors currently meet the definition of “independent” as within the meaning of such rules as a result of their current positions as our executive officers.

Significant Employees

We have no significant employees other than the executive officers/directors described above.

Family Relationships

There are no familial relationships between our officers and directors.

Involvement in Certain Legal Proceedings

No director, person nominated to become a director, executive officer, promoter or control person of our company has, during the last ten years: (i) been convicted in or is currently subject to a pending a criminal proceeding (excluding traffic violations and other minor offenses); (ii) been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to any federal or state securities or banking or commodities laws including, without limitation, in any way limiting involvement in any business activity, or finding any violation with respect to such law, nor (iii) any bankruptcy petition been filed by or against the business of which such person was an executive officer or a general partner, whether at the time of the bankruptcy or for the two years prior thereto.

Stockholder Communications with the Board

We have not implemented a formal policy or procedure by which our stockholders can communicate directly with our Board of Directors. Nevertheless, every effort has been made to ensure that the views of stockholders are heard by the Board of Directors or individual directors, as applicable, and that appropriate responses are provided to stockholders in a timely manner. We believe that we are responsive to stockholder communications, and therefore have not considered it necessary to adopt a formal process for stockholder communications with our Board. During the upcoming year, our Board will continue to monitor whether it would be appropriate to adopt such a process.

Section 16(a) Beneficial Ownership Reporting Compliance

16(a) of the Securities Exchange Act of 1934 requires the Company directors and executive officers, and persons who own more than ten percent of the Company’s common stock, to file with the Securities and Exchange Commission initial reports of ownership and reports of changes of ownership of our common stock. Officers, directors and greater than ten percent shareholders are required by SEC regulation to furnish the Company with copies of all Section 16(a) forms they file. The Company intends to ensure to the best of our ability that all Section 16(a) filing requirements applicable to its officers, directors and greater than ten percent (10%) beneficial owners are complied with in a timely fashion.

ITEM 11.

EXECUTIVE COMPENSATION

We have not paid since our inception, nor do we owe, any compensation to our executive officers or directors. There are no arrangements or employment agreements with our executive officer or directors pursuant to which they will be compensated now or in the future for any services provided as an executive officer, and we do not anticipate entering into any such arrangements or agreements with them in the foreseeable future.

Outstanding Equity Awards at 2019 Fiscal Year-End

We do not currently have a stock option plan or any long-term incentive plans that provide compensation intended to serve as incentive for performance. No individual grants of stock options or other equity incentive awards have been made to any executive officer or any director since our inception; accordingly, none were outstanding at December 31, 2019.

Employment Contracts, Termination of Employment, Change-in-Control Arrangements

There are currently no employments or other contracts or arrangements with our executive officers. There are no compensation plans or arrangements, including payments to be made by us, with respect to our officers, directors or consultants that would result from the resignation, retirement or any other termination of such directors, officers or consultants from us. There are no arrangements for directors, officers, employees or consultants that would result from a change-in-control.

ITEM 12.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The following table sets forth information regarding the beneficial ownership of our common stock as of the date of this Annual Report for:

●	each person, or group of affiliated persons, known by us to beneficially own more than 5% of our common stock;

●	each of our executive officers;

●	each of our directors; and

●	all of our executive officers and directors as a group.

We have determined beneficial ownership in accordance with the rules of the Securities and Exchange Commission. These rules generally attribute beneficial ownership of securities to persons who possess sole or shared voting power or investment power with respect to those securities. The person is also deemed to be a beneficial owner of any security of which that person has a right to acquire beneficial ownership within 60 days. Unless otherwise indicated, the persons or entities identified in this table have sole voting and investment power with respect to all shares shown as beneficially owned by them, subject to applicable community property laws, and the address for each person listed in the table is c/o Eco Energy Tech Asia, Ltd., Unit 503, 15/F, Silvercord Tower 2, 30 Canton Road TST , Kowloon, Hong Kong.

The percentage ownership information shown in the table below is calculated based on 676,827 shares of our common stock issued and outstanding as of the date of this Annual Report. We do not have any outstanding options, warrants or other securities exercisable for or convertible into shares of our common stock.

Title of Class of Beneficial Ownership	Name of Beneficial Owner	Amount and Nature	Percentage of Class
Common Stock	Yuen May Cheung, Chief Executive Officer, President and Director	350,000 (D)	51.71%

Common Stock	Philip K.H. Chan	700 (D)	0.001%
All officers and directors as a group		357,000(D)	51.71%

We are unaware of any contract or other arrangement the operation of which may at a subsequent date result in a change in control of our Company.

We do not have any issued and outstanding securities that are convertible into common stock. None of our stockholders are entitled to registration rights.

ITEM 13.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

As at December 31, 2019, the Company owed $3,343,936 (2018 – $3,511,058) to the President of the Company which is non-interest bearing, unsecured, and due on demand.

As at December 31, 2019, the Company owed $77,149 (2018 - $73,292) to the brother of the President of the Company, which is non-interest bearing, unsecured, and due on demand.

ITEM 14.

PRINCIPAL ACCOUNTANT FEES AND SERVICES

We were billed by our former independent public accounting firm, Saturna Group Chartered Professional Accountants LLP, for the following professional services they performed for us during the years ended December 31, 2019 and 2018 as set forth in the table below.

	Year Ended December 31,
	2019	2018
Audit fees	$18,000	$9,000
Audit-related fees	$nil	$nil
Tax fees	$nil	$nil
All other fees	$18,000	$9,000

Our sole Director pre-approves all audit and non-audit services performed by the Company's auditor and the fees to be paid in connection with such services.

PART IV

ITEM 15.

EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a)	Financial Statements and Financial Statement Schedules

Consolidated Financial Statements are listed in the Index to Consolidated Financial Statements on page F-1 of this Annual Report on Form 10-K.

Other schedules are omitted because they are not applicable, not required, or because required information is included in the Consolidated Financial Statements or notes thereto.

(b)

Exhibits

Exhibit	Description

3.1	Articles of Incorporation of Registrant.*

3.2	Bylaws of Registrant.*

10.1	Share Exchange Agreement dated February 27, 2015*

31.1	Certificate of Yuen May Cheung, President and Chief Executive Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2	Certificate of Philip K.H. Chan, Chief Financial Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1	Certificate of Yuen May Cheung, President and Chief Executive Officer, pursuant to Section 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2	Certificate of Philip K.H. Chan, Chief Financial Officer, pursuant to Section 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101.INS	XBRL Instance Document

101.SCH	XBRL Taxonomy Extension Schema 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

* Incorporated by reference from our Registration Statement on Form S-1, as amended, SEC File No. 333-207095 declared effective on November 12, 2015.

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.



	AIFARM, LTD.

Dated: May 14, 2020	By:	/s/ Yuen May Cheung
		Yuen May Cheung
		President and Chief Executive Officer



Dated: May 14, 2020	By:	/s/ Philip K.H. Chan
		Philip K.H. Chan
		Chief Financial Officer

Signature	Title	Date

/s/ Yuen May Cheung	President and Chief Executive Officer (Principal Executive Officer) and Director	May 14, 2020
Yuen May Cheung

/s/ Philip K.H. Chan	Chief Financial Officer (Principal Financial and Accounting Officer)	May 14, 2020
Philip K.H. Chan

AIFARM, LTD.

(formerly Eco Energy Tech Asia, Ltd.)

Consolidated Financial Statements

Years Ended December 31, 2019 and 2018

(Expressed in U.S. dollars)

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of AIFarm, Ltd. (formerly Eco Energy Tech Asia, Ltd.)

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheet of AIFarm, Ltd. (formerly Eco Energy Tech Asia, Ltd.) (the “Company”) as of December 31, 2019 and 2018, and the related consolidated statements of operations and comprehensive loss, stockholders’ deficit, and cash flows for the years then ended and related notes (collectively, the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as at December 31, 2019 and 2018, and the results of their operations and cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

Explanatory Paragraph Regarding Going Concern

The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern. As discussed in Note 1 to the consolidated financial statements, as at December 31, 2019, the Company has not generated any revenues, has a working capital deficit of $3,393,372, and has an accumulated deficit of $6,168,035. These factors raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to these matters are also discussed in Note 1 to the consolidated financial statements. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated 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 consolidated 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 controls 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 controls 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 audit 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/ SATURNA GROUP CHARTERED PROFESSIONAL ACCOUNTANTS LLP

Saturna Group Chartered Professional Accountants LLP

We have served as the Company’s auditor since 2019

Vancouver, Canada

May 14 ,2020

F-2

AIFARM, LTD.

(formerly Eco Energy Tech Asia, Ltd.)

Consolidated statements of financial position

(Expressed in U.S. dollars)

	December 31, 2019 $	December 31, 2018 $

Assets

Current assets

Cash	88,274	97,118

Total assets	88,274	97,118

Liabilities

Current liabilities

Accounts payable and accrued liabilities	5,829	6,370
Advances payable (Note 3)	54,732	–
Due to related parties (Note 4)	3,421,085	3,584,350

Total liabilities	3,481,646	3,590,720

Nature of operations and continuance of business (Note 1)
Subsequent event (Note 6)

Stockholders’ deficit

Common stock, 75,000,000 shares authorized, $0.0001 par value 676,827 (2018 – 505,793) shares issued and outstanding	68	51
Additional paid-in capital	3,584,801	2,957,900
Share subscriptions received (Note 5)	29,394	–
Share subscriptions receivable (Note 5)	(5,250)	–
Accumulated other comprehensive income	711,123	714,858
Deficit	(6,168,035)	(5,620,946)

Total Eco Energy Tech Asia, Ltd. stockholders’ deficit	(1,847,899)	(1,948,137)

Non-controlling interest	(1,545,473)	(1,545,465)

Total stockholders’ deficit	(3,393,372)	(3,493,602)

Total liabilities and stockholders’ deficit	88,274	97,118

(The accompanying notes are an integral part of these consolidated financial statements)

F-3

AIFARM, LTD.

(formerly Eco Energy Tech Asia, Ltd.)

Consolidated statements of operations and comprehensive loss

(Expressed in U.S. dollars)

	Year ended December 31, 2019 $	Year ended December 31, 2018 $

Expenses

General and administrative	487,134	85,297

Total expenses	487,134	85,297

Loss before other income (expense)	(487,134)	(85,297)

Other income (expense)

Loss on settlement of related party debt (Note 5)	(60,000)	(26,000)
Interest income	37	722

Total other income (expense)	(59,963)	(25,278)

Net loss	(547,097)	(110,575)

Loss attributable to non-controlling interest	8	780

Net loss attributable to Eco Energy Tech Asia, Ltd.	(547,089)	(109,795)

Other comprehensive income (loss)

Foreign currency translation gain (loss)	(3,735)	216,529

Comprehensive income (loss) for the year	(550,824)	106,734

Loss per share attributable to Eco Energy Tech Asia, Ltd. shareholders, basic and diluted	(0.97)	(0.30)

Weighted average shares outstanding used in the calculation of net loss attributable to Eco Energy Tech Asia, Ltd. per common share	566,114	368,650

(The accompanying notes are an integral part of these consolidated financial statements)

F-4

AIFARM, LTD.

(formerly Eco Energy Tech Asia, Ltd.)

Consolidated statements of stockholders’ deficit

(Expressed in U.S. dollars)

	Common stock
	Number of shares	Amount $	Additional paid-in capital $	Share subscriptions received $	Share subscriptions receivable $	Accumulated other comprehensive income $	Deficit $	Non-controlling interest $	Total stockholders’ deficit $

Balance, December 31, 2017	244,710	25	1,427,924	–	–	498,329	(5,511,151)	(1,544,685)	(5,129,558)

Common stock issued for cash	81,083	8	703,994	–	–	–	–	–	704,002

Common stock issued to settle related party debt	180,000	18	825,982	–	–	–	–	–	826,000

Foreign currency translation adjustment	–	–	–	–	–	216,529	–	–	216,529

Net loss for the year	–	–	–	–	–	–	(109,795)	(780)	(110,575)

Balance, December 31, 2018	505,793	51	2,957,900	–	–	714,858	(5,620,946)	(1,545,465)	(3,493,602)

Common stock issued for cash	111,034	11	506,907	–	(5,250)	–	–	–	501,668

Common stock issued to settle related party debt	60,000	6	119,994	–	–	–	–	–	120,000

Share subscriptions received	–	–	–	29,394	–	–	–	–	29,394

Foreign currency translation adjustment	–	–	–	–	–	(3,735)	–	–	(3,735)

Net loss for the year	–	–	–	–	–	–	(547,089)	(8)	(547,097)

Balance, December 31, 2019	676,827	68	3,584,801	29,394	(5,250)	711,123	(6,168,035)	(1,545,473)	(3,393,372)

(The accompanying notes are an integral part of these consolidated financial statements)

F-5

AIFARM, LTD.

(formerly Eco Energy Tech Asia, Ltd.)

Consolidated statements of cash flows

(Expressed in U.S. dollars)

	Year ended December 31, 2019 $	Year ended December 31, 2018 $

Operating activities

Net loss	(547,097)	(110,575)

Adjustments to reconcile net loss to net cash used in operating activities:
Loss on settlement of related party debt	60,000	26,000

Changes in operating assets and liabilities:
Accounts payable and accrued liabilities	(541)	4,067
Due to related parties	(103,265)	(1,326,855)

Net cash used in operating activities	(590,903)	(1,407,363)

Financing activities

Advances payable	54,732	–
Proceeds from common stock issued / share subscriptions received	531,062	704,002

Net cash provided by financing activities	585,794	704,002

Effect of foreign exchange rate changes on cash	(3,735)	216,529

Change in cash	(8,844)	(486,832)

Cash, beginning of year	97,118	583,950

Cash, end of year	88,274	97,118

Non-cash investing and financing activities:
Common stock issued to settle related party debt	120,000	826,000

Supplemental disclosures:
Interest paid	–	–
Income taxes paid	–	–

(The accompanying notes are an integral part of these consolidated financial statements)

F-6

AIFARM, LTD.

(formerly Eco Energy Tech Asia, Ltd.)

Notes to the consolidated financial statements

Years ended December 31, 2019 and 2018

(Expressed in U.S. dollars)

NATURE OF OPERATIONS AND CONTINUANCE OF BUSINESS

Eco Energy Tech Asia, Ltd. (the “Company”) was incorporated in the State of Nevada January 20, 2015. On January 21, 2020, the Company changed its name to AIFarm, Ltd.

On February 27, 2015, the Company entered into a share exchange agreement with Eco Energy Tech Asia Limited (“EETA”) to issue 20,000,000 shares of its common stock to the shareholder of EETA in exchange for 100% of the EETA shares owned by the shareholder. Upon the closing of the share exchange agreement, EETA became a wholly-owned subsidiary of the Company. EETA was incorporated under the laws of Hong Kong on December 27, 2012. The wholly-owned subsidiary of EETA, 3986489 Canada Inc. (“3CI”) was incorporated in British Columbia, Canada on December 17, 2001. 3CI acquired a 60% equity interest in 7582919 Canada Inc. (“7CI”) on June 21, 2014. EETA and 3CI are engaged in investment holdings. 7CI was incorporated in British Columbia, Canada on June 21, 2010. The initial name was Renergy Foods Canada Inc. On March 6, 2012, Renergy Foods Canada Inc. changed its name to NuAgri, Inc. On October 1, 2013, NuAgri, Inc. changed its name to 7582919 Canada Inc. 7CI is engaged in developing a proprietary growing system that designs and builds custom biodomes ranging in size appropriate for global commercial agricultural concerns as well as small local producers. On June 30, 2016, 3CI further acquired the equity interests of 7CI from 83.48% to 92.4%.

On March 11, 2020, the World Health Organization declared COVID-19 a global pandemic. This contagious disease outbreak and any related adverse public health developments, has adversely affected workforces, economies, and financial markets globally, leading to an economic downturn. The impact on the Company is not currently determinable, but management continues to monitor the situation.

These consolidated financial statements have been prepared on a going concern basis, which implies the Company will continue to realize its assets and discharge its liabilities in the normal course of business. The continuation of the Company as a going concern is dependent upon the continued financial support from its shareholders, the ability of the Company to obtain necessary equity financing to continue operations, and the attainment of profitable operations. As at December 31, 2019, the Company has not generated any revenues, has a working capital deficit of $3,393,372, and has an accumulated deficit of $6,168,035. The Company currently has limited liquidity, and has not completed its efforts to establish a stabilized source of revenues sufficient to cover operating costs over an extended period of time. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern. These consolidated financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

SIGNIFICANT ACCOUNTING POLICIES

(a)

Basis of Presentation and Consolidation

These consolidated financial statements and related notes are presented in accordance with accounting principles generally accepted in the United States and are expressed in U.S. dollars. The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, EETA and 3CI, and 92.4% owned subsidiary 7CI. All inter-company accounts and transactions have been eliminated on consolidation.

F-7

AIFARM, LTD.

(formerly Eco Energy Tech Asia, Ltd.)

Notes to the consolidated financial statements

Years ended December 31, 2019 and 2018

(Expressed in U.S. dollars)

SIGNIFICANT ACCOUNTING POLICIES (continued)

(b)

Use of Estimates

The preparation of consolidated financial statements in accordance with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses in the reporting period. The Company regularly evaluates estimates and assumptions related to fair value of stock-based compensation and deferred income tax asset valuation allowances. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.

(c)

Cash and Cash Equivalents

The Company considers all highly liquid instruments with maturity of three months or less at the time of issuance to be cash equivalents.

(d)

Income Taxes

The Company accounts for income taxes using the asset and liability method in accordance with ASC 740, “Income Taxes”. The asset and liability method provides that deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities, and for operating loss and tax credit carry-forwards. Deferred tax assets and liabilities are measured using the currently enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company records a valuation allowance to reduce deferred tax assets to the amount that is believed more likely than not to be realized. The Company has not recorded any amounts pertaining to uncertain tax positions.

(e)

Stock-based Compensation

The Company records stock-based compensation in accordance with ASC 718, “Compensation – Stock Compensation” and ASC 505, “Equity Based Payments to Non-Employees”, using the fair value method. All transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable.

(f)

Foreign Currency Translation

The Company’s functional and reporting currency is the U.S. dollar. The functional currency of EETA is the Hong Kong dollar. The functional currency of 3CI and 7CI is the Canadian dollar. Monetary assets and liabilities denominated in foreign currencies are translated using the exchange rate prevailing at the balance sheet date. Non-monetary assets, liabilities and items recorded in income arising from transactions denominated in foreign currencies are translated at rates of exchange in effect at the date of the transaction. Gains and losses arising on translation or settlement of foreign currency denominated transactions or balances are included in the determination of income.

The assets and liabilities of EETA, 3CI, and 7CI are translated into U.S. dollars using the exchange rate in effect at the balance sheet date. Revenue and expenses are translated using the average exchange rates during the period. Related exchange gains and losses are included in a separate component of stockholders’ equity as accumulated other comprehensive income (loss).

F-8

AIFARM, LTD.

(formerly Eco Energy Tech Asia, Ltd.)

Notes to the consolidated financial statements

Years ended December 31, 2019 and 2018

(Expressed in U.S. dollars)

SIGNIFICANT ACCOUNTING POLICIES (continued)

(g)

Financial Instruments

ASC 820, “Fair Value Measurements and Disclosures”, requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. ASC 820 prioritizes the inputs into three levels that may be used to measure fair value:

Level 1

Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.

Level 2

Level 2 applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data.

Level 3

Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.

The Company’s financial instruments consist principally of cash, accounts payable and accrued liabilities, advances payable, and amounts due to related parties. Pursuant to ASC 820, the fair value of cash is determined based on “Level 1” inputs, which consist of quoted prices in active markets for identical assets. The recorded values of all other financial instruments approximate their current fair values because of their nature and respective maturity dates or durations.

(h)

Loss Per Share

The Company computes earnings (loss) per share in accordance with ASC 260, “Earnings per Share”. ASC 260 requires presentation of both basic and diluted earnings per share (“EPS”) on the face of the statement of operations. Basic EPS is computed by dividing earnings (loss) available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential shares if their effect is anti-dilutive.

(i)

Comprehensive Loss

Comprehensive loss consists of net loss and other related gains and losses affecting stockholders’ equity that are excluded from net income or loss. As at December 31, 2019 and 2018, comprehensive loss includes cumulative translation adjustments for changes in foreign currency exchange rates during the period.

F-9

AIFARM, LTD.

(formerly Eco Energy Tech Asia, Ltd.)

Notes to the consolidated financial statements

Years ended December 31, 2019 and 2018

(Expressed in U.S. dollars)

SIGNIFICANT ACCOUNTING POLICIES (continued)

(j)

Recent Accounting Pronouncements

The Company has implemented all new accounting pronouncements that are in effect and that may impact its consolidated financial statements and does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.

ADVANCES PAYABLE

As at December 31, 2019, the Company owes $54,732 (2018 - $nil) to various individuals who overpaid on their share subscriptions.

RELATED PARTY TRANSACTIONS

(a)

As at December 31, 2019, the Company owed $3,343,936 (2018 – $3,511,058) to the President of the Company which is non-interest bearing, unsecured, and due on demand.

(b)

As at December 31, 2019, the Company owed $77,149 (2018 - $73,292) to the brother of the President of the Company, which is non-interest bearing, unsecured, and due on demand.

COMMON STOCK

(a)

(b)

As at December 31, 2019, the Company has share subscriptions received of $29,394 (2018 - $nil).

(c)

On October 27, 2019, the Company issued 60,000 shares of common stock with a fair value of $120,000 to settle $60,000 owed to the President of the Company. This resulted in a loss on settlement of debt of $60,000.

(d)

During the year ended December 31, 2018, the Company issued 81,803 shares of common stock for proceeds of $704,002.

(e)

On July 1, 2018, the Company issued 100,000 shares of common stock with a fair value of $410,000 to settle $500,000 owed to the President of the Company. This resulted in a gain on settlement of debt of $90,000.

(f)

On September 13, 2018, the Company issued 80,000 shares of common stock with a fair value of $416,000 to settle $300,000 owed to the President of the Company. This resulted in a loss on settlement of debt of $116,000.

F-10

AIFARM, LTD.

(formerly Eco Energy Tech Asia, Ltd.)

Notes to the consolidated financial statements

Years ended December 31, 2019 and 2018

(Expressed in U.S. dollars)

INCOME TAXES

The Company has net operating losses carried forward of $6,705,299 available to offset taxable income in future years which commence expiring in the year 2033.

The Company is subject to United States federal and state income taxes at an approximate rate of 21%. The reconciliation of the provision for income taxes at the United States federal statutory rate compared to the Company’s income tax expense as reported is as follows:

	2019 $	2018 $

Net loss before income taxes	(547,089)	(110,575)
Statutory income tax rate	21%	21%

Expected income tax provision (recovery)	(114,889)	(23,221)
Change in valuation allowance	114,889	23,221

Income tax provision	–	–

The significant components of deferred income tax assets and liabilities as at December 31, 2019 and 2018 are as follows:

	2019 $	2018 $

Net operating losses carried forward	1,408,113	1,293,224
Valuation allowance	(1,408,113)	(1,293,224)

Net deferred income tax asset	–	–

SUBSEQUENT EVENT

Subsequent to December 31, 2019, the Company effected a 1-for-100 share consolidation. All share amounts have been retroactively restated for all periods presented.

F-11

AIFARM, LTD. - FORM 10-K - May 14, 2020

Attached files

AIFARM, LTD. Reports