Indicate by check mark if the registrant is a well-known
seasoned issuer, as defined in Rule 405 of the Securities Act. Yes
☐
No
☑
Check whether the issuer is not required to file reports
pursuant to Section 13 or 15(d) of the Exchange Act. Yes
☐
No
☑
Check whether the issuer (1) filed all reports required to
be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months (or for such shorter periods that
the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes
☑
No
☐
Indicate by check mark whether the registrant has submitted
electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant
to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such files). Yes
☑
No
☐
Check if there is no disclosure of delinquent filers in response
to Item 405 of Regulation S-K contained in this form, and no disclosure will be contained, to the best of the 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.
Indicate by check mark whether the registrant is a shell
company (as defined in Rule 12b-2 of the Exchange Act). Yes
☐
No
☑
.
As of June 30, 2015, the aggregate market
value of the shares of the Registrant’s common stock held by non-affiliates (based upon the closing price of such shares
as reported on the OTC Bulletin Board) was approximately $1,573,594. (143,054 shares, 11.00 per share).
Statements contained in this Annual
Report include “forward-looking statements” within the meaning of such term in Section 27A of the Securities Act and
Section 21E of the Exchange Act. Forward-looking statements involve known and unknown risks, uncertainties and other factors which
could cause actual financial or operating results, performances or achievements expressed or implied by such forward-looking statements
not to occur or be realized. Forward-looking statements made in this Report generally are based on our best estimates of future
results, performances or achievements, predicated upon current conditions and the most recent results of the companies involved
and their respective industries. Forward-looking statements may be identified by the use of forward-looking terminology such as
“may,” “will,” “could,” “should,” “project,” “expect,”
“believe,” “estimate,” “anticipate,” “intend,” “continue,” “potential,”
“opportunity” or similar terms, variations of those terms or the negative of those terms or other variations of those
terms or comparable words or expressions. Potential risks and uncertainties include, among other things, such factors as:
Additional disclosures regarding factors
that could cause our results and performance to differ from results or performance anticipated by this annual report are discussed
in Item 1A. “Risk Factors.” Readers are urged to carefully review and consider the various disclosures made by us in
this annual report and our other filings with the SEC. These reports attempt to advise interested parties of the risks and factors
that may affect our business, financial condition and results of operations and prospects. The forward-looking statements made
in this annual report speak only as of the date hereof and we disclaim any obligation to provide updates, revisions or amendments
to any forward-looking statements to reflect changes in our expectations or future events.
PART I
We are a Nevada corporation incorporated
on August 30, 2006, under the name Gateway Certifications, Inc. On Novermber 16, 2009, our corporate name was changed
to American Jianye Greentech Holdings, Ltd. and on February 13, 2014, our corporate name was changed to AJ Greentech Holdings,
Ltd.
From November 2009 until October, 2013,
through our China subsidiaries, we were engaged in design, marketing and distributing of alcohol base clean fuel which are designed
to use less fossil fuel and have less pollution than traditional fuel.
On October 31, 2013, pursuant to agreements
with one of our former directors, we transferred the stock in our China subsidiaries to the former director in exchange for cancellation
of debt totaling $240,000. As a result of the transfer of the subsidiaries, we were no longer engaged in the China clean
fuel business. We transferred the stock of the China subsidiaries because we felt that, it not our best interest to
continue China clean fuel business as a result of our decreasing revenue, continued losses and inability to raise capital for our
business.
On October 31, 2013, Chu Li An acquired,
for nominal consideration, 8,000,000 shares of common stock from the director who acquired the subsidiaries and 12,778,399 shares
of common stock from The Chairman, who was also a director.
On November 18, 2013, we entered into
agreement pursuant to which we issued to Chu Li An and her BVI company, our sole director and chief executive officer, 180,000,000
shares of common stock, in consideration of the cancellation of debt due to Chu Li An in the amount of $180,000.
On November 30, 2013, the company entered
into an agreement to acquire all of the issued and outstanding stock of Jin Chih International, Ltd., a Taiwan corporation, from
its sole owner Chu Li An
for five million shares of the Company’s common stock. As of December 31, 2015, the
stock has not been issued.
As a result of the above transactions, we carry
out the electronic products and general cargo trading and related consulting service business through our subsidiary named Jin
Chih International, Ltd in Taiwan. We still plan to focus on providing greentech products outside of China in future. Even though
the company has disposed China branches, the company's new management will continue to expand the current green energy and technology
business in the United States and globally, at the same time to explore many other green and renewable energy such as solar, wind
power, sea power by signing licensing agreement or joint venture with other research institutes.
The
new management is in negotiation with an established solar company to co-develop solar farm project in US, solar energy is by using Photovoltaic
generating means to use the photovoltaic effect in the semiconducting material of Solar cells to straightly transfer the radiation
to energy. Solar cell, the key-point, will form a large area of solar component after series connected and to collocate with power
controller and inverter, finally, the photovoltaic power system formed.
By
looking into the huge potential of the biomass to renewable energy, the new management is also in negotiation other US firms to
co-develop biomass project in US, Biomass energy means to store solar energy in the biomass by the form of chemical energy. It
could straightly or indirectly comes from photosynthesis of green plants, and could transfer into normal solid-state, liquid-state
and gaseous state fuel. Biomass power is renewable energy that inexhaustible, and also the only one kind Carbon source could relive.
According to the different resources, the available biomass could be divided into 5 kinds of resources: forest resources, agricultural
resources, sewage and industrial organic wastewater, urban solid waste, and animal wastes. The most promising one is generated
by the main fuel of straw. The calorific value of straw is equal to half of the Standard Calomel Electrode, and the average sulfur
only 3/8%. So, the CO2 emission in the process during generating and will reach the carbon neutral with the CO2 inhalation during
biomass renewing. That results in zero discharge that could mitigate the global warming problems, and is the potential key-point
to solve it.
Employees
The Company currently has 15 full-time employees.
RISKS RELATED TO OUR BUSINESS
You should carefully consider the risks
described below before buying our common stock. If any of the risks described below actually occurs, that event could cause the
trading price of our common stock to decline, and you could lose all or part of your investment.
Downturns
in general economic and market conditions could materially and adversely affect our business.
The greentech industry, especially the
solar and electric car market, is greatly affected by economic downturns. The sale of our solar products is related
to the quantity of new building construction and renovation. Decline in housing transactions causes less demand for solar products.
In addition, our solar and electric products are mainly sold through government tender bids and installed in public areas and other
public buildings will likely be materially affected by economic downturns. If these municipalities have less funds budgeted for
these projects as a result of general economic conditions, sales of our solar and electric car products to government agencies
will be impaired.
If we are not able to compete
effectively with other competitors, our prospects for future growth will be jeopardized.
There is significant competition in
the greentech industry with more established companies We are not only competing with other greentech providers but also with companies
offering different kind of greentech solutions, which are usually more established and have greater resources to devote to research
and development, manufacturing and marketing than we have. Our competitors may promote greentech solutions which are more readily
accepted by customers than our products and maybe required to reduce the prices of our products in order to remain competitive. Our
competitors may also seek to use our financial difficulties in marketing against us.
If critical components become
unavailable or contract manufacturers delay their production, our business will be negatively impacted.
Stability of component supply is crucial
to determine our manufacturing process. As some critical components, such as solar panels, are supplied by certain third party
component manufacturers, we may be unable to acquire necessary amounts of key components at competitive prices. Outsourcing
the production of certain parts and components is one way to reduce manufacturing costs. We have selected these particular manufacturers
based on their ability to consistently produce these products according to our requirements and ensure the best quality product
at the most cost effective price. Contrarily, the loss of all or one of these suppliers or delays in obtaining shipments could
have an adverse effect on our operations until an alternative supplier could be found, if one may be located at all. This
may cause us to breach our contracts and lose sales.
If our contract manufacturers
fail to meet our requirements for quality, quantity and timeliness, our business growth could be harmed.
We design and procure key components
(such as solar panels) and outsource our products to contract manufacturers. These manufacturers procure most of the raw materials
for us and provide all necessary facilities and labor to manufacture our products. If these companies are to terminate their agreements
with us without adequate notice, or fail to provide the required capacity and quality on a timely basis, we would be unable to
process and deliver our lighting products to our customers.
Our products could contain defects
or they may be installed or operated incorrectly, which could reduce sales of those products or result in claims against us.
Although we have experienced quality
control and assurance personnel and established thorough quality assurance practices to ensure good product quality, defects still
may be found in the future in our existing or future products. End-users could lose their confidence in our products
and company when they unexpectedly use defective products. This could result in loss of revenue, loss of profit margin, or loss
of market share. Moreover, these defects could cause us to incur significant warranty, support and repair costs, and harm our relationship
with our customers.
If we are unable to recruit and
retain qualified personnel, our business could be harmed.
Our growth and success highly depend
on qualified personnel. So we are inevitable to make all efforts to recruit and retain skilled technical, sales, marketing, managerial,
manufacturing, and administrative personnel. Competitions among the industry could cause us difficultly to recruit or retain a
sufficient number of qualified technical personnel, which could harm our ability to develop new products. If we are unable to attract
and retain necessary key talents, it definitely will harm our ability to develop competitive product and keep good customers and
could adversely affect our business and operating results.
An increase in raw material prices could increase costs
and decrease profits.
Changes in the cost of raw materials
in the products we distribute could significantly increase the price of those products and affect our ability to market and distribute
them. Although the cost of methanol has traditionally been relatively stable, increased use of methanol for fuel would create increased
demand and could introduce volatility into the market for methanol. The market price for gasoline distillate is a function of the
market price of oil, which has been highly volatile in recent years. The market price of ethanol depends primarily on the availability
of feedstocks, which again has become volatile in recent years due to the heightened demand caused by the widespread acceptance
of ethanol as a fuel supplement.
Increased government regulation of our production and/or
marketing operations could diminish our profits.
The fuel production and supply business
is highly regulated. Government authorities are concerned with effect of fuel distribution on the national and local economy. To
achieve optimal availability of fuel, governments regulate many key elements of both production and distribution of fuel. Increased
government regulation may affect our business in ways that cannot be predicted at this time, potentially involving price regulation,
distribution regulation, and regulation of manufacturing processes. Any such regulation or a combination could have an adverse
effect on our profitability. The effort to obtain the registrations, licenses and permits necessary to carry out our business activities
can be daunting. Significant delays can result from the need to obtain governmental approval of our activities. These delays can
have an adverse effect on the profitability of our operations. In addition, compliance with regulatory requirements applicable
to fuel manufacturing and distribution may increase the cost of our operations, which would adversely affect our profitability.
Currency fluctuations may adversely affect our operating
results.
Company generates revenues and incurs
expenses and liabilities in foreign currency. However, it will report its financial results in the United States in U.S. Dollars.
As a result, our financial results will be subject to the effects of exchange rate fluctuations between these currencies. Any events
that result in a devaluation of the foreign currency versus the U.S. Dollar will have an adverse effect on our reported results.
We have not entered into agreements or purchased instruments to hedge our exchange rate risks.
We are not likely to hold annual shareholder meetings
in the near future.
Management does not expect to hold annual
meetings of shareholders in the near future, due to the expense involved. The current members of the Board of Directors were appointed
to that position by the previous directors. If other directors are added to the Board in the future, it is likely that the current
directors will appoint them.
Risks Related to our Common Stock
There is a limited market for
our common stock, which may make it difficult for you to sell your stock.
Our common stock trades on the OTC under
the symbol “AJGH.” There is a limited trading market for our common stock and there is frequently no trading in our
common stock. As of December 31, 2015, the last reported sale price was $2.34 per share. Accordingly, there
can be no assurance as to the liquidity of any markets that may develop for our common stock, the ability of holders of our common
stock to sell our common stock, or the prices at which holders may be able to sell our common stock.
Because our common stock is a
penny stock, you may have difficulty selling them in the secondary trading market.
Federal regulations under the Securities
Exchange Act of 1934 regulate the trading of “penny stock,” which are generally defined as any security not listed
on a national securities exchange or Nasdaq, priced at less than $5.00 per share and offered by an issuer with limited net tangible
assets and revenues. Our common stock is a penny stock and may not be traded unless a disclosure schedule explaining the penny
stock market and the risks associated therewith is delivered to a potential purchaser prior to any trade.
In
addition, because our common stock is a penny stock, broker-dealers may not process trades in our stock and brokers that do permit
trades in our stock must take certain steps prior to selling a penny stock, which steps include:
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•
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Obtaining
financial and investment information from the investor;
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•
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Obtaining
a written suitability questionnaire and purchase agreement signed by the investor; and
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•
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Pr
oviding
the investor a written identification of the shares being offered and the quantity of the shares.
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If these penny stock rules are not followed
by the broker-dealer, the purchaser has no obligation to purchase the shares. The application of these comprehensive rules will
make it more difficult for broker-dealers to sell our common stock and our stockholders, therefore, may have difficulty in selling
their shares in the secondary trading market, and some broker-dealers will not process purchases or sales of penny stocks.
Our stock price may be volatile
and your investment in our common stock could suffer a decline in value.
As of December 31, 2015, there has only
been limited trading activity in our common stock. There can be no assurance that a market will ever develop in our
common stock in the future. If a market does not develop then stockholders would be unable to sell any of our common
stock likely resulting in a complete loss of any funds they invested.
Should a market develop, the price may
fluctuate significantly in response to a number of factors, many of which are beyond our control. These factors include:
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the market’s perception as to our ability to develop or acquire a business;
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•
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our ability or perceived ability to obtain necessary funding for operations;
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•
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if we do develop or acquire any business, such factors as:
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acceptance of our products in the industry;
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announcements of technological innovations or new products by us or our competitors;
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the effect of any regulatory issues relating to the business;
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o
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if the business is conducted in a country outside of the United States, risks associated with that country, its currency, including currency regulations, its government’s policy toward United States entities operating in the country;
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government regulatory action affecting our products or our competitors’ products in both the United States and foreign countries;
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developments or disputes concerning patent or proprietary rights;
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the effects of environmental conditions and regulations;
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economic conditions in the United States or abroad;
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actual or anticipated fluctuations in our operating results;
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broad market fluctuations; and
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changes in financial estimates by securities analysts.
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Because we are not engaged in any business at the present
time and do not have any agreements with respect to any prospective business, we do not know the exact nature of the risks associated
with any business in which we may engage. We cannot assure you that we will be able to adequately address these additional
risks. If we were unable to do so, our operations might suffer. Additionally, if we engage in a business or acquire a company located
outside of the United States, it is likely that substantially all of our assets would be located outside of the United States and
some of our executive officers and directors might reside outside of the United States. As a result, it may not be possible
for investors in the United States to enforce their legal rights, to effect service of process upon our directors or executive
officers or to enforce judgments of United States courts predicated upon civil liabilities and criminal penalties of our directors
and executive officers under Federal securities laws.
We do not intend to pay any cash
dividends in the foreseeable future.
We have not paid any cash dividends
on our common stock and do not intend to pay cash dividends on our common stock in the foreseeable future.
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ITEM 1B.
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UNRESOLVED STAFF COMMENTS
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Not applicable for smaller reporting companies.
Our corporate offices are located
at 3F-1, No. 200, Sec. 3, Bade Rd. Songshan Dist, Taipei, Taiwan R.O.C. 0118862-2570-7766. Our company website is
AJGreentech.com. On September 1, 2016, the corporate office moved to 21F-1 No 76 Dunhua S' Rd Da'an Disr., Taipei 106, Taiwan
R.O.C.
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ITEM 3.
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LEGAL PROCEEDINGS
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None.
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ITEM 4.
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MINE AND SAFETY DISCLOSURES
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Not Applicable.
PART II
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ITEM 5.
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MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.
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Market for Our Common Stock
The following table sets forth, for
the periods indicated, the high and low closing prices of our common stock. These prices reflect inter-dealer prices, without retail
mark-up, mark-down or commission, and may not represent actual transactions.
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Closing Prices (1)
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High
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Low
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Year Ended December 31, 2015
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1st Quarter
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$
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0.08
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$
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0.08
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2nd Quarter
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$
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11.00
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$
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0.08
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3rd Quarter
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$
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11.00
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$
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8.74
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4th Quarter
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$
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8.74
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$
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2.25
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Year Ended December 31, 2014
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1st Quarter
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$
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0.17
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$
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0.04
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2nd Quarter
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$
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0.08
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$
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0.05
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3rd Quarter
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$
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0.09
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$
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0.02
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4th Quarter
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$
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0.08
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$
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0.01
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(1)
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The above tables set forth the range of high and low closing prices per share of our common stock as reported by OTC Bulletin Board and the Pink Sheets, as applicable, for the periods indicated.
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Approximate Number of Holders of Our Common Stock
On December 31, 2015, there were approx
imately
44 stockholders o
f record of our common stock.
Dividend Policy
The Company has not declared or paid cash dividends or made
distributions in the past, and we do not anticipate that we will pay cash dividends or make distributions in the foreseeable future.
We currently intend to retain and reinvest future earnings, if any, to finance our operations
.
Recent Sales of Unregistered Securities
None. There is no sale of unregistered securities during
the fiscal year ending Dec 31, 2015.
On November 18, 2013, we issued 20,000,000 shares of common
stock to two investors at a purchase price of $0.005 per share, for a total of $100,000. The funds were used to provide
us with funds for working capital purposes. The sale of the shares was exempt from registration pursuant to Regulation
S of the SEC. The two investors, who are accredited investors, were not U.S. Persons, as defined in Rule 902. We
did not engage any broker or investment banker and we did not pay any brokers, finders’ or placement fee in connection with
the sale.
Repurchase of Equity Securities
.
The Company did not repurchase any of its equity securities
that were registered under Section 12 of the Securities Act during the fiscal year ending December 31, 2015.
Securities Authorized for Issuance under Equity Compensation
Plans
We currently do not have any equity compensation plans.
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ITEM 6.
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SELECTED FINANCIAL DATA
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Not applicable for smaller reporting companies.
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ITEM 7.
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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
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This Annual Report contains forward-looking
statements within the meaning of the federal securities laws. These include statements about our expectations, beliefs, intentions
or strategies for the future, which we indicate by words or phrases such as "anticipate," "expect," "intend,"
"plan," "will," "we believe," "management believes" and similar language. The forward-looking
statements are based on the current expectations of the Company and are subject to certain risks, uncertainties and assumptions,
including those set forth in the discussion under "Management's Discussion and Analysis of Financial Condition and Results
of Operations" in this report. Actual results may differ materially from results anticipated in these forward-looking statements.
We base the forward-looking statements on information currently available to us, and we assume no obligation to update them.
Investors are also advised to refer
to the information in our previous filings with the Securities and Exchange Commission (SEC), especially on Forms 10-K, 10-Q and
8-K, in which we discuss in more detail various important factors that could cause actual results to differ from expected or historic
results. It is not possible to foresee or identify all such factors. As such, investors should not consider any list of such factors
to be an exhaustive statement of all risks and uncertainties or potentially inaccurate assumptions.
Overview
From November 2009 until October, 2013,
through our China subsidiary, we were engaged in design, marketing and distributing of alcohol base clean fuel which are designed
to use less fossil fuel and have less pollution than traditional fuel.
On October 31, 2013, pursuant to agreements
with one of our former directors, we transferred the stock in our China subsidiaries to the former director in exchange for cancellation
of debt totaling $240,000. As a result of the transfer of the subsidiaries, we were no longer engaged in the China cleanfuel
business. We transferred the stock of the China subsidiaries because we felt that, it's not our best interest to continue
China cleanfuel business as a result of our decreasing revenue, continued losses and inability to raise capital for our business.
On November 30, 2013, the company entered
into an agreement to acquire all of the issued and outstanding stock of Jin Chih International, Ltd., a Taiwan corporation, from
its sole owner Chu Li An
for five million shares of the Company’s common stock. As of December 31, 2015, the
stock has not been issued.
As a result of the above transactions, we carry
out the electronic products and general cargo trading and related consulting service business through our subsidiary named Jin
Chih International, Ltd in Taiwan. We still plan to focus on providing greentech products outside of China in future. Even though
the company has disposed China branches, the company's new management will continue to expand the current green energy and technology
business in the United States and globally, at the same time to explore many other green and renewable energy such as solar, wind
power, sea power by signing licensing agreement or joint venture with other research institutes
.
Results of Operations
For the year ended December 31, 2015,
we derived our revenues of $3,423,657 compared to $2,104,366 for the year ended December 31, 2014, representing an increase of
$1,319,291. Our sales came from the electronic products and general cargo trading and related consulting service to our customers
operated by the Taiwan subsidiary. The Company experienced major increase in revenues due to the corporate business development.
During the year of 2014, we have only 7 mainly customers and we then continued to develop our trading market and increased our
mainly customers to 14 during the year of 2015.
Selling, general and administrative
expenses consist of provision for doubtful debts, primarily of payroll, local taxes, investor relation expenses and professional
fees. Selling, general and administrative expenses for the year ended December 31, 2015 were $436,956, comparing to $287,781
for the last fiscal year, representing an increase $149,175. The operating expense increased mainly according to the sales increase
and the payroll increased a lot as we plan to expand our business.
Our new business operates primarily
in Taiwanese Dollars (“TWD”), but we report our results in our SEC filings in U.S. Dollars. The conversion of our accounts
from TWD to Dollars results in translation adjustments. While our net income is added to the retained earnings on our balance sheets;
the translation adjustments are added to a line item on our balance sheets labeled “accumulated other comprehensive income,”
since it is more reflective of changes in the relative values of U.S. and Taiwanese currencies than of the success of our business.
During the year ended December 31, 2015, the effect of converting our financial results to U.S. Dollars was to cut down $61,127
to our accumulated other comprehensive income.
Liquidity and Capital Resources
Our operations to date have been funded
primarily by operations, due from related parties and capital contributions.
At December 31, 2015 and 2014, we had
cash and cash equivalents of $291,832 and $198,906, respectively. Our cash at December 31, 2015 was increased by $92,926 from December
31, 2014.
Our
current assets at December 31, 2015 were $1,952,326, compared to $1,927,142 at December 31, 2014. This increase mainly reflects
increases in cash and cash equivalents and accounts receivable, partially offset by decreases in the Short-term investments and
inventory.
Our
current liabilities at December 31, 2015 were $1,027,592, compared to $1,820,294 at December 31, 2014. This decrease mainly
reflects a decrease in accounts payable, due to related parties, short-term loan and advances from customers and
partially
offset by increase of tax payable.
Statements
of Cash Flows
Our cash increased
$92,926 during 2015, as compared to $60,168 during 2014. In 2015, we used cash the amount of $301,883 and $581,665 in operating
activities and financing activities, we obtained cash the amounts of $1,037,601 in our investing activities. In 2014, we obtained
cash in the amount of $246,092 and $321,065 from operating activities and financing activities, we used cash the amounts of $523,215
in our investing activities.
Net Cash
provided by (Used in) Operating Activities
Net
cash provided by operating activities decreased $547,975 from $246,092 in 2014 to negative $301,883 in 2015 was mainly comprised
of
the decrease $59,606 net loss from $72,780 in 2014 to $132,386 in 2015, the decrease $8,428 depreciation and amortization
from $13,528 in 2014 to $5,100 in 2015, the loss on sale of PPE increa
se $102,824 from $15,951
in 2014 to $118,775 in 2015, and the decrease $587,765 from changes in operating assets and liabilities from $289,393 in 2014 to
negative $293,372 in 2015.
Cash
Provided by (Used in) Investing Activities
In 2015
,
net cash provided by investing activities of $1,037,601 comprised of the disposal of Property, plant and equipment $944,199 and
short-term investment $93,402.
In 2014
,
net cash used in investing activities of $523,215 comprised of the investment $519,750 of short-term investment and the investment
$3,465 of other assets.
Cash
Provided by (Used in) Financing Activities
In
2015, cash used in financing activities of $581,665 consisted of the repayment to related parties of $498,390, the shares issued
and capital contribution of $88,000, the repayment of short-term loan and long-term loan of $171,275.
In
2014, cash provided by financing activities of $321,065 consisted of the advance from related parties of $523,227, the capital
contribution of $165,500, the repayment of short-term loan and long-term loan of 367,662.
Off-Balance Sheet Arrangements
We do not have any off-balance sheet arrangements that have
or are reasonably likely to have a current or future effect on our financial condition or results of operations.
Critical Accounting Policies and Estimates
This discussion and analysis of our
financial condition and results of operations are based on our financial statements that have been prepared under accounting principle
generally accepted in the United States of America. 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 the disclosure of contingent assets and liabilities at the date of the financial statements
and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
A summary of significant accounting
policies is included in Note 2 to the consolidated financial statements included in this Annual Report. Of these policies, we believe
that the following items are the most critical in preparing our financial statements.
Accounts Receivable and Allowance
for Doubtful Accounts
Accounts receivable are recorded at
the invoiced amount, net of an allowance for doubtful accounts. The Company follows paragraph 310-10-50-9 of the FASB Accounting
Standards Codification to estimate the allowance for doubtful accounts. The Company performs on-going credit evaluations of its
customers and adjusts credit limits based upon payment history and the customer’s current credit worthiness, as determined
by the review of their current credit information; and determines the allowance for doubtful accounts based on historical write-off
experience, customer specific facts and economic conditions.
Outstanding account balances are reviewed
individually for collectability. The allowance for doubtful accounts is the Company’s best estimate of the amount of probable
credit losses in the Company’s existing accounts receivable. Bad debt expense is included in general and administrative expenses,
if any. Pursuant to paragraph 310-10-50-2 of the FASB Accounting Standards Codification account balances are charged off against
the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. The Company
has adopted paragraph 310-10-50-6 of the FASB Accounting Standards Codification and determine when receivables are past due or
delinquent based on how recently payments have been received.
Inventories
The Company values inventories, consisting
of raw materials, packaging material and finished goods, at the lower of cost or market. Cost is determined on the first-in and
first-out (“FIFO”) method for raw materials and packaging materials and the weighted average cost method for finished
goods. Cost of finished goods comprises direct labor, direct materials, direct production cost and an allocated portion of production
overhead. The Company reduces inventories for the diminution of value, resulting from product obsolescence, damage or other issues
affecting marketability, equal to the difference between the cost of the inventory and its estimated market value. Factors utilized
in the determination of estimated market value include (i) current sales data and historical return rates, (ii) estimates of future
demand, (iii) competitive pricing pressures, (iv)new product introductions, (v) product expiration dates, and (vi) component and
packaging obsolescence.
The Company evaluates its current level
of inventories considering historical sales and other factors and, based on this evaluation, classify inventory markdowns in the
income statement as a component of cost of goods sold pursuant to Paragraph 420-10-S99 of the FASB Accounting Standards Codification
to adjust inventories to net realizable value. These markdowns are estimates, which could vary significantly from actual requirements
if future economic conditions, customer demand or competition differ from expectations. Other significant estimates include the
allocation of variable and fixed production overheads. While variable production overheads are allocated to each unit of production
on the basis of actual use of production facilities, the allocation of fixed production overhead to the costs of conversion is
based on the normal capacity of the Company’s production facilities, and recognizes abnormal idle facility expenses as current
period charges. Certain costs, including categories of indirect materials, indirect labor and other indirect manufacturing costs
which are included in the overhead pools are estimated. The management of the Company determines its normal capacity based upon
the amount of operating hours of the manufacturing machinery and equipment in a reporting period.
Revenue Recognition
The Company applies paragraph 605-10-S99-1
of the FASB Accounting Standards Codification for revenue recognition. The Company recognizes revenue when it is realized or realizable
and earned. The Company considers revenue realized or realizable and earned when all of the following criteria are met: (i) persuasive
evidence of an arrangement exists, (ii) the product has been shipped or the services have been rendered to the customer, (iii)
the sales price is fixed or determinable, and (iv) collectability is reasonably assured.
The Company derives its revenues from
sales contracts with customers with revenues being generated upon the shipment of merchandise. Persuasive evidence of an arrangement
is demonstrated via sales invoice or contract; product delivery is evidenced by warehouse shipping log as well as a signed acknowledgement
of receipt from the customers or a signed bill of lading from the third party trucking company and title transfers upon shipment,
based on free on board (“FOB”) warehouse terms; the sales price to the customer is fixed upon acceptance of the signed
purchase order or contract and there is no separate sales rebate, discount, or volume incentive. When the Company recognizes revenue,
no provisions are made for returns because, historically, there have been very few sales returns and adjustments that have impacted
the ultimate collection of revenues.
Net sales of products represent
the invoiced value of goods, net of value added taxes (“VAT”). The Company is subject to VAT which is levied on all
of the Company’s products at the rate of 5% on the invoiced value of sales. Sales or Output VAT is borne by customers in
addition to the invoiced value of sales and Purchase or Input VAT is borne by the Company in addition to the invoiced value of
purchases to the extent not refunded for export sales.
Foreign Currency Translation
The Company follows Section 830-10-45
of the FASB Accounting Standards Codification (“Section 830-10-45”) for foreign currency translation to translate the
financial statements of the foreign subsidiary from the functional currency, generally the local currency, into U.S. Dollars. Section
830-10-45 sets out the guidance relating to how a reporting entity determines the functional currency of a foreign entity (including
of a foreign entity in a highly inflationary economy), re-measures the books of record (if necessary), and characterizes transaction
gains and losses. the assets, liabilities, and operations of a foreign entity shall be measured using the functional currency of
that entity. An entity’s functional currency is the currency of the primary economic environment in which the entity operates;
normally, that is the currency of the environment, or local currency, in which an entity primarily generates and expends cash.
The functional currency of each foreign
subsidiary is determined based on management’s judgment and involves consideration of all relevant economic facts and circumstances
affecting the subsidiary. Generally, the currency in which the subsidiary transacts a majority of its transactions, including billings,
financing, payroll and other expenditures, would be considered the functional currency, but any dependency upon the parent and
the nature of the subsidiary’s operations must also be considered. If a subsidiary’s functional currency is deemed
to be the local currency, then any gain or loss associated with the translation of that subsidiary’s financial statements
is included in accumulated other comprehensive income. However, if the functional currency is deemed to be the U.S. Dollar, then
any gain or loss associated with the re-measurement of these financial statements from the local currency to the functional currency
would be included in the consolidated statements of income and comprehensive income (loss). If the Company disposes of foreign
subsidiaries, then any cumulative translation gains or losses would be recorded into the consolidated statements of income and
comprehensive income (loss). If the Company determines that there has been a change in the functional currency of a subsidiary
to the U.S. Dollar, any translation gains or losses arising after the date of change would be included within the statement of
income and comprehensive income (loss).
Based on an assessment of the factors
discussed above, the management of the Company determined the relevant subsidiaries’ local currencies to be their respective
functional currencies.
The financial records of the Company's
Taiwan operating subsidiaries acquired on November 30, 2013 are maintained in their local currency, the “TWD”, which
is also the functional currency. Assets and liabilities are translated from the local currency into the reporting currency, U.S.
dollars, at the exchange rate prevailing at the balance sheet date. Revenues and expenses are translated at weighted average exchange
rates for the period to approximate translation at the exchange rates prevailing at the dates those elements are recognized in
the consolidated financial statements. Foreign currency translation gain (loss) resulting from the process of translating the
local currency financial statements into U.S. dollars are included in determining accumulated other comprehensive income in the
consolidated statement of stockholders’ equity.
Most Recent accounting pronouncements
Refer to note 2 in the accompanying
consolidated financial statements.
Impact of Most Recent Accounting Pronouncements
There were no recent accounting pronouncements that have
had a material effect on the Company’s financial position or results of operations.
|
ITEM 7A.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
|
Not required for smaller reporting companies.
|
ITEM 8.
|
FINANCIAL STATEMENTS AND SUPPLEMENTARY FINANCIAL DATA
|
Consolidated Financial Statements
The full text of our audited consolidated financial statements
as of December 31, 2015 and 2014 begins on page F-1 of this Report.
|
ITEM 9.
|
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
|
The Company changes auditors
in March 2013, September of 2013, March 31, 2015 and December 31, 2015. Please refer to 8-K dated March 7, 2013, 8-K dated
September 10, 2013, 8-K dated April 6, 2015 and 8-K dated August 29, 2016.
|
ITEM 9A.
|
CONTROLS AND PROCEDURES.
|
Evaluation of disclosure controls and procedures
.
The Company maintains a set of disclosure
controls and procedures designed to ensure that information required to be disclosed by the Company in the reports filed under
the Securities Exchange Act, is recorded, processed, summarized and reported within the time periods specified by the SEC's rules
and forms. Disclosure controls are also designed with the objective of ensuring that this information is accumulated and communicated
to the Company's management, including the Company's chief executive officer and chief financial officer, as appropriate, to allow
timely decisions regarding required disclosure.
During the course of internal evaluation,
following control weaknesses are noted for the fiscal year ended December 31, 2015 that required correction:
|
|
•
|
no independent director exists in the Board of Directors, and the directors have a little understanding about U.S. GAAP and Sarbanes-Oxley
Act 404 requirements in 2015.
|
Based upon their evaluation as of the
end of the period covered by this annual report, the Company's chief executive officer and chief financial officer concluded that,
due to the significant deficiencies in internal control over financial reporting described below, the Company's disclosure controls
and procedures are not effective as of December 31, 2015.
Changes in internal controls.
The term “internal control over
financial reporting” (defined in SEC Rule 13a-15(f)) refers to the process of a company that is designed to provide reasonable
assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in
accordance with generally accepted accounting principles. The Company’s management, with the participation of the Chief Executive
Officer and Chief Financial Officer, has evaluated any changes in the Company’s internal control over financial reporting
that occurred during the fourth quarter of the year covered by this annual report, and they have concluded that there was no change
to the Company’s internal control over financial reporting that has materially affected, or is reasonably likely to materially
affect, the Company’s internal control over financial reporting.
Management's Report on Internal Control over Financial
Reporting.
Our management is responsible for establishing
and maintaining adequate internal control over financial reporting for the company in accordance with as defined in Rules 13a-15(f)
and 15d-15(f) under the Exchange Act. Our internal control over financial reporting is designed to provide reasonable assurance
regarding the (i) effectiveness and efficiency of operations, (ii) reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with generally accepted accounting principles, and (iii) compliance with applicable
laws and regulations. Our internal controls framework is based on the criteria set forth in the Internal Control - Integrated Framework
issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
Due to inherent limitations, internal
control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future
periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance
with the policies and procedures may deteriorate.
A material weakness in internal controls
is a deficiency in internal control, or combination of control deficiencies, that adversely affects the Company’s ability
to initiate, authorize, record, process, or report external financial data reliably in accordance with accounting principles generally
accepted in the United States of America such that there is more than a remote likelihood that a material misstatement of the Company’s
annual or interim financial statements that is more than inconsequential will not be prevented or detected. In the course of making
our assessment of the effectiveness of internal controls over financial reporting, we identified some material weaknesses in our
internal control over financial reporting.
We lack sufficient personnel with the
appropriate level of knowledge, experience and training in the application of accounting operations of our company. This weakness
causes us to not fully identify and resolve accounting and disclosure issues that could lead to a failure to perform timely internal
control and reviews.
Management is currently reviewing its
staffing and systems in order to remedy the weaknesses identified in this assessment. However, because of the above condition,
management’s assessment is that the Company’s internal controls over financial reporting were not effective as of December
31, 2015. Additionally, the Registrant’s management has concluded that the Registrant has a material weakness associated
with its U.S. GAAP expertise.
This Annual Report does not include
an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting.
Management’s report was not subject to attestation by the Company’s registered public accounting firm pursuant to temporary
rules of the Securities and Exchange Commission that permit the Company to provide only management’s report in this annual
report.
|
ITEM 9B.
|
OTHER INFORMATION.
|
None.
PART III
|
ITEM 10.
|
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.
|
The following table sets forth: (1)
names and ages of all persons who presently are and who have been selected as directors and executive officers of the Registrant;
(2) all positions and offices with the Registrant held by each such person; (3) any period during which he or she has served a
such. All directors hold office until the next annual meeting of our shareholders and until their successors have been elected
and qualify. Officers serve at the pleasure of the Board of Directors.
|
Name
(1)
|
|
Age
|
|
Title
|
|
Chu Li An
|
|
53
|
|
Chief Executive Officer, Chief Financial Officer, Director
|
Ms. Chu, 53, served as chief executive
officer of Jin Chih International Co., Ltd., a trading company from September 2001 through present 2014. From September 2008 to
September 2013, Ms. Chu served as president of Wealthy Link Technology Corp. Ms. Chu received her college degree in business from
Ming Chuan College in 1982, and MBA degree in Business from Angelo State University in Texas in 1987.
Nominating, Compensation and Audit Committees
The Board of Directors does not have
an audit committee, a compensation committee or a nominating committee, due to the small size of the Board. The Board does also
not have an “audit committee financial expert” within the definition given by the Regulations of the Securities and
Exchange Commission.
Section 16(A) Beneficial Ownership Reporting Compliance
Under U.S. securities laws, directors,
certain executive officers and persons holding more than 10% of our common stock must report their initial ownership of the common
stock, and any changes in that ownership, to the SEC.
Involvement in Certain Legal Proceedings
To the best of our knowledge, none of
our directors or executive officers has been convicted in a criminal proceeding, excluding traffic violations or similar misdemeanors,
or has been a party to any judicial or administrative proceeding during the past five years that resulted in a judgment, decree
or final order enjoining the person from future violations of, or prohibiting activities subject to, federal or state securities
laws (except where not subsequently dismissed without sanction or settlement), or from engaging in any type of business practice,
or a finding of any violation of federal or state securities laws. To the best of our knowledge, no petition under the federal
bankruptcy laws or any state insolvency law was filed by or against, or a receiver, fiscal agent or similar officer was appointed
by a court for the business or property of any of our directors or officers, or any partnership in which any of our directors or
officers was a general partner at or within two years before the time of such filing, or any corporation or business association
of which any of our directors or officers was an executive officer at or within two years before the time of such filing. Except
as set forth in our discussion below in “Certain Relationships and Related Transactions, and Director Independence,”
none of our directors, director nominees or executive officers has been involved in any transactions with us or any of our directors,
executive officers, affiliates or associates which are required to be disclosed pursuant to the rules and regulations of the SEC.
Code of Ethics
The Board of Directors has not adopted
a code of ethics applicable to the Company’s executive officers. The Board believes that the small number of individuals
involved in the Company’s management makes such a code unnecessary.
Board Attendance
During 2015, the board of directors
did not hold any meetings. All actions were taken by actions in writing.
|
ITEM 11.
|
EXECUTIVE COMPENSATION
|
The following summary compensation table
indicates the cash and non-cash compensation earned during the years ended December 31, 2015 and December 31, 2014 by each person
who served as chief executive officer and chief financial officer during the year ended December 31, 2015
.
SUMMARY COMPENSATION TABLE
|
|
|
Fiscal
|
|
Salary
|
|
|
Bonus
|
|
|
Stock Awards
|
|
|
All Other Compensation
|
|
|
Total
|
|
|
Name and Principal Position
|
|
Year
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
Chu Li An, chief executive and
|
|
2015
|
|
|
30,000
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
30,000
|
|
|
financial officer (1)
|
|
2014
|
|
|
30,000
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
30,000
|
|
(1) Ms.
Chu Li An has served as chief executive and financial officer since October 2013.
Outstanding Equity Awards at Fiscal Year-End
The following table sets forth for each named executive officer
certain information concerning the outstanding equity awards as of December 31, 2015.
|
|
|
Option
awards
|
|
|
Stock
awards
|
|
|
Name
and Principal
Position
|
|
Number
of
Securities
Underlying
Unexercised
Options
Exercisable
|
|
|
Number
of
Securities
Underlying
Unexercised
Options
Unexercisable
|
|
|
Option
Exercise
Price
($)
|
|
|
Option
Expiration
Date
|
|
|
Number
of
Shares
or
Units
of Stock
that
Have Not
Vested
|
|
|
Market
Value
of
Shares
or
Units
of
Stock
that
Have
Not
Vested
|
|
|
Equity
Incentive
Plan
Awards:
Number
of
Unearned
Shares,
Units
or
Other
Rights
that
Have
Not
Vested
|
|
|
Equity
Incentive
Plan
Awards:
Market
or
Payout
Value
of
Unearned
Shares,
Units
or
Other
Rights
that
Have
Not
Vested
|
|
|
Chu Li An
Chairman, CEO
|
|
|
—
|
|
|
|
—
|
|
|
$
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Remuneration of Directors
None of the members of the Board of Directors receives remuneration
for service on the Board.
Executive Employment Contracts
We have employment agreements with CEO,
Chu Li An on Oct. 1, 2013 for 5 years, subject to automatic renewals of another 5 years at the rate of $30,000 per year.
Equity Compensation Plan Information
Our board of directors and stockholders
approved the 2013 long term incentive plan, which covers the issuance of 2,000,000 shares. The plan provides for the
grant of stock options or restricted stock grants to employees and consultants. No shares were issued under the plan
during 2015, and there are no outstanding options under the plan.
|
ITEM 12.
|
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.
|
Security Ownership of Certain Beneficial Owners and
Management
The following table summarizes certain
information regarding the beneficial ownership (as such term is defined in Rule 13d-3 under the Securities Exchange Act of 1934)
of outstanding Registrant Common Stock as of December 31, 2015 by (i) each person known by us to be the beneficial owner of more
than 5% of the outstanding Common Stock, (ii) each of our directors, (iii) each of our named executive officers, and (iv) all executive
officers and directors as a group. Except as indicated in the footnotes below, the security and stockholders listed below possess
sole voting and investment power with respect to their shares.
|
Name and Address of Beneficial Owner (1)
|
|
Amount and Nature
of Beneficial
Ownership (2)
|
|
|
Percentage of Class (2)
|
|
|
Chu Li An
|
|
|
10,060,000
|
|
|
|
17.21
|
%
|
|
Jenus International Financial Group
|
|
|
560,000
|
|
|
|
0.96
|
%
|
|
All Directors and Executive Officers as a Group (2 persons)
|
|
|
10,620,000
|
|
|
|
18.17
|
%
|
(1) "Beneficial Owner" means
having or sharing, directly or indirectly (i) voting power, which includes the power to vote or to direct the voting, or (ii) investment
power, which includes the power to dispose or to direct the disposition, of shares of the common stock of an issuer. The definition
of beneficial ownership includes shares, underlying options or warrants to purchase common stock, or other securities convertible
into common stock, that currently are exercisable or convertible or that will become exercisable or convertible within 60 days.
Unless otherwise indicated, the beneficial owner has sole voting and investment power.
(2) For each shareholder, the calculation
of percentage of beneficial ownership is based upon 292,060,148 shares of Common Stock outstanding as of December 31, 2015, and
shares of Common Stock subject to options, warrants and/or conversion rights held by the shareholder that are currently exercisable
or exercisable within 60 days, which are deemed to be outstanding and to be beneficially owned by the shareholder holding such
options, warrants, or conversion rights. The percentage ownership of any shareholder is determined by assuming that the shareholder
has exercised all options, warrants and conversion rights to obtain additional securities and that no other shareholder has exercised
such rights.
EMPLOYMENT AGREEMENTS
We have employment agreements with CEO,
Chu Li An on Oct. 1, 2013 for 5 years, subject to automatic renewals of another 5 years at the rate of $30,000 per year.
Equity Compensation Plan Information
As of the date of this Form 10-K, the
Company has not authorized any equity compensation plan, nor has our Board of Directors authorized the reservation or issuance
of any securities under any equity compensation plan.
Changes in Control
There are no arrangements known to us, including any pledge
by any person of our securities, the operation of which may at a subsequent date result in a change in control of the Company.
|
ITEM 13.
|
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS.
|
Transactions with Related Persons
On October 31, 2013, pursuant to agreements
with one of our former directors, we transferred the stock in our China subsidiaries to the former director in exchange for cancellation
of debt totaling $240,000. As a result of the transfer of the subsidiaries, we were no longer engaged in the China cleanfuel
business. We transferred the stock of the China subsidiaries because we felt that, it not our best interest to continue
China cleanfuel business as a result of our decreasing revenue, continued losses and inability to raise capital for our business
On October 31, 2013, Chu Li An acquired,
for nominal consideration, 8,000,000 shares of common stock from the director who acquired the subsidiaries and 12,778,399 shares
of common stock from The Chairman, who was also a director. On November 1, 2013, Chu Li An and the Company entered
into a loan agreement pursuant to which the Chu Li An agreed to lend us $100,000 initially with future loan amount up to $1,000,000,
for which we issued our 6% demand promissory note in the principal amount of $100,000. The securities were issued in
Chu Li An’s name.
On November 18, 2013, we entered into
agreement pursuant to which we issued to Chu Li An and her BVI company, our sole director and chief executive officer, 180,000,000
shares of common stock, in consideration of the cancellation of debt due to Chu Li An in the amount of $180,000.
During the year of 2014, the Company
increased advances from related parties $523,227.
During the year of 2015, the Company
repaid to related parties $498,390.
Director Independence
Currently, we have no independent directors
on our Board of Directors, and therefore have no formal procedures in effect for reviewing and pre-approving any transactions between
us, our directors, officers and other affiliates. We will use our best efforts to insure that all transactions are on terms at
least as favorable to the Company as we would negotiate with unrelated third parties.
|
ITEM 14.
|
PRINCIPAL ACCOUNTANT FEES AND SERVICES.
|
|
|
|
2015
|
|
|
2014
|
|
|
Audit fees(1)
|
|
$
|
18,000
|
|
|
$
|
30,000
|
|
|
Audit-related fees
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Tax fees(2)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
All other fees
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Total
|
|
$
|
18
,000
|
|
|
$
|
30,000
|
|
|
|
(1)
|
Consists of fees billed for the audit of our annual financial statements, review of financial statements included in our Quarterly Reports on Form 10-Q and services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements.
|
|
|
(2)
|
“Tax Fees” consisted of fees billed for professional services rendered by the principal accountant for tax compliance, tax advice, and tax planning.
|
Pre-Approval Policies and Procedures
Under the Sarbanes-Oxley Act of 2002,
all audit and non-audit services performed by our auditors must be approved in advance by our Board to assure that such services
do not impair the auditors’ independence from us. In accordance with its policies and procedures, our Board pre-approved
the audit service performed by McCormack, Su & Company Inc. for our consolidated financial statements as of and for the year
ended December 31, 2015.
Note 1 – Organization and
Basis of presentation
Organization
AJ Greentech Holdings Ltd. is a Nevada
corporation incorporated on August 30, 2006, under the name Gateway Certifications, Inc. On November 16, 2009, our
corporate name was changed to American Jianye Greentech Holdings, Ltd. and on February 13, 2014, our corporate name was changed
to AJ Greentech Holdings, Ltd.
From November 2009 until October 2013,
through our China subsidiaries, we were engaged in design, marketing and distributing of alcohol base clean fuel that are designed
to use less fossil fuel and have less pollution than traditional fuel.
On October 31, 2013, pursuant to agreements
with one of our former directors, we transferred the stock in our China subsidiaries to the former director in exchange for cancellation
of debt totaling $240,000. As a result of the transfer of the subsidiaries, we were no longer engaged in the China
cleanfuel business. We transferred the stock of the China subsidiaries because we felt that, it not our best interest
to continue China cleanfuel business as a result of our decreasing revenue, continued losses and inability to raise capital for
our business
On October 31, 2013, Chu Li An acquired,
for nominal consideration, 8,000,000 shares of common stock from the director who acquired the subsidiaries and 12,778,399 shares
of common stock from The Chairman, who was also a director. On November 1, 2013, Chu Li An and the Company entered
into a loan agreement pursuant to which the Chu Li An agreed to lend us $100,000 initially with future loan amount up to $1,000,000,
for which we will issue our 6% demand promissory note in the principal amount of $100,000. As of December 31, 2015,
the note has not been issued.
On November 18, 2013, we entered into
agreement pursuant to which we issued to Chu Li An and her BVI company, our sole director and chief executive officer, 180,000,000
shares of common stock, in consideration of the cancellation of debt due to Chu Li An in the amount of $180,000.
On November 30, 2013, the Company entered
into an agreement to acquire all of the issued and outstanding stock of Jin Chih International, Ltd., a Taiwan corporation, from
its sole owner Chu Li An
for five million shares of the Company’s common stock. As of December 31, 2015, the
stock has not been issued.
As a result of the above transactions, we
carry out the electronic products and general cargo trading and related consulting service business through our subsidiary named
Jin Chih International, Ltd in Taiwan. We still plan to focus on providing greentech products outside of China in future. Even
though the company has disposed China branches, the company's new management will continue to expand the current green energy
and technology business in the United States and globally, at the same time to explore many other green and renewable energy such
as solar, wind power, sea power by signing licensing agreement or joint venture with other research institutes.
Basis of presentation
The accompanying consolidated financial statements
of AJ Greentech Holdings Ltd. (the “Company”) have been prepared in accordance with accounting principles generally
accepted in the United States of America (“US GAAP”).
NOTE 2 – SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES
Use of Estimates
The preparation of consolidated 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 consolidated financial statements and the amount of revenues and expenses during the reporting periods. Management
makes these estimates using the best information available at the time the estimates are made. However, actual results could differ
materially from those results.
Segment Information
ASC 280 requires companies to report
information about operating segment in interim and annual financial statements. It also requires segment disclosures about products
and services geographic and major customers. The Company has determined that it does not have any separately reportable operating
segments.
Accounts Receivable and Allowance
for Doubtful Accounts
Accounts receivable are recorded at
the invoiced amount, net of an allowance for doubtful accounts. The Company follows paragraph 310-10-50-9 of the FASB Accounting
Standards Codification to estimate the allowance for doubtful accounts. The Company performs on-going credit evaluations of its
customers and adjusts credit limits based upon payment history and the customer’s current credit worthiness, as determined
by the review of their current credit information; and determines the allowance for doubtful accounts based on historical write-off
experience, customer specific facts and economic conditions.
Outstanding account balances are reviewed
individually for collectability. The allowance for doubtful accounts is the Company’s best estimate of the amount of probable
credit losses in the Company’s existing accounts receivable. Bad debt expense is included in general and administrative expenses,
if any. Pursuant to paragraph 310-10-50-2 of the FASB Accounting Standards Codification account balances are charged off against
the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. The Company
has adopted paragraph 310-10-50-6 of the FASB Accounting Standards Codification and determine when receivables are past due or
delinquent based on how recently payments have been received.
Inventories
The Company values inventories, consisting
of raw materials, packaging material and finished goods, at the lower of cost or market. Cost is determined on the first-in and
first-out (“FIFO”) method for raw materials and packaging materials and the weighted average cost method for finished
goods. Cost of finished goods comprises direct labor, direct materials, direct production cost and an allocated portion of production
overhead. The Company reduces inventories for the diminution of value, resulting from product obsolescence, damage or other issues
affecting marketability, equal to the difference between the cost of the inventory and its estimated market value. Factors utilized
in the determination of estimated market value include (i) current sales data and historical return rates, (ii) estimates of future
demand, (iii) competitive pricing pressures, (iv)new product introductions, (v) product expiration dates, and (vi) component and
packaging obsolescence.
The Company evaluates its current level
of inventories considering historical sales and other factors and, based on this evaluation, classify inventory markdowns in the
income statement as a component of cost of goods sold pursuant to Paragraph 420-10-S99 of the FASB Accounting Standards Codification
to adjust inventories to net realizable value. These markdowns are estimates, which could vary significantly from actual requirements
if future economic conditions, customer demand or competition differ from expectations. Other significant estimates include the
allocation of variable and fixed production overheads. While variable production overheads are allocated to each unit of production
on the basis of actual use of production facilities, the allocation of fixed production overhead to the costs of conversion is
based on the normal capacity of the Company’s production facilities, and recognizes abnormal idle facility expenses as current
period charges. Certain costs, including categories of indirect materials, indirect labor and other indirect manufacturing costs
which are included in the overhead pools are estimated. The management of the Company determines its normal capacity based upon
the amount of operating hours of the manufacturing machinery and equipment in a reporting period.
Revenue Recognition
The Company’s revenue recognition
policies are in compliance with ASC 605 (Originally issued as Staff Accounting Bulletin (SAB) 104). Revenue is recognized at the
date of shipment to customers when a formal arrangement exists, the price is fixed or determinable, the delivery is completed,
no other significant obligations of the Company exist and collectability is reasonably assured. Payments received before all of
the relevant criteria for revenue recognition are satisfied are recorded as unearned revenue. Discounts provided
to customers by the Company at the time of sale are recognized as a reduction in sales as the products are sold. Sales taxes are
not recorded as a component of sales.
The Company derives its revenues from
sales contracts with customers with revenues being generated upon the shipment of merchandise. Persuasive evidence of an arrangement
is demonstrated via sales invoice or contract; product delivery is evidenced by warehouse shipping log as well as a signed acknowledgement
of receipt from the customers or a signed bill of lading from the third party trucking company and title transfers upon shipment,
based on free on board (“FOB”) warehouse terms; the sales price to the customer is fixed upon acceptance of the signed
purchase order or contract and there is no separate sales rebate, discount, or volume incentive. When the Company recognizes revenue,
no provisions are made for returns because, historically, there have been very few sales returns and adjustments that have impacted
the ultimate collection of revenues.
Net sales of products represent
the invoiced value of goods, net of value added taxes (“VAT”). The Company is subject to VAT which is levied on all
of the Company’s products at the rate of 5% on the invoiced value of sales. Sales or Output VAT is borne by customers in
addition to the invoiced value of sales and Purchase or Input VAT is borne by the Company in addition to the invoiced value of
purchases to the extent not refunded for export sales.
Fair Value of Financial Instruments
The fair values of the Company’s
accrued expenses and other current liabilities approximate their carrying values due to the relatively short maturities of these
instruments. The carrying value of the Company’s short and long term debt approximates fair value based on management’s
best estimate of the interest rates that would be available for similar debt obligations having similar terms at the balance sheet
date.
Impairment of Long-Lived Assets
The Company accounts for the impairment
and disposition of long-lived assets in accordance with ASC 360, Property, Plant and Equipment. The Company periodically evaluates
long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not
be recoverable. If the estimated future cash flows (undiscounted and without interest charges) from the use of an asset were less
than the carrying value, a write-down would be recorded to reduce the related asset to its estimated fair value.
The assumptions used by management in
determining the future cash flows are critical. In the event these expected cash flows are not realized, future impairment losses
may be recorded.
Income Taxes
The Company accounts for income taxes
in accordance with ASC 740, Income Taxes, which requires that the Company recognize deferred tax liabilities and assets based
on the differences between the financial statement carrying amounts and the tax basis of assets and liabilities, using enacted
tax rates in effect in the years the differences are expected to reverse. Deferred income tax benefit (expense) results from the
change in net deferred tax assets or deferred tax liabilities. A valuation allowance is recorded when, in the opinion of management,
it is more likely than not that some or all of any deferred tax assets will not be realized.
The Company adopted ASC 740-10-25, Income
Taxes- Overall-Recognition, on January 1, 2007, which provides criteria for the recognition, measurement, presentation and disclosure
of uncertain tax position. The Company must recognize the tax benefit from an uncertain tax position only if it is more likely
than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the
position. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit
that has a greater than 50% likelihood of being realized upon ultimate resolution. The Company did not recognize any additional
liabilities for uncertain tax positions as a result of the implementation of ASC 740-10-25.
Net Loss per Share
The Company calculates its basic and
diluted earnings per share in accordance with ASC 260. Basic earnings per share are calculated by dividing net income by the weighted
average number of common shares outstanding for the period. Diluted earnings per share are calculated by adjusting the weighted
average outstanding shares to assume conversion of all potentially dilutive warrants and options and convertible securities. Because
the Company incurred losses for the year ended December 31, 2015, the number of basic and diluted shares of common stock is the
same since any effect from outstanding warrants would be anti-dilutive.
Translation Adjustment
The Company’s financial statements
are presented in the U.S. dollar ($), which is the Company’s reporting and functional currency. The functional currency of
the Company’s subsidiaries is TWD. Transactions in foreign currencies are initially recorded at the functional currency rate
prevailing at the date of transaction. Any differences between the initially recorded amount and the settlement amount are recorded
as a gain or loss on foreign currency transaction in the consolidated statements of operations. Monetary assets and liabilities
denominated in foreign currency are translated at the functional currency rate of exchange prevailing at the balance sheet date.
Any differences are taken to profit or loss as a gain or loss on foreign currency translation in the statements of operations.
In accordance with ASC 830, Foreign
Currency Matters, the Company translates the assets and liabilities into U.S. dollars using the rate of exchange prevailing
at the balance sheet date and the statements of operations and cash flows are translated at an average rate during the reporting
period. Adjustments resulting from the translation from TWD into U.S. dollar are recorded in stockholders’ equity as part
of accumulated other comprehensive income. The exchange rates used for the financial statements in accordance with ASC 830, Foreign
Currency Matters, are as follows:
|
Average Rate for the year
|
|
December 31,
2014
|
|
December 31,
2015
|
|
Taiwan dollar (TWD)
|
|
|
1
|
|
|
|
1
|
|
|
United States dollar ($)
|
|
|
0.0330
|
|
|
|
0.0315
|
|
|
|
|
|
|
|
|
|
|
|
|
Exchange Rate at
|
|
|
December 31,
2014
|
|
|
|
December 31,
2015
|
|
|
Taiwan dollar (TWD)
|
|
|
1
|
|
|
|
1
|
|
|
United States dollar ($)
|
|
|
0.0315
|
|
|
|
0.0304
|
|
Comprehensive Income (Loss)
Comprehensive income (loss) includes
accumulated foreign currency translation gains and losses with respect to the spun-off entities and the operating entity in Taiwan.
Recently Issued Accounting Pronouncements
In August 2014, the FASB issued the FASB Accounting
Standards Update No. 2014-15
“Presentation of Financial Statements—Going Concern (Subtopic 205-40): Disclosure of
Uncertainties about an Entity’s Ability to Continue as a Going Concern (“ASU 2014-15”).
In connection with preparing financial statements for
each annual and interim reporting period, an entity’s management should evaluate whether there are conditions or events,
considered in the aggregate, that raise substantial doubt about the entity’s ability to continue as a going concern within
one year after the date that the
financial statements are issued
(or within one year after the date that the
financial
statements are available to be issued
when applicable). Management’s evaluation should be based on relevant conditions
and events that are known and reasonably knowable at the date that the
financial statements are issued
(or at the date that
the
financial statements are available to be issued
when applicable). Substantial doubt about an entity’s ability
to continue as a going concern exists when relevant conditions and events, considered in the aggregate, indicate that it is probable
that the entity will be unable to meet its obligations as they become due within one year after the date that the financial statements
are issued (or available to be issued). The term
probable
is used consistently with its use in Topic 450, Contingencies.
When management identifies conditions or events that
raise substantial doubt about an entity’s ability to continue as a going concern, management should consider whether its
plans that are intended to mitigate those relevant conditions or events will alleviate the substantial doubt. The mitigating effect
of management’s plans should be considered only to the extent that (1) it is probable that the plans will be effectively
implemented and, if so, (2) it is probable that the plans will mitigate the conditions or events that raise substantial doubt about
the entity’s ability to continue as a going concern.
If conditions or events raise substantial doubt about
an entity’s ability to continue as a going concern, but the substantial doubt is alleviated as a result of consideration
of management’s plans, the entity should disclose information that enables users of the financial statements to understand
all of the following (or refer to similar information disclosed elsewhere in the footnotes):
|
|
a.
|
Principal conditions or events that raised substantial doubt about the entity’s ability to continue as a going concern
(before consideration of management’s plans)
|
|
|
b.
|
Management’s evaluation of the significance of those conditions or events in relation to the entity’s ability to
meet its obligations
|
|
|
c.
|
Management’s plans that alleviated substantial doubt about the entity’s ability to continue as a going concern.
|
If conditions or events raise substantial doubt about
an entity’s ability to continue as a going concern, and substantial doubt is not alleviated after consideration of management’s
plans, an entity should include a statement in the footnotes indicating that there is
substantial doubt about the entity’s
ability to continue as a going concern
within one year after the date that the financial statements are issued (or available
to be issued). Additionally, the entity should disclose information that enables users of the financial statements to understand
all of the following:
|
|
a.
|
Principal conditions or events that raise substantial doubt about the entity’s ability to continue as a going concern
|
|
|
b.
|
Management’s evaluation of the significance of those conditions or events in relation to the entity’s ability to
meet its obligations
|
|
|
c.
|
Management’s plans that are intended to mitigate the conditions or events that raise substantial doubt about the entity’s
ability to continue as a going concern.
|
The amendments in this Update are effective for the
annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. Early application is permitted.
Management does not believe that any recently issued,
but not yet effective accounting pronouncements, when adopted, will have a material effect on the accompanying financial statements.
Note 3 – Going Concern
There are no assurances that the Company
will be able to either (1) achieve a level of revenues adequate to generate sufficient cash flow from operations; or (2) obtain
additional financing through either private placement, public offerings and/or bank financing necessary to support the Company’s
working capital requirements. To the extent that funds generated from any private placements, public offering and/or bank financing
are insufficient to support the Company’s working capital requirements, the Company will have to raise additional working
capital from additional financing. No assurance can be given that additional financing will be available, or if available, will
be on terms acceptable to the Company. If adequate working capital is not available, the Company may not be able continue its operations.
These conditions raise substantial doubt
about the Company’s ability to continue as a going concern. The financial statements do not include any adjustments relating
to the recoverability and classification of asset carrying amounts or the amount and classification of liabilities that might be
necessary should the Company be unable to continue as a going concern.
Note 4 – Accounts Receivable
Accounts receivable at December 31,
2015 and 2014 consisted of the following:
|
|
|
December 31, 2015
|
|
December 31, 2014
|
|
Accounts receivable
|
|
$
|
1,233,130
|
|
|
$
|
1,147,697
|
|
|
Allowance for doubtful accounts
|
|
|
—
|
|
|
|
—
|
|
|
|
|
$
|
1,233,130
|
|
|
$
|
1,147,697
|
|
Note 5 – Short term investment
For the year ended December 31, 2014, the Company purchased
1,600,000 shares per $10TWD issued by GaoPing XiNeng electric power Co., Ltd and 50,000 shares per $10TWD issued by YangXin commercial
bank Co., Ltd.
For the year ended December 31, 2015, the Company sold
out 200,000 shares per $10TWD of GaoPing XiNeng electric power Co., Ltd and 47,000 shares per $10.036TWD issued by YangXin commercial
bank Co., Ltd.
Note 6 – Property, Plant and
Equipment
Property, plant and equipment, stated
at cost, less accumulated depreciation at December 31, 2015 and 2014 consisted of the following:
|
|
|
December 31, 2015
|
|
December 31, 2014
|
|
Land
|
|
$
|
—
|
|
|
$
|
730,616
|
|
|
Buildings
|
|
|
—
|
|
|
|
358,595
|
|
|
Office equiptments
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
1,089,211
|
|
|
Less: Accumulated depreciation
|
|
|
—
|
|
|
|
(21,137
|
)
|
|
Total
|
|
$
|
—
|
|
|
$
|
1,068,074
|
|
For the year ended December 31,
2015 and 2014, the Company recorded depreciation expense of $5,100 and $9,163 , respectively.
On July 6, 2015, the Company sold out the land
and Buildings, the net loss was $118,775.
Note 7 – Prepayments
and other
current assets
|
|
|
December 31, 2015
|
|
December 31, 2014
|
|
Advance on purchase
|
|
$
|
551
|
|
|
$
|
—
|
|
|
Prepayments
|
|
|
465
|
|
|
|
1,544
|
|
|
|
|
$
|
1,016
|
|
|
$
|
1,544
|
|
Note 8 – SHORT-TERM LOAN
|
|
|
|
December
31, 2015
|
|
|
Term
|
|
|
Int.
Rate/Year
|
|
|
Number one commercial bank
|
|
$
|
91,200
|
|
|
Jul.30,2015 to Jan.30,2016
|
|
|
5.25
|
%
|
|
Number one commercial bank
|
|
|
91,200
|
|
|
Aug.4,2015 to Feb.4,2016
|
|
|
5.25
|
%
|
|
GuoTai ShiHua bank
|
|
|
69,160
|
|
|
Nov.18,2015 to Nov.18,2016
|
|
|
5.28
|
%
|
|
GuoTai ShiHua bank
|
|
|
29,566
|
|
|
Nov.18,2015 to Nov.18,2016
|
|
|
5.28
|
%
|
|
Long term debt -the term less than 1 year
|
|
|
|
|
|
|
|
|
|
Ban Xin commercial bank
|
|
41,654
|
|
|
Repaid before Dec.31, 2016
|
|
|
3.69
|
%
|
|
YangXin commercial bank
|
|
101,019
|
|
|
Repaid before Dec.31, 2016
|
|
|
4.17
|
%
|
|
YangXin commercial bank
|
|
39,829
|
|
|
Repaid before Dec.31, 2016
|
|
|
5.30
|
%
|
|
TaiWan medium-sized and small enterprises bank
|
|
48,640
|
|
|
Repaid before Dec.31, 2016
|
|
|
3.73
|
%
|
|
Total
|
|
$
|
512,268
|
|
|
|
|
|
|
|
|
|
|
|
December
31, 2014
|
|
|
Term
|
|
|
Int.
Rate/Year
|
|
|
Number one commercial bank
|
|
$
|
56,700
|
|
|
Jul.28,2014 to Jan.28,2015
|
|
|
3.675
|
%
|
|
Number one commercial bank
|
|
|
132,300
|
|
|
Jul.28,2014 to Jan.28,2015
|
|
|
3.68
|
%
|
|
GuoTai ShiHua bank
|
|
|
101,178
|
|
|
Nov.18,2014 to Nov.18,2015
|
|
|
5.28
|
%
|
|
GuoTai ShiHua bank
|
|
|
42,147
|
|
|
Nov.18,2014 to Nov.18,2015
|
|
|
5.28
|
%
|
|
Long term debt -the term less than 1 year
|
|
|
|
|
|
|
|
|
|
|
Number one commercial bank
|
|
36,960
|
|
|
Repaid before Dec.31,2015
|
|
|
2.62
|
%
|
|
YangXin commercial bank
|
|
113,400
|
|
|
Repaid before Dec.31,2015
|
|
|
5.30
|
%
|
|
YangXin commercial bank
|
|
52,500
|
|
|
Repaid before Dec.31,2015
|
|
|
5.30
|
%
|
|
TaiWan medium-sized and small enterprises bank
|
|
3,490
|
|
|
Repaid before Dec.31,2015
|
|
|
2.62
|
%
|
|
Total
|
|
$
|
538,675
|
|
|
|
|
|
|
|
The long term debt should be repaid as equal principal by
month. The long term debt -the term less than 1 year represented the amount should be repaid within 1 year.
NOTE 9 – RELATED PARTY TRANSACTIONS
The total amount advance from related
parties consisted of the advance from shareholders for the investment, working capital and the expense. The balance was $84,837
and $583,227 as of December 31, 2015 and 2014, respectively.
During the year ended December 31, 2014,
the Company borrowed $523,227 from related parties.
During the year ended December 31, 2015,
the Company repaid $498,390 to related parties.
NOTE 10 – LONG TERM DEBT
|
|
|
|
December
31, 2015
|
|
|
Term
|
|
|
Int.
Rate/Year
|
|
|
Ban Xin commercial bank
|
|
$
|
65,634
|
|
|
Jun 10,2015 to Jun.10,2018
|
|
|
3.69
|
%
|
|
YangXin commercial bank
|
|
|
113,718
|
|
|
Jan.21,2015 to Jan.21,2018
|
|
|
4.17
|
%
|
|
TaiWan medium-sized and small enterprises bank
|
182,400
|
|
|
Sep.25,2015 to Sep.25,2020
|
|
|
3.73
|
%
|
|
Total
|
|
$
|
361,752
|
|
|
|
|
|
|
|
|
|
|
|
December
31, 2014
|
|
|
Term
|
|
|
Int.
Rate/Year
|
|
|
Number one commercial bank
|
|
$
|
458,122
|
|
|
Feb.28,2013 to Jan.29,2028
|
|
|
2.62
|
%
|
|
YangXin commercial bank
|
|
|
43,974
|
|
|
Dec.3,2012 to Sep.26,2016
|
|
|
5.30
|
%
|
|
YangXin commercial bank
|
|
|
4,524
|
|
|
Oct.27,2013 to Sep.26,2016
|
|
|
5.30
|
%
|
|
Total
|
|
$
|
506,620
|
|
|
|
|
|
|
|
The long term debt should be repaid as equal principal by
month. The long term debt -the term less than 1 year represented the amount should be repaid within 1 year.
NOTE
11 - TAXES PAYABLE
|
|
|
December 31, 2015
|
|
|
December 31, 2014
|
|
|
Income tax payable
|
|
$
|
23,694
|
|
|
$
|
402
|
|
|
Value added tax payable
|
|
|
1,502
|
|
|
|
4,552
|
|
|
Total
|
|
$
|
25,196
|
|
|
$
|
4,954
|
|
NOTE 12 – INCOME TAXES
The Company did not provide any current or deferred
U.S. federal income tax provision or benefit for any of the periods presented because the Company has experienced operating losses
for U.S. federal income tax purposes since inception. When it is more likely than not that a tax asset cannot be realized through
future income the Company must allow for this future tax benefit. The operating subsidiary is organized and located
in the TaiWan and does not conduct any business in the United States.
Taxation on profits earned in the TaiWan has been calculated
on the estimated assessable profits for the year at the rates of taxation prevailing in the TaiWan where the Company operates after
taking into account the benefits from any special tax credits or “tax holidays” allowed in the county of operations.
In accordance with the relevant tax
laws in the TaiWan, the Company statutory rate were 17% and 17% for the year ended December 31, 2015 and 2014, respectively.
The components of the income tax (benefit)
expense are as follows:
|
|
|
The year ended
December 31, 2015
|
|
|
The year ended
December 31, 2014
|
|
|
Current provision
|
|
$
|
41,407
|
|
|
$
|
421
|
|
|
Deferred provision (benefit)
|
|
|
—
|
|
|
|
—
|
|
|
Total
|
|
$
|
41,407
|
|
|
$
|
421
|
|
NOTE 13 – COMMON STOCK
On April 7, 2014, the shareholder, Chu
Li An contributed $165,500 capital to the Company.
On June 30, 2015, the Company made a
reverse split of its common stock at the rate of 1 for 1500.
On July 10, 2015, the Company issued 50,000,000 shares
with a par value of $0.001 per share for cash. The cash was finally offset with debt cancel due to shareholder.
On July 10, 2015, the Company issued 800,000 shares
with a par value of $0.01 per share in exchange for consulting services of $8,000.
On August 6, 2015, the Company issued 5,000,000 shares
with a par value of $0.001 per share and 2,500,000 shares with a par value of $0.01 per share for cash. The cash was finally offset
with debt cancel due to shareholder.
The Company’s capitalization
is 394,500,000 common shares with a par value of $0.001 per share. There are a total of 58,443,054 and 143,054 common shares
issued and outstanding at December 31, 2015 and 2014. No preferred shares have been authorized or issued.
NOTE 14 –
FOREIGN OPERATIONS
Operations
Substantially all of the Company’s
operations are carried out and all of its assets are located in the TaiWan. Accordingly, the Company’s business, financial
condition and results of operations may be influenced by the political, economic and legal environments in the TaiWan. The Company’s
business may be influenced by changes in governmental policies with respect to laws and regulations, monetary policies, anti-inflationary
measures, currency fluctuation and remittances and methods of taxation, among other things.
Dividends and Reserves
Under the laws of the TaiWan, net income
after taxation can only be distributed as dividends after appropriation has been made for the following: (i) cumulative prior
years’ losses, if any; (ii) allocations to the “Statutory Surplus Reserve” of at least 10% of net income after
tax, as determined under TaiWan accounting rules and regulations, until the fund amounts to 50% of the Company’s registered
capital; (iii) allocations of 5-10% of income after tax, as determined under PRC accounting rules and regulations, to the Company’s
“Statutory Common Welfare Fund”, which is established for the purpose of providing employee facilities and other collective
benefits to employees in PRC; and (iv) allocations to any discretionary surplus reserve, if approved by stockholders.
As of December 31, 2015, the Company
had no Statutory Surplus Reserve and the Statutory Common Welfare Fund established and segregated in retained earnings.
NOTE 15. COMMITMENT
AND CONTINGENCIES
The Company had
bank loans. Based on the contract agreement, the future minimum repayments required for the coming years are as follows:
|
Years
ending December 31:
|
|
|
|
2016
|
$
|
512,268
|
|
2017
|
|
186,488
|
|
2018
|
|
90,239
|
|
2019
|
|
48,460
|
|
2020
|
|
36,386
|
|
Remaining
payments
|
|
-
|
|
Total
|
$
|
874,021
|
The
Company did not have other significant capital commitments, or significant guarantees as of December 31, 2015, respectively.
NOTE
16 –SUBSEQUENT EVENTS
On April 1, 2016, the Company entered into agreement
to acquire 100% equity share of SkyEye:DMS, a company that analyzes each registered driver’s behavior and to form various
reports, all to improve the driver’s driving behavior towards mobility and safety on the road.
After
the acquisition, AJ Greentech will aim to install SkyEye:DMS systems in each of its security convoy vehicles. SkyEye’s hardware
function is to collect the driver’s driving status and record driving videos and then upload the necessary data to a cloud-based
server. With the SkyEye, the hardware can used to watch over the safety of the car and the driver, to successfully improve both
mobility and safety on the road. This expansion will allow Proguard Security to further propagate its name as well as offer its
security services to bureaucratic and governmental establishments.
F-15
