UNITED
STATES SECURITIES AND EXCHANGE
COMMISSION
Washington, D.C.
20549
FORM
8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of
the Securities and Exchange Act of
1934
Date of Report (date of earliest
event reported):
April 20, 2009
SPARKING
EVENTS, INC.
(Exact
name of registrant as specified in its charter)
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Nevada
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333-148005
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20-8009362
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(State
or other jurisdiction of incorporation)
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(Commission
File Number)
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(IRS
Employer Identification
No.)
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112
North Curry Street
Carson
City, NV
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89703-4934
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(Address
of principal executive offices)
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(Zip
Code)
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Registrant’s
telephone number, including area code:
(775)
321-1013
(Former
name or former address, if changed since last report)
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (
see
General
Instruction A.2. below):
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR 240.14d-2(b))
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR 240.13e-4(c))
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SAFE
HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF
1995
This
current report on Form 8-K (this Report) contains “forward-looking statements”
within the meaning of Section 27A of the Securities Act of 1933 (the Securities
Act) and Section 21E of the Securities Exchange Act of 1934 (Exchange Act). The
forward-looking statements are only predictions and provide our current
expectations or forecasts of future events and financial performance and may be
identified by the use of forward-looking terminology, including the terms
“believes,” “estimates,” “anticipates,” “expects,” “plans,” “intends,” “may,”
“will” or “should” or, in each case, their negative, or other variations or
comparable terminology, though the absence of these words does not necessarily
mean that a statement is not forward-looking. The forward-looking statements are
based on current views with respect to future events and financial performance.
Actual results may differ materially from those projected in the forward-looking
statements. The forward-looking statements are subject to risks, uncertainties
and assumptions, including, among other things those:
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associated
with the relative success of sales, marketing and product
development;
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competition,
including price competition; and
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general
economic and business conditions.
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ITEM 2.01
1. CHANGES IN CONTROL OF
REGISTRANT
The
disclosures set forth under Item 2 are incorporated by reference into this
Item 1.
2. COMPLETION OF
ACQUISITION OR DISPOSITION OF ASSETS
Acquisition
Of APlus International, Ltd.
On April
20, 2009, Sparking Events, Inc. (the “Company” or the “Registrant”) acquired
APlus International, Ltd. a privately owned Nevada limited liability company
(“APlus”), pursuant to an Agreement and Plan of Share Exchange (the
“Exchange”). APlus was organized under the laws of the State of
Nevada on April 12, 2005. APlus is a holding company whose principal
operating companies design, manufacture, market and sell advanced lighting
solutions, including light emitting diode (LED) lighting and other energy-saving
lighting in Taiwan. Upon consummation of the Exchange, the Registrant
adopted the business plan of APlus.
Pursuant
to the terms of the Exchange, Sparking Events, Inc. acquired APlus
International, Ltd. in exchange for an aggregate of 5,333,334 newly issued
shares (the “Exchange Shares”) of the Company’s common stock, par value $0.001
per share (the “Common Stock”), resulting in an aggregate of 5,793,334 shares of
Common Stock issued and outstanding. As a result of the Exchange, APlus
International, Ltd. became a wholly-owned subsidiary of Sparking Events,
Inc. Sparking Events, Inc. shares were issued to the APlus
International, Ltd. In addition, our principal stockholder, Adam
Borges Dos Santos agreed to retire his 9,000,000 shares of Common
Stock. The Registrant also issued 111,667 shares of Common Stock for
services rendered to a finder in connection with the Exchange resulting in an
aggregate of 5,905,001 shares of Common Stock issued and
outstanding.
Also on
April 20, 2009, following the Exchange, the Board of Directors of the Registrant
approved an amendment to the Registrant’s Articles of Incorporation increasing
the number of authorized shares of common stock from 75,000,000 to 225,000,000
and concurrently affecting a three for one (3:1) forward-split of the
Registrant’s issued and outstanding shares of Common Stock. Further,
on April 22, 2009 a majority of shareholders of Sparking Events, Inc. approved
an amendment to the Registrant’s articles of incorporation to change the name of
the Registrant to Xodtec Group USA, Inc. and the creation of 10,000,000 shares
of blank check pefreed stock. Upon the filing of a Definitive
Information Statement and effectiveness of the name change, the Company intends
to apply to the National Association of Security Dealers to change its stock
symbol on the Over the Counter Bulletin Board.
At the
effective time of the Exchange, our board of directors was reconstituted by the
resignation of Mr. Adam Borges Dos Santos
from his role
as sole principal officer and director, and the appointment of Yao-Ting (Curtis)
Su, Chao-Wu (Mike) Chou and Hui-Yu (Rachel) Che as directors. Our executive
management team also was reconstituted following the resignation
of Mr. Dos Santos as APlus’ president, and new officers were
appointed in place of our former officers. See “
Directors and Executive Officers,
Promoters and Control Persons.
”
On April
22, 2009 the Registrant entered into a Financial Advisory Agreement with Unise
Investment Corp. to provide financial consulting services in consideration for
111,667 shares of Common Stock. Further, on April 23, 2009, the
Registrant sold warrants exercisable into 200,000 shares of Common Stock at the
exercise price of $0.65 per share and expiring in 6 months, warrants exercisable
into 500,000 shares of Common Stock at the exercise price of $1.00 per share and
expiring in 2 years and warrants exercisable into 800,000 shares of Common Stock
at the exercise price of $1.50 per share and expiring in
2
years.
Following
the issuance of the Exchange Shares and the retirement of Mr. Dos Santos’
shares, the former members of APlus now beneficially own approximately 92% of
the outstanding shares of our Common Stock. Accordingly, the Exchange represents
a change in control. As of the date of this report, there are 6,016,668 shares
of Common Stock issued and outstanding . For financial accounting
purposes, the acquisition was a reverse acquisition of Sparking Events, Inc. by
APlus International, Ltd., under the purchase method of accounting, and was
treated as a recapitalization with APlus International, Ltd. as the acquirer.
Upon consummation of the Exchange, Sparking Events, Inc. adopted the business
plan of APlus International, Ltd.
PART
1
DESCRIPTION
OF BUSINESS
OVERVIEW
Sparking
Events, Inc. (“Sparking Events,” “the Company”, “us”, “our” or “we,”) was
incorporated in the State of Nevada as a for-profit company on November 29, 2006
and established a fiscal year end of February 28. We are a development-stage
company organized to enter into the special event, concert production and
martial arts promotion industry. As a result of the Exchange with
APlus International, Ltd., we have adopted the business plan of APlus, and now
design, manufacture, market and sell advanced lighting solutions, including
light emitting diode (LED) lighting and other energy-saving
lighting. We offer a wide range of technically innovative indoor
white light, color-changing and outdoor lighting solutions that are used for
applications in public, commercial, architectural, residential, gardening, and
entertainment markets. Our solutions provide many benefits over traditional
incandescent, halogen, fluorescent, and compact fluorescent (CFL) light sources,
including lower energy consumption, longer life spans, and absence of hazardous
materials, lower maintenance costs and greater design flexibility.
Our
advanced LED lighting solutions are based on proprietary designs and patented
technologies associated with industrial design, electrical, optical, mechanical
and thermal engineering. We have developed domain expertise and applications
knowledge for end-user requirements in diverse markets. As a result, we are able
to offer total lighting solutions, which provide better performance and lower
overall cost to users.
According
to Freedonia Group, a market research company, the global lighting industry is
estimated to be approximately $120 billion in 2012 and the average growth rate
will be around 5% annually. On the contrary, iSupply, another market research
company, predicts that the compound annual growth rate (CAGR) for LED lighting
will be up to 14.6% during 2008 to 2012. The lighting fixtures include a variety
of technologies, such as incandescent, fluorescent, halogen, high intensity
discharge (HID), neon, compact inflorescent (CFL) and advanced lighting
solutions (LED lighting, OLED lighting and others). Product selection for users
is influenced several factors, including overall cost, visual and physical
product features, as well as regulatory and environmental factors. With rapid
advancements in the performance, efficiency and cost of LED-based solutions,
traditional light sources, such as incandescent lamps and fluorescent lamps, are
beginning to be replaced by advanced technologies with lower overall costs over
their life spans. Furthermore, the energy-efficient nature of LED makes it an
environmentally friendly light source and its compact size has given the design
of lighting fixtures with much more flexibilities and possibilities. A-Plus
believes that our innovative LED lighting solutions are well positioned to
increasingly displace traditional lightings in our targeted
markets.
We
organize our company by business divisions and functional divisions, each with a
specific function and market focus, in order to accelerate the adoption of our
LED lighting solutions in a number of markets. Strong links with our sales
outlets enable us to educate a broad audience about the benefits of our LED
lighting solutions. These relationships also allow us to increasingly sell our
LED lighting solutions to end markets and quickly collect market responses. We
believe that we can advance our goal of becoming one of the leading providers of
energy-efficient lighting solutions by investing in our technology position,
developing new innovative products, and leveraging the strengths of our sales
outlets.
The Lighting
Industry
According
to the Freedonia Group, the estimated global lighting industry revenue of $120
billion in 2012 is divided between two major product categories, fixtures and
light lamp. The fixtures category includes all apparatuses, fixtures and
systems, while light lamps consist of the replaceable devices that emit light.
Fixtures are constructed from metal, glass or plastic and are available in a
range of decorative styles for residential, commercial and industrial
applications. Traditional light lamps include incandescent, fluorescent, halogen
and HID products. For energy consumption concerns, traditional incandescent
lamps are being prohibited by more and more countries. For residential
applications within the general illumination market, inexpensive halogen lamps
and traditional fluorescent tubes are preferred choice, but expensive compact
fluorescent lamps (CFLs) are getting more popular. For commercial applications,
more expensive and durable fluorescent and HID bulbs and fixtures have the
largest market share.
In most
Asian countries, lighting manufacturers sell products through either
manufacturer’s representatives, electrical supply representatives or an internal
sales force to electrical wholesale distributors. The distributors then
market products to electrical contractors and other end-users. Representatives
also have direct contact with lighting designers, electrical engineers,
architects and general contractors that influence buying decisions. The
manufacturer’s representatives often provide value added services, such as
product promotion or design and implementation assistance. The ability of
smaller companies to compete against larger more established rivals is heavily
rooted in their capacity to leverage their unique product portfolios and
customer service to garner maximum productivity from each
representative.
LED Lighting Industry
Trends
LEDs are
semiconductor-based devices that emit light. As the cost of LEDs decreases and
their performance improves, we expect that they will continue to compete more
effectively in the general illumination market versus traditional lighting.
According to the survey made by Strategies Unlimited, there were over $1.86
billion of LED lighting products sold in 2008 and the compound annual growth
rate (CAGR) during 2009 to 2012 will be around 28% -- a figure which is
forecasted to grow to $5 billion by 2012. Specialist in Business Information
(SBI), another market research company, even predicts to grow up to $14 billion
in 2013. The Company believes the LED lighting industry may experience the
following trends:
Technological innovations expand LED
functionalities
. Since its introduction in the 1960s, LED has offered an
increasingly wide variety of colored lighting. The initial applications of LEDs
included traffic lights, automotive brake lights and indicator lights. In the
mid-1990s, LEDs became capable of emitting blue light. In 1993, GaN series blue
light LED was developed, white light LED then become a feasible
product.
White
light refers to the light obtained by mixing many lights of different colors,
such as second wavelength long light (blue light + yellow light) or third
wavelength light (blue light + green light + red light). White light LED
technology can effectively save energy and reduce the emission of carbon dioxide
when use in general lighting. Thus, with the increasing awareness in
environmental protection, lighting devices using white light LED as the light
source will proliferate dramatically.
Advancements in LEDs’ performance
stimulate adoption in general lighting
. Technological advancements in LED
lighting have resulted in a new breed of LEDs that can meet specifications
previously only satisfied by traditional lighting sources. LED lighting
solutions were historically regarded as expensive in relation to their delivered
light output.
In an
effort to lower energy consumption, lighting companies are focused on increasing
the luminous flux -- lumens per watt. Traditional incandescent lighting sources
can produce between 10 and 35 lumens per watt, while fluorescent and HID light
sources can produce output near 100 lumens per watt. Today’s LEDs have
overwhelmed incandescent performance and are exceeding 100 lumens per watt,
making them comparable to and even exceeding fluorescent and HID light
sources.
Unique capabilities of LEDs broaden
applications and create new lighting alternatives
. Key LED features,
including quality of light output, long life, low power consumption, low heat
output and full digital control are accelerating adoption and expanding market
opportunities. Additional attributes, including design flexibility,
color-changing effects, digital dimming capabilities, remote control, smaller
size and rapid start-up time are creating new lighting applications for LEDs in
commercial, architectural, residential, and entertainment markets.
High energy costs and conservation
efforts drive LED adoption
. According to a statistics, lighting
applications contribute about 22% of all energy consumption. High energy costs
have resulted in increased demand for more energy-efficient lighting solutions,
which has inspired a natural shift to LEDs. LED lighting technology is
inherently more energy-efficient and can result in more than 80% and 50% in
power savings over traditional incandescent and fluorescent solutions,
respectively. In addition, unlike other alternatives such as compact fluorescent
bulbs (CFL), LED lighting solutions are free of hazardous materials such as
mercury, which can be harmful to the environment.
Our Competitive
Advantages
We
believe the following strengths of our company provide us with competitive
advantages in the marketplace:
Industry leading, energy-efficient
and environmentally conscious lighting solutions.
In addition to our
robust line-up of Ares series white light LED products, we have added a variety
of color-changing lighting solutions -- the Venus series. Further, we have
recently introduced our Apollo series of outdoor lighting solutions The Apollo
series street lamps have been installed in several locations since March 2008.
According to our recent measurement, the luminous decay over 1 year is less than
2%.
Proprietary technologies
. We
own proprietary technology on the remote control chip and digital dimming. These
technologies allow us to continue developing featured and robust indoor lighting
products. We plan to continue making strategic investments in intellectual
property through ongoing engineering expenditures, industry partnerships,
licensing arrangements and the pursuit of complementary businesses, such as
energy-saving control companies. These initiatives are designed to allow us to
enhance our intellectual property portfolio, improve existing products, rapidly
introduce new products to fill identified needs, and address new applications
and markets. We believe our ability to successfully develop and produce new
products will allow us to magnify our market opportunity and enhance our market
position.
Reliable, high quality and cost
competitive products.
We design, manufacture and sell high quality,
reliable, and cost competitive products. For example, our color-changing accent
light solutions are designed to allow home users using remote controller to
changing colors or setting control schemes. We achieve this by embedding our
proprietary remote control chip into our light products. To guarantee reliable
and high quality products, we produce our products in ISO 9001-accredited
factories. To deliver cost competitive solutions, we invest in technology
advancements, leverage purchasing volume, capitalize on strategic vendor
relationships and migrate high volume products to our automated manufacturing
process.
Wide range of LED lighting
solutions.
We offer a wide range of LED lighting solutions to the market.
This includes over 50 distinct product types targeted at four distinct markets.
We have expanded our LED product lines to include a range of white light
solutions for commercial, residential and entertainment lighting applications.
We believe the combination of our broad product line, our extensive engineering
and manufacturing know-how, and deep knowledge of our target markets are highly
valued by customers and are key to our ongoing success.
Experienced management team.
Our senior management team includes individuals with diverse backgrounds
and broad experience. We are led by our Chief Executive Officer, Mike Chou, an
industry veteran with over 27 years of IT industry experience and our Chief
Technology Officer, Ming Yu, with over 17 years of industrial control,
networking, and LED design experience. Our management team has demonstrated the
ability to drive organic growth and pursue the operational excellence of the
company.
Our Growth
Strategy
Our
objective is to become one of the leading providers of energy-efficient lighting
solutions. Key elements of our growth strategy include:
Capitalizing on opportunities in our
target markets.
We believe there is a growing need for unique advanced
lighting solutions across our target markets, which include applications in the
commercial, architectural, residential, entertainment, signage and consumer
markets. We expect to continue to introduce innovative LED
Expanding our white light LED
product line-up
. Based on our proprietary technologies on the LED
lighting product design, we are expanding our white light LED product line-up
for general illumination. We believe our Ares series of white light LED lighting
products have some of the most unique features and one of the highest efficacy
levels in the industry. We also incorporate digital dimming function which works
perfectly. We expect that our white light LED solutions will be highly
attractive alternatives to traditional lighting solutions and other competitive
LED offerings and will eventually provide a significant portion of our future
revenue.
Expanding our color-changing LED
product line-up
. Based on our proprietary control technology, our
existing accent lighting products can allow users to change colors or brightness
by using remote controller or switch. We are expanding our accent LED product
line-up by providing some luminaries which are designed to fit into the modern
living environment. We believe our Ares series of accent lighting products have
some of the most unique features which can revolute the life styles of most
families.
Developing and protecting our
intellectual property.
We have devoted significant resources to building
an advanced research and development team for developing complimentary
intellectual property to expand our portfolio of advanced lighting technologies.
Securing and defending intellectual property related to the design, manufacture
and application of advanced lighting technology is expected to be a key element
of our existing and future business. We believe that our growing intellectual
property portfolio will create licensing opportunities in the future and intend
to explore these potential opportunities. The strength of our intellectual
property portfolio allows us to compete on the basis of our technology, which we
believe gives us an advantage over many of our larger competitors.
Leveraging the strength of our
distribution network.
We have an independent global sales and
distribution network. In Taiwan, we have over 200 franchised stores and service
stations selling our products to end users directly. We are copying the
successful model to the international markets and expect to nominate over 30
distributors in over 20 countries. We expect these and other industry
relationships will be a significant source of operational leverage as we
introduce new products and scale our business.
Products
We offer
a wide range of LED lighting solutions. Our company is organized by business
divisions, each with a specific function or sales territory in order to broaden
the adoption of our LED lighting solutions. By combining the efforts of all of
these business divisions, we are able to offer complete solutions to our
customers and leverage synergies across market segments. Our products are
marketed primarily under Xodtec and Danhui brands. End-users utilize our
products for interior and exterior lighting to provide illumination and/or
create ambience and unique visual effects superior to traditional lighting.
The
following table provides a summary overview of our products:
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TARGET
MARKET(S)
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FEATURES
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BENEFITS
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Apollo
series outdoor LED
Lighting
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Street
lamps, garden, and architectural lighting
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Extended life, low
energy consumption, low maintenance cost, thermal
efficiency, light weight
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Ares
series indoor white light
LED
Lighting
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Commercial,
architectural, institutional, hospitality, and residential
lighting
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Extended
life, low energy consumption, size, white light, fixed-color
and dimmable, fit standard incandescent fixtures
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Venus
series indoor color-changing LED
Lighting
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Residential
and entertainment lighting
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Extended
life, low energy consumption, fit standard incandescent fixtures, remote
or switch dimmable/control color- changing
capabilities
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Shinex
series general LED lighting
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Signage,
car head-up display, car tail light, and gaming console
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High
resolution (signage), easy to install (head-up display)
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The
Company currently faces competition from both traditional lighting companies
that provide general lighting products, such as fluorescent and compact
fluorescent lighting, and from companies that are engaged in providing LED
lighting products. In general, we compete with both groups on the basis of
design, innovation, costs, safety issues, sales and marketing, and selling
price.
We
compete with traditional lighting companies in the general illumination market.
Our LED lighting products tend to be alternatives to traditional lighting
sources for applications within the commercial market. In these markets, we
compete on the basis of energy savings, lamp life and durability.
Additionally,
we compete with LED lighting companies that offer competing LED lighting
products. In these markets, we compete on the basis of design, innovation, light
quality, safety issues, price, product quality and brightness.
We
believe that we can compete favorably in our markets, based on the following
factors:
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unique
and proprietary technologies;
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wide
range of high-quality product
offerings;
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ability
to offer standard and custom products that meet customers’ needs at a
competitive cost;
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capability
to provide total lighting solutions, including lamps, luminaries, and
implementation to fulfilling customers’
demand;
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excellence
in customer service and support;
and
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recruitment
and retention of qualified personnel, particularly
engineers.
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We expect
our markets to remain competitive and to reflect rapid technological evolution
and continuously evolving customer and regulatory requirements. Our ability to
remain competitive depends in part upon our success in developing new and
enhanced advanced lighting solutions and introducing these systems at
competitive prices on a timely basis.
Sales and
Marketing
We
believe our sales and marketing efforts have established our reputation for
providing innovative solutions that meet our customers’ needs in a timely,
cost-efficient manner. Our ability to leverage our distribution network
will be an important factor in our continued success. The sales and marketing of
our products largely depends upon the type of offering, location and target
market.
The
breakdown of our LED lighting Products’ sales and marketing coverage by market
is as follows:
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Description
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Architectural
garden, and public lighting
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We
currently market and sell our Apollo series of LED outdoor lighting
products and solutions through our sales teams and individual lighting
agencies. The independent lighting agencies approach government,
constructors, and public lighting design houses by learning their demands
and providing our lighting product specifications to
them
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Commercial
and residential lighting
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We
market and sell our indoor lighting products through our franchised
stores, service stations, and interior decorator to end users. We believe
these distribution outlets allows us to better serve our customers, as
well as offer services such as the bundling of product and
installation.
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We have
recently reorganized our international sales organization to more aggressively
penetrate global markets outside of Taiwan. This team is approaching local
distributors in each country by introducing our successful model in Taiwan to
them. We expect this approach can allow us to penetrate into international
markets successfully and expands our business scale.
The
breakdown of our LED lighting Products, Energy efficiency solution, and
localization service, the total sales and marketing coverage by market is as
follows:
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Market
Applications
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Description
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Architectural
garden, and public lighting
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We
currently market and sell our Apollo series of LED outdoor lighting
products and solutions through our sales teams, franchise channels, public
project management channels. Public project management channels approach
government, constructors, and public lighting design houses by learning
their demands and providing our lighting product specifications to
them.
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Commercial
and residential lighting
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We
market and sell our indoor lighting products through our franchised
stores, service stations, and interior decorator to end users. We believe
these distribution outlets allows us to better serve our customers, as
well as offer services such as the bundling of product and
installation.
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Energy
efficiency solution.
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Our
energy efficiency solution including energy efficiency engineering and
program management. We offer a full spectrum of engineering and total
solution services required to complete facility energy management
projects. We are one of the few in this region capable of integrating
energy saving opportunity assessment, program design, program management,
implementation with turn-key engineering and construction services, and
performance contract with financial solution arrangement. The solution is
tailor-made to meet the customer’s best interest.
Our
service including commercial office buildings, college and high school
campuses, hospitals, hotels, retail stores, high technology, light
industrial, and water/wastewater treatment facilities.
In
addition to, facility energy use optimization assessment, we also built up
its energy saving technical competence in areas such as power metering and
management, chillers and chiller plants, HVAC systems, automated
electricity demand management systems, and air compressors. Two potential
energy optimization products, one for air compressors and one for facility
automated demand management system, are also under development and
expected to be commercialized in the near future.
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Localization
Service
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Our
globalization services span industries worldwide and include adaptation of
marketing strategies to regional requirements specialized in energy saving
and IT sectors, such as energy saving industry, energy sources, material,
gas industry, automobile, lighting, pollution.
Our
localization service follow the localization process of adapting software
and accompanying materials to suit a target-market locale with the goal of
making the product "transparent" to that locale, so that native users
would interact with it as if it were developed there and for that locale
alone.
Our
software localization solutions are geared specifically for software
targeting global markets. We assist software developers deliver
professional and culturally sensitive localized software faster to the
market than their competition, at a competitive price.
Our
hardware experienced localization solution helps leading hardware and
equipment manufacturers deliver professionally localized products faster
to the market than their competition and at a competitive
price.
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Manufacturing and
Suppliers
We
produce our advanced lighting solutions through outsourced manufacturing and
assembly. For LED lighting systems, we engineer and design our products, while
much of the manufacturing is performed by select qualified vendors. All LEDs
used in our LED lighting products and systems are purchased from manufacturers
third-party in Asia and the United States.
Many of
our core components and sub-assemblies are purchased from third party suppliers.
We have selected suppliers based on their ability to consistently produce these
products per our specifications, ensuring the best quality product at the most
cost effective price.
Research and Product
Development
Employees
As of
April 24, 2009, we have approximately 50 employees. We enjoy good employee
relations. None of our employees are members of any labor union, and we are not
a party to any collective bargaining agreement.
CORPORATE
INFORMATION
The
Company's corporate headquarters are located at 335 W. Spring Mountain Road,
#18, Las Vegas, Nevada 89102.
The
Company’s Taipei, Taiwan headquarters are located at 2F., No.139, Jian 1st Rd.,
Jhonghe City, Taipei County 235, Taiwan (R.O.C.). The Company's telephone number
is (886) 2 – 2228-6276.
RISK FACTORS
Investing
in the Company's common stock involves a high degree of risk. Prospective
investors should carefully consider the risks described below, together with all
of the other information included or referred to in this Current Report on Form
8-K, before purchasing shares of the Company's common stock. There are numerous
and varied risks, known and unknown, that may prevent the Company from achieving
its goals. The risks described below are not the only ones the Company will
face. If any of these risks actually occur, the Company's business, financial
condition or results of operation may be materially adversely affected. In such
case, the trading price of the Company's common stock could decline and
investors in the Company's common stock could lose all or part of their
investment.
Risks
Specific to Us
Downturns
in general economic and market conditions could materially and adversely affect
our business.
Lighting
industry, especially residential lighting market is greatly affected by the
economic downturns. The sale of our lighting products is related to
the quantity of new building construction and renovation. Decline in housing
transactions causes less demand for lighting products and conservative shopping
habits learned during economic downturns means people have less desires to try
advanced LED lighting products.
In
addition, our outdoor lighting products are mainly sold through government
tender bids and installed in public areas such as parks, rapid railway stations,
highways and other public buildings will likely be materially. If these
municipalities have less funds budgeted fro these projects as a result of
general economic conditions, sales of our outdoor lighting products the
government budgeting which is inevitably influenced by general economic
downturns.
If
our lighting solutions do not gain expected market acceptance, prospects for our
sales revenue and profit may be affected.
The
public’s relative unfamiliarity with LED lighting products may slow their market
acceptance. Potential customers for our advanced lighting systems may be
reluctant to adopt these as alternatives to traditional lighting technologies
because of their higher initial cost to achieve comparable light
output
Obstacles
to widespread adoption of LED lighting solutions include the comparatively high
cost of high brightness white LEDs and the need for further advances in
brightness, light quality, efficiency and the predicted life of the LEDs before
they require replacement. The future development of the attractiveness to
potential customers may depend on such innovation of high quality
LEDs.
There is
significant competition in the lighting industry with more established companies
We are not only competing with other LED lighting solution providers but also
with companies offering traditional lighting products, 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 lighting 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.
Stability
of component supply is crucial to determine our manufacturing process. As some
critical components, such as LEDs, 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 a 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.
We design
and procure key components (such as LEDs) 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.
If
we fail to successfully manage our relationships with our distributors and
customers, we could lose revenues.
Most of
our products are sold through our distributors and franchise stores, which other
provide the first-line technical support to end-users. If these distributors and
franchised stores do not feel confident about our products/supports, they may
seek to change their terms with us, or alter their ordering patterns with us
which there could be a significant impact on our revenue and
profits.
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.
Risks Related to the Securities
Markets and Investments in Our Common Stock
Because our
common stock is quoted on the "OTCBB," your ability to sell your shares in the
secondary trading market may be limited.
Our
common stock is currently quoted on the over-the-counter market on the OTC
Electronic Bulletin Board. Consequently, the liquidity of our common stock is
impaired, not only in the number of shares that are bought and sold, but also
through delays in the timing of transactions, and coverage by security analysts
and the news media, if any, of our company. As a result, prices for shares of
our common stock may be lower than might otherwise prevail if our common stock
was quoted and traded on Nasdaq or a national securities
exchange.
Because our
shares are "penny stocks," you may have difficulty selling them in the secondary
trading market.
Federal
regulations under the Securities Exchange Act of 1934 regulate the trading of
so-called "penny stocks," 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. Since
our common stock currently is quoted on the "OTCBB" at less than $5.00 per
share, our shares are "penny stocks" 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 not listed on Nasdaq or any national
securities exchange and currently is quoted at and trades at less than $5.00 per
share, trading in our common stock is subject to Rule 15g-9 under the Securities
Exchange Act. Under this rule, broker-dealers must take certain steps prior to
selling a "penny stock," which steps include:
|
|
•
|
obtaining
financial and investment information from the
investor;
|
|
|
•
|
obtaining
a written suitability questionnaire and purchase agreement signed by the
investor; and
|
|
|
•
|
providing
the investor a written identification of the shares being offered and the
quantity of the shares.
|
If these
penny stock rules are not followed by the broker-dealer, the investor 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
shareholders, therefore, may have difficulty in selling their shares in the
secondary trading market.
Our stock price
may be volatile and your investment in our common stock could suffer a decline
in value.
As of
April 20, 2009, there have been no trading activities in the Company’s common
stock. There can be no assurance that a market will ever develop in
the Company’s common stock in the future. If a market does not
develop then investors would be unable to sell any of the Company’s common stock
likely resulting in a complete loss of any funds therein 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:
|
|
•
|
acceptance
of our products in the industry;
|
|
|
•
|
announcements
of technological innovations or new products by us or our
competitors;
|
|
|
•
|
government
regulatory action affecting our products or our competitors' products in
both the United States and foreign
countries;
|
|
|
•
|
developments
or disputes concerning patent or proprietary
rights;
|
|
|
•
|
economic
conditions in the United States or
abroad;
|
|
|
•
|
actual
or anticipated fluctuations in our operating
results;
|
|
|
•
|
broad
market fluctuations; and
|
|
|
•
|
changes
in financial estimates by securities
analysts.
|
A registration of
a significant amount of our outstanding restricted stock may have a negative
effect on the trading price of our stock.
At April
20, 2009,shareholders of the Company had approximately 18,035,000 post-split
adjusted shares of restricted stock, or 92.3% of the outstanding common stock.
If we were to file a registration statement including all of these shares, and
the registration is allowed by the SEC, these shares would be freely tradable
upon the effectiveness of the planned registration statement. If investors
holding a significant number of freely tradable shares decide to sell them in a
short period of time following the effectiveness of a registration statement,
such sales could contribute to significant downward pressure on the price of our
stock.
We
do not intend to pay any cash dividends in the foreseeable future and,
therefore, any return on your investment in our capital stock must come from
increases in the fair market value and trading price of the capital
stock.
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. We intend to retain
future earnings, if any, for reinvestment in the development and expansion of
our business. Any credit agreements, which we may enter into with institutional
lenders, may restrict our ability to pay dividends. Whether we pay cash
dividends in the future will be at the discretion of our board of directors and
will be dependent upon our financial condition, results of operations, capital
requirements and any other factors that the board of directors decides is
relevant. Therefore, any return on your investment in our capital stock must
come from increases in the fair market value and trading price of the capital
stock.
We
may issue additional equity shares to fund the Company's operational
requirements which would dilute your share ownership.
The
Company's continued viability depends on its ability to raise capital. Changes
in economic, regulatory or competitive conditions may lead to cost increases.
Management may also determine that it is in the best interest of the Company to
develop new services or products. In any such case additional financing is
required for the Company to meet its operational requirements. There can be no
assurances that the Company will be able to obtain such financing on terms
acceptable to the Company and at times required by the Company, if at all. In
such event, the Company may be required to materially alter its business plan or
curtail all or a part of its operational plans as detailed further in
Management's Discussion and Analysis in this Form 8-K. While the Company
currently has no offers to sell it securities to obtain financing, sale or the
proposed sale of substantial amounts of our common stock in the public markets
may adversely affect the market price of our common stock and our stock price
may decline substantially. In the event that the Company is unable to raise or
borrow additional funds, the Company may be required to curtail significantly
its operational plans as further detailed in Requirements for Additional Capital
in the Management Discussion and Analysis of this Form 8-K.
The
Company’s proposed Amended Articles of Incorporation authorize the issuance of
up to 225,000,000 total shares of Common Stock without additional approval by
shareholders. As of April 20, 2009, we had 18,075,000 post-split adjusted shares
of common stock outstanding, and warrants and options convertible to post-split
adjusted 1,500,000 shares of common stock outstanding.
Because our
common stock is quoted only on the OTCBB, your ability to sell your shares in
the secondary trading market may be limited.
Our
common stock is quoted only on the OTCBB. Consequently, the liquidity
of our common stock is impaired, not only in the number of shares that are
bought and sold, but also through delays in the timing of transactions, and
coverage by security analysts and the news media, if any, of our company. As a
result, prices for shares of our common stock may be different than might
otherwise prevail if our common stock was quoted or traded on a national
securities exchange such as the New York Stock Exchange.
Large amounts of
our common stock will be eligible for resale under Rule 144.
As of
April 20, 2009, approximately 16,700,000 of the 18,075,000 issued and
outstanding post-split shares of the Company's common stock are restricted
securities as defined under Rule 144 of the Securities Act of 1933, as amended
(the “Act”) and under certain circumstances may be resold without registration
pursuant to Rule 144.
Approximately
1,950,000 shares of our post-split adjusted restricted shares of common stock
are held by non-affiliates who may avail themselves of the public information
requirements and sell their shares in accordance with Rule 144. As a result,
some or all of these shares may be sold in accordance with Rule 144 potentially
causing the price of the Company's shares to decline.
In
general, under Rule 144, a person (or persons whose shares are aggregated) who
has satisfied a six month holding period may, under certain circumstances, sell
within any three-month period a number of securities which does not exceed the
greater of 1% of the then outstanding shares of common stock or the average
weekly trading volume of the class during the four calendar weeks prior to such
sale. Rule 144 also permits, under certain circumstances, the sale of
securities, without any limitation, by a person who is not an Affiliate, as such
term is defined in Rule 144(a)(1), of the Company and who has satisfied a one
year holding period. Any substantial sale of the Company's common stock pursuant
to Rule 144 may have an adverse effect on the market price of the Company's
shares. This filing will satisfy certain public information requirements
necessary for such shares to be sold under Rule 144.
However,
since the Company has previously indicated in its filings with the Commission
that it is a shell company, as that term is defined under the Securities Act,
pursuant to Rule 144, shareholders must wait at least one year from the date of
the filing of this Form 8-K to avail themselves of Rule 144 unless we file a
registration statement for the sale of such shares prior thereto.
The requirements
of complying with the Sarbanes-Oxley act may strain our resources and distract
management
We are
subject to the reporting requirements of the Securities Exchange Act of 1934, as
amended (the “Exchange Act”), and the Sarbanes-Oxley Act of 2002. the costs
associated with these requirements may place a strain on our systems and
resources. The Exchange Act requires that we file annual, quarterly and current
reports with respect to our business and financial condition. The Sarbanes-Oxley
Act requires that we maintain effective disclosure controls and procedures and
internal controls over financial reporting. Historically, as a private company
we have maintained a small accounting staff, but in order to maintain and
improve the effectiveness of our disclosure controls and procedures and internal
control over financial reporting, significant additional resources and
management oversight will be required. This includes, among other things,
retaining independent public accountants. This effort may divert management's
attention from other business concerns, which could have a material adverse
effect on our business, financial condition, results of operations and cash
flows. In addition, we may need to hire additional accounting and financial
persons with appropriate public company experience and technical accounting
knowledge, and we cannot assure you that we will be able to do so in a timely
fashion.
Our executive
officers, directors and principal stockholders control our business and may make
decisions that are not in our stockholders' best
interests.
As of
April 20, 2009 our officers, directors, and principal stockholders, and their
affiliates, in the aggregate, beneficially owned approximately 75% of the
outstanding shares of our common stock on a fully diluted basis. As a result,
such persons, acting together, have the ability to substantially influence all
matters submitted to our stockholders for approval, including the election and
removal of directors and any merger, consolidation or sale of all or
substantially all of our assets, and to control our management and affairs.
Accordingly, such concentration of ownership may have the effect of delaying,
deferring or preventing a change in discouraging a potential acquirer from
making a tender offer or otherwise attempting to obtain control of our business,
even if such a transaction would be beneficial to other
stockholders.
Sales of
additional equity securities may adversely affect the market price of our common
stock and your rights in the Company may be reduced.
We expect
to continue to incur drug development and selling, general and administrative
costs, and in order to satisfy our funding requirements, we may need to sell
additional equity securities. Our stockholders may experience substantial
dilution and a reduction in the price that they are able to obtain upon sale of
their shares. Also, any new securities issued may have greater rights,
preferences or privileges than our existing common stock which may adversely
affect the market price of our common stock and our stock price may decline
substantially.
2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF PLAN OF OPERATIONS
The
following discussion and plan of operations should read in conjunction with the
financial statements and the notes to those statements included in this 8-K.
This discussion includes forward-looking statements that involve risk and
uncertainties. As a result of many factors, such as those set forth under “
Risk Factors
,” actual results
may differ materially from those anticipated in these forward-looking
statements.
Acquisition and
Reorganization
On April
20, 2009, the Acquisition of APlus was completed, and the business of APlus
International, Ltd. was adopted as our business. As such, the following
Management Discussion is focused on the current and historical operations of
APlus, and excludes the prior operations of The Registrant.
Overview
A-Plus
International Ltd. designs, manufactures, markets and sells advanced LED
lighting solutions. We offer a broad range of technically innovative outdoor,
indoor white light, color-changing and fixed-color lighting solutions that are
used for applications in commercial, architectural, residential, hospitality,
entertainment and consumer markets. We believe that we offer one of the broadest
portfolios of advanced LED lighting solutions. Our LED products include street
lights, wall wash lights, floor lights, light strips, and down
lights.
We
generate revenue from selling our products into commercial, architectural and
residential markets. Commercial sales include applications of our fixtures,
system and lamp (light bulb) products in the architectural, retail, hospitality,
entertainment, signage and consumer markets.
Revenue
Revenue
is derived from sales of our advanced lighting products. These products consist
of solid-state LED lighting systems and controls. We also design, market and
sell LED lighting solutions.
Besides
LED Lighting related business, some of our revenue comes from our professional
project management service such as localization and energy saving and efficient
solution services.
Cost of Goods
Sold
Our cost
of goods sold consists primarily of labor-related overhead such as R&D
professionals, designers, administrative personals. We project management
services based on customer orders. Besides our in house resources, we also out
source part of projects to support such demand.
Gross
Profit
Our gross
profit has been and will continue to be affected by a variety of factors,
including changing of the foreign exchange rates for exporting, out sourcing
cost to support project demands, and average sales prices of our products,
including fluctuations in the cost of our purchased components, sales price and
the product life cycle.
Operating
Expenses
Operating
expenses consist primarily of salaries and associated costs for employees in
finance, human resources, sales, information technology and administrative
activities. In addition, operating expenses include charges relating to
accounting, legal, insurance and stock-based compensation under Statement of
Financial Accounting Standards No. 123(R), “Share-Based
Payment.”
Revenue
The
following is a summary of our operating results for the periods
indicated:
|
|
|
Year Ended December 31,
|
|
|
|
|
2008
|
|
|
2007
|
|
|
Change
|
|
|
%
|
|
|
Localization
Service
|
|
|
852,926
|
|
|
|
413,854
|
|
|
|
439,072
|
|
|
|
106.09
|
%
|
|
LED
Lamps
|
|
|
93,017
|
|
|
|
0
|
|
|
|
93,017
|
|
|
|
100.00
|
%
|
|
Lighting
Control System
|
|
|
257,817
|
|
|
|
0
|
|
|
|
257,817
|
|
|
|
100.00
|
%
|
|
Authorization
of Management Control System
|
|
|
364,807
|
|
|
|
0
|
|
|
|
364,807
|
|
|
|
100.00
|
%
|
|
Software
Engineering
|
|
|
15,328
|
|
|
|
0
|
|
|
|
15,328
|
|
|
|
100.00
|
%
|
|
GPS
|
|
|
406,630
|
|
|
|
478,357
|
|
|
|
(71,727
|
)
|
|
|
(14.99
|
%)
|
|
Energy-saving
monitoring system
|
|
|
508,890
|
|
|
|
0
|
|
|
|
508,890
|
|
|
|
100.00
|
%
|
|
Chart
Control System
|
|
|
153,280
|
|
|
|
0
|
|
|
|
153,280
|
|
|
|
100.00
|
%
|
|
Total
|
|
|
2,652,695
|
|
|
|
892,211
|
|
|
|
1,760,484
|
|
|
|
197.32
|
%
|
Revenue
from our localization translation service was approximately $852,926 in 2008, as
compared to approximately $413,854 for 2007. This increase of $439,072, or
106.09%, is attributable to actively in market development of European and
Japanese market. After the increased sales volume, our labor resource allocation
is more efficient than the year 2007, resulted higher margin in 2008. Before
2008, our research and development team was in the development stage for
Management Control system and lighting control system. The main system
architecture completed in 2008, the pattern allows the systems generate revenue
starting in 2008. Our invention pattern in LED control chips received in March
11,, 2008 (Patent Number 2008.3.11-2026.5.18). The patent was successfully used
in commercial products; this reflects intelligent lighting control to be
profitable in the year of 2008.
Gross
Profit and Cost of Goods Sold
|
|
|
Year
Ended December 31,
|
|
|
|
|
2008
|
|
|
2007
|
|
|
Change
|
|
|
%
|
|
|
Revenue
|
|
|
2,652,695
|
|
|
|
892,211
|
|
|
|
1,760,484
|
|
|
|
197.32
|
%
|
|
Cost
of sales
|
|
|
843,106
|
|
|
|
611,067
|
|
|
|
232,039
|
|
|
|
37.97
|
%
|
|
Gross
profit
|
|
|
1,809,589
|
|
|
|
281,144
|
|
|
|
1,528,445
|
|
|
|
|
|
|
Gross
margin %
|
|
|
68.22
|
%
|
|
|
31.51
|
%
|
|
|
|
|
|
|
|
|
Gross
profit for 2008 and 2007 was $1,809,589 and $281,144, respectively. Gross
margins increased 68.22% from 31.51% in 2007 to approximately
36.71%increased.
Production
costs in 2008 increased to approximately $843,106, or 31.78% of revenue, as
compared $611,067, or 68.48% of revenue, in 2007.
Operating
Loss and Expenses
|
|
|
Year
Ended December 31,
|
|
|
|
|
2008
|
|
|
2007
|
|
|
Change
|
|
|
%
|
|
|
Operating
expenses
|
|
|
652,067
|
|
|
|
605,316
|
|
|
|
46,751
|
|
|
|
7.72
|
%
|
|
Research
and development expenses
|
|
|
690
|
|
|
|
65,738
|
|
|
|
(65,048
|
)
|
|
|
(98.95
|
%)
|
|
Total
operating expenses
|
|
|
652,757
|
|
|
|
671,054
|
|
|
|
(18,297
|
)
|
|
|
(2.73
|
%)
|
|
Operating
income(loss)
|
|
|
1,156,832
|
|
|
|
(389,910
|
)
|
|
|
1,546,742
|
|
|
|
396.69
|
%
|
Operating
Expenses
Our
research and development for management Control system and lighting control
system, the main system architecture completed in 2008, the research expenses
decreased from $65,738 to $690, or $65,048, 98.95% decreased.
The
pattern allows the systems generate revenue starting in 2008. The increased for
trade show and travel expenses were approximately $28,858 and $28,953 due to the
main business objective in the market development. Excluding the impact of
manpower needs, increase in salary$61,286, health insurance benefits$5,079,
retirement benefits, approximately$ 13,709.
Depreciation for fixed Asset and
unamortized expense decrease
approximately $35,538 and
$5,878
Professional
service expenses were higher in 2007 compare to 2008, due to higher expenses in
financial and patent consulting cost in 2007, approximately decreased $18,507 in
2008.
In 2007,
some of our LED lighting product research was terminated due to a strategic
decision change, some of the existing related costs resulted in higher expenses
in 2007, approximately decreased $20,211 in 2008 compare to 2007.
Non-operating income and
expenses
|
|
|
Year
Ended December 31,
|
|
|
|
|
2008
|
|
|
2007
|
|
|
Change
|
|
|
%
|
|
|
Operating
income(loss)
|
|
|
1,156,832
|
|
|
|
(389,910
|
)
|
|
|
1,546,742
|
|
|
|
396.69
|
%
|
|
Non-operating
income and gains
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
income
|
|
|
220
|
|
|
|
49
|
|
|
|
171
|
|
|
|
348.98
|
%
|
|
Foreign
exchange gain
|
|
|
43
|
|
|
|
63
|
|
|
|
(20
|
)
|
|
|
(31.75
|
%)
|
|
Rent
income
|
|
|
2,920
|
|
|
|
17,577
|
|
|
|
(14,657
|
)
|
|
|
(83.39
|
%)
|
|
Miscellaneous
|
|
|
1,417
|
|
|
|
0
|
|
|
|
1,417
|
|
|
|
100.00
|
%
|
|
|
|
|
4,600
|
|
|
|
17,689
|
|
|
|
(13,089
|
)
|
|
|
(74.00
|
%)
|
|
Non-operating
expenses and losses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expenses
|
|
|
(6,177
|
)
|
|
|
(11,426
|
)
|
|
|
5,249
|
|
|
|
-45.94
|
%
|
|
Provision
for loss on inventories
|
|
|
(7,440
|
)
|
|
|
0
|
|
|
|
(7,440
|
)
|
|
|
100.00
|
%
|
|
Foreign
exchange loss
|
|
|
(78
|
)
|
|
|
(138
|
)
|
|
|
60
|
|
|
|
-43.48
|
%
|
|
Miscellaneous
expenses
|
|
|
(951
|
)
|
|
|
(5,179
|
)
|
|
|
4,228
|
|
|
|
-81.64
|
%
|
|
|
|
|
(14,646
|
)
|
|
|
(16,743
|
)
|
|
|
2,097
|
|
|
|
-12.52
|
%
|
|
Income
(loss) before income tax
|
|
|
1,146,786
|
|
|
|
(388,964
|
)
|
|
|
1,535,750
|
|
|
|
394.83
|
%
|
|
income
tax expense
|
|
|
(185,062
|
)
|
|
|
0
|
|
|
|
(185,062
|
)
|
|
|
100.00
|
%
|
|
Net
income (loss)
|
|
|
961,724
|
|
|
|
(388,964
|
)
|
|
|
1,350,688
|
|
|
|
347.25
|
%
|
Miscellaneous
Income
Income in
the amount of $1,417 was derived as sales bonuses from Milengo Inc, a famous
localization company in the Unites States. Milengo Inc. is the US
alliance company for Targetek Technology Co., Ltd, they pay the sales bonus to
Targetek.
Interest
The
interest payments have been reduced $5,249 or (45.94%) in 2008 than in 2007 due
to the decrease in the principal amount of the loan.
Provision
for loss on inventories
Due to a
decrease in selling price, there is a loss of $7,440 for the fiscal year 2008
compared to the fiscal year 2007.
(Non-operating
expenses and losses) Miscellaneous expenses
There is
a $4,228 penalty in 2008 due as a result of terminations of the
rental contract of our Taipei office. Our office was relocated to Dunhua South
Road, Taipei.
We have
provided a full valuation allowance against income tax benefits resulting from
losses incurred and accumulated on operations.
Net
Income
Integrated
above reasons, net profit after tax increased $1,350,688 in 2008 compare to
2007.
Earnings Before Interest,
Taxes, Depreciation and Amortization (EBITDA)
Earnings
before interest, taxes, depreciation and amortization (EBITDA) is a non-GAAP
(Generally Accepted Accounting Principle) financial measure provided as
additional information to investors. EBITDA is an alternative method for
assessing our financial condition and operating results. EBITDA is not in
accordance with, or a substitute for, GAAP, and may be different from or
inconsistent with non-GAAP financial measures used by other companies. However,
we believe that EBITDA may provide additional information with respect to our
performance and ability to meet future debt service, capital expenditures and
working capital requirements.
Whenever
we refer to a non-GAAP financial measure we will present the most directly
comparable financial measure calculated and presented in accordance with GAAP,
along with a reconciliation of the differences between the non-GAAP financial
measures we reference with such comparable GAAP financial measure.
The
following table reconciles the GAAP measure net loss to the non-GAAP financial
measure EBITDA:
|
|
|
Year
Ended December 31,
|
|
|
|
|
2008
|
|
|
2007
|
|
|
Change
|
|
|
%
|
|
|
Net
income (loss)
|
|
|
961,724
|
|
|
|
(388,964
|
)
|
|
|
1,350,688
|
|
|
|
347.25
|
%
|
|
Plus:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
|
6,177
|
|
|
|
11,426
|
|
|
|
(5,249
|
)
|
|
|
(45.94
|
%)
|
|
Depreciation
|
|
|
21,092
|
|
|
|
56,629
|
|
|
|
(35,537
|
)
|
|
|
(62.75
|
%)
|
|
Various
amortization
|
|
|
6,045
|
|
|
|
11,923
|
|
|
|
(5,878
|
)
|
|
|
(49.30
|
%)
|
|
Taxes
|
|
|
185,062
|
|
|
|
0
|
|
|
|
185,062
|
|
|
|
100.00
|
%
|
|
EBITDA
|
|
|
1,180,100
|
|
|
|
(308,986
|
)
|
|
|
1,489,086
|
|
|
|
481.93
|
%
|
CRITICAL ACCOUNTING POLICIES
AND ESTIMATES
The
financial statements are prepared in conformity with U.S. generally accepted
accounting principles. Major accounting policies are summarized as
follows:
Foreign
Currency Translation
The
carrying amounts of the Company’s assets, liabilities, equity and results of
operations have been translated from the New Taiwan dollar, which is the
Company’s functional currency, into the U.S. dollar using the current rate
method.
Cash
Equivalents
For the
purpose of the statement of cash flows, the Company considers all highly liquid
investments to be cash equivalents.
Accounts
Receivable and Allowance for Doubtful Accounts
Accounts
receivable are carried at their estimated collectible amounts. Trade
credit is generally extended on a short-term basis, thus accounts receivable do
not bear interest, although a finance charge may be applied to such receivables
that are past due. Bad debts are provided on the allowance method based on
historical experience and management’s evaluation of outstanding accounts
receivable.
Inventory
Inventory
of finished goods is stated at the lower of cost (weighted average method) or
market.
Fixed
Assets
All fixed
assets are stated at cost. Significant renewals and improvements are
treated as capital expenditures and maintenance and repairs are charged to
expense as incurred.
Depreciation
is provided on straight-line method based on the estimated useful lives and
salvage values of the assets, ranging from 2 to 5 years.
Revenue,
Costs and Expenses
Revenues
are recognized when the earning process is substantially completed and they are
realized or realizable. Costs and expenses are recognized as
incurred.
Research
and Development Costs
Research
and development costs are expensed as incurred.
Taxes
Collected from Customers
The
Company presents revenue net of sales, use, and excise taxes collected from
customers.
Shipping
and Handling Costs
The
Company’s policy is to classify shipping and handling costs as part of operating
expenses in the statements of income.
Advertising
Advertising
costs are expensed as incurred.
Income
Taxes
Current -
The Company follows the practice of providing for income taxes based on amounts
reportable for income tax purposes.
Deferred
- The recognition of income and expenses in different periods for financial
accounting and tax purposes gives rise to timing difference that result in
deferred taxes.
Uncertain
Tax Positions
Management
has elected to defer the application of FAS FIN 48, Accounting for Uncertain Tax
Positions, in accordance with FSP FIN 48-3. The Company will continue to
follow FAS 5, Accounting for Contingencies, until it adopts FIN 48.
Use
of Estimates
The
preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect certain reported amounts and disclosures. Accordingly, actual
results could differ from those estimates.
Not
applicable.
RECENT ACCOUNTING
PRONOUNCEMENTS
In May
2008, the FASB released SFAS No. 162, “The Hierarchy of Generally Accepted
Accounting Principles”. This statement identifies the sources of accounting
principles and the framework for selecting the accounting principles used in the
preparation of financial statements of nongovernmental entities that are
presented in conformity with generally accepted accounting principles in the
United States. SFAS No. 162 is effective 60 days after the SEC’s approval of the
Public Company Accounting Oversight Board amendments to AU Section 411, “The
Meaning of Present Fairly in Conformity with Generally Accepted Accounting
Principles”. The Company does not expect the implementation of this
guidance to have a material impact on the financial statements.
In March
2008, the FASB issued SFAS No. 161, “Disclosures about Derivative Instruments
and Hedging Activities-an amendment of FASB Statement No. 133”. SFAS No. 161
gives financial statement users better information about the reporting entity's
hedges by providing for qualitative disclosures about the objectives and
strategies for using derivatives, quantitative data about the fair value of and
gains and losses on derivative contracts, and details of credit-risk-related
contingent features in their hedged positions. SFAS No. 161 is effective for
financial statements issued for fiscal years beginning after November 15, 2008
and interim periods within those years. The Company does not expect the adoption
of SFAS No. 161 to have a material effect on the financial
statements.
In
February 2007, the FASB released SFAS No. 159, “The Fair Value Option for
Financial Assets and Financial Liabilities”. The standard is effective for
fiscal years beginning after November 15, 2007. The standard provides entities
the ability, on an elective basis, to report most financial assets and financial
liabilities at fair value, with corresponding gains and losses recognized in
current earnings. The Company did not elect the fair value option under SFAS No.
159 as of January 1, 2008 for any of our financial assets and liabilities that
were not already fair valued. The Company will consider applying the fair value
option to future transactions as provided by the standard. The Company does not
expect SFAS No. 159 to have a material impact on the financial
statements.
In
December 2007, the FASB released SFAS No. 141(R), “Business Combinations”. This
standard revises and enhances the guidance set forth in SFAS No. 141(R) by
establishing a definition for the “acquirer,” providing additional guidance on
the recognition of acquired contingencies and non-controlling interests, and
broadening the scope of the standard to include all transactions involving a
transfer in control, irrespective of the consideration involved in the transfer.
SFAS No. 141(R) is effective for business combinations for which the acquisition
date occurs in a fiscal year beginning on or after December 15, 2008. Although
the standard will not have any impact on the current financial statements,
application of the new guidance could be significant to the Company in the
context of future merger and acquisition activity.
In
December 2007, the FASB released SFAS No. 160, “Non-controlling Interests in
Consolidated Financial Statements-an amendment of ARB No. 51”. This statement
amends ARB 51 to establish accounting and reporting standards for the
non-controlling interest in a subsidiary and for the deconsolidation of a
subsidiary. It clarifies that a non-controlling interest in a subsidiary is an
ownership interest in the consolidated entity that should be reported as equity
in the consolidated financial statements. SFAS No. 160 is effective for fiscal
years, and interim periods within those fiscal years, beginning on or after
December 15, 2008. The Company does not expect the standard to have a material
impact on the financial statements.
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, changes in financial
condition, revenues or expenses, results of operations, liquidity, capital
expenditures or capital resources that are material to our
investors.
3. DESCRIPTION OF
PROPERTY
Following
the Exchange, our United States address will be located at 3305 W. Spring
Mountain Road, #48, Las Vegas, Nevada 89102. Our corporate headquarters are
comprised of 15,000 square feet located in Jhonghe City, Taipei County, Taiwan
under a lease which expires in 15
th
, March,
2012 at a monthly rental of US $9,257 per month..
4. 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 The Registrant Common Stock as of December 11, 2007
(after giving effect to the Exchange) by (i) each person known by us to be the
beneficial owner of more than 5% of the outstanding APlus Common Stock, (ii)
each of our directors, (iii) each of our named executive officers (as defined in
Item 402(a)(3) of Regulation S-B under the Securities Act), 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
|
Amount
and Nature of Beneficial Owner (1)
|
Percent
of Class (2)
|
|
Yao-Ting
Su(3)
|
1,550,000
|
8.3%
|
|
Xodtec
Technology Co. Ltd
|
2,100,000
|
11,2%
|
|
UP
Technology Co. Ltd
|
5,000,000
|
26.7%
|
|
Radiant
Sun Development S.A.
|
3,500,000
|
18.7%
|
|
All
Directors and Executive Officers as a Group (1 person)
|
1,550,000
|
8.3%
|
(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 91,970,000 shares of Common Stock outstanding as of December 11 2007, 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.
(3)
5.
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS.
The
following table sets forth information regarding the members of the Company’s
board of directors and its executive officers. All of the Company’s executive
officers and directors were appointed on December 6, 2007, the effective date of
the Acquisition. All directors hold office until the first annual meeting of the
stockholders of the Company and until the election and qualification of their
successors or their earlier removal or retirement.
Officers
are elected annually by the board of directors and serve at the discretion of
the board.
|
Name
|
Age
|
Title
|
|
Yao-Ting
Su
|
45
|
Chairman
of the Board of Directors
|
|
Chao-Wu
Chou
|
51
|
Chief
Executive Officer; Director
|
|
Hui-Yu
Che
|
43
|
Chief
Financial Officer,
Director
|
Yao-Tin (Curtis)
Su.
Mr. Su serves as the Company’s Chairman of the Board of
Directors. Simultaneously therewith and since 2007 Mr. Su has served
as the Chairman of the Company’s subsidiary Xodtec Technology Co., Ltd. and from
1997 as the Chief Executive Officer of another of the Company’s other
subsidiaries Targetek Technology Co. Ltd. Mr. Su received a Bachelors
Degree from Soochow University (Taipei, Taiwan) and was the Valedictorian of the
Air Defense Missile School of the United States Army in Fort Bliss,
Texas. Mr. Su also served in the Army of Taiwan from 1979 to
1981.
Chao-Wu (Mike)
Chou
. Mr. Chou serves as our Chief Executive Officer and
Director. Simultaneously therewith and since December 2008, Mr. Chou
serves as the Chief Executive Officer of the Company’s subsidiary Xodtec
Technology Co., Ltd. where he is responsible for the formulation and execution
of corporate strategies, integration of resources and setting and achieving
sales revenues and profit goals. Prior thereto and from July 2003,
Mr. Chou served as the Senior Vice-President of Elitegroup Computer Systems Co.,
Ltd. Mr. Chou received a Masters Degree from National Chiao Tung
University (Taiwan) and his Bachelors Degree from National Taiwan University of
Science and Technology.
Hui-Yu (Rachel)
Che.
Ms. Che serves as the Company’s Chief Financial Officer
and Director. Simultaneously and since 2001, Ms. Che has served as
the Chief Financial Officer of the Company’s subsidiary Targetek Technology Co.,
Ltd. Ms. Che is a certified public accountant and has a degree from
National Chung Hsing University.
AUDIT
COMMITTEE. The Company intends to establish an audit committee, which will
consist of independent directors. The audit committee's duties would be to
recommend to the Company's board of directors the engagement of independent
auditors to audit the Company's financial statements and to review its
accounting and auditing principles. The audit committee would review the scope,
timing and fees for the annual audit and the results of audit examinations
performed by the internal auditors and independent public accountants, including
their recommendations to improve the system of accounting and internal controls.
The audit committee would at all times be composed exclusively of directors who
are, in the opinion of the Company's board of directors, free from
any relationship which would interfere with the exercise of independent judgment
as a committee member and who possess an understanding of financial statements
and generally accepted accounting principles.
COMPENSATION
COMMITTEE. Our board of directors does not have a standing compensation
committee responsible for determining executive and director
compensation. Instead, the entire board of directors fulfills this
function, and each member of the Board participates in the determination.
Given the small size of the Company and its Board and the Company's
limited resources, locating, obtaining and retaining additional independent
directors is extremely difficult. In the absence of independent directors,
the Board does not believe that creating a separate compensation committee would
result in any improvement in the compensation determination process.
Accordingly, the board of directors has concluded that the Company and its
stockholders would be best served by having the entire board of directors act in
place of a compensation committee. When acting in this capacity, the Board
does not have a charter.
In
considering and determining executive and director compensation, our board of
directors reviews compensation that is paid by other similar public companies to
its officers and takes that into consideration in determining the compensation
to be paid to the Company’s officers. The board of directors also
determines and approves any non-cash compensation to any employee. The Company
does not engage any compensation consultants to assist in determining or
recommending the compensation to the Company’s officers or employees.
6. EXECUTIVE
COMPENSATION
Summary
Compensation Table
The
following table sets forth all of the compensation awarded to, earned by or paid
to (i) each individual serving as our principal executive officer during our
last completed fiscal year; and (ii) each other individual that served as an
executive officer at the conclusion of the fiscal year ended December 31, 2008
and who received in excess of $100,000 in the form of salary and bonus during
such fiscal year (collectively, the Named Executives).
|
Name
and
Principal
Position
|
|
Year
|
|
Salary
|
|
Bonus
|
|
|
Option
Awards
|
|
Non-Equity
Incentive Plan Compensation
|
|
All
Other Compensation
|
|
Total
|
|
Yao-Ting
Su (1)
|
|
|
2009
|
|
-
|
|
-
|
|
|
-
|
|
-
|
|
-
|
|
-
|
|
Chao-Wu
Chou (2)
|
|
|
2009
|
|
-
|
|
-
|
|
|
-
|
|
-
|
|
-
|
|
-
|
|
Hui-Yu
Che (3)
|
|
|
2009
|
|
-
|
|
-
|
|
|
-
|
|
-
|
|
-
|
|
-
|
|
Adam
Borges dos Santos
|
|
|
2009
|
|
-
|
|
-
|
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
|
|
2008
|
|
-
|
|
-
|
|
|
-
|
|
-
|
|
-
|
|
-
|
|
Carlo
Giusto
|
|
|
2008
|
|
-
|
|
-
|
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
|
|
2007
|
|
-
|
|
-
|
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
|
|
2006
|
|
-
|
|
-
|
|
|
-
|
|
-
|
|
-
|
|
-
|
Compensation
Policy
. Our Company’s executive compensation plan is based on attracting
and retaining qualified professionals who possess the skills and leadership
necessary to enable our Company to achieve earnings and profitability growth to
satisfy our stockholders. We must, therefore, create incentives for these
executives to achieve both Company and individual performance objectives through
the use of performance-based compensation programs. No one component is
considered by itself, but all forms of the compensation package are considered
in total. Wherever possible, objective measurements will be utilized to quantify
performance, but many subjective factors still come into play when determining
performance.
Compensation
Components
. As an early-stage development company, the main elements of
our compensation package consist of base salary, stock options and
bonus.
Base
Salary
. As we continue to grow and financial conditions improve, these
base salaries, bonuses and incentive compensation will be reviewed for possible
adjustments. Base salary adjustments will be based on both individual and
Company performance and will include both objective and subjective criteria
specific to each executive’s role and responsibility with the
Company.
COMPENSATION OF
DIRECTORS
At this
time, directors receive no remuneration for their services as directors of the
Company, nor does the Company reimburse directors for expenses incurred in their
service to the Board of Directors. The Company does not expect to pay any fees
to its directors for the 2008 fiscal year.
EMPLOYMENT AGREEMENTS, TERMINATION OF
EMPLOYMENT AND CHANGE-IN-CONTROL ARRANGEMENTS
On April
21, 2009, the Company entered into employment agreements with its three
executive officers, Yao-Ting (Curtis) Su, Chairman; Chao-Wu (Mike) Chou,
Chief Executive Officer and Hui-Yu (Rachel) Che, Chief Financial Officer. They
agreements provide for a three year term with minimum annual base salaries of
$55,000 if determined to be appropriate by the Board. In addition, the
agreements provide for bonuses according to the following schedule:
|
1.
|
Year-end
bonus: Minimum of $7,500 will be paid on Jan. 10 of every year during the
validity of the agreements.
|
|
2.
|
Performance
bonus: Based on the actual performance, the company will pay up to $70,000
on Feb. 10 of every year during the validity of the
agreements.
|
The
agreements do not include any terms which show the company should reimburse to
the two executive officers when the employment agreement terminated. When the
company has any change-in-control arrangement, the company will revise the
agreement and the un-paid salary or bonus will be calculated and paid on a pro
rata basis.
7. CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS
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.
8. DESCRIPTION OF
SECURITIES
COMMON
STOCK
Number of Authorized and Outstanding
Shares
. The Company's Articles of Incorporation authorizes the issuance
of 75,000,000 shares of Common Stock, $.001 par value per share, of which
6,016,668 post-split adjusted shares were outstanding on April 24,
2009. On April 20, 2009 the Company’s Board of Directors have
authorized an amendment to the Articles of Incorporation to increase the number
of authorized shares of common stock from 75,000,000 to 225,000,000 and
concurrently affecting a three for one (3:1) forward-split of the Registrant’s
issued and outstanding shares of Common Stock.
Voting Rights
. Holders of
shares of Common Stock are entitled to one vote for each share on all matters to
be voted on by the stockholders. Holders of Common Stock have no cumulative
voting rights. Accordingly, the holders of in excess of 50% of the aggregate
number of shares of Common Stock outstanding will be able to elect all of the
directors of the Company and to approve or disapprove any other matter submitted
to a vote of all stockholders.
Other
. No shareholder has any
preemptive right or other similar right to purchase or subscribe for any
additional securities issued by the Company, and no shareholder has any right to
convert the common stock into other securities. No shares of common stock are
subject to redemption or any sinking fund provisions. All the outstanding shares
of the Company's common stock are fully paid and non-assessable. Subject to the
rights of the holders of the preferred stock, if any, the Company's shareholders
of common stock are entitled to dividends when, as and if declared by the Board
from funds legally available therefore and, upon liquidation, to a pro-rata
share in any distribution to shareholders. The Company does not anticipate
declaring or paying any cash dividends on the common stock in the foreseeable
future.
Preferred
Stock
The
proposed amendment to the Company's Articles of Incorporation authorizes the
issuance of 10,000,000 shares of Preferred Stock, par value $0.001 per share,
subject to any limitations prescribed by law, without further vote or action by
the stockholders, to issue from time to time shares of preferred stock in one or
more series. Each such series of Preferred Stock shall have such number of
shares, designations, preferences, voting powers, qualifications, and special or
relative rights or privileges as shall be determined by the Company's board of
directors, which may include, among others, dividend rights, voting rights,
liquidation preferences, conversion rights and preemptive rights.
Transfer
Agent
Shares of
Common Stock are registered at the transfer agent and are transferable at such
office by the registered holder (or duly authorized attorney) upon surrender of
the Common Stock certificate, properly endorsed. No transfer shall be registered
unless the Company is satisfied that such transfer will not result in a
violation of any applicable federal or state securities laws. The Company's
transfer agent for its Common Stock is Island Stock Transfer, 100 Second Avenue
South, Suite 705S, St. Petersburg, Florida 33701, Telephone (727)
289-0010.
Penny Stock
The
Commission has adopted rules that define a “penny stock” as equity securities
under $5.00 per share which are not listed for trading on Nasdaq (unless the
issuer (i) has a net worth of $2,000,000 if in business for more than three
years or $5,000,000 if in business for less than three years or (ii) has had
average annual revenue of $6,000,000 for the prior three years). The Company's
securities are characterized as penny stock, and therefore broker-dealers
dealings in the securities are subject to the disclosure rules of transactions
involving penny stock which require the broker-dealer, among other things, to
(i) determine the suitability of purchasers of the securities and obtain the
written consent of purchasers to purchase such securities and (ii) disclose the
best (inside) bid and offer prices for such securities and the price at which
the broker-dealer last purchased or sold the securities. The additional
requirements imposed upon broker-dealers discourage them from engaging in
transactions in penny stocks, which reduces the liquidity of the Company's
securities. The Company's common stock is currently quoted on the OTC Bulletin
Board under the symbol SPEV.OB.
PART II.
1. MARKET
INFORMATION
Currently
the Company’s common shares are listed on the Over-the-Counter Bulletin Board
(OTCBB) under the ticker symbol “SPEV”. However, as of the date of
this report there have been no trading activities in the Company’s common
stock. There can be no assurance that a market will ever develop in
the Company’s common stock in the future. If a market does not
develop then investors would be unable to sell any of the Company’s common stock
likely resulting in a complete loss of any funds therein invested
.
Since our
inception, we have not paid any dividends on our Common Stock, and we do not
anticipate that we will pay any dividends in the foreseeable future. We intend
to retain any future earnings for use in our business. At April 20,
2009, we had approximately 52 shareholders of record.
2. LEGAL
PROCEEDINGS
The
Company is not a party to any pending legal proceedings, and no such proceedings
are known to be contemplated.
No
director, officer, or affiliate of the Company and no owner of record or
beneficial owner of more than 5.0% of the securities of the Company, or any
associate of any such director, officer or security holder is a party adverse to
the Company or has a material interest adverse to the Company in reference to
pending litigation.
3.
CHANGES IN AND DISAGREEMENT WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE
Not
applicable.
4. RECENT
ISSUANCES OF UNREGISTERED SECURITIES BY THE REGISTRANT
Since
inception of the Company in November 29, 2006, we have sold unregistered
securities to the following shareholders.
On
December 11, 2006 we issued 9,000,000 shares of Common Stock to Carlo
Giusto, who at the time was the Registrant’s sole officer and director in
exchange of the payment of $9,000, or $0.001 per share.
On April
20, 2009, the Registrant authorized the issuance of 5,333,334 shares in
connection with the execution of a Share Exchange Agreement with the
equity-holders of APlus International, Ltd. (the “Exchange”)and the issuance of
111,667 shares of Common Stock for services rendered to a finder in connection
with the Exchange
On April
22, 2009 the Registrant entered into a Financial Advisory Agreement with Unise
Investment Corp. to provide financial consulting services in consideration for
111,667 shares of Common Stock.
On April
23, 2009, the Registrant sold warrants exercisable into 200,000 shares of Common
Stock at the exercise price of $0.65 per share and expiring in 6 months,
warrants exercisable into 500,000 shares of Common Stock at the exercise price
of $1.00 per share and expiring in 2 years and warrants exercisable into 800,000
shares of Common Stock at the exercise price of $1.50 per share and expiring in
2 years.
Except as
noted above, the sales of the securities identified above were made pursuant to
privately negotiated transactions that did not involve a public offering of
securities and, accordingly, we believe that these transactions were exempt from
the registration requirements of the Securities Act pursuant to Section 4(2)
thereof and rules promulgated thereunder. In addition, we believe that the 8%
Promissory Note is commercial paper and is exempt from the registration
requirements of the Securities Act under Section 3(a)3 thereof. Each of the
above-referenced investors in our stock represented to us in connection with
their investment that they were “accredited investors” (as defined by Rule 501
under the Securities Act) and were acquiring the shares for investment and not
distribution, that they could bear the risks of the investment and could hold
the securities for an indefinite period of time. The investors received written
disclosures that the securities had not been registered under the Securities Act
and that any resale must be made pursuant to a registration or an available
exemption from such registration. All of the foregoing securities are deemed
restricted securities for purposes of the Securities Act.
5.
INDEMNIFICATION OF OFFICERS AND DIRECTORS
Pursuant
to our certificate of incorporation and bylaws, we may indemnify an officer or
director who is made a party to any proceeding, because of his position as such,
to the fullest extent authorized by Nevada Revised Statutes, as the same exists
or may hereafter be amended. In certain cases, we may advance expenses incurred
in defending any such proceeding.
To the
extent that indemnification for liabilities arising under the Securities Act may
be permitted to directors, officers or persons controlling our company pursuant
to the foregoing provisions, we have been informed that, in the opinion of the
SEC, such indemnification is against public policy as expressed in the
Securities Act and is therefore unenforceable. If a claim for indemnification
against such liabilities (other than the payment by us of expenses incurred or
paid by a director, officer or controlling person of our company in the
successful defense of any action, suit or proceeding) is asserted by any of our
directors, officers or controlling persons in connection with the securities
being registered, we will, unless in the opinion of our counsel the matter has
been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by us is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of that issue.
ITEM 4.01 CHANGES IN
REGISTRANT’S CERTIFYING ACCOUNTANT.
See
“Information Required Pursuant to Form 10-SB” II(3) “
Changes In and Disagreements with
Accountants
,” which discussion is incorporated herein by
reference.
ITEM 5.01 CHANGES IN CONTROL
OF REGISTRANT.
Please
see the discussion of “
Closing
of Exchange
”
and “
Recent
Financings
”
in Item 2.01, which discussion is incorporated herein by
reference.
ITEM 5.02
DEPARTURE OF DIRECTORS OR PRINCIPAL OFFICERS; ELECTION OF DIRECTORS; APPOINTMENT
OF PRINCIPAL OFFICERS.
On April
20, 2009, Mr. Adam Borges Dos Santos resigned from his role as the Registrant’s
sole principal officer and director.
Yao-Ting
(Curtis) Su was elected as the Registrant’s Chairman. Chao-Wu (Mike) Chou was
elected as Chief Executive Officer and Director, and Hui-Yu (Rachel) Che was
elected as Chief Financial Officer and Director.
ITEM 5.03
AMENDMENTS TO ARTICLES OF INCORPORATION OR BYLAWS; CHANGE IN FISCAL
YEAR.
On April
20, 2009, the shareholders of the Registrant authorized an amendment to the
Registrant’s Articles of Incorporation to change the name of the corporation to
Xodtec Group USA, Inc. and to increase the Registrant’s authorized capital stock
to 235,000,000 shares of which 225,000,000 will be common stock, par value
$0.001 per share and 10,000,000 shares will be “blank check” preferred stock,
par value $0.001 per share.
ITEM 5.06
CHANGE IN SHELL COMPANY STATUS.
As
described in Item 2.01 above, which is incorporated by reference into this Item
5.06, we ceased being a shell company (as defined in Rule 12b-2 under the
Exchange Act of 1934, as amended) upon completion of the Exchange.
PART III.
ITEM 9.01
FINANCIAL STATEMENTS AND EXHIBITS.
(a)
Financial statements:
As
a result of the Exchange described in Item 2.01, the registrant is filing the
audited financial statement information of APlus International, Ltd.’s principal
operating subsidiaries, Xodtec Technology Co., Ltd., UP-Tech Technology Co.,
Ltd. and Targetek Technology Co., Ltd. as Exhibits 99.1, 99.2 and 99.3 to this
current report.
(b)
Pro forma financial
information:
The unaudited pro forma consolidated financial information
regarding the registrant and APlus International, Ltd. is attached to this
current report as Exhibit 99.4.
(c)
Shell company transactions:
Reference is made to the disclosure set forth under Item 2.01 of this
report, which disclosure is incorporated herein by reference.
(d)
Exhibits:
|
Exhibit
|
|
Description
|
|
|
|
Agreement and Plan of Share
Exchange, by and among Sparking Events, Inc., APlus International, Ltd.,
and the Shareholders of APlus International, Ltd. dated as of December 6,
2007.
|
|
|
|
|
|
|
|
Amended
Articles of Incorporation of Sparking Events, Inc.
|
|
|
|
|
|
|
|
Articles
of Organization of APlus International, Ltd.
|
|
|
|
|
|
|
|
Operating
Agreement of APlus International, Ltd. dated April 1,
2009
|
|
|
|
|
|
4.1
|
|
Form
of Warrant
|
|
|
|
|
|
|
|
Employment
Agreement between Sparking Events, Inc. and Yao-Ting Su dated
April 23, 2009.
|
|
|
|
|
|
|
|
Employment
Agreement between Sparking Events, Inc. and Chao-Wu Chou dated April
23, 2009.
|
|
|
|
|
|
10.3
|
|
Employment
Agreement between Sparking Events, Inc. and Hui-Yu Che
|
|
|
|
|
|
|
|
Securities
Exchange Agreement between APlus International, Ltd. and. Xodtec
Technology Co., Ltd. dated April 1, 2009
|
|
|
|
|
|
|
|
Securities
Exchange Agreement between APlus International, Ltd. and Targetek
Technology Co., Ltd. dated April 1, 2009
|
|
|
|
|
|
|
|
Securities
Exchange Agreement between APlus International, Ltd. and UP Technology
Co., Ltd. dated April 1, 2009
|
|
|
|
|
|
|
|
Agent
Sales Contract between UP-Technology Co., Ltd. and Anteya Technology
Corporation
|
|
|
|
|
|
|
|
Service
Agreement between Targetek Co., Ltd. and Welocalize Inc. dated October 20,
2007
|
|
|
|
|
|
|
|
Consent
from Brock, Schechter & Polakoff, LLP
|
|
|
|
|
|
|
|
Audited
financial statements of Xodtec Technology Co., Ltd. for the period ended
December 31, 2008.
|
|
|
|
|
|
|
|
Audited
financial statements of UP-Tech Technology Co., Ltd. for the period ended
December 31, 2008.
|
|
|
|
|
|
|
|
Audited
financial statements of Targetek Technology Co., Ltd. for the period ended
December 31, 2008.
|
|
|
|
|
|
|
|
Unaudited
Pro Forma Consolidated Financial
Statements
|
In
accordance with the requirements of the Exchange Act, the registrant caused this
report to be signed on its behalf by the undersigned, thereunto duly
authorized.
|
|
|
|
|
SPARKING
EVENTS, INC.
|
|
|
|
|
Date:
April 24, 2009
|
/s/
Chao-Wu Chou
|
|
|
|
|
|
By:
Chao-Wu Chou, Chief Executive
Officer
|
Exhibit
2.1
THIS AGREEMENT AND PLAN OF SHARE
EXCHANGE
(hereinafter referred to as the “Agreement”), is entered into as
of this 10th day of April, 2009, by and among,
SPARKING EVENTS, INC.,
a
publicly-owned Nevada corporation (“SPI”),
ADAM GORDOY BORGES DOS SANTO
,
an individual (the “Shareholder”),
APLUS INTERNATIONAL, LTD,
a
Nevada limited liability company (“APlus”) and the Shareholders of APlus on the
signature page hereof (the “APlus Holders”). (SPI, APlus, and the
APlus Holders are sometimes hereinafter collectively referred to as the
“Parties” and individually as a “Party.”)
W
I T N E S S E T H
WHEREAS
, SPI is a
publicly-owned Nevada corporation with 9,465,000 shares of common stock, par
value $0.001 per share, issued and outstanding (the “SPI Common Stock”) and is
quoted on the Over the Counter Bulletin Board under the symbol
“SPEV”.
WHEREAS
, APlus is a Nevada
limited liability company, the shares of which (the “APlus Interests”), are
owned as of the date hereof by all the APlus Holders on the signature page
hereto.
WHEREAS
, the Parties desire
that SPI acquire all of the APlus Interests from the APlus Holders solely in
exchange for an aggregate of 5,333,333 newly issued shares of SPI Common Stock
(the “Exchange Shares”) pursuant to the terms and conditions set forth in this
Agreement.
WHEREAS
, immediately upon
consummation of the Closing (as hereinafter defined), the Exchange Shares will
be issued to the APlus Holders on a pro rata basis, in proportion to the ratio
that the number of shares of APlus Interests held by such APlus Holder bears to
the pro rata portion of APlus Interests held by all the APlus Holders as of the
date of the Closing as set forth on Schedule I.
WHEREAS
,
following the Closing,
APlus will become a wholly-owned subsidiary of SPI and the Exchange Shares will
represent approximately eighty-eight percent (88%) of the total outstanding
shares of Common Stock of SPI on a fully-diluted basis.
WHEREAS
, the Parties intend
that the transaction contemplated herein (the “Transaction”) qualify as a
reorganization and tax-free exchange under Section 368(a) of the Internal
Revenue Code of 1986, as amended.
NOW THEREFORE
, on the stated
premises and for and in consideration of the foregoing recitals which are hereby
incorporated by reference, the mutual covenants and agreements hereinafter set
forth and the mutual benefits to the Parties to be derived herefrom and for
other good and valuable consideration, the sufficiency and receipt of which are
hereby acknowledged, the Parties hereto agree as follows:
ARTICLE
I
PLAN
OF EXCHANGE
1.1
The Exchange
. At the
Closing (as hereinafter defined), all of the APlus Interests issued and
outstanding immediately prior to the Closing Date shall be exchanged for Five
Million Three Hundred Thirty-Three Thousand Three Hundred Thirty-Three
(5,333,333) shares of SPI Common Stock. From and after the Closing Date, the
APlus Holders shall no longer own any membership interests of APlus Interests,
and the former APlus Interests shall represent the pro rata portion
of the Exchange Shares issuable in exchange therefor pursuant to this
Agreement. Any fractional shares that would result from such exchange
will be rounded up to the next highest whole number.
1.2
No Dilution
. Except as set
forth herein, SPI shall neither effect, nor fix any record date with respect to,
any stock split, stock dividend, reverse stock split, recapitalization, or
similar change in the SPI Common Stock between the date of this Agreement and
the Effective Time.
1.3
Closing
. The closing (“Closing”) of
the transactions contemplated by this Agreement shall occur immediately
following the execution of this Agreement providing the closing conditions set
forth in Articles V and VI have been satisfied or waived (the “Closing
Date”).
1.4
Closing Events
. At the
Closing, each of the respective parties hereto shall execute, acknowledge, and
deliver (or shall cause to be executed, acknowledged, and delivered) any and all
stock certificates, officers’ certificates, opinions, financial statements,
schedules, agreements, resolutions, rulings, or other instruments required by
this Agreement to be so delivered at or prior to the Closing, and the documents
and certificates provided in Sections 5.2, 5.4, 6.2, 6.4 and 6.5, together with
such other items as may be reasonably requested by the parties hereto and their
respective legal counsel in order to effectuate or evidence the transactions
contemplated hereby. If agreed to by the parties, the Closing may
take place through the exchange of documents (other than the exchange of stock
certificates) by fax, email and/or express courier. At the Closing,
the Exchange Shares shall be issued in the names and denominations provided by
APlus.
1.5
Standstill
.
(a)
Until
the earlier of the Closing or June 1, 2009 (the “No Shop Period”), neither APlus
nor the APlus Holders will (i) solicit or encourage any offer or enter into any
agreement or other understanding, whether written or oral, for the sale,
transfer or other disposition of any capital stock or assets of APlus to or with
any other entity or person, except as contemplated by the Transaction, other
than sales of goods and services by APlus in the ordinary course of its
business; (ii) entertain or pursue any unsolicited communication, offer or
proposal for any such sale, transfer or other disposition; or (iii) furnish to
any person or entity (other than SPI, and its authorized agents and
representatives) any nonpublic information concerning APlus r its business,
financial affairs or prospects for the purpose or with the intent of permitting
such person or entity to evaluate a possible acquisition of any capital stock or
assets of APlus. If either APlus or any of the APlus Holders shall
receive any unsolicited communication or offer, APlus or the APlus Holders, as
applicable, shall immediately notify SPI of the receipt of such communication or
offer.
(b)
During
the No-Shop Period, SPI will not (i) solicit or encourage any offer or enter
into any agreement or other understanding, whether written or oral, for the
sale, transfer or other disposition of any capital stock or assets of SPI to or
with any other entity or person, except as contemplated herein, other than sales
of goods and services by SPI in the ordinary course of its business; (ii)
entertain or pursue any unsolicited communication, offer or proposal for any
such sale, transfer or other disposition; or (iii) furnish to any person or
entity (other than APlus, and its authorized agents and representatives) any
nonpublic information concerning SPI or its business, financial affairs or
prospects for the purpose or with the intent of permitting such person or entity
to evaluate a possible acquisition of any capital stock or assets of
SPI. If either SPI or any of SPI’s stockholders shall receive any
unsolicited communication or offer, SPI or such SPI stockholder, as applicable,
shall immediately notify APlus of the receipt of such communication or
offer.
ARTICLE
II
REPRESENTATIONS,
COVENANTS, AND WARRANTIES OF APLUS
As an
inducement to, and to obtain the reliance of SPI, APlus represents and warrants
as follows:
2.1
Organization
. APlus is a
limited liability company duly organized, validly existing, and in good standing
under the laws of the State of Nevada. APlus has the power and is
duly authorized, qualified, franchised, and licensed under all applicable laws,
regulations, ordinances, and orders of public authorities to own all of its
properties and assets and to carry on its business in all material respects as
it is now being conducted, including qualification to do business as a foreign
corporation in jurisdictions in which the character and location of the assets
owned by it or the nature of the business transacted by it requires
qualification. The execution and delivery of this Agreement does not,
and the consummation of the transactions contemplated by this Agreement in
accordance with the terms hereof will not, violate any provision of APlus’s
organizational documents. APlus has taken all action required by
laws, its certificate of incorporation, certificate of business registration, or
otherwise to authorize the execution and delivery of this Agreement. APlus has
full power, authority, and legal right and has taken or will take all action
required by law, its Articles of Organization, and otherwise to consummate the
transactions herein contemplated.
2.2
Capitalization
. All issued
and outstanding membership interests of APlus are legally issued, fully paid,
and non-assessable and were not issued in violation of the pre-emptive or other
rights of any person. APlus has no outstanding options, warrants, or
other convertible securities.
2.3
Financial
Statements
. Except as set forth herein or in the APlus
Schedules:
(a)
APlus
has filed all local income tax returns required to be filed by it from its
inception to the date hereof. All such returns are complete and
accurate in all material respects.
(b)
APlus
has no liabilities with respect to the payment of federal, county, local, or
other taxes (including any deficiencies, interest, or penalties), except for
taxes accrued but not yet due and payable, for which APlus may be liable in its
own right or as a transferee of the assets of, or as a successor to, any other
corporation or entity.
(c)
No
deficiency for any taxes has been proposed, asserted or assessed against
APlus. There has been no tax audit, nor has there been any notice to
APlus by any taxing authority regarding any such tax audit, or, to the knowledge
of APlus, is any such tax audit threatened with regard to any taxes or APlus tax
returns. APlus does not expect the assessment of any additional taxes
of APlus for any period prior to the date hereof and has no knowledge of any
unresolved questions concerning the liability for taxes of APlus.
(d)
APlus
shall have provided to SPI the audited balance sheet of APlus as of, and the
audited statements of income, stockholders’ equity and cash flows of APlus for
the years ended December 31, 2007 and 2008, and the unaudited balance sheet of
APlus as of, and the audited statements of income, stockholders’ equity and cash
flows of APlus for the three months ended March 31, 2007 and 2008 (collectively
“APlus Financial Statements”). The APlus Financial Statements have
been prepared from the books and records of APlus in accordance with U.S.
Generally Accepted Accounting Principals. Except as set forth in the
APlus Schedules (as that term is defined herein), APlus does not have any
liabilities
(e)
The
books and records, financial and otherwise, of APlus are in all material
respects complete and correct and have been maintained in accordance with good
business and accounting practices.
2.4
Information
. The
information concerning APlus set forth in this Agreement and the APlus Schedules
(as that term is defined herein) are and will be complete and accurate in all
material respects and does not contain any untrue statement of a material fact
or omit to state a material fact required to make the statements made, in light
of the circumstances under which they were made, not misleading as of the date
hereof and as of the Closing Date.
2.5
Common Stock
Equivalents
. There are no existing options, warrants, calls,
commitments of any character or other common stock equivalents relating to the
authorized and unissued APlus Interests.
2.6
Absence of Certain Changes
or Events
. Except as set forth in this Agreement or the APlus
Schedules:
(a)
except
in the normal course of business, there has not been (i) any material adverse
change in the business, operations, properties, assets, or condition of APlus;
or (ii) any damage, destruction, or loss to APlus (whether or not covered by
insurance) materially and adversely affecting the business, operations,
properties, assets, or condition of APlus;
(b)
APlus
has not (i) borrowed or agreed to borrow any funds or incurred, or become
subject to, any material obligation or liability (absolute or contingent) not
otherwise in the ordinary course of business, ; (ii) paid any material
obligation or liability not otherwise in the ordinary course of business
(absolute or contingent) other than current liabilities reflected in or shown on
the most recent APlus consolidated balance sheet, and current liabilities
incurred since that date in the ordinary course of business; (iii) sold or
transferred, or agreed to sell or transfer, any of its assets, properties, or
rights not otherwise in the ordinary course of business; (iv) made or permitted
any amendment or termination of any contract, agreement, or license to which
they are a party not otherwise in the ordinary course of business if such
amendment or termination is material, considering the business of APlus; or (v)
issued, delivered, or agreed to issue or deliver any stock, bonds or other
corporate securities including debentures (whether authorized and unissued or
held as treasury stock).
2.7
Litigation and
Proceedings
. There are no actions, suits, proceedings, or
investigations pending or, to the knowledge of APlus, threatened by or against
APlus, or affecting APlus, or its properties, at law or in equity, before any
court or other governmental agency or instrumentality, domestic or foreign, or
before any arbitrator of any kind.
2.8
No Conflict With Other
Instruments
. The execution of this Agreement and the
consummation of the transactions contemplated by this Agreement will not result
in the breach of any term or provision of, or constitute an event of default
under, any material indenture, mortgage, deed of trust, or other material
contract, agreement, or instrument to which APlus is a party or to which any of
its properties or operations are subject.
2.9
Contracts
. APlus
has provided, or will provide SPI, copies of all material contracts, agreements,
franchises, license agreements, or other commitments to which APlus is a party
or by which it or any of its assets, products, technology, or properties are
bound.
2.10
Compliance With Laws and
Regulations
. APlus has complied with all applicable statutes
and regulations of any national, county, or other governmental entity or agency
thereof, except to the extent that noncompliance would not materially and
adversely affect the business, operations, properties, assets, or condition of
APlus.
2.11
Approval of
Agreement
. The board of directors of APlus (the “APlus Board”)
and the APlus Holders have authorized the execution and delivery of this
Agreement by APlus and have approved the transactions contemplated
hereby.
2.12
APlus
Schedules
. APlus will deliver, as soon as practicable, the
following schedules, which are collectively referred to as the “APlus Schedules”
and which consist of separate schedules dated as of the date of execution of
this Agreement and instruments and data as of such date, all certified by the
chief executive officer of APlus as complete, true and correct:
(a)
a
schedule containing complete and correct copies of the organizational documents,
as amended, of APlus in effect as of the date of this Agreement;
and
(b)
a
schedule as requested by SPI, containing true and correct copies of all material
contracts, agreements, or other instruments to which Aplus is a party or by
which it or its properties are bound, specifically including all contracts,
agreements, or arrangements referred to in Section 2.9.
2.13
Title and Related
Matters
. APlus has good and marketable title to all of its
properties, interest in properties, and assets, real and personal, which are
reflected in the APlus balance sheet or acquired after that date (except
properties, interest in properties, and assets sold or otherwise disposed of
since such date in the ordinary course of business), free and clear of all
liens, pledges, charges, or encumbrances except: statutory liens or claims not
yet delinquent; and as described in the APlus Schedules.
2.14
Governmental
Authorizations
. APlus has all licenses, franchises, permits,
and other government authorizations, that are legally required to enable it to
conduct its business operations in all material respects as conducted on the
date hereof. Except for compliance with federal and state securities or
corporation laws, as hereinafter provided, no authorization, approval, consent,
or order of, or registration, declaration, or filing with, any court or other
governmental body is required in connection with the execution and delivery by
APlus of this Agreement and the consummation by APlus of the transactions
contemplated hereby.
2.15
Continuity of Business
Enterprises
. APlus has no commitment or present intention to
liquidate APlus or sell or otherwise dispose of a material portion of its
business or assets following the consummation of the transactions contemplated
hereby.
2.16
Ownership of APlus
Membership Interests
. The APlus Holders are the legal and
beneficial owners of 100% of the APlus Interests as set forth on
Schedule I
, free and
clear of any claims, charges, equities, liens, security interests, and
encumbrances whatsoever, and the APlus Holders have full right, power, and
authority to transfer, assign, convey, and deliver their respective APlus
Interests; and delivery of such common stock at the Closing will convey to SPI
good and marketable title to such shares free and clear of any claims, charges,
equities, liens, security interests, and encumbrances except for any such
claims, charges, equities, liens, security interests, and encumbrances arising
out of such shares being held by SPI.
2.17
Brokers
. Except as
disclosed in the APlus Schedules, APlus has not entered into any contract with
any person, firm or other entity that would obligate APlus or SPI to pay any
commission, brokerage or finders’ fee in connection with the transactions
contemplated herein.
2.18
Subsidiaries and Predecessor
Corporations
. APlus does not have any subsidiaries and does
not own, beneficially or of record, any shares or other equity interests of any
other corporation or entity.
ARTICLE
III
REPRESENTATIONS
,
COVENANTS, AND WARRANTIES OF
SPI
As an
inducement to, and to obtain the reliance of APlus, SPI represents and warrants
as follows:
3.1
Organization
. SPI
is a corporation duly organized, validly existing, and in good standing under
the laws of the State of Nevada, and has the corporate power and is duly
authorized, qualified, franchised, and licensed under all applicable laws,
regulations, ordinances, and orders of public authorities to own all of its
properties and assets and to carry on its business in all material respects as
it is now being conducted, and there is no jurisdiction in which it is not
qualified in which the character and location of the assets owned by it or the
nature of the business transacted by it requires qualification. Included in the
SPI Schedules (as hereinafter defined) are complete and correct copies of the
Articles of Incorporation and bylaws of SPI, and all amendments thereto, as in
effect on the date hereof. The execution and delivery of this Agreement does
not, and the consummation of the transactions contemplated hereby will not,
violate any provision of SPI’s Articles of Incorporation or bylaws. SPI has
taken all action required by law, its Certificate of Incorporation, its bylaws,
or otherwise to authorize the execution and delivery of this Agreement, and SPI
has full power, authority, and legal right and has taken all action required by
law, its Certificate of Incorporation, bylaws, or otherwise to consummate the
transactions herein contemplated.
3.2
Capitalization
. SPI’s
authorized capitalization consists of 75,000,000 shares of Common Stock, of
which no more than 9,465,000 shares will be issued and outstanding at Closing,
and no shares of preferred stock, authorized. All presently issued
and outstanding shares are legally issued, fully paid, and non-assessable and
not issued in violation of the pre-emptive or other rights of any
person. The Exchange Shares will be legally issued, fully paid and
non-assessable and shall not be issued in violation of the pre-emptive or other
rights of any other person.
3.3
Financial
Statements
. Except as described herein or in the SPI
Schedules:
(a)
SPI
has no liabilities with respect to the payment of any federal, state, county,
local, or other taxes (including any deficiencies, interest, or penalties),
except for taxes accrued but not yet due and payable, for which SPI may be
liable in its own right, or as a transferee of the assets of, or as a successor
to, any other corporation or entity.
(b)
SPI
has filed all federal, state, or local income tax returns required to be filed
by it from inception.
(c)
The
books and records, financial and otherwise, of SPI are in all material respects
complete and correct and have been maintained in accordance with good business
and accounting practices.
(d)
No
deficiency for any taxes has been proposed, asserted or assessed against
SPI. There has been no tax audit, nor has there been any notice to
SPI by any taxing authority regarding any such tax audit, or, to the knowledge
of SPI, is any such tax audit threatened with regard to any taxes or SPI tax
returns. SPI does not expect the assessment of any additional taxes
of SPI for any period prior to the date hereof and has no knowledge of any
unresolved questions concerning the liability for taxes of SPI.
(e)
SPI
has good and marketable title to its assets and, except as set forth in the SPI
Schedules, has no material contingent liabilities, direct or indirect, matured
or unmatured.
3.4
Information
. The
information concerning SPI set forth in this Agreement and the SPI Schedules are
and will be complete and accurate in all material respects and does not contain
any untrue statement of a material fact or omit to state a material fact
required to make the statements made, in light of the circumstances under which
they were made, not misleading as of the date hereof and as of the Closing
Date.
3.5
Common Stock
Equivalents
. Except as set forth herein, there are no existing
options, warrants, calls, commitments of any character or other common stock
equivalents relating to authorized and unissued stock of SPI.
3.6
Absence of Certain Changes
or Events
. Except as described herein or in the SPI
Schedules:
(a)
There
has not been (i) any material adverse change, financial or otherwise, in the
business, operations, properties, assets, or condition of SPI (whether or not
covered by insurance) materially and adversely affecting the business,
operations, properties, assets, or condition of SPI;
(b)
SPI
has not (i) amended its Articles of Incorporation or by-laws; (ii) declared or
made, or agreed to declare or make any payment of dividends or distributions of
any assets of any kind whatsoever to stockholders or purchased or redeemed, or
agreed to purchase or redeem, any of its capital stock; (iii) waived any rights
of value which in the aggregate are extraordinary or material considering the
business of SPI; (iv) made any material change in its method of management,
operation, or accounting; (v) entered into any other material transactions; (vi)
made any accrual or arrangement for or payment of bonuses or special
compensation of any kind or any severance or termination pay to any present or
former officer or employee; (vii) increased the rate of compensation payable or
to become payable by it to any of its officers or directors or any of its
employees; or (viii) made any increase in any profit sharing, bonus, deferred
compensation, insurance, pension, retirement, or other employee benefit plan,
payment, or arrangement, made to, for, or with its officers, directors, or
employees;
(c)
SPI
has not (i) granted or agreed to grant any options, warrants, or other rights
for its stocks, bonds, or other corporate securities calling for the issuance
thereof; (ii) borrowed or agreed to borrow any funds or incurred, or become
subject to, any material obligation or liability (absolute or contingent) except
liabilities incurred in the ordinary course of business; (iii) paid or agreed to
pay any material obligation or liability (absolute or contingent) other than
current liabilities reflected in or shown on the most recent SPI balance sheet
and current liabilities incurred since that date in the ordinary course of
business and professional and other fees and expenses incurred in connection
with the preparation of this Agreement and the consummation of the transactions
contemplated hereby; (iv) sold or transferred, or agreed to sell or transfer,
any of its assets, property, or rights (except assets, property, or rights not
used or useful in its business which, in the aggregate have a value of less than
$50,000), or canceled, or agreed to cancel, any debts or claims (except debts or
claims which in the aggregate are of a value of less than $50,000); (v) made or
permitted any amendment or termination of any contract, agreement, or license to
which it is a party if such amendment or termination is material, considering
the business of SPI; or (vi) issued, delivered, or agreed to issue or deliver
any stock, bonds, or other corporate securities including debentures (whether
authorized and unissued or held as treasury stock), except in connection with
this Agreement;
(d)
SPI
has no assets, liabilities or accounts payable of any kind or nature, actual or
contingent, in excess of $50,000 in the aggregate as of the Closing Date;
and
(e)
To
the best knowledge of SPI, it has not become subject to any law or regulation
which materially and adversely affects, or in the future may adversely affect,
the business, operations, properties, assets, or condition of SPI.
3.7
Title and Related
Matters
. SPI has good and marketable title to all of its
properties, interest in properties, and assets, real and personal, which are
reflected in the SPI balance sheet or acquired after that date (except
properties, interest in properties, and assets sold or otherwise disposed of
since such date in the ordinary course of business), free and clear of all
liens, pledges, charges, or encumbrances except:
(a)
statutory
liens or claims not yet delinquent;
(b)
such
imperfections of title and easements as do not and will not materially detract
from or interfere with the present or proposed use of the properties subject
thereto or affected thereby or otherwise materially impair present business
operations on such properties; and
(c)
as
described in the SPI Schedules.
3.8
Litigation and
Proceedings
. There are no actions, suits, or proceedings
pending or, to the knowledge of SPI, threatened by or against or affecting SPI,
at law or in equity, before any court or other governmental agency or
instrumentality, domestic or foreign, or before any arbitrator of any
kind.
3.9
Contracts
. SPI
is not a party to any material contract, agreement, or other commitment, except
as specifically disclosed in its schedules to this Agreement.
3.10
No Conflict With Other
Instruments
. The execution of this Agreement and the
consummation of the transactions contemplated by this Agreement will not result
in the breach of any term or provision of, or constitute a default under, any
indenture, mortgage, deed of trust, or other material agreement or instrument to
which SPI is a party or to which it or any of its assets or operations are
subject.
3.11
Governmental
Authorizations
. SPI is not required to have any licenses,
franchises, permits, and other government authorizations, that are legally
required to enable it to conduct its business operations in all material
respects as conducted on the date hereof. Except for compliance with federal and
state securities or corporation laws, as hereinafter provided, no authorization,
approval, consent, or order of, or registration, declaration, or filing with,
any court or other governmental body is required in connection with the
execution and delivery by SPI of this Agreement and the consummation by SPI of
the transactions contemplated hereby.
3.12
Compliance With Laws and
Regulations
. To the best of its knowledge, SPI has complied
with all applicable statutes and regulations of any federal, state, or other
applicable governmental entity or agency thereof, except to the extent that
noncompliance would not materially and adversely affect the business,
operations, properties, assets, or conditions of SPI or except to the extent
that noncompliance would not result in the incurrence of any material liability.
3.13
Insurance
. SPI
owns no insurable properties and carries no casualty or liability
insurance.
3.14
Approval of
Agreement
. The board of directors of SPI (the “SPI Board”) has
authorized the execution and delivery of this Agreement by SPI and has approved
this Agreement and the transactions contemplated hereby.
3.15
Material Transactions of
Affiliations
. Except as disclosed herein and in the SPI
Schedules, there exists no material contract, agreement, or arrangement between
SPI and any person who was at the time of such contract, agreement, or
arrangement an officer, director, or person owning of record or known by SPI to
own beneficially, 10% or more of the issued and outstanding common stock of SPI
and which is to be performed in whole or in part after the date hereof or was
entered into not more than three years prior to the date hereof. Neither any
officer, director, nor 10% stockholder of SPI has, or has had during the last
preceding full fiscal year, any known interest in any material transaction with
SPI which was material to the business of SPI. SPI has no commitment, whether
written or oral, to lend any funds to, borrow any money from, or enter into any
other material transaction with any such affiliated person.
3.16
Employment
Matters
. SPI has no employees other than its executive
officers.
3.17
SPI
Schedules
. Prior to the Closing, SPI shall have delivered to
APlus the following schedules, which are collectively referred to as the “SPI
Schedules,” which are dated the date of this Agreement, all certified by an
officer to be complete, true, and accurate:
(a)
a
schedule containing complete and accurate copies of the Certificate
of Incorporation and by-laws, as amended, of SPI as in effect as of
the date of this Agreement;
(b)
a
schedule containing a copy of the federal income tax returns of SPI identified
in Section 3.3(b); and
(c)
a
schedule setting forth any other information, together with any required copies
of documents, required to be disclosed in the SPI Schedules.
3.18
Brokers
. SPI
has not entered into any contract with any person, firm or other entity that
would obligate APlus or SPI to pay any commission, brokerage or finders’ fee in
connection with the transactions contemplated herein.
3.19
Subsidiaries
. SPI
does not have any subsidiaries and does not own, beneficially or of record, any
shares or other equity interests of any other corporation or other
entity.
ARTICLE
IV
SPECIAL
COVENANTS
4.1
Retirement of Control
Shares
. Immediately following the Closing and as a condition therefore,
the Shareholder shall deliver to APlus one or more certificates representing the
9,000,000 SPI Common Stock held by the Shareholder (the “Control Shares”) with
written instructions to cancel the Control Shares and return then to authorized
but unissued status.
4.2
Forward-Split
. As
a condition precedent to the Closing, the Board of Directors of SPI shall
authorize a forward-stock split of its Common Stock on a 3 for 1 basis (the
“Forward-Split”) so that following the Forward-Split and the Closing and the
other transactions contemplated herein, SPI shall have an aggregate of Seventeen
Million Seventy-Five Thousand (17,075,000) shares of SPI Common stock issued and
outstanding.
4.3
Actions of SPI
Shareholders
. Prior to the Closing, SPI shall cause the
following actions to be taken by the written consent of the holders of a
majority of the outstanding shares of common stock of SPI:
(a)
the
approval of this Agreement and the transactions contemplated hereby and thereby;
and
(b)
such
other actions as the directors may determine are necessary or
appropriate.
4.4
Actions of APlus
Holders
. Prior to the Closing, APlus shall cause the following
actions to be taken by the written consent of the holders of a majority of the
outstanding shares of common stock of APlus:
(a)
the
approval of this Agreement and the transactions contemplated hereby and thereby;
and
(b)
such
other actions as the directors may determine are necessary or
appropriate.
4.5
Access to Properties and
Records
. SPI and APlus will each afford to the officers and
authorized representatives of the other reasonable access to the properties,
books, and records of SPI or APlus in order that each may have full opportunity
to make such reasonable investigation as it shall desire to make of the affairs
of the other, and each will furnish the other with such additional financial and
operating data and other information as to the business and properties of SPI or
APlus as the other shall from time to time reasonably request.
4.6
Delivery of Books and
Records
. At the Closing, SPI shall deliver to APlus, the
originals of the corporate minute books, books of account, contracts, records,
and all other books or documents of SPI now in the possession or control of SPI
or its representatives and agents.
4.7
Actions Prior to Closing by
both Parties
.
(a)
From
and after the date of this Agreement until the Closing Date and except as set
forth in the SPI or APlus Schedules or as permitted or contemplated by this
Agreement, SPI and APlus will each: (i) carry on its business in substantially
the same manner as it has heretofore; (ii) maintain and keep its properties in
states of good repair and condition as at present, except for depreciation due
to ordinary wear and tear and damage due to casualty; (iii) maintain in full
force and effect insurance comparable in amount and in scope of coverage to that
now maintained by it; (iv) perform in all material respects all of its
obligation under material contracts, leases, and instruments relating to or
affecting its assets, properties, and business; (v) use its best efforts to
maintain and preserve its business organization intact, to retain its key
employees, and to maintain its relationship with its material suppliers and
customers; and (vi) fully comply with and perform in all material respects all
obligations and duties imposed on it by all federal and state laws and all
rules, regulations, and orders imposed by federal or state governmental
authorities.
(b)
Except
as set forth herein, from and after the date of this Agreement until the Closing
Date, neither SPI nor APlus will: (i) make any change in their organizational
documents, charter documents or bylaws; (ii) take any action described in
Section 2.6 in the case of APlus, or in Section 3.6, in the case of SPI (all
except as permitted therein or as disclosed in the applicable party’s
schedules); (iii) enter into or amend any contract, agreement, or other
instrument of any of the types described in such party’s schedules, except that
a party may enter into or amend any contract, agreement, or other instrument in
the ordinary course of business involving the sale of goods or services, or (iv)
make or change any material tax election, settle or compromise any material tax
liability or file any amended tax return.
4.8
Indemnification
.
(a)
APlus
hereby agrees to indemnify SPI and each of the officers, agents and directors of
SPI as of the date of execution of this Agreement against any loss, liability,
claim, damage, or expense (including, but not limited to, any and all expense
whatsoever reasonably incurred in investigating, preparing, or defending against
any litigation, commenced or threatened, or any claim whatsoever), to which it
or they may become subject arising out of or based on any inaccuracy appearing
in or misrepresentation made in Article II. The indemnification provided for in
this paragraph shall not survive the Closing and consummation of the
transactions contemplated hereby but shall survive the termination of this
Agreement pursuant to Section 7.1(b) of this Agreement.
(b)
SPI
hereby agrees to indemnify APlus and each of the officers, agents and directors
of APlus as of the date of execution of this Agreement against any loss,
liability, claim, damage, or expense (including, but not limited to, any and all
expense whatsoever reasonably incurred in investigating, preparing, or defending
against any litigation, commenced or threatened, or any claim whatsoever), to
which it or they may become subject arising out of or based on any inaccuracy
appearing in or misrepresentation made under Article III. The indemnification
provided for in this paragraph shall not survive the Closing and consummation of
the transactions contemplated hereby but shall survive the termination of this
Agreement pursuant to Section 7.1(c) of this Agreement.
ARTICLE
V
CONDITIONS
PRECEDENT TO OBLIGATIONS OF
SPI
The obligations of SPI under this
Agreement are subject to the satisfaction, at or before the Closing, of the
following conditions:
5.1
Forward-Split
. Authorization
of the Forward-Split set forth in Section 4.2.
5.2
Accuracy of Representations;
Performance
. The representations and warranties made by APlus
in this Agreement were true when made and shall be true at the Closing Date with
the same force and effect as if such representations and warranties were made at
and as of the Closing Date (except for changes therein permitted by this
Agreement), and APlus shall have performed or complied with all covenants and
conditions required by this Agreement to be performed or complied with by APlus
prior to or at the Closing. SPI may request to be furnished with a certificate,
signed by a duly authorized officer of APlus and dated the Closing Date, to the
foregoing effect.
5.3
Officer’s
Certificates
. SPI shall have been furnished with a certificate
dated the Closing Date and signed by a duly authorized officer of APlus to the
effect that no litigation, proceeding, investigation, or inquiry is pending or,
to the best knowledge of APlus threatened, which might result in an action to
enjoin or prevent the consummation of the transactions contemplated by this
Agreement, or, to the extent not disclosed in the APlus Schedules, by or against
APlus which might result in any material adverse change in any of the assets,
properties, business, or operations of APlus.
5.4
No Material Adverse
Change
. Prior to the Closing Date, there shall not have
occurred any material adverse change in the financial condition, business, or
operations of APlus, nor shall any event have occurred which, with the lapse of
time or the giving of notice, may cause or create any material adverse change in
the financial condition, business, or operations.
5.5
Other
Items
.
(a)
SPI
shall have received such further documents, certificates, or instruments
relating to the transactions contemplated hereby as SPI may reasonably
request.
(b)
Complete
and satisfactory due diligence review of APlus by SPI.
(c)
Approval
of the Transaction by the APlus Board and the APlus Holders.
(d)
Any
necessary third-party consents shall be obtained prior to Closing, including but
not limited to consents necessary from APlus’s lenders, creditors, vendors and
lessors.
ARTICLE
VI
CONDITIONS
PRECEDENT TO OBLIGATIONS OF APlus
The
obligations of APlus under this Agreement are subject to the satisfaction, at or
before the Closing, of the following conditions:
6.1
Accuracy of Representations;
Performance
. The representations and warranties made by SPI in
this Agreement were true when made and shall be true as of the Closing Date
(except for changes therein permitted by this Agreement) with the same force and
effect as if such representations and warranties were made at and as of the
Closing Date, and SPI shall have performed and complied with all covenants and
conditions required by this Agreement to be performed or complied with by SPI
prior to or at the Closing. APlus shall have been furnished with a
certificate, signed by a duly authorized executive officer of SPI and dated the
Closing Date, to the foregoing effect.
6.2
Officer’s
Certificate
. APlus shall have been furnished with a
certificate dated the Closing Date and signed by a duly authorized executive
officer of SPI to the effect that no litigation, proceeding, investigation, or
inquiry is pending or, to the best knowledge of SPI threatened, which might
result in an action to enjoin or prevent the consummation of the transactions
contemplated by this Agreement.
6.3
No Material Adverse
Change
. Prior to the Closing Date, there shall not have
occurred any material adverse change in the financial condition, business, or
operations of SPI nor shall any event have occurred which, with the lapse of
time or the giving of notice, may cause or create any material adverse change in
the financial condition, business, or operations of SPI.
6.4
Good
Standing
. APlus shall have received a certificate of good
standing from the Secretary of State of the State of Nevada or other appropriate
office, dated as of a date within ten days prior to the Closing Date certifying
that SPI is in good standing as a corporation in the State of Nevada and has
filed all tax returns required to have been filed by it to date and has paid all
taxes reported as due thereon.
6.5
Other
Items
.
(a)
APlus
shall have received a stockholder list of SPI containing the name, address, and
number of shares held by each SPI stockholder as of the date of Closing
certified by an executive officer of SPI as being true, complete, and accurate
by SPI transfer agent.
(b)
APlus
shall have received such further documents, certificates, or instruments
relating to the transactions contemplated hereby as APlus may reasonably
request.
(c)
Complete
and satisfactory due diligence review of SPI by APlus.
(d)
Approval
of the Transaction by the SPI Board and the stockholders of SPI.
(e)
There
shall have been no material adverse changes in SPI, financial or
otherwise.
(f)
There
shall be no SPI Common Stock Equivalents outstanding as of immediately prior to
the Closing. For purposes of the foregoing, “SPI Common Stock
Equivalents” shall mean any subscriptions, warrants, options or other rights or
commitments of any character to subscribe for or purchase from SPI, or
obligating SPI to issue, any shares of any class of the capital stock of SPI or
any securities convertible into or exchangeable for such shares.
(g)
Any
necessary third-party consents shall be obtained prior to Closing, including but
not limited to consents necessary from SPI’s lenders, creditors; vendors, and
lessors.
ARTICLE
VII
TERMINATION
7.1
Termination
.
(a)
This
Agreement may be terminated by either the APlus Board or the SPI Board at any
time prior to the Closing Date if: (i) there shall be any actual or threatened
action or proceeding before any court or any governmental body which shall seek
to restrain, prohibit, or invalidate the transactions contemplated by this
Agreement and which, in the judgment of such board of directors, made in good
faith and based on the advice of its legal counsel, makes it inadvisable to
proceed with the exchange contemplated by this Agreement; (ii) any of the
transactions contemplated hereby are disapproved by any regulatory authority
whose approval is required to consummate such transactions or in the judgment of
such board of directors, made in good faith and based on the advice of counsel,
there is substantial likelihood that any such approval will not be obtained or
will be obtained only on a condition or conditions which would be unduly
burdensome, making it inadvisable to proceed with the exchange; (iii) there
shall have been any change after the date of the latest balance sheets of APlus
and SPI, respectively, in the assets, properties, business, or financial
condition of APlus and SPI, which could have a materially adverse affect on the
value of the business of APlus and SPI respectively, except any changes
disclosed in the APlus and SPI Schedules, as the case may be, dated as of the
date of execution of this Agreement. In the event of termination pursuant to
this paragraph (a) of Section 7.1, no obligation, right, or liability shall
arise hereunder, and each party shall bear all of the expenses incurred by it in
connection with the negotiation, drafting, and execution of this Agreement and
the transactions herein contemplated; (iv) the Closing Date shall not have
occurred by July 1, 2008; or (v) if SPI shall not have provided responses
satisfactory in APlus’s reasonable judgment to APlus’s request for due diligence
materials.
(b)
This
Agreement may be terminated at any time prior to the Closing by action of the
SPI Board if APlus shall fail to comply in any material respect with any of its
covenants or agreements contained in this Agreement or if any of the
representations or warranties of APlus contained herein shall be inaccurate in
any material respect, and, in either case if such failure is reasonably subject
to cure, it remains uncured for seven days after notice of such failure is
provided to APlus. If this Agreement is terminated pursuant to this paragraph
(b) of Section 7.1, this Agreement shall be of no further force or effect, and
no obligation, right, or liability shall arise hereunder, except that APlus
shall bear its own costs as well as the costs incurred by SPI in connection with
the negotiation, preparation, and execution of this Agreement and qualifying the
offer and sale of securities contemplated hereby for exemption from the
registration requirements of state and federal securities laws.
(c)
This
Agreement may be terminated at any time prior to the Closing by action of the
APlus Board if SPI shall fail to comply in any material respect with any of its
covenants or agreements contained in this Agreement or if any of the
representations or warranties of SPI contained herein shall be inaccurate in any
material respect, and, in either case if such failure is reasonably subject to
cure, it remains uncured for seven days after notice of such failure is provided
to SPI. If this Agreement is terminated pursuant to this paragraph
(c) of Section 7.1, this Agreement shall be of no further force or effect, and
no obligation, right, or liability shall arise hereunder, except that SPI shall
bear its own costs as well as the costs of APlus incurred in connection with the
negotiation, preparation, and execution of this Agreement.
ARTICLE
VIII
MISCELLANEOUS
8.1
Governing
Law
. This Agreement shall be governed by, enforced, and
construed under and in accordance with the laws of the United States of America
and, with respect to matters of state law, with the laws of
Nevada. Any dispute arising under or in any way related to this
Agreement will be submitted to binding arbitration before a single arbitrator by
the American Arbitration Association in accordance with the Association’s
commercial rules then in effect. The arbitration will be conducted in New York,
New York. The decision of the arbitrator will set forth in reasonable detail the
basis for the decision and will be binding on the parties. The arbitration award
may be confirmed by any court of competent jurisdiction.
8.2
Notices
. Any
notices or other communications required or permitted hereunder shall be
sufficiently given if personally delivered to it or sent by registered mail or
certified mail, postage prepaid, or by prepaid telegram and any such notice or
communication shall be deemed to have been given as of the date so delivered,
mailed, or telegraphed.
8.3
Attorney’s Fees
. In
the event that any party institutes any action or suit to enforce this Agreement
or to secure relief from any default hereunder or breach hereof, the breaching
party or parties shall reimburse the non-breaching party or parties for all
costs, including reasonable attorneys’ fees, incurred in connection therewith
and in enforcing or collecting any judgment rendered therein.
8.4
Confidentiality
. SPI,
on the one hand, and APlus and the APlus Holders, on the other hand, will keep
confidential all information and materials regarding the other Party designated
by such Party as confidential. The provisions of this Section 8.4
shall not apply to any information which is or shall become part of the public
domain through no fault of the Party subject to the obligation from a third
party with a right to disclose such information free of obligation of
confidentiality. SPI and APlus agree that no public disclosure will be made by
either Party of the existence of the Transaction or the letter of intent or any
of its terms without first advising the other Party and obtaining its prior
written consent to the proposed disclosure, unless such disclosure is required
by law, regulation or stock exchange rule.
8.5
Expenses
. Except
as otherwise set forth herein, each party shall bear its own costs and expenses
associated with the transactions contemplated by this
Agreement. Without limiting the generality of the foregoing, all
costs and expenses incurred by APlus and SPI after the Closing shall be borne by
the surviving entity. After the Closing, the costs and expenses of
the APlus Holders shall be borne by the APlus Holders.
8.6
Schedules;
Knowledge
. Each party is presumed to have full knowledge of
all information set forth in the other party’s schedules delivered pursuant to
this Agreement.
8.7
Third Party
Beneficiaries
. This contract is solely between SPI, APlus and
the APlus Holders, and, except as specifically provided, no director, officer,
stockholder, employee, agent, independent contractor, or any other person or
entity shall be deemed to be a third party beneficiary of this
Agreement.
8.8
Entire
Agreement
. This Agreement represents the entire agreement
between the parties relating to the transaction. There are no other courses of
dealing, understandings, agreements, representations, or warranties, written or
oral, except as set forth herein.
8.9
Survival
. The
representations and warranties of the respective parties shall survive the
Closing Date and the consummation of the transactions herein
contemplated.
8.10
Counterparts
. This
Agreement may be executed in multiple counterparts, each of which shall be
deemed an original and all of which taken together shall be but a single
instrument.
8.11
Amendment or
Waiver
. Every right and remedy provided herein shall be
cumulative with every other right and remedy, whether conferred herein, at law,
or in equity, and may be enforced concurrently herewith, and no waiver by any
party of the performance of any obligation by the other shall be construed as a
waiver of the same or any other default then, theretofore, or thereafter
occurring or existing. At any time prior to the Closing Date, this Agreement may
be amended by a writing signed by all parties hereto, with respect to any of the
terms contained herein, and any term or condition of this Agreement may be
waived or the time for performance hereof may be extended by a writing signed by
the party or parties for whose benefit the provision is intended.
(The
rest of this page left intentionally blank.)
IN WITNESS WHEREOF
, the
corporate parties hereto have caused this Agreement to be executed by their
respective officers, hereunto duly authorized, as of the date first
above-written.
|
SPARKING
EVENTS, INC.
|
|
APLUS
INTERNATIONAL LTD.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
By:
|
|
|
By:
|
|
|
Name:
|
Adam
Gordoy Borges Dos Santo
|
|
Name:
|
Yao-Ting
Su
|
|
Title:
|
Chief
Executive Officer
|
|
Title:
|
Managing
Member
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ADAM
GORDOY BORGES DO SANTO
|
|
|
|
SCHEDULE
I
|
Name
|
Percentage
of
APlus Interests
|
Number
of SPI
Exchange Shares
|
|
Xodtec
Technology Co., Ltd.
|
13.125%
|
2,100,000
|
|
Targetek
Technology Co., Ltd.
|
11.875%
|
1,900,000
|
|
UP-Tech
Technology Co., Ltd.
|
31.250%
|
5,000,000
|
|
Radiant
Sun Development S.A.
|
21.875%
|
3,500,000
|
|
Du-Hsin
Liu
|
3.750%
|
600,000
|
|
Chin
Pi K. Yeh
|
3.750%
|
600,000
|
|
Chun
Ting
|
0.938%
|
150,000
|
|
Kuang-Yu
Chang
|
0.625%
|
100,000
|
|
North
America Chinese Financial Association Inc.
|
3.125%
|
500,000
|
|
Yao-Ting
Su
|
9.688%
|
1,550,000
|
Exhibit
3.1
CERTIFICATE
OF CHANGE PURUSANT
TO
NRS 78.209
CERTIFICTE
OF CHANGE FILED PURUSANT TO NRS 78.209
FOR
NEVADA PROFIT CORPORATIONS
|
1.
|
NAME
OF THE CORPORATION:
|
Sparking
Events, Inc.
|
2.
|
THE
BOARD OF DIRECTORS HAVE ADOPTED A RESOLUTION PURSUANT TO NRS 78.207 AND
HAVE OBTAINED ANY REQUIRED APPROVAL OF THE
STOCKHOLDERS.
|
|
3.
|
THE
CURRENT NUMBER OF AUTHORIZED SHARES AND THE PAR VALUE, IF ANY, OF EACH
CLASS OR SERIES, IF ANY, OF SHARES BEFORE THE
CHANGE:
|
75,000,000
shares of common stock, par value $.001 per share.
|
4.
|
THE
NUMBER OF AUTHORIZED SHARES AND THE PAR VALUE, IF ANY, OF EACH CLASS OR
SERIES, OF ANY, OF SHARES AFTER THE
CHANGE:
|
225,000,000
shares of common stock, par value $.001 per share.
|
5.
|
THE
NUMBER OF SHARES OF EACH AFFECTED CLASS OR SERIES, IF ANY, TO BE ISSUED
AFTER THE CHANGE IN EXCHANGE FOR EACH ISSUED SHARE OF THE SAME CLASS OR
SERIES:
|
Three (3)
shares of common stock shall be issued after the change in exchange for each
share of common stock issued.
|
6.
|
THE
PROVISIONS, IF ANY, FOR THE ISSUANCE OF FRACTIONAL SHARES, OR FOR THE
PAYMENT OF MONEY OR THE ISSUANCE OF SCRIP TO STOCKHOLDERS OTHERWISE
ENTITLED TO A FRACTION OF A SHARE AND THE PERCENTAGE OF OUTSTANDING SHARES
AFFECTED THEREBY:
|
Fractional
shares shall be rounded up to the nearest whole share.
|
7.
|
EFFECTIVE
DATE OF FILING (OPTIONAL):
|
|
Chao-Wu Chou
|
,
|
Chief
Executive Officer
|
|
Date: April
20, 2009
|
|
|
Exhibit
3.2
|
DEAN
HELLER
Secretary
of State
206
North Carson Street
Carson
City, Nevada 89701-4299
(775)
684 5708
Website:
secretaryofstate.biz
|
|
Entity
#
E0211182005-4
Document
Number:
20050118413-05
Date
Filed:
4/12/2005
1:21:10 PM
In
the office of
/s/
Dean Heller
Dean
Heller
Secretary
of State
|
|
|
|
|
|
Articles
of Organization
Limited-Liability
Company
(PURSUANT
TO NRS CHAPTER 86)
|
|
|
Important:
Read attached instructions before completing form.
|
|
ABOVE
SPACE IS FOR OFFICE USE ONLY
|
|
1.
Name of
Limited-Liability
Company:
|
|
APLUS
INTERNANTIONAL LTD
|
|
|
2.
Resident Agent Name
and Street Address:
(must be a Nevada address where
process may be served)
|
|
POWER
POINT MANAAGEMENT LTD.
|
|
|
|
|
|
|
|
|
|
Name
|
|
|
|
|
|
|
|
|
|
3305
W SPRING MOUNTAIN RD #48
|
|
LAS
VEGAS
|
|
NEVADA
|
|
89102
|
|
|
|
Physical
Street Address
|
|
City
|
|
|
|
Zip
Code
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additional
Mailing Address
|
|
City
|
|
State
|
|
Zip
Code
|
|
|
3.
Dissolution
Date:
(OPTIONAL see
instructions)
|
|
Latest
date upon which the company is to dissolve (if existence is not
perpetual):
|
|
|
4.
Management:
(check
one)
|
|
Company
shall be managed by:
o
Manager(s)
OR
Q
Member(s)
|
|
|
5.
Name and Address of
each Manager or Managing Member:
(attach additional pages as
necessary)
|
|
SU,
YAO-TING
|
|
|
|
|
|
|
|
|
|
Name
|
|
|
|
|
|
|
|
|
|
3305
W SPRING MOUNTAIN RD
|
|
LAS
VEGAS
|
|
NEVADA
|
|
891021
|
|
|
|
Address
|
|
City
|
|
State
|
|
Zip
Code
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Address
|
|
City
|
|
State
|
|
Zip
Code
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Address
|
|
City
|
|
State
|
|
Zip
Code
|
|
|
6.
Names, Addresses and
Signature of Organizers:
(if more than one organizer
attach additional page)
|
|
POWER
POINT MANAAGEMENT LTD.
|
|
|
|
|
|
|
|
|
|
Name
|
|
|
|
|
|
|
|
|
|
Signature
|
|
ILLEGIBLE
|
|
|
|
3305
W SPRING MOUNTAIN RD
|
|
LAS
VEGAS
|
|
89102
|
|
89102
|
|
|
|
Address
|
|
City
|
|
State
|
|
Zip
Code
|
|
|
7.
Certificate of
Acceptance of Appointment of Registered
Agent:
|
|
I
hereby accept appointment as Registered Agent for the above named
limited-liability company.
|
|
|
|
|
|
|
|
|
|
ILLEGIBLE
|
|
|
|
|
|
|
|
|
|
Authorized
Signature of R. A. or On Behalf of R.A. Company
|
|
Date
|
|
APR-11-05
|
|
|
|
|
|
|
|
|
|
|
|
|
|
This form must be
accompanied by appropriate fees.
See attached fee schedule.
Exhibit
3.3
OPERATING
AGREEMENT
APLUS
INTERNATIONAL, LTD.
THIS
OPERATING AGREEMENT
(hereinafter referred to as the “Agreement”) is made and entered into as of the
1st day of April, 2009 by and among, APLUS INTERNATIONAL, LTD., a Nevada limited
liability company (the “Company”) and each and all of those persons whose names
are subscribed hereto as members (individually, a “Member,” or collectively, the
“Members”).
WHEREAS,
the Organizers have formed the Company as a limited liability company under the
Laws of the State of Nevada by causing the Articles of Organization, conforming
to the requirements of the Act (as defined below) to be filed in the Office of
the Secretary of State for the State of Nevada.
NOW,
THEREFORE, in consideration of the mutual covenants herein contained, and
intending to be legally bound hereby, and for other good and valuable
consideration, the sufficiency of which are hereby acknowledged, the parties
hereby covenant, agree and certify as follows:
ARTICLE
1
DEFINITIONS
1.1 “
Act
”
shall mean the Nevada
Limited Liability Company Act, Chapter 18, Title 6 of the Delaware
Code.
1.2 “
Agreement
” shall mean
this Operating Agreement as originally executed and as amended from time to
time.
1.3 “
Articles of
Organization
”
shall refer to the
Articles of Organization of the Company filed on April 12, 2005, in the Office
of Secretary of State of Nevada.
1.4 “
Capital
Contribution
”
shall mean any
contribution to the capital of the Company by a Member, whenever made, of cash,
property, services rendered, promissory note(s), or other obligation to
contribute cash or property or to perform services.
1.5 “
Code
” shall refer to
the Internal Revenue Code of 1986 as it presently exists and hereafter may be
amended.
1.6 “
Company
”
shall refer to APlus
International, Ltd., a limited liability company formed under the laws of the
State of Nevada. The principal business of the Company is to engage
in portfolio development and asset management of the Company’s clients (the
“Business Plan”).
1.7 “
Disposition
” shall
refer to the sale of all or substantially all of the assets of the Company,
refinancing of the Company property, condemnation (whether pursuant to
governmental authority or pursuant to a private right of condemnation), a casual
or an involuntary conversion.
1.8
“
Managers
”
shall be the Managers and the person or persons from time-to-time elected
pursuant to Article 8 hereof by the Members to manage the Company.
1.9 “
Members
”
shall be the Members and
any additional or substituted Members admitted pursuant to Article 11
hereof.
1.10
“
Membership
Interests
”
refer to the Members'
interest and ownership in the Company, including, without limitation,
interests in net income and net loss, rights to distributions, allocations,
information, governing rights, and all other rights and obligations under this
Agreement and applicable law related to the Company
.
1.11 “
Organizers
” shall be
the organizers of the Company responsible for filing the Company’s Articles of
Organization.
1.12 “
Profits and Losses
”
shall mean the net profits or net losses of the Company as shown on its books of
account after deduction of expenses, depreciation and such other charges or
additions as are appropriate under the record keeping system and accounting
principles customarily employed by the Company and consistently applied (being
initially, the cash method of accounting for federal income tax reporting
purposes).
ARTICLE
2
OFFICES
The
principal office of the Company shall be at such place within or without the
State of Nevada as the Managers may determine. The Company may have
such other offices, either within or without the State of Nevada as the Managers
may designate or as the business of the Company may from time-to-time
require.
ARTICLE
3
REGISTERED
OFFICE AND AGENT
The
registered office of the Company in the State of Nevada shall be located at 2235
E. Flamingo Road, Suite 201A, in the City of Las Vegas, County of Nevada, and
the registered agent at such address shall be Power Point Management,
Ltd.
ARTICLE
4
TERM
The term
of the Company commenced on the date the Company’s Articles of Organization were
accepted by the Nevada Secretary of State, which also is the effective date of
this Agreement. The Company shall continue for a term of thirty (30)
years and, thereafter, shall continue in existence for such successive periods
of one (1) year each as all of the Members may agree upon by and under any
appropriate instrument, unless it shall have been otherwise dissolved as
hereinafter provided.
ARTICLE
5
RIGHTS
AND OBLIGATIONS OF MEMBERS
5.1
Liability
. Each
Member's liability shall be limited as set forth in the Act and other applicable
law. No Member shall be liable for any debts or losses of the Company
beyond his or her Capital Contributions, except as provided herein and in the
Act.
5.2
Business of the
Company
. Except as provided herein and under the Act, a Member
shall take no part in the conduct or control of the business of the Company and
shall have no right or authority to act for or to bind the Company in any manner
whatsoever.
5.3
Status of Membership
Interests
. Except as is otherwise provided in this Agreement
or the Act, the Membership Interest owned by a Member shall be fully paid and
nonassessable. No Member shall have the right to withdraw or reduce
his or her Capital Contribution to the Company except as a result of the
dissolution and termination of the Company or as otherwise explicitly provided
in this Agreement. No Member shall have the right to bring an action
for partition against the Company and each Member expressly waives any such
right.
ARTICLE
6
MANAGERS
6.1
General
Powers
. The business and affairs of the Company shall be
managed by the Managers, except as otherwise provided by the Act, the Articles
of Organization, or this Agreement. The Managers shall devote such
time to the business and affairs of the Company as they shall reasonably deem
necessary to properly conduct such business and affairs in accordance with this
Agreement and applicable law. It is expressly understood and agreed
that the Managers shall not be required to devote their entire business time or
business resources to the business of the Company, unless so required by the
terms of any employment or other agreement between an individual Manager and the
Company relating to the services of a Manager. Except as provided in
the Act, the Articles of Organization, or this Agreement, each Manager shall be
responsible for the management of the Company's business and shall have all
powers generally conferred by law as well as those which are necessary,
advisable or consistent in connection therewith, provided, however, that all
decisions shall be upon the affirmative vote of a majority of the Managers, or
upon the affirmative vote of both of the Managers if there shall be only two (2)
in office. Any note, contract, deed, bill of sale, mortgage, lease,
or other commitment purporting to bind the Company to any action which is
authorized in accordance with this Agreement shall be signed on behalf of the
Company by any Manager or by any person to whom the Managers designate authority
under an agreement, arrangement or resolution.
6.2
Limitations on Authority of
the Managers
.
A. The
Managers shall not have the authority to:
(a) do
any act in contravention of this Agreement;
(b) do
any act which would make it impossible to carry on the ordinary business of the
Company. For purposes of this Section 6.2, the sale of all or a
substantial portion of the Company's assets not in the ordinary course of
business, without the prior written approval of the holders of two-thirds of the
Membership Interests, shall be deemed to be an act making it impossible for the
Company to carry on its ordinary business;
(c) confess
a judgment against the Company;
(d) possess
Company property or assign the rights of the Company in specific Company
property for other than Company purposes;
(e) admit
a person as a Member except as provided in the Act and this
Agreement;
(f) continue
the business of the Company in contravention of Article 12 hereof;
(g) combine
the Company with another entity without the prior written consent of the holders
of two-thirds of the Membership Interests; or
(h) amend
the Articles of Organization or this Agreement without the prior written consent
of the holders of two-thirds of the Membership Interests.
B. The
Managers shall not do any of the following without the consent of a majority of
the Initial Members:
(i) The
sale or disposition of assets of the Company having an aggregate value in excess
of twenty five percent (25%) of the net book value of all assets of the Company,
unless in the context of a determination by the Board of Managers to cease the
conduct of all business of the Company.
(ii) The
adoption of any official Business Plan or any significant deviation from the
Business Plan in effect from time-to-time.
(iii) Engaging
in any business outside the scope of the business purpose of the
Company.
(iv) Increasing
the authorized and/or issued share capital or issuing any new membership units
of the Company , or granting any option, warrant or other interest over, or
effecting any other reorganization of, the capital of the Company.
(v) Incurring
any indebtedness in the nature of borrowings or making any loan other than as
expressly provided for or contemplated by the Business Plan then in
effect.
6.3
Liability of
Managers
. Each Manager shall discharge his, her or its duties
to the Company in good faith and with reasonable care. Unless fraud,
deceit, gross negligence, willful misconduct or a wrongful taking or other
self-dealing shall be proved in a court of competent jurisdiction, a Manager
shall not be liable or obligated to the Members for any mistake of fact or
judgment or for the doing of any act or the failure to do any act by the Manager
in conducting the business, operations and affairs of the Company which may
cause or result in any loss or damage to the Company or its Members, or for
losses by the Company or the Members. A Manager shall incur no
liability to the Company or to any of the Members as a result of engaging in any
other business or venture, except as may be specified in this Agreement, or any
employment or other agreement relating to the Manager’s provision of services to
the Company.
The
Company shall indemnify any Person (such term includes any natural person and
any legal entity), who was or is a party or is threatened to be made a party to
any threatened, pending, or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative by reason of the fact that he is or
was a Manager, Member, officer, employee or agent of the Company or
is or was serving at the request of the Company as a manager, director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise (“Indemnified Person”), against expenses (including attorneys’
fees), judgments, fines and amounts paid in settlement (subject to the
provisions below) actually and reasonably incurred by him in connection with
such action, suit or proceeding if the act or failure to act giving rise to the
claim for indemnification is not determined by a court to have constituted
fraud, bad faith, gross negligence, recklessness, willful misconduct, or breach
of this Agreement.
The
Company shall not be required to indemnify an Indemnified Person for amounts
paid in settlement unless the Company has approved the terms of such
settlement.
6.4
Number and
Qualifications
. The Company shall have at least one and not
more than seven (7) Managers. No change in the number of Managers
shall have the effect of shortening the term of any incumbent
Manager. Managers shall be natural persons of the age of 18 years or
older.
6.5
Election and Term of
Office
. The initial Managers shall hold office until their
respective successors are duly elected and qualified. Managers shall
be elected by the affirmative vote of a majority of Membership Interests, to
hold office until the next succeeding annual meeting. Each Manager
shall hold office until his or her successor is duly elected and qualified,
unless sooner displaced. Election of Managers need not be by
ballot. Managers also may be elected at a special meeting of the
Members by vote of the holders of a majority of Membership
Interests.
6.6
Compensation
. Salary
or other compensation of the Managers may be fixed from time to time by the
affirmative vote of Members holding a majority of the Membership Interests, and
no Manager shall be prevented from receiving such salary by reason of the fact
that he is also a Member of the Company.
6.7
Removals and
Resignations
. Except as may otherwise be provided by the Act,
the Members may, at any meeting called expressly for the purpose, by a vote of
the Members owning a majority of Membership Interests entitled to vote at an
election of Managers, remove any or all Managers from office, with or without
cause. A Manager may resign at any time by giving written notice to
the Board of Managers. The resignation shall take effect immediately
upon the receipt of the notice, or at any later time specified
therein. The acceptance of such resignation shall not be necessary to
make it effective, unless the resignation by its terms requires
acceptance.
6.8
Vacancies
. Any
vacancy occurring in the office of a Manager, whether by reason of an increase
in the number of Managers or otherwise, shall be filled by the affirmative vote
of the Members holding a majority of Membership Interests. A Manager
elected to fill a vacancy shall be elected for the unexpired term of his or her
predecessor in office, unless sooner displaced.
6.9
Tax
Matters
. The Managers may designate a Manager or committee of
Managers as the “Tax Matters Manager” or “Tax Matters Committee” for the purpose
of determining the tax treatment of any item (“Company Items”) required to be
taken into account for the Company's taxable year under any provision of the
Code. Such Tax Matters Manager or, Committee shall be authorized to
enter into settlement agreements with the Internal Revenue Service on behalf of
all Members with respect to Company Items, and each Member (except any Member
who has filed a statement described in Code Section 6224 (c)(3)(B)) agrees to be
bound by the terms of any settlement agreement entered into by the Tax Matters
Manager or Committee on behalf of all Members. Pursuant to this
authorization, each Member who has not so filed agrees to execute such further
documents as may be necessary or desirable to cause the settlement agreement to
be binding on such Member and not to exercise any right or undertake any other
action which is inconsistent with any settlement agreement entered into by the
Tax Matters Manager or Committee on behalf of such Member. The Tax
Matters Manager or Committee shall (i) keep the Members reasonably informed as
to the status of all administrative and judicial Tax proceedings, (ii) file with
the Internal Revenue Service a request for administrative adjustment if the Tax
Matters Manager or Committee deems such to be appropriate, and (iii) file a
petition in a court of competent jurisdiction regarding any dispute with respect
to Company Items which the Tax Matters Manager or Committee deems
appropriate.
ARTICLE
7
DISTRIBUTIONS
7.1
Distributions
(a) All
Cash Available for Distribution shall be allocated to the Members and
distributed among them pro rata in accordance with their relative Membership
Interests in such amounts as the Managers in their sole discretion may from
time-to-time, and at such times, determine to be appropriate for distribution to
members and consistent with the then applicable business plan and financial
requirements of the Company or in accordance with the provisions for
distribution set forth herein.
(b) Upon
the resignation of a Member, except as otherwise provided in this Agreement, a
resigning Member shall not be entitled to the return of such Member’s capital
contribution or capital account, or to any other payment. Unless the
resigning Member and a majority in interest of the other Members agree on the
terms of redemption of the resigning Member’s Membership Interest, the resigning
Member shall receive the amount such former Member would have
received if still a Member at the time of dissolution. No Member,
regardless of the nature of his or her contribution, has a right to demand or
receive any distribution from the Company in any form other than
cash.
(c) Notwithstanding
anything to the contrary herein contained, the net proceeds realized and
available from any Disposition (which in the case of insurance funds from a
casualty shall take into account the costs or expenditures for repair or
replacement and the requirements of any mortgage holder on the Company property)
shall be distributed in the following order of priority:
(i) to
pay any debts and liabilities of the Company;
(ii) to
establish any reserve which the Managers deem reasonably necessary to provide
for any contingent or unforeseen liabilities or obligations of the Company;
provided that, at the expiration of such period of time as the Managers deem
advisable, the remaining balance of such reserve shall be distributed in the
manner set forth herein;
(iii) to
pay the Members pro rata according to their respective Membership Interests as
set forth herein.
10.2
Limitations on
Distributions
. Company distributions, shall not be made to the
extent that, after giving effect to the distribution, all liabilities of the
Company, other than liabilities to Members on account of their Membership
Interests, would exceed the fair value of the Company's assets. No
distributions shall be made to any Member at any time except accrued and unpaid
Dividends and Profit Participation to the Class B Members.
ARTICLE
8
DISSOLUTION
AND TERMINATION OF THE COMPANY
8.1
Dissolution and
Termination
. The Company shall be dissolved and/or terminated
under the Act upon the occurrence of any of the following events:
(a) Upon
the expiration of the term of this Agreement; or
(b) Upon
the written consent of the holders of two-thirds of the Membership
Interests.
8.2
Distribution upon
Termination
. Upon the dissolution and termination of the
Company, the Managers shall take full account of the Company's assets and
liabilities, the assets shall be liquidated as promptly as is
consistent with
obtaining fair value therefor, and the proceeds therefrom, to the extent
sufficient therefor, shall be applied and distributed in the following
order:
(a) to
the payment of all creditors, other than Members, in the order of priority as
provided by the Act, except any claims of secured creditors whose obligations
will be assumed or otherwise transferred on the liquidation of the Company's
assets;
(b) to
the payment of any obligations of the Company to any Member;
(c) to
the establishment of any reserves which the Managers deem reasonably necessary
for any contingencies or unforeseen liabilities or obligations of the
Company. Such reserves shall be paid over by the Managers to an
escrow agent or shall be held for the purpose of disbursing such reserves in
payment of any of the said contingencies and, at the expiration of such period
as the Managers shall deem advisable, the balance thereof shall be distributed
in the manner and order provided in this Section 8.2; and
(d) to
the payment of all Members of their respective positive capital accounts (after
taking into account all capital account adjustments under Section 10.3 of this
Agreement during the taxable year such liquidation occurs other than any
adjustments for the liquidating distributions hereunder), including Members who
resigned and received less than the fair value of their Membership Interests at
the time of their resignation.
8.3
Allocations During
Dissolution
. Throughout the dissolution and winding up of the
Company, all of the Members shall be allocated their share of Company
Items. Any gain or loss from a sale or other disposition of any
Company property shall also be allocated in accordance with Article 10 of this
Agreement.
8.4
Distributions in
Kind
. In the event a distribution of Company property in kind
is made, such property shall be either: (i) transferred and conveyed to the
Members or their assigns so as to vest in each of them, as tenants-in-common, a
percentage interest in the whole of said property equal to the percentage
interest he would have received had the aforesaid property not been distributed
in kind; or (ii) transferred and conveyed to the Members on an asset-by-asset
determination, as determined by the Managers in their sole and absolute
discretion. Notwithstanding anything to the contrary herein
contained, distributions in kind are expressly authorized to such extent as the
Managers may determine in their sole and absolute discretion and the allocation
of gain or loss in connection therewith, if any, shall be allocated in
accordance with the Provisions of Section 10.1 hereof.
8.5
Time
. A
reasonable time, as determined by the Managers, not to exceed six months from
the date of an event of dissolution, shall be allowed for the orderly
liquidation of the assets of the Company and the discharge of Company
liabilities.
8.6
Statement of
Termination
. The Managers shall furnish each of the Members,
at the Company's expense, with a statement which shall set forth the assets and
liabilities of the Company as of the date of complete liquidation and
distribution as herein provided. Such statement shall also schedule
the receipts and disbursements made with respect to the termination hereunder
and shall be final and binding upon all persons, except such persons who may
file a specific and detailed written protest thereof within 90 days of his or
her receipt of the statement.
8.7
Certificate of
Cancellation
. Upon the completion of termination in accordance
with the terms hereof, the Company shall terminate and the Members shall
execute, acknowledge, and cause to be filed a certificate of cancellation of the
Company, whereupon the Company will cease to exist in all respects.
8.8
Liquidating
Trustee
. In the event of a dissolution of the Company, the
liquidation of its assets and the discharge of its liabilities may be carried
out by a liquidating trustee or receiver who shall be a bank or trust company or
other person or firm having experience in managing, liquidating, or otherwise
handling property of the type then owned by the Company. Any such
liquidating trustee or receiver shall be designated by the
Managers. A liquidating trustee shall not be personally liable for
the debts of the Company but otherwise shall have such obligations and
authorities as are given the Managers pursuant to this Agreement or as may be
agreed upon between the Members and said liquidating trustee.
ARTICLE
9
ACCOUNTING
AND REPORTS
9.1
Books and
Records
. At the expense of the Company, the Managers shall
maintain records and accounts of all operations and expenditures of the
Company. In accordance with the Act, the Company shall keep at its
principal place of business the following records:
(a) A
current list of the full name and last known business, residence, or mailing
address of each Member and Manager, both past and present;
(b) A
copy of the Articles of Organization and all amendments thereto, together with
executed copies of all powers of attorney pursuant to which any amendment has
been executed;
(c) Copies
of the Company's federal, state, and local income tax returns and reports, if
any, for the three most recent years;
(d) Copies
of this Agreement, copies of any writings permitted or required with respect to
a Member's obligation to contribute cash, property or services, and copies of
any financial statements of the Company for the three most recent
years;
(e)
Minutes of every annual, special, and court-ordered meeting of the Members
and/or Managers; and
(f) Any
written consents obtained from Members or Managers for actions taken without a
meeting.
Such
books and records shall be open for the inspection and examination by any
Member, in person or by his or her duly authorized representative, at reasonable
times at the principal office of the Company upon at least five business days
prior written notice and a showing that the request is made in good faith and
for a proper purpose.
The
Company's books and records shall be kept on the cash method of accounting for
federal income tax reporting purposes and any change in method shall be made by
the Tax Matters Manager (or Tax Matters Committee as the case may be) in its
sole discretion.
9.2
Fiscal
Year
. The annual accounting period of the Company shall be the
calendar year.
9.3
Returns and
Reports
. The Company shall prepare or have prepared and
distribute, at the Company's expense, a completed copy of the Company's federal
information return and any similar state income tax return required by
applicable law. The Managers will use reasonable efforts to mail each
Member's Schedule K-1 (Form 1065) within one hundred (100) days of the end of
each calendar year of the Company. The Company shall also furnish to
each Member such other reports on the operation of the Company as may be
reasonably requested. Each Member shall file such state income tax
returns and make timely payment of all state taxes imposed with respect to such
Member's share of Company income.
9.4
Bank
Accounts
. All funds of the Company shall be deposited in its
name in such checking and savings accounts or time certificates (or the like) as
shall be designated by the Managers. Withdrawals therefrom shall be
made upon such one or more signatures as the Managers may designate; provided,
however, that only Managers who maintain an office in the principal office of
the company may be a signatory on any bank account established by the
Company.
9.5
Federal Income Tax
Elections
. All elections required or permitted to be made by
the Company under the Code shall be made by, the Tax Matters Manager (or Tax
Matters Committee, as the case may be) in his or her sole
discretion.
ARTICLE
10
MISCELLANEOUS
10.1
Amendments
. Any
amendment to this Agreement may be proposed by any Member or
Manager. A vote on a proposed amendment shall be taken within 30 days
of the date notice of the proposal is given to the Members. An
amendment shall become effective at such time as it has been approved in writing
by all of the Members entitled to vote.
10.2
Notices
. All
notices required or permitted hereunder shall be in writing and shall be deemed
effectively given: (a) upon personal delivery to the party to be notified; (b)
when sent by confirmed facsimile if sent during normal business hours of the
recipient, if not, then on the next business day; (c) three (3) business days
after having been sent by registered or certified mail, return receipt
requested, postage prepaid; or (d) one (1) day after deposit with a nationally
recognized overnight courier, specifying next day delivery, with written
verification of receipt. All such communications shall be sent to the Company at
principal office, and to the Members at the address set forth on the
signature page hereto or at such other address as the Company or Member may
designate by ten (10) days advance written notice to the other parties
hereto.
10.3
Captions
. Titles
or captions contained in this Agreement are inserted only as a matter of
convenience and reference, and in no way define, limit, extend, or describe the
scope of this Agreement or the intent of any provision hereof.
10.4
Usage
. As
used herein, the masculine, feminine or neuter gender, and the singular or
plural numbers, shall each be deemed to include the others unless the context
clearly indicates to the contrary. “Person” or “party” shall include
a corporation, firm, partnership, proprietorship, or other form of
association.
10.5
Counterparts
. This
Agreement may be executed in any number of counterparts and all of such
counterparts shall be deemed an original and for all purposes constitute one
Agreement binding on the parties hereto, notwithstanding that all parties are
not signatory to the same counterpart.
10.6
Binding
Agreement
. Except as otherwise provided herein to the
contrary, this Agreement shall be binding upon and inure to the benefit of the
parties hereto, their personal representatives, successors, assigns, and legal
representatives.
10.7
Severability
. If
any provision of this Agreement shall be declared invalid or unenforceable, the
remainder of this Agreement will continue in full force and effect so far as the
intent of the parties can be carried out.
10.8
Entire Agreement; Governing
Law
. This Agreement, including the Exhibits hereto, contains
the entire agreement of the parties hereto. In the event any of the
terms or conditions hereof shall conflict with any of the terms or condition of
the Articles of Organization, the terms and conditions of this Agreement shall
control. All amendments, modifications, supplements or riders hereto,
if any, shall be set forth in writing executed by the parties hereto, and shall
be attached to this Agreement at the time of such execution. This
Agreement shall be governed by the laws of the State of Nevada.
10.9
Further
Action
. All parties agree to execute and deliver such papers,
documents, and instruments, and perform such acts, as are necessary or
appropriate to implement or carry out the terms or intent or
hereof.
IN WITNESS WHEREOF
, the
undersigned Members have executed this Operating Agreement under their seal this
1
st
day of
April
,
2009.
APLUS
INTERNATIONAL, LTD.
By:
/s/
Yao-Ting
Su
Yao-Ting
Su, Member
RADIANT
SUN DEVELOPMENT S.A.
By:
/s/ Hui-Yun
Lo
Hui-Yun
Lo, President
SCHEDULE
A
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Member
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Membership Interest
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Xodtec
Technology Co., Ltd.
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16.8%
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Targetek
Technology Co., Ltd.
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15.2%
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UP-Technology
Co., Ltd.
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40.0%
|
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Radiant
Sun Development S.A.
|
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28.0%
|
13
Exhibit
4.1
THIS
WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF THIS WARRANT
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”), OR ANY STATE SECURITIES LAWS. THIS WARRANT AND THE COMMON
STOCK ISSUABLE UPON EXERCISE OF THIS WARRANT MAY NOT BE SOLD, OFFERED FOR SALE,
PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS
TO THIS WARRANT UNDER SAID ACT OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY
TO SPARKING EVENTS, INC., THAT SUCH REGISTRATION IS NOT REQUIRED.
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April
23, 2009
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Warrant
No.: ___
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COMMON
STOCK PURCHASE WARRANT
Right to
Purchase ______ Shares of Common Stock of
SPARKING
EVENTS, INC.
SPARKING
EVENTS, INC.
,
a corporation
organized under the laws of the State of Nevada (the “Company”), hereby
certifies that, for value received, __________________ ( the” Holder”) is
entitled to purchase from the Company upon the due exercise hereof, and subject
to the terms and conditions herein, from the date of issue of this warrant (the
“Warrant”) until six months following the issuance hereof (the "Expiration
Date"), all or any part of ____________________ (_______) fully paid and
non-assessable, post forward-split shares of common stock, par value $0.001 per
share (the "Common Stock") of the Company, upon surrender hereof, with the
exercise form annexed hereto duly completed and executed, at the office of the
Company and upon simultaneous payment therefore in cash or by certified or
official bank check, payable to the order of the Company, at an exercise price
(“Exercise Price”) of $____ per share, subject to adjustment as provided
herein.
1.
Restriction on
Transfer.
No resale of the Warrant or of any of the shares of
Common Stock underlying the exercise of the Warrant (the “Underlying Stock”)
will be made unless such resale is registered pursuant to a registration
statement filed by the Company with the Securities and Exchange Commission (the
"Commission") or made pursuant to an exemption from registration under the
Securities Act of 1933, as amended (the "Securities Act"). By acceptance of this
agreement, the Holder agrees, for itself and all subsequent holders, that prior
to making any disposition of the Warrant or of any Underlying Stock, the Holder
shall give written notice to the Company describing briefly the proposed
disposition; and no such disposition shall be made unless and until (i) the
Company has notified the Holder that, in the opinion of counsel satisfactory to
it, no registration or other action under the Securities Act is required with
respect to such disposition (which opinion may be conditioned upon the
transferee's assuming the Holder's obligation hereunder); or (ii) a registration
statement under the Securities Act has been filed by the Company and declared
effective by the Commission or other such similar action has been
taken.
2.
Expiration of
Warrant.
Unless this Warrant and the Exercise Price are
tendered as herein provided before the close of business on the Expiration Date,
this Warrant will become wholly void and all rights and obligations set forth
herein shall expire and terminate.
3.
Partial
Exercise.
If this Warrant is exercised for less than all the
shares that may be purchased upon the exercise hereof, the Warrant shall be
surrendered by the Holder and replaced with a new warrant of identical terms in
the name of the Holder providing for the right to purchase the number of shares
of Underlying Stock as to which this Warrant has not yet been
exercised.
4.
Adjustments.
The
Exercise Price and the number of shares of Underlying Stock of the Company
issuable pursuant to such exercise is subject to adjustment as
follows:
(a) In
case the Company shall at any time declare a stock dividend or stock split on
the outstanding shares of Common Stock in shares of its Common Stock, then the
Exercise Price and number of shares of Underlying Stock shall be proportionately
adjusted so that the holder of any Warrant exercised after such time shall be
entitled to receive the aggregate number and kind of shares which if such
Warrant had been exercised immediately prior to such time, he or she would have
owned upon such exercise and been entitled to receive by virtue of such
dividend.
(b) In
case the Company shall at any time subdivide or combine the outstanding shares
of the Common Stock, the Exercise Price, initial or adjusted, in effect
immediately prior to such subdivision or combination shall forthwith be
proportionately decreased in the case of subdivision or increased in the case of
combination.
(c) In
case of any capital reorganization, sale of substantially all the assets of the
Company, or any reclassification of the shares of Common Stock of the Company,
or in case of any consolidation with or merger of the Company into or with
another corporation, then as a part of such reorganization sale
reclassification, consolidation or merger, as the case may be, provision shall
be made so that the registered owner of the Warrant evidenced hereby shall have
the right thereafter to receive upon the exercise thereof the kind and amount of
shares of stock or other securities or property which he would have been
entitled to receive if immediately prior to such reorganization,
reclassification, consolidation or merger, he had held the number of shares of
Underlying Stock which were then issuable upon the exercise of the Warrant
evidenced hereby, to the end that the provisions set forth (including provisions
with respect to adjustments of the Exercise Price) shall thereafter be
applicable, as nearly as reasonably may be, in relation to any shares of stock
or other property thereafter deliverable upon the exercise of such
Warrants.
(d) If
the Company at any time makes any spin-off, split-off, or distribution of assets
upon or with respect to its Common Stock, as a liquidating or partial
liquidating dividend, spin-off, or by way of return of capital, or other than as
dividend payable out of earnings or any surplus legally available for dividends,
the Holder then outstanding shall, upon the exercise of the Warrant, receive, in
addition to the shares of Common Stock then issuable on exercise of the Warrant,
the amount of such assets (or, at the option of the Company, a sum equal to the
value thereof at the time of the distributions) which would have been payable to
such holder had he or she exercised the Warrant immediately prior to the record
date for such distribution.
(e) When
any adjustment is required to be made to the Exercise Price, the number of
shares of Common Stock issuable shall be determined as provided for in paragraph
(f) hereof. No fractional shares of Common Stock shall be issued upon the
exercise of the Warrant. The Company shall round all fractional
shares to the next whole share.
(f) Whenever
the Exercise Price is adjusted as provided above, the number of shares of
Underlying Stock immediately prior to such adjustment shall be increased,
effective simultaneously with such adjustment, by a number of shares of Common
Stock computed by multiplying such number of shares of Common Stock by a
fraction, the numerator of which is the Exercise Price in effect immediately
prior to such adjustment and the denominator of which is the Exercise Price in
effect upon such adjustment, and the number of shares of Underlying Stock
arrived at by making said computation shall be added to the number of shares of
Underlying Stock immediately prior to such adjustment. The total number of
shares arrived at by making the computation provided for in the immediately
preceding sentence shall thereupon be the number of shares of Common Stock
issuable upon exercise or the Warrant and the Company shall forthwith determine
the new Exercise Price.
5.
Notice of Adjustment
.
Upon any adjustment of the number of Units and upon any adjustment of the
Exercise Price, then and in each such case the Company shall give written notice
thereof to the Holder, which notice shall state the Exercise Price and the
number of Units or other securities subject to the unexercised Warrants
resulting from such adjustment, and shall set forth in reasonable detail the
method of calculation and the facts upon which such calculation is based. Upon
the request of the Holder there shall be transmitted promptly to the Holder a
statement of the firm of independent chartered accountants retained to audit the
financial statements of the Company to the effect that such firm concurs in the
Company's calculation of the change.
6.
Other Notices
. In case
at any time after the date hereof and prior to the Expiration Date:
(a) the
Company shall declare any dividend upon its shares payable in shares of Common
Stock;
(b) there
shall be any capital reorganization or reclassification of the capital stock of
the Company, or consolidation, amalgamation or merger of the Company with, or
sale of all or substantially all of its assets to, another corporation;
or
(c) there
shall be a voluntary or involuntary dissolution, liquidation or winding-up of
the Company,
then, in
any one or more of such cases, the Company shall give to the Holder (I) at least
10 days' prior written notice of the date on which a record date shall be taken
for such dividend, distribution or subscription rights or for determining rights
to vote in respect of any such reorganization, reclassification, consolidation,
merger, amalgamation, sale, dissolution, liquidation or winding-up and (II) in
the case of any such reorganization, reclassification, consolidation, merger,
sale, dissolution, liquidation or winding-up, at least 10 days' prior written
notice of the date when the same shall take place. Such notice in accordance
with the foregoing clause (I) shall also specify, in the case of any such
dividend, distribution or subscription rights, the date on which the holders of
shares shall be entitled thereto, and such notice in accordance with the
foregoing clause (II) shall also specify the date on which the holders of shares
shall be entitled to exchange their shares for securities or other property
deliverable upon such reorganization, reclassification, consolidation, merger,
amalgamation, sale, dissolution, liquidation or winding-up, as the case may
be.
7.
Delivery of
Underlying Stock.
As soon as practicable after the exercise
hereof, the Company shall deliver a certificate or certificates for the number
of full shares of Underlying Stock, all of which shall be fully paid and
nonassessable, to the person or persons entitled to receive the same provided no
sale, offer to sell or transfer of the Underlying Stock or of this Warrant, or
of any shares or other securities issued in exchange for or in respect of such
shares, shall be made unless a registration statement under the Act, with
respect to such shares, is in effect or an exemption from the registration
requirements of such Act is applicable to such shares.
8.
Condition of Exercise of
Warrant
.
(a) Unless
exercised pursuant to an effective registration statement under the Securities
Act which includes the Underlying Stock, it shall be a condition to any exercise
of this Warrant that the Company shall have received, at the time of such
exercise, a representation in writing from the recipient in the form attached
hereto as Exhibit A-1, that the Underlying Stock being issued upon exercise, are
being acquired for investment and not with a view to any sale or distribution
thereof.
(b) Each
certificate evidencing the Underlying Stock issued upon exercise of this
Warrant, shall be stamped or imprinted with a legend substantially in the
following form:
"The
securities represented by this certificate have not been registered under the
Securities Act of 1933, as amended. The securities have been acquired for
investment and may not be sold, transferred or assigned in the absence of an
effective registration statement for the securities under said Act, or an
opinion of counsel, in form, substance and scope reasonably acceptable to the
Company, that registration is not required under said Act or unless sold
pursuant to Rule 144 under said Act."
Subject
to this Section 6, the Company may instruct its transfer agent not to register
the transfer of all or a part of this Warrant, or any of the Underlying Stock,
unless one of the conditions specified in the above legend is
satisfied.
9.
Representations and
Warranties of the Company
. The Company represents and warrants
to the Holder as follows:
(a) This
Warrant has been duly authorized and executed by the Company and is a valid and
binding obligation of the Company enforceable in accordance with its
terms;
(b) The
Underlying Stock has been duly authorized and reserved for issuance by the
Company and, when issued in accordance with the terms hereof, will be validly
issued, fully paid and nonassessable;
(c) The
execution and delivery of this Warrant is not, and the issuance of the
Underlying Stock upon exercise of this Warrant in accordance with the terms
hereof will not be, inconsistent with the Company’s Articles of Incorporation or
By-laws, as amended.
10.
Representations and Warranties by the
Holder
. The Holder represents and warrants to the Company as
follows:
(a) This
Warrant is being acquired for its own account, for investment and not with a
view to, or for resale in connection with, any distribution or public offering
thereof within the meaning of the Securities Act. Upon exercise of
this Warrant, the Holder shall, if so requested by the Company, confirm in
writing, in the form attached hereto as Exhibit A-1, that the Underlying Stock
issuable upon exercise of this Warrant is being acquired for investment and not
with a view toward distribution or resale.
(b) The
Holder understands that the Warrant and the Underlying Stock have not been
registered under the Securities Act by reason of their issuance in a transaction
exempt from the registration and prospectus delivery requirements of the
Securities Act pursuant to Section 4(2) thereof, and that they must be held by
the Holder indefinitely, and that the Holder must therefore bear the economic
risk of such investment indefinitely, unless a subsequent disposition thereof is
registered under the Securities Act or is exempted from such
registration.
(c) The
Holder has such knowledge and experience in financial and business matters that
it is capable of evaluating the merits and risks of the purchase of this Warrant
and the Underlying Stock and of protecting its interests in connection
therewith.
(d) The
Holder is able to bear the economic risk of the purchase of the Underlying Stock
pursuant to the terms of this Warrant.
11.
Rights of
Stockholders
. No holder of this Warrant shall be entitled, as
a warrant- holder, to vote or receive dividends or be deemed
the holder of Common Stock or any other securities of the Company which may at
any time be issuable on the exercise hereof for any purpose, nor shall anything
contained herein be construed to confer upon the holder of this Warrant, as
such, any of the rights of a stockholder of the Company or any right to vote for
the election of directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corporate action (whether
upon any recapitalization, issuance of stock, reclassification of stock, change
of par value, consolidation, merger, conveyance, or otherwise) or to receive
notice of meetings, or to receive dividends or subscription rights or otherwise
until the Warrant shall have been exercised.
12.
Miscellaneous.
(a) This
Warrant and any term hereof may be changed, waived, discharged or terminated
only by an instrument in writing signed by the party against which enforcement
of such change, waiver, discharge or termination is sought.
(b) This
Warrant shall be governed by and construed in accordance with the laws of State
of Nevada without regard to principles of conflicts of laws. Any
action brought concerning the transactions contemplated by this Warrant shall be
brought only in the state courts of New York or in the federal courts located in
the state of New York; provided, however, that the Company may choose to waive
this provision and bring an action outside the state of New York.
(c) The
invalidity or unenforceability of any provision hereof shall in no way affect
the validity or enforceability of any other provision.
(d) The
headings in this Warrant are for purposes of reference only, and shall not limit
or otherwise affect any of the terms hereof.
(e) The
terms of this Warrant shall be binding upon and shall inure to the benefit of
any successors or assigns of the Company and of the holder or holders hereof and
of the Underlying Stock.
(f) This
Warrant and the other documents delivered pursuant hereto constitute the full
and entire understanding and agreement between the parties with regard to the
subjects hereof and thereof.
(g) Upon
receipt of evidence reasonably satisfactory to the Company of the loss, theft,
destruction or mutilation of this Warrant and, in the case of any such loss,
theft or destruction, upon delivery of an indemnity agreement reasonably
satisfactory in form and amount to the Company or, in the case of any such
mutilation, upon surrender and cancellation of such Warrant, the Company at its
expense will execute and deliver to the holder of record, in lieu thereof, a new
Warrant of like date and tenor.
(h) This
Warrant and any provision hereof may be amended, waived or terminated only by an
instrument in writing signed by the Company and the Holder.
(i) Receipt
of this Warrant by the Holder hereof shall constitute acceptance of and
agreement to the foregoing terms and conditions.
IN WITNESS WHEREOF
, the
Company has caused this Warrant to be signed by its duly authorized
officer.
Dated:
April __, 2009
SPARKING
EVENTS, INC.
EXHIBIT
A
NOTICE
OF EXERCISE
TO:
SPARKING EVENTS,
INC.
1. The
undersigned hereby elects to purchase ________ shares of Common Stock of
SPARKING EVENTS, INC. pursuant to the terms of this Warrant, and tenders
herewith payment of the purchase price of such shares in full.
2. Please
issue a certificate or certificates representing said shares of Common Stock in
the name of the undersigned or in such other name as is specified
below:
3. The
undersigned hereby represents and warrants that the aforesaid shares of Common
Stock are being acquired for the account of the undersigned for investment and
not with a view to, or for resale, in connection with the distribution thereof,
and that the undersigned has no present intention of distributing or reselling
such shares and all representations and warranties of the undersigned set forth
in Section 8 of the attached Warrant are true and correct as of the date
hereof. In support thereof, the undersigned agrees to execute an
Investment Representation Statement in a form substantially similar to the form
attached to the Warrant as EXHIBIT A-1.
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(Signature)
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By:
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Title:
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Date:
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_______________________________,
20__
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EXHIBIT
A-1
INVESTMENT
REPRESENTATION STATEMENT
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PURCHASER:
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______________________
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SELLER:
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______________________
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COMPANY:
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SPARKING
EVENTS, INC.
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SECURITIES:
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COMMON
STOCK ISSUED UPON EXERCISE OF THE WARRANTS ISSUED ON APRIL __,
2009
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AMOUNT:
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__________
SHARES
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In
connection with the purchase of the above-listed Securities, I, the Purchaser,
represent to the Seller and to the Company the following:
(a) I
am aware of the Company’s business affairs and financial condition, and have
acquired sufficient information about the Company to reach an informed and
knowledgeable decision to acquire the Securities. I am purchasing
these Securities for my own account for investment purposes only and not with a
view to, or for the resale in connection with, any "distribution" thereof for
purposes of the Securities Act of 1933, as amended (the "Securities
Act").
(b) I
understand that the Securities have not been registered under the Securities Act
in reliance upon a specific exemption therefrom, which exemption depends upon,
among other things, the bona fide nature of my investment intent as expressed
herein. In this connection, I understand that, in the view of the
Securities and Exchange Commission (the "Commission"), the statutory basis for
such exemption may be unavailable if my representation was predicated solely
upon a present intention to hold these Securities for the minimum capital gains
period specified under tax statutes, for a deferred sale, for or until an
increase or decrease in the market price of the Securities, or for a period of
one year or any other fixed period in the future.
(c) I
further understand that the Securities must be held indefinitely unless
subsequently registered under the Securities Act or unless an exemption from
registration is otherwise available. Moreover, I understand that the
Company is under no obligation to register the Securities. In
addition, I understand that the certificate evidencing the Securities will be
imprinted with a legend which prohibits the transfer of the Securities unless
they are registered or such registration is not required in the opinion of
counsel for the Company.
(d) I
am familiar with the provisions of Rule 144, promulgated under the Securities
Act, which, in substance, permits limited public resale of "restricted
securities" acquired, directly or indirectly, from the issuer thereof, in a
non-public offering subject to the satisfaction of certain
conditions.
(e) I
further understand that in the event all of the applicable requirements of Rule
144 are not satisfied, registration under the Securities Act, or some other
registration exemption will be required; and that, notwithstanding the fact that
Rule 144 is not exclusive, the Commission has expressed its opinion that persons
proposing to sell private placement securities other than in a registered
offering and otherwise than pursuant to Rule 144 will have a substantial burden
of proof in establishing that an exemption from registration is available for
such offers or sales, and that such persons and their respective brokers who
participate in such transactions do so at their own risk.
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(Signature)
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By:
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Title:
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Date:
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_______________________________,20__
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2
Exhibit
10.1
EMPLOYMENT
AGREEMENT
AGREEMENT
("Agreement") made
this 22nd day of April, 2009, by and between Sparking Events, Inc. (the
"Company") and Yao-Ting (Curtis) Su ("Employee").
AGREEMENT:
NOW,
THEREFORE, in consideration of the premises and the mutual covenants and
agreements herein contained, the Company and Employee agree as
follows:
1.
Employment/Duties
: The
Company hereby agrees to employ Employee, and Employee hereby agrees to continue
to serve, subject to the provisions of this Agreement, as Chairman of the
Company. Employee shall continue to perform such duties and
responsibilities as are from time to time assigned to Employee by the Board of
Directors and shall report directly to the Board of Directors. Such
duties and responsibilities shall include the oversight to: (i) to
shape and implement the strategic business plan of the Company; (ii) to direct
the development and monitoring of operating goals and objectives; (iii) to
oversee financial operations and (iv) to provide leadership, direction and
administration of all aspects of Company activities, in all cases subject to the
supervision and authority of the Company's Board of
Directors. Employee agrees to continue to devote sufficient attention
and energies to the performance of the duties assigned to him hereunder, and to
perform such duties faithfully and to the best of his abilities and subject to
such laws, rules, regulations and policies from time to time applicable to the
Company's employees to the best of his knowledge.
2.
Term
: The
term of this Agreement shall be for a period of one (1) year commencing on the
date set forth above (“Effective Date”) and ending on the first anniversary
thereof (the "Initial Term"), unless terminated sooner pursuant to Section 7 of
this Agreement. Thereafter the Agreement is subject to automatic
renewals of one year period (each a "Renewal Term" and collectively with the
Initial Term, the "Term") unless Employee or Company notifies the other in
writing of its election not to renew, such notice to be provided not less than
ninety (90) days prior to the end of the Initial Term or the end of any Renewal
Term.
3.
Compensation
:
(a)
Base
Compensation
: For the services to be rendered by the Employee
under this Agreement the Company shall pay Employee a base salary ("Base
Compensation") of Fifty Thousand Dollars ($50,000.00) on a pro-rated basis
according to the Company's payroll schedule, exclusive of any dividend payments
and subject to applicable withholdings and other payroll
deductions.
(b)
Bonus
Compensation
: Upon each anniversary of this Agreement,
the Company’s Board of Directors shall determine whether a bonus for the
Employee is appropriate.
(c)
Other
Benefits
. Subject to the terms of the plans, Employee shall be
entitled to receive such other benefits or rights as may be provided under any
employee benefit plans provided by the Company to its executives that are now or
hereafter adopted, including participation in life, medical, disability and
dental insurance plans, vacation and sick leave, expense reimbursement and
long-term incentive plans. Notwithstanding anything to the contrary
set forth in this Agreement, any restricted stock awards, stock options or other
equity incentives of the Company (including, without limitation, those
outstanding at the time of termination of employment with the Company) shall be
subject to the terms set forth in such long-term incentive plans, as such plan
may be in effect from time to time, and in any restricted stock award, stock
option or other agreements (including, without limitation, those provisions
relating to vesting, exercisability, forefeitability), as may be entered into
between Employee and the Company pursuant to such long-term incentive
plans. Employee shall continue to be entitled to such paid holidays
as are provided to the Company's employees generally.
4.
Vacation
: Employee
shall be entitled to receive three (3) weeks paid vacation time for each year of
employment under this Agreement. Any vacation time which remains
unused at the end of a year of employment may be carried over to a succeeding
year.
5.
Business
Expenses
: The Company will reimburse or advance Employee
promptly (but not later than thirty (30) days after submittal of appropriate
vouchers or receipts) for his reasonable and documented out-of-pocket business
expenses for travel, meals and similar items incurred in connection with the
performance of Employee's duties (“Business Expenses”), and which are consistent
with the Company's general policies in effect regarding the reimbursement of
Business Expenses as the Company may from time to time establish. All
payments for reimbursement of such expenses shall be made to the Employee only
upon the presentation to the Company of appropriate vouchers or
receipts. All outstanding Employee requests for reimbursement of
Business Expenses shall be paid in full not later than the date of execution of
this Agreement.
6.
Confidentiality
: Employee
agrees to refrain from making any disparaging or unfavorable comments, in
writing or orally, about the Company, including but not limited to press
releases, communication with employees, vendors, customers, professional
references, and others.
7.
Termination
:
(a)
Termination of Employment
With Cause
: In addition to any other remedies available to the
Company at law, in equity or as set forth in this Agreement, the Company shall
have the right, upon written notice to Employee, to terminate his employment
hereunder without any further liability or obligation to him in respect of his
employment (other than its obligation to pay Base Compensation, Bonus and
vacation time accrued but unpaid as of the date of termination and reimbursement
of expenses incurred prior to the date of termination in accordance with Section
3 and 5 above) if Employee: (i) breaches any material
provision of this Agreement; or (ii) has committed an act of gross misconduct in
connection with the performance of his duties hereunder, as reasonably
determined in good faith by the Board of Directors of the Company; or (iii)
demonstrates habitual negligence in the performance of his duties, as reasonably
determined by the Board of Directors of the Company; or (iv) is convicted of or
pleads nolo contendere to any felony; or (v) is convicted of or pleads nolo
contendere to any misdemeanor involving moral turpitude and the conduct
underlying such misdemeanor has materially adverse or detrimental effect on the
Company, its reputation, or its business, as reasonably determined by the Board
of Directors of the Company; or (vi) has committed any act of fraud,
misappropriation of funds or embezzlement in connection with his employment
hereunder (a "Termination With Cause").
Notwithstanding
the foregoing, no purported Termination With Cause pursuant to (i), (ii) or
(iii)
of this
Section 7(a) shall be effective unless all of the following provisions shall
have been complied with: (x) Employee shall be given written notice
by the Board of Directors of the Company of the intention to effect a
Termination With Cause, such notice to state in detail the particular
circumstances that constitute the grounds on which the proposed Termination With
Cause is based; and (y) Employee shall have ten (10) business days after
receiving such notice in which to cure such grounds, to the extent such cure is
possible, as determined in the sole reasonable discretion of the Board of
Directors of the Company.
(b)
Death;
Disability
: In the event that Employee dies or becomes
Disabled (as defined herein) during the Term, Employee's employment shall
terminate when such death or Disability occurs and the Company shall pay
Employee (or his legal representative, as the case may be) as
follows:
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(i)
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any
Base Compensation, Bonus and vacation time accrued but unpaid as of the
date of death or termination for Disability;
and
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(ii)
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any
reimbursement for expenses incurred in accordance with Sections 3 and
5;.
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For the
purposes of this Agreement, Employee shall be deemed to be "Disabled" or have a
"Disability" if, because of Employee's personal injury, disability or illness,
he has been substantially unable to perform his duties hereunder for sixty (60)
days in any one hundred eighty (180) day period. Employee shall be
considered to have been substantially unable to perform his duties hereunder
only if he is either (i) unable to reasonably and effectively carry out his
duties with reasonable accommodations by the Company or (ii) unable to
reasonably and effectively carry out his duties because any reasonable
accommodation which may be required would cause the Company undue
hardship.
Notwithstanding
the foregoing, to the extent and for the period required by any state or federal
family and medical leave law, upon Employee's request (i) he shall be considered
to be on unpaid leave of absence and not terminated, (ii) his group health
benefits shall remain in full force and effect, and (iii) if Employee recovers
from any such Disability, at that time, to the extent required by any state or
federal family and medical leave law, upon Employee's request, he shall be
restored to his position hereunder or to an equivalent position, as the Company
may reasonably determine, and the Term of Employee's employment hereunder shall
be reinstated effective upon such restoration. The Term shall not be
extended by reason of such intervening leave of absence or termination, nor
shall any compensation or benefits accrue in excess of those required by law
during such intervening leave of absence or termination. Upon the
expiration of any such rights, unless Employee has been restored to a position
with the Company, he shall thereupon be considered terminated.
Employee
acknowledges that the payments referred to in both Sections 3 and 5 and this
Section 7(b) together with any rights or benefits under any written plan or
agreement which have vested on or prior to the termination date of Employee's
employment under this Section 7(b), constitute the only payments which Employee
(or his legal representative, as the case may be) shall be entitled to receive
from the Company hereunder in the event of a termination of his employment for
death or Disability, and the Company shall have no further liability or
obligation to him (or his legal representatives, as the case may be) hereunder
or otherwise in respect of his employment.
(c)
No Mitigation by
Employee
. Except as otherwise expressly provided herein,
Employee shall not be required to mitigate the amount of any payment provided
for in this Agreement by seeking other employment or otherwise, nor shall the
amount of any payment provided for herein be reduced by any compensation earned
by Employee as the result of employment by another employer.
8.
Intellectual Property
Rights:
The Company shall be the owner of all inventions, improvements,
designs, methods, plans, computer programs, products, services and other
materials (collectively, “Developments”) created by Employee under this
Agreement or in which Employee assisted in the creation for the benefit of the
Company during the course of employment with the Company under this
Agreement. All intellectual property rights in such Developments of
the Company, including all patents, trademarks, copyrights, trade secrets and
industrial designs, shall be the exclusive property of the
Company. In the event that Employee acquires any rights or interests
in such Developments of the Company as a result of his work under this
Agreement, Employee agrees to assign and by executing this Agreement does assign
all such rights and interests to the Company. The Company shall have
the exclusive rights to obtain copyright registrations, letters patent,
industrial designs, trademark registrations or any other protection in respect
of the work products and the intellectual property rights in the Company’s
Developments anywhere in the world. At the expense and request of the
Company, Employee shall both during and after his employment with the Company,
execute all documents and do all other acts necessary in order to enable the
Company to protect its rights in the Company’s Developments; provided, however,
that Employee shall be entitled to reasonable compensation if he provides such
assistance after the term if this Agreement is ended.
9.
Return of Company
Property
: Employee agrees that following the termination of
his employment for any reason, he shall return all property of the Company
,
its subsidiaries, affiliates
and any divisions thereof he may have managed which is then in or thereafter
comes into his possession, including, but not limited to, documents, contracts,
agreements, plans, photographs, books, notes, electronically stored data and all
copies of the foregoing as well as any automobile or other materials or
equipment supplied by the Company to Employee.
10.
Each Party, the
Drafter
: This Agreement and the provisions contained in it
shall not be construed or interpreted for or against any party to this Agreement
because that party drafted or caused that party's legal representative to draft
any of its provisions.
11.
Waiver
: The
failure of either party to this Agreement to enforce any of its terms,
provisions or covenants shall not be construed as a waiver of the same or of the
right of such party to enforce the same. Waiver by either party
hereto of any breach or default by the other party of any term or provision of
this Agreement shall not operate as a waiver of any other breach or
default.
12.
Severability
: In
the event that any one or more of the provisions of this Agreement shall be held
to be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remainder of the Agreement shall not in any way be
affected or impaired thereby. Moreover, if any one or more of the
provisions contained in this Agreement shall be held to be excessively broad as
to duration, activity or subject, such provisions shall be construed by limiting
and reducing them so as to be enforceable to the maximum extent allowed by
applicable law.
13.
Entire
Agreement
: The provisions contained herein (including any
schedules, exhibits and documents delivered herewith or attached hereto)
constitute the entire agreement between the parties hereto with respect to the
subject matter hereof.
14.
Independent
Counsel
: Employee and the Company each acknowledge that each
of them has had the opportunity to seek independent legal counsel in connection
with entering into this Agreement, and has either done so or has voluntarily
chosen not to.
15.
Governing
Law
: This Agreement shall be governed by and construed in
accordance with the laws of the State of Nevada, without regard to its conflict
of law rules.
16.
Descriptive
Headings
: The paragraph headings contained herein are for
reference purposes only and shall not in any way affect the meaning or
interpretation of this Agreement.
17.
Counterparts
: This
Agreement may be executed in one or more counterparts, which, together, shall
constitute one and the same agreement.
IN
WITNESS WHEREOF, the parties hereto have executed this Agreement on the date
first written above.
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Sparking
Events, Inc.
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By:
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/s/
Yao-Ting (Curtis) Su
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/s/
Yao-Ting (Curtis) Su
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Yao-Ting
(Curtis) Su
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Yao-Ting
(Curtis) Su
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Chairman
and Executive Director
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Exhibit
10.2
EMPLOYMENT
AGREEMENT
AGREEMENT
("Agreement") made
this 22nd day of April, 2009, by and between Sparking Events, Inc. (the
"Company") and Chao-Wu (Mike) Chou ("Employee").
AGREEMENT:
NOW,
THEREFORE, in consideration of the premises and the mutual covenants and
agreements herein contained, the Company and Employee agree as
follows:
1.
Employment/Duties
: The
Company hereby agrees to employ Employee, and Employee hereby agrees to continue
to serve, subject to the provisions of this Agreement, as Chairman of the
Company. Employee shall continue to perform such duties and
responsibilities as are from time to time assigned to Employee by the Board of
Directors and shall report directly to the Board of Directors. Such
duties and responsibilities shall include the oversight to: (i) to
shape and implement the strategic business plan of the Company; (ii) to direct
the development and monitoring of operating goals and objectives; (iii) to
oversee financial operations and (iv) to provide leadership, direction and
administration of all aspects of Company activities, in all cases subject to the
supervision and authority of the Company's Board of
Directors. Employee agrees to continue to devote sufficient attention
and energies to the performance of the duties assigned to him hereunder, and to
perform such duties faithfully and to the best of his abilities and subject to
such laws, rules, regulations and policies from time to time applicable to the
Company's employees to the best of his knowledge.
2.
Term
: The
term of this Agreement shall be for a period of one (1) year commencing on the
date set forth above (“Effective Date”) and ending on the first anniversary
thereof (the "Initial Term"), unless terminated sooner pursuant to Section 7 of
this Agreement. Thereafter the Agreement is subject to automatic
renewals of one year period (each a "Renewal Term" and collectively with the
Initial Term, the "Term") unless Employee or Company notifies the other in
writing of its election not to renew, such notice to be provided not less than
ninety (90) days prior to the end of the Initial Term or the end of any Renewal
Term.
3.
Compensation
:
(a)
Base
Compensation
: For the services to be rendered by the Employee
under this Agreement the Company shall pay Employee a base salary ("Base
Compensation") of Fifty Thousand Dollars ($50,000.00) on a pro-rated basis
according to the Company's payroll schedule, exclusive of any dividend payments
and subject to applicable withholdings and other payroll
deductions.
(b)
Bonus
Compensation
: Upon each anniversary of this Agreement,
the Company’s Board of Directors shall determine whether a bonus for the
Employee is appropriate.
(c)
Other
Benefits
. Subject to the terms of the plans, Employee shall be
entitled to receive such other benefits or rights as may be provided under any
employee benefit plans provided by the Company to its executives that are now or
hereafter adopted, including participation in life, medical, disability and
dental insurance plans, vacation and sick leave, expense reimbursement and
long-term incentive plans. Notwithstanding anything to the contrary
set forth in this Agreement, any restricted stock awards, stock options or other
equity incentives of the Company (including, without limitation, those
outstanding at the time of termination of employment with the Company) shall be
subject to the terms set forth in such long-term incentive plans, as such plan
may be in effect from time to time, and in any restricted stock award, stock
option or other agreements (including, without limitation, those provisions
relating to vesting, exercisability, forefeitability), as may be entered into
between Employee and the Company pursuant to such long-term incentive
plans. Employee shall continue to be entitled to such paid holidays
as are provided to the Company's employees generally.
4.
Vacation
: Employee
shall be entitled to receive three (3) weeks paid vacation time for each year of
employment under this Agreement. Any vacation time which remains
unused at the end of a year of employment may be carried over to a succeeding
year.
5.
Business
Expenses
: The Company will reimburse or advance Employee
promptly (but not later than thirty (30) days after submittal of appropriate
vouchers or receipts) for his reasonable and documented out-of-pocket business
expenses for travel, meals and similar items incurred in connection with the
performance of Employee's duties (“Business Expenses”), and which are consistent
with the Company's general policies in effect regarding the reimbursement of
Business Expenses as the Company may from time to time establish. All
payments for reimbursement of such expenses shall be made to the Employee only
upon the presentation to the Company of appropriate vouchers or
receipts. All outstanding Employee requests for reimbursement of
Business Expenses shall be paid in full not later than the date of execution of
this Agreement.
6.
Confidentiality
: Employee
agrees to refrain from making any disparaging or unfavorable comments, in
writing or orally, about the Company, including but not limited to press
releases, communication with employees, vendors, customers, professional
references, and others.
7.
Termination
:
(a)
Termination of Employment
With Cause
: In addition to any other remedies available to the
Company at law, in equity or as set forth in this Agreement, the Company shall
have the right, upon written notice to Employee, to terminate his employment
hereunder without any further liability or obligation to him in respect of his
employment (other than its obligation to pay Base Compensation, Bonus and
vacation time accrued but unpaid as of the date of termination and reimbursement
of expenses incurred prior to the date of termination in accordance with Section
3 and 5 above) if Employee: (i) breaches any material
provision of this Agreement; or (ii) has committed an act of gross misconduct in
connection with the performance of his duties hereunder, as reasonably
determined in good faith by the Board of Directors of the Company; or (iii)
demonstrates habitual negligence in the performance of his duties, as reasonably
determined by the Board of Directors of the Company; or (iv) is convicted of or
pleads nolo contendere to any felony; or (v) is convicted of or pleads nolo
contendere to any misdemeanor involving moral turpitude and the conduct
underlying such misdemeanor has materially adverse or detrimental effect on the
Company, its reputation, or its business, as reasonably determined by the Board
of Directors of the Company; or (vi) has committed any act of fraud,
misappropriation of funds or embezzlement in connection with his employment
hereunder (a "Termination With Cause").
Notwithstanding
the foregoing, no purported Termination With Cause pursuant to (i), (ii) or
(iii)
of this
Section 7(a) shall be effective unless all of the following provisions shall
have been complied with: (x) Employee shall be given written notice
by the Board of Directors of the Company of the intention to effect a
Termination With Cause, such notice to state in detail the particular
circumstances that constitute the grounds on which the proposed Termination With
Cause is based; and (y) Employee shall have ten (10) business days after
receiving such notice in which to cure such grounds, to the extent such cure is
possible, as determined in the sole reasonable discretion of the Board of
Directors of the Company.
(b)
Death;
Disability
: In the event that Employee dies or becomes
Disabled (as defined herein) during the Term, Employee's employment shall
terminate when such death or Disability occurs and the Company shall pay
Employee (or his legal representative, as the case may be) as
follows:
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|
(i)
|
any
Base Compensation, Bonus and vacation time accrued but unpaid as of the
date of death or termination for Disability;
and
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(ii)
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any
reimbursement for expenses incurred in accordance with Sections 3 and
5;.
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For the
purposes of this Agreement, Employee shall be deemed to be "Disabled" or have a
"Disability" if, because of Employee's personal injury, disability or illness,
he has been substantially unable to perform his duties hereunder for sixty (60)
days in any one hundred eighty (180) day period. Employee shall be
considered to have been substantially unable to perform his duties hereunder
only if he is either (i) unable to reasonably and effectively carry out his
duties with reasonable accommodations by the Company or (ii) unable to
reasonably and effectively carry out his duties because any reasonable
accommodation which may be required would cause the Company undue
hardship.
Notwithstanding
the foregoing, to the extent and for the period required by any state or federal
family and medical leave law, upon Employee's request (i) he shall be considered
to be on unpaid leave of absence and not terminated, (ii) his group health
benefits shall remain in full force and effect, and (iii) if Employee recovers
from any such Disability, at that time, to the extent required by any state or
federal family and medical leave law, upon Employee's request, he shall be
restored to his position hereunder or to an equivalent position, as the Company
may reasonably determine, and the Term of Employee's employment hereunder shall
be reinstated effective upon such restoration. The Term shall not be
extended by reason of such intervening leave of absence or termination, nor
shall any compensation or benefits accrue in excess of those required by law
during such intervening leave of absence or termination. Upon the
expiration of any such rights, unless Employee has been restored to a position
with the Company, he shall thereupon be considered terminated.
Employee
acknowledges that the payments referred to in both Sections 3 and 5 and this
Section 7(b) together with any rights or benefits under any written plan or
agreement which have vested on or prior to the termination date of Employee's
employment under this Section 7(b), constitute the only payments which Employee
(or his legal representative, as the case may be) shall be entitled to receive
from the Company hereunder in the event of a termination of his employment for
death or Disability, and the Company shall have no further liability or
obligation to him (or his legal representatives, as the case may be) hereunder
or otherwise in respect of his employment.
(c)
No Mitigation by
Employee
. Except as otherwise expressly provided herein,
Employee shall not be required to mitigate the amount of any payment provided
for in this Agreement by seeking other employment or otherwise, nor shall the
amount of any payment provided for herein be reduced by any compensation earned
by Employee as the result of employment by another employer.
8.
Intellectual Property
Rights:
The Company shall be the owner of all inventions, improvements,
designs, methods, plans, computer programs, products, services and other
materials (collectively, “Developments”) created by Employee under this
Agreement or in which Employee assisted in the creation for the benefit of the
Company during the course of employment with the Company under this
Agreement. All intellectual property rights in such Developments of
the Company, including all patents, trademarks, copyrights, trade secrets and
industrial designs, shall be the exclusive property of the
Company. In the event that Employee acquires any rights or interests
in such Developments of the Company as a result of his work under this
Agreement, Employee agrees to assign and by executing this Agreement does assign
all such rights and interests to the Company. The Company shall have
the exclusive rights to obtain copyright registrations, letters patent,
industrial designs, trademark registrations or any other protection in respect
of the work products and the intellectual property rights in the Company’s
Developments anywhere in the world. At the expense and request of the
Company, Employee shall both during and after his employment with the Company,
execute all documents and do all other acts necessary in order to enable the
Company to protect its rights in the Company’s Developments; provided, however,
that Employee shall be entitled to reasonable compensation if he provides such
assistance after the term if this Agreement is ended.
9.
Return of Company
Property
: Employee agrees that following the termination of
his employment for any reason, he shall return all property of the Company
,
its subsidiaries, affiliates
and any divisions thereof he may have managed which is then in or thereafter
comes into his possession, including, but not limited to, documents, contracts,
agreements, plans, photographs, books, notes, electronically stored data and all
copies of the foregoing as well as any automobile or other materials or
equipment supplied by the Company to Employee.
10.
Each Party, the
Drafter
: This Agreement and the provisions contained in it
shall not be construed or interpreted for or against any party to this Agreement
because that party drafted or caused that party's legal representative to draft
any of its provisions.
11.
Waiver
: The
failure of either party to this Agreement to enforce any of its terms,
provisions or covenants shall not be construed as a waiver of the same or of the
right of such party to enforce the same. Waiver by either party
hereto of any breach or default by the other party of any term or provision of
this Agreement shall not operate as a waiver of any other breach or
default.
12.
Severability
: In
the event that any one or more of the provisions of this Agreement shall be held
to be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remainder of the Agreement shall not in any way be
affected or impaired thereby. Moreover, if any one or more of the
provisions contained in this Agreement shall be held to be excessively broad as
to duration, activity or subject, such provisions shall be construed by limiting
and reducing them so as to be enforceable to the maximum extent allowed by
applicable law.
13.
Entire
Agreement
: The provisions contained herein (including any
schedules, exhibits and documents delivered herewith or attached hereto)
constitute the entire agreement between the parties hereto with respect to the
subject matter hereof.
14.
Independent
Counsel
: Employee and the Company each acknowledge that each
of them has had the opportunity to seek independent legal counsel in connection
with entering into this Agreement, and has either done so or has voluntarily
chosen not to.
15.
Governing
Law
: This Agreement shall be governed by and construed in
accordance with the laws of the State of Nevada, without regard to its conflict
of law rules.
16.
Descriptive
Headings
: The paragraph headings contained herein are for
reference purposes only and shall not in any way affect the meaning or
interpretation of this Agreement.
17.
Counterparts
: This
Agreement may be executed in one or more counterparts, which, together, shall
constitute one and the same agreement.
IN
WITNESS WHEREOF, the parties hereto have executed this Agreement on the date
first written above.
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Sparking
Events, Inc.
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By:
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/s/
Yao-Ting (Curtis) Su
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/s/
Chao-Wu (Mike) Chou
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Yao-Ting
(Curtis) Su
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Chao-Wu
(Mike) Chou
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Chairman
and Executive Director
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Exhibit
10.3
EMPLOYMENT
AGREEMENT
AGREEMENT
("Agreement") made
this 22nd day of April, 2009, by and between Sparking Events, Inc. (the
"Company") and Hui-Yu (Rachel) Che ("Employee").
AGREEMENT:
NOW,
THEREFORE, in consideration of the premises and the mutual covenants and
agreements herein contained, the Company and Employee agree as
follows:
1.
Employment/Duties
: The
Company hereby agrees to employ Employee, and Employee hereby agrees to continue
to serve, subject to the provisions of this Agreement, as Chairman of the
Company. Employee shall continue to perform such duties and
responsibilities as are from time to time assigned to Employee by the Board of
Directors and shall report directly to the Board of Directors. Such
duties and responsibilities shall include the oversight to: (i) to
shape and implement the strategic business plan of the Company; (ii) to direct
the development and monitoring of operating goals and objectives; (iii) to
oversee financial operations and (iv) to provide leadership, direction and
administration of all aspects of Company activities, in all cases subject to the
supervision and authority of the Company's Board of
Directors. Employee agrees to continue to devote sufficient attention
and energies to the performance of the duties assigned to him hereunder, and to
perform such duties faithfully and to the best of his abilities and subject to
such laws, rules, regulations and policies from time to time applicable to the
Company's employees to the best of his knowledge.
2.
Term
: The
term of this Agreement shall be for a period of one (1) year commencing on the
date set forth above (“Effective Date”) and ending on the first anniversary
thereof (the "Initial Term"), unless terminated sooner pursuant to Section 7 of
this Agreement. Thereafter the Agreement is subject to automatic
renewals of one year period (each a "Renewal Term" and collectively with the
Initial Term, the "Term") unless Employee or Company notifies the other in
writing of its election not to renew, such notice to be provided not less than
ninety (90) days prior to the end of the Initial Term or the end of any Renewal
Term.
3.
Compensation
:
(a)
Base
Compensation
: For the services to be rendered by the Employee
under this Agreement the Company shall pay Employee a base salary ("Base
Compensation") of Fifty Thousand Dollars ($50,000.00) on a pro-rated basis
according to the Company's payroll schedule, exclusive of any dividend payments
and subject to applicable withholdings and other payroll
deductions.
(b)
Bonus
Compensation
: Upon each anniversary of this Agreement,
the Company’s Board of Directors shall determine whether a bonus for the
Employee is appropriate.
(c)
Other
Benefits
. Subject to the terms of the plans, Employee shall be
entitled to receive such other benefits or rights as may be provided under any
employee benefit plans provided by the Company to its executives that are now or
hereafter adopted, including participation in life, medical, disability and
dental insurance plans, vacation and sick leave, expense reimbursement and
long-term incentive plans. Notwithstanding anything to the contrary
set forth in this Agreement, any restricted stock awards, stock options or other
equity incentives of the Company (including, without limitation, those
outstanding at the time of termination of employment with the Company) shall be
subject to the terms set forth in such long-term incentive plans, as such plan
may be in effect from time to time, and in any restricted stock award, stock
option or other agreements (including, without limitation, those provisions
relating to vesting, exercisability, forefeitability), as may be entered into
between Employee and the Company pursuant to such long-term incentive
plans. Employee shall continue to be entitled to such paid holidays
as are provided to the Company's employees generally.
4.
Vacation
: Employee
shall be entitled to receive three (3) weeks paid vacation time for each year of
employment under this Agreement. Any vacation time which remains
unused at the end of a year of employment may be carried over to a succeeding
year.
5.
Business
Expenses
: The Company will reimburse or advance Employee
promptly (but not later than thirty (30) days after submittal of appropriate
vouchers or receipts) for his reasonable and documented out-of-pocket business
expenses for travel, meals and similar items incurred in connection with the
performance of Employee's duties (“Business Expenses”), and which are consistent
with the Company's general policies in effect regarding the reimbursement of
Business Expenses as the Company may from time to time establish. All
payments for reimbursement of such expenses shall be made to the Employee only
upon the presentation to the Company of appropriate vouchers or
receipts. All outstanding Employee requests for reimbursement of
Business Expenses shall be paid in full not later than the date of execution of
this Agreement.
6.
Confidentiality
: Employee
agrees to refrain from making any disparaging or unfavorable comments, in
writing or orally, about the Company, including but not limited to press
releases, communication with employees, vendors, customers, professional
references, and others.
7.
Termination
:
(a)
Termination of Employment
With Cause
: In addition to any other remedies available to the
Company at law, in equity or as set forth in this Agreement, the Company shall
have the right, upon written notice to Employee, to terminate his employment
hereunder without any further liability or obligation to him in respect of his
employment (other than its obligation to pay Base Compensation, Bonus and
vacation time accrued but unpaid as of the date of termination and reimbursement
of expenses incurred prior to the date of termination in accordance with Section
3 and 5 above) if Employee: (i) breaches any material
provision of this Agreement; or (ii) has committed an act of gross misconduct in
connection with the performance of his duties hereunder, as reasonably
determined in good faith by the Board of Directors of the Company; or (iii)
demonstrates habitual negligence in the performance of his duties, as reasonably
determined by the Board of Directors of the Company; or (iv) is convicted of or
pleads nolo contendere to any felony; or (v) is convicted of or pleads nolo
contendere to any misdemeanor involving moral turpitude and the conduct
underlying such misdemeanor has materially adverse or detrimental effect on the
Company, its reputation, or its business, as reasonably determined by the Board
of Directors of the Company; or (vi) has committed any act of fraud,
misappropriation of funds or embezzlement in connection with his employment
hereunder (a "Termination With Cause").
Notwithstanding
the foregoing, no purported Termination With Cause pursuant to (i), (ii) or
(iii)
of this
Section 7(a) shall be effective unless all of the following provisions shall
have been complied with: (x) Employee shall be given written notice
by the Board of Directors of the Company of the intention to effect a
Termination With Cause, such notice to state in detail the particular
circumstances that constitute the grounds on which the proposed Termination With
Cause is based; and (y) Employee shall have ten (10) business days after
receiving such notice in which to cure such grounds, to the extent such cure is
possible, as determined in the sole reasonable discretion of the Board of
Directors of the Company.
(b)
Death;
Disability
: In the event that Employee dies or becomes
Disabled (as defined herein) during the Term, Employee's employment shall
terminate when such death or Disability occurs and the Company shall pay
Employee (or his legal representative, as the case may be) as
follows:
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(i)
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any
Base Compensation, Bonus and vacation time accrued but unpaid as of the
date of death or termination for Disability;
and
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(ii)
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any
reimbursement for expenses incurred in accordance with Sections 3 and
5;.
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For the
purposes of this Agreement, Employee shall be deemed to be "Disabled" or have a
"Disability" if, because of Employee's personal injury, disability or illness,
he has been substantially unable to perform his duties hereunder for sixty (60)
days in any one hundred eighty (180) day period. Employee shall be
considered to have been substantially unable to perform his duties hereunder
only if he is either (i) unable to reasonably and effectively carry out his
duties with reasonable accommodations by the Company or (ii) unable to
reasonably and effectively carry out his duties because any reasonable
accommodation which may be required would cause the Company undue
hardship.
Notwithstanding
the foregoing, to the extent and for the period required by any state or federal
family and medical leave law, upon Employee's request (i) he shall be considered
to be on unpaid leave of absence and not terminated, (ii) his group health
benefits shall remain in full force and effect, and (iii) if Employee recovers
from any such Disability, at that time, to the extent required by any state or
federal family and medical leave law, upon Employee's request, he shall be
restored to his position hereunder or to an equivalent position, as the Company
may reasonably determine, and the Term of Employee's employment hereunder shall
be reinstated effective upon such restoration. The Term shall not be
extended by reason of such intervening leave of absence or termination, nor
shall any compensation or benefits accrue in excess of those required by law
during such intervening leave of absence or termination. Upon the
expiration of any such rights, unless Employee has been restored to a position
with the Company, he shall thereupon be considered terminated.
Employee
acknowledges that the payments referred to in both Sections 3 and 5 and this
Section 7(b) together with any rights or benefits under any written plan or
agreement which have vested on or prior to the termination date of Employee's
employment under this Section 7(b), constitute the only payments which Employee
(or his legal representative, as the case may be) shall be entitled to receive
from the Company hereunder in the event of a termination of his employment for
death or Disability, and the Company shall have no further liability or
obligation to him (or his legal representatives, as the case may be) hereunder
or otherwise in respect of his employment.
(c)
No Mitigation by
Employee
. Except as otherwise expressly provided herein,
Employee shall not be required to mitigate the amount of any payment provided
for in this Agreement by seeking other employment or otherwise, nor shall the
amount of any payment provided for herein be reduced by any compensation earned
by Employee as the result of employment by another employer.
8.
Intellectual Property
Rights:
The Company shall be the owner of all inventions, improvements,
designs, methods, plans, computer programs, products, services and other
materials (collectively, “Developments”) created by Employee under this
Agreement or in which Employee assisted in the creation for the benefit of the
Company during the course of employment with the Company under this
Agreement. All intellectual property rights in such Developments of
the Company, including all patents, trademarks, copyrights, trade secrets and
industrial designs, shall be the exclusive property of the
Company. In the event that Employee acquires any rights or interests
in such Developments of the Company as a result of his work under this
Agreement, Employee agrees to assign and by executing this Agreement does assign
all such rights and interests to the Company. The Company shall have
the exclusive rights to obtain copyright registrations, letters patent,
industrial designs, trademark registrations or any other protection in respect
of the work products and the intellectual property rights in the Company’s
Developments anywhere in the world. At the expense and request of the
Company, Employee shall both during and after his employment with the Company,
execute all documents and do all other acts necessary in order to enable the
Company to protect its rights in the Company’s Developments; provided, however,
that Employee shall be entitled to reasonable compensation if he provides such
assistance after the term if this Agreement is ended.
9.
Return of Company
Property
: Employee agrees that following the termination of
his employment for any reason, he shall return all property of the Company
,
its subsidiaries, affiliates
and any divisions thereof he may have managed which is then in or thereafter
comes into his possession, including, but not limited to, documents, contracts,
agreements, plans, photographs, books, notes, electronically stored data and all
copies of the foregoing as well as any automobile or other materials or
equipment supplied by the Company to Employee.
10.
Each Party, the
Drafter
: This Agreement and the provisions contained in it
shall not be construed or interpreted for or against any party to this Agreement
because that party drafted or caused that party's legal representative to draft
any of its provisions.
11.
Waiver
: The
failure of either party to this Agreement to enforce any of its terms,
provisions or covenants shall not be construed as a waiver of the same or of the
right of such party to enforce the same. Waiver by either party
hereto of any breach or default by the other party of any term or provision of
this Agreement shall not operate as a waiver of any other breach or
default.
12.
Severability
: In
the event that any one or more of the provisions of this Agreement shall be held
to be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remainder of the Agreement shall not in any way be
affected or impaired thereby. Moreover, if any one or more of the
provisions contained in this Agreement shall be held to be excessively broad as
to duration, activity or subject, such provisions shall be construed by limiting
and reducing them so as to be enforceable to the maximum extent allowed by
applicable law.
13.
Entire
Agreement
: The provisions contained herein (including any
schedules, exhibits and documents delivered herewith or attached hereto)
constitute the entire agreement between the parties hereto with respect to the
subject matter hereof.
14.
Independent
Counsel
: Employee and the Company each acknowledge that each
of them has had the opportunity to seek independent legal counsel in connection
with entering into this Agreement, and has either done so or has voluntarily
chosen not to.
15.
Governing
Law
: This Agreement shall be governed by and construed in
accordance with the laws of the State of Nevada, without regard to its conflict
of law rules.
16.
Descriptive
Headings
: The paragraph headings contained herein are for
reference purposes only and shall not in any way affect the meaning or
interpretation of this Agreement.
17.
Counterparts
: This
Agreement may be executed in one or more counterparts, which, together, shall
constitute one and the same agreement.
IN
WITNESS WHEREOF, the parties hereto have executed this Agreement on the date
first written above.
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Sparking
Events, Inc.
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By:
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/s/
Yao-Ting (Curtis) Su
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/s/
Hui-Yu (Rachel) Che
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Yao-Ting
(Curtis) Su
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Hui-Yu
(Rachel) Che
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Chairman
and Executive Director
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Exhibit
10.4
SECURITIES
EXCHANGE AGREEMENT
THIS SECURITIES EXCHANGE AGREEMENT
(hereinafter referred to as the “Agreement”), is entered into as of
this
1
st
day of April, 2009 (the “Closing Date”), by and among A-PLUS INTERNATIONAL,
LTD., a Nevada limited liability company (“A-Plus”), Xodtec Technology
Co., Ltd, a company organized under the laws of the Republic of China (“Xodtec”)
and all of the equity holders of Xodtec set forth on the signature page hereof
(the “Xodtec Shareholders”) collectively referred to as the “Parties” and
individually as a “Party.”)
W
I T N E S S E T H
WHEREAS
, the Parties desire
that A-PLUS acquire all of the issued and outstanding capitalization of Xodtec
from the Xodtec Shareholders in exchange for an aggregate of
approximately 9.375% of the total outstanding equity of A-PLUS on a
fully-diluted basis (the "Exchange Shares") and Xodtec will be a wholly-owned
subsidiary of A-Plus.
WHEREAS
, the Parties intend
that the transaction contemplated herein (the “Transaction”) qualify as a
reorganization and tax-free exchange under Section 368(a) of the Internal
Revenue Code of 1986, as amended.
NOW THEREFORE
, on the stated
premises and for and in consideration of the foregoing recitals which are hereby
incorporated by reference, the mutual covenants and agreements hereinafter set
forth and the mutual benefits to the Parties to be derived herefrom and for
other good and valuable consideration, the sufficiency and receipt of which are
hereby acknowledged, the Parties hereto agree as follows:
ARTICLE
I
PLAN
OF EXCHANGE
1.1
The
Exchange
. Upon Closing (defined below), all of the Xodtec
Shares issued and outstanding immediately prior to the Closing Date shall be
exchanged for the Exchange shares. From and after the Closing Date, the Xodtec
Shareholders shall no longer own any stock ownership interest in Xodtec, and the
former Xodtec Shares shall represent the Exchange Shares issuable in exchange
therefor pursuant to this Agreement.
1.2
Closing
. The closing
(“Closing”) of the transactions contemplated by this Agreement shall occur as of
the date hereof.
1.3
Closing
Events
. Upon Closing, each of the respective Parties hereto
shall execute, acknowledge, and deliver (or shall cause to be executed,
acknowledged, and delivered) any and all stock certificates, membership
certificates, officers’ certificates, opinions, financial statements, schedules,
agreements, resolutions, rulings, or other instruments required by this
Agreement to be so delivered hereunder together with such other items as may be
reasonably requested by the Parties hereto and their respective legal counsel in
order to effectuate or evidence the transactions contemplated
hereby. The Closing may take place through the exchange of documents
by fax, email and/or express courier. Upon Closing, the Exchange
Shares shall be issued to the Xodtec Shareholders as set forth in
Schedule B
attached
hereto.
ARTICLE
II
REPRESENTATIONS,
COVENANTS, AND WARRANTIES OF A-PLUS
As an
inducement to, and to obtain the reliance of Xodtec, A-PLUS represents and
warrants as follows:
2.1
Organization
. A-PLUS
is a corporation duly organized, validly existing, and in good standing under
the laws of the State of Nevada. A-PLUS has the power and is duly
authorized, qualified, franchised, and licensed under all applicable laws,
regulations, ordinances, and orders of public authorities to own all of its
properties and assets and to carry on its business in all material respects as
it is now being conducted, including qualification to do business as a foreign
corporation in jurisdictions in which the character and location of the assets
owned by it or the nature of the business transacted by it requires
qualification. The execution and delivery of this Agreement does not,
and the consummation of the transactions contemplated hereby will not, violate
any provision of A-PLUS’s Articles of Incorporation or By-Laws. A-PLUS has taken
all action required by law, its Articles of Incorporation, its By-Laws, or
otherwise to authorize the execution and delivery of this Agreement, and A-PLUS
has full power, authority, and legal right and has taken all action required by
law, its Articles of Incorporation, By-Laws, or otherwise to consummate the
transactions herein contemplated.
2.2
Approval
of Agreement
. Board of Directors of A-PLUS have authorized the
execution and delivery of this Agreement by A-PLUS and has approved the
transactions contemplated hereby.
2.3
Absence
of Certain Changes or Events
. Except
as described herein:
(a)
except
in the normal course of business, there has not been (i) any material adverse
change in the business, operations, properties, assets, or condition of A-PLUS;
or (ii) any damage, destruction, or loss to A-PLUS (whether or not covered by
insurance) materially and adversely affecting the business, operations,
properties, assets, or condition of A-PLUS;
(b)
A-PLUS
has not (i) borrowed or agreed to borrow any funds or incurred, or become
subject to, any material obligation or liability (absolute or contingent) not
otherwise in the ordinary course of business; (ii) paid any material obligation
or liability not otherwise in the ordinary course of business (absolute or
contingent) other than current liabilities reflected in or shown on the most
recent A-PLUS consolidated balance sheet, and current liabilities incurred since
that date in the ordinary course of business; (iii) sold or transferred, or
agreed to sell or transfer, any of its assets, properties, or rights not
otherwise in the ordinary course of business; (iv) made or permitted any
amendment or termination of any contract, agreement, or license to which they
are a party not otherwise in the ordinary course of business if such amendment
or termination is material, considering the business of A-PLUS; or (v) issued,
delivered, or agreed to issue or deliver to any third party any membership
interests, bonds or other corporate securities including debentures (whether
authorized and unissued or held as treasury stock);
(c)
neither
the execution and the delivery of this Agreement, nor the consummation of the
transactions contemplated hereby, will conflict with, result in a breach of,
constitute a default under, result in the acceleration of, create in any party
the right to accelerate, terminate, modify, or cancel, or require any notice
under any agreement, contract, lease, license, instrument, or other arrangement
to which A-PLUS is a party or by which it is bound or to which any of its assets
is subject; and
(d)
no
litigation, proceeding, investigation, or inquiry is pending or, to the best
knowledge of A-PLUS threatened, which might result in an action to enjoin or
prevent the consummation of the transactions contemplated by this
Agreement.
ARTICLE
III
REPRESENTATIONS
,
COVENANTS, AND WARRANTIES OF
XODTEC
As an
inducement to, and to obtain the reliance of A-PLUS, Xodtec represents and
warrants as follows:
3.1
Organization
. Xodtec
is a corporation duly organized, validly existing, and in good standing under
the laws of the Country of Poland, and has the corporate power and is duly
authorized, qualified, franchised, and licensed under all applicable laws,
regulations, ordinances, and orders of public authorities to own all of its
properties and assets and to carry on its business in all material respects as
it is now being conducted, and there is no jurisdiction in which it is not
qualified in which the character and location of the assets owned by it or the
nature of the business transacted by it requires qualification. The execution
and delivery of this Agreement does not, and the consummation of the
transactions contemplated hereby will not, violate any provision of Xodtec’s
Articles of Incorporation or Bylaws. Xodtec has taken all action required by
law, its Articles of Incorporation, its Bylaws, or otherwise to authorize the
execution and delivery of this Agreement, and Xodtec has full power, authority,
and legal right and has taken all action required by law, its Articles of
Incorporation, Bylaws, or otherwise to consummate the transactions herein
contemplated.
3.2
Capitalization
. Xodtec’s
authorized capitalization consists of _______ (____) shares of stock, of which
all are issued and outstanding as of Closing. All issued and
outstanding shares are legally issued, fully paid, and non-assessable and not
issued in violation of the pre-emptive or other rights of any
person.
3.3
Absence
of Certain Changes or Ev
ents
. Except
as described herein:
(a)
except
in the normal course of business, there has not been (i) any material adverse
change in the business, operations, properties, assets, or condition of Xodtec;
or (ii) any damage, destruction, or loss to Xodtec (whether or not covered by
insurance) materially and adversely affecting the business, operations,
properties, assets, or condition of Xodtec;
(b)
Xodtec
has not (i) borrowed or agreed to borrow any funds or incurred, or become
subject to, any material obligation or liability (absolute or contingent) not
otherwise in the ordinary course of business; (ii) paid any material obligation
or liability not otherwise in the ordinary course of business (absolute or
contingent) other than current liabilities reflected in or shown on the most
recent Xodtec consolidated balance sheet, and current liabilities incurred since
that date in the ordinary course of business; (iii) sold or transferred, or
agreed to sell or transfer, any of its assets, properties, or rights not
otherwise in the ordinary course of business; (iv) made or permitted any
amendment or termination of any contract, agreement, or license to which they
are a party not otherwise in the ordinary course of business if such amendment
or termination is material, considering the business of Xodtec; or (v) issued,
delivered, or agreed to issue or deliver to any third party any stock, bonds or
other corporate securities including debentures (whether authorized and unissued
or held as treasury stock);
(c)
neither
the execution and the delivery of this Agreement, nor the consummation of the
transactions contemplated hereby, will conflict with, result in a breach of,
constitute a default under, result in the acceleration of, create in any party
the right to accelerate, terminate, modify, or cancel, or require any notice
under any agreement, contract, lease, license, instrument, or other arrangement
to which Xodtec is a party or by which it is bound or to which any of its assets
is subject; and
(d)
no
litigation, proceeding, investigation, or inquiry is pending or, to the best
knowledge of Xodtec threatened, which might result in an action to enjoin or
prevent the consummation of the transactions contemplated by this
Agreement.
3.4
Approval
of Agreement
. The Board of Directors of Xodtec (the “Xodtec
Board”) and the Xodtec Shareholders have authorized the execution and delivery
of this Agreement by Xodtec and have approved this Agreement and the
transactions contemplated hereby.
3.5
Ownership of Xodtec
Shares
. The Xodtec Shareholders are the only legal and
beneficial owners of the Xodtec Shares, free and clear of any claims, charges,
equities, liens, security interests, and encumbrances whatsoever, and the Xodtec
Shareholders have full right, power, and authority to transfer, assign, convey,
and deliver the Xodtec Shares; and delivery of such stock upon Closing will
convey to A-PLUS good and marketable title to such shares free and clear of any
claims, charges, equities, liens, security interests, and encumbrances except
for any such claims, charges, equities, liens, security interests, and
encumbrances arising out of such shares being held by Xodtec.
ARTICLE
IV
SPECIAL
COVENANTS
4.1
Actions of Xodtec
Shareholders
. Prior to the Closing, Xodtec shall cause the
following actions to be taken by the written consent of the Xodtec
Shareholders:
(a)
the
approval of this Agreement and the transactions contemplated hereby and thereby;
and
(b)
such
other actions as the directors of Xodtec may determine are necessary or
appropriate.
4.2
Actions of A-PLUS
Members
. At or prior to Closing, A-PLUS shall cause the
following actions to be taken by the written consent of all the members of
A-PLUS:
(a)
the
approval of this Agreement and the transactions contemplated hereby and thereby;
and
(b)
such
other actions as the Managers of A-PLUS may determine are necessary or
appropriate.
4.3
Access to Properties and
Records
. Xodtec and A-PLUS have each afforded the officers and
authorized representatives of the other reasonable access to the properties,
books, and records of Xodtec or A-PLUS in order that each may have full
opportunity to make such reasonable investigation as it shall desire to make of
the affairs of the other, and each has furnished the other with such additional
financial and operating data and other information as to the business and
properties of Xodtec or A-PLUS as the other has reasonably
requested.
4.4
Delivery
of Books and Records
. Upon Closing, Xodtec shall deliver to
A-PLUS, the originals of the corporate minute books, books of account,
contracts, records, and all other books or documents of Xodtec now in the
possession or control of Xodtec or its representatives and
agents.
4.5
Indemnification
.
(a)
A-PLUS
hereby agrees to indemnify Xodtec and each of the officers, agents and directors
of Xodtec as of the date of execution of this Agreement against any loss,
liability, claim, damage, or expense (including, but not limited to, any and all
expense whatsoever reasonably incurred in investigating, preparing, or defending
against any litigation, commenced or threatened, or any claim whatsoever), to
which it or they may become subject arising out of or based on any inaccuracy
appearing in or misrepresentation made in Article II.
(b)
Xodtec
hereby agrees to indemnify A-PLUS and each of the officers, agents and directors
of A-PLUS as of the date of execution of this Agreement against any loss,
liability, claim, damage, or expense (including, but not limited to, any and all
expense whatsoever reasonably incurred in investigating, preparing, or defending
against any litigation, commenced or threatened, or any claim whatsoever), to
which it or they may become subject arising out of or based on any inaccuracy
appearing in or misrepresentation made under Article III.
ARTICLE
V
MISCELLANEOUS
5.1
Governing
Law
. This Agreement shall be governed by, enforced, and
construed under and in accordance with the laws of the United States of America
and, with respect to matters of state law, with the laws of
Nevada. Any dispute arising under or in any way related to this
Agreement will be submitted to binding arbitration before a single arbitrator by
the American Arbitration Association in accordance with the Association’s
commercial rules then in effect. The arbitration will be conducted in New York,
New York. The decision of the arbitrator will set forth in reasonable detail the
basis for the decision and will be binding on the parties. The arbitration award
may be confirmed by any court of competent jurisdiction.
5.2
Notices
. Any
notices or other communications required or permitted hereunder shall be
sufficiently given if personally delivered to it or sent by registered mail or
certified mail, postage prepaid, or by prepaid telegram and any such notice or
communication shall be deemed to have been given as of the date so delivered,
mailed, or telegraphed.
5.3
Attorney
’
s
Fees
. In the event that any party institutes any action or suit to
enforce this Agreement or to secure relief from any default hereunder or breach
hereof, the breaching party or parties shall reimburse the non-breaching party
or parties for all costs, including reasonable attorneys’ fees, incurred in
connection therewith and in enforcing or collecting any judgment rendered
therein.
5.4
Confidentiality
.
A-PLUS, on the one hand, and Xodtec and the Xodtec Shareholders, on the other
hand, will keep confidential all information and materials regarding the other
Party designated by such Party as confidential. The provisions of
this Section 5.4 shall not apply to any information which is or shall become
part of the public domain through no fault of the Party subject to the
obligation from a third party with a right to disclose such information free of
obligation of confidentiality. Xodtec and A-PLUS agree that no public disclosure
will be made by either Party of the existence of the Transaction or the letter
of intent or any of its terms without first advising the other Party and
obtaining its prior written consent to the proposed disclosure, unless such
disclosure is required by law, regulation or stock exchange
rule.
5.5
Expenses
. Except
as otherwise set forth herein, each Party shall bear its own costs and expenses
associated with the transactions contemplated by this
Agreement. Without limiting the generality of the foregoing, all
costs and expenses incurred by A-PLUS and Xodtec after the Closing shall be
borne by the surviving entity.
5.6
Schedules;
Knowledge
. Each Party is presumed to have full knowledge of
all information set forth in the information disclosed and delivered by the
other Party pursuant to this Agreement.
5.7
Third
Party Beneficiaries
. This Agreement is solely between A-PLUS,
Xodtec and the Xodtec Shareholders, and, except as specifically provided, no
director, officer, stockholder, employee, agent, independent contractor, or any
other person or entity shall be deemed to be a third party beneficiary of this
Agreement.
5.8
Entire
Agreement
. This Agreement represents the entire agreement
between the Parties relating to the Transaction. There are no other courses of
dealing, understandings, agreements, representations, or warranties, written or
oral, except as set forth herein.
5.9
Survival
. The
representations and warranties of the respective Parties shall survive the
Closing Date and the consummation of the transactions herein
contemplated.
5.10
C
ounterparts
. This
Agreement may be executed in multiple counterparts, each of which shall be
deemed
an original and all of which taken together shall be but a single
instrument.
5.11
Amendment
or Wai
ver
. Every
right and remedy provided herein shall be cumulative with every other right and
remedy, whether conferred herein, at law, or in equity, and may be enforced
concurrently herewith, and no waiver by any party of the performance of any
obligation by the other shall be construed as a waiver of the same or any other
default then, theretofore, or thereafter occurring or existing. This
Agreement may only be amended by a writing signed by all Parties hereto, with
respect to any of the terms contained herein, and any term or condition of this
Agreement may be waived or the time for performance hereof may be extended by a
writing signed by the Party or Parties for whose benefit the provision is
intended.
(The
rest of this page left intentionally blank.)
IN WITNESS WHEREOF
, the
Parties hereto have caused this Agreement to be duly authorized and executed as
of the date first above-written.
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A-PLUS
INTERNATIONAL, LTD.
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XODTEC
TECHNOLOGY CO., LTD.,
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By:
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/s/
Su, Yao-Ting
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By:
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/s/
Lo, Hui-Yun
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Name:
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Yao-Ting
Su
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Name:
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Hui-Yun
Lo
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Title:
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Manager
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Title:
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President
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8
Exhibit
10.5
SECURITIES
EXCHANGE AGREEMENT
THIS SECURITIES EXCHANGE AGREEMENT
(hereinafter referred to as the “Agreement”), is entered into as of this
1
st
day of April, 2009 (the “Closing Date”), by and among A-PLUS INTERNATIONAL,
LTD., a Nevada limited liability company (“A-Plus”), Targetek
Technology Co., Ltd, a company organized under the laws of the Republic of China
(“Targetek”) and all of the equity holders of Targetek set forth on the
signature page hereof (the “Targetek Shareholders”) collectively referred to as
the “Parties” and individually as a “Party.”)
W
I T N E S S E T H
WHEREAS
, the Parties desire
that A-PLUS acquire all of the issued and outstanding capitalization of Targetek
from the Targetek Shareholders in exchange for an aggregate of
11.875%
of the total outstanding equity of A-PLUS on a fully-diluted basis (the
"Exchange Shares") and Targetek will be a wholly-owned subsidiary of
A-Plus.
WHEREAS
, the Parties intend
that the transaction contemplated herein (the “Transaction”) qualify as a
reorganization and tax-free exchange under Section 368(a) of the Internal
Revenue Code of 1986, as amended.
NOW THEREFORE
, on the stated
premises and for and in consideration of the foregoing recitals which are hereby
incorporated by reference, the mutual covenants and agreements hereinafter set
forth and the mutual benefits to the Parties to be derived herefrom and for
other good and valuable consideration, the sufficiency and receipt of which are
hereby acknowledged, the Parties hereto agree as follows:
ARTICLE
I
PLAN
OF EXCHANGE
1.1
The
Exchange
. Upon Closing (defined below), all of the Targetek
Shares issued and outstanding immediately prior to the Closing Date shall be
exchanged for the Exchange Shares. From and after the Closing Date, the Targetek
Shareholders shall no longer own any stock ownership interest in Targetek, and
the former Xodtec Shares shall represent the Exchange Shares issuable in
exchange therefor pursuant to this Agreement.
1.2
Closing
. The closing
(“Closing”) of the transactions contemplated by this Agreement shall occur as of
the date hereof.
1.3
Closing
Events
. Upon Closing, each of the respective Parties hereto
shall execute, acknowledge, and deliver (or shall cause to be executed,
acknowledged, and delivered) any and all stock certificates, membership
certificates, officers’ certificates, opinions, financial statements, schedules,
agreements, resolutions, rulings, or other instruments required by this
Agreement to be so delivered hereunder together with such other items as may be
reasonably requested by the Parties hereto and their respective legal counsel in
order to effectuate or evidence the transactions contemplated
hereby. The Closing may take place through the exchange of documents
by fax, email and/or express courier. Upon Closing, the Exchange
Shares shall be issued to the Targetek Shareholders as set forth in
Schedule B
attached
hereto.
ARTICLE
II
REPRESENTATIONS,
COVENANTS, AND WARRANTIES OF A-PLUS
As an
inducement to, and to obtain the reliance of Xodtec, A-PLUS represents and
warrants as follows:
2.1
Organization
. A-PLUS
is a corporation duly organized, validly existing, and in good standing under
the laws of the State of Nevada. A-PLUS has the power and is duly
authorized, qualified, franchised, and licensed under all applicable laws,
regulations, ordinances, and orders of public authorities to own all of its
properties and assets and to carry on its business in all material respects as
it is now being conducted, including qualification to do business as a foreign
corporation in jurisdictions in which the character and location of the assets
owned by it or the nature of the business transacted by it requires
qualification. The execution and delivery of this Agreement does not,
and the consummation of the transactions contemplated hereby will not, violate
any provision of A-PLUS’s Articles of Incorporation or By-Laws. A-PLUS has taken
all action required by law, its Articles of Incorporation, its By-Laws, or
otherwise to authorize the execution and delivery of this Agreement, and A-PLUS
has full power, authority, and legal right and has taken all action required by
law, its Articles of Incorporation, By-Laws, or otherwise to consummate the
transactions herein contemplated.
2.2
Approval
of Agreement
. Board of Directors of A-PLUS have authorized the
execution and delivery of this Agreement by A-PLUS and has approved the
transactions contemplated hereby.
2.3
Absence
of Certain Changes or Events
. Except
as described herein:
(a)
except
in the normal course of business, there has not been (i) any material adverse
change in the business, operations, properties, assets, or condition of A-PLUS;
or (ii) any damage, destruction, or loss to A-PLUS (whether or not covered by
insurance) materially and adversely affecting the business, operations,
properties, assets, or condition of A-PLUS;
(b)
A-PLUS
has not (i) borrowed or agreed to borrow any funds or incurred, or become
subject to, any material obligation or liability (absolute or contingent) not
otherwise in the ordinary course of business; (ii) paid any material obligation
or liability not otherwise in the ordinary course of business (absolute or
contingent) other than current liabilities reflected in or shown on the most
recent A-PLUS consolidated balance sheet, and current liabilities incurred since
that date in the ordinary course of business; (iii) sold or transferred, or
agreed to sell or transfer, any of its assets, properties, or rights not
otherwise in the ordinary course of business; (iv) made or permitted any
amendment or termination of any contract, agreement, or license to which they
are a party not otherwise in the ordinary course of business if such amendment
or termination is material, considering the business of A-PLUS; or (v) issued,
delivered, or agreed to issue or deliver to any third party any membership
interests, bonds or other corporate securities including debentures (whether
authorized and unissued or held as treasury stock);
(c)
neither
the execution and the delivery of this Agreement, nor the consummation of the
transactions contemplated hereby, will conflict with, result in a breach of,
constitute a default under, result in the acceleration of, create in any party
the right to accelerate, terminate, modify, or cancel, or require any notice
under any agreement, contract, lease, license, instrument, or other arrangement
to which A-PLUS is a party or by which it is bound or to which any of its assets
is subject; and
(d)
no
litigation, proceeding, investigation, or inquiry is pending or, to the best
knowledge of A-PLUS threatened, which might result in an action to enjoin or
prevent the consummation of the transactions contemplated by this
Agreement.
ARTICLE
III
REPRESENTATIONS
,
COVENANTS, AND WARRANTIES OF
XODTEC
As an
inducement to, and to obtain the reliance of A-PLUS, Xodtec represents and
warrants as follows:
3.1
Organization
. Xodtec
is a corporation duly organized, validly existing, and in good standing under
the laws of the Country of Poland, and has the corporate power and is duly
authorized, qualified, franchised, and licensed under all applicable laws,
regulations, ordinances, and orders of public authorities to own all of its
properties and assets and to carry on its business in all material respects as
it is now being conducted, and there is no jurisdiction in which it is not
qualified in which the character and location of the assets owned by it or the
nature of the business transacted by it requires qualification. The execution
and delivery of this Agreement does not, and the consummation of the
transactions contemplated hereby will not, violate any provision of Xodtec’s
Articles of Incorporation or Bylaws. Xodtec has taken all action required by
law, its Articles of Incorporation, its Bylaws, or otherwise to authorize the
execution and delivery of this Agreement, and Xodtec has full power, authority,
and legal right and has taken all action required by law, its Articles of
Incorporation, Bylaws, or otherwise to consummate the transactions herein
contemplated.
3.2
Capitalization
. Xodtec’s
authorized capitalization consists of _______ (____) shares of stock, of which
all are issued and outstanding as of Closing. All issued and
outstanding shares are legally issued, fully paid, and non-assessable and not
issued in violation of the pre-emptive or other rights of any
person.
3.3
Absence
of Certain Changes or Ev
ents
. Except
as described herein:
(a)
except
in the normal course of business, there has not been (i) any material adverse
change in the business, operations, properties, assets, or condition of Xodtec;
or (ii) any damage, destruction, or loss to Xodtec (whether or not covered by
insurance) materially and adversely affecting the business, operations,
properties, assets, or condition of Xodtec;
(b)
Xodtec
has not (i) borrowed or agreed to borrow any funds or incurred, or become
subject to, any material obligation or liability (absolute or contingent) not
otherwise in the ordinary course of business; (ii) paid any material obligation
or liability not otherwise in the ordinary course of business (absolute or
contingent) other than current liabilities reflected in or shown on the most
recent Xodtec consolidated balance sheet, and current liabilities incurred since
that date in the ordinary course of business; (iii) sold or transferred, or
agreed to sell or transfer, any of its assets, properties, or rights not
otherwise in the ordinary course of business; (iv) made or permitted any
amendment or termination of any contract, agreement, or license to which they
are a party not otherwise in the ordinary course of business if such amendment
or termination is material, considering the business of Xodtec; or (v) issued,
delivered, or agreed to issue or deliver to any third party any stock, bonds or
other corporate securities including debentures (whether authorized and unissued
or held as treasury stock);
(c)
neither
the execution and the delivery of this Agreement, nor the consummation of the
transactions contemplated hereby, will conflict with, result in a breach of,
constitute a default under, result in the acceleration of, create in any party
the right to accelerate, terminate, modify, or cancel, or require any notice
under any agreement, contract, lease, license, instrument, or other arrangement
to which Xodtec is a party or by which it is bound or to which any of its assets
is subject; and
(d)
no
litigation, proceeding, investigation, or inquiry is pending or, to the best
knowledge of Xodtec threatened, which might result in an action to enjoin or
prevent the consummation of the transactions contemplated by this
Agreement.
3.4
Approval
of Agreement
. The Board of Directors of Xodtec (the “Xodtec
Board”) and the Xodtec Shareholders have authorized the execution and delivery
of this Agreement by Xodtec and have approved this Agreement and the
transactions contemplated hereby.
3.5
Ownership of Xodtec
Shares
. The Xodtec Shareholders are the only legal and
beneficial owners of the Xodtec Shares, free and clear of any claims, charges,
equities, liens, security interests, and encumbrances whatsoever, and the Xodtec
Shareholders have full right, power, and authority to transfer, assign, convey,
and deliver the Xodtec Shares; and delivery of such stock upon Closing will
convey to A-PLUS good and marketable title to such shares free and clear of any
claims, charges, equities, liens, security interests, and encumbrances except
for any such claims, charges, equities, liens, security interests, and
encumbrances arising out of such shares being held by Xodtec.
ARTICLE
IV
SPECIAL
COVENANTS
4.1
Actions of Xodtec
Shareholders
. Prior to the Closing, Xodtec shall cause the
following actions to be taken by the written consent of the Xodtec
Shareholders:
(a)
the
approval of this Agreement and the transactions contemplated hereby and thereby;
and
(b)
such
other actions as the directors of Xodtec may determine are necessary or
appropriate.
4.2
Actions of A-PLUS
Members
. At or prior to Closing, A-PLUS shall cause the
following actions to be taken by the written consent of all the members of
A-PLUS:
(a)
the
approval of this Agreement and the transactions contemplated hereby and thereby;
and
(b)
such
other actions as the Managers of A-PLUS may determine are necessary or
appropriate.
4.3
Access to Properties and
Records
. Xodtec and A-PLUS have each afforded the officers and
authorized representatives of the other reasonable access to the properties,
books, and records of Xodtec or A-PLUS in order that each may have full
opportunity to make such reasonable investigation as it shall desire to make of
the affairs of the other, and each has furnished the other with such additional
financial and operating data and other information as to the business and
properties of Xodtec or A-PLUS as the other has reasonably
requested.
4.4
Delivery
of Books and Records
. Upon Closing, Xodtec shall deliver to
A-PLUS, the originals of the corporate minute books, books of account,
contracts, records, and all other books or documents of Xodtec now in the
possession or control of Xodtec or its representatives and
agents.
4.5
Indemnification
.
(a)
A-PLUS
hereby agrees to indemnify Xodtec and each of the officers, agents and directors
of Xodtec as of the date of execution of this Agreement against any loss,
liability, claim, damage, or expense (including, but not limited to, any and all
expense whatsoever reasonably incurred in investigating, preparing, or defending
against any litigation, commenced or threatened, or any claim whatsoever), to
which it or they may become subject arising out of or based on any inaccuracy
appearing in or misrepresentation made in Article II.
(b)
Xodtec
hereby agrees to indemnify A-PLUS and each of the officers, agents and directors
of A-PLUS as of the date of execution of this Agreement against any loss,
liability, claim, damage, or expense (including, but not limited to, any and all
expense whatsoever reasonably incurred in investigating, preparing, or defending
against any litigation, commenced or threatened, or any claim whatsoever), to
which it or they may become subject arising out of or based on any inaccuracy
appearing in or misrepresentation made under Article III.
ARTICLE
V
MISCELLANEOUS
5.1
Governing
Law
. This Agreement shall be governed by, enforced, and
construed under and in accordance with the laws of the United States of America
and, with respect to matters of state law, with the laws of
Nevada. Any dispute arising under or in any way related to this
Agreement will be submitted to binding arbitration before a single arbitrator by
the American Arbitration Association in accordance with the Association’s
commercial rules then in effect. The arbitration will be conducted in New York,
New York. The decision of the arbitrator will set forth in reasonable detail the
basis for the decision and will be binding on the parties. The arbitration award
may be confirmed by any court of competent jurisdiction.
5.2
Notices
. Any
notices or other communications required or permitted hereunder shall be
sufficiently given if personally delivered to it or sent by registered mail or
certified mail, postage prepaid, or by prepaid telegram and any such notice or
communication shall be deemed to have been given as of the date so delivered,
mailed, or telegraphed.
5.3
Attorney
’
s
Fees
. In the event that any party institutes any action or suit to
enforce this Agreement or to secure relief from any default hereunder or breach
hereof, the breaching party or parties shall reimburse the non-breaching party
or parties for all costs, including reasonable attorneys’ fees, incurred in
connection therewith and in enforcing or collecting any judgment rendered
therein.
5.4
Confidentiality
.
A-PLUS, on the one hand, and Xodtec and the Xodtec Shareholders, on the other
hand, will keep confidential all information and materials regarding the other
Party designated by such Party as confidential. The provisions of
this Section 5.4 shall not apply to any information which is or shall become
part of the public domain through no fault of the Party subject to the
obligation from a third party with a right to disclose such information free of
obligation of confidentiality. Xodtec and A-PLUS agree that no public disclosure
will be made by either Party of the existence of the Transaction or the letter
of intent or any of its terms without first advising the other Party and
obtaining its prior written consent to the proposed disclosure, unless such
disclosure is required by law, regulation or stock exchange
rule.
5.5
Expenses
. Except
as otherwise set forth herein, each Party shall bear its own costs and expenses
associated with the transactions contemplated by this
Agreement. Without limiting the generality of the foregoing, all
costs and expenses incurred by A-PLUS and Xodtec after the Closing shall be
borne by the surviving entity.
5.6
Schedules;
Knowledge
. Each Party is presumed to have full knowledge of
all information set forth in the information disclosed and delivered by the
other Party pursuant to this Agreement.
5.7
Third
Party Beneficiaries
. This Agreement is solely between A-PLUS,
Xodtec and the Xodtec Shareholders, and, except as specifically provided, no
director, officer, stockholder, employee, agent, independent contractor, or any
other person or entity shall be deemed to be a third party beneficiary of this
Agreement.
5.8
Entire
Agreement
. This Agreement represents the entire agreement
between the Parties relating to the Transaction. There are no other courses of
dealing, understandings, agreements, representations, or warranties, written or
oral, except as set forth herein.
5.9
Survival
. The
representations and warranties of the respective Parties shall survive the
Closing Date and the consummation of the transactions herein
contemplated.
5.10
C
ounterparts
. This
Agreement may be executed in multiple counterparts, each of which shall be
deemed
an original and all of which taken together shall be but a single
instrument.
5.11
Amendment
or Wai
ver
. Every
right and remedy provided herein shall be cumulative with every other right and
remedy, whether conferred herein, at law, or in equity, and may be enforced
concurrently herewith, and no waiver by any party of the performance of any
obligation by the other shall be construed as a waiver of the same or any other
default then, theretofore, or thereafter occurring or existing. This
Agreement may only be amended by a writing signed by all Parties hereto, with
respect to any of the terms contained herein, and any term or condition of this
Agreement may be waived or the time for performance hereof may be extended by a
writing signed by the Party or Parties for whose benefit the provision is
intended.
(The
rest of this page left intentionally blank.)
IN WITNESS WHEREOF
, the
Parties hereto have caused this Agreement to be duly authorized and executed as
of the date first above-written.
|
A-PLUS
INTERNATIONAL, LTD.
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TARGETEK TECHNOLOGY
CO., LTD.,
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By:
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/s/
Su, Yao-Ting
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By:
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/s/
Su, Yao-Ting
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Name:
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Yao-Ting
Su
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Name:
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Yao-Ting
Su
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Title:
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Manager
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Title:
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Chairman
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Exhibit
10.6
SECURITIES
EXCHANGE AGREEMENT
THIS SECURITIES EXCHANGE AGREEMENT
(hereinafter referred to as the “Agreement”), is entered into as of this
1
st
day of April, 2009 (the “Closing Date”), by and among A-PLUS INTERNATIONAL,
LTD., a Nevada limited liabilty company (“A-Plus”), UP-Tech
Technology Co., Ltd, a company organized under the laws of the Republic of China
(“UP-Tech”) and all of the equity holders of UP-Tech set forth on the signature
page hereof (the “UP-Tech Shareholders”) collectively referred to as the
“Parties” and individually as a “Party.”)
W
I T N E S S E T H
WHEREAS
, the Parties desire
that A-PLUS acquire all of the issued and outstanding capitalization of UP-Tech
from the UP-Tech Shareholders in exchange for an aggregate of
approximately 31.25%
of the total outstanding shares of A-PLUS on a fully-diluted basis and UP-Tech
will be a wholly-owned subsidiary of A-Plus.
WHEREAS
, the Parties intend
that the transaction contemplated herein (the “Transaction”) qualify as a
reorganization and tax-free exchange under Section 368(a) of the Internal
Revenue Code of 1986, as amended.
NOW THEREFORE
, on the stated
premises and for and in consideration of the foregoing recitals which are hereby
incorporated by reference, the mutual covenants and agreements hereinafter set
forth and the mutual benefits to the Parties to be derived herefrom and for
other good and valuable consideration, the sufficiency and receipt of which are
hereby acknowledged, the Parties hereto agree as follows:
ARTICLE
I
PLAN
OF EXCHANGE
1.1
The
Exchange
. Upon Closing (defined below), all of the UP-Tech
Shares issued and outstanding immediately prior to the Closing Date shall be
exchanged for the Exchange Shares. From and after the Closing Date, the UP-Tech
Shareholders shall no longer own any stock ownership interest in UP-Tech, and
the former Xodtec Shares shall represent the Exchange Shares issuable in
exchange therefor pursuant to this Agreement.
1.2
Closing
. The closing
(“Closing”) of the transactions contemplated by this Agreement shall occur as of
the date hereof.
1.3
Closing
Events
. Upon Closing, each of the respective Parties hereto
shall execute, acknowledge, and deliver (or shall cause to be executed,
acknowledged, and delivered) any and all stock certificates, membership
certificates, officers’ certificates, opinions, financial statements, schedules,
agreements, resolutions, rulings, or other instruments required by this
Agreement to be so delivered hereunder together with such other items as may be
reasonably requested by the Parties hereto and their respective legal counsel in
order to effectuate or evidence the transactions contemplated
hereby. The Closing may take place through the exchange of documents
by fax, email and/or express courier. Upon Closing, the Exchange
Shares shall be issued to the UP-Tech Shareholders as set forth in
Schedule B
attached
hereto.
ARTICLE
II
REPRESENTATIONS,
COVENANTS, AND WARRANTIES OF A-PLUS
As an
inducement to, and to obtain the reliance of Xodtec, A-PLUS represents and
warrants as follows:
2.1
Organization
. A-PLUS
is a corporation duly organized, validly existing, and in good standing under
the laws of the State of Nevada. A-PLUS has the power and is duly
authorized, qualified, franchised, and licensed under all applicable laws,
regulations, ordinances, and orders of public authorities to own all of its
properties and assets and to carry on its business in all material respects as
it is now being conducted, including qualification to do business as a foreign
corporation in jurisdictions in which the character and location of the assets
owned by it or the nature of the business transacted by it requires
qualification. The execution and delivery of this Agreement does not,
and the consummation of the transactions contemplated hereby will not, violate
any provision of A-PLUS’s Articles of Incorporation or By-Laws. A-PLUS has taken
all action required by law, its Articles of Incorporation, its By-Laws, or
otherwise to authorize the execution and delivery of this Agreement, and A-PLUS
has full power, authority, and legal right and has taken all action required by
law, its Articles of Incorporation, By-Laws, or otherwise to consummate the
transactions herein contemplated.
2.2
Approval
of Agreement
. Board of Directors of A-PLUS have authorized the
execution and delivery of this Agreement by A-PLUS and has approved the
transactions contemplated hereby.
2.3
Absence
of Certain Changes or Events
. Except
as described herein:
(a)
except
in the normal course of business, there has not been (i) any material adverse
change in the business, operations, properties, assets, or condition of A-PLUS;
or (ii) any damage, destruction, or loss to A-PLUS (whether or not covered by
insurance) materially and adversely affecting the business, operations,
properties, assets, or condition of A-PLUS;
(b)
A-PLUS
has not (i) borrowed or agreed to borrow any funds or incurred, or become
subject to, any material obligation or liability (absolute or contingent) not
otherwise in the ordinary course of business; (ii) paid any material obligation
or liability not otherwise in the ordinary course of business (absolute or
contingent) other than current liabilities reflected in or shown on the most
recent A-PLUS consolidated balance sheet, and current liabilities incurred since
that date in the ordinary course of business; (iii) sold or transferred, or
agreed to sell or transfer, any of its assets, properties, or rights not
otherwise in the ordinary course of business; (iv) made or permitted any
amendment or termination of any contract, agreement, or license to which they
are a party not otherwise in the ordinary course of business if such amendment
or termination is material, considering the business of A-PLUS; or (v) issued,
delivered, or agreed to issue or deliver to any third party any membership
interests, bonds or other corporate securities including debentures (whether
authorized and unissued or held as treasury stock);
(c)
neither
the execution and the delivery of this Agreement, nor the consummation of the
transactions contemplated hereby, will conflict with, result in a breach of,
constitute a default under, result in the acceleration of, create in any party
the right to accelerate, terminate, modify, or cancel, or require any notice
under any agreement, contract, lease, license, instrument, or other arrangement
to which A-PLUS is a party or by which it is bound or to which any of its assets
is subject; and
(d)
no
litigation, proceeding, investigation, or inquiry is pending or, to the best
knowledge of A-PLUS threatened, which might result in an action to enjoin or
prevent the consummation of the transactions contemplated by this
Agreement.
ARTICLE
III
REPRESENTATIONS
,
COVENANTS, AND WARRANTIES OF
XODTEC
As an
inducement to, and to obtain the reliance of A-PLUS, Xodtec represents and
warrants as follows:
3.1
Organization
. Xodtec
is a corporation duly organized, validly existing, and in good standing under
the laws of the Country of Poland, and has the corporate power and is duly
authorized, qualified, franchised, and licensed under all applicable laws,
regulations, ordinances, and orders of public authorities to own all of its
properties and assets and to carry on its business in all material respects as
it is now being conducted, and there is no jurisdiction in which it is not
qualified in which the character and location of the assets owned by it or the
nature of the business transacted by it requires qualification. The execution
and delivery of this Agreement does not, and the consummation of the
transactions contemplated hereby will not, violate any provision of Xodtec’s
Articles of Incorporation or Bylaws. Xodtec has taken all action required by
law, its Articles of Incorporation, its Bylaws, or otherwise to authorize the
execution and delivery of this Agreement, and Xodtec has full power, authority,
and legal right and has taken all action required by law, its Articles of
Incorporation, Bylaws, or otherwise to consummate the transactions herein
contemplated.
3.2
Capitalization
. Xodtec’s
authorized capitalization consists of _______ (____) shares of stock, of which
all are issued and outstanding as of Closing. All issued and
outstanding shares are legally issued, fully paid, and non-assessable and not
issued in violation of the pre-emptive or other rights of any
person.
3.3
Absence
of Certain Changes or Ev
ents
. Except
as described herein:
(a)
except
in the normal course of business, there has not been (i) any material adverse
change in the business, operations, properties, assets, or condition of Xodtec;
or (ii) any damage, destruction, or loss to Xodtec (whether or not covered by
insurance) materially and adversely affecting the business, operations,
properties, assets, or condition of Xodtec;
(b)
Xodtec
has not (i) borrowed or agreed to borrow any funds or incurred, or become
subject to, any material obligation or liability (absolute or contingent) not
otherwise in the ordinary course of business; (ii) paid any material obligation
or liability not otherwise in the ordinary course of business (absolute or
contingent) other than current liabilities reflected in or shown on the most
recent Xodtec consolidated balance sheet, and current liabilities incurred since
that date in the ordinary course of business; (iii) sold or transferred, or
agreed to sell or transfer, any of its assets, properties, or rights not
otherwise in the ordinary course of business; (iv) made or permitted any
amendment or termination of any contract, agreement, or license to which they
are a party not otherwise in the ordinary course of business if such amendment
or termination is material, considering the business of Xodtec; or (v) issued,
delivered, or agreed to issue or deliver to any third party any stock, bonds or
other corporate securities including debentures (whether authorized and unissued
or held as treasury stock);
(c)
neither
the execution and the delivery of this Agreement, nor the consummation of the
transactions contemplated hereby, will conflict with, result in a breach of,
constitute a default under, result in the acceleration of, create in any party
the right to accelerate, terminate, modify, or cancel, or require any notice
under any agreement, contract, lease, license, instrument, or other arrangement
to which Xodtec is a party or by which it is bound or to which any of its assets
is subject; and
(d)
no
litigation, proceeding, investigation, or inquiry is pending or, to the best
knowledge of Xodtec threatened, which might result in an action to enjoin or
prevent the consummation of the transactions contemplated by this
Agreement.
3.4
Approval
of Agreement
. The Board of Directors of Xodtec (the “Xodtec
Board”) and the Xodtec Shareholders have authorized the execution and delivery
of this Agreement by Xodtec and have approved this Agreement and the
transactions contemplated hereby.
3.5
Ownership of Xodtec
Shares
. The Xodtec Shareholders are the only legal and
beneficial owners of the Xodtec Shares, free and clear of any claims, charges,
equities, liens, security interests, and encumbrances whatsoever, and the Xodtec
Shareholders have full right, power, and authority to transfer, assign, convey,
and deliver the Xodtec Shares; and delivery of such stock upon Closing will
convey to A-PLUS good and marketable title to such shares free and clear of any
claims, charges, equities, liens, security interests, and encumbrances except
for any such claims, charges, equities, liens, security interests, and
encumbrances arising out of such shares being held by Xodtec.
ARTICLE
IV
SPECIAL
COVENANTS
4.1
Actions of Xodtec
Shareholders
. Prior to the Closing, Xodtec shall cause the
following actions to be taken by the written consent of the Xodtec
Shareholders:
(a)
the
approval of this Agreement and the transactions contemplated hereby and thereby;
and
(b)
such
other actions as the directors of Xodtec may determine are necessary or
appropriate.
4.2
Actions of A-PLUS
Members
. At or prior to Closing, A-PLUS shall cause the
following actions to be taken by the written consent of all the members of
A-PLUS:
(a)
the
approval of this Agreement and the transactions contemplated hereby and thereby;
and
(b)
such
other actions as the Managers of A-PLUS may determine are necessary or
appropriate.
4.3
Access to Properties and
Records
. Xodtec and A-PLUS have each afforded the officers and
authorized representatives of the other reasonable access to the properties,
books, and records of Xodtec or A-PLUS in order that each may have full
opportunity to make such reasonable investigation as it shall desire to make of
the affairs of the other, and each has furnished the other with such additional
financial and operating data and other information as to the business and
properties of Xodtec or A-PLUS as the other has reasonably
requested.
4.4
Delivery
of Books and Records
. Upon Closing, Xodtec shall deliver to
A-PLUS, the originals of the corporate minute books, books of account,
contracts, records, and all other books or documents of Xodtec now in the
possession or control of Xodtec or its representatives and
agents.
4.5
Indemnification
.
(a)
A-PLUS
hereby agrees to indemnify Xodtec and each of the officers, agents and directors
of Xodtec as of the date of execution of this Agreement against any loss,
liability, claim, damage, or expense (including, but not limited to, any and all
expense whatsoever reasonably incurred in investigating, preparing, or defending
against any litigation, commenced or threatened, or any claim whatsoever), to
which it or they may become subject arising out of or based on any inaccuracy
appearing in or misrepresentation made in Article II.
(b)
Xodtec
hereby agrees to indemnify A-PLUS and each of the officers, agents and directors
of A-PLUS as of the date of execution of this Agreement against any loss,
liability, claim, damage, or expense (including, but not limited to, any and all
expense whatsoever reasonably incurred in investigating, preparing, or defending
against any litigation, commenced or threatened, or any claim whatsoever), to
which it or they may become subject arising out of or based on any inaccuracy
appearing in or misrepresentation made under Article III.
ARTICLE
V
MISCELLANEOUS
5.1
Governing
Law
. This Agreement shall be governed by, enforced, and
construed under and in accordance with the laws of the United States of America
and, with respect to matters of state law, with the laws of
Nevada. Any dispute arising under or in any way related to this
Agreement will be submitted to binding arbitration before a single arbitrator by
the American Arbitration Association in accordance with the Association’s
commercial rules then in effect. The arbitration will be conducted in New York,
New York. The decision of the arbitrator will set forth in reasonable detail the
basis for the decision and will be binding on the parties. The arbitration award
may be confirmed by any court of competent jurisdiction.
5.2
Notices
. Any
notices or other communications required or permitted hereunder shall be
sufficiently given if personally delivered to it or sent by registered mail or
certified mail, postage prepaid, or by prepaid telegram and any such notice or
communication shall be deemed to have been given as of the date so delivered,
mailed, or telegraphed.
5.3
Attorney
’
s
Fees
. In the event that any party institutes any action or suit to
enforce this Agreement or to secure relief from any default hereunder or breach
hereof, the breaching party or parties shall reimburse the non-breaching party
or parties for all costs, including reasonable attorneys’ fees, incurred in
connection therewith and in enforcing or collecting any judgment rendered
therein.
5.4
Confidentiality
.
A-PLUS, on the one hand, and Xodtec and the Xodtec Shareholders, on the other
hand, will keep confidential all information and materials regarding the other
Party designated by such Party as confidential. The provisions of
this Section 5.4 shall not apply to any information which is or shall become
part of the public domain through no fault of the Party subject to the
obligation from a third party with a right to disclose such information free of
obligation of confidentiality. Xodtec and A-PLUS agree that no public disclosure
will be made by either Party of the existence of the Transaction or the letter
of intent or any of its terms without first advising the other Party and
obtaining its prior written consent to the proposed disclosure, unless such
disclosure is required by law, regulation or stock exchange
rule.
5.5
Expenses
. Except
as otherwise set forth herein, each Party shall bear its own costs and expenses
associated with the transactions contemplated by this
Agreement. Without limiting the generality of the foregoing, all
costs and expenses incurred by A-PLUS and Xodtec after the Closing shall be
borne by the surviving entity.
5.6
Schedules;
Knowledge
. Each Party is presumed to have full knowledge of
all information set forth in the information disclosed and delivered by the
other Party pursuant to this Agreement.
5.7
Third
Party Beneficiaries
. This Agreement is solely between A-PLUS,
Xodtec and the Xodtec Shareholders, and, except as specifically provided, no
director, officer, stockholder, employee, agent, independent contractor, or any
other person or entity shall be deemed to be a third party beneficiary of this
Agreement.
5.8
Entire
Agreement
. This Agreement represents the entire agreement
between the Parties relating to the Transaction. There are no other courses of
dealing, understandings, agreements, representations, or warranties, written or
oral, except as set forth herein.
5.9
Survival
. The
representations and warranties of the respective Parties shall survive the
Closing Date and the consummation of the transactions herein
contemplated.
5.10
C
ounterparts
. This
Agreement may be executed in multiple counterparts, each of which shall be
deemed
an original and all of which taken together shall be but a single
instrument.
5.11
Amendment
or Wai
ver
. Every
right and remedy provided herein shall be cumulative with every other right and
remedy, whether conferred herein, at law, or in equity, and may be enforced
concurrently herewith, and no waiver by any party of the performance of any
obligation by the other shall be construed as a waiver of the same or any other
default then, theretofore, or thereafter occurring or existing. This
Agreement may only be amended by a writing signed by all Parties hereto, with
respect to any of the terms contained herein, and any term or condition of this
Agreement may be waived or the time for performance hereof may be extended by a
writing signed by the Party or Parties for whose benefit the provision is
intended.
(The
rest of this page left intentionally blank.)
IN WITNESS WHEREOF
, the
Parties hereto have caused this Agreement to be duly authorized and executed as
of the date first above-written.
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A-PLUS
INTERNATIONAL, LTD.
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XODTEC
TECHNOLOGY CO., LTD.,
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By:
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/s/
Su, Yao-Ting
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By:
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/s/
Yu, Yuan-Ming
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Name:
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Yao-Ting
Su
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Name:
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Yuan-Ming
Yu
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Title:
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Manager
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Title:
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General
Manager
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Exhibit
10.7
Supplier
Service Level Agreement
1.
INTRODUCTION
This
Agreement outlines the Terms and Conditions under which the undersigned
Targetek Co., Ltd
with a business address at
11F. No. 216, Sec. 2,
Nanjing E. Rd., Taipei 10489, Ta
iwan ("Supplier") acknowledges that it is
supplying services to Welocalize, Inc., headquartered at 241 East 4th Street,
Suite 207, Frederick, MD 21701, USA, and its subsidiaries and affiliated
companies (collectively referred to as "Welocalize") for customers of Welocalize
(each, a "Customer Company") or for Welocalize (collectively referred to as "the
Services"), as a result of which in the course of supplying Services as an
independent contractor of Welocalize, the Supplier may be given access to
confidential information of a Customer Company or Welocalize.
The
purpose of this Agreement is to provide a framework for the delivery of Services
that meet the expectations of Welocalize and its Customer Companies and to
provide the conditions which shall govern both Welocalize and the Supplier
relations and the supply of Services.
This
Agreement has an effective date of
Oct. 20th, 2007
("Effective Date"). This Agreement commences on the Effective Date for an
initial period of one year and shall automatically renew on each anniversary of
the Effective Date for successive one-year periods, unless either party gives
the other party written notice of its intent not to renew, at least 90 days
prior to the expiration of the then-current term.
In
consideration of the mutual promises and undertakings set forth herein, and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties agree as follows:
2.
STATEMENT OF WORK
2.1.
Statement of Work
Definition
Welocalize
may engage the Supplier to perform Services as described in a Statement of Work
("SOW"). Failing this, no order shall be deemed to have been placed. A Statement
of Work can be represented by a purchase order, a written message or a work
assignment entry in the Welocalize work assignment system. Modifications in an
SOW must always be in writing.
2.2.
Order Acceptance
Welocalize
shall not send work to the Supplier without its prior approval.
Any Order
not refused in writing by the Supplier within 24 hours of receipt shall be
deemed to have been accepted and the Supplier shall be bound to perform the
Services in accordance with such Order.
If the
Supplier does not accept the Order, all physical materials supplied by
Welocalize shall be returned to Welocalize within 24 hours following the
non-acceptance. Failing this, Welocalize reserves the right to claim damages and
interest for any loss suffered.
2.3.
Change of Scope
Welocalize
may at any time modify or add to the scope of the Services agreed to between the
parties upon written notice to the Supplier specifying the desired modifications
or additions to the same degree of specificity as in the original
specifications. The Supplier must confirm receipt of this information and agrees
that modifications or additions which are not considered by both parties to be
substantial will be performed by the Supplier at no additional cost. If there
are substantial modifications, the Supplier will submit to Welocalize an
estimate of the time and cost to effect such modification or addition
("Estimate") within 24 hours of notification by Welocalize.
The
parties must agree to the Estimate in writing, prior to either party being bound
to its terms. The performance of any modified or augmented Services by the
Supplier shall be governed by the terms and conditions of this
Agreement.
2.4.
Project Cancellation
If the
project is cancelled, Welocalize will promptly notify the Supplier. The Supplier
may invoice Welocalize solely for the amount of work that has been approved and
completed when the written cancellation was received. A written cancellation may
reach the Supplier via post, overnight delivery service, fax or electronic
mail.
3.
DELIVERY
3.1.
Delivery Expectations
Delivery
shall take place in the way indicated in the Statement of Work.
Delivery
at or before the date and time indicated in the Statement of Work is critical.
In the event of any delay in delivery that is due to the Supplier's fault or
negligence, Welocalize reserves the right to decline the work, to place the
order with a third party and/or to claim compensation and interest for the
damage suffered as set out in
Schedule C.
The
Supplier shall keep a full electronic and up-to-date backup copy of all project
files for the duration of the project and thereafter until acceptance of the
delivery by Welocalize.
When
requested by Welocalize, the Supplier shall promptly deliver glossaries,
translation memories or any other additional material produced in direct
relation to the execution of the Statements of Work to Welocalize.
The
Supplier is responsible for the cost of delivering work to
Welocalize.
4.
USE AND OWNERSHIP OF PROJECT-RELATED MATERIALS
The
Supplier shall not make use of any information disclosed to, produced by or
accessed by the Supplier in connection with this Agreement for any purpose other
than to supply Services.
4.1.
Reference Materials
Any
material (texts, drawings, models, films, pictures, negatives, magnetic media,
terminology or other glossaries, etc.) relating to the SOW shall remain the
exclusive property of Welocalize or the Customer Company and shall be returned
without delay on completion of the order, together with any software (discs and
manuals) provided to the Supplier to carry out the work. The Supplier shall also
totally erase any such software from its computer(s), and destroy any copy or
copies of the same made by way of backup(s) or otherwise.
White the
materials and software are in its possession, the Supplier will ensure that they
are not damaged or lost. The Supplier will bear full responsibility in case of
any damage or loss of materials or software and will hold Welocalize harmless
against any claim resulting from such damage or loss.
4.2.
Work Product Materials
Any
materials produced by the Supplier in connection with Services ("Work Product")
shall be considered "work made for hire" on behalf of Welocalize and, as such,
shall be the sole property of Welocalize. The Supplier hereby assigns whatever
right, title and interest the Supplier may have or claim to such Work Product
property and all rights therein, including, but not limited to, any patent,
copyright, right to create derivative works, trademarks, trade secret, mask
works, or other intellectual property rights, to Welocalize or its designee. The
Supplier waives any "moral rights" it may have in any such Work Product and
hereby authorizes Welocalize and/or any person or entity obtaining rights
directly or indirectly from Welocalize (to the extent of such rights) to make
any desired changes to the Work Product or any part thereof, to combine or use
the Work Product with any other goods, products, materials, services or software
in any manner desired, and to withhold the Supplier's identity as an author in
connection with any distribution or use of the Work Product in any manner
thereof, either alone or in combination with other goods, products, materials,
services or software. In the event Welocalize is unable, after reasonable
effort, to secure the Supplier's signature on any letters patent, copyright or
other analogous protection relating to Work Product, Supplier hereby irrevocably
designates and appoints Welocalize and its duly authorized officers and agents
as its agent and attorney-in-fact, to act for and in its behalf and stead to
execute and file any such application or applications and to do all other
lawfully permitted acts to further the prosecution thereon with the same legal
force and effect as if executed by the Supplier.
4.3.
Limited License
Welocalize
may provide the Supplier with computer software and related documentation
("Licensed Programs") which are proprietary to Welocalize or to a Customer
Company. If such Licensed Programs are so provided, the Supplier acknowledges
that they are licensed to the Supplier on a royalty-free, revocable,
non-transferable and non-exclusive basis for the sole purpose of facilitating
the provision of Services by Welocalize under this Agreement, and the Licensed
Programs may not be transferred, distributed, conveyed or disclosed in any
manner, in whole or in part, to any third party. This limited license to the
Licensed Programs shall expire upon the termination or expiration of this
Agreement. Upon such termination or expiration, the Supplier shall return the
Licensed Programs and any copies thereof, to Welocalize and certify to
Welocalize that it has de-installed the Licensed Programs. The Supplier agrees
to establish and maintain appropriate security measures and safeguards against
the destruction, loss, or alteration, and the unauthorized access, use, or
disclosure, of any Licensed Programs in its possession during the term of this
Agreement. ALL LICENSED PROGRAMS PROVIDED TO THE PARTNER ARE PROVIDED ON AN 'AS
IS' BASIS. WELOCALIZE MAKES NO WARRANTY, EXPRESS OR IMPLIED, WITH RESPECT TO
SUCH LICENSED PROGRAMS, INCLUDING ANY IMPLIED WARRANTIES OF MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE. All rights in the Licensed Programs not
expressly granted by this paragraph to the Supplier are hereby reserved by
Welocalize or the applicable Customer Company.
5.
FEES AND EXPENSES
5.1.
Standard Fees
The
standard fees to be applied for individual SOWs, as well as a description of
what these fees cover, are specified in
Schedule A
and/or in the SOWs.
The cost of the work as specified in the SOW shall not be amended without the
written agreement of both parties. If the fee indicated in the SOW differs from
the one indicated in
Schedule
A,
the former takes precedence.
5.2.
Invoicing Terms
All
invoices submitted shall include all the legally required references of the
Supplier, and in particular name, address, and bank account number (including
IBAN, SWIFT, bank ID, bank address, sort code and/or routing number) and Tax
Income Reference Number. The invoice should also include the invoice number,
invoice date, purchase order number, project name, description, unit quantity,
unit price, invoice total value, Welocalize name and address and the name of the
Welocalize project manager.
Invoices
will be submitted in the correct currency to the accounts payable address listed
below:
ð
Email:
(This is the preferred method for
faster processing)
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In
the United States:
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In
Europe:
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accounts.payable@welocalize.com
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AP@welocalize.com
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ð
Postal
service:
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In
the United States:
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In
Europe:
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Welocalize,
Attn.: Accounts Payable
241
East 4th Street, Suite 207
Frederick,
MD 21701
USA
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Welocalize,
Attn.: Accounts Payable
Unit
5, Block 4B
Blanchardstown
Corporate Park
Dublin
15
Ireland
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Invoices
shall not be paid until Welocalize has provided final acceptance of the quality
criteria in writing. Final acceptance or rejection will be provided within 10
business days of final receipt of translated files.
Each
invoice shall be submitted to Welocalize no later than 45 days from the date of
final project/file delivery to Welocalize. Only for projects whose value is less
than $50.00 or €37 shall the Invoicing period be extended to 90 days from
project completion. Welocalize shall not accept invoices 90 days past completion
of any project.
5.3.
Payment Terms
All fees
and expenses are to be paid to the Supplier, in the currency of the invoice, by
check or wire transfer. Welocalize shall use all reasonable efforts to pay the
Supplier at 45 days after receiving an invoice for the Services.
The
Supplier is liable for the Supplier's own expenses, except as noted otherwise in
each SOW. If such expenses are to be reimbursed per the SOW, the Supplier shall
submit monthly expense reports to Welocalize for each open SOW detailing the
expenses incurred for the project. Expense reporting must be completed and
approved by Welocalize prior to payment.
Any
amounts disputed in good faith may be deducted from the invoice. The disputed
amount shall be notified in writing to the Supplier giving the reasons for
withholding payment. Upon receipt of Welocalize's dispute notice, the Supplier
and Welocalize will work together in good faith to resolve such disputes in a
prompt and mutually acceptable manner. Welocalize agrees to pay any disputed
amounts once the issues have been resolved.
6
.
WELOCALIZE DUTIES AND
RESPONSIBILITIES
6.1.
Training on Specialized Equipment or Tasks
Welocalize
will provide suitable training both to ensure the safety of the Supplier's
personnel and to safeguard Welocalize's and/or the Customer Company's systems or
equipment. The Supplier will ensure that all Supplier personnel who work on
Welocalize's and/or the Customer Company's systems or equipment are adequately
qualified.
6.2.
Project Information and Support
Welocalize
shall use all reasonable efforts to:
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Supply
the Supplier with adequate information which allows the Supplier to
provide final files that meet the required standards on
time
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Clearly
specify deliverables, deadlines and quality expectations in the
SOW
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•
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Provide
all reasonable technical and linguistic support to the
Supplier
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•
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Manage
project queries adequately and in a timely
manner
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•
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Provide
all relevant quality feedback Indicating necessary corrective
actions
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6.3.
Supplier Requests for Approvals and Information
Welocalize
will respond promptly to any Supplier requests to provide direction,
Information, approvals, authorizations or decisions that are reasonably
necessary for the Supplier to perform the services.
7.
WARRANTIES AND REMEDIES
7.1.
Quality of Service and Remedies for Breaches
The
Supplier represents and warrants that the Services and any deliverables will
meet the quality criteria as set out in
Schedule B
and in any separate
document accompanying the SOW or otherwise sent by Welocalize to the Supplier
before or during the performance of the Services. In the absence of any explicit
written description of quality criteria for the type of Services provided in the
SOW, the Supplier undertakes and warrants that it shall:
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•
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Deliver
an accurate translation for each of the files in the inventory with each
being linguistically and stylistically appropriate for the target
market
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•
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Maintain
consistency of terminology throughout (including references to software
and other related materials)
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Follow
all client-specific and project-specific instructions (including
compliance to glossaries, style guides, previous translations, customer
reviewer corrections, etc.)
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Thoroughly
review all the files so that grammar, spelling (including mandatory use of
spell checkers) and punctuation are 100%
correct
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In
addition, the Supplier represents and warrants that all Services and all
deliverables will be:
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•
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Performed
in a professional and workmanlike
manner
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Of
a high grade, nature and quality
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Free
from known errors, bugs and
mistakes
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•
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Compliant
with the guidelines and specifications supplied by the customer company or
by Welocalize on the customer company's behalf from time to
time
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Consistent
with industry standards reasonably applicable to such
services
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If
Welocalize considers, during the period of time described in Section 7.5 below,
that a breach of the warranties set forth in this section has occurred and
notifies the Supplier in writing stating the nature of the breach, then the
Supplier shall use its best efforts to immediately correct any affected Services
so that they comply with the warranty.
The
Supplier shall reimburse and indemnify Welocalize for any losses or damages
incurred by it as a result of any breach by the Supplier of this
Agreement.
The
penalties and refunds payable in the event of defective service are as defined
in
Schedule C
to this
Agreement and are supplemental to, and not in lieu of, all other remedies
available to Welocalize by contract or law.
7.2.
Acceptance and Inability to Perform
Acceptance
of the Work by Welocalize may be subject to quality assessments performed as set
out in
Schedule B
and
Welocalize reserves the right to decline any Work which does not comply with the
stated quality criteria. If Work is refused as not meeting the requisite
standards, the Supplier agrees to correct it without additional cost or, if the
delivery date does not permit, reimburse Welocalize for the additional expense
of having the corrections completed elsewhere as set out in
Schedule C.
If for
any reason during the execution of the SOW Welocalize determines that the
Supplier will be incapable of delivering the work within the required deadline
and according to the agreed quality requirements, Welocalize shall have the
right, in its sole discretion, to re-assign the work partly or entirely to
another Supplier.
7.3.
Third-Party Claims
The
Supplier represents that it has no agreement with or obligations to others which
would prevent it from performing the Services hereunder or that would require it
to obtain the prior consent of any third party in order to perform the
Services.
The
Supplier warrants that all Services and all deliverables:
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Do
not and will not infringe upon, violate, or misappropriate any patent,
copyright, trade secret, trademark, contract, or any other publicity
right, privacy right, or proprietary right of any third
party
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Do
not and will not incorporate or be derived from the intellectual property
of any third party, without Welocalize's prior written
consent
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Will
be provided to Welocalize free of all liens, security interests, or other
encumbrances of any kind
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If a
third party takes action against Welocalize for any infringements of this
nature, then the Supplier will, at its own expense, settle the claim or arrange
to defend Welocalize in such proceedings, and, in such circumstances, the
Supplier will pay all settlement costs, damages, and legal fees and expenses
finally so awarded.
7.4.
Exclusions
The
Supplier is not responsible for any infringements to copyright, trade secret,
trademark, contract, or any other publicity right, privacy right, or proprietary
right of any third party where Welocalize has made amendments to original
documents and similar works prepared by the Supplier without the express
approval of the Supplier, or where Welocalize fails to use the most recent
versions of such works that have been delivered by the Supplier and the
infringement is caused by such amendments or failures to use.
7.5.
Services Warranty Period
The
Supplier agrees that it will correct or repair any deliverables or Services that
do not conform to the specifications or acceptance criteria at no charge for the
12-month period following delivery to Welocalize of such deliverables or
Services.
7.6.
Force Majeure
Except in
respect of payment liabilities, neither party will be liable for any failure or
delay in its performance and/or provision of the Services under this Agreement
due to reasons beyond either party's reasonable control, Including national
emergency, acts of war, earthquake, flood, riot, embargo, sabotage, or
governmental act, provided the affected party gives the other party prompt
notice of the reasons for such cause.
7.7.
No Malicious Code
All
deliverables produced by the Supplier hereunder will be free of any and all time
locks, viruses, trojans, worms, spyware, adware, other malware and malicious
code, copy protect mechanisms, back doors, or features designed to (I) disable
the deliverables or render them incapable of operation (whether after a certain
time, after transfer to another machine, or otherwise), (II) permit access
unauthorized by Welocalize or its customers to the deliverables or to any
Welocalize or its customers' networks, systems, programs, or data, or (iii)
enable Supplier to track Welocalize's or users' use of the deliverables without
Welocalize's express consent.
8.
SECURITY
8.1.
Logical Access
Welocalize
will provide the Supplier's employees and sub-contractors with necessary access
to the software and systems in order that the Services may be delivered and
maintained in accordance with the terms of this Agreement.
8.2.
Compliance with Welocalize Security Policies
The
Supplier will ensure that its employees are made aware of security policies and
will also ensure ongoing compliance with these policy statements. Welocalize
will provide the Supplier with up-to-date information on its security policies
and will keep the Supplier informed about any changes to these
policies.
8.3.
Information and Data Security Measures
The
Supplier will manage information and data security with reasonable efforts to
restrict unauthorized access. The Supplier will make best endeavors to ensure
that its employees and representatives are fully aware of the risks associated
with Information and data security issues.
8.4.
Disaster Recovery
The
Supplier will ensure that information and data under its responsibility are
properly backed up on a daily basis and also that arrangements are made for
recovery processes to be installed to minimize any potential disruption to
Welocalize's business. The Supplier is required to ensure that proper measures
are in place to enable continuation of services in the event of unexpected
disruptive events. These measures should include implementation and pre-testing
of formal disaster recovery and business continuity planning within the
Supplier's business.
8.5.
Anti-Virus Software
The
Supplier agrees that it shall utilize best-in-class grade anti-virus software to
examine each deliverable to be provided by it hereunder and cleanse or otherwise
prevent such deliverable from containing any code described in Section 7.7, and
otherwise utilize all reasonable security measures to protect the integrity of
the deliverables provided hereunder.
9.
INFRINGEMENT OF INTELLECTUAL PROPERTY RIGHTS
If the
Supplier has sub-contracted the entirety or parts of the Work Product, the
Supplier is under obligation to ensure that all copyrights are transferred
entirely to Welocalize.
Should
Work Product or other deliverables hereunder become, or in either party's
opinion be likely to become, the subject of a claim of Infringement, the
Supplier:
|
•
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Shall
procure for Welocalize the right to continue to use the affected Work
Product or deliverable
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•
|
Shall
replace the affected Work Product or deliverable with non-infringing
functionally equivalent software or other materials, as applicable,
or
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•
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Shall
modify the affected Work Product or deliverable to make it
non-infringing
|
If the
foregoing remedies are not commercially feasible, the Supplier shall, at
Welocalize's request, uninstall the infringing Work Product or deliverable (and
any other Work Product or deliverable whose functionality is dependent on the
infringing product or deliverable) and shall provide Welocalize with a refund of
all fees paid for such affected Work Product or deliverable, prorated on a
five-year straight line basis from the date of its acceptance.
10.
CONFIDENTIALITY
10.1.
Obligation Not to Use or Disclose
Both
parties agree to keep confidential all information concerning the other party's
business or its ideas, products, customers or services that could be considered
to be "Confidential Information," as such term is defined herein.
The
receiving party will not, during or subsequent to the term of this Agreement,
use the Confidential Information for any purpose whatsoever other than the
performance of the Services for the benefit of Welocalize, or disclose
Confidential Information to any third party other than its employees or
subcontractors who have a need to have access to and knowledge of the
Confidential Information solely in connection with the performance of Services
hereunder.
Prior to
disclosure, the receiving party shall have entered into non-disclosure
agreements with such employees and subcontractors having obligations of
confidentiality as strict as those contained in this Section, to ensure against
unauthorized use or disclosure of Confidential Information.
10.2.
Definition of Confidential Information
"Confidential
Information" shall be deemed to include any technology, proprietary information,
technical data, trade secrets and/or know-how, Including, without limitation,
research, product plans, products, services, customers, customer lists, pricing,
revenue, markets, software, developments, inventions, processes, formulas,
technology, designs, drawings, engineering, hardware configuration information,
methodologies, translation memory databases, software programs and source code
including those licensed by Welocalize and made available to Supplier for the
purpose of facilitating Supplier's performance of services for Welocalize's or
its customers' benefit, identification names and passwords, documentation,
proprietary
Information
belonging to third-party Welocalize customers or licensors, and/or marketing,
finances or other business information, disclosed by the disclosing party either
directly or indirectly in writing, orally, electronically, or by drawings or
inspection of parts or equipment, including but not limited to any Work Product
delivered hereunder, and other such information which, by its nature, is
normally understood to be confidential.
10.3.
Exclusions
The
obligations described in Section 10.1 shall not extend to the
following:
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•
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Confidential
Information which at the time of disclosure is in the public
domain
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|
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•
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Confidential
Information which after generation or disclosure is published or otherwise
becomes part of the public domain through no fault of the receiving party
(but only after and to the extent that it is published or otherwise
becomes part of the public domain)
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•
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Confidential
Information which either party can show was in its possession at the time
of generation or disclosure and was not acquired, directly or indirectly,
from the other party or from a third party under an obligation of
confidence
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|
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•
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Confidential
Information which was received after the time of generation or disclosure
hereunder, from a third party who did not require that party to hold it in
confidence and who did not acquire it, directly or indirectly, from the
other party under an obligation of confidence;
and
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|
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•
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Confidential
Information which the receiving party can show was developed independently
without benefit of, or being based on, information generated hereunder or
made available by the other party
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10.4.
Standard of Care
Each
party shall exercise at least such care in protection of the Confidential
Information of the other as they exercise in the protection of Confidential
Information of their own, but in no event shall such party exercise less than
reasonable care in doing so.
It is the
Supplier's responsibility to notify Welocalize if and when an employee with
access to their identification names and passwords leaves the company.
Welocalize will reset the password upon notification.
10.5.
Acts of Employees, et al.
Each
party shall be responsible for the acts or failures to act of their respective
employees, Including in Supplier's case, any ex-employee possessed of
Identification names and passwords as contemplated by Section 10.4
above.
10.6.
Return of Confidential Information
Upon the
expiration or termination of this Agreement or upon the earlier demand of the
other party, each party agrees to return to the other all of the documents,
software source code, translation memory databases (TMs), discs, files, printed
materials and other Confidential Information provided hereunder, and all copies
thereof.
10.7.
Right to Disclose; No License
Each
party warrants to the other that it has the unqualified right to disclose to
each other the Confidential Information disclosed hereunder. All such
Confidential Information will remain the property of the disclosing party and
the receiving party will not acquire any rights to that confidential
information. In particular, this Agreement does not grant any right or license,
express or implied, to use Confidential Information except as permitted by this
Agreement, nor any right to license, express or implied, under any patent, nor
any right to purchase, distribute or sell any product.
10.8.
Client Contact
Except
where expressly authorized by Welocalize, the Supplier shall not contact any
client for whom it is performing work through Welocalize.
10.9.
Separate Mutual Non-Disclosure Agreement
The
Supplier understands and agrees that it will be asked to enter into a separate
Non-Disclosure Agreement (NDA) document with Welocalize. The articles of that
separate NDA will take precedence over this Confidentiality article, but only to
the extent the former conflicts with the latter.
11.
LEGAL COMPLIANCE & RESOLUTION OF DISPUTES
11.1.
Governing Law
This
Agreement shall be governed in accordance with the laws of the State of
Maryland, United States of America, excluding principles of conflict of laws.
Each party agrees and consents to venue and jurisdiction in connection with any
action arising hereunder, or in connection herewith, solely within the state
courts sitting in Frederick County or Montgomery County, Maryland or, if a
federal action, the federal District Court for the District of Maryland, in each
case at the option of Welocalize.
11.2.
Export Control
Both the
Supplier and Welocalize agree to comply fully with all relevant export laws and
regulation of the country or countries where their offices are
located.
11.3.
Informal Resolution
In the
event of dispute, the Parties will initially attempt to resolve any such
disputes through informal negotiation and discussion. Formal proceedings should
not be commenced until such informal negotiations and discussions are concluded
without resolution.
11.4.
Arbitration
Any
dispute, difference or question relating to or arising between the parties
concerning the construction, meaning, effect or implementation of this Agreement
will be submitted to, and settled by arbitration by a single arbitrator chosen
by the Washington, D.C., Regional Office of the American Arbitration Association
in accordance with the Commercial Rules of the American Arbitration Association.
The arbitrator shall apply Maryland law. Unless otherwise agreed by the parties,
arbitration will take place in Baltimore, Maryland, U.S.A. Any court having
jurisdiction over the matter may enter judgment on the award of the arbitrator.
Service of a petition to confirm the arbitration award may be made by regular
mail or by commercial express mail, to the attorney for the party or, if
unrepresented, to the party at the last known business address.
12.
TERMINATION
12.1.
Termination for Convenience
This
Agreement may be terminated at any time by either party, upon receipt of 45 days
prior written notice of termination by the non-terminating party, provided,
however, that Supplier may not terminate the Agreement during the performance of
an SOW. Upon notice of such termination, the Supplier shall advise Welocalize of
the extent to which performance has been completed through such date, and
collect and deliver to Welocalize whatever Work Product then exists in the
manner requested by Welocalize.
12.2.
Termination for Cause
If either
party fails to perform its obligations under this Agreement, and does not,
within 30 days of receiving written notice describing such failure, cure such
failure, then this Agreement may be terminated forthwith.
12.3.
Payment on Termination
Upon
termination of a SOW or this Agreement by Welocalize, the Supplier shall be paid
for any authorized work performed through the date of termination provided that
in no case will the amount paid exceed the total amount payable under the
particular SOW.
12.4.
Obligations
The
obligations set forth in Sections 2, 3, 4, 7, 10, 11 and 12.4 shall survive any
expiration, regardless of whether or not the Supplier remains associated in any
manner, either directly or indirectly with Welocalize, its agents and/or
contractors.
13.
GENERAL PROVISIONS
13.1.
Notices and Confirmation
Notices
and confirmations required under this Agreement are to be sent to the address
and persons specified in this Agreement. Notices are to be sent in writing by
email, registered post, fax, express courier service or be delivered
personally.
13.2.
Standard of Care
Each
party will act in good faith in the performance of its respective duties and
responsibilities and will not unreasonably delay or withhold the giving of
consent or approval required for the other party under this Agreement. Each
party will provide an acceptable standard of care in its dealings with the other
party and its employees.
13.3.
Assignment
The
Supplier may not assign, transfer or subcontract this Agreement without the
prior written consent of Welocalize, and any attempt to do so shall be void. In
the event that consent for assignment is given, the terms of this Agreement will
be binding upon Supplier's successor. This Agreement shall inure to the benefit
of and may be enforced by the successors and permitted assigns of the
parties.
13.4.
Entire Agreement
This
Agreement constitutes the entire agreement between the Parties hereto and
supersedes and cancels any prior agreements or communications, whether oral or
written, between the Parties hereto relating to the subject matter
hereof.
13.5.
Severability
The
provisions of this Agreement shall be deemed severable, and the unenforceability
of any one of the provisions shall not affect the enforceability of other
provisions. In the event that a provision is found to be unenforceable, the
parties or reviewing court shall substitute for that provision an enforceable
provision that preserves as near as possible the original intent and position of
the parties.
13.6.
Changes to the Agreement
Any
change made in the provisions of this Agreement and applicable to a specific
undertaking, must be in writing and be approved by both parties before the work
concerned is begun in order to be effective. SOWs entered into hereunder shall
be deemed to incorporate therein the terms of this Agreement. In the event of
any conflict between the terms of an SOW and this Agreement, the SOW will
control.
13.7.
Non-Solicitation
During
the term of this Agreement and for twelve (12) months thereafter, the Supplier
agrees that it will not directly or indirectly approach any Customer Company for
whom it is providing Services with the intention of providing such Services, or
similar services, directly to the Customer Company. All communication on
projects and on the Services will be through the Welocalize project manager
unless otherwise authorized by Welocalize in writing. The Supplier will promptly
notify Welocalize if the Supplier is approached directly or indirectly by the
Customer Company to perform the work for which it has been engaged by Welocalize
to perform for Customer Company, or by a competitor of Welocalize to perform the
work for which it has been engaged by Welocalize to perform for Customer
Company.
13.8.
Non-Exclusive Agreement
It is
understood and agreed that this Agreement does not grant to the Supplier any
exclusive rights to do business with Welocalize and also that Welocalize may
contract with other partners for the procurement of similar services. Nothing in
the Agreement prevents the Supplier from marketing, developing, using and
performing similar services or products to other potential clients as long as
this does not violate the Non-Disclosure Agreement between Welocalize and the
Supplier.
13.9.
Insurance
Throughout
the term, the Supplier will procure and maintain at its own expense Commercial
General Liability insurance, with policy limits for bodily injury and damage to
property in amounts acceptable to Welocalize. The insurance Supplier maintains
pursuant to this Section will be in a form and with insurers reasonably
acceptable to Welocalize. Upon Welocalize's request the Supplier will provide to
Welocalize certificates of insurance evidencing full compliance with the
requirements of this Section.
13.10.
Publicity
The
Supplier agrees not to list any Customer Company or Welocalize as a customer in
the Supplier documentation or websites. Without Welocalize's prior written
approval, the Supplier will not directly or indirectly disclose to anyone the
terms of this Agreement.
13.11.
Independent Contractor
The
Supplier is an independent contractor and shall not be deemed for any purpose to
be an employee of Welocalize. The Supplier shall not be entitled to participate
in any Welocalize employee benefits programs. Welocalize shall not be
responsible to the Supplier for any payroll-related taxes related to the
performance of the Services.
13.12.
Authorization to Sign This Agreement
The
Supplier certifies that it is duly authorized to sign this document. The
Supplier certifies that it has no outstanding agreement or obligation that is in
conflict with any of the provisions of this Agreement, or that would preclude
the Supplier from complying with the provisions of this Agreement, and further
certifies that Supplier will not enter into any such conflicting agreement or
obligation during the Term of this Agreement.
Any
conflict between the provisions of this Agreement and any legal provision, or
their non-applicability to a given undertaking because of its specific nature,
shall in no way affect the validity of the other provisions of the Agreement,
which shall continue to apply in full.
13.13.
Schedules
The
Schedules referred to in, and attached to, this document are to be considered an
integral part of this Agreement.
14.
SIGNATURES
The
following authorized representatives of each party execute this Agreement as of
the Effective Date:
For the
Supplier
TARGETEK CO., LTD.
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Signature
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:
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/s/
Lee, Wen-Hui
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Name
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:
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Lee,
Wen-Hui
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Position
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:
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General
Manager
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Date
of Signing:
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:
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Oct.
20, 2007
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For
Welocalize
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Signature
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:
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/s/
Olga Blasco
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Name
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:
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Olga
Blasco
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Position
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:
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Director,
Global Language Services
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Date
of Signing
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:
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SCHEDULE
A -TASKS INCLUDED IN WORD/PAGE RATES
|
A.1.
Word Rates
A.
1.1
Project tasks included in word rates
(Tasks
in italics apply to agencies or freelance networks, but not to individual
freelancers)
Included
in all word rates (if not stated otherwise):
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•
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Review
handoff from Welocalize and raise queries if anything is missing or
unclear within 24 hours or as soon as possible
thereafter
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•
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Review
and ensure adherence to style guides, glossaries, reference materials, and
instructions
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•
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Project
coordination
and
resource management
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Query
management: submit timely queries to appointed Welocalize or client
contact and implement answers globally throughout the
files
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•
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Interface
with appointed contact regarding language
issues
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•
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Implement
feedback from Welocalize Language Quality Assurance (LQA) and provide
feedback on LQA results
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•
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Replace
software terms in documentation and help, whenever they are kept in the
source language until the software is
frozen
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•
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Implement
one round of customer review
comments
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•
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Run
simple verification tool(s), for example, tag checker to ensure integrity
of tags in translated files, spell checker to ensure absence of spelling
mistakes, consistency checker to ensure consistent use of terminology, and
others
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•
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Clean
translated files (if a tool such as Trados is used) and verify integrity
of tags
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•
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Create
MIF or simple PDF for language quality assurance purposes (this does not
include any DTP formatting work)
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Delivery
by email, FTP, collaboration portal or regular
mail
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Deliverables:
clean files, unclean files, up-to-date translation memory (or export), log
files, hardcopy (as requested), handoff checklists and/or any reports
created by mentioned verification
tool(s)
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A.l.2.
Full word rates include:
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•
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Translating
the source text in translation memory tool, word processor or software
localization tool
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•
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Checking
software references in documentation and help against glossary or running
software
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•
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Ensuring
consistency with legacy translations (if
applicable)
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•
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Editing
of target text, i.e., comparing the translation to the source text and
checking it for accuracy, use of correct terminology and country
standards, adherence to specifications, adherence to style guides (if
available), consistency, and use of correct spelling, grammar, and
punctuation.
This step
should be performed by a person other than the original translator unless
agreed otherwise with Welocalize in
writing.
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•
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Implementing
corrections into the translated
files
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•
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Verifying
that all corrections have been
implemented
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A.
1
.3.
Percentage rates for review of 100%
matches include: *
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•
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Comparing
the translation to the source text and checking it for spelling, grammar,
punctuation, adherence to specifications and
consistency
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A.1.4.
Percentage rates for fuzzy matches include: *
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•
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Modifying
leveraged translations as needed
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•
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Editing
of target text, i.e., comparing the translation to the source text and
checking it for accuracy, use of correct terminology, adherence to
specifications, adherence to style guides (if available), consistency, and
use of correct spelling, grammar, and punctuation.
This step should be performed
by a person other than the original translator unless agreed otherwise
with Welocalize in writing.
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•
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Implementing
corrections into the translated
files
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•
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Verifying
that all corrections have been
implemented
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A.1.5.
Examples of tasks not Included in word rates:
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•
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DTP-related
tasks other than preserving original layout
settings
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•
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Engineering
tasks other than preserving integrity of links and original
layout
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•
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Hotkey
duplication check **
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•
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Software
In-Context Validation, i.e. verifying translated software after
compilation **
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•
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Final
QA of documentation after DTP and art linking
***
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•
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Implementing
spelling reforms (e.g. convert legacy translations to new German
spelling)
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•
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Implementing
changes of UI terms, glossaries and style guides into finalized
translation
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•
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Delivery
by courier (unless necessary because of late
delivery)
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*
Welocalize reserves the right to renegotiate discount percentages for Trados
categories on a project-by-project basis; however, this should always be
clarified prior to project start.
** For
some accounts, word rates may be negotiated to include these activities. This
should always be clarified prior to project start.
*** In
some cases, the agreed word rates include the final Documentation QA after the
DTP step. This should always be clarified prior to project start.
A.2.
DTP Page Rates
A.2.1.
Project tasks included in DTP page rates
(Tasks
in italics apply to agencies or freelance networks, but not to individual
freelancers)
Included
in per-page rates:
Infrastructure:
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•
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Provide
required hardware and software
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Preparation:
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•
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Review
handoff from Welocalize and raise queries if anything is missing or not
clear
|
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•
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Install
necessary applications for the
project
|
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•
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Install
necessary fonts for the project
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•
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Install
correct printer driver for the
project
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•
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Produce
a hardcopy of the original source files if this has not been
provided
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Production:
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•
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Apply
appropriate language templates, i.e. import paragraph and other styles
from either the original or previously localized
document
|
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•
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Ensure
the components of the page layout match the paragraph and character
styles, look and size of the original source
document
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•
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Adjust
page and line breaks; apply copy fit, if so
directed
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•
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Link
or embed localized graphics into the localized document, size
graphics
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•
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Check
that all callouts within and around graphics are visible and complete, and
that callout lines point to the correct
positions
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•
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Check
for correct punctuation
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•
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Check
the headers and footers for correct information/format and page
numbers
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•
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Generate
lists (Table of Contents, Index, List of figures and tables, etc...),
ensure the styles and entries are correct, and all ranges are
linked
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•
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Link
and check cross-references to the correct
paragraphs
|
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•
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Check
that variables are represented correctly and in the target
language
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•
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Adjust
part numbers, publication dates, etc. as
directed
|
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•
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Ensure
no languages are mixed in the
content
|
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•
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Ensure
no source language remains in the target language unless otherwise
directed
|
Quality
Assurance:
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•
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Put
QA workflow in place before commencing a project (the Supplier should
never expect or depend on Welocalize to carry out a final
QA)
|
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•
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Review
process which involves comparing a hard copy of the formatted localized
files to a hard copy of the original source files, as well as on-screen
review of cross-references and links. This step should involve a person
other than the original DTP
operator.
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•
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Query
management: submit timely queries to Welocalize or client validator and
implement answers
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•
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Complete
checklist or signoff sheet as
directed
|
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•
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Delivery
of flat PDF file for review
|
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•
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Implement
of Welocalize QA results and/or provide feedback on QA
results
|
|
•
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Implement
of one round of client validation
comments
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•
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Delivery
by email, FTP, collaboration portal or regular mail, according to
instructions provided
|
A.2.2.
Not included in per page rates
Activities
not listed above are not included in the per-page rates and may be charged by
resource on an hourly basis. For example:
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•
|
Creation
of template or style sheet
|
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•
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Implementation
of linguistic corrections
|
|
•
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Creation
and QA of PDFs with links or PostScript
*
|
|
•
|
Creation
of screen capture
|
|
•
|
Creation
of film output
|
|
•
|
Ensure
all changes received during the course of the project to date have been
entered
|
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•
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Conversion,
e.g. in S-Tagger or from word processing to publishing file format
*
|
A.2.3
Distinction between standard and complex DTP
To be
confirmed at the start of each project, based on following
guidelines:
|
•
|
According
to application used: typically (but not always), formatting in Word and
FrameMaker is standard DTP; formatting in Quark Xpress, InDesign,
PageMaker or Interleaf is complex
DTP.
|
|
•
|
According
to tasks: typically, standard DTP applies when formatting from the source
files has been preserved but needs to be tidied up; complex DTP applies
when formatting is done from
scratch.
|
* For
some resources or accounts, page rates may be negotiated to include these
activities. This only applies if stated explicitly. For example, some DTP
resources have specific page rates for PostScript and/or PDF creation, whereas
others may include this in the DTP page rates.
|
SCHEDULE B - LANGUAGE QUALITY
CRITERIA
|
Welocalize
reserves the right to request a written copy of the Supplier's Quality Assurance
Process.
The
standard quality evaluation applied on translation work, called Language Quality
Assessment (LQA), consists of an objective error count based on a sample of the
total work. The LQA process currently applies a number of error criteria,
severity levels and metrics. As quality requirements evolve and new quality
methodologies are developed, Welocalize reserves the right, at its sole
discretion, to determine which level of quality assessment and which error
threshold will be applied to the work delivered by the Supplier.
The
definitions of the error categories are:
•
Accuracy - Errors
of the Accuracy category indicate translation errors. They are normally detected
by comparing the source and target texts.
•
Language - Errors of the Language category indicate language errors. Usually,
these are deviations from generally accepted language conventions such as
punctuation, spelling, or grammar.
•
Terminology -
Errors of the Terminology category indicate compliance errors. Usually, these
are deviations from an approved translation glossary or industry-specific term
usage.
• Style -
Errors of the Style category indicate compliance errors or poor readability of
the target language due to register and tone. Usually, these are deviations from
an approved style guide or from the general style required by the
text.
• Country
- Errors of the Country category indicate localization errors, i.e. the
translation is not appropriate for the target culture or market or does not
conform to the localization standards in use in the target country.
•
Functional - Errors of the Functional category usually indicate technical,
non-language-related errors as a direct result of the translation process such
as deletion or misplacement of tags, links or codes.
The
definitions of error severity levels are:
•
Major
errors - Major errors are blatant and severe errors that jeopardize, invert or
distort the meaning of a translation. Major errors are severe failures in
accuracy, compliance, or language. Examples include:
|
|
•
|
Any
statement that can be potentially
offensive
|
|
|
•
|
Errors
that endanger the integrity of data or the health/safety of
users
|
|
|
•
|
Errors
that modify or misrepresent the functionality of the device or
product
|
|
|
•
|
Errors
that clearly show that the client's and/or Welocalize's instructions
haven't been followed
|
|
|
•
|
Errors
that appear in a High Visibility Portion and/or is numerously
repeated
|
|
|
•
|
Grammar
or syntax errors that are gross violations of generally accepted language
conventions
|
•
Minor errors -
Minor errors are all errors that do not fall in the major error category as
defined above or are merely preferential changes. Examples include:
|
|
•
|
Accuracy
errors that result in a slight change in
meaning
|
|
|
•
|
Small
errors that would not confuse or mislead a user but could be
noticed
|
|
|
•
|
Formatting
errors not resulting in a loss of meaning, e.g. wrong use of bold or
italics
|
|
|
•
|
Wrong
use of punctuation or capitalization not resulting in a loss of
meaning
|
|
|
•
|
Generic
error to indicate generally inadequate style (e.g. literal translation,
"stilted" style, etc.)
|
|
|
•
|
Grammar
or syntax errors that are minor violations of generally accepted language
conventions
|
|
|
•
|
Typos
and misspellings that do not result in a loss of
meaning
|
As the
LQA process is based on a sample of the translation, it is possible that the LQA
result is not representative of the overall quality of the translation.
Therefore even if an LQA result or any other QA check meets expectations, it
cannot automatically be considered as an acceptance of the work by
Welocalize.
|
SCHEDULE
C - SCALE OF PENALTIES
|
|
Late
Delivery Penalties
|
|
12-24
Hour Delivery Delay
|
5%
reduction in total PO value
|
|
25-48
Hour Delivery Delay
|
10%
reduction in total PO value
|
|
49-72
Hour Delivery Delay
|
15%
reduction in total PO value
|
|
73
Hours Delivery Delay or More
|
Welocalize
reserves the right, in its sole discretion, to re-assign the work to
another Supplier and void the
PO.
|
|
Service
Quality Penalties
|
|
Scenario
One
|
|
|
•
Work delivered by Supplier does not meet quality expectations
as defined in Sections 3.1, 7.1 and Schedule
B
•
Supplier
is deemed capable and available to remediate non-compliance in the
required time frame
|
•
Immediate
re-work at the Supplier's expense and re-delivery of corrected work to
Welocalize
•
5%
reduction in total PO value
•
If
re-work still renders non-compliance, Welocalize reserves the right, in
its sole discretion, to void the PO
|
|
Scenario
Two
|
|
|
•
Work
delivered by Supplier does not meet quality expectations as defined in
Sections 3.1, 7.1 and Schedule
B
•
Supplier
is deemed capable but unavailable to remediate non-compliance in the
required time frame
|
•
15%
reduction in total PO value
|
|
Scenario
Three
|
|
|
•
Work
delivered by Supplier does not meet quality expectations as defined in
Sections 3.1, 7.1 and Schedule
B
•
Supplier
is deemed incapable of remediating non-compliance in the required time
frame
|
•
Welocalize
reserves the right, in its sole discretion, to void the
PO
|
CONFIDENTIAL
AND PROPRIETARY
Welocalize,
Inc
MUTUAL
NON-DISCLOSURE AGREEMENT
THIS
MUTUAL NON-DISCLOSURE AGREEMENT (the "Agreement"), is made this
19th day of December,
2007
by and between Welocalize, Inc., a Delaware Corporation
("Welocalize"), and
Targetek Co., Ltd.
("Supplier").
WHEREAS,
the Supplier will provide certain specialized services to include software
development, translation, localization and globalization consulting (the
"Services") for customers of Welocalize (each, a "Customer Company") or for
Welocalize and,
WHEREAS,
the Supplier will need to have access to certain proprietary technology and
materials (including methodologies, translation memory databases, software
programs and source code, identification names and passwords, documentation
and/or marketing materials or other business information) in order to evaluate
its strategy for delivering the Services and for actually delivering the
Services; and,
WHEREAS,
the Supplier and Welocalize consider such documents, identification names and
passwords, records, translation memory databases and information pertaining to
products confidential and do not want them disclosed to third
parties;
NOW,
THEREFORE IN CONSIDERATION of the mutual covenants and conditions herein
contained, the parties agree as follows:
1. OBLIGATION
NOT TO USE OR DISCLOSE
Both
parties agree to keep confidential all information concerning the other party's
business or its ideas, products, customers or services that could be considered
to be "Confidential Information," as such term is defined herein.
The
receiving party will not, during or subsequent to the term of this Agreement,
use the Confidential Information for any purpose whatsoever other than the
performance of the Services for the benefit of Welocalize, or disclose
Confidential Information to any third party other than its employees or
subcontractors who have a need to have access to and knowledge of the
Confidential Information solely in connection with the performance of Services
hereunder.
Prior to
disclosure, the receiving party shall have entered into non-disclosure
agreements with such employees and subcontractors having obligations of
confidentiality as strict as those contained in this Section, to ensure against
unauthorized use or disclosure of Confidential Information.
2. DEFINITION
OF CONFIDENTIAL INFORMATION
"Confidential
Information" shall be deemed to include any technology, proprietary information,
technical data, trade secrets and/or know-how, including, without limitation,
research, product plans, products, services, customers, customer lists, pricing,
revenue, markets, software, developments, inventions, processes, formulas,
technology, designs, drawings, engineering, hardware configuration information,
methodologies, translation memory databases, software programs and source code
including those licensed by Welocalize and made available to Supplier for the
purpose of facilitating Supplier's performance of services for Welocalize's or
its customers' benefit, identification names and passwords, documentation,
proprietary information belonging to third-party Welocalize customers or
licensors, and/or marketing, finances or other business information, disclosed
by the disclosing party either directly or indirectly in writing, orally,
electronically, or by drawings or inspection of parts or equipment, including
but not limited to any work product delivered hereunder, and other such
information which, by its nature, is normally understood to be
confidential.
CONFIDENTIAL
AND PROPRIETARY
Welocalize,
Inc
3. EXCLUSIONS
The
obligations described in Section 1 shall not extend to the
following:
|
|
•
|
Confidential
Information which at the time of disclosure is in the public
domain
|
|
|
•
|
Confidential
Information which after generation or disclosure is published or otherwise
becomes part of the public domain through no fault of the receiving party
(but only after and to the extent that it is published or otherwise
becomes part of the public domain)
|
|
|
•
|
Confidential
Information which either party can show was in its possession at the time
of generation or disclosure and was not acquired, directly or indirectly,
from the other party or from a third party under an obligation of
confidence
|
|
|
•
|
Confidential
Information which was received after the time of generation or disclosure
hereunder, from a third party who did not require that party to hold it in
confidence and who did not acquire it, directly or indirectly, from the
other party under an obligation of confidence;
and
|
|
|
•
|
Confidential
Information which the receiving party can show was developed independently
without benefit of, or being based on, information generated hereunder or
made available by the other party
|
4.
STANDARD OF CARE
Each
party shall exercise at least such care in protection of the confidential
information of the other as they exercise in the protection of Confidential
Information of their own, but in no event shall such party exercise less than
reasonable care in doing so.
It is the
Supplier's responsibility to notify Welocalize if and when an employee with
access to their identification names and passwords leaves the company.
Welocalize will reset the password upon notification.
5. ACTS
OF EMPLOYEES, FT AL.
Each
party shall be responsible for the acts or failures to act of its respective
employees, including in Supplier's case, any ex-employee possessed of
identification names and passwords as contemplated by Section 4
above,
6. RETURN
OF CONFIDENTIAL INFORMATION
Upon the
expiration or termination of this Agreement or upon the earlier demand of the
other party, each party agrees to return to the other all of the documents,
software source code, translation memory databases (TMs), discs, files, printed
materials and other Confidential Information provided hereunder, and all copies
thereof.
7. RIGHT
TO DISCLOSE; NO LICENSE
Each
party warrants to the other that it has the unqualified right to disclose to
each other the Confidential Information disclosed hereunder. All such
Confidential Information will remain the property of the disclosing party and
the receiving party will not acquire any rights to that confidential
information. No license or other rights in and to Confidential Information is
granted hereunder and neither of the parties hereto is under any obligation to
enter into any business/technical arrangement or agreement with the other party
by virtue of this Agreement or any disclosure hereunder, or in fact to make any
disclosure hereunder. In particular, this Agreement does not grant any right or
license, express or implied, to use Confidential Information except as permitted
by this Agreement, nor any right to license, express or implied, under any
patent, nor any right to purchase, distribute or sell any product.
8.
CLIENT CONTACT
Except
where expressly authorized by Welocalize, the Supplier shall not contact any
client for whom it is performing work through Welocalize.
CONFIDENTIAL
AND PROPRIETARY
Welocalize,
Inc
9.
NOTIFICATION OF PARTNER OWNERSHIP CHANGE. In the event of a change in ownership
of the Supplier pursuant to which the group of equity owners possessing a
majority of the equity interests of the company immediately prior to the change,
fails to possess a majority after the change, the Supplier shall immediately
notify Welocalize in writing about the change. This applies regardless of
context and regardless of the corporate form of Supplier — e.g., it applies to
partnerships, acquisitions, mergers and/or the bringing in of new investors,
etc.
10.
ASSIGNMENT. Neither party shall assign this Agreement (directly, indirectly, or
by operation of law as the result of a merger, sale of equity interest or
otherwise) without the other party's consent, and any attempt to do so shall be
void. Notwithstanding the foregoing, however, a party shall have the right to
assign this Agreement to an affiliate, provided the affiliate agrees in writing
to be bound by the terms of this Agreement, and provided that such assignment
shall not release the assigning party from its obligations
hereunder.
11.
NON-HIRING. During any period in which this Agreement is effective, and for
twelve (12) months thereafter, neither party will solicit any employee of the
other party for the purposes of offering employment. Each party shall promptly
notify the other of any communications with any personnel regarding
employment.
12.
NON-SOLICITATION. During the term of this Agreement and for twelve (12) months
thereafter, the Supplier agrees that it will not directly or indirectly approach
any Customer Company for whom it is providing Services with the intention of
providing such Services, or similar services, directly to the Customer Company.
All communication on projects and on the Services will be through Welocalize
project manager unless otherwise authorized by Welocalize in writing. The
Supplier will promptly notify Welocalize if the Supplier is approached directly
or indirectly by the Customer Company to perform the work for which it has been
engaged by Welocalize to perform for Customer Company, or by a competitor of
Welocalize to perform the work for which it has been engaged by Welocalize to
perform for Customer Company. This restriction does not apply with respect to
any service engagement between the Supplier (either directly or through other
MLVs) to a Customer Company in effect prior to the date of this
Agreement.
13.
PARTNER COMPLIANCE WITH LAWS. The Supplier shall not take any action, or fail to
warn Welocalize not to take any action when Supplier is possessed of advance
knowledge of Welocalize's intended action, where such action or failure to warn
may cause Welocalize to be in violation of any law in any jurisdiction in any
service area, or the U.S., Including but not limited to the U.S. Foreign Corrupt
Practices Act of 1977 as amended, the U.S. Export Control Laws and the U.S.
Anti-Boycott laws.
14.
INDEMNIFICATION; EQUITABLE RELIEF. The Supplier shall reimburse and indemnify
Welocalize for any losses or damages incurred by it as a result of any breach by
the Supplier of this Agreement. The Supplier acknowledges that monetary damages
may not be an adequate remedy for a breach of this agreement by the Supplier
and, consequently, that an injunction and/or other appropriate equitable relief
may be obtained to remedy a breach or threatened breach hereof.
15. TERM.
This Agreement commences on the Effective Date for an initial period of one year
and shall automatically renew on each anniversary of the Effective Date for
successive one-year periods, unless neither party has disclosed any Confidential
Information to the other party within the prior six (6) months. Notwithstanding
the foregoing, the obligations of confidentiality set forth in this Agreement
shall survive expiration of the Agreement for a period equal to the longer of
(a) three (3) years following the last disclosure of Confidential Information
made hereunder or, (b) if the Confidential Information constitutes a trade
secret under applicable law, for such time as it remains a trade secret. Nothing
in this Agreement shall be construed so as to require either party to disclose
any particular Confidential Information to the other.
16.
CHOICE OF LAW. This Agreement shall be governed in accordance with the laws of
the State of Maryland, United States of America, excluding principles of
conflict of laws. Each party agrees and consents to venue and jurisdiction in
connection with any action arising hereunder, or in connection herewith, solely
within the state courts sitting in Frederick County or Montgomery County,
Maryland or, if a federal action, the federal District Court for the District of
Maryland, in each case at the option of Welocalize.
CONFIDENTIAL
AND PROPRIETARY
Welocalize,
Inc
17.
MISCELLANEOUS. This Agreement constitutes the entire agreement between the
parties hereto and supersedes and cancels any prior agreements or
communications, whether oral or written, between the Parties hereto relating to
the subject matter hereof. This Agreement may not be changed, waived, discharged
or terminated orally, but only by an agreement in writing signed by the party
against which the enforcement of such change, waiver, discharge or termination
is sought. This Agreement may be executed in any number of counterparts, each of
which shall be deemed an original, and all of which shall be deemed to be one
and the same instrument.
IN
WITNESS HEREOF, the parties hereto by their duly authorized representatives have
executed this Agreement as of the date first written above.
|
Date:
__09/10/07__
|
|
Date:
__12/19/07__
|
|
|
|
|
|
|
|
Accepted
by:
|
|
Accepted
by:
|
|
|
|
|
Targetek Co., Ltd.
|
|
|
(Company
Name)
|
|
(Company
Name)
|
|
|
|
|
|
|
|
/s/
Olga Blasco
|
|
/s/
Wen-Hui Lee
|
|
|
(Signature)
|
|
(Signature)
|
|
|
Olga Blasco
|
|
Lee,
Wen-Hui
|
|
|
(Name)
|
|
(Name
Printed)
|
|
|
Director, Global Language
Services
|
|
Approved
Contract Officer
|
|
|
(Title)
|
|
(Title)
|
|
|
52-2212421
|
|
|
|
|
(Federal
ID#)
|
|
(Federal
ID# or Tax ID)
|
|
|
241 East 4th Street. Suite
207
|
|
11F,
No. 216, Sec. 2,
|
|
|
Frederick. Maryland 21701
|
|
Nanjina E. Rd., Taipei 10489.
Taiwan
|
|
|
(Address)
|
|
(Address)
|
|
4
Exhibit
10.8
Agent
sales contract for large sales channel between Anteya Technology Corporation and
UP-TECH Technology Co., Ltd.
Contract
No. UP200808010001
Date:
August 19, 2008
Contracting
parties:
This
Contract entered into this day
of , 2009, by and between Anteya Technology
Corporation with business address at 101-5 Meishan Road, Niaosong Township,
Kaohsiung County (hereinafter referred to as “Party A”) and UP-TECH Technology
Co., Ltd. with business address at 6-1 Gaoshuang Road, Pingzhen City, Taoyuan
County (hereinafter referred to as “Party B”). Party A licensed Party B for sale
of LED related products produced by Party A (hereby referred to as the contract
target) on large sales channels in the Taiwan area. The parties have agreed to
abide by the following terms and conditions:
Article
1: Contract target:
The
target products of the contract by Anteya Technology Corporation include MR16
monocolor lamp, E27 monocolor lamp, MR16 varied color lamp, E27 varied color
lamp, varied color torch and tiny night lamps and relevant LED related products.
Party A shall be responsible for production of target products of the contract
and its peripheral accessories, relevant product certification and development.
Party B shall be responsible for sales and assist with maintenance and
development of the large sales channel market.
Article
2: Contract period and contract termination:
|
|
1.
|
The
valid period of the contract shall be two years (from the effective date
after applying seal by both parties to August 31, 2010). Without consent
of both parties neither party has the right to terminate the contract in
advance and within 30 days before expiration of the valid period, if both
parties do not notify the opposite party for termination, the contract
shall be automatically extended for another
year.
|
|
|
2.
|
Without
written consent of the opposite party, neither party has the right to
unilaterally terminate the contract in
advance.
|
|
|
3.
|
Either
party has the right to terminate this contract if the opposite party is in
breach of the contract or for reasons attributable to the opposite party
under the premise of clarifying the account books of both
parties.
|
Article
3: Licensing regions and distributors:
|
|
1.
|
According
to terms agreed by both parties, Party B agrees to license to Party B as
the primary sales agent for large sales channels. If Party B has
registered a monthly shipment of 10,000 units 3 months in a row by a
specific sales channel, then Party B is entitled to sole agent sales
right.
|
|
|
2.
|
Large
sales channels is defined as large chain stores (such as RT-Mart, Tsann
Kuen, E-Life, B&Q, Homebox, etc.), large internet sales channels (such
as PCHOME, YAHOO, PayEasy, Mobile01, various credit cards, mail order and
department store member, gifts, etc.), TV shopping (such as Eastern Home
Shopping, Viva, momo, etc.)
customers.
|
|
|
3.
|
For
other large sales channel customers not defined, Party B may file
applications and start selling if Party A confirms no conflict of
customers and has agreed to its
application.
|
|
|
4.
|
During
the contract period, if Party B has successively failed to achieve the
sales target agreed by both parties in a specific period or the sales
channel development performance, Party A has the right to propose changes
to the licensed content and scope; and change adjustment maybe made after
agreement by both parties.
|
Article
4: Responsibility and obligations:
|
|
1.
|
Party
B is a legal product sales agent for Party A and is entitled to relevant
rights and obligations of a sales agent as stipulated in the
contract.
|
|
|
2.
|
Party
B shall be responsible for product promotion education, maintenance of
operation and development management of customers in the target regions of
the contract, and regularly provide production and sales
forecast.
|
|
|
3.
|
If
required, Party A shall provide product certification and licensing
documents of the contract target to Party B to facilitate Party B’s sales
development.
|
|
|
4.
|
Both
Party A and Party B agree to have the sales agent system for execution of
sales operation. Party B shall procure goods from Party A in accordance
with the production/sales forecast and procurement cost price agreed by
both parties. Both parties shall negotiate and sign relevant attachments
related to cost and sales cost pursuant to the time of putting the product
on the market and cost changes.
|
|
|
5.
|
Product
advertising and propaganda plan shall be planned, produced and executed in
the channels by the marketing planning department of Party B. Party B may
present product advertising, product exhibition and propaganda
requirements in accordance with market promotion strategies and after
negotiation of contents by both parties, Party A should provide necessary
technical data, product, personnel or training assistance in accordance
with the content of the contract.
|
|
|
6.
|
Party
A shall assign a single contact window to assist Party B with relevant
ordering and shipment flow before and after ordering by
sales.
|
|
|
7.
|
Prior
to putting the product on the market, Party A shall notify Party B within
an appropriate lead time to facilitate market planning, and dispatch
dedicated personnel to Party B for educational training of new products
and provide supplementary sales information if
needed.
|
|
|
8.
|
Party
B shall be responsible for operating and developing the sales amount of
the various sales points and regularly visit the various sales channels
every month.
|
Article
5: Ordering and acceptance
|
|
1.
|
At
signature of the contract Party B shall provide shipping forecast for the
following season according to the seasonal shipping forecast in accordance
with agreement reached at the production/sales meeting by both parties
pursuant to circumstances of the product putting on the market, and revise
the next seasonal and monthly forecast every month. Party B shall procure
certain quantities for the following month in accordance with the monthly
forecast, and Party A shall produce the committed quantity and notify
Party B the required time for
delivery.
|
|
|
2.
|
Party
B may carry out incoming sampling inspection for products provided by
Party A, and if the defective rate is higher than 0.5% in the course of
acceptance inspection, Party A shall provide explanation or revise the
plan within 7 working days in accordance with the contract, and
voluntarily revise the plan until Party B confirms acceptance inspection.
If it fails in a short time and affects the sales channel, Party A shall
provide equivalent proportional spare parts to maintain smooth sales of
the channels.
|
|
|
3.
|
Delivery
by Party A shall be confirmed after acceptance by Party B, and if quality
defects, shoddy packaging, shortage in quantity, missing parts or other
nonconformances are found during sampling inspection by Party B, latter
may return the commodities or demand replacement of new
commodities.
|
|
|
4.
|
In
the event the commodities are good but afterwards during sales by Party B
or if defects, missing parts or other nonconformances are found which is
not attributable to Party B after consumers bought the commodities, Party
A shall also be responsible in accordance with afore-mentioned
provision.
|
|
|
5.
|
If
there are requirements for exhibition by the sales channels, and Party B
requires to design and to provide exhibition of commodities or platform,
Party B may ask Party A to provide necessary assistance, and after
negotiation of agreed content, Party A shall provide necessary technical
data, product, personnel or training assistance in accordance with the
negotiated content.
|
Article
6: Delivery:
|
|
1.
|
Generally
ordering shall be based on the monthly orders of Party B and Party A shall
honor the monthly shipping time.
|
|
|
2.
|
In
the event of urgent orders, generally within the scope of handling, Party
A shall commit to deliver within 10 calendar days after ordering or within
20 calendar days if required to prepare the
goods.
|
|
|
3.
|
Upon
receipt of Party B’s procurement orders, Party A shall deliver the
commodities contracted by Party B to any specified places within Taiwan
island or to the warehouses of various sales channels and transportation
fee shall be assumed by Party A as
provided.
|
|
|
4.
|
Except
for natural disasters, earthquake or force majeure or reasons attributable
to Party B, Party A shall deliver the goods according to schedule, and in
the event of delay in delivery it is necessary to solicit agreement of
Party B in advance. For delay in delivery or poor quality of commodities
and caused loss to Party B, Party A shall be liable for civil
indemnification.
|
|
|
5.
|
On
the delivery note Party A shall clearly state the procurement order number
and attached with invoice for the goods delivered, one invoice for one
delivery note to facilitate computer
operation.
|
|
|
6.
|
Commodities
delivered by Party A shall be products ordered by Party B. If Party A
supplied goods at random, Party B shall not be responsible for keeping the
products, and if Party A does not comply with afore-mentioned provision,
Party B will not place order and directly return the goods and the
transportation fee shall be paid by Party A; and Party B shall not be
accountable for any loss or missing
parts.
|
|
|
7.
|
In
the event of personnel changes and departure of Party A, it is necessary
to use written notification or email to notify Party B and if disputes
arise therefrom, Party A shall take up full responsibility and not shirk
responsibility to the departed
personnel.
|
Article
7: Delivery cost and payment:
|
|
1.
|
By
mutual agreement, the product sales target and delivery cost shall be as
per quotation attached by Party A.
|
|
|
2.
|
Upon
determination of above prices, both parties shall negotiate and sign
quotation in accordance with market competition and cost
changes.
|
|
|
3.
|
If
Party B has sales cases with lower selling cost than that provided by
Party A or OEM and ODM customers, both parties agree to define them as
specific projects. Sales of specific projects shall be managed in
accordance with specific projects through mutual communication. Prior to
commencement of a specific project, both parties shall discuss and
coordinate schedule for packaging and transportation regarding the
specific project, sales forecast and delivery cost. And no party shall
raise objections after consent.
|
|
|
4.
|
Through
consultation, both parties shall agree to the 60 day payment by Party B on
a monthly basis to be paid by check to Party A for the goods. If shipment
by Party B reached 10,000 units 3 months in a row, Party B shall pay Party
A by check on a 90 day payment term on a monthly
basis.
|
|
|
5.
|
Party
B shall work out the monthly payment to Party A according to latter’s
monthly statement. Before the 10
th
day of the following month, Party A shall provide statement with return
postage to Party B and after verified to be correct, Party B shall pay
Party A with check before the 25
th
day of the following month. If the payment day is a holiday, payment will
be postponed one working day to complete
payment.
|
Article
8: After-sales service:
Party A
agrees to perform following services:
|
|
1.
|
Commodity
warranty: Provision of free maintenance service for 15 months commencing
from the day of arrival of goods. Transportation fee for repaired goods:
During the warranty period, transportation fee for shipping to Party A for
maintenance shall be paid by Party B, and upon completion of maintenance
Party A shall be responsible for sending back the repaired goods to Party
B with postage paid by Party A. Relevant expenses shall be paid by Party B
if the warranty period has passed.
|
|
|
2.
|
DOA:
If failure is not due to human factors, Party A shall provide replacement
service for all goods dead on arrival within 30 days commencing from the
day of arrival of goods, or use reject to
handle.
|
|
|
3.
|
Time
for repair: Within the warranty period, Party A shall repair the
commodities within 7 working days from receipt of goods in failure and
repair free of charge or return new products to Party B. If the warranty
period has passed, Party A shall charge Party B in accordance with the
service charge standard.
|
|
|
4.
|
Provision
of spare parts: Spare parts for repair shall be provided by products in
Party B’s inventory and to be mailed back to Party A by batches. Party A
shall assign a single contact window for service, and upon receipt of
maintenance goods, Party A shall reply the repair progress within 3
working days after receipt by the receiving unit of Party A, and complete
repair and maintenance as soon as possible in accordance with the warranty
conditions or execute replacement.
|
Article
9: Change or amendment of contract:
|
|
1.
|
Any
change, amendment, termination or transfer shall be effected through
consultation between Party A and Party B with written notice. Any remarks
to the contract shall be signed by representatives with legal
authorization and attached to the contract. Any remarks shall be equally
valid with the contract itself.
|
Article
10: Confidentiality agreement
Both
parties shall keep confidential all sales content and information and shall not
disclose to any competitors or any concerned third party. Knowledge from
signature, storage and fulfillment of the contract or holding of any information
of the opposite party (including but not limited to commercial information,
financial information, IPR, sales secret and commercial actions, etc.) shall be
kept strictly confidential and shall not disclose to any other third party by
any means except required by law or with written consent by both
parties.
|
|
1.
|
Except
for fulfillment of the contract, both parties shall not use the
afore-mentioned information. In the event of damage caused to the opposite
party, the party in breach of the contract shall be responsible for all
compensation for damages caused.
|
|
|
2.
|
Both
parties shall use necessary measures to safeguard the known confidential
information and admonish all employees to abide by obligations to keep the
information confidential.
|
|
|
3.
|
The
obligation of keeping the information confidential shall be valid within a
year after termination of the
contract.
|
Article
11: Provision of copyright:
Party A
agrees Party B to use its copyright in provision of product information to
complete relevant articles for marketing but require to obtain consent of Party
A in advance. Party A declares that information provided to Party B using to
complete works will not harm any third party. And if Party B suffers loss from
infringement of the right of any third party, Party A shall be responsible for
any indemnity. If Party B uses the trademark or other source materials of Party
A without permission of latter and caused tangible and intangible losses to
Party A or its customers, Party B shall be unconditionally responsible for
relevant indemnities.
Article
12: Use of trademark
It is
required to have permission of Party A if its registered trademark is required
to use on commodities or packaging, container, label, manual, pricelist or any
other similar articles and held or displayed, disseminated or used in TV,
broadcast and press advertisement or for participation in
exhibition.
Article
13: Attachment
Both
parties agree to have Kaohsiung district court as the first tribunal of
jurisdiction. For matters not specified in this contract, relevant laws and
regulations shall apply or both parties shall reach another written agreement
with the greatest faith. Any written agreement shall be considered an additional
or amended provision to this contract.
Article
14: This contract is made in two (2) originals, and each party holds one
original for record.
Contracting
parties:
Party A:
Anteya Technology Corporation
Unified
Invoice No.: 80133919
Representative:
Wu Dingfeng
Address:
101-5 Meishan Road, Niaosong Township, Kaohsiung
County 833
Tel:
07-7332500
Party B:
UP-TECH Technology Co., Ltd.
Unified
Invoice No.: 97356553
Representative:
Yu Yuanming
Address:
6-1 Gaoshuang Road, Pingzhen City, Taoyuan County 324
Tel:
03-2813206
Exhibit
23.1
CONSENT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We
consent to the incorporation by reference in Registration Statement No.
333-148005 of Sparking Events, Inc. of the following reports
appearing in this Form 8-K:
Audited
financial statements of Xodtec Technology, Inc as of and for the year ended
December 31, 2008, report dated April 1, 2009.
Audit
financial statements of Targetek Co., Ltd. as of and for the years ended
December 31, 2008 and December 31, 2007, report dated April 1,
2009.
Audited
financial statements of Up-Tech Technology Co., Ltd. as of and for the years
ended December 31, 2008 and December 31, 2007, report dated April 1,
2009.
Compiled
unaudited pro forma condensed combined financial statements of Sparking Events,
Inc. as of and for the nine months ended November 30, 2008 and for
the year ended February 29, 2008, report dated April 20, 2009.
/s/
Brock, Schechter & Polakoff, LLP
Exhibit
99.1
XODTEC
TECHNOLOGY, INC.
FINANCIAL
STATEMENTS
DECEMBER
31, 2008 AND DECEMBER 31, 2007
COMPANY
ADDRESS:
11F,
NO.216, NANHING E. RD.
TAIPEI
CITY, TAIWAN (R.O.C.)
COMPANY
TEL : (02)2507-6690
XODTEC
TECHNOLOGY, INC.
CONTENTS
|
|
Page
|
|
|
|
|
Independent
Auditors’ Report
|
1
|
|
|
|
|
Balance
Sheets
|
2
|
|
|
|
|
Statements
of Income
|
3
|
|
|
|
|
Statements
of Changes in Stockholders’ Equity (Deficit)
|
4
|
|
|
|
|
Statements
of Cash Flows
|
5
|
|
|
|
|
Notes
to Financial Statements
|
6-10
|
Independent
Auditors’ Report
To the
Stockholders of
Xodtec
Technology, Inc.
We have
audited the accompanying balance sheet of Xodtec Technology, Inc. as of December
31, 2008, and the related statements of income, changes in stockholders’ equity
(deficit), and cash flows for the years then ended. These financial
statements are the responsibility of the Company’s management. Our
responsibility is to express an opinion on these financial statements based on
our audits. The financial statements of Xodtec Technology, Inc. for
the year ended December 31, 2007 were audited by other auditors whose report
thereon, dated February 28, 2008, expressed an unqualified opinion.
We
conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Xodtec Technology, Inc. as of
December 31, 2008 and the results of its operations and its cash flows for the
years then ended in conformity with U.S. generally accepted accounting
principles.
/s/
Brock, Schechter & Polakoff, LLP
Buffalo,
New York
April
1, 2009
|
Xodtec
Technology, Inc.
|
|
Financial
Statements
|
Balance
Sheets
|
|
|
December
31,
|
|
|
|
|
2008
|
|
|
%
|
|
|
2007
|
|
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
and cash equivalents
|
|
$
|
7,281
|
|
|
|
2
|
|
|
$
|
4,745
|
|
|
|
7
|
|
|
Accounts
receivable, net
|
|
|
290,550
|
|
|
|
65
|
|
|
|
-
|
|
|
|
-
|
|
|
Other
receivable
|
|
|
43
|
|
|
|
-
|
|
|
|
1,850
|
|
|
|
3
|
|
|
Inventories
|
|
|
11,733
|
|
|
|
3
|
|
|
|
-
|
|
|
|
-
|
|
|
Prepaid
expenses
|
|
|
42,746
|
|
|
|
9
|
|
|
|
17,643
|
|
|
|
24
|
|
|
Total
current assets
|
|
|
352,353
|
|
|
|
79
|
|
|
|
24,238
|
|
|
|
34
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fixed
assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost
|
|
|
84,865
|
|
|
|
19
|
|
|
|
38,930
|
|
|
|
54
|
|
|
Less:
accumulated depreciation
|
|
|
( 23,679
|
)
|
|
|
( 5
|
)
|
|
|
( 15,175
|
)
|
|
|
( 21
|
)
|
|
Net
fixed assets
|
|
|
61,186
|
|
|
|
14
|
|
|
|
23,755
|
|
|
|
33
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Refundable
deposits
|
|
|
15,442
|
|
|
|
3
|
|
|
|
23,913
|
|
|
|
33
|
|
|
Deferred
charges
|
|
|
18,359
|
|
|
|
4
|
|
|
|
-
|
|
|
|
-
|
|
|
Total
other assets
|
|
|
33,801
|
|
|
|
7
|
|
|
|
23,913
|
|
|
|
33
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
447,340
|
|
|
|
100
|
|
|
$
|
71,906
|
|
|
|
100
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities
& Stockholders' Equity (Deficit)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
15,756
|
|
|
|
4
|
|
|
$
|
3,333
|
|
|
|
4
|
|
|
Accrued
expenses
|
|
|
36,207
|
|
|
|
8
|
|
|
|
21,261
|
|
|
|
30
|
|
|
Related
party payable
|
|
|
559,805
|
|
|
|
125
|
|
|
|
479,304
|
|
|
|
667
|
|
|
Other
current liabilities
|
|
|
2,962
|
|
|
|
-
|
|
|
|
342
|
|
|
|
-
|
|
|
Total
liabilities
|
|
|
614,730
|
|
|
|
137
|
|
|
|
504,240
|
|
|
|
701
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders'
equity (deficit)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common
stock
|
|
|
31,686
|
|
|
|
7
|
|
|
|
31,686
|
|
|
|
44
|
|
|
Accumulated
deficit
|
|
|
( 199,035
|
)
|
|
|
( 44
|
)
|
|
|
( 460,537
|
)
|
|
|
( 640
|
)
|
|
Accumulated
other comprehensive income
|
|
|
( 41
|
)
|
|
|
-
|
|
|
|
( 3,483
|
)
|
|
|
( 5
|
)
|
|
Total
stockholders' equity (deficit)
|
|
|
( 167,390
|
)
|
|
|
( 37
|
)
|
|
|
( 432,334
|
)
|
|
|
( 601
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
447,340
|
|
|
|
100
|
|
|
$
|
71,906
|
|
|
|
100
|
|
The
accompanying notes to financial statements are an integral part of these
statements.
|
Xodtec
Technology, Inc.
|
|
Financial
Statements
|
Statements
of Income
|
|
|
For
the Years Ended December 31,
|
|
|
|
|
2008
|
|
|
%
|
|
|
2007
|
|
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales-net
|
|
$
|
730,969
|
|
|
|
100
|
|
|
$
|
-
|
|
|
|
-
|
|
|
Cost
of goods sold
|
|
|
(200,249
|
)
|
|
|
(27
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
profit
|
|
|
530,720
|
|
|
|
73
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses
|
|
|
(268,533
|
)
|
|
|
(37
|
)
|
|
|
(197,687
|
)
|
|
|
-
|
|
|
Research
and development expenses
|
|
|
(690
|
)
|
|
|
-
|
|
|
|
(65,738
|
)
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
income (loss)
|
|
|
261,497
|
|
|
|
36
|
|
|
|
(263,425
|
)
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-operating
income and gains
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
income
|
|
|
2
|
|
|
|
-
|
|
|
|
6
|
|
|
|
-
|
|
|
Rent
income
|
|
|
-
|
|
|
|
-
|
|
|
|
17,577
|
|
|
|
-
|
|
|
Miscellaneous
income
|
|
|
3
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
5
|
|
|
|
-
|
|
|
|
17,583
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-operating
expenses and losses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Miscellaneous
expenses
|
|
|
-
|
|
|
|
-
|
|
|
|
(52
|
)
|
|
|
-
|
|
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(52
|
)
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
(loss) before income taxes
|
|
|
261,502
|
|
|
|
36
|
|
|
|
(245,894
|
)
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
tax expense
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income (loss)
|
|
$
|
261,502
|
|
|
|
36
|
|
|
$
|
(245,894
|
)
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings
per share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
earnings per share
|
|
$
|
2.62
|
|
|
|
|
|
|
$
|
(2.46
|
)
|
|
|
|
|
The
accompanying notes to financial statements are an integral part of these
statements.
|
Xodtec
Technology, Inc.
|
|
Financial
Statements
|
Statements
of Changes in Stockholders’ Equity
|
Items
|
|
Common
Stock
|
|
|
Accumulated
Deficit
|
|
|
Accumulated
Other Comprehensive Income
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance
at January 1, 2007
|
|
$
|
31,686
|
|
|
$
|
(214,643
|
)
|
|
$
|
(1,964
|
)
|
|
$
|
(184,921
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change
in translation adjustments
|
|
|
-
|
|
|
|
-
|
|
|
|
(1,519
|
)
|
|
|
(1,519
|
)
|
|
Net
loss for 2007
|
|
|
-
|
|
|
|
(245,894
|
)
|
|
|
-
|
|
|
|
(245,894
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance
at December 31, 2007
|
|
|
31,686
|
|
|
|
(460,537
|
)
|
|
|
(3,483
|
)
|
|
|
(432,334
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change
in translation adjustments
|
|
|
-
|
|
|
|
-
|
|
|
|
3,442
|
|
|
|
3,442
|
|
|
Net
income for 2008
|
|
|
-
|
|
|
|
261,502
|
|
|
|
-
|
|
|
|
261,502
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance
at December 31, 2008
|
|
$
|
31,686
|
|
|
$
|
(199,035
|
)
|
|
$
|
(41
|
)
|
|
$
|
(167,390
|
)
|
The
accompanying notes to financial statements are an integral part of these
statements.
|
Xodtec
Technology, Inc.
|
|
Financial
Statements
|
Statements
of Cash Flows
|
|
|
For
the Years Ended
|
|
|
|
|
December
31,
|
|
|
|
|
2008
|
|
|
2007
|
|
|
|
|
|
|
|
|
|
|
Cash flows from operating
activities
|
|
|
|
|
|
|
|
Net
income (loss)
|
|
$
|
261,502
|
|
|
$
|
(245,894
|
)
|
|
Adjustments
to reconcile net income (loss) to net cash used in operating
activities
|
|
|
|
|
|
|
|
|
|
Depreciation
|
|
|
8,723
|
|
|
|
7,145
|
|
|
(Increase)
in accounts receivable
|
|
|
(292,154
|
)
|
|
|
-
|
|
|
Decrease
(increase) in other receivable
|
|
|
1,796
|
|
|
|
(1,846
|
)
|
|
(Increase)
in inventories
|
|
|
(11,798
|
)
|
|
|
-
|
|
|
(Increase)
in prepayments
|
|
|
(25,442
|
)
|
|
|
(8,095
|
)
|
|
(Increase)
decrease in refundable deposits
|
|
|
8,246
|
|
|
|
(15,549
|
)
|
|
Increase
(decrease) in accounts payable
|
|
|
12,530
|
|
|
|
(153,673
|
)
|
|
Increase
in accrued expenses
|
|
|
15,270
|
|
|
|
5,327
|
|
|
Increase
(decrease) in other current liabilities
|
|
|
2,639
|
|
|
|
(5,897
|
)
|
|
Net
cash used in operating activities
|
|
|
(18,688
|
)
|
|
|
(418,482
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from investing
activities
|
|
|
|
|
|
|
|
|
|
Acquisition
of fixed assets
|
|
|
(46,631
|
)
|
|
|
(2,139
|
)
|
|
(Increase)
in deferred charges
|
|
|
(18,460
|
)
|
|
|
-
|
|
|
Net
cash used in investing activities
|
|
|
(65,091
|
)
|
|
|
(2,139
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from financing
activities
|
|
|
|
|
|
|
|
|
|
Increase
in related party payable
|
|
|
86,382
|
|
|
|
424,740
|
|
|
|
|
|
|
|
|
|
|
|
|
Effect
of exchange rate changes
|
|
|
(67
|
)
|
|
|
15
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
increase in cash and cash equivalents
|
|
|
2,536
|
|
|
|
4,134
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
and cash equivalents - beginning of year
|
|
|
4,745
|
|
|
|
611
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
and cash equivalents - end of year
|
|
$
|
7,281
|
|
|
$
|
4,745
|
|
The
accompanying notes to financial statements are an integral part of these
statements.
|
Xodtec
Technology, Inc.
|
|
Notes
to Financial Statements
|
|
|
1.
|
Organization
and Operations
|
Xodtec
Technology, Inc. (the Company) was incorporated as a company limited by shares
under the provision of the Company Law of the Republic of China on February 17,
2005. As of December 31, 2008, the Company’s common stock of $31,686
is represented by 100,000 issued and outstanding shares with a par value of
$0.317 per share. The Company operates out of the Republic of
China.
The
Company designs, manufactures, markets and sells advanced lighting solutions,
including light emitting diode (LED) and energy-saving lighting. The Company
offers a broad range of technically innovative white light, color-changing and
fixed-color lighting solutions that are used for applications in commercial,
residential, public gardening, architectural, and entertainment markets. The
Company’s lighting solutions provide many benefits over traditional
incandescent, halogen and fluorescent light sources, including lower energy
consumption, longer life spans, absence of hazardous materials, decreased
maintenance costs and greater design flexibility.
As of
December 31, 2008 and December 31, 2007, the Company had 12 and 5 employees,
respectively.
|
|
2.
|
Summary
of Significant Accounting Policies
|
Foreign
Currency Translation
The
carrying amounts of the Company’s assets, liabilities, equity and results of
operations have been translated from the New Taiwan dollar, which is the
Company’s functional currency, into the U.S. dollar using the current rate
method.
Cash
Equivalents
For the
purpose of the statement of cash flows, the Company considers all highly liquid
investments to be cash equivalents.
Accounts
Receivable and Allowance for Doubtful Accounts
Accounts
receivable are carried at their estimated collectible amounts. Trade
credit is generally extended on a short-term basis, thus accounts receivable do
not bear interest, although a finance charge may be applied to such receivables
that are past due. Bad debts are provided on the allowance method
based on historical experience and management’s evaluation of outstanding
accounts receivable. The allowance for doubtful accounts at December
31, 2008 and December 31, 2007 was $-0-.
Inventory
Inventories
of finished goods are stated at the lower of cost (weighted average method) or
market.
Fixed
Assets
All fixed
assets are stated at cost. Significant renewals and improvements are
treated as capital expenditures and maintenance and repairs are charged to
expense as incurred.
Depreciation
is provided on straight-line method based on the estimated useful lives and
salvage values of the assets, ranging from 2 to 5 years.
Revenue,
Costs and Expenses
Revenues
are recognized when the earning process is substantially completed and they are
realized or realizable. Costs and expenses are recognized as
incurred.
|
Xodtec
Technology, Inc.
|
|
Notes
to Financial Statements
|
|
|
2.
|
Summary
of Significant Accounting Policies
(Continued)
|
Research
and Development Costs
Research
and development costs are expensed as incurred.
Taxes
Collected from Customers
The
Company presents revenue net of sales, use, and excise taxes collected from
customers.
Advertising
Advertising
costs are expensed as incurred.
Income
Taxes
Current
- The Company
follows the practice of providing for income taxes based on amounts reportable
for income tax purposes.
Deferred
- The
recognition of income and expenses in different periods for financial accounting
and tax purposes gives rise to timing difference that result in deferred
taxes.
Uncertain
Tax Positions
Management
has elected to defer the application of FAS FIN 48,
Accounting for Uncertain Tax
Positions
, in accordance with FSP FIN 48-3. The Company will
continue to follow FAS 5,
Accounting for Contingencies
,
until it adopts FIN 48.
Use
of Estimates
The
preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect certain reported amounts and disclosures. Accordingly, actual
results could differ from those estimates.
Reclassification
Certain
accounts in the 2007 financial statements have been reclassified to conform to
the 2008 financial statement presentation.
|
|
3.
|
Recent Accounting
Pronouncements
|
In May
2008, the FASB released SFAS No. 162, “The Hierarchy of Generally Accepted
Accounting Principles”. This statement identifies the sources of accounting
principles and the framework for selecting the accounting principles used in the
preparation of financial statements of nongovernmental entities that are
presented in conformity with generally accepted accounting principles in the
United States. SFAS No. 162 is effective 60 days after the SEC’s approval of the
Public Company Accounting Oversight Board amendments to AU Section 411, “The
Meaning of Present Fairly in Conformity with Generally Accepted Accounting
Principles”. The Company does not expect the implementation of this
guidance to have a material impact on the financial statements.
In March
2008, the FASB issued SFAS No. 161, “Disclosures about Derivative Instruments
and Hedging Activities-an amendment of FASB Statement No. 133”. SFAS No. 161
gives financial statement users better information about the reporting entity's
hedges by providing for qualitative disclosures about the objectives and
strategies for using derivatives, quantitative data about the fair value of and
gains and losses on derivative contracts, and details of credit-risk-related
contingent features in their hedged positions. SFAS No. 161 is effective for
financial statements issued for fiscal years beginning after November 15, 2008
and interim periods within those years. The Company does not expect the adoption
of SFAS No. 161 to have a material effect on the financial
statements.
|
Xodtec
Technology, Inc.
|
|
Notes
to Financial Statements
|
|
|
3.
|
Recent
Accounting Pronouncements
(Continued)
|
In
February 2007, the FASB released SFAS No. 159, “The Fair Value Option for
Financial Assets and Financial Liabilities”. The standard is effective for
fiscal years beginning after November 15, 2007. The standard provides entities
the ability, on an elective basis, to report most financial assets and financial
liabilities at fair value, with corresponding gains and losses recognized in
current earnings. The Company did not elect the fair value option under SFAS No.
159 as of January 1, 2008 for any of our financial assets and liabilities that
were not already fair valued. The Company will consider applying the fair value
option to future transactions as provided by the standard. The Company does not
expect SFAS No. 159 to have a material impact on the financial
statements.
In
December 2007, the FASB released SFAS No. 141(R), “Business Combinations”. This
standard revises and enhances the guidance set forth in SFAS No. 141(R) by
establishing a definition for the “acquirer,” providing additional guidance on
the recognition of acquired contingencies and non-controlling interests, and
broadening the scope of the standard to include all transactions involving a
transfer in control, irrespective of the consideration involved in the transfer.
SFAS No. 141(R) is effective for business combinations for which the acquisition
date occurs in a fiscal year beginning on or after December 15, 2008. Although
the standard will not have any impact on the current financial statements,
application of the new guidance could be significant to the Company in the
context of future merger and acquisition activity.
In
December 2007, the FASB released SFAS No. 160, “Non-controlling Interests in
Consolidated Financial Statements-an amendment of ARB No. 51”. This statement
amends ARB 51 to establish accounting and reporting standards for the
non-controlling interest in a subsidiary and for the deconsolidation of a
subsidiary. It clarifies that a non-controlling interest in a subsidiary is an
ownership interest in the consolidated entity that should be reported as equity
in the consolidated financial statements. SFAS No. 160 is effective for fiscal
years, and interim periods within those fiscal years, beginning on or after
December 15, 2008. The Company does not expect the standard to have a material
impact on the financial statements.
Fixed
assets consist of the following:
|
|
|
December
31,
|
|
|
|
|
2008
|
|
|
2007
|
|
|
|
|
|
|
|
|
|
|
Operation
equipment
|
|
$
|
84,865
|
|
|
$
|
38,930
|
|
|
Less: accumulated
depreciation
|
|
|
( 23,679
|
)
|
|
|
( 15,175
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Net
fixed assets
|
|
$
|
61,186
|
|
|
$
|
23,755
|
|
Depreciation
expense for the years ended December 31, 2008 and December 31, 2007 was $8,723
and $7,145, respectively.
|
Xodtec
Technology, Inc.
|
|
Notes
to Financial Statements
|
In
accordance with the Labor Pension Act in Taiwan, the Company contributes 6
percent of the employees’ monthly salaries to employees’ personal pension
accounts on a monthly basis. The pension payments shall be made
either monthly or in full at one time by the amount of the principal and accrued
dividends from the employees’ personal pension accounts. The Company
incurred pension plan expenses during the years ended December 31, 2008 and
December 31, 2007 of $6,824 and $1,020, respectively.
Total
advertising costs were $2,106 and $9,062 for the years ended December 31, 2008
and December 31, 2007, respectively.
Temporary
differences giving rise to the deferred tax asset, which is included in other
current assets, consist of operating loss carry forwards that may be applied
against future taxable income. Deferred taxes and operating loss
carry forwards consist of the following:
|
|
|
December
31, 2008
|
|
|
December
31, 2007
|
|
|
|
|
Amount
|
|
|
Deferred
Taxes
|
|
|
Amount
|
|
|
Deferred
Taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss
carry forwards
|
|
$
|
144,549
|
|
|
$
|
36,442
|
|
|
$
|
409,232
|
|
|
$
|
102,308
|
|
|
Valuation
allowance
|
|
|
|
|
|
|
(36,442
|
)
|
|
|
|
|
|
|
( 102,308
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
deferred tax asset
|
|
|
|
|
|
$
|
-
|
|
|
|
|
|
|
$
|
-
|
|
The
Company’s operating loss carry forwards expire in 2017.
|
|
8.
|
Related
Party Transactions
|
Names and
relationships of related parties are as follows:
|
|
Amy
Lo
|
The
chairperson of the Company
|
The
Company had no sales to or purchases from the related party during the years
ended December 31, 2008 and December 31, 2007.
The
payable due to the related party as of December 31 is summarized as
follows:
|
Related
Party
|
|
Interest
Rate
|
|
2008
|
|
|
2007
|
|
|
|
|
|
|
|
|
|
|
|
|
Amy
Lo
|
|
None
|
|
$
|
559,805
|
|
|
$
|
479,304
|
|
The
related party payable does not have set repayment terms and is
unsecured. Payment is dependent on the Company’s cash
flows. The Company has obtained a letter of financial support from
the related party indicating that they will continue to provide the funds
necessary for use in the Company’s operations.
|
Xodtec
Technology, Inc.
|
|
Notes
to Financial Statements
|
|
|
9.
|
Concentration
of Risks
|
Sales to
four major customers during the year ended December 31, 2008 totaled
approximately 75 percent of sales. The amount due from these
customers, included in accounts receivable, was $175,614 at December 31,
2008.
Purchases
from one major vendor during the year ended December 31, 2008 totaled
approximately 18 percent of expenses.
The
Company leases space under an operating lease arrangement that expires in March
2009. In addition, the Company leases a vehicle under an operating
lease
arrangement
that expires in November 2010. Future minimum lease payments
are:
|
2009
|
|
$
|
26,846
|
|
|
2010
|
|
|
17,527
|
|
Rent
expense for the years ended December 31, 2008 and December 31, 2007 was $50,013
and $31,390, respectively.
In 2009,
the Company, along with other related entities, is planning to fully merge into
A-Plus International, Ltd.
Exhibit
99.2
UP-TECH
TECHNOLOGY CO., LTD.
FINANCIAL
STATEMENTS
DECEMBER
31, 2008 AND DECEMBER 31, 2007
COMPANY
ADDRESS:
NO.6-1,
GAOSHUANG RD., PINGJHEN CITY,
TAOYUAN
COUNTY, TAIWAN (R.O.C.)
COMPANY
TEL: (03)281-3206
UP-TECH
TECHNOLOGY CO., LTD.
CONTENTS
|
|
Page
|
|
|
|
|
Independent
Auditors’ Report
|
1
|
|
|
|
|
Balance
Sheets
|
2
|
|
|
|
|
Statements
of Income
|
3
|
|
|
|
|
Statements
of Changes in Stockholders’ Equity (Deficit)
|
4
|
|
|
|
|
Statements
of Cash Flows
|
5
|
|
|
|
|
Notes
to Financial Statements
|
6-11
|
Independent
Auditors’ Report
To the
Stockholders of
Up-Tech
Technology Co, Ltd.
We have
audited the accompanying balance sheets of Up-Tech Technology Co, Ltd. as of
December 31, 2008 and December 31, 2007, and the related statements of income,
changes in stockholders’ equity (deficit), and cash flows for the years then
ended. These financial statements are the responsibility of the
Company’s management. Our responsibility is to express an opinion on
these financial statements based on our audits.
We
conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Up-Tech Technology Co, Ltd. as of
December 31, 2008 and December 31, 2007 and the results of its operations and
its cash flows for the years then ended in conformity with U.S. generally
accepted accounting principles.
/s/
Brock, Schechter & Polakoff, LLP
Buffalo,
New York
April
1, 2009
|
Up-Tech
Technology Co., Ltd.
|
|
Financial
Statements
|
Balance
Sheets
|
|
|
December
31,
|
|
|
|
|
2008
|
|
|
%
|
|
|
2007
|
|
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
and cash equivalents
|
|
$
|
13,333
|
|
|
|
3
|
|
|
$
|
17,738
|
|
|
|
23
|
|
|
Accounts
receivable, net
|
|
|
241,622
|
|
|
|
57
|
|
|
|
31,620
|
|
|
|
40
|
|
|
Inventory
|
|
|
148,800
|
|
|
|
35
|
|
|
|
12,882
|
|
|
|
16
|
|
|
Other
current assets
|
|
|
6,870
|
|
|
|
2
|
|
|
|
7
|
|
|
|
-
|
|
|
Total
current assets
|
|
|
410,625
|
|
|
|
97
|
|
|
|
62,247
|
|
|
|
79
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fixed
assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost
|
|
|
31,113
|
|
|
|
7
|
|
|
|
25,471
|
|
|
|
33
|
|
|
Less:
accumulated depreciation
|
|
|
( 26,063
|
)
|
|
|
( 6
|
)
|
|
|
( 20,281
|
)
|
|
|
( 26
|
)
|
|
Net
fixed assets
|
|
|
5,050
|
|
|
|
1
|
|
|
|
5,190
|
|
|
|
7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Refundable
deposits
|
|
|
9,943
|
|
|
|
2
|
|
|
|
10,796
|
|
|
|
14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
425,618
|
|
|
|
100
|
|
|
$
|
78,233
|
|
|
|
100
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities
& Stockholders' Equity (Deficit)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
228,929
|
|
|
|
54
|
|
|
$
|
51,873
|
|
|
|
66
|
|
|
Income
tax payable
|
|
|
144,333
|
|
|
|
34
|
|
|
|
-
|
|
|
|
-
|
|
|
Accrued
expenses
|
|
|
12,639
|
|
|
|
3
|
|
|
|
8,192
|
|
|
|
10
|
|
|
Other
payable
|
|
|
-
|
|
|
|
-
|
|
|
|
450
|
|
|
|
1
|
|
|
Related
party payable
|
|
|
110,358
|
|
|
|
25
|
|
|
|
521,517
|
|
|
|
665
|
|
|
Long-term
loan-current portion
|
|
|
2,755
|
|
|
|
1
|
|
|
|
10,738
|
|
|
|
14
|
|
|
Total
current liabilities
|
|
|
499,014
|
|
|
|
117
|
|
|
|
592,770
|
|
|
|
756
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term
liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term
loan
|
|
|
-
|
|
|
|
-
|
|
|
|
2,786
|
|
|
|
4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders'
equity (deficit)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common
stock
|
|
|
160,784
|
|
|
|
38
|
|
|
|
160,784
|
|
|
|
207
|
|
|
Accumulated
deficit
|
|
|
( 174,080
|
)
|
|
|
( 41
|
)
|
|
|
( 614,588
|
)
|
|
|
( 786
|
)
|
|
Accumulated
other comprehensive income
|
|
|
( 60,100
|
)
|
|
|
( 14
|
)
|
|
|
( 63,519
|
)
|
|
|
( 81
|
)
|
|
Total
stockholders' equity (deficit)
|
|
|
( 73,396
|
)
|
|
|
( 17
|
)
|
|
|
( 517,323
|
)
|
|
|
( 660
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
425,618
|
|
|
|
100
|
|
|
$
|
78,233
|
|
|
|
100
|
|
The
accompanying notes to financial statements are an integral part of these
statements.
|
Up-Tech
Technology Co., Ltd.
|
|
Financial
Statements
|
Statements
of Income
|
|
|
For
the Years Ended December 31,
|
|
|
|
|
2008
|
|
|
%
|
|
|
2007
|
|
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales-net
|
|
$
|
1,068,801
|
|
|
|
100
|
|
|
$
|
478,357
|
|
|
|
100
|
|
|
Cost
of goods sold
|
|
|
( 353,856
|
)
|
|
|
( 33
|
)
|
|
|
( 392,253
|
)
|
|
|
( 82
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
profit
|
|
|
714,945
|
|
|
|
67
|
|
|
|
86,104
|
|
|
|
18
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses
|
|
|
( 122,454
|
)
|
|
|
( 11
|
)
|
|
|
( 94,745
|
)
|
|
|
( 20
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
income (loss)
|
|
|
592,491
|
|
|
|
56
|
|
|
|
( 8,641
|
)
|
|
|
( 2
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-operating
income and gains
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
income
|
|
|
194
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-operating
expenses and losses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expenses
|
|
|
( 516
|
)
|
|
|
-
|
|
|
|
( 861
|
)
|
|
|
-
|
|
|
Provision
for loss on inventories
|
|
|
( 7,440
|
)
|
|
|
( 1
|
)
|
|
|
-
|
|
|
|
-
|
|
|
Miscellaneous
expenses
|
|
|
( 951
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
( 8,907
|
)
|
|
|
( 1
|
)
|
|
|
( 861
|
)
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
(loss) before income taxes
|
|
|
583,778
|
|
|
|
55
|
|
|
|
( 9,502
|
)
|
|
|
( 2
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
tax expense
|
|
|
( 143,270
|
)
|
|
|
( 13
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income (loss)
|
|
$
|
440,508
|
|
|
|
42
|
|
|
$
|
( 9,502
|
)
|
|
|
( 2
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings
per share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings
per share before income taxes
|
|
$
|
1.72
|
|
|
|
|
|
|
$
|
( 0.03
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
earnings per share after income taxes
|
|
$
|
1.30
|
|
|
|
|
|
|
$
|
( 0.03
|
)
|
|
|
|
|
The
accompanying notes to financial statements are an integral part of these
statements.
|
Up-Tech
Technology Co., Ltd.
|
|
Financial
Statements
|
Statements
of Changes in Stockholders’ Equity (Deficit)
|
|
|
Common
Stock
|
|
|
Accumulated
Deficit
|
|
|
Accumulated
Other
Comprehensive
Income
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance
at January 1, 2007
|
|
$
|
160,784
|
|
|
$
|
(605,086
|
)
|
|
$
|
(62,001
|
)
|
|
$
|
(506,303
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change
in translation adjustments
|
|
|
-
|
|
|
|
-
|
|
|
|
(1,518
|
)
|
|
|
(1,518
|
)
|
|
Net
loss for 2007
|
|
|
-
|
|
|
|
(9,502
|
)
|
|
|
-
|
|
|
|
(9,502
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance
at December 31, 2007
|
|
|
160,784
|
|
|
|
(614,588
|
)
|
|
|
(63,519
|
)
|
|
|
(517,323
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change
in translation adjustments
|
|
|
-
|
|
|
|
-
|
|
|
|
3,419
|
|
|
|
3,419
|
|
|
Net
income for 2008
|
|
|
-
|
|
|
|
440,508
|
|
|
|
-
|
|
|
|
440,508
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance
at December 31, 2008
|
|
$
|
160,784
|
|
|
$
|
(174,080
|
)
|
|
$
|
(60,100
|
)
|
|
$
|
(73,396
|
)
|
The
accompanying notes to financial statements are an integral part of these
statements.
|
Up-Tech
Technology Co., Ltd.
|
|
Financial
Statements
|
Statements
of Cash Flows
|
|
|
For
the Years Ended
|
|
|
|
|
December
31,
|
|
|
|
|
2008
|
|
|
2007
|
|
|
|
|
|
|
|
|
|
|
Cash flows from operating
activities
|
|
|
|
|
|
|
|
Net
income (loss)
|
|
$
|
440,508
|
|
|
$
|
(9,502
|
)
|
|
Adjustments
to reconcile net income to net cash provided by operating
activities
|
|
|
|
|
|
|
|
|
|
Depreciation
|
|
|
6,044
|
|
|
|
852
|
|
|
Provision
for loss on inventory
|
|
|
7,440
|
|
|
|
-
|
|
|
Increase
in accounts receivable
|
|
|
(211,519
|
)
|
|
|
(31,547
|
)
|
|
Decrease
(increase) in inventory
|
|
|
(144,254
|
)
|
|
|
2,531
|
|
|
Decrease
(increase) in other current assets
|
|
|
(6,901
|
)
|
|
|
84
|
|
|
Decrease
(increase) in refundable deposit
|
|
|
736
|
|
|
|
(8,144
|
)
|
|
Increase
in accounts payable
|
|
|
178,622
|
|
|
|
50,790
|
|
|
Increase
in income tax payable
|
|
|
145,130
|
|
|
|
-
|
|
|
Increase
in accrued expenses
|
|
|
4,565
|
|
|
|
1,367
|
|
|
Decrease
in other payable
|
|
|
(447
|
)
|
|
|
(2,309
|
)
|
|
Net
cash provided by operating activities
|
|
|
419,924
|
|
|
|
4,122
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from investing
activities
|
|
|
|
|
|
|
|
|
|
Acquisition
of fixed assets
|
|
|
(5,963
|
)
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from financing
activities
|
|
|
|
|
|
|
|
|
|
Increase
(decrease) in related party payable
|
|
|
(407,513
|
)
|
|
|
20,664
|
|
|
Repayment
of long-term debt
|
|
|
(10,675
|
)
|
|
|
(7,623
|
)
|
|
Net
cash provided by (used in) financing activities
|
|
|
(418,188
|
)
|
|
|
13,041
|
|
|
|
|
|
|
|
|
|
|
|
|
Effect
of exchange rate changes
|
|
|
(178
|
)
|
|
|
48
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
increase (decrease) in cash and cash equivalents
|
|
|
(4,405
|
)
|
|
|
17,211
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
and cash equivalents - beginning of year
|
|
|
17,738
|
|
|
|
527
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
and cash equivalents - end of year
|
|
$
|
13,333
|
|
|
$
|
17,738
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental
disclosures of cash flow information
|
|
|
|
|
|
|
|
|
|
Interest
paid
|
|
$
|
516
|
|
|
$
|
861
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
taxes paid
|
|
$
|
1
|
|
|
$
|
1
|
|
The
accompanying notes to financial statements are an integral part of these
statements.
|
Up-Tech
Technology Co., Ltd.
|
|
Notes
to Financial Statements
|
|
|
1.
|
Organization
and Operations
|
Up-Tech
Technology Co., Ltd. (the Company) was incorporated as a company limited by
shares under the provision of the Company Law of the Republic of China on
January 21, 1997. As of December 31, 2008, the Company’s common stock
of $160,784 is represented by 340,000 issued and outstanding shares with a par
value of $0.473 per share. Authorized shares are
1,000,000. The Company operates out of the Republic of
China.
The
Company mainly engages in light emitting diode (LED) control component
development, LED control module development, intelligent lighting equipment
development, LED street lighting design & development and energy-saving
lighting products development in the Republic of China.
As of
December 31, 2008 and December 31, 2007, the Company had 17 and 12 employees,
respectively.
|
|
2.
|
Summary
of Significant Accounting Policies
|
Foreign
Currency Translation
The
carrying amounts of the Company’s assets, liabilities, equity and results of
operations have been translated from the New Taiwan dollar, which is the
Company’s functional currency, into the U.S. dollar using the current rate
method.
Cash
Equivalents
For the
purpose of the statement of cash flows, the Company considers all highly liquid
investments to be cash equivalents.
Accounts
Receivable and Allowance for Doubtful Accounts
Accounts
receivable are carried at their estimated collectible amounts. Trade
credit is generally extended on a short-term basis, thus accounts receivable do
not bear interest, although a finance charge may be applied to such receivables
that are past due. Bad debts are provided on the allowance method
based on historical experience and management’s evaluation of outstanding
accounts receivable. The allowance for doubtful accounts at December
31, 2008 and December 31, 2007 was $-0-.
Inventory
Inventory
of finished goods is stated at the lower of cost (weighted average method) or
market.
Fixed
Assets
All fixed
assets are stated at cost. Significant renewals and improvements are
treated as capital expenditures and maintenance and repairs are charged to
expense as incurred.
Depreciation
is provided on straight-line method based on the estimated useful lives and
salvage values of the assets, ranging from 2 to 5 years.
Revenue,
Costs and Expenses
Revenues
are recognized when the earning process is substantially completed and they are
realized or realizable. Costs and expenses are recognized as
incurred.
|
Up-Tech
Technology Co., Ltd.
|
|
Notes
to Financial Statements
|
|
|
2.
|
Summary
of Significant Accounting Policies
(Continued)
|
Taxes
Collected from Customers
The
Company presents revenue net of sales, use, and excise taxes collected from
customers.
Shipping
and Handling Costs
The
Company’s policy is to classify shipping and handling costs as part of operating
expenses in the statements of income.
Advertising
Advertising
costs are expensed as incurred.
Income
Taxes
Current
- The Company
follows the practice of providing for income taxes based on amounts reportable
for income tax purposes.
Deferred
- The
recognition of income and expenses in different periods for financial accounting
and tax purposes gives rise to timing difference that result in deferred
taxes.
Uncertain
Tax Positions
Management
has elected to defer the application of FAS FIN 48,
Accounting for Uncertain Tax
Positions
, in accordance with FSP FIN 48-3. The Company will
continue to follow FAS 5,
Accounting for Contingencies
,
until it adopts FIN 48.
Use
of Estimates
The
preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect certain reported amounts and disclosures. Accordingly, actual
results could differ from those estimates.
|
|
3.
|
Recent Accounting
Pronouncements
|
In May
2008, the FASB released SFAS No. 162, “The Hierarchy of Generally Accepted
Accounting Principles”. This statement identifies the sources of accounting
principles and the framework for selecting the accounting principles used in the
preparation of financial statements of nongovernmental entities that are
presented in conformity with generally accepted accounting principles in the
United States. SFAS No. 162 is effective 60 days after the SEC’s approval of the
Public Company Accounting Oversight Board amendments to AU Section 411, “The
Meaning of Present Fairly in Conformity with Generally Accepted Accounting
Principles”. The Company does not expect the implementation of this
guidance to have a material impact on the financial statements.
In March
2008, the FASB issued SFAS No. 161, “Disclosures about Derivative Instruments
and Hedging Activities-an amendment of FASB Statement No. 133”. SFAS No. 161
gives financial statement users better information about the reporting entity's
hedges by providing for qualitative disclosures about the objectives and
strategies for using derivatives, quantitative data about the fair value of and
gains and losses on derivative contracts, and details of credit-risk-related
contingent features in their hedged positions. SFAS No. 161 is effective for
financial statements issued for fiscal years beginning after November 15, 2008
and interim periods within those years. The Company does not expect the adoption
of SFAS No. 161 to have a material effect on the financial
statements.
|
Up-Tech
Technology Co., Ltd.
|
|
Notes
to Financial Statements
|
|
|
3.
|
Recent
Accounting Pronouncements
(Continued)
|
In
February 2007, the FASB released SFAS No. 159, “The Fair Value Option for
Financial Assets and Financial Liabilities”. The standard is effective for
fiscal years beginning after November 15, 2007. The standard provides entities
the ability, on an elective basis, to report most financial assets and financial
liabilities at fair value, with corresponding gains and losses recognized in
current earnings. The Company did not elect the fair value option under SFAS No.
159 as of January 1, 2008 for any of our financial assets and liabilities that
were not already fair valued. The Company will consider applying the fair value
option to future transactions as provided by the standard. The Company does not
expect SFAS No. 159 to have a material impact on the financial
statements.
In
December 2007, the FASB released SFAS No. 141(R), “Business Combinations”. This
standard revises and enhances the guidance set forth in SFAS No. 141(R) by
establishing a definition for the “acquirer,” providing additional guidance on
the recognition of acquired contingencies and non-controlling interests, and
broadening the scope of the standard to include all transactions involving a
transfer in control, irrespective of the consideration involved in the transfer.
SFAS No. 141(R) is effective for business combinations for which the acquisition
date occurs in a fiscal year beginning on or after December 15, 2008. Although
the standard will not have any impact on the current financial statements,
application of the new guidance could be significant to the Company in the
context of future merger and acquisition activity.
In
December 2007, the FASB released SFAS No. 160, “Non-controlling Interests in
Consolidated Financial Statements-an amendment of ARB No. 51”. This statement
amends ARB 51 to establish accounting and reporting standards for the
non-controlling interest in a subsidiary and for the deconsolidation of a
subsidiary. It clarifies that a non-controlling interest in a subsidiary is an
ownership interest in the consolidated entity that should be reported as equity
in the consolidated financial statements. SFAS No. 160 is effective for fiscal
years, and interim periods within those fiscal years, beginning on or after
December 15, 2008. The Company does not expect the standard to have a material
impact on the financial statements.
At
December 31, 2008, inventory was written down by $7,399 to its estimated market
value.
|
Up-Tech
Technology Co., Ltd.
|
|
Notes
to Financial Statements
|
Fixed
assets consist of the following:
|
|
|
December
31,
|
|
|
|
|
2008
|
|
|
2007
|
|
|
|
|
|
|
|
|
|
|
Cost
|
|
|
|
|
|
|
|
Transportation
equipment
|
|
$
|
5,930
|
|
|
$
|
-
|
|
|
Office
equipment
|
|
|
1,306
|
|
|
|
1,321
|
|
|
Other
equipment
|
|
|
23,877
|
|
|
|
24,150
|
|
|
|
|
|
31,113
|
|
|
|
25,471
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated
depreciation
|
|
|
|
|
|
|
|
|
|
Transportation
equipment
|
|
|
(988
|
)
|
|
|
-
|
|
|
Office
equipment
|
|
|
(1,198
|
)
|
|
|
(991
|
)
|
|
Other
equipment
|
|
|
(23,877
|
)
|
|
|
(19,290
|
)
|
|
|
|
|
(26,063
|
)
|
|
|
(20,281
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Net
fixed assets
|
|
$
|
5,050
|
|
|
$
|
5,190
|
|
Depreciation
expense for the years ended December 31, 2008 and December 31, 2007 was $6,044
and $852, respectively.
Long-term
loan consists of the following:
|
|
|
Current
|
|
|
Long-Term
|
|
|
December
31,
|
|
|
|
|
Portion
|
|
|
Portion
|
|
|
2008
|
|
|
2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long
term loan - monthly payments including interest at 6.00 percent per annum
through March 2009.
|
|
$
|
2,755
|
|
|
$
|
-
|
|
|
$
|
2,755
|
|
|
$
|
13,524
|
|
|
Up-Tech
Technology Co., Ltd.
|
|
Notes
to Financial Statements
|
In
accordance with the Labor Pension Act in Taiwan, the Company contributes 6
percent of the employees’ monthly salaries to employees’ personal pension
accounts on a monthly basis. The pension payments shall be made
either monthly or in full at one time by the amount of the principal and accrued
dividends from the employees’ personal pension account. The Company
incurred pension plan expenses during the years ended December 31, 2008 and
December 31, 2007 of $2,953 and $4,071, respectively.
|
|
8.
|
Shipping
and Handling Costs
|
Shipping
and handling costs for the years ended December 31, 2008 and December 31, 2007
were $5,862 and $4,504, respectively.
Total
advertising costs were $3,238 and $2,654 for the years ended December 31, 2008
and December 31, 2007, respectively.
Income
tax expense consists of the following:
|
|
|
December
31,
|
|
|
|
|
2008
|
|
|
2007
|
|
|
|
|
|
|
|
|
|
|
Income
tax payable
|
|
$
|
144,333
|
|
|
$
|
( 1
|
)
|
|
Deferred
income tax
|
|
|
( 1,850
|
)
|
|
|
-
|
|
|
Prepaid
income tax
|
|
|
1
|
|
|
|
-
|
|
|
Effect
of exchange rate changes
|
|
|
786
|
|
|
|
1
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
tax expense
|
|
$
|
143,270
|
|
|
$
|
-
|
|
Temporary
differences giving rise to the deferred tax asset, which is included in other
current assets, consist of operating loss carry forwards and inventory valuation
differences that may be applied against future taxable
income. Deferred taxes and temporary differences consist of the
following:
|
|
|
December 31,
2008
|
|
|
December 31,
2007
|
|
|
|
|
Amount
|
|
|
Deferred
Taxes
|
|
|
Amount
|
|
|
Deferred
Taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Temporary
differences
|
|
$
|
7,399
|
|
|
$
|
1,850
|
|
|
$
|
9,525
|
|
|
$
|
2,381
|
|
|
Valuation
allowance
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
|
( 2,381
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
deferred tax asset
|
|
|
|
|
|
$
|
1,850
|
|
|
|
|
|
|
$
|
-
|
|
|
Up-Tech
Technology Co., Ltd.
|
|
Notes
to Financial Statements
|
|
|
11.
|
Related
Party Transactions
|
Names and
relationships of related parties are as follows:
|
|
Yuan-Ming
Yu
|
The
chairman of the Company
|
The
Company had no sales to or purchases from related parties during the years ended
December 31, 2008 and December 31, 2007.
The
payable due to the related party as of December 31 is summarized as
follows:
|
Related
Party
|
|
Interest
Rate
|
|
2008
|
|
|
2007
|
|
|
|
|
|
|
|
|
|
|
|
|
Yuan-Ming
Yu
|
|
None
|
|
$
|
110,358
|
|
|
$
|
521,517
|
|
The
related party payable does not have set repayment terms and is
unsecured. Payment is dependent on the Company’s cash
flows. The Company has obtained a letter of financial support from
the related party that they will continue to provide the funds necessary for use
in the Company’s operations.
|
|
12.
|
Concentration
of Risks
|
Sales to
five major customers during the year ended December 31, 2008 totaled
approximately 74 percent of sales. The amount due from these
customers, included in accounts receivable, was $208,370 at December 31,
2008.
Purchases
from three major vendors during the year ended December 31, 2008 totaled
approximately 82 percent of expenses. The amount due to these
vendors, included in accounts payable, was $138,106.
|
|
The
Company leases space under an operating lease arrangement that expires in
December 2009. In addition, the Company leases a vehicle under
an operating lease arrangement that expires in September
2009. Future minimum lease payments
are:
|
Rent
expense for the years ended December 31, 2008 and December 31, 2007 was $16,557
and $7,357, respectively.
In 2009,
the Company, along with other related entities, is planning to fully merge into
A-Plus International, Ltd.
- 11 -
Exhibit
99.3
TARGETEK
CO., LTD.
FINANCIAL
STATEMENTS
DECEMBER
31, 2008 AND DECEMBER 31, 2007
COMPANY
ADDRESS:
11F,
NO.216, NANJING E. RD.,
TAIPEI
CITY, TAIWAN (R.O.C.)
COMPANY
TEL : 886-225012659
TARGETEK
CO., LTD.
CONTENTS
|
|
Page
|
|
|
|
|
Independent
Auditors’ Report
|
1
|
|
|
|
|
Balance
Sheets
|
2
|
|
|
|
|
Statements
of Income
|
3
|
|
|
|
|
Statements
of Changes in Stockholders’ Equity (Deficit)
|
4
|
|
|
|
|
Statements
of Cash Flows
|
5
|
|
|
|
|
Notes
to Financial Statements
|
6-10
|
Independent
Auditors’ Report
To the
Stockholders of
Targetek
Co., Ltd.
We have
audited the accompanying balance sheets of Targetek Co., Ltd. as of December 31,
2008 and December 31, 2007, and the related statements of income, changes in
stockholders’ equity (deficit), and cash flows for the years then
ended. These financial statements are the responsibility of the
Company’s management. Our responsibility is to express an opinion on
these financial statements based on our audits.
We
conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Targetek Co., Ltd. as of December
31, 2008 and December 31, 2007 and the results of its operations and its cash
flows for the years then ended in conformity with U.S. generally accepted
accounting principles.
/s/
Brock, Schechter & Polakoff, LLP
Buffalo,
New York
April
1, 2009
|
Targetek
Co, Ltd.
|
|
Financial
Statements
|
Balance
Sheets
|
|
|
December
31,
|
|
|
|
|
2008
|
|
|
%
|
|
|
2007
|
|
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
and cash equivalents
|
|
$
|
152,302
|
|
|
|
35
|
|
|
$
|
30,112
|
|
|
|
17
|
|
|
Accounts
receivable, net
|
|
|
227,243
|
|
|
|
51
|
|
|
|
58,597
|
|
|
|
32
|
|
|
Other
receivables
|
|
|
15,655
|
|
|
|
4
|
|
|
|
35,878
|
|
|
|
20
|
|
|
Prepaid
expenses
|
|
|
3,312
|
|
|
|
1
|
|
|
|
4,252
|
|
|
|
2
|
|
|
Notes
receivable, net
|
|
|
235
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
Total
current assets
|
|
|
398,747
|
|
|
|
91
|
|
|
|
128,839
|
|
|
|
71
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fixed
assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost
|
|
|
46,240
|
|
|
|
10
|
|
|
|
50,100
|
|
|
|
28
|
|
|
Less:
accumulated depreciation
|
|
|
(38,761
|
)
|
|
|
(9
|
)
|
|
|
(37,995
|
)
|
|
|
(21
|
)
|
|
Net
fixed assets
|
|
|
7,479
|
|
|
|
1
|
|
|
|
12,105
|
|
|
|
7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Refundable
deposits
|
|
|
20,546
|
|
|
|
5
|
|
|
|
20,780
|
|
|
|
11
|
|
|
Deferred
charges
|
|
|
13,423
|
|
|
|
3
|
|
|
|
19,657
|
|
|
|
11
|
|
|
Total
other assets
|
|
|
33,969
|
|
|
|
8
|
|
|
|
40,437
|
|
|
|
22
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
440,195
|
|
|
|
100
|
|
|
$
|
181,381
|
|
|
|
100
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities
& Stockholders' Equity (Deficit)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Short-term
debt
|
|
$
|
35,908
|
|
|
|
8
|
|
|
$
|
122,070
|
|
|
|
67
|
|
|
Accounts
payable
|
|
|
3,339
|
|
|
|
1
|
|
|
|
3,340
|
|
|
|
2
|
|
|
Income
tax payable
|
|
|
41,560
|
|
|
|
9
|
|
|
|
-
|
|
|
|
-
|
|
|
Accrued
expenses
|
|
|
68,452
|
|
|
|
16
|
|
|
|
62,590
|
|
|
|
36
|
|
|
Other
payable
|
|
|
609
|
|
|
|
-
|
|
|
|
464
|
|
|
|
-
|
|
|
Related
party payables
|
|
|
112,042
|
|
|
|
25
|
|
|
|
74,827
|
|
|
|
40
|
|
|
Other
current liabilities
|
|
|
2,216
|
|
|
|
1
|
|
|
|
1,248
|
|
|
|
1
|
|
|
Total
liabilities
|
|
|
264,126
|
|
|
|
60
|
|
|
|
264,539
|
|
|
|
146
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders'
equity (deficit)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common
stock
|
|
|
957,223
|
|
|
|
217
|
|
|
|
957,223
|
|
|
|
528
|
|
|
Accumulated
deficit
|
|
|
(485,434
|
)
|
|
|
(110
|
)
|
|
|
(745,148
|
)
|
|
|
(411
|
)
|
|
Accumulated
other comprehensive income
|
|
|
(295,720
|
)
|
|
|
(67
|
)
|
|
|
(295,233
|
)
|
|
|
(163
|
)
|
|
Total
stockholders' equity (deficit)
|
|
|
176,069
|
|
|
|
40
|
|
|
|
(83,158
|
)
|
|
|
(46
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
440,195
|
|
|
|
100
|
|
|
$
|
181,381
|
|
|
|
100
|
|
The
accompanying notes to financial statements are an integral part of these
statements.
|
Targetek
Co, Ltd.
|
|
Financial
Statements
|
Statements
of Income
|
|
|
For
the Years Ended December 31,
|
|
|
|
|
2008
|
|
|
%
|
|
|
2007
|
|
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales-net
|
|
$
|
852,925
|
|
|
|
100
|
|
|
$
|
413,854
|
|
|
|
100
|
|
|
Cost
of goods sold
|
|
|
(289,001
|
)
|
|
|
(34
|
)
|
|
|
(218,814
|
)
|
|
|
(53
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
profit
|
|
|
563,924
|
|
|
|
66
|
|
|
|
195,040
|
|
|
|
47
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses
|
|
|
(261,080
|
)
|
|
|
(31
|
)
|
|
|
(312,884
|
)
|
|
|
(75
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
income (loss)
|
|
|
302,844
|
|
|
|
35
|
|
|
|
(117,844
|
)
|
|
|
(28
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-operating
income and gains
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
income
|
|
|
24
|
|
|
|
-
|
|
|
|
43
|
|
|
|
-
|
|
|
Foreign
exchange gain
|
|
|
43
|
|
|
|
-
|
|
|
|
63
|
|
|
|
-
|
|
|
Rent
income
|
|
|
2,920
|
|
|
|
1
|
|
|
|
-
|
|
|
|
-
|
|
|
Miscellaneous
income
|
|
|
1,414
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
4,401
|
|
|
|
1
|
|
|
|
106
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-operating
expenses and losses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expenses
|
|
|
(5,661
|
)
|
|
|
(1
|
)
|
|
|
(10,565
|
)
|
|
|
(3
|
)
|
|
Foreign
exchange loss
|
|
|
(78
|
)
|
|
|
-
|
|
|
|
(138
|
)
|
|
|
-
|
|
|
Miscellaneous
expenses
|
|
|
-
|
|
|
|
-
|
|
|
|
(5,127
|
)
|
|
|
(1
|
)
|
|
|
|
|
(5,739
|
)
|
|
|
(1
|
)
|
|
|
(15,830
|
)
|
|
|
(4
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
(loss) before income taxes
|
|
|
301,506
|
|
|
|
35
|
|
|
|
(133,568
|
)
|
|
|
(32
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
tax expense
|
|
|
(41,792
|
)
|
|
|
(5
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income (loss)
|
|
$
|
259,714
|
|
|
|
30
|
|
|
$
|
(133,568
|
)
|
|
|
(32
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings
per share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings
per share before income taxes
|
|
$
|
0.14
|
|
|
|
|
|
|
$
|
(0.06
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
earnings per share after income taxes
|
|
$
|
0.12
|
|
|
|
|
|
|
$
|
(0.06
|
)
|
|
|
|
|
The
accompanying notes to financial statements are an integral part of these
statements.
|
Targetek
Co, Ltd.
|
|
Financial
Statements
|
Statements
of Changes in Stockholders’ Equity (Deficit)
|
|
|
Common
Stock
|
|
|
Accumulated
Deficit
|
|
|
Accumulated
Other Comprehensive Income
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance
at January 1, 2007
|
|
$
|
957,223
|
|
|
$
|
(611,580
|
)
|
|
$
|
(299,891
|
)
|
|
$
|
45,752
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change
in translation adjustments
|
|
|
-
|
|
|
|
-
|
|
|
|
4,658
|
|
|
|
4,658
|
|
|
Net
loss for 2007
|
|
|
-
|
|
|
|
(133,568
|
)
|
|
|
-
|
|
|
|
(133,568
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance
at December 31, 2007
|
|
|
957,223
|
|
|
|
(745,148
|
)
|
|
|
(295,233
|
)
|
|
|
(83,158
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change
in translation adjustments
|
|
|
-
|
|
|
|
-
|
|
|
|
(487
|
)
|
|
|
(487
|
)
|
|
Net
income for 2008
|
|
|
-
|
|
|
|
259,714
|
|
|
|
-
|
|
|
|
259,714
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance
at December 31, 2008
|
|
$
|
957,223
|
|
|
$
|
(485,434
|
)
|
|
$
|
(295,720
|
)
|
|
$
|
176,069
|
|
The
accompanying notes to financial statements are an integral part of these
statements.
|
Targetek
Co, Ltd.
|
|
Financial
Statements
|
Statements
of Cash Flows
|
|
|
For
the Years Ended
|
|
|
|
|
December
31,
|
|
|
|
|
2008
|
|
|
2007
|
|
|
|
|
|
|
|
|
|
|
Cash flows from operating
activities
|
|
|
|
|
|
|
|
Net
income (loss)
|
|
$
|
259,714
|
|
|
$
|
(133,568
|
)
|
|
Adjustments
to reconcile net income (loss) to net cash provided by (used in) operating
activities
|
|
|
|
|
|
|
|
|
|
Depreciation
|
|
|
6,325
|
|
|
|
48,632
|
|
|
Amortization
|
|
|
6,045
|
|
|
|
11,923
|
|
|
Increase
in accounts receivable
|
|
|
(170,241
|
)
|
|
|
(1,211
|
)
|
|
Decrease
(increase) in other receivable
|
|
|
19,927
|
|
|
|
(6,191
|
)
|
|
Decrease
in prepayments
|
|
|
897
|
|
|
|
54,108
|
|
|
Decrease
in other current assets
|
|
|
-
|
|
|
|
8,305
|
|
|
Decrease
in refundable deposit
|
|
|
-
|
|
|
|
923
|
|
|
Increase
(decrease) in accounts payable
|
|
|
37
|
|
|
|
(35,492
|
)
|
|
Increase
in accrued expenses
|
|
|
6,604
|
|
|
|
4,694
|
|
|
Increase
in income tax payable
|
|
|
41,790
|
|
|
|
-
|
|
|
Increase
(decrease) in other payable
|
|
|
151
|
|
|
|
(3,204
|
)
|
|
Increase
(decrease) in other current liabilities
|
|
|
987
|
|
|
|
(3,162
|
)
|
|
Net
cash provided by (used in) operating activities
|
|
|
172,236
|
|
|
|
(54,243
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from investing
activities
|
|
|
|
|
|
|
|
|
|
Decrease
(increase) in notes receivable
|
|
|
(236
|
)
|
|
|
1,542
|
|
|
Acquisition
of fixed assets
|
|
|
(1,811
|
)
|
|
|
-
|
|
|
Increase
in deferred charges
|
|
|
-
|
|
|
|
(3,964
|
)
|
|
Net
cash provided by (used in) investing activities
|
|
|
(2,047
|
)
|
|
|
(2,422
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from financing
activities
|
|
|
|
|
|
|
|
|
|
(Decrease)
in short-term debt
|
|
|
(85,253
|
)
|
|
|
(63,668
|
)
|
|
Increase
in related party payables
|
|
|
38,270
|
|
|
|
65,267
|
|
|
Net
cash used in financing activities
|
|
|
(46,983
|
)
|
|
|
1,599
|
|
|
|
|
|
|
|
|
|
|
|
|
Effect
of exchange rate changes
|
|
|
(1,016
|
)
|
|
|
284
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
increase in cash and cash equivalents
|
|
|
122,190
|
|
|
|
(54,782
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Cash
and cash equivalents - beginning of year
|
|
|
30,112
|
|
|
|
84,894
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
and cash equivalents - end of year
|
|
$
|
152,302
|
|
|
$
|
30,112
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental
Disclosures of cash flow information
|
|
|
|
|
|
|
|
|
|
Interest
paid
|
|
$
|
5,661
|
|
|
$
|
10,565
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
tax paid
|
|
$
|
2
|
|
|
$
|
4
|
|
The
accompanying notes to financial statements are an integral part of these
statements.
|
Targetek
Co, Ltd.
|
|
Notes
to Financial Statements
|
|
|
1.
|
Organization
and Operations
|
Targetek
Co., Ltd. (the Company) was incorporated as a company limited by shares under
the provision of the Company Law of the Republic of China in
March 1997. As of December 31, 2008, the Company’s common stock
of $957,223 is represented by 2,200,000 issued and outstanding shares with
a par value of $0.435 per share. Authorized shares are 5,300,000. The
Company operates out of the Republic of China.
The
Company is a vital localization service and energy saving solution provider in
the global market. As a professional service provider, the Company provides
quality and efficient services for more than 40 Asian and European languages.
The Company has acquired impeccable project management skills through years of
working knowledge and experience of subject matter in the industry.
The
Company has successfully managed business-critical products for leading software
and hardware companies, such as Symantec, Alston, Intel, BEA Systems, Siemens,
Philips, McDonald’s, Microsoft, IBM, HP, CyberLink, Acer, Autodesk, Borland,
SAS, Cisco, Plateau, AMD, Buffalo, Onyx, Information Builders, SABA, MapInfo,
Panda, AOL, SonicWall, and Sun Microsystems.
As of
December 31, 2008 and December 31, 2007 the Company had 12 and 13 employees,
respectively.
|
|
2.
|
Summary
of Significant Accounting Policies
|
Foreign
Currency Translation
The
carrying amounts of the Company’s assets, liabilities, equity and results of
operations have been translated from the New Taiwan dollar, which is the
Company’s functional currency, into the U.S. dollar using the current rate
method.
Cash
Equivalents
For the
purpose of the statements of cash flows, the Company considers all highly liquid
investments to be cash equivalents.
Accounts
Receivable and Allowance for Doubtful Accounts
Accounts
receivable are carried at their estimated collectible amounts. Trade
credit is generally extended on a short-term basis, thus accounts receivable do
not bear interest, although a finance charge may be applied to such receivables
that are past due. Bad debts are provided on the allowance method
based on historical experience and management’s evaluation of outstanding
accounts receivable. The allowance for doubtful accounts at December
31, 2008 and December 31, 2007 was $-0-.
Fixed
Assets
All fixed
assets are stated at cost. Significant renewals and improvements are
treated as capital expenditures and maintenance and repairs are charged to
expense as incurred.
Depreciation
is provided on straight-line method based on the estimated useful lives and
salvage values of the assets, ranging from 3 to 5 years.
|
Targetek
Co, Ltd.
|
|
Notes
to Financial Statements
|
|
|
2.
|
Summary
of Significant Accounting Policies
(Continued)
|
Revenue,
Costs and Expenses
Revenues
are recognized when the earning process is substantially completed and they are
realized or realizable. Costs and expenses are recognized as
incurred.
Taxes
Collected from Customers
The
Company presents revenue net of sales, use, and excise taxes collected from
customers.
Advertising
Advertising
costs are expensed as incurred.
Income
Taxes
Current
- The Company
follows the practice of providing for income taxes based on amounts reportable
for income tax purposes.
Deferred
- The
recognition of income and expenses in different periods for financial accounting
and tax purposes gives rise to timing difference that result in deferred
taxes.
Uncertain
Tax Positions
Management
has elected to defer the application of FAS FIN 48,
Accounting for Uncertain Tax
Positions
, in accordance with FSP FIN 48-3. The Company will
continue to follow FAS 5,
Accounting for Contingencies
,
until it adopts FIN 48.
Use
of Estimates
The
preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect certain reported amounts and disclosures. Accordingly, actual
results could differ from those estimates.
|
|
3.
|
Recent Accounting
Pronouncements
|
In May
2008, the FASB released SFAS No. 162, “The Hierarchy of Generally Accepted
Accounting Principles”. This statement identifies the sources of
accounting principles and the framework for selecting the accounting principles
used in the preparation of financial statements of nongovernmental entities that
are presented in conformity with generally accepted accounting principles in the
United States. SFAS No. 162 is effective 60 days after the SEC’s approval of the
Public Company Accounting Oversight Board amendments to AU Section 411, “The
Meaning of Present Fairly in Conformity with Generally Accepted Accounting
Principles.” The Company does not expect the implementation of this
guidance to have a material impact on the financial statements.
In March
2008, the FASB issued SFAS No. 161, “Disclosures about Derivative Instruments
and Hedging Activities-an amendment of FASB Statement No. 133”. SFAS No. 161
gives financial statement users better information about the reporting entity's
hedges by providing for qualitative disclosures about the objectives and
strategies for using derivatives, quantitative data about the fair value of and
gains and losses on derivative contracts, and details of credit-risk-related
contingent features in their hedged positions. SFAS No. 161 is effective for
financial statements issued for fiscal years beginning after November 15, 2008
and interim periods within those years. The Company does not expect the adoption
of SFAS No. 161 to have a material effect on the financial
statements.
|
Targetek
Co, Ltd.
|
|
Notes
to Financial Statements
|
|
|
3.
|
Recent
Accounting Pronouncements
(Continued)
|
In
February 2007, the FASB released SFAS No. 159, “The Fair Value Option for
Financial Assets and Financial Liabilities”. The standard is effective for
fiscal years beginning after November 15, 2007. The standard provides entities
the ability, on an elective basis, to report most financial assets and financial
liabilities at fair value, with corresponding gains and losses recognized in
current earnings. The Company did not elect the fair value option under SFAS No.
159 as of January 1, 2008 for any of our financial assets and liabilities that
were not already fair valued. The Company will consider applying the fair value
option to future transactions as provided by the standard. The Company does not
expect SFAS No. 159 to have a material impact on the financial
statements.
In
December 2007, the FASB released SFAS No. 141(R), “Business Combinations”. This
standard revises and enhances the guidance set forth in SFAS No. 141(R) by
establishing a definition for the “acquirer,” providing additional guidance on
the recognition of acquired contingencies and non-controlling interests, and
broadening the scope of the standard to include all transactions involving a
transfer in control, irrespective of the consideration involved in the transfer.
SFAS No. 141(R) is effective for business combinations for which the acquisition
date occurs in a fiscal year beginning on or after December 15, 2008. Although
the standard will not have any impact on the current financial statements,
application of the new guidance could be significant to the Company in the
context of future merger and acquisition activity.
In
December 2007, the FASB released SFAS No. 160, “Non-controlling Interests in
Consolidated Financial Statements-an amendment of ARB No. 51”. This statement
amends ARB 51 to establish accounting and reporting standards for the
non-controlling interest in a subsidiary and for the deconsolidation of a
subsidiary. It clarifies that a non-controlling interest in a subsidiary is an
ownership interest in the consolidated entity that should be reported as equity
in the consolidated financial statements. SFAS No. 160 is effective for fiscal
years, and interim periods within those fiscal years, beginning on or after
December 15, 2008. The Company does not expect the standard to have a material
impact on the financial statements.
|
|
Fixed
assets consist of the following:
|
|
|
|
December
31,
|
|
|
|
|
2008
|
|
|
2007
|
|
|
|
|
|
|
|
|
|
|
Cost
|
|
|
|
|
|
|
|
Office
equipment
|
|
$
|
20,053
|
|
|
$
|
23,613
|
|
|
Other
equipment
|
|
|
26,187
|
|
|
|
26,487
|
|
|
|
|
|
46,240
|
|
|
|
50,100
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated
depreciation
|
|
|
|
|
|
|
|
|
|
Office
equipment
|
|
|
(17,450
|
)
|
|
|
(18,868
|
)
|
|
Other
equipment
|
|
|
(21,311
|
)
|
|
|
(19,127
|
)
|
|
|
|
|
(38,761
|
)
|
|
|
(37,995
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Net
fixed assets
|
|
$
|
7,479
|
|
|
$
|
12,105
|
|
Depreciation
expense for the years ended December 31, 2008 and December 31, 2007 was $6,325
and $48,632, respectively.
|
Targetek
Co, Ltd.
|
|
Notes
to Financial Statements
|
The
Company maintains two short term debt agreements with interest that fluctuates
based on market conditions. The interest rates on the short term debt
at December 31, 2008 were 6.19 and 7.19 percent, respectively. The
total balance of short term debt was $35,908 and $122,070 as of December 31,
2008 and December 31, 2007, respectively.
In
accordance with the Labor Pension Act in Taiwan, the Company contributes 6
percent of the employees’ monthly salaries to employees’ personal pension
accounts on a monthly basis. The pension payments shall be made
either monthly or in full at one time by the amount of the principal and accrued
dividends from the employees’ personal pension accounts. The Company
incurred pension plan expenses during the years ended December 31, 2008 and
December 31, 2007 of $8,835 and $9,462, respectively.
Total
advertising expense was $797 and $646 for the years ended December 31, 2008 and
December 31, 2007, respectively.
Income
tax expense consisted of the following:
|
|
|
December
31,
|
|
|
|
|
2008
|
|
|
2007
|
|
|
|
|
|
|
|
|
|
|
Income
tax payable
|
|
$
|
41,560
|
|
|
$
|
( 4
|
)
|
|
Prepaid
income tax
|
|
|
2
|
|
|
|
4
|
|
|
Effect
of exchange rate changes
|
|
|
230
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
tax expense
|
|
$
|
41,792
|
|
|
$
|
-
|
|
Temporary
differences giving rise to the deferred tax asset, which is included in other
current assets, consist of operating loss carry forwards that may be applied
against future taxable income. Deferred taxes and operating loss
carry forwards consist of the following:
|
|
|
December
31, 2008
|
|
|
December
31, 2007
|
|
|
|
|
Amount
|
|
|
Deferred
Taxes
|
|
|
Amount
|
|
|
Deferred
Taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss
carry forwards
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
133,897
|
|
|
$
|
33,474
|
|
|
Valuation
allowance
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
|
( 33,474
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
deferred tax asset
|
|
|
|
|
|
$
|
-
|
|
|
|
|
|
|
$
|
-
|
|
|
Targetek
Co, Ltd.
|
|
Notes
to Financial Statements
|
|
|
9.
|
Related
Party Transactions
|
Names and
relationships of related parties are as follows:
|
|
Yao-Ting
Su
|
The
chairman of the Company
|
|
|
Wen-Hui
Li
|
The
director and general manager of the
Company
|
The
Company had no sales to or purchases from related parties during the years ended
December 31, 2008 and December 31, 2007.
Payables
due to related parties as of December 31 are summarized as follows:
|
Related
Party
|
|
Interest
Rate
|
|
2008
|
|
|
2007
|
|
|
|
|
|
|
|
|
|
|
|
|
Yao-Ting
Su
|
|
None
|
|
$
|
111,561
|
|
|
$
|
71,939
|
|
|
Wen-Hui
Li
|
|
None
|
|
|
481
|
|
|
|
2,888
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
112,042
|
|
|
$
|
74,827
|
|
Related
party payables do not have set repayment terms and are
unsecured. Payment is dependent on the Company’s cash
flows. The Company has obtained a letter of financial support from
the owners indicating that they will continue to provide the funds necessary for
use in the Company’s operations.
|
|
10.
|
Concentration
of Risks
|
Sales to
two major customers during the year ended December 31, 2008 totaled
approximately 24 percent of sales. The amount due from these
customers, included in accounts receivable, was $102,745 at December 31,
2008.
The
Company leases space under an operating lease arrangement that expires in
January 2011. In addition, the Company leases a vehicle under an
operating lease
arrangement that expires
in January 2009. Future minimum lease payments are:
|
2009
|
|
$
|
32,250
|
|
|
2010
|
|
|
31,269
|
|
|
2011
|
|
|
2,606
|
|
Rent
expense for the years ended December 31, 2008 and December 31, 2007 was $41,626
and $44,294, respectively.
In 2009,
the Company, along with other related entities, is planning to fully merge into
A-Plus International, Ltd.
Exhibit
99.4
SPARKING
EVENTS, INC.
(A
Development Stage Company)
UNAUDITED
PRO FORMA CONDENSED COMBINED
FINANCIAL
STATEMENTS
NOVEMBER
30, 2008
(STATED
IN U.S. DOLLARS)
SPARKING
EVENTS, INC.
(A
Development Stage Company)
CONTENTS
|
|
Page
|
|
|
|
|
|
|
|
Accountants’
Compilation Report
|
1
|
|
|
|
|
Introduction
to Unaudited Pro Forma Condensed Combined Financial
Statements
|
2
|
|
|
|
|
Unaudited
Pro Forma Condensed Combined Balance Sheet
|
3
|
|
|
|
|
Unaudited
Pro Forma Condensed Combined Statements of Operations
|
4 -
5
|
|
|
|
|
Notes
to Unaudited Pro Forma Condensed Combined Financial
Statements
|
6
|
To the
Board of Directors
Sparking
Events, Inc.
Carson
City, NV
We have
compiled the accompanying pro forma financial information as of November 30,
2008, for the year ended February 29, 2008, and for the nine months ended
November 30, 2008, reflecting the business combination of Sparking Events, Inc.
(a development stage company) and Aplus International Ltd. (consisting of Xodtec
Technology, Inc., Targetek Co., Ltd., and Up-Tech Technology Co., Ltd.) in
accordance with Statements on Standards for Accounting and Review Services
issued by the American Institute of Certified Public Accountants. The historical
condensed financial statements are derived from the historical financial
statements of Xodtec Technology, Inc., Targetek Co., Ltd., and Up-Tech
Technology Co., Ltd., which were audited by us, and of Sparking Events, Inc.,
which were audited for the year ended February 29, 2008 by other
accountants. The historical condensed financial statements are
derived from the historical unaudited statements of Sparking Events, Inc. for
the nine months ended November 30, 2008.
A
compilation is limited to presenting pro forma financial information that is the
representation of management. We have not audited or reviewed the accompanying
pro forma financial information and, accordingly, do not express an opinion or
any other form of assurance on it.
The
objective of this pro forma financial information is to show what the
significant effects on the historical information might have been had the
transaction occurred at an earlier date. However, the pro forma financial
information is not necessarily indicative of the results of operations or
related effects on financial position that would have been attained had the
above-mentioned transaction actually occurred earlier.
/s/
Brock, Schechter & Polakoff, LLP
Buffalo,
New York
April
20, 2009
|
Sparking
Events, Inc.
(A Development Statement Company)
|
|
Pro
Forma Financial
Information
|
Introduction
to Unaudited Pro Forma
Condensed
Combined Financial Statements
November
30, 2008
The
following unaudited pro forma condensed combined financial statements are
presented to illustrate the estimated effects of the acquisition of Aplus
International Ltd. (Aplus), a disregarded entity consisting of Xodtec
Technology, Inc. (Xodtec), Targetek Co., Ltd. (Targetek), and Up-Tech Technology
Co., Ltd., (Up-Tech), by Sparking Events, Inc. (Sparking) (the “Exchange
Transaction”). The unaudited pro forma condensed combined financial
statements were prepared using the historical financial statements of Sparking,
Xodtec, Targetek, and Up-Tech. Please note that the unaudited
proforma condensed combined financial statements should be read in conjunction
with the historical financial statements of Sparking, Xodtec, Targetek, and
Up-Tech, respectively. Sparking’s financial information can be found
in its Annual Report on Form 10-K for the fiscal year ended February 29, 2008
and quarterly report on Form 10-Q for the nine months ended November 30,
2008. The financial information of Xodtec, Targetek, and Up-Tech is
filed together with this Unaudited Pro Forma Condensed Combined Financial
Statements on Form 8-K.
The
unaudited pro forma condensed combined balance sheet as of November 30, 2008
combines the unaudited condensed balance sheet of Sparking as of November 30,
2008 and the audited balance sheets of Xodtec, Targetek, and Up-Tech,
respectively, as of December 31, 2008 and assumes that the Exchange Transaction
was consummated on November 30, 2008.
The
unaudited pro forma condensed combined statements of operations for the year
ended February 29, 2008 and for the nine months ended November 30, 2008 assume
that the Exchange Transaction was consummated on March 1, 2007. The
unaudited pro forma condensed combined statement of operations for the year
ended February 29, 2008 combines the audited statement of operations of Sparking
for the year ended February 29, 2008 with the audited statements of operations
of Xodtec, Targetek, and Up-Tech for the year ended December 31,
2007. The unaudited proforma condensed combined statement of
operations for the nine months ended November 30, 2008 combines the unaudited
statement of operations of Sparking for the nine months ended November 30, 2008
with the audited statements of operations of Xodtec, Targetek, and Up-Tech for
the year ended December 31, 2008.
The
information presented in the unaudited pro forma condensed combined financial
statements does not purport to represent what our financial position or results
of operations would have been had the Exchange Transaction occurred as of the
dates indicated, nor is it indicative of our future financial position or
results of operations for any period. You should not rely on this
information as being indicative of the historical results that would have been
achieved had the companies always been combined or the future results that the
combined company will experience after the Exchange Transaction.
The
unaudited pro forma adjustments are based upon available information and certain
assumptions that we believe are reasonable under the
circumstances.
|
Sparking
Events, Inc.
(A Development Statement Company)
|
|
Pro
Forma Financial
Information
|
Unaudited
Pro Forma Condensed Combined Balance Sheet
November
30, 2008
(Stated
in U.S. Dollars)
|
|
|
December 31,
2008
|
|
|
November 30,
2008
|
|
|
Pro
Forma
|
|
|
|
Pro
Forma
|
|
|
Assets
|
|
Xodtec
|
|
|
Targetek
|
|
|
Up-Tech
|
|
|
Sparking
|
|
|
Adjustments
|
|
|
|
Combined
|
|
|
Current
assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
and cash equivalents
|
|
$
|
7,281
|
|
|
$
|
152,302
|
|
|
$
|
13,333
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
|
$
|
172,916
|
|
|
Accounts
receivable, net
|
|
|
290,550
|
|
|
|
227,243
|
|
|
|
241,622
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
759,415
|
|
|
Inventory
|
|
|
11,733
|
|
|
|
-
|
|
|
|
148,800
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
160,533
|
|
|
Other
current assets
|
|
|
42,789
|
|
|
|
19,202
|
|
|
|
6,870
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
68,861
|
|
|
Total
current assets
|
|
|
352,353
|
|
|
|
398,747
|
|
|
|
410,625
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
1,161,725
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fixed
assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost
|
|
|
84,865
|
|
|
|
46,240
|
|
|
|
31,113
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
162,218
|
|
|
Less:
accumulated depreciation
|
|
|
( 23,679
|
)
|
|
|
( 38,761
|
)
|
|
|
( 26,063
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
|
( 88,503
|
)
|
|
Net
fixed assets
|
|
|
61,186
|
|
|
|
7,479
|
|
|
|
5,050
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
73,715
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
assets
|
|
|
33,801
|
|
|
|
33,969
|
|
|
|
9,943
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
77,713
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
447,340
|
|
|
$
|
440,195
|
|
|
$
|
425,618
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
|
$
|
1,313,153
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities
& Stockholders' Equity (Deficit)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts
payable and accrued liabilities
|
|
$
|
51,963
|
|
|
$
|
71,791
|
|
|
$
|
241,568
|
|
|
$
|
2,418
|
|
|
$
|
86,000
|
|
c
|
|
$
|
453,740
|
|
|
Income
tax payable
|
|
|
-
|
|
|
|
41,560
|
|
|
|
144,333
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
185,893
|
|
|
Related
party payable
|
|
|
559,805
|
|
|
|
112,042
|
|
|
|
110,358
|
|
|
|
5,788
|
|
|
|
-
|
|
|
|
|
787,993
|
|
|
Other
current liabilities
|
|
|
2,962
|
|
|
|
38,733
|
|
|
|
2,755.0000
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
44,450
|
|
|
Total
current liabilities
|
|
|
614,730
|
|
|
|
264,126
|
|
|
|
499,014
|
|
|
|
8,206
|
|
|
|
86,000
|
|
|
|
|
1,472,076
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders'
equity (deficit)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common
stock, $0.001 par value, 75,000,000
|
|
|
31,686
|
|
|
|
957,223
|
|
|
|
160,784
|
|
|
|
9,460
|
|
|
|
( 1,144,360
|
)
|
a
|
|
|
5,905
|
|
|
shares
authorized, 5,905,001 shares issued
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( 9,000
|
)
|
b
|
|
|
|
|
|
and
outstanding
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
112
|
|
c
|
|
|
|
|
|
Additional
paid in capital
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
8,740
|
|
|
|
1,117,954
|
|
a
|
|
|
1,218,267
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( 8,315
|
)
|
b
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
99,888
|
|
c
|
|
|
|
|
|
Treasury
stock, at cost
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
17,315
|
|
b
|
|
|
17,315
|
|
|
Accumulated
deficit
|
|
|
( 199,035
|
)
|
|
|
( 485,434
|
)
|
|
|
( 174,080
|
)
|
|
|
( 26,406
|
)
|
|
|
26,406
|
|
a
|
|
|
( 1,044,549
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( 186,000
|
)
|
c
|
|
|
|
|
|
Accumulated
other comprehensive income
|
|
|
( 41
|
)
|
|
|
( 295,720
|
)
|
|
|
( 60,100
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
|
( 355,861
|
)
|
|
Total
stockholders' equity (deficit)
|
|
|
( 167,390
|
)
|
|
|
176,069
|
|
|
|
( 73,396
|
)
|
|
|
( 8,206
|
)
|
|
|
( 86,000
|
)
|
|
|
|
( 158,923
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
447,340
|
|
|
$
|
440,195
|
|
|
$
|
425,618
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
|
$
|
1,313,153
|
|
See
accountants’ compilation report.
|
Sparking
Events, Inc.
(A Development Statement Company)
|
|
Pro
Forma Financial Information
|
Unaudited
Pro Forma Condensed Combined Statements of Operations
For
the Nine Months Ended November 30, 2008
(Stated
in U.S. Dollars)
|
|
|
For
the Year Ended
December 31,
2008
|
|
|
For
the Nine
Months
Ended
November 30,
2008
|
|
|
Pro
Forma
|
|
|
|
Pro
Forma
|
|
|
|
|
Xodtec
|
|
|
Targetek
|
|
|
Up-Tech
|
|
|
Sparking
|
|
|
Adjustments
|
|
|
|
Combined
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales-net
|
|
$
|
730,969
|
|
|
$
|
852,925
|
|
|
$
|
1,068,801
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
|
$
|
2,652,695
|
|
|
Cost
of goods sold
|
|
|
( 200,249
|
)
|
|
|
( 289,001
|
)
|
|
|
( 353,856
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
|
( 843,106
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
profit
|
|
|
530,720
|
|
|
|
563,924
|
|
|
|
714,945
|
|
|
|
-
|
|
|
|
|
|
|
|
|
1,809,589
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses
|
|
|
( 268,533
|
)
|
|
|
( 261,080
|
)
|
|
|
( 122,454
|
)
|
|
|
( 13,572
|
)
|
|
|
( 186,000
|
)
|
c
|
|
|
( 851,639
|
)
|
|
Research
and development expenses
|
|
|
( 690
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
( 690
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
income (loss)
|
|
|
261,497
|
|
|
|
302,844
|
|
|
|
592,491
|
|
|
|
( 13,572
|
)
|
|
|
( 186,000
|
)
|
|
|
|
957,260
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-operating
income and gains
|
|
|
5
|
|
|
|
4,401
|
|
|
|
194
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
4,600
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-operating
expenses and losses
|
|
|
-
|
|
|
|
( 5,739
|
)
|
|
|
( 8,907
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
|
( 14,646
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
(loss) before income taxes
|
|
|
261,502
|
|
|
|
301,506
|
|
|
|
583,778
|
|
|
|
( 13,572
|
)
|
|
|
( 186,000
|
)
|
|
|
|
947,214
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
tax expense
|
|
|
-
|
|
|
|
( 41,792
|
)
|
|
|
( 143,270
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
|
( 185,062
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income (loss)
|
|
$
|
261,502
|
|
|
$
|
259,714
|
|
|
$
|
440,508
|
|
|
$
|
( 13,572
|
)
|
|
$
|
( 186,000
|
)
|
|
|
$
|
762,152
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
(loss) per share
|
|
$
|
2.62
|
|
|
$
|
0.12
|
|
|
$
|
1.30
|
|
|
$
|
-
|
|
|
|
|
|
|
|
$
|
0.13
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
average number of shares outstanding
|
|
|
100,000
|
|
|
|
2,200,000
|
|
|
|
340,000
|
|
|
|
9,000,000
|
|
|
|
|
|
|
|
|
6,025,000
|
|
See
accountants’ compilation report.
|
Sparking
Events, Inc.
(A Development Statement Company)
|
|
Pro
Forma Financial Information
|
Unaudited
Pro Forma Condensed Combined Statements of Operations
For
the Year Ended February 28, 2008
(Stated
in U.S. Dollars)
|
|
|
For
the Year Ended
December 31,
2007
|
|
|
For
the Year Ended
February 29,
2008
|
|
|
Pro
Forma
|
|
|
Pro
Forma
|
|
|
|
|
Xodtec
|
|
|
Targetek
|
|
|
Up-Tech
|
|
|
Sparking
|
|
|
Adjustments
|
|
|
Combined
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales-net
|
|
$
|
-
|
|
|
$
|
413,854
|
|
|
$
|
478,357
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
892,211
|
|
|
Cost
of goods sold
|
|
|
-
|
|
|
|
( 218,814
|
)
|
|
|
( 392,253
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
( 611,067
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
profit
|
|
|
-
|
|
|
|
195,040
|
|
|
|
86,104
|
|
|
|
-
|
|
|
|
-
|
|
|
|
281,144
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses
|
|
|
( 197,687
|
)
|
|
|
( 312,884
|
)
|
|
|
( 94,745
|
)
|
|
|
( 10,908
|
)
|
|
|
-
|
|
|
|
( 616,224
|
)
|
|
Research
and development expenses
|
|
|
( 65,738
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
( 65,738
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
loss
|
|
|
( 263,425
|
)
|
|
|
( 117,844
|
)
|
|
|
( 8,641
|
)
|
|
|
( 10,908
|
)
|
|
|
-
|
|
|
|
( 400,818
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-operating
income and gains
|
|
|
17,583
|
|
|
|
106
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
17,689
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-operating
expenses and losses
|
|
|
( 52
|
)
|
|
|
( 15,830
|
)
|
|
|
( 861
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
( 16,743
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss
before income taxes
|
|
|
( 245,894
|
)
|
|
|
( 133,568
|
)
|
|
|
( 9,502
|
)
|
|
|
( 10,908
|
)
|
|
|
-
|
|
|
|
( 399,872
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
tax expense
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss
|
|
$
|
( 245,894
|
)
|
|
$
|
( 133,568
|
)
|
|
$
|
( 9,502
|
)
|
|
$
|
( 10,908
|
)
|
|
$
|
-
|
|
|
$
|
( 399,872
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss
per share
|
|
$
|
( 2.46
|
)
|
|
$
|
( 0.06
|
)
|
|
$
|
( 0.03
|
)
|
|
$
|
( 0.00
|
)
|
|
|
|
|
|
$
|
( 0.07
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
average number of shares outstanding
|
|
|
100,000
|
|
|
|
2,200,000
|
|
|
|
340,000
|
|
|
|
9,000,000
|
|
|
|
|
|
|
|
6,025,000
|
|
See
accountants’ compilation report.
|
Sparking
Events, Inc.
(A Development Statement Company)
|
|
Pro
Forma Financial Information
|
During
April 2009, Sparking acquired Aplus by issuing 5,333,334 common shares at par
value of $0.001, to the then shareholders of Aplus, in exchange for all of their
issued and outstanding common stock in Aplus. Aplus became the
wholly-owned subsidiary of Sparking. Immediately following the
closing, 9,000,000 shares of outstanding common stock of Sparking are to be
canceled.
Prior to
the acquisition of Xodtec, Targetek, and Up-Tech in 2009, Aplus was a
non-operating entity. For purposes of the Sparking acquisition, Aplus
is considered a disregarded entity.
The
Exchange Transaction is deemed to be a reverse acquisition. In
accordance with the Accounting and Financial Reporting Interpretations and
Guidance prepared by the staff of the U.S. Securities and Exchange Commission,
Sparking (the legal acquirer) is considered the accounting acquiree and Aplus
(the legal acquiree) is considered the accounting acquirer. The
financial statements of the combined entity will in substance be those of Aplus,
with the assets, liabilities, revenue and expenses of Sparking being included
effective from the date of the consummation of the Exchange
Transaction. Sparking is deemed to be a continuation of the business
of Aplus. The outstanding stock of Sparking prior to the Exchange
Transaction will be accounted for at its net book value and no goodwill will be
recognized.
|
|
2.
|
Unaudited Pro Forma Adjustments
|
The pro
forma adjustments included in the unaudited pro forma condensed combined
financial statements are as follows:
|
|
a.
|
To
record issuance of 5,333,334 shares of common stock of Sparking at $0.001
per share to the then shareholders of Aplus in exchange for all of their
issued and outstanding common stock in Aplus and to recapitalize for the
Exchange Transaction.
|
|
|
b.
|
To
cancel 9,000,000 shares of common stock previously issued by Sparking at
$0.001 per share.
|
|
|
c.
|
To
record the costs and service fees relating to the services rendered
associated with the Exchange Transaction including 111,667 shares of
common stock to be issued in lieu of
payment.
|
-6-
