Registration No. 333-                

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM S-1

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

  

AMERICAN EDUCATION CENTER INC.

(Exact Name of Registrant as Specified in Its Charter)

 

38-3941544 8200 Nevada
(I.R.S. Employer
Identification Number)
(Primary Standard Industrial
Classification Code Number)
(State or Other Jurisdiction of
Incorporation or Organization)

 

17 Battery Place, Suite 300

New York, NY, 10004

(212) 825-0437

(Address, Including Zip Code, and Telephone Number, Including Area Code, of Registrant’s Principal Executive Offices)

 

Hinman Au, Chief Executive Officer

American Education Center Inc.

17 Battery Place, Suite 300

New York, NY, 10004

(212) 825-0437

 

(Name, Address, Including Zip Code, and Telephone Number, Including Area Code, of Agent for Service)

 

Copies to:

 

Yue Cao, Esq.

Law Office of Yue & Associates

708 3 rd Avenue, 6 th Floor, New York, NY 10017

Telephone: 212-209-3894

 

Approximate date of commencement of proposed sale to the public:     As soon as practicable after the effective date hereof.

 

If any of the securities being registered on this form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933.   ¨

 

 
 

 

If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.   ¨

 

If this form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.   ¨

 

If this form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.   ¨

 

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

 

¨ Accelerated filer   Large accelerated filer
     
x  Smaller reporting company Non-accelerated filer

 

CALCULATION OF REGISTRATION FEE

 

Amount of
Registration Fee (3)
    Proposed
Maximum
Aggregate
Offering Price (2)
    Proposed Maximum Offer
Price Per Share (2)
    Amount to be
Registered (1)
    Class of Securities to be Registered
$ 11.61     $ 90,000     $ .01       9,000,000     Common Stock, par value $.001 per share

 

(1) An indeterminate number of additional shares of common stock shall be issuable pursuant to Rule 416 to prevent dilution resulting from stock splits, stock dividends or similar transactions and in such an event the number of shares registered shall automatically be increased to cover the additional shares in accordance with Rule 416 under the Securities Act.

 

(2) Estimated solely for purposes of calculating the registration fee pursuant to Rule 457 under the Securities Act. Our common stock is not traded on any national exchange and in accordance with Rule 457, the offering price was determined by the average price shares were sold to our shareholders in a private placement.

 

(3) Paid in advance. The Company has agreed to bear the expenses related to the registration of shares for the selling shareholders. Calculated under Section 6(b) of the Securities Act of 1933 as $.00012880 of the aggregate offering price.

 

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

 

 
 

 

The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

 

SUBJECT TO COMPLETION, DATED   ______________

 

Prospectus

 

American Education Center, Inc.

 

9,000,000 Shares of Common Stock

 

 

This is the initial offering of common stock of American Education Center (the “AEC”) and no public market currently exists for the securities being offered.

 

We are offering for sale up to a maximum of 9,000,000 common shares at a fixed price of $.01 per common share. There is no minimum number of common shares that must be sold by us for the offering to proceed, and we will retain the proceeds from the sale of any of the offered common shares.

 

There is no minimum amount of shares that we must sell in our direct offering, and therefore no minimum amount of proceeds will be raised. No arrangements have been made to place funds into escrow or any similar account.  The Company intends to sell the common shares directly on a best efforts basis, which means our officers, will attempt to sell the shares.   The offering is being conducted. We are making this offering without the involvement of underwriters or broker-dealers. No commission or other compensation related to the sale of the common shares.

 

    Per Share     Total  
Price to public   $ .01     $ 90,000  
Proceeds, before expenses to AEC   $ .01     $ 90,000  

 

There is no market for our securities.  Our common stock is presently not traded on any market or securities exchange and we have not applied for listing or quotation on any public market.

 

We are an “emerging growth company” as defined in the Jumpstart Our Business Startups Act (“JOBS Act”) and will therefore be subject to reduced public company reporting requirements.

 

THE PURCHASE OF THE SECURITIES OFFERED THROUGH THIS PROSPECTUS INVOLVES A HIGH DEGREE OF RISK. YOU SHOULD CAREFULLY READ THIS ENTIRE PROSPECTUS, INCLUDING THE SECTION ENTITLED “RISK FACTORS” BEGINNING ON PAGE 10 HEREOF BEFORE BUYING ANY SHARES OF COMMON STOCK.

.

NEITHER THE SEC NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE COMMON SHARES OR DETERMINED THAT THIS PROSPECTUS IS ACCURATE OR COMPLETE.  ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

 

The information in this prospectus is not complete and may be changed.  We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective.  This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

 

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The offering shall terminate on the earlier of:

 

1) the date when the sale of all 9,000,000 common shares is completed;
2) one year from the date of this prospectus; or
3) prior to one year at the sole determination of the board of directors.

 

There has been no market for our securities and a public market may never develop, or, if any market does develop, it may not be sustained. Our common stock is not traded on any exchange or on the over-the-counter market. After the effective date of the registration statement relating to this prospectus, we hope to have a market-maker file an application with the Financial Industry Regulatory Authority (“FINRA”) for our common stock to be eligible for trading on the Over-the-Counter Bulletin Board. To be eligible for quotation, issuers must remain current in their quarterly and annual filings with the SEC. If we are not able to pay the expenses associated with our reporting obligations we will not be able to apply for quotation on the OTC Bulletin Board. We do not yet have a market-maker who has agreed to file such application.  There can be no assurance that our common stock will ever be quoted on a stock exchange or a quotation service or that any market for our stock will develop.

 

Investing in our shares of common stock is speculative.

See “Risk Factors” beginning on page 10 of this prospectus.

 

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

 

You should rely only on the information contained in this prospectus or that we have referred you to.  We have not authorized anyone to provide you with information that is differed.  This prospectus does not constitute an offer to sell, or a solicitation of an offer to buy the securities in any circumstances under which the offer or solicitation is not permitted.

 

You should not assume that the information contained in the registration statement to which this prospectus is a part is accurate as of any date other than the date hereof, regardless of the time of delivery of this prospectus or of any sale of the shares of Common Stock being registered in that registration statement of which this prospectus forms a part.

 

No dealer, salesperson or any other person is authorized to give any information or make any representations in connection with this offering other than those contained in this prospectus and, if given or made, the information or representations must not be relied upon as having been authorized by us. This prospectus does not constitute an offer to sell or a solicitation of an offer to buy any security other than the securities offered by this prospectus, or an offer to sell or a solicitation of an offer to buy any securities by anyone in any jurisdiction in which the offer or solicitation is not authorized or is unlawful.

 

The date of this prospectus is                      , 2014.

 

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You should rely only on the information contained in this prospectus. We have not authorized anyone to provide you with additional information or information different from that contained in this prospectus. Under no circumstances should the delivery to you of this prospectus or any sale made pursuant to this prospectus create any implication that the information contained in this prospectus is correct as of any time after the date of this prospectus. In this prospectus, “Company,” “AEC,” “we” and “us” refer to American Education Center, Inc. unless the context requires otherwise.

 

TABLE OF CONTENTS

 

  Page
Prospectus Summary 5
The Offering 6
   
Risk Factors 8
Cautionary Note Regarding Forward-looking Statements 17
Use of Proceeds 18
Determination of Offering Price 18
Dilution 19
Plan of Distribution 20
Description of Securities to be Registered 22
Market for Common Equity and Related Stockholder Matters 25
Disclosure of Commission Position on Indemnification for Security Act Liabilities  
Business 25
Financial Statements  
Management’s Discussion and Analysis of Financial Condition and Results of Operations 34
Management 42
Principal Shareholders  
Related-Party Arrangements  
Legal Matters 45
Experts 45
Where You Can Find Additional Information 45
Index to Financial Statements F-1

 

Through and including                     , 2014 (the 25th day after the date of this prospectus), all dealers that effect transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealer’s obligation to deliver a prospectus when acting as an underwriter.

 

You should rely only on the information contained in this Prospectus and the information we have referred you to. We have not authorized any person to provide you with any information about this Offering, the Company, or the shares of our common stock offered hereby that is different from the information included in this Prospectus. If anyone provides you with different information, you should not rely on it. Under no circumstances should the delivery to you of this prospectus or any sale made pursuant to this prospectus create any implication that the information contained in this prospectus is correct as of any time after the date of this prospectus. To the extent that any facts or events arising after the date of this prospectus, individually or in the aggregate, represent a fundamental change in the information presented in this prospectus, this prospectus will be updated to the extent required by law.

 

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PROSPECTUS SUMMARY

 

The following summary highlights selected information contained elsewhere in this prospectus. This summary does not contain all the information that may be important to you. You should read this entire prospectus carefully before deciding to invest in our shares of Common Stock.

 

Unless otherwise indicated, all dollar amounts included herein are recorded in United States dollars.

 

Our Business

 

American Education Center, Inc. and subsidiary (the “Company,” “We,” or “AEC”) was incorporated under the laws of the State of Nevada on May 7, 2014. Our operations are conducted through our wholly-owned operating subsidiary, American Education Center, Inc. which is incorporated under the laws of the State of New York (“AEC New York” or ”AEC NY”).

 

On May 31, 2014, we entered into a Share Exchange Agreement (the “Exchange Agreement”) with AEC New York whereby we acquired all of the outstanding capital stock of AEC New York and AEC New York became a wholly owned subsidiary of the Company.  In consideration for the exchange of 100% of the issued and outstanding capital stock of AEC New York under the Exchange Agreement, we issued to the shareholder of AEC, Mr. Max Chen (President and director of the Company), an aggregate of 10,563,000 restricted shares of the Company’s common stock and AEC New York became a wholly-owned subsidiary of the Company.

 

AEC New York was founded in 1999 as a education consulting service company providing education opportunities for teachers, students, and educational institutions between China and the United States. Since 1999, AEC New York has been devoted to providing placement services to students wishing to study in the U.S., and also providing exchange services for qualified U.S. educators to teach in China. AEC New York currently has two representative offices located in Nanjing and Chengdu, and one office in the United States. AEC New York offers a comprehensive solution in which students from all over the world can find superior services suitable to their needs.

 

As of the date of this prospectus, there is no public trading market for our common stock and no assurance that a trading market for our securities will ever develop.

 

Implications of Being an “Emerging Growth Company”

 

As a public reporting company with less than $1.0 billion in revenue during our last fiscal year, we qualify as an “emerging growth company” under the Jumpstart our Business Startups Act of 2012, or the JOBS Act. An emerging growth company may take advantage of certain reduced reporting requirements and is relieved of certain other significant requirements that are otherwise generally applicable to public companies. In particular, as an emerging growth company we:

 

·       are not required to obtain an attestation and report from our auditors on our management’s assessment of our internal control over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act of 2002;

 

·        are not required to provide a detailed narrative disclosure discussing our compensation principles, objectives and elements and analyzing how those elements fit with our principles and objectives (commonly referred to as “compensation discussion and analysis);

 

·        are not required to obtain a non-binding advisory vote from our stockholders on executive compensation or golden parachute arrangements (commonly referred to as the “say-on-pay,” “say-on-frequency” and “say-on-golden-parachute” votes);

 

·        are exempt from certain executive compensation disclosure provisions requiring a pay-for-performance graph and CEO pay ratio disclosure;

 

·       may present only two years of audited financial statements and only two years of related Management’s Discussion & Analysis of Financial Condition and Results of Operations, or MD&A;

 

·       are eligible to claim longer phase-in periods for the adoption of new or revised financial accounting standards under §107 of the JOBS Act; and

 

·        are exempt from any proposed new requirements of the PCAOB rules relating to mandatory audit firm rotation and any requirement to include an auditor discussion and analysis narrative in our audit report.

 

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We intend to take advantage of all of these reduced reporting requirements and exemptions, including the longer phase-in periods for the adoption of new or revised financial accounting standards under §107 of the JOBS Act. Our election to use the phase-in periods may make it difficult to compare our financial statements to those of non-emerging growth companies and other emerging growth companies that have opted out of the phase-in periods under §107 of the JOBS Act.

 

Certain of these reduced reporting requirements and exemptions were already available to us due to the fact that we also qualify as a “smaller reporting company” under SEC rules. For instance, smaller reporting companies are not required to obtain an auditor attestation and report regarding management’s assessment of internal control over financial reporting; are not required to provide a compensation discussion and analysis; are not required to a pay-for-performance graph or CEO pay ratio disclosure; and may present only two years of audited financial statements and related MD&A disclosure.

 

Under the JOBS Act, we may take advantage of these reduced reporting requirements and exemptions for up to five years after our initial sale of common equity pursuant to a registration statement declared effective under the Securities Act of 1933, or such earlier time that we no longer meet the definition of an emerging growth company. In this regard, the JOBS Act provides that we would cease to be an “emerging growth company” if we have more than $1.0 billion in annual revenues, have more than $700 million in market value of our common stock held by non-affiliates, or issue more than $1.0 billion of non-convertible debt over a three-year period. Furthermore, under current SEC rules we will continue to qualify as a “smaller reporting company” for so long as we (1) have a public float (i.e., the market value of common equity held by non-affiliates) of less than $75 million as of the last business day of our most recently completed second fiscal quarter; or (2) for so long as we have a public float of zero, have annual revenues of less than $50 million during our most recently completed fiscal year.

 

Investors should be aware that we will be subject to the "Penny Stock" rules adopted by the Securities and Exchange Commission, which regulate broker-dealer practices in connection with transactions in Penny Stocks. These regulations may have the effect of reducing the level of trading activity, if any, in the secondary market for our stock, and investors in our common stock may find it difficult to sell their shares. Please see the disclosures under "Penny Stock Considerations" in this Prospectus for more information.

 

The Offering

 

Following is a brief summary of this offering.  Please see the “Plan of Distribution” section for a more detailed description of the terms of the offering.

 

Common shares outstanding prior to offering    21,000,000
     
Shares of Common Stock being offered   9,000,000 shares, par value $0.01
     
Number of Shares of Common Stock Outstanding After the Offering   30,000,000
     
Offering Price  

The $0.01 per share initial offering price of our common stock was determined by our Board of Directors based on several factors, including the most recent selling price of shares of our common stock in private placements

     
Use of proceeds   We will use proceeds of the offering for marketing, business development and working capital.

 

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Duration of the offering   The offering shall be terminated on the earlier of:
    (1)   The date when sale of all 9,000,000 shares is completed;
    (2)   One year from the date of this prospectus;
    (3)   Prior to one year at the sole determination of the Board of Directors;
     
Risk Factors   An investment in the shares of Common Stock is subject to a number of risks.  You should carefully consider the information set forth in the "Risk Factors" section below and the other sections of this Prospectus, in addition to the documents included in and/or incorporated by reference in the registration statement to which this Prospectus forms a part.

 

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RISK FACTORS

 

An investment in our shares of Common Stock involves a high degree of risk. You should carefully consider the following risk factors, together with the other information contained in this prospectus, before you decide to buy any shares. Any of the following risks could cause our business, results of operations and financial condition to suffer materially, causing the market price of our shares of Common Stock to decline, in which event you may lose part or all of your investment in our shares of Common Stock. Additional risks and uncertainties not currently known to us or that we currently do not deem material may also become important factors that may materially and adversely affect our business.

 

Risks Related to Our Business

 

If we are not able to continue to attract students to enroll in our courses without a significant decrease in course fees, our revenues may decline and we may not be able to maintain profitability.

 

The success of our business depends primarily on the number of student enrollments in our courses and the amount of course fees that our students are willing to pay. Therefore, our ability to continue to attract students to enroll in our courses without a significant decrease in course fees is critical to the continued success and growth of our business. This in turn will depend on several factors, including our ability to develop new programs and enhance existing programs to respond to changes in market trends and student demands, expand our geographic reach, manage our growth while maintaining the consistency of our teaching quality, effectively market our programs to a broader base of prospective students, develop and license additional high-quality educational content and respond to competitive pressures. If we are unable to continue to attract students to enroll in our courses without a significant decrease in course fees, our revenue may decline and we may not be able to operate profitability.

 

We depend on our dedicated and capable faculty, and if we are not able to continue to hire, train and retain qualified teachers, we may not be able to maintain consistent teaching quality throughout our school network and our brand, business and operating results may be materially and adversely affected.

 

Our teachers are critical to maintaining the quality of our programs, services and products and building and maintaining our brand and reputation. It is critical for us to continue to attract qualified teachers who have a strong command of the subject areas to be taught and meet our qualification. We also need to hire teachers who are capable of delivering innovative and inspirational instruction. The number of teachers in China with the necessary experience and language proficiency to teach our courses is limited and we must provide competitive compensation packages to attract and retain qualified teachers. In addition, criteria such as commitment and dedication are difficult to ascertain during the recruitment process, in particular as we continue to expand and add teachers to meet rising student enrollment. We must also provide continuous training to our teachers so that they can stay up to date with changes in student demands, admissions and assessment tests, admissions standards and other key trends necessary to effectively teach their respective courses. We may not be able to hire, train and retain enough qualified teachers to keep pace with our anticipated growth while maintaining consistent teaching quality across many different schools, learning centers and programs in different geographic locations. Shortages of qualified teachers or decreases in the quality of our instruction, whether actual or perceived, in one or more of our markets may have a material and adverse effect on our business.

 

Our business depends on our name “American Education Center”, and if we are not able to maintain and enhance our brand, our business and operating results may be harmed.

 

We believe that market awareness of our name “American Education Center” has contributed significantly to the success of our business. We also believe that maintaining and enhancing the “American Education Center” brand is critical to maintaining our competitive advantage. We offer a diverse set of programs, services and products to primary and middle school students, college students and other adults throughout many provinces and cities in China. As we continue to grow in size, expand our programs, services and product offerings and extend our geographic reach, our ability to maintain and improve their quality and consistency may be more difficult to achieve.

 

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We have invested in brand promotion initiatives. We cannot assure you that these or our other marketing efforts will be successful in promoting our brand to remain competitive. If we are unable to further enhance our brand recognition and increase awareness of our programs, services and products, or if we incur excessive marketing and promotion expenses, our business and results of operations may be materially and adversely affected. In addition, any negative publicity relating to our Company or our programs and services, regardless of its veracity, could harm our brand image and in turn materially and adversely affect our business and operating results.

 

If we fail to successfully execute our growth strategies, we may not be able to continue to attract students to enroll in our courses and/or utilize our services, and our business and prospects may be materially and adversely affected.

 

Our growth strategies include expanding our programs, services and product offerings and our network with schools and learning centers, updating and expanding the content of our programs, services and products in a cost-effective and timely manner, as well as maintaining and continuing to establish strategic relationships with other businesses. The expansion of our programs, services and products in terms of types of offerings and geographic locations may not succeed due to competition, failure to effectively market our new programs, services and products and maintain their quality and consistency, or other factors. In addition, we may be unable to identify new cities with sufficient growth potential to expand our network, and we may fail to attract students and increase student enrollments or recruit, train and retain qualified teachers for our new schools and learning centers. Some cities in China have undergone development and expansion for several decades while others are still at an early stage of urbanization and development. In more developed cities, it may be difficult to increase the number of schools and learning centers because we and/or our competitors already have extensive operations in these cities. In recently developed and developing cities, demand for our programs, services and products may not increase as rapidly as we expect. Furthermore, we may be unable to develop or license additional content on commercially reasonable terms in a timely manner, or at all, to keep pace with changes in market demands. If we fail to successfully execute our growth strategies, we may not be able to continue to attract students to enroll in our courses and utilize our services, and our business and prospects may be materially and adversely affected.

 

We face significant competition in each major program we offer and each geographic market in which we operate, and if we fail to compete effectively, we may lose our market share and our profitability may be adversely affected.

 

The private education sector in China is rapidly evolving, highly fragmented and competitive, and we expect competition in this sector to persist and intensify. We face competition in each major program we offer and each geographic market in which we operate. For example, we face nationwide competition for our English as a Second Language (“ESL”) preparation courses from companies which offer similar preparation courses in China. We also face competition from companies that focus on providing after-school tutoring services, including TAL Education Group and Xueda Education Group.

 

Our student enrollments may decrease due to intense competition. Some of our competitors have greater resources than we do. These competitors may be able to devote greater resources than we can to the development, promotion and sale of their programs, services and products and respond more quickly than we can to changes in student needs, testing materials, admissions standards or new technologies. In addition, we face competition from many different smaller sized organizations that only focus on some of our targeted markets, and they may be able to respond faster to changes in student preferences in these markets. Further, the increased use of the internet, and advances in internet and computer related technologies, such as web video conferencing and online testing simulators, are eliminating geographic and cost entry barriers to providing private educational services. As a result, many of our international competitors that offer online test preparation and language training courses may be able to more effectively penetrate the China market. Many of these competitors have strong education brands, which may cause students and parents in China to be more attracted to these companies based in the country that the student wishes to study in or in which the selected language is widely spoken. Moreover, many smaller companies are able to use the internet to quickly and cost effectively offer their programs, services and products to a large number of students with less capital expenditures than previously required. We may have to reduce course fees or increase spending in response to competition in order to retain or attract students or pursue new market opportunities. As a result, our revenues and profitability may decrease. We cannot assure you that we will be able to compete successfully against current or future competitors. If we are unable to maintain our competitive position or otherwise respond to competitive pressures effectively, we may lose our market share and our profitability may be adversely affected.

 

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Failure to adequately and promptly respond to changes in testing materials, admissions standards and technologies could cause our programs, services and products to be less attractive to students.

 

Admissions and assessment tests undergo continuous change, in terms of the focus of the subjects and questions asked, the format of the tests and the manner in which the tests are administered. For example, certain admissions and assessment tests in the United States now include an essay component, which require us to hire and train teachers to be able to analyze written essays that tend to be more subjective in nature and require a higher level of English proficiency. In addition, some admissions and assessment tests that were previously offered in paper format only are now offered in a computer-based testing format. These changes require us to continually update and enhance our test preparation materials and our teaching methods, and could lead to an increase in our expenses and a decrease in profitability.

 

If colleges, universities and other higher education institutions reduce their reliance on admissions and assessment tests, we may experience a decrease in demand for our admission preparation services and our business may be materially and adversely affected.

 

We provide preparation services for Chinese students seeking admission to colleges and universities in the United States. We derive a significant portion of our revenues from such admission services. The success of our admission services depends on the continued use of admission and assessment tests as a requirement for admission or graduation. If these tests are changed and we are unable to maintain a program to keep up with these changes or if these tests are not utilized by the colleges and universities, our business can be materially and adversely affected.

 

In the United States, there has been a continuing debate regarding the usefulness of admission and assessment tests to assess qualifications of applicants and many people have criticized the use of these tests as unfairly discriminating against certain test takers. If a large number of educational institutions abandon the use of existing admission and assessment tests as a requirement for admission, without replacing them with other admission and assessment tests, we may experience a decrease in demand for our test preparation courses and our business may be seriously harmed.

 

New programs, services and products that we develop may compete with our current offerings.

 

We are constantly developing new programs, services and products to meet changes in student demands and respond to changes in testing materials, admissions standards, market needs and trends and technological changes. While some of the programs, services and products that we develop will expand our current offerings and increase student enrollments, others may compete with or make irrelevant our existing offerings without increasing our total student enrollments. For example, our online courses may take away students from our existing classroom-based courses, and our partnership with new schools and learning centers may take away students from our existing schools and learning centers. If we are unable to expand our program, service and product offerings while increasing our total student enrollments and profitability, our business and growth may be adversely affected.

 

Our business is subject to fluctuations caused by seasonality or other factors beyond our control, which may cause our operating results to fluctuate from quarter to quarter.

 

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We have experienced, and expect to continue to experience, seasonal fluctuations in our revenues and results of operations, primarily due to seasonal changes in student enrollments. Historically, we receive deposits for our services during the second and third quarter of our fiscal year which lead to increased revenues during the subsequent quarters. Further, because these deposits are refundable if the client is not accepted to the college or university (normally in the third and fourth quarters of our fiscal year) our revenues during these quarters may be lower than in previous quarters. In addition, because these deposits can be refundable , revenue cannot be recognized until we successfully complete our services. However, certain of our expenses do not necessarily correspond with changes in our student enrollments and revenues. For example, we make investments in marketing and promotion, teacher recruitment and training, and product development throughout the year and we pay rent for our facilities. In addition, other factors beyond our control, such as special events that take place during a quarter when our student enrollment would normally be high, may have a negative impact on our student enrollments. We expect quarterly fluctuations in our revenues and results of operations to continue. These fluctuations could result in volatility and adversely affect our operations from one quarter to the next. As our revenues grow, these seasonal fluctuations may become more pronounced.

 

Our historical financial and operating results are not indicative of our future performance; and our financial and operating results are difficult to forecast.

 

Our financial and operating results to date are not necessarily indicative of future operating results. In addition to the fluctuations described above, our revenues, expenses and operating results may vary from quarter to quarter and from year to year in response to a variety of other factors beyond our control, including, but not limited to:

 

    general economic conditions;

 

    regulations or actions pertaining to the provision of private educational services in China;

 

    detrimental negative publicity about us, our competitors or our industry;

 

    changes in consumers’ spending patterns; and

 

    non-recurring charges incurred in connection with acquisitions or other extraordinary transactions or unexpected circumstances.

 

Due to these and other factors, we believe that quarter-to-quarter comparisons of our operating results may not be indicative of our future performance, and therefore you should not rely on them to predict the future performance of our Company. In addition to the above factors, our past results may not be indicative of future performance because of new businesses developed or acquired by us.

 

Our business is difficult to evaluate because we have limited experience generating revenues from some of our newer services.

 

Historically, our core business has been student admission services for college and graduate study, teacher placement, and recruiting and consulting services to educational institutions between the United States and China. We have launched new services to expand our business and student base in recent years. For example, during the second half of 2013, we launched our “VIP Personalized Services” for students who would like to apply to top U.S. universities. In 2014, we established our University Pathway Program (“UPP”) with the State University of New York, and Masters in Data Sciences program with St. Peter’s University. Some of these operations have not generated significant revenues to date, and we have less experience responding quickly to changes, competing successfully and maintaining and expanding our brand in these areas. Consequently, there is limited operating history on which you can base your evaluation of the business and prospects of these relatively newer operations.

 

The continuing efforts of our senior management team and other key personnel are important to our success, and our business may be harmed if we lose their services.

 

It is important for us to have the continuing services of our senior management team, in particular, Max Pu Chen, our founder, and chairman, who has been with AEC New York since inception in 1999. If one or more of our senior executives or other key personnel are unable or unwilling to continue in their present positions, we may not be able to replace them easily, and our business may be disrupted or suffer from their departure. Competition for experienced management personnel in the private education sector is intense, the pool of qualified candidates is very limited, and we may not be able to retain the services of our senior executives or key personnel, or attract and retain high-quality senior executives or key personnel in the future. In addition, if any member of our senior management team or any of our other key personnel joins a competitor or forms a competing company, we may lose teachers, students, and key professionals and staff members.

 

Some of Our Officers and Our Director have no public company experience, which could result in their inability to properly manage Company affairs.  The Company’s needs could exceed the level of experience they may have.  The Company will be dependent on key executives, and the loss of the services of the current officers and directors could severely impact the Company’s business operations.  This could result in the loss of one’s entire investment.

 

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The Company’s business plan does not provide for the hiring of any additional employees, other than outlined in its Plan of Operations, until operations can support the expense.  Until that time, the responsibility of developing the Company’s business, the offering and selling of the shares through this prospectus and fulfilling the reporting requirements of a public company will fall upon the officers and director of the Company.  Further, our President and sole director has no experience in complying with the various rules and regulations which are required of a public company, and as a result, he may not be able to successfully operate a public company, even if the Company’s operations are successful.  While each of the Company’s officers and director will use their best judgment to resolve all potential conflicts, there is no formulated plan to resolve any possible conflict of interest with their other business activities, and we cannot guarantee that any potential conflicts can be avoided.  In the event they are unable to fulfill any aspect of their duties to the Company, it may experience a shortfall or complete lack of sales resulting in little or no profits and eventual closure of its business.

 

The management of future growth will require, among other things, continued development of the Company's financial and management controls and management information systems, stringent control of costs, increased marketing activities, ability to attract and retain qualified management, research and marketing personnel.  The loss of key executives or the failure to hire qualified replacement personnel would compromise the Company’s ability to generate revenues or otherwise have a material adverse effect on the Company.  There can be no assurance that the Company will be able to successfully attract and retain skilled and experienced personnel.

 

We are an “emerging growth company,” and we cannot be certain if the reduced reporting requirements applicable to emerging growth companies will make our common stock less attractive to investors.

 

We are an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act, or the JOBS Act. For as long as we continue to be an emerging growth company, we may take advantage of exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies, including not being required to comply with the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our annual reports and proxy statements and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. We could be an emerging growth company for up to five years, although we could lose that status sooner if our revenues exceed $1,000,000,000, if we issue more than $1,000,000,000 in non-convertible debt in a three year period, or if the market value of our common stock held by non-affiliates exceeds $100,000,000 as of any April 30 before that time, in which case we would no longer be an emerging growth company as of the following April 30. We cannot predict if investors will find our common stock less attractive because we may rely on these exemptions. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our stock price may be more volatile.

 

We have elected to use the extended transition period for complying with new or revised accounting standards under Section 102(b)(2) of the Jobs Act, that allows us to delay the adoption of new or revised accounting standards that have different effective dates for public and private companies until those standards apply to private companies. As a result of this election, our financial statements may not be comparable to companies that comply with the public company effective dates.

 

Risks Related To Doing Business In China

 

The PRC laws and regulations governing the Company’s business operations are sometimes vague and uncertain. Any changes in such PRC laws and regulations may have a material and adverse effect on the Company’s business.

 

There are substantial uncertainties regarding the interpretation and application of PRC laws and regulations, including but not limited to the laws and regulations governing the Company’s business, or the enforcement and performance of the Company’s arrangements with customers in the event of the imposition of statutory liens, death, bankruptcy and criminal proceedings. The Company and any future subsidiaries are considered foreign persons or foreign funded enterprises under PRC laws, and as a result, the Company is required to comply with PRC laws and regulations. These laws and regulations are sometimes vague and may be subject to future changes, and their official interpretation and enforcement may involve substantial uncertainty.

 

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The effectiveness of newly enacted laws, regulations or amendments may be delayed, resulting in detrimental reliance by foreign investors. New laws and regulations that affect existing and proposed future businesses may also be applied retroactively. The Company cannot predict what effect the interpretation of existing or new PRC laws or regulations may have on the Company’s businesses.

 

Doing business in the PRC is subject to many uncertainties and changes in the political, economic or social desection of the PRC could have an adverse effort on the Company’s operations.

 

The Company’s operations may be adversely affected by signification political, economic and social uncertainties in the PRC. The differing cultures, business preferences, corruption, deserve uncertain government regulations, tax systems and currency regulations are risks that can impact the Company’s operations. Although the PRC government has been pursuing economic reform policies, no assurance can be given that the PRC government will continue to pursue such policies or that such policies may not be significantly attend, especially in the event of a change in leadership, social or political description or unforeseen circumstance, there is also no guarantee that the PRC government’s pursuit of economic reforms will be consistent, effective or continue.

 

Governmental control of currency conversion may affect the value of an investment in the Company and may limit our ability to receive and use our revenues effectively.

 

At the present time, the Renminbi, the currency of the PRC, is not a freely convertible currency.  We receive all of our revenue in Renminbi, which may need to be converted to other currencies, primarily U.S. dollars, in order to be remitted outside of the PRC.  The PRC government imposes controls on the convertibility of Renminbi into foreign currencies and, in certain cases, the remittance of currency out of the PRC. Any future restrictions on currency exchanges may limit our ability to use revenue generated in Renminbi to fund any future business activities outside China or to make dividend or other payments in U.S. dollars.

 

Effective July 1, 1996, foreign currency “current account” transactions by foreign investment enterprises are no longer subject to the approval of State Administration of Foreign Exchange (“SAFE,” formerly, “State Administration of Exchange Control”), but need only a ministerial review, according to the Administration of the Settlement, Sale and Payment of Foreign Exchange Provisions promulgated in 1996 (the “FX regulations”). “Current account” items include international commercial transactions, which occur on a regular basis, such as those relating to trade and provision of services.  Distributions to joint venture parties also are considered “current account transactions.”  Non-current account items, including direct investments and loans, known as “capital account” items, remain subject to SAFE approval and companies are required to open and maintain separate foreign exchange accounts for capital account items.  There are other significant restrictions on the convertibility of Renminbi, including that foreign-invested enterprises may only buy, sell or remit foreign currencies after providing valid commercial documents at those banks in China authorized to conduct foreign exchange business. Under current regulations, we can obtain foreign currency in exchange for the Renminbi from swap centers authorized by the government.  While we do not anticipate problems in obtaining foreign currency to satisfy our requirements, we cannot be certain that foreign currency shortages or changes in currency exchange laws and regulations by the PRC government will not restrict us from freely converting the Renminbi in a timely manner.

 

We may be exposed to liabilities under the Foreign Corrupt Practices Act, and any determination that we violated the Foreign Corrupt Practices Act could harm our business.

 

Although we are currently not subject to these regulations, we anticipate that we will be subject to the United States Foreign Corrupt Practices Act, or FCPA, and other laws that prohibit U.S. companies from engaging in bribery or other prohibited payments to foreign officials for the purpose of obtaining or retaining business. Our activities in China create the risk of unauthorized payments or offers of payments by one of the employees, consultants, sales agents or distributors of our Company, even though these parties are not always subject to our control. It is our policy to implement safeguards to discourage these practices by our employees. However, our existing safeguards and any future improvements may prove ineffective, and the employees, consultants, sales agents or distributors of our Company may engage in conduct for which we might be held responsible. Violations of the FCPA may result in severe criminal or civil sanctions, and we may be subject to other liabilities, which could adversely impact our business, operating results and financial condition.

 

Risks Related to this Offering

 

The offering price of the shares should not be used as an indicator of the future market price of the shares, therefore, the offering price bears no relationship to the actual value of the Company and may make our shares difficult to sell

 

Since our shares are not listed or quoted on any exchange or quotation system, the offering price for the sale of the shares of common stock by the Company was determined arbitrarily by management. The facts considered in determining the offering price were our financial condition and prospects, our limited operating history and the general condition of the securities market. The offering price bears no relationship to the book value, assets or earnings of the Company or any other recognized criteria of value. The offering price should not be regarded as an indicator of the future market price of the shares.

 

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The ownership of our common stock is concentrated among a small number of shareholders, and if our principal shareholders, director and officers choose to act together, they may be able to significantly influence management and operations, which may prevent us from taking actions that may be favorable to you.

 

Our ownership is concentrated among a small number of shareholders, including our founder, director, officers and entities related to these persons. Accordingly, these shareholders, acting together, will have the ability to exert substantial influence over all matters requiring approval by our shareholders, including the election and removal of directors and any proposed merger, consolidation or sale of all or substantially all of our assets. This concentration of ownership could have the effect of delaying, deferring or preventing a change in control of the Company or impeding a merger or consolidation, takeover or other business combination that could be favorable to you.

 

The requirements of being a public company may strain our resources and divert management’s attention.

 

Compliance with the Exchange Act and the Sarbanes-Oxley Act and other applicable securities rules and regulations will increase our legal and financial compliance costs, make some activities more difficult, time-consuming, or costly, and increase demand on our systems and resources. As a result, management’s attention may be diverted from other business concerns, which could harm our business and operating results. In addition, complying with public company disclosure rules makes our business more visible, which we believe may result in threatened or actual litigation, including by competitors and other third parties. If such claims are successful, our business and operating results could be harmed, and even if the claims do not result in litigation or are resolved in our favor, these claims, and the time and resources necessary to resolve them, could divert the resources of our management and harm our business and operating results.

 

There is no assurance of a public market or that the Company’s common stock will ever trade on a recognized exchange; therefore, you may be unable to liquidate your investment in our stock.

 

There is no established public trading market for our common stock. Our shares are not and have not been listed or quoted on any exchange or quotation system. There can be no assurance that a market maker will agree to file the necessary documents to obtain a listing on the OTC Bulletin Board (or comparable platform), nor can there be any assurance that such an application for quotation will be approved or that a regular trading market will develop or that if developed, will be sustained. In the absence of a trading market, an investor may be unable to liquidate their investment.

 

Our common stock is considered a “penny stock” which is subject to restrictions on marketability, so you may not be able to sell your shares.

 

The SEC has adopted regulations which generally define “penny stock” to be an equity security that has a market price of less than $5.00 per share or an exercise price of less than $5.00 per share, subject to specific exemptions. The market price of our common stock is currently less than $5.00 per share and therefore is designated as a “penny stock” according to SEC rules. This designation requires any broker or dealer selling these securities to disclose some information concerning the transaction, obtain a written agreement from the purchaser and determine that the purchaser is reasonably suitable to purchase the securities. These rules may restrict the ability of brokers or dealers to sell the common stock and may affect the ability of investors to sell their shares. These regulations may likely have the effect of limiting the trading activity of the Company’s common stock and reducing the liquidity of an investment in its common stock. In addition, investors may find it difficult to obtain accurate quotations of the common stock and may experience a lack of buyers to purchase our Company’s stock or a lack of market makers to support the stock price.

 

If our common stock becomes tradable in the secondary market, we will be subject to the penny stock rules adopted by the Securities and Exchange Commission that require brokers to provide extensive disclosure to their customers prior to executing trades in penny stocks. These disclosure requirements may cause a reduction in the trading activity of our common stock, which in all likelihood would make it difficult for our shareholders to sell their shares.

 

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Our shareholders may face significant restrictions on the resale of our securities due to state “Blue Sky” laws.

 

Each state has its own securities laws, often called “blue sky” laws, which (i) limit sales of securities to a state’s residents unless the securities are registered in that state or qualify for an exemption from registration, and (ii) govern the reporting requirements for broker-dealers doing business directly or indirectly in the state. Before a security is sold in a state, there must be a registration in place to cover the transaction, or the transaction must be exempt from registration. The applicable broker must be registered in that state.

 

We do not know whether our securities will be registered or exempt from registration under the laws of any state. A determination regarding registration will be made by those broker-dealers, if any, who agree to serve as the market-makers for our common stock. There may be significant state blue sky law restrictions on the ability of investors to sell, and on purchasers to buy, our securities. You should therefore consider the resale market for our common stock to be limited, as you may be unable to resell your shares without the significant expense of state registration or qualification.

 

Because we are not subject to compliance with rules requiring the adoption of certain corporate governance measures, our shareholders have limited protections against interested director transactions, conflicts of interest and similar matters.

 

The Sarbanes-Oxley Act of 2002, as well as rule changes proposed and enacted by the SEC, the New York and NYSE AMEX Equities exchanges and the Nasdaq Stock Market, as a result of Sarbanes-Oxley, require the implementation of various measures relating to corporate governance. These measures are designed to enhance the integrity of corporate management and the securities markets and apply to securities which are listed on those exchanges or the Nasdaq Stock Market. Because we are not presently required to comply with many of the corporate governance provisions and because we chose to avoid incurring the substantial additional costs associated with such compliance any sooner than necessary, we have not yet adopted these measures.

 

We do not currently have independent audit or compensation committees. As a result, the board of directors has the ability, among other things, to determine their own level of compensation. Until we comply with such corporate governance measures, regardless of whether such compliance is required, the absence of such standards of corporate governance may leave our shareholders without protections against interested director transactions, conflicts of interest and similar matters and investors may be reluctant to provide us with funds necessary to expand our operations.

 

An active trading market for our shares of Common Stock may not develop.

 

Prior to this offering, there has been no public market for our shares of Common Stock. An active trading market for our shares may not develop or be sustained following this offering. Accordingly, you may not be able to sell your shares quickly or at the market price if trading in our shares is not active. The initial public offering price for our shares of Common Stock hereunder may bear no relation to its intrinsic value or to the market price of our shares of Common Stock after this offering. Investors may not be able to sell their shares of Common Stock at or above the initial public offering price or at all.

 

If the price of our common stock is volatile when (and if) we are trading, purchasers of our shares of Common Stock could incur substantial losses.

 

The price of our Common Stock when (and if) we are trading is likely to be volatile. As a result of this volatility, investors may not be able to sell their shares of Common Stock at or above the initial public offering price. The price for our shares of Common Stock may be influenced by many factors, including general economic, industry and market conditions.

 

A decline in the market price of our shares of Common Stock could cause investors to lose some or all of their investment and may adversely impact our ability to attract and retain employees and raise additional capital. In addition, shareholders may initiate securities class action lawsuits if the market price of our shares drops significantly, which may cause us to incur substantial costs and could divert the time and attention of our management.

 

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Moreover, we cannot assure you that any securities analysts will initiate or maintain research coverage of our company and our shares of Common Stock. We do not control analysts or the content and opinions included in their reports. The price of our shares of Common Stock could decline if one or more equity research analysts downgrade our shares of Common Stock or if analysts issue other unfavorable commentary or cease publishing reports about us or our business.

 

We do not intend to pay cash dividends on our shares of Common Stock in the foreseeable future.

 

We do not anticipate paying any cash dividends in the foreseeable future. We currently intend to retain our future earnings, if any, to fund the development and growth of our business. In addition, the right of holders of our shares of Common Stock to receive dividends declared by our board of directors may be restricted to the extent we issue preferred shares with dividend rights superior to those of our shares of Common Stock.

 

Shares of the Company’s common stock represent equity interests and are subordinate to existing and future indebtedness.

 

Shares of our common stock represent equity interests in our Company and, as such, rank junior to any indebtedness of our Company now existing or created in the future, as well as to the rights of any preferred shares that may be issued in the future. In the future, we may incur substantial amounts of debt and other obligations that will rank senior to our common stock or to which our common stock will be structurally subordinated.

 

Provisions in our charter documents and Nevada law could discourage or prevent a takeover, even if an acquisition would be beneficial to our shareholders.

 

Provisions of our articles of incorporation and bylaws, as well as provisions of Nevada law, could make it more difficult for a third party to acquire us, even if beneficial to our shareholders.  Provisions include (i) authorizing the issuance of “blank check” preferred shares that could be issued by our board of directors to increase the number of outstanding shares and thwart a takeover attempt; (ii) prohibiting cumulative voting in the election of directors, which would otherwise allow less than a majority of our shareholders to elect director candidates; and (iii) advance notice provisions in connection with shareholder proposals that may prevent or hinder any attempt by our shareholders to bring business to be considered by shareholders at a meeting or replace our Company’s board of directors.

 

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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

 

This prospectus, including sections entitled “Prospectus Summary,” “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operation” and “Business,” contains forward-looking statements. Forward-looking statements include, but are not limited to, statements about:

 

implementation of our business strategy;

 

our anticipated capital requirements and future operating performance; and

 

our use of the net proceeds from this offering.

 

Any statements that relate to future events or conditions, including, without limitation, the statements included in this prospectus that are not historical facts, that relate to industry prospects and that concern our prospective results of operations or financial position, may be deemed to be forward-looking statements. Often, however, our uses of the words “believe,” “anticipate,” “plan,” “expect,” “intend” and similar expressions will identify forward-looking statements, but the absence of these words does not necessarily mean that a statement is not forward-looking. Although we believe that the expectations reflected in the forward-looking statements contained in this prospectus are reasonable, these statements represent our current expectations and are inherently uncertain. The factors discussed above under “Risk Factors,” among others, could cause actual results, levels of activity, performance or achievements to differ materially from those indicated by these forward-looking statements. Forward-looking statements represent our views as of the date of this prospectus. While we may elect to update these forward-looking statements in the future, we disclaim any obligation to do so, even if subsequent events cause our views to change. For all of these reasons, you should not unduly rely on any forward-looking statements.

 

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USE OF PROCEEDS

 

We will receive up to $90,000 in proceeds from the sale of shares offered by us under this prospectus. There is no assurance that we will be able to raise any funds from this offering as we are conducting this offering on a “best-efforts” basis. The proceeds we receive shall be used to pay for offering expenses consisting of legal and accounting fees. The use of proceeds may include: consulting services and hiring personnel or engaging in joint ventures with other companies.

 

If all the shares being offered by the Company are sold, the gross proceeds from this offering will be $90,000. The proceeds from this offering are expected to be used in the priority set forth below after successful completion of this offering:

 

GROSS OFFERING   $ 90,000  
LESS ESTIMATED OFFERING EXPENSES     55,199  
NET PROCEEDS   $ 34,801  
         
PLANNED USES        
         
USE OF PROCEEDS        
Consulting Services   $ 23,121  
Salaries and wages     4,400  
Other     2,180  
Reserve     5,100  
Total use of proceeds   $ 34,801  

 

Other working capital will consist of travel expenses, communication expenses, international calls, mobile, hotels, meal and entertainment.

 

 There is no guarantee the Company will be able to sell the shares being offered in this prospectus.

  

DETERMINATION OF OFFERING PRICE

 

The offering price of the shares has been determined arbitrarily by us.  The price does not bear any relationship to our assets, book value, earnings, or other established criteria for valuing a privately held company.  In determining the number of shares to be offered and the offering price, we took into consideration our cash on hand and the amount of money we would need to implement our business plan.  Accordingly, the offering price should not be considered an indication of the actual value of the securities.

 

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DILUTION

 

If you invest in our shares of Common Stock, you will experience dilution to the extent of the difference between the public offering price per share you pay in this offering and the net tangible book value per share of our shares of Common Stock immediately after this offering.

 

Our net tangible book value as of September 30, 2014 was $149,008 or $0.007 per share of common stock.   Our net tangible book value per share represents the amount of our total tangible assets reduced by the amount of our total liabilities and divided by the total number of shares of our common stock outstanding as of September 30, 2014.   After giving effect to the sale by the Company of 9,000,000 shares of Common Stock offered hereby at the public offering price of $0.010 per share, after deducting estimated offering expenses of $55,199, the adjusted net tangible book value and our net tangible book value per share would have been $183,809 or $0.006 per share of Common Stock. This represents an immediate decrease in net tangible book value of ($0.001) per share to existing shareholders and an immediate dilution in net tangible book value of $0.004 per share to new investors.

 

The following table illustrates the per share dilution:

 

Assumed initial offering price per share           $ 0.010  
Pro forma net tangible book value per share as of Sept 30, 2014   $ 0.007          
Decrease in pro forma net tangible book value per share attributable to investors purchasing shares in our initial public offering     (0.001 )        
Pro forma as adjusted net tangible book value per share after our initial public offering             (0.006 )
Dilution in pro forma net tangible book value per share to investors in this offering           $ 0.004  

  

Even if we have sufficient funds for our current and forecasted operating plans, we may choose to raise additional capital due to market conditions or strategic considerations. To the extent that additional capital is raised through the sale of equity or convertible debt securities, the issuance of these securities could result in further dilution to our shareholders.

  

Assuming completion of the offering, there will be 30,000,000 common shares outstanding.  The following table illustrates the per common share dilution that may be experienced by investors at various funding levels.

 

    Shares Purchased     Total Consideration     Average 
Price Per
 
    Number     Percent     Amount     Percent     Share  
Existing stockholders     21,000,000       70.0 %   $ 210,000       70.0 %   $ 0.01  
New investors     9,000,000       30.0       90,000       30.0       0.01  
Total     30,000,000       100.0 %   $ 300,000       100.0 %        

  

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PLAN OF DISTRIBUTION

 

AEC has 21,000,000 common shares issued and outstanding as of the date of this prospectus.  AEC is registering up to 9,000,000 common shares for sale at the price of $0.01 per share. There has been no market for our securities.  Our common stock is not traded on any exchange or on the over-the-counter market.  After the effective date of the registration statement relating to this prospectus, we hope to have a market maker file an application with FINRA for our common stock to be eligible for trading on the over-the-counter market.  We do not yet have a market maker who has agreed to file such application.  

 

We will sell the 9,000,000 common shares ourselves and do not plan to use underwriters or pay any commissions.  We will be selling our common shares using our best efforts and no one has agreed to buy any of our common shares.  This prospectus permits our officers and director to sell the common shares directly to the public, with no commission or other remuneration payable to them for any common shares he may sell.

 

There is no plan or arrangement to enter into any contracts or agreements to sell the common shares with a broker or dealer.  Our officers and director will sell the common shares and intend to offer them to friends, family members and business acquaintances.

 

There is no minimum amount of common shares we must sell so no money raised from the sale of our common shares will go into escrow, trust or another similar arrangement.

 

The common shares are being offered for the Company by Mr. Max Chen, our President. . Mr. Chen will be relying on the safe harbor in Rule 3a4-1 of the Securities Exchange Act of 1934 to sell the common shares.  No sales commission will be paid for common shares sold by Mr. Chen.

 

No public market currently exists for our common stock. We intend to apply to have our common stock quoted on the OTC Bulletin Board. This process usually takes at least 60 days and an application must be made on our behalf by a market maker. We have not yet engaged a market maker to make the application. If we are unable to obtain a market maker for our securities, we will be unable to develop a trading market for our common stock.

 

This is a self-underwritten offering.  This Prospectus is part of a prospectus that permits the Mr. Chen to sell the shares being offered by the Company directly to the public, with no commission or other remuneration payable to them for any shares they may sell.  There are no plans or arrangements to enter into any contracts or agreements to have the shares sold by a broker or dealer.  The Mr. Chen will sell the shares and intend to offer them to friends, family members and business acquaintances.

 

Mr. Chen will not register as broker-dealers pursuant to Section 15 of the Securities Exchange Act of 1934, in reliance upon Rule 3a4-1, which sets forth those conditions under which a person associated with an issuer may participate in the offering of the issuer's securities and not be deemed to be a broker-dealer.

 

  a. Its officers and directors are not subject to a statutory disqualification, as that term is defined in Section 3(a)(39) of the Act, at the time of their participation; and,

 

  b. Its officers and directors will not be compensated in connection with their participation by the payment of commissions or other remuneration based either directly or indirectly on transactions in securities;  and

 

  c. Its officers and director are not, nor will they be at the time of their participation in the offering, an associated person of a broker-dealer; and

 

  d. Its officers and director meet the conditions of paragraph (a)(4)(ii) of Rule 3a4-1 of the Exchange Act, in that they (A) primarily perform, or are intended primarily to perform at the end of the offering, substantial duties for or on behalf of the company, other than in connection with transactions in securities; and (B) is not a broker or dealer, or been an associated person of a broker or dealer, within the preceding twelve months; and (C) have not participated in selling and offering securities for any Issuer more than once every twelve months other than in reliance on Paragraphs (a)(4)(i) or (a)(4)(iii).

 

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Its officers, director, control persons and affiliates do not intend to purchase any shares in this offering.

 

Terms of the Offering

 

The shares being offered by the Company will be sold at the fixed price of $0.01 per share until the completion of this offering.  There is no minimum amount of subscription required per investor, and subscriptions, once received, are irrevocable.

 

This offering will commence on the effective date of this prospectus and continue for a period of 12 months, unless extended by the Company Board of Directors for an additional 90 days. If the Board of Directors votes to extend the offering for the additional 90 days, a post-effective amendment to the registration statement will be filed to notify subscribers and potential subscribers of the extended offering period.  The offering proceeds received from investors will be immediately available to the Company.

 

Deposit of Offering Proceeds

 

This is a “best efforts” offering, so the Company is not required to sell any specific number or dollar amount of securities but will use its best efforts to sell the securities offered. The Company has made no arrangements to place subscription funds in an escrow, trust or similar account which means that all funds collected for subscriptions will be immediately available to the Company for use in the implementation of its business plan.

 

Procedures and Requirements for Subscription

 

If you decide to subscribe for any shares being sold by the Company in this offering, you will be required to execute a Subscription Agreement and tender it, together with a check, bank draft or cashier’s check payable to the Company. Subscriptions, once received by the Company, are irrevocable. 

 

Blue Sky Restrictions on Resale

 

When a selling shareholder wants to sell shares of our Common Stock acquired under the Prospectus which is a part of this registration statement, the selling shareholder will also need to comply with state securities laws, also known as “blue sky laws,” with regard to secondary sales. All states offer a variety of exemptions from registration of secondary sales. The broker for a selling shareholder will be able to advise the shareholder as to which states have an exemption for secondary sales of our common stock. Any person who purchases shares of our common stock from a selling shareholder pursuant to this Prospectus and who subsequently wishes to resell such shares will also have to comply with blue sky laws regarding secondary sales. When this Prospectus becomes effective, a selling shareholder will indicate in which state(s) he or she wishes to sell the shares, and such seller’s broker will be able to identify whether the shareholder will need to register in that state or may rely on an exemption from registration.

 

Penny Stock Rules

 

The SEC has adopted rules that regulate broker-dealer practices in connection with transactions in penny stocks. Penny stocks are generally equity securities with a price of less than $5.00 (other than securities registered on certain national securities exchanges or authorized for quotation on certain automated quotation systems, provided that current price and volume information with respect to transactions in such securities is provided by the exchange or system).

 

The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from those rules, to deliver a standardized risk disclosure document prepared by the SEC which:

  

contains a description of the nature and level of risk in the market for penny stocks in both public offerings and secondary trading;

 

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contains a description of the broker's or dealer's duties to the customer and of the rights and remedies available to the customer with respect to violations of such duties or other requirements of federal securities laws;

 

contains a brief, clear, narrative description of a dealer market, including "bid" and "ask" prices for penny stocks and the significance of the spread between the bid and ask prices;

 

contains the toll-free telephone number for inquiries on disciplinary actions;

 

defines significant terms in the disclosure document or in the conduct of trading in penny stocks; and

 

contains such other information, and is in such form (including language, type size, and format) as the SEC shall require by rule or regulation.

 

 Prior to effecting any transaction in a penny stock, a broker-dealer must also provide a customer with:

 

the bid and ask prices for the penny stock;

 

the number of shares to which such bid and ask prices apply, or other comparable information relating to the depth and liquidity of the market for such stock;

 

the amount and a description of any compensation that the broker-dealer and its associated salesperson will receive in connection with the transaction; and

 

a monthly account statement indicating the market value of each penny stock held in the customer's account.

 

In addition, the penny stock rules require that prior to effecting any transaction in a penny stock not otherwise exempt from those rules, a broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive (i) the purchaser's written acknowledgment of the receipt of a risk disclosure statement; (ii) a written agreement to transactions involving penny stocks; and (iii) a signed and dated copy of a written suitability statement. These disclosure requirements may have the effect of reducing the trading activity in the secondary market for our securities, and therefore security holders may have difficulty selling their shares.

 

DESCRIPTION OF SECURITIES TO BE REGISTERED

 

General

 

The authorized capital stock of the Company consists of 180,000,000 shares of common stock, $0.001 par value, and 20,000,000 shares of “blank check” preferred stock, $0.001 par value.  As of December 10, 2014, there were a total of 21,000,000 shares of common stock issued and outstanding, and no shares of preferred stock outstanding.

 

The following statements are qualified in their entirety by reference to the detailed provisions of our Articles of Incorporation and Bylaws. The shares registered pursuant to the registration statement of which this Prospectus is a part are shares of common stock, all of the same class and entitled to the same rights and privileges as all other shares of common stock.

 

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Common Stock

 

Holders of outstanding shares of common stock are entitled to one vote for each share of stock in his or her name on the records of the Company on all matters submitted to a vote of stockholders, including the election of directors.  The holders of common stock do not have cumulative voting rights.  Dividends may be paid to holders of common stock when, as and if declared by the Board of Directors out of funds legally available therefore.  Holders of common stock have no conversion, redemption or preemptive rights.  All shares of common stock, when validly issued and fully paid, will be non-assessable.  In the event of any liquidation, dissolution or winding up of the Company, holders of common stock are entitled to share ratably in the assets of the Company remaining after provision for payment of creditors and after the liquidation preference, if any, of any preferred stock outstanding at the time.

 

Preferred Stock

 

The Company has the authority to issue up to 20,000,000 shares of preferred stock. As of the date of this prospectus the Board has not assigned a designation to any of the shares of preferred stock. The Board may, by resolution, issue preferred stock in one or more series at such time or times and for such consideration as the Board may determine.  The Board is expressly authorized to provide for such designations, preferences, voting power (or no voting power), relative, participating, optional or other special rights and privileges, and such qualifications, limitations or restrictions thereof, as it determines in the resolutions providing for the issue of such class or series of preferred stock prior to the issuance of any shares thereof.

 

Options and Warrants

 

There are no outstanding options or other securities which are convertible into shares of our common stock.

 

Anti-Takeover Provisions

 

Some provisions of our amended articles of incorporation and our bylaws may be deemed to have an anti-takeover effect and may delay, defer or prevent a tender offer or takeover attempt that a shareholder might deem to be in the shareholder’s best interest.  The authorized but unissued shares of our common stock and preferred stock are available for future issuance without shareholder approval.  These additional shares may be used for a variety of corporate purposes, such as for additional public offerings, acquisitions and employee benefit plans.  The existence of authorized but unissued and unreserved common stock and preferred stock could render it more difficult or discourage an attempt to obtain control of us by means of a proxy contest, tender offer, merger or otherwise.  In addition, our board of directors is authorized to make, alter or repeal our bylaws without further shareholder approval.

 

Limitation of Officers’ and Directors' Liability; Indemnification

 

The Nevada Revised Statutes authorize corporations to limit or eliminate the personal liability of directors to corporations and their officers and employees for monetary damages for breaches of directors’ fiduciary duties.

 

Under our Articles of Incorporation, we may indemnify a person (including against reasonable expenses incurred by such person) in connection with any proceeding if such person was made a party to the proceeding because he or she is or was a director, if he or she conducted himself/herself in good faith and he/she reasonably believed (i) in the case of conduct in his/her official capacity with the Company, that his/her conduct was in the Company’s best interests, or (ii) in the case of any criminal proceedings, that he/she had no reasonable cause to believe his/her conduct was unlawful.  The Company may not however indemnify a director in connection with (i) a proceeding by or in the right of the Company in which the director was adjudged liable to the corporation and (ii) in connection with any proceeding charging improper personal benefit to the Director, whether or not involving action in his official capacity, if he/she was adjudged liable on the basis that personal benefit was improperly received by him/her. We have not entered into separate indemnification agreements with any of our officers or our director.

 

The limitation of liability and indemnification provisions in our Articles of Incorporation and bylaws may discourage shareholders from bringing a lawsuit against directors for breach of their fiduciary duty. These provisions may also have the effect of reducing the likelihood of derivative litigation against directors and officers, even though such an action, if successful, might otherwise benefit our shareholders and us. In addition, your investment may be adversely affected to the extent we pay the costs of settlement and damage awards against directors and officers pursuant to these indemnification provisions.

 

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Insofar as indemnification for liabilities arising under the Securities Act may be permitted to our director, officers and controlling persons pursuant to the foregoing provisions, or otherwise, 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.

 

We also have the right and/or duty to indemnify any officer, employee, or agent of the corporation who is not a director to the extent provided by law, or to a greater extent if consistent with law and if provided by resolution of the corporation's shareholders or directors, or in a contract.

 

There is currently no pending material litigation or proceeding involving our director, officers or employees for which indemnification is sought.

 

Transfer Agent

 

The transfer agent and registrar for our shares of Common Stock is Vstock Transfer, LLC.

 

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MARKET FOR COMMON STOCK AND RELATED STOCKHOLDER MATTERS

 

There is presently no public market for our shares of common stock. We anticipate applying for trading of our common stock on the OTC Bulletin Board upon the effectiveness of the Registration Statement of which this Prospectus forms a part. However, we can provide no assurance that our shares of common stock will be traded on the OTC Bulletin Board or, if traded, that a public market will materialize. To qualify for quotation on the OTC Bulletin Board, an equity security must have one registered broker-dealer, known as the market-maker, willing to list, bid, or give sale quotations and to sponsor the listing of a company’s securities. We do not yet have an agreement with a registered broker-dealer as the market-maker, willing to list, bid, or give sale quotations and to sponsor the common stock of the Company. We may not now and may never qualify for quotation on the OTC Bulletin Board.

 

Holders of Securities.

 

At November 23, 2014, there were approximately 27 holders of record of our common stock.

 

Dividends.

 

We have not declared or paid any cash dividends on our common stock since our inception, and our Board of Directors currently intends to retain all earnings for use in the business for the foreseeable future.  Any future payment of dividends will depend upon our results of operations, financial condition, cash requirements and other factors deemed relevant by our Board of Directors. 

 

Equity Compensation Plan Information

 

No securities are authorized for issuance by the registrant under equity compensation plans.

 

BUSINESS

 

Overview

 

American Education Center, Inc., a Nevada corporation (the “Company”) was incorporated under the laws of the State of Nevada on May 7, 2014. Our operations are conducted through our wholly-owned operating subsidiary, American Education Center, Inc. incorporated under the laws of the State of New York (“AEC New York” or “AEC NY”). American Education Center, Inc. (“AEC NY”), founded in 1999, is an education consulting company providing education opportunities for teachers, students, and educational institutions between China and the United States.

 

On May 31, 2014, we entered into a Share Exchange Agreement (the “Exchange Agreement”) with AEC New York whereby we acquired all of the outstanding capital stock of AEC New York and it became a wholly owned subsidiary of the Company.  In consideration for the exchange of 100% of the issued and outstanding capital stock of AEC New York under the Exchange Agreement, we issued to the shareholder of AEC NY, Mr. Max Chen (President and director of the Company), an aggregate of 10,563,000 restricted shares of the Company’s common stock and AEC became a wholly-owned subsidiary of the Company.

 

Since 1999, AEC NY has been devoted to international education exchange. AEC NY provides placement services to students wishing to study in the U.S., and also provides exchange services for qualified U.S. educators to teach in China. AEC NY currently has two representative offices located in Chengdu and Nanjing, and also operates one office in New York.

 

AEC New York introduced English as a Second Language (“ESL”) programs to China in 2002. Our ESL program provides comprehensive ideas to individual students, helping them to achieve their academic, life and career goals. In addition, AEC New York has partnered with the Guangzhou Branch of New Oriental Education & Technology Group Inc. (NYSE: EDU) to expand its University Pathway Program in 2014.

 

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Growth Strategy

 

We intend to expand our business in the coming years as follows, although there is no guarantee we will be successful:

 

Organic Growth

 

We plan to organize our sales efforts to create organic growth from existing clients. From our existing client base, we will provide the highest level of individual services to help our client base in any way to smooth the transition to the U.S., including visa consulting services, travel guides, life advice, investment consulting and other services.

 

Partnership

 

Through 15 years of stable development, we have built a solid foundation of industry credibility and a solid reputation, which enables us to work with quality partners. These partnerships enable us to maintain a comparatively low cost basis while keeping our core business competitive.

 

Online Development

 

With the development of digital terminals, the presence of online resources allows people to gain knowledge through the Internet without the restriction of location and time. AEC will emphasize in developing markets its web-based products to satisfy a variety of customers, while keeping the expansion network with our institutional clients. .

 

Acquisitions

 

In coming years we hope to acquire companies focusing on student exchange programs between the U.S. and China. While there are no agreements in place and there is always risk that even if a target is identified, that it will not be successful, we believe that given our track record, brand name, reputation, and by becoming a public company in the United States we will be able to attract suitable candidates.

 

Industry

 

The demand for global education is growing rapidly in China. The number of Chinese students that studied in the U.S. exploded in 2006, when Congress loosened its restrictions on student visas from China for the first time since the tragic events of 9-11. This sudden influx has resulted in what we believe to be a large number of Chinese students in the U.S. who lack sufficient support and services.

 

International students who plan to study overseas need high quality education consulting services. We strive to become a bridge for these students, to facilitate international study and education, by providing fully structured education consulting services. Our comprehensive solution for international students includes three broad categories: Pre-Entrance services, Post-Entrance services, and VIP Personalized services.

 

Pursuant to a report published by the Ministry of Education of the People’s Republic of China on May 27, 2014, since 1978, more than three million Chinese students have studied in a foreign country. In 2013, the total number of Chinese students studying abroad reached 413,900, among which 194,029, or approximately 47%, pursued a higher education degree in the U.S.

 

The total number of international students studying in the U.S. has reached a record high of 819,644 1 in the 2012 to 2013 academic year. There are approximately 300,000 American students studying abroad annually for academic credits. President Obama’s “100,000 strong initiative program” advocates sending American students to China to study abroad and promote American culture.

 

 

1

 

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Pursuant to the 2013 Open Door Report published by Institute of International Education, since 1978, a total of over three million Chinese students have studied in a foreign country. This number has been increasing at an accelerating rate. The average growth rate of the number of students from China was above 20% in the last eight years. Specifically, the total number of Chinese students reached a historic high of 235,597 with a growth of 21.4% in year 2013. 2 Based on the historical data, we project given these current favorable conditions, the Company foresees that the market will maintain rapid growth in the next five years. The market size has been previously expected to increase at an average rate of 23% for Chinese students to study in the U.S., and therefore the number of Chinese students in the U.S. is estimated to be as follows:

 

Chinese Students Studying in the U.S. :

 

2018     2017     2016     2015     2014     Year
  289,784       356,435       438,415       663,278       539,250     Number of Students

 

On the other hand, the number of U.S. students studying in China is also experiencing steady growth. In 2012 alone, 14,167 American students were studying in China and the average growth rate in the last four years has been 2%. However, AEC estimates the growth rate to be at least double this for the next few years for the following reasons. Both the U.S. and Chinese government encourage Chinese-American education exchange and cooperation. President Obama’s 100,000 strong initiative program advocates sending American students to China to study abroad and spread the American culture. This will not only help increase the number of American students willing to study abroad in China, but will also increase our client base and further improve our competitiveness in the industry. The current annual number of American students studying abroad in China per year is roughly 25,000, and we expect this number will continue growing in the following years. However, this number has been increasing at a rapid rate. Second, more policies make it easier for American students to study in China. In fact, the Chinese government has relaxed the regulations on American students in recent years. Lastly, rising international influence and status significantly improve China's allure to American students. AEC projects the number of American students studying in China is estimated to be as follows:

 

U.S. Students Studying in China:

2018/2019     2017/2018     2016/2017     2015/2016     2014/2015     Year
  15,263       15,843       16,445       17,070       17,719     Number of Students

 

Business

 

We provide Student Services, Educator Placement, and Institutional Services to students, teachers and educational institutes in the U.S. and China. The Student Service is a “one-stop” service that assists our clients with academic applications, admissions and support their personalized needs during their study, internship and career development. Our Educator Placement program connects opportunities to teachers and educators between the U.S. and China. Our Institutional Service assists U.S. institutions in establishing alliances and strategic business partnerships with colleges and universities in China.

 

Student Services

 

We provide guidance and consulting services to help our customers throughout their application and the admission process during their study and also help them find internships and other career opportunities in the United States. We categorize this service into three programs: academic, life and career. As of today, we have provided these services to hundreds of students from China to study in middle and high schools, colleges and universities in the U.S.

 

 

2

 

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The three programs are as follows:

 

Academic Program

 

Our Academic Program focuses on assisting students between the ages of 15 to 25. For the younger students, we assist in providing information on U.S. high schools. We also help high school graduates with academic admissions to U.S. colleges and universities.

 

In connection with our admission services, we provide English as a Second Language (“ESL”) classes and one-on-one tutoring to improve students’ language skills and assist them in preparing for language competency tests. We established the ESL program in 2002 and published a complete package of textbooks, examinations and certificates. These materials cover listening, speaking, reading and writing English. We place ESL teachers in our representative offices in China to conduct the ESL programs. Students who enrolled in this program are trained to take ESL tests and obtain certificates upon successfully passing these tests. This program requires approximately 85 hours of training. We charge $30/hour for this program. We are enhancing our joint efforts with U.S. based universities aiming to make our ESL certificates widely recognized as a substitute to TOFEL scores for admission tests.

 

AEC’S Elite 100 Program, is aimed at those Chinese students who have achieved academic excellence. In this program we provide consulting services to top talented Chinese students to enable these students to reach a comprehensive understanding of United States political, business, science, education, culture and other areas. First, we offer academic consulting services to these elite Chinese students to apply to prestigious colleges and universities in the United States. In connection with our admission services, we assist these students in arranging campus tours, writing programs, tailored ESL language programs and interview guidance. After the students are admitted into U.S. colleges/universities, we provide consulting services in connection with applications for a second major, transfers, housing accommodations’, accelerated degree applications and other services. We enroll the students in seminars and events in which we partner with other business organizations, governments, non-government organizations (“NGOs”), scholars and universities to help these students build social networks and cultivate their leadership skills. We also help arrange after school activities tailored for each student, such as dancing classes, international concerts, organizing students to participate in singing, painting, photography and performance competitions to enrich their cultural experience.

 

AEC offers University Placement Services (the “UPP” program) to a number of American and Chinese universities including “Ivy League” schools in the United States, and in China, Peking University and Tsinghua University. Students can benefit from our alliances in both China and the U.S. We specialize in improving our students’ qualifications and assisting them in preparing for schools which are suited for their personal needs.

 

Through our partnership with the Guangzhou Branch of the New Oriental Education & Technology Group (“New Oriental” Guangzhou) we are offering a UPP1+3 program. Under this program we organize and facilitate our U.S. business partners to provide education courses in China to students recruited by the New Oriental Guangzhou for 16 credits earned in the first year of the UPP program recognized and transferrable to any State University of New York (“SUNY”) school, followed by a three-year study at colleges in the U.S. New Oriental Guangzhou provides classroom and other education facilities for this program. We provide comprehensive education materials which are taught in this program. Under this partnership, we receive 45% of the total tuition. A portion of the credits earned in the first year of this program are accepted and transferrable to the schools in the SUNY system. Through enrolling in this program, the students will receive discounted tuition for the first year.

 

Life Program

 

Our Life Program offers consulting services to assist Chinese students in acclimating to United States society. We provide assistance in all facets of everyday life, for instance, we will refer students to individuals/companies who are involved in the areas of real estate, financial management and investment, buying insurance and starting businesses. Our mission is to assist students with their daily basic needs so they can focus on their education.

 

Our Optional Practical Training (“OPT”) services are offered to those who are in college or pursuing master graduate degrees to communicate with government authorities on any matter concerning the OPT application. We charge $300 per hour as a service fee. The OPT service fee is refundable if the application is denied. If the student terminates the application, the student will be not required to make further payment; but the fee already paid are nonrefundable.

 

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Our Personalized VIP Service, which is one of our key businesses, provides “concierge services” personally tailored for our clients to meet almost all aspects of their needs during their stay in the U.S. We charge $300 per hour for these services. Every VIP client has an exclusive consultant to help meet his or her needs and monitors their progress along the way, so that a customized career plan can be developed taking into consideration changing economic and personal conditions. VIP services include high school enrollment, college applications, medical insurance, parental travel support, housing, legal and immigration status, internship, job application and referrals to financial and real estate investment advisory firms and other related services.

 

Career Program

 

Our Career Program focuses on assisting students in their career choices by identifying internships and work opportunities that are suitable to their interests, educational background and experience level. We charge $100 per hour for this service. Through this program we attempt to provide clients with possible career paths, assisting them every step of the way from academic improvement to career assistance. In addition, we make introductions to companies to potentially provide internships and part-time or full-time work opportunities.

 

Institutional Services

 

AEC Institutional Services Program mainly focuses on providing international consulting and recruiting services to U.S. schools, colleges and universities. Through this program we work with academic institutions in reaching a broader potential demographic area for students. Although most U.S. educational institutions, have interest in attracting students from China, they often lack the knowledge and understanding of the Chinese culture and often have a difficult time recruiting students from China. We essentially serve as an international liaison to provide on the ground recruitment in China. We charge $1,000 per hour as a service fee. In addition, we assist institutional clients in retaining qualified professors to lecture in the partnership programs in both the U.S. and China.

 

Recruiting Services

 

For most of the prestigious Chinese educational institutions, the desire for native-speaking English teachers is higher than ever. We currently focus on placing qualified American teachers into Chinese schools and institutions. Meanwhile, the increased demand of learning Mandarin has been driven by China's ascendancy in the global economy. Mandarin has become the first choice among second languages. By applying years of experience and knowledge, AEC plans to provide unified and quality Mandarin Chinese teachers for U.S. institutions in the future.

 

University Pathway Program (“UPP”)

 

State University of New York (“SUNY”) is the largest comprehensive university system in the United States, with 64 institutions globally, including research universities, academic medical centers, liberal arts colleges, community colleges, agricultural and technical institutes and an online learning network. SUNY educates approximately 463,000 students in more than 7,500 degree and certificate programs, and nearly 2 million students in workforce and professional development programs. Our clients who are students enrolling in this UPP program, earn credits under our program that are transferrable to any institution in the SUNY system. AEC charges students $100/hour and $500/hour in tuition and in consulting services, respectively. The Company is obligated to refund the full amount of consulting service fees to any client enrolled in UPP program if the customer fails to be admitted by SUNY by the end of application process.

 

The UPP was established in 2008 and as of today it has been offering consulting services for U.S. universities and the SUNY system. This program aims to assist universities in increasing their enrollment of qualified international students and explore possible collaborations with selected universities in China, and at the same time assist Chinese students in pursuit of their degrees from SUNY. Students who are in the program either: (i) have two out of three years high school education in China, who then enroll in the UPP program approved by such high school in China and its partnership universities and colleges in the States, or (ii) have split their time of study of the same major between the Chinese and U.S. universities to obtain degrees from both universities. AEC will further contract with U.S. high schools, colleges and universities to assign teachers and professors to its UPP program in China or assist U.S. colleges to recruit and place qualified educators in China subject to their approval.

 

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Graduate Data Science Program 

 

We have entered into an agency agreement with Saint Peter’s University to recruit students from China for their Masters of Science in Data Science program. The goal of the Graduate Data Science Program is to enable students to develop knowledge, skills and values needed for their leadership in serving others and shaping their adaptability to social, technological and environmental changes. It was developed by computer science engineers to align with “best industry practice” in big data concepts utilized by the Oracle Corporation. The curriculum has tight integration with the most current Oracle Corporation approaches to the management of big data technology and business intelligence.

 

The Masters of Science in Data Science with a concentration in Business Analytics program is a 12 course/36 credit degree program, designed for part-time and full-time students who have completed undergraduate degrees in science, mathematics, computer science or engineering and are interested in pursuing careers in industry-specific analytical fields. The inaugural class starts in the fall of 2015 at Saint Peter’s University. Saint Peter’s University will pay a commission equal to 15% of tuition.

 

Saint Peter’s University has appointed Max P. Chen, our President and chairman of our board of directors, as Executive Director of Chinese Educational Partners. We will refer Chinese students to study at Saint Peter’s University for Master’s Degrees and Baccalaureate Study. The partnership also includes having Saint Peter’s University’s faculty teach its programs in China. Some courses are taken in China and other courses are taken in the United States on the Saint Peter’s University campus. We also will explore opportunities to offer college courses to high school students in China, although there are no definitive agreements in place and no guarantee such agreements will be executed.

 

Educator Placements

 

The main purpose of our Educator Placement Program is to meet the increasing demands for foreign teachers in both the U.S. and China. We help teachers in the U.S. or China who plan to gain experience in another country find the most suitable positions. In order to ensure educators a smoother transition, we will provide local services to educators, which contain settlement services, financial services, insurance coverage, tax services, living services, as well as business consulting services. We charges $300 per hour for educator placement consulting services.

 

Competition

 

The education consulting business in China is rapidly evolving, highly fragmented and competitive, and we expect competition in this sector to persist and intensify. We face competition in each major program we offer and each geographic market in which we operate. For example, we face competition for our student services from Boya International Elite Company, which offers overseas education programs for students from China. We face competition from the Study Abroad Foundation for our institutional services, which offers advice on attracting international students to universities. We face competition from the First Abroad Organization for our educator placement services, which introduce American teachers to China. Because we cover three major aspects of the education service industry, we have several competitors in each of our areas of service. However, we do not believe that we have competitors who integrate and provide services to cover all three major targeted clients (students, institutions and educators) like our business.

 

We believe the principal competitive factors in our market include the following:

 

provide one-stop integrated services to students, teachers, and institutions;
brand recognition and reputation;
a service model that aligns personalized services to the specific needs of students and institutions;
overall customer satisfaction;
size and coverage of service network and proximity of services to customers;
scope, quality and consistency of service.

 

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Our key competitive strengths lie in our individualized attention to students, its ability to place educators at top universities around the globe and in the US, and its understanding of the globalization needs of top universities in recruiting both international students and faculty in an ever evolving education landscape. We provide a one-stop service to students, teachers, and institutions. However, some of our existing and potential competitors may have more resources than we do. These competitors may be able to devote greater resources than we can to the development, promotion and sale of their programs, services and products and respond more quickly than we can to changes in student demands, testing materials, admissions standards, market needs or new technologies.

 

Operations

 

Currently, we have established two representative offices in Nanjing and Chengdu, in China, and one office in New York. We plan to expand our representative offices to second and third tier cities in the U.S. and China in the next couple of years. The first tier would be core offices in metropolitan cities such as Los Angles, Hong Kong, and Shanghai. The second tier would be major representative offices in strategic cities that have a large quantity of post-secondary educational institutions, including Chengdu, Hangzhou, etc. The third tier, sub-representative offices, would be developed subsequent to the first two tiers, and will be located in smaller cities that offer strategic value but were not included in the development phase of our major representative offices, examples of which would include Ganzhou, etc.

 

Marketing Strategies

 

We employ a variety of marketing and recruiting methods to attract students, institutions and teachers. By doing so, we intend to continue fostering a standard corporate identity across our education network both in China and the US.

 

We believe prospective students, institutions, and teachers are attracted to our services due to our excellent brand name, our personalized service model and the quality of our programs. We employ the following marketing methods to attract new students, institutions and teachers and retain existing customers:

 

Referrals.   Our student enrollments have benefited from, and are expected to continue to benefit from, word-of-mouth referrals by our current and former customers.

 

Social Events and seminars. For several years we have successfully hosted the ESL (English as Second Language) Annual Conference in China, which annually hosts over 500 attendees. AEC is planning to continue the annual conference this year. We plan to host marketing events in New York City to promote AEC’s services and brand name. In addition, AEC will attend higher education conferences held annually to further promote and market our services.

 

Distribution of Marketing Materials . We plan to publish a “Chinese Visitors Guide Book”. It is a travel book with plug-in advertisements for AEC, which will assist Chinese visitors to the U.S. and simultaneously promote AEC. We will also advertise in e-magazines, prepare and distribute brochures and present at exhibitions as part of our marketing strategy.

 

Media advertising.   We plan to develop a mobile app in the future. We plan to open a business account named “AEC Elite 100 Club” with the popular smartphone app Wechat. “Elite U.S. Club” will be a free service platform aiming to market our company and services to potential customers. Wechat users can subscribe to our personalized VIP services through their free accounts opened with “AEC Elite 100 Club”. Elite 100 Club account holders receive rebates based on their membership levels, which are tenure. Our members can upgrade their membership by their cumulative consumption of services available through AEC Elite 100 Club.

 

Acquisitions . Most importantly, AEC plans to engage in acquiring other education consulting Chinese companies in our industry or our competitors in China. Mergers and acquisitions will help AEC acquire a broader additional customer base, allowing us to generate more revenue. We hope to acquire such target companies by a combination of a cash payment and issuance of equity in AEC Nevada.

 

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Government Regulation

 

Regulation of the Education Industry in the United States

 

Government authorities in the United States, at the Federal, state and local level, and in other countries extensively regulate education and exchange student programs. Such regulations include, among other things, the regulations and policies of the United States Department of Education. However, unlike the systems of most other countries, education in the United States is highly decentralized, and the Federal government and Department of Education are not heavily involved in determining curricula or educational standards. The establishment and grading of such standards has been left to state and local school districts.

 

A more formalized regulation is the requirement that a citizen of a foreign country who wishes to enter the United States must first obtain a visa, either a nonimmigrant visa for temporary stay, or an immigrant visa for permanent residence. Foreign students must have a student visa to study in the United States. Visas generally require an application and an interview.

 

The process of obtaining regulatory approvals and the subsequent substantial compliance with appropriate Federal, state, local and foreign statutes and regulations may require the expenditure of substantial time and financial resources.

 

In addition to the regulatory approval requirements described above, we are or will be, directly, or indirectly, subject to extensive regulation of the educational industry by the Federal and state governments and the governments’ of foreign countries in which our services are provided.

 

Regulation of the Education Industry in China

 

The laws that directly or indirectly affect our ability to operate our business include the following:

 

The principal regulations governing private education in China consist of the Education Law of the PRC, the Law for Promoting Private Education (2003) and The Implementation Rules for the Law for Promoting Private Education (2004) and the Regulations on Chinese-Foreign Cooperation in Operating Schools. Below is a summary of relevant provisions of these regulations.

 

On March 18, 1995, the National People’s Congress enacted the Education Law of the PRC, or the Education Law. The Education Law sets forth provisions relating to the fundamental education systems of the PRC, including a school system of pre-school education, primary education, secondary education and higher education, a system of nine-year compulsory education and a system of education certificates. The Education Law stipulates that the government formulates plans for the development of education and establishes and operates schools and other institutions of education and, in principle, enterprises, social organizations and individuals are encouraged to operate schools and other types of education organizations in accordance with PRC laws and regulations. However, no organization or individual may establish or operate a school or any other education institution for profit-making purposes. However, according to the Law for Promoting Private Education, private schools may be operated for “reasonable returns.”

 

If our operations are found to be in violation of any of these laws, regulations, rules or policies or any other law or governmental regulation to which we or our customers are or will be subject, or if interpretations of the foregoing change, we and our commercialization partners may be subject to civil and criminal penalties, damages, fines, and the curtailment or restructuring of our operations. Similarly, if our customers are found non-compliant with applicable laws, they may be subject to sanctions.

 

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Properties/Facilities

 

Our main executive office located at 17 Battery Place, Suite 300, New York, New York.

 

The Company occupied office space owned by its sole stockholder under a month to month arrangement in 2012 and until September 2013, at a monthly rental of approximately $2,000.

 

The Company leases office space under a month to month arrangement from a third party commencing October 2013 at a monthly rental of approximate $1,700, which was paid by an entity affiliated with Company under common control. The related payable of $4,950 at December 31, 2013 is included in accounts payable and accrued expenses on the accompanying balance sheets.

 

Insurance

 

We maintain a commercial general liability insurance policy to safeguard against bodily injury, property damage, personal and advertising injury and medical expenses arising out of the ownership, maintenance or use of the premises of our main executive office located at 17 Battery Place, Suite 300, New York, New York. We also maintain a commercial excess liability insurance policy, pursuant to which the insurance company will pay on our behalf any sums in excess of retained limits that we are legally obligated to pay as damages by reason of the liability imposed by law because of its causing of bodily injury, property damage or personal injury and advertising injury, as defined in the insurance policy.

 

Legal Matters

 

The Company is not a party to any legal proceedings at this time.

 

Employees

  

Currently, the Company has 8 employees, and 5 independent contractors..

 

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the consolidated financial statements and the related notes. This discussion contains forward-looking statements based upon current expectations that involve risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those identified below and those discussed in the section titled “Risk Factors” included elsewhere in this S-1 Registration Statement.

 

Overview

 

American Education Center Inc. was incorporated in 1999 in New York (“AEC New York”) and was approved and licensed by the Education Department of the state of New York in 2003 to engage in education consulting service between the U.S. and China. AEC New York has 200 authorized shares that were all issued to Mr. Max Chen. Mr. Max Chen was the sole director and officer of AEC New York. American Education Center Inc. was incorporated in Nevada (“AEC Nevada”) in May 2014 as a holding company. AEC Nevada has 200,000,000 authorized shares of common stock at $0.001 par value (the “Common Stock”). The sole shareholder of AEC New York entered into a Share Exchange Agreement with AEC Nevada dated May 31, 2014 (the “Share Exchange”) for AEC Nevada to issue 10,563,000 shares in exchange for the 200 shares of AEC New York and became sole shareholder of AEC Nevada. On September 30, 2014, AEC Nevada issued 8,982,000 shares to purchasers through private placements and consultants for services at $0.01 per share.

 

For fifteen years, AEC has been devoted to international education exchange, by providing education and career enrichment opportunities for students, teachers, and educational institutions between China and the United States. We provide admission consulting services to Chinese students wishing to study in the U.S., and also provide exchange and placement services for qualified U.S. educators to teach in China.

 

We have two local representative offices in China – Nanjing and Chengdu, and we plan to open more representative offices in China in the future.

 

CRITICAL ACCOUNTING POLICIES

 

While our significant accounting policies are more fully described in Note 2 to our financial statements, we believe that the following accounting policies are the most critical to aid you in fully understanding and evaluating this “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

 

Basis of Preparation

 

The Company’s financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("US GAAP").

 

Cash and Cash Equivalents

 

The Company considers all liquid investments with an initial maturity of three months or less that are readily convertible into cash to be cash equivalents.

 

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Revenue Recognition

 

The Company recognizes revenue in accordance with Accounting Standards Codification (“ASC”) 605-10, Revenue Recognition , and SEC Staff Accounting Bulletin No. 104. Pursuant to these pronouncements, revenue is recognized when all of the following criteria are met:

 

- Persuasive evidence of an arrangement exists;

- Delivery has occurred or services have been rendered;

- The seller’s price to the buyer is fixed or determinable; and

- Collectability is reasonably assured.

 

Tuition and consulting fees are generally paid in advance and are recognized when all services are rendered, net of refunds, if any.

 

Advertising Costs

 

Advertising costs are charged to operations when incurred. Advertising costs were $0 and $8,246 for the years ended December 31, 2013 and 2012, respectively.

 

Concentration of Credit Risk

 

Financial instruments that potentially expose the Company to concentrations of credit risk only consist of cash and cash equivalents. The Company has no other current assets. It maintains its cash accounts at a commercial bank with high-credit ratings and quality. The Federal Deposit Insurance Corporation (“FDIC”) covers $250,000 per depositor for substantially all depository accounts at the same bank. As of December 31, 2013, the Company did not have cash balances which were in excess of the FDIC insurance limit. The Company performs ongoing evaluation of this financial institution to limit its concentration of risk exposure. Management believes this risk is not significant due to the financial strength of the financial institution utilized by the Company.

 

Income Taxes

 

The Company accounts for income taxes in accordance with FASB ASC 740, Income Taxes (“ASC 740”), which requires the recognition of deferred income taxes for differences between the basis of assets and liabilities for financial statement and income tax purposes. The differences relate principally to deferred income. Deferred tax assets and liabilities represent the future tax consequences for those differences, which will either be taxable or deductible when the assets and liabilities are recovered or settled. Deferred taxes are also recognized for operating losses that are available to offset future taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized.

 

ASC 740 addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under ASC 740, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position would be measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. ASC 740 also provides guidance on de-recognition of income tax assets and liabilities, classification of current and deferred income tax assets and liabilities, and accounting for interest and penalties associated with tax positions. As of December 31, 2013 and 2012, the Company did not have a liability for any unrecognized tax benefits.

 

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Use of Estimates

 

In preparing financial statements in conformity with accounting principles generally accepted in the United States of America, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of revenues and expenses during the reporting periods. These accounts and estimates include, but are not limited to, the valuation of the amount due to related parties. Actual results could differ from those estimates.

 

Earnings (Loss) per Share

 

Net loss per share is calculated in accordance with FASB ASC260, Earnings per Share . Basic earnings (loss) per share is based upon the weighted average number of common shares outstanding. Diluted earnings per share reflect the potential dilution that could occur if securities or other contracts to issue common shares were exercised or converted into common shares. Dilution is computed by applying the treasury stock method. Under this method, options and warrants are assumed to be exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase common stock at the average market price during the period. Basic and diluted loss per share are the same for the years ended December 31,2013and 2012, because the Company had no common stock equivalent and their inclusion would be anti-dilutive.

 

RESULTS OF OPERATIONS

 

AEC currently has two representative offices located in Chengdu and Nanjing. The majority of our revenue is generated from consulting services; we provide professional advice and services to our customers for a reasonable fee charge based on the time we spend on each single project. We generate nearly all of our revenue through three types of services: Students Services, Educator Placements, and Institution Services.

 

Prior to December 31, 2013, in certain cases, we collected our service fees in advance from clients. If we were not successful in all of the promised services, these fees were refundable. Accordingly, until all the promised work was completed successfully, these fees were shown as deferred revenue. Commencing in 2014, in order to better manage our company financially, we changed our policy. We now charge for each of our services as we complete them. The fees are no longer refundable.

 

Our Student Services provide guidance and consulting services to help our customers throughout their application and admission process and during their study and also help them find internship and other career opportunities in the United States. AEC categorizes this service into three programs: academic, life and career. Our academic program focuses on providing admission services, English as a Second Language (ESL) training program, the Elite 100 program, and University Placement Services (UPS) for Chinese students to study in the U.S. Our life program offers consulting services, including personalized VIP service, to assist AEC customers to settle down in the U.S. from China so they can focus effectively on their studies. AEC will refer its customers to AEC’s business partners in the U.S. to assist the customers with purchasing real estate properties, understanding financial management and investment, buying insurance and starting businesses. Our Career Program focuses on assisting clients to improve their career development by identifying internship and work opportunities that are suitable to their educational background and experience level.

 

Our Educator Placement Program is designed to meet the increasing demands for foreign teachers in both the U.S. and China. Our program helps teachers in the U.S. or China who plan to gain experience in another country find the most suitable positions.

 

Our Institution Services Program is mainly focused on providing consulting and recruiting services to U.S. schools, colleges and universities to enroll international students from China. We recruit and place native English speaking teachers for our joint programs in China and recruit and place Chinese speaking teachers for U.S. educational institutions. Our University Pathway Program (UPP) was establish in 2008 and has been offering consulting service for U.S. universities and the State University of New York (SUNY) system to enroll qualified international students to such universities and explore possible collaborations with selected universities in China. We also engaged St. Peter University to serve as a Chinese education consultant since they are more experienced in Student Exchange Programs. These Programs serve as a part of our revenue therefore retaining St. Peter University's services greatly improves the Company's revenue.

 

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Year ended September 30, 2014 Compared with Year ended September 30, 2013

 

For the nine months ended September 30, 2014, AEC reported net income of $214,367, an increase of $240,860, or 909%, from the net loss of $(26,493) for the same period in 2013.

 

Revenue

 

Net revenues from educational programs and consulting services for the nine months ended September 30, 2014 were $1,669,240, representing an 1,355% increase from the nine months ended September 30, 2013. The growth was mainly driven by increasing of our clients engaging our student services programs from China due to the expansion of our business. We did recognize the deferred income from 2013 in year 2014. In 2014, we will not have deferred income. The business model had been changed.

 

Cost of Revenue

 

Cost of Revenue for the nine months ended September 30, 2014 was $1,035,100, an increase of $912,056, or 741%, compared to $123,044 for the nine months ended September 30, 2013. The increase was mainly due to business growth. Cost of Revenue mainly consists of wages of consultants and contractors. This also includes the consultation of highly experienced professionals.

 

Gross Profit (Loss)

 

Gross Profit for the nine months ended September 30, 2014 was $634,140, an increase of $642,484, or approximately 7,700%, compared to a gross loss of $(8,344) for the nine months ended September 30, 2013. The increase was mainly due to a substantial increase in revenues only partially offset by the increase in cost.

 

Operating Expenses

 

Operating expenses consisted primarily of general and administrative expenses of $255,088 for the nine months ended September 30, 2014, an increase of $199,183, or 365%, from $55,905 for the nine months ended September 30, 2013. The increase was mainly due to increased rent expenses of $22,198 to $82,716 in 2014, up 273%. Due to the increase in our business activities, payroll expenses rose to $127,302 in 2014 from $0 in 2013.

 

Operating Loss / Income

 

Operating income for the nine months ended September 30, 2014, was $379,052, an increase of $443,301, or 690%, from operating loss of $(64,249) for the nine months ended September 30, 2013. This increase was mainly due to an increase of gross profit of $642,484 only partially offset by the increase of operating expenses of $199,183. The gross profit increase was due to the increase in business revenue. The increase in operating expenses was primarily a result of the growth in our operations and business activities.

 

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Net Income (Loss)

 

Our net income for the nine months ended September 30, 2014, was $214,367, an increase of $240,860, or 909%, from net loss of $(26,493) for the nine months ended September 30, 2013.

 

Statement of Operations   9 Months Ended
 September 30,
             
    2013     2014     Increase     %  
Revenues   $ 114,700     $ 1,669,240     $ 1,554,540       1,355 %
Cost of revenues     (123,044 )     (1,035,100 )     912,056       741 %
Gross (loss) profit     (8,344 )     634,140       642,484       7,700 %
Operating expenses                                
General & administrative     (55,905 )     (255,088 )     199,183       356 %
Operating (loss) income     (64,249 )     379,052       443,301       690 %
Benefit from income taxes     (37,756 )     164,685       202,441       536 %
Net loss   $ (26,493 )   $ 214,367     $ 240,860       909 %

 

Liquidity and Capital Resources

 

As of September 30, 2014, we had cash and cash equivalents of $206,416, a decrease of $87,619 from $294,035 as of September 30, 2013. We have historically funded our working capital needs with positive cash flow from operations, advance payments from customers, and capital contributions from our shareholders. Our working capital requirements are influenced by the level of our operations, and the timing of accounts receivable collections.

 

The following table sets forth a summary of our cash flows for the periods indicated:

 

    September 30,
2014
    September 30,
2013
 
Net cash provided by/(used in) operating activities   $ 65,903     $ 181,690  
Net cash (used in) /  provided byfinancing activities   $ -     $ 7,845  
Increase in cash and cash equivalents   $ 65,903     $ 189,535  
Cash and cash equivalents, beginning of periods   $ 140,513     $ 104,500  
Cash and cash equivalents, end of periods   $ 206,416     $ 294,035  

 

Operating Activities

 

Net cash provided by operating activities was $65,903 for the nine months ended September 30, 2014 compared to cash provided by operating activities of $181,690 for the nine months ended September 30, 2013. We had a net income of $214,367 for the nine months ended September 30, 2014, a decrease in deferred income taxes of $158,708, the increase in payables and accruals of $73,609 which were only partially offset by the decrease in deferred income of $353,956, generated the positive cash flow from operations.

 

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We had net cash provided by operating activities of $181,690 for the nine months ended September 30, 2013. The net loss of $(26,493) and the increase in deferred income taxes of $96,241 were more than offset by the increase in payables and accruals of $80,985 and the increase in deferred income of $223,439 which generated the positive cash flow from operations.

 

Financing Activities

 

There was no cash flows from financing activities for the nine months ended September 30, 2014. For the nine months ended September 30, 2013, net cash provided by financing activities was $7,845. There was repayment of the stockholder loan of $11,460 and proceeds from stockholder loan of $19,305.

 

Year ended December 31, 2013 Compared with Year ended December 31, 2012

 

For the fiscal year ended December 31, 2013, AEC reported net loss of $(120,370), an increase of $90,445, or 302%, from the net loss of $(29,925) for the year ended December 31, 2012.

 

Revenue

 

Net revenues from educational programs and consulting services for the fiscal year ended December 31, 2013 were $316,429, representing a 353% increase from the prior year. The growth was mainly driven by the increase in the number of clients engaging our student services program from China due to the expansion of our business.

 

Cost of Revenue

 

Cost of Revenue for the year ended December 31, 2013 was $365,996, an increase of $299,607, or 451%, compared to $66,389 for the year ended December 31, 2012. The increase was mainly due to the expansion of our business. The cost of revenue mainly consists of wages and fees for consultants and contractors.

 

Gross Profit (Loss)

 

The Gross Loss for the year ended December 31, 2013 was $(49,567), a decrease of $53,034 compared to a gross profit of $3,467 for the year ended December 31, 2012. The decrease was mainly due to a substantial increase in business volume that required higher costs to provide services but the increase in revenues could not fully offset the increase in cost. Revenues had to be deferred since they were refundable until all the services agreed to were successfully completed the Company.

 

Operating Expenses

 

Operating expenses consisted primarily of general and administrative expenses and were $176,757 for the year ended December 31, 2013, an increase of $119,130, or 207%, from $57,627 for the year ended December 31, 2012. The increase was principally due to marketing expenses which increased by $44,625 to $52,871 in 2013, up 541%. Professional fees for 2013 rose from to $25,500 from $5,500 in 2012. Miscellaneous expenses also grew to $25,937 from $6,099 in 2012.

 

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Operating Loss

 

The Operating loss for the year ended December 31, 2013, was $226,324, an increase of $172,164 from an operating loss of $54,160 for the year ended December 31, 2012. This increase is mainly due to a decrease of gross profit of $53,034 and the increase in operating expenses of $119,130.

 

Net Income (Loss)

 

Our net loss for the year ended December 31, 2013, was $120,370, an increase of $90,445 from the net loss of $29,925 for the year ended December 31, 2012 due to the reasons discussed above.

 

Statement of Operations   12 Months Ended
December 31,
             
    2012     2013     Increase     %  
Revenues   $ 69,856     $ 316,429     $ 246,573       353 %
Cost of revenues     (66,389 )     (365,996 )     299,607       451 %
Gross (loss) profit     3,467       (49,567 )     (53,034 )     -1,530 %
Operating expenses                                
General & administrative     (57,627 )     (176,757 )     119,130       207 %
Operating (loss) income     (54,160 )     (226,324 )     172,164       318 %
Benefit from income taxes     (24,235 )     (105,954 )     81,719       337 %
Net loss   $ (29,925 )   $ (120,370 )   $ 90,445       302 %

 

Liquidity and Capital Resources

 

As of December 31, 2013, we had cash and cash equivalents of $140,513, an increase of $36,013 from $104,500 as of December 31, 2012. We have historically funded our working capital needs with cash flow from operations, advance payments from customers. Our working capital requirements are influenced by the level of our operations, and the timing of accounts receivable collections.

 

The following table sets forth a summary of our cash flows for the periods indicated:

 

    December 31,
2013
    December 31,
2012
 
Net cash provided by/(used in) operating activities   $ 38,322     $ (3,300 )
Net cash (used in) /  provided by financing activities   $ (2,309 )   $ 45,391  
Increase in cash and cash equivalents   $ 36,013     $ 42,091  
Cash and cash equivalents, beginning of periods   $ 104,500     $ 62,409  
Cash and cash equivalents, end of periods   $ 140,513     $ 104,500  

 

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Operating Activities

 

Net cash provided by operating activities was $38,322 for the year ended December 31, 2013 compared to net cash used in operating activities of $3,300 for the year ended December 31, 2012. We had a net loss of $(120,370) during the year ended December 31, 2013 and an increase in deferred income taxes of $111,825. These were offset by the $258,196 increase in deferred income and increases in payables and accruals of $12,321.

 

We had net cash used in operating activities of $3,300 for the year ended December 31, 2012. The net loss of $(29,925) and the increase in deferred taxes of $24,285 was only partially offset by the increase in payables and accruals of $5,550 and the increase in deferred income of $45,360.

 

Financing Activities

 

Net cash used in financing activities was $2,309 for the year ended December 31, 2013 as a result of the repayment of the stockholder loans of $23,622, partially offset by proceeds from stockholder loans of $21,313. For the year ended December 31, 2012, there were only proceeds from stockholder loans of $45,391 and no repayments.

 

Growth Strategies

 

AEC intends to expand its business through five growth strategies:

  

Growth Strategies   Spent in
2013
    Estimate in
2014
    Estimate in
2015
    Estimate in
2016
 
                         
Customized Service : AEC plans to organize its sales efforts to create organic growth from its existing clients. From its existing client base, AEC plans to provide the highest level of VIP individual services to help their family members smooth the transition to the U.S., including visa consulting services, travel guides, life advice, investment consulting and other services.   $ 0     $ 1,400,000     $ 2,600,000     $ 4,000,000  
                                 
Online Development : With the development of digital terminals, the presence of online resources allows people to gain knowledge through the Internet without the restriction of location and time. AEC plans to focus on developing markets of web-based products to satisfy a variety of its customers, while enlarging the number of our entity partners.   $ 0     $ 0     $ 0     $ 300,000  
                                 
Acquisition : Based on prior negotiations with several major Chinese consulting companies in the sector, AEC plans to acquire several of these target companies focusing on student exchange programs between the U.S. and China. AEC’s acquisition transactions will be made through cash raised from investors and new stock issued by the Company. AEC intends to leverage its well-known brand name, reputation and services to attract business partners in China.   $ 0     $ 0     $ 3,000,000     $ 6,000,000  

 

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Inflation and Changing Prices

 

Inflation and changing prices have not had a material effect on our business because the charges for our services are based in U.S. dollars and we do not anticipate that inflation or changing prices will materially affect our business in the foreseeable future.

 

MANAGEMENT

 

The following table sets forth certain information as of October 15, 2014 with respect to our executive officers and directors:

 

Position     Age   Name
         
President, CFO, Secretary, Chairman of the Board       Max Chen
         
Chief Executive Officer       Hinman Au

 

Max P. Chen, Ph.D. , President, CFO and sole Director

 

Mr. Max P. Chen, is the sole Director, President, Chief Financial Officer and Secretary of AEC Nevada. He previously served as the President, and sole Director of AEC New York since its inception in 1999.

 

Mr. Chen enrolled in Sichuan Normal University Department of Foreign Language from 1978 to1982. Mr. Chen was originally a Professor in China Peasant University, and operated Correspondence Sichuan University with more than 70,000 students registered in 1984s. Mr. Chen relocated to the U.S. and has developed schools and educational centers that coordinate cooperative educational programs between the U.S. and China. Mr. Chen holds an M&R Management Certificate from Harvard Business School. Mr. Chen is also Executive Director of the US-China Higher Education Alliance.

 

Hinman Au , Chief Executive Officer

 

Mr. Hinman Au was appointed Interim CEO of AEC Nevada in June 2014. He is a licensed securities broker, licensed securities principal and general securities principal associated with FINRA since 1992. From 2012 to present, Mr. Au has been the CEO and President of Traderfield Securities Inc. located in Manhattan, New York. From 2011 to 2012, Mr. Au was the Investment Director of Winta Investment LLC located in Manhattan, New York and his key responsibility was to search for real estate investment opportunities for a Beijing based real estate developer. Before this, he served as the Senior Vice President of First American International Bank (FAIB), heading the division of Investment and Insurance Sales & Services from 2006 to 2011. FAIB is a New York based community bank with nine branches located in the metropolitan area.   He earned an MBA in Finance from CUNY at Baruch College, a Master of Science in Electrical Engineering from SUNY at Stony Brook, and a Bachelor of Science in Computer Science from CUNY at Lehman College.

 

Mr. Au is not acting as a broker for this offering and there is no commission arrangement between the Company and Mr. Au for any AEC fundraising activities.

 

Family Relationships   

 

There are no family relationships among the directors and executive officers of the Company.

 

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Board Committees

 

Our board of directors has not established any committees, including an audit committee, a compensation committee, a nominating committee or any committee performing a similar function. The functions of those committees are being undertaken by the entire board as a whole. Because we do not have any independent directors, our board of directors believes that the establishment of committees of the Board of Directors would not provide any benefits to our company and could be considered more form than substance.

 

Code of Conduct and Ethics

 

We have adopted a code of business conduct and ethics that applies to our directors, officers and all employees.

 

Director Compensation

 

We have not paid any cash compensation to members of our Board of Directors for their services as directors.

 

We will reimburse our directors for reasonable expenses in connection with attendance at board and committee meetings. Directors will also be eligible to receive stock options offered by our company from time to time. No options have been granted to any director as of the date of this offering.

  

Executive Compensation—Employment Agreements

 

The table below summarizes all compensation awarded to, earned by, or paid to our Principal Executive Officers, our two most highly compensated executive officers who occupied such position at the end of our latest fiscal year. Two additional executive officers would have been included in the table below except for the fact that they were not executive officers at the end of our latest fiscal year, and received no compensation from us, or by any third party where the purpose of a transaction was to furnish compensation, for all services rendered in all capacities to us for the year ended December 31, 2013, since our inception.(this last sentence does not make sense-please fix)

 

                      Stock Option           All Other        
Name and         Salary     Bonus     Awards     Stock Awards     Compensation     Total  
Principal Position   Year     ($)     ($)     ($)     (#)     ($)     ($)  
Max Chen, President     2014     $ 36,000       N/A     N/A     N/A     N/A   $ 36,000  
      2013       N/A       N/A       N/A       N/A       N/A       N/A  
Hinman Au, CEO     2014     $ 36,000       N/A       N/A       2,850       N/A     $ 38,850 (1)
      2013       N/A       N/A       N/A       N/A       N/A       N/A  

 

(1) Includes 285,000 shares of common stock issued to Mr. Au as compensation for service rendered to the Company valued at $0.01 per share.

 

Agreements with Executive Officers

 

The Company has entered into employment agreements with officers or other key employees.

 

Security Ownership of Certain Beneficial Owners and Management

  

The following table sets forth information regarding the ownership of our shares of Common Stock by:

 

each person known by us to beneficially own more than 5% of our outstanding shares of Common Stock;

 

each of our current directors;

 

our named executive officers; and

 

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

 

Unless otherwise noted, all information set forth below is as of November 15, 2014. Also, the address of the following persons is c/o 17 Battery Place, Suite 300, New York, NY, 10004, unless we indicate otherwise. As used in the column below, “Percentage of Common Shares Outstanding Before this Offering” is based on 21,000,000 shares of Common Stock outstanding as of November 15, 2014. The “Percentage of Common Shares Outstanding After this Offering” column assumes the sale of all of the 9,000,000 shares of Common Stock being offering in this offering.

 

          Percentage of     Percentage of  
    Number of     Shares of Common     Shares of Common  
    Shares of     Stock     Stock  
    Common Stock     Outstanding     Outstanding  
    Beneficially     Before this     After this  
Beneficial Owner   Owned (1)(2)     Offering (2)     Offering  
                   
Jinchun Huang     1,500,000       7.14 %     5.00 %
Directors and Officers                        
Hinman Au, Chief Executive Officer     285,000       1.36 %     *  
Max Pu Chen, President     10,563,000       50.30 %     35.20 %
All directors and executive officers as a group (2persons) (3)(4)     10,848,000       51.66 %     36.16 %

 

 * Less than one percent
(1) The inclusion herein of any shares of Common Stock deemed beneficially owned does not constitute an admission of beneficial ownership of those shares of Common Stock.

 

44
 

  

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

  

Other than compensation agreements and other arrangements described in “Management,” and our transactions described below, since our inception there has not been, nor is there currently proposed, any transaction or series of similar transactions to which we were or will be a party:

 

in which the amount involved exceeded or will exceed $60,000; and

 

in which any current director, executive officer, holder of 5% or more of our shares of Common Stock on an as-converted basis or any member of their immediate family had or will have a direct or indirect material interest.

  

The Company occupied office space owned by the sole shareholder of AEC New York under a month to month arrangement until September 2013 at a monthly rental of approximately $2,000. The related payable is included in a loan from stockholders on the accompanying balance sheet as of December 31, 2013 and 2012.

 

The Company leased office space under month to month arrangement from a third party commencing October 2013 at a monthly rental of approximately $1,700, which was paid by an affiliate entity with the AEC New York under common control.

 

LEGAL MATTERS

 

The validity of the securities offered by this prospectus will be passed upon for us by the Law Office of Yue & Associates, with the address at 708 3 rd Avenue, New York, NY 10017, in the capacity as securities counsel to the Company.

 

EXPERTS

 

The financial statements of the registrant appearing in this prospectus and in the registration statement have been audited by Wei, Wei & Co., LLP, an independent registered public accounting firm and are included in reliance upon such report given upon the authority of such firm as experts in accounting and auditing.

 

WHERE YOU CAN FIND MORE INFORMATION

 

We have filed with the SEC a registration statement under the Securities Act with respect to the shares of Common Stock offered by this prospectus. This prospectus does not contain all of the information set forth in the registration statement and the exhibits and schedules to the registration statement. Please refer to the registration statement, exhibits and schedules for further information with respect to the shares of Common Stock offered by this prospectus. Statements contained in this prospectus regarding the contents of any contract or other document are only summaries. With respect to any contract or document filed as an exhibit to the registration statement, you should refer to the exhibit for a copy of the contract or document, and each statement in this prospectus regarding that contract or document is qualified by reference to the exhibit. A copy of the registration statement and its exhibits and schedules may be inspected without charge at the SEC’s public reference room, located at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the public reference room. Our filings with the SEC are also available to the public from commercial document retrieval services and at the SEC’s web site at http://www.sec.gov .

  

45
 

  

INDEX TO FINANCIALS

 

    Page
Report of Independent Registered Public Accounting Firm   F-2
     
Balance Sheets as of December 31, 2012 and 2013 (Audited) and September 30, 2014(Unaudited)   F-3
     
Statements of Operations for the Years Ended December 31, 2013 and 2012 (Audited) and Nine Months Ended September 30, 2014(Unaudited)   F-4
     
Statements of Changes in Stockholders’ Equity (DEFICIT) for the Years Ended December 31, 2013 and 2012 (Audited) and Nine Months Ended September 30, 2014(Unaudited)   F-5
     
Statements of Cash Flows for the Years Ended December 31, 2013 and 2012(Audited) and Nine Months Ended September 30, 2014(Unaudited)   F-6
     
Notes to Financial Statements   F-7
     
Notes to consolidated financial statements    

 

F- 1
 

 

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

The Board of Directors and Stockholder of

American Education Center, Inc.

 

We have audited the accompanying balance sheets of American Education Center, Inc. (the “Company”), as of December 31, 2013 and 2012, and the related statements of operations, changes in stockholder’s deficit, and cash flows for the years ended December 31, 2013 and 2012. 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. The Company is not required, nor have we been engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit 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 presentations. 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 American Education Center, Inc. at December 31, 2013 and 2012, and the results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2013, in conformity with accounting principles generally accepted in the United States of America.

 

 

/s/ Wei, Wei & Co., LLP  

Wei, Wei & Co., LLP

 

December 8, 2014

Flushing, NY

  

F- 2
 

  

AMERICAN EDUCATION CENTER, Inc.AND SUBSIDIARY

 

BALANCE SHEETS

 

    December 31,     September 30,  
  2012     2013     2014  
                (Unaudited)  
ASSETS                        
                         
Current assets:                        
Cash (Note2)   $ 104,500     $ 140,513     $ 206,416  
Stock subscription receivable (Note 9 and 10)     -       -       89,820  
Prepaid expenses     -       -       713  
Deferred income taxes (Notes 2 and 8)     46,883       158,708       -  
                         
Total current assets     151,383       299,221       296,949  
                         
Noncurrent assets:                        
Security deposit (Note 4)     -       -       40,662  
                         
TOTAL ASSETS   $ 151,383     $ 299,221     $ 337,611  
                         
LIABILITIES AND STOCKHOLDERS’EQUITY (DEFICIT)                        
                         
Current liabilities:                        
Accounts payable and accrued expenses   $ 14,122     $ 26,443     $ 100,052  
Deferred revenue (Note 5)     95,760       353,956       -  
Loan from stockholder (Note 6)     90,860       88,551       88,551  
                         
Total current liabilities     200,742       468,950       188,603  
                         
Stockholders’ equity (deficit):                        
Preferred stock, $0.001 par value; 20,000,000 shares authorized; none issued     -       -       -  
Common stock, $0.001 par value; 200,000,000 shares authorized; 10,563,000 and 21,000,000 shares issued and outstanding, at December 31, 2012 and 2013, and September 30, 2014, respectively     10,563       10,563       21,000  
Additional paid-in capital     95,067       95,067       189,000  
(Deficit)     (154,989 )     (275,359 )     (60,992 )
                         
Total stockholders’ equity (deficit)     (49,359 )     (169,729 )     149,008  
                         
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)   $ 151,383     $ 299,221     $ 337,611  

 

See accompanying notes to financial statements.

 

F- 3
 

  

AMERICAN EDUCATION CENTER, Inc.AND SUBSIDIARY

 

STATEMENTS OF OPERATIONS

 

    Year Ended December 31,     Nine Months Ended
September 30,
 
    2012     2013     2013     2014  
                (Unaudited)  
Revenues (Note 2)   $ 69,856     $ 316,429     $ 114,700     $ 1,669,240  
                                 
Costs and expenses:                                
Consulting services     66,389       363,097       120,275       1,026,075  
Application fees     -       2,899       2,769       9,025  
General and administrative     57,627       176,757       55,905       255,088  
                                 
(Loss) income before (benefit) provision for income taxes     (54,160 )     (226,324 )     (64,249 )     379,052  
(Benefit) provision for income taxes     (24,235 )     (105,954 )     (37,756 )     164,685  
                                 
Net (loss) income   $ (29,925 )   $ (120,370 )   $ (26,493 )   $ 214,367  
                                 
Basic and diluted (loss) income earnings per share   $ (0.00 )   $ (0.01 )   $ (0.00 )   $ 0.02  
                                 
Weighted average shares outstanding, basic and diluted     10,563,000       10,563,000       10,563,000       10,601,799  

 

See accompanying notes to financial statements.

 

F- 4
 

  

AMERICAN EDUCATION CENTER, Inc.AND SUBSIDIARY

 

Statements of Changes in Stockholders’ EQUITY ( DEFICIT )

for the years ended DECEMBER 31, 2013 AND 2012 AND NINE MONTHS ended September 30, 2014

  

    Common Stock     Additional
paid-in
    Accumulated        
    Shares     Amount     capital     Deficit     Total  
                               
Balance-January 1, 2012     10,563,000     $ 10,563     $ 95,067     $ (125,064 )   $ (19,434 )
Net (loss)     -       -       -       (29,925 )     (29,925 )
                                         
Balance-December 31, 2012     10,563,000       10,563       95,067       (154,989 )     (49,359 )
Net (loss)     -       -       -       (120,370 )     (120,370 )
                                         
Balance-December 31, 2013     10,563,000       10,563       95,067       (275,359 )     (169,729 )
Shares issued for services     1,455,000       1,455       13,095       -       14,550  
Sale of common stock, at $0.01 per share     8,982,000       8,982       80,838       -       89,820  
Net income     -       -       -       214,367       214,367  
                                         
Balance-September 30, 2014 (unaudited)     21,000,000     $ 21,000     $ 189,000     $ (60,992 )   $ 149,008  

 

See accompanying notes to financial statements.

 

F- 5
 

  

AMERICAN EDUCATION CENTER, Inc.AND SUBSIDIARY

 

STATEMENTS OF CASH FLOWS

 

    Year Ended
December 31,
    Nine Months Ended
September 30,
 
    2012     2013     2013     2014  
                (Unaudited)  
Cash flows from operating activities:                                
Net(loss) income   $ (29,925 )   $ (120,370 )   $ (26,493 )   $ 214,367  
Deferred income taxes     (24,285 )     (111,825 )     (96,241 )     158,708  
Shares issued for compensation     -       -       -       14,550  
Change in operating assets and liabilities:                                
(Increase) in prepaid expenses     -       -       -       (713 )
(Increase) in security deposit     -       -       -       (40,662 )
Increase in accounts payable and accrued expenses     5,550       12,321       80,985       73,609  
Increase (Decrease) in deferred income     45,360       258,196       223,439       (353,956 )
                                 
Net cash (used in) provided by operating activities     (3,300 )     38,322       181,690       65,903  
                                 
Cash flows from financing activities:                                
Proceeds from stockholder loan     45,391       21,313       19,305       -  
Repayment of stockholder loan     -       (23,622 )     (11,460 )     -  
                                 
Net cash provided by (used in) financing activities     45,391       (2,309 )     7,845       -  
                                 
Net change in cash     42,091       36,013       189,535       65,903  
Cash, beginning of the period     62,409       104,500       104,500       140,513  
                                 
Cash, end of the period   $ 104,500     $ 140,513     $ 294,035     $ 206,416  
                                 
Supplemental disclosure of cash flow information                                
                                 
Cash paid for income taxes   $ -     $ -     $ -     $ 1,953  
                                 
Cash paid for interest   $ -     $ -     $ -     $ -  

 

See accompanying notes to financial statements.

 

F- 6
 

  

AMERICAN EDUCATION CENTER, Inc.AND SUBSIDIARY

 

NOTES TOFINANCIAL STATEMENTS

(INformation as of september 30, 2014 and for the nine months ended september30, 2013 and 2014 is unaudited)

 

1. ORGANIZATION AND BUSINESS

 

American Education Center, Inc. (“AEC New York”) is a New York Corporation organized on November 8, 1999 and is licensed by the Education Department of the State of New York to engage in education related consulting services between the United States and China.

 

On May 7, 2014, the President/sole shareholder of AEC New York formed a New Company (“AEC Nevada”) in the state of Nevada with the same name. On May 31, 2014, the President/sole shareholder of AEC New York exchanged his 200 shares for 10,563,000 shares of AEC Nevada. This exchange made AEC New York a wholly owned subsidiary of AEC Nevada (“AEC Nevada” or the “Company”).

 

The Company’s primary goal is to build upon the concept of “one-stop comprehensive services”for international students, educators, and institutions. The Company has been devoted to international education exchanges, by providing educational and career enrichment opportunities for students, teachers, and educational institutions between China and the United States. The Company currently provides admission, visa, housing and other consulting services to Chinese students wishing to study in the United States. The Company also provides exchange and placement services for qualified United States educators to teach in China.

 

2. ACCOUNTING POLICIES

 

Basis of Presentation

 

As disclosed above, the exchange of shares has been treated as a transaction between entities under common control, similar to a pooling of interest, whereby the assets and liabilities are recorded at their carrying values. Based upon this treatment, the equity section of AEC New York has been recast as if this transaction had occurred at the beginning of the earliest period being presented and accordingly, as if the 10,563,000 shares of AEC Nevada have been outstanding since then. AEC Nevada had no assets or liabilities when formed.

 

The accompany consolidated financial statements have been prepared on the accrual basis in accordance with accounting principles generally accepted in the United States of American (“GAAP”). All significant intercompany accounts and transactions have been eliminated in consolidation.

 

F- 7
 

  

AMERICAN EDUCATION CENTER, Inc.AND SUBSIDIARY

 

NOTES TO FINANCIAL STATEMENTS

(INFORMATION AS OF SEPTEMBER 30, 2014 AND FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2013 AND 2014 IS UNAUDITED)

 

2. ACCOUNTING POLICIES(continued)

 

Unaudited Interim Financial Statements

 

The accompanying interim consolidated balance sheet as of September 30, 2014 and the statements of consolidated operations, changes in stockholder’s equity (deficit) and cash flows for the nine months ended September 30, 2013 and 2014 and the related footnote disclosures are unaudited. These unaudited interim financial statements have been prepared in accordance with GAAP and the Regulations of the Securities and Exchange Commission. The unaudited interim financial statements have been prepared on the same basis as the audited financial statements and reflect, in management’s opinion, all adjustments of a normal, recurring nature that are necessary for the fair presentation of the Company’s consolidated financial position as of September 30, 2014 and the results of its operations and cash flows for the nine months ended September 30, 2013 and 2014. The results for the nine months ended September 30, 2014 are not necessarily indicative of the results expected for the full year or any other period.

 

Cash and Cash Equivalents

 

The Company considers all liquid investments with an original maturity of three months or less to be cash equivalents.

 

Revenue Recognition

 

Revenue is recorded pursuant to Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”)605, Revenue Recognition , when persuasive evidence of an arrangement exists, delivery of the services has occurred, the fee is fixed or determinable and collectability is reasonably assured.

 

Tuition and consulting fees are generally paid in advance. Tuition fees are recognized when reliable estimates of the number of students enrolled in the program are available upon the class completion. Consulting services that have refund provisions are recognized when such provisions have been fulfilled and no longer exist. In 2014, the Company records non-refundable consulting fees as earned and has discontinued utilizing the refund provisions in its consulting agreements.

 

Advertising Costs

 

Advertising costs are charged to operations when incurred. Advertising costs were $8,246 and $0 for the years ended December 31, 2012 and 2013, respectively, and no advertising costs were incurred for the nine month ended September 30, 2013 and 2014.

 

F- 8
 

  

AMERICAN EDUCATION CENTER, Inc.AND SUBSIDIARY

 

NOTES TO FINANCIAL STATEMENTS

(INFORMATION AS OF SEPTEMBER 30, 2014 AND FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2013 AND 2014 IS UNAUDITED)

 

2. ACCOUNTING POLICIES(continued)

 

Concentration of Credit Risk

 

The Company maintains its cash accounts at a commercial bank. The Federal Deposit Insurance Corporation (“FDIC”) covers $250,000 per bank for substantially all depository accounts. At September 30, 2014, the Company did not have cash balances which were in excess of the FDIC insurance limit. The Company performs ongoing evaluation of the financial institution to limit its concentration of risk exposure. Management believes this risk is not significant due to the financial strength of the financial institution utilized by the Company.

 

Income Taxes

 

The Company accounts for income taxes in accordance with FASB ASC 740, Income Taxes (“ASC 740”), which requires the recognition of deferred income taxes for differences between the basis of assets and liabilities for financial statement and income tax purposes. The differences relate principally to deferred income. Deferred tax assets and liabilities represent the future tax consequences for those differences, which will either be taxable or deductible when the assets and liabilities are recovered or settled. Deferred taxes are also recognized for operating losses that are available to offset future taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized.

 

ASC 740 also addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under ASC 740, the Company may recognize the tax benefit from an uncertain tax position only if it is “more likely than not” that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position would be measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. ASC 740 also provides guidance on derecognition of income tax assets and liabilities, classification of current and deferred income tax assets and liabilities, and accounting for interest and penalties associated with tax positions. As of December 31, 2012 and 2013 and September 30 2014, the Company does not have a liability for any unrecognized tax benefits.

 

F- 9
 

  

AMERICAN EDUCATION CENTER, Inc.AND SUBSIDIARY

 

NOTES TO FINANCIAL STATEMENTS

(INFORMATION AS OF SEPTEMBER 30, 2014 AND FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2013 AND 2014 IS UNAUDITED)

 

2. ACCOUNTING POLICIES (continued)

 

Fair Value of Financial Measurements

 

FASB ASC 820, Fair Value Measurement , specifies a hierarchy of valuation techniques based upon whether the inputs to those valuation techniques reflect assumptions other market participants would use based upon market data obtained from independent sources (observable inputs). In accordance with ASC 820, the following summarizes the fair value hierarchy:

 

Level 1 Inputs – Unadjusted quoted market prices for identical assets and liabilities in an active market that the Company has the ability to access.

 

Level 2 Inputs – Inputs other than the quoted prices in active markets that are observable either directly or indirectly.

 

Level 3 Inputs – Inputs based on prices or valuation techniques that are both unobservable and significant to the overall fair value measurements.

 

FASB ASC 820 requires the use of observable market data, when available, in making fair value measurements. When inputs used to measure fair value fall within different levels of the hierarchy, the level within which the fair value measurement is categorized is based on the lowest level input that is significant to the fair value measurement. Valuation techniques used need to maximize the use of observable inputs and minimize the use of unobservable inputs.

 

The Company did not identify any assets or liabilities that are required to be presented at fair value on a recurring basis. Non-derivative financial instruments include cash, loan from stockholder and accounts payable and accrued expenses. As of December 31, 2012 and 2013 and September 30, 2014, the carrying values of these financial instruments approximated their fair values due to their short term nature.

 

Use of Estimates

 

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

 

F- 10
 

  

AMERICAN EDUCATION CENTER, Inc.AND SUBSIDIARY

 

NOTES TO FINANCIAL STATEMENTS

(INFORMATION AS OF SEPTEMBER 30, 2014 AND FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2013 AND 2014 IS UNAUDITED)

 

2. ACCOUNTING POLICIES(continued)

 

Income (Loss) per Share

 

Net income (loss) per share is calculated in accordance with FASB ASC 260, Earnings Per Share, and SEC SAB 98. Basic income(loss) per share is based upon the weighted average number of common shares outstanding. Diluted net income per share is based on the assumption that all dilutive convertible shares and stock options are converted or exercised. Dilution is computed by applying the treasury stock method. Under this method, options and warrants are assumed to be exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase common stock at the average market price during the period. Basic and diluted income (loss) per share are the same for the years ended December 31, 2012 and 2013 and for the nine months ended September 30, 2013 and 2014, because the Company had no common stock equivalents.

 

3. RECENTLY ISSUED ACCOUNTING STANDARDS

 

The Company has assessed all newly issued accounting pronouncements released during the years ended December 31, 2012and 2013 and the nine months ended September 2014 and through the report date, and has found none of them will have a material impact on the Company’s financial statements when or if adopted.

 

4. SECURITY DEPOSIT

 

The Company leases office space from a third party for the period April 2014 through May 2016. The Company has deposited with the landlord a security deposit of $40,662.

 

5. DEFERRED REVENUE

 

Deferred income at December 31, 2012 and 2013 represents refundable revenue for services that have not been fulfilled, tuition revenue to be earned in 2013 and prepayment for consulting services to be rendered in 2014.

 

F- 11
 

  

AMERICAN EDUCATION CENTER, Inc.AND SUBSIDIARY

 

NOTES TO FINANCIAL STATEMENTS

(INFORMATION AS OF SEPTEMBER 30, 2014 AND FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2013 AND 2014 IS UNAUDITED)

 

6. RELATED-PARTY TRANSACTIONS

 

The loan from stockholder represents an unsecured non-interest bearing loan, arising from expenses paid on behalf of the Company. The borrowings are due on demand.

 

The Company occupied office space owned by its sole stockholder under a month to month arrangement until September 2013, at a monthly rental of approximately $2,000. The related payable is included in the loan from stockholder as of December 31, 2012, 2013, and September 30, 2014.

 

The Company leased office space under a month to month arrangement from a third party commencing October 2013 at a monthly rental of approximate $1,700, which was paid by an entity affiliated with the Company under common control. The related payable of $4,950 at December 31, 2013 is included in accounts payable and accrued expenses.

 

Rent expense under these related leases was approximately $25,000, $29,000 and $5,000 for the years ended December 31, 2012 and 2013 and for the nine months ended September 2014,respectively.

 

7. LEASE COMMITMENT

 

In April 2014, the Company entered into to a new lease for office space with by an unrelated third party. This lease agreement required a monthly rental of $13,554 and expires on May 31, 2016.Rent expense was approximately $95,000 for the nine months ended September 30, 2014.

 

Future minimum lease commitments are as follows:

 

    Amount  
Year Ending:        
December 31, 2015   $ 166,037  
December 31, 2016     70,506  
         
Total   $ 236,543  

 

F- 12
 

  

AMERICAN EDUCATION CENTER, Inc.AND SUBSIDIARY

 

NOTES TO FINANCIAL STATEMENTS

(INFORMATION AS OF SEPTEMBER 30, 2014 AND FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2013 AND 2014 IS UNAUDITED)

 

8. Income taxes

 

The components of deferred tax assets at December 31are as follows:

 

    2012     2013  
             
Deferred revenue   $ 42,937     $ 158,708  
Net operating losses     3,946       -  
                 
    $ 46,883     $ 158,708  

 

The (benefit from) provision for income taxes for the years ended December 31, consists of the following:

 

    2012     2013  
             
Current   $ 50     $ 5,871  
Deferred     (24,285 )     (111,825 )
                 
Total   $ (24,235 )   $ (105,954 )

 

The components of deferred tax assets at September 30 are as follows:

 

    2013     2014  
    (Unaudited)  
Deferred revenue   $ 143,124     $ -  
Net operating losses     -       -  
                 
    $ 143,124     $ -  

 

F- 13
 

  

AMERICAN EDUCATION CENTER, Inc.AND SUBSIDIARY

 

NOTES TO FINANCIAL STATEMENTS

(INFORMATION AS OF SEPTEMBER 30, 2014 AND FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2013 AND 2014 IS UNAUDITED)

 

8. Income taxes (continued)

 

The (benefit from) provision for income taxes for the nine months ended September30,consists of the following:

 

    2013     2014  
    (Unaudited)  
Current   $ 58,485     $ 5,977  
Deferred     (96,241 )     158,708  
                 
Total   $ (37,756 )   $ 164,685  

 

The Company’s tax returns are subject to examination by the Federal, State and City tax authorities. The 2011, 2012 and 2013 tax years are open and subject to examination by the taxing authorities. The Company is not currently under examination nor have they been notified by the authorities.

 

A reconciliation of the (benefit) provision for income taxes, with the amount computed by applying the statutory Federal income tax rate for the year ended December 31, 2012 and 2013 and the nine months ended September 30, 2013 and 2014, is as follows:

 

    December 31,     September 30,  
    2012     2013     2013     2014  
                (Unaudited)  
Tax at federal statutory rate     (34.0 )%     (34.0 )%     (34.0 )%     34.0 %
State and local taxes, net of federal benefit     (10.8 )%     (10.8 )%     (10.8 )%     10.8 %
Surtax exemption     0.0 %     (2.4 )%     (13.5 )%     (1.0 )%
Other     0.1 %     0.4 %     (0.5 )%     (0.4 )%
                                 
Benefit from income taxes     (44.7 )%     (46.8 )%     (58.8 )%     43.4 %

 

F- 14
 

 

AMERICAN EDUCATION CENTER, INC. AND SUBSIDIARY

 

NOTES TO FINANCIAL STATEMENTS

(INFORMATION AS OF SEPTEMBER 30, 2014 AND FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2013 AND 2014 IS UNAUDITED)

 

9. ISSUANCE OF COMMON STOCK

 

On May 31, 2014, we entered into a Share Exchange Agreement (the “Exchange Agreement”) with AEC New York whereby we acquired all of the outstanding capital stock of AEC New York and AEC New York became a wholly owned subsidiary of the Company.  In consideration for the purchase of 100% of the issued and outstanding capital stock of AEC New York under the Exchange Agreement, we issued to the shareholder of AEC New York, Mr. Max Chen (President and director of the Company), an aggregate of 10,563,000 restricted shares of the Company’s common stock and AEC New York became a wholly-owned subsidiary of the Company.

 

On September 30, 2014, the Company issued 8,982,000 shares of common stock at the purchase price of $0.01 per share and received gross and net proceeds of $89,820 from this private placement.

 

On September 30, 2014, the Company issued 1,455,000 to Employees consultants and legal counsel for services previously rendered. These shares, 285,000 were issued to the Company’s chief executive officer. The shares were recorded at their fair value of $.01 per share.

 

10. EMPLOYMENT AGREEMENTS

 

On August 1, 2014, the Company entered into employment agreements with its President/Sole director and its Chief Executive Officer, which both expire on July 31, 2015. Both agreements provide for a monthly salary of $3,000. In addition, the Chief Executive Officer was issued 285,000 shares of common stock for his services through September 30, 2014. The shares were valued at $0.01 per share.

 

11.   SUBSEQUENT EVENTS

 

On November 11 and 12, 2014, the Company received $89,820 from the sale of 8,982,000 shares of common stock on September 30, 2014 which was shown as stock subscription receivable.

 

The Company’s management has performed subsequent events procedures through December 08, 2014, which is the date the financial statements were available to be issued. There were no subsequent events requiring adjustment to or disclosure in the financial statements.

 

F- 15
 

  

AMERICAN EDUCATION CENTER, INC.

 

9,000,000 SHARES OF COMMON STOCK

 

PROSPECTUS

  

No dealer, sales representative or any other person has been authorized to give any information or to make any representations other than those contained in this prospectus and, if given or made, such information or representation must not be relied upon as having been authorized by the Company or any of the underwriters. This prospectus does not constitute an offer of any securities other than those to which it relates or an offer to sell, or a solicitation of any offer to buy, to any person in any jurisdiction where such an offer or solicitation would be unlawful. Neither the delivery of this prospectus nor any sale made hereunder shall, under any circumstances, create an implication that the information set forth herein is correct as of any time subsequent to the date hereof.

 

___________________, 2014

  

46
 

 

PART II

 

INFORMATION NOT REQUIRED IN PROSPECTUS

 

Item 13.                      Other Expenses of Issuance and Distribution

 

The following table sets forth all estimated costs and expenses payable by the Company in connection with the Offering for the securities included in this registration statement:

 

SEC registration fee   $ 12.00  
Printing expenses   $ 1,000  
Legal fees and expenses   $ 30,000  
Accountants’ fees and expenses   $ 2,500  
Auditor fees and expenses   $ 20,687  
Transfer agent fees   $ 1,000  
Miscellaneous expenses     N/A  
    Total   $ 55,199  

 

Item 14.                      Indemnification of Directors and Officers

 

Our Articles of Incorporation and By-Laws provide that we will indemnify to the fullest extent permitted by the Nevada General Corporation Law any person made or threatened to be made a party to any action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that such person or such person's testator or intestate is or was a director, officer, employee or agent of the Company or serves or served at our request as a director, officer or employee of another corporation or entity.

 

We may enter into agreements to indemnify our directors and officers, in addition to the indemnification provided for in our Articles of Incorporation and By-Laws.  These agreements, among other things, would indemnify our directors and officers for certain expenses (including advancing expenses for attorneys' fees), judgments, fines and settlement amounts incurred by any such person in any action or proceeding, including any action by us or in our right, arising out of such person's services as a director or officer of the Company, any subsidiary of ours or any other company or enterprise to which the person provides services at our request.

 

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers and controlling persons pursuant to the foregoing provisions, or otherwise, we have been advised that, in the opinion of the Securities and Exchange Commission, such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable.

 

Item 15.                      Recent Sales of Unregistered Securities

 

As of December 10, 2014, we have 21,000,000 shares of common stock issued and outstanding. 

 

On May 31, 2014, we entered into a Share Exchange Agreement (the “Exchange Agreement”) with AEC New York whereby we acquired all of the outstanding capital stock of AEC New York and AEC New York became a wholly owned subsidiary of the Company.  In consideration for the purchase of 100% of the issued and outstanding capital stock of AEC New York under the Exchange Agreement, we issued to the shareholder of AEC New York, Mr. Max Chen (President and director of the Company), an aggregate of 10,563,000 restricted shares of the Company’s common stock and AEC New York became a wholly-owned subsidiary of the Company.

 

On September 30, 2014, we issued a total of 8,982,000 shares of common stock to an aggregate of 19 shareholders at the purchase price of $0.01 per share. We received gross and net proceeds of $89,820 from this private placement.

 

47
 

  

During the period from January to July 2014, , we issued a total of 870,000 shares of common stock at $0.01 per share to consultants and employees for services provided during that period. The Company recorded a fair value of $8,700  for these shares.

 

We issued a total of 285,000 shares of common stock to Mr. Hinman Au at value of $0.01 per share on September 30, 2014 as executive compensation for Mr. Au serving as Chief Executive Officer for the Company. The Company recorded a fair value of $2,850 for such services rendered.

 

In addition, we issued 300,000 shares of common stock to our legal counsel, the Law Office of Yue & Associates, P.C. for services rendered in August 2014. The Company recorded a fair value of $3,000 for these shares.

 

Unless stated otherwise below, all issuances of securities described under this “ Item 15 – Recent Sales of Unregistered Securities ” were issued pursuant to exemptions from registration provided by Section 4(2) of the Securities Act and Regulation D promulgated there under and Regulation S.

 

Item 16.                      Exhibits

 

(a) Exhibits.

 

Exhibit    
Number   Description
     
  2.1   Share Exchange Agreement between AEC New York and AEC dated May 31, 2014
     
  2.3   Subscription Agreement between AEC Nevada and accredited investors dated September 30, 2014
     
  2.4   Subscription Agreement between AEC Nevada and nonaccredited investors dated September 30, 2014
     
  3.1   Articles of Incorporation of Registrant, dated May 7, 2014.
     
  3.2   Bylaws of the Registrant.
     
  4.1   Specimen Common Stock Certificate.
     
  5.1   Opinion of Law Office of Yue & Associates
     
10.1   Employment Agreement with Hinman Au (CEO) dated August1, 2014
     
10.2   Employee Agreement with Max Chen (President) dated August 1, 2014
     
10.3   Consulting agreement between AEC New York and New Oriental Guangzhou dated August 13, 2013
     
10.4   Consulting agreement between AEC New York and Saint Peter's University dated May 1, 2014
     
14.1   Code of Business Conduct and Ethics
     
23.1   Consent of Independent Registered Public Accounting Firm.
     
23.2   Consent of Law Office of Yue & Associates (included in Exhibit 5.1).

 

48
 

  

(b) Financial Statement Schedule

 

Schedules have been omitted because they are not applicable, not required or the information required to be set forth therein is included in the consolidated financial statements or notes thereto.

 

Item 17.                      Undertakings

 

The undersigned Registrant hereby undertakes:

  

  1. To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:

 

   i.     To include any Prospectus required by section 10(a)(3) of the Securities Act of 1933;

 

  ii.

To reflect in the Prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of Prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement.

     
  iii. To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement;

 

  2.

That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

     
  3. To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

 

  4. That, for the purpose of determining liability of the registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities: The undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:

 

   i.

Any Preliminary Prospectus or Prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424;

     
  ii.

Any free writing Prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant;

     
  iii.

The portion of any other free writing Prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and 

 

49
 

  

  iv. Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser.

 

  5.   That, for the purpose of determining liability under the Securities Act of 1933 to any purchaser: Each Prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than Prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or Prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or Prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or Prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use.

 

Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to our directors, officers and controlling persons, we have been advised that in the opinion of the Securities and Exchange Commission, such indemnification is against public policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the event that 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 the corporation in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, we will, unless in the opinion of our counsel the matter has been settled by a controlling precedent, submit to a court of appropriate jurisdiction the question of whether such indemnification by us is against public policy as expressed in the Securities Act of 1933, as amended, and will be governed by the final adjudication of such case.

 

50
 

  

SIGNATURES

 

Pursuant to the requirements of the Securities Act of 1933, the registrant certifies that it has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized on the 10 st day of December, 2014.

 

  American Education Center Inc.
   
  By: /s/ Hinman Au
    Hinman Au, Chief Executive Officer

 

Pursuant to the requirements of the Securities Act of 1933, this registration statement was signed by the following persons in the capacities and on the dates indicated.

 

Name and Title   Date
     
/s/ Hinman Au   December 10,  2014
     
Hinman Au    
Chief Executive Officer    
(Principal Executive Officer, Principal Financial    
Officer and Principal Accounting Officer)    
     
/s/ Max Chen   December 10, 2014
     

Max Chen

President, Chairman, Chief Financial Officer and Secretary

   
(Principal Executive Officer, Principal Financial    
Officer and Principal Accounting Officer)    

 

51

 

 

Exhibit 2.1

 

SHARE EXCHANGE AGREEMENT

 

by and among

 

American Education Center, Inc. (a New York corporation)

(“AEC New York“)

 

and

 

the Shareholder of AEC New York,

 

on the one hand ;

 

and

 

American Education Center, Inc. (a Nevada corporation)

(“AEC Nevada”),

 

on the other hand

 

May 31, 2014

 

 

 

1
 

 

SHARE EXCHANGE AGREEMENT

 

This Share Exchange Agreement, dated as of May 31, 2014 (this “Agreement”), is made and entered into by and among American Education Center, Inc. (a New York corporation, “ AEC New York ”), and Max Pu Chen, the sole shareholder of AEC New York (“ AEC New York Shareholder ”) listed on the Signature Pages for AEC New York Shareholder that are attached hereto, on the one hand; and American Education Center, Inc. (a Nevada corporation, “ AEC Nevada ”)on the other hand.

 

RECITALS

 

WHEREAS, the Board of Directors of AEC Nevada has adopted resolutions approving AEC Nevada’s acquisition of the common stock of AEC New York held by the AEC New York Stockholder (the “ Acquisition ”) by means of a share exchange with the AEC New York Shareholder by issuance of 10,563,000 shares of common stock of AEC Nevada, upon the terms and conditions hereinafter set forth in this Agreement;

 

WHEREAS, subject to the terms and conditions of this Agreement, the AEC New York shareholder owns 100% of issued and outstanding shares of Common Stock, par value $0.001 per share, of AEC New York (the “AEC New York Common Shares”), and believe it is in his best interest to exchange all AEC New York Common Shares for 10,563,000 newly issuance of shares of Common Stock, par value $0.001 per share, of AEC Nevada (the “AEC Nevada Common Shares”);

 

WHEREAS, upon consummation of the transactions contemplated by this Agreement, AEC New York will become a 100% wholly-owned subsidiary of AEC Nevada; and

 

WHEREAS, it is intended that the terms and conditions of this Agreement comply in all respects with Section 368(a)(1)(B) and/or Section 351 of the Code and the regulations corresponding thereto, so that the Acquisition shall qualify as a tax free reorganization under the Code, and that this share exchange transaction shall qualify as a transaction in securities exempt from registration or qualification under the Securities Act of 1933, as amended and in effect on the date of this Agreement.

 

AGREEMENT

 

NOW, THEREFORE, the parties hereto, intending to be legally bound, agree as follows:

 

ARTICLE 1

 

THE ACQUISITION

 

1.1           The Acquisition . Upon the terms and subject to the conditions hereof, at the Closing (as hereinafter defined) the parties shall do the following:

 

(a)          The AEC New York Shareholder will each sell, convey, assign, transfer and deliver to AEC Nevada certificates representing the AEC New York Common Stock held by Max Pu Chen, which in the aggregate shall constitute 100% of the issued and outstanding equity interests of AEC New York, accompanied by a properly executed and authenticated stock power or instrument of like tenor.

 

2
 

 

(b)          As consideration for the acquisition of the AEC New York Common Stock, AEC Nevada will issue to each AEC New York Shareholder, in exchange for such AEC New York Shareholder’s portion of the AEC New York Common Stock, the number of shares of common stock set forth opposite such party’s name in Column IV on Annex I attached hereto (collectively, the “ AEC Nevada Shares ”).

 

1.2           Closing Date . The closing of the Acquisition (the “Closing”) shall take place on such date as may be mutually agreed upon by the parties. Such date is referred to herein as the “Closing Date.”

 

1.3           Taking of Necessary Action; Further Action . If, at any time after the Closing, any further action is necessary or desirable to carry out the purposes of this Agreement, the AEC New York Shareholder, AEC New York, the AEC Nevada Stockholders, and/or AEC Nevada (as applicable) will take all such lawful and necessary action.

 

1.4           Certain Definitions . The following capitalized terms as used in this Agreement shall have the respective definitions:

 

Affiliate ” means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control with a Person, as such terms are used in and construed under Rule 405 under the Securities Act.

 

Contract ” means any contract, lease, license, indenture, note, bond, agreement, permit, concession, franchise or other instrument.

 

Knowledge ” means the actual knowledge of the officers, directors or advisors of the referenced party.

 

Liens ” means a lien, charge, security interest, encumbrance, right of first refusal, preemptive right or other restriction.

 

Material Adverse Effect ” means an adverse effect on either referenced party or the combined entity resulting from the consummation of the transaction contemplated by this Agreement, or on the financial condition, results of operations or business, before or after the consummation of the transaction contemplated in this Agreement, which as a whole is or would be considered material to an investor in the securities of AEC Nevada.

 

Non-U.S. Person ” means any person who is not a U.S. Person or is deemed not to be a U.S. Person under Rule 902(k)(2).

 

Person ” means any individual, corporation, partnership, joint venture, trust, business association, organization, governmental authority or other entity.

 

Securities Act ” means the Securities Act of 1933, as amended.

 

Tax ” or “ Taxes ” means any and all applicable central, federal, provincial, state, local, municipal and foreign taxes, including, without limitation, gross receipts, income, profits, sales, use, occupation, value added, ad valorem, transfer, franchise, withholding, payroll, recapture, employment, excise and property taxes, assessments, governmental charges and duties together with all interest, penalties and additions imposed with respect to any such amounts and any obligations under any agreements or arrangements with any other person with respect to any such amounts and including any liability of a predecessor entity for any such amounts.

 

Trading Day ” means a day on which the principal Trading Market is open for trading.

 

3
 

 

Transaction ” means the transactions contemplated by this Agreement, including the share exchange.

 

United States ” means and includes the United States of America, its territories and possessions, any State of the United States, and the District of Columbia.

 

U.S. Person as defined in Regulation S means: (i) a natural person resident in the United States; (ii) any partnership or corporation organized or incorporated under the laws of the United States; (iii) any estate of which any executor or administrator is a U.S. Person; (iv) any trust of which any trustee is a U.S. Person; (v) any agency or branch of a foreign entity located in the United States; (vi) any nondiscretionary account or similar account (other than an estate or trust) held by a dealer or other fiduciary for the benefit or account of a U.S. Person; (vii) any discretionary account or similar account (other than an estate or trust) held by a dealer or other fiduciary organized, incorporated and (if an individual) resident in the United States; and (viii) a corporation or partnership organized under the laws of any foreign jurisdiction and formed by a U.S. Person principally for the purpose of investing in securities not registered under the Securities Act, unless it is organized or incorporated, owned, by accredited investors (as defined in Rule 501(a) under the Securities Act) who are not natural persons, estates or trusts).

 

1.5           Tax Consequences . It is intended that the terms and conditions of this Agreement comply in all respects with Section 368(a)(1)(B) and/or Section 351 of the Code and the regulations corresponding thereto, so that the Acquisition shall qualify as a tax-free reorganization under the Code.

 

ARTICLE 2

 

REPRESENTATIONS AND WARRANTIES OF AEC NEW YORK

 

Except as otherwise disclosed herein or in a disclosure schedule attached hereto, AEC New York (the AEC New York Shareholder, as applicable) hereby represents and warrants to AEC Nevada and the AEC Nevada Stockholders as of the date hereof and as of the Closing Date (unless otherwise indicated) as follows:

 

2.1           Organization . AEC New York has been duly incorporated, validly exists as a corporation, and is in good standing under the laws of its jurisdiction of incorporation, and has the requisite power to carry on its business as now conducted.

 

2.2           Capitalization . The authorized capital stock of AEC New York consists of 200 shares of common stock without par value per share. The capitalization of AEC New York is as provided to AEC Nevada, and as of Closing the capitalization of each shall not have changed. All of the issued and outstanding shares of capital stock of AEC New York, as of the date of this Agreement are and as of Closing will be, duly authorized, validly issued, fully paid, non-assessable and free of preemptive rights. There are no voting trusts or any other agreements or understandings with respect to the voting of AEC New York Holding’s capital stock. Except as set forth in the preceding sentence, no other class of capital stock or other security of AEC New York is authorized, issued, reserved for issuance or outstanding. There are no authorized or outstanding options, warrants, equity securities, calls, rights, commitments or agreements of any character by which AEC New York or any of the AEC New York Shareholder is obligated to issue, deliver or sell, or cause to be issued, delivered or sold, any shares of capital stock or other securities of AEC New York. There are no outstanding contractual obligations (contingent or otherwise) of AEC New York to retire, repurchase, redeem or otherwise acquire any outstanding shares of capital stock of, or other ownership interests in, AEC New York.

 

2.3           Subsidiaries . As of the Closing, AEC New York has no direct or indirect subsidiaries.

 

4
 

 

2.4            Certain Corporate Matters . AEC New York is duly qualified to do business as a corporation and is in good standing under the laws of the State of its incorporation, except where the failure to be so qualified would not have a Material Adverse Effect on AEC New York’ financial condition, results of operations or business. AEC New York has full corporate power and authority and all authorizations, licenses and permits necessary to carry on the business in which it is engaged and to own and use the properties owned and used by it.

 

2.5            Authority Relative to this Agreement . AEC New York has the requisite power and authority to enter into this Agreement and to carry out its respective obligations hereunder. The execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby by AEC New York have been duly authorized by AEC New York’ Board of Directors and no other actions on the part of AEC New York are necessary to authorize this Agreement or the transactions contemplated hereby. This Agreement has been duly and validly executed and delivered by AEC New York and constitutes a valid and binding agreement, enforceable against AEC New York in accordance with its terms, except as such enforcement may be limited by bankruptcy, insolvency or other similar laws affecting the enforcement of creditors’ rights generally or by general principles of equity.

 

2.6            Consents and Approvals; No Violations . Except for applicable requirements of federal securities laws and state securities or blue-sky laws, no filing with, and no permit, authorization, consent or approval of, any third party, public body or authority is necessary for the consummation by AEC New York of the transactions contemplated by this Agreement. Neither the execution and delivery of this Agreement by AEC New York nor the consummation by AEC New York of the transactions contemplated hereby, nor compliance by them with any of the provisions hereof, will (a) conflict with or result in any breach of any provisions of the charter or bylaws (or operating agreement) of AEC New York, (b) result in a violation or breach of, or constitute (with or without due notice or lapse of time or both) a default (or give rise to any right of termination, cancellation or acceleration) under, any of the terms, conditions or provisions of any note, bond, mortgage, indenture, license, Contract, agreement or other instrument or obligation to which AEC New York is a party or by which any of their respective properties or assets may be bound, or (c) violate any order, writ, injunction, decree, statute, rule or regulation applicable to AEC New York, or any of its properties or assets, except in the case of clauses (b) and (c) for violations, breaches or defaults which are not in the aggregate material to AEC New York taken as a whole.

 

2.7            Books and Records . The books and records of AEC New York delivered to AEC Nevada prior to the Closing fully and fairly reflect the transactions to which AEC New York is a party or by which it or its properties are bound.

 

2.8            Intellectual Property . AEC New York has no knowledge of any claim that, or inquiry as to whether, any product, activity or operation of AEC New York infringes upon or involves, or has resulted in the infringement of, any trademarks, trade-names, service marks, patents, copyrights or other proprietary rights of any other person, corporation or other entity; and no proceedings have been instituted, are pending or are threatened.

 

2.9            Litigation . There is no action, suit, inquiry, notice of violation, proceeding or investigation pending or, to the Knowledge of AEC New York, threatened against or affecting AEC New York or any of its properties before or by any court, arbitrator, governmental or administrative agency or regulatory authority (federal, state, county, local or foreign) (collectively, an “ Action ”) which (i) adversely affects or challenges the legality, validity or enforceability of this Agreement or (ii) could, if there were an unfavorable decision, have or reasonably be expected to result in a Material Adverse Effect. Neither AEC New York nor any director or officer thereof, is or has been the subject of any Action involving a claim of violation of or liability under federal or state securities laws or a claim of breach of fiduciary duty. There has not been, and to the Knowledge of AEC New York, there is not pending or contemplated, any investigation by any regulatory body involving AEC New York or any current or former director or officer of AEC New York.

 

5
 

 

2.10          Legal Compliance . To the best Knowledge of AEC New York, after due investigation, no claim has been filed against AEC New York alleging a violation of any applicable laws and regulations of foreign, federal, state and local governments and all agencies thereof. AEC New York holds all of the material permits, licenses, certificates or other authorizations of foreign, federal, state or local governmental agencies required for the conduct of their respective businesses as presently conducted.

 

2.11          Contracts . There are no Contracts that are material to the business, properties, assets, condition (financial or otherwise), results of operations or prospects of the AEC New York. AEC New York is not in violation of or in default under (nor does there exist any condition which upon the passage of time or the giving of notice would cause such a violation of or default under) any Contract to which they are a party or by which they or any of their properties or assets are bound, except for violations or defaults that would not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect.

 

2.12          Labor Relations . No labor dispute exists or, to the Knowledge of AEC New York and the AEC New York Shareholder, is imminent with respect to any of the employees of AEC New York which could reasonably be expected to result in a Material Adverse Effect. None of AEC New York’s employees is a member of a union that relates to such employee’s relationship with AEC New York, and AEC New York is not a party to a collective bargaining agreement, and AEC New York believe that its relationships with their employees are good. No executive officer, to the Knowledge of AEC New York and the AEC New York Shareholder, is, or is now expected to be, in violation of any material term of any employment contract, confidentiality, disclosure or proprietary information agreement or non-competition agreement, or any other contract or agreement or any restrictive covenant in favor of any third party, and the continued employment of each such executive officer does not subject AEC New York to any liability with respect to any of the foregoing matters. AEC New York is in compliance with all U.S. federal, state, local and foreign laws and regulations relating to employment and employment practices, terms and conditions of employment and wages and hours, except where the failure to be in compliance could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

 

2.13          Title to Assets . AEC New York has good and marketable title in fee simple to all real property owned by them and good and marketable title in all personal property owned by them that is material to the business of AEC New York free and clear of all Liens, except for Liens that do not materially affect the value of such property and do not materially interfere with the use made and proposed to be made of such property by AEC New York and Liens for the payment of Taxes, the payment of which is neither delinquent nor subject to penalties. Any real property and facilities held under lease by AEC New York are held under valid, subsisting and enforceable leases with which AEC New York are in compliance.

 

2.14          Tax Status . Except for matters that would not, individually or in the aggregate, have or reasonably be expected to result in a Material Adverse Effect, AEC New York and each AEC New York Subsidiary has timely filed all necessary Tax Returns and has paid or accrued all Taxes shown as due thereon, and AEC New York has no Knowledge of a tax deficiency which has been asserted or threatened against AEC New York.

 

2.15          No General Solicitation . Neither AEC New York nor any person acting on behalf of AEC New York has offered or sold securities in connection herewith by any form of general solicitation or general advertising.

 

6
 

 

2.16          Foreign Corrupt Practices. AEC New York has not, nor to the Knowledge of AEC New York and the AEC New York Shareholder, has any agent or other person acting on behalf of AEC New York: (i) directly or indirectly, used any funds for unlawful contributions, gifts, entertainment or other unlawful expenses related to foreign or domestic political activity, (ii) made any unlawful payment to foreign or domestic government officials or employees or to any foreign or domestic political parties or campaigns from corporate funds, (iii) failed to disclose fully any contribution made by AEC New York (or made by any person acting on its behalf of which AEC New York is aware) which is in violation of law, or (iv) violated in any material respect any provision of the Foreign Corrupt Practices Act of 1977, as amended.

 

2.17          Minute Books . The minute books of AEC New York made available to AEC Nevada contain a complete summary of all meetings and written consents in lieu of meetings of directors and stockholders since the time of incorporation.

 

2.18          Employee Benefits . AEC New York has (including the two years preceding the date hereof has had) no plans which are subject to ERISA.

 

2.19          Disclosure . The representations and warranties and statements of fact made by AEC New York in this Agreement are, as applicable, accurate, correct and complete and do not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements and information contained herein not false or misleading.

 

2.20          Patents and Trademarks . AEC Nevada has, or has rights to use, all patents, patent applications, trademarks, trademark applications, service marks, trade names, trade secrets, inventions, copyrights, licenses and other intellectual property rights and similar rights as described in the SEC Reports as necessary or material for use in connection with their business and which the failure to so have could have a Material Adverse Effect (collectively, the “ Intellectual Property Rights ”). AEC Nevada has not received a notice (written or otherwise) that any of the Intellectual Property Rights used by AEC Nevada violates or infringes upon the rights of any Person. To the Knowledge of AEC Nevada, all such Intellectual Property Rights are enforceable and there is no existing infringement by another Person of any of the Intellectual Property Rights. AEC Nevada has taken reasonable security measures to protect the secrecy, confidentiality and value of all of their intellectual properties, except where failure to do so could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

 

ARTICLE 3

 

REPRESENTATIONS AND WARRANTIES OF THE AEC NEW YORK SHAREHOLDER

 

The AEC New York Shareholder each hereby represent and warrant to AEC Nevada as follows:

 

3.1            Ownership of the AEC New York Common Stock . AEC New York Shareholder own, beneficially and of record, good and marketable title to the amount of the AEC New York Common Stock, free and clear of all security interests, liens, adverse claims, encumbrances, equities, proxies, options or voting agreements. AEC New York Shareholder represent that they each have no right or claims whatsoever to any equity interests of AEC New York, other than the AEC New York Common Stock and do not have any options, warrants or any other instruments entitling any of them to exercise or purchase or convert into additional equity interests of AEC New York. At the Closing, the AEC New York Shareholder will convey to AEC Nevada good and marketable title to the AEC New York Common Stock, free and clear of any security interests, liens, adverse claims, encumbrances, equities, proxies, options, shareholders’ agreements or restrictions.

 

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3.2           Authority Relative to this Agreement . This Agreement has been duly and validly executed and delivered by the AEC New York Shareholder and constitutes a valid and binding agreement of such person, enforceable against such person in accordance with its terms, except as such enforcement may be limited by bankruptcy, insolvency or other similar laws affecting the enforcement of creditors’ rights generally or by general principles of equity.

 

3.3           Purchase of Restricted Securities for Investment . The AEC New York Shareholder each acknowledge that the AEC Nevada Shares will not be registered pursuant to the Securities Act or any applicable state securities laws, that the AEC Nevada Shares will be characterized as “restricted securities” under federal securities laws, and that under such laws and applicable regulations the AEC Nevada Shares cannot be sold or otherwise disposed of without registration under the Securities Act or an exemption therefrom. In this regard, each AEC New York Shareholder is familiar with Rule 144 promulgated under the Securities Act, as currently in effect, and understands the resale limitations imposed thereby and by the Securities Act. Further, each AEC New York Shareholder acknowledges and agrees that:

 

(a)          Each AEC New York Shareholder is acquiring the AEC Nevada Shares for investment, for such AEC New York Shareholder’s own account and not as a nominee or agent, and not with a view to the resale or distribution of any part thereof, and each AEC New York Shareholder has no present intention of selling, granting any participation in, or otherwise distributing the same. Each AEC New York Shareholder further represents that he, she or it does not have any Contract, undertaking, agreement or arrangement with any person to sell, transfer or grant participation to such person or to any third person, with respect to any of the AEC Nevada Shares.

 

(b)          Each AEC New York Shareholder understands that the AEC Nevada Shares are not registered under the Securities Act on the ground that the sale and the issuance of securities hereunder is exempt from registration under the Securities Act pursuant to Section 4(2) thereof, and that AEC Nevada’s reliance on such exemption is predicated on the each Shareholder’s representations set forth herein.

 

3.4           Status of Stockholder . Each of the AEC New York Shareholder hereby makes the representations and warranties in either paragraph (a) or (b) of this Section 3.4, as indicated on the Signature Page of AEC New York Shareholder which is attached and part of this Agreement:

 

(a)           Accredited Investor Under Regulation D . The AEC New York Shareholder is an “Accredited Investor”   as that term is defined in Rule 501 of Regulation D promulgated under the Securities Act, an excerpt of which is included in the attached Annex II , and such AEC New York Shareholder is not acquiring its portion of the AEC Nevada Shares as a result of any advertisement, article, notice or other communication regarding the AEC Nevada Shares published in any newspaper, magazine or similar media or broadcast over television or radio or presented at any seminar or any other general solicitation or general advertisement.

 

(b)          The AEC New York Shareholder understands that the AEC Nevada Shares are being offered and sold to it in reliance on specific provisions of U.S. federal and state securities laws and that the parties to this Agreement are relying upon the truth and accuracy of the representations, warranties, agreements, acknowledgments and understanding of the AEC New York Shareholder set forth herein in order to determine the applicability of such provisions. Accordingly, the AEC New York Shareholder agrees to notify AEC Nevada of any events which would cause the representations and warranties of the AEC New York Shareholder to be untrue or breached at any time after the execution of this Agreement by such AEC New York Shareholder and prior to the expiration of the Restricted Period.

 

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3.5            Investment Risk . The AEC New York Shareholder is able to bear the economic risk of acquiring the AEC Nevada Shares pursuant to the terms of this Agreement, including a complete loss of such the AEC New York Shareholder’s investment in the AEC Nevada Shares.

 

3.6            Restrictive Legends . The AEC New York Shareholder acknowledges that the certificate(s) representing the AEC New York Shareholder’s pro rata portion of the AEC Nevada Shares shall each conspicuously set forth on the face or back thereof a legend in substantially the following form, corresponding to the stockholder’s status as set forth in Section 3.4 and the signature pages hereto:

 

REGULATION D LEGEND :

 

“THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THE SECURITIES UNDER SAID ACT OR PURSUANT TO AN EXEMPTION FROM REGISTRATION OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.”

 

3.7            Disclosure . The representations and warranties and statements of fact made by AEC New York Shareholder in this Agreement are, as applicable, accurate, correct and complete and do not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements and information contained herein not false or misleading.

 

ARTICLE 4

 

REPRESENTATIONS AND WARRANTIES OF AEC NEVADA

 

AEC Nevada hereby represents and warrants to AEC New York and the AEC New York Shareholder as of the date hereof and as of the Closing Date (unless otherwise indicated), as follows:

 

4.1            Organization and Qualification . AEC Nevada is an entity duly incorporated or otherwise organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization, with the requisite power and authority to own and use its properties and assets and to carry on its business as currently conducted. AEC Nevada is not, to its Knowledge, in violation nor default of any of the provisions of its articles of incorporation, bylaws or other organizational or charter documents (collectively the “ Charter Documents ”). AEC Nevada is duly qualified to conduct business and is in good standing as a foreign corporation or other entity in each jurisdiction in which the nature of the business conducted or property owned by it makes such qualification necessary, except where the failure to be so qualified or in good standing, as the case may be, could not have or reasonably be expected to result in a Material Adverse Effect, and no proceeding has been instituted in any such jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or curtail such power and authority or qualification.

 

4.2            Issuance of the AEC Nevada Shares . The AEC Nevada Shares are duly authorized and, when issued and paid for in accordance with this Agreement, will be duly and validly issued, fully paid and nonassessable, free and clear of all Liens imposed on or by AEC Nevada other than restrictions on transfer provided for in this Agreement.

 

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4.3            Capitalization . The capitalization of AEC Nevada is as previously provided to AEC New York and will remain as of the Closing Date. AEC Nevada has not issued any capital stock since its most recently filed periodic report under the Exchange Act. No Person has any right of first refusal, preemptive right, right of participation, or any similar right to participate in the transactions contemplated by this Agreement. There are no outstanding options, warrants, scrip rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities, rights or obligations convertible into or exercisable or exchangeable for, or giving any Person any right to subscribe for or acquire any shares of AEC Nevada’s common stock, or Contracts, commitments, understandings or arrangements by which AEC Nevada is or may become bound to issue additional shares of AEC Nevada’s common stock or Common Stock Equivalents. The issuance of the AEC Nevada Shares will not obligate AEC Nevada to issue shares of AEC Nevada’s common stock or other securities to any Person (other than the AEC New York Shareholder) and will not result in a right of any holder of AEC Nevada securities to adjust the exercise, conversion, exchange or reset price under any of such securities. All of the outstanding shares of capital stock of AEC Nevada are validly issued, fully paid and nonassessable, have been issued in compliance with all federal and state securities laws, and none of such outstanding shares was issued in violation of any preemptive rights or similar rights to subscribe for or purchase securities. No further approval or authorization of any stockholder or AEC Nevada’s board of directors is required for the issuance of the AEC Nevada Shares. There are no stockholders agreements, voting agreements or other similar agreements with respect to AEC Nevada’s capital stock to which AEC Nevada is a party or, to the Knowledge of AEC Nevada, between or among any of AEC Nevada’s stockholders.

 

4.4            Litigation . There is no action, suit, inquiry, notice of violation, proceeding or investigation pending or, to the Knowledge of AEC Nevada, threatened against or affecting AEC Nevada or any of its properties before or by any court, arbitrator, governmental or administrative agency or regulatory authority (federal, state, county, local or foreign) (collectively, an “ Action ”) which (i) adversely affects or challenges the legality, validity or enforceability of this Agreement or the AEC Nevada Shares, or (ii) could, if there were an unfavorable decision, have or reasonably be expected to result in a Material Adverse Effect. Neither AEC Nevada nor any current director or officer thereof, is or has been the subject of any Action involving a claim of violation of or liability under federal or state securities laws or a claim of breach of fiduciary duty. There has not been, and to the Knowledge of AEC Nevada, there is not pending or contemplated, any investigation by any regulatory body involving AEC Nevada or any current director or officer of AEC Nevada.

 

4.5            Compliance . To its Knowledge, AEC Nevada: (i) is not in default under or in violation of (and no event has occurred that has not been waived that, with notice or lapse of time or both, would result in a default by AEC Nevada under), nor has AEC Nevada received notice of a claim that it is in default under or that it is in violation of, any indenture, loan or credit agreement or any other agreement or instrument to which it is a party or by which it or any of its properties is bound (whether or not such default or violation has been waived), (ii) is not in violation of any order of any court, arbitrator or governmental body, or (iii) is or has been in violation of any statute, rule or regulation of any governmental authority, including without limitation all foreign, federal, state and local laws applicable to its business and all such laws that affect the environment, except in each case as could not have or reasonably be expected to result in a Material Adverse Effect.

 

4.6            Regulatory Permits . AEC Nevada possesses all certificates, authorizations and permits issued by the appropriate federal, state, local or foreign regulatory authorities necessary to conduct its business, except where the failure to possess such permits could not reasonably be expected to result in a Material Adverse Effect (“ Material Permits ”), and AEC Nevada has not received any notice of proceedings relating to the revocation or modification of any Material Permit.

 

4.7            Issuance of AEC Nevada Shares . Assuming the accuracy of the AEC New York Shareholder’s representations and warranties set forth in Section 3, no registration under the Securities Act is required for the offer and issuance of the AEC Nevada Shares by AEC Nevada to the AEC New York Shareholder as contemplated hereby. The issuance of the AEC Nevada Shares hereunder does not contravene the rules and regulations of the applicable Trading Market.

 

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4.8            Tax Status . Except for matters that would not, individually or in the aggregate, have or reasonably be expected to result in a Material Adverse Effect, AEC Nevada has filed all necessary Tax Returns and has paid or accrued all Taxes shown as due thereon, and AEC Nevada has no knowledge of a tax deficiency which has been asserted or threatened against AEC Nevada.

 

4.9            Foreign Corrupt Practices. Neither AEC Nevada, nor to the Knowledge of AEC Nevada, any agent or other person acting on behalf of AEC Nevada, has: (i) directly or indirectly, used any funds for unlawful contributions, gifts, entertainment or other unlawful expenses related to foreign or domestic political activity, (ii) made any unlawful payment to foreign or domestic government officials or employees or to any foreign or domestic political parties or campaigns from corporate funds, (iii) failed to disclose fully any contribution made by AEC Nevada (or made by any person acting on its behalf of which AEC Nevada is aware) which is in violation of law or (iv) violated in any material respect any provision of the Foreign Corrupt Practices Act of 1977, as amended.

 

4.10          No Disagreements with Accountants and Lawyers. To the Knowledge of AEC Nevada, there are no disagreements of any kind, including but not limited to any disagreements regarding fees owed for services rendered, presently existing, or reasonably anticipated by AEC Nevada to arise, between AEC Nevada and the accountants and lawyers formerly or presently employed by AEC Nevada which could affect AEC Nevada’s ability to perform any of its obligations under this Agreement, and AEC Nevada is current with respect to any fees owed to its accountants and lawyers.

 

4.11          Minute Books . The minute books of AEC Nevada made available to AEC New York and the AEC New York Shareholder contain a complete summary of all meetings and written consents in lieu of meetings of directors and stockholders since the time of incorporation.

 

4.12          Employee Benefits . AEC Nevada has not (nor for the two years preceding the date hereof has) had any plans which are subject to ERISA.

 

4.13          Business Records and Due Diligence . Prior to the Closing, AEC Nevada delivered to AEC New York all records and documents relating to AEC Nevada, which AEC Nevada and possesses, including, without limitation, books, records, government filings, Tax Returns, Charter Documents, corporate records, stock records, consent decrees, orders, and correspondence, director and stockholder minutes, resolutions and written consents, stock ownership records, financial information and records, and other documents used in or associated with AEC Nevada and AEC Nevada Subsidiaries.

 

4.14          Contracts . Except as previously disclosed to AEC New York there are no Contracts that are material to the business, properties, assets, condition (financial or otherwise), results of operations or prospects of AEC Nevada taken as a whole. AEC Nevada is not in violation of or in default under (nor does there exist any condition which upon the passage of time or the giving of notice would cause such a violation of or default under) any Contract to which it is a party or by which it or any of its properties or assets is bound, except for violations or defaults that would not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect.

 

4.15          No Undisclosed Liabilities . Except as otherwise disclosed in AEC Nevada’s Financial Statements or incurred in the ordinary course of business after the fiscal year ended September 30, 2009, and quarterly reports since such date, AEC Nevada has no other undisclosed liabilities whatsoever, either direct or indirect, matured or unmatured, accrued, absolute, contingent or otherwise. AEC Nevada represents that at the date of Closing, AEC Nevada shall have no liabilities or obligations whatsoever, either direct or indirect, matured or unmatured, accrued, absolute, contingent or otherwise.

 

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4.16          Disclosure . The representations and warranties and statements of fact made by AEC Nevada in this Agreement are, as applicable, accurate, correct and complete and do not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements and information contained herein not false or misleading.

 

 

ARTICLE 5

 

[INTENTIONALLY OMITTED]

 

ARTICLE 6

 

COVENANTS OF THE PARTIES

 

6.1            Corporate Examinations and Investigations . Prior to the Closing, each party shall be entitled, through its employees and representatives, to make such investigations and examinations of the books, records and financial condition of AEC New York and AEC Nevada as each party may request. In order that each party may have the full opportunity to do so, AEC New York and AEC Nevada, the AEC New York Shareholder and the AEC Nevada Stockholders shall furnish each party and its representatives during such period with all such information concerning the affairs of AEC New York or AEC Nevada as each party or its representatives may reasonably request and cause AEC New York or AEC Nevada and their respective officers, employees, consultants, agents, accountants and attorneys to cooperate fully with each party’s representatives in connection with such review and examination and to make full disclosure of all information and documents requested by each party and/or its representatives. Any such investigations and examinations shall be conducted at reasonable times and under reasonable circumstances, it being agreed that any examination of original documents will be at each party’s premises, with copies thereof to be provided to each party and/or its representatives upon request.

 

6.2            Cooperation; Consents . Prior to the Closing, each party shall cooperate with the other parties to the end that the parties shall (i) in a timely manner make all necessary filings with, and conduct negotiations with, all authorities and other persons the consent or approval of which, or the license or permit from which is required for the consummation of the Acquisition and (ii) provide to each other party such information as the other party may reasonably request in order to enable it to prepare such filings and to conduct such negotiations.

 

6.3            Conduct of Business . Subject to the provisions hereof, from the date hereof through the Closing, each party hereto shall (i) conduct its business in the ordinary course and in such a manner so that the representations and warranties contained herein shall continue to be true and correct in all material respects as of the Closing as if made at and as of the Closing, and (ii) not enter into any material transactions or incur any material liability not required or specifically contemplated hereby, without first obtaining the written consent of AEC New York and the AEC New York Shareholder on the one hand and AEC Nevada and the holders of a majority of voting stock of AEC Nevada common stock on the other hand. Without the prior written consent of AEC New York, the AEC New York Shareholder, AEC Nevada or the AEC Nevada Stockholders, except as required or specifically contemplated hereby, each party shall not undertake or fail to undertake any action if such action or failure would render any of said warranties and representations untrue in any material respect as of the Closing.

 

6.4            Litigation . From the date hereof through the Closing, each party hereto shall promptly notify the representative of the other parties of any lawsuits, claims, proceedings or investigations which after the date hereof are threatened or commenced against such party or any of its affiliates or any officer, director, employee, consultant, agent or shareholder thereof, in their capacities as such, which, if decided adversely, could reasonably be expected to have a Material Adverse Effect on AEC Nevada.

 

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6.5           Notice of Default . From the date hereof through the Closing, each party hereto shall give to the representative of the other parties prompt written notice of the occurrence or existence of any event, condition or circumstance occurring which would constitute a violation or breach of this Agreement by such party or which would render inaccurate in any material respect any of such party’s representations or warranties herein.

 

ARTICLE 7

 

CONDITIONS TO CLOSING

 

7.1           Conditions. The obligations of the parties shall be subject to each of the following conditions:

 

(a)           Closing Deliveries . At the Closing, each of parties shall deliver to the other party the following:

 

(i)          this Agreement duly executed by all parties;

 

(ii)         Resolutions duly adopted by the Board of Directors of AEC New York and AEC Nevada authorizing and approving the execution, delivery and performance of this Agreement;

 

(iii)        certificates representing the AEC New York Common Stock to be delivered pursuant to this Agreement duly endorsed or accompanied by duly executed stock powers or instruments of like tenor; and

 

(iv)        such other documents as may reasonably be requested in connection with the transactions contemplated hereby.

 

 

(b)           Representations and Warranties to be True . The representations and warranties of each of the parties herein contained shall be true in all material respects at the Closing with the same effect as though made at such time. Each party shall have performed in all material respects all obligations and complied in all material respects with all covenants and conditions required by this Agreement to be performed or complied with by them at or prior to the Closing.

 

(c)           No Liabilities . At the Closing, AEC Nevada shall have no liabilities, debts or payables (contingent or otherwise), no tax obligations, and except as contemplated in this Agreement, no material changes to its business or financial condition shall have occurred since the date of this Agreement.

 

(d)           No Adverse Effect . The business and operations of AEC New York and AEC Nevada will not have suffered any Material Adverse Effect.

 

ARTICLE 8

 

TERMINATION

 

8.1          This Agreement may be terminated at any time prior to the Closing by mutual written agreement of AEC Nevada and the AEC New York Shareholder;

 

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ARTICLE 9

 

GENERAL PROVISIONS

 

9.1            Notices . Any and all notices and other communications hereunder shall be in writing and shall be deemed duly given to the party to whom the same is so delivered, sent or mailed at addresses and contact information set forth on the signature pages hereof (or at such other address for a party as shall be specified by like notice) Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and shall be deemed given and effective on the earliest of: (a) on the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number set forth on the signature pages attached hereto prior to 5:30 p.m. (local time of the recipient) on a business day, (b) on the next business day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number set forth on the signature pages attached hereto on a day that is not a business day or later than 5:30 p.m. (local time of the recipient) on any business day, (c) on the second business day following the date of mailing, if sent by U.S. nationally recognized overnight courier service or (d) upon actual receipt by the party to whom such notice is required to be given.

 

9.2            Interpretation . The headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. References to Sections and Articles refer to sections and articles of this Agreement unless otherwise stated.

 

9.3            Severability . If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Agreement shall remain in full force and effect and shall in no way be affected, impaired or invalidated and the parties shall negotiate in good faith to modify this Agreement to preserve each party’s anticipated benefits under this Agreement.

 

9.4            Miscellaneous . This Agreement (together with all other documents and instruments referred to herein): (a) constitutes the entire agreement and supersedes all other prior agreements and undertakings, both written and oral, among the parties with respect to the subject matter hereof; (b) except as expressly set forth herein, is not intended to confer upon any other person any rights or remedies hereunder and (c) shall not be assigned by operation of law or otherwise, except as may be mutually agreed upon by the parties hereto.

 

9.5            Governing Law . This Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of New York. All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflicts of law thereof. Each party agrees that all legal proceedings concerning the interpretations, enforcement and defense of the transactions contemplated by this Agreement (whether brought against a party hereto or its respective affiliates, directors, officers, shareholders, employees or agents) shall be commenced exclusively in the state and federal courts sitting in the County of New York. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in the County of New York for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect to the enforcement of the Agreement), and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is improper or is an inconvenient venue for such proceeding. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by law. If either party shall commence an action or proceeding to enforce any provisions of the Agreement, then the prevailing party in such action or proceeding shall be reimbursed by the other party for its reasonable attorneys’ fees and other costs and expenses incurred with the investigation, preparation and prosecution of such action or proceeding.

 

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9.6            Counterparts and Facsimile Signatures . This Agreement may be executed in two or more counterparts, which together shall constitute a single agreement. This Agreement and any documents relating to it may be executed and transmitted to any other party by facsimile, which facsimile shall be deemed to be, and utilized in all respects as, an original, wet-inked manually executed document.

 

9.7            Waiver . No waiver by any party of any default or breach by another party of any representation, warranty, covenant or condition contained in this Agreement shall be deemed to be a waiver of any subsequent default or breach by such party of the same or any other representation, warranty, covenant or condition. No act, delay, omission or course of dealing on the part of any party in exercising any right, power or remedy under this Agreement or at law or in equity shall operate as a waiver thereof or otherwise prejudice any of such party’s rights, powers and remedies. All remedies, whether at law or in equity, shall be cumulative and the election of any one or more shall not constitute a waiver of the right to pursue other available remedies.

 

[ Remainder of Page Left Blank Intentionally ]

 

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IN WITNESS WHEREOF, the parties have executed this Share Exchange Agreement as of the date first written above.

 

AEC NEVADA:

 

AMERICAN EDUCATION CENTER, INC. (A NEVADA CORPORATION),

 

By: Himan Au

 

Chief Executive Officer

 

Address for Notices: 17 Battery Place, Suite 300, New York, NY, 10004

 

Address:    17 Battery Place, Suite 300, New York, NY, 10004

 Tel:     +1(212) 825-0437

 

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SIGNATURE PAGE OF AEC NEW YORK

 

AEC NEW YORK:

 

AMERICAN EDUCATION CENTER, INC. (A NEW YORK CORPORATION)

 



By: /s/ Max Pu Chen   
Name: Max Pu Chen  
Title: Chief Executive Officer  

 

Address for Notices:

 

American Education Center, Inc. (a New York corporation)

 

Address:   17 Battery Place, Suite 300, New York, NY, 10004  
       
       
Tel:   (212)-825-0437  
Fax:   (718)228-8977  

 

17
 

 

SIGNATURE PAGES OF AEC NEW YORK SHAREHOLDERS

 

AEC NEW YORK SHAREHOLDER:

 

  /s/ Max Chen   
Name: Max Chen  
     

 

Address for Notices:

 

Address:   17 Battery Place, Suite 300, New York, NY, 10004  
Tel:   (212)-825-0437  
Fax:   (718)228-8977  

 

Please Check One :

 

The AEC New York Shareholder hereby certifies that it is:

  ¨ an “Accredited Investor” under Regulation D of the Securities Act (see Section 3.4 and Annex II of this Agreement); or
  ¨ a Non-U.S. Person, that hereby confirms that the representations and warranties in Section 3.4(b) of this Agreement are true and correct as to such AEC New York Shareholder, and hereby accepts and agrees to comply with the covenants in Section 3.4(b).

  

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ANNEX I

 

 

(I)

 

Name of

AEC New York Shareholder

 

(II)

 

Number of Shares of
Common Stock of AEC New
York

 

(III)

 

Number of Shares of Common
Stock of AEC Nevada

Max Pu Chen 200 10,563,000

 

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ANNEX II

 

ACCREDITED INVESTOR DEFINITION

 

Category A   The undersigned is an individual (not a partnership, corporation, etc.) whose individual net worth, or joint net worth with his or her spouse, presently exceeds $1,000,000.
     
Category B   The undersigned is an individual (not a partnership, corporation, etc.) who had an income in excess of $200,000 in each of the two most recent years, or joint income with his or her spouse in excess of $300,000 in each of those years (in each case including foreign income, tax exempt income and full amount of capital gains and losses but excluding any income of other family members and any unrealized capital appreciation) and has a reasonable expectation of reaching the same income level in the current year.
     
Category C   The undersigned is a director or executive officer of AEC Nevada which is issuing and selling the securities.
     
Category D   The undersigned is a bank; a savings and loan association; insurance company; registered investment company; registered business development company; licensed small business investment company (“SBIC”); or employee benefit plan within the meaning of Title 1 of ERISA and (a) the investment decision is made by a plan fiduciary which is either a bank, savings and loan association, insurance company or registered investment advisor, or (b) the plan has total assets in excess of $5,000,000 or (c) is a self directed plan with investment decisions made solely by persons that are accredited investors.
     
Category E   The undersigned is a private business development company as defined in section 202(a)(22) of the Investment Advisors Act of 1940.
     
Category F   The undersigned is either a corporation, partnership, Massachusetts business trust, or non-profit organization within the meaning of Section 501(c)(3) of the Internal Revenue Code, in each case not formed for the specific purpose of acquiring the Securities and with total assets in excess of $5,000,000.
     
Category G   The undersigned is a trust with total assets in excess of $5,000,000, not formed for the specific purpose of acquiring the Securities, where the purchase is directed by a “sophisticated investor“ as defined in Regulation 506(b)(2)(ii) under the Act.
     
Category H   The undersigned is an entity (other than a trust) in which all of the equity owners are “accredited investors” within one or more of the above categories. If relying upon this Category alone, each equity owner must complete a separate copy of this Agreement.

 

20

 

 

Exhibit 2.3 

 

SECURITIES PURCHASE AGREEMENT

 

This Stock Purchase Agreement (“Agreement”) is effective as of September 30, 2014, by and among, American Education Center, Inc. (collectively referred to as the “Company) and Mr. Jinchun Huang (the “Purchaser”).

 

AGREEMENT

 

It is agreed as follows:

 

1. PURCHASE AND SALE OF SHARES .

 

1.1            Sale and Purchase of Securities .      In reliance upon the representations and warranties contained herein and subject to the terms and conditions set forth herein, the Company shall sell to the Purchaser an aggregate of 1,500,000 shares of Common Stock of the Company at a purchase price of $0.01 with standard restrictive legend (the “Shares”) for an aggregate purchase price of US$15, 000 (the “Purchase Price”).

 

2. THE CLOSING.

 

2.1           Date and Time .     Subject to all of the terms and conditions set forth in this Agreement being satisfied, the closing of the sale of Shares contemplated by this Agreement (the “ Closing ”) shall take place at the Company’s offices. The Purchaser shall deliver a check or wire transfer pursuant to the instructions to be provided by the Company, in the amount of the Purchase Price allocated to each Purchaser as set forth on Schedule A annexed hereto. At the Closing, the Company will deliver to the Purchaser the certificates representing the Shares purchased by the Purchaser against payment of such Purchaser’s portion of the Purchase Price.

 

3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

 

As a material inducement to the Purchaser to enter into this Agreement and to acquire the Shares, the Company represents and warrants that the following statements are true and correct in all material respects, except as expressly qualified or modified herein.

 

3.1            Validity of Transactions .    This Agreement, and each document executed and delivered by the Company in connection with the transactions contemplated by this Agreement, have been duly authorized, executed and delivered by the Company and is each the valid and legally binding obligation of the Company, enforceable in accordance with its terms, except as limited by applicable bankruptcy, insolvency reorganization and moratorium laws and other laws affecting enforcement of creditor’s rights generally and by general principles of equity.

 

3.2            Valid Issuance of Shares .   The Shares that are being sold to the Purchaser hereunder are duly and validly issued, fully paid and nonassessable and free of restrictions on transfer, other than restrictions on transfer under this Agreement and under applicable federal and state securities laws, and will be free of all other liens and adverse claims.

 

3.3            Securities Law Compliance .   Assuming the accuracy of the representations and warranties of the Purchaser set forth in Section 4 of this Agreement, the offer, sale and delivery of the Shares will constitute an exempted transaction under the Securities Act of 1933, as amended and now in effect (“Securities Act”), and registration of the Shares under the Securities Act is not required.

 

 
 

 

4. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER.

 

Each Purchaser hereby represents, warrants, and covenants with the Company as follows:

 

4.1           Legal Power .  The Purchaser has the requisite power to enter into this Agreement, to purchase the Shares hereunder, and to carry out and perform its obligations under the terms of this Agreement.

 

4.2           Due Execution .   This Agreement has been duly executed and delivered by Purchaser, and, upon due execution and delivery by the Company, this Agreement will be a valid and binding agreement of the Purchaser.

 

4.3           Receipt of Restricted Securities .   The Purchaser has been advised that the Shares have not been registered under the Securities Act or any other applicable securities laws and that the Shares are being offered and sold pursuant to Section 4(2) of the Securities Act, and that the Company’s reliance upon Section 4(2) of the Securities Act is predicated in part on the Purchaser’s representations as contained herein.

 

4.3.1      The Purchaser acknowledges that the Shares have not been registered under the Securities Act or the securities laws of any state and are being offered, and will be sold, pursuant to applicable exemptions from such registration for nonpublic offerings and will be sold as “restricted securities” as defined by Rule 144 promulgated pursuant to the Securities Act. The Shares may not be resold in the absence of an effective registration thereof under the Securities Act and applicable state securities laws unless, in the opinion of the Company’s counsel, an applicable exemption from registration is available.

 

4.3.2      The Purchaser is acquiring the Shares for its own account, for investment purposes only and not with a view to, or for sale in connection with, a distribution, as that term is used in Section 2(11) of the Securities Act, in a manner which would require registration under the Securities Act or any state securities laws.

 

4.3.3      Accredited Investor Under Regulation D. The Purchaser:

 

a)           The Purchaser is an “Accredited Investor” as that term is defined in Rule 501 of Regulation D promulgated under the Securities Act, and such Purchaser is not acquiring the Shares as a result of any advertisement, article, notice or other communication regarding the Shares published in any newspaper, magazine or similar media or broadcast over television or radio or presented at any seminar or any other general solicitation or general advertisement.

 

b)           The Purchaser understands that the Shares are being offered and sold to it in reliance on specific provisions of U.S. federal and state securities laws and that the parties to this Agreement are relying upon the truth and accuracy of the representations, warranties, agreements, acknowledgments and understanding of the Purchaser set forth herein in order to determine the applicability of such provisions. Accordingly, the Purchaser agrees to notify the Company of any events which would cause the representations and warranties of the Purchaser to be untrue or breached at any time after the execution of this Agreement by such Purchaser.

 

c)           Investment Risk. The Purchaser is able to bear the economic risk of acquiring the Shares pursuant to the terms of this Agreement, including a complete loss of such the Purchaser’s investment in the Shares.

 

2
 

 

d)           Restrictive Legends. The Purchaser acknowledges that the certificate(s) representing the Purchaser’s pro rata portion of the Shares shall each conspicuously set forth on the face or back thereof a legend in substantially the following form, corresponding to the stockholder’s status as set forth in Section 3.4 and the signature pages hereto:

 

REGULATION D LEGEND:

 

“THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THE SECURITIES UNDER SAID ACT OR PURSUANT TO AN EXEMPTION FROM REGISTRATION OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.”

 

4.3.4      The Purchaser acknowledges that an investment in the Shares is not liquid and is transferable only under limited conditions. The Purchaser acknowledges that such securities must be held indefinitely unless they are subsequently registered under the Securities Act or an exemption from such registration is available. The Purchaser is aware of the provisions of Rule 144 promulgated under the Securities Act, which permits limited resale of securities purchased in a private placement subject to the satisfaction of certain conditions and that such Rule is not now available and, in the future, may not become available for resale of the Shares.

 

4.4          Purchaser Sophistication and Ability to Bear Risk of Loss . The Purchaser acknowledges that it is able to protect its interests in connection with the acquisition of the Shares and can bear the economic risk of investment in such securities without producing a material adverse change in the Purchaser’s financial condition. The Purchaser otherwise has such knowledge and experience in financial or business matters that it is capable of evaluating the merits and risks of the investment in the Shares. Purchaser’s investment in restricted securities is reasonable in relation to the Purchaser’s net worth. Purchaser has had experience in investments in restricted and publicly traded securities, and Purchaser has had experience in investments in speculative securities and other investments which involve the risk of loss of investment. Purchaser acknowledges that an investment in the Shares is speculative and involves the risk of loss. Purchaser has the requisite knowledge to assess the relative merits and risks of this investment without the necessity of relying upon other advisors, and Purchaser’s can afford the risk of loss of his entire investment in the Shares.

 

4.5          Purchases by Groups . The Purchaser represents, warrants, and covenants that he/she is not acquiring the Shares as part of a group within the meaning of Section 13(d)(3) of the Securities Exchange Act of 1934, as amended.

 

5. MISCELLANEOUS.

 

5.1           Governing Law and Venue . This Agreement shall be governed by and construed under the laws of the State of New York. All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflicts of law thereof. Venue for any legal action or dispute shall be the County of New York, State of New York.

 

5.2           Successors and Assigns . Except as otherwise expressly provided herein, the provisions hereof shall inure to the benefit of, and be binding upon, the successors, assigns, heirs, executors, and administrators of the parties hereto.

 

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5.3            Entire Agreement . This Agreement and the Exhibits hereto and thereto, and the other documents delivered pursuant hereto and thereto, constitute the full and entire understanding and agreement among the parties with regard to the subjects hereof and no party shall be liable or bound to any other party in any manner by any representations, warranties, covenants, or agreements except as specifically set forth herein or therein. Nothing in this Agreement, express or implied, is intended to confer upon any party, other than the parties hereto and their respective successors and assigns, any rights, remedies, obligations, or liabilities under or by reason of this Agreement, except as expressly provided herein.

 

5.4            Severability . In case any provision of this Agreement shall be invalid, illegal, or unenforceable, it shall to the extent practicable, be modified so as to make it valid, legal and enforceable and to retain as nearly as practicable the intent of the parties, and the validity, legality, and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

 

5.5            Amendment and Waiver . Except as otherwise provided herein, any term of this Agreement may be amended, and the observance of any term of this Agreement may be waived (either generally or in a particular instance, either retroactively or prospectively, and either for a specified period of time or indefinitely), with the written consent of the Company and the Purchaser. Any amendment or waiver effected in accordance with this Section shall be binding upon each future holder of any security purchased under this Agreement (including securities into which such securities have been converted) and the Company.

 

5.6            Notices . All notices and other communications required or permitted hereunder shall be in writing and shall be effective when delivered personally, or sent by telex or telecopier (with receipt confirmed), provided that a copy is mailed by registered mail, return receipt requested, or when received by the addressee, if sent by Express Mail, Federal Express or other express delivery service (receipt requested).

 

5.7           Faxes and Counterparts . This Agreement may be executed in one or more counterparts. Delivery of an executed counterpart of the Agreement or any exhibit attached hereto by facsimile transmission shall be equally as effective as delivery of an executed hard copy of the same. Any party delivering an executed counterpart of this Agreement or any exhibit attached hereto by facsimile transmission shall also deliver an executed hard copy of the same, but the failure by such party to deliver such executed hard copy shall not affect the validity, enforceability or binding nature effect of this Agreement or such exhibit.

 

5.8            Titles and Subtitles . The titles of the paragraphs and subparagraphs of this Agreement are for convenience of reference only and are not to be considered in construing this Agreement.

 

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first set forth above.

 

AMERICAN EDUCATION CENTER  INC.  
   
/s/ Max Chen  
By: Max Chen  
Title: President  

 

4
 

 

PURCHASER SIGNATURE FOLLOWS

 

To subscribe for Securities in the private offering of American Education Center Inc.:

 

1. Date and Fill in the number of shares of Common Stock being purchased and Complete and Sign the Omnibus Signature Page.

 

2. Initial the Accredited Investor Certification page attached to this letter.

 

3. Complete and return the Investor Profile and, if applicable, Wire Transfer Authorization attached to this letter.

 

4. Send all signed original documents with check to:

 

  AMERICAN EDUCATION CENTER, INC.
     
  Attention: Max Chen
  Address: 17 Battery Place, Suite 300, New York, NY, 10004
  Tel: (212)825-0437
  Fax: (718)228-8977

 

5. Please make your subscription payment payable to the order of “American Education Center, Inc.”

 

For wiring funds directly to the escrow account,

see the following instructions:

 

  Bank Name:
  ABA Number:
  A/C Name: American Education Center Inc.
  A/C Number:

 

  FBO:   Investor Name: Jinchun Huang
    Social Security Number
    Address

 

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ANTI MONEY LAUNDERING REQUIREMENTS

 

The USA PATRIOT Act   What is money laundering?   How big is the problem and why is it important?
         
The USA PATRIOT Act is designed to detect, deter, and punish terrorists in the United States and abroad.  The Act imposes new anti-money laundering requirements on brokerage firms and financial institutions.  Since April 24, 2002 all brokerage firms have been required to have new, comprehensive anti-money laundering programs.   Money laundering is the process of disguising illegally obtained money so that the funds appear to come from legitimate sources or activities.  Money laundering occurs in connection with a wide variety of crimes, including illegal arms sales, drug trafficking, robbery, fraud, racketeering, and terrorism.   The use of the U.S. financial system by criminals to facilitate terrorism or other crimes could well taint our financial markets.  According to the U.S. State Department, one recent estimate puts the amount of worldwide money laundering activity at $1 trillion a year.
         
To help you understand these efforts, we want to provide you with some information about money laundering and our steps to implement the USA PATRIOT Act.        

 

What are we required to do to eliminate money laundering?
     
Under rules required by the USA PATRIOT Act, our anti-money laundering program must designate a special compliance officer, set up employee training, conduct independent audits, and establish policies and procedures to detect and report suspicious transaction and ensure compliance with such laws.   As part of our required program, we may ask you to provide various identification documents or other information.  Until you provide the information or documents we need, we may not be able to effect any transactions for you.

 

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American Education Center Inc.

OMNIBUS SIGNATURE PAGE

 

Subscriber hereby elects to subscribe under the Securities Purchase Agreement for a total of ___ 1,500,000___ shares of Common Stock for a purchase price of $ __15,000__ (NOTE: to be completed by subscriber) and executes the Securities Purchase Agreement.

 

Date (NOTE: To be completed by subscriber): ____September 30, 2014____

 

 

If the Purchaser is an INDIVIDUAL, and if purchased as JOINT TENANTS, as TENANTS IN COMMON, or as COMMON PROPERTY:

 

Jinchun Huang    
Print Name   Social Security Number
     
/s/ Jinchun Huang    
Signature of Subscriber    
     
9/30/2014    
Date   Address
     
For Joint Subscriber:    
     
     
Print Name   Social Security Number
     
     
Signature of Subscriber    
     
     
Date   Address

 

If the Purchaser is a PARTNERSHIP, CORPORATION, LIMITED LIABILITY COMPANY or TRUST:

 

     
Name of Partnership,   Federal Taxpayer
Corporation, Limited   Identification Number
Liability Company or Trust    
     
By:      
  Name:   State of Organization
  Title:    
     
     
Date   Address
     
American Education Center, Inc.    
     
By: /s/ Max Chen    
  Authorized Officer    

 

7
 

 

American Education Center Inc.

ACCREDITED INVESTOR CERTIFICATION

 

     

For Individual Investors Only

(all Individual Investors must INITIAL where appropriate):

       

Initial ________   I have a net worth (including homes, furnishings and automobiles, but excluding for these purposes the value of my primary residence ) in excess of $1 million either individually or through aggregating my individual holdings and those in which I have a joint, community property or other similar shared ownership interest with my spouse.
Initial ________   I have had an annual gross income for the past two years of at least $200,000 (or $300,000 jointly with my spouse) and expect my income (or joint income, as appropriate) to reach the same level in the current year.
Initial ________   I am a director or executive officer of American Education Center Inc.

 

For Non-Individual Investors

(all Non-Individual Investors must INITIAL where appropriate):

 

Initial ________   The investor certifies that it is a partnership, corporation, limited liability company or business trust that is 100% owned by persons who meet at least one of the criteria for Individual Investors set forth above.
Initial ________   The investor certifies that it is a partnership, corporation, limited liability company or business trust that has total assets of at least $5 million and was not formed for the purpose of investing in the Company.
Initial ________   The investor certifies that it is an employee benefit plan whose investment decision is made by a plan fiduciary (as defined in ERISA §3(21)) that is a bank, savings and loan association, insurance company or registered investment adviser.
Initial ________   The investor certifies that it is an employee benefit plan whose total assets exceed $5,000,000 as of the date of this Agreement.
Initial ________   The undersigned certifies that it is a self-directed employee benefit plan whose investment decisions are made solely by persons who meet either of the criteria for Individual Investors.
Initial ________   The investor certifies that it is a U.S. bank, U.S. savings and loan association or other similar U.S. institution acting in its individual or fiduciary capacity.
Initial ________   The undersigned certifies that it is a broker-dealer registered pursuant to §15 of the Securities Exchange Act of 1934.
Initial ________   The investor certifies that it is an organization described in §501(c)(3) of the Internal Revenue Code with total assets exceeding $5,000,000 and not formed for the specific purpose of investing in the Company.
Initial ________   The investor certifies that it is a trust with total assets of at least $5,000,000, not formed for the specific purpose of investing in the Company, and whose purchase is directed by a person with such knowledge and experience in financial and business matters that he is capable of evaluating the merits and risks of the prospective investment.
Initial ________   The investor certifies that it is a plan established and maintained by a state or its political subdivisions, or any agency or instrumentality thereof, for the benefit of its employees, and which has total assets in excess of $5,000,000.
Initial ________   The investor certifies that it is an insurance company as defined in §2(13) of the Securities Act, or a registered investment company.

 

8
 

 

American Education Center Inc.

Investor Profile

( Must be completed by Investor)

 

Section A - Personal Investor Information

 

Investor Name(s): __________________________________________________________________________________
Individual executing Profile or Trustee: __________________________________________________________ _______
Social Security Numbers / Federal I.D. Number: ___________________________________________________ _______
 
Home Street Address: _______________________________________________________________________ ________
Home City, State & Zip Code: _________________________________________________________________ _______
Home Phone: ________________________ Home Fax: _____________________  Home Email: __________ ________
Employer: ________________________________________________________________________________ ________
Employer Street Address: _____________________________________________________________________ _______
Employer City, State & Zip Code: ______________________________________________________________ _______
Bus. Phone: __________________________ Bus. Fax: __________________________ Bus. Email: _________ _______
Type of Business: _________________________________________________________________________ _________

 

If you are a United States citizen , please list the number and jurisdiction of issuance of any other government-issued document evidencing residence and bearing a photograph or similar safeguard (such as a driver’s license or passport), and provide a photocopy of each of the documents you have listed.

State: _____________________

Number: ______________________________________________

 

If you are NOT a United States citizen , for each jurisdiction of which you are a citizen or in which you work or reside, please list (i) your passport number and country of issuance or (ii) alien identification card number AND (iii) number and country of issuance of any other government-issued document evidencing nationality or residence and bearing a photograph or similar safeguard, and provide a photocopy of each of these documents you have listed. These photocopies must be certified by a lawyer as to authenticity.

 

 

Section B – Certificate Delivery Instructions

 

____ Please deliver certificate to the Employer Address listed in Section A.

____ Please deliver certificate to the Home Address listed in Section A.

____ Please deliver certificate to the following address: ___________________________________________.

 

Section C – Form of Payment – Check or Wire Transfer

 

____ Check payable to American Education Center Inc.

____ Wire funds from my outside account according to the "How to subscribe for Shares" Page.

Please check if you are a FINRA member or affiliate of a FINRA member firm: ________

 

     
Investor Signature   Date
     
Name:      
Title:      
     
     
Investor Signature (if Joint Subscriber)   Date

 

9

 

 

Exhibit 2.4

 

SECURITIES PURCHASE AGREEMENT

 

This Stock Purchase Agreement (“Agreement”) is effective as of September 30, 2014, by and among, American Education Center, Inc. (referred to as the “Company) and the investors set forth on the signature page hereto (collectively referred to as the “Purchaser” or “Purchasers”).

 

AGREEMENT

 

It is agreed as follows:

 

1.          PURCHASE AND SALE OF SHARES .

 

1.1            Sale and Purchase of Securities . In reliance upon the representations and warranties contained herein and subject to the terms and conditions set forth herein, the Company shall sell to the Purchasers an aggregate of 7,482,000 shares of Common Stock of the Company at purchase price of $0.01 with standard restrictive legend (the “Shares”) for an aggregate purchase price of US$74,820 (the “Purchase Price”) as set forth on Schedule A annexed hereto.

 

2.          THE CLOSING.

 

2.1            Date and Time . Subject to all of the terms and conditions set forth in this Agreement being satisfied, the closing of the sale of Shares contemplated by this Agreement (the “ Closing ”) shall take place at the Company’s offices. The Purchaser shall deliver a check or wire transfer pursuant to the instructions to be provided by the Company, in the amount of the Purchase Price allocated to each Purchaser as set forth on Schedule A annexed hereto. At the Closing, the Company will deliver to the Purchaser the certificates representing the Shares purchased by the Purchaser against payment of such Purchaser’s portion of the Purchase Price.

 

3.          REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

 

As a material inducement to the Purchaser to enter into this Agreement and to acquire the Shares, the Company represents and warrants that the following statements are true and correct in all material respects, except as expressly qualified or modified herein.

 

3.1            Validity of Transactions . This Agreement, and each document executed and delivered by the Company in connection with the transactions contemplated by this Agreement, have been duly authorized, executed and delivered by the Company and is each the valid and legally binding obligation of the Company, enforceable in accordance with its terms, except as limited by applicable bankruptcy, insolvency reorganization and moratorium laws and other laws affecting enforcement of creditor’s rights generally and by general principles of equity.

 

3.2            Valid Issuance of Shares . The Shares that are being sold to the Purchaser hereunder are duly and validly issued, fully paid and nonassessable and free of restrictions on transfer, other than restrictions on transfer under this Agreement and under applicable federal and state securities laws, and will be free of all other liens and adverse claims.

 

3.2            Securities Law Compliance . Assuming the accuracy of the representations and warranties of the Purchaser set forth in Section 4 of this Agreement, the offer, sale and delivery of the Shares will constitute an exempted transaction under the Securities Act of 1933, as amended and now in effect (“Securities Act”), and registration of the Shares under the Securities Act is not required.

 

 
 

 

4.          REPRESENTATIONS AND WARRANTIES OF THE PURCHASER.

 

Each Purchaser hereby represents, warrants, and covenants with the Company as follows:

 

4.1            Legal Power . The Purchaser has the requisite power to enter into this Agreement, to purchase the Shares hereunder, and to carry out and perform its obligations under the terms of this Agreement.

 

4.2            Due Execution . This Agreement has been duly executed and delivered by Purchaser, and, upon due execution and delivery by the Company, this Agreement will be a valid and binding agreement of the Purchaser.

 

4.3            Receipt of Restricted Securities . The Purchaser has been advised that the Shares have not been registered under the Securities Act or any other applicable securities laws and that the Shares are being offered and sold pursuant to Section 4(2) of the Securities Act, and that the Company’s reliance upon Section 4(2) of the Securities Act is predicated in part on the Purchaser’s representations as contained herein.

 

4.3.1           The Purchaser acknowledges that the Shares have not been registered under the Securities Act or the securities laws of any state and are being offered, and will be sold, pursuant to applicable exemptions from such registration for nonpublic offerings and will be sold as “restricted securities” as defined by Rule 144 promulgated pursuant to the Securities Act. The Shares may not be resold in the absence of an effective registration thereof under the Securities Act and applicable state securities laws unless, in the opinion of the Company’s counsel, an applicable exemption from registration is available.

 

4.3.2           The Purchaser is acquiring the Shares for its own account, for investment purposes only and not with a view to, or for sale in connection with, a distribution, as that term is used in Section 2(11) of the Securities Act, in a manner which would require registration under the Securities Act or any state securities laws.

 

4.3.3           

 

a)                 The Purchaser is not acquiring the Shares as a result of any advertisement, article, notice or other communication regarding the Shares published in any newspaper, magazine or similar media or broadcast over television or radio or presented at any seminar or any other general solicitation or general advertisement.

 

b)                 The Purchaser understands that the Shares are being offered and sold to it in reliance on specific provisions of U.S. federal and state securities laws and that the parties to this Agreement are relying upon the truth and accuracy of the representations, warranties, agreements, acknowledgments and understanding of the Purchaser set forth herein in order to determine the applicability of such provisions. Accordingly, the Purchaser agrees to notify the Company of any events which would cause the representations and warranties of the Purchaser to be untrue or breached at any time after the execution of this Agreement by such Purchaser .

 

c)                 The Purchaser acknowledges that the certificate(s) representing the Purchaser’s pro rata portion of the Shares shall each conspicuously set forth on the face or back thereof a legend in substantially the following form:

 

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REGULATION D LEGEND:

 

“THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THE SECURITIES UNDER SAID ACT OR PURSUANT TO AN EXEMPTION FROM REGISTRATION OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.”

 

4.3.5           The Purchaser acknowledges that an investment in the Shares is not liquid and is transferable only under limited conditions. The Purchaser acknowledges that such securities must be held indefinitely unless they are subsequently registered under the Securities Act or an exemption from such registration is available. The Purchaser is aware of the provisions of Rule 144 promulgated under the Securities Act, which permits limited resale of securities purchased in a private placement subject to the satisfaction of certain conditions and that such Rule is not now available and, in the future, may not become available for resale of the Shares. Purchaser Sophistication and Ability to Bear Risk of Loss . The Purchaser acknowledges that it is able to protect its interests in connection with the acquisition of the Shares and can bear the economic risk of investment in such securities without producing a material adverse change in the Purchaser’s financial condition. The Purchaser otherwise has such knowledge and experience in financial or business matters that it is capable of evaluating the merits and risks of the investment in the Shares. Purchaser’s investment in restricted securities is reasonable in relation to the Purchaser’s net worth. Purchaser has had experience in investments in restricted and publicly traded securities, and Purchaser has had experience in investments in speculative securities and other investments which involve the risk of loss of investment. Purchaser acknowledges that an investment in the Shares is speculative and involves the risk of loss. Purchaser has the requisite knowledge to assess the relative merits and risks of this investment without the necessity of relying upon other advisors, and Purchaser’s can afford the risk of loss of his entire investment in the Shares.

 

4.4            Purchases by Groups . The Purchaser represents, warrants, and covenants that he/she is not acquiring the Shares as part of a group within the meaning of Section 13(d)(3) of the Securities Exchange Act of 1934, as amended.

 

5.          MISCELLANEOUS.

 

5.1            Governing Law and Venue . This Agreement shall be governed by and construed under the laws of the State of New York. All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflicts of law thereof. Venue for any legal action or dispute shall be the County of New York, State of New York.

 

5.2            Successors and Assigns . Except as otherwise expressly provided herein, the provisions hereof shall inure to the benefit of, and be binding upon, the successors, assigns, heirs, executors, and administrators of the parties hereto.

 

5.3            Entire Agreement . This Agreement and the Exhibits hereto and thereto, and the other documents delivered pursuant hereto and thereto, constitute the full and entire understanding and agreement among the parties with regard to the subjects hereof and no party shall be liable or bound to any other party in any manner by any representations, warranties, covenants, or agreements except as specifically set forth herein or therein. Nothing in this Agreement, express or implied, is intended to confer upon any party, other than the parties hereto and their respective successors and assigns, any rights, remedies, obligations, or liabilities under or by reason of this Agreement, except as expressly provided herein.

 

3
 

 

5.4            Severability . In case any provision of this Agreement shall be invalid, illegal, or unenforceable, it shall to the extent practicable, be modified so as to make it valid, legal and enforceable and to retain as nearly as practicable the intent of the parties, and the validity, legality, and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

 

5.5            Amendment and Waiver . Except as otherwise provided herein, any term of this Agreement may be amended, and the observance of any term of this Agreement may be waived (either generally or in a particular instance, either retroactively or prospectively, and either for a specified period of time or indefinitely), with the written consent of the Company and the Purchaser. Any amendment or waiver effected in accordance with this Section shall be binding upon each future holder of any security purchased under this Agreement (including securities into which such securities have been converted) and the Company.

 

5.6            Notices . All notices and other communications required or permitted hereunder shall be in writing and shall be effective when delivered personally, or sent by telex or telecopier (with receipt confirmed), provided that a copy is mailed by registered mail, return receipt requested, or when received by the addressee, if sent by Express Mail, Federal Express or other express delivery service (receipt requested).

 

5.7            Faxes and Counterparts . This Agreement may be executed in one or more counterparts. Delivery of an executed counterpart of the Agreement or any exhibit attached hereto by facsimile transmission shall be equally as effective as delivery of an executed hard copy of the same. Any party delivering an executed counterpart of this Agreement or any exhibit attached hereto by facsimile transmission shall also deliver an executed hard copy of the same, but the failure by such party to deliver such executed hard copy shall not affect the validity, enforceability or binding nature effect of this Agreement or such exhibit.

 

5.8            Titles and Subtitles . The titles of the paragraphs and subparagraphs of this Agreement are for convenience of reference only and are not to be considered in construing this Agreement.

 

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first set forth above.

 

AMERICAN EDUCATION CENTER INC.  
   
/s/ Max Chen  
By: Max Chen  
Title: President  

 

4
 

 

SCHEDULE A

 

 

Woodridge Service Inc.  
   
     
By: /s/ Raymond Chen  
  Name:  
  Title:  

 

Number of common stock of AEC Nevada Shares purchased: 750,000

 

Oregon Trading Inc.  
   
     
By: /s/ Lu Li  
  Name:  
  Title:  

 

Number of common stock of AEC Nevada Shares purchased: 750,000

 

Medinnova USA Inc.  
   
     
By: /s/ Sujin Liu  
  Name:  
  Title:  

 

Number of common stock of AEC Nevada Shares purchased: 1,000,000

 

Central Merchant Inc.  
   
     
By: /s/ Boyuan Zhang  
  Name:  
  Title:  

 

Number of common stock of AEC Nevada Shares purchased: 1,000,000

 

Aclor Inc.  
   
     
By: /s/ Haiping Zhou  
  Name:  
  Title:  

 

Number of common stock of AEC Nevada Shares purchased: 1,000,000

 

Multi-Culture Communications Inc.  
   
By: /s/ Lu Li  
  Name:  
  Title:  

 

Number of common stock of AEC Nevada Shares purchased: 1,000,000

 

5
 

 

Oxbridge International Group Inc.
     
By: /s/ Ruifeng Chen  
  Name:  
  Title:  

 

Number of common stock of AEC Nevada Shares purchased: 865, 600

 

Greatfame Management USA Inc.

 

By: /s/ Yi Wang  
  Name:  
  Title:  

 

Number of common stock of AEC Nevada Shares purchased: 1,000,000

 

/s/ Boyang Wu  
Name: Boyang Wu  
Number of common stock of AEC Nevada Shares purchased: 29, 700

 

/s/ Chen Zhang  
Name: Chen Zhang  
Number of common stock of AEC Nevada Shares purchased: 29, 700

 

/s/ Lu Bai  
Name: Lu Bai  
Number of common stock of AEC Nevada Shares purchased: 6, 000

 

/s/ Yiming Xu  
Name: Yiming Xu  
Number of common stock of AEC Nevada Shares purchased: 6, 000

 

/s/ Yun Wang  
Name: Yun WANG  
Number of common stock of AEC Nevada Shares purchased: 6, 000

 

/s/ Ruotao Li  
Name: Ruotao Li  
Number of common stock of AEC Nevada Shares purchased: 6, 000

 

6
 

 

/s/ Yijun Ge  
Name: Yijun Ge  
Number of common stock of AEC Nevada Shares purchased: 6, 000

 

/s/ Andrew Liu  
Name: Andrew Liu  
Number of common stock of AEC Nevada Shares purchased: 6, 000

 

/s/ Liyuan Jiang  
Name: Liyuan Jiang  
Number of common stock of AEC Nevada Shares purchased: 6, 000

 

/s/ Jie Su  
Name: Jie Su  
Number of common stock of AEC Nevada Shares purchased: 15, 000

 

7
 

PURCHASER SIGNATURE FOLLOWS

 

To subscribe for Securities in the private offering of American Education Center Inc.:

 

1. Date and Fill in the number of shares of Common Stock being purchased and Complete and Sign the Omnibus Signature Page.

 

2. Initial the Accredited Investor Certification page attached to this letter.

 

3. Complete and return the Investor Profile and, if applicable, Wire Transfer Authorization attached to this letter.

 

4. Send all signed original documents with check to:

 

  AMERICAN EDUCATION CENTER, INC.
   
  Attention: Max Chen
  Address: 17 Battery Place, Suite 300, New York, NY, 10004
  Tel: (212)825-0437
  Fax: (718)228-8977

 

5.          Please make your subscription payment payable to the order of “American Education Center, Inc.”

 

For wiring funds directly to the escrow account,

see the following instructions:

 

 

  Bank Name:
  ABA Number:
  A/C Name: American Education Center Inc.
  A/C Number:

 

  FBO: Investor Name
    Social Security Number
    Address

 

8
 

ANTI MONEY LAUNDERING REQUIREMENTS

 

The USA PATRIOT Act   What is money laundering?   How big is the problem and why is it important?
         
The USA PATRIOT Act is designed to detect, deter, and punish terrorists in the United States and abroad.  The Act imposes new anti-money laundering requirements on brokerage firms and financial institutions.  Since April 24, 2002 all brokerage firms have been required to have new, comprehensive anti-money laundering programs.   Money laundering is the process of disguising illegally obtained money so that the funds appear to come from legitimate sources or activities.  Money laundering occurs in connection with a wide variety of crimes, including illegal arms sales, drug trafficking, robbery, fraud, racketeering, and terrorism.   The use of the U.S. financial system by criminals to facilitate terrorism or other crimes could well taint our financial markets.  According to the U.S. State Department, one recent estimate puts the amount of worldwide money laundering activity at $1 trillion a year.
         
To help you understand these efforts, we want to provide you with some information about money laundering and our steps to implement the USA PATRIOT Act.        

 

What are we required to do to eliminate money laundering?
     
Under rules required by the USA PATRIOT Act, our anti-money laundering program must designate a special compliance officer, set up employee training, conduct independent audits, and establish policies and procedures to detect and report suspicious transaction and ensure compliance with such laws.   As part of our required program, we may ask you to provide various identification documents or other information.  Until you provide the information or documents we need, we may not be able to effect any transactions for you.

  

9
 

American Education Center Inc.

OMNIBUS SIGNATURE PAGE

 

Subscriber hereby elects to subscribe under the Securities Purchase Agreement for a total of ___________________ shares of Common Stock for a purchase price of $_________ (NOTE: to be completed by subscriber) and executes the Securities Purchase Agreement.

 

Date (NOTE: To be completed by subscriber):    

 

 

 

If the Purchaser is an INDIVIDUAL, and if purchased as JOINT TENANTS, as TENANTS IN COMMON, or as COMMON PROPERTY:

 

         
  Print Name   Social Security Number  
         
         
  Signature of Subscriber      
         
         
  Date   Address  
         
  For Joint Subscriber:      
         
         
  Print Name   Social Security Number  
         
         
  Signature of Subscriber      
         
         
  Date   Address  

 

If the Purchaser is a PARTNERSHIP, CORPORATION, LIMITED LIABILITY COMPANY or TRUST:

 

         
  Name of Partnership,   Federal Taxpayer  
  Corporation, Limited   Identification Number  
  Liability Company or Trust      

 

  By:        
    Name:   State of Organization  
    Title:      

 

         
  Date   Address  

 

American Education Center, Inc.  
     
By: /s/ Max Chen  
  Authorized Officer  

 

10
 

 

 

American Education Center Inc.

ACCREDITED INVESTOR CERTIFICATION

 

For Individual Investors Only

(all Individual Investors must INITIAL where appropriate):

 

Initial  ______   I have a net worth (including homes, furnishings and automobiles, but excluding for these purposes the value of my primary residence ) in excess of $1 million either individually or through aggregating my individual holdings and those in which I have a joint, community property or other similar shared ownership interest with my spouse.
Initial  ______   I have had an annual gross income for the past two years of at least $200,000 (or $300,000 jointly with my spouse) and expect my income (or joint income, as appropriate) to reach the same level in the current year.
Initial  ______   I am a director or executive officer of American Education Center Inc.

 

For Non-Individual Investors

(all Non-Individual Investors must INITIAL where appropriate):

 

Initial  ______   The investor certifies that it is a partnership, corporation, limited liability company or business trust that is 100% owned by persons who meet at least one of the criteria for Individual Investors set forth above.
Initial  ______   The investor certifies that it is a partnership, corporation, limited liability company or business trust that has total assets of at least $5 million and was not formed for the purpose of investing in the Company.
Initial  ______   The investor certifies that it is an employee benefit plan whose investment decision is made by a plan fiduciary (as defined in ERISA §3(21)) that is a bank, savings and loan association, insurance company or registered investment adviser.
Initial  ______   The investor certifies that it is an employee benefit plan whose total assets exceed $5,000,000 as of the date of this Agreement.
Initial  ______   The undersigned certifies that it is a self-directed employee benefit plan whose investment decisions are made solely by persons who meet either of the criteria for Individual Investors.
Initial  ______   The investor certifies that it is a U.S. bank, U.S. savings and loan association or other similar U.S. institution acting in its individual or fiduciary capacity.
Initial  ______   The undersigned certifies that it is a broker-dealer registered pursuant to §15 of the Securities Exchange Act of 1934.
Initial  ______   The investor certifies that it is an organization described in §501(c)(3) of the Internal Revenue Code with total assets exceeding $5,000,000 and not formed for the specific purpose of investing in the Company.
Initial  ______   The investor certifies that it is a trust with total assets of at least $5,000,000, not formed for the specific purpose of investing in the Company, and whose purchase is directed by a person with such knowledge and experience in financial and business matters that he is capable of evaluating the merits and risks of the prospective investment.
Initial  ______   The investor certifies that it is a plan established and maintained by a state or its political subdivisions, or any agency or instrumentality thereof, for the benefit of its employees, and which has total assets in excess of $5,000,000.
Initial  ______   The investor certifies that it is an insurance company as defined in §2(13) of the Securities Act, or a registered investment company.

 

11
 

 

American Education Center Inc.

Investor Profile

( Must be completed by Investor)

 

Section A - Personal Investor Information

 

Investor Name(s):  

Individual executing Profile or Trustee:  

Social Security Numbers / Federal I.D. Number:  

 

Home Street Address:  

Home City, State & Zip Code:  

Home Phone:   Home Fax:   Home Email:  

Employer:  

Employer Street Address:  

Employer City, State & Zip Code:  

Bus.  Phone:    Bus. Fax:   Bus. Email:  

Type of Business:  

 

If you are a United States citizen , please list the number and jurisdiction of issuance of any other government-issued document evidencing residence and bearing a photograph or similar safeguard (such as a driver’s license or passport), and provide a photocopy of each of the documents you have listed.

State:    

Number:    

 

If you are NOT a United States citizen , for each jurisdiction of which you are a citizen or in which you work or reside, please list (i) your passport number and country of issuance or (ii) alien identification card number AND (iii) number and country of issuance of any other government-issued document evidencing nationality or residence and bearing a photograph or similar safeguard, and provide a photocopy of each of these documents you have listed. These photocopies must be certified by a lawyer as to authenticity.

 

 

Section B – Certificate Delivery Instructions

 

  Please deliver certificate to the Employer Address listed in Section A.

  Please deliver certificate to the Home Address listed in Section A.

  Please deliver certificate to the following address:  

 

Section C – Form of Payment – Check or Wire Transfer

 

  Check payable to American Education Center Inc.

  Wire funds from my outside account according to the "How to subscribe for Shares" Page.

Please check if you are a FINRA member or affiliate of a FINRA member firm:    

 

 

     
Investor Signature   Date

 

Name:    

Title:    

 

       

Investor Signature (if Joint Subscriber)     Date

 

12

 

Exhibit 3.1

 

 

ARTICLES OF INCORPORATION

OF

AMERICAN EDUCATION CENTER, INC

 

ARTICLE I

NAME

 

The name of the corporation is American Education Center, Inc. (which is hereinafter referred to as the “Corporation”).

 

ARTICLE II

PERIOD OF DURATION

 

The Corporation shall continue in existence perpetually unless sooner dissolved in accordance with the law.

 

ARTICLE III

PURPOSE

 

The purpose of the Corporation shall be to engage in any lawful act or activity for which corporations may be organized and incorporated under the laws of the state of Nevada.

 

ARTICLE IV

AUTHORIZED SHARES

 

The Corporation shall be authorized to issue 200,000,000 shares of capital stock, of which 180,000,000 shares shall be shares of Common Stock, $0.001 par value (“Common Stock”), and 20,000,000 shares shall be shares of Preferred Stock, $0.001 par value (“Preferred Stock”).

 

Shares of Preferred Stock may be issued from time to time in one or more classes or series. The Board of Directors of the Corporation (the “Board of Directors”) is hereby authorized to fix by resolution or resolutions the classes, series, and number of each class or series of stock as provided in Nevada Revised Statutes (“NRS”) 78.195, 78.1955, and 78.196, as well as prescribe the voting powers, if any, designations, powers, preferences, and the relative, participating, optional, or other rights, if any, and the qualifications, limitations, or restrictions thereof, of any unissued class or series of Preferred Stock; to fix the number of shares constituting such class or series; and to increase or decrease the number of shares of any such class or series, but not below the number of shares thereof then outstanding.

 

Except as otherwise provided by law or by the resolution or resolutions adopted by the Board of Directors designating the powers, designations, preferences, limitations, restrictions, and relative rights of any Preferred Stock, the Common Stock shall have the exclusive right to vote for the election of directors and for all other purposes. Each share of Common Stock shall entitle the holder thereof to one vote on all matters on which stockholders are entitled generally to vote, and the holders of Common Stock shall vote together as a single class.

 

ARTICLE V

DIRECTORS

 

The Board of Directors shall initially consist of two members and thereafter shall consist of the number of directors that, from time to time shall be fixed by, or in the manner provided in the bylaws of the corporation. The names and addresses of the individuals who are to serve as the initial Board of Directors of the corporation until the next annual meeting of stockholders, or until their successors are duly elected and qualified are as follows:

 

 
 

  

Name Address
Max P. Chen 110-05 66Rd Ste 1C, Forest Hills NY 11375
Ruifeng Chen 17 Battery Pl Ste 300A, New York ,NY 10004

 

Elections of directors need not be done by written ballot unless the Bylaws of the corporation shall otherwise provide.

 

Each director shall serve until his successor is elected and qualified or until his death, resignation or removal; and no decrease in the authorized number of directors shall shorten the term of any incumbent director.

 

Newly created directorships resulting from any increase in the number of directors, or any vacancies on the Board of Directors resulting from death, resignation, removal or other causes, shall be filled solely by the affirmative vote of a majority of the remaining directors then in office, even though less than a quorum of the Board of Directors. Any director elected in accordance with the preceding sentence shall hold office for the remainder of the full term of the class of directors in which the new directorship was created or the vacancy occurred and until such director's successor shall have been elected and qualified or until such director's death, resignation or removal, whichever first occurs.

 

In addition to the powers and authority hereinbefore or by statute expressly conferred upon them, the directors are hereby empowered to exercise all such powers and do all such acts and things as may be exercised or done by the corporation, subject, nevertheless, to the provisions of the NRS, these Articles of Incorporation, and any Bylaws.

 

ARTICLE VI

LIMITATION ON LIABILITY

 

Unless otherwise provided by law, a director or officer is not individually liable to the Corporation or its stockholders or creditors for any damages as a result of any act or failure to act in his individual capacity as a director or officer unless it is proven that his act or failure to act constituted a breach of his fiduciary duties as a director or officer and his breach of those duties involved intentional misconduct, fraud, or a knowing violation of law. If the NRS is amended to further eliminate or limit or authorize corporate action to further eliminate or limit the liability of directors or officers, the liability of directors and officers of the corporation shall be eliminated or limited to the fullest extent permitted by the NRS as so amended from time to time. Neither any amendment nor repeal of this Article VI, nor the adoption of any provision of these Articles of Incorporation inconsistent with this Article VI, shall eliminate, reduce or otherwise adversely affect any limitation on the personal liability of a director or officer of the corporation existing at the time of such amendment, repeal or adoption of such an inconsistent provision.

 

ARTICLE VII

INDEMNIFICATION

 

Every person who was or is a party to, or is threatened to be made a party to, or is involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative, by the reason of the fact that he or she, or a person with whom he or she is a legal representative, is or was a director or officer of the Corporation, or who is serving at the request of the Corporation as a director or officer of another corporation, or is a representative in a partnership, joint venture, trust or other enterprise, shall be indemnified and held harmless to the fullest extent legally permissible under the laws of the State of Nevada from time to time against all expenses, liability and loss (including attorneys' fees, judgments, fines, and amounts paid or to be paid in a settlement) reasonably incurred or suffered by him or her in connection therewith. The right of indemnification shall be a contract right which may be enforced in any manner desired by such person. The expenses of officers and directors incurred in defending a civil suit or proceeding must be paid by the Corporation as incurred and in advance of the final disposition of the action, suit, or proceeding, under receipt of an undertaking by or on behalf of the director or officer to repay the amount if it is ultimately determined by a court of competent jurisdiction that he or she is not entitled to be indemnified by the Corporation. Such right of indemnification shall not be exclusive of any other right of such directors, officers or representatives may have or hereafter acquire, and, without limiting the generality of such statement, they shall be entitled to their respective rights of indemnification under any bylaw agreement, vote of stockholders, provision of law, or otherwise, as well as their rights under this article.

 

 
 

 

Without limiting the application of the foregoing, the Board of Directors may adopt bylaws from time to time with respect to indemnification, to provide at all times the fullest indemnification permitted by the laws of the State of Nevada, and may cause the corporation to purchase or maintain insurance on behalf of any person who is or was a director or officer of the corporation or who is serving at the request of the corporation as an officer, director or representative of any other entity or other enterprise against any liability asserted against such person and incurred in any such capacity or arising out of such status, whether or not the corporation would have the power to indemnify such person.

 

Any repeal or modification of the above provisions of this Article VII, approved by the stockholders of the corporation shall be prospective only, and shall not adversely affect any limitation on the liability of a director or officer of the corporation existing as of the time of such repeal or modification. In the event of any conflict between the above indemnification provisions, and any other Article of the Articles, the terms and provisions of this Article VII shall control.

 

ARTICLE VIII

CONTRACTS OR OTHER TRANSACTIONS WITH INTERESTED PERSONS

 

No contract or other transaction of the corporation with any other person, firm or corporation, or in which this corporation is interested, shall be affected or invalidated by: (i) the fact that any one or more of the directors or officers of the corporation is interested in or is a director or officer of such other firm or corporation; or, (ii) the fact that any director or officer of the corporation, individually or jointly with others, may be a party to or may be interested in any such contract or transaction, so long as the contract or transaction is authorized, approved or ratified at a meeting of the Board of Directors by sufficient vote thereon by directors not interested therein, to which such fact of relationship or interest has been disclosed, or the contract or transaction has been approved or ratified by vote or written consent of the stockholders entitled to vote, to whom such fact of relationship or interest has been disclosed, or so long as the contract or transaction is fair and reasonable to the corporation. Each person who may become a director or officer of the corporation is hereby relieved from any liability that might otherwise arise by reason of his contracting with the corporation for the benefit of himself or any firm or corporation in which he may in any way be interested.

 

ARTICLE IX

ADOPTION AND AMENDMENT OF BYLAWS

 

The bylaws of the Corporation shall be adopted by the Board of Directors. The power to alter, amend, or repeal the bylaws or adopt new bylaws shall be vested in the board of directors, but the stockholders of the Corporation may also alter, amend, or repeal the bylaws or adopt new bylaws. The bylaws may contain any provisions for the regulation or management of the affairs of the Corporation not inconsistent with the laws of the state of Nevada now or hereafter existing.

 

ARTICLE X

AMENDMENTS

 

The Corporation reserves the right to amend, alter, change, or repeal all or any portion of the provisions contained in these articles of incorporation from time to time in accordance with the laws of the state of Nevada, and all rights conferred on stockholders herein are granted subject to this reservation.

 

ARTICLE XI

INCORPORATOR

 

The name and mailing address of the incorporator is:

 

 
 

 

Max P. Chen

110-05 66Rd Ste 1C, Forest Hills NY 11375

 

The undersigned incorporator hereby acknowledges that the foregoing certificate is his act and deed and that the facts stated herein are true.

 

Dated: May 06, 2014

 

  INCORPORATOR
   
  /s/ Max P. Chen  
  Max P. Chen

 

 

 

Exhibit 3.2

 

Bylaws
of

American Education Center, Inc.

 

Article I
Office

 

The Board of Directors shall designate and the Corporation shall maintain a principal office. The location of the principal office may be changed by the Board of Directors. The Corporation also may have offices in such other places as the Board may from time to time designate. The location of the initial principal office of the Corporation shall be designated by resolution.

 

Article II
Shareholders Meetings

 

1. Annual Meetings

The annual meeting of the shareholders of the Corporation shall be held at such place within or without the State of Nevada as shall be set forth in compliance with these Bylaws. The meeting shall be held on the third Tuesday of February of each year. If such day is a legal holiday, the meeting shall be on the next business day. This meeting shall be for the election of Directors and for the transaction of such other business as may properly come before it.

 

2. Special Meetings

Special meetings of shareholders, other than those regulated by statute, may be called by the President upon written request of the holders of 50% or more of the outstanding shares entitled to vote at such special meeting. Written notice of such meeting stating the place, the date and hour of the meeting, the purpose or purposes for which it is called, and the name of the person by whom or at whose direction the meeting is called shall be given.

 

3. Notice of Shareholders Meeting

The Secretary shall give written notice stating the place, day, and hour of the meeting, and in the case of a special meeting, the purpose or purposes for which the meeting is called, which shall be delivered not less than ten or more than fifty days before the date of the meeting, either personally or by mail to each shareholder of record entitled to vote at such meeting. If mailed, such notice shall be deemed to be delivered when deposited in the United States mail, addressed to the shareholder at their address as it appears on the books of the Corporation, with postage thereon prepaid. Attendance at the meeting shall constitute a waiver of notice thereof.

 

4. Place of Meeting

The Board of Directors may designate any place, either within or without the State of Nevada, as the place of meeting for any annual meeting or for any special meeting called by the Board of Directors. A waiver of notice signed by all shareholders entitled to vote at a meeting may designate any place, either within or without the State of Nevada, as the place for the holding of such meeting. If no designation is made, or if a special meeting is otherwise called, the place of meeting shall be the principal office of the Corporation.

 

5. Record Date

The Board of Directors may fix a date not less than ten nor more than fifty days prior to any meeting as the record date for the purpose of determining shareholders entitled to notice of and to vote at such meetings of the shareholders. The transfer books may be closed by the Board of Directors for a stated period not to exceed fifty days for the purpose of determining shareholders entitled to receive payment of and dividend, or in order to make a determination of shareholders for any other purpose.

 

6. Quorum

A majority of the outstanding shares of the Corporation entitled to vote, represented in person or by proxy, shall constitute a quorum at a meeting of shareholders. If less than a majority of the outstanding shares are represented at a meeting, a majority of the shares so represented may adjourn the meeting from time to time without further notice. At a meeting resumed after any such adjournment at which a quorum shall be present or represented, any business may be transacted, which might have been transacted at the meeting as originally noticed.

 

7. Voting

A holder of outstanding shares, entitled to vote at a meeting, may vote at such meeting in person or by proxy. Except as may otherwise be provided in the currently filed Articles of Incorporation, every shareholder shall be entitled to one vote for each share standing their name on the record of shareholders. Except as herein or in the currently filed Articles of Incorporation otherwise provided, all corporate action shall be determined by a majority of the votes cast at a meeting of shareholders by the holders of shares entitled to vote thereon.

 

 
 

 

8. Proxies

At all meeting of shareholders, a shareholder may vote in person or by proxy executed in writing by the shareholder or by their duly authorized attorney-in-fact. Such proxy shall be filed with the Secretary of the Corporation before or at the time of the meeting. No proxy shall be valid after six months from the date of its execution.

 

9. Informal Action by Shareholders

Any action required to be taken at a meeting of the shareholders, may be taken without a meeting if a consent in writing, setting forth the action so taken, shall be signed by a majority of the shareholders entitled to vote with respect to the subject matter thereof.

 

Article III
Board of Directors

 

1. General Powers

The business and affairs of the Corporation shall be managed by its Board of Directors. The Board if Directors may adopt such rules and regulations for the conduct of their meetings and the management of the Corporation as they appropriate under the circumstances. The Board shall have authority to authorize changes in the Corporation’s capital structure.

 

2. Number, Tenure and Qualification

The number of Directors of the Corporation shall be a number between one and five, as the Directors may by resolution determine from time to time. Each of the Directors shall hold office until the next annual meeting of shareholders and until their successor shall have been elected and qualified.

 

3. Regular Meetings

A regular meeting of the Board of Directors shall be held without other notice than by this Bylaw, immediately after and, at the same place as the annual meeting of shareholders. The Board of Directors may provide, by resolution, the time and place for the holding of additional regular meetings without other notice than this resolution.

 

4. Special Meetings

Special meetings of the Board of Directors may be called by order of the Chairman of the Board or the President. The Secretary shall give notice of the time, place and purpose or purposes of each special meeting by mailing the same at least two days before the meeting or by telephone, telegraphing or telecopying the same at least one day before the meeting to each Director. Meeting of the Board of Directors may be held by telephone conference call.

 

5. Quorum

A majority of the members of the Board of Directors shall constitute a quorum for the transaction of business, but less than a quorum may adjourn any meeting from time to time until a quorum shall be present, whereupon the meeting may be held, as adjourned, without further notice. At any meeting at which every Director shall be present, even though without any formal notice any business may be transacted

 

6. Manner of Acting

At all meetings of the Board of Directors, each Director shall have one vote. The act of a majority of Directors present at a meeting shall be the act of the full Board of Directors, provided that a quorum is present.

 

7. Vacancies

A vacancy in the Board of Directors shall be deemed to exist in the case of death, resignation, or removal of any Director, or if the authorized number of Directors is increased, or if the shareholders fail, at any meeting of the shareholders, at which any Director is to be elected, to elect the full authorized number of Directors to be elected at that meeting.

 

8. Removals

Directors may be removed, at any time, by a vote of the shareholders holding a majority of the shares outstanding and entitled to vote. Such vacancy shall be filled by the Directors entitled to vote. Such vacancy shall be filled by the Directors then in office, though less than a quorum, to hold office until the next annual meeting or until their successor is duly elected and qualified, except that any directorship to be filled by election by the shareholders at the meeting at which the Director is removed. No reduction of the authorized number of Directors shall have the effect of removing any Director prior to the expiration of their term of office.

 

9. Resignation

A director may resign at any time by delivering written notification thereof to the President or Secretary of the Corporation. A resignation shall become effective upon its acceptance by the Board of Directors; provided, however, that if the Board of Directors has not acted thereon within ten days from the date of its delivery, the resignation shall be deemed accepted.

 

10. Presumption of Assent

A Director of the Corporation who is present at a meeting of the Board of Directors at which action on any corporate matter is taken shall be presumed to have assented to the action(s) taken unless their dissent shall be placed in the minutes of the meeting or unless he or she shall file their written dissent to such action with the person acting as the secretary of the meeting before the adjournment thereof or shall forward such dissent by registered mail to the secretary of the Corporation immediately after the adjournment of the meeting. Such right to dissent shall not apply to a Director who voted in favor of such action.

 

 
 

 

11. Compensation

By resolution of the Board of Directors, the Directors may be paid their expenses, if any, of attendance at each meeting of the Board of Directors or a stated salary as Director. No such payment shall preclude any Director from serving the Corporation in any other capacity and receiving compensation therefor.

 

12. Emergency Power

When, due to a national disaster or death, a majority of the Directors are incapacitated or otherwise unable to attend the meetings and function as Directors, the remaining members of the Board of Directors shall have all the powers necessary to function as a complete Board, and for the purpose of doing business and filling vacancies shall constitute a quorum, until such time as all Directors can attend or vacancies can be filled pursuant to these Bylaws.

 

13. Chairman

The Board of Directors may elect from its own number a Chairman of the Board, who shall preside at all meetings of the Board of Directors, and shall perform such other duties as may be prescribed from time to time by the Board of Directors. The Chairman may by appointment fill any vacancies on the Board of Directors.

 

Article IV
Officers

 

1. Number

The officers of the Corporation shall be a President, one or more Vice Presidents, a Secretary, and a Treasurer, each of whom shall be elected by a majority of the Board of Directors. Such other Officers and assistant Officers as may be deemed necessary may be elected or appointed by the Board of Directors. In its discretion, the Board of Directors may leave unfilled for any such period as it may determine any office except those of President and Secretary. Any two or more offices may be held by the same person. Officers may or may not be Directors or shareholders of the Corporation.

 

2. Election and Term of Office

The Officers of the Corporation to be elected by the Board of Directors shall be elected annually by the Board of Directors at the first meeting of the Board of Directors held after each annual meeting of the shareholders. If the election of Officers shall not be held at such meeting, such election shall be held as soon thereafter as convenient. Each Officer shall hold office until their successor shall have been duly elected and shall have qualified or until their death or until they shall resign or shall have been removed in the manner hereinafter provided.

 

3. Resignations

Any Officer may resign at any time by delivering a written resignation either to the President or to the Secretary. Unless otherwise specified therein, such resignation shall take effect upon delivery.

 

4. Removal

Any Officer or agent may be removed by the Board of Directors whenever in its judgment the best interests Corporation will be served thereby, but such removal shall be without prejudice to the contract rights, if any, of the person so removed. Election or appointment of an Officer or agent shall not of itself create contract rights. Any such removal shall require a majority vote of the Board of Directors, exclusive of the Officer in question if he or she is also a Director.

 

5. Vacancies

A vacancy in any office because of death, resignation, removal, disqualification or otherwise, or is a new office shall be created, may be filled by the Board of Directors for the un-expired portion of the term.

 

6. President

The president shall be the chief executive and administrative Officer of the Corporation. He or she shall preside at all meetings of the stockholders and, in the absence of the Chairman of the Board, at meetings of the Board of Directors. He or she shall exercise such duties as customarily pertain to the office of President and shall have general and active supervision over the property, business, and affairs of the Corporation and over its several Officers, agents, or employees other than those appointed by the Board of Directors. He or she may sign, execute and deliver in the name of the Corporation powers of attorney, contracts, bonds and other obligations, and shall perform such other duties as may be prescribed from time to time by the Board of Directors or by the Bylaws.

 

7. Vice President

The Vice President shall have such powers and perform such duties as may be assigned to him by the Board of Directors or the President. In the absence or disability of the President, the Vice President designated by the Board or the President shall perform the duties and exercise the powers of the President. A Vice President may sign and execute contracts any other obligations pertaining to the regular course of their duties.

 

8. Secretary

The Secretary shall keep the minutes of all meetings of the stockholders and of the Board of Directors and, to the extent ordered by the Board of Directors or the President, the minutes of meeting of all committees. He or she shall cause notice to be given of meetings of stockholders, of the Board of Directors, and of any committee appointed by the Board. He or she shall have custody of the corporate seal and general charge of the records, documents and papers of the Corporation not pertaining to the performance of the duties vested in other Officers, which shall at all reasonable times be open to the examination of any Directors. He or she may sign or execute contracts with the President or a Vice President thereunto authorized in the name of the Corporation and affix the seal of the Corporation thereto. He or she shall perform such other duties as may be prescribed from time to time by the Board of Directors or by the Bylaws.

 

 
 

 

9. Treasurer

The Treasurer shall have general custody of the collection and disbursement of funds of the Corporation. He or she shall endorse on behalf of the Corporation for collection check, notes and other obligations, and shall deposit the same to the credit of the Corporation in such bank or banks or depositories as the Board of Directors may designate. He or she may sign, with the President or such other persons as may be designated for the purpose of the Board of Directors, all bills of exchange or promissory notes of the Corporation. He or she shall enter or cause to be entered regularly in the books of the Corporation full and accurate account of all monies received and paid by him on account of the Corporation; shall at all reasonable times exhibit his (or her) books and accounts to any Director of the Corporation upon application at the office of the Corporation during business hours; and, whenever required by the Board of Directors or the President, shall render a statement of his (or her) accounts. The Treasurer shall perform such other duties as may be prescribed from time to time by the Board of Directors or by the Bylaws.

 

10. Other Officers

Other Officers shall perform such duties and shall have such powers as may be assigned to them by the Board of Directors.

 

11. Salaries

Salaries or other compensation of the Officers of the Corporation shall be fixed from time to time by the Board of Directors, except that the Board of Directors may delegate to any person or group of persons the power to fix the salaries or other compensation of any subordinate Officers or agents. No Officer shall be prevented from receiving any such salary or compensation by reason of the fact the he or she is also a Director of the Corporation.

 

12. Surety Bonds

In case the Board of Directors shall so require, any Officer or agent of the Corporation shall execute to the Corporation a bond in such sums and with such surety or sureties as the Board of Directors may direct, conditioned upon the faithful performance of his (or her) duties to the Corporation, including responsibility for negligence and for the accounting for all property, monies or securities of the Corporation, which may come into his (or her) hands.

 

Article V
Contracts, Loans, Checks and Deposits

 

1. Contracts

The Board of Directors may authorize any Officer or Officers, agent or agents, to enter into any contract or execute and deliver any instrument in the name of and on behalf of the Corporation and such authority may be general or confined to specific instances.

 

2. Loans

No loan or advance shall be contracted on behalf of the Corporation, no negotiable paper or other evidence of its obligation under any loan or advance shall be issued in its name, and no property of the Corporation shall be mortgaged, pledged, hypothecated or transferred as security for the payment of any loan, advance, indebtedness or liability of the Corporation unless and except as authorized by the Board of Directors. Any such authorization may be general or confined to specific instances.

 

3. Deposits

All funds of the Corporation not otherwise employed shall be deposited from time to time to the credit of the Corporation in such banks, trust companies or other depositories as the Board of Directors may select, or as may be selected by an Officer or agent of the Corporation authorized to do so by the Board of Directors.

 

4. Checks and Drafts

All notes, drafts, acceptances, checks, endorsements and evidence of indebtedness of the Corporation shall be signed by such Officer or Officers or such agent or agents of the Corporation and in such manner as the Board of Directors from time to time may determine. Endorsements for deposits to the credit of the Corporation in any of its duly authorized depositories shall be made in such manner as the Board of Directors may from time to time determine.

 

5. Bonds and Debentures

Every bond or debenture issued by the Corporation shall be in the form of an appropriate legal writing, which shall be signed by the President or Vice President and by the Treasurer or by the Secretary, and sealed with the seal of the Corporation. The seal may be facsimile, engraved or printed. Where such bond or debenture is authenticated with the manual signature of an authorized Officer of the Corporation or other trustee designated by the indenture of trust or other agreement under which such security is issued, the signature of any of the Corporation’s Officers named thereon may be facsimile. In case any Officer who signed, or whose facsimile signature has been used on any such bond or debenture, shall cease to be an Officer of the Corporation for any reason before the same has been delivered by the Corporation, such bond or debenture may nevertheless by adopted by the Corporation and issued and delivered as though the person who signed it or whose facsimile signature has been used thereon had not ceased to be such Officer.

 

 
 

 

Article VI
Capital Stock

 

1. Certificate of Share

The shares of the Corporation shall be represented by certificates prepared by the Board of Directors and signed by the President. The signatures of such Officers upon a certificate may be facsimiles if the certificate is countersigned by a transfer agent or registered by a registrar other than the Corporation itself or one of its employees. All certificates for shares shall be consecutively numbered or otherwise identified. The name and address of the person to whom the shares represented thereby are issued, with the number of shares and date of issue, shall be entered on the stock transfer books of the Corporation. All certificates surrendered to the Corporation for transfer shall be canceled except that in case of a lost, destroyed or mutilated certificate, a new one may be issued therefor upon such terms and indemnity to the Corporation as the Board of Directors may prescribe.

 

2. Transfer of Shares

Transfer of shares of the Corporation shall be made only on the stock transfer books of the Corporation by the holder of record thereof or by his (or her) legal representative, who shall furnish proper evidence of authority to transfer, or by his (or her) attorney thereunto authorized by power of attorney duly executed and filed with the Secretary of the Corporation, and on surrender for cancellation of the certificate for such shares. The person in whose name shares stand on the books of the Corporation shall be deemed by the Corporation to be the owner thereof for all purposes.

 

3. Transfer Agent and Registrar

The Board of Directors of the Corporation shall have the power to appoint one or more transfer agents and registrars for the transfer and registration of certificates of stock of any class, and may require that stock certificates shall be countersigned and registered by one or more of such transfer agents and registrars.

 

4. Lost or Destroyed Certificates

The Corporation may issue a new certificate to replace any certificate theretofore issued by it alleged to have been lost or destroyed. The Board of Directors may require the owner of such a certificate or his (or her) legal representative to give the Corporation a bond in such sum and with such sureties as the Board of Directors may direct to indemnify the Corporation as transfer agents and registrars, if any, against claims that may be made on account of the issuance of such new certificates. A new certificate may be issued without requiring any bond.

 

5. Registered Shareholders

The Corporation shall be entitled to treat the holder of record of any share or shares of stock as the holder thereof, in fact, and shall not be bound to recognize any equitable or other claim to or on behalf of this Corporation to any and all of the rights and powers incident to the ownership of such stock at any such meeting, and shall have power and authority to execute and deliver proxies and consents on behalf of this Corporation in connection with the exercise by this Corporation of the rights and powers incident to the ownership of such stock. The Board of Directors, from time to time, may confer like powers upon any other person or persons.

 

Article VII
Indemnification

 

No Officer or Director shall be personally liable for any obligations of the Corporation or for any duties or obligations arising out of any acts or conduct of said Officer or Director performed for or on behalf of the Corporation. The Corporation shall and does hereby indemnify and hold harmless each person and their heirs and administrators who shall serve at any time hereafter as a Director or Officer of the Corporation from and against any and all claims, judgments and liabilities to which such persons shall become subject by reason of their having heretofore or hereafter been a Director or Officer of the Corporation, or by reason of any action alleged to have heretofore or hereafter taken or omitted to have been taken by him as such Director or Officer, and shall reimburse each such person for all legal and other expenses reasonably incurred by him in connection with any such claim or liability, including power to defend such persons from all suits or claims as provided for under the provisions of the Nevada Revised Statutes; provided, however, that no such persons shall be indemnified against, or be reimbursed for, any expense incurred in connection with any claim or liability arising out of his (or her) own negligence or willful misconduct. The rights accruing to any person under the foregoing provisions of this section shall not exclude any other right to which he or she may lawfully be entitled, nor shall anything herein contained restrict the right of the Corporation to indemnify or reimburse such person in any proper case, even though not specifically herein provided for. The Corporation, its Directors, Officers, employees and agents shall be fully protected in taking any action or making any payment, or in refusing so to do in reliance upon the advice of counsel.

 

 
 

 

Article VIII
Notice

 

Whenever any notice is required to be given to any shareholder or Director of the Corporation under the provisions of the Articles of Incorporation, or under the provisions of the Nevada Statutes, a waiver thereof in writing signed by the person or persons entitled to such notice, whether before or after the time stated therein, shall be deemed equivalent to the giving of such notice. Attendance at any meeting shall constitute a waiver of notice of such meetings, except where attendance is for the express purpose of objecting to the holding of that meeting.

 

Article IX
Amendments

 

These Bylaws may be altered, amended, repealed, or new Bylaws adopted by a majority of the entire Board of Directors at any regular or special meeting. Any Bylaw adopted by the Board may be repealed or changed by the action of the shareholders.

 

Article X
Fiscal Year

 

The fiscal year of the Corporation shall be fixed and may be varied by resolution of the Board of Directors.

 

Article XI
Dividends

 

The Board of Directors may at any regular or special meeting, as they deem advisable, declare dividends payable out of the surplus of the Corporation.

 

Article XII
Corporate Seal

 

The seal of the Corporation shall be in the form of a circle and shall bear the name of the Corporation and the year of incorporation per sample affixed hereto.

 

CERTIFIED TO BE THE BYLAWS OF:

 

American Education Center, Inc.

 

/s/ Max Chen  
Max Chen  
President  

 

 

 

 

Exhibit 4.1

 

 

 

 

Exhibit 5.1

 

LAW OFFICE OF YUE & ASSOCIATES, P.C.

708 Third Avenue, 5 Floor

New York, NY 10017

Telephone: (212)-209-3894

Fax: (212)-209-7100

www.yueuslaw.com

 

December 12, 2014

American Education Center, Inc.

17 Battery Place, Suite 300, New York, NY, 10004

 

Re: Registration Statement on Form S-1 (File No. 333-)

 

Ladies and Gentlemen:

 

We have acted as counsel to American Education Center, Inc., a Nevada corporation (the “ Company ”), in connection with the preparation of a Registration Statement on Form S-1 (the “ Registration Statement ”) filed with the U.S. Securities and Exchange Commission under the Securities Act of 1933, as amended (the “ Act ”).  The Registration Statement relates to the registration of 9,000,000 shares of the Company’s common stock (the " Common Stock "), par value $0.001 per share (the “ Public Offering Shares ”) to be offered and sold by the Company.

 

For purposes of this opinion, we have examined and relied upon such documents, records, certificates and other instruments as we have deemed necessary. With respect to all documents examined by us, we have assumed the genuineness of all signatures, the authenticity of all documents submitted to us as originals, the conformity to original documents of all documents submitted to us as reproduced or certified copies, and the authenticity of the originals of those latter documents. As to questions of fact material to this opinion, we have, to the extent deemed appropriate, relied upon certain representations of certain officers of the Company.  We also assumed (i) the persons identified as officers are actually serving as such and that any certificates representing the securities will be properly executed by one or more such persons; (ii) the persons executing the documents examined by us have the legal capacity to execute such documents; (iii) the Registration Statement has been declared effective pursuant to the Act; (iv) the board of directors of the Company will have taken action necessary to set the sale price of the securities; and (v) the purchasers in this offering will actually pay in full all amounts that they have agreed to pay to purchase the securities in this offering.

 

We are opining solely on all applicable statutory provisions of the Nevada Revised Statutes and all applicable judicial determinations in connection therewith.  We express no opinion as to whether the laws of any other jurisdiction are applicable to the subject matter hereof.  We are not rendering any opinion as to compliance with any federal or state law, rule or regulation relating to securities, or to the sale or issuance thereof.  This opinion is based upon currently existing statutes, rules, regulations and judicial decisions, and we disclaim any obligation to advise you of any change in any of these sources of law or subsequent legal or factual developments which might affect any matters or opinions set forth herein.

 

Public Offering Shares . When the Registration Statement becomes effective under the Act and when the offering is completed as contemplated by the Registration Statement, the Public Offering Shares will be validly issued, fully paid and non-assessable shares of Common Stock.

 

 

We hereby consent to the use of this opinion as Exhibit 5.1 to the Registration Statement, and to the use of our name as your counsel under “Legal Matters” in the Prospectus constituting a part of the Registration Statement.  In giving this consent, we do not thereby concede that we come within the categories of persons whose consent is required by the Act or the General Rules and Regulations promulgated thereunder.  We assume no obligation to update or supplement any of the opinions set forth herein to reflect any changes of law or fact that may occur.

 

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  Very truly yours,
   
  /s/ Law Office of Yue & Associates, P.C.
   Law Office of Yue & Associates, P.C.
   708 3rd Avenue, 5 FL
   New York, NY 10017

 

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Exhibit 10.1

 

EMPLOYMENT AGREEMENT

 

This Employment Agreement ("Agreement") is entered into by and between American Education Center, Inc, aNevada company ("Employer"), and Hinman Au ("Employee"), to be effective on this 1st day of August, 2014 (the "Effective Date").

 

WHEREAS, Employer is desirous of employing Employee pursuant to the terms and conditions and for the consideration set forth in this Agreement, and Employee is desirous of entering the employ of Employer pursuant to such terms and conditions and for such consideration.

 

NOW, THEREFORE, for and in consideration of the mutual promises, covenants, and obligations contained herein, Employer and Employee agree as follows:

 

ARTICLE 1: EMPLOYMENT AND DUTIES:

 

1.1.     Employer agrees to employ Employee, and Employee agrees to be employed by Employer, beginning as of the Effective Date and continuing until July 31, 2014, and for additional consecutive one year periods thereafter (the "Term") absent termination as provided herein and subject to the other terms and conditions of this Agreement.

 

1.2.      Beginning August 1st, 2014, Employee shall be employed as Chief Executive Officer of Employer. Employee agrees to serve in the assigned position and to perform diligently and to the best of Employee's abilities the duties and services appertaining to such position as determined by Employer, as well as such additional or different duties and services appropriate to such position which Employee from time to time may be reasonably directed to perform by Employer. Employee shall at all times comply with and be subject to such policies and procedures as Employer may establish from time to time.

 

1.3.      Employee shall, during the period of Employee's employment by Employer, devote Employee's full business time, energy, and best efforts to the business and affairs of Employer. The foregoing notwithstanding, the parties recognize and agree that Employee may engage in passive personal investments and other business activities, which do not conflict with the business and affairs of the Employer or interfere with Employee's performance of his duties hereunder.

 

1.4.     Employee acknowledges and agrees that Employee owes a fiduciary duty of loyalty, fidelity and allegiance to act at all times in the best interests of the Employer and to do no act which would intentionally injure Employer's business, its interests, or its reputation. Employee agrees that Employee shall not knowingly become involved in a conflict of interest with Employer, or its affiliates, or upon discovery thereof, allow such a conflict to continue, except as as approved by a majority of independent members of Employer’s Board of Directors.

 

ARTICLE 2: COMPENSATION AND BENEFITS:

 

2.1.      Employee's initial base salary (the “Salary”) shall be $3,000.00 per month which shall be paid in accordance with Employer's standard payroll practice. Employee shall be further compensated with a 285,000 shares of Employer’s common stock issued on September 30, 2014, with standard restrictive legend (the “Shares”).

 

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2.2.       From and after the Effective Date, Employer shall pay, or reimburse Employee, for all ordinary, reasonable and necessary expenses which Employee incurs in performing his duties under this Agreement including, but not limited to, travel, entertainment, education, professional dues and subscriptions, and all dues, fees and expenses associated with membership in various professional, business and civic associations and societies of which Employee's participation is in the best interest of Employer.

 

2.3.      While employed by Employer, Employee shall be allowed to participate, on the same basis generally as other employees of Employer, in all general employee benefit plans and programs, including improvements or modifications of the same, which on the effective date or thereafter are made available by Employer to all or substantially all of Employer's employees. Such benefits, plans, and programs may include, without limitation, medical, health, and dental care, life insurance, disability protection, and qualified retirement plans. Except as specifically provided herein, nothing in this Agreement is to be construed or interpreted to provide greater rights, participation, coverage, or benefits under such benefit plans or programs than provided to employees pursuant to the terms and conditions of such benefit plans and programs.

 

2.4.      Employer may withhold from any compensation, benefits, or amount payable under this Agreement all federal, state, city, or other taxes as may be required pursuant to any law or governmental regulation or ruling.

 

2.4       Employee’s investment in restricted securities is reasonable in relation to the Employee’s net worth. Employee has had experience in investments in restricted and publicly traded securities, and Employee has had experience in investments in speculative securities and other investments which involve the risk of loss of investment. Employee acknowledges that an investment in the Shares is speculative and involves the risk of loss. Employee has the requisite knowledge of the business and operations of the Employer to assess the relative merits and risks of this investment, and Employee can afford the risk of loss of his entire investment in the Shares.

 

2.5       Employee is acquiring the Shares for the Employee’s own account for long-term investment and not with a view toward resale or distribution thereof except in accordance with applicable securities laws.

 

2.8       The Employee acknowledges that the Shares will not have been registered under the Securities Act of 1933, and accordingly are “restricted securities” within the meaning of Rule 144 of the Act. As such, the Shares may not be resold or transferred unless the shares have been included in a registration statement filed by the Employer with the United States Securities and Exchange Commission permitting the resale there under, or the Employer has received an opinion of counsel that such resale or transfer is exempt from the registration requirements of that Act, the Employer will take all action as may be required as a condition to the availability of Rule 144, and the Employer will upon request supply written confirmation that it is in compliance with the reporting requirements of Rule 144.

 

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ARTICLE 3: TERMINATION PRIOR TO EXPIRATION OF TERM AND EFFECTS OF SUCH TERMINATION:

 

3.1.      Employee's employment with Employer shall be terminated (i) upon the death of Employee, or (ii) upon Employee's permanent disability (permanent disability being defined as Employee's physical or mental incapacity to perform his usual duties as an employee with such condition to remain continuously and permanently for a period of 90 days).

 

3.2.      If Employee's employment is terminated by reason of a "Voluntary Termination" (as hereinafter defined), the death of Employee, or by the Employer for "Cause" (as hereinafter defined), all future compensation to which Employee is otherwise entitled and all future benefits for which Employee is eligible shall cease and terminate as of the date of termination as provided in this Section. Employee, or his estate in the case of Employee's death, shall be entitled to base salary through the date of such termination and shall be entitled to any individual bonuses or individual incentive compensation not yet paid but due under Employer's plans but shall not be entitled to any other payments by or on behalf of Employer except for those which may be payable pursuant to the terms of Employer's employee benefit plans (as hereinafter defined). For purposes of this Section 3.2, a "Voluntary Termination" of the employment relationship by Employee prior to expiration of the Term shall be a termination of employment in the sole discretion of and at the election of Employee, other than (i) a termination of Employee's employment because of a material breach by Employer of any material provision of this Agreement which remains uncorrected for thirty (30) days following written notice of such breach by Employee to Employer or (ii) a termination of Employee's employment within six (6) months of a material reduction in Employees' rank or responsibility with Employer. For purposes of this Section 3.2, the term "Cause" shall mean any of (i) Employee's gross negligence or willful misconduct in the performance of the duties and services required of Employee pursuant to this Agreement; (ii) Employee's final conviction of a felony; or (iii) Employee's material breach of any material provision of this Agreement which remains uncorrected for thirty (30) days following written notice to Employee by Employer of such breach.

 

3.3.      If Employee's employment is terminated for any reason other than as described in Section2 3.1 or 3.2 above during the Term, Employer shall pay to Employee a severance benefit consisting of a single lump sum number of shares of common stock of the Company equal to one year Salary due to Employee valued at average trading price of past thirty days prior to the termination date. Such severance benefit shall be paid no later than sixty (60) days following Employee's termination of employment. Employee shall not be under any duty or obligation to seek or accept other employment following a termination of employment pursuant to which severance benefit payments under this Section 3.3 are owing and the amounts due Employee pursuant to this Section 3.3 shall not be reduced or suspended if Employee accepts subsequent employment or earns any amounts as a self-employed individual. Employee's rights under this Section 3.3 are Employee's sole and exclusive rights against the Employer or its affiliates and the Employer's sole and exclusive liability to Employee under this Agreement, in contract, tort or otherwise, for the termination of his employment relationship with Employer.

 

ARTICLE 4: MISCELLANEOUS:

 

4.1.      For purposes of this Agreement, (i) the terms "affiliates" or "affiliated" means an entity who directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with Employer or in which Employer has a 50% or more equity interest, and (ii) any action or omission permitted to be taken or omitted by Employer hereunder shall only be taken or omitted by Employer upon the express authority of the Board of Directors of Employer or of any Committee of the Board to which authority over such matters may have been delegated.

 

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4.2.       For purposes of this Agreement, notices and all other communications provided for herein shall be in writing and shall be deemed to have been duly given when received by or tendered to Employee or Employer, as applicable, by pre-paid courier or by United States registered or certified mail, return receipt requested, postage prepaid, addressed as follows: (i) If to Employer, to current corporate headquarters to the attention of the General Counsel of Company. (ii) If to Employee, to his last known personal residence.

 

4.3.      This Agreement shall be governed in all respects by the laws of the State of New York, excluding any conflict-of-law rule or principle that might refer to the laws of another State or country.

 

4.4.      No failure by either party hereto at any time to give notice of any breach by the other party of, or to require compliance with, any condition or provision of this Agreement shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time.

 

4.5.      It is a desire and intent of the parties that the terms, provisions, covenants, and remedies contained in this Agreement shall be enforceable to the fullest extent permitted by law. If any such term, provision, covenant, or remedy of this Agreement or the application thereof to any person, association, or entity or circumstances shall, to any extent, be construed to be invalid or unenforceable in whole or in part, then such term, provision, covenant, or remedy shall be construed in a manner so as to permit its enforceability under the applicable law to the fullest extent permitted by law. In any case, the remaining provisions of this Agreement or the application thereof to any person, association, or entity or circumstances other than those to which they have been held invalid or unenforceable, shall remain in full force and effect.

 

4.6.      This Agreement shall be binding upon and inure to the benefit of Employer and any other person, association, or entity which may hereafter acquire or succeed to all or substantially all of the business or assets of Employer by any means whether direct or indirect, by purchase, merger, consolidation, or otherwise. Employee's rights and obligations under this Agreement are personal and such rights, benefits, and obligations of Employee shall not be voluntarily or involuntarily assigned, alienated, or transferred, whether by operation of law or otherwise, without the prior written consent of Employer, other than in the case of death or incompetence of Employee.

 

4.7.      This Agreement replaces and merges any previous agreements and discussions pertaining to the subject matter covered herein. This Agreement constitutes the entire agreement of the parties with regard to such subject matter, and contains all of the covenants, promises, representations, warranties, and agreements between the parties with respect such subject matter. Each party to this Agreement acknowledges that no representation, inducement, promise, or agreement, oral or written, has been made by either party with respect to such subject matter, which is not embodied herein, and that no agreement, statement, or promise relating to the employment of Employee by Employer that is not contained in this Agreement shall be valid or binding. Any modification of this Agreement will be effective only if it is in writing and signed by each party whose rights hereunder are affected thereby, provided that any such modification must be authorized or approved by the Board of Directors of Employer.

 

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IN WITNESS WHEREOF, Employer and Employee have duly executed this Agreement as of the Effective Date.

 

American Education Center Inc.  
   
/s/ Max Chen  
Max Chen, President  
   
EMPLOYEE  
   
/s/ Hinman Au  
Hinman Au  

 

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Exhibit 10.2

 

EMPLOYMENT AGREEMENT

 

This Employment Agreement ("Agreement") is entered into by and between American Education Center, Inc, a Nevada company ("Employer"), and Max Chen ("Employee"), to be effective on this 1st day of August, 2014 (the "Effective Date").

 

WHEREAS, Employer is desirous of employing Employee pursuant to the terms and conditions and for the consideration set forth in this Agreement, and Employee is desirous of entering the employ of Employer pursuant to such terms and conditions and for such consideration.

 

NOW, THEREFORE, for and in consideration of the mutual promises, covenants, and obligations contained herein, Employer and Employee agree as follows:

 

ARTICLE 1: EMPLOYMENT AND DUTIES:

 

1.1.   Employer agrees to employ Employee, and Employee agrees to be employed by Employer, beginning as of the Effective Date and continuing until July 31, 2015, and for additional consecutive one year periods thereafter (the "Term") absent termination as provided herein and subject to the other terms and conditions of this Agreement.

 

1.2.   Beginning August 1st, 2014, Employee shall be employed as President of Employer. Employee agrees to serve in the assigned position and to perform diligently and to the best of Employee's abilities the duties and services appertaining to such position as determined by Employer, as well as such additional or different duties and services appropriate to such position which Employee from time to time may be reasonably directed to perform by Employer. Employee shall at all times comply with and be subject to such policies and procedures as Employer may establish from time to time.

 

1.3.   Employee shall, during the period of Employee's employment by Employer, devote Employee's full business time, energy, and best efforts to the business and affairs of Employer. The foregoing notwithstanding, the parties recognize and agree that Employee may engage in passive personal investments and other business activities, which do not conflict with the business and affairs of the Employer or interfere with Employee's performance of his duties hereunder.

 

1.4.   Employee acknowledges and agrees that Employee owes a fiduciary duty of loyalty, fidelity and allegiance to act at all times in the best interests of the Employer and to do no act which would intentionally injure Employer's business, its interests, or its reputation. Employee agrees that Employee shall not knowingly become involved in a conflict of interest with Employer, or its affiliates, or upon discovery thereof, allow such a conflict to continue, except as approved by a majority of independent members of Employer’s Board of Directors.

 

ARTICLE 2: COMPENSATION AND BENEFITS:

 

2.1.   Employee's initial base salary (the “Salary”) shall be $3,000.00 per month which shall be paid in accordance with Employer's standard payroll practice.

 

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2.2.   From and after the Effective Date, Employer shall pay, or reimburse Employee, for all ordinary, reasonable and necessary expenses which Employee incurs in performing his duties under this Agreement including, but not limited to, travel, entertainment, education, professional dues and subscriptions, and all dues, fees and expenses associated with membership in various professional, business and civic associations and societies of which Employee's participation is in the best interest of Employer.

 

2.3.   While employed by Employer, Employee shall be allowed to participate, on the same basis generally as other employees of Employer, in all general employee benefit plans and programs, including improvements or modifications of the same, which on the effective date or thereafter are made available by Employer to all or substantially all of Employer's employees. Such benefits, plans, and programs may include, without limitation, medical, health, and dental care, life insurance, disability protection, and qualified retirement plans. Except as specifically provided herein, nothing in this Agreement is to be construed or interpreted to provide greater rights, participation, coverage, or benefits under such benefit plans or programs than provided to employees pursuant to the terms and conditions of such benefit plans and programs.

 

2.4.   Employer may withhold from any compensation, benefits, or amount payable under this Agreement all federal, state, city, or other taxes as may be required pursuant to any law or governmental regulation or ruling.

 

ARTICLE 3: TERMINATION PRIOR TO EXPIRATION OF TERM AND EFFECTS OF SUCH TERMINATION:

 

3.1.   Employee's employment with Employer shall be terminated (i) upon the death of Employee, or (ii) upon Employee's permanent disability (permanent disability being defined as Employee's physical or mental incapacity to perform his usual duties as an employee with such condition to remain continuously and permanently for a period of 90 days).

 

3.2.   If Employee's employment is terminated by reason of a "Voluntary Termination" (as hereinafter defined), the death of Employee, or by the Employer for "Cause" (as hereinafter defined), all future compensation towhich Employee is otherwise entitled and all future benefits for which Employee is eligible shall cease and terminate as of the date of termination as provided in this Section. Employee, or his estate in the case of Employee's death, shall be entitled to base salary through the date of such termination and shall be entitled to any individual bonuses or individual incentive compensation not yet paid but due under Employer's plans but shall not be entitled to any other payments by or on behalf of Employer except for those which may be payable pursuant to the terms of Employer's employee benefit plans (as hereinafter defined). For purposes of this Section 3.2, a "Voluntary Termination" of the employment relationship by Employee prior to expiration of the Term shall be a termination of employment in the sole discretion of and at the election of Employee, other than (i) a termination of Employee's employment because of a material breach by Employer of any material provision of this Agreement which remains uncorrected for thirty (30) days following written notice of such breach by Employee to Employer or (ii) a termination of Employee's employment within six (6) months of a material reduction in Employees' rank or responsibility with Employer. For purposes of this Section 3.2, the term "Cause" shall mean any of (i) Employee's gross negligence or willful misconduct in the performance of the duties and services required of Employee pursuant to this Agreement; (ii) Employee's final conviction of a felony; or (iii) Employee's material breach of any material provision of this Agreement which remains uncorrected for thirty (30) days following written notice to Employee by Employer of such breach.

 

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3.3.   If Employee's employment is terminated for any reason other than as described in Section2 3.1 or 3.2 above during the Term, Employer shall pay to Employee a severance benefit consisting of a single lump sum number of shares of common stock of the Company equal to one year Salary due to Employee valued at average trading price of past thirty days prior to the termination date. Such severance benefit shall be paid no later than sixty (60) days following Employee's termination of employment. Employee shall not be under any duty or obligation to seek or accept other employment following a termination of employment pursuant to which severance benefit payments under this Section 3.3 are owing and the amounts due Employee pursuant to this Section 3.3 shall not be reduced or suspended if Employee accepts subsequent employment or earns any amounts as a self-employed individual. Employee's rights under this Section 3.3 are Employee's sole and exclusive rights against the Employer or its affiliates and the Employer's sole and exclusive liability to Employee under this Agreement, in contract, tort or otherwise, for the termination of his employment relationship with Employer.

 

ARTICLE 4: MISCELLANEOUS:

 

4.1.   For purposes of this Agreement, (i) the terms "affiliates" or "affiliated" means an entity who directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with Employer or in which Employer has a 50% or more equity interest, and (ii) any action or omission permitted to be taken or omitted by Employer hereunder shall only be taken or omitted by Employer upon the express authority of the Board of Directors of Employer or of any Committee of the Board to which authority over such matters may have been delegated.

 

4.2.   For purposes of this Agreement, notices and all other communications provided for herein shall be in writing and shall be deemed to have been duly given when received by or tendered to Employee or Employer, as applicable, by pre-paid courier or by United States registered or certified mail, return receipt requested, postage prepaid, addressed as follows: (i) If to Employer, to current corporate headquarters to the attention of the General Counsel of Company. (ii) If to Employee, to his last known personal residence.

 

4.3.   This Agreement shall be governed in all respects by the laws of the State of New York, excluding any conflict-of-law rule or principle that might refer to the laws of another State or country.

 

4.4.   No failure by either party hereto at any time to give notice of any breach by the other party of, or to require compliance with, any condition or provision of this Agreement shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time.

 

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4.5.   It is a desire and intent of the parties that the terms, provisions, covenants, and remedies contained in this Agreement shall be enforceable to the fullest extent permitted by law. If any such term, provision, covenant, or remedy of this Agreement or the application thereof to any person, association, or entity or circumstances shall, to any extent, be construed to be invalid or unenforceable in whole or in part, then such term, provision, covenant, or remedy shall be construed in a manner so as to permit its enforceability under the applicable law to the fullest extent permitted by law. In any case, the remaining provisions of this Agreement or the application thereof to any person, association, or entity or circumstances other than those to which they have been held invalid or unenforceable, shall remain in full force and effect.

 

4.6.   This Agreement shall be binding upon and inure to the benefit of Employer and any other person, association, or entity which may hereafter acquire or succeed to all or substantially all of the business or assets of Employer by any means whether direct or indirect, by purchase, merger, consolidation, or otherwise. Employee's rights and obligations under this Agreement are personal and such rights, benefits, and obligations of Employee shall not be voluntarily or involuntarily assigned, alienated, or transferred, whether by operation of law or otherwise, without the prior written consent of Employer, other than in the case of death or incompetence of Employee.

 

4.7.   This Agreement replaces and merges any previous agreements and discussions pertaining to the subject matter covered herein. This Agreement constitutes the entire agreement of the parties with regard to such subject matter, and contains all of the covenants, promises, representations, warranties, and agreements between the parties with respect such subject matter. Each party to this Agreement acknowledges that no representation, inducement, promise, or agreement, oral or written, has been made by either party with respect to such subject matter, which is not embodied herein, and that no agreement, statement, or promise relating to the employment of Employee by Employer that is not contained in this Agreement shall be valid or binding. Any modification of this Agreement will be effective only if it is in writing and signed by each party whose rights hereunder are affected thereby, provided that any such modification must be authorized or approved by the Board of Directors of Employer.

 

IN WITNESS WHEREOF, Employer and Employee have duly executed this Agreement as of the Effective Date.

 

AMERICAN EDUCATION CENTER INC.  
   
/s/ Hinman Au  
Hinman Au, Chief Executive Officer  
   
EMPLOYEE  
   
/s/ Max Chen  
Max Chen  

 

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Exhibit 10.3

 

Implementation Agreement on the State University of New York (SUNY) 1+3 Program

 

Party A: New Oriental Education & Tech Group GuangZhou Branch

 

Party B: American Education Center Inc.

 

Through friendly negotiation, Part A and Part B agree to conclude the contract on the terms and conditions as set forth below:

 

I. Parties of the Agreement

 

1. Party A, a private educational services provider which is approved by the Bureau of civil administration of Yuexiu district, Guangzhou City, Guangdong Province, is to enter into a corporate agreement with Party B. Part Awill set up classroom and other education facilities for the State University of New York (SUNY) 1+3 Program provided by Part B.

 

2. Party B, an international education service provider approved by U.S. New York State Government, with the authorization from the SUNY, is to promote the State University of New York (SUNY) 1+3 Program, including enrollment andacademiccredits andapplication process related formalities for students, as well as facilitation between Party A and SUNY.

 

II. Content

 

1. In the first year of the program, students will have 16 credits pre-courses of SUNY (including IBT English-Improving Courses) started in September. SUNY will assign their Professors or entrust qualified Chinese Professors to Participate in the teaching work. Language test is required before attending to the United States. The pass of the ESL Admission test, approved by AEC, can still meet the admission qualification of part of the SUNY universities, even without IBT or IELTS scores. Credits earned for the first year will be recognized and transferred into SUNY system. After fulfill the rest credits required, students will be awarded Bachelor Degree at SUNY. Transferring to other US based universities is also available by the end of the second year of the program.

 

2. Every single SUNY 1+3 Program should include student enrollment, admission test, English-Improving courses, student registration, Chinese courses and the U.S. courses, administration management on education, Professors, and students, award ofSUNY’s diploma of Bachelor’s degree,student transfer process, studentsF1 visa preparation, overseas service, and so on. Both Parties should corporate closely, share work, help each other, as well as complete every taskin accordance with plan.

 

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III. Implementation Detail

 

1.The requiredMinimum Class Size: 10 people

 

2.Enrollment and Enrollment propaganda: As responsibility of Party A. The program enrolls eleven grade students who plan not to attend Chinese college entrance examination, high school graduates, and return students. When Party A requires Party B to attend or assist propaganda activities, for example, Party A may need SUNY’s Professors to present in the propaganda activities on July and August in 2015, Party B is supposed to provide assistance. The fee involved will be allocated through later negotiation.

 

3. Admission Test and IBT English-Improving: According to SUNY’s requirements, Party A should hold admission test, and set up the English Improving courses to qualified students who have enrolled in the program. Party B is responsible for coordinating with SUNY.

 

4. SUNY Enrollment Registration: Party B is supposed to prepare SUNY registration files for students who have earned high school diploma and passed IBT with a score equal or higher than 75. Party B is also supposed to coordinate and ensureevery student will have a SUNY registration ID.

 

5. Class Teaching: Both Parties are all responsible for teaching courses in the first year of the program. SUNY’s Professors or qualified Chinese Professors entrusted by SUNY are supposed to teach courses of 16 credit hours. Each program will have at least one SUNY’s Professors in teaching works.

 

6. Administration Management on Education: Education plan should be composed in strict accordance with SUNY’s requirement. Party A is responsible to supervise. If Party A requires, Party B should provide assistance.

 

7. Administration Management on Professors: Party A is responsible to supervise Professors from both sides (Chinese and the U.S.). If Party A requires, Party B should provide assistance. Party A is responsible to provide working and education facilities as well as necessary working permit from Chinese Government to Professors from the U.S. side. Party A should also provide assistance in processing of Visa and lodging of Party B, while flight ticket and subsistence charge should be paid by Party B.

 

8. Administration Management on Students: A responsibility of Party A.

 

9. Credit and SUNY Bachelor Diploma: Students who have passed all required exams and finished SUNY 1+3 Program will receive formal Credit Certification and formal Transcript issued by Party B’s related Chinese Institution, as well as Bachelor Diploma issued by SUNY. Party B is responsible to coordinate all the procedure.

 

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10. Transfer Application: Party B is responsible to prepare transfer application files for students who have earned enough SUNY credits. According to students’ IBT score and academic performance, students can transfer into any one of SUNY’s branch colleges to finish the second year of college.

 

11. Enrollment Registration, Visa, and Visa Preparation: Party A should provide one-to-one Visa guidance that best suited for each student. If Party A requires, Party B should provide assistance.

 

12. Overseas Service: Party B is supposed to provide consulting service for Visa, internship, and employment after students have arrived America.

 

IV. Tuition, Fees, Partnership, Income Allocation, Payment Method, Tax, and Refund

 

Part One Tuition

 

1. The tuition involved in SUNY 1+3 Program will be decided through anther negotiation between both Parties, while Party A is responsible to collect.

 

2. Income Allocation: Party Aclaim 55% of actual income (tuition collected after discount), and Party B 45%. Party A will put 10% of income into the corporation with Tieyi High School. Any income besides tuition will not be allocated to both Parties.

 

3. Payment method: Every year after enrolling students (before Sep 30th), Party A should wire transferentitled income of Party B.Part B will provide officially invoice to Party A within in five business days after receiving Part A’s remittance.

 

4. Both Party A and Party B are responsible for each tax payable.

 

5. Students drop out refund

 

1) Party B must comply with Party A’s drop out refund rules (Party B will depend on the Party A student’s refund proportion to return money.

 

2) Tuition fee is non-refundableafter the courses begin unless the students could provide evidence ofcritical illness (Medical Certificate required).

 

3) Except for student’s illness or giving up studying abroad, Party B promises to let students get offers from State University of New York when students finish one-year courses in China and satisfy SUNY’s academic requirement. If students cannot take courses in SUNY because their academic performance fails SUNY’s basic requirement or other reasons, tuition should be returnedby Party A and Party B proportionally. Also students can choose to restudy one year for free instead (new payment still need students to pay), then Party A and Party B response for the division of labor contract individually.

 

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PART TWO Related Transfer Costs

 

1. Transfer to State University of New York System:

 

1) Transfer cost: the cost depend on State University of New York official website and this cost is non-refundable.

 

2. Transfer to other U.S. universities System:

 

1) Transfer cost: the cost depend on U.S. university official website and is non-refundable.

 

2) Credit evaluation cost: Credit evaluation provided the third party is needed while transfer to other U.S. universities. The cost is based on officialprice of the third partyand is non-refundable.

 

3. Party A is responsibleother services except for the transfer service mentioned above. Party A charges for these services exclusively.

 

4. Other costs: Students pay for the costs to related organization such as IBT exam cost, passport cost, consulate visa and service cost, notary fee and so on.

 

V. The Term of Partnership

 

The contract shall come into effect as soon as it is duly signed by both parties and shall remain effective for two years. Extended contract could be signed by both Part A and Parted 3 months before the expiration.

 

VI . Contract Modify

 

If the contract needs any changes or revisions, Party A and Party B should negotiate together and give a Written Supplementary Agreement; Written Supplementary Agreement has the same force of law as this contract.

 

VII . The Contract Termination and Force Majeure

 

1. After the expiration of the agreement, the contract shall automatically terminate.

 

2. Because of Force Majeure or other unavoidable factors which are unforeseen, unavoidable or insurmountable, and which prevent total or partial performance by either of the Parties, the Party who suffers one of the above shall notify the counterpart without delay and provide details and valid supporting documents within thirty days. If the agreement has to terminate because of force majeure, neither party shall bear the economic responsibilities. In addition, both Parties shall make proper arrangements for participants of this UPP 1+3 program, and do their best to minimize the students’ loss.

 

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VIII . The determination and Compensation of Liability for Breach Contract

 

It shall be regarded as breach if any party cannot implement the agreement and perform its own duties or responsibilities in accordance with the time, manner and requirements stipulated.

 

1. If behaviors of the breach party cause the objective of the agreement not being realized or cause economic loss for the counterpart, the breach party shall bear the relevant compensation duties.

 

2. If the breach behavior or improper behavior of the breach party violates the legal rights or interests of the students in this education program, or the relevant legal rights or interests of related organizations in the society, or the laws or government decrees of PRC, the breach party shall undertake the related legal duties independently.

 

3. If the breach behavior or improper behavior of the breach party causes dispute with a third Party and involves the counterpart into the compensation affairs, the Party who has no fault shall have the right to request the breach party (or the party which has improper behaviors) to indemnify the relevant loss.

 

I X . Dispute Settlement

 

1. In the process of agreement implementation, notification of important matters by one Party to the other shall be based on the content of the confirmation letter.

 

2. Any dispute in the implementation of the agreement shall first be resolved through negotiation by the two Parties.

 

3. As to disputes which cannot be solved through negotiation, both sides may appeal to the Court in Guangzhou, China.

 

4. The contract is applicable to the law in the People's Republic of China.

 

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  X.Others

 

1. If any party of the contract finds any commercial bribery behavior among staff, this party can report to the other side. Party A auditing and supervisory Department reporting phone number: 010-62605388; reporting email: wubijubao@xdf.cn; Party B reporting phone number: ________.

 

2. The contract has six pages and four copies in total. Party A and Party B shall hold two copies respectively and each copy has equal legal effects. The contract shall become effective as soon as it signed (stamp) by both parties.

  

Part A: New Oriental Education & Tech GroupGuangZhou Branch  

  

Representative:    

 

Date:    

  

Part B:   American Education Center    

  

Representative:    

 

Date:      

 

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Exhibit 10.4  

 

 

 
 

 

 

 
 

 

 

 
 

 

 

 
 

 

 

 
 

 

 

 
 

 

 

 
 

 

 

 
 

 

 

 
 

 

 

 

 

Exhibit 14.1

 

AMERICAN EDUCATION CENTER, INC.

a Nevada corporation

________________________________

Code of Ethics

 

American Education Center, Inc. (the “Company”) is committed to the highest standards of ethical conduct. This Code of Ethics (the “Code”) summarizes the basic principles and standards of conduct to help ensure compliance with the laws and regulations that apply to our business. The Code applies to directors, officers and employees of the Company. Therefore, all directors, officers and employees are expected to read and understand the Code, uphold these standards in day-to-day activities, comply with all applicable policies and procedures, and ensure that all agents and independent contractors are aware of, understand and adhere to these standards.

 

The Company is committed to continuously reviewing and updating its policies and procedures. The Code supersedes all other such codes, policies, procedures, instructions, practices, rules or written or verbal representations to the extent they are inconsistent.

 

Please read this statement carefully and then sign it where indicated if you understand and agree to it. The Compliance Officer (as defined below) will maintain this acknowledgement with the Company's corporate records.

 

1. ETHICAL CONDUCT . You must adhere to, advocate and promote honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships.

 

2. COMPLIANCE . You must respect and comply with applicable laws, rules and regulations of the U.S. and other countries, and the states, counties, cities and other jurisdictions in which the Company conducts business.

 

3. PUBLIC COMPANY REPORTING . As a public company, the Company’s filings with the SEC must be full, fair, accurate, timely, and include understandable disclosure in reports and documents that the Company files with or submits to the Securities and Exchange Commission and in other public communications made by the Company. Whether or not you are directly involved in that process, you have several responsibilities:

 

· Depending upon your position, you may be called upon to provide information to assure that our public reports are complete, fair and understandable. The Company expects you to take this responsibility very seriously and to provide prompt, full and accurate answers to inquiries related to its public disclosure requirements.
· The Company’s books, records, accounts and financial statements must be maintained in reasonable detail, must appropriately reflect its transactions and must conform both to applicable legal requirements and to the Company's system of internal controls. Unrecorded or "off the books" funds or assets should not be maintained unless permitted by applicable law or regulation and disclosed to and approved by the Chief Financial Officer.
· Additionally, records should always be retained or destroyed according to the Company’s record retention practices. In accordance with those practices, in the event of litigation or governmental investigation, please consult the Compliance Officer immediately.
· The Company’s public reports must fairly, completely, and accurately reflect Company operations. If you believe they do not, you have a responsibility to bring your concerns to the Company's attention by reporting it to your manager, the Chief Financial Officer or in the manner described in paragraph 5 below.

 

 
 

 

4. CONFLICTS OF INTEREST . You should avoid actual or apparent conflicts of interest with the Company. A "conflict of interest" exists whenever your private interests interfere or conflict in any way (or even appear to interfere or conflict) with the Company's interests. A conflict of interest can arise when you take actions or have interests that may make it difficult to perform your work for us objectively and effectively. Conflicts of interest may also arise when you, or members of your family, receive improper personal benefits as a result of your position with the Company, regardless of from where those benefits are received.

 

A conflict of interest may exist (i) if you work simultaneously for one of the Company’s competitors, customers or suppliers, even as a consultant or board member (a conflict may exist if a member of your immediate family works for a competitor, customer or supplier), or (ii) if you receive any form of compensation (including loans or gifts other than de minimis gifts) from any person with whom the Company does business or own an undisclosed interest in any supplier to the Company (other than an interest of less than 1% in a public company).

 

In general, the best policy is to avoid any direct or indirect business connection with the Company’s customers, suppliers or competitors, except on its behalf. You must report all potential conflicts to the Audit Committee or the Board of Directors, as applicable, and can proceed only if the relationship is approved in writing by the Audit Committee or the Board of Directors. Please raise any questions about whether a situation is a conflict of interest with the Compliance Officer or the Chief Financial Officer.

 

5. REPORTING AND TREATMENT OF VIOLATIONS . If you (i) are concerned about any accounting or auditing matters or (ii) believe or are concerned that anyone connected with the Company may have or is about to violate this Code or has committed or plans to take any illegal or unethical action in connection with the Company's business, you must promptly bring the matter to the attention of the Compliance Officer, the Chief Financial Officer or the Board of Directors. You should not accept any direction by your supervisor that contradicts these policies. To assist in the response to or investigation of the alleged violation, the report should contain as much specific information as possible to allow for proper assessment of the nature, extent and urgency of the alleged violation.

 

6 . CONSEQUENCES OF VIOLATIONS . If a violation is substantiated, the Board of Directors may impose such sanctions or take such actions as it deems appropriate, including, but not limited to:

 

· disciplinary action (including, without limitation, censure, re-assignment, demotion, suspension or termination);

 

· pursuit of any and all remedies available to the Company for any damages or harm resulting from a violation, including injunctive relief; and

 

· referral of matters to appropriate legal or regulatory authorities for investigation and prosecution.

 

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7. REQUEST FOR WAIVER AND CHANGES IN CODE . The Board of Directors must approve any consent or waiver with respect to the Code. Any waiver (including an implicit waiver) that constitutes a material departure from a provision of this Code shall be publicly disclosed on a timely basis, to the extent required by the SEC or other rules and regulations. In addition, any amendments to this Code (other than technical, administrative or other non-substantive amendments) shall be publicly disclosed on a timely basis, to the extent required by applicable SEC rules or other rules and regulations.

 

8. CONTACT INFORMATION . For questions regarding the Company's Code of Ethics or reporting potential violations to this Code of Ethics, you may contact the Compliance Officer or any member of the Board of Directors as you deem appropriate.

 

Contact information for the Compliance Officer is as follows:

 

----------------, Compliance Officer

Telephone: (---)

E-mail:

 

By Mail — You may identify yourself or send your information anonymously:

 

American Education Center, Inc.

 

Attention: ------------------------------, Compliance Officer

 

Please indicate that you have received, read and will abide by this Code by signing your name and dating the acknowledgement below and returning it promptly to the Company.

 

I certify that I have carefully read this Code of Ethics and will comply with its terms and conditions.

 

   
  (Signature)
   
   
  (Print Name)

 

   
  (Date)

 

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Exhibit 23.1

 

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

We hereby consent to the inclusion in this registration statement on Form S-1 of our report dated December 8, 2014 relating to the consolidated financial statements of America Education Center, Inc. and Subsidiary as of December 31, 2013 and 2012 and for the years then ended.

 

We also consent to the reference to our firm under the caption “Experts” in such registration statement.

 

/s/ Wei, Wei & Co., LLP

Flushing, New York

December 12, 2014