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As submitted to the Securities and Exchange Commission on December 11, 2018
Registration No. 333-[•]​
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM F-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
Asia Times Holdings Limited
(Exact name of registrant as specified in its charter)
British Virgin Islands
6531
Not Applicable
(State or other jurisdiction of
incorporation or organization)
(Primary Standard Industrial
Classification Code Number)
(I.R.S. Employer
Identification Number)
Room 3803,
Dachong International Centre, 39 Tonggu Road
Nanshan district, Shenzhen, China
(+86) 0755-8695-0818
(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)
Hunter Taubman Fischer & Li LLC
1450 Broadway, 26 th Floor
New York, NY 10018
(212) 530-2206
(Name, address, including zip code, and telephone number, including area code, of agent for service)
With a Copy to:
Ying Li, Esq.
Guillaume de Sampigny, Esq.
Hunter Taubman Fischer & Li LLC
1450 Broadway, 26 th Floor
New York, NY 10018
(212) 530-2206
William S. Rosenstadt, Esq.
Mengyi “Jason” Ye, Esq.
Ortoli Rosenstadt LLP
366 Madison Avenue, 3rd Floor
New York, NY 10017
(212) 588-0022
Approximate date of commencement of proposed sale to the public: Promptly after the effective date of this registration statement.
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 check the following box: ☒
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 an emerging growth company as defined in Rule 405 of the Securities Act of 1933.
Emerging growth company ☒
If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. ☐
CALCULATION OF REGISTRATION FEE
Title of Each Class of Securities to Be Registered
Amount to
Be Registered
Proposed Maximum Offering
Price per Share
Proposed Maximum Aggregate
Offering Price
Amount of
Registration Fee
Ordinary Shares, par value US$0.001 per share (1)(2)
5,000,000 4.00 $ 20,000,000 $ 2,424
Underwriters’ warrants (3)
Ordinary Shares underlying Underwriters’ warrants (2)(4)
325,000 4.00 $ 1,300,000 $ 157.56
Total 5,325,000 4.00 $ 21,300,000 $ 2,581.56
(1)
There is no current market for the securities or price at which the shares are being offered. Estimated solely for the purpose of calculating the amount of the registration fee pursuant to Rule 457(a) under the Securities Act of 1933, as amended (the “Securities Act”).
(2)
Pursuant to Rule 416 under the Securities Act, there is also being registered hereby such indeterminate number of additional Ordinary Shares of the Registrant as may be issued or issuable because of stock splits, stock dividends, stock distributions, and similar transactions.
(3)
No fee required pursuant to Rule 457(g) of the Securities Act.
(4)
Represents Underwriter’s warrants to purchase up to an aggregate of 6.5% of the Ordinary Shares sold in the offering, at an exercise price equal to 100% of the Public Offering Price. As estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(g) under the Securities Act, the proposed maximum aggregate offering price of the Underwriter’s warrants is $4.00. The Underwriter’s warrants are exercisable commencing from the date of issuance, for a period of 5 years from the issuance date.
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, as amended, or until the registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to such Section 8(a), may determine.

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The information in this prospectus is not complete and may be changed. We may not sell the securities until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell these securities and we are not soliciting any offer to buy these securities in any jurisdiction where such offer or sale is not permitted.
As submitted to the Securities and Exchange Commission on December 11, 2018
SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS DATED [           ], 2018
2,000,000 Ordinary Shares
(minimum offering amount)
5,000,000 Ordinary Shares
(maximum offering amount)
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Asia Times Holdings Limited
This is an initial public offering of ordinary shares of Asia Times Holdings Limited. We are offering, on a best effort basis, our ordinary shares, $0.001 par value per share (“Ordinary Shares”).
Prior to this offering, there has been no public market for our Ordinary Shares. We expect the initial public offering price will be $4.00 per Ordinary Share. We are in the process of applying to list our Ordinary Shares and have reserved the symbol “ATIF” for purposes of listing our Ordinary Shares on the NASDAQ Capital Market under the symbol “ATIF.”
Investing in our Ordinary Shares involves a high degree of risk, including the risk of losing your entire investment. See “Risk Factors” beginning on page 9 to read about factors you should consider before buying our Ordinary Shares.
We are an “emerging growth company” as used in the Jumpstart Our Business Startups Act of 2012, and as such, we have elected to take advantage of certain reduced public company reporting requirements for this prospectus and future filings. See “Risk Factors — Risks Related to Our Business” and “Prospectus Summary — Implications of Our Being an (Emerging Growth Company)” on pages 9 and 4 , respectively.
Minimum offering amount
Maximum offering amount
Per ordinary share
Total
Per ordinary share
Total
Initial public offering price
US $4.00
US $8,000,000.00
US $4.00
US $20,000,000.00
Underwriter’s discount and commissions
US $0.26
US $520,000.00
US $0.25
US $1,250,000.00
Proceeds to our company before expenses (1)(2)
US $3.74
US $7,480,000.00
US $3.75
US $18,750,000.00
(1)
We have agreed to pay Boustead Securities LLC (the “Underwriter”) a fee equal to 6.5% of the first 10,000,000 of and 6% of any amount in excess thereof of, the gross proceeds of the offering. We have agreed to grant to the Underwriter warrants equal to 6.5% of the aggregate number of Ordinary Shares sold in the offering. See “Underwriting” in this prospectus for more information regarding our arrangements with the Underwriter.
(2)
The total estimated expenses related to this offering are set forth in the section entitled “Discounts, Commissions and Expenses.”
The Underwriter is selling our Ordinary Shares in this offering on a best efforts basis. The Underwriter is not required to sell any specific number or dollar amount of Ordinary Shares but will use its best efforts to sell the Ordinary Shares offered. One of the conditions to our obligation to sell any securities through the Underwriter is that, upon the closing of the offering, the Ordinary Shares would qualify for listing on the Nasdaq Capital Market.
We do not intend to close this offering unless we sell at least the minimum number of Ordinary Shares, at the price per Ordinary Share set forth above, to result in sufficient proceeds to list our Ordinary Shares on the Nasdaq Capital Market. The offering may terminate on the earlier of  (i) any time after the minimum offering amount of our Ordinary Shares is raised, or (ii) [•] days from the effective date of this prospectus, or the expiration date. If we can successfully raise the minimum offering amount within the offering period, the proceeds from the offering will be released to us after deducting certain escrow fees. The proceeds from the sale of the Ordinary Shares in this offering will be payable to “FinTech Clearing, as Deposit Account Agent for the investors in Asia Times Holdings Limited” and will be deposited in a separate (limited to funds received on behalf of us) non-interest bearing trust bank account until the minimum offering amount is raised. If we do not raise the minimum offering amount of  $8,000,000, we will not conduct a closing of this offering and will return to investors all amounts previously deposited by them in escrow, without interest or deduction.
Neither the Securities and Exchange Commission nor any state securities commission nor any other regulatory body 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.
Prospectus dated [•], 2018.
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About this Prospectus
We and the Underwriter have not authorized anyone to provide any information or to make any representations other than those contained in this prospectus or in any free writing prospectuses prepared by us or on our behalf or to which we have referred you. We take no responsibility for, and can provide no assurance as to the reliability of, any other information that others may give you. This prospectus is an offer to sell only the Ordinary Shares offered hereby, but only under circumstances and in jurisdictions where it is lawful to do so. We are not making an offer to sell these securities in any jurisdiction where the offer or sale is not permitted or where the person making the offer or sale is not qualified to do so or to any person to whom it is not permitted to make such offer or sale. The information contained in this prospectus is current only as of the date on the front cover of the prospectus. Our business, financial condition, results of operations and prospects may have changed since that date.
Through and including, [•] 2019 (the 25 th 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 dealers’ obligation to deliver a prospectus when acting as Underwriter and with respect to their unsold allotments or subscriptions.
Other Pertinent Information
Unless otherwise indicated or the context requires otherwise, references in this prospectus to:

“Affiliated Entities” are to our subsidiaries;

“ATIFL HK” are to the Company’s wholly-owned subsidiary, Asia Times International Finance Limited, a Hong Kong corporation;

“AT Consulting Center” are to Asia Times International Financial Consulting Center, which is owned and operated by Qianhai;

“BVI” are to the “British Virgin Islands”;

“China” or the “PRC” are to the People’s Republic of China, excluding Taiwan and the special administrative regions of Hong Kong and Macau for the purposes of this prospectus only;

“CNNM” are to www.chinacnnm.com, a news and media platform owned and operated by ATIFL HK;

“Huaya”, “Huaya Consultant” or “WFOE” are to Huaya Consultant (Shenzhen) Co., Ltd., a limited liability company organized under the laws of the PRC, which is wholly-owned by ATIFL HK;

“Qianhai” are to Qianhai Asia Times (Shenzhen) International Financial Services Co., Ltd., a limited liability company organized under the laws of the PRC, which we control via a series of contractual arrangements between WFOE and Qianhai;

“shares”, “Shares” or “Ordinary Shares” are to the Ordinary Shares of the Company, par value US$0.001 per share;

“VIE” are to variable interest entity; and

“we”, “us”, or the “Company” or the “Group” are to one or more of Asia Times Holdings Limited (“ATHL”), and its Affiliated Entities, as the case may be.
Our consulting business is conducted by Qianhai, our VIE entity in the PRC, using RMB, the currency of China. Our consolidated financial statements are presented in United States dollars. In this prospectus, we refer to assets, obligations, commitments and liabilities in our consolidated financial statements in United States dollars. These dollar references are based on the exchange rate of RMB to United States dollars, determined as of a specific date or for a specific period. Changes in the exchange rate will affect the amount of our obligations and the value of our assets in terms of United States dollars which may result in an increase or decrease in the amount of our obligations (expressed in dollars) and the value of our assets, including accounts receivable (expressed in dollars).
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PROSPECTUS SUMMARY
The following summary is qualified in its entirety by, and should be read in conjunction with, the more detailed information and financial statements included elsewhere in this prospectus. In addition to this summary, we urge you to read the entire prospectus carefully, especially the risks of investing in our Ordinary Shares, discussed under “Risk Factors,” beginning on page 9 before deciding whether to buy our Ordinary Shares. This prospectus contains certain estimates and information from an industry report (“Frost & Sullivan Report”) commissioned by us and prepared by Frost & Sullivan Inc. (“Frost & Sullivan”), an independent market research firm, regarding our industries and our market positions in China, which have not been independently verified by us, the underwriters or any of their respective affiliates or advisers. The information in such sources may not be consistent with other information compiled in or outside of China.
Overview
Our Company
Since November 2015, through our variable interest entity (“VIE”), Qianhai Asia Times (Shenzhen) International Financial Services Co., Ltd. (“Qianhai”), we have provided consulting services to small and medium-sized enterprises in mainland China. The focus of our consulting business has been to provide comprehensive consulting services designed to help small and medium-sized enterprises become public companies. We generated a total revenue of approximately US$104,000, US$3,635,000, and US$5,308,000 for the fiscal years ended July 31, 2016, 2017, and 2018, respectively. The revenues generated from consulting service were $49,253, $3,469,224, and $5,236,196 for the fiscal years ended July 31, 2016, 2017, and 2018, respectively. Before we are able to provide new clients with personalized going public consulting services, a one-time registration fee is charged to set up the clients’ accounts and profiles in our system. The revenue generated from the registration fee amounted to $54,921, $166,147, and $71,695 for the fiscal years ended July 31, 2016, 2017, and 2018, respectively.
Beginning in August 2018, to complement and facilitate the growth of our consulting services, we launched AT Consulting Center to provide financial consulting services in Shenzhen, and in September, 2018, we acquired www.chinacnnm.com (“CNNM”), a news and media website focused on distributing financial news and information. Although upfront capital and human investments are required, we believe positive synergies can be generated by effectively integrating these two new business ventures with our existing consulting services, and we expect they will contribute to our growth in the long run.
We have experienced substantial growth since our inception in 2015. Currently, all our consulting clients are located in mainland China, but our goal is to become an international consulting company with clients and offices throughout Asia.
Industry Background
The PRC economy has grown significantly since the PRC government introduced economic reforms in the late 1970s. This growth has accelerated since China entered the World Trade Organization in 2001. The China capital market has experienced rapid growth ever since the global financial crisis occurred in late 2008. PRC domestic companies are looking for opportunities in China as well as abroad to increase their presence in the global market. It is expected that financing activities such as mergers and acquisitions, and initial public offerings, will become more prosperous than before. Financial consultancy services are particularly important in these kind of transactions as consultants can assist their clients with strategy planning and other professional services. The financial consultancy market has been growing rapidly in recent years driven by factors including rising prosperous M&A and financing activities, strong government support in terms of regulating policies and measures, enhanced participation of more parties and growing awareness of the importance of financial consultancy by downstream enterprises. Based on expert interviews and primary market research conducted by Frost & Sullivan, it is estimated that, from 2013 to 2017, the overall financial consultancy market in China increased from RMB136.9 billion to RMB257.2 billion at a compound annual growth rate, or CAGR, of 17.1%; and looking forward, it is forecasted that the economy in China will maintain a steady growth momentum over the next 5 years, and by 2022 the financial consultancy market is expected to reach RMB506.0 billion, at a CAGR of 14.2%.
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Competitive Advantages
We believe that the following competitive strengths have contributed to our success and differentiated us from our competitors:

highly qualified professional service team with extensive experience in going public and financial consulting services.

recognition and reputation of our services achieved from our previous success helping our clients going public;

established long-term professional relationships with a group of well-known third party professional providers both domestically and in the U.S.; and

Established long term cooperation relationships with local chambers of commerce and associations.
Growth Strategies
Our goal is to become a leading consulting services enterprise that provides a full range of consulting services to its clients in order to meet the growing and evolving needs of small to medium-sized companies in Asia.
Our primary strategies to achieve our goal include:

to attract and recruit highly qualified professionals to join our team;

to expand our consulting service from U.S.-based markets and exchanges to include Chinese domestic exchanges and the Hong Kong Stock Exchange; and

to invest in new complementary business ventures to facilitate the growth of our consulting services business and create more sources of revenues.
Corporate Information
Our principal executive offices are located at Room 3803, Dachong International Centre, 39 Tonggu Road, Nanshan District, Shenzhen City, Guangdong Province, China, and our telephone number is (+86) 0755-8695-0818. We maintain a website at www.atifchina.com. Our website or any other website does not constitute a part of this prospectus.
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Corporate Structure
The following diagram illustrates the corporate structure of the Company upon completion of our IPO based on a proposed maximum number of 5,000,000 ordinary shares being offered. For more detail on our corporate history please refer to “Business — Corporate History and Structure”.
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Implications of Our Being an “Emerging Growth Company”
As a company with less than $1.07 billion in revenue during our last fiscal year, we qualify as an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act. An “emerging growth company” may take advantage of reduced reporting requirements that are otherwise generally applicable to public companies. In particular, as an emerging growth company, we:

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

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, which is commonly referred to as “compensation discussion and analysis”;

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 the Sarbanes-Oxley Act of 2002;

are not required to obtain a non-binding advisory vote from our shareholders 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;

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

will not be required to conduct an evaluation of our internal control over financial reporting until our second annual report on Form 20-F following the effectiveness of our initial public offering.
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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.
Under the JOBS Act, we may take advantage of the above-described 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, as amended, herein referred to as the Securities Act, or such earlier time that we no longer meet the definition of an emerging growth company. The JOBS Act provides that we would cease to be an “emerging growth company” if we have more than $1.07 billion in annual revenues, have more than $700 million in market value of our Ordinary Share held by non-affiliates, or issue more than $1 billion in principal amount of non-convertible debt over a three-year period.
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THE OFFERING
Ordinary Shares outstanding
50,000,000 Ordinary Shares
Ordinary Shares offered by us
A minimum of 2,000,000 Ordinary Shares and a maximum of 5,000,000 Ordinary Shares
Best Efforts
The Underwriter is selling our Ordinary Shares on a “best efforts” basis. Accordingly, the Underwriter has no obligation or commitment to purchase any securities. The Underwriter is not required to sell any specific number of dollar amount of Ordinary Shares but will use its best efforts to sell the Ordinary Shares offered.
Ordinary Shares to be outstanding immediately after completion of this offering:
52,000,000 Ordinary Shares if the Ordinary Shares are offered and sold at the minimum offering amount in this offering; or
55,000,000 Ordinary Shares if the Ordinary Shares are offered and sold at the maximum offering amount in this offering.
Price per Ordinary Share
$4.00
Offering Period
The Ordinary Shares are being offered for a period of  [•] days commencing on the date of this prospectus. If the minimum offering amount is not raised within [•] days from the date of this prospectus, all subscription funds from the escrow account will be returned to investors promptly without interest or deduction of fees. The offering may close or terminate, as the case may be, on the earlier of  (i) any time after the minimum offering amount of our Ordinary Shares is raised, or (ii) [•] days from the date of this prospectus although we retain the right to terminate the offering prior to the expiration of the [•]-day period. If we raise the minimum offering amount within the offering period, the proceeds from the offering will be released to us.
Escrow Account
The gross proceeds from the sale of the Ordinary Shares in this offering will be deposited in a non-interest bearing escrow account maintained by the deposit account agent, Fintech Clearing, LLC (the “Deposit Account Agent”). The Deposit Account Agent is affiliated with the Underwriter, as the Deposit Account Agent is under the same indirect common ownership as the Underwriter. All checks will be deposited directly into the escrow account and all wire transfers will be wired directly to the escrow account at Pacific Mercantile Bank. The funds will be held in escrow until the Deposit Account Agent has advised us and the escrow agent that it has received a minimum of  $8,000,000, the minimum offering, in cleared funds. If we do not receive the minimum of  $8,000,000 by [•], 2019, all funds will be returned to purchasers in this offering on the next business day after the termination of the offering, without charge, deduction or interest. Prior to [•], 2019, in no event will funds be returned to you unless the offering is terminated. You will only be entitled to receive a
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refund of your subscription price if we do not raise a minimum of  $8,000,000 by [•], 2019. No interest will be paid either to us or to you. See “Underwriting — Deposit of Offering Proceeds.”
Listing
We are in the process of applying to list our Ordinary Shares on the NASDAQ Capital Market under the symbol “ATIF.”
Transfer Agent
Transhare Corporation
Use of proceeds
We intend to use the proceeds from this offering to for working capital and general corporate purposes, including the expansion of our business. See “Use of Proceeds” on page 33 for more information.
Risk factors
The Ordinary Shares offered hereby involve a high degree of risk. You should read “Risk Factors,” beginning on page 9 for a discussion of factors to consider before deciding to invest in our Ordinary Shares.
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Summary Financial Data
The following summary consolidated financial data for the years ended July 31, 2018 and 2017, has been derived from our audited consolidated financial statements included elsewhere in this prospectus.
Our consolidated financial statements are prepared and presented in accordance with the generally accepted accounting principles in the United States of America, or U.S. GAAP. Our historical results are not necessarily indicative of results expected for future periods. You should read this Summary Consolidated Financial Data section together with our audited consolidated financial statements and the related notes and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included elsewhere in this registration statement.
The following table presents our summary consolidated statement of comprehensive income for the years ended July 31, 2018 and 2017.
For the Years Ended
July 31,
2018
2017
Summary Consolidated Statement of Comprehensive Income:
Revenue
$ 5,307,891 $ 3,635,371
Operating expenses
Selling expenses
1,773,159 2,301,567
General and administrative expenses
807,053 408,739
Total operating expenses
2,580,212 2,710,306
Other income (expense)
Other expense, net
(63,980 ) (67,080 )
Income before income taxes
2,663,699 857,985
Provision for income taxes
716,816 217,025
Net income
$ 1,946,883 $ 640,960
The following table presents our summary consolidated balance sheet data as of July 31, 2018 and 2017.
As of July 31,
2018
2017
Summary Consolidated Balance Sheet Data:
Cash and cash equivalents
$ 72,965 $ 144,813
Other assets
3,673,789 1,127,688
Total assets
3,746,754 1,272,501
Total liabilities
1,731,964 1,846,642
Total shareholders’ equity (deficit)
$ 2,014,790 $ (574,141 )
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RISK FACTORS
An investment in our Ordinary Shares involves a high degree of risk. Before deciding whether to invest in our Ordinary Shares, you should consider carefully the risks described below, together with all of the other information set forth in this prospectus, including the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operation” and our consolidated financial statements and related notes. If any of these risks actually occurs, our business, financial condition, results of operations or cash flow could be materially and adversely affected, which could cause the trading price of our Ordinary Shares to decline, resulting in a loss of all or part of your investment. The risks described below and in the documents referenced above are not the only ones that we face. Additional risks not presently known to us or that we currently deem immaterial may also affect our business. You should only consider investing in our Ordinary Shares if you can bear the risk of loss of your entire investment.
Risks Related to Our Business
We have a limited operating history and are subject to the risks encountered by early-stage companies.
We have only been in business since November 2015. We launched AT Consulting Center, which offers financial and advisory services to our clients in August 2018 and acquired CNNM, a media and news platform, in September 2018. We did not generate any revenue until the year ended July 31, 2016. As a start-up company, our business strategies and model are constantly being tested by the market and operating results, and we pursue to adjust our allocation of resources accordingly. As such, our business may be subject to significant fluctuations in operating results in terms of amounts of revenues and percentages of total with respect to the business segments.
We are, and expect for the foreseeable future to be, subject to all the risks and uncertainties, inherent in a new business and in an industry which is in the early stages of development in China. As a result, we must establish many functions necessary to operate a business, including expanding our managerial and administrative structure, assessing and implementing our marketing program, implementing financial systems and controls and personnel recruitment. Accordingly, you should consider our prospects in light of the costs, uncertainties, delays and difficulties frequently encountered by companies with a limited operating history. These risks and challenges are, among other things:

we operate in an industry that is or may in the future be subject to increasing regulation by various governmental agencies in China;

we may require additional capital to develop and expand our operations which may not be available to us when we require it;

our marketing and growth strategy may not be successful;

our business may be subject to significant fluctuations in operating results; and

we may not be able to attract, retain and motivate qualified professionals.
Our future growth will depend substantially on our ability to address these and the other risks described in this prospectus. If we do not successfully address these risks, our business would be significantly harmed.
Our historical financial results may not be indicative of our future performance.
Our business has achieved rapid growth since our inception. Our net revenue increased from $104,174 for the period from November 3, 2015 (when we started our consulting business) through July 31, 2016, to $3,635,371 for the year ended July 31, 2017, and $5,307,891 for the year ended July 31, 2018. Our net loss was $1,231,677 for the period from November 3, 2015 through July 31, 2016, and increased to a net income of  $640,960 for the year ended July 31, 2017 and $1,946,883 for the year ended July 31, 2018. However, our historically growth rate and the limited history of operation make it difficult to evaluate our prospects. We may not be able to sustain our historically rapid growth or may not be able to grow our business at all.
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Changes in the U.S. capital markets could make our services less attractive to our clients and adversely affect our business and financial condition.
Our consulting services help our clients based in mainland China to become public companies. We are expanding our consulting services to include Chinese domestic exchanges and the Hong Kong Stock Exchange, but currently, all our former and current clients have chosen to go public in the U.S. We believe this is due to the more flexible rules provided by the U.S. OTC markets and exchanges than the Chinese domestic exchanges, as well as the attractive financing and growth opportunities the U.S. capital market, which has remained relatively stable comparing to the Chinese capital market, are perceived to be able to provide to the Chinese enterprises. As a result, our going public consulting business has flourished since its inception in 2015. However, changes in the U.S. capital markets could make our service less desirable to Chinese enterprise. For example, if the U.S. OTC markets and exchanges make their rules more stringent to Chinese enterprises, then fewer Chinese enterprises will be able to use our consulting services to go public in the U.S., and our business and financial condition will be adversely affected as a result.
A severe or prolonged downturn in the global or Chinese economy could materially and adversely affect our business and our financial condition.
Although the Chinese economy has grown steadily in the past decade, there is considerable uncertainty over the long-term effects of the expansionary monetary and fiscal policies adopted by the People’s Bank of China and financial authorities of some of the world’s leading economies, including the United States and China. There have been concerns over unrest and terrorist threats in the Middle East, Europe and Africa, which have resulted in volatility in oil and other markets. There have also been concerns on the relationship among China and other Asian countries, which may result in or intensify potential conflicts in relation to territorial disputes. Economic conditions in China are sensitive to global economic conditions, as well as changes in domestic economic and political policies and the expected or perceived overall economic growth rate in China. Any severe or prolonged slowdown in the global or Chinese economy may materially and adversely affect our business, results of operations and financial condition.
Because we lack a diversified client base, a severe or prolonged downturn in Chinese economy could materially and adversely affect our business and our financial condition.
Our goal is to become an international business serving clients throughout Asia, but as of the date of this registration statement all our former and current clients are based in mainland China. Accordingly, we do not have a geographically diversified client base, and there will be a potentially devastating effect on our business if the Chinese economy experiences a severe or prolonged downturn.
Failure to maintain or enhance our brand or image could have a material and adverse effect on our business and results of operations.
We believe our “ATIF” brand is associated with a well-recognized, integrated consulting services company in the market that it operates, with comprehensive personalized one-stop consulting services to suit our clients’ needs. Our brand is integral to our sales and marketing efforts. We are in the process of applying for trademark registration for our brand “ATIF” in the PRC, US, and HK. Our continued success in maintaining and enhancing our brand and image depends to a large extent on our ability to satisfy customers’ needs by further developing and maintaining quality of services across our operations, as well as our ability to respond to competitive pressures. If we are unable to satisfy customers’ needs or if our public image or reputation were otherwise diminished, our business transactions with our clients may decline, which could in turn adversely affect our results of operations.
If we cannot manage our growth effectively and efficiently, our results of operations or profitability could be adversely affected.
Our revenue for fiscal year 2018 was $5,307,891, an increase of 46% from $3,635,371 in fiscal year 2017, and an increase of 4995% from $104,174 in fiscal year 2016. We intend to continue to expand our services and operations. For example, to complement and facilitate our consulting services, we launched AT Consulting Center and acquired CNNM in 2018. This expansion has placed, and will continue to place, substantial demands on our managerial, operational, technological and other resources. Our planned
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expansion will also place significant demands on us to maintain the quality of our services to ensure that our brand does not suffer as a result of any deviations, whether actual or perceived, in the quality of our services. In order to manage and support our growth, we must continue to improve our existing operational and administrative systems and our quality control, and recruit, train and retain additional qualified professionals as well as other administrative and sales and marketing personnel, particularly as we expand into new business ventures and launch new business initiatives. We may not be able to effectively and efficiently manage the growth of our operations, recruit and retain qualified personnel and integrate new expansion into our operations. As a result, our quality of service may deteriorate and our results of operations or profitability could be adversely affected.
We may not be successful in implementing important new strategic initiatives, which may have an adverse impact on our business and financial results.
There is no assurance that we will be able to implement important strategic initiatives in accordance with our expectations, which may result in an adverse impact on our business and financial results. Our new strategic initiatives, AT Consulting Center and CNNM, which were launched in 2018, are designed to create growth, improve our results of operations and drive long-term shareholder value. However, our management may lack required experience, knowledge, insight, or human and capital resources to carry out the effective implementation to expand into new spaces outside the financial consulting industry. As such, we may not be able to realize our expected growth, and our business and financial results will be adversely impacted.
Increasing competition within our industry could have an impact on our business prospects.
The financial consulting market is an industry where new competitors can easily enter into since there are no significant barriers to entry. Competing companies may have significantly greater financial and other resources than we have and may offer services that are more attractive to companies seeking funds; increased competition would have a negative impact on both our revenues and our profit margins.
Our results of operations and cash flows may fluctuate due to the non-recurring nature of our going public consulting services provided to our clients.
We generated the bulk of our total revenues from going public consulting services provided to small and medium-sized enterprises in China. Unlike other service businesses that have the potential of retaining their clients for long-term and recurring services, our consulting contractual relationships with our clients usually last for 12 months; there is no recurring business from our clients once they become public companies. Therefore, we face the constant challenge of identifying and recruiting new clients in order to maintain our operations and cash flows, which are difficult for us to predict from year to year.
In addition, even though we screen our prospective clients carefully before entering into service agreements, occasionally we have to discontinue our consulting services due to a variety of unforeseeable reasons such as the client’s shortage in funds, disagreements regarding the going public process, changes in the client’s business and expectations, among others. Due to the fact that our consulting fee is paid on installments, we will not be able to realize the complete contracted amounts under these circumstances, without getting into potentially costly litigations.
As the operator of a website www.chinacnnm.com, we may be subject to damages resulting from unauthorized access or hacking and other cyber risks.
Hacking is the process of attempting to gain or successfully gaining unauthorized access to computer system. As with any website, our website may be subject to hacking regardless of whether we have in place securities systems which limit access to our platform. When a person engages in website hacking, he or she takes control of the website from the website owner. Password hacking is obtaining a user’s secret password from data that has been stored in or transmitted by a computer system. Computer hacking is obtaining access to and viewing, creating or editing material without authorization. Hackers can bring a website down by causing large numbers of users to seek to access the website without the knowledge of the users, which is known as denial of service hacking. Despite our disclaimers, injured parties may seek to obtain damages
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from us for their loss. Thus, in additional to any financial or reputation losses that we may sustain, it is possible that a court or administrative body may hold us liable for damages sustained by others. Any such losses could materially impair our financial condition and our ability to conduct business.
If we fail to hire, train and retain qualified managerial and other employees, our business and results of operations could be materially and adversely affected.
We place substantial reliance on the consulting and financial service industry experience and knowledge of our senior management team as well as their relationships with other industry participants. The loss of the services of one or more members of our senior management could hinder our ability to effectively manage our business and implement our growth strategies. Finding suitable replacements for our current senior management could be difficult, and competition for such personnel of similar experience is intense. If we fail to retain our senior management, our business and results of operations could be materially and adversely affected.
Our consulting service personnel are critical to maintaining the quality and consistency of our services, brand and reputation. It is important for us to attract qualified managerial and other employees who have experience in consulting services and are committed to our service approach. There may be a limited supply of such qualified individuals. We must hire and train qualified managerial and other employees on a timely basis to keep pace with our rapid growth while maintaining consistent quality of services across our operations. We must also provide continuous training to our managerial and other employees so that they are equipped with up-to-date knowledge of various aspects of our operations and can meet our demand for high-quality services. If we fail to do so, the quality of our services may decrease, which in turn, may cause a negative perception of our brand and adversely affect our business.
Any failure to protect our trademarks and other intellectual property rights could have a negative impact on our business.
We believe our trademarks, “ATIF” and “CNNM”, for which we are currently applying for trademark protection, and other intellectual property rights are critical to our success. Any unauthorized use of our trademarks and other intellectual property rights could harm our competitive advantages and business. Historically, China has not protected intellectual property rights to the same extent as the United States, and infringement of intellectual property rights continues to pose a serious risk of doing business in China. Monitoring and preventing unauthorized use are difficult. The measures we take to protect our intellectual property rights may not be adequate. Furthermore, the application of laws governing intellectual property rights in China and abroad is uncertain and evolving, and could involve substantial risks to us. If we are unable to adequately protect our brand, trademarks and other intellectual property rights, we may lose these rights and our business may suffer materially.
As internet domain name rights are not rigorously regulated or enforced in China, other companies may incorporate in their domain names elements similar in writing or pronunciation to the “ATIF” and “CNNM”, trademarks or their Chinese equivalents. This may result in confusion between those companies and our company and may lead to the dilution of our brand value, which could adversely affect our business.
If we fail to maintain an effective system of internal controls over financial reporting, we may not be able to accurately report our financial results or prevent fraud.
We are subject to reporting obligations under the U.S. securities laws. The Securities and Exchange Commission, or the SEC, as required by Section 404 of the Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley Act, adopted rules requiring every public company to include a management report on such company’s internal controls over financial reporting in its annual report, which contains management’s assessment of the effectiveness of the company’s internal controls over financial reporting. As we are an “emerging growth company,” we are expected to first include a management report on our internal controls over financial reporting in our annual report in the second fiscal year end following the effectiveness of our initial public offering. As such, these requirements are expected to first apply to our annual report on Form 20-F for the fiscal year ending on July 31, 2020. Our management may conclude that our internal controls over our financial reporting are not effective. Moreover, even if our management concludes that our internal
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controls over financial reporting are effective, our independent registered public accounting firm may still decline to attest to our management’s assessment or may issue a report that is qualified if it is not satisfied with our internal controls or the level at which our controls are documented, designed, operated or reviewed, or if it interprets the relevant requirements differently from us. Our reporting obligations as a public company will place a significant strain on our management, operational and financial resources and systems for the foreseeable future.
Prior to this offering, we have been a private company with limited accounting personnel and other resources with which to address our internal controls and procedures. We planned to remedy our material weaknesses and other control deficiencies in time to meet the deadline imposed by Section 404 of the Sarbanes-Oxley Act. If we fail to timely achieve or maintain the adequacy of our internal controls, we may not be able to conclude that we have effective internal controls over financial reporting. Moreover, effective internal controls over financial reporting are necessary for us to produce reliable financial reports and are important to help prevent fraud. As a result, our failure to achieve and maintain effective internal controls over financial reporting could result in the loss of investor confidence in the reliability of our financial statements, which in turn could harm our business and negatively impact the trading price of our Ordinary Shares. Furthermore, we anticipate that we will incur considerable costs and devote significant management time and efforts and other resources to comply with Section 404 of the Sarbanes-Oxley Act.
We will incur increased costs as a result of being a public company.
Once we become a public company, we will incur significant legal, accounting and other expenses that we did not incur as a private company prior to this offering. In addition, the Sarbanes-Oxley Act of 2002, as well as new rules subsequently implemented by the SEC and NASDAQ, have required changes in corporate governance practices of public companies. We expect these new rules and regulations to increase our legal, accounting and financial compliance costs and to make certain corporate activities more time-consuming and costly. In addition, we incur ongoing additional costs associated with our public company reporting requirements. We are currently evaluating and monitoring developments with respect to these new rules, and we cannot predict or estimate the amount of additional costs we may incur or the timing of such costs.
Increases in labor costs in the PRC may adversely affect our business and our profitability.
China’s economy has experienced increases in labor costs in recent years. China’s overall economy and the average wages in China are expected to continue to grow. The average wage level for our employees has also increased in recent years. We expect that our labor costs, including wages and employee benefits, will continue to increase. Our consulting service is heavy on labor costs, as the main cost of our business is compensation and benefits for our professionals. Unless we are able to pass on these increased labor costs to our customers by increasing prices for our services, our profitability and results of operations may be materially and adversely affected.
In addition, we have been subject to stricter regulatory requirements in terms of entering into labor contracts with our employees and paying various statutory employee benefits, including pensions, housing fund, medical insurance, work-related injury insurance, unemployment insurance and childbearing insurance to designated government agencies for the benefit of our employees. Pursuant to the PRC Labor Contract Law, or the Labor Contract Law, that became effective in January 2008, its implementing rules that became effective in September 2008 and its amendments that became effective in July 2013, employers are subject to stricter requirements in terms of signing labor contracts, minimum wages, paying remuneration, determining the term of employees’ probation and unilaterally terminating labor contracts. In the event that we decide to terminate some of our employees or otherwise change our employment or labor practices, the Labor Contract Law and its implementing rules may limit our ability to effect those changes in a desirable or cost-effective manner, which could adversely affect our business and results of operations.
As the interpretation and implementation of labor-related laws and regulations are still evolving, we cannot assure you that our employment practice does not and will not violate labor-related laws and regulations in China, which may subject us to labor disputes or government investigations. If we are deemed
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to have violated relevant labor laws and regulations, we could be required to provide additional compensation to our employees and our business, financial condition and results of operations could be materially and adversely affected.
Because we are a BVI company and all of our business is conducted in the PRC, you may be unable to bring an action against us or our officers and directors or to enforce any judgment you may obtain.
We are incorporated in the BVI and conduct our operations primarily in China. Substantially all of our assets are located outside of the United States and the proceeds of this offering will primarily be held in banks outside of the United States. In addition, all of our directors and officers reside outside of the United States. As a result, it may be difficult or impossible for you to bring an action against us or against these individuals in the United States in the event that you believe we have violated your rights, either under United States federal or state securities laws or otherwise, or if you have a claim against us. Even if you are successful in bringing an action of this kind, the laws of the BVI and of China may not permit you to enforce a judgment against our assets or the assets of our directors and officers. See “Enforceability of Civil Liabilities” on page 31 .
PRC regulation of loans to and direct investment in PRC entities by offshore holding companies and governmental control of currency conversion may delay or prevent us from using the proceeds of this offering to make loans or additional capital contributions to our PRC subsidiary and VIE, which could materially and adversely affect our liquidity and our ability to fund and expand our business.
Any funds we transfer to our PRC subsidiary and VIE, either as a shareholder loan or as an increase in registered capital, are subject to approval by or registration with relevant governmental authorities in China. According to the relevant PRC regulations on foreign-invested enterprises, or FIEs, the combined amount of offshore capital contributions and loans cannot exceed the FIE’s approved total investment amount. Any capital contributions to our PRC subsidiary must be filed with MOFCOM or its local counterparts, and registered with a local bank authorized by the State Administration of Foreign Exchange, or SAFE. In addition, (a) any loan provided by us to WFOE, which is a FIE, cannot exceed the difference between its total investment amount and registered capital, and must be registered with SAFE or its local counterparts, and (b) any loan provided by us to our VIE which is a domestic PRC entity, over a certain threshold, must be approved by the relevant government authorities and must be registered with SAFE or its local counterparts. Given that the registered capital and total investment amount of WFOE are currently the same, if we seek to make a capital contribution to WFOE we must first apply to increase both its registered capital and total investment amount, while if we seek to provide a loan to WFOE, we must first increase its total investment amount. Although we currently do not have any immediate plans to utilize the proceeds from this offering to make capital contribution into WFOE or provide any loan to WFOW or to our VIE, if we seek to do so in the future, we may not be able to obtain the required government approvals or complete the required registrations on a timely basis, if at all. If we fail to receive such approvals or complete such registrations, our ability to use the proceeds of this offering and to capitalize our PRC operations may be negatively affected, which could adversely affect our liquidity and our ability to fund and expand our business.
On March 30, 2015, SAFE promulgated the Circular on Reforming the Management Approach Regarding the Foreign Exchange Capital Settlement of Foreign-Invested Enterprises, or SAFE Circular 19. SAFE Circular 19 launched a nationwide reform of the administration of the settlement of the foreign exchange capitals of FIEs and allows FIEs to settle their foreign exchange capital at their discretion, but continues to prohibit FIEs from using the Renminbi fund converted from their foreign exchange capitals for expenditure beyond their business scopes, providing entrusted loans or repaying loans between non-financial enterprises. Violations of these Circulars could result in severe monetary or other penalties. SAFE Circular 19 and relevant foreign exchange regulatory rules may significantly limit our ability to use Renminbi converted from the net proceeds of this offering to fund the establishment of new entities in China by our consolidated affiliates, to invest in or acquire any other PRC companies through our PRC subsidiaries or consolidated affiliates or to establish new consolidated affiliates in the PRC, which may adversely affect our business, financial condition and results of operations.
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Since our President will own at least 71.85% of our Ordinary Shares following the sale of the maximum offering, he will have the ability to elect directors and approve matters requiring shareholder approval by way of resolution of members.
Ms. Qiuli Wang, our President, and Chairman of the Board, is currently the beneficial owner of 39,500,000, or 79% of our outstanding Ordinary Shares, of which 53% are directly held by Tianzhen Investments Limited, an entity 100% owned by Ms. Wang, and the remaining 26% are beneficially owned by Ms. Wang through a proxy agreement entered with Eno Group Limited on September 30, 2018. If we sell the minimum number of Ordinary Shares, Ms. Wang will have the right to vote 75.96% of the Ordinary Shares; if we sell the maximum number of Ordinary Shares, Ms. Wang will have the right to vote 71.82% of the Ordinary Shares. Ms. Wang is expected to have the power to elect all directors and approve all matters requiring shareholder approval without the votes of any other shareholder. She is expected to have significant influence over a decision to enter into any corporate transaction and has the ability to prevent any transaction that requires the approval of shareholders, regardless of whether or not our other shareholders believe that such transaction is in our best interests. Such concentration of voting power could have the effect of delaying, deterring, or preventing a change of control or other business combination, which could, in turn, have an adverse effect on the market price of our Ordinary Shares or prevent our shareholders from realizing a premium over the then-prevailing market price for their Ordinary Shares.
Because we are an “emerging growth company,” we may not be subject to requirements that other public companies are subject to, which could affect investor confidence in us and our Ordinary Shares.
We are an “emerging growth company,” as defined in the JOBS Act, and we intend to take advantage of certain exemptions from disclosure and other requirements applicable to other public companies that are not emerging growth companies including, most significantly, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act for so long as we are an emerging growth company. As a result, if we elect not to comply with such auditor attestation requirements, our investors may not have access to certain information they may deem important. See “Implications of Our Being an Emerging Growth Company” on page 4 .
Risks Relating to Doing Business in China
There are significant uncertainties under the Draft Foreign Investment Law relating to the status of businesses in China controlled by foreign invested entities primarily through contractual arrangements, such as our business.
On January 19, 2015, MOFCOM published a draft of the PRC Law on Foreign Investment (Draft for Comment), or the Draft Foreign Investment Law. At the same time, MOFCOM published an accompanying explanatory note of the Draft Foreign Investment Law, or the Explanatory Note, which contains important information about the Draft Foreign Investment Law, including its drafting philosophy and principles, main content, plans to transition to the new legal regime and treatment of business in China controlled by foreign invested enterprises, or FIEs, primarily through contractual arrangements. The Draft Foreign Investment Law utilizes the concept of  “actual control” for determining whether an entity is considered to be a foreign-invested enterprise, and defines “control” broadly to include, among other things, voting or board control through contractual arrangements.
The Draft Foreign Investment Law proposes significant changes to the PRC foreign investment legal regime and may have a material impact on Chinese companies listed or to be listed overseas. The Draft Foreign Investment Law would regulate FIEs the same way as PRC domestic entities, except for those FIEs that operate in industries deemed to be either “restricted” or “prohibited” in a “negative list.” The Draft Foreign Investment Law also provides that only FIEs operating in industries on the negative list will require entry clearance and other approvals that are not required of PRC domestic entities. As a result of the entry clearance and approvals, certain FIE’s operating in industries on the negative list may not be able to continue to conduct their operations through contractual arrangements. The Draft Foreign Investment Law also provides that entities established in China but controlled by foreign investors will be treated as FIEs, while entities set up outside of China which are controlled by PRC persons or entities, would be treated as domestic entities after completion of market entry procedures. The MOFCOM, and the National Development and Reform Commission, or NDRC, promulgated the Catalogue of Industries for Guiding
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Foreign Investment , or the Catalogue, as amended on March 10, 2015, which came into effect on April 10, 2015, and as further amended on June 28, 2018 and came into effect on July 28, 2018 (the “2018 Catalogue”). According to the 2018 Catalogue, financial consulting services sector in which the Company is currently engaged in business operations, are not deemed to be either “restricted” or “prohibited” in a “negative list.” However, the MOFCOM and NDRC publish new Catalogues from time to time that may change the scope of the “negative list,” and as such it is uncertain whether future Catalogues may re-classify financial consulting services sector in the “negative list.”
There is substantial uncertainty regarding the Draft Foreign Investment Law, including, among others, what the actual content of the law will be as well as the adoption and effective date of the final form of the law. As a result, we cannot assure you that the new Foreign Investment Law, when it becomes effective, will not have a material and adverse effect on our ability to conduct our business through our contractual arrangements.
The Draft Foreign Investment Law, if enacted as proposed, may also materially impact our corporate governance practice and increase our compliance costs. For instance, the Draft Foreign Investment Law imposes stringent ad hoc and periodic information reporting requirements on both foreign investors and the FIE subject to the law. Aside from an investment implementation report and an investment amendment report that are required for each investment and alteration of investment specifics, an annual report is mandatory, and large foreign investors meeting certain criteria are required to report on a quarterly basis. Any company found to be non-compliant with these information reporting obligations may potentially be subject to fines and/or administrative or criminal liabilities, and the persons directly responsible may be subject to criminal liabilities.
Further, if we are deemed to have a non-PRC entity as a controlling shareholder and the MOFCOM re-classifies the financial consulting services sector in the “negative list,” the provisions regarding control through contractual arrangements could reach our VIE arrangement, and as a result Qianhai could become subject to restrictions on foreign investment, which may materially impact the viability of our current and future operations. Specifically, we may be required to modify our corporate structure, change our current scope of operations, obtain approvals or face penalties or other additional requirements, compared to entities which do have PRC controlling shareholders. Substantial uncertainties exist with respect to the enactment timetable, interpretation and implementation of the Draft Foreign Investment Law and how it may impact the viability of our current corporate structure, corporate governance and business operations.
It is uncertain whether we would be considered as ultimately controlled by Chinese parties. All of our outstanding voting securities are currently owned by PRC citizens. It is uncertain, however, if these factors would be sufficient to satisfy the requirements under the Draft Foreign Investment Law. Moreover, the Draft Foreign Investment Law has not taken a position on what actions will be taken with respect to companies currently employing a VIE structure, whether or not these companies are controlled by Chinese parties, while it is soliciting comments from the public on this point. If the enacted version of the Draft Foreign Investment Law mandate further actions, such as MOFCOM market entry clearance or certain restructuring of our corporate structure and operations there may be substantial uncertainties as to whether we can complete these actions in a timely manner, if at all, and our business and financial condition may be materially and adversely affected.
Changes in the policies of the PRC government could have a significant impact upon our ability to operate profitably in the PRC.
Currently, we conduct all of our operations and all of our revenue is generated, in the PRC. Accordingly, economic, political and legal developments in the PRC will significantly affect our business, financial condition, results of operations and prospects. Policies of the PRC government can have significant effects on economic conditions in the PRC and the ability of businesses to operate profitably. Our ability to operate profitably in the PRC may be adversely affected by changes in policies by the PRC government, including changes in laws, regulations or their interpretation that may affect our ability to operate as currently contemplated.
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Because our business is dependent upon government policies that encourage a market-based economy, change in the political or economic climate in the PRC may impair our ability to operate profitably, if at all.
Although the PRC government has been pursuing a number of economic reform policies for more than two decades, the PRC government continues to exercise significant control over economic growth in the PRC. Because of the nature of our business, we are dependent upon the PRC government pursuing policies that encourage private ownership of businesses. Restrictions on private ownership of businesses would affect the securities business in general and businesses using real estate service in particular. We cannot assure you that the PRC government will pursue policies favoring a market-oriented economy or that existing policies will not be significantly altered, especially in the event of a change in leadership, social or political disruption, or other circumstances affecting political, economic and social life in the PRC.
PRC laws and regulations governing our current business operations are sometimes vague and uncertain and any changes in such laws and regulations may impair our ability to operate profitably.
There are substantial uncertainties regarding the interpretation and application of PRC laws and regulations including, but not limited to, the laws and regulations governing our business and the enforcement and performance of our arrangements with customers in certain circumstances. The laws and regulations are sometimes vague and may be subject to future changes, and their official interpretation and enforcement may involve substantial uncertainty. The effectiveness and interpretation of newly enacted laws or regulations, including amendments to existing laws and regulations, may be delayed, and our business may be affected if we rely on laws and regulations which are subsequently adopted or interpreted in a manner different from our understanding of these laws and regulations. New laws and regulations that affect existing and proposed future businesses may also be applied retroactively. We cannot predict what effect the interpretation of existing or new PRC laws or regulations may have on our business.
We are not in compliance with the PRC’s regulations relating to offshore investment activities by PRC residents, and as a result, the Company and its shareholders may be subject to severe penalties if we are not able to remediate the non-compliance.
In July 2014, SAFE promulgated the Circular on Issues Concerning Foreign Exchange Administration Over the Overseas Investment and Financing and Roundtrip Investment by Domestic Residents Via Special Purpose Vehicles, or Circular 37, which replaced Relevant Issues Concerning Foreign Exchange Control on Domestic Residents’ Corporate Financing and Roundtrip Investment through Offshore Special Purpose Vehicles, or Circular 75. Circular 37 requires PRC residents to register with local branches of SAFE in connection with their direct establishment or indirect control of an offshore entity, referred to in Circular 37 as a “special purpose vehicle” for the purpose of holding domestic or offshore assets or interests. Circular 37 further requires amendment to a PRC resident’s registration in the event of any significant changes with respect to the special purpose vehicle, such as an increase or decrease in the capital contributed by PRC individuals, share transfer or exchange, merger, division or other material event. Under these regulations, PRC residents’ failure to comply with specified registration procedures may result in restrictions being imposed on the foreign exchange activities of the relevant PRC entity, including the payment of dividends and other distributions to its offshore parent, as well as restrictions on capital inflows from the offshore entity to the PRC entity, including restrictions on its ability to contribute additional capital to its PRC subsidiaries. Further, failure to comply with the SAFE registration requirements could result in penalties under PRC law for evasion of foreign exchange regulations.
Qiuli Wang, Renyan Ou, Xueqing Liu, Haiyun Liu, Yanru Zhou, and Ronghua Liu (each, a “Beneficial Owner,” and together, the “Beneficial Owners”), who are our beneficial owners and are PRC residents, have not completed the initial foreign exchange registrations. We have requested our shareholders who are Chinese residents to make the necessary applications, filings, and amendments as required under Circular 37 and other related rules. However, we cannot provide any assurances that all of our shareholders who are Chinese residents will comply with our request to make or obtain any applicable registration. Any failure by any of our shareholders who is a PRC resident, or is controlled by a PRC resident, to comply with relevant requirements under these regulations could subject us to fines or sanctions imposed by the PRC government, including restrictions on WFOE’s ability to pay dividends or make distributions to us and on our ability to increase our investment in the WFOE.
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Although we believe that our agreements relating to our structure are in compliance with current PRC regulations, we cannot assure you that the PRC government would agree that these contractual arrangements comply with PRC licensing, registration or other regulatory requirements, with existing policies or with requirements or policies that may be adopted in the future.
We were not in compliance with the PRC’s regulations relating to employees’ social insurance fees for a period from November 2015 to September 2018, and as a result, the Company and its shareholders may be subject to penalties if we are not able to remediate the non-compliance.
Qianhai did not deposit social insurance fees for employees in full since its establishment to September 2018. However, Qianhai has deposited the social insurance fees in full for all the employees in compliance with the relevant regulations since October 2018. Shenzhen social insurance fund administration has issued a statement showing that there is no significant violations of relevant laws and regulations by Qianhai since its establishment. Ronghua Liu and Qiang Chen, shareholders of Qianhai, have signed consent to undertake and guarantee to fully reimburse and compensate the Company for any possible losses due to its non-compliance of the rules and regulations governing employees’ social insurance fees, in case the Company is required by relevant government authorities to make up for any outstanding payments and penalties for employees’ social insurance fees in the future.
We are not in compliance with the PRC’s regulations relating to employees’ housing funds, and as a result, the Company and its shareholders may be subject to penalties if we are not able to remediate the non-compliance.
In accordance with the Regulations on Management of Housing Provident Fund (the “Regulations of HPF”), which were promulgated by the PRC State Council on April 3, 1999 and last amended on March 24, 2002, employers must register at the designated administrative centers and open bank accounts for employees’ housing funds deposits. Employers and employees are also required to pay and deposit housing funds, in an amount no less than 5% of the monthly average salary of each of the employees in the preceding year in full and on time. Qianhai has registered at the designated administrative centers and opened bank accounts for its employees’ housing funds deposits; however, Qianhai did not deposit employees’ housing funds in accordance with the Regulations of HPF, and there is a risk of administrative penalty being imposed by the designated administrative center to Qianhai. Ronghua Liu and Qiang Chen, shareholders of Qianhai, have signed consents to guarantee that they will assume the full compensatory liabilities if the company is to be subjected to such penalties.
Because our business is conducted in RMB and the price of our Ordinary Shares is quoted in United States dollars, changes in currency conversion rates may affect the value of your investments.
Our business is conducted in the PRC, our books and records are maintained in RMB, which is the currency of the PRC, and the financial statements that we file with the SEC and provide to our shareholders are presented in United States dollars. Changes in the exchange rate between the RMB and dollar affect the value of our assets and the results of our operations in United States dollars. The value of the RMB against the United States dollar and other currencies may fluctuate and is affected by, among other things, changes in the PRC’s political and economic conditions and perceived changes in the economy of the PRC and the United States. Any significant revaluation of the RMB may materially and adversely affect our cash flows, revenue and financial condition. Further, our Ordinary Shares offered by this prospectus are denominated in United States dollars, we will need to convert the net proceeds we receive into RMB in order to use the funds for our business. Changes in the conversion rate between the United States dollar and the RMB will affect that amount of proceeds we will have available for our business.
Under the PRC Enterprise Income Tax Law, or the EIT Law, we may be classified as a “resident enterprise” of China, which could result in unfavorable tax consequences to us and our non-PRC shareholders.
The EIT Law and its implementing rules provide that enterprises established outside of China whose “de facto management bodies” are located in China are considered “resident enterprises” under PRC tax laws. The implementing rules promulgated under the EIT Law define the term “de facto management bodies” as a management body which substantially manages, or has control over the business, personnel, finance and assets of an enterprise. In April 2009, the State Administration of Taxation, or SAT, issued a circular, known as Circular 82, which provides certain specific criteria for determining whether the “de
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facto management bodies” of a PRC-controlled enterprise that is incorporated offshore is located in China. However, there are no further detailed rules or precedents governing the procedures and specific criteria for determining “de facto management body.” Although our board of directors and management are located in the PRC, it is unclear if the PRC tax authorities would determine that we should be classified as a PRC “resident enterprise.”
If we are deemed as a PRC “resident enterprise,” we will be subject to PRC enterprise income tax on our worldwide income at a uniform tax rate of 25%, although dividends distributed to us from our existing PRC subsidiary and any other PRC subsidiaries which we may establish from time to time could be exempt from the PRC dividend withholding tax due to our PRC “resident recipient” status. This could have a material and adverse effect on our overall effective tax rate, our income tax expenses and our net income. Furthermore, dividends, if any, paid to our shareholders may be decreased as a result of the decrease in distributable profits. In addition, if we were considered a PRC “resident enterprise”, any dividends we pay to our non-PRC investors, and the gains realized from the transfer of our Ordinary Shares may be considered income derived from sources within the PRC and be subject to PRC tax, at a rate of 10% in the case of non-PRC enterprises or 20% in the case of non-PRC individuals (in each case, subject to the provisions of any applicable tax treaty). It is unclear whether holders of our Ordinary Shares would be able to claim the benefits of any tax treaties between their country of tax residence and the PRC in the event that we are treated as a PRC resident enterprise. This could have a material and adverse effect on the value of your investment in us and the price of our Ordinary Shares.
There are significant uncertainties under the EIT Law relating to the withholding tax liabilities of our PRC subsidiary, and dividends payable by our PRC subsidiary to our offshore subsidiaries may not qualify to enjoy certain treaty benefits.
Under the EIT Law and its implementation rules, the profits of a foreign invested enterprise generated through operations, which are distributed to its immediate holding company outside the PRC, will be subject to a withholding tax rate of 10%. Pursuant to a special arrangement between Hong Kong and the PRC, such rate may be reduced to 5% if a Hong Kong resident enterprise owns more than 25% of the equity interest in the PRC company. Our PRC subsidiary is wholly-owned by our Hong Kong subsidiary. Moreover, under the Notice of the State Administration of Taxation on Issues regarding the Administration of the Dividend Provision in Tax Treaties promulgated on February 20, 2009, the tax payer needs to satisfy certain conditions to enjoy the benefits under a tax treaty. These beneficial owners of the relevant dividends and the corporate shareholder to receive dividends from the PRC subsidiary must have continuously met the direct ownership thresholds during the 12 consecutive months preceding the receipt of the dividends. Further, the State Administration of Taxation promulgated the Notice on How to Understand and Recognize the “Beneficial Owner” in Tax Treaties on October 27, 2009, which limits the “beneficial owner” to individuals, projects or other organizations normally engaged in substantive operations, and sets forth certain detailed factors in determining the “beneficial owner” status. In current practice, a Hong Kong enterprise must obtain a tax resident certificate from the relevant Hong Kong tax authority to apply for the 5% lower PRC withholding tax rate. As the Hong Kong tax authority will issue such a tax resident certificate on a case-by-case basis, we cannot assure you that we will be able to obtain the tax resident certificate from the relevant Hong Kong tax authority. As of the date of this prospectus, we have not commenced the application process for a Hong Kong tax resident certificate from the relevant Hong Kong tax authority, and there is no assurance that we will be granted such a Hong Kong tax resident certificate.
Even after we obtain the Hong Kong tax resident certificate, we are required by applicable tax laws and regulations to file required forms and materials with relevant PRC tax authorities to prove that we can enjoy 5% lower PRC withholding tax rate. ATIFL HK intends to obtain the required materials and file with the relevant tax authorities when it plans to declare and pay dividends, but there is no assurance that the PRC tax authorities will approve the 5% withholding tax rate on dividends received from ATIFL HK.
Our contractual arrangements with Qianhai and its shareholders may not be effective in providing control over Qianhai.
All of our current revenue and net income generated from consulting services are derived from Qianhai. Pursuant to the terms of a trust deed executed on December 11, 2017, Ronghua Liu, as trustee, is
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holding 4,925,000 shares, or 98.5%, of the total issued and outstanding shares of Qianhai, for the benefit of Qiuli Wang, who beneficially owns 79% of the Company’s issued and outstanding Ordinary Shares. We do not have an equity ownership interest in Qianhai but rely on contractual arrangements with it to control and operate its business. However, these contractual arrangements may not be effective in providing us with the necessary control over Qianhai and its operations. Any deficiency in these contractual arrangements may result in our loss of control over the management and operations of Qianhai, which will result in a significant loss in the value of an investment in our company. We rely on contractual rights through our VIE structure to effect control over the management of Qianhai and its subsidiaries and branch offices, which exposes us to the risk of potential breach of contract by the shareholders of Qianhai.
Because we conduct our consulting business through Qianhai, a VIE entity, if we fail to comply with applicable law, we could be subject to severe penalties and our business could be materially and adversely affected.
We operate our consulting business through Qianhai, a VIE entity, through a series of contractual arrangements, as a result of which, under United States generally accepted accounting principles, the assets and liabilities of Qianhai are treated as our assets and liabilities and the results of operations of Qianhai are treated in all aspects as if they were the results of our operations. There are uncertainties regarding the interpretation and application of PRC laws, rules and regulations, including but not limited to the laws, rules and regulations governing the validity and enforcement of the contractual arrangements between WFOE and Qianhai.
On or around September 2011, various media sources reported that the China Securities Regulatory Commission (the “CSRC”) had prepared a report proposing pre-approval by a competent central government authority of offshore listings by China-based companies with variable interest entity structures that operate in industry sectors subject to foreign investment restrictions. However, it is unclear whether the CSRC officially issued or submitted such a report to a higher level government authority or what any such report provides, or whether any new PRC laws or regulations relating to variable interest entity structures will be adopted or what they would provide.
If WFOE, Qianhai or their ownership structure or the contractual arrangements are determined to be in violation of any existing or future PRC laws, rules or regulations, or WFOE or Qianhai fails to obtain or maintain any of the required governmental permits or approvals, the relevant PRC regulatory authorities would have broad discretion in dealing with such violations, including:

revoking the business and operating licenses of WFOE or Qianhai;

discontinuing or restricting the operations of WFOE or Qianhai;

imposing conditions or requirements with which we, WFOE, or Qianhai may not be able to comply;

requiring us, WFOE, or Qianhai to restructure the relevant ownership structure or operations which may significantly impair the rights of the holders of our Ordinary Shares in the equity of Qianhai;

restricting or prohibiting our use of the proceeds from our initial public offering to finance our business and operations in China; and

imposing fines.
We cannot assure you that the PRC courts or regulatory authorities may not determine that our corporate structure and contractual arrangements violate PRC laws, rules or regulations. If the PRC courts or regulatory authorities determine that our contractual arrangements are in violation of applicable PRC laws, rules or regulations, our contractual arrangements will become invalid or unenforceable, and Qianhai will not be treated as a VIE entity and we will not be entitled to treat Qianhai’s assets, liabilities and results of operations as our assets, liabilities and results of operations, which could effectively eliminate the assets, liabilities, revenue and net income of Qianhai from our balance sheet and statement of income. This would most likely require us to cease conducting our business and would result in the delisting of our Ordinary Shares from Nasdaq Capital Market and a significant impairment in the market value of our Ordinary Shares.
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Our Shareholders are subject to greater uncertainties because we operate through a VIE structure due to restrictions on the transfer of Qianhai shares imposed by applicable PRC laws even though the PRC laws and regulations do not currently prohibit direct foreign ownership of our operating company, Qianhai, in China.
Investment in the PRC by foreign investors and foreign-invested enterprises must comply with the Catalogue for the Guidance of Foreign Investment Industries (the “Catalogue”) (2017 Revision), which was last amended and issued by MOFCOM and NDRC on June 28, 2017 and became effective since July 28, 2017, and the Special Management Measures for Foreign Investment Access (2018 version), or the Negative List, which came into effect on July 28, 2018. The Catalogue and the Negative List contain specific provisions guiding market access for foreign capital and stipulate in detail the industry sectors grouped under the categories of encouraged industries, restricted industries and prohibited industries. The VIE structure has been adopted by many PRC-based companies, to conduct business in the industries that are currently subject to foreign investment restrictions in China, or are on the Negative List, due to the fact that direct foreign ownership of these companies are prohibited. Any industry not listed in the Negative List is a permitted industry unless otherwise prohibited or restricted by other PRC laws or regulations. Currently, the financial consulting industry falls within the permitted category in accordance with the Catalogue and the Negative List. Therefore, we are not prohibited from direct foreign ownership of our VIE, Qianhai, in China.
However, the Company opted for a VIE structure instead of direct ownership due to restrictions on certain share transfer under article 141 of the Company Law of the People’s Republic of China(“the Company Law”), which was promulgated on December 29, 1993 and last amended on October 26, 2018. According to Article 141, directors, supervisors and senior management of a “company limited by share” shall not transfer more than 25% of their shares in the company during their term of appointment or transfer their shares within one year from the date on which the shares of the company are listed on a stock exchange. The aforesaid persons also cannot transfer their shares in the company within half a year after leaving their post.
Qianhai is registered as “a company limited by shares” in PRC. Therefore its shareholders’ transfers of their shares in Qianhai are subject to the limitation under article 141 of the Company Law. Since Ronghua Liu served as Qianhai’s director from the date of establishment and resigned on September 7, 2018, he is allowed to transfer his shares in Qianhai to Huaya Consultant until six months after his resignation. As a result of the above limitation, Huaya Consultant is currently unable to control Qianhai by direct ownership and can only exert control over Qianhai via the VIE structure. As a result, our corporate structure and VIE contractual arrangements may be subject to greater scrutiny and by various PRC government authorities, and subject our shareholders to greater uncertainty with regard to the legality of their share ownership.
We believe that our corporate structure and contractual arrangements comply with the current applicable PRC laws and regulations. Our PRC legal counsel, based on its understanding of the relevant laws and regulations, is of the opinion that each of the contracts among our wholly-owned PRC subsidiary, our VIE and its shareholders is valid, binding and enforceable in accordance with its terms. However, as there are substantial uncertainties regarding the interpretation and application of PRC laws and regulations, there can be no assurance that the PRC government authorities, such as the Ministry of Commerce, or the MOFCOM, or other authorities would agree that our corporate structure or any of the above contractual arrangements comply with PRC licensing, registration or other regulatory requirements, with existing policies or with requirements or policies that may be adopted in the future. PRC laws and regulations governing the validity of these contractual arrangements are uncertain and the relevant government authorities have broad discretion in interpreting these laws and regulations.
If we become directly subject to the scrutiny, criticism and negative publicity involving U.S.-listed Chinese companies, we may have to expend significant resources to investigate and resolve the matter which could harm our business operations, stock price and reputation.
U.S. public companies that have substantially all of their operations in China have been the subject of intense scrutiny, criticism and negative publicity by investors, financial commentators and regulatory agencies, such as the SEC. Much of the scrutiny, criticism and negative publicity has centered on financial and accounting irregularities and mistakes, a lack of effective internal controls over financial accounting, inadequate corporate governance policies or a lack of adherence thereto and, in many cases, allegations of
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fraud. As a result of the scrutiny, criticism and negative publicity, the publicly traded stock of many U.S. listed Chinese companies sharply decreased in value and, in some cases, has become virtually worthless. Many of these companies are now subject to shareholder lawsuits and SEC enforcement actions and are conducting internal and external investigations into the allegations. It is not clear what effect this sector-wide scrutiny, criticism and negative publicity will have on us, our business and our stock price. If we become the subject of any unfavorable allegations, whether such allegations are proven to be true or untrue, we will have to expend significant resources to investigate such allegations and/or defend our company. This situation will be costly and time consuming and distract our management from growing our business. If such allegations are not proven to be groundless, we and our business operations will be severely affected and you could sustain a significant decline in the value of our stock.
The disclosures in our reports and other filings with the SEC and our other public pronouncements are not subject to the scrutiny of any regulatory bodies in the PRC.
We are regulated by the SEC and our reports and other filings with the SEC are subject to SEC review in accordance with the rules and regulations promulgated by the SEC under the Securities Act and the Exchange Act. Our SEC reports and other disclosures and public pronouncements are not subject to the review or scrutiny of any PRC regulatory authority. For example, the disclosure in our SEC reports and other filings are not subject to the review by the China Securities Regulatory Commission, a PRC regulator that is responsible for oversight of the capital markets in China. Accordingly, you should review our SEC reports, filings and our other public pronouncements with the understanding that no local regulator has done any review of us, our SEC reports, other filings or any of our other public pronouncements.
The failure to comply with PRC regulations relating to mergers and acquisitions of domestic entities by offshore special purpose vehicles may subject us to severe fines or penalties and create other regulatory uncertainties regarding our corporate structure.
On August 8, 2006, MOFCOM, joined by the CSRC, the State-owned Assets Supervision and Administration Commission of the State Council, the SAT, the State Administration for Industry and Commerce (the “SAIC”), and SAFE, jointly promulgated regulations entitled the Provisions Regarding Mergers and Acquisitions of Domestic Entities by Foreign Investors (the “M&A Rules”), which took effect as of September 8, 2006, and as amended on June 22, 2009. These regulations, among other things, have certain provisions that require offshore special purpose vehicles formed for the purpose of acquiring PRC domestic companies and controlled directly or indirectly by PRC individuals and companies, to obtain the approval of MOFCOM prior to engaging in such acquisitions and to obtain the approval of the CSRC prior to publicly listing their securities on an overseas stock market. On September 21, 2006, the CSRC published on its official website a notice specifying the documents and materials that are required to be submitted for obtaining CSRC approval.
The application of the M&A Rules with respect to our corporate structure remains unclear, with no current consensus existing among leading PRC law firms regarding the scope and applicability of the M&A Rules. Thus, it is possible that the appropriate PRC government agencies, including MOFCOM, would deem that the M&A Rules required us or our entities in China to obtain approval from MOFCOM or other PRC regulatory agencies in connection with WFOE’s control of Qianhai through contractual arrangements. If the CSRC, MOFCOM, or another PRC regulatory agency determines that government approval was required for the VIE arrangement between WFOE and Qianhai, or if prior CSRC approval for overseas financings is required and not obtained, we may face severe regulatory actions or other sanctions from MOFCOM, the CSRC or other PRC regulatory agencies. In such event, these regulatory agencies may impose fines or other penalties on our operations in the PRC, limit our operating privileges in the PRC, delay or restrict the repatriation of the proceeds from overseas financings into the PRC, restrict or prohibit payment or remittance of dividends to us or take other actions that could have a material adverse effect on our business, financial condition, results of operations, reputation and prospects, as well as the trading price of our Ordinary Shares. The CSRC or other PRC regulatory agencies may also take actions requiring us, or making it advisable for us, to delay or cancel overseas financings, to restructure our current corporate structure, or to seek regulatory approvals that may be difficult or costly to obtain.
The M&A Rules, along with certain foreign exchange regulations discussed below, will be interpreted or implemented by the relevant government authorities in connection with our future offshore financings or
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acquisitions, and we cannot predict how they will affect our acquisition strategy. For example, Qianhai’s ability to remit its profits to us or to engage in foreign-currency-denominated borrowings, may be conditioned upon compliance with the SAFE registration requirements by Qianhai, principal shareholder of the Registrant and the VIE, over whom we may have no control.
Our contractual arrangements with Qianhai are governed by the laws of the PRC and we may have difficulty in enforcing any rights we may have under these contractual arrangements.
As all of our contractual arrangements with Qianhai are governed by the PRC laws and provide for the resolution of disputes through arbitration in the PRC, they would be interpreted in accordance with PRC law and any disputes would be resolved in accordance with PRC legal procedures. Disputes arising from these contractual arrangements between us and Qianhai will be resolved through arbitration in China, although these disputes do not include claims arising under the United States federal securities law and thus do not prevent you from pursuing claims under the United States federal securities law. The legal environment in the PRC is not as developed as in the United States. As a result, uncertainties in the PRC legal system could further limit our ability to enforce these contractual arrangements, through arbitration, litigation and other legal proceedings remain in China, which could limit our ability to enforce these contractual arrangements and exert effective control over Qianhai. Furthermore, these contracts may not be enforceable in China if PRC government authorities or courts take a view that such contracts contravene PRC laws and regulations or are otherwise not enforceable for public policy reasons. In the event we are unable to enforce these contractual arrangements, we may not be able to exert effective control over Qianhai, and our ability to conduct our business may be materially and adversely affected.
Risks Relating to this Offering and the Trading Market
There has been no public market for our Ordinary Shares prior to this offering, and you may not be able to resell our Ordinary Shares at or above the price you pay for them, or at all.
Prior to this offering, there has not been a public market for our Ordinary Shares. We plan to apply for the listing of our Ordinary Shares on the Nasdaq Capital Market. However, an active public market for our Ordinary Shares may not develop or be sustained after the offering, in which case the market price and liquidity of our Ordinary Shares will be materially and adversely affected.
We are offering our Ordinary Shares on a best efforts basis and may be unable to sell any shares. Because this is a best efforts offering, there is a possibility that we may not be able to sell the minimum offering amount of Ordinary Shares. In the event that we do not raise the minimum offering amount of Ordinary Shares prior to [•], 2019, all funds raised will be promptly returned to the investors, without interest or deduction. If we successfully raise the minimum offering amount of Ordinary Shares, we will be able to execute our business plan as described.
The initial public offering price for our Ordinary Shares may not be indicative of prices that will prevail in the trading market and such market prices may be volatile.
The initial public offering price for our Ordinary Shares will be determined by negotiations between us and the Underwriter, and does not bear any relationship to our earnings, book value or any other indicia of value. We cannot assure you that the market price of our Ordinary Shares will not decline significantly below the initial public offering price. The financial markets in the United States and other countries have experienced significant price and volume fluctuations in the last few years. Volatility in the price of our Ordinary Shares may be caused by factors outside of our control and may be unrelated or disproportionate to changes in our results of operations.
You will experience immediate and substantial dilution in the net tangible book value of Ordinary Shares purchased.
The initial public offering price of our Ordinary Shares is substantially higher than the net tangible book value per share of our Ordinary Shares. Consequently, when you purchase our Ordinary Shares in the offering and upon completion of the offering, you will incur immediate dilution, based on an assumed
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initial public offering price of US$4.00, of US$3.83 per share if the minimum amount is raised or US$3.64 per share if the maximum amount raised. See “Dilution.” In addition, you may experience further dilution to the extent that additional ordinary shares are issued upon exercise of outstanding warrants or options we may grant from time to time.
Our shares will initially trade under $5.00 per share and thus will be a penny stock. Trading in penny stocks has certain restrictions and these restrictions could negatively affect the price and liquidity of our shares.
Our stock is expected to trade below $5.00 per share upon listing. As a result, our stock would be known as a “penny stock”, which is subject to various regulations involving disclosures to be given to you prior to the purchase of any penny stock. The U.S. Securities and Exchange Commission (the “SEC”) has adopted regulations which generally define a “penny stock” to be any equity security that has a market price of less than $5.00 per share, subject to certain exceptions. Depending on market fluctuations, our Ordinary Shares could be considered to be a “penny stock”. A penny stock is subject to rules that impose additional sales practice requirements on broker/dealers who sell these securities to persons other than established Members and accredited investors. For transactions covered by these rules, the broker/dealer must make a special suitability determination for the purchase of these securities. In addition, he must receive the purchaser’s written consent to the transaction prior to the purchase. He must also provide certain written disclosures to the purchaser. Consequently, the “penny stock” rules may restrict the ability of broker/dealers to sell our securities, and may negatively affect the ability of holders of shares of our Ordinary Shares to resell them. These disclosures require you to acknowledge that you understand the risks associated with buying penny stocks and that you can absorb the loss of your entire investment. Penny stocks generally do not have a very high trading volume. Consequently, the price of the stock is often volatile and you may not be able to buy or sell the stock when you want to.
Substantial future sales of our Ordinary Shares or the anticipation of future sales of our Ordinary Shares in the public market could cause the price of our Ordinary Shares to decline.
Sales of substantial amounts of our Ordinary Shares in the public market after this offering, or the perception that these sales could occur, could cause the market price of our Ordinary Shares to decline. An aggregate of 50,000,000 Ordinary Shares are outstanding before the consummation of this offering and 52,000,000 Ordinary Shares are expected to be outstanding immediately after the consummation of this offering if the minimum offering amount is raised, and 55,000,000 Ordinary Shares will be outstanding immediately after the consummation of this offering if the maximum offering amount is raised . Sales of these shares into the market could cause the market price of our Ordinary Shares to decline.
We do not intend to pay dividends for the foreseeable future.
We currently intend to retain any future earnings to finance the operation and expansion of our business, and we do not expect to declare or pay any dividends in the foreseeable future. As a result, you may only receive a return on your investment in our Ordinary Shares if the market price of our Ordinary Shares increases.
If securities or industry analysts do not publish research or reports about our business, or if the publish a negative report regarding our Ordinary Shares, the price of our Ordinary Shares and trading volume could decline.
The trading market for our Ordinary Shares may depend in part on the research and reports that industry or securities analysts publish about us or our business. We do not have any control over these analysts. If one or more of the analysts who cover us downgrade us, the price of our Ordinary Shares would likely decline. If one or more of these analysts cease coverage of our company or fail to regularly publish reports on us, we could lose visibility in the financial markets, which could cause the price of our Ordinary Shares and the trading volume to decline.
The market price of our Ordinary Shares may be volatile or may decline regardless of our operating performance, and you may not be able to resell your shares at or above the initial public offering price.
The initial public offering price for our Ordinary Shares will be determined through negotiations between the Underwriter and us and may vary from the market price of our Ordinary Shares following our
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initial public offering. If you purchase our Ordinary Shares in our initial public offering, you may not be able to resell those shares at or above the initial public offering price. We cannot assure you that the initial public offering price of our Ordinary Shares, or the market price following our initial public offering, will equal or exceed prices in privately negotiated transactions of our shares that have occurred from time to time prior to our initial public offering. The market price of our Ordinary Shares may fluctuate significantly in response to numerous factors, many of which are beyond our control, including:

actual or anticipated fluctuations in our revenue and other operating results;

the financial projections we may provide to the public, any changes in these projections or our failure to meet these projections;

actions of securities analysts who initiate or maintain coverage of us, changes in financial estimates by any securities analysts who follow our company, or our failure to meet these estimates or the expectations of investors;

announcements by us or our competitors of significant products or features, technical innovations, acquisitions, strategic partnerships, joint ventures, or capital commitments;

price and volume fluctuations in the overall stock market, including as a result of trends in the economy as a whole;

lawsuits threatened or filed against us; and

other events or factors, including those resulting from war or incidents of terrorism, or responses to these events.
In addition, the stock markets have experienced extreme price and volume fluctuations that have affected and continue to affect the market prices of equity securities of many companies. Stock prices of many companies have fluctuated in a manner unrelated or disproportionate to the operating performance of those companies. In the past, stockholders have filed securities class action litigation following periods of market volatility. If we were to become involved in securities litigation, it could subject us to substantial costs, divert resources and the attention of management from our business, and adversely affect our business.
Our management has broad discretion to determine how to use the funds raised in the offering and may use them in ways that may not enhance our results of operations or the price of our Ordinary Shares.
We anticipate that we will use the net proceeds from this offering for working capital and other corporate purposes. Our management will have significant discretion as to the use of the net proceeds to us from this offering and could spend the proceeds in ways that do not improve our results of operations or enhance the market price of our Ordinary Shares.
We will incur increased costs as a result of being a public company, particularly after we cease to qualify as an “emerging growth company.”
Upon completion of this offering, we will become a public company and expect to incur significant legal, accounting and other expenses that we did not incur as a private company. The Sarbanes-Oxley Act of 2002, as well as rules subsequently implemented by the SEC and the Nasdaq Capital Market, impose various requirements on the corporate governance practices of public companies. As an “emerging growth company” pursuant to the JOBS Act, we may take advantage of specified reduced reporting and other requirements that are otherwise applicable generally to public companies. We expect these rules and regulations to increase our legal and financial compliance costs and to make some corporate activities more time-consuming and costly. After we are no longer an “emerging growth company,” we expect to incur significant additional expenses and devote substantial management effort toward ensuring compliance increased disclosure requirements.
If we cease to qualify as a foreign private issuer, we would be required to comply fully with the reporting requirements of the Exchange Act applicable to U.S. domestic issuers, and we would incur significant additional legal, accounting and other expenses that we would not incur as a foreign private issuer.
We expect to qualify as a foreign private issuer upon the completion of this offering. As a foreign private issuer, we will be exempt from the rules under the Exchange Act prescribing the furnishing and
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content of proxy statements, and our officers, directors and principal shareholders will be exempt from the reporting and short-swing profit recovery provisions contained in Section 16 of the Exchange Act. In addition, we will not be required under the Exchange Act to file periodic reports and financial statements with the SEC as frequently or as promptly as United States domestic issuers, and we will not be required to disclose in our periodic reports all of the information that United States domestic issuers are required to disclose. While we currently expect to qualify as a foreign private issuer immediately following the completion of this offering, we may cease to qualify as a foreign private issuer in the future.
Because we are a foreign private issuer and are exempt from certain Nasdaq corporate governance standards applicable to U.S. issuers, you will have less protection than you would have if we were a domestic issuer.
Nasdaq Listing Rule requires listed companies to have, among other things, a majority of their board members be independent. As a foreign private issuer, however, we are permitted to, and we may, follow home country practice in lieu of the above requirements, or we may choose to comply with the Nasdaq requirement within one year of listing. The corporate governance practice in our home country, the BVI, does not require a majority of our board to consist of independent directors. Since a majority of our board of directors may not consist of independent directors, fewer board members may be exercising independent judgment and the level of board oversight on the management of our company may decrease as a result. In addition, the Nasdaq listing rules also require U.S. domestic issuers to have a compensation committee, a nominating/corporate governance committee composed entirely of independent directors, and an audit committee with a minimum of three members. We, as a foreign private issuer, are not subject to these requirements. The Nasdaq listing rules may require shareholder approval for certain corporate matters, such as requiring that shareholders be given the opportunity to vote on all equity compensation plans and material revisions to those plans, certain ordinary share issuances. We intend to comply with the requirements of Nasdaq Listing Rules in determining whether shareholder approval is required on such matters and to appoint a nominating and corporate governance committee. However, we may consider following home country practice in lieu of the requirements under the Nasdaq listing rules with respect to certain corporate governance standards which may afford less protection to investors.
Anti-takeover provisions in our memorandum and articles of association may discourage, delay or prevent a change in control.
Some provisions in our memorandum and articles of association, may discourage, delay or prevent a change in control of our company or management that shareholders may consider favorable, including, among other things, the following:

provisions that permit our board of directors by resolution to amend certain provisions of the memorandum and articles of association, including to create and issue classes of shares with preferred, deferred or other special rights or restrictions as the board of directors determine in their discretion, without any further vote or action by our shareholders. If issued, the rights, preferences, designations and limitations of any class of preferred shares would be set by the board of directors by way of amendments to relevant provisions of the memorandum and articles of association and could operate to the disadvantage of the outstanding ordinary shares the holders of which would not have any pre-emption rights in respect of such an issue of preferred shares. Such terms could include, among others, preferences as to dividends and distributions on liquidation, or could be used to prevent possible corporate takeovers; and

provisions that restrict the ability of our shareholders holding in aggregate less than thirty percent (30%) of the outstanding voting shares in the company to call meetings and to include matters for consideration at shareholder meetings.
Our board of directors may decline to register transfers of ordinary shares in certain circumstances.
Our board of directors may, in its sole discretion, decline to register any transfer of any Ordinary Share which is not fully paid up or on which we have a lien. Our directors may also decline to register any transfer of any share unless (i) the instrument of transfer is lodged with us, accompanied by the certificate for the shares to which it relates and such other evidence as our board of directors may reasonably require to show the right of the transferor to make the transfer; (ii) the instrument of transfer is in respect of only
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one class of shares; (iii) the instrument of transfer is properly stamped, if required; (iv) in the case of a transfer to joint holders, the number of joint holders to whom the share is to be transferred does not exceed four; (v) the shares conceded are free of any lien in favor of us; or (vi) a fee of such maximum sum as Nasdaq Capital Market may determine to be payable, or such lesser sum as our board of directors may from time to time require, is paid to us in respect thereof.
If our directors refuse to register a transfer they shall, within one month after the date on which the instrument of transfer was lodged, send to each of the transferor and the transferee notice of such refusal. The registration of transfers may, on 14 days’ notice being given by advertisement in such one or more newspapers or by electronic means, be suspended and the register closed at such times and for such periods as our board of directors may from time to time determine, provided, however, that the registration of transfers shall not be suspended nor the register closed for more than 30 days in any year.
Certain types of class or derivative actions generally available under U.S. law may not be available as a result of the fact that we are incorporated in the BVI. As a result, the rights of shareholders may be limited.
Whilst statutory provisions do exist in British Virgin Islands law for derivative actions to be brought in certain circumstances, these rights may be more limited than the rights afforded to minority shareholders under the laws of states in the United States and shareholders of BVI companies may not have standing to initiate a shareholder derivative action in a court of the United States. Furthermore, questions of interpretation of our memorandum and articles of association will be questions of BVI law and determined by the BVI courts. In any event, the circumstances in which any such action may be brought, if at all, and the procedures and defenses that may be available in respect to any such action, may result in the rights of shareholders of a BVI company being more limited than those of shareholders of a company organized in the United States. Accordingly, shareholders may have fewer alternatives available to them if they believe that corporate wrongdoing has occurred. The BVI courts are also unlikely to recognize or enforce against us judgments of courts in the United States based on certain liability provisions of U.S. securities law or to impose liabilities against us, in original actions brought in the BVI, based on certain liability provisions of U.S. securities laws that are penal in nature.
There is no statutory recognition in the BVI of judgments obtained in the United States, although the courts of the BVI will in certain circumstances recognize such a foreign judgment and treat it as a cause of action in itself which may be sued upon as a debt at common law so that no retrial of the issues would be necessary provided that:
(i)
the U.S. court issuing the judgment had jurisdiction in the matter and the company either submitted to such jurisdiction or was resident or carrying on business within such jurisdiction and was duly served with process; is final and for a liquidated sum;
(ii)
the judgment given by the U.S. court was not in respect of penalties, taxes, fines or similar fiscal or revenue obligations of the company;
(iii)
in obtaining judgment there was no fraud on the part of the person in whose favor judgment was given or on the part of the court;
(iv)
recognition or enforcement of the judgment would not be contrary to public policy in the BVI; and
(v)
the proceedings pursuant to which judgment was obtained were not contrary to natural justice.
In appropriate circumstances, a BVI Court may give effect in the British Virgin Islands to other kinds of final foreign judgments such as declaratory orders, orders for performance of contracts and injunctions.
You may have more difficulty protecting your interests than you would as a shareholder of a U.S. corporation.
Our corporate affairs are governed by the provisions of our memorandum and articles of association, as amended and restated from time to time, the BVI Business Companies Act, 2004 as amended from time to time (the “BVI Act”) and the common law of the BVI. The rights of shareholders and the statutory
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duties and fiduciary responsibilities of our directors and officers under BVI law may not be clearly established as they would be under statutes or judicial precedents in some jurisdictions in the United States, and some states (such as Delaware) have more fully developed and judicially interpreted bodies of corporate law.
These rights and responsibilities are governed by our memorandum and articles of association, the BVI Act and the common law of the BVI. The common law of the BVI is derived in part from judicial precedent in the BVI as well as from English common law, which has persuasive, but not binding, authority on a court in the BVI. In addition, BVI law does not make a distinction between public and private companies and some of the protections and safeguards (such as statutory pre-emption rights, save to the extent expressly provided for in the memorandum and articles of association) that investors may expect to find in relation to a public company are not provided for under BVI law.
There may be less publicly available information about us than is regularly published by or about U.S. issuers. Also, the BVI regulations governing the securities of BVI companies may not be as extensive as those in effect in the United States, and the BVI law and regulations regarding corporate governance matters may not be as protective of minority shareholders as state corporation laws in the United States. Therefore, you may have more difficulty protecting your interests in connection with actions taken by our directors and officers or our principal shareholders than you would as a shareholder of a corporation incorporated in the United States.
The laws of BVI provide limited protections for minority shareholders, so minority shareholders will not have the same options as to recourse in comparison to the United States if the shareholders are dissatisfied with the conduct of our affairs.
Under the laws of the BVI there is limited statutory protection of minority shareholders other than the provisions of the BVI Act dealing with shareholder remedies. The principal protections under BVI statutory law are derivative actions, actions brought by one or more shareholders for relief from unfair prejudice, oppression and unfair discrimination and/or to enforce the BVI Act or the memorandum and articles of association. Shareholders are entitled to have the affairs of the company conducted in accordance with the BVI Act and the memorandum and articles of association, and are entitled to payment of the fair value of their respective shares upon dissenting from certain enumerated corporate transactions.
The common law of the BVI is derived in part from judicial precedent in the BVI as well as from English common law, which has persuasive, but not binding, authority on a court in the BVI. There are common law rights for the protection of shareholders that may be invoked, largely dependent on English company law, since the common law of the BVI is less extensive than that of England. Under the general rule pursuant to English company law known as the rule in Foss v. Harbottle, a court will generally refuse to interfere with the management of a company at the insistence of a minority of its shareholders who express dissatisfaction with the conduct of the company’s affairs by the majority or the board of directors. However, every shareholder is entitled to seek to have the affairs of the company conducted properly according to law and the constitutional documents of the company. As such, if those who control the company have persistently disregarded the requirements of company law or the provisions of the company’s memorandum and articles of association, then the courts may grant relief. Generally, the areas in which the courts will intervene are the following: (i) a company is acting or proposing to act illegally or beyond the scope of its authority; (ii) the act complained of, although not beyond the scope of the authority, could only be effected if duly authorized by more than the number of votes which have actually been obtained; (iii) the individual rights of the plaintiff shareholder have been infringed or are about to be infringed; or (iv) those who control the company are perpetrating a “fraud on the minority.”
These rights may be more limited than the rights afforded to minority shareholders under the laws of states in the United States.
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There are no pre-emptive rights in favor of holders of ordinary shares so you may not be able to participate in future equity offerings.
There are no pre-emptive rights applicable under the BVI Act or the memorandum and articles of association in favor of holders of ordinary shares in respect of further issues of shares of any class. Consequently, you will not be entitled under applicable law to participate in any such future offerings of further ordinary shares or any preferred or other classes of shares.
If we are classified as a passive foreign investment company, United States taxpayers who own our Ordinary Shares may have adverse United States federal income tax consequences.
A non-U.S. corporation such as ourselves will be classified as a passive foreign investment company, which is known as a PFIC, for any taxable year if, for such year, either

At least 75% of our gross income for the year is passive income; or

The average percentage of our assets (determined at the end of each quarter) during the taxable year which produce passive income or which are held for the production of passive income is at least 50%.
Passive income generally includes dividends, interest, rents and royalties (other than rents or royalties derived from the active conduct of a trade or business) and gains from the disposition of passive assets.
If we are determined to be a PFIC for any taxable year (or portion thereof) that is included in the holding period of a U.S. taxpayer who holds our ordinary shares, the U.S. taxpayer may be subject to increased U.S. federal income tax liability and may be subject to additional reporting requirements.
Depending on the amount of cash we raise in this offering, together with any other assets held for the production of passive income, it is possible that, for our 2018 taxable year or for any subsequent year, more than 50% of our assets may be assets which produce passive income. We will make this determination following the end of any particular tax year. Although the law in this regard is unclear, because we control Qianhai’s management decisions, and also because we are entitled to the economic benefits associated with Qianhai, we are treating Qianhai as our wholly-owned subsidiary for U.S. federal income tax purposes. For purposes of the PFIC analysis, in general, according to Internal Revenue Code Section 1297(c), a non-U.S. corporation is deemed to own its pro rata share of the gross income and assets of any entity in which it is considered to own at least 25% of the stock by value. Although we do not technically own any stock in Qianhai, the control of Qianhai’s management decisions, the entitlement to economic benefits associated with Qianhai, and the inclusion of Qianhai as part of the consolidated group (in accordance with Accounting Standards Codification (ASC) Topic 810, “Consolidation,”) is akin to holding a stock interest in Qianhai, and therefore we consider our interest in Qianhai as a deemed stock interest. As a result, the income and assets of Qianhai should be included in the determination of whether or not we are a PFIC in any taxable year. Should the IRS challenge our position and consider that we are as owning Qianhai for United States federal income tax purposes, we would likely be treated as a PFIC.
For a more detailed discussion of the application of the PFIC rules to us and the consequences to U.S. taxpayers if we were determined to be a PFIC, see “Taxation — United States Federal Income Taxation — Passive Foreign Investment Company.”
Our pre-IPO shareholders will be able to sell their shares after completion of this offering subject to restrictions under the Rule 144.
Our pre-IPO shareholders, the Beneficial Owners, may be able to sell their Ordinary Shares under Rule 144 after completion of this offering. Because these shareholders have paid a lower price per Ordinary Share than participants in this offering, when they are able to sell their pre-IPO shares under Rule  144, they may be more willing to accept a lower sales price than the IPO price. This fact could impact the trading price of the stock following completion of the offering, to the detriment of participants in this offering. We issued a total of 50,000,000 Ordinary Shares to our pre-IPO shareholders on August 23, 2018, September 27, 2018, and November 2, 2018. Under rule 144, before our pre-IPO shareholders can sell their shares, in addition to meeting other requirements, they must meet the required holding period. We do not expect any of the ordinary shares to be sold pursuant to Rule 144 during the pendency of this offering.
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DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus contains forward-looking statements that reflect our current expectations and views of future events, all of which are subject to risks and uncertainties. Forward-looking statements give our current expectations or forecasts of future events. You can identify these statements by the fact that they do not relate strictly to historical or current facts. You can find many (but not all) of these statements by the use of words such as “approximates,” “believes,” “hopes,” “expects,” “anticipates,” “estimates,” “projects,” “intends,” “plans,” “will,” “would,” “should,” “could,” “may” or other similar expressions in this prospectus. These statements are likely to address our growth strategy, financial results and product and development programs. You must carefully consider any such statements and should understand that many factors could cause actual results to differ from our forward-looking statements. These factors may include inaccurate assumptions and a broad variety of other risks and uncertainties, including some that are known and some that are not. No forward-looking statement can be guaranteed and actual future results may vary materially. Factors that could cause actual results to differ from those discussed in the forward-looking statements include, but are not limited to:

future financial and operating results, including revenues, income, expenditures, cash balances and other financial items;

our ability to execute our growth, and expansion, including our ability to meet our goals;

current and future economic and political conditions;

our ability to compete in an industry with low barriers to entry;

our ability to continue to operate through our VIE structure;

our capital requirements and our ability to raise any additional financing which we may require;

our ability to attract new clients, and further enhance our brand recognition;

our ability to hire and retain qualified management personnel and key employees in order to enable us to develop our business;

trends and competition in the financial consulting services industry; and

other assumptions described in this prospectus underlying or relating to any forward-looking statements.
We describe material risks, uncertainties and assumptions that could affect our business, including our financial condition and results of operations, under “Risk Factors.” We base our forward-looking statements on our management’s beliefs and assumptions based on information available to our management at the time the statements are made. We caution you that actual outcomes and results may, and are likely to, differ materially from what is expressed, implied or forecast by our forward-looking statements. Accordingly, you should be careful about relying on any forward-looking statements. Except as required under the federal securities laws, we do not have any intention or obligation to update publicly any forward-looking statements after the distribution of this prospectus, whether as a result of new information, future events, changes in assumptions, or otherwise.
Industry Data and Forecasts
This prospectus contains data related to the financial consulting services industry in China. These industry data include projections that are based on a number of assumptions which have been derived from industry and government sources which we believe to be reasonable. The financial consulting services industry may not grow at the rate projected by industry data, or at all. The failure of this industry to grow as anticipated is likely to have a material adverse effect on our business and the market price of our Ordinary Shares. In addition, the rapidly changing nature of the financial consulting services industries subject any projections or estimates relating to the growth prospects or future condition of our industry to significant uncertainties. Furthermore, if any one or more of the assumptions underlying the industry data turns out to be incorrect, actual results may, and are likely to, differ from the projections based on these assumptions.
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ENFORCEABILITY OF CIVIL LIABILITIES
We are incorporated in the British Virgin Islands to take advantage of certain benefits associated with being a British Virgin Islands business company, such as:

political and economic stability;

an effective judicial system;

a favorable tax system;

the absence of exchange controls or currency restrictions; and

the availability of professional and support services.
However, certain disadvantages accompany incorporation in the British Virgin Islands. These disadvantages include, but are not limited to:

the British Virgin Islands has a less developed body of securities laws as compared to the United States and these securities laws provide significantly less protection to investors as compared to the United States; and

British Virgin Islands companies may not have standing to sue before the federal courts of the United States.
Our memorandum and articles of association do not contain provisions requiring that disputes, including those arising under the securities laws of the United States, between us, our officers, directors and shareholders, be arbitrated.
Substantially all of our assets are located in the PRC. In addition, all of our directors and officers are nationals or residents of the PRC and all or a substantial portion of their assets are located outside the United States. As a result, it may be difficult for investors to effect service of process within the United States upon us or these persons, or to enforce against us or them judgments obtained in United States courts, including judgments predicated upon the civil liability provisions of the securities laws of the United States or any state in the United States.
We have appointed Hunter Taubman Fischer & Li LLC as our agent to receive service of process with respect to any action brought against us in the United States District Court for the Southern District of New York under the federal securities laws of the United States or of any state in the United States or any action brought against us in the Supreme Court of the State of New York in the County of New York under the securities laws of the State of New York.
Ogier, our counsel with respect to the laws of BVI, and Dentons Law Firm, our counsel with respect to PRC law, have advised us (privilege in which advice is not waived) that there is uncertainty as to whether the courts of the BVI or the PRC would (i) recognize or enforce judgments of United States courts obtained against us or our directors or officers predicated upon the civil liability provisions of the securities laws of the United States or any state in the United States or (ii) entertain original actions brought in the BVI or the PRC against us or our directors or officers predicated upon the securities laws of the United States or any state in the United States.
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There is uncertainty with regard to British Virgin Islands law as to whether a judgment obtained from the United States courts under civil liability provisions of the securities laws will be determined by the courts of the British Virgin Islands as penal or punitive in nature. If such a determination is made, the courts of the British Virgin Islands are also unlikely to recognize or enforce the judgment against a British Virgin Islands company. Because the courts of the British Virgin Islands have yet to rule on whether such judgments are penal or punitive in nature, it is uncertain whether they would be enforceable in the British Virgin Islands. Ogier has advised us that although there is no statutory enforcement in the British Virgin Islands of judgments obtained in the federal or state courts of the United States, in certain circumstances a judgment obtained in such jurisdiction may be recognized and enforced in the courts of the British Virgin Islands at common law, without any re-examination of the merits of the underlying dispute, by an action commenced on the foreign judgment debt in the Commercial Division of the Eastern Caribbean Supreme Court in the British Virgin Islands, provided such judgment:

is given by a foreign court of competent jurisdiction;

imposes on the judgment debtor a liability to pay a liquidated sum for which the judgment has been given;

is final;

is not in respect of taxes, a fine, a penalty or similar fiscal or revenue obligations of the company;

was not obtained in a fraudulent manner and is not of a kind the enforcement of which is contrary to natural justice or the public policy of the British Virgin Islands.
In appropriate circumstances, a BVI Court may give effect in the BVI to other kinds of final foreign judgments such as declaratory orders, orders for performance of contracts and injunctions.
Dentons Law Firm has further advised us that the recognition and enforcement of foreign judgments are provided for under the PRC Civil Procedure Law. PRC courts may recognize and enforce foreign judgments in accordance with the requirements of the PRC Civil Procedure Law based either on treaties between China and the country where the judgment is made or on reciprocity between jurisdictions. Dentons Law Firm has advised us further that there are no treaties between China and the United States for the mutual recognition and enforcement of court judgments, thus making the recognition and enforcement of a U.S. court judgment in China difficult.
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USE OF PROCEEDS
We estimate that we will receive net proceeds from this offering, after deducting the estimated underwriting discounts and commissions and the estimated offering expenses payable by us and based upon an assumed initial public offering price of US$ 4.00 per Ordinary Share, of approximately $ 6,624,000 if we sell the minimum number of Ordinary Shares and approximately $ 17,844,000 if we sell the maximum number of Ordinary Shares.
We plan to use the net proceeds we receive from this offering for the following purposes:
Use of net proceeds
2,000,000
shares
Minimum
offering
amount
2,500,000
shares
50% of
maximum
offering
amount
3,750,000
shares
75% of
maximum
offering
amount
5,000,000
shares
Maximum
offering
amount
Set up new branches
US$  662,400​
US$  892,200​
US$1,338,300​
US$1,784,400​
R&D system improvement and recruitment of talented personnel
US$  662,400​
US$  892,200​
US$1,338,300​
US$1,784,400​
Marketing
US$1,987,200​
US$2,676,600​
US$4,014,900​
US$5,353,200​
Mergers and acquisitions within the industry
US$3,312,000​
US$4,461,000​
US$6,691,500​
US$8,922,000​
The principal purpose of this offering is to provide us with funds to develop our business. The net proceeds from this offering will be used for working capital and other general corporate purposes, including marketing, hiring additional employees, enhancing our information technology systems. We may also use a portion of the net proceeds for the acquisition of, or investment in, technologies, solutions or businesses that complement our business, although we have no present commitments or agreements to enter into any acquisitions or investments. Our management will have considerable discretion in the application of the net proceeds, and you will not have the opportunity, as part of your investment decision, to assess whether the proceeds are being used appropriately. The net proceeds may be used for corporate purposes that do not increase our operating results or the market value of our Ordinary Shares. In view of the foregoing, in purchasing Ordinary Shares, you will be entrusting your funds to our management with little specific information as to how the proceeds will be utilized. Our management, however, will have significant flexibility and discretion to apply the net proceeds of this offering. If an unforeseen event occurs or business conditions change, we may use the proceeds of this offering differently than as described in this prospectus.
As an offshore holding company, we are permitted under PRC laws and regulations to provide funding to our PRC subsidiaries through loans or capital contributions, subject to applicable regulatory approvals. We currently cannot make loans or capital contributions to our PRC subsidiary without first obtaining regulatory approvals, and if we decide to use the proceeds from this offering within the PRC, we cannot assure you that we will be able to obtain these regulatory approvals on a timely basis, if at all. See “Risk Factors—Risks Related to Our Corporate Structure—PRC regulation of loans to and direct investment in PRC entities by offshore holding companies and governmental control of currency conversion may delay or prevent us from using the proceeds of this offering to make loans or additional capital contributions to our PRC subsidiaries and consolidated affiliates, which could materially and adversely affect our liquidity and our ability to fund and expand our business.” However, we do not plan to use the proceeds from this offering to provide funding to WFOE or to our VIE through loans or capital contributions, and the uses specified above can generally be accomplished without transferring funds into the PRC, such as (1) opening new branch offices and conducting R&D and recruitment in Hong Kong and other Asian countries, (2) conducting marketing and promotional activities in the aforementioned territories, (3) conducting mergers and acquisitions abroad or using offshore investment structures. Moreover, we believe the current cash reserves held by WFOE and our VIE, combined with the cash generated from their operating activities, will be sufficient for our operating and expansion needs within the PRC over the foreseeable future.
To the extent that the net proceeds we receive from this offering are not immediately used for the above purposes, we intend to invest our net proceeds in short-term, interest-bearing bank deposits or debt instruments.
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DIVIDEND POLICY
We intend to keep any future earnings to finance the expansion of our business, and we do not anticipate that any cash dividends will be paid in the foreseeable future.
Subject to the BVI Act and our memorandum and articles of association, our board of directors may authorize declare a dividend to shareholders at such time and of such an amount as they think fit if they are satisfied, on reasonable grounds, that immediately following the dividend the value of our assets will exceed our liabilities and we will be able to pay our debts as they become due. There is no further BVI statutory restriction on the amount of funds which may be distributed by us by dividend.
If we determine to pay dividends on any of our Ordinary Shares in the future, as a holding company, we will be dependent on receipt of funds from our Hong Kong subsidiary, ATIFL HK.
Current PRC regulations permit our indirect PRC subsidiaries to pay dividends to ATIFL HK only out of their accumulated profits, if any, determined in accordance with Chinese accounting standards and regulations. In addition, each of our subsidiaries in China is required to set aside at least 10% of its after-tax profits each year, if any, to fund a statutory reserve until such reserve reaches 50% of its registered capital. Each of such entity in China is also required to further set aside a portion of its after-tax profits to fund the employee welfare fund, although the amount to be set aside, if any, is determined at the discretion of its board of directors. Although the statutory reserves can be used, among other ways, to increase the registered capital and eliminate future losses in excess of retained earnings of the respective companies, the reserve funds are not distributable as cash dividends except in the event of liquidation.
The PRC government also imposes controls on the conversion of RMB into foreign currencies and the remittance of currencies out of the PRC. Therefore, we may experience difficulties in completing the administrative procedures necessary to obtain and remit foreign currency for the payment of dividends from our profits, if any. Furthermore, if our subsidiaries and affiliates in the PRC incur debt on their own in the future, the instruments governing the debt may restrict their ability to pay dividends or make other payments. If we or our subsidiaries are unable to receive all of the revenues from our operations through the current contractual arrangements, we may be unable to pay dividends on our Ordinary Shares.
Cash dividends, if any, on our Ordinary Shares will be paid in U.S. dollars. If we are considered a PRC tax resident enterprise for tax purposes, any dividends we pay to our overseas shareholders may be regarded as China-sourced income and as a result may be subject to PRC withholding tax at a rate of up to 10.0%. See “Taxation — People’s Republic of China Enterprise Taxation.”
Pursuant to the Arrangement between Mainland China and the Hong Kong Special Administrative Region for the Avoidance of Double Taxation and Tax Evasion on Income, or the Double Tax Avoidance Arrangement, the 10% withholding tax rate may be lowered to 5% if a Hong Kong resident enterprise owns no less than 25% of a PRC entity. However, the 5% withholding tax rate does not automatically apply and certain requirements must be satisfied, including without limitation that (a) the Hong Kong entity must be the beneficial owner of the relevant dividends; and (b) the Hong Kong entity must directly hold no less than 25% share ownership in the PRC entity during the 12 consecutive months preceding its receipt of the dividends. In current practice, a Hong Kong entity must obtain a tax resident certificate from the Hong Kong tax authority to apply for the 5% lower PRC withholding tax rate. As the Hong Kong tax authority will issue such a tax resident certificate on a case-by-case basis, we cannot assure you that we will be able to obtain the tax resident certificate from the relevant Hong Kong tax authority and enjoy the preferential withholding tax rate of 5% under the Double Taxation Arrangement with respect to dividends to be paid by our PRC subsidiary to its immediate holding company, ATIFL HK. As of the date of this prospectus, we have not applied for the tax resident certificate from the relevant Hong Kong tax authority. ATIFL HK intends to apply for the tax resident certificate when WFOE plans to declare and pay dividends to ATIFL HK. See “Risk Factors — There are significant uncertainties under the EIT Law relating to the withholding tax liabilities of our PRC subsidiary, and dividends payable by our PRC subsidiary to our offshore subsidiaries may not qualify to enjoy certain treaty benefits.”
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CAPITALIZATION
The following table sets forth our capitalization as of July 31, 2018:

on an actual basis; and

on an as adjusted basis, giving effect to the issuance and sale of the Ordinary Shares by us in this offering at both the minimum offering amount and the maximum offering amount at the initial public offering price of US$4.00 per Ordinary Share, after deducting the estimated underwriting discounts and commissions to the Underwriter and the estimated offering expenses payable by us.
You should read this capitalization table in conjunction with “Use of Proceeds,” “Selected Consolidated Financial and Operating Data,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the consolidated financial statements and the related notes appearing elsewhere in this prospectus.
Actual
As adjusted
(Minimum
offering
amount)
As adjusted
(Maximum
offering
amount)
US$
US$
US$
Equity
Share capital US$0.001 par value, 100,000,000,000 shares authorized,
divided into ordinary shares of  $0.001 par value each and
preferred shares of  $0.001 par value each, 50,000,000 ordinary
shares issued and outstanding; 52,000,000 ordinary shares issued
and outstanding, as adjusted to reflect the minimum offering
amount, and 55,000,000 ordinary shares issued and outstanding,
as adjusted to reflect the maximum offering amount
50,000 52,000 55,000
Additional paid-in capital (1)
705,139 7,327,139 18,544,139
Statutory reserves
278,836 278,836 278,836
Retained earnings
1,038,889 1,038,889 1,038,889
Accumulated other comprehensive loss
(58,074 ) (58,074 ) (58,074 )
Total equity
2,014,790 8,638,790 19,858,790
Total capitalization
2,014,790 8,638,790 19,858,790
(1)
Pro forma additional paid in capital reflects the net proceeds we expect to receive, after deducting underwriting fee, Underwriter expense allowance and other expenses. We expect to receive net proceeds of  (a) approximately $6,624,000 if the minimum offering amount is raised ($(8,000,000) offering, less underwriting fee of  $520,000 and offering expenses of approximately $856,000 or (b) approximately $17,844,000 if the maximum offering amount is raised ($20,000,000 offering, less underwriting fee of $1,300,000 and offering expenses of approximately $856,000). The additional paid in capital reflects the net proceeds we expect to receive, after deducting underwriting fee, Underwriter expense allowance and other expenses.
The actual and as adjusted information set forth in the table excludes warrants to purchase up to 130,000 Ordinary Shares issuable to the Underwriter in connection with this offering if the minimum offering amount is raised, and up to 325,000 Ordinary Shares issuable to the Underwriter in connection with this offering if the maximum offering amount is raised.
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DILUTION
If you invest in our Ordinary Shares, your interest will be diluted for each Ordinary Share you purchase to the extent of the difference between the initial public offering price per Ordinary Share and our net tangible book value per Ordinary Share after this offering. Dilution results from the fact that the initial public offering price per Ordinary Share is substantially in excess of the net tangible book value per Ordinary Share based on our presently outstanding Ordinary Shares.
Dilution to New Investors if the Minimum Offering Amount is Sold
Our net tangible book value as of July 31, 2018 was US $2,014,790, or US$0.04 per Ordinary Share. Net tangible book value represents the amount of our total consolidated tangible assets, less the amount of our total consolidated liabilities. Dilution is determined by subtracting the as adjusted net tangible book value per Ordinary Share from the initial public offering price per Ordinary Share and after deducting the estimated commissions to the Underwriter and the estimated offering expenses payable by us.
After giving effect to our sale of 2,000,000 Ordinary Shares offered in this offering based on the initial public offering price of US$4.00 per Ordinary Share after deduction of the estimated commissions to the Underwriter and the estimated offering expenses payable by us, our as adjusted net tangible book value as of July 31, 2018 would have been US$8,638,790, or US$0.17 per outstanding Ordinary Share and US$0.17 per Ordinary Share. This represents an immediate increase in net tangible book value of US$0.13 per Ordinary Share to the existing shareholders, and an immediate dilution in net tangible book value of US$3.83 per Ordinary Share to investors purchasing Ordinary Shares in this offering.
Dilution to New Investors if the Maximum Offering Amount is Sold
Our net tangible book value as of July 31, 2018 was US $2,014,790, or US$0.04 per Ordinary Share. Net tangible book value represents the amount of our total consolidated tangible assets, less the amount of our total consolidated liabilities. Dilution is determined by subtracting the as adjusted net tangible book value per Ordinary Share from the initial public offering price per Ordinary Share and after deducting the estimated commissions to the Underwriter and the estimated offering expenses payable by us.
After giving effect to our sale of 5,000,000 Ordinary Shares offered in this offering based on the initial public offering price of US$4.00 per Ordinary Share after deduction of the estimated commissions to the Underwriter and the estimated offering expenses payable by us, our as adjusted net tangible book value as of July 31, 2018 would have been US$19,858,790, or US$0.36 per outstanding Ordinary Share and US$0.36 per Ordinary Share. This represents an immediate increase in net tangible book value of US$0.32 per Ordinary Share to the existing shareholders, and an immediate dilution in net tangible book value of US$3.64 per Ordinary Share to investors purchasing Ordinary Shares in this offering. The as adjusted information discussed above is illustrative only.
The following table illustrates such dilution:
Minimum
Maximum
Initial public offering price per Ordinary Share
US$4.00
US$4.00
Net tangible book value per Ordinary Share as of July 31, 2018
US$0.04
US$0.04
As adjusted net tangible book value per Ordinary Share attributable to payments by new investors
US$0.17
US$0.36
Increase in net tangible book value per Ordinary Share to the existing shareholders
US$0.13
US$0.32
Amount of dilution in net tangible book value per Ordinary Share to new investors in the offering
US$3.83
US$3.64
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The following table summarizes, on an as adjusted basis as of July 31, 2018, the differences between existing shareholders and the new investors with respect to the alternative minimum and maximum offering assumptions, such number of Ordinary Shares purchased from us, the total consideration paid and the average price per Ordinary Share before deducting the estimated commissions to the Underwriter and the estimated offering expenses payable by us.
Ordinary Shares purchased
Total consideration
Average price per
ordinary share
MINIMUM OFFERING
Number
Percent
Amount
Percent
(US$ in thousands)
Existing shareholders
50,000,000 96.15 % 50,000.00 0.62 % 0.001
New investors
2,000,000 3.85 % 8,000,000.00 99.38 % 4.00
Total
52,000,000 100 % 8,050,000.00 100 %
MAXIMUM OFFERING
Number
Percent
Amount
Percent
(US$ in thousands)
Existing shareholders
50,000.00 90.91 % 50,000.00 0.25 % 0.001
New investors
5,000,000 9.09 % 20,000,000.00 99.75 % 4.00
Total
55,000,000 100 % 20,050,000.00 100 %
The as adjusted information as discussed above is illustrative only.
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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 our financial statements and the related notes included elsewhere in this prospectus. This discussion contains forward-looking statements reflecting our current expectations that involve risks and uncertainties. See “Disclosure Regarding Forward-Looking Statements” for a discussion of the uncertainties, risks and assumptions associated with these statements. Actual results and the timing of events could differ materially from those discussed in our forward-looking statements as a result of many factors, including those set forth under “Risk Factors” and elsewhere in this prospectus.
Overview
We are a consulting company offering financial consulting services to small and medium-sized enterprise customers in China. Our goal is to become an international financial consulting company with clients and offices throughout Asia. Since our inception in 2015, we have primarily focused on helping clients going public on the U.S. OTC markets and exchanges, but we are in the process of expanding our service to listing clients on domestic exchanges in China as well as the Hong Kong Stock Exchange.
For the year ended July 31, 2017, we successfully helped three Chinese clients go public in the U.S, and for the year ended July 31, 2018, we entered into consulting service agreements with 12 companies. Our business expansion has benefited from the growing financial consultancy market in China, which is driven by factors including rising financing activities, strong government support in terms of regulations and policies, and growing awareness of the importance of financial consultancy by more Chinese enterprises.
In order to expand our consulting business and diversify our revenue sources, in August 2018, we made the strategic decision to launch our AT Consulting Center, which offers financial consulting and advisory services to enterprises, government entities, and individuals. In September 2018, we also acquired a financial and news platform CNNM ( www.chinacnnm.com ) with approximately 10 million registered users. We plan to use CNNM as a platform to market our consulting services to potential clients, as well as help our clients distribute corporate news and worldwide press releases.
Key Factors that Affect Operating Results
We believe the following key factors may affect our financial condition and results of operations:
Our business success depends on our ability to acquire customers effectively
Our ability to increase our revenue largely depends on our ability to attract and engage potential customers. Our sales and marketing efforts include those related to customer acquisition and retention, and general marketing. We intend to continue to dedicate significant resources to our sales and marketing efforts and constantly seek to improve the effectiveness of these efforts to grow our revenues.
Our customer acquisition channels primarily include our sales and marketing campaigns and existing customer referrals. In order to acquire customers, we have made significant efforts in building mutually beneficial long-term relationships with local government, academic institutions and local business associations. In addition, we also market our consulting services through social media, such as WeChat or Weibo. If any of our current customer acquisition channels becomes less effective, if we are unable to continue to use any of these channels or if we are not successful in using new channels, we may not be able to attract new customers in a cost-effective manner or convert potential customers into active customers or even lose our existing customers to our competitors. To the extent that our current customer acquisition and retention efforts becomes less effective, our service revenue may be significantly impacted, which would have a significant adverse effect on our revenues, financial condition and results of operations.
Our consulting business faces strong market competition
We are currently facing intense market competition. Some of our current or potential competitors have significantly more financial, technical, marketing and other resources than we do and may be able to devote greater resources to the development, promotion and support of their customer acquisition and retention
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channels. In light of the low barriers to entry in the financial consulting industry, we expect more players to enter this market and increase the level of competition. Our ability to differentiate our services from other competitors will have significant impact on our business growth in the future.
Changes in PRC Regulatory Environment may impact our business and results of operations
The regulatory environment for the financial consulting industry in China is evolving. Recently, many local governments have established various subsidization schemes and policies to stimulate and encourage local business enterprises to go public, this may stimulate the growth of more financial consulting firms to become new players given the low barrier of entry into the financial consulting industry as well. As more players enter into the competition, PRC governmental authorities may publish and promulgate various new laws and rules to regulate the financial consulting marketplace. We have been closely tracking the development and implementation of new rules and regulations likely to affect us. We will continue to ensure timely compliance with any new rules and regulations and believe that such timely compliance is essential to our growth. To the extent that we may be required to adapt our operations to new laws and regulations, our operating costs may increase which will impact our profitability.
Ability to Attract and Retain Our Key Personnel
We rely heavily on the expertise and leadership of our directors and officers to maintain our core competence. Under their leadership, we have been able to achieve rapid expansion and significant growth since our inception in 2015. As our business scope increases, we expect to continue to invest significant resources in hiring and retaining a deep talent pool of financial consultancy professionals. Our ability to sustain our growth will depend on our ability to attract qualified personnel and retain our current staff.
Results of Operations
Our fiscal year starts on August 1 and ends on July 31.
The following table sets forth key components of our results of operations for the fiscal years ended July 31, 2018 and 2017:
For the Years Ended July 31,
Variances
% of
variance
2018
2017
Revenue
$ 5,307,891 $ 3,635,371 $ 1,672,520 46 %
Operating expenses
Selling expenses
1,773,159 2,301,567 (528,408 ) (23 )%
General and administrative expenses
807,053 408,739 398,314 97 %
Total Operating Expenses
2,580,212 2,710,306 (130,094 ) (5 )%
Income from operations
2,727,679 925,065 1,802,614 195 %
Other income (expense)
Interest income
16,303 469 15,834 3376 %
Other expense
(80,283 ) (67,549 ) (12,734 ) 19 %
Total other expense, net
(63,980 ) (67,080 ) 3,100 (5 %)
Income before income taxes
2,663,699 857,985 1,805,714 210 %
Provision for income taxes
716,816 217,025 499,791 230 %
Net income
$ 1,946,883 $ 640,960 $ 1,305,923 204 %
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Operating Revenues.
The following table sets forth the reconciliation of our net revenue for the fiscal years ended July 31, 2018 and 2017:
For the Years Ended July 31,
2018
2017
Variance
(US$)
% of
revenue
(US$)
% of
revenue
Amount
%
Operating Revenue
Consulting service fee
$ 5,236,196 98.6 % $ 3,469,224 95.4 % $ 1,766,972 50.9 %
Registration fee
71,695 1.4 % 166,147 4.6 % (94,452 ) (56.8 )%
Total revenue
$ 5,307,891 100.0 % $ 3,635,371 100.0 % $ 1,672,520 46.0 %
Our revenue increased by $1,672,520 or 46.1% from $3,635,371 in the fiscal year 2017 to $5,307,891 in the fiscal year 2018, primarily due to increased going public consulting services provided to customers during fiscal year 2018. In fiscal year 2017, we only provided such consulting services to three customers for pre-listing knowledge education and tutoring, due diligence, market information analysis and business plan drafting, shell company identification and reverse merger transaction assistance. In contrast, we provided more extensive consulting services to twelve customers in fiscal year 2018, including but not limited to due diligence, market information collection and analysis, business planning, pre-listing education and tutoring, legal structure re-organization advisory services, shell company identification and recommendation, auditing and legal firms recommendation, investors referral and pre-listing financing coordination as well as follow-up services. Through these comprehensive consulting services provided to customers, we enhanced our public awareness and acquired more customers in fiscal year 2018. Our revenue increased accordingly as we successfully rendered more consulting services to our customers in fiscal year 2018.
We charge our new customers an initial non-refundable registration fee for account setup before we post their information and profiles on our website, at which point, we recognize such registration fee as revenue. We do not charge our customers additional profile maintenance fees after the initial posting is completed as limited efforts are required for us to maintain such information on an on-going basis. Registration fee decreased by $94,452 or 56.8% when comparing fiscal year 2018 to fiscal year 2017 because we only signed on four new customers in 2018 as compared to seven new customers in 2017.
In fiscal year 2017, we successfully helped three customers become publicly listed in the United States through reverse merger transactions. The service fees charged to these customers were higher in fiscal year 2017 than the fees we currently charge because we lacked internal resources to provide legal and accounting advisory services and had limited shell company identification channel. As a result, we had to outsource some of the services to third-party service providers to assist us providing the consulting services we promised to our customers. As we accumulated more experiences and hired more qualified employees in fiscal year 2018, we have brought many outsourced services in house to save costs, and also more customers elected to go public through an initial public offering as opposed to a reverse merger; accordingly, we lowered the service fees charged to our customers in fiscal year 2018, and provided going public consulting services to 12 customers in fiscal year 2018.
Although the average service fees decreased by approximately $0.73 million when comparing fiscal year 2018 to fiscal year 2017, the total number of customers increased from 3 customers in fiscal year 2017 to 12 customers in fiscal year 2018 and our overall revenue in fiscal year 2018 increased by $1.67 million or 46% as compared to fiscal year 2017.
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Operating expenses
Our operating expenses consist of selling and general and administrative expenses.
For the
Year ended
July 31,
2018
For the
Year ended
July 31,
2017
Change
Change
(%)
Selling expenses
$ 1,773,159 $ 2,301,567 $ (528,408 ) (23 )%
General and administrative expenses
807,053 408,739 398,314 97 %
Total operating expenses
$ 2,580,212 $ 2,710,306 $ (130,094 ) (5 )%
Selling expenses.    Our selling expenses decreased by $528,408 or 23% from $2,301,567 in fiscal year 2017 to $1,773,159 in fiscal year 2018. The decrease in our selling expenses was primarily because we reduced our use of third party providers as we hired and retained more qualified and competent employees in fiscal year 2018; this enabled us to bring more services in house and to save costs by approximately $496,386 as compared to fiscal year 2017. In addition, the decrease in our selling expenses was also attributable to an approximately $48,025 decrease in business conference, travel and meals expenses in fiscal year 2018 as compared to fiscal year 2017. In fiscal year 2017, we initiated more marketing and promotional campaigns and seminars in order to attract and educate potential enterprise customers, and accordingly, we incurred substantial related expenses. In fiscal year 2018, with a greater market reputation, our promotional campaigns related expenditures were reduced accordingly. We expect our overall sales and marketing expenses, including but not limited to, brand promotion, salary, incentive and servicing expense, will continue to increase in the foreseeable future as and if our business further grows.
General and administrative expenses.    Our general and administrative expenses increased by $398,314 or 97%, from $408,739 in fiscal year 2017 to $807,053 in fiscal year 2018. Such increase in fiscal year 2018 was largely due to the IPO audit fees of  $200,000, and increased office lease expense by $180,616 for a larger office space leased to meet our business expansion demand. We expect our general and administrative expenses, including, but not limited to, salaries and business consulting, to continue to increase in the foreseeable future, as our business further grows. We expect our rental expenses to remain consistent unless we need to further expand our administrative office due to lack of office spaces. We expect our professional fees for legal, audit, and advisory services will increase as we become a public company upon the completion of this offering.
Interest income.    Our interest income increased by $15,834 from only $469 in fiscal year 2017 to $16,303 in fiscal year 2018. From February to July 2018, we advanced a short-term loan of  $2,750,078 (RMB18,743,157) to a third-party company, Jinqisheng Technology Co., Ltd. with interest rate of 5% per annum. The related interest income of  $15,536 has been accrued for the fiscal year ended July 31, 2018. This led to our increased interest income in fiscal year 2018.
Provision for income taxes.    Our parent company ATHL was incorporated in the British Virgin Islands. Under the current laws of the British Virgin Islands, ATHL is not subject to tax on income or capital gain. Additionally, upon payments of dividends to the shareholders, no British Virgin Islands withholding tax will be imposed.
ATIFL HK is subject to Hong Kong profits tax at a rate of 16.5%. However, it did not have any assessable profits arising in or derived from Hong Kong for the fiscal years ended July 31, 2018 and 2017, and accordingly no provision for Hong Kong profits tax has been made in these periods.
Huaya and Qianhai are incorporated in the PRC. Under the Income Tax Laws of the PRC, these companies are subject to income tax at a rate of 25%.
Our income tax expense increased by $499,791 when comparing fiscal year 2018 to 2017, primarily due to increased revenue and taxable income in fiscal year 2018.
Net income.    As a result of the foregoing, we reported a net income of  $1,946,883 for the fiscal year ended July 31, 2018, compared to a net income of  $640,960 for the fiscal year ended July 31, 2017.
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Plan of Operation
Beginning in August 2018, to complement and facilitate the growth of our consulting services, we launched AT Consulting Center, which offers financial training and acquired www.chinacnnm.com , a news and media website to focus on distributing financial news and information. Although upfront capital and human investments are required, we believe positive synergies can be generated by effectively integrating these two new business ventures with our existing consulting services, and we expect that they will become our new profit contributors in the long term. We expect CNNM will generate revenues from advertising, content subscriptions and customer news dissemination services. For advertising services, we expect our revenues to be based on the number of times and display positions the advertisements are displayed on our website over a specified period of time. Our planned initial charge for this service will be in the range of HK$1,500 (approximately $192) to HK$5,000 (approximately $641) per month or HK$10,000 (approximately $1,282) to HK$40,000 (approximately $5,128) per year. In addition, we will also accept sponsorships for particular sections of our website and the planned initial charge will be about HK$6,000 (approximately $769) per month or HK$50,000 (approximately $6,410) per year. For content subscriptions, our plan is to publish exclusive news and original articles for subscriptions under a payment plan of HK$1 (approximately $0.128) per each news or article. We estimate that 40% of this payment will be retained by us as income and the remaining 60% will be paid out to the content contributors. For our customer news dissemination service, we plan to assist our consulting service customers with their publicities and public relations by means of posting news, interviews, articles and videos about the companies and their businesses periodically. Our planned initial charge for this service will be about HK$60,000 (approximately $7,692) for 6 months or HK$100.000 (approximately $12,820) for one year. In addition to bringing new sources of revenue, we also expect that CNNM will help promote and accelerate the growth of our financial consulting business in the near future.
Liquidity and Capital Resources
To date, we have financed our operations primarily through cash flows from operations and working capital loan from our major shareholders, if necessary. We plan to support our future operations primarily from cash generated from our operations and cash on hand.
As of July 31, 2018, we had $72,965 cash and cash equivalents compared to $144,813 as of July 31, 2017. We also had $137,550 accounts receivable from one customer for consulting services rendered. We fully collected this accounts receivable subsequently in September 2018. As of July 31, 2018, we also had deferred revenue of  $547,235 derived from customer deposits for one-time registration fee and consulting services. Such amount will be recognized as revenue as our consulting services are gradually provided. From February to July 2018, we provided a short-term loan of  $2,750,078 (RMB18,743,157) to a third-party company Jinqisheng Technology Co., Ltd. with interest rate of 5% per annum. We fully collected this loan receivable in August 2018, and it is available for use in our operation as working capital if necessary.
As of July 31, 2018, we had positive working capital of  $1.96 million. Our working capital requirements are influenced by the level of our operations, the numerical volume and dollar value of our sales contracts, the progress of execution on our customer contracts, and the timing of accounts receivable collections.
We believe that our current cash and cash flows provided by operating activities, loans from our principal shareholders, and the estimated net proceeds from this offering will be sufficient to meet our working capital needs in the next 12 months from the date the audited financial statements were issued. If we experience an adverse operating environment or incur unanticipated capital expenditure requirements, or if we determine to accelerate our growth, then additional financing may be required. No assurance can be given, however, that additional financing, if required, would be available at all or on favorable terms. Such financing may include the use of additional debt or the sale of additional equity securities. Any financing which involves the sale of equity securities or instruments that are convertible into equity securities could result in immediate and possibly significant dilution to our existing shareholders.
Substantially all of our operations are conducted in China and all of our revenue, expenses, cash and cash equivalents are denominated in RMB. Due to the PRC exchange control regulations that restrict our ability to convert RMB into U.S. dollars, we may have difficulty distributing any dividends outside of China.
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We have not declared nor paid any cash dividends to our shareholders. We do not plan to pay any dividends out of our restricted net assets as of July 31, 2018.
We have limited financial obligations denominated in U.S. dollars, thus the foreign currency restrictions and regulations in the PRC on the dividends distribution will not have a material impact on our liquidity, financial condition and results of operations.
We intend to raise additional fund through our initial public offering and use these funds to grow our business primarily by:

Hiring additional employees to enhance our business structure and management;

Upgrading our corporate facilities; and

Applying a portion of these proceeds for general corporate purposes, including working capital, operating expenses and capital expenditures.
The following table sets forth a summary of our cash flows for the periods indicated:
For the years ended
July 31,
2018
2017
Net cash provided by operating activities
$ 2,036,439 $ 153,718
Net cash used in investing activities
$ (2,898,916 ) $ (20,483 )
Net cash provided by financing activities
$ 755,139 $
Net (decrease) increase in cash and cash equivalents
$ (71,848 ) $ 134,938
Cash and cash equivalents at the beginning of year
$ 144,813 $ 9,875
Cash and cash equivalents at the end of year
$ 72,965 $ 144,813
Operating Activities
Net cash provided by operating activities amounted to $2,036,439 for the fiscal year ended July 31, 2018, including net income of  $1,946,883 generated from providing consulting services to our customers. In addition, our accounts payable decreased by $571,121 because we have decreased outsourcing arrangements in the fiscal year 2018. Our taxes payable also increased by $688,781 due to our increased taxable income in the fiscal year 2018. Our deferred revenue decreased by $472,721 because some of the cash deposits we received in the fiscal year 2017 from customers for our going public consulting services and other services have been rendered in the fiscal year 2018. The overall increase in our cash flow from operating activities reflected the above combined factors.
Net cash provided in operating activities amounted to $153,718 for the fiscal year ended July 31, 2017, including our net operating income of  $640,960 as adjusted by an increase in prepaid expenses and other current assets by $386,018, and a decrease in accounts payable by $311,355, which is offset by an increase in tax payable by $204,423.
Investing Activities
Net cash used in investing activities amounted to $2,898,916 for the fiscal year ended July 31, 2018, including purchases of property and equipment of  $26,765, an increase in loans receivable of  $2,872,151 because we advanced a short-term loans to a third-party company, Jinqisheng Technology Co., Ltd., to generate interest income at an interest rate of 5% per annum. We fully collected this loan receivable in August 2018.
Net cash used in investing activities amounted to $20,483 for the fiscal year ended July 31, 2017 which includes purchases of property and equipment of  $14,965 and an increase in loans receivable of  $5,518.
Financing Activities
Net cash provided by financing activities amounted to $755,139 for the fiscal year ended July 31, 2018, representing proceeds from capital contributions from our shareholders to meet the paid in capital requirement of Qianhai during fiscal year 2018.
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There was no cash provided by or used in financing activities for the fiscal year ended July 31, 2017.
Trend Information
Other than as disclosed elsewhere in this registration statement, we are not aware of any trends, uncertainties, demands, commitments or events that are reasonably likely to have a material effect on our net revenues, income from continuing operations, profitability, liquidity or capital resources, or that would cause reported financial information not necessarily to be indicative of future operating results or financial condition.
Off-Balance Sheet Arrangements
We do not have any off-balance sheet arrangements as of July 31, 2018.
Tabular Disclosure of Contractual Obligations
We lease office space under a non-cancellable operating lease arrangement. Operating lease expense amounted to $400,151 and $219,536 for the fiscal years ended July 31, 2018 and 2017, respectively.
Future minimum lease payments under non-cancelable operating leases are as follows as of July 31, 2018:
Year ending July 31,
2019
$ 409,810
2020
121,579
Total
$ 531,389
Inflation
Inflation does not materially affect our business or the results of our operations.
Seasonality
The nature of our business does not appear to be affected by seasonal variations.
Critical Accounting Policies and Management Estimates
We prepare our consolidated financial statements in accordance with U.S. GAAP. These accounting principles require us to make judgments, estimates and assumptions on the reported amounts of assets and liabilities at the end of each fiscal period, and the reported amounts of revenues and expenses during each fiscal period. We continually evaluate these judgments and estimates based on our own historical experience, knowledge and assessment of current business and other conditions, our expectations regarding the future based on available information and assumptions that we believe to be reasonable.
The selection of critical accounting policies, the judgments and other uncertainties affecting application of those policies and the sensitivity of reported results to changes in conditions and assumptions are factors that should be considered when reviewing our financial statements. We believe the following accounting policies involve the most significant judgments and estimates used in the preparation of our consolidated financial statements.
Use of Estimates
The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates required to be made by management, include, but are not limited to, the valuation of accounts and loans receivable, useful lives of property and equipment, revenue recognition and provision necessary for contingent liabilities. Actual results could differ from these estimates.
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Accounts Receivable
Accounts receivable are recognized and carried at original invoiced amount less an estimated allowance for uncollectible amounts. We generally require advanced payment before delivery of the services but may extend unsecured credit to our customers in the ordinary course of business. We mitigate the associated risks by performing credit checks and actively pursuing past due accounts. An allowance for doubtful accounts is established and recorded based on management’s assessment of the credit history of the customers and our current relationships with them. As of July 31, 2018, and 2017, there was no allowance recorded as we consider all of the accounts receivable fully collectible.
Fair Value of Financial Instruments
We follow the provision of Accounting Standards Codification (“ASC”) 820, “Fair Value Measurements and Disclosures,” which defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A three-level fair value hierarchy prioritizes the inputs used to measure fair value. The hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows:
Level 1 — Observable inputs such as unadjusted quoted prices in active markets for identical assets or liabilities available at the measurement date.
Level 2 — Observable inputs (other than Level 1 quoted prices) such as quoted prices active markets for similar assets or liabilities, quoted prices in markets that are not active for identical or similar as or liabilities, or other inputs that are observable or can be corroborated by observable market data.
Level 3 — Inputs are unobservable inputs which reflect management’s assumptions based on the best available information.
We consider the recorded value of our financial assets and liabilities, which consist primarily of cash and cash equivalents, accounts receivable, dues from related parties, loans receivable, prepaid expenses and other current assets, deferred revenue, accrued expenses and other current liabilities, taxes payable and dues to related parties to approximate the fair value of the respective assets and liabilities as of July 31, 2018 and 2017 based upon the short-term nature of the assets and liabilities.
Revenue Recognition
Our revenue is recognized when persuasive evidence of an arrangement exists, service has occurred, and all obligations have been performed pursuant to the terms of the agreement, the sales price is fixed or determinable, and collectability is reasonably assured.
We currently generate our revenue from the following main sources:

Revenue from customer’s initial registration fee
In order to engage us for consulting services, a new customer is required to pay an initial non-refundable registration fee to us and we will then post the customer’s information and profiles on our website, which enables the customer’s corporate information to be available to the public, at which point, such registration fee is recognized as revenue. We do not charge additional customer profile maintenance fee after the initial posting is completed as limited effort is required for us to maintain such information on an on-going basis.

Revenue from consulting services
We provide consulting services to companies seeking to go public on the markets and exchanges in the United States, Hong Kong, and mainland China. We categorize our going public consulting services into three phases:
Phase I primarily includes due diligence review, market research and feasibility study, business plan drafting, accounting record review, and business analysis and recommendations. We estimate that Phase I normally takes about three months to complete.
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Phase II primarily includes reorganization, pre-listing education and tutoring, talent search, legal and audit firm recommendation and coordination, VIE contracts and other public-listing related documents review, merger and acquisition planning, investor referral and pre-listing equity financing source identification and recommendations, independent directors and audit committee candidate’s recommendation. We estimate that Phase II normally takes about eight months to complete.
Phase III primarily includes shell company identification and recommendation for customers expecting to become publicly listed through reverse merger transaction; assistance in preparation of customers’ public filings in connection with IPO or reverse merger transactions; assistance in answering comments and questions received from regulatory agencies. It is very difficult to estimate the timing of this phase of services as the completion of Phase III services is not within our control.
Each phase of consulting services is standalone and fees associated with each phase are clearly identified in our service agreements. Revenue from providing Phase I and Phase II consulting services to customers is recognized ratably over the estimated completion period of each phase. Revenue from providing Phase III consulting services to customers is recognized upon completion of a reverse merger transaction or an IPO transaction. Revenue that has been billed and not yet recognized is reflected as deferred revenue on our balance sheet.
Depending on the complexity of the underlying services arrangements and related terms and conditions, significant judgments, assumptions and estimates may be required to determine when substantial deliveries of contract elements have occurred, whether any significant ongoing obligations exist subsequent to contract execution, whether amounts due are collectible and the appropriate period or periods in which, or during which, the completion of the earnings process occurs. Depending on the magnitude of specific revenue arrangements, adjustment may be made to the judgments, assumptions and estimates regarding contracts executed in any specific period.
The provisions of ASC 740-10-25, “Accounting for Uncertainty in Income Taxes,” prescribe a more-likely-than-not threshold for consolidated financial statement recognition and measurement of a tax position taken (or expected to be taken) in a tax return. This interpretation also provides guidance on the recognition of income tax assets and liabilities, classification of current and deferred income tax assets and liabilities, accounting for interest and penalties associated with tax positions, and related disclosures. We do not believe that there was any uncertain tax position as of July 31, 2018 and 2017. As of July 31, 2018, the PRC tax returns filed in 2015 through 2017 remained open for statutory examination by the PRC tax authorities.
Recent Accounting Pronouncements
We consider the applicability and impact of all accounting standards updates (“ASUs”), and our management periodically reviews new accounting standards that are issued.
In May 2014, the Financial Accounting Standards Board (the “FASB”) issued ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606)” (“ASU 2014-09”). ASU 2014-09 requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. ASU 2014-09 will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective and permits the use of either the retrospective or cumulative effect transition method. The guidance also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts. In August 2015, the FASB issued ASU No. 2015-14, “Deferral of the Effective Date” (“ASU 2015-14”), which defers the effective date for ASU 2014-09 by one year. For public entities, the guidance in ASU 2014-09 will be effective for annual reporting periods beginning after December 15, 2017 (including interim reporting periods within those periods), and for all other entities, ASU 2014-09 will be effective for annual reporting periods beginning after December 15, 2018, and interim reporting periods within annual reporting periods beginning after December 15, 2019.
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In March 2016, the FASB issued ASU No. 2016-08, “Principal versus Agent Considerations (Reporting Revenue versus Net)” (“ASU 2016-08”), which clarifies the implementation guidance on principal versus agent considerations in the new revenue recognition standard.
In April 2016, the FASB issued ASU No. 2016-10, “Identifying Performance Obligations and Licensing” (“ASU 2016-10”), which reduces the complexity when applying the guidance for identifying performance obligations and improves the operability and understandability of the license implementation guidance.
In May 2016, the FASB issued ASU No. 2016-12 “Narrow-Scope Improvements and Practical Expedients” (“ASU 2016-12”), which amends the guidance on transition, collectability, noncash consideration and the presentation of sales and other similar taxes.
We adopted ASC 606 on August 1, 2018, using the modified retrospective method where the cumulative effect is recognized at the date of initial application. We believe that the adoption of this new guidance will not result in a cumulative catch-up adjustment to the opening balance sheet of retained earnings at the effective date.
In February 2018, the FASB issued ASU 2018-02, Income Statement — Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income . The amendments in this update affect any entity that is required to apply the provisions of Topic 220, Income Statement — Reporting Comprehensive Income, and has items of other comprehensive income for which the related tax effects are presented in other comprehensive income as required under GAAP. The amendments in this update are effective for all entities for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption of the amendments in this update is permitted, including adoption in any interim period, (1) for public business entities for reporting periods for which financial statements have not yet been issued and (2) for all other entities for reporting periods for which financial statements have not yet been made available for issuance. The amendments in this update should be applied either in the period of adoption or retrospectively to each period (or periods) in which the effect of the change in the U.S. federal corporate income tax rate in the Tax Cuts and Jobs Act is recognized. We do not expect the adoption of this ASU to have a material effect on our consolidated financial statements.
In March 2018, the FASB issued ASU 2018-05 — Income Taxes (Topic 740): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118 (“ASU 2018-05”), which amends the FASB Accounting Standards Codification and XBRL Taxonomy based on the Tax Cuts and Jobs Act (the “Jobs Act”) that was signed into law on December 22, 2017 and Staff Accounting Bulletin No. 118 (“SAB 118”) that was released by the Securities and Exchange Commission. The Jobs Act changes numerous provisions that impact U.S. corporate tax rates, business-related exclusions, and deductions and credits and may additionally have international tax consequences for many companies that operate internationally. We do not believe this guidance will have a material impact on our consolidated financial statements.
In June 2018, the FASB issued ASU 2018-07: “Compensation-Stock Compensation (Topic 718) — Improvements to Nonemployee Share-Based Payment Accounting”. The amendments in this update expand the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees. An entity should apply the requirements of Topic 718 to nonemployee awards except for specific guidance on inputs to an option pricing model and the attribution of cost (that is, the period of time over which share-based payment awards vest and the pattern of cost recognition over that period). The amendments specify that Topic 718 applies to all share-based payment transactions in which a grantor acquires goods or services to be used or consumed in a grantor’s own operations by issuing share-based payment awards. The amendments also clarify that Topic 718 does not apply to share-based payments used to effectively provide (1) financing to the issuer or (2) awards granted in conjunction with selling goods or services to customers as part of a contract accounted for under Topic 606, Revenue from Contracts with Customers. The amendments in this update are effective for public business entities for fiscal years beginning after December 15, 2018, including interim periods within that fiscal year. We do not believe this guidance will have a material impact on our consolidated financial statements.
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INDUSTRY
Industry Overview
This Section contains certain estimates and information from an industry report commissioned by us and prepared by Frost & Sullivan Inc. (“Frost & Sullivan”), an independent market research firm, regarding our industries and our market positions in China, which have not been independently verified by us, the underwriters or any of their respective affiliates or advisers. The information in such sources may not be consistent with other information compiled in or outside of China.
Overview of Financial Services Industry in China
According to the International Monetary Fund (IMF), the nominal GDP of China increased from RMB59,696.3 billion in 2013 to RMB81,133.0 billion in 2017 at a CAGR of 8.0%. Driven by strong domestic consumption, ambitious government policy direction and active financing activities, the overall economy in China is expected to be at a CAGR of 8.2% from 2018 to 2022 (according to Frost & Sullivan). Driven by the social and economic development in China, the overall direct investment (inward and outward) in China increased from USD 123.9 billion in 2013 to approximately USD 133.7 billion in 2016, representing a CAGR of 2.6%:
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Source:   Ministry of Commerce of PRC, Frost & Sullivan Report
Financial Consultancy Market in China
The China capital market has experienced rapid growth ever since the global financial crisis occurred in late 2008. PRC domestic companies are looking for opportunities in China as well as abroad to increase their presence in the global market. It is expected that financing activities such as mergers and acquisitions, and initial public offerings, will become more frequent. Financial consultancy services are particularly important in these transactions as consultants can assist their clients with strategic planning and other professional services. The financial consultancy market has been growing rapidly in recent years driven by factors including rising M&A and financing activities, strong government support in terms of regulating policies and measures, enhanced participation of more parties and growing awareness of the importance of financial consultancy by enterprises. Based on expert interviews and primary research conducted by Frost & Sullivan, it is estimated that, from 2013 to 2017, the overall financial consultancy market in China increased from RMB136.9 billion to RMB257.2 billion at a CAGR of 17.1%; and looking forward, it is forecasted that the economy in China will maintain a steady growth momentum in the next five years and by 2022, the financial consultancy market is expected to reach RMB506.0 billion, at a CAGR of 14.2% (according to Frost & Sullivan).
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Source:   Frost & Sullivan Report
Underpinned by the robust growth of the capital market in the PRC in recent years, the total number of listed companies in the PRC witnessed a steady growth from 2,489 in 2013 to 3,485 in 2017, representing a CAGR of 8.8% from 2013 to 2017. In addition, the number of listed companies on the Shanghai Stock Exchange (SSE) and Shenzhen Stock Exchange (SZSE) increased at a positive CAGR of 10.0% and 8.0% from 2013 to 2017 respectively. From 2012 to 2013, the PRC authorities prohibited IPOs resulting in zero newly listed companies occurring in 2013. From 2014 onward, the government re-approved IPO applications and therefore the total number of newly listed companies in the PRC rapidly increased at a CAGR of 51.7% from 2014 to 2017.
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Source:   National Bureau of Statistics of the PRC, SSE, SZSE, Frost & Sullivan Report
The expansion of the capital market and demand for fund raising is highlighted by the growth of listed companies. According to the market data provided by the Hong Kong Exchanges and Clearing (HKEx), the total number of listed companies in Hong Kong increased from 1,643 in 2013 to 2,118 in 2017, representing a CAGR of approximately 6.6%. In addition, the number of newly listed companies in Hong
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Kong saw an overall growth from 110 in 2013 to 174 in 2017 at a CAGR of approximately 12.2% from 2013 to 2017. The growing number of listed companies in Hong Kong underpinned the demand for IPO consulting services as listed companies require consulting services in order to comply with the listing requirements specified by the HKEx.
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Source:   HKEx, Frost & Sullivan Report
Capital markets in the United States have had steady developments in recent years. Based on the market data provided by the Nasdaq Stock Market and World Federation of Exchange, from 2014 to 2017, the total number of existing listed companies on the NYSE and Nasdaq slightly decreased, primarily due to stringent listing regulations and increasing M&A activities in the US capital markets in recent years; from 2014 to 2017, the total number of newly listed companies on the NYSE and Nasdaq increased from 290 in 2014 to 317 in 2017, representing a CAGR of 3.0%; and as of September 11, 2018, there were 153 Chinese companies listed on the NYSE or Nasdaq (according to Frost & Sullivan).
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Source:   World Federation of Exchange, Nasdaq, Frost & Sullivan Report
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Total Number of Newly Listed Companies on NYSE and Nasdaq Originating from China, 2013 – 2018
2013
2014
2015
2016
2017
2018*
Nasdaq
2 8 8 5 21 18
NYSE
1 2 1 2 2 1
*
2018 refers to the period from January 1, 2018 to September 27, 2018
Source:   World Federation of Exchange, Nasdaq, Frost & Sullivan Report
Financial Media Service Market in China
The improving economy of the PRC has been directly driven by the robust capital market in recent years. As a result, the demand for up-to-date financial information on the internet has grown rapidly. In general, financial news media providers offer financial analysis and insight for investors. Online commercial advertisements provide streams of income for financial news media providers. Based on expert interviews and primary market research conducted by Frost and Sullivan, the total revenue of financial news media providers increased from RMB3.5 billion in 2013 to RMB6.2 billion in 2017, with a CAGR of 15.2% from 2013 to 2017; and with the continuous expansion of capital markets in the PRC and Hong Kong, the demand for such services are expected to grow; therefore, the market size by revenue of the financial news media industry is expected to grow at a CAGR of 17.1% from 2018 to 2022.
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Source:   Frost & Sullivan Report
Financial Training and Education Market in China
Underpinned by the strong economic growth and rising disposable income per capital in China, the demand for financial training and education in the PRC has been increasing. According to the Guiding Opinions of the State Council on Actively Advancing the “Internet plus” Action by the State Council of the PRC, the government has been promoting the synergy between the internet and financial training and education. Based on expert interviews and primary research conducted by Frost & Sullivan, the financial training and education market by number of students in China has been growing from 5.4 million in 2013 to 9.5 million in 2017, at a CAGR of 15.4% (according to Frost & Sullivan).
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Source:   Frost & Sullivan Report
Financial Services Industry.    We believe that the financial services industry in China presents the following key characteristics:
Rising demand for financial consultancy services.    In the PRC, financial consultancy services are becoming increasingly important as such services can contribute to enhance financial returns and thus are favored by more and more enterprises across the country. Industry regulations are generally favoring the financial consultancy market, but have become more stringent so as to eradicate deviant practices and encourages real value-added financial consultancy services.
Growing awareness for professional executive training.    The capital market in China has been very active recently with an influx of newly listed companies. As of mid-2018, based on market data provided by Shanghai Stock Exchange and Shenzhen Stock Exchange, there were more than 3,000 companies listed either on the two exchanges. We believe that the senior management teams of these listed companies have an increasing awareness of the importance of financial education, wishing to enhance on their professional knowledge, and provide better returns to their investors. The increase in number of listed companies thereby translates into opportunities for the professional financial education providers in the PRC.
Strong business network.    It is not uncommon for financial advisory companies to offer training and education programs for existing and potential clients. Financial training and education programs such as executive training and career training have cultivated a large group of talents for different positions in the finance industry including company secretaries, CFOs, and fund managers. These programs essentially build a strong knowledge platform and business network for entrepreneurs, company executives, and other elite individuals which potentially also broaden customer resources for the financial advisory companies.
Technology advancement in media industry.    With the advancement of technology and change in consumer behavior, financial media outlets in the PRC have gradually shifted their focus from offline to online. Many financial media companies are now incorporating large amounts of audio visual into their content presentations, including but not limited to 24/7 financial news broadcasting, internet radio, short videos and webcast. Financial media companies in the PRC tend to target specific types of services within the market, or target a specific type of clients, leading to a broadened revenue stream, from the traditional advertising revenue, to membership-based pricing scheme, and products/services-based offerings. With a specialized positioning within the value chain, companies are able to build up deeper market know how, thus providing more professional media services.
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Strong government support .   In order to encourage PRC companies to go public, governments from different municipalities and provinces have established various schemes and policies to subsidize these companies. Below is a list of examples of subsidies offered by municipal or provincial governments:
Issuing Department
Issuing Date
Amount of Subsidy
Beijing Municipal Government
May 24, 2018
Depending on the Listing stock market, the maximum amount is RMB6.0 million.
Hubei Provincial Government
April 27, 2018
For companies planning to list on SSE and SZSE: Maximum amount of RMB4.0 million. For companies planning to list on an oversea stock market: Maximum amount of RMB3.0 million.
Shenzhen Municipal Government
December 10, 2017
For companies planning to list on an oversea stock market: Maximum amount of RMB5.0 million.
Jinan City Government
June 6, 2018
For companies planning to list on an oversea stock market: Maximum amount of RMB5.0 million. For companies planning to list on the OTC. Maximum amount of RMB2.0 million.
Guangdong Provincial Government
August 31, 2018
For companies planning to list on SSE and SZSE: Maximum amount of RMB3.0 million. For companies successfully listed on the OTC Market: RMB500 thousand.
Source:   Frost & Sullivan Report
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OUR BUSINESS
Overview
We are a consulting company providing financial consulting services to small and medium-sized enterprises. Since our inception in 2015, the main focus of our consulting business has been providing comprehensive going public consulting services designed to help small and medium-sized enterprises become public companies on suitable markets and exchanges. Our goal is to become an international financial consulting company with clients and offices throughout Asia. We have to date primarily focused on helping clients going public on the OTC markets and exchanges in the U.S., but we are in the process of expanding our service to listing clients on domestic exchanges in China as well as the Hong Kong Stock Exchange.
Since our inception until July 31, 2018, the close of our last full fiscal year, our revenue was mainly generated from our going public consulting services. We also generated a small portion of our revenue from a one-time registration fee charged to our new clients. We generated a total revenue of approximately US$104,000, US$3,635,000, and US$5,308,000 for the fiscal years ended July 31, 2016, 2017, and 2018, respectively. The revenues generated from going public consulting services were $49,253, $3,469,224, and $5,236,196 for the fiscal years ended July 31, 2016, 2017, and 2018, respectively. The year to year increases were due to the strong growth of our going public consulting services in these years.
Beginning in August 2018, to complement and facilitate the growth of our going public consulting service, we launched AT Consulting Center to offer financial consulting programs in Shenzhen, and in September 2018, we acquired CNNM, or www.chinacnnm.com, a news and media website focused on distributing financial news and information. Although upfront capital and human investments are required in connection with the aforementioned developments, we believe positive synergies can be generated by effectively integrating these two new business ventures with our existing going public consulting services, and we expect these to contribute to our growth in the long run.
In China, a fast-growing economy and a positive market environment have created many entrepreneurial and high-growth enterprises, many of which need assistance in obtaining development funds through financing. China has relatively immature financial systems compared to developed countries. Due to restrictions imposed by China’s foreign exchange regulations, it is difficult for foreign capital to enter China’s capital market. Because of the strict listing policies and a relatively closed financial environment in mainland China, most small to medium sized enterprises in the development stage are unable to list on domestic exchanges in China. Therefore, many Chinese enterprises strive to enter international capital markets through overseas listing for equity financing. However, in China, there is a general lack of understanding of international capital markets, as well as a lack of professional institutions that provide overseas going public consulting services to these companies, and many of them may not be familiar with overseas listing requirements.
We launched our consulting services in 2015. Our aim was to assist these Chinese enterprises by filling the gaps and forming a bridge between PRC companies and overseas markets and exchanges. We have a team of qualified and experienced personnel with legal, regulatory and language expertise in several overseas jurisdictions. Our services are designed to help small and medium sized enterprises in China achieve their goal of becoming public companies. We create a going public strategy for each client based on many factors, including our assessment of the client’s financial and operational situations, market conditions, and the client’s business and financing requirements. Since our inception and up to the date of this registration statement, we have successfully helped three Chinese enterprises to be quoted on the U.S. OTC markets and are currently assisting our other clients in their respective going public efforts. All of our current and past clients have been Chinese companies, and we plan to expand our operations to other Asian countries, such as Malaysia, Vietnam, and Singapore, by the year of 2020.
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Corporate History and Structure
On January 5, 2015, we established a holding company, ATHL (formerly known as Eternal Fairy International Limited), under the laws of the BVI. ATHL owns 100% of ATIFL HK, a Hong Kong Company incorporated on January 6, 2015 (formerly known as China Elite International Holdings Limited).
On May 20, 2015, WFOE (Huaya Consultant (Shenzhen) Co., Ltd.) was incorporated pursuant to the PRC law as a wholly foreign owned enterprise. ATIFL HK holds 100% of the equity interests in WFOE.
On November 3, 2015, our variable interest entity, Qianhai Asia Times (Shenzhen) International Financial Services Co., Ltd. (Qianhai) was incorporated pursuant to the PRC law as a limited company. We operate our going public financial consulting services through Qianhai.
On December 11, 2015, Qianhai established a wholly-owned subsidiary Qianhai Asia Times (Shenzhen) International Fund Management Co., Ltd; we disposed of our entire equity ownership in Qianhai Asia Times (Shenzhen) International Fund Management Co., Ltd on September 19, 2018.
As the date of this registration statement, Qianhai has two shareholders, both are PRC residents. Ronghua Liu, as trustee, is holding 4,925,000 shares (the “Beneficial Shares”), for their beneficial owner, Qiuli Wang (the “Beneficiary”), pursuant to a trust deed entered into and executed under the PRC law on December 11, 2017. The trust deed stipulates, among other customary provisions, that (1) all dividends and interest accrued on the Beneficial Shares shall be payable as directed by the Beneficiary in writing, and (2) the Beneficiary may transfer the Beneficial Shares to a third-party company or individual as required.
In August 2018, Qianhai launched AT Consulting Center to provide financial consulting services.
On September 20, 2018, ATIFL HK acquired and started operating CNNM, a news and media platform based in Hong Kong.
Pursuant to PRC law, each entity formed under PRC law shall have a business scope as submitted to the Administration of Industry and Commerce or its local counterpart. Depending on the particular business scopes, approval by the relevant competent regulatory agencies may be required prior to commencement of business operations. WFOE’s business scope is to primarily engage in investment consulting, business management consulting, corporate image engineering, and communication product development. Since the sole business of WFOE is to provide Qianhai with technical support, consulting services and other management services relating to its day-to-day business operations and management in exchange for a service fee approximately equal to Qianhai’s net income after the deduction of the required PRC statutory reserve, such business scope is appropriate under PRC law. Qianhai, on the other hand, is also able to, pursuant to its business scope, provide financial consulting businesses. Qianhai is approved by the competent regulatory body in Shenzhen that regulates financial consulting businesses, to engage in financial consulting business operations.
Mr. Ronghua Liu was the majority shareholder of Qianhai prior to this offering. However, we control Qianhai through contractual arrangements, which are described under “Business — Contractual Arrangements between WFOE and Qianhai.”
Our principal executive offices are located at Room 3803, Dachong International Centre, 39 Tonggu Road, Nanshan District, Shenzhen City, Guangdong Province, China, and our telephone number is (+86) 0755-8695-0818. We maintain a website at www.atifchina.com. Our website or any other website does not constitute a part of this registration statement.
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The following diagram illustrates our corporate structure, including our principal subsidiaries, as of the date of this registration statement:
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Contractual Arrangements between WFOE and Qianhai
Neither we nor our subsidiaries own any equity interest in Qianhai. Instead, we control and receive the economic benefits of Qianhai’s business operation through a series of contractual arrangements. WFOE, Qianhai and its shareholders entered into a series of contractual arrangements, also known as VIE Agreements, on September 5, 2018. The VIE Agreements are designed to provide WFOE with the power, rights and obligations equivalent in all material respects to those it would possess as the sole equity holder of Qianhai, including absolute control rights and the rights to the assets, property and revenue of Qianhai.
On October 9, 2018, the shareholders of Qianhai, Ronhua Liu and Ka Feng, transferred a total of 75,000 shares (25,000 shares from Ronghua Liu and 50,000 shares from Feng Ka) of Qianhai’s stock to Qiang Chen, who is the CEO of Qianhai. As a result of the transfers, Ronghua Liu now holds 4,925,000 shares, or 98.5%, of the issued and outstanding shares of Qianhai; Qiang Chen now holds 75,000 shares, or 1.5% of the issued and outstanding shares of Qianhai; and Ka Feng ceased to be a shareholder of Qianhai. WFOE, Qianhai, Ronghua Liu, and Feng Ka executed cancellation agreements for each of the VIE agreements executed on September 5, 2018. At the same time, WFOE, and Qianhai entered into and executed VIE agreements with Qianhai’s new shareholders, Ronghua Liu and Qiang Chen, together holding 100% of Qianhai’s shares (the “Qianhai Shareholders”).
According to the Exclusive Service Agreement, Qianhai is obligated to pay service fees to WFOE approximately equal to the net income of Qianhai after deduction of the required PRC statutory reserve.
Each of the VIE Agreements is described in detail below:
Exclusive Service Agreement
Pursuant to the Exclusive Service Agreement between Qianhai and WFOE, WFOE provides Qianhai with technical support, consulting services, intellectual services and other management services relating to its day-to-day business operations and management, on an exclusive basis, utilizing its advantages in technology, human resources, and information. Additionally, Qianhai granted an irrevocable and exclusive option to WFOE to purchase from Qianhai, any or all of its assets at the lowest purchase price permitted under PRC laws. Should WFOE exercise such option, the parties shall enter into a separate asset transfer or
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similar agreement. For services rendered to Qianhai by WFOE under this agreement, WFOE is entitled to collect a service fee calculated based on the time of services rendered multiplied by the corresponding rate, the plus amount of the services fees or ratio decided by the board of directors of WFOE based on the value of services rendered by WFOE and the actual income of Qianhai from time to time, which is approximately equal to the net income of Qianhai after deduction of the required PRC statutory reserve.
The Exclusive Service Agreement shall remain in effect for 20 years unless it is terminated earlier by Qianhai and WFOE in writing.
The executive director of WFOE, Mr. Qiang Chen, who is the CEO of Qianhai, is currently managing Qianhai pursuant to the terms of the Exclusive Service Agreement. WFOE has absolute authority relating to the management of Qianhai, including but not limited to decisions with regard to expenses, salary raises and bonuses, hiring, firing and other operational functions. Upon establishment of the Company’s audit committee at the consummation of this offering, the Company’s audit committee will be required to review and approve in advance any related party transactions, including transactions involving WFOE or Qianhai.
Equity Pledge Agreement
Under the Equity Pledge Agreement between WFOE, Qianhai and the Qianhai Shareholders, the Qianhai Shareholders pledged all of their equity interests in Qianhai to WFOE to guarantee the performance of Qianhai’s obligations under the Exclusive Service Agreement. Under the terms of the Equity Pledge Agreement, in the event that Qianhai or the Qianhai Shareholders breach their respective contractual obligations under the Exclusive Service Agreement, WFOE, as pledgee, will be entitled to certain rights, including, but not limited to, the right to collect dividends generated by the pledged equity interests. The Qianhai Shareholders also agreed that upon occurrence of any event of default, as set forth in the Equity Pledge Agreement, WFOE is entitled to dispose of the pledged equity interest in accordance with applicable PRC laws. The Qianhai Shareholders further agreed not to dispose of the pledged equity interests or take any actions that would prejudice WFOE’s interest.
The Equity Pledge Agreement is effective until all payments due under the Exclusive Service Agreement have been paid by Qianhai. WFOE shall cancel or terminate the Equity Pledge Agreement upon Qianhai’s full payment of fees payable under the Exclusive Service Agreement.
The purposes of the Equity Pledge Agreement are to (1) guarantee the performance of Qianhai’s obligations under the Exclusive Service Agreement, (2) make sure the Qianhai Shareholders do not transfer or assign the pledged equity interests, or create or allow any encumbrance that would prejudice WFOE’s interests without WFOE’s prior written consent, and (3) provide WFOE control over Qianhai. In the event Qianhai breaches its contractual obligations under the Exclusive Service Agreement, WFOE will be entitled to foreclose on the Qianhai Shareholders’ equity interests in Qianhai and may (1) exercise its option to purchase or designate third parties to purchase part or all of their equity interests in Qianhai and WFOE may terminate the VIE Agreements after acquisition of all equity interests in Qianhai or form a new VIE structure with the third parties designated by WFOE; or (2) dispose of the pledged equity interests and be paid in priority out of proceed from the disposal in which case the VIE structure will be terminated.
Call Option Agreement
Under the Call Option Agreement, the Qianhai Shareholders irrevocably granted WFOE (or its designee) an exclusive option to purchase, to the extent permitted under PRC law, once or at multiple times, at any time, part or all of their equity interests in Qianhai. The option price is equal to the capital paid in by the Qianhai Shareholders subject to any appraisal or restrictions required by applicable PRC laws and regulations. As of the date of this registration statement, if WFOE exercised such option, the total option price that would be paid to all of the Qianhai Shareholders would be approximately $728,000, which is the aggregate registered capital of Qianhai. The option purchase price shall increase in case the Qianhai Shareholders make additional capital contributions to Qianhai, including when the registered capital is increased upon Qianhai receiving the proceeds from our initial public offering.
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Under the Call Option Agreement, WFOE may at any time under any circumstances, purchase, or have its designee purchase, at its discretion, to the extent permitted under PRC law, all or part of the Qianhai Shareholders’ equity interests in Qianhai. The Call Option Agreement, together with the Equity Pledge Agreement, Exclusive Service Agreement, and the Shareholders’ Voting Rights Proxy Agreement, enable WFOE to exercise effective control over Qianhai.
The Call Option Agreement remains effective for a term of 20 years and may be renewed at WFOE’s election.
Shareholders’ Voting Rights Proxy Agreement
Under the Shareholders’ Voting Rights Proxy Agreement, the Qianhai Shareholders authorize WFOE to act on their behalf as their exclusive agent and attorney with respect to all rights as shareholders, including but not limited to: (a) attending shareholders’ meetings; (b) exercising all the shareholder’s rights, including voting, that shareholders are entitled to under the laws of China and the Articles of Association, including but not limited to the sale or transfer or pledge or disposition of shares in part or in whole; and (c) designating and appointing on behalf of shareholders the legal representative, the executive director, supervisor, the chief executive officer and other senior management members of Qianhai.
The term of the Shareholders’ Voting Rights Proxy Agreement is the same as the term of the Call Option Agreement. The Shareholders’ Voting Rights Proxy Agreement is irrevocable and continuously valid from the date of execution of the Shareholders’ Voting Rights Proxy Agreement, so long as the Qianhai Shareholders are shareholders of Company.
Competitive Strengths
We believe that the following strengths enable us to capture opportunities in the financial service industry in China and differentiate us from our competitors:
Experienced and Highly Qualified Team
We have a highly qualified professional service team with extensive experience in going public consulting services. Our professional team members have an average of five years of experience in their respective fields of international finance and capital market, cross-border and domestic listing services, and marketing. The majority of the members of our team previously worked in the technology or finance industries. Our President and CEO, Ms. Qiuli Wang, has 5 years of experience in corporate management. She maintains a strong network with various government agencies and business leaders. She has extensive experience in domestic and overseas capital markets, M&A, FinTech and other related fields. Ms. Wang was previously the deputy general manager of Morgan Networks, an integrated B2C online shopping mall utilizing its proprietary Morgan Payment Instant Settlement System. Our executive director, Mr. Qiang Chen, has 10 years of experience in the Chinese, U.S. and Hong Kong capital markets. He has personally assisted three companies to go public in the U.S., and has provided financing, corporate restructuring and M&A strategy consulting services.We highly value members of our qualified professional team and are on the constant lookout for new talents to join our team.
Recognition and Reputation Achieved from Our Previous Success
Since our inception in 2015, we have successfully helped three clients to be quoted on the U.S. OTC markets. Our proven track records and professionalism have won us recognition and reputation within the consulting service industry in China. We believe we are one of the few going public consulting service providers that possess the necessary resources and expertise to provide comprehensive personalized one-stop going public consulting services to clients.
Long Term Cooperation Relationship with Third Party Professional Providers
We have established long-term professional relationships with a group of well-known third party professional providers both domestically and in the U.S., such as investment banks, certified public accounting firms, law firms, investor relations agencies, whose services and support are necessary for us to provide high quality one-stop going public consulting service to our clients. It took us years of hard work to
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demonstrate to these professional organizations that we are a worthy partner capable of providing high quality professional services that conforms to their high standards. As a result, our clients are able to gain direct access to and obtain high quality professional services from our third party professional providers.
Long Term Cooperation Relationships with Local Chamber of Commerce and Associations
We believe our recent success was at least partially attributable to our long term cooperation relationships with local chambers of commerce and associations. There are no contractual relationships between us and these organizations. We were able to gain access to many prospective clients through events organized by these organizations. Our cooperation relationships with these local organizations helped us to: (1) understand the evolving needs of our potential clients; (2) recognize the trends of the local business community we strive to serve; and (3) provide timely feedbacks to our potential clients and maintain open communication channels with local business communities.
Growth Strategies
Since our inception in 2015, we have achieved rapid growth of our consulting business, which was reflected in a 4995% increase in our revenue from fiscal year 2016 to fiscal year 2018. Our goal is to continue building upon the prior success, expand our consulting services from China to the rest of Asia, and grow into an international consulting service company. We believe the following strategies will help us achieve our goal.
Attract and recruit highly qualified professionals to join our team.
As a consulting company, the services we offer our clients are based on the knowledge, expertise and insight of our professional team. In order to expand and grow our business, we need to aggressively recruit and attract highly qualified professionals to join our team. We have an internal promotion system and a vocational training program as part of our staff benefits. The Chinese economy has grown steadily in recent years, but its financial system is not yet fully developed and there has been a lack of qualified professionals well-versed in the operations of international financial markets. One of our main objectives for launching AT Consulting Center is to educate, train, and cultivate qualified professionals for China’s fast expanding financial industry, with the potential of becoming a source of supply of highly qualified members of our growing consulting team.
Expand our going public consulting services from U.S. based markets and exchanges to include Chinese domestic exchanges and the Stock Exchange of Hong Kong.
To develop our business, we need to expand our client base. In April 2018, the Stock Exchange of Hong Kong (SEHK) announced a set of new listing rules designed to accommodate Chinese enterprises. These new rules have made the SEHK more attractive and accessible to Chinese enterprises, while also presenting an opportunity for us to expand our client base to include those who would prefer to be listed on the SEHK rather than on PRC domestic or overseas exchanges. We are presently in the process of assembling a team specialized in SEHK consulting listing services. In addition, for enterprises not willing to list abroad but meeting the requirements of the Chinese domestic exchanges, we will develop personalized going public consulting service to guide them through the domestic listing process.
Invest in new complementary business ventures to facilitate the growth of our consulting services business and create more additional sources of revenues.
In 2018, we made the strategic decision to launch our AT Consulting Center. Due to the growth of the Chinese economy, there is a high demand for financial consulting services. With a population of 1.4 billion, China has a consumer market unmatched by any country in the World. According to statistics from Credit Suisse’s 2015 Global Wealth Report, China’s total household wealth reached 22.8 trillion US dollars in 2015, second only to the United States. With newly accumulated wealth, more individuals, families, and enterprises need financial services. However, we believe that traditional consulting organizations are not meeting such market demand by offering professional financial consulting services; we have practical knowledge and hands-on experience in financial planning and capital markets operations, and other
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resources to offer such financial consulting services. AT Consulting Center was launched to meet the demand for real world financial advisory services designed specifically to meet the needs of each of our three targeted groups — enterprises, individuals and families.
Although an upfront capital investment is necessary to fund the launch and operations of AT Consulting Center, we anticipate a positive revenue flow will be realized in consulting fees for our services. In addition, we also plan to utilize AT Consulting Center as a marketing platform to expand and promote our going public consulting business.
On September 20, 2018, we acquired CNNM, www.chinacnnm.com, a news and media on line platform with over 10 million registered users. We are currently in the planning and development phase to implement a number of business initiatives for CNNM. One of the initiatives is to build a portal for our consulting business on CNNM, where information and news about overseas capital markets relating to our consulting services will be broadcasted.
We believe, if we are able to successfully implement and execute our business strategies for AT Consulting Center and CNNM, then each will have the potential to bring additional revenue streams, and together, combined with our existing going public consulting business, will form an integrated business that is capable of continued growth and expansion into a successful international enterprise.
Our services
Our Going Public Consulting Services
We started our consulting services in China in November 2015, and while currently still in the development stage, we have steadily grown into a company that has achieved some degree of recognition in the going public consulting services industry in China. In 2016, for the purpose of promoting and generating awareness of our business, we held nearly one hundred forums and lectures in Shenzhen, Guangzhou, Hangzhou, Shenyang, Dalian, Jilin, and Xiamen with local government, organizations and enterprises covering cross-border listing related topics. We also aggressively grew our relationship resources with prospective clients by establishing cooperation with various provincial and city chambers of commerce and business associations throughout mainland China, such as the Wenzhou Chamber of Commerce in Shenyang, Zhejiang Chamber of Commerce in Shenzhen, Shenzhen Elite Chamber of Commerce, and SME Service Platform for the Northeast China. As a result, our consulting services grew rapidly and we were able to achieve profitability in the following years. In 2016, we entered into consulting agreements with three enterprises, which became public companies in the U.S. by being quoted on the OTC market in 2017 under our guidance. In 2017, we entered into consulting agreements with seven enterprises, and five in 2018 as the date of this registration statement. As of the date of this registration statement, all our clients are based in mainland China; however, we plan to expand our operations throughout Asia in the near future. We have an experienced professional service team, with extensive experience in going public consulting services, and a network of third party service providers including accounting firms, law firms, institutional investors, and investment banks.
We provide each client with comprehensive one-stop going public consulting services adapted to each client’s specific needs. Before becoming a client, a prospective client must first meet a set of requirements similar to the eligibility standards of its targeted exchange or markets. If we are able to confirm the qualifications of the prospective client after an initial due diligence investigation, we enter into a service agreement and our professional consulting team starts to guide the client through the going public process in each of the following three stages.
Stage I
We carry out the following evaluation and planning in order to assess and prepare our client for becoming a public company through the following steps:

we conduct a due diligence investigation and evaluation of the business and financial position of the client, including its assets and liabilities, capital structure, management, development prospect and business model;
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we offer assistance in streamlining and standardization of the client’s business model and organization structure to achieve optimization;

we help the client integrate its resources to highlight the value of its business;

we connect the client facing funding shortages with venture capital funds, banks or other financial institutions that can provide potential assistance in its financing needs;

we help the client become familiar with regulations of the securities markets and assist it in meeting the standards for going public; and

we assist the client in identifying potential employees, advisory board members, board of director members, consultants, advisors, market experts and any other persons that can add value to the client’s strategy and/or business.
Stage II
Based on the result of our evaluation of the client in the pre-listing stage we devise and carry out a detailed going public plan on behalf of our client through the following steps:

we assist the client in identifying qualified professional firms in legal, accounting, investment banking, investor relations and other required service to support the client’s transition to a public company and its subsequent offerings and investor awareness campaigns;

we work with other third party professional parties engaged by the client to identify the most suitable path in going public for the client by means of  (i) initial public offering; (ii) acquisition by or merger with a public company with business operations, (iii) merger with a public company with nominal operations other than a “special purpose acquisition company” (“SPAC”), or (iv) merger with a SPAC;

we assess to validate or modify the equity position of the client, and work with qualified investment bankers, certified public accountants, and attorneys to set up the capital structure, stock par value and holding percentages of its shareholders, and, where necessary, help the clients to build a new equity structure in accordance with requirements of the relevant securities regulatory commission;

we assist the client in preparation for investor presentations, assembling due diligence material required for interested investors or investment banks in financing the client’s going public process;

we assist the client with key negotiations with various third parties and help the client navigate the process and procedure of listing on an exchange; and

we provide business management trainings to the client’s management to prepare them for the responsibilities and requirements that come with being a public company.
Stage III
After the client successfully completes the going public process, for the following six months, we continue to work with the client transitioning to a public company, to that effect:

we help the client establish an effective corporate governance system, including the board of directors, audit committee, compensation committee, corporate governance and nominating committee, when applicable, to oversee the client’s management team;

we assist, using outside legal counsel as required, with the preparation of all internal corporate documents, including corporate resolutions, minutes, changes and amendments to corporate documents, as required;

we assist the client in meeting public reporting requirements and the preparation of required legal and regulatory documents, including, but not limited to disclosure statements and agreements, subscription agreements, federal, state and regulatory filings, as required;

we assist in liaising with investors for the purposes of raising capital, as required; and
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we assist the clients in up-listing, debt and equity financing, as required.
We strive to complete the going public process for our clients within a pre-defined time period, usually six months, and once listed in the chosen exchange, we continue supporting our clients for the next six months to assist with transitioning from private companies to public companies. We also offer options, through a separate engagement agreement, to extend our services after the end of our initial going public service, if a client expresses interest.
Our Fee Structure for Going Public Consulting Service
Our consulting fees are negotiated on a case-by-case basis, taking into consideration the specific services that our team provides, the nature of the business and requirements, and our business relationship with each client.
We charge our clients a fixed consulting fee in installments determined by the projected completion phases of services rendered. Our fees range from $1,000,000 to $2,500,000 based on the technical complexity and conditions of each individual client. In general, the first installment is due within three days following the signing of the service agreement; the second installment is due once we complete the work for Stage I; the third and the subsequent installments are due once we complete certain predefined milestones during the going public process. The installment payment schedule is designed to ensure that we get compensated in a timely manner while affording our clients flexibility in securing the funds for our consulting fees.
Occasionally, for certain clients who demonstrate outstanding growth potential, such as a 30% or more year-to-year growth of revenues for at least the past three years, and (or) possess excellent market positions, represented by at least a 5% market share in the Chinese domestic market in the industry the company operates, we are willing to adopt a fee structure that includes both cash payment and partial equity ownership, which usually amounts to 3 – 10% of the clients’ total equity shares. Such approach has the potential to bring us a considerable return on capital while easing the clients’ burden of raising funds for going public. Currently, we do not hold any position in any of our clients’ equities.
Consulting Services Clients
The majority of our clients are small to medium-sized enterprises seeking growth and expansion through going public on recognized exchanges, and 98.6% of our total revenues of US$5,236,196 was generated from our consulting services for the fiscal year ended July 31, 2018. Since our inception in 2015 through July 31, 2018, all of our former and current clients were based in mainland China, The number of our consulting service clients were one, three, and 12, respectively, for the fiscal years ended July 31, 2016, 2017, and 2018. Due to the nature of our consulting business, which requires us to dedicate a large amount of resources to each of our clients, we were able to generate a relatively large revenue from a small number of clients. As a result, we had one, three, and two clients that accounted for more than 10% of our total revenues, for the years ended July 31, 2016, 2017, and 2018, respectively. As we continue to expand and grow the number of clients, we expect the number of clients that account for more than 10% of our total revenue will decrease accordingly.
Some of Our Representative Clients
Fortune Valley Treasures, Inc. (“FVTI”)
FVTI engages in the business of retail and wholesale of a wide spectrum of wine products in China and Hong Kong. We entered into a consulting agreement with FVTI on May 25, 2016, and completed our services on April 19, 2018. We assisted FVTI in a reverse merger with a U.S. OTC quoted company under the ticker “FVTI”.
Porter Holding International Inc. (“ULNV”)
ULNV operates an online to offline (O2O) business platform for consumer manufacturing enterprises utilizing cloud technology to provide Internet-based intelligent e-commerce information services. We entered into a consulting agreement with ULNV on August 28, 2016, and completed our services on April 14, 2018. We assisted ULNV in a reverse merger with a U.S. OTC quoted company under the ticker “ULNV”.
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Addentax Group Corp. (“ATXG”)
ATXG provides garment decoration and textile printing services. It focuses on producing images on multiple surfaces, such as glass, leather, plastic, ceramic, and textile using 3D sublimation vacuum heat transfer machine. We entered into a consulting agreement with ATXG on September 27, 2016, and completed our services on June 15, 2018. We assisted ATXG in a reverse merger with a U.S. OTC quoted under the ticker “ATXG”.
Client A. This company operates an agriculture park in Hubei Province in China. The park covers about 3,300 acres land dedicated to ecological agriculture and leisure agriculture. We entered into a consulting agreement with the company on July 25, 2017. Currently we are in the process of assisting the company completing a reverse merger with a U.S. OTC quoted company.
Client B. This company is a full-service real estate agent located in Liaoning China and was founded in November 2016. It owns 177 directly operated stores and has over 2000 employees, servicing realty markets in Heilongjiang, Liaoning, Hebei and Hainan provinces in North East China. We entered into a consulting agreement with the company on December 29, 2017. Currently we are in the process of assisting the company in its going public process.
Client C. This company is a multimedia investment and marketing company located in Northeast China, specializing in movie trailers, commercials and multimedia marketing. It also invests in television and film original content and manages movie theaters across China. We entered into a listing agreement with the company on May 14, 2018 to assist with its planned IPO on Nasdaq.
Costs Related to the Operation of Our Consulting Services
Our costs to provide consulting services consist of fees paid to our third party professional providers, and operational and administrative expenses, such as rent for our office space located in Shenzhen; and compensation for our employees. From time to time, we also incur expenses for marketing and promotional events such as organized forums, salons and lectures.
Asia Times International Financial Consulting Center
In August 2018, our management launched Asia Times International Financial Consulting Center (“AT Consulting Center”) in Shenzhen, upon recognizing a general lack of consulting services designed to meet the growing demand for financial consulting services arising from the rapid accumulation of wealth of the Chinese population.
Advisors of AT Consulting Center
Our advisors are experts in their respective fields and many enjoy stellar reputations in the consulting industry. The followings are some of our advisors:
Jun Liu — Mr. Liu earned his Doctorate degree in International Finance from Camden University in the U.S., in 2015. He was awarded “China’s outstanding innovative entrepreneur” in 2009. He is a former expert committee member of E-government of Chinese Academy of Science, and former Director of the Shenzhen Service Centre of the National Internet Project. Mr. Liu served as the Head of Sales for Alibaba’s South China District from December 2000 to December 2001. He is the founder of B2B.CN, one of China’s top ten largest e-commerce companies. He is also the founder of Morgan Network Ltd., a B2C online shopping mall. Mr. Liu has theoretical and practical experience in domestic and overseas capital markets, financing, mergers and acquisitions.
Jinsheng Guan — Mr. Guan is the president of Shanghai Jiusong Shanhe Equity Investment Fund Management Limited. He has a Master’s degree in French Literature from Shanghai International Studies University, and a Master’s degree in Business Administration from Brussels University of Liberty in Belgium. He is the founder of Shenyin Wanguo Securities Co., Ltd., and is nicknamed as “China’s Securities Godfather”.
Lingyao Li — Ms Li is a part-time professor at the School of Economics of Peking University, as well as a special professor at Tsinghua University and a well-known economist in China. She studied computer science at the Research Institute of University of Maryland. Since 1985, she has toured dozens of cities in
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China to give speeches, and was received by the Chinese state leaders and local government leaders as recognitions for her achievements and contributions to China.
Xiangfa Zhang — Mr. Zhang is a senior partner of Beijing Dentons (Guangzhou) Law Firm. He has in-depth knowledge of securities and capital markets (IPO, new third board, delisted old third board and re-listing), domestic and foreign investment and financing (mergers and acquisitions, foreign investment, cross-border investment and financing, corporate bonds and private equity funds), Hong Kong-related legal affairs (notarization of Hong Kong, international notarization, Hong Kong litigation and arbitration, and offshore companies), real estate investment (project investment and development, engineering construction and commercial housing sales), corporate governance and corporate legal risk management, and litigation and dispute resolution.
Programs of AT Consulting Center
AT Consulting Center is currently offering financial consulting programs structured to target three groups of clients, enterprises, families, and individual. For enterprise clients, the program is called “Becoming Public” with a fee of  $20,000; for individual clients, the program is called “Family Wealth Management,” with fees ranging from $5,000 to $20,000; for family clients, the program is called “Career Planning,” with fees ranging from $5,000 to $10,000.
Becoming Public
Becoming Public targets enterprise executive clienteles by offering a comprehensive and in-depth program covering various aspects of the domestic and foreign capital markets, as well as the processes, operations, and management of taking private companies public. The program is offered over six months, and is comprised of the following 11 sections: Capital Market Introduction, How to Become a Public Company, Business Plan Workshop, Management, Asset-Backed Securitization, Red-chip Structures, Financial and Tax Rules, Business Valuation, Public Company Management, Market Value of Public Companies, and Equity Financing.
Family Wealth Management
Family Wealth Management targets our family clienteles by offering a program designed to help families with financial planning, investment and management. The program is offered over six days and is comprised of the following three sections: Family Wealth Planning I, Family Investing, and Family Wealth Planning II.
Career Planning
Career Planning targets our individual clients by offering career planning and training consultations designed to help professionals achieve a more successful and rewarding career. The program is offered over 12 weeks and covers the following sections: Logical Thinking, How to Study Effectively, Effective Speech, Influence Training, Dealing with Personal Emotions, Social Relations, Career Planning, Practical Application of Philosophy, Family Relations, and The Meaning of Life.
Our Lectures and Events
We intend to develop AT Consulting Center as a platform that facilitates the marketing of our consulting business by offering private lectures and events for entrepreneurs, business managers and financial professionals. Since the establishment of the AT Consulting Center in August 2018, we have held two private lectures, each with about 100 participants.
On September 14, 2018, we held the “Becoming Public” lecture. The expert speakers included Mr. Jun Liu, president of Elite Trade Association; Mr. Ming, president of the Elite Chamber of Commerce; Mr. Jianwen Huang, committee member of Datong World International; Mr. Xiao Liu, Chairman of board of Bausch & Lomb Glasses; Mr. Wei Xu, Chairman of the board of Xinmingguang Holding Group; Ms. Wei Zhang, Chairman of Jingjian Investment Co.; Mr. Xiangfa Zhang, senior partner of Dentons Law Firm;
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and Ms. Jingwen Li, a professional financial auditor. We invited more than 50 enterprises and dozens of financial investment institutions to participate at the lecture, during which our expert speakers carried out evaluations and offered valuable professional guidance for the participating enterprises’ going public projects.
On September 28, 2018, we held another lecture, at which Mr. Jun Liu, president of the Elite Trade Association, spoke about the wisdom of life. Mr. Liu analyzed the true meaning of an “excellent life” from various aspects such as self-improvement, career development and fulfillment. Speaking about his own life experience, Mr. Liu provided an outlook of an “excellent life” through the perspectives of a successful entrepreneur, and illustrated the importance of continuing learning and pursuing of excellence in life.
Financial and News Platform CNNM (www.chinacnnm.com)
On September 20, 2018, we acquired CNNM, a financial and news website at www.chinacnnm.com. CNNM is operated by ATIFL HK, a wholly-owned subsidiary of the Company. The website has approximately ten million registered users and is expected to generate revenues from advertisements and subscription services. CNNM’s operation was suspended for nearly a year due to lack of operational funds prior to our acquisition, and currently there are about 50,000 daily page views. We are in the process of setting up a team to revitalize its management and operation. Moreover, we expect to utilize CNNM as a platform to facilitate the growth and expansion of our consulting services. Currently we are in the process of developing business initiatives for CNNM, some of which, among others, are:

building a portal on CNNM as a platform to market and promote our consulting services to potential clients;

assisting engaged enterprises to enhance their corporate images through various information dissemination channels which are currently being built on CNNM; and

establishing an extensive public relations and journalism network to develop awareness and publicity for engaged enterprises.
Marketing
We believe the success of our consulting business requires building mutually beneficial long-term relationships with relevant and influential entities, and we have developed our main marketing channels based on these relationships.
Since our inception, we have cultivated and maintained cooperation with a number of city and provincial chambers of commerce and business associations in China, including the Zhejiang Chamber of Commerce in Shenzhen and Guangdong, Shenzhen Industrial Park Association, Meixian Chamber of Commerce in Shenzhen, Wenzhou Chamber of Commerce in Shenyang, Shenzhen Elite Chamber of Commerce, and the SME Service Platform in Northeast China. There are no contractual relationships between us and these organizations. However, these local business organizations have helped our marketing efforts greatly, due to the fact that: (1) they have access to the information of local enterprises and often recommend and connect us with potential clients; (2) they help us organize going public briefings and international financial lectures with local enterprises; and (3) they are able to utilize relationships with local government to initiate and organize government sponsored financial forums to promote and introduce our consulting services to the local enterprises.
We also strive to maintain professional relationships with our former and prospective clients. Our former clients have benefited from our services and oftentimes are willing and able to introduce prospective clients to us. After nearly three years operating as a consulting service provider specialized in cross-border going public services, we have developed a database consisting of former and prospective clients, using each as a resource for business connections and social relations.
Our employees have been working in various industries for many years, and accumulated networks of business and social relations including personal connections, corporate associations, and governmental affiliations, which are all valuable resources through which we can potentially obtain new clients.
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We are constantly seeking new and effective marketing channels in order to grow into an international consulting company with clients and branches throughout Asia. To complement and facilitate our growth perspectives, in 2018, we launched AT Consulting Center and acquired a financial and news media platform CNNM, both of which, we believe, have the great potential in becoming instrumental in our marketing efforts for continued growth of our consulting business.
In addition to our marketing efforts described above, we also market our consulting services, through:

Social media, principally WeChat and Weibo;

Newsletters to our prospective clients; and

Business relationships with well-known corporations and web platforms with large online traffics that can direct traffic to our website through links on their websites.
Competition
We face competition from a number of consulting companies providing going public consulting services such as Greenpro Capital Corp., Forward Capital, and Dragon Victory, who recently entered going public consulting services in 2018. We believe that our relatively mature operating history of nearly 3 years differentiates our company from other competitors. Our comprehensive one-stop consulting services, through which we are directly involved in each of the three pre-defined stages of our clients’ going public process (see Business — Our Consulting Services), are unlike the services provided by many of our competitors, who often act as mere initial order takers, and then outsource a majority of services to third party providers.
Currently, many of the going public consulting providers in China operate on a relatively small scale, only with a few employees. We believe that we are currently one of the few consulting companies capable of providing comprehensive one-stop going public services to qualified enterprises. However, due to favorable market conditions, which may have been overheated by various Chinese government stimulus programs offered recently to encourage and reward enterprises going public, a number of companies have entered and are entering the going public consulting business. As such, we expect competition will become more intense, and it is possible that we will not be able to maintain the growth rate we have achieved previously.
Employees
As of the date of this registration statement, we had approximately 25 full time employees. None of our employees are subject to collective bargaining agreements governing their employment with us. We believe our employee relations are good.
Seasonality
We currently do not experience seasonality in our operations.
Legal Proceedings
We are not currently a party to any litigation the outcome of which, if determined adversely to us, would individually or in the aggregate be reasonably expected to have a material adverse effect on our business, operating results, cash flows or financial condition.
Tax
Qianhai and Huaya, as PRC entities, are subject to enterprise income tax (“EIT”) according to applicable PRC tax rules and regulations.
PRC enterprises are required to prepay the EIT on a monthly or quarterly basis and to file provisional EIT returns with the tax authorities within 15 days of the end of each quarter based on actual monthly or quarterly profits. Enterprises that have difficulty in paying monthly or quarterly tax based on actual monthly or quarterly profits may make payments based on the monthly or quarterly average taxable income in the preceding calendar year, or by any other methods approved by the relevant tax authorities. Qianhai and Huaya, have filed all quarterly EIT returns based on actual quarterly profits since inception.
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ATIFL HK, a Hong Kong entity, has not generated revenues as July 31, 2018, but it will be subject to 16.5% tax rate according to Hong Kong tax rules and regulations, if it starts to generate revenue in the future.
Facilities/Property
Our principal executive office is located at Room 3803, Dachong International Centre, 39 Tonggu Road, Nanshan District, Shenzhen City, Guangdong Province, China. We lease an aggregate of 890 square meters of property from an unrelated third party pursuant to the terms of a lease agreement. The duration of the lease is for one year, from November 1, 2018 through November 26, 2019.
Our operating lease expenses amounted to RMB 1,497,101 (approximately $219,535) and RMB 2,601,424 (approximately $400,148) for the years ended July 31, 2017 and 2018, respectively.
Future minimum lease payments under our lease agreement are as follows as of July 31, 2018:
Year ending July 31,
2019
$ 409,810
2020
121,579
Total
$ 531,389
We believe our facilities are sufficient for our business operation.
Intellectual Property
We are in the process of applying for trademark registration for “ATIF” in China, Hong Kong, and the U.S.; and “CNNM” in Hong Kong and the U.S.
We also own three domain names: asiaerachina.com; chinacnnm.com; atifchina.com.
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REGULATIONS
This section sets forth a summary of the principal PRC laws and regulations relevant to our business and operations in China.
PRC Laws and Regulations relating to Foreign Investment
Investment in the PRC by foreign investors and foreign-invested enterprises shall comply with the Catalogue for the Guidance of Foreign Investment Industries (the “Catalogue”) (2017 Revision), which was last amended and issued by MOFCOM and NDRC on June 28, 2017 and became effective since July 28, 2017, and the Special Management Measures for Foreign Investment Access (2018 version), or the Negative List, which came into effect on July 28, 2018. The Catalogue and the Negative List contains specific provisions guiding market access for foreign capital and stipulates in detail the industry sectors grouped under the categories of encouraged industries, restricted industries and prohibited industries. Any industry not listed in the Negative List is a permitted industry unless otherwise prohibited or restricted by other PRC laws or regulations. The management consulting industry falls within the permitted category in accordance with the Catalogue and the Negative List.
PRC Laws and Regulations relating to Wholly Foreign-owned Enterprises
The establishment, operation and management of corporate entities in China are governed by the PRC Company Law, which was promulgated by the Standing Committee of the National People’s Congress on December 29, 1993 and became effective on July 1, 1994. It was last amended on December 28, 2013 and the amendments became effective on March 1, 2014. Under the PRC Company Law, companies are generally classified into two categories, namely, limited liability companies and joint stock limited companies. The PRC Company Law also applies to limited liability companies and joint stock limited companies with foreign investors. Where there are otherwise different provisions in any law on foreign investment, such provisions shall prevail.
The Law of the PRC on Wholly Foreign-invested Enterprises was promulgated and became effective on April 12, 1986, and was last amended and became effective on October 1, 2016. The Implementing Regulations of the PRC Law on Foreign-invested Enterprises were promulgated by the State Council on October 28, 1990. They were last amended on February 19, 2014 and the amendments became effective on March 1, 2014. The Provisional Measures on Administration of Filing for Establishment and Change of Foreign Investment Enterprises were promulgated by MOFCOM and became effective on October 8, 2016, and were last amended on July 20, 2017 with immediate effect. The above-mentioned laws form the legal framework for the PRC Government to regulate WFOEs. These laws and regulations govern the establishment, modification, including changes to registered capital, shareholders, corporate form, merger and split, dissolution and termination of WFOEs.
According to the above regulations, a WFOE should get approval by MOFCOM before its establishment and operation. Huaya Consultant is a WFOE since established, and has obtained the approval of the local administration of MOFCOM. Its establishment and operation are in compliance with the above-mentioned laws. Qianhai is a PRC domestic company, and it is not subject to the record-filling or examination applicable to FIE.
PRC Laws and Regulations relating to Management Consulting Industry
Law of the People’s Republic of China on Promotion of Small and Medium-sized Enterprises (the “SME Promotion Law”) was promulgated by the standing committee of the National People’s Congress on June 29, 2002, amended on September 1, 2017, and became effective on January 1, 2018. According to the SME Promotion Law, the government encourage all kinds of services organization to provide services including training and counselling on entrepreneurship, intellectual property protection, management consulting, information consulting, credit service, marketing, development of projects, investment and financing, accounting and taxation, equity transaction, technology support, talent introduction, foreign cooperation, exhibition and legal consulting.
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Pursuant to the Opinions of the State Council on Further Promoting The Development of Small And Medium-sized Enterprises (the “Opinions”) which were promulgated by the State Council on September 19, 2009, the government support to foster organizations of management consulting for small and medium-sized enterprises (“SMEs”) and conduct activities of management consulting to guide SMEs to use external sources to improve their level on management.
According to the SME Promotion Law and the Opinions, our business is encouraged by the government and is in compliance with relevant regulations in PRC. There are no further regulations on management consulting industry in the PRC presently. However, we cannot assure that there will not be more regulations on management consulting industry to be issued by PRC government in the future that could affect our business.
Regulations on Intellectual Property Rights
Regulations on trademarks
The trademark law of the People’s Republic of China was adopted at the 24 th meeting of the Standing Committee of the Fifth National People’s Congress on August 23, 1982. Three amendments were made on February 22, 1993, October 27, 2001 and August 30, 2013. The last amendment was implemented on May 1, 2014. The regulations on the implementation of the trademark law of the People’s Republic of China were promulgated by the State Council of the People’s Republic of China on August 3, 2002, which took effect on September 15, 2002. It was revised on April 29, 2014 and became effective as of May 1, 2014. According to the trademark law and the implementing regulations, a trademark which has been approved and registered by the trademark office is a registered trademark, including a trademark of goods, services, collective trademark and certification trademark. The trademark registrant shall enjoy the exclusive right to use the trademark and shall be protected by law. The trademark law also specifies the scope of registered trademarks, procedures for registration of trademarks and the rights and obligations of trademark owners. We have completed trademark registration of  “AEIF” in the 36, 38, 35, 42, 45, 41 categories in China and own the exclusive right to use such trademark.
Regulations on domain names
The Ministry of Industry and Information Technology of the PRC, or the MIIT, promulgated the Measures on Administration of Internet Domain Names , or the Domain Name Measures, on August 24, 2017, which took effect on November 1, 2017 and replaced the Administrative Measures on China Internet Domain Name promulgated by the MIIT on November 5, 2004. According to the Domain Name Measures, the MIIT is in charge of the administration of PRC internet domain names. The domain name registration follows a first-to-file principle. Applicants for registration of domain names shall provide true, accurate and complete information of their identities to domain name registration service institutions. The applicant will become the holder of such domain names upon completion of the registration procedure. As of September 15, 2018, we have completed registration of two domain names of  “asiaerachina.com” and “atifchina.com” in the PRC and became the legal holder of such domain names.
PRC Laws and Regulations relating to Merger and Acquisition
The Regulations on Mergers and Acquisitions of Domestic Companies by Foreign Investors, or the M&A Rules, adopted by six PRC regulatory agencies in August 2006 and amended in 2009, requires an overseas special purpose vehicle formed for listing purposes through acquisitions of PRC domestic companies and controlled by PRC companies or individuals to obtain the approval of the China Securities Regulatory Commission, or the CSRC, prior to the listing and trading of such special purpose vehicle’s securities on an overseas stock exchange. In September 2006, the CSRC published a notice on its official website specifying documents and materials required to be submitted to it by a special purpose vehicle seeking CSRC approval of its overseas listings. The application of the M&A Rules remains unclear.
Our PRC counsel has advised us based on their understanding of the current PRC laws, rules and regulations that the CSRC’s approval should not be required for the listing and trading of our ordinary shares on the NASDAQ in the context of this offering, given that: (i) we established our PRC subsidiary,
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WFOE, by means of direct investment rather than by merger with or acquisition of PRC domestic companies; and (ii) no explicit provision in the M&A Rules classifies the respective contractual arrangements between WFOE, Guangxi Qianpen and its shareholders as a type of acquisition transaction falling under the M&A Rules.
However, there remains some uncertainty as to how the M&A Rules will be interpreted or implemented in the context of an overseas offering and the CSRC’s opinions summarized above are subject to any new laws, rules and regulations or detailed implementations and interpretations in any form relating to the M&A Rules. We cannot assure you that relevant PRC government agencies, including the CSRC, would reach the same conclusion as we do. If the CSRC or any other PRC regulatory agencies subsequently determines that we need to obtain the CSRC’s approval for this offering or if the CSRC or any other PRC government agencies promulgates any interpretation or implements rules before our listing that would require us to obtain CSRC or other governmental approvals for this offering, we may face adverse actions or sanctions by the CSRC or other PRC regulatory agencies. Sanctions may include fines and penalties on our operations in the PRC, limitations on our operating privileges in the PRC, delays in or restrictions on the repatriation of the proceeds from this offering into the PRC, restrictions on or prohibition of the payments or remittance of dividends by our PRC subsidiary, or other actions that could have a material adverse effect on our business, financial condition, results of operations, reputation and prospects, as well as the trading price of our ordinary shares. The CSRC or other PRC regulatory agencies may also take actions requiring us, or making it advisable for us, to halt this offering before the settlement and delivery of ordinary shares that we are offering. Consequently, if you engage in market trading or other activities in anticipation of and prior to the settlement and delivery of ordinary shares we are offering, you would be doing so at the risk that the settlement and delivery may not occur. In addition, if the CSRC or other PRC regulatory agencies later promulgate new rules or explanations requiring that we obtain their approvals for this offering, we may be unable to obtain a waiver of such approval requirements, if and when procedures are established to obtain such a waiver. Any uncertainties and/or negative publicity regarding such approval requirement could have a material adverse effect on the trading price of ordinary shares.
On August 8, 2006, six PRC governmental and regulatory agencies, MOFCOM, the State-owned Assets Supervision and Administration Commission of the State Council, SAT, CSRC, SAIC and SAFE jointly promulgated the Provisions on the Acquisitions of Domestic Enterprises by Foreign Investors (the “M&A Rules”), which became effective on September 8, 2006 and were amended on June 22, 2009. Under the M&A Rules, a foreign investor is required to obtain necessary approvals when (1) a foreign investor acquires equity in a PRC domestic non-foreign invested enterprise (the “domestic company”) thereby converting it into a foreign-invested enterprise (“FIE”), or subscribes for new equity in a domestic company via an increase of registered capital thereby converting it into a foreign-invested enterprise; or (2) a foreign investor establishes a foreign-invested enterprise which purchases and operates the assets of a domestic enterprise, or which purchases the assets of a domestic enterprise and injects those assets to establish a foreign-invested enterprise. According to Article 11 of the M&A Rules, where a domestic individual intends to have a domestic company taken over by an offshore company which he lawfully controls, the takeover shall be subject to the examination and approval of MOFCOM. Where a foreign investor purchases the equity interest of a domestic foreign-invested enterprise or subscribe for the increased capital of a domestic foreign-invested enterprise, it shall be subject to the current laws, administrative regulations on foreign-invested enterprises and the relevant provisions on alteration in investors’ equity interest of foreign-invested enterprises.
As Huaya Consultant was established as a foreign-invested enterprise, the M&A Rules do not apply to Huaya Consultant.
PRC Laws and Regulations relating to Foreign Exchange
General administration of foreign exchange
The principal regulation governing foreign currency exchange in the PRC is the Administrative Regulations of the PRC on Foreign Exchange (the “Foreign Exchange Regulations”), which were promulgated on January 29, 1996, became effective on April 1, 1996 and were last amended on August 5, 2008. Under these rules, Renminbi is generally freely convertible for payments of current account items,
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such as trade- and service-related foreign exchange transactions and dividend payments, but not freely convertible for capital account items, such as capital transfer, direct investment, investment in securities, derivative products or loans unless prior approval by competent authorities for the administration of foreign exchange is obtained. Under the Foreign Exchange Regulations, foreign-invested enterprises in the PRC may purchase foreign exchange without the approval of SAFE to pay dividends by providing certain evidentiary documents, including board resolutions, tax certificates, or for trade- and services-related foreign exchange transactions, by providing commercial documents evidencing such transactions.
Circular No. 75, Circular No. 37 and Circular No. 13
Circular 37 was released by SAFE on July 4, 2014 and abolished Circular 75 which had been in effect since November 1, 2005. Pursuant to Circular 37, a PRC resident should apply to SAFE for foreign exchange registration of overseas investments before it makes any capital contribution to a special purpose vehicle, or SPV, using his or her legitimate domestic or offshore assets or interests. SPVs are offshore enterprises directly established or indirectly controlled by domestic residents for the purpose of investment and financing by utilizing domestic or offshore assets or interests they legally hold. Following any significant change in a registered offshore SPV, such as capital increase, reduction, equity transfer or swap, consolidation or division involving domestic resident individuals, the domestic individuals shall amend the registration with SAFE. Where an SPV intends to repatriate funds raised after completion of offshore financing to the PRC, it shall comply with relevant PRC regulations on foreign investment and foreign debt management. A foreign-invested enterprise established through return investment shall complete relevant foreign exchange registration formalities in accordance with the prevailing foreign exchange administration regulations on foreign direct investment and truthfully disclose information on the actual controller of its shareholders.
If any shareholder who is a PRC resident (as determined by the Circular No. 37) holds any interest in an offshore SPV and fails to fulfil the required foreign exchange registration with the local SAFE branches, the PRC subsidiaries of that offshore SPV may be prohibited from distributing their profits and dividends to their offshore parent company or from carrying out other subsequent cross-border foreign exchange activities. The offshore SPV may also be restricted in its ability to contribute additional capital to its PRC subsidiaries. Where a domestic resident fails to complete relevant foreign exchange registration as required, fails to truthfully disclose information on the actual controller of the enterprise involved in the return investment or otherwise makes false statements, the foreign exchange control authority may order them to take remedial actions, issue a warning, and impose a fine of less than RMB300,000 on an institution or less than RMB50,000 on an individual.
Circular 13 was issued by SAFE on February 13, 2015, and became effective on June 1, 2015. Pursuant to Circular 13, a domestic resident who makes a capital contribution to an SPV using his or her legitimate domestic or offshore assets or interests is no longer required to apply to SAFE for foreign exchange registration of his or her overseas investments. Instead, he or she shall register with a bank in the place where the assets or interests of the domestic enterprise in which he or she has interests are located if the domestic resident individually seeks to make a capital contribution to the SPV using his or her legitimate domestic assets or interests; or he or she shall register with a local bank at his or her permanent residence if the domestic resident individually seeks to make a capital contribution to the SPV using his or her legitimate offshore assets or interests.
As of the date of this registration statement, our Beneficial Shareholders have not completed registrations in accordance with Circular 37, they are currently working on their registrations in the local Administration of Exchange Control. The failure of our Beneficial Shareholders to comply with the registration procedures may subject each of our Beneficial Shareholders to fines of less than RMB50,000 (approximately US$7199). If the registration formalities cannot be processed retrospectively, then the repatriation of the financing funds, profits or any other interests of our shareholders obtained through special purpose vehicles, for use in China, would be prohibited. As a result, any cross-border capital flows between our PRC subsidiary and its offshore parent company, including dividend distributions and capital contributions, would be illegal.
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Circular 19 and Circular 16
Circular 19 was promulgated by SAFE on March 30, 2015, and became effective on June 1, 2015. According to Circular 19, foreign exchange capital of foreign-invested enterprises shall be granted the benefits of Discretional Foreign Exchange Settlement (“Discretional Foreign Exchange Settlement”). With Discretional Foreign Exchange Settlement, foreign exchange capital in the capital account of a foreign-invested enterprise for which the rights and interests of monetary contribution has been confirmed by the local foreign exchange bureau, or for which book-entry registration of monetary contribution has been completed by the bank, can be settled at the bank based on the actual operational needs of the foreign-invested enterprise. The allowed Discretional Foreign Exchange Settlement percentage of the foreign exchange capital of a foreign-invested enterprise has been temporarily set to be 100%. The Renminbi converted from the foreign exchange capital will be kept in a designated account and if a foreign-invested enterprise needs to make any further payment from such account, it will still need to provide supporting documents and to complete the review process with its bank.
Furthermore, Circular 19 stipulates that foreign-invested enterprises shall make bona fide use of their capital for their own needs within their business scopes. The capital of a foreign-invested enterprise and the Renminbi if obtained from foreign exchange settlement shall not be used for the following purposes:

directly or indirectly used for expenses beyond its business scope or prohibited by relevant laws or regulations;

directly or indirectly used for investment in securities unless otherwise provided by relevant laws or regulations;

directly or indirectly used for entrusted loan in Renminbi (unless within its permitted scope of business), repayment of inter-company loans (including advances by a third party) or repayment of bank loans in Renminbi that have been sub-lent to a third party; and

directly or indirectly used for expenses related to the purchase of real estate that is not for self-use (except for foreign-invested real estate enterprises).
Circular 16 was issued by SAFE on June 9, 2016. Pursuant to Circular 16, enterprises registered in the PRC may also convert their foreign debts from foreign currency to Renminbi on a self-discretionary basis. Circular 16 provides an integrated standard for conversion of foreign exchange capital items (including but not limited to foreign currency capital and foreign debts) on a self-discretionary basis applicable to all enterprises registered in the PRC. Circular 16 reiterates the principle that an enterprise’s Renminbi converted from foreign currency-denominated capital may not be directly or indirectly used for purposes beyond its business scope or purposes prohibited by PRC laws or regulations, and such converted Renminbi shall not be provided as loans to non-affiliated entities.
Circulars 16 and 19 address foreign direct investments into the PRC, and stipulate the procedures applicable to foreign exchange settlement. As we do not plan to transfer proceeds raised in this offering to our WFOE or VIE in the PRC, the proceeds raised in this offering would not be subject to Circular 19 or Circular 16. However, if and when circumstances require funds to be transferred to our WFOE or VIE in the PRC from our offshore entities, then any such transfer would be subject to Circulars 16 and 19.
PRC Laws and Regulations relating to Taxation
Enterprise Income Tax
The Enterprise Income Tax Law of the People’s Republic of China (the “EIT Law”) was promulgated by the Standing Committee of the National People’s Congress on March 16, 2007 and became effective on January 1, 2008, and was later amended on February 24, 2017. The Implementation Rules of the EIT Law (the “Implementation Rules”) were promulgated by the State Council on December 6, 2007 and became effective on January 1, 2008. According to the EIT Law and the Implementation Rules, enterprises are divided into resident enterprises and non-resident enterprises. Resident enterprises shall pay enterprise income tax on their incomes obtained in and outside the PRC at the rate of 25%. Non-resident enterprises setting up institutions in the PRC shall pay enterprise income tax on the incomes obtained by such
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institutions in and outside the PRC at the rate of 25%. Non-resident enterprises with no institutions in the PRC, and non-resident enterprises whose incomes having no substantial connection with their institutions in the PRC, shall pay enterprise income tax on their incomes obtained in the PRC at a reduced rate of 10%.
The Arrangement between the PRC and Hong Kong Special Administrative Region for the Avoidance of Double Taxation the Prevention of Fiscal Evasion with respect to Taxes on Income (the “Arrangement”) was promulgated by the State Administration of Taxation (“SAT”) on August 21, 2006 and came into effect on December 8, 2006. According to the Arrangement, a company incorporated in Hong Kong will be subject to withholding tax at the lower rate of 5% on dividends it receives from a company incorporated in the PRC if it holds a 25% interest or more in the PRC company. The Notice on the Understanding and Identification of the Beneficial Owners in the Tax Treaty (the “Notice”) was promulgated by SAT and became effective on October 27, 2009. According to the Notice, a beneficial ownership analysis will be used based on a substance-over-form principle to determine whether or not to grant tax treaty benefits.
Huaya and Qianhai are resident enterprises and pay EIT tax at the rate of 25% in PRC. It is more likely than not that the Company and its offshore subsidiary would be treated as a non-resident enterprise for PRC tax purposes. Please see Section of  “Taxation - People’s Republic of China Enterprise Taxation”.
Value-added Tax
The Provisional Regulations on Value-Added Tax of the PRC (the “VAT Regulations”) were promulgated by the State Council on December 13, 1993 and took effect on January 1, 1994, which were last amended on November 19, 2017. The Rules for the Implementation of the Provisional Regulations on Value Added Tax of the PRC (the “Rules”) were promulgated by the Ministry of Finance (“MOF”) on December 25, 1993 and were last amended on October 28, 2011. Pursuant to the VAT Regulations and the Rules, entities or individuals in the PRC engaged in the sale of goods, the provision of processing, repairs and replacement services and the importation of goods are required to pay VAT, on the value added during the course of the sale of goods or provision of services. Unless otherwise specified, the applicable VAT rate for the sale or importation of goods and provision of processing, repair and replacing services is 17%.
The SAT and the MOF jointly promulgated the Circular on Comprehensively Promoting the Pilot Program of the Collection of Valued-added Tax in lieu of Business Tax on March 23, 2016, which became effective on 1 May 2016. Pursuant to this new circular, entities and individuals shall pay VAT at a rate of 6% for any taxable activities unless otherwise stipulated.
According to the above-regulations, our PRC subsidiaries and consolidated affiliated entities are generally subject to a 6% VAT rate.
Dividend Withholding Tax
The Enterprise Income Tax Law provides that since January 1, 2008, an income tax rate of 10% will normally be applicable to dividends declared to non-PRC resident investors which do not have an establishment or place of business in the PRC, or which have such establishment or place of business but the relevant income is not effectively connected with the establishment or place of business, to the extent such dividends are derived from sources within the PRC.
Pursuant to an Arrangement Between the Mainland of China and the Hong Kong Special Administrative Region for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Incomes (“Double Tax Avoidance Arrangement”) and other applicable PRC laws, if a Hong Kong resident enterprise is determined by the competent PRC tax authority to have satisfied the relevant conditions and requirements under such Double Tax Avoidance Arrangement and other applicable laws, the 10% withholding tax on the dividends the Hong Kong resident enterprise receives from a PRC resident enterprise may be reduced to 5%. However, based on the Circular on Certain Issues with Respect to the Enforcement of Dividend Provisions in Tax Treaties (the “SAT Circular 81”) issued on February 20, 2009 by SAT, if the relevant PRC tax authorities determine, in their discretion, that a company benefits from such reduced income tax rate due to a structure or arrangement that is primarily tax-driven, such PRC tax authorities may adjust the preferential tax treatment. According to the Circular on Several Questions regarding the “Beneficial Owner” in Tax Treaties , which was issued on February 3, 2018 by the SAT and took effect on April 1, 2018, when determining the applicant’s status of the “beneficial owner” regarding tax treatments in connection
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with dividends, interests or royalties in the tax treaties, several factors, including without limitation, whether the applicant is obligated to pay more than 50% of his or her income in twelve months to residents in third country or region, whether the business operated by the applicant constitutes the actual business activities, and whether the counterparty country or region to the tax treaties does not levy any tax or grant tax exemption on relevant incomes or levy tax at an extremely low rate, will be taken into account, and it will be analyzed according to the actual circumstances of the specific cases. This circular further provides that applicants who intend to prove his or her status of the “beneficial owner” shall submit the relevant documents to the relevant tax bureau according to the Announcement on Issuing the Measures for the Administration of Non-Resident Taxpayers’ Enjoyment of the Treatment under Tax Agreements .
We have not commenced the application process for a Hong Kong tax resident certificate from the relevant Hong Kong tax authority, and there is no assurance that we will be granted such a Hong Kong tax resident certificate. We also have not filed required forms or materials with the relevant PRC tax authorities to prove that we should enjoy the 5% PRC withholding tax rate.
PRC Laws and Regulations relating to Employment and Social Welfare
Labor Law of the PRC
Pursuant to the Labor Law of the PRC, which was promulgated by the Standing Committee of the NPC on July 5, 1994 with an effective date of January 1, 1995 and was last amended on August 27, 2009 and the Labor Contract Law of the PRC, which was promulgated on June 29, 2007, became effective on January 1, 2008 and was last amended on December 28, 2012, with the amendments coming into effect on July 1, 2013, enterprises and institutions shall ensure the safety and hygiene of a workplace, strictly comply with applicable rules and standards on workplace safety and hygiene in China, and educate employees on such rules and standards. Furthermore, employers and employees shall enter into written employment contracts to establish their employment relationships. Employers are required to inform their employees about their job responsibilities, working conditions, occupational hazards, remuneration and other matters with which the employees may be concerned. Employers shall pay remuneration to employees on time and in full accordance with the commitments set forth in their employment contracts and with the relevant PRC laws and regulations. Qianhai has entered into written employment contracts with all the employees and performed its obligations required under the relevant PRC laws and regulations.
Social Insurance and Housing Fund
Pursuant to the Social Insurance Law of the PRC , which was promulgated by the Standing Committee of the NPC on October 28, 2010 and became effective on July 1, 2011, employers in the PRC shall provide their employees with welfare schemes covering basic pension insurance, basic medical insurance, unemployment insurance, maternity insurance, and occupational injury insurance. Qianhai did not deposit social insurance fees for employees in full for the period from its establishment to September 2018. However, Qianhai has deposited the social insurance fees in full for all the employees in compliance with the relevant regulations since October 2018. Shenzhen social insurance fund administration has issued a statement showing that there is no significant violations of relevant laws and regulations by Qianhai since its establishment.
In accordance with the Regulations on Management of Housing Provident Fund , which were promulgated by the State Council on April 3, 1999 and last amended on March 24, 2002, employers must register at the designated administrative centers and open bank accounts for depositing employees’ housing funds. Employer and employee are also required to pay and deposit housing funds, with an amount no less than 5% of the monthly average salary of the employee in the preceding year in full and on time.
Qianhai has registered at the designated administrative centers and opened bank accounts for depositing employees’ housing funds, however, Qianhai has not deposited employees’ housing funds in full according the Regulations of HPF. There is a risk of administrative penalty imposed by the designated administrative center.
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Ronghua Liu and Qiang Chen, shareholders of Qianhai, have signed the consent to undertake and guarantee to fully reimburse and compensate the Company for any possible losses due to its non-compliance of the rules and regulations governing Employees’ social insurance and housing funds, in case the Company is required by relevant government authorities to make up for any outstanding payments and penalties for Employees’ social insurance and housing funds in the future.
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HONG KONG REGULATORY OVERVIEW
We own and operate CNNM, www.chinacnnm.com, a news and media platform, in Hong Kong. The following is a summary of certain aspects of major Hong Kong laws and regulations that are or may be applicable to the Company.
REGULATIONS ON DIGITAL MEDIA PUBLICATION, DOMAIN NAME REGISTRATION, AND ADVERTISING SERVICES
There are no specific legislations governing domain name registration or digital media publication in Hong Kong. There are certain ordinances which contain provisions that may be applicable to digital media publication business and advertising services in Hong Kong: the Control of Obscene and Indecent Articles Ordinance (Chapter 390 of the Laws of Hong Kong), the Personal Data (Privacy) Ordinance (Chapter 486 of the Laws of Hong Kong), the Copyright Ordinance (Chapter 528 of the Laws of Hong Kong), the Defamation Ordinance (Chapter 21 of the Laws of Hong Kong), the Undesirable Medical Advertisements Ordinance (Chapter 231 of the Laws of Hong Kong), the Business Registration Ordinance (Chapter 310 of the Laws of Hong Kong). Contravention of the relevant laws and regulations may expose the Company to criminal and civil liabilities including penalties, fines, damages and other sanctions. These ordinances are discussed in further details below.
Control of Obscene and Indecent Articles Ordinance (Chapter 390 of the Laws of Hong Kong) (the “COIAO”)
There are no specific regulations targeting advertising practice or digital media publication in Hong Kong. However, COIAO is applicable to digital materials and contents posted on the Company’s website, www.chinacnnm.com.
Section 21 of the COIAO stipulates that any person who publishes, or possesses for the purpose of publication, any obscene article commits an offence and is liable to a fine of HK$1,000,000 (approximately US$127,646) and may be subject imprisonment for up to three years.
Section 22 of the COIAO stipulates that any person who publishes any indecent material accessible to a juvenile commits an offence, whether intentionally or unintentionally. Such offences impose a fine of HK$400,000 (approximately US$51,064) and imprisonment of 12 months on first conviction. A second or subsequent conviction will give rise to a fine of HK$800,000 (approximately US$102,128) and imprisonment of up to 12 months.
Personal Data (Privacy) Ordinance (Chapter 486 of the Laws of Hong Kong) (the “PDPO”)
The Company, as a data user, needs to comply with the PDPO to ensure that personal data it collected are accurate, securely kept and used only for the purpose for which they are collected.
The PDPO protects the privacy interests of living individuals in relation to personal data and regulates the conducts of a data user, i.e., any person who, either alone or jointly or in common with other persons, controls the collection, holding, processing or use of personal data. Pursuant to section 2 of the PDPO, personal data means any data (i) relating directly or indirectly to a living individual; (ii) from which it is practicable for the identity of the individual to be directly or indirectly ascertained; and (iii) in a form in which access to or processing of the data is practicable. In general, the personal data shall be lawfully and fairly collected and steps should be taken to ensure that the data collection subject is explicitly and implicitly informed on or before the data collection.
There are six principles under the PDPO which regulate the purpose and manner of collection of data, the accuracy and duration of retention of collected data, the use of personal data, the security of personal data, and the access to personal data. As the Company may collect personal data of users of its website, www.chinacnnm.com, the Company is subject to the following principles, which are:
Principle 1 — Data Collection Principle
Personal data must be collected in a lawful and fair way, for the purpose directly related to a function/activity of the data user. Data collection subjects must be notified of the purpose of the collection and the classes of persons to whom the data may be transferred. Data collection should be necessary, and not excessive for the purpose of collection.
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Principle 2 — Accuracy & Retention Principle
Personal data must be accurate and should not be kept for a period longer than is necessary to fulfil the purpose for which it is used.
Principle 3 — Data Use Principle
Personal data must be used for the purpose for which the data is collected or for a directly related purpose, unless voluntary and explicit consent of a new purpose is obtained from the data collection subject.
Principle 4 — Data Security Principle
A data user needs to take practical steps to safeguard personal data from unauthorized or accidental access, processing, erasure, loss or use.
Principle 5 — Openness Principle
A data user must make personal data policies and practices known to the public regarding the types of personal data it holds and how the data is used.
Principle 6 — Data Access & Correction Principle
A data collection subject must be given access to his/her personal data and allowed to make corrections if it is inaccurate.
Pursuant to the PDPO, if any of the above principles are not complied with, the Privacy Commissioner for Personal Data (the “ PDPD ”) may serve an enforcement notice to direct the data user to remedy the contravention and/or instigate prosecution actions. Further, section 50A of the PDPO provides that contravention of an enforcement notice is an offence which could result in a maximum fine of HK$50,000 (approximately US$6,383) and imprisonment for two years. The PDPO also criminalizes misuse or inappropriate use of personal data in direct marketing activities under Part VI of the PDPO.
As the Company may collect and possess private and confidential data of the users of www.chinacnnm.com, the Company is subject to the principles set out in the PDPO regarding the collection, use, retention, accuracy and security of and access to personal data.
Copyright Ordinance (Chapter 528 of the Laws of Hong Kong) (the “Copyright Ordinance”)
The Copyright Ordinance provides comprehensive protection for recognized categories of work such as literary, dramatic, musical and artistic works, as well as for films, television broadcasts and cable diffusion, and works made available to the public on the internet.
In the course of providing advertising services and digital media publication, certain copyrights may subsist in the works the Company creates in relation to its publications, digital media content and advertising materials, including artistic works (such as artworks and photos), films (such as videos) or literary works (such as text) that qualify for copyright protection without registration. It is not necessary to register a copyright nor are there other formalities required to obtain copyright protection for a work in Hong Kong. There is no official registry in Hong Kong for registration of copyright works.
The Copyright Ordinance restricts certain acts such as copying and/or issuing or making available copies to the public of a copyright work without the authorization from the copyright owner which, if done, constitutes “primary infringement” of copyright which does not require knowledge of infringement.
The Copyright Ordinance permits certain acts that can be done in relation to copyright works without authorization from the copyright owner, one of which being fair dealing with a copyright work for the purpose of criticism, review or reporting current events if accompanied by a sufficient acknowledgement of such copyright work and its author.
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Under the Copyright Ordinance, a person may incur civil liability for “secondary infringement” if that person, amongst others, possesses, sells, distributes or deals with a copy of a work which is, and which he knows or has reason to believe to be, an infringing copy of the work for the purposes of or in the course of any trade or business without the consent of the copyright owner. However, the person will only be liable if, at the time he committed the act, he knew or had reason to believe that he was dealing with infringing copies of the work.
Defamation Ordinance (Chapter 21 of the Laws of Hong Kong) (the “DO”)
As the Company’s website, www.chinacnnm.com, may contain information and or/news from other sources and such information and/or news may not be independently verified by the Company, such information may lead to defamatory matters.
Under the DO, any person who maliciously publishes defamatory matter regarding another person or an organization in writing or by word of mouth or by conduct may be liable for defamation. In general, there are two main kinds of defamation, which are libel and slander. Libel is the malicious publication of defamatory matter in writing or in some other permanent form. Slander is the publication of defamatory matter by word of mouth or in some other transient (temporary) form.
Section 5 of the DO provides that any person who maliciously publishes any defamatory libel, knowing the same to be false, shall be liable to imprisonment for two years, and, in addition, to pay such fine as the court may award.
There are several defenses available, including but not limited to (a) unintentional defamation; (b) an offer of amends; (c) defense of justification, which means the words were true in substance and in fact; (d) fair comment; and (e) publication which was privileged as prescribed in the schedule of the DO.
Undesirable Medical Advertisements Ordinance (Chapter 231 of the Laws of Hong Kong) (“UMAO”)
As the Company’s website, www.chinacnnm.com, may contain information and/or advertisements relating to medical aspects, the Company may be subject to the provisions under the UMAO. The UMAO aims to protect public health through prohibiting or restricting advertisements which may induce the seeking of improper management of certain health conditions.
As defined in the UMAO, “advertisement” includes any notice, poster, circular, label, wrapper or document, and any announcement made orally or by means of producing or transmitting light or sound. These include advertisements published in newspapers and magazines, leaflets, on radio, television, and internet, as well as on the label of a container or package containing any medicine, surgical appliance, treatment, or orally consumed product.
Pursuant to the UMAO, no person shall publish, or cause to be published any advertisements likely to lead to the use of any medicine, surgical appliance or treatment for: (a) the purpose of treating human beings for, or preventing them from contracting any of the diseases or conditions specified in the UMAO which include, among others, any disease of the skin, hair or scalp except for a purpose specified in the UMAO which, among others, include prevention of pimples and relief or prevention of minor skin conditions including dry and chapped skin; or (b) treating human beings for any purpose specified in the UMAO which include, among others, the restoration of lost youth and the correction of deformity or the surgical alteration of a person’s appearance.
Business Registration Ordinance (Chapter 310 of the Laws of Hong Kong) (“BRO”)
The BRO requires every person, whether a company or an individual, who carries on a business in Hong Kong to apply for business registration certificate from the Inland Revenue Department within one month from the date of commencement of the business, and to display the valid business registration certificate at the place of business. Any person who fails to apply for business registration or display a valid business registration certificate at the place of business shall be guilty of an offence, and shall be liable to a fine of HK$5,000 (approximately US$638) and to imprisonment for one year.
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MANAGEMENT
Set forth below is information concerning our directors, executive officers and other key employees.
The following individuals are members of the Board and executive management of the Registrant.
Name
Age
Position(s)
Qiuli Wang
45
President, CEO, and Chairman of the Board
Fang Cheng
55
Chief Financial Officer
Qiang Chen
48
Director
Kwong Sang Liu (1)(2)(3) *
56
Independent Director Nominee, Chairman of Audit Committee
Yongyuan Chen (1)(2)(3) *
55
Independent Director Nominee, Chairman of Nominating and Corporate Governance Committee
Longdley Zephirin (1)(2)(3) *
47
Independent Director Nominee, Chairman of Compensation Committee
(1)
Member of the Audit Committee.
(2)
Member of the Compensation Committee.
(3)
Member of the Nominating and Corporate Governance Committee.
*
This individual consents to be in such position upon closing of this offering.
Ms. Qiuli Wang has been our president and chairman of the Board since July 2018, and our CEO since November 2018. Ms. Wang served as the CEO of Shenzhen Haorong Guarantee Ltd. from January 2010 to June 2018. From May 2007 to December 2009, Ms. Wang served as VP at Shenzhen Morgan Network Technology Ltd. She graduated from the Shaanxi University of Technology. As a successful entrepreneur, she jointly founded B2B.cn, an E-commerce group and within 6 years grew it into one of the top ten network marketing companies in China at that time, with 12 branches and nearly 2,000 employees. We believe that Ms. Wang, with years of experience in team building and branding, internet platform operations, and enterprise management, is qualified to be our president and chairman of the Board.
Ms. Fang Cheng has been our Chief Financial Officer (“CFO”) since September 2018. Ms. Cheng has also served as the CFO of Qianhai Asia Times (Shenzhen) International Financial Services Co., Ltd. since November 2015. From July 1984 to October 2015, Ms. Cheng served as the Chief Accountant of China Railway Zhuzhou Bridge Co., Ltd. She graduated from Correspondence College of Central Party School and has a strong understanding of international accounting and tax policies. We believe Ms. Cheng is qualified to serve as our CFO with her extensive experience in the related fields.
Mr. Qiang Chen was appointed as our executive director on October 12, 2018. Mr. Chen has also served as the CEO of Qianhai Asia Times (Shenzhen) International Financial Services Co., Ltd. since November 2015. From January 2010 to October 2015, Mr. Chen served as the VP of Suzhou Ungeo Limited Inc. From June 2005 to December 2009, Mr. Chen served as the CEO of Shenzhen Shangyuan Electronic Commerce Co., Ltd. Mr. Chen graduated from Suzhou University, majoring in business administration. Mr. Chen specializes in international capital markets operations, China-US and Hong Kong capital market policies and regulations, and has rich professional knowledge and practical experience in going public consulting, asset restructuring, equity and securities financing. He has advised several Chinese companies in their going public processes. We believe Mr. Chen is qualified to be our director with his professional achievement and demonstrated ability as a successful executive at his prior positions.
Mr. Kwong Sang Liu will be appointed as our director upon closing of this offering. Since May 1997, Mr. Liu has managed K.S. Liu & Company, CPA Limited, a company he founded. Mr. Liu is a practicing accountant in Hong Kong for over 20 years specializing in audit, taxation and corporate financial advisory. He is currently a non-executive director in a number of Hong Kong Stock Exchange listed companies. Mr. Liu graduated with honors from the Hong Kong Polytechnic University with a bachelor’s degree in Accountancy and holds a Master of Business Administration degree from the University of Lincoln, England. He is a certified tax advisor and fellow member of the Institute of Chartered Accountants in
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England and Wales, the Association of Chartered Certified Accountants, the Institute of Financial Accountants of the United Kingdom, the Institute of Certified Public Accountants of Australia, the Institute of Certified Public Accountants of Hong Kong, the Taxation Institute of Hong Kong, and the Society of Registered Financial Planners.
Mr. Yongyuan Chen will be appointed as our director upon closing of this offering. Mr. Chen is a practicing lawyer in China and Australia for over 20 years. He is currently the director of China Commercial Law Co. Australia Pty Limited specializing in foreign investment, merger and acquisition and intellectual property laws. He holds a bachelor degree in international law from Jilin University of China, a Master’s degree in international economic law from Renmin University of China, and a Doctor’s degree in law from the University of Sydney. Mr. Chen is a member of the Pacific Rim Bar Association and All-China Law Society, a legal assistant to the Standing Committee of the Shenzhen Municipal People’s Congress, and a member of the WTO Committee of the Shenzhen Bar Association. He formerly served as legal counsel of the Ministry of Foreign Economic Relations and Trade, China National Technology Import and Export Corporation, and chief of the Policy and Regulation Division of Shenzhen Science and Technology Bureau. From April 2011, Mr. Chen has worked as senior partner at Guangdong Huashang Law Firm, Sydney Branch. From October 2007 to April 2008, Mr. Chen worked as senior partner at the Beijing office of the UK Law Firm Lowells.
Mr. Longdley Zephirin will be appointed as our director upon closing of this offering. Mr. Zephirin was selected as the No. 1 Stock Picker by the Thomson Reuters Analyst Survey in 2010, and as a Master Stock Picker by the Wall Street Journal in 2008. Mr. Zephirin has served as the CEO and Director of Research at The Zephirin Group, Inc. since January 2014. From March 2015 to December 2016, he worked as a consultant at Barclays Wealth; from October 2006 to December 2012, he worked as an analyst consultant at Deutsche Asset Management. He attended Pace University Lubin School of Business where he studied Finance and International Law. Mr. Zephirin was a member of the board and benefit committee of Complexions Contemporary Ballet and Wiyo Ltd.
Pursuant to our articles of association, the minimum number of directors is one. Unless removed or re-appointed, each director shall be appointed for a term expiring at the next-following annual general meeting, if any is held. At any annual general meeting held, our directors will be elected by a majority vote of shareholders eligible to vote at that meeting. At each annual general meeting, each director so elected shall hold office for a one-year term and until the election of their respective successors in office or removed.
For additional information see “Description of Share Capital — Directors”.
Family Relationships
None of the directors or executive officers has a family relationship as defined in Item 401 of Regulation S-K.
Involvement in Certain Legal Proceedings
To the best of our knowledge, none of our directors or executive officers has, during the past ten years, been involved in any legal proceedings described in subparagraph (f) of Item 401 of Regulation S-K.
Board of Directors
Our board of directors will consist of 5 directors upon closing of this offering.
Duties of Directors
Under British Virgin Islands law, our directors owe fiduciary duties both at common law and under statute, including a statutory duty to act honestly, in good faith and with a view to our best interests. When exercising powers or performing duties as a director, our directors also have a duty to exercise the care, diligence and skills that a reasonable director would exercise in comparable circumstances, taking into account without limitation the nature of the company, the nature of the decision and the position of the director and the nature of the responsibilities undertaken by him. In exercising the powers of a director, the
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directors must exercise their powers for a proper purpose and shall not act or agree to the company acting in a manner that contravenes our memorandum and articles of association or the BVI Act. See “Description of Share Capital — Differences in Corporate Law” for additional information on our directors’ fiduciary duties under British Virgin Islands law. In fulfilling their duty of care to us, our directors must ensure compliance with our memorandum and articles of association. We have the right to seek damages if a duty owed by our directors is breached.
The functions and powers of our board of directors include, among others:

appointing officers and determining the term of office of the officers;

authorizing the payment of donations to religious, charitable, public or other bodies, clubs, funds or associations as deemed advisable;

exercising the borrowing powers of the company and mortgaging the property of the company;

executing checks, promissory notes and other negotiable instruments on behalf of the company; and

maintaining or registering a register of relevant charges of the company
Terms of Directors and Executive Officers
Each of our directors holds office until a successor has been duly elected and qualified unless the director was appointed by the board of directors, in which case such director holds office until the next following annual meeting of shareholders at which time such director is eligible for reelection. All of our executive officers are appointed by and serve at the discretion of our board of directors.
Qualification
There is currently no shareholding qualification for directors.
Insider Participation Concerning Executive Compensation
Our board of directors, which was comprised of either one or two directors, was making all determinations regarding executive officer compensation. When the three independent directors are appointed, they will be making all determinations regarding executive officer compensation.
The following table lists the Company’s directors since its inception;
Date
Director
From January 16, 2015 To July 5, 2016 Mr. Youxi Yang
From July 5, 2016 to April 8, 2017 Mr. Zhong Wang
From April 8, 2017 to August 10, 2017 Mr. Ronghua Liu
From August 10, 2017 to July 26, 2018 Mr. Qiang Chen
From July 26, 2017 to present Ms. Qiuli Wang
From October 12, 2018 to present Mr. Qiang Chen
Committees of the Board of Directors
We will establish three committees under the board of directors immediately upon closing of this offering: an audit committee, a compensation committee and a nominating and corporate governance committee. We have adopted a charter for each of the three committees. Each committee’s members and functions are described below.
Audit Committee .   Our audit committee will consist of Kwong Sang Liu, Yongyuan Chen and Longdley Zephirin. Kwong Sang Liu will be the chairman of our audit committee. We have determined that Kwong Sang Liu, Yongyuan Chen and Longdley Zephirin will satisfy the “independence” requirements of Section 5605(a)(2) of the Nasdaq Listing Rules and Rule 10A-3 under the Securities Exchange Act. Our board also has determined that Kwong Sang Liu qualifies as an audit committee financial expert within the
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meaning of the SEC rules or possesses financial sophistication within the meaning of the Nasdaq Listing Rules. The audit committee will oversee our accounting and financial reporting processes and the audits of the financial statements of our company. The audit committee will be responsible for, among other things:

appointing the independent auditors and pre-approving all auditing and non-auditing services permitted to be performed by the independent auditors;

reviewing with the independent auditors any audit problems or difficulties and management’s response;

discussing the annual audited financial statements with management and the independent auditors;

reviewing the adequacy and effectiveness of our accounting and internal control policies and procedures and any steps taken to monitor and control major financial risk exposures;

reviewing and approving all proposed related party transactions;

meeting separately and periodically with management and the independent auditors; and

monitoring compliance with our code of business conduct and ethics, including reviewing the adequacy and effectiveness of our procedures to ensure proper compliance.
Compensation Committee.    Our compensation committee will consist of Kwong Sang Liu, Yongyuan Chen and Longdley Zephirin upon the effectiveness of their appointments. Longdley Zephirin will be the chairman of our compensation committee. We have determined that Kwong Sang Liu, Yongyuan Chen and Longdley Zephirin will satisfy the “independence” requirements of Section 5605(a)(2) of the NASDAQ Listing Rules and Rule 10A-3 under the Securities Exchange Act. The compensation committee will assist the board in reviewing and approving the compensation structure, including all forms of compensation, relating to our directors and executive officers. Our chief executive officer may not be present at any committee meeting during which his compensation is deliberated. The compensation committee will be responsible for, among other things:

reviewing and approving to the board with respect to the total compensation package for our most senior executive officers;

approving and overseeing the total compensation package for our executives other than the most senior executive officers;

reviewing and recommending to the board with respect to the compensation of our directors;

reviewing periodically and approving any long-term incentive compensation or equity plans;

selecting compensation consultants, legal counsel or other advisors after taking into consideration all factors relevant to that person’s independence from management; and

programs or similar arrangements, annual bonuses, employee pension and welfare benefit plans.
Nominating and Corporate Governance Committee.    Our nominating and corporate governance committee currently consists of will consist of Kwong Sang Liu, Yongyuan Chen and Longdley Zephirin upon the effectiveness of their appointments. Yongyuan Chen will be the chairman of our nominating and corporate governance committee. Kwong Sang Liu, Yongyuan Chen and Longdley Zephirin satisfy the “independence” requirements of Section 5605(a)(2) of the NASDAQ Listing Rules and Rule 10A-3 under the Securities Exchange Act. The nominating and corporate governance committee will assist the board of directors in selecting individuals qualified to become our directors and in determining the composition of the board and its committees. The nominating and corporate governance committee will be responsible for, among other things:

identifying and recommending nominees for election or re-election to our board of directors or for appointment to fill any vacancy;

reviewing annually with our board of directors its current composition in light of the characteristics of independence, age, skills, experience and availability of service to us;
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identifying and recommending to our board the directors to serve as members of committees;

advising the board periodically with respect to significant developments in the law and practice of corporate governance as well as our compliance with applicable laws and regulations, and making recommendations to our board of directors on all matters of corporate governance and on any corrective action to be taken; and

monitoring compliance with our code of business conduct and ethics, including reviewing the adequacy and effectiveness of our procedures to ensure proper compliance.
Corporate Governance
Our board of directors has adopted a code of business conduct and ethics, which is applicable to all of our directors, officers and employees. We intend to make our code of business conduct and ethics publicly available on our website prior to the initial closing of this offering.
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EXECUTIVE COMPENSATION
Summary Compensation Table
The following table sets forth certain information with respect to compensation for the fiscal years ended July 31, 2018 and 2017 paid to our Named Executive Officers.
Summary Compensation Table
Name and Principal Position
Year
Salary
($)
Bonus
($)
Stock
Awards
($)
Option
Awards
($)
Non-Equity
Incentive Plan 
Compensation
Deferred
Compensation
Earnings
Other
Total
($)
Qiuli Wang*
President of the Company
2018
3,492 0 0 0 0 0 0 3,492
2017
5,238 0 0 0 0 0 0 5,238
Qiang Chen**
CEO of the Company and Qianhai
2018
26,190 0 0 0 0 0 0 26,190
2017
23,862 0 0 0 0 0 0 23,862
Fang Cheng
CFO of the Company and Qianhai
2018
15,278 0 0 0 0 0 0 15,278
2017
19,628 0 0 0 0 0 0 19,628
*
Qiuli Wang was appointed as our CEO on November 26, 2018
**
Qiang Chen ceased to be our CEO on November 26, 2018
Agreements with Named Executive Officers
On September 29, 2018, we entered into employment agreements with our executive officers. Pursuant to employment agreements, the form of which is filed as Exhibit 10.3 to this Registration Statement, we will agree to employ each of our executive officers for a specified time period, which will be renewed upon both parties’ agreement thirty days before the end of the current employment term, and payment of cash compensation and benefits shall become payable when the Company becomes a public reporting company in the US. We may terminate the employment for cause, at any time, without notice or remuneration, for certain acts of the executive officer, including but not limited to the commitments of any serious or persistent breach or non-observance of the terms and conditions of the employment, conviction of a criminal offense, willful disobedience of a lawful and reasonable order, fraud or dishonesty, receipt of bribery, or severe neglect of his or her duties. An executive officer may terminate his or her employment at any time with a one-month prior written notice. Each executive officer has agreed to hold, both during and after the employment agreement expires, in strict confidence and not to use or disclose to any person, corporation or other entity without written consent, any confidential information.
Our employment agreement with Qiuli Wang, our President, is for a term of 3 years beginning on October 1, 2018 and provides for an annual salary of  $87,108, the payment of which commences when the Company becomes a public reporting company in the US. On November 26, 2018, the Company amended the employment agreement with Qiuli Wang to provide that Qiuli Wang would also be acting as our CEO.
Our employment agreement with Fang Cheng, our CFO, is for a term of 3 years beginning on October 1, 2018, and provides for an annual salary of  $87,108, the payment of which commences when the Company becomes a public reporting company in the US.
Compensation of Directors
For the fiscal years ended July 31, 2018 and 2017, we did not compensate our directors for their services other than to reimburse them for out-of-pocket expenses incurred in connection with their attendance at meetings of the Board of Directors.
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PRINCIPAL SHAREHOLDERS
The following table sets forth information with respect to the beneficial ownership, within the meaning of Rule 13d-3 under the Exchange Act, of our Ordinary Shares as of the date of this registration statement, and as adjusted to reflect the sale of the Ordinary Shares offered in this offering for:

each of our directors and executive officers who beneficially own our Ordinary Shares;

all of our directors and executive officers as a group; and

each person known to us to own beneficially more than 5.0% of our Ordinary Shares.
Beneficial ownership includes voting or investment power with respect to the securities. Except as indicated below, and subject to applicable community property laws, the persons named in the table have sole voting and investment power with respect to all Ordinary Shares shown as beneficially owned by them. Percentage of beneficial ownership of each listed person prior to this offering is based on 50,000,000 Ordinary Shares issued and outstanding as of the date of this registration statement.
The number and percentage of Ordinary Shares beneficially owned after the offering are based on (i) 52,000,000 Ordinary Shares outstanding following the sale of 2,000,000 Ordinary Shares if the minimum offering amount is raised, and (ii) 55,000,000 Ordinary Shares outstanding following the sale of 5,000,000 Ordinary shares if the maximum offering amount is raised. Information with respect to beneficial ownership has been furnished by each director, officer or beneficial owner of 5% or more of our Ordinary Shares. Beneficial ownership is determined in accordance with the rules of the SEC and generally requires that such person have voting or investment power with respect to securities. In computing the number of Ordinary Shares beneficially owned by a person listed below and the percentage ownership of such person, Ordinary Shares underlying options, warrants or convertible securities held by each such person that are exercisable or convertible within 60 days of the date of this prospectus are deemed outstanding, but are not deemed outstanding for computing the percentage ownership of any other person. As of the date of this registration statement, we have 6 shareholders of record, none of which are located in the United States. We will be required to have at least 300 shareholders at closing in order to satisfy the Nasdaq listing standards.
Ordinary Shares
Beneficially Owned
Prior to this Offering
Ordinary Shares
Beneficially Owned
After this Offering
(Minimum offering
amount)
Ordinary Shares
Beneficially Owned
After this Offering
(Maximum offering amount)
Number
%
Number
%
Number
%
Directors and Executive Officers:
Qiuli Wang (1)
39,500,000 79 % 39,500,000 76 % 39,500,000 71.8 %
Fang Cheng (2)
0 0 % 0 0 % 0 0
Qiang Chen (3)
0 0 % 0 0 % 0 0
Kwong Sang Liu (4)
0 0 % 0 0 % 0 0
Yongyuan Chen (4)
0 0 % 0 0 % 0 0
Longdley Zephirin (4)
0 0 % 0 0 % 0 0
Directors and Executive Officers as a group (6 persons)
39,500,000 79 % 39,500,000 76 % 39,500,000 71.8 %
Haiyun Liu (5)
4,000,000 8 % 4,000,000 7.7 % 4,000,000 7.3 %
(1)
Qiuli Wang, our president, CEO and chairman of the Board, beneficially owns 26,500,000 Ordinary Shares through her 100% ownership of Tianzhen Investments Limited, which owns 53% of the Company’s Ordinary Shares, and 13,000,000 shares through a proxy agreement entered with Eno Group Limited, which owns 26% of the Company’s Ordinary Shares.
(2)
Fang Cheng, our CFO
(3)
Qiang Chen, our director
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(4)
Our independent directors
(5)
Haiyun Liu beneficially owns 4,000,000 Ordinary Shares through her 100% equity ownership in Great State Investments Limited
History of Shares
The Company was incorporated in the BVI on January 5, 2015. On January 16, 2015, we issued one ordinary share to a founder shareholder in connection with a business plan which was subsequently abolished.
The Company was initially authorized to issue up to a maximum of 50,000,000 shares of US$1.00 par value each in a single class. The number of shares the Company is authorized to issue was increased on various dates as follows:
Date
Number of shares the company is authorized to issue
May 5, 2017 50,000,000 shares of a single class with a par value of US$0.0004 per share
October 13, 2017 100,000,000 shares of a single class with a par value of US$0.0004 per share
August 21, 2018 100,000,000,000 shares of a single class with a par value of US$0.001 per share
[DATE]
100,000,000,000 shares divided into the following classes:
 — 
Ordinary Shares of US$0.001 par value each; and
 — 
Class A preferred shares of US$0.001 par value each;
In connection with the Company’s anticipated public offering, the Company undertook a reorganization, cancelled its previously outstanding shares and issued 50,000,000 shares as listed in the following table:
Date
Number of shares
issued
Amount Paid Per
Share
Name of Shareholder
August 23, 2018
1,000​
USD0.001​
Qiuli Wang
September 27, 2018
2,000​
USD0.001​
Ronghua Liu
September 27, 2018
25,500​
USD0.001​
Tianzhen Investments Limited
September 27, 2018
13,000​
USD0.001​
Eno Group Limited
September 27, 2018
4,000​
USD0.001​
Great State Investments Limited
September 27, 2018
2,100​
USD0.001​
Xueqing Liu
September 27, 2018
2,400​
USD0.001​
Renyan Ou
November 2, 2018
1,998,000​
USD0.001​
Ronghua Liu
November 2, 2018
26,473,500​
USD0.001​
Tianzhen Investments Limited
November 2, 2018
12,987,000​
USD0.001​
Eno Group Limited
November 2, 2018
3,996,000​
USD0.001​
Great State Investments Limited
November 2, 2018
2,097,900​
USD0.001​
Xueqing Liu
November 2, 2018
2,397,600
USD0.001​
Renyan Ou
50,000,000
All shares issued in the past 3 years:

attached the rights to one vote per share and an equal share to distributions of dividends and surplus assets.

were issued for a cash consideration at par value; and

were not issued with discounts, special terms or installment plans.
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As of the date of this registration statement, we are authorized to issue up to a maximum of 100,000,000,000 shares divided into ordinary shares of  $0.001 par value each and preferred shares of  $0.001 par value each. Holders of Ordinary Shares are entitled to one vote per share. We will issue Ordinary Shares in this offering.
As of the date of this registration statement, none of our issued Ordinary Shares are held by record holders in the United States.
We are not aware of any arrangement that may, at a subsequent date, result in a change of control of the Company.
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RELATED PARTY TRANSACTIONS
Upon completion of this offering, Ms. Qiuli Wang will beneficially hold 75.96% of the combined total of our outstanding Ordinary Shares if the minimum offering is raised, and 71.82% if the maximum offering is raised. Following the completion of this offering, Ms. Qiuli Wang will continue to have the power to act alone in approving any action requiring a vote of the majority of our Ordinary Shares and to elect all of our directors.
Contractual Arrangements with WFOE, Qianhai and Its Shareholders
We conduct our financial services business through Qianhai, a VIE entity that we control through a series of contractual arrangements between our PRC subsidiary WFOE, Qianhai and its shareholders including but not limited to our principal shareholder, Qiuli Wang. Such contractual arrangements provide us (i) the power to control Qianhai, (ii) the exposure or rights to variable returns from our involvement with Qianhai, and (iii) the ability to affect those returns through use of our power over Qianhai to affect the amount of our returns. Therefore, we control Qianhai. For a description of these contractual arrangements, see “Business — Our History and Corporate Structure”.
Material Transactions with Related Parties
On November 2, 2018, the Company issued 49,950,000 Ordinary Shares to our Beneficial Owners, in private transactions, for a total consideration of  $49,950: 26,473,500 Ordinary Shares were issued to Tianzhen Investments Limited, an entity that owned 53% of the Company’s outstanding shares, and is 100% controlled by Qiuli Wang, our President and Chairman of the board of directors; 12,987,000 Ordinary Shares were issued to Eno Group Limited, an entity that owned 26% of the Company’s outstanding Shares, and is 100% controlled by our Beneficial Owner, Yanru Zhou; 3,996,000 Ordinary Shares were issued to Great State Investments Limited, an entity that owned 8% of the Company’s outstanding shares and is 100% controlled by our Beneficial Owner, Haiyun Liu; and 1,998,000 Ordinary Shares were issued to our Beneficial Owner, Ronghua Liu, who owned 98.5% equity of Qianhai, our VIE.
On August 23 and September 27, 2018, the Company issued 26,500 Ordinary Shares to Tianzhen Investments Limited, an entity 100% controlled by Qiuli Wang, our President and Chairman of the board of directors; and 2000 Ordinary Shares to Ronghua Liu, who own 98.5% equity of Qianhai, our VIE.
On August 13, 2018, through a reorganization in connection with the intended IPO, Qianhai sold 45% of its equity ownership in its former wholly-owned subsidiary, Qianhai Asia Times (Shenzhen) International Fund Management Co., Ltd, for a total price of RMB31,500 (approximately US$4,586) to Yanru Zhou, who beneficially owns 13,000 shares, or 26% of the Company’s Ordinary Shares, through his 100% ownership in the equity of Eno Group Limited. Qianhai’s remaining 55% equity ownership interest in Asia Times Fund was sold to two unrelated individuals in September 2018.
Advances to Related Parties
From April 2016 to October 2017, the Company had a plan to develop a guarantee business and accordingly advanced cash to Shenzhen Haorong Guarantee Co., Ltd., an entity controlled by the Company’s major shareholder, Ronghua Liu, in order to conduct business planning. The advance is due on demand and non-interest bearing. As of July 31, 2018, the outstanding advance was $14,966. As of August 6, 2018, the outstanding advance was $580.
Advances and Loans from Related Parties
On October 25, 2015, Mr. Qiang Chen, the Company’s director, made a due-on-demand and non-interest bearing loan in the amount of RMB 99,500 (approximately US$14,791) to the Company. As of July 31, 2018, this outstanding loan payable to Mr. Chen was $14,791.
On February 1, 2017, Mr. Qiang Chen, the Company’s director, made another due-on-demand and non-interest bearing loan in the amount of RMB 100,000 (approximately US$14,866) to the Company. As of July 31, 2018, this outstanding loan payable to Mr. Chen was $14,866.
Employment Agreements
See “Management — Employment Agreements”.
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DESCRIPTION OF SHARE CAPITAL
We were incorporated as a BVI business company under the BVI Act, in the British Virgin Islands on January 5, 2015 under the name “Eternal Fairy International Limited”. Our name was changed to “Asia Times Holdings Limited” on April 28, 2017. As of the date of this prospectus, are authorized to issue up to a maximum of 100,000,000,000 shares divided into ordinary shares of  $0.001 par value each and preferred shares of  $0.001 par value each. The following are summaries of the material provisions of our memorandum and articles of association; a copy of these documents are filed as exhibits to the registration statement of which this prospectus is a part. Because it is only a summary, it may not contain all the information that is important to you.
Shares
General
All of our issued shares are fully paid and non-assessable. Certificates evidencing the shares are issued in registered form. There are no limitations imposed by our memorandum and articles of association on the rights of non-resident or foreign shareholders to hold or exercise voting rights on our shares. In addition, there are no provisions in our memorandum and articles of association governing the ownership threshold above which shareholder ownership must be disclosed.
Under the BVI Act, the Ordinary Shares are deemed to be issued when the name of the shareholder is entered in our register of members. If  (a) information that is required to be entered in the register of members is omitted from the register or is inaccurately entered in the register, or (b) there is unreasonable delay in entering information in the register, a shareholder of the company, or any person who is aggrieved by the omission, inaccuracy or delay, may apply to the British Virgin Islands Courts for an order that the register be rectified, and the court may either refuse the application or order the rectification of the register, and may direct the company to pay all costs of the application and any damages the applicant may have sustained.
Distributions
Shareholders holding shares in the Company are entitled to receive such dividends as may be declared by our board of directors subject to the BVI Act and the memorandum and articles of association.
Voting rights
Any action required or permitted to be taken by the shareholders must be effected at a duly called meeting of the shareholders entitled to vote on such action or may be effected by a resolution of members in writing, each in accordance with the memorandum and articles of association. At each meeting of shareholders, each shareholder who is present in person or by proxy (or, in the case of a shareholder being a corporation, by its duly authorized representative) will have one vote for each share that such shareholder holds.
Election of directors
Delaware law permits cumulative voting for the election of directors only if expressly authorized in the certificate of incorporation. There is nothing under BVI law which specifically prohibits or restrict the creation of cumulative voting rights for the election of our directors. Our memorandum and articles of association do not provide for cumulative voting for elections of directors.
Meetings
Under our memorandum and articles of association, a copy of the notice of any meeting of shareholders shall be given not less than 7 days before the date of the proposed meeting to those persons whose names appear as shareholders in the register of members on the date of the notice and are entitled to vote at the meeting. Our board of directors shall call a meeting of shareholders upon the written request of shareholders holding at least 30% of our outstanding voting shares. In addition, our board of directors may call a meeting of shareholders on its own motion. A meeting of shareholders may be called on short notice
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if at least 90% of the shares entitled to vote on the matters to be considered at the meeting have agreed to short notice of the meeting, or if all members holding shares entitled to vote on all or any matters to be considered at the meeting have waived notice and presence at the meeting shall be deemed to constitute waiver for this purpose.
At any meeting of shareholders, a quorum will be present if there are shareholders present in person or by proxy representing not less than one-third of the issued shares entitled to vote on the resolutions to be considered at the meeting. Such quorum may be represented by only a single shareholder or proxy. If no quorum is present within two hours of the start time of the meeting, the meeting shall be dissolved if it was requested by shareholders. In any other case, the meeting shall be adjourned to the next business day, and if shareholders representing not less than one-third of the votes of the common shares or each class of shares entitled to vote on the matters to be considered at the meeting are present within one hour of the start time of the adjourned meeting, a quorum will be present. If not, the meeting will be dissolved. No business may be transacted at any meeting of shareholders unless a quorum is present at the commencement of business. If present, the chair of our board of directors shall be the chair presiding at any meeting of the shareholders. If the chair of our board is not present then the members present shall choose a shareholder to act to chair the meeting of the shareholders. If the shareholders are unable to choose a chairman for any reason, then the person representing the greatest number of voting shares present in present of by proxy shall preside as chairman, failing which the oldest individual member or member representative shall take the chair.
A corporation that is a shareholder shall be deemed for the purpose of our memorandum and articles of association to be present in person if represented by its duly authorized representative. This duly authorized representative shall be entitled to exercise the same powers on behalf of the corporation which he represents as that corporation could exercise if it were our individual shareholder.
Protection of minority shareholders
We would normally expect British Virgin Islands courts to follow English case law precedents, which permit a minority shareholder to commence a representative action, or derivative action in our name, or an unfair prejudice claim, as appropriate, to challenge, for example (1) an act which is ultra vires or illegal, (2) an act which constitutes a fraud against the minority by parties in control of us, (3) the act complained of constitutes an infringement of individual rights of shareholders, such as the right to vote and (4) an irregularity in the passing of a resolution which requires a majority of the shareholders.
Pre-emptive rights
There are no pre-emptive rights applicable to the issue by us of new shares under either British Virgin Islands law or our memorandum and articles of association.
Transfer of shares
Subject to the restrictions in our memorandum and articles of association, the lock-up agreements with our Underwriters described in “Shares Eligible for Future Sale — Lock-Up Agreements” and applicable securities laws, any of our shareholders may transfer all or any of his or her shares by an instrument of transfer in the usual or common form, in the case of listed shares, in any manner permitted by and in accordance with the rules of the relevant exchange, or in any other form which our directors may approve.
Liquidation
As permitted by the BVI Act and our memorandum and articles of association, we may be voluntarily liquidated under Part XII of the BVI Act by resolution of directors and resolution of shareholders if our assets exceed our liabilities and we are able to pay our debts as they fall due. We also may be wound up in circumstances where we are insolvent in accordance with the terms of the BVI Insolvency Act, 2003 (as amended).
If we are wound up and the assets available for distribution among our shareholders are more than sufficient to repay all amounts paid to us on account of the issue of shares immediately prior to the winding up, the excess shall be distributable pari passu among those shareholders in proportion to the amount paid
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up immediately prior to the winding up on the shares held by them, respectively. If we are wound up and the assets available for distribution among the shareholders as such are insufficient to repay the whole of the amounts paid to us on account of the issue of shares, those assets shall be distributed so that, to the greatest extent possible, the losses shall be borne by the shareholders in proportion to the amounts paid up immediately prior to the winding up on the shares held by them, respectively. If we are wound up, the liquidator appointed by us may, in accordance with the BVI Act, divide among our shareholders in specie or kind the whole or any part of our assets (whether they shall consist of property of the same kind or not) and may, for such purpose, set such value as the liquidator deems fair upon any property to be divided and may determine how such division shall be carried out as between the shareholders or different classes of shareholders.
Calls on shares and forfeiture of shares
Our board of directors may, on the terms established at the time of the issuance of such shares or as otherwise agreed, make calls upon shareholders for any amounts unpaid on their shares in a notice served to such shareholders at least 14 days prior to the specified time of payment. The shares that have been called upon and remain unpaid are subject to forfeiture.
Redemption of shares
Subject to the provisions of the BVI Act, we may issue shares on terms that are subject to redemption, at our option or at the option of the holders, on such terms and in such manner as may be determined by our memorandum and articles of association and subject to any applicable requirements imposed from time to time by, the BVI Act, the SEC, the NASDAQ Capital Market, or by any recognized stock exchange on which our securities are listed.
Modifications of class rights
If at any time, the Company is authorized to issue more than one class of shares, all or any of the rights attached to any class of shares may be amended only with the consent in writing of or by a resolution passed at a meeting of not less than 50 percent of the shares of the class to be affected.
Changes in the number of shares we are authorized to issue and those in issue
We may from time to time by resolution of our board of directors, subject to our memorandum and articles of association:

amend our memorandum and articles of association to increase or decrease the maximum number of shares we are authorized to issue;

divide our authorized and issued shares into a larger number of shares;

combine our authorized and issued shares into a smaller number of shares; and

create new classes of shares with preferences to be determined by resolution of the board of directors to amend the memorandum and articles of association to create new classes of shares with such preferences at the time of authorization.
Untraceable shareholders
Under our memorandum and articles of association, we are entitled to sell any shares of a shareholder who is untraceable, as long as: (a) all checks, not being less than three in total number, for any sums payable in cash to the holder of such shares have remained uncashed for a period of 12 years; (b) we have not during that time or before the expiry of the three-month period referred to in (c) below received any indication of the existence of the shareholder or person entitled to such shares by death, bankruptcy or operation of law; and (c) upon expiration of the 12-year period, we have caused an advertisement to be published in newspapers, giving notice of our intention to sell these shares, and a period of three months or such shorter period has elapsed since the date of such advertisement. The net proceeds of any such sale shall belong to us, and when we receive these net proceeds we shall become indebted to the former shareholder for an amount equal to such net proceeds.
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Inspection of books and records
Under the BVI Act, members of the general public, on payment of a nominal fee, can obtain copies of the public records of a company available at the office of the Registrar of Corporate Affairs which will include the company’s certificate of incorporation, its memorandum and articles of association (with any amendments) and records of license fees paid to date and will also disclose any articles of dissolution, articles of merger and a register of charges if the company has elected to file such a register.
A member of the Company is also entitled, upon giving written notice to us, to inspect (i) our memorandum and articles of association, (ii) the register of members, (iii) the register of directors and (iv) minutes of meetings and resolutions of members and of those classes of members of which that member is a member, and to make copies and take extracts from the documents and records referred to in (i) to (iv) above. However, our directors may, if they are satisfied that it would be contrary to the company’s interests to allow a member to inspect any document, or part of a document specified in (ii) to (iv) above, refuse to permit the member to inspect the document or limit the inspection of the document, including limiting the making of copies or the taking of extracts or records. See “Where You Can Find More Information.” Where a company fails or refuses to permit a member to inspect a document or permits a member to inspect a document subject to limitations, that member may apply to the BVI court for an order that he should be permitted to inspect the document or to inspect the document without limitation.
Rights of non-resident or foreign shareholders
There are no limitations imposed by our memorandum and articles of association on the rights of non-resident or foreign shareholders to hold or exercise voting rights on our shares. In addition, there are no provisions in our memorandum and articles of association governing the ownership threshold above which shareholder ownership must be disclosed.
Issuance of additional shares
Our memorandum and articles of association authorizes our board of directors to issue additional shares from authorized but unissued shares, to the extent available, from time to time as our board of directors shall determine.
Preferred Shares
Our memorandum and articles of association authorizes the creation and issuance without shareholder approval preferred shares up to the maximum number of authorised but unissued shares, divided into a single class, Class A, with such designation, rights and preferences as may be determined by a resolution of our board of directors to amend the memorandum and articles of association to create such designations, rights and preferences. Under BVI law, all shares of a single class must be issued with the same rights and obligations. No preferred shares are currently issued or outstanding. Accordingly, our board of directors is empowered, without shareholder approval, to issue preferred shares with dividend, liquidation, redemption, voting or other rights, which could adversely affect the voting power or other rights of the holders of ordinary shares. The preferred shares could be utilized as a method of discouraging, delaying or preventing a change in control of us. Although we do not currently intend to issue any preferred shares, we may do so in the future.
The rights of preferred shareholders, once the preferred shares are in issue, may only be amended by a resolution to amend our memorandum and articles of association provided such amendment is also approved by a separate resolution of a majority of the votes of preferred shareholders who being so entitled attend and vote at the class meeting of the relevant preferred class. If our preferred shareholders want us to hold a meeting of preferred shareholders (or of a class of preferred shareholders), they may requisition the directors to hold one upon the written request of preferred shareholders entitled to exercise at least 30% of the voting rights in respect of the matter (or class) for which the meeting is requested. Under British Virgin Islands law, we may not increase the required percentage to call a meeting above 30%.
Differences in Corporate Law
The BVI Act and the laws of the British Virgin Islands affecting British Virgin Islands companies like us and our shareholders differ from laws applicable to U.S. corporations and their shareholders. Set forth
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below is a summary of the significant differences between the provisions of the laws of the British Virgin Islands applicable to us and the laws applicable to companies incorporated in the United States and their shareholders.
Mergers and similar arrangements
Under the laws of the British Virgin Islands, two or more companies may merge or consolidate in accordance with Section 170 of the BVI Act. A merger means the merging of two or more constituent companies into one of the constituent companies (the “surviving company”) and a consolidation means the uniting of two or more constituent companies into a new company (the “consolidated company”). The procedure for a merger or consolidation between the company and another company (which need not be a BVI company, and which may be the company’s parent or subsidiary, but need not be) is set out in the BVI Act. In order to merge or consolidate, the directors of each constituent company must approve a written plan of merger or consolidation, which with the exception of a merger between a parent company and its subsidiary, must also be approved by a resolution of a majority of the shareholders voting at a quorate meeting of shareholders or by written resolution of the shareholders of the BVI company or BVI companies which are to merge. While a director may vote on the plan of merger or consolidation, or any other matter, even if he has a financial interest in the plan, the interested director must disclose the interest to all other directors of the company promptly upon becoming aware of the fact that he is interested in a transaction entered into or to be entered into by the company. A transaction entered into by our company in respect of which a director is interested (including a merger or consolidation) is voidable by us unless the director’s interest was (a) disclosed to the board prior to the transaction or (b) the transaction is (i) between the director and the company and (ii) the transaction is in the ordinary course of the company’s business and on usual terms and conditions. Notwithstanding the above, a transaction entered into by the company is not voidable if the material facts of the interest are known to the shareholders and they approve or ratify it or the company received fair value for the transaction. In any event, all shareholders must be given a copy of the plan of merger or consolidation irrespective of whether they are entitled to vote at the meeting to approve the plan of merger or consolidation. A foreign company which is able under the laws of its foreign jurisdiction to participate in the merger or consolidation is required by the BVI Act to comply with the laws of that foreign jurisdiction in relation to the merger or consolidation. The shareholders of the constituent companies are not required to receive shares of the surviving or consolidated company but may receive debt obligations or other securities of the surviving or consolidated company, other assets, or a combination thereof. Further, some or all of the shares of a class or series may be converted into a kind of asset while the other shares of the same class or series may receive a different kind of asset. As such, not all the shares of a class or series must receive the same kind of consideration. After the plan of merger or consolidation has been approved by the directors and authorized, if required, by a resolution of the shareholders, articles of merger or consolidation are executed by each company and filed with the Registrar of Corporate Affairs in the British Virgin Islands. The merger is effective on the date that the articles of merger are registered with the Registrar or on such subsequent date, not exceeding thirty days, as is stated in the articles of merger or consolidation.
As soon as a merger becomes effective: (a) the surviving company or consolidated company (so far as is consistent with its memorandum and articles of association, as amended or established by the articles of merger or consolidation) has all rights, privileges, immunities, powers, objects and purposes of each of the constituent companies; (b) in the case of a merger, the memorandum and articles of association of any surviving company are automatically amended to the extent, if any, that changes to its memorandum and articles of association are contained in the articles of merger or, in the case of a consolidation, the memorandum and articles of association filed with the articles of consolidation are the memorandum and articles of the consolidated company; (c) assets of every description, including choses-in-action and the business of each of the constituent companies, immediately vest in the surviving company or consolidated company; (d) the surviving company or consolidated company is liable for all claims, debts, liabilities and obligations of each of the constituent companies; (e) no conviction, judgment, ruling, order, claim, debt, liability or obligation due or to become due, and no cause existing, against a constituent company or against any member, director, officer or agent thereof, is released or impaired by the merger or consolidation; and (f) no proceedings, whether civil or criminal, pending at the time of a merger by or against a constituent company, or against any member, director, officer or agent thereof, are abated or
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discontinued by the merger or consolidation; but: (i) the proceedings may be enforced, prosecuted, settled or compromised by or against the surviving company or consolidated company or against the member, director, officer or agent thereof; as the case may be; or (ii) the surviving company or consolidated company may be substituted in the proceedings for a constituent company. The Registrar of Corporate Affairs shall strike off the register of companies each constituent company that is not the surviving company in the case of a merger and all constituent companies in the case of a consolidation. If the directors determine it to be in the best interests of the company, it is also possible for a merger to be approved as a Court approved plan of arrangement or scheme of arrangement in accordance with the BVI Act.
A shareholder may dissent from (a) a merger if the company is a constituent company, unless the company is the surviving company and the member continues to hold the same or similar shares; (b) a consolidation if the company is a constituent company; (c) any sale, transfer, lease, exchange or other disposition of more than 50 per cent in value of the assets or business of the company if not made in the usual or regular course of the business carried on by the company but not including: (i) a disposition pursuant to an order of the court having jurisdiction in the matter, (ii) a disposition for money on terms requiring all or substantially all net proceeds to be distributed to the members in accordance with their respective interest within one year after the date of disposition, or (iii) a transfer pursuant to the power of the directors to transfer assets for the protection thereof; (d) a compulsory redemption of 10 per cent, or fewer of the issued shares of the company required by the holders of 90 percent, or more of the shares of the company pursuant to the terms of the BVI Act; and (e) a plan of arrangement, if permitted by the British Virgin Islands Court (each, an Action). A shareholder properly exercising his dissent rights is entitled to a cash payment equal to the fair value of his shares.
A shareholder dissenting from an Action must object in writing to the Action before the vote by the shareholders on the merger or consolidation, unless notice of the meeting was not given to the shareholder. If the merger or consolidation is approved by the shareholders, the company must give notice of this fact to each shareholder within 20 days who gave written objection. Such objection shall include a statement that the members proposes to demand payment for his or her shares if the Action is taken. These shareholders then have 20 days to give to the company their written election in the form specified by the BVI Act to dissent from the Action, provided that in the case of a merger, the 20 days starts when the plan of merger is delivered to the shareholder. Upon giving notice of his election to dissent, a shareholder ceases to have any shareholder rights except the right to be paid the fair value of his shares. As such, the merger or consolidation may proceed in the ordinary course notwithstanding his dissent. Within seven days of the later of the delivery of the notice of election to dissent and the effective date of the merger or consolidation, the company shall make a written offer to each dissenting shareholder to purchase his shares at a specified price per share that the company determines to be the fair value of the shares. The company and the shareholder then have 30 days to agree upon the price. If the company and a shareholder fail to agree on the price within the 30 days, then the company and the shareholder shall, within 20 days immediately following the expiration of the 30-day period, each designate an appraiser and these two appraisers shall designate a third appraiser. These three appraisers shall fix the fair value of the shares as of the close of business on the day prior to the shareholders’ approval of the transaction without taking into account any change in value as a result of the transaction.
Shareholders’ suits
There are both statutory and common law remedies available to our shareholders as a matter of British Virgin Islands law. These are summarized below.
Prejudiced members
A shareholder who considers that the affairs of the company have been, are being, or are likely to be, conducted in a manner that is, or any act or acts of the company have been, or are, likely to be oppressive, unfairly discriminatory or unfairly prejudicial to him in that capacity, can apply to the court under Section 184I of the BVI Act, inter alia, for an order that his shares be acquired, that he be provided compensation, that the Court regulate the future conduct of the company, or that any decision of the company which contravenes the BVI Act or our memorandum and articles of association be set aside.
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Derivative actions
Section 184C of the BVI Act provides that a shareholder of a company may, with the leave of the Court, bring an action in the name of the company in certain circumstances to redress any wrong done to it. Such actions are known as derivative actions. The BVI Court may only grant permission to bring a derivative action where the following circumstances apply:

the company does not intend to bring, diligently continue or defend or discontinue proceedings; and

it is in the interests of the company that the conduct of the proceedings not be left to the directors or to the determination of the shareholders as a whole.
When considering whether to grant leave, the British Virgin Islands Court is also required to have regard to the following matters:

whether the shareholder is acting in good faith;

whether a derivative action is in the company’s best interests, taking into account the directors’ views on commercial matters;

whether the action is likely to proceed;

the costs of the proceedings; and

whether an alternative remedy is available.
Just and equitable winding up
In addition to the statutory remedies outlined above, shareholders can also petition the BVI Court for the winding up of a company under the BVI Insolvency Act, 2003 (as amended) for the appointment of a liquidator to liquidate the company and the court may appoint a liquidator for the company if it is of the opinion that it is just and equitable for the court to so order. Save in exceptional circumstances, this remedy is generally only available where the company has been operated as a quasi-partnership and trust and confidence between the partners has broken down.
Indemnification of directors and executive officers and limitation of liability
Our memorandum and articles of association provide that, subject to certain limitations, we indemnify against all expenses, including legal fees, and against all judgments, fines and amounts paid in settlement and reasonably incurred in connection with legal, administrative or investigative proceedings for any person who:

is or was a party or is threatened to be made a party to any threatened, pending or completed proceedings, whether civil, criminal, administrative or investigative, by reason of the fact that the person is or was our director; or

is or was, at our request, serving as a director or officer of, or in any other capacity is or was acting for, another body corporate or a partnership, joint venture, trust or other enterprise
These indemnities only apply if the person acted honestly and in good faith with a view to our best interests and, in the case of criminal proceedings, the person had no reasonable cause to believe that his conduct was unlawful. The decision of the directors as to whether the person acted honestly and in good faith and with a view to the best interests of the company and as to whether the person had no reasonable cause to believe that his conduct was unlawful and is, in the absence of fraud, sufficient for the purposes of the memorandum and articles of association, unless a question of law is involved. The termination of any proceedings by any judgment, order, settlement, conviction or the entering of a nolle prosequi does not, by itself, create a presumption that the person did not act honestly and in good faith and with a view to the best interests of the company or that the person had reasonable cause to believe that his conduct was unlawful.
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This standard of conduct is generally the same as permitted under the Delaware General Corporation Law for a Delaware corporation. Insofar as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers or persons controlling us under the foregoing provisions, we have been advised that in the opinion of the SEC, such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.
Anti-takeover provisions in our Memorandum and Articles of Association
Some provisions of our articles of association may discourage, delay or prevent a change in control of our company or management that shareholders may consider favorable. Under the BVI Act there are no provisions, which specifically prevent the issuance of preferred shares or any such other ‘poison pill’ measures. The memorandum and articles of association of the company also do not contain any express prohibitions on the issuance of any preferred shares. Therefore, the directors without the approval of the holders of ordinary shares may issue preferred shares that have characteristics that may be deemed to be anti-takeover. Additionally, such a designation of shares may be used in connection with plans that are poison pill plans. However, under British Virgin Islands law, our directors in the exercise of their powers granted to them under our memorandum and articles of association and performance of their duties, are required to act honestly and in good faith in what the director believes to be in the best interests of our company.
Directors’ fiduciary duties
Under Delaware corporate law, a director of a Delaware corporation has a fiduciary duty to the corporation and its shareholders. This duty has two components: the duty of care and the duty of loyalty. The duty of care requires that a director act in good faith, with the care that an ordinarily prudent person would exercise under similar circumstances. Under this duty, a director must inform himself of, and disclose to shareholders, all material information reasonably available regarding a significant transaction.
The duty of loyalty requires that a director act in a manner he reasonably believes to be in the best interests of the corporation. He must not use his corporate position for personal gain or advantage. This duty prohibits self-dealing by a director and mandates that the best interest of the corporation and its shareholders take precedence over any interest possessed by a director, officer or controlling shareholder and not shared by the shareholders generally. In general, actions of a director are presumed to have been made on an informed basis, in good faith and in the honest belief that the action taken was in the best interests of the corporation. However, this presumption may be rebutted by evidence of a breach of one of the fiduciary duties. Should such evidence be presented concerning a transaction by a director, a director must prove the procedural fairness of the transaction and that the transaction was of fair value to the corporation.
Under British Virgin Islands law, our directors owe fiduciary duties both at common law and under statute including, among others, a statutory duty to act honestly, in good faith, for a proper purpose and with a view to what the directors believe to be in the best interests of the company. Our directors are also required, when exercising powers or performing duties as a director, to exercise the care, diligence and skill that a reasonable director would exercise in comparable circumstances, taking into account without limitation, the nature of the company, the nature of the decision and the position of the director and the nature of the responsibilities undertaken. In the exercise of their powers, our directors must ensure neither they nor the company acts in a manner which contravenes the BVI Act or our memorandum and articles of association. A shareholder has the right to seek damages for breaches of duties owed to us by our directors.
Pursuant to the BVI Act and our memorandum and articles of association, a director of a company who has an interest in a transaction and who has declared such interest to the other directors, may:
(a)
vote on a matter relating to the transaction;
(b)
attend a meeting of directors at which a matter relating to the transaction arises and be included among the directors present at the meeting for the purposes of a quorum; and
(c)
sign a document on behalf of the Company, or do any other thing in his capacity as a director, that relates to the transaction.
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In certain limited circumstances, a shareholder has the right to seek various remedies against the company in the event the directors are in breach of their duties under the BVI Act. Pursuant to Section 184B of the BVI Act, if a company or director of a company engages in, or proposes to engage in or has engaged in, conduct that contravenes the provisions of the BVI Act or the memorandum or articles of association of the company, the British Virgin Islands Court may, on application of a shareholder or director of the company, make an order directing the company or director to comply with, or restraining the company or director from engaging in conduct that contravenes the BVI Act or the memorandum or articles. Furthermore, pursuant to section 184I(1) of the BVI Act a shareholder of a company who considers that the affairs of the company have been, are being or likely to be, conducted in a manner that is, or any acts of the company have been, or are likely to be oppressive, unfairly discriminatory, or unfairly prejudicial to him in that capacity, may apply to the British Virgin Islands Court for an order which, inter alia, can require the company or any other person to pay compensation to the shareholders.
Shareholder action by written consent
Under the Delaware General Corporation Law, a corporation may eliminate the right of shareholders to act by written consent by amendment to its certificate of incorporation. British Virgin Islands law provides that, subject to the memorandum and articles of association of a company, an action that may be taken by members of the company at a meeting may also be taken by a resolution of members consented to in writing.
Shareholder proposals
Under the Delaware General Corporation Law, a shareholder has the right to put any proposal before the annual meeting of shareholders, provided it complies with the notice provisions in the governing documents. A special meeting may be called by the board of directors or any other person authorized to do so in the governing documents, but shareholders may be precluded from calling special meetings. British Virgin Islands law and memorandum and articles of association allow our shareholders holding 30% or more of the votes of the outstanding voting shares to requisition a shareholders’ meeting. There is no requirement under BVI law to hold shareholders’ annual general meetings, but our memorandum and articles of association do permit the directors to call such a meeting. The location of any shareholders’ meeting can be determined by the board of directors and can be held anywhere in the world.
Cumulative voting
Under the Delaware General Corporation Law, cumulative voting for elections of directors is not permitted unless the corporation’s certificate of incorporation specifically provides for it. Cumulative voting potentially facilitates the representation of minority shareholders on a board of directors since it permits the minority shareholder to cast all the votes to which the shareholder is entitled on a single director, which increases the shareholder’s voting power with respect to electing such director. As permitted under British Virgin Islands law, our memorandum and articles of association do not provide for cumulative voting. As a result, our shareholders are not afforded any less protections or rights on this issue than shareholders of a Delaware corporation.
Removal of directors
Under the Delaware General Corporation Law, a director of a corporation with a classified board may be removed only for cause with the approval of a majority of the outstanding shares entitled to vote, unless the certificate of incorporation provides otherwise. Under our memorandum and articles of association, directors can be removed from office, with or without cause, by a resolution of shareholders. Directors can also be removed by a resolution of directors passed at a meeting of directors called for the purpose of removing the director or for purposes including the removal of the director.
Transactions with interested shareholders
The Delaware General Corporation Law contains a business combination statute applicable to Delaware public corporations whereby, unless the corporation has specifically elected not to be governed by such statute by amendment to its certificate of incorporation, it is prohibited from engaging in certain
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business combinations with an “interested shareholder” for three years following the date that such person becomes an interested shareholder. An interested shareholder generally is a person or group who or which owns or owned 15% or more of the target’s outstanding voting shares within the past three years. This has the effect of limiting the ability of a potential acquirer to make a two-tiered bid for the target in which all shareholders would not be treated equally. The statute does not apply if, among other things, prior to the date on which such shareholder becomes an interested shareholder, the board of directors approves either the business combination or the transaction which resulted in the person becoming an interested shareholder. This encourages any potential acquirer of a Delaware public corporation to negotiate the terms of any acquisition transaction with the target’s board of directors. British Virgin Islands law has no comparable statute and our memorandum and articles of association fails to expressly provide for the same protection afforded by the Delaware business combination statute.
Dissolution; Winding Up
Under the Delaware General Corporation Law, unless the board of directors approves the proposal to dissolve, dissolution must be approved by shareholders holding 100% of the total voting power of the corporation. Only if the dissolution is initiated by the board of directors may it be approved by a simple majority of the corporation’s outstanding shares. Delaware law allows a Delaware corporation to include in its certificate of incorporation a supermajority voting requirement in connection with dissolutions initiated by the board. Under the BVI Act and our memorandum and articles of association, we may appoint a voluntary liquidator by a resolution of the shareholders, provided that the directors have made a declaration of solvency that the company is able to discharge its debts as they fall due and that the value of the company’s assets exceed its liabilities.
Variation of rights of shares
Under the Delaware General Corporation Law, a corporation may vary the rights of a class of shares with the approval of a majority of the outstanding shares of such class, unless the certificate of incorporation provides otherwise. Under our memorandum and articles of association, if at any time our shares are divided into different classes of shares, the rights attached to any class may only be varied, whether or not our company is in liquidation, with the consent in writing of or by a resolution passed at a meeting by a majority of the votes cast by those entitled to vote at a meeting of the holders of the issued shares in that class. For these purposes the creation, designation or issue of preferred shares with rights and privileges ranking in priority to an existing class of shares is deemed not to be a variation of the rights of such existing class and may in accordance with our memorandum and articles of association be effected by resolution of directors without shareholder approval.
Amendment of governing documents
Under the Delaware General Corporation Law, a corporation’s governing documents may be amended with the approval of a majority of the outstanding shares entitled to vote, unless the certificate of incorporation provides otherwise. As permitted by British Virgin Islands law, our memorandum and articles of association may be amended by a resolution of shareholders and, subject to certain exceptions, by a resolution of directors. An amendment is effective from the date it is registered at the Registry of Corporate Affairs in the British Virgin Islands.
Anti-Money Laundering Laws
In order to comply with legislation or regulations aimed at the prevention of money laundering we are required to adopt and maintain anti-money laundering procedures, and may require subscribers to provide evidence to verify their identity. Where permitted, and subject to certain conditions, we also may delegate the maintenance of our anti-money laundering procedures (including the acquisition of due diligence information) to a suitable person.
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We reserve the right to request such information as is necessary to verify the identity of a subscriber. In the event of delay or failure on the part of the subscriber in producing any information required for verification purposes, we may refuse to accept the application, in which case any funds received will be returned without interest to the account from which they were originally debited.
If any person resident in the British Virgin Islands knows or suspects that another person is engaged in money laundering or terrorist financing and the information for that knowledge or suspicion came to their attention in the course of their business the person will be required to report his belief or suspicion to the Financial Investigation Agency of the British Virgin Islands, pursuant to the Proceeds of Criminal Conduct Act 1997 (as amended). Such a report shall not be treated as a breach of confidence or of any restriction upon the disclosure of information imposed by any enactment or otherwise.
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SHARES ELIGIBLE FOR FUTURE SALE
Prior to this offering, there has not been a public market for our Ordinary Shares. We are in the process of applying to list our Ordinary Shares on the Nasdaq Capital Market under the symbol “ATIF”. Future sales of substantial amounts of shares of our Ordinary Shares in the public market after our initial public offering, or the possibility of these sales occurring, could cause the prevailing market price for our Ordinary Shares to fall or impair our ability to raise equity capital in the future. Upon completion of this offering, we will have newly issued Ordinary Shares representing approximately 3.85% of our Ordinary Shares in issue if the Ordinary Shares are offered and sold at the minimum offering amount, and approximately 9.1% of our Ordinary Shares in issue if the Ordinary Shares are offered and sold at the maximum offering amount. This number excludes any issuance of aggregate of additional Ordinary Shares that could occur in connection with the conversion or exercise of our outstanding convertible promissory notes, options and warrants.
All of the Ordinary Shares sold in this offering will be freely transferable by persons other than our affiliates without restriction or further registration under the Securities Act.
Rule 144
All of our Ordinary Shares outstanding prior to this offering are “restricted securities” as that term is defined in Rule 144 under the Securities Act and may be sold publicly in the United States only if they are subject to an effective registration statement under the Securities Act or pursuant to an exemption from the registration requirement such as those provided by Rule 144 and Rule 701 promulgated under the Securities Act.
In general, under Rule 144 as currently in effect, beginning 90 days after the date of this prospectus, a person who is not deemed to have been our affiliate at any time during the three months preceding a sale and who has beneficially owned restricted securities within the meaning of Rule 144 for more than six months would be entitled to sell an unlimited number of those shares, subject only to the availability of current public information about us. A non-affiliate who has beneficially owned restricted securities for at least one year from the later of the date these shares were acquired from us or from our affiliate would be entitled to freely sell those shares.
A person who is deemed to be an affiliate of ours and who has beneficially owned “restricted securities” for at least six months would be entitled to sell, within any three-month period, a number of shares that is not more than the greater of:

1% of the number of Ordinary Shares then outstanding, in the form of Ordinary Shares or otherwise, which will equal approximately shares immediately after this offering; or

the average weekly trading volume of the Ordinary Shares on the Nasdaq Capital Market during the four calendar weeks preceding the filing of a notice on Form 144 with respect to such sale.
Sales under Rule 144 by our affiliates or persons selling shares on behalf of our affiliates are also subject to certain manner of sale provisions and notice requirements and to the availability of current public information about us.
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TAXATION
Unless otherwise noted in the following discussion, this section is the opinion of Dentons Law Firm, our PRC counsel, insofar as it relates to legal conclusions with respect to matters of People’s Republic of China Enterprise Taxation below.
People’s Republic of China Enterprise Taxation
The following brief description of Chinese enterprise laws is designed to highlight the enterprise-level taxation on our earnings, which will affect the amount of dividends, if any, we are ultimately able to pay to our shareholders. See “Dividend Policy.”
We are a holding company incorporated in the British Virgin Islands and we gain income by way of dividends paid to us from our PRC subsidiaries. The EIT Law and its implementation rules provide that China-sourced income of foreign enterprises, such as dividends paid by a PRC subsidiary to its equity holders that are non-resident enterprises, will normally be subject to PRC withholding tax at a rate of 10%, unless any such foreign investor’s jurisdiction of incorporation has a tax treaty with China that provides for a preferential tax rate or a tax exemption.
Under the EIT Law, an enterprise established outside of China with a “de facto management body” within China is considered a “resident enterprise,” which means that it is treated in a manner similar to a Chinese enterprise for enterprise income tax purposes. Although the implementation rules of the EIT Law define “de facto management body” as a managing body that actually, comprehensively manage and control the production and operation, staff, accounting, property and other aspects of an enterprise, the only official guidance for this definition currently available is set forth in SAT Notice 82, which provides guidance on the determination of the tax residence status of a Chinese-controlled offshore incorporated enterprise, defined as an enterprise that is incorporated under the laws of a foreign country or territory and that has a PRC enterprise or enterprise group as its primary controlling shareholder. Although ATHL, Inc. does not have a PRC enterprise or enterprise group as our primary controlling shareholder and is therefore not a Chinese-controlled offshore incorporated enterprise within the meaning of SAT Notice 82, in the absence of guidance specifically applicable to us, we have applied the guidance set forth in SAT Notice 82 to evaluate the tax residence status of ATHL, Inc. and its subsidiaries organized outside the PRC.
According to SAT Notice 82, a Chinese-controlled offshore incorporated enterprise will be regarded as a PRC tax resident by virtue of having a “de facto management body” in China and will be subject to PRC enterprise income tax on its worldwide income only if all of the following criteria are met: (i) the places where senior management and senior management departments that are responsible for daily production, operation and management of the enterprise perform their duties are mainly located within the territory of China; (ii) financial decisions (such as money borrowing, lending, financing and financial risk management) and personnel decisions (such as appointment, dismissal and salary and wages) are decided or need to be decided by organizations or persons located within the territory of China; (iii) main property, accounting books, corporate seal, the board of directors and files of the minutes of shareholders’ meetings of the enterprise are located or preserved within the territory of China; and (iv) one half  (or more) of the directors or senior management staff having the right to vote habitually reside within the territory of China.
We believe that we do not meet some of the conditions outlined in the immediately preceding paragraph. For example, as a holding company, the key assets and records of ATHL, including the resolutions and meeting minutes of our board of directors and the resolutions and meeting minutes of our shareholders, are located and maintained outside the PRC. In addition, we are not aware of any offshore holding companies with a corporate structure similar to ours that has been deemed a PRC “resident enterprise” by the PRC tax authorities. Accordingly, we believe that ATHL and its offshore subsidiaries should not be treated as a “resident enterprise” for PRC tax purposes if the criteria for “de facto management body” as set forth in SAT Notice 82 were deemed applicable to us. However, as the tax residency status of an enterprise is subject to determination by the PRC tax authorities and uncertainties remain with respect to the interpretation of the term “de facto management body” as applicable to our offshore entities, we will continue to monitor our tax status.
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The implementation rules of the EIT Law provide that, (i) if the enterprise that distributes dividends is domiciled in the PRC or (ii) if gains are realized from transferring equity interests of enterprises domiciled in the PRC, then such dividends or gains are treated as China-sourced income. It is not clear how “domicile” may be interpreted under the EIT Law, and it may be interpreted as the jurisdiction where the enterprise is a tax resident. Therefore, if we are considered as a PRC tax resident enterprise for PRC tax purposes, any dividends we pay to our overseas shareholders which are non-resident enterprises as well as gains realized by such shareholders from the transfer of our shares may be regarded as China-sourced income and as a result become subject to PRC withholding tax at a rate of up to 10%. We are unable to provide a “will” opinion because Dentons Law Firm, our PRC counsel, believes that it is more likely than not that the Company and its offshore subsidiaries would be treated as a non-resident enterprise for PRC tax purposes because they do not meet some of the conditions out lined in SAT Notice. In addition, we are not aware of any offshore holding companies with a corporate structure similar to ours that has been deemed a PRC “resident enterprise” by the PRC tax authorities as of the date of the prospectus. Therefore we believe that it is possible but highly unlikely that the income received by our overseas shareholders will be regarded as China-sourced income.
See “Risk Factors — Risks Relating to Doing Business in China — Under the PRC Enterprise Income Tax Law, or the EIT Law, we may be classified as a “resident enterprise” of China, which could result in unfavorable tax consequences to us and our non-PRC shareholders.”
Our company pays an EIT rate of 25% for Huaya. The EIT is calculated based on the entity’s global income as determined under PRC tax laws and accounting standards. If the PRC tax authorities determine that Huaya a PRC resident enterprise for enterprise income tax purposes, we may be required to withhold a 10% withholding tax from dividends we pay to our shareholders that are non-resident enterprises. In addition, non-resident enterprise shareholders may be subject to a 10% PRC withholding tax on gains realized on the sale or other disposition of our Ordinary Shares, if such income is treated as sourced from within the PRC. It is unclear whether our non-PRC individual shareholders would be subject to any PRC tax on dividends or gains obtained by such non-PRC individual shareholders in the event we are determined to be a PRC resident enterprise. If any PRC tax were to apply to dividends or gains realized by non-PRC individuals, it would generally apply at a rate of 20% unless a reduced rate is available under an applicable tax treaty. However, it is also unclear whether non-PRC shareholders of the Company would be able to claim the benefits of any tax treaties between their country of tax residence and the PRC in the event that the Company is treated as a PRC resident enterprise. There is no guidance from the PRC government to indicate whether or not any tax treaties between the PRC and other countries would apply in circumstances where a non-PRC company was deemed to be a PRC tax resident, and thus there is no basis for expecting how tax treaty between the PRC and other countries may impact non-resident enterprises.
British Virgin Islands Taxation
The Government of the British Virgin Islands does not, under existing legislation, impose any income, corporate or capital gains tax, estate duty, inheritance tax, gift tax or withholding tax upon the company or its shareholders who are not tax resident in the British Virgin Islands.
The Company and all distributions, interest and other amounts paid by the Company to persons who are not tax resident in the British Virgin Islands will not be subject to any income, withholding or capital gains taxes in the British Virgin Islands, with respect to the ordinary shares in the Company owned by them and dividends received on such shares, nor will they be subject to any estate or inheritance taxes in the British Virgin Islands.
No estate, inheritance, succession or gift tax, rate, duty, levy or other charge is payable by persons who are not tax resident in the British Virgin Islands with respect to any shares, debt obligations or other securities of the Company.
Except to the extent that we have any interest in real property in the British Virgin Islands, all instruments relating to transactions in respect of the shares, debt obligations or other securities of the company and all instruments relating to other transactions relating to the business of the Company are exempt from the payment of stamp duty in the British Virgin Islands.
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There are currently no withholding taxes or exchange control regulations in the British Virgin Islands applicable to the Company or its shareholders.
There is no income tax treaty or convention currently in effect between the United States and the British Virgin Islands or between China and the British Virgin Islands.
United States Federal Income Taxation
WE URGE POTENTIAL PURCHASERS OF OUR ORDINARY SHARES TO CONSULT THEIR OWN TAX ADVISORS CONCERNING THE U.S. FEDERAL, STATE, LOCAL AND NON-U.S. TAX CONSEQUENCES OF PURCHASING, OWNING AND DISPOSING OF OUR ORDINARY SHARES.
The following does not address the tax consequences to any particular investor or to persons in special tax situations such as:

banks;

financial institutions;

insurance companies;

regulated investment companies;

real estate investment trusts;

broker-dealers;

persons that elect to mark their securities to market;

U.S. expatriates or former long-term residents of the U.S.;

governments or agencies or instrumentalities thereof;

tax-exempt entities;

persons liable for alternative minimum tax;

persons holding our Ordinary Shares as part of a straddle, hedging, conversion or integrated transaction;

persons that actually or constructively own 10% or more of our voting power or value (including by reason of owning our Ordinary Shares);

persons who acquired our Ordinary Shares pursuant to the exercise of any employee share option or otherwise as compensation; or

persons holding our Ordinary Shares through partnerships or other pass-through entities.

beneficiaries of a Trust holding our Ordinary Shares

persons holding our Ordinary Shares through a Trust
M aterial T ax C onsequences A pplicable to U.S. H olders of O ur O rdinary S hares
The following sets forth the material U.S. federal income tax consequences related to the ownership and disposition of our Ordinary Shares. It is directed to U.S. Holders (as defined below) of our Ordinary Shares and is based upon laws and relevant interpretations thereof in effect as of the date of this prospectus, all of which are subject to change. This description does not deal with all possible tax consequences relating to ownership and disposition of our Ordinary Shares or U.S. tax laws, other than the U.S. federal income tax laws, such as the tax consequences under non-U.S. tax laws, state, local and other tax laws.
The following brief description applies only to U.S. Holders (defined below) that hold Ordinary Shares as capital assets and that have the U.S. dollar as their functional currency. This brief description is based on the federal income tax laws of the United States in effect as of the date of this prospectus and on
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U.S. Treasury regulations in effect or, in some cases, proposed, as of the date of this prospectus, as well as judicial and administrative interpretations thereof available on or before such date. All of the foregoing authorities are subject to change, which change could apply retroactively and could affect the tax consequences described below.
The brief description below of the U.S. federal income tax consequences to “U.S. Holders” will apply to you if you are a beneficial owner of Ordinary Share and you are, for U.S. federal income tax purposes,

an individual who is a citizen or resident of the United States;

a corporation (or other entity taxable as a corporation for U.S. federal income tax purposes) organized under the laws of the United States, any state thereof or the District of Columbia;

an estate whose income is subject to U.S. federal income taxation regardless of its source; or

a trust that (1) is subject to the primary supervision of a court within the United States and the control of one or more U.S. persons for all substantial decisions or (2) has a valid election in effect under applicable U.S. Treasury regulations to be treated as a U.S. person.
The discussion set forth below is addressed only to U.S. Holders that purchase Ordinary Shares in this offering. Prospective purchasers are urged to consult their own tax advisors about the application of the U.S. federal income tax rules to their particular circumstances as well as the state, local, foreign and other tax consequences to them of the purchase, ownership and disposition of our Ordinary Shares.
Taxation of Dividends and Other Distributions on our Ordinary Shares
Subject to the passive foreign investment company (“PFIC”) rules discussed below, the gross amount of distributions made by us to you with respect to the Ordinary Shares (including the amount of any taxes withheld therefrom) will generally be includable in your gross income as dividend income on the date of receipt by you, but only to the extent that the distribution is paid out of our current or accumulated earnings and profits (as determined under U.S. federal income tax principles). With respect to corporate U.S. Holders, the dividends will not be eligible for the dividends-received deduction allowed to corporations in respect of dividends received from other U.S. corporations.
With respect to non-corporate U.S. Holders, including individual U.S. Holders, dividends will be taxed at the lower capital gains rate applicable to qualified dividend income, provided that (1) the Ordinary Shares are readily tradable on an established securities market in the United States, or we are eligible for the benefits of an approved qualifying income tax treaty with the United States that includes an exchange of information program, (2) we are not a passive foreign investment company (as discussed below) for either our taxable year in which the dividend is paid or the preceding taxable year, and (3) certain holding period requirements are met. Because there is no income tax treaty between the United States and the BVI, clause (1) above can be satisfied only if the Ordinary Shares are readily tradable on an established securities market in the United States. Under U.S. Internal Revenue Service authority, Ordinary Shares are considered for purpose of clause (1) above to be readily tradable on an established securities market in the United States if they are listed on the Nasdaq Capital Market. You are urged to consult your tax advisors regarding the availability of the lower rate for dividends paid with respect to our Ordinary Shares, including the effects of any change in law after the date of this prospectus.
Dividends will constitute foreign source income for foreign tax credit limitation purposes. If the dividends are taxed as qualified dividend income (as discussed above), the amount of the dividend taken into account for purposes of calculating the foreign tax credit limitation will be limited to the gross amount of the dividend, multiplied by the reduced rate divided by the highest rate of tax normally applicable to dividends. The limitation on foreign taxes eligible for credit is calculated separately with respect to specific classes of income. For this purpose, dividends distributed by us with respect to our Ordinary Shares will constitute “passive category income” but could, in the case of certain U.S. Holders, constitute “general category income.”
To the extent that the amount of the distribution exceeds our current and accumulated earnings and profits (as determined under U.S. federal income tax principles), it will be treated first as a tax-free return of your tax basis in your Ordinary Shares, and to the extent the amount of the distribution exceeds your tax
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basis, the excess will be taxed as capital gain. We do not intend to calculate our earnings and profits under U.S. federal income tax principles. Therefore, a U.S. Holder should expect that a distribution will be treated as a dividend even if that distribution would otherwise be treated as a non-taxable return of capital or as capital gain under the rules described above.
Taxation of Dispositions of Ordinary Shares
Subject to the passive foreign investment company rules discussed below, you will recognize taxable gain or loss on any sale, exchange or other taxable disposition of a share equal to the difference between the amount realized (in U.S. dollars) for the share and your tax basis (in U.S. dollars) in the Ordinary Shares. The gain or loss will be capital gain or loss. If you are a non-corporate U.S. Holder, including an individual U.S. Holder, who has held the Ordinary Shares for more than one year, you will generally be eligible for reduced tax rates. The deductibility of capital losses is subject to limitations. Any such gain or loss that you recognize will generally be treated as United States source income or loss for foreign tax credit limitation purposes which will generally limit the availability of foreign tax credits.
Passive Foreign Investment Company (“PFIC”)
A non-U.S. corporation is considered a PFIC, as defined in Section 1297(a) of the US Internal Revenue Code, for any taxable year if either:

at least 75% of its gross income for such taxable year is passive income; or

at least 50% of the value of its assets (based on an average of the quarterly values of the assets during a taxable year) is attributable to assets that produce or are held for the production of passive income (the “asset test”).
Passive income generally includes dividends, interest, rents and royalties (other than rents or royalties derived from the active conduct of a trade or business) and gains from the disposition of passive assets. We will be treated as owning our proportionate share of the assets and earning our proportionate share of the income of any other corporation in which we own, directly or indirectly, at least 25% (by value) of the stock. In determining the value and composition of our assets for purposes of the PFIC asset test, (1) the cash we raise in this offering will generally be considered to be held for the production of passive income and (2) the value of our assets must be determined based on the market value of our Ordinary Shares from time to time, which could cause the value of our non-passive assets to be less than 50% of the value of all of our assets (including the cash raised in this offering) on any particular quarterly testing date for purposes of the asset test.
Based on our operations and the composition of our assets we do not expect to be treated as a PFIC under the current PFIC rules. However, we must make a separate determination each year as to whether we are a PFIC, and there can be no assurance with respect to our status as a PFIC for our current taxable year or any future taxable year. Depending on the amount of cash we raise in this offering, together with any other assets held for the production of passive income, it is possible that, for our current taxable year or for any subsequent taxable year, more than 50% of our assets may be assets held for the production of passive income. We will make this determination following the end of any particular tax year. Although the law in this regard is unclear, we are treating Qianhai as being owned by us for United States federal income tax purposes, not only because we control their management decisions, but also because we are entitled to the economic benefits associated with Qianhai, and as a result, we are treating Qianhai as our wholly-owned subsidiary for U.S. federal income tax purposes. If we are not treated as owning Qianhai for United States federal income tax purposes, we would likely be treated as a PFIC. In addition, because the value of our assets for purposes of the asset test will generally be determined based on the market price of our Ordinary Shares and because cash is generally considered to be an asset held for the production of passive income, our PFIC status will depend in large part on the market price of our Ordinary Shares and the amount of cash we raise in this offering. Accordingly, fluctuations in the market price of the Ordinary Shares may cause us to become a PFIC. In addition, the application of the PFIC rules is subject to uncertainty in several respects and the composition of our income and assets will be affected by how, and how quickly, we spend the cash we raise in this offering. We are under no obligation to take steps to reduce the risk of our being classified as a PFIC, and as stated above, the determination of the value of our assets will depend
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upon material facts (including the market price of our Ordinary Shares from time to time and the amount of cash we raise in this offering) that may not be within our control. If we are a PFIC for any year during which you hold Ordinary Shares, we will continue to be treated as a PFIC for all succeeding years during which you hold Ordinary Shares. However, if we cease to be a PFIC and you did not previously make a timely “mark-to-market” election as described below, you may avoid some of the adverse effects of the PFIC regime by making a “purging election” (as described below) with respect to the Ordinary Shares.
If we are a PFIC for your taxable year(s) during which you hold Ordinary Shares, you will be subject to special tax rules with respect to any “excess distribution” that you receive and any gain you realize from a sale or other disposition (including a pledge) of the Ordinary Shares, unless you make a “mark-to-market” election as discussed below. Distributions you receive in a taxable year that are greater than 125% of the average annual distributions you received during the shorter of the three preceding taxable years or your holding period for the Ordinary Shares will be treated as an excess distribution. Under these special tax rules:

the excess distribution or gain will be allocated ratably over your holding period for the Ordinary Shares;

the amount allocated to your current taxable year, and any amount allocated to any of your taxable year(s) prior to the first taxable year in which we were a PFIC, will be treated as ordinary income, and

the amount allocated to each of your other taxable year(s) will be subject to the highest tax rate in effect for that year and the interest charge generally applicable to underpayments of tax will be imposed on the resulting tax attributable to each such year.
The tax liability for amounts allocated to years prior to the year of disposition or “excess distribution” cannot be offset by any net operating losses for such years, and gains (but not losses) realized on the sale of the Ordinary Shares cannot be treated as capital, even if you hold the Ordinary Shares as capital assets.
A U.S. Holder of  “marketable stock” (as defined below) in a PFIC may make a mark-to-market election, under Section 1296 of the US Internal Revenue Code, for such stock to elect out of the tax treatment discussed above. If you make a mark-to-market election for first taxable year which you hold (or are deemed to hold) Ordinary Shares and for which we are determined to be a PFIC, you will include in your income each year an amount equal to the excess, if any, of the fair market value of the Ordinary Shares as of the close of such taxable year over your adjusted basis in such Ordinary Shares, which excess will be treated as ordinary income and not capital gain. You are allowed an ordinary loss for the excess, if any, of the adjusted basis of the Ordinary Shares over their fair market value as of the close of the taxable year. However, such ordinary loss is allowable only to the extent of any net mark-to-market gains on the Ordinary Shares included in your income for prior taxable years. Amounts included in your income under a mark-to-market election, as well as gain on the actual sale or other disposition of the Ordinary Shares, are treated as ordinary income. Ordinary loss treatment also applies to any loss realized on the actual sale or disposition of the Ordinary Shares, to the extent that the amount of such loss does not exceed the net mark-to-market gains previously included for such Ordinary Shares. Your basis in the Ordinary Shares will be adjusted to reflect any such income or loss amounts. If you make a valid mark-to-market election, the tax rules that apply to distributions by corporations which are not PFICs would apply to distributions by us, except that the lower applicable capital gains rate for qualified dividend income discussed above under “— Taxation of Dividends and Other Distributions on our Ordinary Shares” generally would not apply.
The mark-to-market election is available only for “marketable stock”, which is stock that is traded in other than de minimis quantities on at least 15 days during each calendar quarter (“regularly traded”) on a qualified exchange or other market (as defined in applicable U.S. Treasury regulations), including the Nasdaq Capital Market. If the Ordinary Shares are regularly traded on the Nasdaq Capital Market and if you are a holder of Ordinary Shares, the mark-to-market election would be available to you were we to be or become a PFIC.
Alternatively, a U.S. Holder of stock in a PFIC may make a “qualified electing fund” election, under Section 1295(b) of the US Internal Revenue Code, with respect to such PFIC to elect out of the tax treatment discussed above. A U.S. Holder who makes a valid qualified electing fund election with respect to
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a PFIC will generally include in gross income for a taxable year such holder’s pro rata share of the corporation’s earnings and profits for the taxable year. However, the qualified electing fund election is available only if such PFIC provides such U.S. Holder with certain information regarding its earnings and profits as required under applicable U.S. Treasury regulations. We do not currently intend to prepare or provide the information that would enable you to make a qualified electing fund election. If you hold Ordinary Shares in any taxable year in which we are a PFIC, you will be required to file U.S. Internal Revenue Service Form 8621 in each such year and provide certain annual information regarding such Ordinary Shares, including regarding distributions received on the Ordinary Shares and any gain realized on the disposition of the Ordinary Shares.
If you do not make a timely “mark-to-market” election (as described above), and if we were a PFIC at any time during the period you hold our Ordinary Shares, then such Ordinary Shares will continue to be treated as stock of a PFIC with respect to you even if we cease to be a PFIC in a future year, unless you make a “purging election” for the year we cease to be a PFIC. A “purging election” creates a deemed sale of such Ordinary Shares at their fair market value on the last day of the last year in which we are treated as a PFIC. The gain recognized by the purging election will be subject to the special tax and interest charge rules treating the gain as an excess distribution, as described above. As a result of the purging election, you will have a new basis (equal to the fair market value of the Ordinary Shares on the last day of the last year in which we are treated as a PFIC) and holding period (which new holding period will begin the day after such last day) in your Ordinary Shares for tax purposes.
You are urged to consult your tax advisors regarding the application of the PFIC rules to your investment in our Ordinary Shares and the elections discussed above.
Information Reporting and Backup Withholding
Dividend payments with respect to our Ordinary Shares and proceeds from the sale, exchange or redemption of our Ordinary Shares may be subject to information reporting to the U.S. Internal Revenue Service and possible U.S. backup withholding, under Section 3406 of the US Internal Revenue Code with, at a current flat rate of 24%. Backup withholding will not apply, however, to a U.S. Holder who furnishes a correct taxpayer identification number and makes any other required certification on U.S. Internal Revenue Service Form W-9 or who is otherwise exempt from backup withholding. U.S. Holders who are required to establish their exempt status generally must provide such certification on U.S. Internal Revenue Service Form W-9. U.S. Holders are urged to consult their tax advisors regarding the application of the U.S. information reporting and backup withholding rules.
Backup withholding is not an additional tax. Amounts withheld as backup withholding may be credited against your U.S. federal income tax liability, and you may obtain a refund of any excess amounts withheld under the backup withholding rules by filing the appropriate claim for refund with the U.S. Internal Revenue Service and furnishing any required information. We do not intend to withhold taxes for individual shareholders. However, transactions effected through certain brokers or other intermediaries may be subject to withholding taxes (including backup withholding), and such brokers or intermediaries may be required by law to withhold such taxes.
Under the Hiring Incentives to Restore Employment Act of 2010, certain U.S. Holders are required to report information relating to our Ordinary Shares, subject to certain exceptions (including an exception for Ordinary Shares held in accounts maintained by certain financial institutions), by attaching a complete Internal Revenue Service Form 8938, Statement of Specified Foreign Financial Assets, with their tax return for each year in which they hold Ordinary Shares.
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UNDERWRITING
We expect to enter into an underwriting agreement with Boustead Securities, LLC (the “Underwriter”). The Underwriter is not purchasing or selling any securities offered by this prospectus, nor is it required to arrange the purchase or sale of any specific number or dollar amount of securities, but rather it has agreed to use its best efforts to arrange for the sale of all of the securities offered hereby. Under the terms and subject to the conditions contained in the underwriting agreement, we have agreed to issue and sell to the public through the Underwriter, and the Underwriter have agreed to offer and sell, on a best efforts basis, at the public offering price less the underwriting fees and commissions set forth below a minimum of 2,000,000 Ordinary Shares and a maximum of 5,000,000 Ordinary Shares. The Underwriter may retain other brokers or dealers to act as a sub-agents or selected dealers on their behalf in connection with this offering.
The Underwriter must sell the minimum number of securities offered (2,000,000 Ordinary Shares) if any shares are sold. The Underwriter is required to use only its best efforts to sell the securities offered. The offering will terminate upon the earlier of: (i) a date mutually acceptable to us and our Underwriter after which the minimum offering is sold or (ii) [•] days from the effective date of this registration statement, unless extended by the Company or the Underwriter (the “Termination Date”). On the closing date, the following will occur:

we will receive funds in the amount of the aggregate purchase price of the shares being sold by us on such closing date;

we will cause to be delivered the Ordinary Shares being sold on such closing date in book-entry form; and

we will pay the Underwriter their commissions.
Pursuant to an offering deposit account agent agreement to be entered by and among us, the Underwriter and FinTech Clearing, LLC (the “Deposit Account Agent”), as deposit account agent, until at least 2,000,000 Ordinary Shares are sold, all funds received in payment for securities sold in this offering will be required to be submitted by subscribers to a non-interest bearing escrow account with the Deposit Account Agent at Pacific Mercantile Bank and will be held by the Deposit Account Agent for such account. The Underwriter and we shall require all investor checks for payment for the securities to be made payable to “FinTech Clearing, as Deposit Account Agent for the Investors in Asia Times Holding Limited.” All subscription agreements and checks should be delivered to FinTech Clearing, LLC, Attention: Brian Park. Failure to do so will result in checks being returned to the investor who submitted the check. The investors will have sole claim to the proceeds held in trust prior to the receipt of the minimum offering proceeds. The funds are held for the benefit of the investors until the minimum is reached. Prior to reaching the minimum claims may not be reached by creditors of the Company. If the Underwriter does not sell at least 2,000,000 Ordinary Shares by the Termination Date, all funds will be returned promptly to subscribers without interest or deduction. If this Offering completes, then on the closing date, net proceeds will be delivered to us and we will issue the Ordinary Shares to purchasers. Unless purchasers instruct us otherwise, we will deliver the Ordinary Shares electronically upon receipt of purchaser funds to the accounts of those purchasers who hold accounts at the Underwriter, or elsewhere, as specified by the purchaser, as soon as practical upon the closing of the Offering. Alternately, purchasers who do not carry an account at the Underwriter may request that the shares be held in book-entry at the Company’s transfer agent, or may be issued in book-entry at the Company’s transfer agent and subsequently delivered electronically to the purchasers’ respective brokerage account upon request of the purchasers.
Fees, Commissions and Expense Reimbursement
The Underwriter will receive an underwriting commission equal to 6.5% of the first $10,000,000 of and six percent (6%) of any amount in excess thereof of, the gross amount to be raised in this offering, between $520,000 in the case of the minimum offering amount and $1,300,000 in the case of the maximum offering amount.
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The following table shows, for each of the minimum and maximum offering amounts, the per share and maximum total public offering price, underwriting fees and commissions to be paid to the Underwriter by us, and proceeds to us, before expenses.
Initial Public
Offering Price
Underwriting
Discounts and
Commissions
Proceeds to
Our Company
Before Expenses
Minimum Offering Amount
$ 4.00 $ 520,000 $ 8,000,000
Maximum Offering Amount
$ 4.00 $ 1,300,000 $ 20,000,000
Because the actual amount to be raised in this offering is uncertain, the actual total offering commissions are not presently determinable and may be substantially less than the maximum amount set forth above.
Our obligation to issue and sell securities to the purchasers is subject to the conditions set forth in the subscription agreement, which may be waived by us at our discretion. A purchaser’s obligation to purchase securities is subject to the conditions set forth in the subscription agreement as well, which may also be waived.
Under the underwriting agreement, we have agreed to reimburse the Underwriter’s reasonable out-of-pocket expenses incurred by the Underwriter in connection with this offering, including i) legal fees up to $75,000, ii) due diligence expenses up to $75,000, iii) road show, travel, platform on-boarding fees and other reasonable out-of-pocket expenses up to $50,000, iv) $6,000 for background checks on Company’s officers, directors and major shareholders, and v) $15,000 for our DTC application. The reimbursable accountable expenses shall not exceed $221,000 and shall be refundable to us the extent actually not incurred by the Underwriter in accordance with FINRA Rule 5110(f)(2)(C). We have advanced $143,750 in accountable expenses as of the date hereof.
We have also agreed to grant to the Underwriter a warrant covering a number of Ordinary Shares equal to 6.5% of the aggregate number of the Ordinary Shares (the “Underwriter Warrant”) sold in the offering. The Underwriter Warrants will be exercisable, from the date of issuance and will expire on the five-year anniversary of the issuance. The Underwriter Warrants will be exercisable at a price equal to 100% of the initial public offering price. The Underwriter Warrant shall not be redeemable or cancellable. We will register the shares underlying the Underwriter Warrants and file all necessary undertakings in connection therewith. The Underwriter Warrants may not be sold, transferred, assigned, pledged or hypothecated, or be the subject of any hedging, short sale, derivative, put, or call transaction that would result in the effective economic disposition of the securities by any person for a period of 180 days immediately following the commencement of sales of the offering, of which this prospectus forms a part (in accordance with FINRA Rule 5110), except that they may be assigned, in whole or in part, to any successor, officer, manager, member, or partner of the Underwriter, and to members of the syndicate or selling group and their respective officers, managers, members or partners. The Underwriter Warrants may be exercised as to all or a lesser number of shares, will provide for cashless exercise and will contain provisions for immediate “piggyback” registration rights at our expense for a period of five years from the issuance date. We have registered the Underwriter Warrants and the shares underlying the Underwriter Warrants in this offering.
We estimate that the total expenses of the offering, including registration, filing and listing fees, printing fees and legal and accounting expenses, but excluding the Underwriter’s fees and commissions, will be approximately $[•], all of which are payable by us.
The Underwriter intends to offer our Ordinary Shares to their retail customers only in states in which we are permitted to offer our Ordinary Shares. We have relied on an exemption to the blue sky registration requirements afforded to “covered securities.” Securities listed on the Nasdaq Capital Market are “covered securities.” If we were unable to meet the Nasdaq Capital Market’s listing standards, then we would be unable to rely on the covered securities exemption to blue sky registration requirements and we would need to register the offering in each state in which we planned to sell shares. Consequently, we will not complete this offering unless we meet the Nasdaq Capital Market’s listing requirements.
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The foregoing does not purport to be a complete statement of the terms and conditions of the underwriting agreement and subscription agreement. The underwriting agreement and a form of subscription agreement are included as exhibits to the registration statement of which this prospectus forms a part.
Deposit Account Agent and Deposit of Offering Proceeds
The Underwriter and the Company have agreed in accordance with the provisions of SEC Rule 15c2-4 to cause all funds received by the Underwriter for the sale of the Ordinary Shares to be promptly deposited in a non-interest bearing escrow account (“Escrow Account”) at Pacific Mercantile Bank maintained by FinTech Clearing, LLC (the “Deposit Account Agent”) as deposit account agent for the investors in the offering. The purpose of the Escrow Account is for (i) the deposit of all subscription monies (checks or wire transfers) which are received by the Underwriter from prospective purchasers of our offered Ordinary Shares and are delivered by the Underwriter to the Deposit Account Agent, (ii) the holding of amounts of subscription monies which are collected through the banking system, and (iii) the disbursement of collected funds. The Deposit Account Agent will exercise signature control on the escrow account and will act based on joint instructions from our Company and the Underwriter. On the closing date for the offering, and presuming that all conditions to closing have been attained (i.e. Nasdaq approval and other conditions described herein) proceeds in the escrow account maintained by the Deposit Account Agent will be delivered to our company. We will not be able to use such proceeds in China, however, until we complete certain remittance procedures in China, which may take as long as six months in the ordinary course.
The Underwriter shall promptly deliver to the Deposit Account Agent all funds in the form of checks or wire transfers which it receives from prospective purchasers of our Ordinary Shares by noon of the next business day following receipt where internal supervisory review is conducted at the same location at which subscription documents and funds are received. Simultaneously with each deposit to the Escrow Account, the Underwriter shall inform the Deposit Account Agent about the subscription information for each prospective purchaser. Upon the Deposit Account Agent’s receipt of such monies, they shall be credited to the Deposit Account. All checks delivered to the Deposit Account Agent shall be made payable to “FinTech Clearing, LLC, as Deposit Account Agent for Asia Times Holding Limited.” The Deposit Account Agent shall not be required to accept for credit to the Escrow Account or for deposit into the Escrow Account checks which are not accompanied by the appropriate subscription information. Wire transfers representing payments by prospective purchasers shall not be deemed deposited in the Escrow Account until the Deposit Account Agent has received in writing the subscription information required with respect to such payments.
No interest will be available for payment to either us or the investors (since the funds are being held in a non-interest bearing account). All subscription funds will be held in trust pending the raising of the minimum offering amount and no funds will be released to us until the completion of the offering. Release of the funds to us is based upon the Deposit Account Agent reviewing the records of the depository institution holding the escrow to verify that the funds received have cleared the banking system prior to releasing the funds to us. All subscription information and subscription funds through checks or wire transfers should be delivered to the Deposit Account Agent. Failure to do so will result in subscription funds being returned to the investor. In event that the offering is terminated, all subscription funds from the escrow account will be returned to investors.
If we do not terminate this offering before the offering is terminated, all amounts will be promptly returned to the investors as described below. In the event of any dispute between us and the Underwriter, including whether and how funds are to be reimbursed, the Deposit Account Agent is entitled to petition a court of competent jurisdiction to resolve any such dispute.
Investors must pay in full for Ordinary Shares at the time of investment. Payment for the shares may be made by wire made payable to “FinTech Clearing, LLC, as Deposit Account Agent for Asia Times Holdings Limited” The Underwriter will inform prospective purchasers of the anticipated date of closing.
Proceeds deposited in the Escrow Account held by Deposit Account Agent may not be withdrawn by investors prior to the earlier of the closing of the offering or the date the offering is terminated. If the offering is withdrawn or canceled or terminated and proceeds therefrom are not received by us on or prior
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to the date the offering is terminated, all proceeds will be promptly returned by the Deposit Account Agent without interest or deduction to the persons from which they are received (within one business day) in accordance with applicable securities laws. All such proceeds will be placed in a non-interest bearing account pending such time.
Lock-Up Agreements
Except as disclosed below, we and each of our officers, directors and certain shareholders have agreed with the Underwriter not to offer, issue, sell, contract to sell, encumber, grant any option for the sale of or otherwise dispose of any ordinary shares or other securities convertible into or exercisable or exchangeable for ordinary shares for a period of  [six (6), nine (9) or twelve (12) months] after the effective date of the registration statement of which this prospectus is a part without the prior written consent of the Underwriter.
The Underwriter may in its sole discretion and at any time without notice release some or all of the shares subject to lock-up agreements prior to the expiration of the lock-up period. When determining whether or not to release shares from the lock-up agreements, the Underwriter will consider, among other factors, the security holder’s reasons for requesting the release, the number of shares for which the release is being requested and market conditions at the time.
Price Stabilization
The Underwriter will be required to comply with the Securities Act and the Exchange Act, including without limitation, Rule 10b-5 and Regulation M under the Exchange Act. These rules and regulations may limit the timing of purchases and sales of shares of capital stock by the Underwriter acting as principal. Under these rules and regulations, the Underwriter:

may not engage in any stabilization activity in connection with our securities; and

may not bid for or purchase any of our securities or attempt to induce any person to purchase any of our securities, other than as permitted under the Exchange Act, until it has completed its participation in the distribution.
Determination of Offering Price
The public offering price of the shares we are offering was determined by us in consultation with the Underwriter based on discussions with potential investors in light of the history and prospects of our company, the stage of development of our business, our business plans for the future and the extent to which they have been implemented, an assessment of our management, the public stock price for similar companies, general conditions of the securities markets at the time of the Offering and such other factors as were deemed relevant.
Electronic Offer, Sale and Distribution of Securities.
A prospectus in electronic format may be delivered to potential investors by the Underwriter. The prospectus in electronic format will be identical to the paper version of such prospectus. Other than the prospectus in electronic format, the information on the Underwriter’s website and any information contained in any other website maintained by the Underwriter is not part of the prospectus or the registration statement of which this Prospectus forms a part.
Foreign Regulatory Restrictions on Purchase of our Shares
We have not taken any action to permit a public offering of our shares outside the United States or to permit the possession or distribution of this prospectus outside the United States. People outside the United States who come into possession of this prospectus must inform themselves about and observe any restrictions relating to this Offering of our shares and the distribution of this prospectus outside the United States.
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Indemnification
We have agreed to indemnify the Underwriter against liabilities relating to the Offering arising under the Securities Act and the Exchange Act and to contribute to payments that the Underwriter may be required to make for these liabilities.
Application for Nasdaq Market Listing
We have submitted an application to have our Ordinary Shares approved for listing/quotation on the Nasdaq Capital Market under the symbol “ATIF”. We cannot guarantee that we will be successful in listing on Nasdaq; however, we will not consummate and close this offering without a listing approval letter from the Nasdaq Capital Market. Our receipt of a listing approval letter is not the same as an actual listing on the Nasdaq Capital Market. The listing approval letter will serve only to confirm that, if we sell a number of shares in this “best efforts, mini-max” offering sufficient to satisfy applicable listing criteria, our Ordinary Shares will in fact be listed.
If the application is approved, trading of our Ordinary Shares on the Nasdaq Capital Market will begin within five days following the closing of this offering. If our Ordinary Shares are listed on the Nasdaq Capital Market, we will be subject to continued listing requirements and corporate governance standards. We expect these new rules and regulations to significantly increase our legal, accounting and financial compliance costs.
Foreign Regulatory Restrictions on Purchase of our Shares
We have not taken any action to permit a public offering of our shares outside the United States or to permit the possession or distribution of this prospectus outside the United States. People outside the United States who come into possession of this prospectus must inform themselves about and observe any restrictions relating to this offering of our shares and the distribution of this prospectus outside the United States.
British Virgin Islands.    This prospectus does not constitute , and there will not be, an offering of securities to the public in the British Virgin Islands
Canada.    The ordinary shares may not be offered, sold or distributed, directly or indirectly, in any province or territory of Canada other than the provinces of Ontario and Quebec or to or for the benefit of any resident of any province or territory of Canada other than the provinces of Ontario and Quebec, and only on a basis that is pursuant to an exemption from the requirement to file a prospectus in such province, and only through a dealer duly registered under the applicable securities laws of such province or in accordance with an exemption from the applicable registered dealer requirements.
Cayman Islands.    This prospectus does not constitute a public offer of the Ordinary shares, whether by way of sale or subscription, in the Cayman Islands. Each underwriter has represented and agreed that it has not offered or sold, and will not offer or sell, directly or indirectly, any ordinary shares to any member of the public in the Cayman Islands.
Hong Kong.    The ordinary shares may not be offered or sold by means of this document or any other document other than (i) in circumstances that do not constitute an offer or invitation to the public within the meaning of the Companies Ordinance (Cap.32, Laws of Hong Kong) or the Securities and Futures Ordinance (Cap.571, Laws of Hong Kong), or (ii) to “professional investors” within the meaning of the Securities and Futures Ordinance (Cap.571, Laws of Hong Kong) and any rules made thereunder, or (iii) in other circumstances that do not result in the document being a “prospectus” within the meaning of the Companies Ordinance (Cap.32, Laws of Hong Kong), and no advertisement, invitation or document relating to the ordinary shares may be issued or may be in the possession of any person for the purpose of issue (in each case whether in Hong Kong or elsewhere), that is directed at, or the contents of which are likely to be accessed or read by, the public in Hong Kong (except if permitted to do so under the laws of Hong Kong) other than with respect to ordinary shares which are or are intended to be disposed of only to persons outside Hong Kong or only to “professional investors” within the meaning of the Securities and Futures Ordinance (Cap.571, Laws of Hong Kong) and any rules made thereunder.
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People’s Republic of China.    This prospectus may not be circulated or distributed in the PRC and the ordinary shares may not be offered or sold, and will not offer or sell to any person for re-offering or resale directly or indirectly to any resident of the PRC except pursuant to applicable laws and regulations of the PRC. For the purpose of this paragraph, PRC does not include Taiwan and the special administrative regions of Hong Kong and Macau.
Singapore.    This prospectus has not been registered as a prospectus with the Monetary Authority of Singapore. Accordingly, this prospectus and any other document or material in connection with the offer or sale, or invitation for subscription or purchase, of the ordinary shares may not be circulated or distributed, nor may the ordinary shares be offered or sold, or be made the subject of an invitation for subscription or purchase, whether directly or indirectly, to persons in Singapore other than (i) to an institutional investor under Section 274 of the Securities and Futures Act, Chapter 289 of Singapore, or the SFA, (ii) to a relevant person, or any person pursuant to Section 275(1A), and in accordance with the conditions, specified in Section 275 of the SFA, or (iii) otherwise pursuant to, and in accordance with the conditions of, any other applicable provision of the SFA.
Where the ordinary shares are subscribed or purchased under Section 275 by a relevant person that is: (a) a corporation (that is not an accredited investor) the sole business of which is to hold investments and the entire share capital of which is owned by one or more individuals, each of whom is an accredited investor; or (b) a trust (where the trustee is not an accredited investor) whose sole purpose is to hold investments and each beneficiary is an accredited investor, shares, debentures and units of shares and debentures of that corporation or the beneficiaries’ rights and interest in that trust shall not be transferable for six months after that corporation or that trust has acquired the ordinary shares under Section 275 except: (1) to an institutional investor (for corporations, under 274 of the SFA) or to a relevant person defined in Section 275(2) of the SFA, or to any person pursuant to an offer that is made on terms that such shares,
(2) debentures and units of shares and debentures of that corporation or such rights and interest in that trust are acquired at a consideration of not less than S$200,000 (or its equivalent in a foreign currency) for each transaction, whether such amount is to be paid for in cash or by exchange of securities or other assets, and further for corporations, in accordance with the conditions specified in Section 275 of the SFA; (3) where no consideration is or will be given for the transfer; or
(3) where the transfer is by operation of law.
Taiwan.    The ordinary shares have not been and will not be registered or filed with, or approved by, the Financial Supervisory Commission of Taiwan pursuant to relevant securities laws and regulations and may not be offered or sold in Taiwan through a public offering or in circumstances which constitute an offer within the meaning of the Securities and Exchange Act of Taiwan or relevant laws and regulations that require a registration, filing or approval of the Financial Supervisory Commission of Taiwan. No person or entity in Taiwan has been authorized to offer or sell the ordinary shares in Taiwan.
United Kingdom.    An offer of the ordinary shares may not be made to the public in the United Kingdom within the meaning of Section 102B of the Financial Services and Markets Act 2000, as amended, or the FSMA, except to legal entities that are authorized or regulated to operate in the financial markets or, if not so authorized or regulated, whose corporate purpose is solely to invest in securities or otherwise in circumstances that do not require the publication by the company of a prospectus pursuant to the Prospectus Rules of the Financial Services Authority, or the FSA.
An invitation or inducement to engage in investment activity (within the meaning of Section 21 of FSMA) may only be communicated to persons who have professional experience in matters relating to investments falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 or in circumstances in which Section 21 of FSMA does not apply to the company.
All applicable provisions of the FSMA with respect to anything done by the underwriter in relation to the ordinary shares must be complied with in, from or otherwise involving the United Kingdom.
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EXPENSES RELATING TO THIS OFFERING
Set forth below is an itemization of the total expenses, excluding placement discounts and commissions, that we expect to incur in connection with this offering. With the exception of the SEC registration fee, the FINRA filing fee and the Nasdaq listing fee, all amounts are estimates.
Securities and Exchange Commission Registration Fee
$          
Nasdaq Capital Market Listing Fee
$
FINRA $
Legal Fees and Expenses
$
Accounting Fees and Expenses
$
Printing and Engraving Expenses
$
Miscellaneous Expenses
$
Total Expenses
$
These expenses will be borne by us. Underwriting discounts and commissions will be borne by us in proportion to the numbers of ordinary shares sold in the offering.
LEGAL MATTERS
The validity of the Ordinary Shares and certain other legal matters as to United States Federal and New York State law in connection with this offering will be passed upon for us by Hunter Taubman Fischer & Li LLC. The validity of the Ordinary Shares offered in this offering and certain other legal matters as to BVI law will be passed upon for us by Ogier, our counsel as to BVI law. Legal matters as to PRC law will be passed upon for us by Dentons Law Firm. Hunter Taubman Fischer & Li LLC may rely upon Dentons Law Firm with respect to matters governed by PRC law. Ortoli Rosenstadt LLP is counsel for the Underwriter.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
EXPERTS
The consolidated financial statements for the years ended July 31, 2018 and 2017 included in this prospectus have been so included in reliance on the report of Friedman LLP, an independent registered public accounting firm, given on the authority of said firm as experts in auditing and accounting. The office of Friedman LLP is located at 1700 Broadway New York, NY 10019.
INTERESTS OF NAMED EXPERTS AND COUNSEL
No expert or counsel named in this prospectus as having prepared or certified any part of this prospectus or having given an opinion upon the validity of the securities being registered or upon other legal matters in connection with the registration or offering of the Ordinary Shares was employed on a contingency basis, or had, or is to receive, in connection with the offering, a substantial interest, direct or indirect, in the registrant. Nor was any such person connected with the registrant as a promoter, managing or principal Underwriter, voting trustee, director, officer, or employee.
DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION
Insofar as indemnification for liabilities arising under the Securities Act, may be permitted to our directors, officers or persons controlling us, we have been advised that it is the SEC’s opinion that such indemnification is against public policy as expressed in such act and is, therefore, unenforceable.
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WHERE YOU CAN FIND ADDITIONAL INFORMATION
We have filed with the SEC a registration statement on Form F-1, including relevant exhibits and schedules under the Securities Act, covering the Ordinary Shares offered by this prospectus. You should refer to our registration statements and their exhibits and schedules if you would like to find out more about us and about the Ordinary Shares. This prospectus summarizes material provisions of contracts and other documents that we refer you to. Since the prospectus may not contain all the information that you may find important, you should review the full text of these documents.
Immediately upon the completion of this offering, we will be subject to periodic reporting and other informational requirements of the Exchange Act, as applicable to foreign private issuers. Accordingly, we will be required to file reports, including annual reports on Form 20-F, and other information with the SEC. As a foreign private issuer, we are exempt from the rules of the Exchange Act prescribing the furnishing and content of proxy statements to shareholders under the federal proxy rules contained in Sections 14(a), (b) and (c) of the Exchange Act, and our executive officers, directors and principal shareholders are exempt from the reporting and short-swing profit recovery provisions contained in Section 16 of the Exchange Act.
The registration statements, reports and other information so filed can be inspected and copied at the public reference facilities maintained by the SEC at 100 F Street, N.E., Washington, D.C. 20549. You can request copies of these documents upon payment of a duplicating fee, by writing to the SEC. Please call the SEC at 1-800-SEC-0330 for further information on the operation of the public reference rooms. The SEC also maintains a website that contains reports, proxy statements and other information about issuers, such as us, who file electronically with the SEC. The address of that website is http://www.sec.gov. The information on that website is not a part of this prospectus.
No dealers, salesperson or other person is authorized to give any information or to represent anything not contained in this prospectus. You must not rely on any unauthorized information or representations. This prospectus is an offer to sell only the securities offered hereby, but only under circumstances and in jurisdictions where it is lawful to do so. The information contained in this prospectus is current only as of its date.
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INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
Page
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[MISSING IMAGE: TV504568_FRIEDMANHDR.JPG]  
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the shareholders and the board of directors of
Asia Times Holdings Limited
We have audited the accompanying consolidated balance sheets of Asia Times Holdings Limited and its subsidiaries (collectively, the “Company”) as of July 31, 2018 and 2017, and the related consolidated statements of income and comprehensive income, changes in shareholders’ equity (deficit), and cash flows for each of the two years in the period ended July 31, 2018, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of July 31, 2018 and 2017, and the results of its operations and its cash flows for each of the two years in the period ended July 31, 2018, in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.
/s/ Friedman LLP
We have served as the Company’s auditor since 2018.
New York, New York
October 12, 2018, except Notes 1, 11, 13 and 14, as to which the date is November 27, 2018.
[MISSING IMAGE: TV504568_FRIEDMANFTR.JPG]
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Asia Times Holdings Limited
Consolidated Balance Sheets
As of July 31,
2018
2017
ASSETS
Current Assets
Cash and cash equivalents
$ 72,965 $ 144,813
Accounts receivable, net
137,550
Loans receivable
2,750,078 10,557
Due from a related party
14,966 7,730
Prepaid expenses and other current assets
721,817 1,069,333
Total current assets
3,697,376 1,232,433
Property and equipment, net
49,378 40,068
Total assets
$ 3,746,754 $ 1,272,501
LIABILITIES AND SHAREHOLDERS’ EQUITY (DEFICIT)
Current Liabilities
Accounts payable
$ $ 551,951
Accrued expenses and other current liabilities
291,679 44,246
Taxes payable
861,684 207,371
Deferred revenue
547,235 1,011,296
Due to related parties
31,366 31,778
Total current liabilities
$ 1,731,964 $ 1,846,642
Commitments and contingencies
Equity
Common stock, 100,000,000,000 shares authorized; par value $0.001, 50,000,000
shares issued and outstanding as of July 31, 2018 and 2017, respectively
50,000 50,000
Subscription receivable
(50,000 )
Additional paid in capital
705,139
Statutory reserve
278,836 64,111
Retained earnings (accumulated deficit)
1,038,889 (693,269 )
Accumulated other comprehensive income (loss)
(58,074 ) 55,017
Total shareholders’ equity (deficit)
2,014,790 (574,141 )
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY (DEFICIT)
$ 3,746,754 $ 1,272,501
The accompanying notes are an integral part to the consolidated financial statements
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Asia Times Holdings Limited
Consolidated Statements of Income and Comprehensive Income
For the Years Ended July 31,
2018
2017
Revenue
$ 5,307,891 $ 3,635,371
Operating expenses
Selling expenses
1,773,159 2,301,567
General and administrative expenses
807,053 408,739
Total Operating Expenses
2,580,212 2,710,306
Income from operations
2,727,679 925,065
Other income (expense)
Interest income
16,303 469
Other expense, net
(80,283 ) (67,549 )
Total other expense, net
(63,980 ) (67,080 )
Income before income tax
2,663,699 857,985
Provision for income taxes
716,816 217,025
Net income
1,946,883 640,960
Other comprehensive income
Foreign currency translation adjustment
(113,091 ) 74,963
Comprehensive income
$ 1,833,792 $ 715,923
Earnings per share
Basic and diluted
$ 0.04 $ 0.01
Weighted average number of shares
Basic and diluted
50,000,000 50,000,000
The accompanying notes are an integral part to the consolidated financial statements
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Asia Times Holdings Limited
Consolidated Statements of Changes in Shareholders’ Equity (Deficit)
For the Years Ended July 31, 2018 and 2017
Common Stock
Additional
Paid in
Capital
Statutory
Reserve
Retained
Earnings
(Accumulated
Deficit)
Other
Comprehensive
income (loss)
Total
Shareholders’
Equity (Deficit)
Number of
Shares*
Par value
of
$0.001
Balance at July 31, 2016
50,000,000 $ 50,000 $ $ $ (1,270,118 ) $ (19,946 ) $ (1,240,064 )
Subscription receivable
(50,000 ) (50,000 )
Appropriation to statutory surplus reserve
64,111 (64,111 )
Net income
640,960 640,960
Foreign currency translation gain
74,963 74,963
Balance at July 31, 2017
50,000,000 $ 50,000 $ (50,000 ) $ 64,111 $ (693,269 ) $ 55,017 $ (574,141 )
Capital contribution
755,139 755,139
Appropriation to statutory surplus reserve
214,725 (214,725 )
Net income
1,946,883 1,946,883
Foreign currency translation loss
(113,091 ) (113,091 )
Balance at July 31, 2018
50,000,000 $ 50,000 $ 705,139 $ 278,836 $ 1,038,889 $ (58,074 ) $ 2,014,790
*
The Company issued totally 50,000,000 shares in August, September and November 2018. These shares are presented on a retroactive basis to reflect the nominal share issuance, see Note 11 for additional information.
The accompanying notes are an integral part of these consolidated financial statements
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Asia Times Holdings Limited
Consolidated Statements of Cash Flows
For the Years Ended July 31,
2018
2017
CASH FLOWS FROM OPERATING ACTIVITIES
Net income
$ 1,946,883 $ 640,960
Adjusted to reconcile net income to cash provided by operating activities:
Depreciation
16,458 11,320
Changes in operating assets and liabilities:
Accounts receivable
(144,202 )
Prepaid expenses and other current assets
329,750 (386,018 )
Due from a related party
(7,691 ) (7,625 )
Deferred revenue
(472,721 ) (12,920 )
Accounts payable
(571,121 ) (311,355 )
Other payables and accrued expenses
250,302 14,933
Income taxes payable
688,781 204,423
Net cash provided by operating activities
2,036,439 153,718
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property and equipment
(26,765 ) (14,965 )
Loans to a third party
(2,872,151 ) (5,518 )
Net cash used in investing activities
(2,898,916 ) (20,483 )
CASH FLOWS FROM FINANCING ACTIVITIES
Capital contribution
755,139
Net cash provided by financing activities
755,139
EFFECT OF CHANGES OF FOREIGN EXCHANGE RATES ON CASH
35,490 1,703
NET (DECREASE) INCREASE IN CASH
(71,848 ) 134,938
CASH, BEGINNING OF YEAR
144,813 9,875
CASH, END OF YEAR
$ 72,965 $ 144,813
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid for interest expense
$ $
Cash paid for income tax
$ 142,681 $ 31,499
The accompanying notes are an integral part of these consolidated financial statements
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Asia Times Holdings Limited
Notes to the Consolidated Financial Statements
NOTE 1 — ORGANIZATION AND BUSINESS DESCRIPTION
Asia Times Holdings Limited (“ATHL” or “the Company”), formerly known as Eternal Fairy International Limited, was incorporated under the laws of British Virgin Islands (“BVI”) on January 5, 2015 as a holding company to develop business opportunities in the People’s Republic of China (“PRC” or “China”). The Company changed to its current name on April 28, 2017.
ATHL owns 100% equity interest of Asia Times International Finance Limited (“ATIFL HK”), formerly known as China Elite International Holdings Limited, a limited liability company established in Hong Kong on January 6, 2015 and changed to its current name on May 16, 2017. ATIFL HK is currently not engaging in any active business and merely acting as a holding company except for the acquisition of a financial and news media platform www.chinacnnm.com subsequent to the year-end in September 2018 as detailed in Note 14.
On May 20, 2015, ATIFL HK incorporated Huaya Consultant (Shenzhen) Co., Ltd. (“Huaya”) as a Wholly-Owned Foreign Enterprise (“WFOE”) in China. On September 5, 2018, Huaya entered into a series of contractual arrangements with the owners of Qianhai Asia Times (Shenzhen) International Financial Service Co., Ltd. (“Qianhai”), a company incorporated on November 3, 2015 under the laws of China with a registered capital of RMB 5 million (approximately $0.75 million) which has been fully paid in December 2017. Qianhai is primarily engaged in providing public listing tutoring and financial consulting services to small and medium-sized enterprise customers in PRC.
Qianhai originally owned a 100% controlled subsidiary Qianhai Asia Times (Shenzhen) International Fund Management Co., Ltd. (“Asia Times Fund”) which has limited operation since its inception on December 11, 2015. In connection with the reorganization of the legal structure for the intended initial public offering (“IPO”), on August 13, 2018, Qianhai sold 45% of its equity ownership in Asia Times Fund for a total price of RMB31,500 (approximately US$4,586) to a related party Mr. Yanru Zhou, who beneficially owns 13,000 shares, or 26% of the Company’s Ordinary Shares. In September 2018, Qianhai’s remaining 55% equity ownership interest in Asia Times Fund were sold to two unrelated individuals: Ms. Zehong Lai and Mr. Zhuorong Cai, for a total price of RMB 34,500 (approximately $5,023). After these transactions, Asia Times Fund was considered completely spun off.
Reorganization
A reorganization of the legal structure was completed on September 19, 2018. The reorganization involved the transfer of the ownership interest in ATHL from original shareholders to the current controlling shareholders, and the spinoff of Asia Times Fund. ATHL became the ultimate holding company of ATIFL HK, Huaya and Qianhai, which were all controlled by the same shareholders before and after the Reorganization.
On September 5, 2018, Huaya entered into a series of contractual arrangements with the owners of Qianhai. These agreements include an Exclusive Service Agreement, an Equity Pledge Agreement, a Call Option Agreement and a Shareholders’ Voting Rights Proxy Agreement (collectively “VIE Agreements”). Pursuant to the above VIE Agreements, Huaya has the exclusive right to provide Qianhai consulting services related to business operations including technical and management consulting services. All the above contractual arrangements obligate Huaya to absorb a majority of the risk of loss from business activities of Qianhai and entitle Huaya to receive a majority of their residual returns. In essence, Huaya has gained effective control over Qianhai. Therefore, the Company believes that Qianhai should be considered as a Variable Interest Entity (“VIE”) under the Statement of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 810 “Consolidation”.
The Company together with its wholly-owned subsidiary, WFOE and its VIE are effectively controlled by the same shareholders before and after the reorganization and therefore the Reorganization is considered under common control. The consolidation of the Company and its subsidiaries and VIE has been accounted for at historical cost as of the beginning of the first period presented in the accompanying consolidated financial statements.
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Asia Times Holdings Limited
Notes to the Consolidated Financial Statements
NOTE 1 — ORGANIZATION AND BUSINESS DESCRIPTION – (Continued)
The Company, through its subsidiaries and VIE, is engaged in providing public listing and financial consulting services to customers in the PRC.
The consolidated financial statements of the Company included the following entities:
Date of
incorporation
Place of
incorporation
Percentage
of ownership
Principal
activities
Asia Times Holdings Limited (“ATHL” or the “Company”)
January 5,
2015
British Virgin
Islands
100%
Parent
Holding
Wholly owned subsidiaries
Asia Times International Finance Limited (“ATIFL HK”)
January 6,
2015
Hong Kong
100%
Investment holding
Huaya Consultant (Shenzhen) Co., Ltd. (“Huaya”)
May 20,
2015
PRC
100%
WFOE, Consultancy and information technology support
Variable Interest Entity (“VIE”)
Qianhai Asia Times (Shenzhen) International Financial Service Co., Ltd (“Qianhai”)
November 3,
2015
PRC
VIE
Listing and financial consulting services
The VIE contractual arrangements
Foreign investments in domestic Chinese companies that engage in private equity investment business are restricted in China under current PRC laws and regulations. Huaya is a wholly-owned foreign enterprise and is subject to such legal restrictions. As such, our main operating entity Qianhai is controlled through contractual arrangements in lieu of direct equity ownership by the Company or any of its subsidiaries.
Risks associated with the VIE structure
The Company believes that the contractual arrangements with its VIE and respective shareholders are in compliance with PRC laws and regulations and are legally enforceable. However, uncertainties in the PRC legal system could limit the Company’s ability to enforce the contractual arrangements. If the legal structure and contractual arrangements were found to be in violation of PRC laws and regulations, the PRC government could:

revoke the business and operating licenses of the Company’s PRC subsidiary and VIE;

discontinue or restrict the operations of any related-party transactions between the Company’s PRC subsidiary and VIE;

limit the Company’s business expansion in China by way of entering into contractual arrangements;

impose fines or other requirements with which the Company’s PRC subsidiary and VIE may not be able to comply;

require the Company or the Company’s PRC subsidiary and VIE to restructure the relevant ownership structure or operations; or

restrict or prohibit the Company’s use of the proceeds from public offering to finance the Company’s business and operations in China.
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Asia Times Holdings Limited
Notes to the Consolidated Financial Statements
NOTE 1 — ORGANIZATION AND BUSINESS DESCRIPTION – (Continued)
The Company’s ability to conduct its consulting services business may be negatively affected if the PRC government were to carry out of any of the aforementioned actions. As a result, the Company may not be able to consolidate its VIE in its consolidated financial statements as it may lose the ability to exert effective control over the VIE and its respective shareholders and it may lose the ability to receive economic benefits from the VIE. The Company, however, does not believe such actions would result in the liquidation or dissolution of the Company, its PRC subsidiary and VIE.
Total assets and liabilities presented on the Consolidated Balance Sheets and revenue, expenses, and net income presented on the Consolidated Statement of Income and Other Comprehensive Income as well as the cash flows from operating investing and financing activities presented on the Consolidated Statement of Cash Flows are substantially the financial position, operation and cash flow of the Company’s VIE Qianhai. The Company has not provided any financial support to the VIE for the years ended July 31, 2018 and 2017. The following financial statement amounts and balances of the VIE were included in the accompanying consolidated financial statements after elimination of intercompany transactions and balances:
Balance as of
July 31, 2018
July 31, 2017
Current assets
$ 3,689,028 $ 1,231,696
Non-current assets
49,378 40,068
Total assets
3,738,406 1,271,764
Current liabilities
1,512,761 1,827,832
Non-current liabilities
Total liabilities
$ 1,512,761 $ 1,827,832
For the years ended July 31,
2018
2017
Net revenue
$ 5,341,271 $ 3,657,223
Net income
$ 2,147,253 $ 641,107
For the years ended July 31,
2018
2017
Net cash provided by operating activities
$ 2,036,439 $ 153,718
Net cash used in investing activities
$ (2,898,916 ) $ (20,483 )
Net cash provided by financing activities
$ 755,139 $
NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation and Principles of Consolidation
The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and pursuant to the rules and regulations of the Securities Exchange Commission (“SEC”). The consolidated financial statements of the Company include the accounts of the Company, its subsidiaries, and their VIE. All intercompany balances and transactions have been eliminated upon consolidation.
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Asia Times Holdings Limited
Notes to the Consolidated Financial Statements
NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – (Continued)
Use of Estimates and Assumptions
The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates required to be made by management, include, but are not limited to, the valuation of accounts and loans receivable, useful lives of property and equipment, revenue recognition and provision necessary for contingent liabilities. Actual results could differ from these estimates.
Cash and Cash Equivalents
Cash includes cash on hand and demand deposits in accounts maintained with commercial banks. The Company considers all highly liquid investments with original maturities of three months or less when purchased to be cash equivalents. The Company maintains most of the bank accounts in the PRC. Cash balances in bank accounts in PRC are not insured by the Federal Deposit Insurance Corporation or other programs.
Accounts Receivable, net
Accounts receivable are recognized and carried at original invoiced amount less an estimated allowance for uncollectible amounts. The Company generally requires advanced payment before delivery of the services but may extend unsecured credit to its customers in the ordinary course of business. The Company mitigates the associated risks by performing credit checks and actively pursuing past due accounts. An allowance for doubtful accounts is established and recorded based on management’s assessment of the credit history of the customers and current relationships with them. As of July 31, 2018, and 2017, there was no allowance recorded as the Company considers all of the accounts receivable fully collectible.
Prepaid expenses
Prepaid expenses represent advance payments made to the Company’s vendors for certain prepaid services such as marketing and promotions services, advisory services, and rentals deposits.
Property and equipment, net
Property, plant and equipment are recorded at cost. The straight-line depreciation method is used to compute depreciation over the estimated useful lives of the assets, as follows:
Useful life
Electronic equipment
3 years
Office furniture
5 years
Expenditures for maintenance and repairs, which do not materially extend the useful lives of the assets, are charged to expense as incurred. Expenditures for major renewals and betterments which substantially extend the useful life of assets are capitalized. The cost and related accumulated depreciation of assets retired or sold are removed from the respective accounts, and any gain or loss is recognized in the consolidated statements of income and other comprehensive income in other income or expenses.
The Company also re-evaluates the periods of depreciation to determine whether subsequent events and circumstances warrant revised estimates of useful lives.
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Asia Times Holdings Limited
Notes to the Consolidated Financial Statements
NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – (Continued)
Impairment of Long-lived Assets
Long-lived assets, including property and equipment with finite lives are reviewed for impairment whenever events or changes in circumstances (such as a significant adverse change to market conditions that will impact the future use of the assets) indicate that the carrying value of an asset may not be recoverable. The Company assesses the recoverability of the assets based on the undiscounted future cash flows the assets are expected to generate and recognize an impairment loss when estimated discounted future cash flows expected to result from the use of the asset plus net proceeds expected from disposition of the asset, if any, are less than the carrying value of the asset. If an impairment is identified, the Company would reduce the carrying amount of the asset to its estimated fair value based on a discounted cash flows approach or, when available and appropriate, to comparable market values. As of July 31, 2018, and 2017, no impairment of long-lived assets was recognized.
Fair value measurement
The accounting standard regarding fair value of financial instruments and related fair value measurements defines financial instruments and requires disclosure of the fair value of financial instruments held by the Company. The Company applies fair value accounting for all financial assets and liabilities and non-financial assets and liabilities that are recognized or disclosed at fair value in the financial statements.
The accounting standards define fair value, establish a three-level valuation hierarchy for disclosures of fair value measurement and enhance disclosure requirements for fair value measures. The three levels are defined as follows:
Level 1 — Observable inputs such as unadjusted quoted prices in active markets for identical assets or liabilities available at the measurement date.
Level 2 — Observable inputs (other than Level 1 quoted prices) such as quoted prices active markets for similar assets or liabilities, quoted prices in markets that are not active for identical or similar as or liabilities, or other inputs that are observable or can be corroborated by observable market data.
Level 3 — Inputs are unobservable inputs which reflect management’s assumptions based on the best available information.
The Company considers the recorded value of its financial assets and liabilities, which consist primarily of cash and cash equivalents, accounts receivable, due from a related party, loans receivable, prepaid expenses and other current assets, deferred revenue, accrued expenses and other current liabilities, taxes payable and due to related parties to approximate the fair value of the respective assets and liabilities as of July 31, 2018 and 2017 based upon the short-term nature of the assets and liabilities.
Revenue recognition
The Company’s revenue is recognized when persuasive evidence of an arrangement exists, service has occurred, and all obligations have been performed pursuant to the terms of the agreement, the sales price is fixed or determinable, and collectability is reasonably assured.
The Company currently generates its revenue from the following main sources:

Revenue from customer’s initial registration fee
In order to engage with the Company for various consulting services, a new customer is required to pay an initial non-refundable registration fee to the Company and the Company will then post the customer’s information and profiles on its website, at which point, such registration fee is recognized as revenue. The Company does not charge additional customer profile maintenance fee after the initial posting is completed as limited effort is required for the Company to maintain such information on an on-going basis.
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Asia Times Holdings Limited
Notes to the Consolidated Financial Statements
NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – (Continued)

Revenue from consulting services
The Company provides various consulting services to its members, especially to those who have the intention to be publicly listed in the stock exchanges in the United States and other countries. The Company categorizes its consulting services into three Phases:
Phase I consulting services primarily include due diligence review, market research and feasibility study, business plan drafting, accounting record review, and business analysis and recommendations. Management estimates that Phase I normally takes about three months to complete based on its past experience.
Phase II consulting services primarily include reorganization, pre-listing education and tutoring, talent search, legal and audit firm recommendation and coordination, VIE contracts and other public-listing related documents review, merger and acquisition planning, investor referral and pre-listing equity financing source identification and recommendations, and independent directors and audit committee candidate’s recommendation. Management estimates that Phase II normally takes about eight months to complete based on its past experience.
Phase III consulting services primarily include shell company identification and recommendation for customers expecting to become publicly listed through reverse merger transaction; assistance in preparation of customers’ public filings for IPO or reverse merger transactions; and assistance in answering comments and questions received from regulatory agencies. Management believes it is very difficult to estimate the timing of this phase of service as the completion of Phase III services is not within the Company’s control.
Each phase of consulting services is standalone and fees associated with each phase are clearly identified in service agreements. Revenue from providing Phase I and Phase II consulting services to customers is recognized ratably over the estimated completion period of each phase. Revenue from providing Phase III consulting services to customers is recognized upon completion of reverse merger transaction or IPO transaction. Revenue that has been billed and not yet recognized is reflected as deferred revenue on the balance sheet.
Depending on the complexity of the underlying service arrangement and related terms and conditions, significant judgments, assumptions and estimates may be required to determine when substantial delivery of contract elements has occurred, whether any significant ongoing obligations exist subsequent to contract execution, whether amounts due are collectible and the appropriate period or periods in which, or during which, the completion of the earnings process occurs. Depending on the magnitude of specific revenue arrangements, adjustment may be made to the judgments, assumptions and estimates regarding contracts executed in any specific period.
Income taxes
The Company accounts for income taxes under ASC 740. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the consolidated financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period including the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.
The provisions of ASC 740-10-25, “Accounting for Uncertainty in Income Taxes,” prescribe a more-likely-than-not threshold for consolidated financial statement recognition and measurement of a tax position taken (or expected to be taken) in a tax return. This interpretation also provides guidance on the recognition of income tax assets and liabilities, classification of current and deferred income tax assets and
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Asia Times Holdings Limited
Notes to the Consolidated Financial Statements
NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – (Continued)
liabilities, accounting for interest and penalties associated with tax positions, and related disclosures. Management does not believe that there was any uncertain tax position as of July 31, 2018 and 2017. As of July 31, 2018, PRC tax returns filed in 2015 to 2017 remain open for statutory examination by PRC tax authorities.
Earnings Per Share
Basic earnings per share are computed by dividing income available to ordinary shareholders of the Company by the weighted average ordinary shares outstanding during the period. Diluted earnings per share takes into account the potential dilution that could occur if securities or other contracts to issue ordinary shares were exercised and converted into ordinary shares. As of July 31, 2018, and 2017, there were no dilutive shares.
Foreign Currency Translation
The accounts of the Company and its subsidiaries are measured using the currency of the primary economic environment in which the entity operates (the “functional currency”). The Company’s functional currency is the U.S. Dollar (“USD”) while its subsidiary in Hong Kong reports its financial positions and results of operations in Hong Kong Dollar and the Company’s subsidiary in China reports its financial position sand results of operations in Renminbi (“RMB”). The accompanying consolidated financial statements are presented in USD. The results of operations and the consolidated statements of cash flows denominated in foreign currency are translated at the average rate of exchange during the reporting period. Assets and liabilities denominated in foreign currencies at the balance sheet date are translated at the applicable rates of exchange in effect at that date. The equity denominated in the functional currency is translated at the historical rate of exchange at the time of capital contribution. Because cash flows are translated based on the average translation rate, amounts related to assets and liabilities reported on the consolidated statements of cash flows will not necessarily agree with changes in the corresponding balances on the consolidated balance sheets. Translation adjustments arising from the use of different exchange rates from period to period are included as a separate component of accumulated other comprehensive income (loss) included in consolidated statements of changes in equity. Gains and losses from foreign currency transactions are included in the results of operations.
The following table outlines the currency exchange rates that were used in creating the consolidated financial statements:
July 31,
2018
2017
Foreign currency
Balance
Sheet
Profits/Loss
Balance
Sheet
Profits/Loss
RMB: 1USD
0.1467 0.1538 0.1487 0.1466
HKD: 1USD
0.1274 0.1278 0.1280 0.1287
Comprehensive income
Comprehensive income consists of two components, net income and other comprehensive income. Other comprehensive income refers to revenue, expenses, gains and losses that under GAAP are recorded as an element of shareholders’ equity but are excluded from net income. Other comprehensive income consists of a foreign currency translation adjustment resulting from the Company not using USD as its functional currencies.
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Asia Times Holdings Limited
Notes to the Consolidated Financial Statements
NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – (Continued)
Statement of Cash Flows
In accordance with ASC 230, “Statement of Cash Flows”, cash flows from the Company’s operations are formulated based upon the local currencies. As a result, amounts related to assets and liabilities reported on the statements of cash flows will not necessarily agree with changes in the corresponding balances on the balance sheets.
Risks and Uncertainty
The Company’s major operations are conducted in the PRC. Accordingly, the political, economic, and legal environments in the PRC, as well as the general state of the PRC’s economy may influence the Company’s business, financial condition, and results of operations.
The Company’s major operations in the PRC are subject to special considerations and significant risks not typically associated with companies in North America and Western Europe. These include risks associated with, among others, the political, economic, and legal environment. The Company’s results may be adversely affected by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, and rates and methods of taxation, among other things. Although the Company has not experienced losses from these situations and believes that it is in compliance with existing laws and regulations including its organization and structure disclosed in Note 1, this may not be indicative of future results.
Recent Accounting Pronouncements
The Company considers the applicability and impact of all accounting standards updates (“ASUs”). Management periodically reviews new accounting standards that are issued.
In May 2014, the Financial Accounting Standards Board (the “FASB”) issued ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606)” (“ASU 2014-09”). ASU 2014-09 requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. ASU 2014-09 will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective and permits the use of either the retrospective or cumulative effect transition method. The guidance also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts. In August 2015, the FASB issued ASU No. 2015-14, “Deferral of the Effective Date” (“ASU 2015-14”), which defers the effective date for ASU 2014-09 by one year. For public entities, the guidance in ASU 2014-09 will be effective for annual reporting periods beginning after December 15, 2017 (including interim reporting periods within those periods), and for all other entities, ASU 2014-09 will be effective for annual reporting periods beginning after December 15, 2018, and interim reporting periods within annual reporting periods beginning after December 15, 2019. In March 2016, the FASB issued ASU No. 2016-08, “Principal versus Agent Considerations (Reporting Revenue versus Net)” (“ASU 2016-08”), which clarifies the implementation guidance on principal versus agent considerations in the new revenue recognition standard. In April 2016, the FASB issued ASU No. 2016-10, “Identifying Performance Obligations and Licensing” (“ASU 2016-10”), which reduces the complexity when applying the guidance for identifying performance obligations and improves the operability and understandability of the license implementation guidance. In May 2016, the FASB issued ASU No. 2016-12 “Narrow-Scope Improvements and Practical Expedients” (“ASU 2016-12”), which amends the guidance on transition, collectability, noncash consideration and the presentation of sales and other similar taxes.
The Company adopted ASC 606 on August 1, 2018, using the modified retrospective method where the cumulative effect is recognized at the date of initial application. The Company believes that the adoption of this new guidance will not result in a cumulative catch-up adjustment to the opening balance sheet of retained earnings at the effective date.
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Asia Times Holdings Limited
Notes to the Consolidated Financial Statements
NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – (Continued)
In February 2018, the FASB issued ASU 2018-02, Income Statement — Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income . The amendments in this Update affect any entity that is required to apply the provisions of Topic 220, Income Statement — Reporting Comprehensive Income, and has items of other comprehensive income for which the related tax effects are presented in other comprehensive income as required by GAAP. The amendments in this Update are effective for all entities for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption of the amendments in this Update is permitted, including adoption in any interim period, (1) for public business entities for reporting periods for which financial statements have not yet been issued and (2) for all other entities for reporting periods for which financial statements have not yet been made available for issuance. The amendments in this Update should be applied either in the period of adoption or retrospectively to each period (or periods) in which the effect of the change in the U.S. federal corporate income tax rate in the Tax Cuts and Jobs Act is recognized. The Company does not expect the adoption of this ASU would have a material effect on the Company’s consolidated financial statements.
In March 2018, the FASB issued ASU 2018-05 — Income Taxes (Topic 740): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118 (“ASU 2018-05”), which amends the FASB Accounting Standards Codification and XBRL Taxonomy based on the Tax Cuts and Jobs Act (the “Act”) that was signed into law on December 22, 2017 and Staff Accounting Bulletin No. 118 (“SAB 118”) that was released by the Securities and Exchange Commission. The Act changes numerous provisions that impact U.S. corporate tax rates, business-related exclusions, and deductions and credits and may additionally have international tax consequences for many companies that operate internationally. The Company does not believe this guidance will have a material impact on its consolidated financial statements.
In June 2018, the FASB issued ASU 2018-07: “Compensation-Stock Compensation (Topic 718) —  Improvements to Nonemployee Share-Based Payment Accounting”. The Board is issuing this Update as part of its Simplification Initiative. The amendments in this Update expand the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees. An entity should apply the requirements of Topic 718 to nonemployee awards except for specific guidance on inputs to an option pricing model and the attribution of cost (that is, the period of time over which share-based payment awards vest and the pattern of cost recognition over that period). The amendments specify that Topic 718 applies to all share-based payment transactions in which a grantor acquires goods or services to be used or consumed in a grantor’s own operations by issuing share-based payment awards. The amendments also clarify that Topic 718 does not apply to share-based payments used to effectively provide (1) financing to the issuer or (2) awards granted in conjunction with selling goods or services to customers as part of a contract accounted for under Topic 606, Revenue from Contracts with Customers. The amendments in this Update are effective for public business entities for fiscal years beginning after December 15, 2018, including interim periods within that fiscal year. The Company does not believe this guidance will have a material impact on its consolidated financial statements.
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Asia Times Holdings Limited
Notes to the Consolidated Financial Statements
NOTE 3 — ACCOUNTS RECEIVABLE, NET
The Company’s net accounts receivable is as follows:
July 31,
2018
2017
Accounts receivable
$ 137,550 $       —
Less: allowances for doubtful accounts
Accounts receivables, net
$ 137,550 $
Accounts receivable of  $137,550 resulted from balance due from providing public listing related consulting services to a customer for services rendered and billed but has not been collected as of the balance sheet date. Such receivable is considered fully collectible and no allowance is deemed necessary. The Company fully collected this balance in September 2018.
NOTE 4 — LOANS RECEIVABLE
From February to July 2018, the Company advanced a total of  $2,750,078 (RMB18,743,157) one-year short-term loans to a third party Jinqisheng Technology Co., Ltd. (“Jinqisheng”) as working capital. The loans bear interest rate of 5% per annum. Interest income of  $15,536 was accrued for the year ended July 31, 2018. The Company subsequently fully collected the loans receivable before their maturity dates.
NOTE 5 —  PREPAID EXPENSES AND OTHER CURRENT ASSETS
Prepaid expenses and other current assets consist of the following:
July 31,
2018
2017
Security deposits for operating lease and auto license plate
98,971 64,334
Advance to employees for business purposes
595,397 996,670
Interest receivable
14,819
Others
12,630 8,329
Total
$ 721,817 $ 1,069,333
NOTE 6 — PROPERTY AND EQUIPMENT, NET
Property and equipment consist of the following:
July 31,
2018
2017
Office equipment
$ 48,907 $ 23,686
Furniture
29,880 30,273
Total
78,787 53,959
Less: accumulated depreciation
(29,409 ) (13,891 )
Property and equipment, net
$ 49,378 $ 40,068
Depreciation expense for the years ended July 31, 2018 and 2017 was $16,458 and $11,320, respectively.
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Asia Times Holdings Limited
Notes to the Consolidated Financial Statements
NOTE 7 — ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES
Accrued expenses and other current liabilities consist of the following:
July 31,
2018
2017
Accrued payroll and welfare
$ 17,976 $ 38,904
Accrued professional fees
200,000
Deposit payable
47,417
Others
26,286 5,342
Total
$ 291,679 $ 44,246
NOTE 8 — DEFERRED REVENUE
Deferred revenue consists of amounts received from customers for initial registration and public listing related consulting services not yet completed as of the balance sheet date. The details of deferred revenue are as follows:
July 31,
2018
2017
Customer deposits for registration
$ $ 14,865
Customer deposits for consulting services
547,235 996,431
Total
$ 547,235 $ 1,011,296
NOTE 9 — RELATED PARTY TRANSACTIONS
The Company’s related party transactions include the following:
a. Due from a related party:
Name of related party
Relationship
July 31, 2018
July 31, 2017
Shenzhen Haorong Guarantee Co., Ltd. (“Haorong”)
An affiliate controlled by the
Company’s major shareholder
$ 14,966 $ 7,730
The Company originally had a plan to develop the guarantee business and accordingly advanced cash to Haorong, an entity controlled by the Company’s major shareholder, in order to conduct business planning. The Company substantially collected the balance from Haorong in September 2018.
b. Due to related parties
As of July 31, 2018 and 2017, the balances of due to related parties are comprised of advances from the Company’s principal officers and used for working capital. These advances are non-interest bearing and due upon demand.
NOTE 10 — TAXES
The Company is subject to income taxes on an entity basis on income arising in or derived from the tax jurisdiction in which each entity is domiciled .
British Virgin Islands
Under the current laws of the British Virgin Islands, the Company is not subject to tax on income or capital gain. Additionally, upon payments of dividends to the shareholders, no British Virgin Islands withholding tax will be imposed.
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Asia Times Holdings Limited
Notes to the Consolidated Financial Statements
NOTE 10 — TAXES – (Continued)
Hong Kong
ATIFL HK is subject to Hong Kong profits tax at a rate of 16.5%. However, it did not generate any assessable profits arising in or derived from Hong Kong for the fiscal year ended July 31, 2018 and 2017, and accordingly no provision for Hong Kong profits tax has been made in these periods.
PRC
Huaya and Qianhai are incorporated in the PRC. Under the Income Tax Laws of the PRC, these companies are subject to income tax rate of 25%.
The following table reconciles China statutory rates to the Company’s effective tax rate:
For the
year ended
July 31, 2018
For the
year ended
July 31, 2017
China income tax rate
25.0 % 25.0 %
Permanent difference-non-deductible expenses per PRC tax code
1.9 % 0.3 %
Effective tax rate
26.9 % 25.3 %
The Company’s income tax provision for the years ended July 31, 2018 and 2017 consists of the following:
For the years ended July 31,
2018
2017
Current income tax provision
BVI
$ $
Hong Kong
China
716,816 217,025
716,816 217,025
Deferred income tax provision
BVI
Hong Kong
China
Total income tax provision
$ 716,816 $ 217,025
The Company’s taxes payable consists of the following:
July 31,
2018
2017
Value added tax payable
$ 65,368 $ 17,110
Income tax payable
794,853 188,076
Others
1,463 2,185
Total taxes payable
$ 861,684 $ 207,371
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Asia Times Holdings Limited
Notes to the Consolidated Financial Statements
NOTE 10 — TAXES – (Continued)
Uncertain tax positions
The Company evaluates each uncertain tax position (including the potential application of interest and penalties) based on the technical merits, and measure the unrecognized benefits associated with the tax positions. As of July 31, 2018 and 2017, the Company did not have any significant unrecognized uncertain tax positions.
NOTE 11 — EQUITY
Common Stock
The Company was established under the laws of the British Virgin Islands on January 5, 2015. Prior to the reorganization, the authorized number of common stock was 100,000,000 shares of common stock with par value of  $0.0004 per share and 50,000,000 shares were issued at par value. On August 21, 2018, the Company amended its Memorandum of Association to cancel the 50,000,000 shares issued at par value of $0.0004 per share, and by the same time to increase the authorized shares to 100,000,000,000 shares and increase its par value of each share to $0.001. In connection with the cancellation of 50,000,000 shares, the Company issued 50,000 new shares to the controlling shareholders at par $0.001 per share.
On November 2, 2018, the Company issued additional 49,950,000 ordinary shares, at par value of $0.001 per share, to its beneficial owners, in private transactions, for a total consideration of  $49,950, with 26,473,500 ordinary shares issued to Tianzhen Investments Limited, an entity that owned 53% of the Company’s outstanding shares, and is 100% controlled by Qiuli Wang, the President and Chairman of the Board of Directors of the Company; 12,987,000 ordinary shares issued to Eno Group Limited, an entity that owned 26% of the Company’s outstanding Shares, and is 100% controlled by beneficial owner, Yanru Zhou; 3,996,000 ordinary shares issued to Great State Investments Limited, an entity that owned 8% of the Company’s outstanding shares and is 100% controlled by beneficial owner, Haiyun Liu; 1,998,000 Ordinary Shares to beneficial owner, Ronghua Liu, who owned 98.5% equity of Qianhai, the Company’s VIE; 2,097,900 Ordinary Shares to an unrelated individual Mr. Xueqing Liu and 2,397,600 Ordinary Shares to another unrelated individual Ms. Renyan Ou.
The issuance of these 50,000,000 shares is considered as a part of the Reorganization of the Company, which was retroactively applied as if the transaction occurred at the beginning of the period presented.
Statutory reserve
The Company is required to make appropriations to certain reserve funds, comprising the statutory surplus reserve and the discretionary surplus reserve, based on after-tax net income determined in accordance with generally accepted accounting principles of the PRC (“PRC GAAP”). Appropriations to the statutory surplus reserve are required to be at least 10% of the after-tax net income determined in accordance with PRC GAAP until the reserve is equal to 50% of the entity’s registered capital. Appropriations to the discretionary surplus reserve are made at the discretion of the Board of Directors. The restricted amounts as determined pursuant to PRC statutory laws totaled $278,836 and $64,111 as of July 31, 2018 and 2017, respectively.
NOTE 12 — CONCENTRATIONS AND RISKS
The Company maintains certain bank accounts in the PRC and Hong Kong, which are not insured by Federal Deposit Insurance Corporation (“FDIC”) insurance or other insurance. As of July 31, 2018 and 2017, cash balances of  $72,965 and $144,813, respectively, were maintained at financial institutions in the PRC and Hong Kong, which were not insured by any of the authorities.
For the years ended July 31, 2018 and 2017, substantial of the Company’s assets were located in the PRC and substantial of the Company’s revenues were derived from its subsidiaries located in the PRC.
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Asia Times Holdings Limited
Notes to the Consolidated Financial Statements
NOTE 12 — CONCENTRATIONS AND RISKS – (Continued)
For the year ended July 31, 2018, two customers accounted for approximately 32.9% and 20.7% of the Company’s total revenue. For the year ended July 31, 2017, three customers accounted for approximately 34.0%, 30.8% and 30.3% of the Company’s total revenue.
For the year ended July 31, 2018, one customer accounted for 100% of the Company’s outstanding accounts receivable.
NOTE 13 — COMMITMENTS
Lease Obligation
The Company leases office spaces under operating leases. On October 31, 2018, the Company terminated the old lease agreement and at the same time signed a new lease agreement. The current office lease expires on November 26, 2019. Operating lease expense amounted to $400,151 and $219,536 for the years ended July 31, 2018 and 2017, respectively.
Future minimum lease payments under non-cancelable operating leases are as follows as of July 31, 2018:
Year ending July 31,
2019
$ 409,810
2020
121,579
Thereafter
Total
$ 531,389
NOTE 14  — SUBSEQUENT EVENTS
In order to diversify the Company’s business and revenue source, on September 20, 2018 (the “Acquisition Date”), ATIFL HK entered into a purchase agreement with Shenzhen Shangyuan Electronic Commerce Co., Ltd. (“Shangyuan”) to acquire a financial and news media platform www.chinacnnm.com from Shangyuan, for a total cash consideration of approximately $0.46 million (or RMB 3 million).The purchase price was based on the estimated fair value of this asset as of the Acquisition Date in accordance with the valuation report of an independent appraisal firm. The transaction costs (including title search and legal costs) associated with the news media platform acquisition were immaterial and transaction cost capitalization is not deemed necessary. The Company acquired only the financial and news platform/website from Shangyuan, not the equity interest of Shangyuan. Thus, the Company determined that the acquisition constituted as an acquisition of assets for financial statement purposes, rather than an acquisition of a business. The Company does not believe that purchase price allocation is necessary in this transaction because only one intangible asset is identified. The Company plans to use this financial and news platform to market its listing consulting services to potential clients and to help existing clients to distribute news and worldwide press releases.
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2,000,000 Ordinary Shares
(minimum offering amount)

5,000,000 Ordinary Shares
(maximum offering amount)
[MISSING IMAGE: LG_ASIATIMES.JPG]
Asia Times Holdings Limited
Prospectus dated December   , 2018

TABLE OF CONTENTS
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 6.   INDEMNIFICATION OF DIRECTORS AND OFFICERS.
To the extent permitted by law, we shall indemnify each existing or former secretary, director (including alternate director), and any of our other officers (including an investment adviser or an administrator or liquidator) and their personal representatives against:
(a)
all actions, proceedings, costs, charges, expenses, losses, damages or liabilities incurred or sustained by the existing or former secretary or officer in or about the conduct of our business or affairs or in the execution or discharge of the existing or former secretary’s or officer’s duties, powers, authorities or discretions; and
(b)
without limitation to paragraph (a) above, all costs, expenses, losses or liabilities incurred by the existing or former secretary or officer in defending (whether successfully or otherwise) any civil, criminal, administrative or investigative proceedings (whether threatened, pending or completed) concerning us or our affairs in any court or tribunal, whether in the BVI or elsewhere.
These indemnities will only apply if the person acted honestly and in good faith with a view to our best interests and, in the case of criminal proceedings, the person had no reasonable cause to believe that his conduct was unlawful.
To the extent permitted by law, we may make a payment, or agree to make a payment, whether by way of advance, loan or otherwise, for any legal costs incurred by an existing or former secretary or any of our officers in respect of any matter identified in above on condition that the secretary or officer must repay the amount paid by us to the extent that it is ultimately found not liable to indemnify the secretary or that officer for those legal costs.
Pursuant to indemnification agreements, the form of which will be filed as Exhibit 10.02 to this Registration Statement, we will agree to indemnify our directors and officers against certain liabilities and expenses incurred by such persons in connection with claims made by reason of their being such a director or officer.
The Underwriting Agreement, the form of which will be filed as Exhibit 1.01 to this Registration Statement, will also provide for indemnification of us and our officers and directors.
Insofar as indemnification for liabilities arising under the Securities Act of 1933, as amended may be permitted to directors, officers or persons controlling us pursuant to the foregoing provisions, we have been informed that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.
ITEM 7.   RECENT SALES OF UNREGISTERED SECURITIES.
The Company was incorporated in the BVI on January 5, 2015. On 16 January 2015, we issued one (1) Ordinary Share to a founder shareholder in connection with a business plan which was subsequently abolished. In connection with the Company’s anticipated public offering, the Company undertook a reorganization, cancelled its previously outstanding shares and issued 50,000,000 Ordinary Shares as follows:
Date
Number of
shares issued
Amount Paid
Per Share
Shareholders
August 23, 2018
1,000​
USD0.001​
Qiuli Wang
September 27, 2018
2,000​
USD0.001​
Ronghua Liu
September 27, 2018
25,500​
USD0.001​
Tianzhen Investments Limited
September 27, 2018
13,000​
USD0.001​
Eno Group Limited
September 27, 2018
4,000​
USD0.001​
Great State Investments Limited
September 27, 2018
2,100​
USD0.001​
Xueqing Liu
September 27, 2018
2,400​
USD0.001​
Renyan Ou
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Date
Number of
shares issued
Amount Paid
Per Share
Shareholders
November 2, 2018
1,998,000​
USD0.001​
Ronghua Liu
November 2, 2018
26,473,500​
USD0.001​
Tianzhen Investments Limited
November 2, 2018
12,987,000​
USD0.001​
Eno Group Limited
November 2, 2018
3,996,000​
USD0.001​
Great State Investments Limited
November 2, 2018
2,097,900​
USD0.001​
Xueqing Liu
November 2, 2018
2,397,600
USD0.001​
Renyan Ou
50,000,000
ITEM 8.   EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(a)
Exhibits
See Exhibit Index beginning on page II-6 of this registration statement.
(b)
Financial Statement Schedules
Schedules have been omitted because the information required to be set forth therein is not applicable or is shown in the Consolidated Financial Statements or the Notes thereto.
ITEM 9.   UNDERTAKINGS.
The undersigned registrant hereby undertakes to provide to the Underwriter at the closing specified in the underwriting agreement, certificates in such denominations and registered in such names as required by the Underwriter to permit prompt delivery to each purchaser.
Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant pursuant to the provisions described in Item 6, or otherwise, the registrant has 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. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant 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, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.
The undersigned registrant hereby undertakes that:
(1)
For purposes of determining any liability under the Securities Act, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant under Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective.
(2)
For the purpose of determining any liability under the Securities Act, each post-effective amendment that contains a form of prospectus 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)
For the purpose of determining liability under the Securities Act 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
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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.
(4)
For the purpose of determining any liability of the registrant under the Securities Act to any purchaser in the initial distribution of the securities, the undersigned registrant undertakes that in an 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
(iv)
Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form F-1 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Shenzhen, People’s Republic of China, on December 11, 2018.
Asia Times Holdings Limited
By:
/s/ Qiuli Wang
Ms. Qiuli Wang
President, Chief Executive Officer, and Director
Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated.
Signature
Title
Date
/s/ Qiuli Wang
Name: Qiuli Wang
President, Chief Executive Officer, and Director
(principal executive officer)
December 11, 2018
/s/ Fang Cheng
Name: Fang Cheng
Chief Financial Officer
(principal accounting officer)
December 11, 2018
/s/ Qiang Chen
Name: Qiang Chen
Director
December 11, 2018
* By:
/s/ Qiuli Wang
Name: Qiuli Wang
Attorney-in-Fact
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SIGNATURE OF AUTHORIZED REPRESENTATIVE IN THE UNITED STATES
Pursuant to the Securities Act of 1933 as amended, the undersigned, the duly authorized representative in the United States of America, has signed this registration statement thereto in New York, NY on December 11, 2018.
Hunter Taubman Fischer & Li LLC
By:
/s/ Ying Li
Name: Ying Li
Title:   Partner and Member
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EXHIBIT INDEX
Description
1.1
Form of Underwriting Agreement**
Form of Amended Memorandum and Articles of Association*
Specimen Certificate for Ordinary Shares*
Form of opinion of Ogier regarding the validity of the Ordinary Shares being registered*
Form of opinion of Dentons Law Firm regarding certain PRC tax matters (included in Exhibit 99.2)
Agreement of Website (CNNM) Transfer between ATIFL HK entered on September 20, 2018*
Voting Right Proxy Agreement between Qiuli Wang and Eno Group entered on September 30, 2018*
Form of Employment Agreement by and between executive officers and the Registrant*
Form of Indemnification Agreement with the Registrant’s directors and officers*
Exclusive Service Agreement dated October 9, 2018, between WFOE and VIE*
Equity Pledge Agreement dated October 9, 2018, between WFOE, Beneficial Owners, and VIE*
Exclusive Call Option Agreement dated October 9, 2018, between WFOE, Beneficial Owners, and VIE*
Shareholders’ Voting Rights Proxy Agreement dated October 9, 2018, between WFOE, Beneficial Owners, and VIE*
Lease Contract dated October 25, 2018 by and between the Qianhai and Shenzhen Dedian Investment Ltd.*
Equity Transfer Agreement dated August 13, 2018 by and between Huaya and Yanru Zhou*
Equity Transfer Agreement dated September 19, 2018 by and between Huaya and Zhuorong Cai*
Equity Transfer Agreement dated September 19, 2018 by and between Huaya and Zehong Lai*
Trust Deed dated December 11, 2017 by and between Ronghua Liu and Qiuli Wang*
Letter of Undertaking by Qianhai Shareholder*
Subsidiaries*
Consent of Friedman LLP*
Consent of Ogier (included in Exhibit 5.1)
Consent of Dentons Law Firm (included in Exhibit 99.2)
Code of Business Conduct and Ethics of the Registrant*
Form of opinion of Dentons Law Firm, People’s Republic of China counsel to the Registrant, regarding certain PRC law matters and the validity of the VIE agreements*
Consent of Kwong Sang Liu*
Consent of Yongyuan Chen*
Consent of Longdley Zephirin*
Consent of Frost & Sullivan*
Offering Deposit Account Agency Agreement, dated October 7, 2018*
*
Filed herewith.
**
To be filed by amendment.
II-6

 

Exhibit 3.1

 

TERRITORY OF THE BRITISH VIRGIN ISLANDS

 

THE BVI BUSINESS COMPANIES ACT 2004

 

MEMORANDUM OF ASSOCIATION

 

OF

 

Asia Times Holdings Limited

[ please insert foreign character name ]

 

a company limited by shares

 

Amended and restated on [DATE]

 

1 NAME

 

The name of the Company is Asia Times Holdings Limited. In addition to its name, the Company has also registered a foreign character name, being [PLEASE INSERT].

 

2 STATUS

 

The Company shall be a company limited by shares.

 

3 REGISTERED OFFICE AND REGISTERED AGENT

 

3.1 The first registered office of the Company is the office of Portcullis TrustNet (BVI) Limited, Portcullis TrustNet Chambers, 4 th Floor Ellen Skelton Building, 3076 Sir Francis Drake Highway, Road Town, Tortola, British Virgin Islands VG1110, the office of the first registered agent.

 

3.2 The current registered office of the Company is Portcullis Chambers, 4 th Floor Ellen Skelton Building, 3076 Sir Francis Drake Highway, Road Town, Tortola, British Virgin Islands VG1110

 

3.3 The first registered agent of the Company is the office of Portcullis TrustNet (BVI) Limited of Portcullis TrustNet Chambers, 4 th Floor Ellen Skelton Building, 3076 Sir Francis Drake Highway, Road Town, Tortola, British Virgin Islands VG1110.

 

3.4 The current registered agent of the Company is Portcullis (BVI) Ltd of Portcullis Chambers, 4 th Floor Ellen Skelton Building, 3076 Sir Francis Drake Highway, Road Town, Tortola, British Virgin Islands VG1110.

 

3.5 The Company may change its registered office or registered agent by a Resolution of Directors or a Resolution of Members. The change shall take effect upon the Registrar registering a notice of change filed under section 92 of the Act.

 

  1  

 

 

4 CAPACITY AND POWER

 

4.1 The Company has, subject to the Act and any other British Virgin Islands legislation for the time being in force, irrespective of corporate benefit:

 

(a) full capacity to carry on or undertake any business or activity, do any act or enter into any transaction; and

 

(b) for the purposes of paragraph (a), full rights, powers and privileges.

 

4.2 There are subject to Clause 4.1 and Regulation 23, no limitations on the business that the Company may carry on.

 

5 NUMBER AND CLASSES OF SHARES

 

5.1 The maximum number of shares that he Company is authorised to issue is 100,000,000,000 shares with a par value of US$0.001 divided into two classes of shares as follows:

 

(a) Ordinary shares ( Ordinary Shares ); and

 

(b) Class A preferred shares ( the Preferred Shares ). 1

 

5.2 The Company may at the discretion of the Board of Directors, but shall not otherwise be obliged to, issue fractional Shares or round up or down fractional holdings of Shares to its nearest whole number and a fractional Share (if authorised by the Board of Directors) may have the corresponding fractional rights, obligations and liabilities of a whole share of the same class or series of shares.

 

6 DESIGNATIONS POWERS PREFERENCES OF SHARES

 

6.1 Each Ordinary Share in the Company confers upon the Member (unless waived by such Member):

 

(a) the right to one vote at a meeting of the Members of the Company or on any Resolution of Members;

 

(b) the right to an equal share with in any distribution by way of dividend paid by the Company; and

 

(c) the right to an equal share in the distribution of the surplus assets of the Company on its liquidation.

 

6.2 The rights, privileges, restrictions and conditions attaching to the Preferred Shares shall be stated in this Memorandum, which shall be amended accordingly prior to the issue of such Preferred Shares. Such rights, privileges, restrictions and conditions may include:

 

 

1 Ogier comment – please confirm if one class of Preferred Shares is sufficient.

 

  2  

 

 

(a) the number of shares and series constituting that class and the distinctive designation of that class;

 

(b) the dividend rate of the Preferred Shares of that class, if any, whether dividends shall be cumulative, and, if so, from which date or dates, and whether they shall be payable in preference to, or in relation to, the dividends payable on any other class or classes of Shares;

 

(c) whether that class shall have voting rights, and, if so, the terms of such voting rights;

 

(d) whether that class shall have conversion or exchange privileges, and, if so, the terms and conditions of such conversion or exchange, including provision for adjustment of the conversion or exchange rate in such events as the Board of Directors shall determine;

 

(e) whether or not the Preferred Shares of that class shall be redeemable, and, if so, the terms and conditions of such redemption, including the manner of selecting Shares for redemption if less than all Preferred Shares are to be redeemed, the date or dates upon or after which they shall be redeemable, and the amount per share payable in case of redemption, which amount maybe less than fair value and which may vary under different conditions and at different dates;

 

(f) whether that class shall be entitled to the benefit of a sinking fund to be applied to the purchase or redemption of Preferred Shares of that class, and, if so, the terms and amounts of such sinking fund;

 

(g) the right of the Preferred Shares of that class to the benefit of conditions and restrictions upon the creation of indebtedness of the Company or any subsidiary, upon the issue of any additional Preferred Shares (including additional Preferred Shares of such class of any other class) and upon the payment of dividends or the making of other distributions on, and the purchase, redemption or other acquisition or any subsidiary of any outstanding Preferred Shares of the Company;

 

(h) the right of the Preferred Shares of that class in the event of any voluntary or involuntary liquidation, dissolution or winding up of the Company and whether such rights be in preference to, or in relation to, the comparable rights or any other class or classes of Shares; and

 

(i) any other relative, participating, optional or other special rights, qualifications, limitations or restrictions of that class.

 

6.3 The Directors may at their discretion by Resolution of Directors redeem, purchase or otherwise acquire all or any of the Shares in the Company subject to Regulation 6 and Regulation 23 of the Articles.

  

  3  

 

 

6.4 The Directors have the authority and the power by Resolution of Directors:

 

(a) to authorise and create additional classes of shares; and

 

(b) (subject to the provisions of Clause 6.2) to fix the designations, powers, preferences, rights, qualifications, limitations and restrictions, if any, appertaining to any and all classes of shares that may be authorised to be issued under this Memorandum.

 

7 VARIATION OF RIGHTS

 

7.1 The rights attached to the Ordinary Shares as specified in Clause 6.1 may only, whether or not the Company is being wound up, be varied by a resolution passed at a meeting by the holders of at least [fifty percent (50%)/sixty-five percent (65%)] 2 of the total number of Ordinary Shares that have voted (and are entitled to vote thereon) in relation to any such resolution, unless otherwise provided by the terms of issue of such class

 

7.2 The rights attached to any class of Preferred Shares in issue as specified in Clause 6.2 may only, whether or not the Company is being wound up, be varied by a resolution passed at a meeting by the holders of more than [fifty percent (50%)/sixty-five percent (65%)] of the Preferred Shares of that same class present at a duly convened and constituted meeting of the Members of the Company holding Preferred Shares in such class which were present at the meeting and voted unless otherwise provided by the terms of issue of such class.

 

8 RIGHTS NOT VARIED BY THE ISSUE OF SHARES PARI PASSU

 

The rights conferred upon the holders of the Shares of any class issued with preferred or other rights shall not, unless otherwise expressly provided by the terms of issue of the Shares of that class, be deemed to be varied by the creation or issue of further Shares ranking pari passu therewith, and, for the avoidance of doubt, the issue of shares in any class of the Preferred Shares where such class is authorised under Clause 5.1 hereof at the date of the IPO shall not be considered to vary the terms of the Ordinary Shares.

 

9 REGISTERED SHARES

 

9.1 The Company shall issue registered shares only.

 

9.2 The Company is not authorised to issue bearer shares, convert registered shares to bearer shares or exchange registered shares for bearer shares.

 

10 TRANSFER OF SHARES

 

A Share may be transferred in accordance with Regulation 4 of the Articles.

 

 

2 Ogier comment – the current M&A says 65%. Please confirm.

 

  4  

 

 

11 AMENDMENT OF MEMORANDUM AND ARTICLES

 

11.1 The Company may amend its Memorandum or Articles by a Resolution of Members or by a Resolution of Directors, save that no amendment may be made by a Resolution of Directors:

  

(a) to restrict the rights or powers of the Members to amend the Memorandum or Articles;

 

(b) to change the percentage of Members required to pass a Resolution of Members to amend the Memorandum or Articles;

 

(c) in circumstances where the Memorandum or Articles cannot be amended by the Members; or

 

(d) to change Clauses 7 or 8, this Clause 11 or Regulation 23 (or any of the defined terms used in any such Clause or Regulation)..

 

12 DEFINITIONS AND INTERPRETATION

 

12.1 In this Memorandum of Association and the attached Articles of Association, if not inconsistent with the subject or context:

 

(a) Act means the BVI Business Companies Act, 2004 and includes the regulations made under the Act;

 

(b) AGM means an annual general meeting of the Members;

 

(c) Articles means the attached Articles of Association of the Company;

 

(d) Board of Directors means the board of directors of the Company;

 

(e) Business Days means a day other than a Saturday or Sunday or any other day on which commercial banks in New York are required or are authorised to be closed for business;

 

(f) Chairman means a person who is appointed as chairman to preside at a meeting of the Company and Chairman of the Board means a person who is appointed as chairman to preside at a meeting of the Board of Directors of the Company, in each case, in accordance with the Articles;

 

(g) Class A Preferred Shares has the meaning given to it in Clause 5.1;

 

(h) Designated Stock Exchange means the Capital Market of the Nasdaq Stock Market LLC. provided, however, that until the Shares are listed on the Designated Stock Exchange, the rules of the Designated Stock Exchange shall be inapplicable to the Company and this Memorandum or the Articles;

 

(i) Director means any director of the Company, from time to time;

 

(j) Distribution in relation to a distribution by the Company means the direct or indirect transfer of an asset, other than Shares, to or for the benefit of a Member in relation to Shares held by a Member, and whether by means of a purchase of an asset, the redemption or other acquisition of Shares, a distribution of indebtedness or otherwise, and includes a dividend;

 

  5  

 

 

(k) Eligible Person means individuals, corporations, trusts, the estates of deceased individuals, partnerships and unincorporated associations of persons;

 

(l) Enterprise means the Company and any other corporation, constituent corporation (including any constituent of a constituent) absorbed in a consolidation or merger to which the Company (or any of its wholly owned subsidiaries) is a party, limited liability company, partnership, joint venture, trust, employee benefit plan or other enterprise of which an Indemnitee is or was serving at the request of the Company as a Director, Officer, trustee, general partner, managing member, fiduciary, employee or agent;

 

(m) Exchange Act means the United States Securities Exchange Act of 1934, as amended;

 

(n) Expenses shall include all direct and indirect costs, fees and expenses of any type or nature whatsoever, including, without limitation, all legal fees and costs, retainers, court costs, transcript costs, fees of experts, witness fees, travel expenses, fees of private investigators and professional advisors, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees, fax transmission charges, secretarial services and all other disbursements, obligations or expenses, in each case reasonably incurred in connection with prosecuting, defending, preparing to prosecute or defend, investigating, being or preparing to be a witness in, settlement or appeal of, or otherwise participating in, a Proceeding, including reasonable compensation for time spent by the Indemnitee for which he or she is not otherwise compensated by the Company or any third party. Expenses shall also include any or all of the foregoing expenses incurred in connection with all judgments, liabilities, fines, penalties and amounts paid in settlement (including all interest, assessments and other charges paid or payable in connection with or in respect of such Expenses, judgments, fines, penalties and amounts paid in settlement) actually and reasonably incurred (whether by an Indemnitee, or on his behalf) in connection with such Proceeding or any claim, issue or matter therein, or any appeal resulting from any Proceeding, including without limitation the principal, premium, security for, and other costs relating to any cost bond, supersedeas bond, or other appeal bond or its equivalent, but shall not include amounts paid in settlement by an Indemnitee or the amount of judgments or fines against an Indemnitee;

 

(o) Indemnitee means any person detailed in sub regulations (a) and (b) of Regulation 15.

 

(p) IPO means the initial public offering of securities or other rights to receive or subscribe for securities of the Company;

 

(q) Member means an Eligible Person whose name is entered in the share register of the Company as the holder of one or more Shares or fractional Shares;

 

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(r) Memorandum means this Memorandum of Association of the Company;

 

(s) Officer means any officer of the Company, from time to time;

 

(t) Ordinary Shares has the meaning ascribed to it in Clause 5.1;

 

(u) Proceeding means any threatened, pending or completed action, suit, arbitration, mediation, alternate dispute resolution mechanism, investigation, inquiry, administrative hearing or any other actual, threatened or completed proceeding, whether brought in the name of the Company or otherwise and whether of a civil (including intentional or unintentional tort claims), criminal, administrative or investigative nature, in which an Indemnitee was, is, will or might be involved as a party or otherwise by reason of the fact that such Indemnitee is or was a Director or Officer of the Company, by reason of any action (or failure to act) taken by him or of any action (or failure to act) on his part while acting as a Director, Officer, employee or adviser of the Company, or by reason of the fact that he is or was serving at the request of the Company as a Director, Officer, trustee, general partner, managing member, fiduciary, employee, adviser or agent of any other Enterprise, in each case whether or not serving in such capacity at the time any liability or expense is incurred for which indemnification, reimbursement, or advancement of Expenses can be provided under these Articles;

 

(v) Preferred Shares has the meaning ascribed to it in Clause 5.1;

 

(w) relevant system means a relevant system for the holding and transfer of shares in uncertificated form;

 

(x) Resolution of Directors means either:

 

(i) Subject to sub-paragraph (ii) below, a resolution approved at a duly convened and constituted meeting of Directors of the Company or of a committee of Directors of the Company by the affirmative vote of a majority of the Directors present at the meeting who voted except that where a Director is given more than one vote, he shall be counted by the number of votes he casts for the purpose of establishing a majority; or

 

(ii) a resolution consented to in writing by all Directors or by all members of a committee of Directors of the Company, as the case may be;

 

(y) Resolution of Members means:

 

(i) a resolution approved at a duly convened and constituted meeting of the Members of the Company by the affirmative vote of a majority of the votes of the Shares entitled to vote thereon which were present at the meeting and were voted; or

 

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(ii) a resolution consented to in writing by [all] Members of the Company or all the Members of the class of shares entitled to vote upon such resolution, as the case may be; 3

 

(z) Seal means any seal which has been duly adopted as the common seal of the Company;

 

(aa) SEC means the United States Securities and Exchange Commission;

 

(bb) Securities means Shares, other securties and debt obligations of every kind of the Company, and including without limitation options, warrants and rights to acquire shares or debt obligations;

 

(cc) Securities Act means the United States Securities Act of 1933, as amended;

 

(dd) Share means a share issued or to be issued by the Company and Shares shall be construed accordingly;

 

(ee) Treasury Share means a Share that was previously issued but was repurchased, redeemed or otherwise acquired by the Company and not cancelled; and

 

(ff) written or any term of like import includes information generated, sent, received or stored by electronic, electrical, digital, magnetic, optical, electromagnetic, biometric or photonic means, including electronic data interchange, electronic mail, telegram, telex or telecopy, and "in writing" shall be construed accordingly.

 

12.2 In the Memorandum and the Articles, unless the context otherwise requires a reference to:

 

(a) a Regulation is a reference to a regulation of the Articles;

 

(b) a Clause is a reference to a clause of the Memorandum;

 

(c) voting by Member is a reference to the casting of the votes attached to the Shares held by the Member voting;

 

(d) the Act, the Memorandum or the Articles is a reference to the Act or those documents as amended; and

 

(e) the singular includes the plural and vice versa.

 

12.3 Any words or expressions defined in the Act unless the context otherwise requires bear the same meaning in the Memorandum and Articles unless otherwise defined herein.

 

12.4 Headings are inserted for convenience only and shall be disregarded in interpreting the Memorandum and Articles.

 

 

3 Ogier comment – We assume that, following the IPO, members be not be able to pass written resolutions because it would not be practicable given the breadth of the shareholder base. If so, the S-1 should be amended to say thi.

 

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We, Portcullis TrustNet (BVI) Limited of Portcullis TrustNet Chambers, Portcullis TrustNet Chambers, 4 th Floor Ellen Skelton Building, 3076 Sir Francis Drake Highway, Road Town, Tortola, British Virgin Islands VG1110, for the purpose of incorporating a BVI business company under the laws of the British Virgin Islands hereby sign this Memorandum of Association the 5 th day of January, 2015.

Incorporator

 

 

   
   
Portcullis TrustNet (BVI) Limited  
   
Portcullis TrustNet Chambers  
   
4 th Floor Ellen Skelton Building  
   
3076 Sir Francis Drake Highway  
   
Road Town, Tortola  
   
British Virgin Islands VG1110  
   
(Sgd. Petagaye Daley-Savage)  

 

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TERRITORY OF THE BRITISH VIRGIN ISLANDS

 

THE BVI BUSINESS COMPANIES ACT 2004

 

ARTICLES OF ASSOCIATION

 

OF

 

Asia Times Holdings Limited

[ please insert foreign character name ]

 

a company limited by shares

 

Amended and restated on [DATE]

 

1 REGISTERED SHARES

 

1.1 Every Member is entitled to a certificate signed by a Director of the Company or under the Seal specifying the number of Shares held by him and the signature of the Director and the Seal may be facsimiles.

 

1.2 Any Member receiving a certificate shall indemnify and hold the Company and its Directors and officers harmless from any loss or liability which it or they may incur by reason of any wrongful or fraudulent use or representation made by any person by virtue of the possession thereof. If a certificate for Shares is worn out or lost it may be renewed on production of the worn out certificate or on satisfactory proof of its loss together with such indemnity as may be required by a Resolution of Directors.

 

1.3 If several Eligible Persons are registered as joint holders of any Shares, any one of such Eligible Persons may give an effectual receipt for any Distribution.

 

1.4 Nothing in these Articles shall require title to any Shares or other Securities to be evidenced by a certificate if the Act and the rules of the Designated Stock Exchange permit otherwise.

 

1.5 Subject to the Act and the rules of the Designated Stock Exchange, the Board of Directors without further consultation with the holders of any Shares or Securities may resolve that any class or series of Shares or other Securities in issue or to be issued from time to time may be issued, registered or converted to uncertificated form and the practices instituted by the operator of the relevant system. No provision of these Articles will apply to any uncertificated shares or Securities to the extent that they are inconsistent with the holding of such shares or securities in uncertificated form or the transfer of title to any such shares or securities by means of a relevant system.

 

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1.6 Conversion of Shares held in certificated form into Shares held in uncertificated form, and vice versa, may be made in such manner as the Board of Directors, in its absolute discretion, may think fit (subject always to the requirements of the relevant system concerned). The Company or any duly authorised transfer agent shall enter on the register of members how many Shares are held by each member in uncertificated form and certificated form and shall maintain the register of members in each case as is required by the relevant system concerned. Notwithstanding any provision of these Articles, a class or series of Shares shall not be treated as two classes by virtue only of that class or series comprising both certificated shares and uncertificated shares or as a result of any provision of these Articles which applies only in respect of certificated shares or uncertificated shares.

 

1.7 Nothing contained in Regulation 1.5 and 1.6 is meant to prohibit the Shares from being able to trade electronically. For the avoidance of doubt, Shares shall only be traded and transferred electronically upon consummation of the IPO.

 

2 SHARES

 

2.1 Subject to the provisions of these Articles and, where applicable, the rules of the Designated Stock Exchange, the unissued Shares of the Company shall be at the disposal of the Directors and Shares and other Securities may be issued and option to acquire Shares or other Securities may be granted at such times, to such Eligible Persons, for such consideration and on such terms as the Directors may by Resolution of Directors determine.

 

2.2 Without prejudice to any special rights previously conferred on the holders of any existing Preferred Shares or class of Preferred Shares, any class of Preferred Shares may be issued with such preferred, deferred or other special rights or such restrictions, whether in regard to dividend, voting or otherwise as the Directors may from time to time determine.

 

2.3 Section 46 of the Act does not apply to the Company.

 

2.4 A Share may be issued for consideration in any form, including money, a promissory note, real property, personal property (including goodwill and know-how) or a contract for future services.

 

2.5 No Shares may be issued for a consideration other than money, unless a Resolution of Directors has been passed stating:

 

(a) the amount to be credited for the issue of the Shares; and

 

(b) that, in their opinion, the present cash value of the non-money consideration for the issue is not less than the amount to be credited for the issue of the Shares.

 

2.6 Subject to Regulation 2.7, the Company shall keep a register (the share register ) containing:

 

(a) the names and addresses of the persons who hold Shares;

 

(b) the number of each class and series of Shares held by each Member;

 

(c) the date on which the name of each Member was entered in the share register; and

 

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(d) the date on which any Eligible Person ceased to be a Member.

 

2.7 Where the Company or any of its Shares is listed on a Designated Stock Exchange, the company may keep a share register containing the information referred to in Regulation 2.6 or such other information as these Articles permit or as may be approved by a Resolution of Members.

 

2.8 The share register may be in any such form as the Directors may approve, but if it is in magnetic, electronic or other data storage form, the Company must be able to produce legible evidence of its contents. Until the Directors otherwise determine, the magnetic, electronic or other data storage form shall be the original share register.

 

2.9 A Share is deemed to be issued when the name of the Member is entered in the share register.

 

2.10 Subject to the provisions of the Act, Shares may be issued on the terms that they are redeemable, or at the option of the Company be liable to be redeemed on such terms and in such manner as the Directors before or at the time of the issue of such Shares may determine. The Directors may issue options, warrants or convertible securities or securities of a similar nature conferring the right upon the holders thereof to subscribe for, purchase or receive any class of Shares or Securities on such terms as the Directors may from time to time determine. Notwithstanding the foregoing, the Directors may also issue options, warrants, other rights to acquire shares or convertible securities in connection with the Company's IPO.

 

3 FORFEITURE

 

3.1 Shares that are not fully paid on issue are subject to the forfeiture provisions set forth in this Regulation and for this purpose Shares issued for a promissory note or a contract for future services are deemed to be not fully paid.

 

3.2 A written notice of call specifying the date for payment to be made shall be served on the Member who defaults in making payment in respect of the Shares.

 

3.3 The written notice of call referred to in Regulation 3.2 shall name a further date not earlier than the expiration of 14 days from the date of service of the notice on or before which the payment required by the notice is to be made and shall contain a statement that in the event of non-payment at or before the time named in the notice the Shares, or any of them, in respect of which payment is not made will be liable to be forfeited.

 

3.4 Where a written notice of call has been issued pursuant to Regulation 3.2 and the requirements of the notice have not been complied with, the Directors may, at any time before tender of payment, forfeit and cancel the Shares to which the notice relates.

 

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3.5 The Company is under no obligation to refund any moneys to the Member whose Shares have been cancelled pursuant to Regulation 3.4 and that Member shall be discharged from any further obligation to the Company.

 

4 TRANSFER OF SHARES

 

4.1 Subject to the Memorandum, certificated shares may be transferred by a written instrument of transfer signed by the transferor and containing the name and address of the transferee, which shall be sent to the Company for registration.

 

4.2 A member shall be entitled to transfer uncertificated shares by means of a relevant system and the operator of the relevant system shall act as agent of the Members for the purposes of the transfer of such uncertificated shares.

 

4.3 The transfer of a Share is effective when the name of the transferee is entered on the share register.

 

4.4 If the Directors of the Company are satisfied that an instrument of transfer relating to Shares has been signed but that the instrument has been lost or destroyed, they may resolve by Resolution of Directors:

 

(a) to accept such evidence of the transfer of Shares as they consider appropriate; and

 

(b) that the transferee's name should be entered in the share register notwithstanding the absence of the instrument of transfer.

 

4.5 Subject to the Memorandum, the personal representative of a deceased Member may transfer a Share even though the personal representative is not a Member at the time of the transfer.

 

4.6 [Except in relation to a transfer made pursuant to Regulation 4.2] 4 , the Directors may decline to register a transfer of an Ordinary Share which (i) is not fully paid up or on which the Company has a lien; or (ii) in the case of a transfer to join holders, the number of joint holders to whom the share is to be transferred does not exceed four (4). If the Directors refuse to register a transfer they shall, within one (1) month after the date on which the instrument of transfer was lodged, send to each of the transferor and the transferee notice of such refusal.

 

4.7 A member wishing to transfer a Share is liable to pay to the Company a fee of such maximum sum as the Designated Stock Exchange may determine to be payable, or such lesser sum as the Director may from time to time require, is paid to the Company in respect of such transfer. 5

 

 

4 Ogier comment –please confirm if this is correct

5 Ogier comment – this is to reflect the S1 – see "Our board of director may decline to register transfers of ordinary shares in certain circumstances"

 

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4.8 The registration of transfers may, on fourteen (14) days' notice being given by advertisement in such one or more newspapers or by electronic means, be suspended and the register closed at such times and for such periods as the Directors may from time to time determine, provided, however, that the registration of transfers shall not be suspended nor the register closed for more than thirty (30) days in any year.

 

5 DISTRIBUTIONS

 

5.1 The Directors of the Company may, by Resolution of Directors, authorise a distribution at a time and of an amount they think fit if they are satisfied, on reasonable grounds, that, immediately after the distribution, the value of the Company's assets will exceed its liabilities and the Company will be able to pay its debts as and when they fall due.

 

5.2 Dividends may be paid in money, shares, or other property.

 

5.3 The Company may, by Resolution of Directors, from time to time pay to the Members such interim dividends as appear to the Directors to be justified by the profits of the Company, provided always that they are satisfied, on reasonable grounds, that, immediately after the distribution, the value of the Company's assets will exceed its liabilities and the Company will be able to pay its debts as and when they fall due.

 

5.4 Notice in writing of any dividend that may have been declared shall be given to each Member in accordance with Regulation 21 and all dividends unclaimed for three years after such notice has been given to a Member may be forfeited by Resolution of Directors for the benefit of the Company.

 

5.5 No dividend shall bear interest as against the Company.

 

6 REDEMPTION OF SHARES AND TREASURY SHARES

 

6.1 The Company may purchase, redeem or otherwise acquire and hold its own Shares save that the Company may not purchase, redeem or otherwise acquire its own Shares without the consent of the Member whose Shares are to be purchased, redeemed or otherwise acquired unless the Company is permitted or required by the Act or any other provision in the Memorandum or Articles to purchase, redeem or otherwise acquire the Shares without such consent.

 

6.2 The purchase, redemption or other acquisition by the Company of its own Shares is deemed not to be a distribution where:

 

(a) the Company purchases, redeems or otherwise acquires the Shares pursuant to a right of a Member to have his Shares redeemed or to have his shares exchanged for money or other property of the Company, or

 

(b) the Company purchases, redeems or otherwise acquires the Shares by virtue of the provisions of section 179 of the Act.

 

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6.3 Sections 60, 61 and 62 of the Act shall not apply to the Company.

 

6.4 Subject to the provisions of Regulation 23, shares that the Company purchases, redeems or otherwise acquires pursuant to this Regulation may be cancelled or held as Treasury Shares except to the extent that such Shares are in excess of 50 percent of the issued Shares in which case they shall be cancelled but they shall be available for reissue.

 

6.5 All rights and obligations attaching to a Treasury Share are suspended and shall not be exercised by the Company while it holds the Share as a Treasury Share.

 

6.6 Treasury Shares may be disposed of by the Company on such terms and conditions (not otherwise inconsistent with the Memorandum and Articles) as the Company may by Resolution of Directors determine.

 

6.7 Where Shares are held by another body corporate of which the Company holds, directly or indirectly, shares having more than 50 per cent of the votes in the election of Directors of the other body corporate, all rights and obligations attaching to the Shares held by the other body corporate are suspended and shall not be exercised by the other body corporate.

 

7 MORTGAGES AND CHARGES OF SHARES

 

7.1 A Member may by an instrument in writing mortgage or charge his Shares.

 

7.2 There shall be entered in the share register at the written request of the Member:

 

(a) a statement that the Shares held by him are mortgaged or charged;

 

(b) the name of the mortgagee or chargee; and

 

(c) the date on which the particulars specified in subparagraphs (a) and (b) are entered in the share register.

 

7.3 Where particulars of a mortgage or charge are entered in the share register, such particulars may be cancelled:

 

(a) with the written consent of the named mortgagee or chargee or anyone authorised to act on his behalf; or

 

(b) upon evidence satisfactory to the Directors of the discharge of the liability secured by the mortgage or charge and the issue of such indemnities as the Directors shall consider necessary or desirable.

 

7.4 Whilst particulars of a mortgage or charge over Shares are entered in the share register pursuant to this Regulation:

 

(a) no transfer of any Share the subject of those particulars shall be effected;

 

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(b) the Company may not purchase, redeem or otherwise acquire any such Share; and

 

(c) no replacement certificate shall be issued in respect of such Shares,

 

without the written consent of the named mortgagee or chargee.

 

8 MEETINGS AND CONSENTS OF MEMBERS

 

8.1 Any Director of the Company may convene meetings of the Members at such times and in such manner and places within or outside the British Virgin Islands as the Director considers necessary or desirable. [An AGM shall be held annually at such date and time as may be determined by the Directors] 6 .

 

8.2 Upon the written request of the Members entitled to exercise 30 percent or more of the voting rights in respect of the matter for which the meeting is requested the Directors shall convene a meeting of Members.

 

8.3 The Director convening a meeting of Members shall give not less than 7 days' written notice of such meeting to:

 

(a) those Members whose names on the date the notice is given appear as Members in the share register of the Company and are entitled to vote at the meeting; and

 

(b) the other Directors.

 

8.4 The Director convening a meeting of Members shall fix in the notice of the meeting the record date for determining those Members that are entitled to vote at the meeting.

 

8.5 A meeting of Members held in contravention of the requirement to give notice is valid if Members holding at least either (i) 90 per cent of the shares entitled to vote on the matters to be considered at the meeting; or (ii) all members holding shares entitled to vote on all or any maters to be considered at the meeting, have waived notice of the meeting and, for this purpose, the presence of a Member at the meeting shall constitute waiver in relation to all the Shares which that Member holds.

 

8.6 The inadvertent failure of a Director who convenes a meeting to give notice of a meeting to a Member or another Director, or the fact that a Member or another Director has not received notice, does not invalidate the meeting.

 

8.7 A Member may be represented at a meeting of Members by a proxy who may speak and vote on behalf of the Member.

 

8.8 The instrument appointing a proxy shall be produced at the place designated for the meeting before the time for holding the meeting at which the person named in such instrument proposes to vote.

 

 

6 Ogier comment – do you want to include this provision?

 

  7  

 

 

8.9 The instrument appointing a proxy shall be in substantially the following form or such other form as the chairman of the meeting shall accept as properly evidencing the wishes of the Member appointing the proxy.

 

Asia Times Holding Limited

 

I/We being a Member of the above Company HEREBY APPOINT ____________________________________ of _______________________________ or failing him _______________________________. of ___________________________________ to be my/our proxy to vote for me/us at the meeting of Members to be held on the ____ day of ____________, 20____ and at any adjournment thereof.

 

(Any restrictions on voting to be inserted here.)

 

Signed this ____ day of ____________, 20_____

 

 

 

_______________

 

Member

 

8.10 The following applies where Shares are jointly owned:

 

(a) if two or more persons hold Shares jointly each of them may be present in person or by proxy at a meeting of Members and may speak as a Member;

 

(b) if only one of the joint owners is present in person or by proxy he may vote on behalf of all joint owners; and

 

(c) if two or more of the joint owners are present in person or by proxy they must vote as one and in the event of disagreement between any of the joint owners of Shares then the vote of the joint owner whose name appears first (or earliest) in the share register in respect of the relevant Shares shall be recorded as the vote attributable to the Shares.

 

8.11 A Member shall be deemed to be present at a meeting of Members if he participates by telephone or other electronic means and all Members participating in the meeting are able to hear each other.

 

8.12 A meeting of Members is duly constituted if, at the commencement of the meeting, there are present in person or by proxy not less than one-third of the votes of the Shares entitled to vote on Resolutions of Members to be considered at the meeting. If the Company has two or more classes of shares, a meeting may be quorate for some purposes and not for others. A quorum may comprise a single Member or proxy and then such person may pass a Resolution of Members and a certificate signed by such person accompanied where such person holds a proxy by a copy of the proxy instrument shall constitute a valid Resolution of Members. No business may be transacted at any meeting of Members unless a quorum is present at the commencement of business.

 

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8.13 If within two hours from the time appointed for the meeting of Members, a quorum is not present, the meeting, at the discretion of the Chairman of the Board of Directors shall be dissolved if it was requisitioned by Members, In any other case, the meeting shall stand adjourned to the next business day in the jurisdiction in which the meeting was to have been held at the same time and place, and if at the adjourned meeting there are present within one hour from the time appointed for the meeting in person or by proxy not less than one third of the votes of the Shares entitled to vote or each class or series of Shares entitled to vote, as applicable, on the matters to be considered by the meeting, those present shall constitute a quorum but otherwise the meeting shall either be dissolved.

 

8.14 At every meeting of Members, the Chairman of the Board shall preside as chairman of the meeting. If there is no Chairman of the Board or if the Chairman of the Board is not present at the meeting, the Members present shall choose one of their number to be the chairman. If the Members are unable to choose a chairman for any reason, then the person representing the greatest number of voting Shares present in person or by proxy at the meeting shall preside as chairman failing which the oldest individual Member or representative of a Member present shall take the chair.

 

8.15 The person appointed as chairman of the meeting pursuant to Regulation 8.14 may adjourn any meeting from time to time, and from place to place. For the avoidance of doubt, a meeting may remain open indefinitely for as long a period as may be determined by the chairman.

 

8.16 At any meeting of the Members the chairman of the meeting is responsible for deciding in such manner as he considers appropriate whether any resolution proposed has been carried or not and the result of his decision shall be announced to the meeting and recorded in the minutes of the meeting. If the chairman has any doubt as to the outcome of the vote on a proposed resolution, he shall cause a poll to be taken of all votes cast upon such resolution. If the chairman fails to take a poll then any Member present in person or by proxy who disputes the announcement by the chairman of the result of any vote may immediately following such announcement demand that a poll be taken and the chairman shall cause a poll to be taken. If a poll is taken at any meeting, the result shall be announced to the meeting and recorded in the minutes of the meeting.

 

8.17 Subject to the specific provisions contained in this Regulation for the appointment of representatives of Members other than individuals the right of any individual to speak for or represent a Member shall be determined by the law of the jurisdiction where, and by the documents by which, the Member is constituted or derives its existence. In case of doubt, the Directors may in good faith seek legal advice and unless and until a court of competent jurisdiction shall otherwise rule, the Directors may rely and act upon such advice without incurring any liability to any Member or the Company.

 

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8.18 Any Member other than an individual may by resolution of its Directors or other governing body authorise such individual as it thinks fit to act as its representative at any meeting of Members or of any class of Members, and the individual so authorised shall be entitled to exercise the same rights on behalf of the Member which he represents as that Member could exercise if it were an individual.

 

8.19 The chairman of any meeting at which a vote is cast by proxy or on behalf of any Member other than an individual may at the meeting but not thereafter call for a notarially certified copy of such proxy or authority which shall be produced within 7 days of being so requested or the votes cast by such proxy or on behalf of such Member shall be disregarded.

 

8.20 Directors of the Company may attend and speak at any meeting of Members and at any separate meeting of the holders of any class or series of Shares.

 

8.21 [Until the consummation of the Company's IPO,] any action that may be taken by the Members at a meeting may also be taken by a Resolution of Members consented to in writing, without the need for any prior notice. If any Resolution of Members is adopted otherwise than by the unanimous written consent of all Members, a copy of such resolution shall forthwith be sent to all Members not consenting to such resolution. The consent may be in the form of counterparts, each counterpart being signed by one or more Members. If the consent is in one or more counterparts, and the counterparts bear different dates, then the resolution shall take effect on the earliest date upon which Eligible Persons holding a sufficient number of votes of Shares to constitute a Resolution of Members have consented to the resolution by signed counterparts. [Following the Company's IPO, any action required or permitted to be taken by the Members of the Company must be effected by a meeting of the Company, such meeting to be duly convened and held in accordance with these Articles] 7 .

 

9 DIRECTORS

 

9.1 The first Directors of the Company shall be appointed by the first registered agent within 30 days of the incorporation of the Company; and thereafter, the Directors shall be elected:

 

(a) subject to Regulation 9.1 (b), by Resolution of Members or by Resolution of Directors for such term as the Members or Directors determine;

 

(b) [following consummation of the Company's IPO, those Directors who were appointed by a Resolution of Directors shall stand elected for a term expiring at the Company's next AGM. Commencing at the Company’s first AGM, and at each following AGM, Directors elected to succeed those Directors whose terms expire shall be elected for a term of office to expire at the AGM following their election. Persons are eligible or may be nominated for election or re-election as set out in Regulation 9.2. Except as the Act or any applicable law may otherwise require, in the interim between an AGM or general meeting called for the election of Directors and/or the removal of one or more Directors any vacancy on the Board of Directors, may be filled by the majority vote of the remaining Directors.] 8

 

 

7 Ogier comment – please confirm if this is correct.

8 Ogier comment – we have provided that directors serve until the next AGM and are then reappointed – is this the intention? There is no legal requirement to do so but we generally see listed BVI companies providing for this.

 

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9.2 [A Director whose term of office expires at any AGM shall be eligible for re-election as a director at that same meeting, but no person other than any such Director shall be eligible for election as a Director at any AGM or other meeting of the Members unless:

 

(a) such person has been nominated for election by those persons designated as independent Directors; or

 

(b)

 

(i) [in the case of an AGM, not less than 90 days nor more than 120 days before the anniversary date of the previous AGM (provided, however, that if the AGM is called for a date that is not within 45 days before or after such anniversary date, notice must instead be so received not earlier than 120 days before the AGM and not later than the later of (x) 90 days before the meeting or (y) 10 days following the day on which announcement of the date of the AGM was first made); or]

 

(ii) in the case of any other meeting of the Members, not later than 10 days after the date on which the holding of such meeting is announced,

 

a written notice signed by a Member eligible to vote at the meeting has been given to the Company of the intention of that Member to nominate that person for election as a Director at the meeting, any such notice must state all particulars which would, if the person nominated by the Member was elected as a director, be required to be included in the Company’s register of directors, including or together with (as the case may be): (A) (1) the name, age, date of birth, nationality, business address and residence address of the person, (2) the principal occupation or employment of the person, (3) the class or series and number of shares in the Company that are owned beneficially or of record by the person (if any) and (4) any other information relating to the person that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for election of directors pursuant to Section 14 of the Exchange Act and the rules and regulations promulgated thereunder; and (B) as to the Member giving the notice (1) the name and record address of such Member and the name and address of the beneficial owner, if any, on whose behalf the nomination is made, (2) the class or series and number of shares in the Company that are owned beneficially and of record by such Member and the beneficial owner, if any, on whose behalf the nomination is made, (3) a description of all arrangements or understandings relating to the nomination to be made by such Member among such Member, the beneficial owner, if any, on whose behalf the nomination is made, each proposed nominee and any other person or persons (including their names), (4) a representation that such Member intends to appear in person or by proxy at the meeting to nominate the persons named in its notice and (5) any other information relating to such Member and the beneficial owner, if any, on whose behalf the nomination is made that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for election of directors pursuant to Section 14 of the Exchange Act and the rules and regulations promulgated thereunder. ] 9

 

 

 

9 Ogier comment – please review and confirm if you want to include these provisions.

 

  11  

 

 

Any such notice as is referred to above must also be accompanied by a written consent of each proposed nominee to being named as a nominee and to serve as a director if elected. and such notice must also be accompanied by a written notice from the Member’s nominee confirming that he has consented in writing to act as Director.

 

9.3 No person shall be appointed as a Director of the Company unless he has consented in writing to act as a Director.

 

9.4 The minimum number of Directors shall be one and there shall be no maximum number of Directors. 10

 

9.5 Each Director holds office for the term, if any, fixed by the Resolution of Members or Resolution of Directors appointing him, or until his earlier death, resignation or removal. If no term is fixed on the appointment of a Director, the Director serves indefinitely until his earlier death, resignation or removal.

 

9.6 A Director may be removed from office with or without cause by:

 

(a) a Resolution of Members passed at a meeting of Members called for the purposes of removing the Director or for purposes including the removal of the Director; or

 

(b) subject to Regulation 9.1 (b), a Resolution of Directors passed at a meeting of Directors.

 

9.7 A Director may resign his office by giving written notice of his resignation to the Company and the resignation has effect from the date the notice is received by the Company at the office of its registered agent or from such later date as may be specified in the notice. A Director shall resign forthwith as a Director if he is, or becomes, disqualified from acting as a Director under the Act.

 

 

10 Ogier comment – the S1 says that upon closing of the offering, the board of directors will consist of 4 directors. Please confirm if a minimum or maximum number of directors should be provided for?

 

  12  

 

 

9.8 Subject to Regulation 9.1 (b), the Directors may at any time appoint any person to be a Director either to fill a vacancy or as an addition to the existing Directors. Where the Directors appoint a person as Director to fill a vacancy, the term shall not exceed the term that remained when the person who has ceased to be a Director ceased to hold office.

 

9.9 A vacancy in relation to Directors occurs if a Director dies or otherwise ceases to hold office prior to the expiration of his term of office.

 

9.10 The Company shall keep a register of Directors containing:

 

(a) the names and addresses of the persons who are Directors of the Company;

 

(b) the date on which each person whose name is entered in the register was appointed as a Director of the Company;

 

(c) the date on which each person named as a Director ceased to be a Director of the Company; and

 

(d) such other information as may be prescribed by the Act.

 

9.11 The register of Directors may be kept in any such form as the Directors may approve, but if it is in magnetic, electronic or other data storage form, the Company must be able to produce legible evidence of its contents. Until a Resolution of Directors determining otherwise is passed, the magnetic, electronic or other data storage shall be the original register of Directors.

 

9.12 The Directors, or if the Shares (or depository receipts therefore) are listed or quoted on a Designated Stock Exchange, and if required by the Designated Stock Exchange, any committee thereof, may, by a Resolution of Directors, fix the emoluments of Directors with respect to services to be rendered in any capacity to the Company.

 

9.13 A Director is not required to hold a Share as a qualification to office.

 

10 POWERS OF DIRECTORS

 

10.1 The business and affairs of the Company shall be managed by, or under the direction or supervision of, the Directors of the Company. The Directors of the Company have all the powers necessary for managing, and for directing and supervising, the business and affairs of the Company. The Directors may pay all expenses incurred preliminary to and in connection with the incorporation of the Company and may exercise all such powers of the Company as are not by the Act or by the Memorandum or the Articles required to be exercised by the Members.

 

10.2 If the Company is the wholly owned subsidiary of a holding company, a Director of the Company may, when exercising powers or performing duties as a Director, act in a manner which he believes is in the best interests of the holding company even though it may not be in the best interests of the Company.

 

  13  

 

 

10.3 Each Director shall exercise his powers for a proper purpose and shall not act or agree to the Company acting in a manner that contravenes the Memorandum, the Articles or the Act. Each Director, in exercising his powers or performing his duties, shall act honestly and in good faith in what the Director believes to be the best interests of the Company.

 

10.4 Any Director which is a body corporate may appoint any individual as its duly authorised representative for the purpose of representing it at meetings of the Directors, with respect to the signing of consents or otherwise.

 

10.5 The continuing Directors may act notwithstanding any vacancy in their body.

 

10.6 Subject to Regulation 23.7, the Directors may by Resolution of Directors exercise all the powers of the Company to incur indebtedness, liabilities or obligations and to secure indebtedness, liabilities or obligations whether of the Company or of any third party.

 

10.7 All cheques, promissory notes, drafts, bills of exchange and other negotiable instruments and all receipts for moneys paid to the Company shall be signed, drawn, accepted, endorsed or otherwise executed, as the case may be, in such manner as shall from time to time be determined by Resolution of Directors.

 

10.8 Section 175 of the Act shall not apply to the Company.

 

11 PROCEEDINGS OF DIRECTORS

 

11.1 Any one Director of the Company may call a meeting of the Directors by sending a written notice to each other Director.

 

11.2 The Directors of the Company or any committee thereof may meet at such times and in such manner and places within or outside the British Virgin Islands as the notice calling the meeting provides.

 

11.3 A Director is deemed to be present at a meeting of Directors if he participates by telephone or other electronic means and all Directors participating in the meeting are able to hear each other.

 

11.4 A Director may by a written instrument appoint an alternate who need not be a Director, any such alternate shall be entitled to attend meetings in the absence of the Director who appointed him and to vote or consent in place of the Director until the appointment lapses or is terminated.

 

11.5 A Director shall be given not less than three days' notice of meetings of Directors, but a meeting of Directors held without three days' notice having been given to all Directors shall be valid if all the Directors entitled to vote at the meeting who do not attend waive notice of the meeting, and for this purpose the presence of a Director at a meeting shall constitute waiver by that Director. The inadvertent failure to give notice of a meeting to a Director, or the fact that a Director has not received the notice, does not invalidate the meeting.

 

  14  

 

 

11.6 A meeting of Directors is duly constituted for all purposes if at the commencement of the meeting there are present in person or by alternate not less than one-half of the total number of Directors, unless there are only two Directors in which case the quorum is two.

 

11.7 If the Company has only one Director the provisions herein contained for meetings of Directors do not apply and such sole Director has full power to represent and act for the Company in all matters as are not by the Act, the Memorandum or the Articles required to be exercised by the Members. In lieu of minutes of a meeting the sole Director shall record in writing and sign a note or memorandum of all matters requiring a Resolution of Directors. Such a note or memorandum constitutes sufficient evidence of such resolution for all purposes.

 

11.8 At meetings of Directors at which the Chairman of the Board is present, he shall preside as chairman of the meeting. If there is no Chairman of the Board or if the Chairman of the Board is not present, the Directors present shall choose one of their number to be chairman of the meeting. If the Directors are unable to choose a chairman for any reason, then the oldest individual Director present (and for this purpose an alternate Director shall be deemed to be the same age as the Director that he represents) shall take the chair.

 

11.9 An action that may be taken by the Directors or a committee of Directors at a meeting may also be taken by a Resolution of Directors or a resolution of a committee of Directors consented to in writing by all Directors or by all members of the committee, as the case may be, without the need for any notice. The consent may be in the form of counterparts each counterpart being signed by one or more Directors. If the consent is in one or more counterparts, and the counterparts bear different dates, then the resolution shall take effect on the date upon which the last Director has consented to the resolution by signed counterparts.

 

12 COMMITTEES

 

12.1 The Directors may, by Resolution of Directors, designate one or more committees, each consisting of one or more Directors, and delegate one or more of their powers, including the power to affix the Seal, to the committee.

 

12.2 The Directors have no power to delegate to a committee of Directors any of the following powers:

 

(a) to amend the Memorandum or the Articles;

 

(b) to designate committees of Directors;

 

(c) to delegate powers to a committee of Directors;

 

(d) to appoint Directors;

 

(e) to appoint an agent;

 

  15  

 

 

(f) to approve a plan of merger, consolidation or arrangement; or

 

(g) to make a declaration of solvency or to approve a liquidation plan.

 

12.3 Regulations 12.2(b) and (c) do not prevent a committee of Directors, where authorised by the Resolution of Directors appointing such committee or by a subsequent Resolution of Directors, from appointing a sub-committee and delegating powers exercisable by the committee to the sub-committee.

 

12.4 The meetings and proceedings of each committee of Directors consisting of 2 or more Directors shall be governed mutatis mutandis by the provisions of the Articles regulating the proceedings of Directors so far as the same are not superseded by any provisions in the Resolution of Directors establishing the committee.

 

13 OFFICERS AND AGENTS

 

13.1 The Company may by Resolution of Directors appoint officers of the Company at such times as may be considered necessary or expedient. Such officers may consist of a Chairman of the Board of Directors, a Chief Executive Officer, a President, a Chief Financial Officer (in each case there may be more than one of such officers), one or more vice-presidents, secretaries and treasurers and such other officers as may from time to time be considered necessary or expedient. Any number of offices may be held by the same person.

 

13.2 The officers shall perform such duties as are prescribed at the time of their appointment subject to any modification in such duties as may be prescribed thereafter by Resolution of Directors. In the absence of any specific prescription of duties it shall be the responsibility of the Chairman of the Board (or Co-Chairman, as the case may be) to preside at meetings of Directors and Members, the Chief Executive Officer (or Co-Chief Executive Officer, as the case may be) to manage the day to day affairs of the Company, the vice-presidents to act in order of seniority in the absence of the Chief Executive Officer (or Co-Chief Executive Officer, as the case may be) but otherwise to perform such duties as may be delegated to them by the Chief Executive Officer (or Co-Chief Executive Officer, as the case may be), the secretaries to maintain the share register, minute books and records (other than financial records) of the Company and to ensure compliance with all procedural requirements imposed on the Company by applicable law, and the treasurer to be responsible for the financial affairs of the Company.

 

13.3 The emoluments of all officers shall be fixed by Resolution of Directors.

 

13.4 The officers of the Company shall hold office until their death, resignation or removal. Any officer elected or appointed by the Directors may be removed at any time, with or without cause, by Resolution of Directors. Any vacancy occurring in any office of the Company may be filled by Resolution of Directors.

  

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13.5 The Directors may, by a Resolution of Directors, appoint any person, including a person who is a Director, to be an agent of the Company. An agent of the Company shall have such powers and authority of the Directors, including the power and authority to affix the Seal, as are set forth in the Articles or in the Resolution of Directors appointing the agent, except that no agent has any power or authority with respect to the matters specified in Regulation 12.1. The Resolution of Directors appointing an agent may authorise the agent to appoint one or more substitutes or delegates to exercise some or all of the powers conferred on the agent by the Company. The Directors may remove an agent appointed by the Company and may revoke or vary a power conferred on him.

 

14 CONFLICT OF INTERESTS

 

14.1 A Director of the Company shall, forthwith after becoming aware of the fact that he is interested in a transaction entered into or to be entered into by the Company, disclose the interest to all other Directors of the Company.

 

14.2 For the purposes of Regulation 14.1, a disclosure to all other Directors to the effect that a Director is a member, Director or officer of another named entity or has a fiduciary relationship with respect to the entity or a named individual and is to be regarded as interested in any transaction which may, after the date of the entry or disclosure, be entered into with that entity or individual, is a sufficient disclosure of interest in relation to that transaction.

 

14.3 Provided that the requirements of Regulation 9.13 have first been satisfied, a Director of the Company who is interested in a transaction entered into or to be entered into by the Company may:

 

(a) vote on a matter relating to the transaction;

 

(b) attend a meeting of Directors at which a matter relating to the transaction arises and be included among the Directors present at the meeting for the purposes of a quorum; and

 

(c) sign a document on behalf of the Company, or do any other thing in his capacity as a Director, that relates to the transaction,

 

and, subject to compliance with the Act and these Articles shall not, by reason of his office be accountable to the Company for any benefit which he derives from such transaction and no such transaction shall be liable to be avoided on the grounds of any such interest or benefit.

 

15 INDEMNIFICATION

 

15.1 Subject to the limitations hereinafter provided the Company may indemnify, hold harmless and exonerate against all direct and indirect costs, fees and Expenses of any type or nature whatsoever, any person who:

 

(a) is or was a party or is threatened to be made a party to any Proceeding by reason of the fact that such person is or was a Director of the Company; or

 

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(b) is or was, at the request of the Company, serving as a Director of, or in any other capacity is or was acting for, another Enterprise.

 

15.2 The indemnity in Regulation 15.1 only applies if the relevant Indemnitee acted honestly and in good faith with a view to the best interests of the Company and, in the case of criminal proceedings, the Indemnitee had no reasonable cause to believe that his conduct was unlawful.

 

15.3 The decision of the Directors as to whether an Indemnitee acted honestly and in good faith and with a view to the best interests of the Company and as to whether such Indemnitee had no reasonable cause to believe that his conduct was unlawful is, in the absence of fraud, sufficient for the purposes of the Articles, unless a question of law is involved.

 

15.4 The termination of any Proceedings by any judgment, order, settlement, conviction or the entering of a nolle prosequi does not, by itself, create a presumption that the relevant Indemnitee did not act honestly and in good faith and with a view to the best interests of the Company or that such Indemnitee had reasonable cause to believe that his conduct was unlawful.

 

15.5 The Company may purchase and maintain insurance, purchase or furnish similar protection or make other arrangements including, but not limited to, providing a trust fund, letter of credit, or surety bond in relation to any Indemnitee or who at the request of the Company is or was serving as a Director, officer or liquidator of, or in any other capacity is or was acting for, another Enterprise, against any liability asserted against the person and incurred by him in that capacity, whether or not the Company has or would have had the power to indemnify him against the liability as provided in these Articles.

 

16 RECORDS

 

16.1 The Company shall keep the following documents at the office of its registered agent:

 

(a) the Memorandum and the Articles;

 

(b) the share register, or a copy of the share register;

 

(c) the register of Directors, or a copy of the register of Directors; and

 

(d) copies of all notices and other documents filed by the Company with the Registrar of Corporate Affairs in the previous 10 years.

 

16.2 If the Company maintains only a copy of the share register or a copy of the register of Directors at the office of its registered agent, it shall:

 

(a) within 15 days of any change in either register, notify the registered agent in writing of the change; and

 

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(b) provide the registered agent with a written record of the physical address of the place or places at which the original share register or the original register of Directors is kept.

 

16.3 The Company shall keep the following records at the office of its registered agent or at such other place or places, within or outside the British Virgin Islands, as the Directors may determine:

 

(a) minutes of meetings and Resolutions of Members and classes of Members;

 

(b) minutes of meetings and Resolutions of Directors and committees of Directors; and

 

(c) an impression of the Seal, if any.

 

16.4 Where any original records referred to in this Regulation are maintained other than at the office of the registered agent of the Company, and the place at which the original records is changed, the Company shall provide the registered agent with the physical address of the new location of the records of the Company within 14 days of the change of location.

 

16.5 The records kept by the Company under this Regulation shall be in written form or either wholly or partly as electronic records complying with the requirements of the Electronic Transactions Act.

 

17 REGISTERS OF CHARGES

 

17.1 The Company shall maintain at the office of its registered agent a register of charges in which there shall be entered the following particulars regarding each mortgage, charge and other encumbrance created by the Company:

 

(a) the date of creation of the charge;

 

(b) a short description of the liability secured by the charge;

 

(c) a short description of the property charged;

 

(d) the name and address of the trustee for the security or, if there is no such trustee, the name and address of the chargee;

 

(e) unless the charge is a security to bearer, the name and address of the holder of the charge; and

 

(f) details of any prohibition or restriction contained in the instrument creating the charge on the power of the Company to create any future charge ranking in priority to or equally with the charge.

 

  19  

 

 

18 CONTINUATION

 

The Company may by Resolution of Members or by a Resolution of Directors continue as a company incorporated under the laws of a jurisdiction outside the British Virgin Islands in the manner provided under those laws.

 

19 SEAL

 

The Company may have more than one Seal and references herein to the Seal shall be references to every Seal which shall have been duly adopted by Resolution of Directors. The Directors shall provide for the safe custody of the Seal and for an imprint thereof to be kept at the registered office. Except as otherwise expressly provided herein the Seal when affixed to any written instrument shall be witnessed and attested to by the signature of any one Director or other person so authorised from time to time by Resolution of Directors. Such authorisation may be before or after the Seal is affixed, may be general or specific and may refer to any number of sealings. The Directors may provide for a facsimile of the Seal and of the signature of any Director or authorised person which may be reproduced by printing or other means on any instrument and it shall have the same force and validity as if the Seal had been affixed to such instrument and the same had been attested to as hereinbefore described.

 

20 ACCOUNTS AND AUDIT 11

 

20.1 The Company shall keep records that are sufficient to show and explain the Company's transactions and that will, at any time, enable the financial position of the Company to be determined with reasonable accuracy.

 

20.2 The Company may by Resolution of Members call for the Directors to prepare periodically and make available a profit and loss account and a balance sheet. The profit and loss account and balance sheet shall be drawn up so as to give respectively a true and fair view of the profit and loss of the Company for a financial period and a true and fair view of the assets and liabilities of the Company as at the end of a financial period.

 

20.3 The Company may by Resolution of Members call for the accounts to be examined by auditors.

 

20.4 If the Shares are listed or quoted on the Designated Stock Exchange, and if required by the Designated Stock Exchange, the Directors shall establish and maintain an audit committee as a committee of the Board of Directors, the composition and responsibilities of which shall comply with the rules and regulations of the SEC and the Designated Stock Exchange subject to any available exemptions therefrom and the operation of the Act. The audit committee shall meet at least once every financial quarter, or more frequently as circumstances dictate.

 

 

11 Ogier comment – please review and confirm if these provisions are correct from a US/Nasdaq perspective.

 

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20.5 If the Shares are listed or quoted on a Designated Stock Exchange that requires the Company to have an audit committee, the Directors shall adopt a formal written audit committee charter and review and assess the adequacy of the formal written charter on an annual basis.

 

20.6 If the Shares are listed or quoted on the Designated Stock Exchange, the Company shall conduct an appropriate review of all related party transactions on an ongoing basis and, if required, shall utilise the audit committee for the review and approval of potential conflicts of interest.

 

20.7 If applicable, and subject to applicable law and the rules of the SEC and the Designated Stock Exchange:

 

(a) at the AGM or at a subsequent extraordinary general meeting in each year, the Members shall appoint an auditor who shall hold office until the Members appoint another auditor. Such auditor may be a Member but no Director or officer or employee of the Company shall during, his continuance in office, be eligible to act as auditor;

 

(b) a person, other than a retiring auditor, shall not be capable of being appointed auditor at an AGM unless notice in writing of an intention to nominate that person to the office of auditor has been given not less than ten days before the AGM and furthermore the Company shall send a copy of such notice to the retiring auditor; and

 

(c) the Members may, at any meeting convened and held in accordance with these Articles, by resolution remove the auditor at any time before the expiration of his term of office and shall by resolution at that meeting appoint another auditor in his stead for the remainder of his term.

 

20.8 The remuneration of the auditors shall be fixed by Resolution of Directors in such manner as the Directors may determine or in a manner required by the rules and regulations of the Designated Stock Exchange and the SEC.

 

20.9 The auditors shall examine each profit and loss account and balance sheet required to be laid before a meeting of the Members or otherwise given to Members and shall state in a written report whether or not:

 

(a) in their opinion the profit and loss account and balance sheet give a true and fair view respectively of the profit and loss for the period covered by the accounts, and of the assets and liabilities of the Company at the end of that period; and

 

(b) all the information and explanations required by the auditors have been obtained.

 

20.10 The report of the auditors shall be annexed to the accounts and shall be read at the meeting of Members at which the accounts are laid before the Company or shall be otherwise given to the Members.

 

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20.11 Every auditor of the Company shall have a right of access at all times to the books of account and vouchers of the Company, and shall be entitled to require from the Directors and officers of the Company such information and explanations as he thinks necessary for the performance of the duties of the auditors.

 

20.12 The auditors of the Company shall be entitled to receive notice of, and to attend any meetings of Members at which the Company's profit and loss account and balance sheet are to be presented.

 

21 NOTICES

 

21.1 Any notice, information or written statement to be given by the Company to Members may be given by personal service by mail, facsimile or other similar means of electronic communication, addressed to each Member at the address shown in the share register.

 

21.2 Any summons, notice, order, document, process, information or written statement to be served on the Company may be served by leaving it, or by sending it by registered mail addressed to the Company, at its registered office, or by leaving it with, or by sending it by registered mail to, the registered agent of the Company.

 

21.3 Service of any summons, notice, order, document, process, information or written statement to be served on the Company may be proved by showing that the summons, notice, order, document, process, information or written statement was delivered to the registered office or the registered agent of the Company or that it was mailed in such time as to admit to its being delivered to the registered office or the registered agent of the Company in the normal course of delivery within the period prescribed for service and was correctly addressed and the postage was prepaid.

 

22 VOLUNTARY WINDING UP

 

The Company may by a Resolution of Members or by a Resolution of Directors appoint a voluntary liquidator.

 

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We, Portcullis TrustNet (BVI) Limited of Portcullis TrustNet Chambers, Portcullis TrustNet Chambers, 4 th Floor Ellen Skelton Building, 3076 Sir Francis Drake Highway, Road Town, Tortola, British Virgin Islands VG1110, for the purpose of incorporating a BVI business company under the laws of the British Virgin Islands hereby sign these Articles of Association the 5 th day of January, 2015.

 

Incorporator

 

 

   
   
Portcullis TrustNet (BVI) Limited  
   
Portcullis TrustNet Chambers  
   
4 th Floor Ellen Skelton Building  
   
3076 Sir Francis Drake Highway  
   
Road Town, Tortola  
   
British Virgin Islands VG1110  
   
(Sgd. Petagaye Daley-Savage)  

 

  23  

 

Exhibit 4.1

 

BUSINESS COMPANY Share Certificate Certificate Number _ Number of Shares _ Incorporated under the Business companies Act of the British Virgin Islands Number of Shares Authorized to Issue THIS IS TO CERTIFY THAT _ is/are the registered holder(s) of _ share in the above=named Company, subject to the Memorandum and Articles of Association of the Said Company. Given this _ day of _ _ Director _ Officer

 

 

 

Exhibit 5.1

 

 

 

Asia Times Holdings Limited

Portcullis Chambers

4 th Floor, Ellen Skelton Building

3076 Sir Francis Drake Highway

Road Town

  D:  +44  1534 514298
  E:  simon.schilder@ogier.com
   
 
  Ref:  SIS/MCF/175987.00001
Tortola    
British Virgin Islands  
     
    [     ] 2018

 

Dear Sirs

 

Asia Times Holdings Limited (company number 1857285) (the Company)

 

We have acted as counsel as to British Virgin Islands law to the Company in connection with the Company’s registration statement on Form F-1, including all amendments or supplements to such form filed with the Securities and Exchange Commission ( Commission ) under the United States Securities Act of 1933, as amended ( Act ) (File No. [ ]) ( Registration Statement ), related to the offering and sale of up to [ ] ordinary shares of US$0.0001 par value (the Shares ) for whom Boustead Securities LLC is acting as underwriter (the Underwriter ). This opinion is given in accordance with the terms of the legal matters section of the Registration Statement.

 

1 Documents

 

In preparing this opinion, we have reviewed copies of the following documents:

 

(a) the Registration Statement;

 

(b) (i) the constitutional documents and public records of the Company obtained from the Registry of Corporate Affairs in the British Virgin Islands on [  ] 2018;

 

(ii) the public information revealed from searches (the Court Searches ) of the electronic records of the Civil Division and the Commercial Division of the Registry of the High Court and of the Court of Appeal (Virgin Islands) Register, each from 1 January 2000, as maintained on the Judicial Enforcement Management System (JEMS) by the Registry of the High Court of the Virgin Islands on [  ] 2018;

 

(each of the searches in (b)(i) and (ii) together, the Public Records );

 

(iv) a registered agent’s certificate issued by the Company’s registered agent dated [  ] 2018 (the Registered Agent’s Certificate ); and

 

(v) written resolutions of the directors of the Company containing resolutions of the directors of the Company dated [  ] 2018 approving, inter alia , the Registration Statement ( Directors’ Resolutions ).

 

We have not made any enquiries or undertaken any searches concerning, and have not examined any other documents entered into by or affecting the Company or any other person, save for the examinations referred to in paragraph 1 above. In particular, but without limitation, we have not examined any documents referred to within the Registration Statement save as expressly referred to above and our opinion is limited accordingly.

 

  1  

 

 

2 Assumptions

 

This opinion is given only as to the circumstances existing on the date hereof and as to British Virgin Islands law in force on this date. We have relied on each of the Registered Agent's Certificate without further enquiry and upon the following assumptions, which we have not independently verified:

 

(a) all parties to the Registration Statement (other than the Company) have the capacity, power and authority to exercise their rights and perform their obligations under such Registration Statement;

 

(b) the Registration Statement has been or, as the case may be, will be duly authorised by or on behalf of all relevant parties (other than the Company);

 

(c) copies of documents or records provided to us are true copies of the originals which are authentic and complete;

 

(d) all signatures and seals on all documents are genuine and authentic and in particular that any signatures on the documents we have reviewed are the true signatures of the persons authorised to execute the same;

 

(e) the Directors' Resolutions remain in full force and effect;

 

(f) the accuracy and completeness of the Registered Agent's Certificate as at the date hereof; and

 

(g) the information and documents disclosed by the searches of the Public Records was and is accurate, up-to-date and remains unchanged as at the date hereof and there is no information or document which has been delivered for registration by any party (other than the Company), or which is required by the laws of the British Virgin Islands to be delivered for registration by any party (other than the Company), which was not included and available for inspection in the Public Records.

 

3 Opinion

 

Based upon the foregoing, and subject to the qualifications expressed below, we are of the opinion that:

 

(a) The Company is a company duly incorporated with limited liability under the BVI Business Companies Act, 2004 and validly existing in good standing under the laws of the British Virgin Islands. It is a separate legal entity and is subject to suit in its own name.

 

(b) The Company has the capacity and power to exercise its rights and perform its obligations under the Registration Statement.

 

(c) The Shares to be offered and sold by the Company as contemplated by the Registration Statement have been duly authorised for issue and, when issued by the Company against payment in full of the consideration in accordance with the terms set out in the Registration Statement and the terms in the underwriting agreement referred to within the Registration Statement and duly registered in the Company’s register of members, will be validly issued, fully paid and non-assessable.

 

  2  

 

 

(d) The performance of the Company's obligations under the Registration Statement do not and will not conflict with or result in any breach of:

 

(i) the amended and restated Memorandum and Articles of Association of the Company; or

 

(ii) any law of the British Virgin Islands applicable to the Company.

 

(e) There were no actions pending against the Company based on our search of each of the Civil Index Book and the Commercial Book maintained by the British Virgin Islands High Court Registry.

 

(f) On the basis of our searches conducted at the Registry of Corporate Affairs and the Court Searches, no currently valid order or resolution for the winding-up of the Company and no current notice of appointment of a receiver in the British Virgin Islands over the Company, or any of its assets, appears on the records maintained in respect of the Company. It is a requirement under section 118 of the Insolvency Act 2003 that notice of appointment of a receiver be registered with the Registry of Corporate Affairs, however, it should be noted that failure to file a notice of appointment of a receiver does not invalidate the receivership but gives rise to penalties on the part of the receiver.

 

(g) Although there is no statutory enforcement in the British Virgin Islands of judgments obtained in the courts of the United States of America, the courts of the British Virgin Islands will recognise such a foreign judgment and treat it as a cause of action in itself which may be sued upon as a debt at common law so that no retrial of the issues would be necessary if fresh proceedings are brought in the British Virgin Islands to enforce that judgment, provided however that such judgment:

 

(i) is not in respect of penalties, fines, taxes or similar fiscal or revenue obligations of the Company against which the judgment is granted;

 

(ii) is final and for a liquidated sum;

 

(iii) was not obtained in a fraudulent manner;

 

(iv) is not of a kind the enforcement of which is contrary to the public policy in the British Virgin Islands;

 

(v) is not contrary to the principles of natural justice; and

 

(vi) provided that the courts of the United States of America had jurisdiction in the matter and the Company against which the judgment is granted either submitted to such jurisdiction or was resident or carrying on business within such jurisdiction and was duly served with process.]

 

(h) Non-money judgments from a foreign court are not directly enforceable in the British Virgin Islands. However, it is possible for a non-money judgment from a foreign court to be indirectly enforced by means of a claimant bringing an identical action in the courts of the British Virgin Islands in respect of which a non-money judgment has been made by a foreign court. In appropriate circumstances, the courts of the British Virgin Islands may give effect to issues and causes of action determined by the foreign court, such that those matters need not be retried.

 

  3  

 

 

(i) The statements contained in the Registration Statement in the section headed “British Virgin Islands Taxation”, in so far as they purport to summarise the laws or regulations of the British Virgin Islands, fairly and accurately summarise the matters referred to therein. This opinion is given under Item 601 of Regulation S-K, as our opinion regarding tax matters. All such statements are based upon laws and relevant interpretations thereof in effect as of the date of the prospectus, all of which are subject to change. Further, there can be no assurance that the British Virgin Islands courts will not take a contrary position. Our opinion expressed above is limited to the tax laws of the British Virgin Islands. We assume no obligation to revise or supplement this letter in the event of any changes in law or fact arising after the date hereof; provided, however, that our opinions set forth in the Registration Statement will be revised, if needed to remain accurate in all material respects as of the effective date of the Registration Statement.

 

4 Limitations

 

We offer no opinion:

 

(a) in relation to the laws of any jurisdiction other than the British Virgin Islands (and we have not made any investigation into such laws);

 

(b) in relation to any representation or warranty made or given by the Company in the Registration Statement; or

 

(c) as to the commerciality of the transactions envisaged in the Registration Statement or, save as expressly stated in this opinion, whether the Registration Statement and the transaction envisaged therein achieve the commercial, tax, legal, regulatory or other aims of the parties to the Registration Statement.

 

5 Governing Law and Reliance

 

(a) This opinion shall be governed by and construed in accordance with the laws of the British Virgin Islands and is limited to the matters expressly stated herein. This opinion is confined to and given on the basis of the laws and practice in the British Virgin Islands at the date hereof.

 

(b) We hereby consent to the filing of this opinion as an exhibit to the Registration Statement and to the reference to our firm in the sections of the Registration Statement under the headings “Legal Matters”, “Enforceability of Civil Liabilities”, and “Taxation” and elsewhere in the Registration Statement. In the giving of our consent, we do not thereby admit that we are in the category of persons whose consent is required under Section 7 of the Act or the Rules and Regulations of the Commission thereunder.

 

Yours faithfully

 

Ogier

 

  4  

 

 

Exhibit 10.1

 

Agreement of Website Transfer

 

Party A: Shenzhen Shangyuan Electronic Commerce Ltd.

Legal Representative: WANG Zhong

Phone Number: (86)15986831281

 

Party B: Asia Times International Finance Ltd.

Director: WANG Qiuli

Phone Number: (86)13828780880

 

In view of the fact that Party A independently and legally owns the website (the domain name is www.chinacnnm.com ), Party A and Party B have reached the following agreement on Party B’s acquisition of Party A’s website after friendly negotiation:

 

1. The actual situation of the acquired website is: CNNM, a website that issues comprehensive financial information.

 

2. The subject matter purchased in this agreement includes the domain name www.chinacnnm.com , all the contents of the w ebsite host which the domain name points to and all intellectual property rights related to the contents of the domain name and website.

 

3. Acquisition fee and Payment method: The total acquisition fee is THREE million RMB ( 3,000,000 RMB) which should be paid off in one time. Payment time shall be within 3 days from the date when Party B obtains all the documentation and registration certificates of the domain names related to this website as well as legally and actually obtains the management authority of the domain name (the date can be the date of registration if the registration is necessary according to laws and regulations).

 

4. The term “legally obtain the management authority” as mentioned in this agreement means that both parties voluntarily transfer by agreement and legally change the ownership of the subject matter referred to in this agreement (if registration is necessary according to law, it should be the subject matter referred to in the registration); the term “actually obtains the management authority” as mentioned in this agreement means that Party B have the sole ownership of the management password from Party A.

 

5. Rights and obligations of Party A and B:

 

(1) Party A shall ensure that the ownership of this website is independent and legal when it is purchased.

 

(2) Party A voluntarily transfers this website and the intellectual property rights based on it to Party B. Once Party B pays the purchase fee in full by convention, Party A will no longer enjoy any rights related to this website, including all intellectual property rights related to it.

 

(3) On the signing date, Party A shall transfer all the documentation and registration certificates related to this website. If it is necessary to go through formalities of changing the ownership of the website in departments concerned, Party A shall actively cooperate with Party B to handle them.

 

(4) After signing this agreement, Party B shall pay the acquisition fee in full be convention.

 

6. Due to the change of ownership of this website, all debts of this website before acquisition have nothing to do with Party B and shall be born by Party A itself.

 

 

 

 

7. Liability for breach of contract: Party A and Party B shall fulfill the obligations stipulated in this agreement; if one party breaches it, the other one shall have the right to pursue its responsibility in accordance with the relevant provisions of the Contract Law.

 

8. This agreement is made in two copies which both have the same effect in law and each party has one copy.

 

9. This agreement shall become effective from the date of signing or sealing by both parties.

 

Party A: Shenzhen Shangyuan Electronic Commerce Ltd.

 

Signing (Sealing) : WANG Zhong

 

Date: 20 September, 2018

 

Party A: Asia Times International Finance Ltd.

 

Signing (Sealing) : WANG Qiuli

 

Date: 20 September, 2018

 

 

 

Exhibit 10.2

 

VOTING RIGHTS PROXY AGREEMENT

 

This Voting Rights Proxy Agreement (this “ Agreement ”) is entered into as of September 30, 2018 (“ Effective Date ”), 2018 by and between Qiuli Wang (“ Wang ”) and the undersigned shareholder (the “ Shareholder ”). Wang and the Shareholder are each referred to in this Agreement as a “ Party ” and collectively as the “ Parties .”

 

RECITALS

 

A.          The Shareholder is a member of Asia Times Holdings Limited, a British Virgin Islands company (the “ Company ”) and the registered holder of such number of the ordinary shares of the Company (the “Ordinary Share ”), par value $0,001 per share, of the Company as set forth on Schedule A of this Agreement (the “ Shares ”);

 

B.           The Shares are beneficially owned by Yanru Zhou, a director of the Shareholder, through his 100% ownership of the Shareholder; and

 

C.           The Shareholder desires to grant to Wang a proxy to vote the Shares for the maximum period of time permitted by law, by entry of the power of attorney set forth on Schedule B of this Agreement.

 

NOW THEREFORE, the Parties agree as follows:

 

1. The Shareholder hereby agrees to irrevocably grant a power of attorney to, and entrust, Wang, for the maximum period of time permitted by law, with all of its voting rights as a member of the Company, including without limitation, in connection with the election of directors and approval of all corporate transactions which requires the approval of the Company’s members. Wang shall exercise such rights in accordance with the laws of the British Virgin Islands and the Company’s memorandum and articles of association, as may be amended.

 

2. This Agreement has been duly executed by the Parties as of the Effective Date. This Agreement shall take effect upon the Effective Date.

 

3. The Shareholder represents and warrants to Wang that such Shareholder legally and beneficially owns such Shares as set forth on Schedule A . free and clear of all liens and encumbrances, and such Shareholder has not granted to any party, other than Wang, a power of attorney or proxy over any of such Shares or any of such Shareholder’s rights as a member of the Company. The Shareholder further represents and warrants that the execution and delivery of this Agreement by such Shareholder shall not violate any law, regulations, judicial or administrative order, arbitration award, agreement, contract or covenant applicable to such Shareholder.

 

4. This Agreement, may be terminated at any time by either Party, with or without cause, provided that a thirty (30) day prior written notice is given to either Wang (in the case the Shareholder wishes to terminate the Agreement) or the Shareholder (in the case Wang wishes to terminate the Agreement).

 

5. No provision of this Agreement may be amended or waived without the prior written consent or agreement of the Parties hereto.

 

6. This Agreement shall be governed by, construed and entered in accordance with the laws of the British Virgin Islands applicable to contracts deemed to be made within jurisdiction, without regard to choice of law or conflict of law provisions thereof.

 

 

 

 

7. Except for the parties to this Agreement and their respective successors and assigns, nothing expressed or implied in this Agreement is intended, or will be construed, to confer upon or give any person other than the parties hereto and their respective successors and assigns any rights or remedies under or by reason of this Agreement.

 

[SIGNATURE PAGE FOLLOWS]

 

  2  

 

 

IN WITNESS WHEREOF, the undersigned have duly executed this Agreement as of the day and year first written above.

 

  By: /s/ Qiuli Wang
     
  Name: Qiuli Wang
   
  Accepted and Acknowledged:
     
  By: /s/ Yanru Zhou
     
  Name: Yanru Zhou
  for and on behalf of Eno Group Limited
  3  

 

 

Schedule A

 

Shareholder   Number of Ordinary Shares     Ownership Percentage *  
Eno Group Limited     13,000       26%

 

* The percentage is based on 50,000 shares of ordinary share of the Company issued and outstanding as of the date of this Agreement.

 

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Schedule B

 

Form of Power of Attorney

 

This POWER OF ATTORNEY is made by Eno Group Limited (the Appointer) of SUITE 2501A SKYLINE TOWER 39 WANG KWONG RD KOWLOON BAY, HONG KONG on 30 September 2018. The Appointer is the registered holder of 13,000 ordinary shares of par value $0.001 per share (the Shares) in Asia Times Holdings Limited, a British Virgin Islands company (the Company).

 

1. Background

 

It was noted that the Appointer has entered into a voting proxy agreement (the Agreement) with Qiuli Wang (Wang) pursuant to which the Appointer has agreed to appoint Wang as its proxy to vote the Shares for the maximum period of time permitted by law, and as determined in this Power of Attorney.

 

2. Appointment

 

Pursuant to the Agreement, the Appointer therefore irrevocably appoints Wang to act as its attorney with full power in the Appointer's name or otherwise and on its behalf (and as Wang in his absolute discretion sees fit) to exercise all rights in relation to the Shares including to:

 

(a) receive and accept service of or waive any notices, and execute any consent to short notice, attend and vote at and demand a poll at any meetings or any class meetings of the holders of shares or securities in the Company;

 

(b) attend, participate and vote at any general meeting or class meeting of the Company in relation to the Shares including any election of directors and approval of all corporate transactions which requires the approval of the Company’s members);

 

(c) give any written consent to any resolution of the holders of shares or securities in the Company, whether or not that consent or resolution relates to all of or any class of shares or securities or otherwise of the Company in relation to the Shares;

 

(d) exercise all or any of the voting and other rights, powers and privileges attached to the Shares or otherwise capable of being exercised by the Appointer in relation to the Shares;

 

(e) appoint any person as the Appointer may decide as the Appointer's proxy at any meeting or any class meeting of holders of shares or securities in the Company and for that purpose to execute, complete and lodge a form of proxy on behalf of the Appointer irrespective of whether or not the Appointer has separately appointed a proxy;

 

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(f) deal with, and give directions on behalf of the Appointer as to, any money, security, benefit, document, notices or other communication in whatever form arising by right of the Shares or received in connection with the Shares from the Company or any other person; and

 

(g) otherwise execute, deliver any document, deed or instrument and do anything which may be done in the Appointer's capacity as registered holder of the Shares.

 

3. Term

 

This Power of Attorney may be revoked by the Appointer or Wang at any time from the date of execution and delivery of this Power of Attorney, with or without cause, provided that a thirty (30) day prior written notice is given to either Wang (in the case the Appointer wishes to terminate the Power of Attorney) or the Appointer (in the case Wang wishes to terminate the Power of Attorney).

 

4. Ratification and Indemnity

 

The Appointer undertakes to ratify and confirm whatever Wang does or purports to do in good faith in the exercise of any power conferred by this Power of Attorney.

 

The Appointer undertakes to indemnify Wang fully against all claims, losses, costs, expenses, damages or liability which he sustains or incurs as a result of any action taken in good faith pursuant to this Power of Attorney (including any cost incurred in enforcing this indemnity).

 

5. Validity

 

The Appointer declares that a person who deals with Wang in good faith may accept a written statement signed by Wang to the effect that this Power of Attorney has not been revoked as conclusive evidence of that fact.

 

6. Governing Law and Jurisdiction

 

This Power of Attorney is governed by and shall be construed in accordance with the laws of the British Virgin Islands. Noil-contractual obligations (if any) arising out of or in connection with this Power of Attorney (including its formation) shall also be governed by the laws of the British Virgin Islands.

 

The courts of the British Virgin Islands shall have exclusive jurisdiction to settle any dispute or claim arising out of or in connection with this Power of Attorney or its subject matter or formation (including non-contractual disputes or claims).

 

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IN WITNESS WHEREOF, the undersigned have duly executed this Power of Attorney as of the day and year first written below.

 

This Power of Attorney has been executed as a deed and has been delivered on 30 September, 2018

 

By: /s/ Yanru Zhou  
Name: Yanru Zhou  
for and on behalf of  
Eno Group Limited  
   
and  
   
By: /s/ Qiuli Wang  
Name: Qiuli Wang  

 

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POWER OF ATTORNEY

 

KNOW ALL MEN BY THESE PRESENTS:

 

Qiang Chen (CEO of Asia Times Holdings Limited)

 

 

 

Here in after referred to as PRINCIPAL, in the

 

City of Shenzhen
   
State/Country of   China

 

Do(es) appoint:

Ying Li

 

 

his (her) true and lawful attorney.

 

In principal’s name, and for principal’s use and benefit, said attorney is authorized hereby:

 

(1) To execute, acknowledge, and deliver such written documentation with respect to completing and filing a UNIFORM APPLICATION FOR ACCESS CODES TO FILE ON EDGAR with the U.S. Security and Exchange Commission, all upon such terms and conditions as said attorney shall approve.

 

Giving and granting to said attorney full power and authority to do all and every act and thing whatsoever requisite and necessary to be done relative to any of the foregoing as fully to all intents and purposes as principal might or could do if personally present.

 

All that said attorney shall lawfully do or cause to be done under the authority of this power of attorney is expressly approved.

 

30 September 2018  
Date   Signature

 

 

 

Exhibit 10.3

 

EMPLOYMENT AGREEMENT

 

This EMPLOYMENT AGREEMENT (the “ Agreement” ), is entered into as of  [ ], 2018  by and between Asia Times Holdings Limited., a company incorporated and existing under the laws of the British Virgin Islands (the “Company”), and [ ] , an individual (the “ Executive” ). The term “Company” as used herein with respect to all obligations of the Executive hereunder shall be deemed to include the Company and all of its direct or indirect parent companies, subsidiaries, affiliates, or subsidiaries or affiliates of its parent companies (collectively, the “ Group ”).

 

RECITALS

 

The Company desires to employ the Executive and to assure itself of the services of the Executive during the term of Employment (as defined below).

 

The Executive desires to be employed by the Company during the term of Employment and upon the terms and conditions of this Agreement.

 

AGREEMENT

The parties hereto agree as follows:

 

  1. POSITION

 

The Executive hereby accepts a position of [ ] of the Company (the “ Employment ”).

 

  2. TERM

 

Subject to the terms and conditions of this Agreement, the initial term of the Employment shall be [ ] years, commencing on [ ], 2018 (the “ Effective Date ”), unless terminated earlier pursuant to the terms of this Agreement. Upon expiration of the [ ]-year term, the Employment shall be automatically extended for successive [ ]-year terms unless either party gives the other party hereto a [ ]-month prior written notice to terminate the Employment prior to the expiration of such [ ]-year term or unless terminated earlier pursuant to the terms of this Agreement.

 

  3. PROBATION

 

No probationary period.

 

  4. DUTIES AND RESPONSIBILITIES

 

The Executive’s duties at the Company will include all jobs assigned by the Company’s Board of Directors (the “ Board ”) and/or the [ ] of the Company.

 

The Executive shall devote all of his/her working time, attention and skills to the performance of his/her duties at the Company and shall faithfully and diligently serve the Company in accordance with this Agreement, the Memorandum and Articles of Association of the Company (the “ Articles of Association ”), and the guidelines, policies and procedures of the Company approved from time to time by the Board.

  

 

 

 

  5. NO BREACH OF CONTRACT

 

The Executive shall use his/her best efforts to perform his/her duties hereunder. The Executive shall not, without prior consent of the Board, become an employee of any entity other than the Company and any subsidiary or affiliate of the Company, and shall not be concerned or interested in any business or entity that directly or indirectly competes with the Group (any such business or entity, a “ Competitor ”), provided that nothing in this clause shall preclude the Executive from holding shares or other securities of any Competitor that is listed on any securities exchange or recognized securities market anywhere,  provided however,  that the Executive shall notify the Company in writing prior to his/her obtaining a proposed interest in such shares or securities in a timely manner and with such details and particulars as the Company may reasonably require. The Company shall have the right to require the Executive to resign from any board or similar body which he/she may then serve if the Board reasonably determines in writing that the Executive’s service on such board or body interferes with the effective discharge of the Executive’s duties and responsibilities to the Company or that any business related to such service is then in competition with any business of the Company or any of its subsidiaries or affiliates.

 

The Executive hereby represents to the Company that: (i) the execution and delivery of this Agreement by the Executive and the performance by the Executive of the Executive’s duties hereunder shall not constitute a breach of, or otherwise contravene, the terms of any other agreement or policy to which the Executive is a party or otherwise bound, except for agreements that are required to be entered into by and between the Executive and any member of the Group pursuant to applicable law of the jurisdiction where the Executive is based, if any; (ii) that the Executive has no information (including, without limitation, confidential information and trade secrets) relating to any other person or entity which would prevent, or be violated by, the Executive entering into this Agreement or carrying out his/her duties hereunder; (iii) that the Executive is not bound by any confidentiality, trade secret or similar agreement (other than this) with any other person or entity except for other member(s) of the Group, as the case may be.

 

  6. LOCATION

 

The Executive will be based in [, the People’s Republic of China], until both parties hereto agree to change otherwise. The Executive acknowledges that he/she may be required to travel from time to time in the course of performing his/her duties for the Company.

 

  7. COMPENSATION AND BENEFITS

 

  (a) Compensation . The Executive’s cash compensation (inclusive of the statutory welfare reserves that the Company is required to set aside for the Executive under applicable law) shall be provided by the Company in a separate schedule A attached herein (“Schedule A”) or as specified in a separate agreement between the executive and the company’s designated subsidiary or affiliated entity, subject to annual review and adjustment by the Company or the compensation committee of the Board.  The cash compensation  may be paid by the Company, a subsidiary or affiliated entity or a combination thereof, as designated by the Company from time to time.

 

  (b) Equity Incentives . To the extent the Company adopts and maintains a share incentive plan, the Executive will be eligible to participate in such plan pursuant to the terms thereof.

 

  (c) Benefits . The Executive is eligible for participation in any standard employee benefit plan of the Company that currently exists or may be adopted by the Company in the future, including, but not limited to, any retirement plan, life insurance plan, health insurance plan and travel/holiday plan.

 

  

  8. TERMINATION OF THE AGREEMENT

 

  (a) By the Company . The Company may terminate the Employment for cause, at any time, without notice or remuneration, if the Executive (1) commits any serious or persistent breach or non-observance of the terms and conditions of your employment; (2) is convicted of a criminal offence other than one which in the opinion of the Board does not affect the executive’s position as an employee of the Company, bearing in mind the nature of your duties and the capacity in which the executive is employed; (3) willfully disobeys a lawful and reasonable order; (4) misconducts himself/herself and such conduct being inconsistent with the due and faithful discharge of the Executive’s material duties; (5) is guilty of fraud or dishonesty; or (6) is habitually neglectful in his/her duties. The Company may terminate the Employment without cause at any time with a [ ]-month prior written notice to the Executive or by payment of [ ] months’ salary in lieu of notice.

 

 

 

 

  (b) By the Executive . The Executive may terminate the Employment at any time with a [ ]-month prior written notice to the Company or by payment of [ ] months’ salary in lieu of notice. In addition, the Executive may resign prior to the expiration of the Agreement if such resignation or an alternative arrangement with respect to the Employment is approved by the Board.

 

  (c) Notice of Termination.  Any termination of the Executive’s employment under this Agreement shall be communicated by written notice of termination from the terminating party to the other party. The notice of termination shall indicate the specific provision(s) of this Agreement relied upon in effecting the termination.

 

  9. CONFIDENTIALITY AND NONDISCLOSURE

 

  (a) Confidentiality and Non-disclosure.  The Executive hereby agrees at all times during the term of his/her employment and after termination, to hold in the strictest confidence, and not to use, except for the benefit of the Group, or to disclose to any person, corporation or other entity without written consent of the Company, any Confidential Information. The Executive understands that “ Confidential Information ” means any proprietary or confidential information of the Group, its affiliates, their clients, customers or partners, and the Group’s licensors, including, without limitation, technical data, trade secrets, research and development information, product plans, services, customer lists and customers (including, but not limited to, customers of the Group on whom the Executive called or with whom the Executive became acquainted during the term of his/her employment), supplier lists and suppliers, software, developments, inventions, processes, formulas, technology, designs, drawings, engineering, hardware configuration information, personnel information, marketing, finances, information about the suppliers, joint ventures, licensors, licensees, distributors and other persons with whom the Group does business, information regarding the skills and compensation of other employees of the Group or other business information disclosed to the Executive by or obtained by the Executive from the Group, its affiliates, or their clients, customers or partners either directly or indirectly in writing, orally or by drawings or observation of parts or equipment, if specifically indicated to be confidential or reasonably expected to be confidential. Notwithstanding the foregoing, Confidential Information shall not include information that is generally available and known to the public through no fault of the Executive.

 

  (b) Company Property . The Executive understands that all documents (including computer records, facsimile and e-mail) and materials created, received or transmitted in connection with his/her work or using the facilities of the Group are property of the Group and subject to inspection by the Group, at any time. Upon termination of the Executive’s employment with the Company (or at any other time when requested by the Company), the Executive will promptly deliver to the Company all documents and materials of any nature pertaining to his/her work with the Company and will provide written certification of his compliance with this Agreement. Under no circumstances will the Executive have, following his/her termination, in his/her possession any property of the Group, or any documents or materials or copies thereof containing any Confidential Information.

  

  (c) Former Employer Information . The Executive agrees that he has not and will not, during the term of his/her employment, (i) improperly use or disclose any proprietary information or trade secrets of any former employer or other person or entity with which the Executive has an agreement or duty to keep in confidence information acquired by Executive, if any, or (ii) bring into the premises of the Group any document or confidential or proprietary information belonging to such former employer, person or entity unless consented to in writing by such former employer, person or entity. The Executive will indemnify the Group and hold it harmless from and against all claims, liabilities, damages and expenses, including reasonable attorneys’ fees and costs of suit, arising out of or in connection with any violation of the foregoing.

 

 

 

 

  (d) Third Party Information . The Executive recognizes that the Group may have received, and in the future may receive, from third parties their confidential or proprietary information subject to a duty on the Group’s part to maintain the confidentiality of such information and to use it only for certain limited purposes. The Executive agrees that the Executive owes the Group and such third parties, during the Executive’s employment by the Company and thereafter, a duty to hold all such confidential or proprietary information in the strictest confidence and not to disclose it to any person or firm and to use it in a manner consistent with, and for the limited purposes permitted by, the Group’s agreement with such third party.

 

This Section 9 shall survive the termination of this Agreement for any reason. In the event the Executive breaches this Section 9, the Company shall have right to seek remedies permissible under applicable law.

 

  10. WITHHOLDING TAXES

 

Notwithstanding anything else herein to the contrary, the Company may withhold (or cause there to be withheld, as the case may be) from any amounts otherwise due or payable under or pursuant to this Agreement such national, provincial, local or any other income, employment, or other taxes as may be required to be withheld pursuant to any applicable law or regulation.

 

  11. NOTIFICATION OF NEW EMPLOYER

 

In the event that the Executive leaves the employ of the Company, the Executive hereby grants consent to notification by the Company to his/her new employer about his/her rights and obligations under this Agreement.

 

  12. ASSIGNMENT

 

This Agreement is personal in its nature and neither of the parties hereto shall, without the consent of the other, assign or transfer this Agreement or any rights or obligations hereunder;  provided, however , that (i) the Company may assign or transfer this Agreement or any rights or obligations hereunder to any member of the Group without such consent, and (ii) in the event of a merger, consolidation, or transfer or sale of all or substantially all of the assets of the Company with or to any other individual(s) or entity, this Agreement shall, subject to the provisions hereof, be binding upon and inure to the benefit of such successor and such successor shall discharge and perform all the promises, covenants, duties, and obligations of the Company hereunder.

 

  13. SEVERABILITY

 

If any provision of this Agreement or the application thereof is held invalid, the invalidity shall not affect other provisions or applications of this Agreement which can be given effect without the invalid provisions or applications and to this end the provisions of this Agreement are declared to be severable.

 

 

  14. ENTIRE AGREEMENT

 

This Agreement constitutes the entire agreement and understanding between the Executive and the Company regarding the terms of the Employment and supersedes all prior or contemporaneous oral or written agreements concerning such subject matter, other than any such agreement under any employment agreement entered into with a subsidiary of the Company at the request of the Company to the extent such agreement does not conflict with any of the provisions herein. The Executive acknowledges that he/she has not entered into this Agreement in reliance upon any representation, warranty or undertaking which is not set forth in this Agreement. Any amendment to this Agreement must be in writing and signed by the Executive and the Company.

 

 

 

 

  15. REPRESENTATIONS

 

The Executive hereby agrees to execute any proper oath or verify any proper document required to carry out the terms of this Agreement. The Executive hereby represents that the Executive’s performance of all the terms of this Agreement will not breach any agreement to keep in confidence proprietary information acquired by the Executive in confidence or in trust prior to his/her employment by the Company. The Executive has not entered into, and hereby agrees that he/she will not enter into, any oral or written agreement in conflict with this Section 18. The Executive represents that the Executive will consult his/her own consultants for tax advice and is not relying on the Company for any tax advice with respect to this Agreement or any provisions hereunder.

 

  16. GOVERNING LAW

 

This Agreement shall be governed by and construed in accordance with the laws of the State of New York.

 

  17. ARBITRATION

 

Any dispute arising out of, in connection with or relating to, this Agreement shall be resolved through arbitration conducted in New York under the auspices of the Judicial Arbitration and Mediation Services, Inc. (the “JAMS”) in accordance with the rules of the United Nations Commission of International Trade Law (“UNCITRAL Rules”) in effect at the time of the arbitration. There shall be one arbitrator. The award of the arbitration tribunal shall be final and binding upon the disputing parties, and any party may apply to a court of competent jurisdiction for enforcement of such award.

 

  18. AMENDMENT

 

This Agreement may not be amended, modified or changed (in whole or in part), except by a formal, definitive written agreement expressly referring to this Agreement, which agreement is executed by both of the parties hereto.

 

  19. WAIVER

 

Neither the failure nor any delay on the part of a party to exercise any right, remedy, power or privilege under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any right, remedy, power or privilege preclude any other or further exercise of the same or of any right, remedy, power or privilege, nor shall any waiver of any right, remedy, power or privilege with respect to any occurrence be construed as a waiver of such right, remedy, power or privilege with respect to any other occurrence. No waiver shall be effective unless it is in writing and is signed by the party asserted to have granted such waiver.

 

  20. NOTICES

 

All notices, requests, demands and other communications required or permitted under this Agreement shall be in writing and shall be deemed to have been duly given and made if (i) delivered by hand, (ii) otherwise delivered against receipt therefor, or (iii) sent by a recognized courier with next-day or second-day delivery to the last known address of the other party.

 

 

 

 

  21. COUNTERPARTS

 

This Agreement may be executed in any number of counterparts, each of which shall be deemed an original as against any party whose signature appears thereon, and all of which together shall constitute one and the same instrument. This Agreement shall become binding when one or more counterparts hereof, individually or taken together, shall bear the signatures of all of the parties reflected hereon as the signatories. Photographic copies of such signed counterparts may be used in lieu of the originals for any purpose.

 

  22. NO INTERPRETATION AGAINST DRAFTER

 

Each party recognizes that this Agreement is a legally binding contract and acknowledges that such party has had the opportunity to consult with legal counsel of choice. In any construction of the terms of this Agreement, the same shall not be construed against either party on the basis of that party being the drafter of such terms. The Executive agrees and acknowledges that he/she has read and understands this Agreement, is entering into it freely and voluntarily, and has been advised to seek counsel prior to entering into this Agreement and has ample opportunity to do so.

  

[Remainder of this page has been intentionally left blank.]

  

 

 

 

IN WITNESS WHEREOF, this Agreement has been executed as of the date first written above.

 

Asia Times Holdings Limited  
     
By:  

/s/

 
Name:      
Title:      

 

Executive

 

Signature:  

/s/

 
Name:      

  

[Signature Page to Employment Agreement]

 

 

 

 

Schedule A

 

Annual compensation is $[  ].

  

 

 

 

Exhibit 10.4

 

INDEMNIFICATION AGREEMENT

 

This Indemnification Agreement (this “ Agreement ”) is entered into as of                           by and between Asia Times Holdings Limited, a British Virgin Islands company (the “ Company ”), and the undersigned, a director and/or an officer of the Company (“ Indemnitee ”), as applicable.

 

RECITALS

 

The Board of Directors of the Company (the “ Board of Directors ”) has determined that the inability to attract and retain highly competent persons to serve the Company is detrimental to the best interests of the Company and its shareholders and that it is reasonable and necessary for the Company to provide adequate protection to such persons against risks of claims and actions against them arising out of their services to the corporation.

 

AGREEMENT

 

In consideration of the premises and the covenants contained herein, the Company and Indemnitee do hereby covenant and agree as follows:

 

A.      DEFINITIONS

 

The following terms shall have the meanings defined below:

 

Expenses  shall include, without limitation, damages, judgments, fines, penalties, settlements and costs, attorneys’ fees and disbursements and costs of attachment or similar bond, investigations, and any other expenses paid or incurred in connection with investigating, defending, being a witness in, participating in (including on appeal), or preparing for any of the foregoing in, any Proceeding.

 

Indemnifiable Event  means any event or occurrence that takes place either before or after the execution of this Agreement, related to the fact that Indemnitee is or was a director or an officer of the Company, or is or was serving at the request of the Company as a director or officer of another corporation, partnership, joint venture or other entity, or related to anything done or not done by Indemnitee in any such capacity, including, but not limited to neglect, breach of duty, error, misstatement, misleading statement or omission.

 

Participant  means a person who is a party to, or witness or participant (including on appeal) in, a Proceeding.

 

Proceeding  means any threatened, pending, or completed action, suit, arbitration or proceeding, or any inquiry, hearing or investigation, whether civil, criminal, administrative, investigative or other, including appeal, in which Indemnitee may be or may have been involved as a party or otherwise by reason of an Indemnifiable Event.

 

B.      AGREEMENT TO INDEMNIFY

 

1.    General Agreement . In the event Indemnitee was, is, or becomes a Participant in, or is threatened to be made a Participant in, a Proceeding, the Company shall indemnify the Indemnitee from and against any and all Expenses which Indemnitee incurs or becomes obligated to incur in connection with such Proceeding, to the fullest extent permitted by applicable law.

 

2.    Indemnification of Expenses of Successful Party . Notwithstanding any other provision of this Agreement, to the extent that Indemnitee has been successful on the merits in defense of any Proceeding or in defense of any claim, issue or matter in such Proceeding, the Company shall indemnify Indemnitee against all Expenses incurred in connection with such Proceeding or such claim, issue or matter, as the case may be.

 

3.    Partial Indemnification . If Indemnitee is entitled under any provision of this Agreement to indemnification by the Company for a portion of Expenses, but not for the total amount of Expenses, the Company shall indemnify the Indemnitee for the portion of such Expenses to which Indemnitee is entitled.

 

 

4.     No Employment Rights . Nothing in this Agreement is intended to create in Indemnitee any right to continued employment with the Company.

 

5.    Contribution . If the indemnification provided in this Agreement is unavailable and may not be paid to Indemnitee for any reason other than those set forth in Section B.4, then the Company shall contribute to the amount of Expenses paid in settlement actually and reasonably incurred and paid or payable by Indemnitee in such proportion as is appropriate to reflect (i) the relative benefits received by the Company on the one hand and by the Indemnitee on the other hand from the transaction or events from which such Proceeding arose, and (ii) the relative fault of the Company on the one hand and of the Indemnitee on the other hand in connection with the events which resulted in such Expenses, as well as any other relevant equitable considerations. The relative fault of the Company on the one hand and of the Indemnitee on the other hand shall be determined by reference to, among other things, the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent the circumstances resulting in such Expenses, judgments, fines or settlement amounts. The Company agrees that it would not be just and equitable if contribution pursuant to this Section B.6 were determined by pro rata allocation or any other method of allocation which does not take account of the foregoing equitable considerations.

 

C.     INDEMNIFICATION PROCESS

 

1.    Notice and Cooperation By Indemnitee . Indemnitee shall, as a condition precedent to his/her right to be indemnified under this Agreement, give the Company notice in writing as soon as practicable of any claim made against Indemnitee for which indemnification will or could be sought under this Agreement, provided that the delay of Indemnitee to give notice hereunder shall not prejudice any of Indemnitee’s rights hereunder, unless such delay results in the Company’s forfeiture of substantive rights or defenses. Notice to the Company shall be given in accordance with Section F.7 below. If, at the time of receipt of such notice, the Company has directors’ and officers’ liability insurance policies in effect, the Company shall give prompt notice to its insurers of the Proceeding relating to the notice. The Company shall thereafter take all necessary and desirable action to cause such insurers to pay, on behalf of Indemnitee, all Expenses payable as a result of such Proceeding. In addition, Indemnitee shall give the Company such information and cooperation as the Company may reasonably request.

 

2.    Indemnification Payment.

 

(a)  Advancement of Expenses . Indemnitee may submit a written request with reasonable particulars to the Company requesting that the Company advance to Indemnitee all Expenses that may be reasonably incurred in advance by Indemnitee in connection with a Proceeding. The Company shall, within 10 business days of receiving such a written request by Indemnitee, advance all requested Expenses to Indemnitee. Any excess of the advanced Expenses over the actual Expenses will be repaid to the Company.

 

(b)  Reimbursement of Expenses . To the extent Indemnitee has not requested any advanced payment of Expenses from the Company, Indemnitee shall be entitled to receive reimbursement for the Expenses incurred in connection with a Proceeding from the Company immediately after Indemnitee makes a written request to the Company for reimbursement unless the Company refers the indemnification request to the Reviewing Party in compliance with Section C.2(c) below.

 

(c)  Determination by the Reviewing Party . If the Company reasonably believes that it is not obligated under this Agreement to indemnify the Indemnitee, the Company shall, within 10 days after the Indemnitee’s written request for an advancement or reimbursement of Expenses, notify the Indemnitee that the request for advancement of Expenses or reimbursement of Expenses will be submitted to the Reviewing Party (as hereinafter defined). The Reviewing Party shall make a determination on the request within 30 days after the Indemnitee’s written request for an advancement or reimbursement of Expenses. Notwithstanding anything foregoing to the contrary, in the event the Reviewing Party informs the Company that Indemnitee is not entitled to indemnification in connection with a Proceeding under this Agreement or applicable law, the Company shall be entitled to be reimbursed by Indemnitee for all the Expenses previously advanced or otherwise paid to Indemnitee in connection with such Proceeding;  provided however , that Indemnitee may bring a suit to enforce his/her indemnification right in accordance with Section C.3 below.

 

 

3.    Suit to Enforce Rights . Regardless of any action by the Reviewing Party, if Indemnitee has not received full indemnification within 30 days after making a written demand in accordance with Section C.2 above or 50 days if the Company submits a request for advancement or reimbursement to the Reviewing Party under Section C.2(c) above, Indemnitee shall have the right to enforce its indemnification rights under this Agreement by commencing litigation in any court of competent jurisdiction seeking a determination by the court or challenging any determination by the Reviewing Party or any aspect of this Agreement. Any determination by the Reviewing Party not challenged by Indemnitee and any judgment entered by the court shall be binding on the Company and Indemnitee.

 

4.    Assumption of Defense . In the event the Company is obligated under this Agreement to advance or bear any Expenses for any Proceeding against Indemnitee, the Company shall be entitled to assume the defense of such Proceeding, with counsel approved by Indemnitee, upon delivery to Indemnitee of written notice of its election to do so. After delivery of such notice, approval of such counsel by Indemnitee and the retention of such counsel by the Company, the Company will not be liable to Indemnitee under this Agreement for any fees of counsel subsequently incurred by Indemnitee with respect to the same Proceeding, unless (i) the employment of counsel by Indemnitee has been previously authorized by the Company, (ii) Indemnitee shall have reasonably concluded, based on written advice of counsel, that there may be a conflict of interest of such counsel retained by the Company between the Company and Indemnitee in the conduct of any such defense, or (iii) the Company ceases or terminates the employment of such counsel with respect to the defense of such Proceeding, in any of which events the fees and expenses of Indemnitee’s counsel shall be at the expense of the Company. At all times, Indemnitee shall have the right to employ counsel in any Proceeding at Indemnitee’s expense.

 

5.    Defense to Indemnification, Burden of Proof and Presumptions . It shall be a defense to any action brought by Indemnitee against the Company to enforce this Agreement that it is not permissible under this Agreement or applicable law for the Company to indemnify the Indemnitee for the amount claimed. In connection with any such action or any determination by the Reviewing Party or otherwise as to whether Indemnitee is entitled to be indemnified under this Agreement, the burden of proving such a defense or determination shall be on the Company.

 

6.    No Settlement Without Consent . Neither party to this Agreement shall settle any Proceeding in any manner that would impose any damage, loss, penalty or limitation on Indemnitee without the other party’s written consent. Neither the Company nor Indemnitee shall unreasonably withhold its consent to any proposed settlement.

 

7.    Company Participation . Subject to Section B.5, the Company shall not be liable to indemnify the Indemnitee under this Agreement with regard to any judicial action if the Company was not given a reasonable and timely opportunity, at its expense, to participate in the defense, conduct and/or settlement of such action.

 

8.    Reviewing Party.

 

(a) For purposes of this Agreement, the Reviewing Party with respect to each indemnification request of Indemnitee that is referred by the Company pursuant to Section C.2(c) above shall be (A) the Board of Directors by a majority vote of a quorum consisting of Disinterested Directors (as hereinafter defined), or (B) if a quorum of the Board of Directors consisting of Disinterested Directors is not obtainable or, even if obtainable, said Disinterested Directors so direct, by Independent Counsel in a written opinion to the Board of Directors, a copy of which shall be delivered to Indemnitee. If the Reviewing Party determines that Indemnitee is entitled to indemnification, payment to Indemnitee shall be made within ten (10) days after such determination. Indemnitee shall cooperate with the person, persons or entity making such determination with respect to Indemnitee’s entitlement to indemnification, including providing to such person, persons or entity upon reasonable advance request any documentation or information which is not privileged or otherwise protected from disclosure and which is reasonably available to Indemnitee and reasonably necessary to such determination. Any Independent Counsel or member of the Board of Directors shall act reasonably and in good faith in making a determination under this Agreement of the Indemnitee’s entitlement to indemnification. Any reasonable costs or expenses (including reasonable attorneys’ fees and disbursements) incurred by Indemnitee in so cooperating with the person, persons or entity making such determination shall be borne by the Company (irrespective of the determination as to Indemnitee’s entitlement to indemnification) and the Company hereby indemnifies and agrees to hold Indemnitee harmless therefrom. “ Disinterested Director ” means a director of the Company who is not and was not a party to the Proceeding in respect of which indemnification is sought by Indemnitee.

 

 

(b) If the determination of entitlement to indemnification is to be made by Independent Counsel, the Independent Counsel shall be selected as provided in this Section C.8(b). The Independent Counsel shall be selected by Indemnitee (unless Indemnitee shall request that such selection be made by the Board of Directors, in which event the proceeding sentence shall apply), and Indemnitee shall give written notice to the Company advising it of the identity of the Independent Counsel so selected. In either event, Indemnitee or the Company, as the case may be, may, within 10 days after such written notice of selection shall have been given, deliver to the Company or to Indemnitee, as the case may be, a written objection to such selection;  provided however , that such objection may be asserted only on the ground that the Independent Counsel so selected does not meet the requirements of “ Independent Counsel ” as defined in Section C.8(d) of this Agreement, and the objection shall set forth with particularity the factual basis of such assertion. Absent a proper and timely objection, the person so selected shall act as Independent Counsel. If a written objection is made and substantiated, the Independent Counsel selected may not serve as Independent Counsel unless and until such objection is withdrawn or a court has determined that such objection is without merit. If, within 20 days after submission by Indemnitee of a written request for indemnification, no Independent Counsel shall have been selected and not objected to, either the Company or Indemnitee may petition a court of competent jurisdiction for resolution of any objection which shall have been made by the Company or Indemnitee to the other’s selection of Independent Counsel and/or for the appointment as Independent Counsel of a person selected by the court or by such other person as the court shall designate, and the person with respect to whom all objections are so resolved or the person so appointed shall act as Independent Counsel. The Company shall pay any and all reasonable fees and expenses of Independent Counsel incurred by such Independent Counsel in connection with acting under this Agreement, and the Company shall pay all reasonable fees and expenses incident to the procedures of this Section C.8(b), regardless of the manner in which such Independent Counsel was selected or appointed.

 

(c) In making a determination with respect to entitlement to indemnification hereunder, the Reviewing Party shall presume that Indemnitee is entitled to indemnification under this Agreement if Indemnitee has submitted a request for indemnification in accordance with this Agreement, and the Company shall have the burden of proof to overcome that presumption in connection with the making by any person, persons or entity of any determination contrary to that presumption. The termination of any Proceeding or of any claim, issue or matter therein, by judgment, order, settlement (with or without court approval), conviction, or upon a plea of  nolocontendere  or its equivalent, shall not (except as otherwise expressly provided in this Agreement) of itself adversely affect the right of Indemnitee to indemnification or create a presumption that Indemnitee did not act in good faith and in a manner which he/she reasonably believed to be in or not opposed to the best interests of the Company or, with respect to any criminal Proceeding, that Indemnitee had reasonable cause to believe that his/her conduct was unlawful. For purposes of any determination of good faith, Indemnitee shall be deemed to have acted in good faith if Indemnitee’s action is based on the records or books of account of the Company and any other corporation, partnership, joint venture or other entity of which Indemnitee is or was serving at the written request of the Company as a director, officer, employee, agent or fiduciary, including financial statements, or on information supplied to Indemnitee by the officers and directors of the Company or such other corporation, partnership, joint venture or other entity in the course of their duties, or on the advice of legal counsel for the Company or such other corporation, partnership, joint venture or other entity or on information or records given or reports made to the Company or such other corporation, partnership, joint venture or other entity by an independent certified public accountant or by an appraiser or other expert selected with reasonable care by the Company or such other corporation, partnership, joint venture or other entity. In addition, the knowledge and/or actions, or failure to act, of any director, officer, agent or employee of the Company or such other corporation, partnership, joint venture or other entity shall not be imputed to Indemnitee for purposes of determining the right to indemnification under this Agreement. The provisions of this Section C.8(c) shall not be deemed to be exclusive or to limit in any way the other circumstances in which the Indemnitee may be deemed to have met the applicable standard of conduct set forth in this Agreement.

 

 

(d) “ Independent Counsel ” means a law firm, or a member of a law firm, that is experienced in matters of corporation law and neither presently is, nor in the past five years has been, retained to represent (i) the Company or Indemnitee in any matter material to either such party (other than with respect to matters concerning the Indemnitee under this Agreement, or of other indemnitees under similar indemnification agreements), or (ii) any other party to the Proceeding giving rise to a claim for indemnification hereunder. Notwithstanding the foregoing, the term “Independent Counsel” shall not include any person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either the Company or Indemnitee in an action to determine Indemnitee’s rights under this Agreement. The Company agrees to pay the reasonable fees of the Independent Counsel referred to above and to fully indemnify such counsel against any and all Expenses, claims, liabilities and damages arising out of or relating to this Agreement or its engagement pursuant hereto.

 

D.       DIRECTOR AND OFFICER LIABILITY INSURANCE

 

1.    Good Faith Determination . The Company shall from time to time make the good faith determination whether or not it is practicable for the Company to obtain and maintain a policy or policies of insurance with reputable insurance companies providing the officers and directors of the Company with coverage for losses incurred in connection with their services to the Company or to ensure the Company’s performance of its indemnification obligations under this Agreement.

 

2.    Coverage of Indemnitee . To the extent the Company maintains an insurance policy or policies providing directors’ and officers’ liability insurance, Indemnitee shall be covered by such policy or policies, in accordance with its or their terms, to the maximum extent of the coverage available for any of the Company’s directors or officers.

 

3.    No Obligation . Notwithstanding the foregoing, the Company shall have no obligation to obtain or maintain any director and officer insurance policy if the Company determines in good faith that such insurance is not reasonably available in the case that (i) premium costs for such insurance are disproportionate to the amount of coverage provided, or (ii) the coverage provided by such insurance is limited by exclusions so as to provide an insufficient benefit.

 

E.       NON-EXCLUSIVITY; U.S. FEDERAL PREEMPTION; TERM

 

1.    Non-Exclusivity . The indemnification provided by this Agreement shall not be deemed exclusive of any rights to which Indemnitee may be entitled under the Company’s current memorandum and articles of association, as may be amended from time to time, applicable law or any written agreement between Indemnitee and the Company (including its subsidiaries and affiliates). The indemnification provided under this Agreement shall continue to be available to Indemnitee for any action taken or not taken while serving in an indemnified capacity even though he/she may have ceased to serve in any such capacity at the time of any Proceeding.

 

2.    U.S. Federal Preemption . Notwithstanding the foregoing, both the Company and Indemnitee acknowledge that in certain instances, U.S. federal law or public policy may override applicable law and prohibit the Company from indemnifying its directors and officers under this Agreement or otherwise. Such instances include, but are not limited to, the U.S. Securities and Exchange Commission (the “ SEC ”)’s prohibition on indemnification for liabilities arising under certain U.S. federal securities laws. Indemnitee understands and acknowledges that the Company has undertaken or may be required in the future to undertake with the SEC to submit the question of indemnification to a court in certain circumstances for a determination of the Company’s right under public policy to indemnify Indemnitee.

 

3.    Duration of Agreement . All agreements and obligations of the Company contained herein shall continue during the period Indemnitee is an officer and/or a director of the Company (or is or was serving at the request of the Company as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise) and shall continue thereafter so long as Indemnitee shall be subject to any Proceeding by reason of his/her former or current capacity at the Company, whether or not he/she is acting or serving in any such capacity at the time any Expense is incurred for which indemnification can be provided under this Agreement. This Agreement shall continue in effect regardless of whether Indemnitee continues to serve as an officer and/or a director of the Company or any other enterprise at the Company’s request.

 

F.       MISCELLANEOUS

 

1.    Amendment of this Agreement . No supplement, modification, or amendment of this Agreement shall be binding unless executed in writing by the parties hereto. No waiver of any of the provisions of this Agreement shall operate as a waiver of any other provisions (whether or not similar), nor shall such waiver constitute a continuing waiver. Except as specifically provided in this Agreement, no failure to exercise or any delay in exercising any right or remedy shall constitute a waiver.

 

2.    Subrogation . In the event of payment to Indemnitee by the Company under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee, who shall execute all papers required and shall do everything that may be necessary to secure such rights, including the execution of such documents necessary to enable the Company to bring suit to enforce such rights.

 

3.    Assignment; Binding Effect . Neither this Agreement nor any of the rights or obligations hereunder may be assigned by either party hereto without the prior written consent of the other party; except that the Company may, without such consent, assign all such rights and obligations to a successor in interest to the Company which assumes all obligations of the Company under this Agreement. Notwithstanding the foregoing, this Agreement shall be binding upon and inure to the benefit of and be enforceable by and against the parties hereto and the Company’s successors (including any direct or indirect successor by purchase, merger, consolidation, or otherwise to all or substantially all of the business and/or assets of the Company) and assigns, as well as Indemnitee’s spouses, heirs, and personal and legal representatives.

 

4.    Severability and Construction . Nothing in this Agreement is intended to require or shall be construed as requiring the Company to do or fail to do any act in violation of applicable law. The Company’s inability, pursuant to a court order, to perform its obligations under this Agreement shall not constitute a breach of this Agreement. In addition, if any portion of this Agreement shall be held by a court of competent jurisdiction to be invalid, void, or otherwise unenforceable, the remaining provisions shall remain enforceable to the fullest extent permitted by applicable law. The parties hereto acknowledge that they each have opportunities to have their respective counsels review this Agreement. Accordingly, this Agreement shall be deemed to be the product of both of the parties hereto, and no ambiguity shall be construed in favor of or against either of the parties hereto.

 

 

5.    Counterparts . This Agreement may be executed in two counterparts, both of which taken together shall constitute one instrument.

 

6.    Governing Law . This agreement and all acts and transactions pursuant hereto and the rights and obligations of the parties hereto shall be governed, construed and interpreted in accordance with the laws of the State of New York, without giving effect to conflicts of law provisions thereof.

 

7.    Notices . All notices, demands, and other communications required or permitted under this Agreement shall be made in writing and shall be deemed to have been duly given if delivered by hand, against receipt, or mailed via postage prepaid, certified or registered mail, return receipt requested, and addressed to the Company at:

 

Asia Times Holdings Limited

 

Attention: Chief Financial Officer

 

and to Indemnitee at his/her address last known to the Company.

 

8.    Entire Agreement . This Agreement constitutes the entire agreement and supersedes all prior agreements and understandings, both written and oral, between the parties with respect to the subject matter hereof.

 

(Signature page follows)

 

IN WITNESS WHEREOF, the parties hereto execute this Agreement as of the date first written above.

 

Asia Times Holdings Limited  
     
By:       
Name:    
Title:    
       

Indemnitee

 

Signature:    
Name:    

 

[Signature Page to Indemnification Agreement]

 

 

 

Exhibit 10.5

 

Confidential

 

THE EXCLUSIVE SERVICE AGREEMENT

 

AMONG

 

HUAYA CONSULTANT (SHENZHEN) CO., LTD.

 

AND

 

QIANHAI ASIA TIMES (SHENZHEN) INTERNATIONAL FINANCIAL SERVICES CO., LTD.

 

9 th October, 2018

 

  1

 

 

THE EXCLUSIVE SERVICE AGREEMENT

 

THIS EXCLUSIVE SERVICE AGREEMENT (this “AGREEMENT”) is entered into as of 9 th October, 2018 in Shenzhen , the People’s Republic of China (“CHINA” or “PRC”) by and among the following five Parties:

 

(1) HUAYA CONSULTANT (SHENZHEN) CO., LTD. (HUAYA)

 

REGISTERED ADDRESS: Room 3902, Building 5, Dachong International Center, No.39 Tong Gu Road, Yuehai Street, Nanshan district, Shen Zhen, China

 

(2) QIANHAI ASIA TIMES (SHENZHEN) INTERNATIONAL FINANCIAL SERVICES CO., LTD.( “ASIA TIMES”)

 

REGISTERED ADDRESS: Room 3902A, Building 5, Dachong International Center, No.39 Tong Gu Road, Yuehai Street, Nanshan district, Shen Zhen, China

 

(In this Agreement, HUAYA , ASIA TIMES and ASIA TIMES Subsidiaries shall hereinafter be referred to as a “PARTY” individually, and collectively “PARTIES”.)

 

WHEREAS:

 

(1) HUAYA is a consulting company, which owns a series of managing consulting and commercial consulting services of enterprises.

 

(2) ASIA TIMES is a comprehensive company with professional commercial consulting services of enterprises, which specializes on finance information consulting and counselling of IPO.

 

(3) In order to give HUAYA the actual control of ASIA TIMES and ASIA TIMES Subsidiaries, ASIA TIMES and ASIA TIMES Subsidiaries intends to irrevocably entrust to HUAYA the right of management and operation of ASIA TIMES and ASIA TIMES Subsidiaries and the responsibilities and authorities of their shareholders and directors of ASIA TIMES and ASIA TIMES Subsidiaries.

 

(4) HUAYA agrees to accept the entrustment of ASIA TIMES and ASIA TIMES Subsidiaries, and to exercise the right of management and operation of ASIA TIMES and ASIA TIMES Subsidiaries and the responsibilities and authorities of their shareholders and board of directors of ASIA TIMES and ASIA TIMES Subsidiaries.

 

NOW, THEREFORE, after friendly consultations among them, the Parties hereby agree as follows:

 

  2

 

 

ARTICLE 1 – DEFINITION

 

1.1 Unless to be otherwise interpreted by the terms or in the context herein, the following terms in this Agreement shall be interpreted to have the following meanings:

 

“SERVICE FEES” means the provision of management and consultation services charged by HUAYA hereunder.

 

ASIA TIMES Subsidiaries” means all of the companies held by ASIA TIMES (exclusive of Qianhai ASIA TIMES (Shenzhen) International Fund Management Company (“Fund Company”))

 

1.2 References in this Agreement to any laws and regulations (the “LAWS”) shall include reference (1) to the amendments, changes, supplements and reformulations of such Laws, whether or not the effectiveness of the same is prior to or after the execution of this Agreement; and (2) at the same time to other decisions, notices and rules formulated or becoming effective according to such Laws.

 

1.3 Unless otherwise specified in the context of this Agreement, the Article, sub-article, section or paragraph mentioned herein shall refer to the corresponding content in this Agreement accordingly.

 

ARTICLE 2 – LICENSES AND SERVICES BY HUAYA

 

2.1 ASIA TIMES and ASIA TIMES Subsidiaries agree to irrevocably entrust the right of management and operation of ASIA TIMES and ASIA TIMES Subsidiaries and the responsibilities and authorities of their shareholders and board of directors to HUAYA in accordance with the terms and conditions of this Agreement. HUAYA agrees to exercise the aforesaid rights and responsibilities in accordance with the terms and conditions of this Agreement.

 

2.2 The said entrustment is irrevocable and shall not be withdrawn, unless the Agreement is terminated pursuant to written agreement of both parties.

 

2.3 The purpose of the entrusted operation is that HUAYA shall be in charge of the normal business operations of ASIA TIMES and ASIA TIMES Subsidiaries and perform the responsibilities and rights of ASIA TIMES and ASIA TIMES Subsidiaries’ investors and directors. During the term of the entrusted operation, HUAYA , as the entrusted manager, shall provide full management to ASIA TIMES and ASIA TIMES Subsidiaries’ operations.

 

2.4 The contents of the entrusted operation shall include but not be limited to the following:

 

1) HUAYA shall be in charge of all aspects of ASIA TIMES and ASIA TIMES Subsidiaries’ operations; nominate and replace the members of ASIA TIMES and ASIA TIMES Subsidiaries’ board of directors, and engage ASIA TIMES and ASIA TIMES Subsidiaries’ management staff and decide their compensation.

 

  3

 

 

2) HUAYA shall manage and control all the funds of ASIA TIMES and ASIA TIMES Subsidiaries. The accounts of ASIA TIMES and ASIA TIMES Subsidiaries shall be managed solely by HUAYA . The seals and signatures for such account shall be the seals and signatures of the personnel appointed and confirmed by HUAYA . All the cash of ASIA TIMES and ASIA TIMES Subsidiaries shall be kept in this entrusted account and shall be handled through this account, including but not limited to receipt of all ASIA TIMES and ASIA TIMES Subsidiaries’ business income, current working capital, recovered account receivables, and the payment of all account payables and operation expenses, employee salaries and asset purchases.

 

3) All the matters of ASIA TIMES and ASIA TIMES Subsidiaries, including but not limited to internal financial management, day-to-day operation, external contact execution and performance, tax filing and payment, change of rights and personnel, shall be controlled and managed by HUAYA in all aspects.

 

4) HUAYA shall enjoy all the other responsibilities and rights enjoyed by ASIA TIMES and ASIA TIMES Subsidiaries’ investors in accordance with the applicable law and the articles of association of ASIA TIMES and ASIA TIMES Subsidiaries, including but not limited to the following:

 

a. Deciding ASIA TIMES and ASIA TIMES Subsidiaries’ operation principles and investment plan;
b. Nominating the members of the board of directors;
c. Discussing and approving the report of the executive officers;
d. Discussing and approving the annual financial budget and settlement plan;
e. Discussing and approving the profit distribution plan and the loss compensation plan;
f. Resolving on the increase or decrease of the registered capital;
g. Resolving on the issuance of the corporate bond;
h. Resolving on the matters including merger, division, change of corporate form, dissolution and liquidation of the company;
i. Amending the articles of association;
j. Other responsibilities and rights provided by ASIA TIMES and ASIA TIMES Subsidiaries’ articles of association.

 

5) HUAYA enjoys all the other responsibilities and rights enjoyed by ASIA TIMES and ASIA TIMES Subsidiaries’ board of directors and executive officers in accordance with the applicable law and the articles of association of ASIA TIMES and ASIA TIMES Subsidiaries, including but not limited to the following:

 

a. Executing the resolution of the investors;
b. Deciding the company’s operation plan and investment scheme;
c. Composing the annual financial budget and settlement plan;
d. Formulating the profit distribution plan and the loss compensation plan;
e. Formulating the plans regarding to the increase or decrease of the registered capital and the issuance of the corporate bond;

 

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f. Formulating the plans regarding to the matters including merger, division, change of corporate form and dissolution of the company;
g. Deciding on the establishment of the internal management structure of the company;
h. Formulating the basic rules and regulations of the company;
i. Representing the company to sign relative documents;
j. Other responsibilities and rights provided by ASIA TIMES and ASIA TIMES Subsidiaries’ articles of association.

 

ARTICLE 3 – SERVICE FEES

 

3.1 The Service Fees to be charged by HUAYA for its provision of services hereunder shall be as follows:

 

(1) All revenue of ASIA TIMES and its subsidiaries, including revenue from the business on commercial consulting and counselling of IPO, which can be waived by HUAYA from time to time in its sole discretion.

 

(2) The amount of Service Fees agreed in (1) above shall be paid to HUAYA on a monthly basis following the proportion according to their actual incomes from main business in the current month.

 

3.2 Upon written agreement between HUAYA and ASIA TIMES and its subsidiaries, the fees agreed in Article 3.1 or their calculation percentage may be adjusted according to the circumstances in the actual performance, with particulars thereof to be stipulated in separate supplementary agreements to be entered into between the two Parties as an appendix hereto.

 

3.3 ASIA TIMES and its subsidiaries shall, in accordance with this Article 3, pay promptly the amounts due and payable to HUAYA to the bank account designated by HUAYA . In case that HUAYA is to change its bank account, HUAYA shall notify the ASIA TIMES and its subsidiaries thereof in writing seven (7) working days in advance.

 

ARTICLE 4 – EXCLUSIVITY

 

4.1 Without the prior consent in writing by HUAYA , none of the ASIA TIMES and its subsidiaries may accept any management and consulting services from any other third parties.

 

4.2 HUAYA shall no longer provide any other commercial consulting companies at the local places of the ASIA TIMES and its subsidiaries with management and consulting services similar to those hereunder. However, this Article does not restrict HUAYA from providing such similar services to Commercial Consulting servicers in other cities. Such new Commercial Consulting servicers may, through signing Acknowledgement Letter in the form of Appendix 1 hereof, become a party of this Agreement, to enjoy the same rights of the other Commercial Consulting servicers and to assume the same obligations of the other Commercial Consulting servicers;

 

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provided that such new Commercial Consulting servicers shall perform, starting from the date of execution of the Acknowledgement Letter, the payment obligations hereunder of the Exclusive Service Fees. As the rights and obligations of the Commercial Consulting servicers hereunder are severable and independent from each other’s, such new Commercial Consulting servicers will not, by their joining in this Agreement, affect in any way the rights and obligations of the existing Commercial Consulting servicers, with the joining-in of such new Commercial Consulting servicers only subject to the confirmation thereof by HUAYA in signing an agreement among them. ASIA TIMES or its subsidiaries agree hereby irrevocably and unconditionally to such joining-in, and confirm further that any issue concerning the joining-in of new Commercial Consulting servicers for business cooperation hereunder will not be subject to the agreement of the existing Commercial Consulting servicers.

 

ARTICLE 5 – INTELLECTUAL PROPERTY

 

5.1 The rights of intellectual property concerning the work product created during the process of services provision by HUAYA hereunder shall belong to HUAYA .

 

5.2 During the valid term of this Agreement, if HUAYA develops any new solutions that may be used in the daily commercial consulting business or management of the Commercial Consulting servicers, or provides the Commercial Consulting servicers with other services not included herein at their request, the Parties agree to cooperate with each other thereon in the way, in priority, agreed herein or in the way similar to that agreed herein, with necessary adjustments to be made to the Service Fee payment percentage or the most similar percentage agreed in Article 3.

 

ARTICLE 6 – CONFIDENTIALITY

 

6.1 No matter if this Agreement is terminated or not, the Parties shall be obliged to keep in strict confidence the commercial secret, proprietary information and customer information in relation to other Parties and any other non-open information of other Parties which they may become aware of as the result of their performance hereof (collectively, “CONFIDENTIAL INFORMATION”).

 

Unless with prior consent of such other Parties in writing or required to disclose to parties other than Parties hereof according to relevant laws, regulations or listing rules, no Party shall disclose the Confidential Information or any part thereof to any parties other than Parties hereof; unless for the purpose of performance hereof, no Party shall use directly or indirectly the Confidential Information or any part thereof for any other purposes, or it shall bear the default liability and indemnify the losses.

 

6.2 Upon termination of this Agreement, the Parties shall, upon demand by other Parties providing the Confidential Information, return, destroy or otherwise dispose of all the documents, materials or software containing the Confidential Information and suspend using such Confidential Information.

 

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6.3 Notwithstanding any other provisions herein, the validity of this Article shall not be affected by the suspension or termination of this Agreement.

 

ARTICLE 7 – UNDERTAKINGS AND GUARANTEES

 

HUAYA , ASIA TIMES and ASIA TIMES Subsidiaries hereby undertake and guarantee for each of its own that:

 

7.1 it is a company of limited liabilities duly registered and legally existing under the PRC laws with independent legal person status, and with full and independent status and legal capacity to execute, deliver and perform this Agreement, and may act independently as a subject of actions;

 

7.2 its has full internal power and authority within its company to execute and deliver this Agreement and all the other documents to be entered into by it in relation to the transaction referred to herein, and it has the full power and authority to complete the transaction referred to herein. This Agreement shall be executed and delivered by it legally and properly, and constitutes the legal and binding obligations on it and is enforceable on it in accordance with its terms and conditions;

 

7.3 it has all business licenses necessary for its business operations as of the effective date of this Agreement, has full rights and qualifications to engage in its currently engaged businesses, may perform its obligations hereunder, and will maintain, during the valid term of this Agreement, the validity of all its such business licenses; and

 

7.4 it shall inform promptly the other Parties of any litigations it is involved in and other disadvantageous circumstances that may affect the performance hereof, and shall endeavor at its best efforts to prevent the deterioration of losses caused by such litigations or other disadvantageous circumstances.

 

ARTICLE 8 – AGREEMENT TERM

 

8.1 The Parties hereby confirm that, once this Agreement is formally executed by the Parties, this Agreement shall be irrevocably effective as far as the date 9 th October, 2018 ; unless terminated earlier by the Parties in writing, this Agreement shall be valid for a term of 20 years starting from the date 9 th October, 2018 .

 

Notwithstanding the provision in the preceding sentence, as the rights and obligations of each of the Commercial Consulting servicers there under are separate and independent from each other, upon agreement in writing by HUAYA, this Agreement may be terminated only in relation to any one of the Commercial Consulting servicers, with such termination not subject to the agreement of the other Commercial Consulting servicers.

 

8.2 The Parties hereby confirm that, from the year 2019 onward, the amount of the Service Fees shall be negotiated on January 1 each year, with any adjustment thereto (if any) to be made in writing as an appendix hereto.

 

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8.3 Upon termination of this Agreement, each Party shall continue to abide by its obligations under Articles 3 and 6 hereunder.

 

ARTICLE 9 – NOTICE

 

9.1 Any notice, request, demand and other correspondences made as required by or in accordance with this Agreement shall be made in writing and delivered to the relevant Party.

 

9.2 The abovementioned notice or other correspondences shall be deemed to have been delivered when it is transmitted if transmitted by facsimile or telex; it shall be deemed to have been delivered when it is delivered if delivered in person; it shall be deemed to have been delivered five (5) days after posting the same if posted by mail.

 

ARTICLE 10 – DEFAULT LIABILITY

 

10.1 The Parties agree and confirm that, if any Party (the “DEFAULTING PARTY”) breaches substantially any of the agreements made under this Agreement, or fails substantially to perform any of the obligations under this Agreement, such a breach shall constitute a default under this Agreement (a “DEFAULT”), then the non-defaulting Party whose interest is damaged thereby shall have the right to require the Defaulting Party to rectify such Default or take remedial measures within a reasonable period. If the Defaulting Party fails to rectify such Default or take remedial measures within such reasonable period or within ten (10) days of the non-defaulting Party notifying the Defaulting Party in writing and requiring it to rectify the Default, then the non-defaulting Party shall have the right, at its own discretion, to (1) terminate this Agreement and require the Defaulting Party to indemnify it fully for the damage; or (2) demand the enforcement of the Defaulting Party’s obligations hereunder and require the Defaulting Party to indemnify it fully for the damage.

 

10.2 The Parties agree that any of the following events shall be deemed to have constituted the Default:

 

(1) Any of ASIA TIMES or its subsidiaries or their respective shareholders breaches any provisions of the Entrustment Agreement on Shareholder’s Voting Rights PROXY AGREEMENT entered into by it with HUAYA ;

 

(2) any of ASIA TIMES or its subsidiaries or their respective shareholders breaches any provisions of other Agreements entered into by it with HUAYA on 9 th October, 2018 .

 

10.3 The Parties agree and confirm that under no circumstances shall ASIA TIMES and ASIA TIMES Subsidiaries be able to demand termination of this Agreement for whatever reason, unless the Laws or this Agreement provides for otherwise.

 

10.4 Not withstanding any other provisions herein, the validity of this Article 10 shall not be affected by the suspension or termination of this Agreement.

 

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ARTICLE 11 – FORCE MAJEURE

 

In the event of earthquake, typhoon, flood, fire, war, computer virus, loophole in the design of tooling software, internet system encountering hacker’s invasion, change of policies or laws, and other unforeseeable or unpreventable or unavoidable event of force majeure, which directly prevents a Party from performing this Agreement or performing the same on the agreed condition, the Party encountering such a force majeure event shall forthwith issue a notice by a facsimile and, within ten (10) days, present the documents proving the details of such force majeure event and the reasons for which this Agreement is unable to be performed or is required to be postponed in its performance, and such proving documents shall be issued by the notaries office of the area where such force majeure event takes place. The Parties shall consult each other and decide whether this Agreement shall be waived in part or postponed in its performance with regard to the extent of impact of such force majeure event on the performance of this Agreement. No Party shall be liable to compensate for the economic losses brought to the other Parties by the force majeure event.

 

ARTICLE 12 – MISCELLANEOUS

 

12.1 This Agreement shall be prepared in the Chinese language in two (2) original copies, with each involved Party holding one (1) copy hereof.

 

12.2 The formation, validity, execution, amendment, interpretation and termination of this Agreement shall be subject to the PRC Laws.

 

12.3 Any disputes arising hereunder and in connection herewith shall be settled through consultations among the Parties, and if the Parties cannot reach an agreement regarding such disputes within thirty (30) days of their occurrence, such disputes shall be submitted to Shenzhen Court of International Arbitration in accordance with the arbitration rules of such Commission, and the arbitration award shall be final and binding on the Parties involved in such dispute.

 

12.4 Any rights, powers and remedies empowered to any Party by any provisions herein shall not preclude any other rights, powers and remedies enjoyed by such Party in accordance with laws and other provisions under this Agreement, and the exercise of its rights, powers and remedies by a Party shall not preclude its exercise of its other rights, powers and remedies by such Party.

 

12.5 Any failure or delay by a Party in exercising any of its rights, powers and remedies hereunder or in accordance with laws (the “PARTY’S RIGHTS”) shall not lead to a waiver of such rights, and the waiver of any single or partial exercise of the Party’s Rights shall not preclude such Party from exercising such rights in any other way and exercising the remaining part of the Party’s Rights.

 

12.6 The titles of the Articles contained herein shall be for reference only, and in no circumstances shall such titles be used in or affect the interpretation of the provisions hereof.

 

12.7 Each provision contained herein shall be severable and independent from each of other provisions, and if at any time any one or more articles herein become invalid, illegal or unenforceable, the validity, legality or enforceability of the remaining provisions herein shall not be affected as a result thereof.

 

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12.8 Once executed, this Agreement shall replace any other legal documents entered into by the relevant Parties hereof in respect of the same subject matter hereof.

 

12.9 Any amendments or supplements to this Agreement shall be made in writing and shall take effect only when properly signed by the Parties to this Agreement.

 

12.10 No Party shall assign any of its rights and/or obligations hereunder to any parties other than the Parties hereof without the prior written consent from the other Parties.

 

12.11 This Agreement shall be binding on the legal successors of the Parties.

 

12.12 The rights and obligations of each of the ASIA TIMES Subsidiaries hereunder are independent and severable from each other, and the performance by any of the ASIA TIMES Subsidiaries of its obligations hereunder shall not affect the performance by any other of the ASIA TIMES Subsidiaries of their obligations hereunder.

 

12.13 Each of the Parties undertakes to declare and pay respectively according to the Laws any taxes in relation to the transaction hereunder.

 

[THE REMAINDER OF THIS PAGE IS LEFT BLANK]

 

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IN WITNESS HEREOF, the Parties have caused this Exclusive Service Agreement to be executed in Guangzhou as of the date first hereinabove mentioned.

 

HUAYA (SHENZHEN) INFORMATION CO., LTD. (Company chop)
     
Signed by: /s/ Qiang Chen  
Name: Qiang Chen  
Position: Authorized Representative  
     
QIANHAI ASIA TIMES (SHENZHEN) INTERNATIONAL FINANCIAL SERVICES CO., LTD. (Company chop)
 
Signed by: /s/ Qiang Chen  
Name: Qiang Chen  
Position: Authorized Representative  

 

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Exhibit 10.6

 

CONFIDENTIAL

 

EQUITY PLEDGE AGREEMENT

 

AMONG

 

LIU RONGHUA

 

CHEN QIANG

 

QIANHAI ASIA TIMES (SHENZHEN) INTERNATIONAL FINANCIAL

SERVICES CO., LTD..

 

AND

 

HUAYA CONSULTANT (SHENZHEN) CO., LTD.

 

October 9 th , 2018

 

 

 

 

EQUITY PLEDGE AGREEMENT

 

This EQUITY PLEDGE AGREEMENT (hereinafter, this “AGREEMENT”) is entered into in the People’s Republic of China (hereinafter, “PRC”) in Shenzhen as of October 9 th , 2018 by and among the following Parties:

 

(1) Liu Ronghua

ADDRESS: No. 16, 12 Team, Datang Village, Dali Town, Beiliu, Guangxi Province, China

ID Number: 450681199012101418

 

(2) ChenQiang

ADDRESS: Room 601, Unit 1, Building 9, Chengshi Shangu, Nanshan District, Shenzhen City, Guangdong Province, China

ID Number:320503197010060537

 

(3) QIANHAI ASIA TIMES (SHENZHEN) INTERNATIONAL FINANCIAL SERVICES CO., LTD..( “ASIA TIMES”)

 

REGISTERED ADDRESS: Room 3902A, Building 5, Dachong International Center, No.39 Tong Gu Road, Yuehai Street, Nanshan district, Shen Zhen, China

 

(4) HUAYA CONSULTANT (SHENZHEN) Co., Ltd. (HUAYA)

 

REGISTERED ADDRESS: Room 3902, Building 5, Dachong International Center, No.39 Tong Gu Road, Yuehai Street, Nanshan district, Shen Zhen, China

 

(The above Parties hereinafter each referred to as a “PARTY” individually, and collectively, the “PARTIES”. Among them, Liu Ronghua and Chen Qiang hereinafter referred to as the “INDIVIDUAL PLEDGORS”; the Individual Pledgor and ASIA TIMES hereinafter referred to as a “PLEDGOR” individually, and collectively, the “PLEDGORS”; HUAYA hereinafter referred to as a “PLEDGEE”.)

 

WHEREAS:

 

(l)As of the date of this Agreement, Liu Ronghua and Cheng Qiang are the registered shareholders of ASIA TIMES, legally holding equity in ASIA TIMES, of which Liu Ronghua holding 98.5% interest, Chen Qiang holding 1.5% . Liu Ronghua intends to pledged 98.5% of the equity interests in ASIA TIMES which are legally owned by him to the HUAYA, and Chen Qiang intends to pledged 1.5% of the equity interests in ASIA TIMES which are legally owned by him to the HUAYA.

 

 

 

 

(2) Pursuant to the Call Option Agreement dated as of September 5 th , 2018 among HUAYA, the Pledgors and the Target Companies (as defined below) (hereinafter, the “CALL OPTION AGREEMENT”), the Pledgors shall transfer part or all of the equity interest of the Target Companies to HUAYA and/or any other entity or individual designated by HUAYA at the request of the HUAYA.

 

(3)Pursuant to the Shareholders’ Voting Right Proxy Agreement dated as of September 5 th , 2018 among HUAYA, the Target Company and the Pledgors (hereinafter, the “PROXY AGREEMENT”), Pledgors have already irrevocably entrusted the personnel designated by HUAYA then with full power to exercise on their behalf all of their shareholders’ voting rights in respect of the relevant Target Companies.

 

(4) Pursuant to the Exclusive Service Agreement dated as of September 5 th , 2018 among HUAYA and the Target Companies (hereinafter, the “SERVICE AGREEMENT”), the Target Companies have already engaged HUAYA exclusively to provide them with relevant management and consultation and other services, for which the Target Companies will respectively pay HUAYA services accordingly.

 

(5)As security for performance by the Pledgors of the Contract Obligations (as defined below) and repayment of the Guaranteed Liabilities (as defined below), the Pledgors agree to pledge all of their Target Company Equity to the Pledgee and grant the Pledgee the right to request for repayment in first priority and the Target Companies agree such equity pledge arrangement.

 

THEREFORE, the Parties hereby have reached the following agreement upon mutual consultations:

 

ARTICLE 1 - DEFINITION

 

1.1 Except as otherwise construed in the context, the following terms in this Agreement shall be interpreted to have the following meanings:

 

“CONTRACT OBLIGATIONS” shall mean all contractual obligations of a Pledgor under the Call Option Agreement and Proxy Agreement; all contractual obligations of a Target Company under the Exclusive Service Agreement, Call Option Agreement, Proxy Agreement; and all contractual obligations of a Pledgor under this Agreement.

 

“TARGET COMPANY” shall mean, to Liu Ronghua and Chen Qiang, ASIA TIMES and to ASIA TIMES, any and all of the companies in which it held equity interest (exclusive of Qianhai ASIA TIMES (Shenzhen) International Fund Management Company (“Fund Company”)).

 

 

 

 

“GUARANTEED LIABILITIES” shall mean all direct, indirect and consequential losses and losses of foreseeable profits suffered by Pledgee due to any Breaching Event (as defined below) a Pledgor and/or a Target Company, and all fees incurred by Pledgee for the enforcement of the Contractual Obligations of a Pledgor and/or a Target Company.

 

“TRANSACTION AGREEMENTS” shall mean the Call Option Agreement and the Proxy Agreement in respect of a Pledgor; the Exclusive Service Agreement, and Proxy Agreement in respect of a Target Company.

 

“BREACHING EVENT” shall mean any breach by either Pledgor of its Contract Obligations under the Proxy Agreement, Call Option Agreement or this Agreement; any breach by a Target Company of its Contract Obligations under the Service Agreement, Call Option Agreement and/or Proxy Agreement.

 

“PLEDGED PROPERTY” shall mean (1) in respect of Liu Ronghua and Chen Qiang, 98.5% and 1.5% of the equity interests in ASIA TIMES which are legally owned by them as of the effective date hereof and is to be pledged by them to the Pledgee according to provisions hereof as the security for the performance by them and ASIA TIMES of their Contractual Obligations, and the increased capital contribution and equity interest described in Articles 2.6 and 2.7 hereof; (2) in respect of ASIA TIMES, all of the equity interest in the Target Companies which is legally owned by it as of the effective date hereof and is to be pledged to the Pledgee by it according to provisions hereof as the security for the performance of the Contractual Obligations by it and the Target Companies (for details of such equity interest, see Appendix I), and the increased capital contribution and equity interest described in Articles 2.6 and 2.7 hereof.

 

“PRC LAW” shall mean the then valid laws, administrative regulations, administrative rules, local regulations, judicial interpretations and other binding regulatory documents of the People’s Republic of China.

 

1.2 The references to any PRC Law here in shall be deemed:

 

(l) to include the references to the amendments, changes, supplements and reenactments of such law, irrespective of whether they take effect before or after the formation of this Agreement; and

 

(2) to include the references to other decisions, notices or regulations enacted in accordance therewith or effective as a result thereof.

 

1.3 Except as otherwise stated in the context herein, all references to an Article, clause, item or paragraph shall refer to the relevant part of this Agreement.

 

 

 

 

ARTICLE 2 - EQUITY PLEDGE

 

2.1 Each Pledgor hereby agrees to pledge the Pledged Property, which it legally owns and has the right to dispose of, to Pledgee according to the provisions hereof as the security for the performance of the Contract Obligations and the repayment of the Guaranteed Liabilities. Each Target Company hereby agrees that the Pledgors legally holding equity interest in it to pledge the Pledged Property to the Pledgee according to the provisions hereof.

 

2.2 Each Pledgor hereby undertakes that it will be responsible for, recording the arrangement of the equity pledge hereunder (hereinafter, the “EQUITY PLEDGE”) on the shareholder register of each Target Company on the date hereof, and will do its best endeavor to make registration with registration authorities of industry and commerce of each Target Company. Each Target Company respectively undertakes that it will do its best to cooperate with the Pledgors to complete the registration with authorities of industry and commerce under this Article.

 

2.3 During the valid term of this Agreement, except for the willful misconduct or gross negligence of Pledgee which has direct cause and effect relationship the reduction in value of the Pledged Property, Pledgee shall not be liable in any way to, nor shall Pledgors have any right to claim in any way or propose any demands on Pledgee, in respect of the said reduction in value of the Pledged Property.

 

2.4 To the extent not violating provision of Article 2.3 above, in case of any possibility of obvious reduction in value of the Pledged Property which is sufficient to jeopardize Pledgee’s rights, Pledgee may at any time auction or sell off the Pledged Property on behalf of Pledgors, and discuss with Pledgors to use the proceeds from such auction or sale-off as pre-repayment of the Guaranteed Liabilities, or may submit such proceeds to the local notary institution where Pledgee are domiciled (any fees incurred in relation thereto shall be borne by Pledgors).

 

2.5 HUAYA as Pledgee shall be deemed to have created the encumbrance of first order in priority on the Pledged Property, and in case of any Breaching Event, Pledgee shall have the right to dispose of the Pledged Property in the way set out in Article 4 hereof.

 

2.6 Only upon prior consent by Pledgee shall Pledgors be able to increase their capital contribution to any or all of the Target Companies. Further capital contribution made by Pledgor (s) in the Target Company shall also be part of the Pledged Property.

 

2.7 Only upon prior consent by Pledgee shall Pledgors be able to receive dividends or share profits from the Pledged Property. The dividends or the profits received by Pledgors from the Pledged Property shall be deposited into Pledgee’s bank account designated by Pledgee respectively, to be under the supervision of Pledgee and used as the Pledged Property to repay in priority the Guaranteed Liabilities.

 

 

 

 

2.8 Liu Ronghua and Chen Qiang, agree to bear joint liabilities respectively to Pledgee upon occurrence of any Breaching Event on the part of ASIA TIMES and Pledgee shall have the right, upon occurrence of the Breaching Event, to dispose of any Pledged Property of either of Pledgors in accordance with the provisions hereof.

 

ARTICLE 3 - RELEASE OF PLEDGE

 

In respect of equity interest of any Target Company, upon full and complete performance by relevant Pledgors of all of their Contractual Obligations, Pledgee shall, at the request of relevant Pledgors, release the pledge created on such Target Company under this Agreement, and shall cooperate with relevant Pledgors to go through the formalities to cancel the record of the Equity Pledge in the shareholder register of the relevant Target Company, with the reasonable fees incurred in connection with such release to be borne by Pledgee with the same proportion.

 

ARTICLE 4 - DISPOSAL OF THE PLEDGED PROPERTY

 

4.1 Pledgors, Target Companies and Pledgee hereby agree that, in case of any Breaching Event, Pledgee shall have the right to exercise, upon giving written notice to Pledgors, all of the remedial rights and powers enjoyable by them under PRC Law, including but not limited to being repayment in priority with proceeds from auctions or sale-offs of the Pledged Property. Pledgee shall not be liable for any loss as the result of their reasonable exercise of such rights and powers.

 

4.2 Pledgee shall have the right to designate in writing its legal counsel or other agents to exercise on their respective behalf any and all rights and powers set out above, and neither Pledgors nor Target Companies shall not oppose thereto.

 

4.3 The reasonable costs incurred by Pledgee in connection with their exercise of any and all rights and powers set out above shall be borne by Pledgors, and Pledgee shall have the right to deduct the costs actually incurred from the proceeds that they acquire from the exercise of the rights and powers.

 

4.4 The proceeds that Pledgee acquire from the exercise of their respective rights and powers shall be used in the priority order as follows:

 

First, to pay any cost incurred in connection with the disposal of the Pledged Property and the exercise by Pledgee of their respective rights and powers (including remuneration paid to their respective legal counsels and agents);

 

- Second, to pay any taxes and levies payable for the disposal of the Pledged Property; and

 

 

 

 

-Third, to repay Pledgee for the Guaranteed Liabilities.

 

In case of any balance after payment of the above amounts, Pledgee shall return the same to Pledgors or other persons entitled thereto according to the relevant laws and rules or submit the same to the local notary institution where Pledgee are domiciled (any fees incurred in relation thereto shall be borne by Pledgors).

 

4.5 Pledgee shall have the option to exercise, simultaneously or in certain sequence, any of the remedies at breaching that it is entitled to in respect of the equity interest of any Target Company holding by any Pledgor; Pledgee shall not be obliged to exercise other remedies at breaching before their exercise of the right to the auctions or sale-offs of the Pledged Property hereunder. Pledgors or Target Companies shall not oppose to whether Pledgee exercise any part of the right to the pledge or the sequence of exercising the pledge interest.

 

ARTICLE 5 - FEES AND COSTS

 

All costs actually incurred in connection with the establishment of the Equity Pledge hereunder, including but not limited to stamp duties, any other taxes, all legal fees, etc shall be borne by Pledgee with the same proportion.

 

ARTICLE 6 - CONTINUITY AND NO WAIVE

 

The Equity Pledge hereunder is a continuous guarantee, with its validity to continue until the full performance of the Contractual Obligations or the full repayment of the Guaranteed Liabilities. Neither exemption or grace period granted by Pledgee to Pledgors in respect of their breach, nor delay by Pledgee in exercising any of their rights under this Agreement shall affect the rights of Pledgee under this Agreement, relevant PRC Law, the rights of Pledgee to demand at any time thereafter the strict performance of this Agreement by Pledgors or the rights Pledgee may be entitled to due to subsequent breach by Pledgors of the obligations under this Agreement.

 

ARTICLE 7 - REPRESENTATIONS AND WARRANTIES BY PLEDGORS

 

Each of Pledgors hereby, in respect of itself and Target Company in which it holds equity interest, represents and warrants to Pledgee as follows:

 

7.1 Each Individual Pledgor is a PRC citizen with full capacity of disposition and has obtained due authorization to execute, deliver and perform this Agreement and can independently be a subject of actions; ASIA TIMES is a limited liability corporation duly incorporated and validly existing under PRC Law, has full right and authorization to execute and deliver this Agreement and other documents relating to the transaction as stipulated in this Agreement and to be executed by them. It also has full right and authorization to complete the transaction stipulated in this Agreement.

 

 

 

 

7.2 Target Company is a limited liability corporation duly incorporated and validly existing under PRC Law, it has independent status as a legal person; it has full and independent legal status and capacity to execute, deliver and perform this Agreement and can independently be a subject of actions. It has full right and authorization to execute and deliver this Agreement and other documents relating to the transaction as stipulated in this Agreement and to be executed by them. It also has full right and authorization to complete the transaction stipulated in this Agreement.

 

7.3 All reports, documents and information concerning Pledgors and all matters as required by this Agreement which are provided by Pledgors to Pledgee before this Agreement comes into effect are true, correct and effective in all material aspects as of the execution hereof.

 

7.4 At the time of the effectiveness of this Agreement, Pledgors are the sole legal owner of the Pledged Property, with no existing dispute whatever concerning the ownership of the Pledged Property. Pledgors have the right to dispose of the Pledged Property or any part thereof.

 

7.5 Except for the encumbrance set on the Pledged Property hereunder and the rights set under the Transaction Agreements, there is no other encumbrance or third party interest set on the Pledged Property.

 

7.6 The Pledged Property is capable of being pledged or transferred according to the laws, and Pledgors have the full right and power to pledge the Pledged Property to Pledgee according to this Agreement.

 

7.7 This Agreement constitutes the legal, valid and binding obligations on Pledgors when it is duly executed by Pledgors.

 

7.8 Any consent, permission, waive or authorization by any third person, or any approval, permission or exemption by any government authority, or any registration or filing formalities (if required by laws) with any government authority to be handled or obtained in respect of the execution and performance hereof and the Equity Pledge hereunder have already been handled or obtained, and will be fully effective during the valid term of this Agreement.

 

7.9 The execution and performance by Pledgors of this Agreement are not in violation of or conflict with any laws applicable to them, or any agreement to which they are a party or which has binding effect on their assets, any court judgment, any arbitration award, or any administration authority decision.

 

 

 

 

7.10 The pledge hereunder constitutes the encumbrance of first order in priority on the Pledged Property.

 

7.11 All taxes and fees payable in connection with acquisition of the Pledged Property have already been paid in full amount by Pledgors.

 

7.12 There is no pending or, to the knowledge of Pledgors, threatened litigation, legal process or demand by any court or any arbitral tribunal against Pledgors, or their property, or the Pledged Property, nor is there any pending or, to the knowledge of Pledgors, threatened litigation, legal process or demand by any government authority or any administration authority against Pledgors, or their property, or the Pledged Property, which is of material or detrimental effect on the economic status of Pledgors or their capability to perform the obligations hereunder and the Guaranteed Liabilities.

 

7.13 Pledgors hereby warrant to Pledgee that the above representations and warranties will remain true, correct and effective at any time and under any circumstance before the Contractual Obligations are fully performed or the Guaranteed Liabilities are fully repaid, and will be fully complied with.

 

ARTICLE 8 - REPRESENTATIONS AND WARRANTIES

BY TARGET COMPANY

 

Each of Target Company hereby individually represents and warrants to Pledgee as follows:

 

8.1 Target Company is a limited liability corporation duly incorporated and validly existing under PRC Law, with full capacity of disposition and has obtained due authorization to execute, deliver and perform this Agreement and can independently be a subject of actions.

 

8.2 All reports, documents and information concerning Pledged Property and all matters as required by this Agreement which are provided by Target Company to Pledgee before this Agreement comes into effect are true, correct and effective in all material aspects as of the execution hereof.

 

8.3 All reports, documents and information concerning Pledged Property and all matters as required by this Agreement which are provided by Target Company to Pledgee after this Agreement comes into effect are true, correct and effective in all material aspects upon provision.

 

 

 

 

8.4 This Agreement constitutes the legal, valid and binding obligations on Target Company when it is duly executed by Target Company.

 

8.5 It has full right and authorization to execute and deliver this Agreement and other documents relating to the transaction as stipulated in this Agreement and to be executed by them. It also has full right and authorization to complete the transaction stipulated in this Agreement.

 

8.6 There is no pending or, to the knowledge of Target Company, threatened litigation, legal process or demand by any court or any arbitral tribunal against Target Company, or their property (including but are not limited to the Pledged Property), nor is there any pending or, to the knowledge of Target Company, threatened litigation, legal process or demand by any government authority or any administration authority against Target Company, or their property (including but are not limited to the Pledged Property), which is of material or detrimental effect on the economic status of Target Company or their capability to perform the obligations hereunder and the Guaranteed Liabilities.

 

8.7 Each of Target Company hereby agree to bear joint responsibilities to Pledgee in respect of the representations and Warranties made by its relevant Pledgor according to Article 7.5, Article 7.6, Article 7.7, Article 7.9 and Article 7.11 hereof.

 

8.8 Target Company hereby warrant to Pledgee that the above representations and warranties will remain true, correct and effective at any time and under any circumstance before the Contractual Obligations are fully performed or the Guaranteed Liabilities are fully repaid, and will be fully complied with.

 

ARTICLE 9 - UNDERTAKINGS BY PLEDGORS

 

Each of Pledgors hereby individually undertakes to Pledgee in respect of it and Its Target Company of which it holds equity as follows:

 

9.1 Without the prior written consent by Pledgee, Pledgors shall not establish or permit to establish any new pledge or any other encumbrance on the Pledged Property.

 

9.2 Without first giving written notice to Pledgee and having Pledgee’s prior written consent, Pledgors shall not transfer the Pledged Property, and any attempt by Pledgors to transfer the Pledged Property shall be null and void. The proceeds from transfer of the Pledged Property by Pledgors shall be used to repay to Pledgee in advance the Guaranteed Liabilities or submit the same to the third party agreed with Pledgee.

 

 

 

 

9.3 In case of any litigation, arbitration or other demand which may affect detrimentally the interest of Pledgors or Pledgee under the Transaction Agreements and hereunder or the Pledged Property, Pledgors undertake to notify Pledgee thereof in writing as soon as possible and promptly and shall take, at the reasonable request of Pledgee, all necessary measures to ensure the pledge interest of Pledgee in the Pledged Property.

 

9.4 Pledgors shall not carry on or permit any act or action which may affect detrimentally the interest of Pledgee under the Transaction Agreements and hereunder or the Pledged Property.

 

9.5 Pledgors guarantee that they shall, at the reasonable request of Pledgee, take all necessary measures and execute all necessary documents (including but not limited to supplementary agreement hereof) in respect of ensuring the pledge interest of Pledgee in the Pledged Property and the exercise and realization of the rights thereof.

 

9.6 In case of assignment of any Pledged Property as the result of the exercise of the right to the pledge hereunder, Pledgors guarantee that they will take all necessary measures to realize such assignment.

 

9.7 Liu Ronghua and Chen Qiang, undertake individually to bear joint responsibilities with the other party if the performance of the Article 9 thereof of the other Party refers to ASIA TIMES; Liu Ronghua , Chen Qiang and ASIA TIMES undertake individually to bear joint responsibilities with the other party if the performance of Article 9 thereof of the other party refers to any Target Company listed in the Appendix I to this Agreement.

 

ARTICLE 10 - UNDERTAKINGS BY TARGET COMPANY

 

10.1 Any consent, permission, waive or authorization by any third person, or any approval, permission or exemption by any government authority, or any registration or filing formalities (if required by laws) with any government authority to be handled or obtained in respect of the execution and performance hereof and the Equity Pledge hereunder will be cooperated to handle or obtain by Target Company to their best and will be ensured to remain full effective during the valid term of this Agreement.

 

10.2 Without the prior written consent by Pledgee, Target Company shall not cooperate to establish or permit to establish any new pledge or any other encumbrance on the Pledged Property.

 

10.3 Without having Pledgee’s prior written consent, Target Company shall not cooperate to transfer or permit to transfer the Pledged Property.

 

 

 

 

10.4 In case of any litigation, arbitration or other demand which may affect detrimentally the interest of Target Company or Pledgee under the Transaction Agreements and hereunder or the equity of Target Company as the Pledged Property, Target Company undertake to notify Pledgee thereof in writing as soon as possible and promptly and shall take, at the reasonable request of Pledgee, all necessary measures to ensure the pledge interest of Pledgee in the Pledged Property.

 

10.5 Target Company shall not carry on or permit any act or action which may affect detrimentally the interest of Pledgee under the Transaction Agreements and hereunder or the Pledged Property.

 

10.6 Target Company shall provide Pledgee with the financial statement of the last calendar season within the first month of each calendar season, including but are not limited to the balance sheet, the income statement and the statement of cash flow.

 

10.7 Target Company guarantee that they shall, at the reasonable request of Pledgee, take all necessary measures and execute all necessary documents (including but not limited to supplementary agreement hereof) in respect of ensuring the pledge interest of Pledgee in the Pledged Property and the exercise and realization of the rights thereof.

 

10.8 In case of assignment of any Pledged Property as the result of the exercise of the right to the pledge hereunder, Target Company guarantee that they will take all necessary measures to realize such assignment.

 

ARTICLE 11 - ENCUMBRANCE OF FIRST ORDER IN PRIORITY

 

11.1 HUAYA has the encumbrance of first order in priority on any and all Pledged Property. Pursuant to the stipulations of the Transaction Agreement, any Breaching Event under any Transaction Agreement shall result in the occurrence of Breaching Event under other Transaction Agreement, HUAYA shall claim the pledge interest hereunder to Pledgor relevant to the Breaching Event, and be repaid in priority in the proportion of their respective security amount from the proceeds obtained according to the disposal of Pledged Property stipulated in Article 4 hereof.

 

ARTICLE 12 - CHANGE OF CIRCUMSTANCES

 

12 As supplement and subject to compliance with other terms of the Transaction Agreements and this Agreement, in case that at any time the promulgation or change of any PRC Law, regulations or rules, or change in interpretation or application of such laws, regulations and rules, or the change of the relevant registration procedures enables Pledgee to believe that it will be illegal or in conflict with such laws, regulations or rules to further maintain the effectiveness of this Agreement and/or dispose of the Pledged Property in the way provided herein, Pledgors and Target Company shall, at the written direction of Pledgee and in accordance with the reasonable request of Pledgee, promptly take actions and/or execute any agreement or other document, in order to:

 

 

 

 

(1) keep this Agreement remain in effect;
(2) facilitate the disposal of the Pledged Property in the way provided herein; and/or
(3) maintain or realize the intention or the guarantee established hereunder.

 

ARTICLE 13 - EFFECTIVENESS AND TERM OF THIS AGREEMENT

 

13.1 This Agreement shall become effective upon the satisfaction of all of the following conditions in respect of any Target Company and any Pledgor who holds the equity of the Target Company:

 

(1) this Agreement is duly executed by Pledgors, the Target Company and the Pledgors who pledge the equity of the Target Company; and

 

(2) the Equity Pledge hereunder has been legally recorded in the shareholders’ register of the Target Company.

 

Pledgors shall provide the registration certification of the Equity Pledge being recorded in the shareholders’ register as mentioned above to Pledgee in a way satisfactory to Pledgee.

 

13.2 This Agreement shall have its valid term until the full performance of the Contractual Obligations or the full repayment of the Guaranteed Liabilities.

 

ARTICLE 14 - NOTICE

 

14.1 Any notice, request, demand and other correspondences made as required by or in accordance with this Agreement shall be made in writing and delivered to the relevant Party.

 

14.2 The abovementioned notice or other correspondences shall be deemed to have been delivered when it is transmitted if transmitted by facsimile or telex; it shall be deemed to have been delivered when it is delivered if delivered in person; it shall be deemed to have been delivered five (5) days after posting the same if posted by mail.

 

ARTICLE 15 - MISCELLANEOUS

 

15.1 Pledgee may, upon notice to Pledgors but not necessarily with Pledgors’ consent, assign Pledgee’s rights and/or obligations hereunder to any third party; provided that Pledgors may not, without Pledgee’s prior written consent, assign Pledgors’ rights, obligations and/or liabilities hereunder to any third party. Successors or permitted assignees (if any) of Pledgors shall continue to perform the obligations of Pledgors under this Agreement.

 

 

 

 

15.2 This Agreement shall be prepared in the Chinese language in six (6) original copies, with each involved Party holding one (1).

 

15.3 The formation, validity, execution, amendment, interpretation and termination of this Agreement shall be subject to PRC Law.

 

15.4 Any disputes arising hereunder and in connection herewith shall be settled through consultations among the Parties, and if the Parties cannot reach an agreement regarding such disputes within thirty (30) days of their occurrence, such disputes shall be submitted to Shenzhen Court of International Arbitration in accordance with the arbitration rules of such Commission, and the arbitration award shall be final and binding on all Parties.

 

15.5 Any rights, powers and remedies empowered to any Party by any provisions herein shall not preclude any other rights, powers and remedies enjoyed by such Party in accordance with laws and other provisions under this Agreement, and the exercise of its rights, powers and remedies by a Party shall not preclude its exercise of its other rights, powers and remedies by such Party.

 

15.6 Any failure or delay by a Party in exercising any of its rights, powers and remedies hereunder or in accordance with laws (hereinafter, the “PARTY’S RIGHTS”) shall not lead to a waiver of such rights, and the waiver of any single or partial exercise of the Party’s Rights shall not preclude such Party from exercising such rights in any other way and exercising the remaining part of the Party’s Rights.

 

15.7 The titles of the Articles contained herein shall be for reference only, and in no circumstances shall such titles be used in or affect the interpretation of the provisions hereof.

 

15.8 Each provision contained herein shall be severable and independent from each of other provisions, and if at any time any one or more articles herein become invalid, illegal or unenforceable, the validity, legality or enforceability of the remaining provisions herein shall not be affected as a result thereof.

 

15.9 This Agreement shall substitute any other documents on the same subject executed by relevant Parties hereof once duly executed.

 

 

 

 

15.10 Any amendments or supplements to this Agreement shall be made in writing. Except for assignment by Pledgee of its rights hereunder according to Article 15.1 of this Agreement, the amendments or supplements to this Agreement shall take effect only when properly signed by the Parties to this Agreement. Notwithstanding the preceding sentence, considering the rights and obligations of Target Company and Pledgors are severable and independent, in case the amendment or supplement is intended to have impact upon one Party of the Target Company and part of the Pledgors who hold the equity interest, the amendment or supplement requires the consent by the Target Company and the part of the Pledgors only and it is not required to obtain the consent of other Target Company and other Pledgors (to the extent the amendment or supplement does not have impact upon such Pledgor).

 

15.11 This Agreement shall be binding on the legal successors of the Parties.

 

15.12 At the time of execution hereof, each of Pledgors shall sign respectively a power of attorney (as set out in Appendix 1 hereto, hereinafter, the “POWER OF ATTORNEY”) to authorize any person designated by HUAYA to sign on its behalf according to this Agreement any and all legal documents necessary for the exercise by Pledgee of HUAYA’s rights hereunder. Such Power of Attorney shall be delivered to HUAYA to keep in custody and, when necessary, HUAYA may at any time submit the Power of Attorney to the relevant government authority.

 

15.13 Notwithstanding any provision to the contrary in this Agreement, new companies except the Target Company and its shareholders can be included as one party of this Agreement by executing the Acknowledgement Letter in the form of Appendix 2 to this Agreement. The new companies shall enjoy the same rights and obligations as other Target Companies; the shareholders of the new companies shall enjoy the same rights and obligations as other Pledgors hereunder. Considering that the rights and obligations of the Target Company and relevant Pledgors under the Agreement are severable and independent, the participation of the new target companies and their shareholders will not affect the rights and obligations of the original Target Company and relevant Pledgors, the participation of the new target companies only requires confirmation of HUAYA by signature. Each of the Target Company hereby irrevocably and unconditionally agree the participation of the new companies and their shareholders and further confirm that shareholders of any new target companies can pledge their equity of the new target companies to HUAYA according to the stipulation of this Agreement not necessarily with consent of the original Target Company or their relevant Pledgors.

 

[The remainder of this page is left blank]

 

 

 

 

(EXECUTION PAGE)

 

IN WITNESS HEREOF, the following Parties have caused this Equity Pledge Agreement to be executed as of the date and in the place first here abovementioned.

 

Liu Ronghua    
Signature by: /s/ Liu Ronghua  
     
Chen Qiang    
Signature by: /s/ Chen Qiang  
     
HUAYA CONSULTANT (SHENZHEN) CO., LTD.  
     
Signed by: /s/ Chen Qiang  
Name: Chen Qiang  
Position: Authorized Representative  
     
QIANHAI ASIA TIMES (SHENZHEN) INTERNATIONAL FINANCIAL SERVICES CO., LTD. (Company chop)  
     
Signed by: /s/ Chen Qiang  
Name: Chen Qiang  
Position: Authorized Representative  

 

 

 

 

Exhibit 10.7

 

Confidential

 

CALL OPTION AGREEMENT

 

AMONG

 

RONGHUA LIU

 

QIANG CHEN

 

QIANHAI ASIA TIMES (SHENZHEN) INTERNATIONAL FINANCIAL

SERVICES CO., LTD.

 

HUAYA CONSULTANT (SHENZHEN) CO., LTD.

 

9 lh October, 2018

 

 

 

 

CALL OPTION AGREEMENT

 

This CALL OPTION AGREEMENT (this “AGREEMENT”) is entered into in Shenzhen of the People’s Republic of China (“China” or the “PRC”) as of 9 th October, 2018 by and among the following Parties:

 

(1) Ronghua Liu

ADDRESS: No.16, 12 Team, Datang Village, Dali Town, Beiliu, Guangxi Province, China

ID Number: 450681199012101418

 

(2) Qiang Chen

ADDRESS: Room 601, Unit 1, Building 9, Chengshi Shangu, Nanshan District, Shenzhen City, Guangdong Province, China

ID Number:320503197010060537

 

(3) Qianhai Asia Times (Shenzhen) International Financial Services Co., Ltd. (“ASIATIMES”)

 

REGISTERED ADDRESS: Room 3902A, Building 5, Dachong International Center, No.39 Tong Gu Road, Yuehai Street, Nanshan district, Shen Zhen, China

 

(4) HUAYA CONSULTANT (SHENZHEN) CO., LTD. (“HUAYA”)

 

REGISTERED ADDRESS: Room 3902, Building 5, Dachong International Center, No.39 Tong Gu Road, Yuehai Street, Nanshan district, Shen Zhen, China

 

( Ronghua Liu, Qiang Chen hereinafter shall be individually referred to as a “PERSONAL SHAREHOLDER” and collectively, the “PERSONAL SHAREHOLDERS”. The Personal Shareholders and ASIA TIMES hereinafter individually referred to as a “SHAREHOLDER” and collectively, the “SHAREHOLDERS”. The Shareholders, HUAYA and the companies which was holding by ASIA TIMES hereinafter shall be individually referred to as a “PARTY” and collectively referred to as the “PARTIES”.)

 

WHEREAS

 

(l) As of the date of this Agreement, Ronghua Liu and Qiang Chen are the enrolled shareholders of ASIA TIMES, legally holding all the equity in ASIA TIMES, of which Ronghua Liu holding 98.5% interest, Qiang Chen holding 1.5% interest.

 

 

 

 

(2) The Shareholders intend to transfer to HUAYA , and HUAYA is willing to accept, all their respective equity interest in the Target Companies (as defined below), to the extent not violating PRC Law.

 

(3) In order to conduct the above equity transfer, the Shareholders agree to jointly grant HUAYA an irrevocable call option for equity transfer (hereinafter the “CALL OPTION”), under which and to the extent permitted by PRC Law, the Shareholders shall on demand of HUAYA transfer the Option Equity (as defined below) to HUAYA and/or any other entity or individual designated by it in accordance with the provisions contained herein.

 

(4) ASIA TIMES intends to transfer to HUAYA all of its assets and liabilities to the extent not violating PRC Law. In order to conduct the above asset transfer, ASIA TIMES agrees to grant HUAYA an irrevocable call option for assets (hereinafter the “ASSET CALL OPTION”), under which and to the extent as permitted by PRC Law, ASIA TIMES shall on demand of HUAYA transfer the assets and liabilities to HUAYA and/or any other entity or individual designated by it in accordance with the provisions contained herein.

 

THEREFORE, the Parties hereby have reached the following agreement upon mutual consultations:

 

ARTICLE 1 - DEFINITION

 

1.1 Except as otherwise construed in the context, the following terms in this Agreement shall be interpreted to have the following meanings:

 

“PRC LAW” shall mean the then valid laws, administrative regulations, administrative rules, local regulations, judicial interpretations and other binding regulatory documents of the People’s Republic of China.

 

“OPTION EQUITY” shall mean, in respect of each of the Shareholders, all of the equity interest held thereby in the Target Company Registered Capital (as defined below).

 

“TARGET COMPANY” shall mean, to PERSONAL SHAREHOULDERS, ASIA TIMES ; and to ASIA TIMES, any and all of the companies which was held by it (exclusive of Qianhai ASIA TIMES (Shenzhen) International Fund Management Company (“Fund Company”)).

 

“TARGET COMPANY REGISTERED CAPITAL” shall mean the registered capital of ASIA TIMES as of the execution date of this Agreement, i.e., RMB50, 000,000, and the registered capital of each Target Company which was holding by ASIA TIMES, which shall include any expanded registered capital as the result of any capital increase within the term of this Agreement.

 

 

 

 

“TRANSFERRED EQUITY” shall mean the equity of Target Company which HUAYA has the right to require the Shareholders to transfer to it or its designated entity or individual when HUAYA exercises its Call Option (hereinafter the “EXERCISE OF OPTION”) in accordance with Article 3.2 herein, the amount of which may be all or part of the Option Equity and the details of which shall be determined by HUAYA at its sole discretion in accordance with the then valid PRC Law and from its commercial consideration.

 

“TRANSFER PRICE” shall mean all the consideration that HUAYA or its designated entity or individual is required to pay to the Shareholders in order to obtain the Transferred Equity upon each Exercise of Option. In spite of any provision herein, in case of HUAYA exercising the call option in its sole discretion upon the occurrence of the situation in which such call option exercise become feasible under the relevant laws in PRC, any additional consideration paid other than the $1.00 which may be required under the laws of China to effect such purchase to comply with such legal formalities shall be either cancelled or returned to the company immediately with no additional compensation to the owners. The shareholders hereby acknowledge the purpose of such provisions and hereby agrees and authorizes the company to take any and all actions to effect such transaction and agrees irrevocably to execute any and all documents and instruments and authorize HUAYA and its designated entity or individual to sign on his or her behalf and hereby gives the HUAYA and its designated entity or individual a proxy to execute and deliver such documents and instruments to effect the purpose of this provision and hereby waives any defense or claim of causes of action to challenge or defeat this provision.If there exists any regulatory provision with respect to Transfer Price under the then PRC Law, HUAYA or its designated entity or individual shall be entitled to determine the lowest price permitted by PRC Law as the Transfer Price.

 

“BUSINESS PERMITS” shall mean any approvals, permits, filings, registrations etc. which ASIA TIMES is required to have for legally and validly operating its commercial consulting business and all such other businesses, including but not limited to the Business License of the Cooperate Legal Person, the Tax Registration Certificate, the Permit for commercial consulting business and such other relevant licenses and permits as required by the then PRC Law.

 

“TARGET COMPANY ASSETS” shall mean, in respect of any Target Company, all the tangible and intangible assets which such Target Company owns or has the right to use during the term of this Agreement, including but not limited to any immoveable and moveable assets, and such intellectual property rights as trademarks, copyrights, patents, proprietary know-how, domain names and software use rights.

 

“THE EXCLUSIVE SERVICE AGREEMENT” shall mean the Exclusive Service Agreement entered into among each Target Company and HUAYA dated 9 th October, 2018 .

 

 

 

 

“MATERIAL AGREEMENT” shall mean an agreement to which any Target Company is a party and which has a material impact on the businesses or assets of the Target Company, including but not limited to the Exclusive Service Agreement among the Target Company and HUAYA , and other agreements regarding the Target Company’s commercial consulting business.

 

1.2 The references to any PRC Law herein shall be deemed

 

(1) to include the references to the amendments, changes, supplements and reenactments of such law, irrespective of whether they take effect before or after the formation of this Agreement; and

 

(2) to include the references to other decisions, notices or regulations enacted in accordance therewith or effective as a result thereof.

 

1.3 Except as otherwise stated in the context herein, all references to an Article, clause, item or paragraph shall refer to the relevant part of this Agreement.

 

ARTICLE 2 -GRANT OF CALL OPTION

 

The Parties agree that the Shareholders exclusively grant HUAYA hereby irrevocably and without any additional conditions with a Call Option, under which HUAYA shall have the right to require the Shareholders to transfer the Option Equity to HUAYA or its designated entity or individual in such method as set out herein and as permitted by PRC Law. HUAYA also agrees to accept such Call Option.

 

In case of HUAYA exercising the call option in its sole discretion upon the occurrence of the situation in which such call option exercise become feasible under the relevant laws in PRC, any additional consideration paid other than the $1.00 which may be required under the laws of China to effect such purchase to comply with such legal formalities shall be either cancelled or returned to the company immediately with no additional compensation to the ASIA TIMES and Shareholders. ASIA TIMES and Shareholders hereby acknowledge the purpose of such provisions and hereby agrees and authorizes the company to take any and all actions to effect such transaction and agrees irrevocably to execute any and all documents and instruments and authorize the company’s relevant officers to sign on his or her behalf and hereby gives the company and any of its relevant officers a proxy to execute and deliver such documents and instruments to effect the purpose of this provision and hereby waives any defense or claim of causes of action to challenge or defeat this provision.

 

 

 

 

ARTICLE 3 - METHOD OF EXERCISE OF OPTION

 

3.1 To the extent permitted by PRC Law, HUAYA shall have the sole discretion to determine the specific time, method and times of its Exercise of Option.

 

3.2 If the then PRC Law permits HUAYA and/or other entity or individual designated by it to hold all the equity interest of Target Company, then HUAYA shall have the right to elect to exercise all of its Call Option at once, where HUAYA and/or other entity or individual designated by it shall accept all the Option Equity from the Shareholders at once;

if the then PRC Law permits HUAYA and/or other entity or individual designated by it to hold only part of the equity in Target Company, HUAYA shall have the right to determine the amount of the Transferred Equity within the extent not exceeding the upper limit of shareholding ratio set out by the then PRC Law (hereinafter the “SHAREHOLDING LIMIT”), where HUAYA and/or other entity or individual designated by it shall accept such amount of the Transferred Equity from the Shareholders. In the latter case, HUAYA shall have the right to exercise its Call Option at multiple times in line with the gradual deregulation of PRC Law on the permitted Shareholding Limit, with a view to ultimately acquiring all the Option Equity.

 

3.3 At each Exercise of Option by HUAYA , each of the Shareholders shall transfer their respective equity in the Target Company to HUAYA and/or other entity or individual designated by it respectively in accordance with the amount required in the Exercise Notice stipulated in Article 3.5. HUAYA and other entity or individual designated by it shall pay the Transfer Price to each of the Shareholders who has transferred the Transferred Equity for the Transferred Equity accepted in each Exercise of Option. HUAYA shall have the right to elect to pay the purchase price by settlement of certain credits held by it or its affiliates to the shareholders.

 

3.4 In each Exercise of Option, HUAYA may accept the Transferred Equity by itself or designate any third party to accept all or part of the Transferred Equity.

 

3.5 On deciding each Exercise of Option, HUAYA shall issue to the Shareholders a notice for exercising the Call Option (hereinafter the “EXERCISE NOTICE”, the form of which is set out as Appendix I hereto). The Shareholders shall, upon receipt of the Exercise Notice, forthwith transfer all the Transferred Equity in accordance with the Exercise Notice to HUAYA and/or other entity or individual designated by HUAYA in such method as described in Article 3.3 herein.

 

3.6 The Shareholders hereby severally undertake and guarantee that once HUAYA   issues the Exercise Notice in respect to the specific Transferred Equity of the Target Company held by it:

 

 

 

 

(l) it shall immediately hold or request to hold a shareholders’ meeting of the Target Company and adopt a resolution through the shareholders’ meeting, and take all other necessary actions to agree to the transfer of all the Call Option to HUAYA and/or other entity or individual designated by it at the Transfer Price and waive the possible preemption;

 

(2)it shall immediately enter into an equity transfer agreement with HUAYA and/or other entity or individual designated by it for transfer of all the Transferred Equity to HUAYA and/or other entity or individual designated by it at the Transfer Price; and

 

(3) it shall provide HUAYA with necessary support (including providing and executing all the relevant legal documents, processing all the procedures for government approvals and registrations and bearing all the relevant obligations) in accordance with the requirements of HUAYA and of the laws and regulations, in order that HUAYA and/or other entity or individual designated by it may take all the Transferred Equity free from any legal defect.

 

3.7 At the meantime of this Agreement, the Shareholders shall respectively enter into a power of attorney (hereinafter the “POWER OF ATTORNEY”, the form of which is set out as Appendix II hereto), authorizing in writing any person designated by HUAYA to, on behalf of such Shareholder, to enter into any and all of the legal documents in accordance with this Agreement so as to ensure that HUAYA and/or other entity or individual designated by it take all the Transferred Equity free from any legal defect. Such Power of Attorney shall be delivered for custody by HUAYA and HUAYA may, at any time if necessary, require the Shareholders to enter into multiple copies of the Power of Attorney respectively and deliver the same to the relevant government department.

 

ARTICLE 4 - ASSET CALL OPTION

 

ASIA TIMES and the Personal Shareholders hereby further undertake to grant HUAYA   irrevocably an option to purchase assets within the term of this Agreement: to the extent not violating the mandatory requirements under PRC Law, ASIA TIMES will transfer all of its assets and liabilities to HUAYA and/or other entity or individual designated by it when required by HUAYA .

 

In case of the HUAYA exercising the Asset Call Option in its sole discretion upon the occurrence of the situation in which such call option exercise become feasible under the relevant laws in PRC, any additional consideration paid other than the $1.00 which may be required under the laws of China to effect such purchase to comply with such legal formalities shall be either cancelled or returned to the company immediately with no additional compensation to the ASIA TIMES and Shareholders. ASIA TIMES and Shareholders hereby acknowledge the purpose of such provisions and hereby agrees and authorizes the company to take any and all actions to effect such transaction and agrees irrevocably to execute any and all documents and instruments and authorize the company’s relevant officers to sign on his or her behalf and hereby gives the company and any of its relevant officers a proxy to execute and deliver such documents and instruments to effect the purpose of this provision and hereby waives any defense or claim of causes of action to challenge or defeat this provision.

 

 

 

 

ARTICLE 5 - REPRESENTATIONS AND WARRANTIES

 

5.1 Each of the Shareholders hereby severally represents and warrants in respect to itself and the Target Company in which he holds equity as follows:

 

5.1.1 Each of the Personal Shareholders is a PRC citizen with full capacity, with full and independent legal status and legal capacity to execute, deliver and perform this Agreement, and may act independently as a litigant party. Each of the Personal Shareholders has full power and authorization to execute and deliver this Agreement and all the other documents to be entered into by it in relation to the transaction referred to herein, and it has the full power and authorization to complete the transaction referred to herein.

 

5.1.2 This Agreement is executed and delivered by Personal Shareholders legally and properly. This Agreement constitutes the legal and binding obligations on Personal Shareholders and is enforceable on it in accordance with its terms and conditions. The Personal Shareholders are the enrolled legal owner of the Option Equity as of the effective date of this Agreement, and except the rights created by this Agreement, the Shareholders’ Voting Rights Proxy Agreement entered into by Personal Shareholders, HUAYA and their respective Target Company dated 9 th October , 2018 (the “PROXY AGREEMENT”), the Equity Pledge Agreement entered into by it, HUAYA , the Target Company dated 9 th October, 2018 (the “EQUITY PLEDGE AGREEMENT”), there is no lien, pledge, claim and other encumbrances and third party rights on the Option Equity. In accordance with this Agreement, HUAYA and/or other entity or individual designated by it may, after the Exercise of Option, obtain the proper title to the Transferred Equity free from any lien, pledge, claim and other encumbrances and third party rights.

 

5.1.3 Target Company shall obtain complete Business Permits as necessary for its operations upon this Agreement taking effect, and Target Company shall have sufficient rights and qualifications to operate within PRC the businesses of commercial consulting and other business relating to its current business structure. Target Company has conducted its business legally since its establishment and has not incurred any cases which violate or may violate the regulations and requirements set forth by the departments of commerce and industry, tax, culture, news, quality technology supervision, labor and social security and other governmental departments or any disputes in respect of breach of contract.

 

 

 

 

5.2 ASIA TIMES hereby represents and warrants in respect to itself and the Target Company in which it holds equity as follows:

 

5.2.1 ASIA TIMES is a limited liability company operation duly registered and validly existing under PRC Law, with independent status as a legal person; ASIA TIMES has full and independent legal status and legal capacity to execute, deliver and perform this Agreement, and may act independently as a subject of actions.

 

5.2.2 ASIA TIMES has full power and authorization to execute and deliver this Agreement and all the other documents to be entered into by it in relation to the transaction referred to herein, and it has the full power and authorization to complete the transaction referred to herein.

 

5.2.3 This Agreement is executed and delivered by ASIA TIMES legally and properly. This Agreement constitutes legal and binding obligations on it.

 

5.2.4 ASIA TIMES is the enrolled legal shareholder of the Option Equity when this Agreement comes into effect, except the rights created by this Agreement, the Proxy Agreement, the Equity Pledge Agreement, there is no lien, pledge, claim and other encumbrances and third party rights on the Option Equity. In accordance with this Agreement, HUAYA and/or other entity or individual designated by it may, upon the Exercise of Option, obtain the proper title to the Transferred Equity free from any lien, pledge, claim and other encumbrances and third party rights.

 

5.2.5 Target Company shall obtain complete Business Permits as necessary for its operations upon this Agreement taking effect, and Target Company shall have sufficient rights and qualifications to operate within PRC the businesses of commercial consulting and other business relating to its current business structure. Target Company has conducted its business legally since its establishment and has not incurred any cases which violate or may violate the regulations and requirements set forth by the departments of commerce and industry, tax, culture, quality technology supervision, labor and social security and other governmental departments or any disputes in respect of breach of contract.

 

The remaining shareholders of the Target Companies in which ASIA TIMES holds equity have given written approvals regarding the content of this Agreement and have irrevocably undertaken, upon the Exercise of Option by ASIA TIMES of Option Equity in accordance with this Agreement, to respectively waive possible rights of preemption and offer necessary assistance.

 

5.3 HUAYA hereby represents and warrants as follows:

 

5.3.1 HUAYA is a company with limited liability properly registered and legally existing under PRC Law, with an independent status as a legal person. HUAYA has full and independent legal status and legal capacity to execute, deliver and perform this Agreement and may act independently as a subject of actions.

 

 

 

 

5.3.2 HUAYA has full power and authorization to execute and deliver this Agreement and all the other documents to be entered into by it in relation to the transaction referred to herein, and it has the full power and authorization to complete the transaction referred to herein.

 

ARTICLE 6 - UNDERTAKINGS BY THE SHAREHOLDERS

 

6.1 The Shareholders hereby individually undertake within the term of this Agreement that it must take all necessary measures to ensure that Target Company is able to obtain all the Business Permits necessary for its business in a timely manner and all the Business Permits remain in effect at any time.

 

6.2 The Shareholders hereby individually undertake within the term of this Agreement that without the prior written consent by HUAYA ,

 

6.2.1 no Shareholders shall transfer or otherwise dispose of any Option Equity or create any encumbrance or other third party rights on any Option Equity;

 

6.2.2 it shall not increase or decrease the Target Company Registered Capital or cast affirmative vote regarding the aforesaid increase or decrease in registered capital;

 

6.2.3 it shall not dispose of or cause the management of Target Company to dispose of any of the Target Company Assets (except as occurs during the arm’s length operations);

 

6.2.4 it shall not terminate or cause the management of Target Company to terminate any Material Agreements entered into by Target Company, or enter into any other Material Agreements in conflict with the existing Material Agreements;

 

6.2.5 it shall not individually or collectively cause each Target Company to conduct any transactions that may substantively affect the asset, liability, business operation, equity structure, equity of a third party and other legal rights (except those occurring during the arm’s length operations or daily operation, or having been disclosed to and approved by HUAYA in writing);

 

6.2.6 it shall not appoint or cancel or replace any executive directors or members of board of directors (if any), supervisors or any other management personnel of Target Company to be appointed or dismissed by the Shareholders;

 

6.2.7 it shall not announce the distribution of or in practice release any distributable profit, dividend or share profit or cast affirmative votes regarding the aforesaid distribution or release;

 

 

 

 

6.2.8 it shall ensure that Target Company shall validly exist and prevent it from being terminated, liquidated or dissolved;

 

6.2.9 it shall not amend the Articles of Association of Target Company or cast affirmative votes regarding such amendment;

 

6.2.10 it shall ensure that Target Company shall not lend or borrow any money, or provide guarantee or engage in security activities in any other forms, or bear any substantial obligations other than on the arm’s length basis; and

 

6.3 The Shareholders hereby individually undertake that it must make all its efforts during the term of this Agreement to develop the business of Target Company, and ensure that the operations of Target Company are legal and in compliance with the regulations and that it shall not engage in any actions or omissions which might harm the Target Company Assets or its credit standing or affect the validity of the Business Permits of Target Company.

 

6.4 Without limiting the generality of Article 6.3 above, considering the fact that each Shareholder of each Target Company sets aside all the equity interest held thereby in each Target Company as security to secure the performance by each Target Company of the obligations under the Exclusive Service Agreement, the performance of such Shareholder of the obligations under the Proxy Agreement, the Shareholder undertakes to, within the term of this Agreement, make full and due performance of any and all of the obligations on the part thereof under the Proxy Agreement, and to procure the full and due performance of each Target Company of any and all of its obligations under the Exclusive Service Agreement and warrants that no adverse impact on exercising the rights under this Agreement by HUAYA will be incurred due to the breach by the Shareholder of the Proxy Agreement or the breach of the Target Company of the Exclusive Service Agreement.

 

6.5 ASIA TIMES undertakes that, before HUAYA Exercise of Option and acquire all equity of ASIA TIMES, ASIA TIMES shall not do the following:

 

6.5.1 Sell, transfer, mortgage or dispose by other way any assets, business, revenue or other legal rights of its own or any Target Company, or permit creating any encumbrance or other third party’s interest on such assets, business, revenue or other legal rights (except as occurs during the arm’s length or operations or daily operation, or as is disclosed to HUAYA and approved by HUAYA in writing);

 

6.5.2 conduct any transactions that may substantively affect the asset, liability, business operation, equity structure, equity of a third party and other legal rights (except those occurring during the arm’s length operations or daily operation, or having been disclosed to HUAYA and approved by HUAYA in writing);

 

 

 

 

6.5.3 release any dividend or share profit to the Personal Shareholders or cause the Target Company to do so in any form.

 

ARTICLE 7 - CONFIDENTIALITY

 

7.1 Notwithstanding the termination of this Agreement, the Shareholders shall be obligated to keep in confidence the following information (hereinafter collectively the “CONFIDENTIAL INFORMATION”): (i) information on the execution, performance and the contents of this Agreement; (ii) the commercial secret, proprietary information and customer information in relation to HUAYA known to or received by it as the result of execution and performance of this Agreement; and (iii) the commercial secrets, proprietary information and customer information in relation to Target Company known to or received by it as the shareholder of Target Company. The Shareholders may use such Confidential Information only for the purpose of performing its obligations under this Agreement. No Shareholders shall disclose the above Confidential Information to any third parties without the written consent from HUAYA , or they shall bear the default liability and indemnify the losses.

 

7.2 Upon termination of this Agreement, both Shareholders shall, upon demand by HUAYA , return, destroy or otherwise dispose of all the documents, materials or software containing the Confidential Information and suspend using such Confidential Information.

 

7.3 Notwithstanding any other provisions herein, the validity of this Article shall not be affected by the suspension or termination of this Agreement.

 

ARTICLE 8 - TERM OF AGREEMENT

 

8.1 This Agreement shall take effect as of the date of formal execution by the Parties. For each Shareholder, this Agreement shall terminate in respect to such Shareholder when all the Option Equity of all the Target Company held by him is legally transferred under the name of HUAYA and/or other entity or individual designated by it in accordance with the provisions of this Agreement.

 

8.2 After termination of this Agreement in respect to such Shareholder according to Article 8.1 above, this Agreement continues to be fully valid in respect to other Shareholders.

 

ARTICLE 9 - NOTICE

 

9.1 Any notice, request, demand and other correspondences made as required by or in accordance with this Agreement shall be made in writing and delivered to the relevant Party.

 

 

 

 

9.2 The abovementioned notice or other correspondences shall be deemed to have been delivered when it is transmitted if transmitted by facsimile or telex; it shall be deemed to have been delivered when it is delivered if delivered in person; it shall be deemed to have been delivered five (5) days after posting the same if posted by mail.

 

ARTICLE 10 - LIABILITY FOR BREACH OF CONTRACT

 

10.1 The Parties agree and confirm that, if any party (hereinafter the “DEFAULTING PARTY”) breaches substantially any of the provisions herein or omits substantially to perform any of the obligations hereunder, or fails substantially to perform any of the obligations under this Agreement, such a breach or omission shall constitute a default under this Agreement (hereinafter a “DEFAULT”), then non-defaulting Party shall have the right to require the Defaulting Party to rectify such Default or take remedial measures within a reasonable period. If the Defaulting Party fails to rectify such Default or take remedial measures within such reasonable period or within ten (10) days of non-defaulting Party’s notifying the Defaulting Party in writing and requiring it to rectify the Default, then non-defaulting Party shall have the right at its own discretion to select any of the following remedial measures:

(1) to terminate this Agreement and require the Defaulting Party to indemnify it for all the damage; or

(2) mandatory performance of the obligations of the Defaulting Party hereunder and require the Defaulting Party to indemnify it for all the damage.

 

10.2 Without limiting the generality of Article 10.1, any breach of the Proxy Agreement, the Equity Pledge Agreement shall be deemed as having constituted the breach by such Shareholder of this Agreement; and any breach by Target Company of any provision in the Exclusive Service Agreement, if attributable to the failure of any Shareholder to perform the obligations thereof under Article 6.4 hereof, shall be deemed as having constituted the breach by such Shareholder of this Agreement.

 

10.3 The Parties agree and confirm that in no circumstances shall the Shareholders request the termination of this Agreement for any reason, except otherwise stipulated by law or this Agreement.

 

10.4 Notwithstanding any other provisions herein, the validity of this Article shall stand disregarding the suspension or termination of this Agreement.

 

ARTICLE 11 - MISCELLANEOUS

 

11.1 This Agreement shall be prepared in the Chinese language in four (4) original copies, with each involved Party holding one (1) copy hereof.

 

 

 

 

11.2 The formation, validity, execution, amendment, interpretation and termination of this Agreement shall be subject to PRC Law.

 

11.3 Any disputes arising hereunder and in connection herewith shall be settled through consultations among the Parties, and if the Parties cannot reach an agreement regarding such disputes within thirty (30) days of their occurrence, such disputes shall be submitted to Shenzhen Court of International Arbitration in accordance with the arbitration rules of such Commission in Shenzhen, and the arbitration award shall be final and binding on all Parties.

 

11.4 Any rights, powers and remedies empowered to any Party by any provisions herein shall not preclude any other rights, powers and remedies enjoyed by such Party in accordance with laws and other provisions under this Agreement, and the exercise of its rights, powers and remedies by a Party shall not preclude its exercise of its other rights, powers and remedies by such Party.

 

11.5 Any failure or delay by a Party in exercising any of its rights, powers and remedies hereunder or in accordance with laws (hereinafter the “PARTY’S RIGHTS”) shall not lead to a waiver of such rights, and the waiver of any single or partial exercise of the Party’s Rights shall not preclude such Party from exercising such rights in any other way and exercising the remaining part of the Party’s Rights.

 

11.6 The titles of the Articles contained herein shall be for reference only, and in no circumstances shall such titles be used in or affect the interpretation of the provisions hereof.

 

11.7 Each provision contained herein shall be severable and independent from each of other provisions, and if at any time any one or more articles herein become invalid, illegal or unenforceable, the validity, legality or enforceability of the remaining provisions herein shall not be affected as a result thereof

 

11.8 Upon execution, this Agreement shall substitute any other legal documents previously executed by the Parties on the same subject.

 

11.9 Any amendments or supplements to this Agreement shall be made in writing and shall take effect only when properly signed by the Parties to this Agreement. Notwithstanding the preceding sentence, considering that the rights and obligations of each of the Shareholders hereunder are independent and severable from each other, in case the amendment or supplement to this Agreement is intended to have impact upon one of the Shareholders, such amendment or supplement requires the approval of such Shareholder only and it is not required to obtain the approval from the other ones of the Shareholders (to the extent the amendment or supplement do not have impact upon such other Shareholders).

 

 

 

 

11.10 Without prior written consent by HUAYA , the Shareholders shall not transfer to any third party any of its right and/or obligation under this Agreement, HUAYA shall have the right to transfer to any third party designated by it any of its right and/or obligation under this Agreement after notice to the Shareholders.

 

11.11 This Agreement shall be binding on the legal successors of the Parties.

 

Notwithstanding any provision to the contrary in this Agreement, in case of the event stipulated under Article 6.2.10, the relevant Shareholder shall, upon request by HUAYA ,, procure that such new commercial consulting company should be included as a Target Company defined hereunder and that the all the equity interest held by such Shareholder in such new commercial consulting company shall become the Option Equity defined hereunder, by signing the acknowledgement letter in substantially the form attached hereto as Appendix III. Considering that the rights and obligations of each of the Shareholders hereunder are independent and severable from each other, the arrangement procuring that the equity interest in such new commercial consulting company becoming the Option Equity will have no impact on the rights or obligations of the other Shareholders, the above arrangement requires written confirmation of HUAYA and the relevant Shareholder only. The other Shareholders hereto hereby grant irrevocable and unconditional waiver in respect to such arrangement, and further acknowledge that the relevant Shareholder should not be obligated to obtain approval from them when he or it make the equity interest held by him or it Option Equity.

 

[The remainder of this page is left blank]

 

 

 

 

(EXECUTION PAGE)

 

IN WITNESS HEREOF, the following Parties have caused this Call Option Agreement to be executed as of the date and in the place first here above mentioned.

 

Ronghua Liu  
Signature by: /s/ Ronghua Liu  
     
Qiang Chen    
Signature by: /s/ Qiang Chen  
     
HUAYA CONSULTANT (SHENZHEN) CO., LTD. (Company chop)  
     
Signed by: /s/ Qiang Chen  
Name: Qiang Chen  
Position: Authorized Representative  
     
QIANHAI   ASIA TIMES (SHENZHEN) INTERNATIONAL FINANCIAL SERVICES CO., LTD (Company chop)  
     
Signed by: /s/ Qiang Chen  
Name: Qiang Chen  
Position: Authorized Representative  

 

 

 

 

Exhibit 10.8

 

CONFIDENTIAL

 

SHAREHOLDERS’ VOTING RIGHTS PROXY AGREEMENT

 

AMONG

 

RONGHUA LIU

 

QIANG CHEN

 

QIANHAI ASIA TIMES (SHENZHEN) INTERNATIONAL FINANCIAL SERVICES CO., LTD.

 

AND

 

HUAYA CONSULTANT (SHENZHEN) CO., LTD.

 

9 th October , 2018

 

    1

 

 

SHAREHOLDERS’ VOTING RIGHTS PROXY AGREEMENT

 

This SHAREHOLDERS’ VOTING RIGHTS PROXY AGREEMENT (this “AGREEMENT”) is entered into as of 9 th October , 2018 by and among the following Parties:

 

(1) Ronghua Liu

ADDRESS: No. 16, 12 Team, Datang Village, Dali Town, Beiliu, Guangxi Province, China

ID Number: 450681199012101418

 

(2) Qiang Chen

ADDRESS: Room 601, Unit 1, Building 9, Chengshi Shangu, Nanshan District, Shenzhen City, Guangdong Province, China

ID Number:320503197010060537

 

(3) QIANHAI ASIA TIMES (SHENZHEN) INTERNATIONAL FINANCE SERVICE CO., LTD. ( “ASIA TIMES”)

 

REGISTERED ADDRESS: Room 3902A, Building 5, Dachong International Center, No.39 Tong Gu Road, Yuehai Street, Nanshan district, Shen Zhen, China

 

(4) HUAYA CONSULTANT (SHENZHEN) CO., LTD. (HUAYA)

 

REGISTERED ADDRESS: Room 3902, Building 5, Dachong International Center, No.39 Tong Gu Road, Yuehai Street, Nanshan district, Shen Zhen, China

 

(The above parties shall hereinafter be individually referred to as a “PARTY” and collectively, “PARTIES”. Ronghua Liu, Qiang Chen shall hereinafter be individually referred to as a “PERSONAL SHAREHOLDER” and collectively, “PERSONAL SHAREHOLDERS”, Personal Shareholders and ASIA TIMES shall hereinafter be individually referred to as a “SHAREHOLDER” and collectively, “SHAREHOLDERS”.)

 

WHEREAS:

 

1. As of the date of this Agreement, Ronghua Liu, Qiang Chen are the enrolled shareholders of ASIA TIMES, legally holding all the equity in ASIA TIMES, of which Ronghua Liu holding 98.5% interest, Qiang Chen holding 1.5%.

 

    2

 

 

2. The Shareholders intend to severally entrust the individual designated by HUAYA with the exercises of their voting rights in Target Company (as defined below) while HUAYA is willing to designate such an individual.

 

The Parties hereby have reached the following agreement upon friendly consultations:

 

ARTICLE 1 VOTING RIGHTS ENTRUSTMENT

 

1.1 Under this Agreement, “TARGET COMPANY” shall mean, to Ronghua Liu, Qiang Chen , ASIA TIMES; and to ASIA TIMES, any and all of the companies held by ASIA TIMES (exclusive of Qianhai ASIA TIMES (Shenzhen) International Fund Management Company (“Fund Company”)).

 

1.2 The Shareholders hereby irrevocably undertake to respectively sign the Entrustment Letter after execution of the Agreement to respectively entrust the personnel designated by HUAYA CONSULTANT (SHENZHEN) CO., LTD. then (“TRUSTEES”) to exercise the following rights enjoyed by them as shareholders of Target Company in accordance with the then effective articles of association of Target Company (collectively, the “ENTRUSTED RIGHTS”):

 

(1) Proposing to convene and attending shareholders’ meetings of Target Company as proxy of the Shareholders according to the articles of association of Target Company;

 

(2) Exercising voting rights as proxy of the Shareholders, on issues discussed and resolved by the shareholders’ meeting of Target Company, including but not limited to the appointment and election for the directors, general manager and other senior management personnel of Target Company.

 

The above authorization and entrustment is granted subject to the status of trustees as PRC citizens and the approval by HUAYA. Upon and only upon written notice of dismissing and replacing Trustee(s) given by HUAYA to the Shareholders, the Shareholders shall promptly entrust another PRC citizen then designated by HUAYA to exercise the above Entrusted Rights, and once new entrustment is made, the original entrustment shall be replaced; the Shareholders shall not cancel the authorization and entrustment of the Trustee(s) otherwise.

 

1.3 The Trustees shall perform the entrusted obligation within the scope of entrustment in due care and prudence and in compliance with laws; the Shareholders acknowledge and assume relevant liabilities for any legal consequences of the Trustees’ exercise of the foregoing Entrusted Rights.

 

1.4 The Shareholders hereby acknowledge that the Trustees are not required to seek advice from the Shareholders prior to their respective exercise of the foregoing Entrusted Rights. However, the Trustees shall inform the Shareholders in a timely manner of any resolution or proposal on convening interim shareholders’ meeting after such resolution or proposal is made.

 

    3

 

 

ARTICLE 2 RIGHT TO INFORMATION

 

2.1 For the purpose of exercising the Entrusted Rights under this Agreement, the Trustees are entitled to know the information with regard to Target Company’s operation, business, clients, finance, staff, etc., and shall have access to relevant materials of Target Company. Target Company shall adequately cooperate with the Trustees in this regard.

 

ARTICLE 3 EXERCISE OF ENTRUSTED RIGHTS

 

3.1 The Shareholders will provide adequate assistance to the exercise of the Entrusted Rights by the Trustees, including execution of the resolutions of the shareholders’ meeting of Target Company or other pertinent legal documents made by the Trustee when necessary (e.g., when it is necessary for examination and approval of or registration or filing with governmental departments).

 

3.2 If at any time during the term of this Agreement, the entrustment or exercise of the Entrusted Rights under this Agreement is unenforceable for any reason except for default of any Shareholder or Target Company, the Parties shall immediately seek a most similar substitute for the unenforceable provision and, if necessary, enter into supplementary agreement to amend or adjust the provisions herein, in order to ensure the realization of the purpose of this Agreement.

 

ARTICLE 4 EXEMPTION AND COMPENSATION

 

4.1 The Parties acknowledge that HUAYA shall not be requested to be liable for or compensate (monetary or otherwise) other Parties or any third party due to exercise of Entrusted Rights by the Trustees designated by HUAYA under this Agreement.

 

4.2 Target Company and the Shareholders agree to compensate HUAYA for and hold it harmless against all losses incurred or likely to be incurred by it due to exercise of the Entrusted Rights by the Trustees designated by HUAYA, including without limitation any loss resulting from any litigation, demand arbitration or claim initiated or raised by any third party against it or from administrative investigation or penalty of governmental authorities.

 

However, the Shareholders and Target Company will not compensate for losses incurred due to willful misconduct or gross negligence of HUAYA.

 

    4

 

 

ARTICLE 5 REPRESENTATIONS AND WARRANTIES

 

5.1 Each of the Personal Shareholders hereby severally and jointly represents and warrants that:

 

5.1.1 Each of the Personal Shareholders is a PRC citizen with full capacity and with full and independent legal status and legal capacity to execute, deliver and perform this Agreement, and may act independently as a subject of actions.

 

5.1.2 Each of the Personal Shareholders has full right and authorization to execute and deliver this Agreement and other documents that are related to the transaction referred to herein and to be executed by them. They have full right and authorization with respect to consummate the transaction referred to herein.

 

5.1.3 This Agreement shall be executed and delivered by the Personal Shareholders lawfully and properly. This Agreement constitutes the legal and binding obligations on them and is enforceable on them in accordance with its terms and conditions hereof.

 

5.1.4 The Personal Shareholders are enrolled and legal shareholders of Target Company as of the effective date of this Agreement, and except the rights created by this Agreement, the Call Option Agreement entered into by HUAYA, Target Companies and them on 9 th October, 2018 (the “CALL OPTION AGREEMENT”), as well as the Equity Pledge Agreement entered into by HUAYA and Target Company and them on 9 th October , 2018, (the “EQUITY PLEDGE AGREEMENT”), there exists no third party right on the Entrusted Rights. Pursuant to this Agreement, the Trustees may fully and sufficiently exercise the Entrusted Rights in accordance with the then effective articles of association of Target Company.

 

5.1.5 Considering the fact that according to Equity Pledge Agreement, considering the fact that Personal Shareholders will set aside all the equity interest held thereby in relevant Target Company as security to secure the performance by them of their obligations under the Call Option Agreement entered into between them respectively and HUAYA as of 9 th October , 2018, Personal Shareholders undertake to make full and due performance of the obligations under Call Option Agreement during the valid term of this Agreement, and they will not be in conflict with any stipulation under Call Option Agreement, which are likely to have impact on the exercise of his Entrusted Rights the Trustees under this Agreement.

 

5.1.6 Considering the facts that the Target Company entered into the Exclusive Agreement (the “EXCLUSIVE SERVICE AGREEMENT”) on 9 th October , 2018 with HUAYA, the Call Option Agreement with HUAYA and the Shareholders on 9 th October , 2018, and that the Shareholders of Target Company will set aside all equity interest held thereby in Target Company as security to secure the performance of the contractual obligations under the above two agreements by Target Company, the Personal Shareholders undertake to, during the valid term of this Agreement, procure the full and due performance of Target Company of any and all its obligations under the Service Agreement, the Call Option Agreement, and warrant that no adverse impact on the exercise of the Entrusted Rights hereunder by the Trustees will be incurred due to the breach of the Exclusive Service Agreement, Call Option Agreement by Target Company.

 

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5.2 HUAYA (excluding the person designated by it) hereby represents and warrants that:

 

5.2.1 it is a company with limited liability properly registered and legally existing under PRC laws, with an independent corporate legal person status, and with full and independent legal status and legal capacity to execute, deliver and perform this Agreement and may act independently as a subject of actions; and

 

5.2.2 it has the full corporate power and authority to execute and deliver this Agreement and all the other documents to be entered into by it in relation to the transaction contemplated hereunder, and has the full power and authority to consummate such transaction.

 

5.3 Target Company other than ASIA TIMES hereby in respect of themselves respectively represents and warrants that:

 

5.3.1 it is a company with limited liability properly registered and legally existing under PRC laws, with an independent legal person status, and with full and independent legal status and legal capacity to execute, deliver and perform this Agreement and may act independently as a subject of actions; and

 

5.3.2 it has the full corporate power and authority to execute and deliver this Agreement and all the other documents to be entered into by it in relation to the transaction contemplated hereunder, and has the full power and authority to consummate such transaction.

 

5.3.3 the Shareholders are enrolled shareholders as of the effective date of this Agreement, legally holding the equity interest in it. Except rights created by this Agreement, the Equity Pledge Agreement and the Call Option Agreement, there exists no third party right on the Entrusted Rights. Pursuant to this Agreement, the Trustees may fully and sufficiently exercise the Entrusted Rights in accordance with the then effective articles of association of Target Company.

 

5.3.4 Considering the fact that the Shareholders of Target Company will set aside all the equity interest held thereby in Target Company as security to secure the performance of the contractual obligations by Target Company under the Exclusive Service Agreement and the Call Option Agreement, Target Company undertakes to, during the valid term of this Agreement, make full and due performance of any and all obligations under the Exclusive Service Agreement, the Call Option Agreement, and warrant that no adverse impact on the exercise of the Entrusted Rights hereunder by the Trustees will be incurred due to the breach of the Exclusive Service Agreement, the Call Option Agreement by Target Company.

 

    6

 

 

5.4 ASIA TIMES hereby in respect of itself represents and warrants that:

 

5.4.1 it is a company with limited liability properly registered and legally existing under PRC laws, with an independent legal person status, and with full and independent legal status and legal capacity to execute, deliver and perform this Agreement and may act independently as a subject of actions; and

 

5.4.2 it has the full corporate power and authority to execute and deliver this Agreement and all the other documents to be entered into by it in relation to the transaction contemplated hereunder, and has the full power and authority to consummate such transaction.

 

5.4.3 As of the effective date of this Agreement, Ronghua Liu, Qiang Chen are enrolled shareholders, legally holding the equity interest in ASIA TIMES. Except rights created by this Agreement, the Equity Pledge Agreement and the Call Option Agreement, in respect of ASIA TIMES, there exists no third party right on the Entrusted Rights. Pursuant to this Agreement, the Trustees may fully and sufficiently exercise the Entrusted Rights according to the then effective articles of association of ASIA TIMES.

 

5.4.4 As of the effective date of this Agreement and in respect of Target Company in which it holds equity interest, it is enrolled shareholder. Except rights created by this Agreement, the Call Option Agreement and the Equity Pledge Agreement, there exists no third party right on the Entrusted Rights. Pursuant to this Agreement, the Trustees may fully and sufficiently exercise the Entrusted Rights according to the then effective articles of association of Target Company.

 

5.4.5 Considering the fact that according to the Equity Pledge Agreement, it shall set aside all equity interest held thereby in relevant Target Company as security to secure the performance of its obligations under the Call Option Agreement. ASIA TIMES undertakes to make full and due performance of the Call Option Agreement during the valid term of this Agreement and that it will not be in conflict with any term under the Call Option Agreement, which may have impact on the exercise of the Entrusted Rights by the Trustees under this Agreement.

 

    7

 

 

5.4.6 Considering the fact that according to the Equity Pledge Agreement, that Shareholders of Target Company will set aside all the equity interest held thereby in Target Company as security to secure the performance of the contractual obligations by Target Company under the Exclusive Service Agreement, Call Option Agreement, ASIA TIMES undertakes to, during the valid term of this Agreement, procure the full and due performance of any and all obligations under the Exclusive Service Agreement and Call Option Agreement by the Target Company in which it holds equity interest, and warrants that no adverse impact on the exercise of the Entrusted Rights hereunder by the Trustees will be incurred due to breaching the Exclusive Service Agreement, or Call Option Agreement by Target Company.

 

ARTICLE 6 TERM OF AGREEMENT

 

6.1 This Agreement takes effect from the date of due execution of all the Parties hereto, with the valid term of twenty (20) years, unless terminated in advance by written agreement of all the Parties or according to Article 8.1 of this Agreement. This Agreement shall automatically renew for another one (1) year when the term (whether original or extended, if applicable) of this Agreement is due, unless HUAYA gives a thirty-day notice in writing to the other Parties of the cancellation of such renewal.

 

6.2 In case that a Shareholder transfers all of the equity interest held by it in Target Company with prior consent of HUAYA, such Shareholder shall no longer be a Party to this Agreement whilst the obligations and commitments of the other Parties under this Agreement shall not be adversely affected thereby.

 

ARTICLE 7 NOTICE

 

7.1 Any notice, request, demand and other correspondences made as required by or in accordance with this Agreement shall be made in writing and delivered to the relevant Party.

 

7.2 The abovementioned notice or other correspondences shall be deemed to have been delivered when (i) it is transmitted if transmitted by facsimile or telex, or (ii) it is delivered if delivered in person, or (iii) when five (5) days have elapsed after posting the same if posted by mail.

 

ARTICLE 8 DEFAULT LIABILITY

 

8.1 The Parties agree and confirm that, if any of the Parties (the “DEFAULTING PARTY”) breaches substantially any of the provisions herein or fails substantially to perform any of the obligations hereunder, such a breach or failure shall constitute a default under this Agreement (a “DEFAULT”). In such event any of the other Parties without default (a “NON-DEFAULTING PARTY”) who incurs losses arising from such a Default shall have the right to require the Defaulting Party to rectify such Default or take remedial measures within a reasonable period. If the Defaulting Party fails to rectify such Default or take remedial measures within such reasonable period or within ten (10) days of a Non-defaulting Party’s notifying the Defaulting Party in writing and requiring it to rectify the Default, then the relevant Non-defaulting Party shall be entitled to choose at its discretion to (1) terminate this Agreement and require the Defaulting Party to indemnify all damages, or (2) require specific performance by the Defaulting Party of this Agreement and indemnification against all damages.

 

    8

 

 

8.2 Without limiting the generality of Article 8.1 above, any breach by any Shareholder of the Call Option Agreement or Equity Pledge Agreement shall be deemed as having constituted the breach by such Shareholder of this Agreement; any breach by Target Company of the Exclusive Service Agreement or Call Option Agreement shall be deemed as having constituted the breach by Target Company of this Agreement.

 

8.3 The Parties agree and confirm, the Shareholders or Target Company shall not request the termination of this Agreement for whatsoever reason and under whatsoever circumstance, except otherwise stipulated by laws or this Agreement.

 

8.4 Notwithstanding any other provisions herein, the validity of this Article shall not be affected by the suspension or termination of this Agreement.

 

ARTICLE 9 MISCELLANEOUS

 

9.1 This Agreement shall be prepared in Chinese language in four (4) original copies, with each involved Party holding one (1) hereof.

 

9.2 The conclusion, validity, execution, amendment, interpretation and termination of this Agreement shall be governed by laws of the PRC.

 

9. 3 Any disputes arising from and in connection with this Agreement shall be settled through consultations among the Parties involved, and if the Parties involved fail to reach an agreement regarding such a dispute within thirty (30) days of its occurrence, such dispute shall be submitted to Shenzhen Court of International Arbitration in accordance with the arbitration rules of such commission, and the arbitration award shall be final and binding on all the Parties involved.

 

9.4 Any rights, powers and remedies empowered to any Party by any provisions herein shall not preclude any other rights, powers and remedies enjoyed by such Party in accordance with laws and other provisions under this Agreement, and a Party’s exercise of any of its rights, powers and remedies shall not preclude its exercise of other rights, powers and remedies of it.

 

9.5 Any failure or delay by a Party in exercising any of its rights, powers and remedies hereunder or in accordance with laws (the “PARTY’S RIGHTS”) shall not lead to a waiver of such rights, and the waiver of any single or partial exercise of the Party’s Rights shall not preclude such Party from exercising such rights in any other way or exercising the remaining part of the Party’s Rights.

 

    9

 

 

9.6 The titles of the Articles contained herein are for reference only, and in no circumstances shall such titles be used for or affect the interpretation of the provisions.

 

9.7 Each provision contained herein shall be severable and independent from each of other provisions. If at any time any one or more articles herein become invalid, illegal or unenforceable, the validity, legality or enforceability of the remaining provisions herein shall not be affected thereby.

 

9.8 Upon execution, this Agreement shall replace any other previous legal documents entered into by relevant Parties on the same subject matter.

 

9.9 Any amendments or supplements to this Agreement shall be made in writing and shall take effect only when properly signed by the Parties to this Agreement. Notwithstanding the preceding sentence, considering that the rights and obligations of each Target Company and its Shareholders are independent and severable from each other, in case that the amendment or supplement to this Agreement is intended to have impact upon one of the Target Companies and its Shareholders, such amendment or supplement requires only the approval of HUAYA, the Target Company and its Shareholder while no consent is necessary from the other Target Companies and their Shareholders (to the extent that the amendment or supplement does not have impact upon such other Shareholders).

 

9.10 In respect of the Shareholder and Target Company, they shall not assign any of their rights and/or transfer any of their obligations hereunder to any third parties without prior written consent from HUAYA; HUAYA shall have the right to assign any of its rights and/or transfer any of its obligations hereunder to any third parties designated by it after giving notice to the Shareholders.

 

9.11 This Agreement shall be binding on the legal successors of the Parties.

 

9.12 The rights and obligations of Target Companies are severable and independent, performance of this Agreement by any Shareholder and any Target Company shall not affect the performance by the other Shareholders and other Target Companies.

 

    10

 

 

9.13 Notwithstanding any provision to the contrary in this Agreement, new companies other than the Target Companies and their shareholder(s) can be included as one party to this Agreement by signing the Acknowledgement Letter in the form of Appendix to this Agreement. The new companies shall enjoy the same rights and assume the same obligations as other Target Companies; the shareholder(s) of the new companies shall enjoy the same rights and assume obligations as the other Shareholders hereunder. Since the rights and obligations of the Target Company and its Shareholder(s) under the Agreement are severable and independent, the participation of the new target companies and their shareholders will not affect the rights and obligations of the original Target Company and its Shareholders, the participation of the new target companies only requires confirmation of HUAYA by signing. Each of the Target Companies hereby irrevocably and unconditionally agrees to the participation of the new companies and their shareholders, and further confirms that the shareholder(s) of any new target company can entrust the Trustees to exercise the voting rights according to the terms of this Agreement not necessarily with consent of the original Target Companies or their relevant Shareholder(s).

 

[The remainder of this page is left blank]

 

    11

 

 

IN WITNESS HEREOF, the following Parties have caused this Shareholders’ Voting Rights Proxy Agreement to be executed as of the date first here above mentioned.

 

Ronghua Liu    
Signature by: /s/ Ronghua Liu  
     
Qiang Chen    
Signature by:  /s/ Qiang Chen  
     
HUAYA CONSULTANT (SHENZHEN) CO., LTD. Company chop  
 
Signed by: /s/ Qiang Chen  
Name: Qiang Chen  
Position: Authorized Representative  
     
QIANHAI   ASIA TIMES (SHENZHEN) INTERNATIONAL FINANCIAL SERVICES CO., LTD (Company chop)  
     
Signed by: /s/ Qiang Chen  
Name: Qiang Chen  
Position: Authorized Representative  

 

    12

 

 

Exhibit 10.9

 

Lease Contrac t

 

Contract Number: DDTZDCGJZX-20181025001

 

Lessor (Party A): Shenzhen Dedian Investment Ltd.

 

Mailing Address: Room 3805, Dachong International Center, 39 Tonggu Road, Nanshan District, Shenzhen City, Guangdong Province, China

 

Contact : (86) 15820444743

 

Unified social credit code or Valid ID number: 91440300311826993X

 

Lesser (Party B): Qianhai Asia Times (Shenzhen) International Financial Services Co., Ltd.

 

Mailing Address: Room 3803, Dachong International Center, 39 Tonggu Road, Nanshan District, Shenzhen City, Guangdong Province, China

 

Unified social credit code or Valid ID number: 91440300329553145Y

 

In accordance with “Contract Law of the People’s Republic of China”, “Urban Real Estate Administration Law of the People’s Republic of China”, “Measures for the Administration of Commodity House Leasing” and “Decisions about strengthening the safety of house leasing by Shenzhen Standing Committee of People’s Congress”, Party A and B have reached an agreement through friendly consultation to conclude the following contract.

 

Article 1 Condition of leasing real estate

 

At the request of Party B, Party A agrees to lease the following real estate to Party B and it shall be used by Party B in accordance with the provisions of this agreement:

 

1.1 Location and Number: Room 3803, Dachong International Center, 39 Tonggu Road, Nanshan District, Shenzhen City, Guangdong Province, China

 

1.2 Delivery Standard: Deliver as is

 

1.3 Party B confirms: before signing this agreement, Party B has been to the spot to check carefully all the conditions of the property including its decoration and agreed area, and expressed satisfaction and acceptance; Party B undertakes that the property is only for office use.

 

 

 

 

Article 2 Term and Area of Lease

 

2.1 Term of Lease:

 

From 1 November, 2018 to 26 November, 2019 .

 

2.2 Area of Lease: The area of the leasing house is 890 square meters.

 

Article 3 Rent and Management Fee

 

3.1 Rent per month: On the basis of area, the rent of second years increased by 6% on the basis of the first year.

 

3.2.1 In the first year (from 1 November, 2018 to 26 November, 2018) , monthly rental per square meter is 218.36 (two hundred and eighteen point three six) Yuan, of which the rent is 178 (one hundred and seventy-eight) Yuan, the management fee and the air-conditional fee for working hours is 28 (twenty-eight) Yuan, and the tax is 12.36 (twelve point three six) Yuan.

 

3.2.2 In the second year (from 27 November, 2018 to 26 November, 2019) , monthly rental per square meter is 229.68 (two hundred and twenty-nine point six eight) Yuan, of which the rent is 188.68 (one hundred and eighty-eight point six eight) Yuan, the management fee and the air-conditional fee for working hours is 28 (twenty-eight) Yuan, and the tax is 13 (thirteen) Yuan.

 

3.3 Total rent per month

 

3.3.1 In the first year (from 1 November, 2018 to 26 November, 2018) , monthly rental is 194,340.4 (one hundred and ninety-four thousand three hundred and forty point four) Yuan, of which the rent is 158,420 (one hundred and fifty-eight thousand four hundred and twenty) Yuan, the management fee and the air-conditional fee for working hours is 24,920 (twenty-four thousand nine hundred and twenty) Yuan, and the tax is 11,000.4 (eleven thousand point four) Yuan.

 

3.3.2 In the second year (from 27 November, 2018 to 26 November, 2019) , monthly rental per square meter is 204,415.20 (two hundred and four thousand four hundred and fifteen point two) Yuan, of which the rent is 167,925.2 (one hundred and sixty-seven thousand nine hundred and twenty-five point two) Yuan, the management fee and the air-conditional fee for working hours is 24,920 (twenty-four thousand nine hundred and twenty) Yuan, and the tax is 11,570 (eleven thousand five hundred and seventy) Yuan.

 

3.3 All costs above include tax.

 

Article 4 House lease security deposit

 

4.1 Within 5 working days from the signing and effective day, Party B shall pay to Party A the house lease security deposit in an amount of two months’ rental (including management fees) which means 366,680 (three hundred and sixty-six thousand six hundred and eighty) Yuan.

 

 

 

 

4.2 Within 3 working days from the signing and effective day, Party B shall pay to Party A the water and electricity deposit in an amount of two months’ water and electricity fees (10 Yuan/square meter/month) which means 17,800 (seventeen thousand eight hundred) Yuan.

 

4.3 The lease security deposit shall be kept by Party A without interest. Within 15 days after all the following conditions are met, Party A shall return the lease security deposit to Party B through bank transfer, and Party B shall bear the bank transfer fee (deducted directly from the deposit), but the deposit which offsets the account payable by Party B shall not be returned;

 

4.2.1 Party B do not renew the lease at the end of the lease term;

 

4.2.2 Party B has returned the property, has paid the full amount and completed all the procedures in accordance with Article 12.1 and the convention, as well as has fulfilled all other obligations and responsibilities stipulated in this agreement;

 

4.2.3 Party B has returned the original receipt of the lease security deposit issued by Party A (copy is invalid), and has provided in written form the information of the bank account which is to receive the deposit.

 

4.3 The deposit shall not be returned in case of any of the following conditions:

 

4.3.1 Party B terminates this agreement in advance without Party A’s consent;

 

4.3.2 Party B terminates this agreement or renounce the lease in advance by practical behavior without Party A’s consent;

 

4.3.3 Party B’s behavior leads to an invalidation of this agreement;

 

4.3.4 Party A terminates this agreement according to its articles due to Party B’s any great breach.

 

Article 5 Payment of Rent, Management Fee, Water and Electricity Charge, etc.

 

5.1 Party B shall within 2 working days from the signing and effective day pay the first rent to Party A.

 

5.2 Party B shall pay the rent to Party A before 5 th of every month, and Party A shall issue an official invoice within 5 days from the receipt of the rent.

 

5.3 Party B shall pay the property special maintenance funds to Party A before 10 th of every month which means 222.5 (two hundred and twenty-two point five)Yuan.

 

5.4 Party B shall pay the rent and deposit by bank transfer to the designated account of Party A:

 

Name of Organization: Shenzhen Dedian Investment Ltd.

 

Account Bank: Shanghai Pudong Development Bank Shenzhen Nan Zhong Road Sub Branch

 

Account Number: 7913 0154 7400 1207 2

 

 

 

 

Article 6 Receiving and Renewal

 

6.1 Party B agrees to and shall come to Dachong International Center at the beginning day of the lease term to receive the property, as well as shall go through the residence formalities with Party A on the basis of identity information and relevant payment vouchers, which shall not be informed again by Party A to Party B (Party B has no objection on this).

 

6.2 If Party B fails to pay the rent, lease security deposit and management fees which should be paid before or on the signing date of this agreement before receipt, which means a major breach of Party B, Party A has the right to choose to postpone the delivery of the property or to deal with it in accordance with Article 14.1. If Party A chooses to postpone the delivery, the delivery date shall be within 5 working days after Party B has paid all the payment, and Party B shall assume the agreed responsibility for the overdue receipt.

 

6.3 Party B should carefully and comprehensively check the status of the property when receiving it.

 

6.4 If Party B delays to receive the property, Party B should assume the overdue receipt responsibility which means: the lease term remains unchanged, and the relevant payable amounts such as rent and management fees incurred from the beginning date of the lease term should be borne by Party B. If Party B delays for up to 15 days to receive, it means a major breach of Party B.

 

6.5 After the expiration of the lease term, in the same conditions (subject to the lease conditions determined by Party A at that time) Party B shall have the priority to renew the lease, but Party B should submit a written renewal application to Party A three months before the expiration of the lease term, and both parties shall negotiate about the lease conditions and sign the lease agreement; Party B will be deemed to wave the priority right of renewal if it does not apply within the specified time limit.

 

6.6 If Party B do not renew the lease agreement with Party A at the expiration of the lease term, Party B shall return the property as stipulated in Article 13.1, otherwise Party B shall bear the responsibility stipulated in Article 13.2.

 

Article 7 Decoration and No change of housing structure

 

7.1 According to Article 223 of the Contract Law and Clause 2 of Article 38 of the Leasing Ordinance, if Party B needs to renovate property (including but not limited to internal decoration, separation, construction, alteration, installation or replacement of equipment and facilities, and other decorations),it shall obtain the written consent of Party A and the property management company in advance and shall pay the decoration deposit. After Party B finishes the decoration which passed the inspection by Party A and property management company, the decoration deposit shall be returned to Party B without interest. Party B can not decorate without the written consent of the property management company. If Party B renovates without authorization and does not correct it within the time limit specified by Party A and the property management company, it shall be deemed as a major breach. Party A and the property management company must agree to Party B’s renovation requirements unless they have justifiable reasons.

 

 

 

 

7.2 Party B’s decoration design, grade, style and image must match that of the building which the property is located and the surrounding buildings, and must ensure the safety of the building. In case of dispute, the final ruling shall be attributable to Party A and the property management company.

 

7.3 After Party B receive the property, if the country laws or policies stipulate that Party B should go through the government examination and approval formalities (including but not limited to fire safety), Party B shall be responsible for all formalities to the government departments and bear all costs.

 

7.4 Party B shall not change its main structure at any time (including but not limited to foundations, load-bearing walls, load-bearing column beams, other load-bearing components, floor slabs, roof beams, ring beams, staircases, etc.). Otherwise, it will be a major breach of contract by Party B.

 

7.5 Party B understands: at the expiration of the lease term, Party A does not necessarily renew the lease agreement with Party B, so Party B’s decoration is voluntary and matches the lease term. Party B agrees that, at the expiration of the lease term, or when Party B withdraws the lease in advance, or when Party A rescinds this agreement due to Party B’s serious breach of contract, or when both parties agree to terminate this agreement in advance through consultation, whether or not the decoration still has residual value, and whether or not Party A accepts the decoration, Party B can not require Party A to compensate for any reason.

 

Article 8 Other liabilities about using of Party B

 

8.1 Party B shall be responsible for all the government approval procedures (including but not limited to industrial and commercial license, tax registration, fire checking and acceptance, environmental protection approval, special trade operation permits, safety permits, etc.) for the use of the property and shall finish the procedures within the legal time limit and bear all the expenses with Party A’s assistance in legal and reasonable scope. Party B shall not operate without license or illegally. Otherwise, Party B shall be deemed to have breached the contract and bear all the legal responsibilities.

 

 

 

 

8.2 Party B is responsible for the safety management of the property. Party B shall, in accordance with the national laws, policies, management regulations and the management system of Dachong International Center, do a good job in all safety management of the property (including fire safety, anti-theft and anti-robbery, public security management, safety management, power safety, gas safety, food safety, health and epidemic prevention, etc.). In this property, Party B shall not store valuables, drugs, guns, control knives, radioactive dangerous goods, fireworks, firecrackers and other inflammable and explosive materials, and shall not stay, which is in order to ensure the personal safety and property safety of itself, staff, visitors and the property. If the property has a fire, explosion, public security incidents, personal casualties or other security incidents, or if Party B violates the provisions of this article and fails to make corrections within the time limit required by Party A and the property management company, Party B shall be deemed to be in serious breach of contract, and Party B shall bear all legal responsibilities.

 

8.3 Party B shall be responsible for the cleanliness of the property. All kinds of garbage (including but not limited to commercial garbage, decoration garbage, large-scale garbage and oil pollution) produced by Party B shall be dealt with according to the management regulations of the property management company, and Party B shall not cause pollution to the area outside the property, otherwise Party B shall be deemed to be in breach of contract and Party B shall bear all legal responsibilities and costs of pollution cleaning.

 

8.4 Party B shall deal well with all relationships and disputes between it and suppliers, purchasers, consumers, visitors, internal employees, other merchants, government departments, other relevant personnel and units according to law. Party B shall be deemed to have breached the contract and shall bear full legal responsibility if Party B fails to properly handle the matter which then affects the normal business, office or public order of other merchants, Party A, the property management company or Sunshine Kechuang Market.

 

Article 9 Maintenance and Repairing

 

9.1 Both parties agree: Party A's maintenance responsibility is limited to that of the original main structure of the property and its original ancillary facilities; Party B shall be responsible for maintenance and repairing of the ancillary facilities brought by itself and its decoration, and shall bear the full costs.

 

9.2 Party B shall properly manage the property. If the main structure of the property or of its building is damaged or lost due to improper using or management by Party B, Party B shall be responsible for the maintenance. If Party B refuses to repair, Party A and the property management company can assist to repair or entrust a third party to repair, and the maintenance costs shall be borne by Party B.

 

Article 10 Insurance and Force Majeure

 

10.1 In order to prevent accidental loss, Party B shall purchase full amount of Property All Risks, public liability insurance and other necessary insurance for all the property in the estate, shall pay employer liability insurance and social insurance (including industrial injury insurance and medical insurance) for its employees in accordance with the law, and shall ask insurance companies and insurance institutions promptly after the accident occurs. Compensation. If Party A has purchased insurance for the property, Party A shall not be responsible to compensate Party B's loss.

 

 

 

 

10.2 In the event of force majeure, both parties should bear their own losses. If the event of force majeure does not affect the continuing lease of the property, the two parties shall continue to perform this agreement.

 

10.3 Force Majeure Events refer to natural disasters (including but not limited to earthquakes, subsidence, tsunamis, typhoons, rainstorms, floods, etc.) that cannot be foreseen, prevented or avoided by both parties and accidents (including but not limited to fires, explosions, radiation, falling objects from the air, wars, unrest, riots, mass incidents, terrorist attacks, government bans, etc.) caused by non-parties.

 

Article 11 Property transfer

 

11.1 This office is limited to be used by Party B for working. Without Party A's consent, Party B shall not sublet and transfer the office, otherwise it will be a major breach of contract.

 

Article 12 Return the property

 

12.1 On the date of termination of this agreement, Party B shall return the property (including its ancillary facilities and all keys) to Party A in good condition and pay the full amount payable (including rent, utilities, gas bill, communications fees, television viewing fees, government tax, liquidated damages, late fees, compensation and other payables). Party B shall also complete the cancellation of lease contracts, the cancellation or the address’s moving out of its business license, and other formalities required by the law and the government to ensure that the new lessee can handle the relevant government approval formalities timely and smoothly when leasing the property, and can successfully apply for relevant public utilities services.

 

12.2 If Party B fails to fulfil all its obligations under Article 13.1, Party A shall have the right to deduct temporarily the amount payable which should have been paid to Party B (including but not limited to the lease deposit). If it leads to losses of Party A and the new lessee, Party B agrees to compensate them in full and the amount shall be deducted from Party B's lease deposit and other funds. If relevant public utilities, government departments or judicial procuratorial organs ask in written form Party A to assist in withholding or deducting Party B's funds, Party B shall agree Party A to assist.

 

 

 

 

12.3 If Party B fails to return the property on time as stipulated in Article 13.1, it shall pay the rent twice as much as the standard rent stipulated in this agreement, and shall pay the liquidated damages as 10% of the total amount of monthly rent. If the property is not returned within five days after the expiration date, Party B shall be deemed to have given up the ownership of all the articles, equipment, facilities and decoration in the property automatically; Party A shall have the right to recover the property, enter the property on its own and dispose of all the articles, equipment, facilities and garbage in the property on its own. All the expenses incurred shall be borne by Party B, and Party A shall have the right to deduct the cost from Party B's lease security and other funds.

 

12.4 When Party B returns the property, (i.e. the state in which Party A delivers the property) or jointly uses the above rights. If Party A does not make a definite choice, it shall be deemed that it receive without compensation, and Party B shall not destroy any decoration in the property (including but not limited to hydroelectric lines, ceilings, floors, partitions, glass doors and windows, various decorations and accessories fixed to the property, except for movable articles, facilities and equipment etc.); however, if Party B changes the structure of the property without the written consent of Party A, Party B shall restore it to its original state as required by Party A and the property management company; if Party B does not restored in the limited time, Party A has the right to entrust a third party to repair or restore it to the original state, and all the expenses incurred shall be borne by Party B. Party A has the right to deduct the expenses from Party B's lease deposit.

 

12.5 Party B agrees that Party A has the right to bring any visitor or future lessees into the property for inspection at or within 2 months before the expiration of the lease term or the termination of this agreement.

 

Article 13 Other liabilities for breach of contract and Termination of the agreement

 

13.1 If Party B fails to pay the amount payable within ten days after agreed date, Party B shall pay to Party A the liquidated damages at 5% of the amount owed on each overdue day until the date of payment. If Party B fails to pay the property management fee and the water and electricity fee on time, Party B shall pay the late fee according to the late fee standard determined by the property management company and Shenzhen water supply and power supply department until the payment date.

 

13.2 If Party B has any of the following circumstances, it shall be deemed as a serious breach of contract, and Party A shall have the right to terminate this agreement unilaterally at any time (not deemed to be a violation) and to take back the property and rent out it separately, without refunding the rent and the lease deposit paid by Party B who shall separately compensate for the loss of Party A:

 

13.2.1 Party B is in arrears with rent, property management fees or other payables, and the time of default is up to 30 days or more (whether or not Party A has urged Party B to pay);

 

13.2.2 Party B violates Dachong International Center's management rules and regulations and does not make corrections within the time limit stipulated by Party A and the property management company;

 

 

 

 

13.2.3 Party B violates the Article 8 of this agreement, failing to install its advertisement in the designated place as required by Party A and the property management company and failing to correct it within the time limit stipulated by Party A;

 

13.2.4 Party B fails to fulfill its maintenance obligations and still fails to do after Party A or the property management company urges;

 

13.2.5 Party B has other major breaches of contract.

 

13.3 If Party A has one of the following circumstances, Party B can unilaterally terminate this agreement (not deemed to be a breach of contract) and require Party A to return the rent for the period not yet fulfilled.

 

13.3.1 Party A delays the delivery of the property for 30 days or more (except for reasons arising from Party B);

 

13.3.2 Without the consent of Party B or the approval of relevant departments, Party A rebuilds, expands or renovates the property, which causes Party B to be unable to use it;

 

13.3.3 Party A withdraws the property before the expiration date;

 

13.3.4 The structure or quality of the property affects the normal use of Party B;

 

13.3.5 Party B can not successfully handle relevant licenses due to Party A or the property management company.

 

Party B has the right to refuse to pay the rent and terminate the agreement when the above situation occurs, and Party A should return the deposit within 3 days and compensate for the loss of Party B.

 

13.4 During the term of the lease, in any of the following circumstances, either party can terminate this agreement (not deemed to be in breach of contract), and the rent and other charges payable shall be settled and paid in accordance with the actual term of the lease:

 

13.4.1 The property is expropriated or requisitioned for national construction or social public interests according to the law;

 

13.4.2 The property has been disposed of by mortgage;

 

13.4.3 The property is destroyed, unable to continue to be used or identified as a dangerous building due to Force Majeure;

 

13.4.4 Party A and Party B agree not to pursue liabilities for breach of contract.

 

13.5 The term "termination of this agreement" as used herein means the termination of the lease relationship established by Party A and Party B with respect to the property, including the termination of this agreement as well as the lease contracts and relevant legal documents for the record of the government.

 

 

 

 

Article 14 Notice

 

14.1 Unless otherwise agreed, the contact address, telephone number and fax number of both parties shall be governed by this agreement. If there is any change, the other party should be notified in writing seven days in advance, otherwise the consequences and liabilities arising therefrom will be borne by the changing party. After Party B enters the house, the address of the property automatically becomes one of the communication addresses of Party B.

 

14.2 If either party sends a notice to the other one by mail, the other party is deemed to have received the notice when the postal unit or the courier sends the mail to the other party's contact address in the usual way. If the mail is returned due to "unknown address", "no such person", "telephone disconnection", "the other party refuses to accept" or other reasons, it is also deemed to have been served.

 

14.3 If Party A or the property management company serves written notice to Party B but Party B refuses to sign or cannot sign, Party A or the property management company can post written notice on the exterior wall of the property or in a prominent position leading to the property, or issue the notice with electronic display screen. When posted or released, it is deemed to have been served.

 

Article 15 Settlement of disputes and Application of law

 

In case of dispute, the two parties shall negotiate to resolve it. When negotiation fails, any party of Party A and Party B can bring proceedings in the people's court of the region where the property is located. Disputes about this agreement shall be handled according to the laws of the people's Republic of China (except those in Hong Kong, Macao and Taiwan).

 

Article 16 Validity of the agreement

 

16.1 This agreement and the appendix have constituted all the rights and obligations of the two parties on the lease of the house. Advertising and publicity materials provided by Party A do not constitute part of the agreement. This Agreement shall immediately replace all previous commitments, letters of intent, agreements and contracts between the two parties from the date of signing. The rights and obligations of both parties shall be governed by the provisions of this agreement and the annex.

 

16.2 If some clauses or some contents of any clause in this agreement are found to be invalid, invalid, illegal or unenforceable, it shall not affect the continuous and effective execution of other clauses and other contents of the clause.

 

 

 

 

16.3 If either party do not exercise any right conferred by this agreement, it shall not be deemed to waive the right and it also can exercise the right in the future. The rescission or termination of the agreement shall not be deemed that either party has waived the right to pursue the other party's liability for breach of contract. Either party shall have the right to pursue the other party's liability for breach of contract in accordance with the law and this agreement.

 

Article 17 Effective and Number of contracts

 

This Agreement shall come into force on the date of signing and sealing by both parties. This agreement is done in duplicate, and Party A and Party B each holds one copy with the same legal effect.

 

Party A (Sealing): Shenzhen Dedian Investment Ltd.

 

Legal Representative: ZHOU Guanru

 

Party B (Sealing): Qianhai Asia Times (Shenzhen) International Financial Services Co., Ltd.

 

Legal Representative: CHEN Qiang

 

Signing Date: 25 October, 2018

 

 

 

 

Exhibit 10.10

 

Equity Transfer Agreement

 

Transferor (Party A): Qianhai Asia Times (Shenzhen) International Financial Services Co., Ltd.

 

Legal Representative: CHEN Qiang

 

Transferee (Party B): ZHOU Yanru (identity card number: 44052719591014441X)

 

Address: Room 30B, Building South D2, Jingji Binhe Times Square, Binhe Street, Futian District, Shenzhen, Guangdong, China

 

The subject matter of this transfer: 45% of the shares held by Party A of Qianhai Asia Times (Shenzhen) International Fund Management Co., Ltd.

 

In accordance with the relevant laws and regulations and through friendly negotiation, Party A and Party B have reached an agreement on the transfer of 45% held by Party A of the shares of Qianhai Asia Times (Shenzhen) International Fund Management Co., Ltd. (hereinafter referred to as "target company") to Party B. On this basis, both parties sign this agreement and execute it strictly.

 

1. The condition of the subject matter

 

1) The registered capital of the target company is 50 million RMB.

 

2) The subject matter of this transfer is 45% of shares held by Party A of the target company.

 

2. The equity structure of the target company after this transfer is:

 

Name of Shareholder 1: Qianhai Asia Times (Shenzhen) International Financial Services Co., Ltd.

 

Subscribed Capital: 27,500,000 RMB

 

Equity Portion: 55%

 

 

 

 

Name of Shareholder 2: ZHOU Yanru

 

Subscribed Capital: 22,500,000 RMB

 

Equity Portion: 45%

 

3. Representation and Warranties by both parties

 

1) Representation and Warranties by Party A

 

a) Party A is a corporation legal person established and surviving legally with an independent civil capacity.

 

b) Party A is the shareholder of the target company, legally holding 45% of the company's equity, and agrees to transfer the equity it holds to Party B;

 

c) Party A undertakes that the shares it holds and shall transfer to Party B are not guaranteed, pledged or any other third party’s interests to any other third party, without any restrictions form the judiciary.

 

d) Party A undertakes that the transfer of shares to Party B has been approved by its authorized decision-making body.

 

e) Party A undertakes to actively assist Party B in handling the relevant procedures for transfer of the shares. Party A shall not dispose of any asset of the target company and shall not provide guarantees or mortgages in the name of the target company before the relevant procedures are completed.

 

f) Party A confirms that before the signing of this agreement, the condition of the legal personality, legal operation and legal existence of the target company as well as the status of ownership of assets, debt and liabilities, taxation, litigation and arbitration, and other disputes, incidents or factors that may adversely affect the company, provided by the target company and itself to Party B are true, accurate and complete, without any false. And Party A is willing to bear any legal liability caused by improper disclosure of the target company and its own.

 

2) Representation and Warranties by Party B

 

a) Party B is a corporation legal person established and surviving legally with an independent civil capacity.

 

 

 

 

b) Party B agrees to acquire 45% of the shares of the target company from Party A and the relevant acts have been approved by the authority. Party B has understand the basic situation of the target company.

 

c) Party B guarantees that it has the ability to pay the equity transfer price.

 

d) Party B guarantees that it will further promote and support the development of the target company after it becomes one of it’s shareholders.

 

4. Transfer Price and Payment

 

1) Party A and Party B agree and confirm that the equity transfer price under this agreement is 31,500 RMB (THIRTY-ONE THOUSAND AND FIVE HUNDRED RMB).

 

2) Party A and Party B agree that Party B shall pay the equity transfer price to Party A at once, and Party A shall issue a compliance receipt to Party B at the same time as the payment is received.

 

5. Conditions under which the agreement becomes effective

 

When these two conditions are met, this agreement shall become effective. The conditions are:

 

1) This agreement is signed by Party A and Party B.

 

2) This agreement has been authorized and approved by Party A's organ of authority (Board of Directors or Shareholders' Meeting).

 

6. Liability for breach of agreement

 

1) Party A and Party B shall both fully perform the contents stipulated in this agreement. Failure by either party to fulfill the terms stipulated in this agreement, its subsidiary or supplementary provisions shall be deemed to be a breach of agreement, and the other party shall have the right to ask it to pay the liquidated damages and compensate for the corresponding losses.

 

2) The liquidated damages of this agreement are 5% of the total value of the equity transfer price. The corresponding losses only refers to direct and actual losses of the party, excluding other losses.

 

 

 

 

3) When the party who complies with the agreement investigate the other one for breach of agreement, it shall have the right to request the continuation or termination of the performance of this agreement.

 

7. Change and termination of agreement

 

1) Both parties of this agreement can change or supplement this agreement by signing a written supplementary agreement by consensus.

 

2) Both parties agree that any of the following circumstances can result in the termination of this agreement:

 

a) Party A and Party B have fulfilled their obligations under this agreement and their rights under this agreement have been fully realized.

 

b) Party A and Party B agree to terminate this agreement by consensus.

 

c) The transfer referred to in this agreement has not been approved by the industry and commerce authorities for other reasons.

 

If this agreement is terminated for the reasons mentioned in above item (2) (3), Party A shall return in full the transfer price paid by Party B within 30 days.

 

3) After the termination of the rights and obligations of this agreement, the parties shall perform the obligations of notification, assistance and confidentiality.

 

8. Confidentiality

 

Neither party shall disclose or disseminate to the public or any third party any business secrets about the production, operation, investment or any other aspects of the other party which is known in the course of negotiation, signing or performance of this agreement; nor shall it use such business secrets for its own or any other person's benefit. Unless there is: (1) legal requirement; (2) public interest requirement; (3) prior written consent of the other party.

 

9. Supplementary articles

 

1) Any dispute arising from the performance of this agreement shall be settled by friendly negotiation as far as possible. If it fails to reach agreement, either party can bring the action to the people's court in the place where the agreement is signed.

 

 

 

 

2) The matters not covered in this agreement shall be settled by both parties on the principle of friendly consultation. A supplementary agreement may be signed separately and shall have the same legal effect as this agreement.

 

3) This agreement is in quadruplicate, each party holds one copy, the target company keeps one copy, and the remaining one is submitted to the company registration authority for the record.

 

Transferor (Party A): Qianhai Asia Times (Shenzhen) International Financial Services Co., Ltd.

 

(Sealing)

 

Legal Representative: CHEN Qiang

 

Transferee (Party B): ZHOU Yanru

 

(Signing)

 

13 August, 2018 in Nanshan District, Shenzhen

 

 

 

 

Exhibit 10.11

 

Equity Transfer Agreement

 

Transferor (Party A): Qianhai Asia Times (Shenzhen) International Financial Services Co., Ltd.

 

Legal Representative: CHEN Qiang

 

Transferee (Party B): CAI Zhuorong (identity card number: 440527197610153778)

 

Address: Room 510, Building 7, Guangda Industrial Town, North Liusha Street, Puning, Guangdong, China

 

The subject matter of this transfer: 20% of the shares held by Party A of Qianhai Asia Times (Shenzhen) International Fund Management Co., Ltd.

 

In accordance with the relevant laws and regulations and through friendly negotiation, Party A and Party B have reached an agreement on the transfer of 20% held by Party A of the shares of Qianhai Asia Times (Shenzhen) International Fund Management Co., Ltd. (hereinafter referred to as "target company") to Party B. On this basis, both parties sign this agreement and execute it strictly.

 

1. The condition of the subject matter

 

1) The registered capital of the target company is 50 million RMB.

 

2) The subject matter of this transfer is 20% of shares held by Party A of the target company.

 

2. The equity structure of the target company after this transfer is:

 

Name of Shareholder 1: ZHOU Yanru

 

Subscribed Capital: 22,500,000 RMB

 

Equity Portion: 45%

 

 

 

 

Name of Shareholder 2: LAI Zehong

 

Subscribed Capital: 17,500,000 RMB

 

Equity Portion: 35%

 

Name of Shareholder 3: CAI Zhuorong

 

Subscribed Capital: 10,000,000 RMB

 

Equity Portion: 20%

 

3. Representation and Warranties by both parties

 

1) Representation and Warranties by Party A

 

a) Party A is a corporation legal person established and surviving legally with an independent civil capacity.

 

b) Party A is the shareholder of the target company, legally holding 20% of the company's equity, and agrees to transfer the equity it holds to Party B;

 

c) Party A undertakes that the shares it holds and shall transfer to Party B are not guaranteed, pledged or any other third party’s interests to any other third party, without any restrictions form the judiciary.

 

d) Party A undertakes that the transfer of shares to Party B has been approved by its authorized decision-making body.

 

e) Party A undertakes to actively assist Party B in handling the relevant procedures for transfer of the shares. Party A shall not dispose of any asset of the target company and shall not provide guarantees or mortgages in the name of the target company before the relevant procedures are completed.

 

f) Party A confirms that before the signing of this agreement, the condition of the legal personality, legal operation and legal existence of the target company as well as the status of ownership of assets, debt and liabilities, taxation, litigation and arbitration, and other disputes, incidents or factors that may adversely affect the company, provided by the target company and itself to Party B are true, accurate and complete, without any false. And Party A is willing to bear any legal liability caused by improper disclosure of the target company and its own.

 

 

 

 

2) Representation and Warranties by Party B

 

a) Party B is a corporation legal person established and surviving legally with an independent civil capacity.

 

b) Party B agrees to acquire 20% of the shares of the target company from Party A and the relevant acts have been approved by the authority. Party B has understand the basic situation of the target company.

 

c) Party B guarantees that it has the ability to pay the equity transfer price.

 

d) Party B guarantees that it will further promote and support the development of the target company after it becomes one of it’s shareholders.

 

4. Transfer Price and Payment

 

1) Party A and Party B agree and confirm that the equity transfer price under this agreement is 10,000 RMB (TEN THOUSAND RMB).

 

2) Party A and Party B agree that Party B shall pay the equity transfer price to Party A at once, and Party A shall issue a compliance receipt to Party B at the same time as the payment is received.

 

5. Conditions under which the agreement becomes effective

 

When these two conditions are met, this agreement shall become effective. The conditions are:

 

1) This agreement is signed by Party A and Party B.

 

2) This agreement has been authorized and approved by Party A's organ of authority (Board of Directors or Shareholders' Meeting).

 

6. Liability for breach of agreement

 

1) Party A and Party B shall both fully perform the contents stipulated in this agreement. Failure by either party to fulfill the terms stipulated in this agreement, its subsidiary or supplementary provisions shall be deemed to be a breach of agreement, and the other party shall have the right to ask it to pay the liquidated damages and compensate for the corresponding losses.

 

 

 

 

2) The liquidated damages of this agreement are 5% of the total value of the equity transfer price. The corresponding losses only refers to direct and actual losses of the party, excluding other losses.

 

3) When the party who complies with the agreement investigate the other one for breach of agreement, it shall have the right to request the continuation or termination of the performance of this agreement.

 

7. Change and termination of agreement

 

1) Both parties of this agreement can change or supplement this agreement by signing a written supplementary agreement by consensus.

 

2) Both parties agree that any of the following circumstances can result in the termination of this agreement:

 

a) Party A and Party B have fulfilled their obligations under this agreement and their rights under this agreement have been fully realized.

 

b) Party A and Party B agree to terminate this agreement by consensus.

 

c) The transfer referred to in this agreement has not been approved by the industry and commerce authorities for other reasons.

 

If this agreement is terminated for the reasons mentioned in above item (2) (3), Party A shall return in full the transfer price paid by Party B within 30 days.

 

3) After the termination of the rights and obligations of this agreement, the parties shall perform the obligations of notification, assistance and confidentiality.

 

8. Confidentiality

 

Neither party shall disclose or disseminate to the public or any third party any business secrets about the production, operation, investment or any other aspects of the other party which is known in the course of negotiation, signing or performance of this agreement; nor shall it use such business secrets for its own or any other person's benefit. Unless there is: (1) legal requirement; (2) public interest requirement; (3) prior written consent of the other party.

 

 

 

 

9. Supplementary articles

 

1) Any dispute arising from the performance of this agreement shall be settled by friendly negotiation as far as possible. If it fails to reach agreement, either party can bring the action to the people's court in the place where the agreement is signed.

 

2) The matters not covered in this agreement shall be settled by both parties on the principle of friendly consultation. A supplementary agreement may be signed separately and shall have the same legal effect as this agreement.

 

3) This agreement is in quadruplicate, each party holds one copy, the target company keeps one copy, and the remaining one is submitted to the company registration authority for the record.

 

Transferor (Party A): Qianhai Asia Times (Shenzhen) International Financial Services Co., Ltd.

 

(Sealing)

 

Legal Representative: CHEN Qiang

 

Transferee (Party B): CAI Zhuorong

 

(Signing)

 

19 September, 2018 in Nanshan District, Shenzhen

 

 

 

 

Exhibit 10.12

 

Equity Transfer Agreement

 

Transferor (Party A): Qianhai Asia Times (Shenzhen) International Financial Services Co., Ltd.

 

Legal Representative: CHEN Qiang

 

Transferee (Party B): LAI Zehong (identity card number: 445281198707027023)

 

Address: Room 510, Building 7, Guangda Industrial Town, North Liusha Street, Puning, Guangdong, China

 

The subject matter of this transfer: 35% of the shares held by Party A of Qianhai Asia Times (Shenzhen) International Fund Management Co., Ltd.

 

In accordance with the relevant laws and regulations and through friendly negotiation, Party A and Party B have reached an agreement on the transfer of 35% held by Party A of the shares of Qianhai Asia Times (Shenzhen) International Fund Management Co., Ltd. (hereinafter referred to as "target company") to Party B. On this basis, both parties sign this agreement and execute it strictly.

 

1. The condition of the subject matter

 

1) The registered capital of the target company is 50 million RMB.

 

2) The subject matter of this transfer is 35% of shares held by Party A of the target company.

 

2. The equity structure of the target company after this transfer is:

 

Name of Shareholder 1: ZHOU Yanru

 

Subscribed Capital: 22,500,000 RMB

 

Equity Portion: 45%

 

 

 

 

Name of Shareholder 2: LAI Zehong

 

Subscribed Capital: 17,500,000 RMB

 

Equity Portion: 35%

 

Name of Shareholder 3: Qianhai Asia Times (Shenzhen) International Financial Services Co., Ltd.

 

Subscribed Capital: 10,000,000 RMB

 

Equity Portion: 20%

 

3. Representation and Warranties by both parties

 

1) Representation and Warranties by Party A

 

a) Party A is a corporation legal person established and surviving legally with an independent civil capacity.

 

b) Party A is the shareholder of the target company, legally holding 35% of the company's equity, and agrees to transfer the equity it holds to Party B;

 

c) Party A undertakes that the shares it holds and shall transfer to Party B are not guaranteed, pledged or any other third party’s interests to any other third party, without any restrictions form the judiciary.

 

d) Party A undertakes that the transfer of shares to Party B has been approved by its authorized decision-making body.

 

e) Party A undertakes to actively assist Party B in handling the relevant procedures for transfer of the shares. Party A shall not dispose of any asset of the target company and shall not provide guarantees or mortgages in the name of the target company before the relevant procedures are completed.

 

f) Party A confirms that before the signing of this agreement, the condition of the legal personality, legal operation and legal existence of the target company as well as the status of ownership of assets, debt and liabilities, taxation, litigation and arbitration, and other disputes, incidents or factors that may adversely affect the company, provided by the target company and itself to Party B are true, accurate and complete, without any false. And Party A is willing to bear any legal liability caused by improper disclosure of the target company and its own.

 

 

 

 

2) Representation and Warranties by Party B

 

a) Party B is a corporation legal person established and surviving legally with an independent civil capacity.

 

b) Party B agrees to acquire 35% of the shares of the target company from Party A and the relevant acts have been approved by the authority. Party B has understand the basic situation of the target company.

 

c) Party B guarantees that it has the ability to pay the equity transfer price.

 

d) Party B guarantees that it will further promote and support the development of the target company after it becomes one of it’s shareholders.

 

4. Transfer Price and Payment

 

1) Party A and Party B agree and confirm that the equity transfer price under this agreement is 24,500 RMB (TWENTY-FOUR THOUSAND AND FIVE HUNDRED RMB).

 

2) Party A and Party B agree that Party B shall pay the equity transfer price to Party A at once, and Party A shall issue a compliance receipt to Party B at the same time as the payment is received.

 

5. Conditions under which the agreement becomes effective

 

When these two conditions are met, this agreement shall become effective. The conditions are:

 

1) This agreement is signed by Party A and Party B.

 

2) This agreement has been authorized and approved by Party A's organ of authority (Board of Directors or Shareholders' Meeting).

 

6. Liability for breach of agreement

 

1) Party A and Party B shall both fully perform the contents stipulated in this agreement. Failure by either party to fulfill the terms stipulated in this agreement, its subsidiary or supplementary provisions shall be deemed to be a breach of agreement, and the other party shall have the right to ask it to pay the liquidated damages and compensate for the corresponding losses.

 

 

 

 

2) The liquidated damages of this agreement are 5% of the total value of the equity transfer price. The corresponding losses only refers to direct and actual losses of the party, excluding other losses.

 

3) When the party who complies with the agreement investigate the other one for breach of agreement, it shall have the right to request the continuation or termination of the performance of this agreement.

 

7. Change and termination of agreement

 

1) Both parties of this agreement can change or supplement this agreement by signing a written supplementary agreement by consensus.

 

2) Both parties agree that any of the following circumstances can result in the termination of this agreement:

 

a) Party A and Party B have fulfilled their obligations under this agreement and their rights under this agreement have been fully realized.

 

b) Party A and Party B agree to terminate this agreement by consensus.

 

c) The transfer referred to in this agreement has not been approved by the industry and commerce authorities for other reasons.

 

If this agreement is terminated for the reasons mentioned in above item (2) (3), Party A shall return in full the transfer price paid by Party B within 30 days.

 

3) After the termination of the rights and obligations of this agreement, the parties shall perform the obligations of notification, assistance and confidentiality.

 

8. Confidentiality

 

Neither party shall disclose or disseminate to the public or any third party any business secrets about the production, operation, investment or any other aspects of the other party which is known in the course of negotiation, signing or performance of this agreement; nor shall it use such business secrets for its own or any other person's benefit. Unless there is: (1) legal requirement; (2) public interest requirement; (3) prior written consent of the other party.

 

 

 

 

9. Supplementary articles

 

1) Any dispute arising from the performance of this agreement shall be settled by friendly negotiation as far as possible. If it fails to reach agreement, either party can bring the action to the people's court in the place where the agreement is signed.

 

2) The matters not covered in this agreement shall be settled by both parties on the principle of friendly consultation. A supplementary agreement may be signed separately and shall have the same legal effect as this agreement.

 

3) This agreement is in quadruplicate, each party holds one copy, the target company keeps one copy, and the remaining one is submitted to the company registration authority for the record.

 

Transferor (Party A): Qianhai Asia Times (Shenzhen) International Financial Services Co., Ltd.

 

(Sealing)

 

Legal Representative: CHEN Qiang

 

Transferee (Party B): LAI Zehong

 

(Signing)

 

19 September, 2018 in Nanshan District, Shenzhen

 

 

 

 

Exhibit 10.13

 

Declaration of Trust

 

THIS TRUST DEED is made on 11 December, 2017 BETWEEN LIU RONGHUA whose ID Number is 450981199012101418 of No. 16, Group 12, Datang Village, Dali Town, Beiliu City, Guangxi Province, China (hereinafter called the "Trustee") of the one part AND WANG QIULI whose ID Number is 61242319741220002X of Unit 2304, Xinbi Court, Eighth District, Baoan District, Shenzhen City, Guangdong Province, China (hereinafter called the "Beneficiary") of the other part.

 

WHEREAS, the Beneficiary is the beneficial owner of the shares specified in the “Schedule 1” hereto.

 

AND WHEREAS, the Beneficiary requires the Trustee to register the said shares in the Trustee’s name.

 

AND WHEREAS, the registration as aforesaid was made to the Trustee as a nominee of the Beneficiary and it was agreed that the Trustee should execute such declaration of trust as is hereinafter contained.

 

NOW THIS DEED WITNESSTH as follows:

 

(1) The Beneficiary confirms that the Trustee holds the shares specified in the “Schedule 1” of this contract in its requirements and ensures that the ownership of these shares is legitimate, and the act of substituting in this contract does not violate the provisions of relevant laws.

 

(2) The Trustee here by declares it holds the shares specified in the “Schedule 1” of this contract and all dividends and interest accrue upon the same or any of them upon trust for the Beneficiary and his successors in title and agrees to transfer pay and deal with the said shares and the dividends and interest payable in respect of the same in such manners as the Beneficiary shall from time to time direct in writing.

 

(3) The Trustee will at the request of the Beneficiary attend all meetings of shareholders or or otherwise which it shall be entitled to attend by virtue of being the registered proprietor of the said share(s). The Trustee will also comply with the written instructions of the Beneficiary and vote in accordance with the precedent of such instructions. The Trustee shall also execute all proxies or other documents which shall be necessary or proper to enable the Beneficiary, its personal representatives, assigns or its nominees to vote at any such meeting in the place of the Trustee. The legal consequences of the vote made by the Trustee under the direction of the Beneficiary shall be borne by the Beneficiary.

 

 

 

 

(4) The Trustee shall upon request provide the Beneficiary or its successors in title with such information as may be available to the Trustee as a shareholder with regard to the operation of QIANHAI ASIA TIMES (SHENZHEN) INTERNATIONAL FINANCIAL SERVICES CO., LTD.

 

(5) The Beneficiary may transfer the shares registered by the Trustee as the nominee of the Beneficiary to a third-party company or individual as required.

 

(6) When the Beneficiary uses the shares registered by the Trustee as the nominee of the Beneficiary as the consideration to purchase any third-party company, the Trustee shall sign the share transfer agreement and acquisition agreement, and the Trustee should fully understand that the ownership of the acquired company belongs to the Trustee.

 

Trustee: LIU Ronghua

 

Beneficiary: WANG Qiuli

 

Date: 11 December, 2017

 

 

 

 

Schedule 1

 

Company Name QIANHAI ASIA TIMES (SHENZHEN) INTERNATIONAL FINANCIAL SERVICES CO., LTD.
   
Registered Office Unit 3902, Building 5, Dachong International Centre, Nanshan District, Shenzhen City, Guangodng Province, China
   
Class of Share(s) Ordinary
   
No. of Share(s) 4,950,000
   
Distinctive No. NONE

 

IN WITNESS WHEREOF the parties hereto have now set their seals on the day and in the year before mentioned.

 

Witness to the signature(s) of the Trustee -

 

)

)

)

 

Witness's name and address:

HE Xiaoyong

Room 602, Building 4, Fulian Garden, Futian District, Shenzhen City, Guangdong Province, China

 

)

)

)

)

)

)

 

 

 

LIU RONGHUA刘荣华

(Trustee)

 

Witness to the signature(s) of the Beneficiary -

 

)

)

)

 

Witness's name and address:

HE Xiaoyong

Room 602, Building 4, Fulian Garden, Futian District, Shenzhen City, Guangdong Province, China

)

)

)

)

)

)

 

 

 

WANG QIULI王秋丽

(Beneficiary)

 

 

 

 

Exhibit 10.14

 

Letter of Undertaking by Qianhai Shareholder

 

I, Qiang Chen, [ID No.320503197010060537], a registered shareholder of Qianhai Asia Times (Shenzhen) International Financial Services Co., Ltd. (hereinafter referred to as "Company"), undertake and guarantee to fully reimburse and compensate the Company for any possible losses due to its non-compliance of the rules and regulations governing Employees’ social insurance and housing funds, in case the Company is required by relevant government authorities to make up for any outstanding payments and penalties for Employees’ social insurance and housing funds in the future.

 

Undertaker: Qiang Chen

 

Signature

 

Date: October 20, 2018

 

 

 

 

Letter of Undertaking by Qianhai Shareholder

 

I, Ronghua Liu, [ID No.450981199012101418], a registered shareholder of Qianhai Asia Times (Shenzhen) International Financial Services Co., Ltd. (hereinafter referred to as "Company"), undertake and guarantee to fully reimburse and compensate the Company for any possible losses due to its non-compliance of the rules and regulations governing Employees’ social insurance and housing funds, in case the Company is required by relevant government authorities to make up for any outstanding payments and penalties for Employees’ social insurance and housing funds in the future.

 

Undertaker: Ronghua Liu

 

Signature

 

Date: October 20, 2018

 

 

 

Exhibit 21.1

 

List of Subsidiaries

 

Subsidiary   Jurisdiction of incorporation
or organization
     
Asia Times International Finance Limited   Hong Kong
     
Huaya Consultant (Shenzhen) Co., LTD.   PRC
     
Qianhai Asia Times (Shenzhen) International Financial Services Co., LTD.   PRC

 

 

 

 

Exhibit 23.1

 

 

 

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

  

 

We hereby consent to the use in the Registration Statement on Form F-1 of Asia Times Holdings Limited of our report dated October 12, 2018, except for Notes 1, 11, 13 and 14, as to which the date is November 27, 2018, with respect to the consolidated balance sheets of Asia Times Holdings Limited as of July 31, 2018 and 2017, and the related consolidated statements of income and comprehensive income, changes in shareholders’ equity (deficit) and cash flows for each of the years in the two-year period ended July 31, 2018, included in this Registration Statement. We also consent to the reference to our firm under the heading “Experts” in such Registration Statement.

 

 

 

 

 

/s/ Friedman LLP

 

 

New York, New York

December 11, 2018

 

 

 

Exhibit 99.1

 

  Asia Times Holdings Limited

 

CODE OF BUSINESS CONDUCT AND ETHICS

 

This Code of Business Conduct and Ethics covers a wide range of business practices and procedures. It does not cover every issue that may arise, but it sets out basic principles to guide the employees of Asia Times Holdings Limited and its subsidiaries (the “Company”). All of our employees must conduct themselves in accordance with these principles and seek to avoid even the appearance of improper behavior. The Company's agents and representatives, including consultants and directors, to the extent practicable, shall also follow this Code.

 

This Code is in addition to and supplements the other policies and procedures which have been implemented by the Company. If a law conflicts with a policy in this Code, you must comply with the law; however, if a local custom or policy conflicts with this Code, you must comply with the Code. If you have any questions about a conflict, you should ask your supervisor how to handle the situation.

 

All claims of violations of this Code will be investigated by appropriate personnel. Those who violate the standards in this Code will be subject to disciplinary action. If you are in a situation that you believe may violate or lead to a violation of this Code, follow the guidelines described in Section 14 of this Code.

 

1. Compliance with Laws, Rules and Regulations

 

Obeying the law, both in letter and in spirit, is the foundation on which this Company's ethical standards are built. All employees must respect and obey the laws of all jurisdictions in which the Company operates. Any employee who is unsure about any aspect of these laws should seek advice from supervisors, managers or other appropriate personnel.

 

2. Record-Keeping

 

Accuracy and reliability in the preparation of all business records is critically important to the Company's decision-making process and to the proper discharge of its financial, legal, and reporting obligations. All of the Company's books, records, accounts and financial statements shall be maintained in reasonable detail, shall appropriately reflect the Company's transactions and shall conform both to applicable legal requirements and to the Company's system of internal controls. Unrecorded or “off the books” funds or assets shall not be maintained unless permitted by applicable law or regulation.

 

Many employees regularly incur business expenses, which must be documented and recorded accurately. If you are not sure whether a certain expense is appropriate, consult the policy or ask your supervisor.

 

Business records and communications often become public, and we should avoid exaggeration, derogatory remarks, guesswork, or inappropriate characterizations of people and companies that can be misunderstood. This applies equally to e-mail, internal memos and formal reports. Records shall always be retained or destroyed according to the Company's record retention policies.

 

3. Conflicts of Interest and Related Party Transactions

 

A “conflict of interest” exists when a person's private interest interferes in any way with the interests of the Company. A conflict situation can arise when an employee, officer or director takes actions or has interests that may make it difficult to perform his or her Company work objectively and effectively. Conflicts of interest may also arise when an employee, officer or director, or members of his or her family, receives improper personal benefits as a result of his or her position in the Company. Loans to, or guarantees of obligations of, employees and their family members may create conflicts of interest. Loans to, or guarantees of obligations of, directors, executive officers and their family members are prohibited.

 

 

 

A conflict of interest almost always exists when a Company employee works concurrently for a competitor, customer or supplier. You are not allowed to work for a competitor as a consultant or board member. The best policy is to avoid any direct or indirect business connection with the Company's competitors, customers or suppliers, except on the Company's behalf.

 

A conflict of interest may occur when an employee of the Company has an ownership or financial interest in another business organization that is doing business with the Company. These transactions between the Company and the other organization are characterized as related party transactions. While not all related party transactions are improper, the Company must be aware of the details of each such transaction so that it can make a judgment as to the appropriateness of the transaction. If you or a family member have any ownership or financial interest in another organization that conducts business or seeks to conduct business with the Company, you must report the situation to the Chief Executive Officer (“CEO”) and cooperate with the legal staff by providing all relevant facts. The CEO will determine whether or not the related party transaction is a conflict of interest.

 

Conflicts of interest are prohibited as a matter of Company policy, except under guidelines approved by the Board of Directors. Conflicts of interest may not always be clear, so if you have a question, you should consult with higher levels of management or the Company's CEO. Any employee, officer or director who becomes aware of a conflict or potential conflict shall bring it to the attention of a supervisor, manager or other appropriate personnel or consult the procedures described in Section 14 of this Code.

 

4. Confidentiality

 

Employees must maintain the confidentiality of confidential information entrusted to them by the Company or its customers, except when disclosure is authorized by the CEO or legally mandated. Even within the Company, you should disclose confidential information only to those employees who need to know the information. Confidential information includes all non-public information that might be of use to competitors, or harmful to the Company or its customers, if disclosed. It also includes information that suppliers and customers have entrusted to us. The obligation to preserve confidential information continues even after employment ends.

 

5. Insider Trading

 

Employees who have access to confidential information are not permitted to use or share that information for stock trading purposes or for any other purpose except the conduct of the Company's business. All non-public information about the Company shall be considered confidential information. To use non-public information for personal financial benefit or to “tip” others who might make an investment decision on the basis of this information is not only unethical but also illegal. If you have any questions, you should consult the Company's CEO.

 

6. Corporate Opportunities

 

Employees, officers and directors are prohibited from taking for themselves personally opportunities that are discovered through the use of corporate property, information or position without the consent of the Board of Directors. No employee shall use corporate property, information, or position for improper personal gain, and no employee shall compete with the Company directly or indirectly. Employees, officers and directors owe a duty to the Company to advance its legitimate interests when the opportunity to do so arises.

 

 

 

7. Competition and Fair Dealing

 

The Company seeks to outperform its competition fairly and honestly. The Company seeks competitive advantages through superior performance, never through unethical or illegal business practices. Stealing proprietary information, possessing trade secret information that was obtained without the owner's consent, or inducing such disclosures by past or present employees of other companies is prohibited. Each employee shall endeavor to respect the rights of and deal fairly with the Company's customers, suppliers, competitors and employees. No employee shall take unfair advantage of anyone through manipulation, concealment, abuse of privileged information, misrepresentation of material facts, or any other intentional unfair-dealinq practice.

 

The purpose of business entertainment and gifts in a commercial setting is to create good will and sound working relationships, not to gain unfair advantage with customers. No gift or entertainment shall ever be offered, given, provided or accepted by any Company employee, family member of an employee or agent unless it:

 

· is not a cash gift,

 

· is consistent with customary business practices,

 

· is not excessive in value,

 

· cannot be construed as a bribe or payoff, and

 

· does not violate any laws or regulations.

 

8. Discrimination and Harassment

 

The diversity of the Company's employees is a tremendous asset. The Company is firmly committed to providing equal opportunity in all aspects of employment and shall not tolerate any illegal discrimination or harassment or any kind. Examples include derogatory comments based on racial, gender, religious, or ethnic characteristics and unwelcome sexual advances.

 

9. Health and Safety

 

The Company strives to provide each employee with a safe and healthful work environment. Each employee has the responsibility for maintaining a safe and healthful workplace for all employees by following safety and health rules and practices and reporting accidents, injuries and unsafe equipment, practices or conditions.

 

Violence and threatening behavior are not permitted. Employees must report to work in condition to perform their duties, free from the influence of alcohol or illegal drugs. The use of alcohol or illegal drugs in the workplace is not tolerated.

 

 

 

10. Protection and Proper Use of Company Assets

 

All employees shall endeavor to protect the Company's assets and ensure their efficient use. Theft, carelessness and waste have a direct impact on the Company's profitability. All Company assets should be used for legitimate business purposes. Any suspected incident of theft, carelessness, or waste of or with Company assets shall be immediately reported for investigation. Company equipment shall not be used for non-Company business, although incidental personal use may be permitted by your supervisor.

 

The obligation of employees to protect the Company's assets includes its proprietary information. Proprietary information includes intellectual property such as trade secrets, patents, trademarks, and copyrights, as well as business, marketing and service plans, databases, records, salary information and any unpublished financial data and reports. Unauthorized use or distribution of this information would violate Company policy. It could also be illegal and result in civil and/or criminal penalties.

 

11. Accounting and Related Matters

 

All employees participate, in some measure, in the gathering of information made available to the Company's accounting department for use in the Company's financial reports and other information required to be publicly disclosed by the Securities and Exchange Commission and the NASDAQ Stock Market LLC. Each employee should endeavor to ensure that such information is accurate and complete in all material respects through full compliance with the Company's accounting requirements, internal disclosure and accounting controls and audits.

 

12. Waivers of the Code of Business Conduct and Ethics

 

Any waiver of this Code for executive officers or directors may be made only by the Corporate Governance Committee of the Board and shall be promptly disclosed as required by law or stock exchange regulation.

 

13. Administration of Code

 

This Code shall be administered by the Company's CEO, who shall act as the Corporate Compliance Officer of the Company, Company employees are encouraged to seek guidance regarding the application or interpretation of this Code from the CEO and are expected to cooperate fully in any investigation of any potential violation of this Code.

 

14. Reporting Violations; Compliance Procedures

 

All employees shall work to ensure prompt and consistent action against violations of this Code. However, in some situations it is difficult to know right from wrong. Since no one can anticipate every situation that will arise, it is important to have a way to approach a new question or problem. These are the steps to keep in mind:

 

· Make sure you have all the facts . In order to reach the right solutions, you must be as fully informed as possible.

 

· Ask yourself : What specifically am I being asked to do? Does it seem unethical or improper? This will enable you to focus on the specific question you are faced with and the alternatives you have. Use your judgment and common sense; if something seems unethical or improper, it probably is.

 

 

 

· Clarify your responsibility and role . In most situations there is shared responsibility. Are your colleagues informed? It may help to get others involved and discuss the problem.

 

· Discuss the problem with your supervisor . You are encouraged to talk to your supervisor about any issues concerning illegal, unethical or improper behavior and when in doubt about the best course of action in a particular situation. This is the basic guidance for all situations. In many cases your supervisor will be more knowledgeable about the question, and will appreciate being brought into the decision-making process. Remember it is your supervisor's responsibility to help solve problems.

 

· Report serious violations to the Company's CEO . You should report serious violations that have not been properly addressed by your supervisor or other resources of the Company to the CEO. However, if it is not appropriate to discuss an issue with the CEO, or if you believe that the CEO has not properly addressed the violations, you may contact any independent director of the Board of Directors. In the rare case that you become aware of a material legal violation or a breach of fiduciary duty by an employee of the Company, address your concerns to: Nominating/Corporate Governance Committee Chairman, Asia Times Holdings Limited, Room 3808, Dachong International Centre, 39 Tonggu Road,Nanshan district, Shenzhen, China.

 

· Reporting of accounting issues . If you are aware of an issue concerning accounting, auditing or the Company's internal accounting controls, address your concerns with the Company's internal audit function or to the CEO. In the event that you believe that the Company has not properly responded to the issue, you may address your concerns to: Audit Committee Chairman, Asia Times Holdings Limited, Room 3808, Dachong International Centre, 39 Tonggu Road,Nanshan district, Shenzhen, China.

 

· You may report any possible violation in confidence and without fear of retaliation . If your situation requires that your identity be kept secret, your anonymity will be protected and you will be guaranteed confidentiality in the handling of your claim. It is the policy of the Company not to allow retaliation for reports of misconduct by others made in good faith by employees. Employees are expected to cooperate in internal investigations of misconduct.

 

· Always ask first, act later : If you are unsure of, what to do in any situation, seek guidance before you act.

 

 

 

Exhibit 99.2

 

北京大成律师事务所

 

www.dentons.cn

 

北京市朝阳区东大桥路 9 号侨福芳草地 D 7 层( 100020 )

 

7/F, Building D, Parkview Green FangCaoDi, No.9, Dongdaqiao Road

 

Chaoyang District, 100020, Beijing, China

 

Tel: +86 10-58137799     Fax: +86 10-58137788

 

【 , 2018】

 

To: ASIA TIMES HOLDING LIMITED. (the “Company”)

 

Room 3902A Dachong International Center,

 

No.39 Tong Gu Road, Nanshan district, Shen Zhen,

 

People’s Republic of China

 

Dear Sirs or Madams:

 

We are qualified lawyers of the People’s Republic of China (the “PRC” or “China”, for the purpose of this opinion only, the PRC shall not include the Hong Kong Special Administrative Region, the Macao Special Administrative Region and Taiwan) and as such are qualified to issue this opinion on the laws and regulations of the PRC effective as of the date hereof.

 

We act as the PRC counsel to ASIA TIMES HOLDING LIMITED (the “Company”), a company incorporated under the laws of the British Virgin Islands Islands, in connection with (i) the proposed initial public offering (the “Offering”) of certain number of ordinary shares, par value $[ ] per share, of the Company (the “Ordinary Shares”), by the Company as set forth in the Company’s registration statement on Form F-1, including all amendments or supplements thereto (the “Registration Statement”), filed by the Company with the Securities and Exchange Commission under the U.S. Securities Act of 1933 (as amended) in relation to the Offering, and (ii) the Company’s proposed listing of the Ordinary Shares on the Nasdaq Capital Market.

 

 

 

 

1 Documents and Assumptions

 

1.1 In rendering this opinion, we have examined originals or copies of the due diligence documents provided to us by the Company and the PRC Companies (as defined below) and such other documents, corporate records and certificates issued by the governmental authorities in the PRC (collectively the “Documents”).

 

1.2 In rendering this opinion, we have assumed without independent investigation that (“Assumptions”):

 

1.2.1 All signatures, seals and chops are genuine, each signature on behalf of a party thereto is that of a person duly authorized by such party to execute the same, all Documents submitted to us as originals are authentic, and all Documents submitted to us as certified or photostatic copies conform to the originals;

 

1.2.2 Each of the parties to the Documents, other than the PRC Companies, (a) if a legal person or other entity, is duly organized and is validly existing in good standing under the laws of its jurisdiction of organization and/or incorporation, or (b) if an individual, has full capacity for civil conduct; each of them, other than the PRC Companies, has full power and authority to execute, deliver and perform its obligations under the Documents to which it is a party in accordance with the laws of its jurisdiction of organization or incorporation or the laws that it/she/he is subject to;

 

1.2.3 The Documents that were presented to us remain in full force and effect on the date of this opinion and have not been revoked, amended or supplemented, and no amendments, revisions, supplements, modifications or other changes have been made, and no revocation or termination has occurred, with respect to any of the Documents after they were submitted to us for the purposes of this legal opinion;

 

1.2.4 The laws of jurisdictions other than the PRC which may be applicable to the execution, delivery, performance or enforcement of the Documents are complied with; and

 

1.2.5 All requested Documents have been provided to us and all factual statements made to us by the Company and the PRC Companies in connection with this legal opinion are true, correct and complete.

 

2 Definitions

 

2.1 In addition to the terms defined in the context of this opinion, the following capitalized terms used in this opinion shall have the meanings ascribed to them as follows:

 

 

 

 

2.1.1 “Governmental Agency” means any national, provincial or local governmental, regulatory or administrative authority, agency or commission in the PRC, or any court, tribunal or any other judicial body in the PRC, or anybody exercising, or entitled to exercise, any administrative, judicial, legislative, police, regulatory, or taxing authority or power of similar nature in the PRC;

 

2.1.2 “Governmental Authorizations” means any license, approval, consent, waiver, order, sanction, certificate, authorization, filing, disclosure, registration, exemption, permission, endorsement, annual inspection, clearance, qualification, permit or license by, from or with any Governmental Agency pursuant to any PRC Laws;

 

2.1.3 “M&A Rules” means the Regulations on Mergers and Acquisitions of Domestic Enterprises by Foreign Investors promulgated by six PRC regulatory agencies, including the Ministry of Commerce, the State Assets Supervision and Administration Commission, the State Administration for Taxation, the State Administration for Industry and Commerce, the China Securities Regulatory Commission, and the State Administration of Foreign Exchange, which became effective on September 8, 2006 and was amended on June 22, 2009 by the Ministry of Commerce;

 

2.1.4 “PRC Companies” means PRC Subsidiary and PRC Operating Entity, and “PRC Company” means any of them;

 

2.1.5 “PRC Operating Entity” means QIANHAI ASIA TIMES (SHEN ZHEN) INTERNATIONAL FINANCE SERVICE CO., LTD. (the “ASIA TIMES”);

 

2.1.6 “PRC Subsidiary” means HUAYA CONSULTANT CO., LTD. (the “HUAYA”);

 

2.1.7 “PRC Laws” mean all applicable national, provincial and local laws, regulations, rules, orders, decrees, and supreme court’s judicial interpretations of the PRC currently in effect and publicly available on the date of this opinion.

 

3 Opinions

 

3.1 Based on our review of the Documents and subject to the Assumptions and the Qualifications, we are of the opinion that:

 

 

 

 

3.1.1 VIE Structure.

 

The ownership structure of PRC Companies, currently and immediately after giving effect to the Offering, will not result in any violation of PRC laws or regulations currently in effect. Each of PRC Companies and, to the best of our knowledge after due inquiry, each shareholder of ASIA TIMES, has full power, authority and legal right (corporate or otherwise) to execute, deliver and perform their respective obligations in respect of each of the agreements under the contractual arrangements described in the Registration Statement under the caption “Our History and Corporate Structure” (the “VIE Agreements”) to which it is a party, and has duly authorized, executed and delivered each of the VIE Agreements to which it is a party.

 

According to the provisions of relevant laws and regulations of PRC, the VIE Agreements are compliant with the provisions of existing laws and regulations of PRC. The PRC Operating Entity has completed the registration of the pledge of relevant equity interests with the administrative authorities for industry and commerce. The VIE Agreements are valid, binding and enforceable, and will not result in any violation of (i) PRC laws or regulations currently in effect, or (ii) any violation of the business license, articles of association, approval certificate or other constitutional documents (if any) of the PRC Companies. No Governmental Authorizations are required under any PRC Laws in connection with the due execution, delivery or performance of each of the VIE Agreements other than those already obtained.

 

To the best of our knowledge after due inquiry, none of the PRC Companies is in material breach or default in the performance or observance of the VIE Agreements to which it is a party.

 

3.1.2 M&A Rule.

 

Based on our understanding of the explicit provisions under the PRC Laws as of the date hereof, we believe that since the PRC Subsidiary was established by means of direct investment rather than by merger or acquisition directly or indirectly of the equity interest or assets of any “domestic company” as defined under the M&A Rules, and no provision in the M&A Rules classifies the contractual arrangements contemplated under the VIE Agreements as a type of acquisition transaction falling under the M&A Rules, we are of the opinion that the issue and sale of the Ordinary Shares by the Company on the Nasdaq Capital Market, do not require any Governmental Authorization. However, there are substantial uncertainties regarding the interpretation and application of current PRC laws and regulations and there can be no assurance that the PRC government will ultimately take a view that is consistent with our opinion stated above.

 

 

 

 

3.1.3 Foreign Exchange Registration.

 

Pursuant to regulations on foreign exchange control, prior to making contribution in a special purpose vehicle by a Chinese resident using its legitimate assets or interests in China or overseas, the Chinese resident shall apply to the foreign exchange bureau for completion of foreign exchange registration formalities for overseas investment. As of the date of this Letter of Opinions, the shareholders have not completed such registration procedures. The failure of the shareholders to comply with the registration procedures may subject the shareholders to fines less than ¥ 50,000. If the registration formalities cannot be processed retrospectively, the repatriation of the financing funds, profits and other interests of the shareholders obtained through special purpose vehicles, for use in China, would be prohibited. In addition, the cross-border capital flows between PRC Subsidiary and its offshore parent company, including distributing dividends, paying contributions, etc., would be illegal.

 

3.1.4 Enforceability of Civil Procedures.

 

The recognition and enforcement of foreign judgments are provided for under PRC Civil Procedures Law. PRC courts may recognize and enforce foreign judgments in accordance with the requirements of PRC Civil Procedures Law based either on treaties between China and the country where the judgment is made or on reciprocity between jurisdictions. China does not have any treaties or other form of reciprocity with the United States or the British Virgin Islands that provide for the reciprocal recognition and enforcement of foreign judgments. In addition, according to the PRC Civil Procedures Law, courts in the PRC will not enforce a foreign judgment against a company or its directors and officers if they decide that the judgment violates the basic principles of PRC law or national sovereignty, security or public interest. As a result, it is uncertain whether and on what basis a PRC court would enforce a judgment rendered by a court in the United States or in the British Virgin Islands.

 

3.1.5 Taxation.

 

The statements made in the Registration Statement under the caption “Taxation—People’s Republic of China Enterprise Taxation,” with respect to the PRC tax laws and regulations, constitute true and accurate descriptions of the matters described therein in all material aspects.

 

 

 

 

3.1.6 PRC Laws.

 

All statements set forth in the Registration Statement under the captions “Prospectus Summary,” “Risk Factors,” “Use of Proceeds,” “Enforceability of Civil Liabilities,” “Business,” “Business- Corporate History and Structure, ” “Regulations,” “Management,” “Related Party Transactions” and “Taxation”, in each case insofar as such statements describe or summarize PRC legal or regulatory matters, are true and accurate in all material aspects, and correctly set forth therein, and nothing has been omitted from such statements which would make the same misleading in any material aspects.

 

3.2 Our opinion expressed above is subject to the following qualifications (the “ Qualifications ”):

 

3.2.1 Our opinion is limited to the PRC laws of general application on the date hereof. We have made no investigation of, and do not express or imply any views on, the laws of any jurisdiction other than the PRC.

 

3.2.2 The PRC laws and regulations referred to herein are laws and regulations publicly available and currently in force on the date hereof and there is no guarantee that any of such laws and regulations, or the interpretation or enforcement thereof, will not be changed, amended or revoked in the future with or without retrospective effect.

 

3.2.3 Our opinion is subject to the effects of (i) certain legal or statutory principles affecting the enforceability of contractual rights generally under the concepts of public interest, social ethics, national security, good faith, fair dealing, and applicable statutes of limitation, (ii) any circumstance in connection with formulation, execution or performance of any legal documents that would be deemed materially mistaken, clearly unconscionable, fraudulent, coercionary or concealing illegal intentions with a lawful form, (iii) judicial discretion with respect to the availability of specific performance, injunctive relief, remedies or defenses, or calculation of damages, and (iv) the discretion of any competent PRC legislative, administrative or judicial bodies in exercising their authority in the PRC.

 

3.2.4 This opinion is issued based on our understanding of the current PRC Laws. For matters not explicitly provided under the current PRC Laws, the interpretation, implementation and application of the specific requirements under PRC Laws are subject to the final discretion of competent PRC legislative, administrative and judicial authorities, and there can be no assurance that the Government Agencies will ultimately take a view that is not contrary to our opinion stated above.

 

 

 

 

3.2.5 We may rely, as to matters of fact (but not as to legal conclusions), to the extent we deem proper, on certificates and confirmations of responsible officers of the PRC Subsidiaries and PRC government officials.

 

3.2.6 This opinion is intended to be used in the context which is specifically referred to herein.

 

3.2.7 We have not undertaken any independent investigation to ascertain the existence or absence of any fact, and no inference as to our knowledge of the existence or absence of any fact should be drawn from our representation of the Company and the PRC Subsidiaries or the rendering of this opinion.

 

We hereby consent to the use of this opinion in, and the filing hereof as an exhibit to the Registration Statement, and to the reference to our name in such Registration Statement.

 

Yours faithfully,  
   
/s/ Dentons  
   
Dentons Law Offices, LLP  

 

 

 

 

APPENDIX

 

List of VIE Agreements

 

1. Exclusive Service Agreement (独家服务协议) entered into between the HUAYA and ASIA TIMES;

 

2. Shareholders’ Voting Rights Proxy Agreement (股东投票代理权协议) entered into between the HUAYA, AISA TIMES and individual shareholders of ASIA TIMES;

 

3. Call Option Agreement (购买选择权协议) entered into between the HUAYA, AISA TIMES and individual shareholders of ASIA TIMES;

 

4. Equity Pledge Agreement (股权质押协议) entered into among the HUAYA and individual shareholders of ASIA TIMES.

 

 

 

 

Exhibit 99.3

 

CONSENT OF KWONG SANG LIU

 

Asia Times Holdings Limited (the “Company”) intends to file a Registration Statement on Form F-l (together with any amendments or supplements thereto, the “Registration Statement”) registering securities for issuance in its initial public offering. As required by Rule 438 under the Securities Act of 1933, as amended, the undersigned hereby consents to being named in the Registration Statement as a Director Nominee.

 

Dated: 9.25.2018

 

By: /s/ Kwong Sang Liu  
   
Kwong Sang Liu  

 

 

 

 

Exhibit 99.4

 

CONSENT OF YONGYUAN CHEN

 

Asia Times Holdings Limited (the “Company”) intends to file a Registration Statement on Form F-l (together with any amendments or supplements thereto, the “Registration Statement”) registering securities for issuance in its initial public offering. As required by Rule 438 under the Securities Act of 1933, as amended, the undersigned hereby consents to being named in the Registration Statement as a Director Nominee.

 

Dated: 9.25.2018

 

By: /s/ Yongyuan Chen  
     
Yongyuan Chen  

 

 

 

 

Exhibit 99.5

 

CONSENT OF LONGDLEY ZEPHIRIN

 

Asia Times Holdings Limited (the “Company”) intends to file a Registration Statement on Form F-I (together with any amendments or supplements thereto, the “Registration Statement”) registering securities for issuance in its initial public offering. As required by Rule 438 under the Securities Act of 1933, as amended, the undersigned hereby consents to being named in the Registration Statement as a Director Nominee.

 

Dated: 9.25.2018

 

By: /s/ Longdley Zephirin  
     
Longdley Zephirin  

 

 

 

 

Exhibit 99.6

 

CONSENT OF QIANG CHEN

 

Asia Times Holdings Limited (the “Company”) intends to file a Registration Statement on Form F-l (together with any amendments or supplements thereto, the “Registration Statement”) registering securities for issuance in its initial public offering. As required by Rule 438 under the Securities Act of

 

1933, as amended, the undersigned hereby consents to being named in the Registration Statement as a Director Nominee.

 

Dated: 9.25.2018

 

By: /s/ Qiang Chen

 

Qiang Chen

 

 

 

Exhibit 99.7

 

OFFERING DEPOSIT ACCOUNT AGENCY AGREEMENT

 

This OFFERING DEPOSIT ACCOUNT AGENCY AGREEMENT (this “ Agreement ”) dated as of this seventeenth day of October 2018, by and among Asia Times Holdings Ltd., its subsidiaries and affiliates or any other corporate entities that may be utilized from time to time (the “ Company ”), having an address at Suite 2501-A Skyline Tower Kowloon Bay, Hong Kong, and BOUSTEAD SECURITIES, LLC , serving as the representative of the underwriters (the “ Underwriter ”), having an address at 6 Venture, Suite 265, Irvine, CA 92618 USA, and FinTech Clearing, LLC (the “ Deposit Account Agent ”), a broker-dealer registered with the Securities and Exchange Commission (“ SEC ”), having an office at 6 Venture, Suite 265, Irvine, CA 92618 USA. All capitalized terms not herein defined shall have the meaning ascribed to them in that certain prospectus filed with the United States SEC dated [          ], under File Number[   ], including all attachments, schedules and exhibits thereto, as amended from time to time (the “ Prospectus ”).

 

WITNESSETH :

 

WHEREAS , pursuant to the terms of the Prospectus the Company desires to sell (the “ Offering ”) a minimum of $8,000,000 (the “ Minimum Amount ”) and a maximum of $20,000,000 (the “ Maximum Amount ”) of its ordinary shares (the “ Shares ”). The minimum investment per subscriber is one hundred shares (which minimum investment may be waived by Company); and

 

WHEREAS, unless the Minimum Amount is sold by [          ] (the “ Final Termination Date ”), the Offering shall terminate, and all funds shall be returned to the subscribers in the Offering, and if the Minimum Amount is met, the Offering may continue until the Final Termination Date; and

 

WHEREAS , the Company and Underwriter desire to establish a deposit account with the Deposit Account Agent into which the Company and Underwriter shall instruct investors introduced to the Company by Underwriter (the “ Investors ”) to wire funds made payable to the order of “FinTech Clearing as Deposit Account Agent for the Investors in Asia Times Holdings Ltd.” and Deposit Account Agent is willing to accept said wires for the payment of money in accordance with the terms hereinafter set forth; and

WHEREAS , the Company, as issuer, and Underwriter, as an introducing broker-dealer, represent and warrant to the Deposit Account Agent that they will comply with all of their respective obligations under applicable state and federal securities laws and regulations with respect to sale of the Offering; and

 

WHEREAS , the Company and Underwriter represent and warrant to the Deposit Account Agent that they have not stated to any individual or entity that the Deposit Account Agent’s duties will include anything other than those duties stated in this Agreement; and

 

 

 

 

WHEREAS , the Company and Underwriter warrant to the Deposit Account Agent that a copy of each document that has been delivered to Investors and third parties that include Deposit Account Agent’s name and duties, has been attached hereto as Schedule I .

 

NOW, THEREFORE, IT IS AGREED as follows:

 

1.            Delivery of Deposit Funds .

 

(a)         Underwriter and the Company shall instruct Investors to wire transfer to “FinTech Clearing, as Deposit Account Agent for the Investors in Asia Times Holdings Ltd.” Account No. _____________, at Pacific Mercantile Bank, SWIFT Code PMERUS66 and ABA Routing Number 122242869 in each case, with the name and address of the individual or entity making payment. In the event any Investor’s address is not provided to Deposit Account Agent by the Investor, then Underwriter and/or the Company agree to promptly provide Deposit Account Agent with such information in writing. The wire transfers shall be deposited into a non-interest-bearing account at Pacific Mercantile Bank (the “ Deposit Account ”).

 

(b)         The collected funds deposited into the Deposit Account are referred to as the “ Deposit Funds .”

 

(c)         The Deposit Account Agent shall have no duty or responsibility to enforce the collection or demand payment of any funds deposited into the Deposit Account. If, for any reason, any check deposited into the Deposit Account shall be returned unpaid to the Deposit Account Agent, the sole duty of the Deposit Account Agent shall be to return the check to the Investor and advise the Company and Underwriter promptly thereof.

 

2.            Release of Deposit Funds . The Deposit Funds shall be paid by the Deposit Account Agent in accordance with the following:

 

(a)         In the event that the Company and Underwriter advise the Deposit Account Agent in writing that the Offering has been terminated (the “ Termination Notice ”), the Deposit Account Agent shall promptly return the funds paid by each Investor to said Investor without interest or offset within five (5) business days.

 

(b)         If prior to 3:00 P.M. Pacific Time on the Final Termination Date, the Deposit Account Agent receives written notice, in the form of Exhibit A, attached hereto and made a part hereof, and signed by the Company and Underwriter, stating that the Final Termination Date has been extended (the “ Extension Notice ”), then the Final Termination Date shall be so extended and such date shall be the new “Final Termination Date”.

 

(c)         Provided that the Deposit Account Agent does not receive the Termination Notice in accordance with Section 2(a) and there is the Minimum Amount deposited into the Deposit Account on or prior to the Final Termination Date or the date stated in the Extension Notice, if any, received by the Deposit Account Agent in accordance with Section 2(b) above, the Deposit Account Agent shall, upon receipt of written instructions, in the form of Exhibit B, attached hereto and made a part hereof, or in a form and substance satisfactory to the Deposit Account Agent, received from the Company and Underwriter, pay the Deposit Funds in accordance with such written instructions, such payment or payments to be made by wire transfer within one (1) business day of receipt of such written instructions. Such instructions must be received by the Deposit Account Agent no later than 3:00 PM Pacific Time on a Business Day for the Deposit Account Agent to process such instructions that Business Day.

 

 

 

 

(d)         If by 3:00 P.M. Pacific time on the later of the Final Termination Date or the date stated in the Extension Notice, if any, that the Deposit Account Agent has received in accordance with Section 2(b) above, the Deposit Account Agent has not received written instructions from the Company and Underwriter regarding the disbursement of the Deposit Funds or the total amount of the Deposit Funds is less than the Minimum Amount, then the Deposit Account Agent shall promptly return the Deposit Funds to the Investors without interest or offset within five (5) business days. The Deposit Funds returned to each Investor shall be free and clear of any and all claims of the Deposit Account Agent.

 

(e)         The Deposit Account Agent shall not be required to pay any uncollected funds or any funds that are not available for withdrawal.

 

(f)         If the Final Termination Date or any date that is a deadline under this Agreement for giving the Deposit Account Agent notice or instructions or for the Deposit Account Agent to take action is not a Business Day, then such date shall be the Business Day that immediately preceding that date. A “ Business Day ” is any day other than a Saturday, Sunday or a day that a SEC-registered broker-dealer is not legally obligated to be opened.

 

3.            Acceptance by Deposit Account Agent . The Deposit Account Agent hereby accepts and agrees to perform its obligations hereunder, provided that:

 

(a)         The Deposit Account Agent may act in reliance upon any signature believed by it to be genuine and may assume that any person who has been designated by Underwriter or the Company to give any written instructions, notice or receipt, or make any statements in connection with the provisions hereof has been duly authorized to do so. Deposit Account Agent shall have no duty to make inquiry as to the genuineness, accuracy or validity of any statements or instructions or any signatures on statements or instructions. The names and true signatures of each individual authorized to act singly on behalf of the Company and Underwriter are stated in Schedule II , which is attached hereto and made a part hereof. The Company and Underwriter may each remove or add one or more of its authorized signers stated on Schedule II by notifying the Deposit Account Agent of such change in accordance with this Agreement, which notice shall include the true signature for any new authorized signatories.

 

(b)         The Deposit Account Agent may act relative hereto in reliance upon advice of counsel in reference to any matter connected herewith. The Deposit Account Agent shall not be liable for any mistake of fact or error of judgment or law, or for any acts or omissions of any kind, unless caused by its willful misconduct or gross negligence.

 

(c)         Underwriter and the Company agree to indemnify and hold the Deposit Account Agent harmless from and against any and all claims, losses, costs, liabilities, damages, suits, demands, judgments or expenses (including but not limited to reasonable attorney’s fees) claimed against or incurred by Deposit Account Agent arising out of or related, directly or indirectly, to this Agreement unless caused by the Deposit Account Agent’s gross negligence or willful misconduct.

 

 

 

 

(d)         In the event that the Deposit Account Agent shall be uncertain as to its duties or rights hereunder, the Deposit Account Agent shall be entitled to (i) refrain from taking any action other than to keep safely the Deposit Funds until it shall be directed otherwise by a court of competent jurisdiction, or (ii) deliver the Deposit Funds to a court of competent jurisdiction.

 

(e)         The Deposit Account Agent shall have no duty, responsibility or obligation to interpret or enforce the terms of any agreement other than Deposit Account Agent’s obligations hereunder, and the Deposit Account Agent shall not be required to make a request that any monies be delivered to the Deposit Account, it being agreed that the sole duties and responsibilities of the Deposit Account Agent shall be to the extent not prohibited by applicable law (i) to accept checks or other instruments for the payment of money and wire transfers delivered to the Deposit Account Agent for the Deposit Account and deposit said checks and wire transfers into the non-interest bearing Deposit Account, and (ii) to disburse or refrain from disbursing the Deposit Funds as stated above, provided that the checks received by the Deposit Account Agent have been collected and are available for withdrawal.

 

4.            Term of Deposits.  This Agreement shall terminate upon the disbursement of all Deposit Funds in the Deposit Account pursuant to Section 2(c), Section 2(d), Section 6 or Section 7 (except with respect to provisions hereof which are specifically intended to survive such termination).

 

5.            Deposit Account Statements and Information. The Deposit Account Agent agrees to send to the Company and/or the Underwriter a copy of the Deposit Account periodic statement, upon request and to also provide the Company and/or Underwriter, or their designee, upon request other deposit account information, including Deposit Account balances, by telephone or by computer communication, to the extent practicable. The Company and Underwriter agree to complete and sign all forms or agreements required by the Deposit Account Agent for that purpose. The Company and Underwriter each consent to the Deposit Account Agent’s release of such Deposit Account information to any of the individuals designated by Company or Underwriter, which designation has been signed in accordance with Section 3(a) by any of the persons in Schedule II .  Further, the Company and Underwriter have an option to receive e-mail notification of incoming and outgoing wire transfers. If this e-mail notification service is requested and subsequently approved by the Deposit Account Agent, the Company and Underwriter agrees to provide a valid e-mail address and other information necessary to set-up this service and sign all forms and agreements required for such service. The Company and Underwriter each consent to the Deposit Account Agent’s release of wire transfer information to the designated e-mail address(es). The Deposit Account Agent’s liability for failure to comply with this section shall not exceed the cost of providing such information.

 

 

 

 

6.            Resignation and Termination of the Deposit Account Agent . The Deposit Account Agent may resign at any time by giving 30 days’ prior written notice of such resignation to Underwriter and the Company. Upon providing such notice, the Deposit Account Agent shall have no further obligation hereunder except to hold as depositary the Deposit Funds that it receives until the end of such 30-day period. In such event, the Deposit Account Agent shall not take any action, other than receiving and depositing Investors’ checks and wire transfers in accordance with this Agreement, until the Company has designated a banking corporation, trust company, attorney or other person as successor. Upon receipt of such written designation signed by Underwriter and the Company, the Deposit Account Agent shall promptly deliver the Deposit Funds to such successor and shall thereafter have no further obligations hereunder. If such instructions are not received within 30 days following the effective date of such resignation, then the Deposit Account Agent may deposit the Deposit Funds held by it pursuant to this Agreement with a clerk of a court of competent jurisdiction pending the appointment of a successor. In either case provided for in this Section, the Deposit Account Agent shall be relieved of all further obligations and released from all liability thereafter arising with respect to the Deposit Funds.

 

7.            Termination . The Company and Underwriter may terminate the appointment of the Deposit Account Agent hereunder upon written notice specifying the date upon which such termination shall take effect, which date shall be at least 30 days from the date of such notice. In the event of such termination, the Company and Underwriter shall, within 30 days of such notice, appoint a successor deposit account agent and the Deposit Account Agent shall, upon receipt of written instructions signed by the Company and Underwriter, turn over to such successor deposit account agent all of the Deposit Funds; provided , however , that if the Company and Underwriter fail to appoint a successor deposit account agent within such 30-day period, such termination notice shall be null and void and the Deposit Account Agent shall continue to be bound by all of the provisions hereof. Upon receipt of the Deposit Funds, the successor deposit account agent shall become the deposit account agent hereunder and shall be bound by all of the provisions hereof and Deposit Account Agent shall be relieved of all further obligations and released from all liability thereafter arising with respect to the Deposit Funds and under this Agreement.

 

8.            Investment . All funds received by the Deposit Account Agent shall be held only in non-interest-bearing accounts at Pacific Mercantile Bank.

 

9.            Compensation . Deposit Account Agent shall be entitled, for the duties to be performed by it hereunder, to a fee as set forth on Schedule III. In addition, the Company shall be obligated to reimburse Deposit Account Agent for all fees, costs and expenses incurred or that become due in connection with this Agreement or the Deposit Account, including reasonable attorney’s fees. Neither the modification, cancellation, termination or rescission of this Agreement nor the resignation or termination of the Deposit Account Agent shall affect the right of Deposit Account Agent to retain the amount of any fee which has been paid, or to be reimbursed or paid any amount which has been incurred or becomes due, prior to the effective date of any such modification, cancellation, termination, resignation or rescission. To the extent the Deposit Account Agent has incurred any such expenses, or any such fee becomes due, prior to any closing, the Deposit Account Agent shall advise the Company and the Company shall direct all such amounts to be paid directly at any such closing.

 

10.          Notices . All notices, requests, demands and other communications required or permitted to be given hereunder shall be in writing and shall be deemed to have been duly given if sent by hand-delivery, by facsimile (followed by first-class mail), by nationally recognized overnight courier service or by prepaid registered or certified mail, return receipt requested, to the addresses set forth below:

 

 

 

 

If to Underwriter:

Boustead Securities, LLC

6 Venture, Suite 265

Irvine, CA 92618 USA

Attention: Keith Moore, CEO

Fax: +1 815 301 8099

 

If to the Company:

Asia Times Holdings Ltd.

Attention: Ms. Qiuli Wang, Chariman

Suite 2501-A Skyline Tower

Kowloon Bay, Hong Kong

Email: wang@atifchina.com

 

With copy to:

 

If to Deposit Account Agent:

FinTech Clearing, LLC

6 Venture, Suite 265

Irvine, CA 92618 USA

Attention: Brian Park, President

Fax: +1 310 504 3704

 

11.          General .

 

(a)         This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of Delaware applicable to agreements made and to be entirely performed within such State, without regard to choice of law principles and any action brought hereunder shall be brought in the courts of the State of California, located in the County of Orange. Each party hereto irrevocably waives any objection on the grounds of venue, forum non–conveniens or any similar grounds and irrevocably consents to service of process by mail or in any manner permitted by applicable law and consents to the jurisdiction of said courts. EACH OF THE PARTIES HERETO HEREBY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT.

 

(b)         This Agreement sets forth the entire agreement and understanding of the parties with respect to the matters contained herein and supersedes all prior agreements, arrangements and understandings relating thereto.

 

 

 

 

(c)         All of the terms and conditions of this Agreement shall be binding upon, and inure to the benefit of and be enforceable by, the parties hereto, as well as their respective successors and assigns.

 

(d)         This Agreement may be amended, modified, superseded or canceled, and any of the terms or conditions hereof may be waived, only by a written instrument executed by each party hereto or, in the case of a waiver, by the party waiving compliance. The failure of any party at any time or times to require performance of any provision hereof shall in no manner affect its right at a later time to enforce the same. No waiver of any party of any condition, or of the breach of any term contained in this Agreement, whether by conduct or otherwise, in any one or more instances shall be deemed to be or construed as a further or continuing waiver of any such condition or breach or a waiver of any other condition or of the breach of any other term of this Agreement. No party may assign any rights, duties or obligations hereunder unless all other parties have given their prior written consent.

 

(e)         If any provision included in this Agreement proves to be invalid or unenforceable, it shall not affect the validity of the remaining provisions.

 

(f)         This Agreement and any modification or amendment of this Agreement may be executed in several counterparts or by separate instruments and all of such counterparts and instruments shall constitute one agreement, binding on all of the parties hereto.

 

12.          Form of Signature. The parties hereto agree to accept a facsimile transmission copy of their respective actual signatures as evidence of their actual signatures to this Agreement and any modification or amendment of this Agreement; provided , however , that each party who produces a facsimile signature agrees, by the express terms hereof, to place, promptly after transmission of his or her signature by fax, a true and correct original copy of his or her signature in overnight mail to the address of the other party.

 

13.          No Third-Party Beneficiaries .  This Agreement is solely for the benefit of the parties and their respective successors and permitted assigns, and no other person has any right, benefit, priority, or interest under or because of the existence of this Agreement.

 

[SIGNATURE PAGE FOLLOWS]

 

 

 

 

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

 

Asia Times Holdings Ltd.   Boustead Securities, LLC
         
By: /s/ Qiuli Wang   By: /s/ Keith Moore
  Name:  Qiuli Wang     Name:  Keith Moore
  Title:    Chairman     Title:    CEO

 

FinTech Clearing, LLC  
     
By: /s/ Brian Park  
  Name: Brian Park  
  Title:   President  
     
By:    
  Name:  
  Title:  

 

 

 

 

Schedule I

 

OFFERING DOCUMENTS

 

 

 

 

Schedule II

 

The Deposit Account Agent is authorized to accept instructions signed or believed by the Deposit Account Agent to be signed by any one of the following on behalf of the Company and Underwriter.

 

  Asia Times Holdings Ltd.
       
  Name   True Signature
       
  Qiuli Wang, Chairman   /s/ Qiuli Wang

 

  Boustead Securities, LLC
       
  Name   True Signature
       
 

Keith Moore, CEO 

  /s/ Keith Moore
       
  Dan McClory, Managing Director

/s/ Dan McClory

 

 

 

 

Schedule III

 

Fee Schedule

 

Service Fee
Cash Management Fee 2.0 % of Proceeds disbursed to the Issuer but in no event less than $200,000 or greater than $300,000 payable upon the initial release of Deposit Funds.
CIP/AML check (applied to each subscriber) $2.00
Wire Transfers – Incoming (Domestic or Foreign) $5.00
Wire Transfers – Outgoing (Domestic) $10.00
Wire Transfers – Outgoing (Foreign) $25.00
NACHA Upload per file $5.00
ACH per transaction (incoming or outgoing) $0.50
ACH Exceptions (incoming or outgoing) $2.00
Check Processing (incoming or outgoing) $10.00

 

 

 

 

Exhibit A

 

EXTENSION NOTICE

 

Date:

 

FinTech Clearing, LLC

6 Venture, Suite 265 Irvine, CA 92618

Attention: Brian Park, President

 

Dear Mr. Park:

 

In accordance with the terms of Section 2(b) of a Deposit Account Agreement dated ___ _______, by and among[          ]. (the “Company”), Boustead Securities, LLC (the “Underwriter”), and FinTech Clearing, LLC (the “Deposit Account Agent”), the Company and Underwriter hereby notifies the Deposit Account Agent that the Termination Date has been extended to ____________, 2018, the Final Termination Date.

 

Very truly yours,  
   
[          ]  

 

By:    

 

Name:  
Title:  
   

Boustead Securities, LLC 

 

 
By:    
Name: Keith Moore  
Title: CEO  

 

 

Exhibit B

 

FORM OF DEPOSIT RELEASE NOTICE

 

Date:

 

FinTech Clearing, LLC

6 Venture, Suite 265

Irvine, CA 92618

Attention: Brian Park, President

 

Dear Mr. Park:

 

In accordance with the terms of Section 2(c) of a Deposit Account Agreement dated as of ________ __, 2018 (the "Deposit Account Agreement"), by and between [          ](the "Company"), FinTech Clearing, LLC (the "Deposit Account Agent") and Boustead Securities, LLC (the "Underwriter"), the Company and Underwriter hereby notify the Deposit Account Agent that the ________ closing will be held on ___________ for gross proceeds of $_________.

 

PLEASE DISTRIBUTE FUNDS BY WIRE TRANSFER AS FOLLOWS (wire instructions attached):

 

________________________: $
   
________________________: $
   
________________________: $

 

Very truly yours,  
   
[          ]  

 

By:    

Name:  
Title:  
   
Boustead Securities, LLC  

 

By:    

Name: Keith Moore  
Title: CEO