☑
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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☐
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Nevada
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90-0746568
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
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6565 E. Washington Blvd.
Commerce, CA
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90040
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(Address of principal executive offices)
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(Zip Code)
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Large accelerated filer
¨
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Accelerated filer
¨
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Non-accelerated filer
¨
(Do not check if smaller reporting company)
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Smaller reporting company
þ
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Page
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PART I
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Item 1.
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1
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Item 1A.
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8
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Item 1B.
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19
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Item 2.
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20
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Item 3.
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20
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Item 4.
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20
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PART II
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Item 5.
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21
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Item 6.
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21
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Item 7.
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21
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Item 7A.
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31
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Item 8.
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31
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Item 9.
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32
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Item 9A.
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32
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Item 9B.
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33
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PART III
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Item 10.
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34
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Item 11.
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34
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Item 12.
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34
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Item 13.
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34
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Item 14.
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34
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PART IV
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Item 15.
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35
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F-1
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●
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Investors’ perceptions of, and demand for, companies in our industry;
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●
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Investors’ perceptions of, and demand for, companies operating in China;
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●
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Conditions of the U.S. and other capital markets in which we may seek to raise funds;
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●
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Our future results of operations, financial condition and cash flows;
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●
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Governmental regulation of foreign investment in companies in particular countries;
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●
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Economic, political and other conditions in the U.S., China, and other countries; and
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●
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Governmental policies relating to foreign currency borrowings.
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●
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Issued patents and trademarks that we own or have the right to use may not provide us with any competitive advantages;
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●
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Our efforts to protect our proprietary rights may not be effective in preventing misappropriation of our intellectual property or that of those from whom we license our rights to use;
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●
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Our efforts may not prevent the development and design by others of products or technologies similar to or competitive with, or superior to those we use or develop; or
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●
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Another party may obtain a blocking patent and we or our licensors would need to either obtain a license or design around the patent in order to continue to offer the contested feature or service in our products.
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High |
Low
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||||||
2015
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||||||||
First Quarter (through March 31, 2015)
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$
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3.70
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1.74
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|||||
Second Quarter (through June 30, 2015)
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3.43
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1.87
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||||||
Third Quarter (through September 30, 2015)
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$
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2.68
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1.77
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|||||
Fourth Quarter (through December 31, 2015)
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2.34
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1.75
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2016
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||||||||
First Quarter (through March 31, 2016)
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$
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1.92
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$
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1.00
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||||
Second Quarter (through June 30, 2016)
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1.29
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0.39
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||||||
Third Quarter (through September 30, 2016)
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$
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4.23
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$
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0.40
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||||
Fourth Quarter (through December 31, 2016)
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5.15
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1.88
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Years Ended December 31,
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|||||||||||||||
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2016
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2015
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||||||||||||||
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$
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% of Sales
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$
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% of Sales
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||||||||||||
Net sales
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92,648,195
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89,943,415
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||||||||||||||
Cost of sales
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(79,124,451
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)
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(85
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%)
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(74,664,644
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)
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(83
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%)
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||||||||
Gross profit
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13,523,744
|
15
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%
|
15,278,771
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17
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%
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||||||||||
Operating expenses
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(14,289,836
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)
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(15
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%)
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(10,648,563
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)
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(12
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%)
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||||||||
Income (loss) from operations
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(766,092
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)
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(1
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%)
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4,630,208
|
5
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%
|
|||||||||
Other expenses, net
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(362,564
|
)
|
-
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%
|
(1,064,358
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)
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(1
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%)
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||||||||
Income tax (benefit) expense
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(836,620
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)
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(1
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%)
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161,443
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-
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%
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|||||||||
(Loss) Income from continuing operations
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(292,036
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)
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-
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%
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3,404,407
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4
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%
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|||||||||
Loss from discontinued operations
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(826,217
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)
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(1
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%)
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(1,204,165
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)
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(1
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%)
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||||||||
Net (loss) income
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(1,118,253
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)
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(1
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%)
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2,200,242
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2
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%
|
|
2016
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2015
|
||||||
Cash (used in) provided by:
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||||||||
Operating activities
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$
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(6,421,503
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)
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$
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(4,229,308
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)
|
||
Investing activities
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6,098,402
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(2,473,664
|
)
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|||||
Financing activities
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1,925,654
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6,452,072
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1.
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Financial statements listed in the Index to Financial Statements, filed as part of this Annual Report beginning on page F-1; and
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2.
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Exhibits
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Exhibit No.
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Description
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2.1
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Agreement and Plan of Merger by and between Stevens Resources, Inc. and Nova LifeStyle, Inc., dated June 14, 2011 (Incorporated herein by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K (File No. 333-163019) filed on June 30, 2011)
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2.2
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Share Exchange Agreement and Plan of Reorganization by and between Nova Furniture Limited and Nova LifeStyle, Inc., dated June 30, 2011 (Incorporated herein by reference to Exhibit 2.2 to the Company’s Current Report on Form 8-K (File No. 333-163019) filed on June 30, 2011)
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2.3
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Return to Treasury Agreement by and between Nova LifeStyle, Inc. and Alex Li, dated June 30, 2011 (Incorporated herein by reference to Exhibit 2.3 to the Company’s Current Report on Form 8-K (File No. 333-163019) filed on June 30, 2011)
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3.1
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Articles of Incorporation (Incorporated herein by reference to Exhibit 3.1 to the Company’s Registration Statement on Form S-1 (File No. 333-163019) filed on November 10, 2009)
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3.2
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Amended and Restated Bylaws (Incorporated herein by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K (File No. 333-163019) filed on June 30, 2011)
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3.3
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Certificate of Amendment to Articles of Incorporation filed with the Secretary of the State of Nevada on December 15, 2009, and effective as of September 9, 2009 (Incorporated herein by reference to Exhibit 3.3 to the Company’s Current Report on Form 8-K (File No. 333-163019) filed on June 30, 2011)
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3.4
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Articles of Merger between Stevens Resources, Inc. and Nova LifeStyle, Inc. amending the Articles of Incorporation filed with the Secretary of State of the State of Nevada on June 14, 2011, and effective as of June 27, 2011 (Incorporated herein by reference to Exhibit 3.4 to the Company’s Current Report on Form 8-K (File No. 333-163019) filed on June 30, 2011)
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3.5
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Articles of Exchange of Nova Furniture Limited and Nova LifeStyle, Inc. filed with the Secretary of State of the State of Nevada on June 30, 2011 (Incorporated herein by reference to Exhibit 3.5 to the Company’s Current Report on Form 8-K (File No. 333-163019) filed on June 30, 2011)
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4.1
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Specimen Stock Certificate (Incorporated herein by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K (File No. 333-163019) filed on June 30, 2011)
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4.2
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Form of Regulation S Subscription Agreement (Incorporated herein by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K (File No. 333-163019) filed on August 22, 2011)
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4.3
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Form of Regulation D Subscription Agreement (Incorporated herein by reference to Exhibit 4.3 to the Company’s Current Report on Form 8-K (File No. 333-163019) filed on August 22, 2011)
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4.4
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Form of Regulation S Warrant (Incorporated herein by reference to Exhibit 4.4 to the Company’s Current Report on Form 8-K (File No. 333-163019) filed on August 22, 2011)
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4.5
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Form of Regulation D Warrant (Incorporated herein by reference to Exhibit 4.5 to the Company’s Current Report on Form 8-K (File No. 333-163019) filed on August 22, 2011)
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4.6
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Form of Regulation S Registration Rights Agreement (Incorporated herein by reference to Exhibit 4.6 to the Company’s Current Report on Form 8-K (File No. 333-163019) filed on August 22, 2011)
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4.7
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Form of Regulation D Registration Rights Agreement (Incorporated herein by reference to Exhibit 4.7 to the Company’s Current Report on Form 8-K (File No. 333-163019) filed on August 22, 2011)
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4.8
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Form of Regulation S Subscription Agreement (Incorporated herein by reference to Exhibit 4.8 to the Company’s Current Report on Form 8-K (File No. 333-163019) filed on January 18, 2012)
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4.9
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Form of Regulation D Subscription Agreement (Incorporated herein by reference to Exhibit 4.9 to the Company’s Current Report on Form 8-K (File No. 333-163019) filed on January 18, 2012)
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4.10
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Form of Regulation S Warrant (Incorporated herein by reference to Exhibit 4.10 to the Company’s Current Report on Form 8-K (File No. 333-163019) filed on January 18, 2012)
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4.11
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Form of Regulation D Warrant (Incorporated herein by reference to Exhibit 4.11 to the Company’s Current Report on Form 8-K (File No. 333-163019) filed on January 18, 2012)
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4.12
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Form of Regulation S Registration Rights Agreement (Incorporated herein by reference to Exhibit 4.12 to the Company’s Current Report on Form 8-K (File No. 333-163019) filed on January 18, 2012)
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4.13
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Form of Regulation D Registration Rights Agreement (Incorporated herein by reference to Exhibit 4.13 to the Company’s Current Report on Form 8-K (File No. 333-163019) filed on January 18, 2012)
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4.14
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Form of Series A Warrant (Incorporated herein by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K (File No. 333-163019) filed on April 14, 2014)
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4.15
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Form of Series B Warrant (Incorporated herein by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K (File No. 333-163019) filed on April 14, 2014)
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4.16
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Form of Series C Warrant (Incorporated herein by reference to Exhibit 4.3 to the Company’s Current Report on Form 8-K (File No. 333-163019) filed on April 14, 2014)
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10.1
|
|
Option to Purchase Agreement, dated September 30, 2009 (Incorporated herein by reference to Exhibit 10.1 to the Company’s Registration Statement on Form S-1 (File No. 333-163019) filed on November 10, 2009)
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10.2
|
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Shareholder Agreement by and between Nova Furniture Limited and St. Joyal, dated January 1, 2011 (Incorporated herein by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K (File No. 333-163019) filed on June 30, 2011)
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10.3
|
|
Intellectual Property Rights Transfer Agreement by and between Nova Furniture (Dongguan) Co., Ltd. and Ya Ming Wong, dated January 7, 2011 (Incorporated herein by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K (File No. 333-163019) filed on June 30, 2011)
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10.4
|
|
Form of Product Franchise Agreement (Incorporated herein by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K (File No. 333-163019) filed on June 30, 2011)
|
10.5
|
|
Promissory Note, dated June 30, 2011 (Incorporated herein by reference to Exhibit 10.5 to the Company’s Current Report on Form 8-K (File No. 333-163019) filed on June 30, 2011)
|
10.6
|
|
Lock-Up Agreement between Ya Ming Wong and Nova LifeStyle, Inc., dated June 30, 2011 (Incorporated herein by reference to Exhibit 10.9 to the First Amendment to the Company’s Current Report on Form 8-K (File No. 333-163019) filed on August 10, 2011)
|
10.7
|
|
Lock-Up Agreement between Yuen Ching Ho and Nova LifeStyle, Inc., dated June 30, 2011 (Incorporated herein by reference to Exhibit 10.10 to the First Amendment to the Company’s Current Report on Form 8-K (File No. 333-163019) filed on August 10, 2011)
|
10.8
|
|
Lock-Up Agreement between Jun Jiang and Nova LifeStyle, Inc., dated June 30, 2011 (Incorporated herein by reference to Exhibit 10.11 to the First Amendment to the Company’s Current Report on Form 8-K (File No. 333-163019) filed on August 10, 2011)
|
10.9
|
|
Lock-Up Agreement between Qiang Liu and Nova LifeStyle, Inc., dated June 30, 2011 (Incorporated herein by reference to Exhibit 10.12 to the First Amendment to the Company’s Current Report on Form 8-K (File No. 333-163019) filed on August 10, 2011)
|
10.10
|
|
Stock Purchase Agreement between Nova LifeStyle, Inc. and Jun Zhang, dated August 31, 2011 (Incorporated herein by reference to Exhibit 10.13 to the Company’s Current Report on Form 8-K (File No. 333-163019) filed on September 6, 2011)
|
10.11
|
|
Trademark Purchase and Assignment Agreement by and between St. Joyal and Nova LifeStyle, Inc., dated August 31, 2011 (Incorporated herein by reference to Exhibit 10.14 to the Company’s Current Report on Form 8-K (File No. 333-163019) filed on September 6, 2011)
|
10.12
|
|
First Amendment to Intellectual Property Rights Transfer Agreement by and between Nova Furniture (Dongguan) Co., Ltd. and Ya Ming Wong, dated September 21, 2011 (Incorporated herein by reference to Exhibit 10.16 to the Company’s Registration Statement on Form S-1 (File No. 333-177353) filed on October 17, 2011)
|
10.13
|
|
Stock Acquisition Agreement by and between Nova LifeStyle, Inc. and Bright Swallow International Group Limited, dated March 22, 2013 (Incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K (File No. 333-163019) filed on March 26, 2013)
|
10.14#
|
|
Amended and Restated Employment Agreement between Nova LifeStyle, Inc. and Thanh H. Lam, dated May 3, 2013 (Incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K (File No. 333-163019) filed on May 9, 2013)
|
10.15#
|
|
Form of Director Agreement (Incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K (File No. 333-163019) filed on June 3, 2013)
|
10.16#
|
|
Employment Agreement between Nova LifeStyle, Inc. and Ya Ming Wong, dated November 7, 2013 (Incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K (File No. 333-163019) filed on November 12, 2013)
|
10.17#
|
|
Employment Agreement between Nova LifeStyle, Inc. and Yuen Ching Ho, dated November 7, 2013 (Incorporated herein by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K (File No. 333-163019) filed on November 12, 2013)
|
10.18
|
|
First Amendment to Lock-Up Agreement between Ya Ming Wong and Nova LifeStyle, Inc., dated March 25, 2014 (Incorporated herein by reference to Exhibit 10.18 to the Company’s Annual Report on Form 10-K (File No. 333-163019) filed on March 31, 2014)
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10.19
|
|
First Amendment to Lock-Up Agreement between Yuen Ching Ho and Nova LifeStyle, Inc., dated March 25, 2014 (Incorporated herein by reference to Exhibit 10.19 to the Company’s Annual Report on Form 10-K (File No. 333-163019) filed on March 31, 2014)
|
10.20
|
|
First Amendment to Lock-Up Agreement between Jun Jiang and Nova LifeStyle, Inc., dated March 25, 2014 (Incorporated herein by reference to Exhibit 10.20 to the Company’s Annual Report on Form 10-K (File No. 333-163019) filed on March 31, 2014)
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10.21
|
|
First Amendment to Lock-Up Agreement between Qiang Liu and Nova LifeStyle, Inc., dated March 25, 2014 (Incorporated herein by reference to Exhibit 10.21 to the Company’s Annual Report on Form 10-K (File No. 333-163019) filed on March 31, 2014)
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10.22
|
|
Lock-Up Agreement between Ah Wan Wong and Nova LifeStyle, Inc., dated August 18, 2011 (Incorporated herein by reference to Exhibit 10.22 to the Company’s Annual Report on Form 10-K (File No. 333-163019) filed on March 31, 2014)
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10.23
|
|
Lock-Up Agreement between Man Shek Ng and Nova LifeStyle, Inc., dated August 18, 2011 (Incorporated herein by reference to Exhibit 10.23 to the Company’s Annual Report on Form 10-K (File No. 333-163019) filed on March 31, 2014)
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10.24
|
|
First Amendment to Lock-Up Agreement between Ah Wan Wong and Nova Lifestyle, Inc., dated March 25, 2014 (Incorporated herein by reference to Exhibit 10.24 to the Company’s Annual Report on Form 10-K (File No. 333-163019) filed on March 31, 2014)
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10.25
|
|
First Amendment to Lock-Up Agreement between Man Shek Ng and Nova Lifestyle, Inc., dated March 25, 2014 (Incorporated herein by reference to Exhibit 10.25 to the Company’s Annual Report on Form 10-K (File No. 333-163019) filed on March 31, 2014)
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10.26
|
|
Stock Award Agreement between Tanh H. Lam and Nova Lifestyle, Inc., effective May 3, 2013 (Incorporated herein by reference to Exhibit 10.26 to the Company’s Annual Report on Form 10-K (File No. 333-163019) filed on March 31, 2014)
|
10.27
|
|
Securities Purchase Agreement by and among Nova LifeStyle, Inc. and each of the investors listed on the Schedule of Buyers attached thereto, dated April 14, 2014 (Incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K (File No. 333-163019) filed on April 14, 2014)
|
10.28
|
|
Placement Agent Agreement by and between Nova LifeStyle, Inc. and FT Global Capital, Inc., dated March 31, 2014 (Incorporated herein by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K (File No. 333-163019) filed on April 14, 2014)
|
10.29#
|
|
Nova LifeStyle, Inc. 2014 Omnibus Long-Term Incentive Plan (Incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K/A (File No. 333-163019) filed on July 10, 2014)
|
10.30#
|
|
Nova LifeStyle, Inc. Form of Restricted Stock Award Agreement (Incorporated herein by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K/A (File No. 333-163019) filed on July 10, 2014)
|
10.31#
|
|
Employment Agreement between Nova LifeStyle, Inc. and Ya Ming Wong, dated March 25, 2015 and effective as of November 10, 2014 (Incorporated herein by reference to Exhibit 10.31 to the Company’s Annual Report on Form 10-K filed on March 26, 2015)
|
10.32#
|
|
Employment Agreement between Nova LifeStyle, Inc. and Yuen Ching Ho, dated March 25, 2015 and effective as of November 10, 2014 (Incorporated herein by reference to Exhibit 10.32 to the Company’s Annual Report on Form 10-K filed on March 26, 2015)
|
10.33#
|
|
Employment Agreement between Nova LifeStyle, Inc. and Ya Ming Wong, dated March 25, 2016 and effective as of November 11, 2015 (Incorporated herein by reference to Exhibit 10.33 to the Company’s Annual Report on Form 10-K filed on March 28, 2016)
|
10.34#
|
|
Employment Agreement between Nova LifeStyle, Inc. and Yuen Ching Ho, dated March 25, 2016 and effective as of November 11, 2015 (Incorporated herein by reference to Exhibit 10.33 to the Company’s Annual Report on Form 10-K filed on March 28, 2016)
|
10.35†
|
||
10.36†
|
||
14.1
|
|
Code of Business Conduct and Ethics of Nova Lifestyle, Inc. (Incorporated herein by reference to Exhibit 14.1 to the Company’s Current Report on Form 8-K (File No. 333-163019) filed on June 10, 2013)
|
21.1†
|
|
|
23.1†
|
|
|
24.1†
|
|
|
31.1†
|
|
|
31.2†
|
|
|
32.1‡
|
|
|
101.INS†
|
|
XBRL Instance Document
|
101.SCH†
|
|
XBRL Taxonomy Extension Schema Document
|
101.CAL†
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
101.DEF†
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
101.LAB†
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
101.PRE†
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
Page
|
F-2
|
|
Financial Statements
|
|
F-3
|
|
F-5
|
|
F-6
|
|
F-7
|
|
F-9
|
2016
|
2015
|
|||||||
Assets
|
||||||||
Current Assets
|
||||||||
Cash and cash equivalents
|
$
|
2,587,743
|
$
|
920,227
|
||||
Accounts receivable, net
|
42,102,761
|
42,684,259
|
||||||
Advance to suppliers
|
13,669,752
|
7,936,141
|
||||||
Inventories
|
2,781,123
|
2,514,319
|
||||||
Assignment fee receivable (Note 3)
|
1,250,000
|
--
|
||||||
Receivable from an unrelated party (Note 8)
|
7,000,000
|
--
|
||||||
Prepaid expenses and other receivables
|
642,891
|
508,999
|
||||||
Taxes receivable
|
14,893
|
8,494
|
||||||
Assets of discontinued operations
|
--
|
11,260,606
|
||||||
Total Current Assets
|
70,049,163
|
65,833,045
|
||||||
Noncurrent Assets
|
||||||||
Plant, property and equipment, net
|
171,276
|
200,077
|
||||||
Lease deposit
|
43,260
|
43,260
|
||||||
Goodwill
|
218,606
|
218,606
|
||||||
Intangible assets, net
|
5,686,623
|
6,247,481
|
||||||
Deferred tax asset
|
874,759
|
61,000
|
||||||
Assets of discontinued operations, non-current
|
--
|
17,144,538
|
||||||
Total Noncurrent Assets
|
6,994,524
|
23,914,962
|
||||||
Total Assets
|
$
|
77,043,687
|
$
|
89,748,007
|
2016
|
2015
|
|||||||
Liabilities and Stockholders’ Equity
|
||||||||
Current Liabilities
|
||||||||
Accounts payable
|
$
|
2,368,775
|
$
|
5,708,259
|
||||
Lines of credit
|
7,977,841
|
1,848,000
|
||||||
Advance from customers
|
513,880
|
63,789
|
||||||
Accrued liabilities and other payables
|
780,960
|
1,438,105
|
||||||
Liabilities of discontinued operations
|
--
|
8,147,018
|
||||||
Total Current Liabilities
|
11,641,456
|
17,205,171
|
||||||
Noncurrent Liabilities
|
||||||||
Lines of credit
|
--
|
5,659,357
|
||||||
Income tax payable
|
2,136,788
|
2,160,449
|
||||||
Liabilities of discontinued operations, non-current
|
--
|
4,731,348
|
||||||
Total Noncurrent Liabilities
|
2,136,788
|
12,551,154
|
||||||
Total Liabilities
|
13,778,244
|
29,756,325
|
||||||
Contingencies and Commitments
|
||||||||
Stockholders’ Equity
|
||||||||
Common stock, $0.001 par value; 75,000,000 shares authorized,
27,309,695 and 24,254,160 shares issued and outstanding;
as of December 31, 2016 and 2015, respectively
|
27,309
|
24,254
|
||||||
Additional paid-in capital
|
36,885,462
|
31,761,983
|
||||||
Statutory reserves
|
6,241
|
6,241
|
||||||
Accumulated other comprehensive income
|
--
|
1,570,534
|
||||||
Retained earnings
|
26,346,431
|
26,628,670
|
||||||
Total Stockholders’ Equity
|
63,265,443
|
59,991,682
|
||||||
Total Liabilities and Stockholders’ Equity
|
$
|
77,043,687
|
$
|
89,748,007
|
|
2016
|
2015
|
||||||
|
||||||||
|
||||||||
Net Sales
|
$
|
92,648,195
|
$
|
89,943,415
|
||||
|
||||||||
Cost of Sales
|
79,124,451
|
74,664,644
|
||||||
|
||||||||
Gross Profit
|
13,523,744
|
15,278,771
|
||||||
|
||||||||
Operating Expenses
|
||||||||
Selling expenses
|
5,324,270
|
4,631,758
|
||||||
General and administrative expenses
|
8,965,566
|
6,016,805
|
||||||
|
||||||||
Total Operating Expenses
|
14,289,836
|
10,648,563
|
||||||
|
||||||||
(Loss) Income From Operations
|
(766,092
|
)
|
4,630,208
|
|||||
|
||||||||
Other Income (Expenses)
|
||||||||
Non-operating (income) expense, net
|
46,717
|
43,237
|
||||||
Foreign exchange transaction loss
|
(6,386
|
)
|
(7,003
|
)
|
||||
Loss on change in fair value and extinguishment of warrant liability
|
--
|
(767,096
|
)
|
|||||
Interest expense
|
(283,795
|
)
|
(275,630
|
)
|
||||
Financial expense
|
(119,100
|
)
|
(57,866
|
)
|
||||
|
||||||||
Total Other Expenses, Net
|
(362,564
|
)
|
(1,064,358
|
)
|
||||
|
||||||||
(Loss) Income Before Income Taxes and Discontinued operations
|
(1,128,656
|
)
|
3,565,850
|
|||||
|
||||||||
Income Tax (Benefit) Expense
|
(836,620
|
)
|
161,443
|
|||||
|
||||||||
(Loss) Income From Continuing Operations
|
(292,036
|
)
|
3,404,407
|
|||||
|
||||||||
Loss From Discontinued Operations, net of tax
|
(826,217
|
)
|
(1,204,165
|
)
|
||||
|
||||||||
Net (Loss) Income
|
(1,118,253
|
)
|
2,200,242
|
|||||
|
||||||||
Other Comprehensive Income (Loss)
|
||||||||
Release of foreign currency translation adjustments upon disposal of subsidiaries
|
836,014
|
--
|
||||||
Foreign currency translation
|
(734,520
|
)
|
(1,004,633
|
)
|
||||
|
||||||||
Comprehensive (Loss) Income
|
$
|
(1,016,759
|
)
|
$
|
1,195,609
|
|||
|
||||||||
Basic weighted average shares outstanding
|
25,432,037
|
22,825,652
|
||||||
Diluted weighted average shares outstanding
|
25,432,037
|
22,825,652
|
||||||
|
||||||||
(Loss) income from continuing operations per share of common stock
|
||||||||
Basic
|
$
|
(0.01
|
)
|
$
|
0.15
|
|||
Diluted
|
$
|
(0.01
|
)
|
$
|
0.15
|
|||
|
||||||||
Loss from discontinued operations per share of common stock
|
||||||||
Basic
|
$
|
(0.03
|
)
|
$
|
(0.05
|
)
|
||
Diluted
|
$
|
(0.03
|
)
|
$
|
(0.05
|
)
|
||
|
||||||||
Net (loss) income per share of common stock
|
||||||||
Basic
|
$
|
(0.04
|
)
|
$
|
0.10
|
|||
Diluted
|
$
|
(0.04
|
)
|
$
|
0.10
|
|
Accumulated
|
|||||||||||||||||||||||||||
|
Other
|
Total
|
||||||||||||||||||||||||||
|
Common stock
|
Additional Paid
|
Comprehensive
|
Statutory
|
Retained
|
Stockholders’
|
||||||||||||||||||||||
|
Shares
|
Amount
|
in Capital
|
Income
|
Reserves
|
Earnings
|
Equity
|
|||||||||||||||||||||
Balance
–January 1, 2015
|
20,897,316
|
$
|
20,897
|
$
|
24,751,476
|
$
|
2,575,167
|
$
|
6,241
|
$
|
24,428,428
|
$
|
51,782,209
|
|||||||||||||||
Exercise of warrants
|
1,062,912
|
1,063
|
2,231,052
|
--
|
--
|
--
|
2,232,115
|
|||||||||||||||||||||
Sales of common stock, net of issuance cost of $355,000
|
2,000,001
|
2,000
|
3,643,002
|
--
|
--
|
--
|
3,645,002
|
|||||||||||||||||||||
Stock issued to officers
|
189,209
|
189
|
790,811
|
--
|
--
|
--
|
791,000
|
|||||||||||||||||||||
Stock issued to consultants
|
63,332
|
63
|
191,939
|
--
|
--
|
--
|
192,002
|
|||||||||||||||||||||
|
||||||||||||||||||||||||||||
Stock compensation for board of directors
|
41,390
|
42
|
153,703
|
--
|
--
|
--
|
153,745
|
|||||||||||||||||||||
|
||||||||||||||||||||||||||||
Net income
|
--
|
--
|
--
|
--
|
--
|
2,200,242
|
2,200,242
|
|||||||||||||||||||||
Foreign currency translation loss
|
--
|
--
|
--
|
(1,004,633
|
) |
--
|
--
|
(1,004,633
|
) | |||||||||||||||||||
|
||||||||||||||||||||||||||||
Balance
–December 31, 2015
|
24,254,160
|
$
|
24,254
|
$
|
31,761,983
|
$
|
1,570,534
|
$
|
6,241
|
$
|
26,628,670
|
$
|
59,991,682
|
|||||||||||||||
|
||||||||||||||||||||||||||||
Exercise of warrants
|
1,141,667
|
1,142
|
3,092,776
|
-
|
-
|
-
|
3,093,918
|
|||||||||||||||||||||
|
||||||||||||||||||||||||||||
Stock issued to officers
|
350,000
|
349
|
424,277
|
-
|
-
|
-
|
424,626
|
|||||||||||||||||||||
|
||||||||||||||||||||||||||||
Stock issued to employees and service providers
|
967,500
|
968
|
582,457
|
-
|
-
|
-
|
583,425
|
|||||||||||||||||||||
Stock issued to consultants
|
495,389
|
495
|
919,074
|
-
|
-
|
-
|
919,569
|
|||||||||||||||||||||
|
||||||||||||||||||||||||||||
Stock compensation for board of directors
|
100,979
|
101
|
104,895
|
-
|
-
|
-
|
104,996
|
|||||||||||||||||||||
Disposal of subsidiaries
|
-
|
-
|
-
|
(836,014
|
)
|
-
|
836,014
|
-
|
||||||||||||||||||||
Net loss
|
-
|
-
|
-
|
-
|
-
|
(1,118,253
|
)
|
(1,118,253
|
)
|
|||||||||||||||||||
|
||||||||||||||||||||||||||||
Foreign currency translation loss
|
-
|
-
|
-
|
(734,520
|
)
|
-
|
-
|
(734,520
|
)
|
|||||||||||||||||||
|
||||||||||||||||||||||||||||
Balance
–December 31, 2016
|
27,309,695
|
$
|
27,309
|
$
|
36,885,462
|
$
|
-
|
$
|
6,241
|
$
|
26,346,431
|
$
|
63,265,443
|
2016
|
2015
|
|||||||
Cash Flows From Operating Activities
|
||||||||
Net income (loss) from continuing operations
|
$
|
(292,036
|
)
|
$
|
3,404,407
|
|||
Adjustments to reconcile net income to net cash used in operating activities:
|
||||||||
Depreciation and amortization
|
603,155
|
512,884
|
||||||
Deferred tax expense
|
(813,760
|
)
|
(52,742
|
)
|
||||
Stock compensation expense
|
1,637,362
|
1,377,328
|
||||||
Change in fair value and extinguishment of warrant liability
|
--
|
767,096
|
||||||
Bad debt expenses
|
2,603,745
|
660,136
|
||||||
Changes in operating assets and liabilities:
|
||||||||
Accounts receivable
|
(2,022,248
|
)
|
(8,782,341
|
)
|
||||
Advance to suppliers
|
(5,733,611
|
)
|
231,046
|
|||||
Inventories
|
(266,804
|
)
|
(1,193,622
|
)
|
||||
Other current assets
|
298,115
|
(724,046
|
)
|
|||||
Accounts payable
|
(3,856,326
|
)
|
(533,545
|
)
|
||||
Advance from customers
|
450,091
|
(58,251
|
)
|
|||||
Accrued liabilities and other payables
|
(710,327
|
)
|
(295,394
|
)
|
||||
Taxes payable
|
(30,060
|
)
|
115,616
|
|||||
Net Cash Used in Continuing Operations
|
(8,132,704
|
)
|
(4,571,428
|
)
|
||||
Net Cash Provided by Discontinued Operations
|
1,711,201
|
342,120
|
||||||
Net Cash Used in Operating Activities
|
(6,421,503
|
)
|
(4,229,308
|
)
|
||||
Cash Flows From Investing Activities
|
||||||||
Deposits on plant construction and equipment
|
(52,398
|
)
|
||||||
Payment for land compensation fee and occupancy tax
|
--
|
--
|
||||||
Purchase of property and equipment
|
(13,494
|
)
|
--
|
|||||
Proceeds from disposal of subsidiaries, net of $43,873 of cash disposed of
|
13,206,127
|
--
|
||||||
Advances to an unrelated party (Note 8)
|
(7,000,000
|
)
|
--
|
|||||
Construction in progress
|
--
|
(231,864
|
)
|
|||||
Net Cash Provided by (Used in) Continuing Operations
|
6,192,633
|
(284,262
|
)
|
|||||
Net Cash Used in Discontinued Operations
|
(94,231
|
)
|
(2,189,402
|
)
|
||||
Net Cash Provided by (Used in) Investing Activities
|
6,098,402
|
(2,473,664
|
)
|
|||||
Cash Flows From Financing Activities
|
||||||||
Proceeds from line of credit and bank loan
|
44,405,074
|
36,034,645
|
||||||
Repayment to line of credit and bank loan
|
(43,934,591
|
)
|
(35,057,901
|
)
|
||||
Proceeds from warrant exercised
|
3,093,918
|
--
|
||||||
Proceeds from equity financing, net of expenses of $355,000
|
--
|
3,645,002
|
||||||
Net Cash Provided by Continuing Operations
|
3,564,401
|
4,621,746
|
||||||
Net Cash (Used in) Provided by Discontinued Operations
|
(1,638,747
|
)
|
1,830,326
|
|||||
Net Cash Provided by Financing Activities
|
$
|
1,925,654
|
$
|
6,452,072
|
|
2016
|
2015
|
||||||
|
||||||||
Effect of Exchange Rate Changes on
Cash and Cash Equivalents
|
$
|
(2,839
|
)
|
$
|
(5,379
|
)
|
||
|
||||||||
Net (decrease) increase in cash and cash equivalents
|
1,599,714
|
(256,279
|
)
|
|||||
|
||||||||
Cash and cash equivalents, beginning of year
|
988,029
|
1,244,308
|
||||||
|
||||||||
Cash and cash equivalents, ending of year
|
$
|
2,587,743
|
$
|
988,029
|
||||
|
||||||||
Analysis of cash and cash equivalents
|
||||||||
Included in cash and cash equivalents per consolidated balance sheets
|
$
|
2,587,743
|
$
|
$ 920,227
|
||||
Included in assets of discontinued operations
|
-
|
67,802
|
||||||
Cash and cash equivalents, end of year
|
$
|
2,587,743
|
$
|
988,029
|
||||
Supplemental Disclosure of Cash Flow Information
|
||||||||
|
||||||||
Continuing operations:
|
||||||||
Cash paid during the period for:
|
||||||||
Income tax payments
|
$
|
7,200
|
$
|
131,292
|
||||
Interest paid
|
$
|
282,951
|
$
|
275,860
|
||||
|
||||||||
Discontinued operations:
|
||||||||
Cash paid during the period for:
|
||||||||
Income tax payments
|
$
|
--
|
$
|
--
|
||||
Interest paid
|
$
|
145,645
|
$
|
112,465
|
||||
|
||||||||
Supplemental Disclosure of Non-Cash Investing and Financing Activities
|
||||||||
|
||||||||
Construction in progress and deposits for equipment and factory construction transfer to fixed assets
|
$
|
--
|
$
|
2,406,995
|
||||
Deposit on plant construction and website design transfer to construction in progress
|
$
|
--
|
$
|
1,208,200
|
||||
Issuance of common stock in exchange of surrender and termination of warrants
|
$
|
--
|
$
|
2,232,115
|
Building and workshops
|
20 years
|
Computer and office equipment
|
5 years
|
Decoration and renovation
|
10 years
|
Machinery
|
10 years
|
Autos
|
5 years
|
|
Gross UTB
|
|||||||
2016
|
2015
|
|||||||
Beginning Balance
– January 1
|
$
|
1,805,014
|
$
|
1,791,388
|
||||
(Decrease) increase in unrecorded tax benefits taken in the years ended December 31, 2016 and 2015, related to the Company’s continuing operations
|
(162,633
|
)
|
13,626
|
|||||
Ending Balance
– December 31
|
$
|
1,642,381
|
$
|
1,805,014
|
|
Years Ended
December 31,
|
|||||||
|
2016
|
2015
|
||||||
|
||||||||
(Loss) Income from continuing operations
|
$
|
(292,036
|
)
|
$
|
3,404,407
|
|||
Loss from discontinued operations
|
(826,217
|
)
|
(1,204,165
|
)
|
||||
Net (loss) income
|
(1,118,253
|
)
|
2,200,242
|
|||||
|
||||||||
Weighted average shares outstanding – basic and diluted*
|
25,432,037
|
22,825,652
|
||||||
|
||||||||
Income (loss) from continuing operations per share
– basic and diluted
|
$
|
(0.01
|
)
|
$
|
0.15
|
|||
Loss from discontinued operations per share
– basic and diluted
|
(0.03
|
)
|
(0.05
|
)
|
||||
Net income (loss) per share
– basic and diluted
|
$
|
(0.04
|
)
|
$
|
0.10
|
·
|
Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.
|
|
|
·
|
Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.
|
|
|
·
|
Level 3 inputs to the valuation methodology are unobservable and significant to the fair value measurement.
|
|
For the Years Ended December 31,
|
|||||||
|
2016
|
2015
|
||||||
|
||||||||
Balance at January 1
|
$
|
-
|
$
|
1,465,019
|
||||
Adjustment resulting from change in fair value (a) and extinguishment of warrants recognized in earnings
|
-
|
767,096
|
||||||
1,053,670 common shares issued in exchange of surrender of 1,062,912 warrants
|
(2,232,115
|
)
|
||||||
Balance at December 31
|
$
|
-
|
$
|
-
|
Cash and equivalents
|
$
|
43,873
|
||
Accounts receivable, net
|
4,667,943
|
|||
Advance to suppliers, net
|
69,161
|
|||
Inventories
|
2,600,856
|
|||
Prepaid expenses and other receivables
|
564,517
|
|||
Taxes receivable
|
6,589
|
|||
Heritage and cultural assets
|
119,875
|
|||
Property, plant and equipment, net
|
13,293,530
|
|||
Lease deposit
|
48,936
|
|||
Deposits for equipment and factory construction
|
624,935
|
|||
Intangible assets, net
|
1,746,856
|
|||
Deferred tax assets
|
392
|
|||
Accounts payable
|
(3,456,101
|
)
|
||
Lines of credit
|
(1,049,659
|
)
|
||
Advance from customers
|
(49,379
|
)
|
||
Accrued liabilities and other payables
|
(718,793
|
)
|
||
Deferred rental payable
|
(84,682
|
)
|
||
Noncurrent FIN 48 liability
|
(7,403
|
)
|
||
Net assets of Nova Dongguan and subsidiaries upon disposal
|
18,421,446
|
|||
Consideration received
|
(13,250,000
|
)
|
||
Consideration receivable as of December 31, 2016
|
(1,250,000
|
)
|
||
Loss on disposal of subsidiaries
|
$
|
(3,921,446
|
)
|
For the years ended December 31,
|
||||||||
|
2016
|
2015
|
||||||
|
||||||||
Sales from external customers
|
$
|
14,796,374
|
$
|
18,876,697
|
||||
Intrasegment sales
|
1,632,079
|
|
1,860,710
|
|||||
Cost of goods sold
|
(14,255,611
|
)
|
(17,626,626
|
)
|
||||
Operating expenses
|
(3,469,576
|
)
|
(4,191,133
|
)
|
||||
Loss before income taxes
|
(1,542,815
|
)
|
(814,022
|
)
|
||||
Loss on disposal of subsidiaries
|
(3,921,446
|
)
|
-
|
|||||
Income tax benefit (expense)
|
4,638,044
|
(390,143
|
)
|
|||||
Income (loss) from discontinued operations
|
$
|
826,217
|
$
|
(1,204,165
|
)
|
|
December 31, 2015
|
|||
|
||||
Cash and cash equivalents
|
$
|
67,802
|
||
Accounts receivable, net
|
7,767,406
|
|||
Advance to suppliers
|
22,729
|
|||
Inventories
|
2,739,710
|
|||
Prepaid expenses and other receivables
|
662,959
|
|||
Current assets of discontinued operations
|
11,260,606
|
|||
|
||||
Heritage and cultural assets
|
124,868
|
|||
Plant, property and equipment, net
|
15,001,318
|
|||
Lease deposit
|
50,975
|
|||
Deposits for equipment and factory construction
|
143,758
|
|||
Intangible assets, net
|
1,815,168
|
|||
Deferred tax asset
|
8,451
|
|||
Assets of discontinued operations, non-current
|
17,144,538
|
|||
|
||||
Accounts payable
|
4,114,598
|
|||
Lines of credit
|
2,756,560
|
|||
Advance from customers
|
123,570
|
|||
Accrued liabilities and other payables
|
1,146,517
|
|||
Taxes payable
|
5,773
|
|||
Liabilities of discontinued operations
|
8,147,018
|
|||
|
||||
Deferred rent payable
|
89,904
|
|||
Income tax payable
|
4,641,444
|
|||
Liabilities of discontinued operations, non-current
|
$
|
4,731,348
|
||
|
|
2016
|
2015
|
||||||
|
||||||||
Computer and office equipment
|
$
|
274,735
|
$
|
261,240
|
||||
Decoration and renovation
|
110,015
|
110,015
|
||||||
Less: accumulated depreciation
|
(213,474
|
)
|
(171,178
|
)
|
||||
|
$
|
171,276
|
$
|
200,077
|
|
2016
|
2015
|
||||||
|
||||||||
eCommerce platform
|
$
|
1,208,200
|
$
|
1,208,200
|
||||
Customer relationship
|
6,150,559
|
6,150,559
|
||||||
Trademarks
|
200,000
|
200,000
|
||||||
Less: accumulated amortization
|
(1,872,136
|
)
|
(1,311,278
|
)
|
||||
|
$
|
5,686,623
|
$
|
6,247,481
|
(a) |
On September 22, 2016, in order to promote the Company’s image and extend its customer reach, the Company entered into a memorandum of understating with an unrelated party (“MOU”) whereby the Company agreed to pay a total fee of $16,000,000 for a period of twelve months, commencing on December 31, 2016, to finance the establishment and promotion of the unrelated party’s Academic E-commerce platform and integrated training center in Hong Kong (the “Platform”). As of December 31, 2016, the Company prepaid $7,000,000 to the unrelated party.
|
(b) |
Prepaid Expenses and Other Receivables consisted of the following at December 31, 2016 and 2015:
|
|
2016
|
2015
|
||||||
|
||||||||
Prepaid expenses
|
$
|
573,005
|
$
|
479,091
|
||||
Other receivables
|
69,886
|
29,908
|
||||||
Total
|
$
|
642,891
|
$
|
508,999
|
|
2016
|
2015
|
||||||
|
||||||||
Other payables
|
$
|
47,790
|
$
|
46,598
|
||||
Salary payable
|
30,207
|
80,639
|
||||||
Financed insurance premiums
|
66,314
|
66,960
|
||||||
Accrued consulting fees
|
-
|
19,078
|
||||||
Accrued rents
|
102,269
|
135,673
|
||||||
Accrued commission
|
494,108
|
460,475
|
||||||
Accrued marketing expense
|
-
|
450,000
|
||||||
Accrued expenses, others
|
40,272
|
178,682
|
||||||
|
||||||||
Total
|
$
|
780,960
|
$
|
1,438,105
|
|
2016
|
2015
|
||||||
Tax receivable
|
$
|
14,893
|
8,494
|
|||||
Income tax payable - current
|
$
|
-
|
$
|
-
|
||||
Income tax payable – noncurrent
|
$
|
2,136,788
|
$
|
2,160,449
|
|
2016
|
2015
|
||||||
|
||||||||
Loss subject to domestic income taxes only
|
$
|
(2,614,069
|
)
|
$
|
(920,468
|
)
|
||
Income subject to foreign income taxes only
|
1,485,413
|
4,486,318
|
||||||
Total
|
$
|
(1,128,656
|
)
|
$
|
3,565,850
|
|
2016
|
2015
|
||||||
Current:
|
||||||||
Federal
|
$
|
(137,833
|
)
|
$
|
105,879
|
|||
State
|
800
|
17,610
|
||||||
PRC
|
114,173
|
90,696
|
||||||
|
(22,860
|
)
|
214,185
|
|||||
|
||||||||
Deferred:
|
||||||||
Federal
|
(751,351
|
)
|
(48,369
|
)
|
||||
State
|
(62,409
|
)
|
(4,373
|
)
|
||||
Total (benefit) provision for income taxes
|
$
|
(836,620
|
)
|
$
|
161,443
|
|
2016
|
2015
|
||||||
Tax at Federal Statutory rate
|
$
|
(383,743
|
)
|
$
|
1,212,389
|
|||
Foreign Rate Differential
|
(168,882
|
)
|
(403,625
|
)
|
||||
Change in fair value and extinguishment of warrant liability
|
-
|
260,813
|
||||||
ASC 740-10 Uncertain Tax Position
|
(23,660
|
)
|
141,502
|
|||||
Tax exemption
|
(336,158
|
)
|
(1,121,724
|
)
|
||||
Stock Based Compensation
|
96,963
|
122,666
|
||||||
Others
|
(21,140
|
)
|
(50,578
|
)
|
||||
|
$
|
(836,620
|
)
|
$
|
161,443
|
|
2016
|
2015
|
||||||
Aggregate dollar effect of tax holiday
|
$
|
336,158
|
$
|
1,121,724
|
|
2016
|
2015
|
||||||
Non-Current Deferred Tax Assets:
|
||||||||
Accrued liabilities
|
87,826
|
94,468
|
||||||
Fed & CA amortization
|
49,197
|
44,330
|
||||||
Stock compensation
|
116,748
|
116,332
|
||||||
U.S. NOL
|
882,939
|
|
-
|
|||||
|
||||||||
Non-Current Deferred Tax Liabilities:
|
||||||||
Prepaid expenses
|
(217,852
|
)
|
(134,701
|
)
|
||||
Fed & CA depreciation
|
(44,099
|
)
|
(56,872
|
)
|
||||
Purchase accounting
|
-
|
(2,557
|
)
|
|||||
|
||||||||
Net Non-Current Deferred Tax Assets (Liabilities) before Valuation Allowance
|
874,759
|
61,000
|
||||||
Less: Valuation Allowance
|
-
|
-
|
||||||
Non-Current Deferred Tax Assets (Liabilities), Net:
|
874,759
|
61,000
|
||||||
|
||||||||
Total Deferred Assets, Net:
|
$
|
874,759
|
$
|
61,000
|
|
Number of
Warrants
|
Average
Exercise
Price
|
Weighted
Average
Remaining
Contractual
Term in Years
|
|||||||||
|
||||||||||||
Outstanding at January 1, 2015
|
1,241,462
|
7.90
|
2.99
|
|||||||||
Exercisable at January 1, 2015
|
1,241,462
|
7.90
|
2.99
|
|||||||||
Granted
|
2,000,001
|
2.71
|
5.50
|
|||||||||
Exercised/surrendered
|
(1,062,912
|
)
|
2.1
|
-
|
||||||||
Expired
|
(128,550
|
)
|
4.50
|
-
|
||||||||
Outstanding at January 1, 2016
|
2,050,001
|
2.74
|
4.82
|
|||||||||
Exercisable at January 1, 2016
|
2,050,001
|
2.74
|
4.82
|
|||||||||
Granted
|
-
|
-
|
-
|
|||||||||
Exercised / surrendered
|
(1,141,667
|
)
|
2.71
|
-
|
||||||||
Expired
|
(50,000
|
)
|
4.00
|
-
|
||||||||
Outstanding at December 31, 2016
|
858,334
|
2.71
|
3.92
|
|||||||||
Exercisable at December 31, 2016
|
858,334
|
2.71
|
3.92
|
Geographical Areas
|
2016
|
2015
|
||||||
|
||||||||
North America
|
$
|
58,203,291
|
$
|
75,447,905
|
||||
Europe
|
12,488,328
|
10,579,444
|
||||||
China*
|
10,002,059
|
-
|
||||||
Australia
|
4,871,892
|
535,145
|
||||||
Asia**
|
4,349,661
|
2,676,669
|
||||||
Hong Kong
|
2,499,418
|
384,832
|
||||||
Other countries
|
233,546
|
319,420
|
||||||
|
$
|
92,648,195
|
$
|
89,943,415
|
* excluding Hong Kong
** excluding China and Hong Kong
|
|
12 Months Ended December 31,
|
Amount
|
|||
2017
|
$
|
576,713
|
||
2018
|
472,714
|
|||
2019
|
-
|
|||
2020
|
-
|
|||
2021
|
-
|
|||
Thereafter
|
-
|
|||
Total
|
$
|
1,049,427
|
|
|
NOVA LIFESTYLE, INC.
|
|
|
|
(Registrant)
|
|
|
|
|
|
Date: April 14, 2017
|
By:
|
/s/ Thanh H. Lam
|
|
|
|
Thanh H. Lam
Chairperson and Chief Executive Officer
(Principal Executive Officer)
|
|
Signature
|
|
Title
|
|
Date
|
/s/ Thanh H. Lam
|
|
Chief Executive Officer, President, Director and Chairperson
|
|
April 14, 2017
|
Thanh H. Lam
|
|
(Principal Executive Officer)
|
|
|
/s/ Yuen Ching Ho
|
|
Chief Financial Officer and Director
|
|
April 14, 2017
|
Yuen Ching Ho
|
|
(Principal Financial and Accounting Officer)
|
|
|
|
|
|
|
|
/s/ Bin Liu
|
|
Director
|
|
April 14, 2017
|
Bin Liu
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
/s/ Umesh Patel
|
|
Director
|
|
April 14, 2017
|
Umesh Patel
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
/s/ Huy P. La
|
|
Director
|
|
April 14, 2017
|
Huy P. La
|
|
|
|
|
|
|
|
|
|
Exhibit No.
|
|
Description
|
2.1
|
|
Agreement and Plan of Merger by and between Stevens Resources, Inc. and Nova LifeStyle, Inc., dated June 14, 2011 (Incorporated herein by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K (File No. 333-163019) filed on June 30, 2011)
|
2.2
|
|
Share Exchange Agreement and Plan of Reorganization by and between Nova Furniture Limited and Nova LifeStyle, Inc., dated June 30, 2011 (Incorporated herein by reference to Exhibit 2.2 to the Company’s Current Report on Form 8-K (File No. 333-163019) filed on June 30, 2011)
|
2.3
|
|
Return to Treasury Agreement by and between Nova LifeStyle, Inc. and Alex Li, dated June 30, 2011 (Incorporated herein by reference to Exhibit 2.3 to the Company’s Current Report on Form 8-K (File No. 333-163019) filed on June 30, 2011)
|
3.1
|
|
Articles of Incorporation (Incorporated herein by reference to Exhibit 3.1 to the Company’s Registration Statement on Form S-1 (File No. 333-163019) filed on November 10, 2009)
|
3.2
|
|
Amended and Restated Bylaws (Incorporated herein by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K (File No. 333-163019) filed on June 30, 2011)
|
3.3
|
|
Certificate of Amendment to Articles of Incorporation filed with the Secretary of the State of Nevada on December 15, 2009, and effective as of September 9, 2009 (Incorporated herein by reference to Exhibit 3.3 to the Company’s Current Report on Form 8-K (File No. 333-163019) filed on June 30, 2011)
|
3.4
|
|
Articles of Merger between Stevens Resources, Inc. and Nova LifeStyle, Inc. amending the Articles of Incorporation filed with the Secretary of State of the State of Nevada on June 14, 2011, and effective as of June 27, 2011 (Incorporated herein by reference to Exhibit 3.4 to the Company’s Current Report on Form 8-K (File No. 333-163019) filed on June 30, 2011)
|
3.5
|
|
Articles of Exchange of Nova Furniture Limited and Nova LifeStyle, Inc. filed with the Secretary of State of the State of Nevada on June 30, 2011 (Incorporated herein by reference to Exhibit 3.5 to the Company’s Current Report on Form 8-K (File No. 333-163019) filed on June 30, 2011)
|
4.1
|
|
Specimen Stock Certificate (Incorporated herein by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K (File No. 333-163019) filed on June 30, 2011)
|
4.2
|
|
Form of Regulation S Subscription Agreement (Incorporated herein by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K (File No. 333-163019) filed on August 22, 2011)
|
4.3
|
|
Form of Regulation D Subscription Agreement (Incorporated herein by reference to Exhibit 4.3 to the Company’s Current Report on Form 8-K (File No. 333-163019) filed on August 22, 2011)
|
4.4
|
|
Form of Regulation S Warrant (Incorporated herein by reference to Exhibit 4.4 to the Company’s Current Report on Form 8-K (File No. 333-163019) filed on August 22, 2011)
|
4.5
|
|
Form of Regulation D Warrant (Incorporated herein by reference to Exhibit 4.5 to the Company’s Current Report on Form 8-K (File No. 333-163019) filed on August 22, 2011)
|
4.6
|
|
Form of Regulation S Registration Rights Agreement (Incorporated herein by reference to Exhibit 4.6 to the Company’s Current Report on Form 8-K (File No. 333-163019) filed on August 22, 2011)
|
4.7
|
|
Form of Regulation D Registration Rights Agreement (Incorporated herein by reference to Exhibit 4.7 to the Company’s Current Report on Form 8-K (File No. 333-163019) filed on August 22, 2011)
|
4.8
|
|
Form of Regulation S Subscription Agreement (Incorporated herein by reference to Exhibit 4.8 to the Company’s Current Report on Form 8-K (File No. 333-163019) filed on January 18, 2012)
|
4.9
|
|
Form of Regulation D Subscription Agreement (Incorporated herein by reference to Exhibit 4.9 to the Company’s Current Report on Form 8-K (File No. 333-163019) filed on January 18, 2012)
|
4.10
|
|
Form of Regulation S Warrant (Incorporated herein by reference to Exhibit 4.10 to the Company’s Current Report on Form 8-K (File No. 333-163019) filed on January 18, 2012)
|
4.11
|
|
Form of Regulation D Warrant (Incorporated herein by reference to Exhibit 4.11 to the Company’s Current Report on Form 8-K (File No. 333-163019) filed on January 18, 2012)
|
4.12
|
|
Form of Regulation S Registration Rights Agreement (Incorporated herein by reference to Exhibit 4.12 to the Company’s Current Report on Form 8-K (File No. 333-163019) filed on January 18, 2012)
|
4.13
|
|
Form of Regulation D Registration Rights Agreement (Incorporated herein by reference to Exhibit 4.13 to the Company’s Current Report on Form 8-K (File No. 333-163019) filed on January 18, 2012)
|
4.14
|
|
Form of Series A Warrant (Incorporated herein by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K (File No. 333-163019) filed on April 14, 2014)
|
4.15
|
|
Form of Series B Warrant (Incorporated herein by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K (File No. 333-163019) filed on April 14, 2014)
|
4.16
|
|
Form of Series C Warrant (Incorporated herein by reference to Exhibit 4.3 to the Company’s Current Report on Form 8-K (File No. 333-163019) filed on April 14, 2014)
|
10.1
|
|
Option to Purchase Agreement, dated September 30, 2009 (Incorporated herein by reference to Exhibit 10.1 to the Company’s Registration Statement on Form S-1 (File No. 333-163019) filed on November 10, 2009)
|
10.2
|
|
Shareholder Agreement by and between Nova Furniture Limited and St. Joyal, dated January 1, 2011 (Incorporated herein by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K (File No. 333-163019) filed on June 30, 2011)
|
10.3
|
|
Intellectual Property Rights Transfer Agreement by and between Nova Furniture (Dongguan) Co., Ltd. and Ya Ming Wong, dated January 7, 2011 (Incorporated herein by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K (File No. 333-163019) filed on June 30, 2011)
|
10.4
|
|
Form of Product Franchise Agreement (Incorporated herein by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K (File No. 333-163019) filed on June 30, 2011)
|
10.5
|
|
Promissory Note, dated June 30, 2011 (Incorporated herein by reference to Exhibit 10.5 to the Company’s Current Report on Form 8-K (File No. 333-163019) filed on June 30, 2011)
|
10.6
|
|
Lock-Up Agreement between Ya Ming Wong and Nova LifeStyle, Inc., dated June 30, 2011 (Incorporated herein by reference to Exhibit 10.9 to the First Amendment to the Company’s Current Report on Form 8-K (File No. 333-163019) filed on August 10, 2011)
|
10.7
|
|
Lock-Up Agreement between Yuen Ching Ho and Nova LifeStyle, Inc., dated June 30, 2011 (Incorporated herein by reference to Exhibit 10.10 to the First Amendment to the Company’s Current Report on Form 8-K (File No. 333-163019) filed on August 10, 2011)
|
10.8
|
|
Lock-Up Agreement between Jun Jiang and Nova LifeStyle, Inc., dated June 30, 2011 (Incorporated herein by reference to Exhibit 10.11 to the First Amendment to the Company’s Current Report on Form 8-K (File No. 333-163019) filed on August 10, 2011)
|
10.9
|
|
Lock-Up Agreement between Qiang Liu and Nova LifeStyle, Inc., dated June 30, 2011 (Incorporated herein by reference to Exhibit 10.12 to the First Amendment to the Company’s Current Report on Form 8-K (File No. 333-163019) filed on August 10, 2011)
|
10.10
|
|
Stock Purchase Agreement between Nova LifeStyle, Inc. and Jun Zhang, dated August 31, 2011 (Incorporated herein by reference to Exhibit 10.13 to the Company’s Current Report on Form 8-K (File No. 333-163019) filed on September 6, 2011)
|
10.11
|
|
Trademark Purchase and Assignment Agreement by and between St. Joyal and Nova LifeStyle, Inc., dated August 31, 2011 (Incorporated herein by reference to Exhibit 10.14 to the Company’s Current Report on Form 8-K (File No. 333-163019) filed on September 6, 2011)
|
10.12
|
|
First Amendment to Intellectual Property Rights Transfer Agreement by and between Nova Furniture (Dongguan) Co., Ltd. and Ya Ming Wong, dated September 21, 2011 (Incorporated herein by reference to Exhibit 10.16 to the Company’s Registration Statement on Form S-1 (File No. 333-177353) filed on October 17, 2011)
|
10.13
|
|
Stock Acquisition Agreement by and between Nova LifeStyle, Inc. and Bright Swallow International Group Limited, dated March 22, 2013 (Incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K (File No. 333-163019) filed on March 26, 2013)
|
10.14
|
|
Amended and Restated Employment Agreement between Nova LifeStyle, Inc. and Thanh H. Lam, dated May 3, 2013 (Incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K (File No. 333-163019) filed on May 9, 2013)
|
10.15#
|
|
Form of Director Agreement (Incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K (File No. 333-163019) filed on June 3, 2013)
|
10.16#
|
|
Employment Agreement between Nova LifeStyle, Inc. and Ya Ming Wong, dated November 7, 2013 (Incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K (File No. 333-163019) filed on November 12, 2013)
|
10.17#
|
|
Employment Agreement between Nova LifeStyle, Inc. and Yuen Ching Ho, dated November 7, 2013 (Incorporated herein by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K (File No. 333-163019) filed on November 12, 2013)
|
10.18
|
|
First Amendment to Lock-Up Agreement between Ya Ming Wong and Nova LifeStyle, Inc., dated March 25, 2014 (Incorporated herein by reference to Exhibit 10.18 to the Company’s Annual Report on Form 10-K (File No. 333-163019) filed on March 31, 2014)
|
10.19
|
|
First Amendment to Lock-Up Agreement between Yuen Ching Ho and Nova LifeStyle, Inc., dated March 25, 2014 (Incorporated herein by reference to Exhibit 10.19 to the Company’s Annual Report on Form 10-K (File No. 333-163019) filed on March 31, 2014)
|
10.20
|
|
First Amendment to Lock-Up Agreement between Jun Jiang and Nova LifeStyle, Inc., dated March 25, 2014 (Incorporated herein by reference to Exhibit 10.20 to the Company’s Annual Report on Form 10-K (File No. 333-163019) filed on March 31, 2014)
|
10.21
|
|
First Amendment to Lock-Up Agreement between Qiang Liu and Nova LifeStyle, Inc., dated March 25, 2014 (Incorporated herein by reference to Exhibit 10.21 to the Company’s Annual Report on Form 10-K (File No. 333-163019) filed on March 31, 2014)
|
10.22
|
|
Lock-Up Agreement between Ah Wan Wong and Nova LifeStyle, Inc., dated June 30, 2011 (Incorporated herein by reference to Exhibit 10.22 to the Company’s Annual Report on Form 10-K (File No. 333-163019) filed on March 31, 2014)
|
10.23
|
|
Lock-Up Agreement between Man Shek Ng and Nova LifeStyle, Inc., dated August 18, 2011 (Incorporated herein by reference to Exhibit 10.23 to the Company’s Annual Report on Form 10-K (File No. 333-163019) filed on March 31, 2014)
|
10.24
|
|
First Amendment to Lock-Up Agreement between Ah Wan Wong and Nova Lifestyle, Inc., dated March 25, 2014 (Incorporated herein by reference to Exhibit 10.24 to the Company’s Annual Report on Form 10-K (File No. 333-163019) filed on March 31, 2014)
|
10.25
|
|
First Amendment to Lock-Up Agreement between Man Shek Ng and Nova Lifestyle, Inc., dated March 25, 2014 (Incorporated herein by reference to Exhibit 10.25 to the Company’s Annual Report on Form 10-K (File No. 333-163019) filed on March 31, 2014)
|
10.26
|
|
Stock Award Agreement between Tanh H. Lam and Nova Lifestyle, Inc., effective May 3, 2013 (Incorporated herein by reference to Exhibit 10.26 to the Company’s Annual Report on Form 10-K (File No. 333-163019) filed on March 31, 2014)
|
10.27
|
|
Securities Purchase Agreement by and among Nova LifeStyle, Inc. and each of the investors listed on the Schedule of Buyers attached thereto, dated April 14, 2014 (Incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K (File No. 333-163019) filed on April 14, 2014)
|
10.28
|
|
Placement Agent Agreement by and between Nova LifeStyle, Inc. and FT Global Capital, Inc., dated March 31, 2014 (Incorporated herein by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K (File No. 333-163019) filed on April 14, 2014)
|
10.29#
|
|
Nova LifeStyle, Inc. 2014 Omnibus Long-Term Incentive Plan (Incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K/A (File No. 333-163019) filed on July 10, 2014)
|
10.30#
|
|
Nova LifeStyle, Inc. Form of Restricted Stock Award Agreement (Incorporated herein by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K/A (File No. 333-163019) filed on July 10, 2014)
|
10.31#
|
|
Employment Agreement between Nova LifeStyle, Inc. and Ya Ming Wong, dated March 25, 2015 and effective as of November 10, 2014 (Incorporated herein by reference to Exhibit 10.31 to the Company’s annual report on Form 10-K filed on March 26, 2015)
|
10.32#
|
|
Employment Agreement between Nova LifeStyle, Inc. and Yuen Ching Ho, dated March 25, 2015 and effective as of November 10, 2014 (Incorporated herein by reference to Exhibit 10.32 to the Company’s annual report on Form 10-K filed on March 26, 2015)
|
10.33#
|
|
Employment Agreement between Nova LifeStyle, Inc. and Ya Ming Wong, dated March 25, 2016 and effective as of November 11, 2015
|
10.34#
|
|
Employment Agreement between Nova LifeStyle, Inc. and Yuen Ching Ho, dated March 25, 2016 and effective as of November 11, 2015
|
10.35†
|
||
10.36† | ||
14.1
|
|
Code of Business Conduct and Ethics of Nova Lifestyle, Inc. (Incorporated herein by reference to Exhibit 14.1 to the Company’s Current Report on Form 8-K (File No. 333-163019) filed on June 10, 2013)
|
21.1†
|
|
|
23.1†
|
|
|
24.1†
|
|
|
31.1†
|
|
|
31.2†
|
|
|
32.1‡
|
|
|
101.INS†
|
|
XBRL Instance Document
|
101.SCH†
|
|
XBRL Taxonomy Extension Schema Document
|
101.CAL†
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
101.DEF†
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
101.LAB†
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
101.PRE†
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
(a)
|
“
Agreement
” shall mean this Agreement, and all the exhibits and other documents attached or referred hereto, and all amendments and supplements, if any, hereto;
|
(b)
|
“
Closing
” shall mean the completion of the Transaction, in accordance with Section 7 hereof, at which the Closing Documents shall be exchanged by the parties, except for those documents or other items specifically required to be exchanged at a later time;
|
(c)
|
“
Closing Date
” shall mean a date mutually agreed upon by the parties hereto in writing and in accordance with Section 7 hereof following the satisfaction or waiver by Buyer and Seller of the conditions precedent set out in Section 5
|
(d)
|
“
Closing Documents
” shall mean the papers, instruments and documents required to be executed and delivered at the Closing pursuant to this Agreement;
|
(e)
|
“
Liabilities
” shall include any direct or indirect indebtedness, guaranty, endorsement, claim, loss, damage, deficiency, cost, expense, obligation or responsibility, fixed or unfixed, known or unknown, asserted choate or inchoate, liquidated or unliquidated, secured or unsecured;
|
(f)
|
“
Taxes
” shall mean all international, federal, state, provincial and local income taxes, capital gains taxes, value-added taxes, franchise, personal property and real property taxes, levies, assessments, tariffs, duties (including any customs duties), business license or other fees, sales, use and any other taxes relating to the assets of the designated party or the business of the designated party for all periods up to and including the Closing Date, together with any related charge or amount, including interest, fines, penalties and additions to tax, if any, arising out of tax assessments;
|
(g)
|
“
Transaction
” shall mean the purchase of all of the issued and outstanding shares of Nova Furniture (Dongguan) Co., Ltd. by Buyer from the Seller in consideration as described in section 2.
|
(a)
|
Nova Furniture (Dongguan) Co., Ltd. and its subsidiaries are corporations duly organized, validly existing and in good standing under the laws of their respective jurisdictions of incorporation and each has the requisite corporate power and authority to own, lease and carry on its business as now being conducted. Nova Furniture (Dongguan) Co., Ltd. and its subsidiaries are duly qualified to do business and are in good standing as foreign corporations in each of the jurisdictions in which they own property, lease property, do business.
|
(b)
|
All of the issued and outstanding shares of Nova Furniture (Dongguan) Co., Ltd. have been duly authorized, are validly issued, were not issued in violation of any pre-emptive rights and are fully paid and non-assessable, are not subject to preemptive rights and were issued in full compliance with the laws of the PRC. There are no outstanding options, warrants, subscriptions, conversion rights, or other rights, agreements, or commitments obligating Nova Furniture (Dongguan) Co., Ltd. to issue any additional shares of Nova Furniture (Dongguan) Co., Ltd.
|
(c)
|
The issued and outstanding shares of each of Nova Furniture (Dongguan) Co., Ltd.’s subsidiaries have been duly authorized, are validly issued, were not issued in violation of any pre-emptive rights and are fully paid and non-assessable, are not subject to preemptive rights and were issued in full compliance with all applicable laws. There are no outstanding options, warrants, subscriptions, conversion rights, or other rights, agreements, or commitments obligating Nova Furniture (Dongguan) Co., Ltd. or any of its subsidiaries to issue any additional common stock of any of Nova Furniture (Dongguan) Co., Ltd.’s subsidiaries, or any other securities convertible into, exchangeable for, or evidencing the right to subscribe for or acquire any shares of the common stock of any of Nova Furniture (Dongguan) Co., Ltd.’s subsidiaries.
|
(a)
|
as limited by applicable bankruptcy, insolvency, reorganization, moratorium, and other laws of general application affecting enforcement of creditors’ rights generally;
|
(b)
|
as limited by laws relating to the availability of specific performance, injunctive relief, or other equitable remedies; and
|
(c)
|
as limited by public policy.
|
(a)
|
conflict with, result in a violation of, cause a default under (with or without notice, lapse of time or both) or give rise to a right of termination, amendment, cancellation or acceleration of any obligation contained in or the loss of any material benefit under, or result in the creation of any lien, security interest, charge or encumbrance upon any of the material properties or assets of Nova Furniture (Dongguan) Co., Ltd. and its subsidiaries under any term, condition or provision of any loan or credit agreement, note, debenture, bond, mortgage, indenture, lease or other agreement, instrument, permit, license, judgment, order, decree, statute, law, ordinance, rule or regulation applicable to Nova Furniture (Dongguan) Co., Ltd. or any of its subsidiaries, or any of their respective material property or assets;
|
(b)
|
violate any provision of the Articles of Incorporation, Bylaws or any other documents of Nova Furniture (Dongguan) Co., Ltd. or any of its subsidiaries or any applicable laws; or
|
(c)
|
violate any order, writ, injunction, decree, statute, rule, or regulation of any court or governmental or regulatory authority applicable to Nova Furniture (Dongguan) Co., Ltd. or its subsidiaries or any of their respective material property or assets.
|
(a)
|
Each of Nova Furniture (Dongguan) Co., Ltd. and its subsidiaries is in compliance with, is not in default or violation in any material respect under, and has not been charged with or received any notice at any time of any material violation of any statute, law, ordinance, regulation, rule, decree or other applicable regulation to its business or operations;
|
(b)
|
None of Nova Furniture (Dongguan) Co., Ltd. and its subsidiaries is subject to any judgment, order or decree entered in any lawsuit or proceeding applicable to its business and operations that would constitute a Material Adverse Effect;
|
(c)
|
Nova Furniture (Dongguan) Co., Ltd. and its subsidiaries has operated in material compliance with all laws, rules, statutes, ordinances, orders and regulations applicable to its business. None of Nova Furniture (Dongguan) Co., Ltd. or its subsidiaries has received any notice of any violation thereof, nor is aware of a valid basis therefore.
|
(a)
|
None of Nova Furniture (Dongguan) Co., Ltd. and its subsidiaries are presently under (nor have any of them received notice of any contemplated) investigation or audit by any regulatory or governmental agency or body or any foreign or state taxing authority concerning any fiscal year or period ended prior to the date hereof;
|
(b)
|
To the Seller’s knowledge, there are no liens for Taxes upon any of the assets of Nova Furniture (Dongguan) Co., Ltd. and its subsidiaries, except for liens for Taxes not yet due and payable.
|
(c)
|
Nova Furniture (Dongguan) Co., Ltd. and its subsidiaries have paid, or made provision for the payment of, all material Taxes required to be paid with respect to their businesses and assets.
|
(a)
|
as limited by applicable bankruptcy, insolvency, reorganization, moratorium, and other laws of general application affecting enforcement of creditors’ rights generally;
|
(b)
|
as limited by laws relating to the availability of specific performance, injunctive relief, or other equitable remedies; and
|
(c)
|
as limited by public policy.
|
(a)
|
violate, or result in a breach of, or constitute an occurrence of default under any provision of, result in the acceleration or cancellation of any obligation under, or give rise to a right by any third party to terminate or amend its obligations under, any contract to which Buyer is a party or by which it or its assets or properties are
|
(b)
|
violate any applicable Law of any governmental body having jurisdiction over Buyer, which violation would individually or in the aggregate be materially adverse to Buyer, or
|
(c)
|
require the consent, authorization, order or approval of, filing or registration with, or waiver of any right of first refusal or first offer from, any governmental body or any third party, that has not been obtained, except as would not individually or in the aggregate be materially adverse to Buyer.
|
(a)
|
Representations and Warranties
. The representations and warranties of the Seller set forth in this Agreement will be true, correct and complete in all respects as of the Closing Date, as though made on and as of the Closing Date.
|
(b)
|
Performance
. All of the covenants and obligations that the Seller are required to perform or to comply with pursuant to this Agreement at or prior to the Closing must have been performed and complied with in all material respects.
|
(c)
|
Transaction Documents
. This Agreement and all other documents necessary to consummate the Transaction, all in form and substance reasonably satisfactory to Buyer, will have been executed and delivered to Buyer.
|
(d)
|
No Material Adverse Change
. No Material Adverse Effect will have occurred since the date of this Agreement.
|
(e)
|
Surrender of Shares
. Seller shall surrender all of the issued and outstanding shares of Nova Furniture (Dongguan) Co., Ltd. to Buyer endorsed in blank for transfer from Seller to Buyer.
|
(a)
|
Representations and Warranties
. The representations and warranties of Buyer set forth in this Agreement will be true, correct and complete in all respects as of the Closing Date, as though made on and as of the Closing Date.
|
(b)
|
Payment of Purchase Price
The Purchase Price has been transferred to the bank accounts of the Seller or its designated bank account pursuant to Article 2 of this Agreement.
|
(c)
|
Performance
. All of the covenants and obligations that the Buyer are required to perform or to comply with pursuant to this Agreement at or prior to the Closing must have been performed and complied with in all material respects.
|
(d)
|
Transaction Documents
. This Agreement and all other documents necessary to consummate the Transaction, all in form and substance reasonably satisfactory to Seller, will have been executed and delivered to Seller.
|
(a)
|
copies of the resolutions or consent action adopted by or on behalf of the Board of Directors and the shareholders of Buyer evidencing approval of this Agreement and the Transaction
|
(b)
|
A fully executed and completed copy of this Agreement and any other necessary documents, each duly executed by Seller, as required to give effect to the Transaction
|
(c)
|
share certificate or equivalent document representing the Nova Furniture (Dongguan) Co., Ltd. Shares;
|
(a)
|
copies of the resolutions or consent action adopted by or on behalf of the Board of Directors and the shareholders of Buyer evidencing approval of this Agreement and the Transaction;
|
(b)
|
A fully executed and completed copy of this Agreement and any other necessary documents, each duly executed by Buyer, as required to give effect to the Transaction; and
|
(c)
|
evidence of payment of Purchase Price by the Buyer to the bank account in accordance with section 2.3 hereof.
|
(a)
|
mutual agreement of Buyer and Seller;
|
(b)
|
Buyer, if there has been a material breach by the Seller of any material representation, warranty, covenant or agreement set forth in this Agreement that is not cured, to the reasonable satisfaction of Buyer, within ten business days after notice of such breach is given by Buyer;
|
(c)
|
Seller, if there has been a material breach by Buyer of any material representation, warranty, covenant or agreement set forth in this Agreement on the part of Buyer that is not cured by the breaching party, to the reasonable satisfaction of the Seller, within ten business days after notice of such breach is given by Buyer.
|
(a)
|
In the case of email, on the day after the email has been sent;
|
(b)
|
in the case of personal delivery, on the date of such delivery;
|
(c)
|
in the case of a fax, when the party sending such fax has received electronic confirmation of its delivery;
|
(d)
|
in the case of delivery by internationally-recognized express courier, on the third business day following dispatch; and
|
(e)
|
in the case of mailing, on the seventh business day following mailing.
|
SELLER
|
BUYER
|
||
Nova Furniture Limited (
Nova BVI
)
|
Kuka Design Limited
|
||
By:
|
/s/ Thanh H. Lam
|
By:
|
/s/ Gu Jiangsheng
|
Name:
|
Thanh H. Lam
|
Name:
|
GU Jiangsheng
|
Title:
|
|
Title:
|
|
Address:
|
|
Address: Room 901, 9/F, Easey Commercial
Bldg., 253-261 Hennessy Road, Wanchai,
Hong Kong
|
|
Tel.:
|
|
Tel.: 6570-3676
|
|
Email:
|
Email: kuka_design@yahoo.com
|
Mark
|
Registration No.
|
Registration Date
|
Country
|
NOVA
|
441900400004342
|
24 March 2011
|
China
|
Subsidiary Name
|
|
Jurisdiction of Incorporation
|
|
Percentage Owned
|
|
Diamond Bar Outdoors, Inc.
|
|
California, U.S.
|
|
100%
|
|
Bright Swallow International Group Limited
|
|
British Virgin Islands
|
|
100%
|
|
Nova Furniture Limited
|
|
British Virgin Islands
|
|
100%
|
|
* Nova Furniture Macao Commercial Offshore Ltd.
|
|
Macao
|
|
100%
|
|
1.
|
I have reviewed this Annual Report on Form 10-K for the period ended December 31, 2016, of Nova LifeStyle, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
c.
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
d.
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: April 14, 2017
|
By:
|
/s/ Thanh H. Lam
|
|
|
|
Thanh H. Lam
Chief Executive Officer
(Principal Executive Officer)
|
|
1.
|
I have reviewed this Annual Report on Form 10-K for the period ended December 31, 2016, of Nova LifeStyle, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
c.
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
d.
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: April 14, 2017
|
By:
|
/s/ Yuen Ching Ho
|
|
|
|
Yuen Ching Ho
Chief Financial Officer
(Principal Financial Officer)
|
|
Date: April 14, 2017
|
By:
|
/s/ Thanh H. Lam
|
|
|
|
Thanh H. Lam
Chief Executive Officer
|
|
Date: April 14, 2017
|
By:
|
/s/ Yuen Ching Ho
|
|
|
|
Yuen Ching Ho
Chief Financial Officer
|
|