☒
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
☐
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
Delaware
|
90-0370486
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(State or Other Jurisdiction of
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(I.R.S. Employer
|
Incorporation or Organization)
|
Identification Number)
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Large accelerated filer
☐
|
|
Accelerated filer
☐
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Non-accelerated filer
☐
(Do not check if a smaller reporting company)
|
|
Smaller reporting company
☑
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Class of Securities
|
|
Shares Outstanding
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Common Stock, $0.001 par value
|
|
8,041,995
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PART I
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|||
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1
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||
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7
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||
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7
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||
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7
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||
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7
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||
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8
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PART II
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|||
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9
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||
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11
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||
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11
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||
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19
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||
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19
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||
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20
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20
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21
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PART III
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|||
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21
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25
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||
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30
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||
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33
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||
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34
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PART IV
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|||
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36
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||
38
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|||
F-1
|
l |
our potential inability to raise additional capital;
|
l |
changes in domestic and foreign laws, regulations and taxes;
|
l |
uncertainties related to China's legal system and economic, political and social events in China;
|
l |
Securities and Exchange Commission regulations which affect trading in the securities of “penny stocks;” and
|
l |
changes in economic conditions, including a general economic downturn or a downturn in the securities markets.
|
l |
“
BVI” are references to the British Virgin Islands;
|
l |
“
China” and “PRC” are to the People’s Republic of China;
|
l |
the “Company”, “NCN”, “we”, “us”, or “our”, are references to Network CN Inc., a Delaware corporation and its direct and indirect subsidiaries: NCN Group Limited, or NCN Group, a BVI limited company; NCN Media Services Limited, a BVI limited company; NCN Group Management Limited, or NCN Group Management, a Hong Kong limited company; Crown Winner International Limited, or Crown Winner, a Hong Kong Limited company, and its subsidiary, Business Boom Investments Limited, a BVI Limited company and its variable interest entity, Xingpin Shanghai Advertising Limited; Crown Eagle Investments Limited, a Hong Kong limited company; NCN Group (HK) Limited, a Hong Kong limited company; Cityhorizon Limited, or Cityhorizon Hong Kong, a Hong Kong limited company, and its subsidiary, Huizhong Lianhe Media Technology Co., Ltd., or Lianhe, a PRC limited company; and Chuanghua Shanghai advertising Limited, a PRC limited company; NCN Huamin Management Consultancy (Beijing) Company Limited, or NCN Huamin, a PRC limited company; and the Company’s variable interest entity, Beijing Huizhong Bona Media Advertising Co., Ltd., or Bona, a PRC limited company;
|
l |
“
RMB” are to the Renminbi, the legal currency of China;
|
l |
the “Securities Act” are to the Securities Act of 1933, as amended; and the “Exchange Act” are to the Securities Exchange Act of 1934, as amended;
|
l |
“
U.S. dollar”, “$” and “US$” are to the legal currency of the United States.
|
l |
slower economic growth in PRC
|
l |
the rising costs to acquire advertising rights due to competition among bidders for those rights;
|
l |
slower than expected consumer acceptance of the digital form of advertising media;
|
l |
strong competition from other media companies; and
|
l |
many customers continued to be cost-conscious in their advertising budget especially on our new digital form of media.
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Name of Customer
|
Advertising Sales %
|
For the year ended December 31, 2014
|
|
Windcom Advertising and Trading
|
67%
|
Jiangsu Ninghu Real Estate Co., Ltd
|
16%
|
For the year ended December 31, 2013
|
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Windcom Advertising and Trading
|
67%
|
l |
The Advertising Law (1994);
|
l |
Regulations on Control of Advertisement (1987); and
|
l |
The Implementing Rules for the Advertising Administrative Regulations (2004).
|
l |
utilize traffic safety facilities and traffic signs;
|
l |
impede the use of public facilities, traffic safety facilities and traffic signs;
|
l |
obstruct commercial and public activities or create an eyesore in urban areas;
|
l |
be placed in restrictive areas near government offices, cultural landmarks or historical or scenic sites; and
|
l |
be placed in areas prohibited by the local governments from having out-of-home advertisements.
|
l |
the Foreign Investment Enterprise Law (1986), as amended; and
|
l |
Administrative Rules under the Foreign Investment Enterprise Law (2001).
|
ITEM 5. |
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
|
|
Closing Prices
(1)
|
|||||||
|
High
|
Low
|
||||||
FISCAL YEAR ENDED DECEMBER 31, 2015:
|
||||||||
Fourth Quarter
|
$
|
0.59
|
$
|
0.07
|
||||
Third Quarter
|
$
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0.90
|
$
|
0.51
|
||||
Second Quarter
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$
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1.34
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$
|
0.75
|
||||
First Quarter
|
$
|
1.05
|
$
|
0.75
|
||||
FISCAL YEAR ENDED DECEMBER 31, 2014:
|
||||||||
Fourth Quarter
|
$
|
1.35
|
$
|
0.975
|
||||
Third Quarter
|
$
|
1.80
|
$
|
0.975
|
||||
Second Quarter
|
$
|
1.80
|
$
|
1.35
|
||||
First Quarter
|
$
|
2.775
|
$
|
0.375
|
(1) |
The above tables set forth the range of high and low closing prices per share of our common stock as reported by
www.bloomberg.com
for the periods indicated.
|
l |
slower economic growth in PRC
|
l |
the rising costs to acquire advertising rights due to competition among bidders for those rights;
|
l |
slower than expected consumer acceptance of the digital form of advertising media;
|
l |
strong competition from other media companies; and
|
l |
many customers continued to be cost-conscious in their advertising budget especially on our new digital form of media.
|
|
Years ended December 31,
|
|||||||
|
2015
|
2014
|
||||||
Net cash used in operating activities
|
$
|
(409,817
|
)
|
$
|
(1,318,405
|
)
|
||
Net cash (used in) provided by investing activities
|
(1,535
|
)
|
15,858
|
|||||
Net cash provided by financing activities
|
395,292
|
1,211,033
|
||||||
Effect of exchange rate changes on cash
|
205
|
2,270
|
||||||
Net decrease in cash
|
(15,855
|
)
|
(89,244
|
)
|
||||
Cash at the beginning of year
|
22,645
|
111,889
|
||||||
Cash at the end of year
|
$
|
6,790
|
$
|
22,645
|
|
Years Ended December 31,
|
|||||||
|
2015
|
2014
|
||||||
Prepayments for advertising operating rights
|
$
|
$
|
-
|
|||||
Settlement of accrued advertising operating rights
|
-
|
|||||||
Total payments
|
$
|
$
|
-
|
|||||
|
||||||||
Amortization of prepayments for advertising operating rights
|
$
|
$
|
-
|
|||||
Accrued advertising operating rights fee recognized
|
1,066,112
|
|||||||
Total advertising operating rights fee expensed
|
$
|
$
|
1,066,112
|
|
As of December 31,
|
|||||||
|
2015
|
2014
|
||||||
Prepayments for advertising operating rights, net
|
$
|
-
|
$
|
-
|
||||
Accrued advertising operating rights
|
$ |
$
|
(525,790
|
)
|
|
Payments due by period
|
|||||||||||||||||||
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Total
|
Due in
2016
|
Due in
2017 –
2018
|
Due in
2019-2020
|
Thereafter
|
|||||||||||||||
Debt Obligations (a)
|
$
|
5,000,000
|
$
|
5,000,000
|
$
|
-
|
$
|
-
|
$
|
-
|
||||||||||
Short Term Loan (b)
|
2,501,389
|
2,501,389
|
-
|
-
|
-
|
|||||||||||||||
Capital Lease Obligation (c)
|
17,604
|
13,052
|
4,552
|
-
|
-
|
Media display equipment
|
5 - 7 years
|
Office equipment
|
3 - 5 years
|
Furniture and fixtures
|
3 - 5 years
|
Motor vehicles
|
5 years
|
Leasehold improvements
|
Over the unexpired lease terms
|
Name
|
Age
|
Position
|
Director Since
|
Earnest Leung
|
60
|
Chief Executive Officer and Chairperson of the Board
|
2009
|
Shirley Cheng
|
38
|
Chief Financial Officer, Corporate Secretary and Director
|
2015
|
Wong Wing Kong
|
50
|
Director
|
2015
|
Frederick Wong
|
49
|
Director
|
2015
|
1. |
had any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time;
|
2. |
been convicted in a criminal proceeding or is a named subject to a pending criminal (excluding traffic violations and other minor offenses);
|
3. |
been subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities, futures, commodities or banking activities; or
|
4. |
been found by a court of competent jurisdiction (in a civil action), the Securities and Exchange Commission or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated.
|
Name of Director
|
Audit
|
Nominating
|
Remuneration
|
Wong Wing Kong
|
M
|
C
|
M
|
Frederick Wong
|
C
|
M
|
C
|
|
The Audit Committee
Frederick Wong
|
|
1.
|
The name of the stockholder and evidence of the person’s ownership of Company stock, including the number of shares owned and the length of time of ownership; and
|
|
2.
|
The name of the candidate, the candidate’s resume or a listing of his or her qualifications to be a director of the Company and the person’s consent to be named as a director if selected by the Nominating Committee and nominated by the Board.
|
Name
|
Position
|
Earnest Leung
|
Chief Executive Officer and Chairperson of the Board
|
Shirley Cheng
|
Chief Financial Officer and Corporate Secretary
|
Name and
Principal
Position
|
Year
|
Salary
($)
|
(1)
Bonus
($)
|
(2)
Stock
Awards
($)
|
Options
Awards
($)
|
Non-Equity
Incentive Plan
Compensation
($)
|
Change in
Pension Value
and
Nonqualified
Deferred
Compensation
Earnings
($)
|
(3) All Other
Compensation
($)
|
Total
($)
|
Earnest Leung,
Chief Executive
Officer and
Director
|
2015
|
2,308
|
-
|
-
|
-
|
-
|
-
|
2,308
|
4,616
|
2014
|
27,404
|
-
|
-
|
-
|
-
|
-
|
2,147
|
29,551
|
|
|
|
|
|
||||||
Shirley Cheng Chief
Financial Officer
and Corporate
Secretary
|
2015
|
22,160
|
-
|
-
|
-
|
-
|
-
|
769
|
22,929
|
2014
|
63,000
|
-
|
-
|
-
|
-
|
-
|
2,147
|
65,147
|
|
(1) |
No bonus was paid to the Named Executive Officers in fiscal 2015 and 2014. The amounts reflected the salary paid to the Executives during each of fiscal years. The Company withheld 12 months’ and 10 months’ salary payment for Dr. Leung during the fiscal year ended December 31, 2015 and 2014 respectively.
|
(2) |
As required by SEC rules, amounts in the column “Stock Awards” present the aggregate grant date fair value of awards made each year computed in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification™ 718
Compensation—Stock Compensation
(“FASB ASC 718”). The grant date fair value of each of the executives’ award is measured based on the closing price of our common stock on the date of grant.
|
Named Executive Officer
|
2015
|
2014
|
Earnest Leung
|
-
|
-
|
Shirley Cheng
|
-
|
-
|
(3) |
All other compensation only represents the followings:
|
Name
|
Grant Date
|
|
All Other
Stock
Awards:
Number of
Shares of
Stock
or Units (#)
|
|
|
All Other
Option
Awards:
Number
of Securities
Underlying
Options (#)
(1)
|
|
|
Exercise or
Base Price
of
Option
Awards
($/share)
|
|
|
Grant Date
Fair Value
of Stock
and
Options
Awards
|
|
|
Closing
Price on
Grant
Date
($/share)
|
|
|||||
Earnest Leung
|
-
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Shirley Cheng
|
-
|
-
|
-
|
-
|
-
|
-
|
Option Awards
|
|
|
Stock Awards
|
|
||||||||||||||||||||
Name
|
|
Number of
Securities
Underlying
Unexercised
Options (#)
Exercisable
|
|
|
Number of
Securities
Underlying
Unexercised
Options (#)
Unexercisable
|
|
|
Option Exercise
Price ($)
|
|
|
Option
Expiration
Date
|
|
|
Number of
Shares or
Units of
Stock That
Have Not
Vested (#)
|
|
|
Market Value
of Shares or
Units of Stock
That Have
Not Vested
($)
|
|
||||||
Earnest
Leung |
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Shirley
Cheng |
-
|
-
|
-
|
-
|
-
|
-
|
Name of
director(3) |
|
Fees Earned
or Paid(1)
in Cash
($)
|
|
|
Stock
Awards(2)
($)
|
|
|
Option
Awards
($)
|
|
|
Non-Equity
Incentive Plan
Compensation
($)
|
|
|
Change in
Pension Value
and
Nonqualified
Deferred
Compensation
Earnings($)
|
|
|
All Other
Compensation
($)
|
|
|
Total
($)
|
|
|||||||
Earnest
Leung |
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
-
|
-
|
|
|
|
-
|
|
Shirley
Cheng |
-
|
-
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||||||||
Wong
Wing Kong* |
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
-
|
-
|
|
|
|
-
|
|
Gerald
Godfrey* |
||||||||||||||||||||||||||||
Frederick
Wong* |
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(1) |
For the service periods from January 2015 to December 2015, both the employee directors and non-employee directors were entitled to a monthly cash compensation of $1,000. The Company withheld 12 monthly cash compensation during the fiscal year ended December 31, 2015.
|
(2) |
As required by SEC rules, amounts in the column “Stock Awards” present the aggregate grant date fair value of awards made each year computed in accordance with ASC Topic 718. The grant date fair value of each of the directors’ award is measured based on the closing price of our common stock on the date of grant. These amounts do not reflect whether the recipient has actually realized or will realize a financial benefit from the awards. Under generally accepted accounting principles, compensation expense with respect to stock awards granted to our employees, executives and directors is generally recognized over the requisite services period.
|
(3) |
On February 18, 2015, Mr. Gerald Godfrey was retired from his position as a director.
|
Plan Category
|
Number Of Securities To
Be Issued Upon Exercise Of
Outstanding Options,
Warrants And Rights
(A)
|
Weighted Average
Exercise Price Of
Outstanding Options,
Warrants And Rights
(B)
|
Number Of Securities Remaining
Available For Future Issuance
Under Equity Compensation
Plans (Excluding Securities
Reflected In Column (A))
(C)
|
|
|
|
|
Equity compensation
plans approved by
security holders
|
-
|
-
|
281,503 (1)
|
|
|
|
|
Equity compensation
plans not approved by
security holders
|
1,333 (2)
|
$52.5
|
-
|
|
|
|
|
Total
|
1,333(2)
|
$52.5
|
281,503
|
(1)
|
We reserved 40,000 shares for issuance under our 2004 Stock Incentive Plan, of which 13,333 shares are still available for issuance as of December 31, 2014. We reserved 2,680,000 shares for issuance under our Amended and Restated 2007 Equity Incentive Plan of which 268,170 are still available for issuance as of December 31, 2015. See below subsection
- " Equity Incentive Plans"
for more information about the plan.
|
(2)
|
A warrant to purchase 1,333 shares of restricted common stock was granted to a consultant on August 25, 2006 with an exercise price of $52.5 per share. The warrant shall remain exercisable until August 25, 2016. The warrant remained unexercised as of December 31, 2015.
|
Title of Class
|
|
Name and Address of
Beneficial Owner
|
|
Office, If Any
|
|
Amount & Nature of
Beneficial
Ownership
(1)
|
|
Percent of
Class
(4)
|
Common Stock
|
|
Earnest Leung
|
|
CEO and Director
|
|
4,049,168
(2)
|
|
40.2
|
Common Stock
|
|
Shirley Cheng
|
|
CFO and director
|
|
-
|
|
-
|
Common Stock
|
|
Wong Wing Kong
|
|
Director
|
|
-
|
|
-
|
All Officers and Directors as a group (3 persons named above)
|
|
|
|
|
|
4,049,168
|
|
|
Common Stock
|
|
Keywin Holdings Limited (5)
21/F., One Harbour Square, 181 Hoi Bun Road, Kwun Tong, Kowloon, Hong Kong
|
|
5% Security Holder
|
|
3,629,662
(3)
|
|
36.1
|
Common Stock
|
|
Sino Portfolio International Ltd(6)
3104 -7, 31/F, Central Plaza, 18 Harbour Road, Hong Kong
|
|
5% Security Holder
|
|
1,835,753
|
|
18.2
|
Common Stock
|
|
Godfrey Hui
Room 801A and 807B, 8/F, Tsim Sha Tsui Centre, 66 Mody Road, Tsim Sha Tsui, Kowloon, Hong Kong
|
|
5% Security Holder
|
|
873,674
|
|
8.7
|
Total Shares Owned by Persons Named above
|
|
|
|
|
|
6,758,595
|
|
|
l |
the benefits to the Company of the transaction;
|
l |
the nature of the related party’s interest in the transaction;
|
l |
whether the transaction would impair the judgment of a director or executive officer to act in the best interest of the Company and its stockholders;
|
l |
the potential impact of the transaction on a director’s independence; and
|
l |
any other matters the Audit Committee deems appropriate.
|
Fee Category
|
|
2015
|
|
|
2014
|
|
||
Audit Fees
|
|
$
|
49,070
|
|
|
$
|
64,744
|
|
Audit-Related Fees
|
|
$
|
--
|
|
|
$
|
--
|
|
Tax Fees
|
|
$
|
--
|
|
|
$
|
--
|
|
All Other Fees
|
|
$
|
--
|
|
|
$
|
--
|
|
(i)
|
Reports of Independent Registered Public Accounting Firms
|
|
(ii)
|
Consolidated Balance Sheets as of December 31, 2015 and 2014
|
|
(iii)
|
Consolidated Statements of Operations and Comprehensive Loss for the years ended December 31, 2015 and 2014
|
|
(iv)
|
Consolidated Statement of Stockholders’ Equity for the years ended December 31, 2015 and 2014
|
|
(v)
|
Consolidated Statements of Cash Flows for the years ended December 31, 2015 and 2014
|
|
(vi)
|
Notes to Consolidated Financial Statements
|
|
|
NETWORK CN INC
|
|
|
|
|
|
|
|
By:
|
/s/ Earnest Leung
|
|
|
Earnest Leung
|
|
|
|
Chief Executive Officer
|
|
|
|
(Principal Executive Officer)
|
|
|
Date: April 14, 2017
|
|
|
|
|
|
|
|
By:
|
/s/ Shirley Cheng
|
|
|
Shirley Cheng
|
|
|
|
Chief Financial Officer
|
|
|
|
(Principal Financial and Accounting Officer)
|
|
|
Date: April 14, 2017
|
|
|
Name
|
|
Title
|
Date
|
|
|
|
|
/s/ Earnest Leung
|
|
Chief Executive Officer and Director
|
April 14, 2017
|
Earnest Leung
|
|
(Principal Executive Officer)
|
|
|
|
|
|
/s/ Shirley Cheng
|
|
Chief Financial Officer and Director
|
April 14, 2017
|
Shirley Cheng
|
|
(Principal Financial and Accounting Officer)
|
|
|
|
|
|
/s/ Wong Wing Kong
|
|
Director
|
April 14, 2017
|
Wong Wing Kong
|
|
|
|
|
|
|
|
/s/ Frederick Wong
|
|
Director
|
April 14, 2017
|
Frederick Wong
|
|
|
|
|
|
|
|
Description
|
|
3.1
|
Amended And Restated Certificate Of Incorporation (incorporated herein by reference from Exhibit A to Registrant’s Definitive Information Statement on Schedule 14C filed with the SEC on January 10, 2007)
|
3.2
|
Amended and Restated By-Laws, adopted on January 10, 2006 (incorporated herein by reference from Exhibit 3-(II) to Registrant’s. Current Report on Form 8-K filed with the SEC on January 18, 2006)
|
3.3
|
Amended and Restated Certificate of Incorporation filed with the Delaware Secretary of State on July 27, 2009 (incorporated herein by reference from Exhibit 3.1 to Registrant's Current Report on Form 8-K filed with the SEC on July 29, 2009).
|
3.4
|
Certificate of Amendment of Certificate of Incorporation filed with the Delaware Secretary of State on September 16, 2011 (incorporated herein by reference from Exhibit 3.1 to Registrant's Current Report on Form 8-K filed with the SEC on September 19, 2011).
|
3.5
|
Amended and Restated Certificate of Incorporation filed with the Delaware Secretary of State on September 16, 2011. (incorporated herein by reference from Exhibit 3.5 to the Registrant's Annual Report on Form 10-K filed with the SEC on April 16, 2012)
|
4.1
|
Form of Registrant’s Common Stock Certificate (incorporated herein by reference from Exhibit 4.1 to Registrant's Current Report on Form S-8 filed with the SEC on July 30, 2010).
|
4.2
|
Form of Registrant’s Common Stock Certificate (incorporated herein by reference from Exhibit 4.2 to the Registrant's Annual Report on Form 10-K filed with the SEC on April 16, 2012)
|
4.3
|
Form of Warrant, in connection with 3% Convertible Promissory Notes and Warrants. (incorporated herein by reference from Exhibit 4.2 to Registrant's Current Report on Form 8-K filed with the SEC on February 6, 2008).
|
4.4
|
TEDA Travel Group, Inc. 2004 Stock Incentive Plan, effective on April 16, 2004 (incorporated herein by reference from Exhibit 4.1 to Registrant's Registration Statement on Form S-8 filed with the SEC on April 22, 2004)
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4.5
|
2007 Stock Option/Stock Issuance Plan, effective on April 6, 2007 (incorporated herein by reference from Exhibit 10.1 to Registrant's Registration Statement on Form S-8 filed with the SEC on April 6, 2007)
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4.6
|
Form of Note 1% Senior Unsecured Convertible Promissory Note, dated April 2, 2009 (incorporated herein by reference to Exhibit 4.1 from Registrant's Current Report on Form 8-K filed with the SEC on April 6, 2009)
|
4.7
|
Registration Rights Agreement, in connection with debt restructuring, dated April 2, 2009, by and among the Company, Sculptor Finance (MD) Ireland Limited, Sculptor Finance (AS) Ireland Limited, Sculptor Finance (SI) Ireland Limited and Keywin Holdings Limited. (incorporated herein by reference from Exhibit 4.2 Registrant's Current Report on Form 8-K filed with the SEC on April 6, 2009)
|
4.8
|
Network CN Inc. Amended and Restated 2007 Equity Incentive Plan (incorporated herein by reference from Exhibit 4.1 to Registrant's Current Report on Form S-8 filed with the SEC on July 30, 2010).
|
4.9
|
Form of Note 1% Senior Unsecured Convertible Promissory Note, dated April 2, 2012 (incorporated herein by reference to Exhibit 10.1 to Registrant's Quarterly Report on Form 10-Q filed with the SEC on November 14, 2012).
|
4.10
|
Network CN Inc. Second Amended and Restated 2007 Equity Incentive Plan (incorporated herein by reference from Exhibit 4.2 to Registrant's Current Report on Form S-8 filed with the SEC on October 12, 2012).
|
4.11
|
Network CN Inc. Third Amended and Restated 2007 Equity Incentive Plan (incorporated herein by reference from Exhibit 4.2 to Registrant's Current Report on Form S-8 filed with the SEC on January 16, 2014).
|
10.1
|
Registration Rights Agreement, dated November 19, 2007, by and among (i) Network CN Inc., Sculptor Finance (MD) Ireland Limited, Sculptor Finance (AS) Ireland Limited and Sculptor Finance (SI) Ireland Limited, OZ Master Fund, Ltd., OZ Asia Master Fund, Ltd. and OZ Global Special Investments Master Fund, L.P. (incorporated herein by reference from Exhibit 99.4 to Registrant's Current Report on Form 8-K filed with the SEC on November 26, 2007)
|
10.2
|
Note Exchange Agreement, dated April 2, 2009, by and among the Company, Sculptor Finance (MD) Ireland Limited, Sculptor Finance (AS) Ireland Limited, Sculptor Finance (SI) Ireland Limited, OZ Master Fund, Ltd., OZ Asia Master Fund, Ltd. and OZ Global Special Investments Master Fund, L.P. (incorporated herein by reference from Exhibit 10.1 to Registrant's Current Report on Form 8-K filed with the SEC on April , 2009)
|
10.3
|
Note Exchange and Option Agreement, dated April 2, 2009, between the Company and Keywin Holdings Limited. (incorporated herein by reference from Exhibit 10.2 to Registrant's Current Report on Form 8-K filed with the SEC on April 6, 2009)
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10.4
|
Letter Agreement and Termination of Investor Rights Agreement, dated April 2, 2009, by and among the Company, Sculptor Finance (MD) Ireland Limited, Sculptor Finance (AS) Ireland Limited, Sculptor Finance (SI) Ireland Limited, OZ Master Fund, Ltd., OZ Asia Master Fund, Ltd., OZ Global Special Investments Master Fund, L.P. and Keywin Holdings Limited. (incorporated herein by reference from Exhibit 10.3 to Registrant's Current Report on Form 8-K filed with the SEC on April 6, 2009)
|
10.5
|
Employment Agreement, dated July 15, 2009, between the Company and Earnest Leung. (incorporated herein by reference from Exhibit 10.2 to Registrant's Quarterly Report on Form 10-Q filed with the SEC on August 10, 2009)
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Contents
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|
Page
|
|
F-2
|
|
|
|
|
|
F-3
|
|
|
|
|
|
F-4
|
|
|
|
|
|
F-5
|
|
|
|
|
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F-6
|
|
|
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F-7
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|
As of December 31,
|
||||||||||
|
Note
|
2015
|
2014
|
||||||||
ASSETS
|
|||||||||||
Current Assets
|
|||||||||||
Cash
|
$
|
6,790
|
$
|
22,645
|
|||||||
Accounts receivable, net
|
4
|
-
|
11,926
|
||||||||
Prepaid expenses and other current assets, net
|
6
|
101,157
|
151,571
|
||||||||
Total Current Assets
|
107,947
|
186,142
|
|||||||||
|
|||||||||||
Equipment, Net
|
7
|
16,643
|
38,528
|
||||||||
|
|||||||||||
TOTAL ASSETS
|
$
|
124,590
|
$
|
224,670
|
|||||||
|
|||||||||||
LIABILITIES AND STOCKHOLDERS’ DEFICIT
|
|||||||||||
Current Liabilities
|
|||||||||||
Accounts payable, accrued expenses and other payables
|
8
|
$
|
4,853,036
|
$
|
4,524,112
|
||||||
1% convertible promissory notes due 2016, net
|
9
|
5,000,000
|
-
|
||||||||
Capital lease obligation
|
10
|
13,052
|
12,144
|
||||||||
Total Current Liabilities
|
9,866,088
|
4,536,256
|
|||||||||
|
|||||||||||
Non-Current Liabilities
|
|||||||||||
1% convertible promissory note due 2016, net
|
9
|
-
|
5,000,000
|
||||||||
Capital lease obligation, net of current portion
|
10
|
4,552
|
17,604
|
||||||||
Total Non-Current Liabilities
|
4,552
|
5,017,604
|
|||||||||
|
|||||||||||
TOTAL LIABILITIES
|
9,870,640
|
9,553,860
|
|||||||||
|
|||||||||||
COMMITMENTS AND CONTINGENCIES
|
11
|
||||||||||
|
|||||||||||
STOCKHOLDERS’ DEFICIT
|
12
|
||||||||||
Preferred stock, $0.001 par value, 5,000,000 shares authorized
None issued and outstanding |
-
|
-
|
|||||||||
Common stock, $0.001 par value,
26,666,667
shares authorized
Shares issued and outstanding: 8,041,995 and 7,718,964 as of December 31, 2015 and 2014, respectively+ |
8,042
|
7,719
|
|||||||||
Additional paid-in capital
|
123,686,741
|
123,268,503
|
|||||||||
Accumulated deficit
|
(135,144,882
|
)
|
(134,308,106
|
)
|
|||||||
Accumulated other comprehensive income
|
1,704,049
|
1,702,694
|
|||||||||
TOTAL STOCKHOLDERS’ DEFICIT
|
(9,746,050
|
)
|
(9,329,190
|
)
|
|||||||
|
|||||||||||
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT
|
$
|
124,590
|
$
|
224,670
|
Common Stock
|
Additional Paid-In
|
Accumulated
|
Accumulated
Other
Comprehensive
|
|||||||||||||||||||||
Share
|
Amount
|
Capital
|
Deficit
|
Income
|
Total
|
|||||||||||||||||||
Balance as of
January1,
2014
|
7,094,631
|
$
|
7,095
|
$
|
122,458,614
|
$
|
(131,823,174
|
)
|
$
|
1,700,594
|
$
|
(7,656,871
|
)
|
|||||||||||
Stock-based
compensation for stock granted to directors and officers for services |
(9,000
|
)
|
(9
|
)
|
4,922
|
-
|
-
|
4,913
|
||||||||||||||||
Issuance of
stock for services rendered by consultants |
133,333
|
133
|
55,467
|
-
|
-
|
55,600
|
||||||||||||||||||
Issuance of
stock for Private Placement |
500,000
|
500
|
749,500
|
750,000
|
||||||||||||||||||||
Translation
adjustment |
-
|
-
|
-
|
-
|
2,100
|
2,100
|
||||||||||||||||||
Net loss for
the year |
-
|
-
|
-
|
(2,484,932
|
)
|
-
|
(2,484,932
|
)
|
||||||||||||||||
Balance as of
December 31, 2014 |
7,718,964
|
$
|
7,719
|
$
|
123,268,503
|
$
|
(134,308,106
|
)
|
$
|
1,702,694
|
$
|
(9,329,190
|
)
|
|||||||||||
Stock-based
compensation for stock granted to/surrendered by directors and officers for services |
56,250
|
56
|
47,196
|
-
|
-
|
47,252
|
||||||||||||||||||
Issuance of
stock for services rendered by consultants |
266,667
|
267
|
323,733
|
-
|
-
|
324,000
|
||||||||||||||||||
Stock-based
compensation for stock granted to directors and officers for service |
-
|
-
|
47,309
|
-
|
-
|
47,309
|
||||||||||||||||||
Adjustment
for reverse stock split |
114
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||
Translation
adjustment |
-
|
-
|
-
|
-
|
1,355
|
1,355
|
||||||||||||||||||
Net loss for
the year |
-
|
-
|
-
|
(836,776
|
)
|
-
|
(836,776
|
)
|
||||||||||||||||
Balance as of
December 31, 2015 |
8,041,995
|
$
|
8,042
|
$
|
123,686,741
|
$
|
(135,144,882
|
)
|
$
|
1,704,049
|
$
|
(9,746,050
|
)
|
|
For the Years Ended December 31,
|
|||||||
|
2015
|
2014
|
||||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
||||||||
Net loss
|
$
|
(836,776
|
)
|
$
|
(2,484,932
|
)
|
||
Adjustments to reconcile net loss to net cash used in operating activities
|
||||||||
Depreciation and amortization:
|
||||||||
Equipment and intangible assets
|
15,975
|
43,831
|
||||||
Deferred charges and debt discount
|
-
|
935,588
|
||||||
Stock-based compensation for service
|
371,309
|
80,764
|
||||||
(Gain) loss on disposal of equipment
|
7,441
|
(15,227
|
)
|
|||||
Gain from disposal of subsidiaries
|
(129,726
|
)
|
||||||
Gain from write-off of long-aged payables
|
(437,749
|
)
|
-
|
|||||
Changes in operating assets and liabilities:
|
||||||||
Accounts receivable
|
(5
|
)
|
748,051
|
|||||
Prepayments for advertising operating rights, net
|
-
|
-
|
||||||
Prepaid expenses and other current assets, net
|
50,414
|
181,789
|
||||||
Accounts payable, accrued expenses and other payables
|
549,300
|
(808,269
|
)
|
|||||
Net cash used in operating activities
|
(409,817
|
)
|
(1,318,405
|
)
|
||||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
||||||||
Purchase of equipment
|
(1,535
|
)
|
(14,268
|
)
|
||||
Proceeds from sales of equipment
|
-
|
30,126
|
||||||
Net cash (used in) provided by investing activities
|
(1,535
|
)
|
15,858
|
|||||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
||||||||
Proceeds from private placement
|
-
|
750,000
|
||||||
Proceeds from directors’ loans
|
-
|
-
|
||||||
Proceeds from short-term loans
|
407,436
|
663,387
|
||||||
Repayment of directors’ loans
|
-
|
(85,244
|
)
|
|||||
Repayment of short-term loans
|
-
|
(105,874
|
)
|
|||||
Repayment of capital lease obligation
|
(12,144
|
)
|
(11,236
|
)
|
||||
Net cash provided by financing activities
|
395,292
|
1,211,033
|
||||||
EFFECT OF EXCHANGE RATE CHANGES ON CASH
|
205
|
2,270
|
||||||
|
||||||||
NET (DECREASE) INCREASE IN CASH
|
(15,855
|
)
|
(89,244
|
)
|
||||
CASH, BEGINNING OF YEAR
|
22,645
|
111,889
|
||||||
|
||||||||
CASH, END OF YEAR
|
$
|
6,790
|
$
|
22,645
|
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
|
||||||||
Cash paid during the year for:
|
||||||||
Income taxes
|
$
|
-
|
$
|
-
|
||||
Interest
|
$
|
1,702
|
$
|
296,736
|
Media display equipment
|
5 - 7 years
|
Office equipment
|
3 - 5 years
|
Furniture and fixtures
|
3 - 5 years
|
Motor vehicles
|
5 years
|
Leasehold improvements
|
Over the unexpired lease terms
|
Name
|
Place of
Incorporation
|
Ownership/Control
interest
attributable to
the Company
|
Principal activities
|
NCN Group Limited
|
BVI
|
100%
|
Investment holding
|
NCN Media Services Limited
|
BVI
|
100%
|
Investment holding
|
Business Boom Investments Limited
|
BVI
|
100%
|
Investment holding
|
Cityhorizon Limited
|
Hong Kong
|
100%
|
Investment holding
|
NCN Group Management Limited
|
Hong Kong
|
100%
|
Provision of administrative and
management services |
Crown Eagle Investment Limited
|
Hong Kong
|
100%
|
Dormant
|
Crown Winner International Limited
|
Hong Kong
|
100%
|
Investment holding
|
NCN Group (HK) Limited
|
Hong Kong
|
100%
|
Dormant
|
NCN Huamin Management Consultancy (Beijing)
Company Limited |
PRC
|
100%
|
Dormant
|
Huizhong Lianhe Media Technology Co., Ltd.
|
PRC
|
100%
|
Dormant
|
Beijing Huizhong Bona Media Advertising Co., Ltd.
|
PRC
|
100% (1)
|
Dormant
|
Xingpin Shanghai Advertising Limited
|
PRC
|
100% (1)
|
Dormant
|
Chuanghua Shanghai Advertising Limited
|
PRC
|
100%
|
Dormant
|
Jiahe Shanghai Advertising Limited
|
PRC
|
100%
|
Dormant
|
1) |
Variable interest entity which the Company exerted 100% control through a set of commercial arrangements.
|
2) |
During the year ended December 31, 2015, the Company’s subsidiary, NCN Media Services Limited, disposed of its entire 100% equity interests of Linkrich Enterprise Advertising and Investment Limited, a Hong Kong investment holding company and Yi Gao Shanghai Advertising Limited, a PRC advertising company which has maintained minimal operation since October 2014, to an individual at $1 consideration. Accordingly, the Company recorded a gain from disposal of subsidiaries of $129,726 for the year ended December 31, 2015.
|
|
2015
|
2014
|
||||||
Accounts receivable
|
$
|
-
|
$
|
25,514
|
||||
Less: allowance for doubtful debts
|
-
|
(13,588
|
)
|
|||||
Total
|
$
|
-
|
$
|
11,926
|
|
2015
|
2014
|
||||||
Gross carrying amount
|
||||||||
Beginning
|
$
|
-
|
$
|
648,082
|
||||
Addition
|
-
|
323,334
|
||||||
Write off
|
-
|
(965,861
|
)
|
|||||
Translation adjustments
|
-
|
(5,555
|
)
|
|||||
Total gross carrying amount
|
-
|
-
|
||||||
|
||||||||
Accumulated amortization
|
||||||||
Beginning
|
-
|
(648,082
|
)
|
|||||
Transfer from accrued advertising operating rights fee
|
-
|
(323,334
|
)
|
|||||
Write off
|
-
|
965,861
|
||||||
Translation adjustments
|
-
|
5,555
|
||||||
Total accumulated amortization
|
-
|
-
|
||||||
|
||||||||
Prepayments for advertising operating rights, net
|
$
|
-
|
$
|
-
|
|
2015
|
2014
|
||||||
Payments from customers withheld by a third party
|
$
|
-
|
$
|
1,568,151
|
||||
Prepaid expenses
|
100,955
|
103,748
|
||||||
Rental and other deposits
|
202
|
45,449
|
||||||
Other receivables
|
-
|
4,525
|
||||||
Sub-total
|
101,157
|
1,721,873
|
||||||
Less: allowance for doubtful debts
|
-
|
(1,570,302
|
)
|
|||||
Total
|
$
|
101,157
|
$
|
151,571
|
|
2015
|
2014
|
||||||
Office equipment
|
$
|
14,049
|
$
|
28,105
|
||||
Motor vehicles
|
57,692
|
57,692
|
||||||
Leasehold improvement
|
-
|
12,809
|
||||||
Sub-Total
|
71,741
|
98,606
|
||||||
Less: accumulated depreciation
|
(55,098
|
)
|
(60,078
|
)
|
||||
Total
|
$
|
16,643
|
$
|
38,528
|
|
2015
|
2014
|
||||||
Accrued advertising operating rights
|
$
|
-
|
$
|
525,790
|
||||
Accrued staff benefits and related fees
|
1,241,765
|
1,237,128
|
||||||
Accrued professional fees
|
149,508
|
139,276
|
||||||
Accrued interest expenses
|
878,275
|
408,474
|
||||||
Other accrued expenses
|
74,117
|
79,077
|
||||||
Short-term loans 1)
|
2,501,389
|
2,093,953
|
||||||
Receipts in advance
|
-
|
10,834
|
||||||
Other payables
|
7,982
|
29,580
|
||||||
Total
|
$
|
4,853,036
|
$
|
4,524,112
|
|
New 1%
Convertible
Promissory
Notes, due in
2014
|
New 1%
Convertible
Promissory
Notes, due in 2016
|
Total
|
|||||||||
Proceeds of new 1% convertible promissory notes
|
$
|
5,000,000
|
$
|
-
|
$
|
5,000,000
|
||||||
Allocated intrinsic value of beneficial conversion feature
|
(3,598,452
|
)
|
-
|
(3,598,452
|
)
|
|||||||
Amortization of debt discount for the year ended December 31, 2012
|
800,249
|
-
|
800,249
|
|||||||||
Net carrying value of convertible promissory notes as of December
31, 2012 |
2,201,797
|
2,201,797
|
||||||||||
Amortization of debt discount for the year ended December 31, 2013
|
1,862,615
|
1,862,615
|
||||||||||
Net carrying value of convertible promissory notes as of December
31, 2013 |
4,064,412
|
-
|
4,064,412
|
|||||||||
Amortization of debt discount for the year ended December 31, 2014
|
935,588
|
-
|
935,588
|
|||||||||
Repayment of 1% convertible promissory note
|
(5,000,000
|
)
|
-
|
(5,000,000
|
)
|
|||||||
Proceeds of new 1% convertible promissory notes
|
-
|
5,000,000
|
5,000,000
|
|||||||||
Allocated intrinsic value of beneficial conversion feature
|
-
|
-
|
-
|
|||||||||
Net carrying value of convertible promissory notes as of December
31, 2014 and 2015 |
$
|
-
|
$
|
5,000,000
|
$
|
5,000,000
|
|
Warrants
|
Conversion
Features
|
Deferred
Charges
|
Total
|
||||||||||||
New 1% convertible promissory notes, due in 2016
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
||||||||
New 1% convertible promissory notes, due in 2014
|
-
|
-
|
-
|
-
|
||||||||||||
Total
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
|
Warrants
|
Conversion
Features
|
Deferred
Charges
|
Total
|
||||||||||||
New 1% convertible promissory notes, due in 2016
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
||||||||
New 1% convertible promissory notes, due in 2014
|
-
|
935,588
|
-
|
935,588
|
||||||||||||
Total
|
$
|
-
|
$
|
935,588
|
$
|
-
|
$
|
935,588
|
Years Ended December 31,
|
||||||||
|
2015
|
2014
|
||||||
New 1% convertible promissory notes, due in 2016
|
$
|
50,000
|
$
|
37,397
|
||||
New 1% convertible promissory notes, due in 2014
|
12,603
|
|||||||
Total
|
$
|
50,000
|
$
|
50,000
|
Fiscal years ending December 31,
|
||||
2016
|
$
|
13,846
|
||
2017
|
4,615
|
|||
Total minimum lease payments
|
18,461
|
|||
Less: Amount representing interest
|
(857
|
)
|
||
Present value of net minimum lease payment
|
17,604
|
|||
Less: Current portion
|
(13,052
|
)
|
||
Non-current portion
|
$
|
4,552
|
(A) |
Stock, Options and Warrants Issued for Services
|
|
2015
|
2014
|
||||||
Numerator:
|
||||||||
Net loss attributable to NCN common stockholders
|
$
|
(836,776
|
)
|
$
|
(2,484,932
|
)
|
||
Denominator
:
|
||||||||
Weighted average number of shares outstanding, basic
|
8,003,289
|
7,669,855
|
||||||
Effect of dilutive securities
|
-
|
|||||||
Options and warrants
|
-
|
-
|
||||||
Weighted average number of shares outstanding, diluted
|
8,003,289
|
7,669,855
|
||||||
|
||||||||
Net loss per common share – basic and diluted
|
$
|
(0.11
|
)
|
$
|
(0.32
|
)
|
|
2015
|
2014
|
||||||
Potential common equivalent shares:
|
||||||||
Stock warrants for services (1)
|
-
|
-
|
||||||
Conversion feature associated with convertible promissory notes to
common stock |
-
|
-
|
||||||
Common stock to be granted to directors executives and employees
for services (including non-vested shares) |
-
|
-
|
||||||
Common stock to be granted to consultants for services (including
non-vested shares)* |
1,333
|
1,333
|
||||||
Stock options granted to Keywin
|
-
|
79,715
|
||||||
Total
|
1,333
|
81,048
|
2015
|
2014
|
||||
Customer A
|
-
|
67%
|
|
||
Customer B
|
-
|
16%
|
|
|
2015
|
2014
|
||||||
United States
|
$
|
539,586
|
$
|
1,241,366
|
||||
Foreign
|
297,190
|
1,243,566
|
||||||
|
$
|
836,776
|
$
|
2,484,932
|
|
2015
|
2014
|
||||||
Current
|
||||||||
United States
|
$
|
-
|
$
|
-
|
||||
Foreign
|
-
|
-
|
||||||
|
$
|
-
|
$
|
-
|
||||
Deferred
|
||||||||
United States
|
$
|
-
|
$
|
-
|
||||
Foreign
|
-
|
-
|
||||||
|
$
|
-
|
$
|
-
|
|
2015
|
2014
|
||||||
Expected income tax benefit
|
$
|
284,504
|
$
|
844,877
|
||||
Operating loss carried forward
|
(183,459
|
)
|
(103,965
|
)
|
||||
Nondeductible income (expenses)
|
-
|
(318,100
|
)
|
|||||
Tax effect on foreign income which is not subject to U.S. federal
corporate income tax rate of 34% |
(101,045
|
)
|
(422,812
|
)
|
||||
|
$
|
-
|
$
|
-
|
2015
|
2014
|
|||||||
Deferred tax assets:
|
||||||||
Effect of net operating loss carried forward
|
$
|
8,517,120
|
$
|
8,333,661
|
||||
Less: valuation allowance
|
(8,517,120
|
)
|
(8,333,661
|
)
|
||||
Net deferred tax assets
|
$
|
-
|
$
|
-
|
NETWORK CN INC.
|
|||
By
|
|||
Name: Shirley Cheng
|
|||
Title: Director and Chief Financial Officer
|
|||
KEYWIN HOLDINGS LIMITED
|
|||
By
|
|||
Name: Earnest Leung
|
|||
Title: Director
|
Name
|
Place of
Incorporation
|
Ownership
interest
attributable to
the Company
|
NCN Group Limited
|
British Virgin Islands
|
100%
|
|
|
|
NCN Media Services Limited
|
British Virgin Islands
|
100%
|
|
|
|
Business Boom Investments Limited
|
British Virgin Islands
|
100%
|
|
|
|
Cityhorizon Limited
|
Hong Kong
|
100%
|
|
|
|
NCN Group Management Limited
|
Hong Kong
|
100%
|
|
|
|
Crown Eagle Investment Limited
|
Hong Kong
|
100%
|
|
|
|
Crown Winner International Limited
|
Hong Kong
|
100%
|
|
|
|
NCN Group (HK) Limited
|
Hong Kong
|
100%
|
|
|
|
NCN Huamin Management Consultancy (Beijing) Company Limited
|
The PRC
|
100%
|
|
|
|
Huizhong Lianhe Media Technology Co., Ltd.
|
The PRC
|
100%
|
|
|
|
Beijing Huizhong Bona Media Advertising Co., Ltd.*
|
The PRC
|
100% *
|
|
|
|
Xingpin Shanghai Advertising Limited.*
|
The PRC
|
100% *
|
|
|
|
Chuanghua Shanghai Advertising Limited
|
The PRC
|
100%
|
|
|
|
Jiahe Shanghai Advertising Limited
|
The PRC
|
100%
|
|
1.
|
I have reviewed this annual report on Form 10-K of Network CN 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 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 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.
|
|
1.
|
I have reviewed this annual report on Form 10-K of Network CN 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 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 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.
|
|
|
|
|
|
|
|
|
/s/ Earnest Leung
|
|
|
|
|
Earnest Leung
|
|
|
|
|
Chief Executive Officer
|
|
|
|
|
(Principal Executive Officer)
|
|
|
|
|
|
|
|
|
|
/s/ Shirley Cheng
|
|
|
|
|
Shirley Cheng
|
|
|
|
|
Chief Financial Officer
|
|
|
|
|
(Principal Financial and Accounting Officer)
|
|