RISK FACTORS

Investors should carefully consider the following factors in evaluation our business, operations and financial condition.  Additional risks and uncertainties not presently known to us, that we currently deem immaterial, or that are similar to those faced by other companies in our industry or business in general, such as competitive conditions, may also impair our business operations.  The occurrence of any of the following risks could have a material adverse effect on our business, financial condition and results of operations.

Risks Related To the Company

As we have elected to use the extended transition period for complying with new or revised accounting standards pursuant to the JOBS Act of 2012, our financial statements may not be comparable to public companies that are not emerging growth companies.

Section 107 of the JOBS Act of 2012 provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act of 1933 for complying with new or revised accounting standards.  An emerging growth company can, therefore, delay the adoption of certain accounting standards until those standards would otherwise apply to private companies.  We have elected to take advantage of the benefits of this extended transition period.  Our financial statements may, therefore, not be comparable to those of public companies that comply with such new or revised accounting standards.

As a “smaller reporting company,” certain reduced disclosure and other requirements will be available to us after we are no longer an emerging growth company.

We are, also, a “smaller reporting company” pursuant to the Securities Exchange Act of 1934. Some of the reduced disclosure and other requirements available to us as a result of the JOBS Act of 2012 may continue to be available to us after we are no longer an emerging growth company pursuant to the JOBS Act of 2012 but remain a “smaller reporting company” pursuant to the Securities Exchange Act of 1934. As a “smaller reporting company” we are not required to:

·

have an auditor report regarding our internal controls of financial reporting pursuant to Section 4(b) of the Sarbanes-Oxley Act;

·

present more than two years audited financial statement in our registration statement and annual reports on Form 10-K and present selected financial data in such registration statements and annual reports;

·

Make risk factor disclosure in our annual reports of Form 10-K; and

·

Make certain otherwise required disclosures in our annual reports on Form 10-K and quarterly reports on Form 10-Q

Our auditor has expressed substantial doubt about our ability to continue as a going concern.

The financial statements included with the registration statement of which this prospectus is a part have been prepared on a going concern basis. We may not be able to generate profitable operations in the future and/or obtain the necessary financing to meet our obligations and pay liabilities arising from normal business operations when they come due. The outcome of these matters cannot be predicted with any certainty at this time. These factors raise substantial doubt that we will be able to continue as a going concern.  We plan to continue to provide for our capital needs through sales of our securities and/or related party advances. Our financial statements do not include any adjustments to the amounts and classification of assets and liabilities that may be necessary should we be unable to continue as a going concern.

 

Because we are currently considered a “shell company” within the meaning or Rule 12b-2 pursuant to the Securities Exchange Act of 1934, the ability of holders of our common stock to sell their shares may be limited by applicable regulations.

We are, currently, considered a “shell company” within the meaning of Rule 12b-2 pursuant to the Securities Exchange Act of 1934 and Rule 405 pursuant to the Securities Act of 1933, in that we currently have nominal operations and nominal assets other than cash. Accordingly, the ability of holders of our common stock to sell their shares may be limited by applicable regulations.

As a result of our classification as a “shell company,” our investors are not allowed to rely on the “safe harbor” provisions of Rule 144 promulgated pursuant to the Securities Act of 1933 so as not to be considered underwriters in connection with the sale of our securities until one year from the date that we cease to be a “shell company.”  Additionally, as a result of our classification as a shell company:

·

Investors should consider shares of our common stock to be significantly risky and illiquid investments;

·

We may not register our securities on Form S-8 (an abbreviated form of registration statement);

·

Our ability to attract additional funding to sustain our operations may be limited significantly;

·

We are required to provide more details disclosure upon completion of a transaction that causes us to cease being a shell company;

·

We must file a current report on Form 8-K specifying the information required in a registration statement on Form 10, no later than 4 business days following the completion of the particular transaction taken together with financial information of the private operating company which is a party to that transaction;

·

To assist the SEC in the identification of shell companies, we are required to check a box on Form 10-Q and Form 10-K indicating that we are a shell company; and

·

To the extent that we are required to comply with additional disclosure because we are a shell company, we may be delayed in executing any merger or requiring other assets that will cause us to cease being a shell company.

We can provide no assurance or guarantee that we will cease to be a “shell company” and, accordingly, we can provide no assurance or guarantee that there will be a liquid market for our shares. Accordingly, investors may not be able to sell our shares and lose their investments in the Company.

The Company’s requirements could exceed the amount of time or level of experience that our sole officer and director may have.

Our success largely depends on the continuing services of our President, Yu Cheng Yang. Our continued success, also, depends on our ability to attract and retain qualified personnel. We believe that Yu Cheng Yang possesses valuable business development and marketing knowledge, experience and leadership abilities that would be difficult in the short term to replicate. The loss of Yu Cheng Yang could harm our operations, business plans and cash flows.

Our business plan does not provide for the hiring of any additional employees until operations will support the expense, which is difficult to estimate. Until then, the responsibility of developing our business, offering and selling the shares offered by this prospectus and fulfilling the reporting requirements of a public company will be performed by Yu Cheng Yang, our sole officer and director. While Yu Cheng Yang has business experience, including management and marketing experience, he does not have experience in connection with the responsibilities of a public company, including serving as a principal accounting officer or principal financial officer. Accordingly, Yu Cheng Yang may not be able to operate our business effectively or generate any revenue from the sale of the skin care products. There can be no assurance that we will be able to attract and hire officers or directors with experience in the skin care products industry to operate our business, in the event that Yu Cheng Yang is otherwise unsuccessful in doing so.

Yu Cheng Yang spends at least 40 hours or more per week on the Company’s operations, or 100% of his time. In the event he is unable to fulfill any aspect of his duties to the Company, we may experience little or no profits and eventual closure of business.

 

As we are a development stage company, we have generated no revenues and do not have an operating history.

The Company was incorporated on April 3, 2015; and we have not yet realized any revenues. We have no operating history upon which an evaluation of our future prospects can be made. Based upon current plans, we expect to incur operating losses in future periods as we incurred significant expenses associated with the initial startup of our business. Further, we cannot guarantee that we will be successful in realizing revenues or in achieving or sustaining positive cash flow at any time in the future. Any such failure could result in the possible closure of our business or force us to seek additional capital from loans or additional sales of our equity securities to continue operations, which would dilute the value of any shares you purchase in this offering.

We don’t have any substantial assets and are totally dependent upon the proceeds of this offering to initially fund our business. If we do not sell the shares in this offering, we will have to seek alternative financing to complete our business plans or abandon them. As of July 31, 2015, we had cash and cash equivalents of $54,123. We don’t have sufficient cash to pay our obligations as they become due. We have enough cash to satisfy our obligations for 3 months.

We have limited capital resources. To date, the Company has financed its operations from limited funding and has not generated any cash from operations. Unless we generate sufficient revenues to finance operations as a going concern, we may experience liquidity and solvency problems. Such liquidity and solvency problems may force the Company to cease operations, if additional financing is not available.

As of July 31, 2015 , we had cash and cash equivalents of $54,123. Our liabilities at July 31, 2015 , totaled $150,000. Our operations to date have been funded by capital contributed by sales of our common stock and loans by Yu Cheng Yang, our President and sole director. We believe that our cash on hand will meet our obligations for approximately 3 months.

 

We believe that we will need $200,000 to meet our financial obligations for the next 12 months.  The proceeds from the sale of the maximum number of shares offered in this offering, will not provide us with sufficient funds to pay our obligations as they become due. As our cash on hand is $54,123, we require $145,877 to satisfy our financial obligations for the next 12 months.

We anticipate that our source of cash to finance our operations for the next 12 months will be obtained from the proceeds of this offering, and loans by Yu Cheng Yang, our President and sole director. We have a written commitment from Mr. Yang, our President and sole director, to lend us as much as $200,000 to fund our operations for a period of 12 months, which is in addition to the $150,000 which has been lent to us by Mr. Yang, and a copy of that commitment is attached as Exhibit 99.1 to that registration statement of which this prospectus is a part.

 

Our failure to obtain sufficient funds to continue our operations for the next 12 months could cause a reduction or termination of our operations, which could result in a loss of our shareholders’ investments our common stock.

Our growth strategy contemplated by our business plan may not be achievable or may not result in profitability.

We may not be able to implement the growth strategy contemplated in our business plan soon enough for us to achieve profitability.  Our growth strategy is dependent on a number of factors, including market acceptance of the skin care products and revenue.  We can provide no assurance that potential customers will purchase the skin care products or that those customers will purchase the skin care products at the cost and on the terms assumed in our business plan.

  

Among other things, implementation of our growth strategy would be adversely affected if:

 

·

we fail to generate revenue sufficient to fund our operations;

 

 

We can provide no assurance that we will be able to manage our growth effectively or successfully.  Our failure to meet the encountered challenges could cause us to lose money and our shareholders’ investments in us could be lost.

The skin care business is highly competitive, and if we are unable to compete effectively our results will suffer.

 

We face vigorous competition from companies throughout the world, including multinational consumer product companies.  Some of these competitors have greater resources than we do and may be able to respond to changing business and economic conditions more quickly than us.  Competition in the skin care business is based on pricing of products, innovation, perceived value, service to the consumer, promotional activities, advertising, special events, new product introductions, e-commerce initiatives and other activities.  It is difficult for us to predict the timing and scale of our competitors’ actions in these areas.  A consolidation in the retail trade may result in us becoming increasingly dependent on key retailers.  This could result in an increased risk related to the concentration of our customers.  A severe adverse impact on the business operations of our customers could have a corresponding material adverse effect on us.  Our ability to compete also depends on the strength of A.C. (USA) Inc. brands.  In addition, certain of our key retailers will market and sell competing brands or are owned or otherwise affiliated with companies that market and sell competing brands.  Our inability to continue to compete effectively could have an adverse impact on our business.

Our performance depends on market acceptance of skin care products.

The nature of skin care products that the market determines to be desirable and willing to purchase is critically important to our success. We cannot be certain that the skin care products that we intend to offer will be appealing to the market and, as a result, there may not be any demand for those products, our sales could be limited, and we may never realize any revenues. In addition, there are no assurances that if we offer other skin care products in the future, the market’s demand for those other products will develop, and this could adversely affect our business and any possible revenues.

Our business is subject to inherent risks relating to product liability and personal injury claims.

The sale of skin care products involves risks inherent in the manufacturing and distribution of those products, such as with respect to improper labeling and adequacy of warnings.  In addition, product liability claims may be asserted against us with respect to any of the skin care products we sell, and we may be required to pay for damages for any successful product liability claim against us, although with respect to those skin care products we sell, we may have the right under applicable laws, rules and regulations to recover from the manufacturer any compensation we paid to our customers in connection with a product liability claim.  We may also be obligated to recall affected skin care products.  If we are found liable for product liability claims, we could be required to pay substantial monetary damages.  Furthermore, even if we successfully defend ourselves against this type of claim, we could be required to spend significant management, financial and other resources, which could disrupt our business and our reputation.  We, like many other similar companies in Taiwan, do not carry product liability insurance.  As a result, any imposition of product liability could materially harm our business, financial condition and results of operations.  In addition, we do not have any business interruption insurance due to the limited coverage of any available business interruption insurance in Taiwan, and as a result, any business disruption or natural disaster could severely disrupt our business and operations and significantly decrease our revenue and profitability.

Our corporate actions are substantially controlled by Yu Cheng Yang and his father.

 

Our President and sole director, Yu Cheng Yang, and his father beneficially own approximately 74% of the outstanding shares of our common stock as of the date of this prospectus. After the closing of the offering, they will own at least approximately 63% of the then outstanding shares of our common stock.  As a result, they will have significant influence regarding most matters requiring approval by our stockholders. Accordingly, our other shareholders may be limited in their ability to affect change in how we conduct our business.  Mr. Yang and his father will have significant influence in determining the outcome of any corporate transaction or other matters submitted to our shareholders for approval, including mergers, consolidations and the sale of all or substantially all of our assets, the election of directors and other significant corporate actions. In addition to his stock ownership, Mr. Yang is key to our operations and will have significant influence regarding our key decisions. This concentration of ownership and influence over our decision-making may also discourage, delay or prevent a change in control of the Company, which could deprive our other shareholders of an opportunity to receive a premium for their shares as part of a sale of the Company and might reduce the price of our common stock. These actions may be taken even if they are opposed by our other shareholders.

 

We depend on strategic marketing relationships.

We expect our future marketing efforts will focus in part on developing business relationships with companies that seek to augment their businesses by offering our skin care products to their customers. Our inability to enter into and retain strategic relationships, or the inability of such companies to effectively market the skin care products, could materially and adversely affect our business, operating results and financial condition.

A disruption in operations of A.C. (USA) Inc. or our supply of skin care products could adversely affect our business and financial results.

 

As a company engaged in distribution of skin care products, we are subject to the risks inherent in such activities, including industrial accidents, environmental events, strikes and other labor disputes, disruptions in supply chain or information systems, loss or impairment of our supplier, product quality control, safety, increase in commodity prices and energy costs, licensing requirements and other regulatory issues, as well as natural disasters and other external factors over which we have no control.  If such an event were to occur, it could have an adverse effect on our business and financial results.

Changes in the financial or business condition of our supplier could have an adverse effect on our business.

Changes in the financial or business condition of our supplier could subject us to losses or adversely affect our ability to bring skin care products to market.  Further, the failure of our supplier to deliver skin care products in sufficient quantities, in compliance with applicable standards, and in a timely manner could adversely affect our business.  In addition, any increases in the costs of goods and services for our business may adversely affect our profit margins if we are unable to pass along any higher costs in the form of price increases or otherwise achieve cost efficiencies in our operations.

Our success depends, in part, on the quality, efficacy and safety of the skin care products.

 

Our success depends on the quality, efficacy and safety of the skin care products.  If our products are found to be defective or unsafe, our product claims are found to be deceptive, or our products otherwise fail to meet our consumers’ expectations, our relationships with customers could suffer, the appeal of one or more of the skin care products could be diminished, and we could lose sales and/or become subject to liability or claims, any of which could result in a material adverse effect on our business, results of operations and financial condition.

The prolonged downturn in the global economy could materially and adversely affect our business and results of operations.

The current global market and economic conditions are unprecedented and challenging, with recessions occurring in most major economies. Continued concerns about the systemic impact of potential long-term and wide-spread recession, energy costs, geopolitical issues, and the availability and cost of credit have contributed to increased market volatility and diminished expectations for economic growth around the world. The difficult economic outlook has negatively affected businesses and consumer confidence and contributed to volatility of unprecedented levels. We cannot provide any assurance that our operations will not be materially and adversely affected by these conditions. If our operations are so affected, we may not be profitable and you could lose your investment in our shares.

We may not maintain sufficient insurance coverage for the risks associated with our business operations.

Risks associated with our business and operations include, but are not limited to, claims for wrongful acts committed by our officers, directors, and other representatives, the loss of intellectual property rights, the loss of key personnel and risks posed by natural disasters. Any of these risks may result in significant losses. We do not carry business interruption insurance. In addition, we cannot provide any assurance that our insurance coverage is sufficient to cover any losses that we may sustain, or that we will be able to successfully claim our losses under our insurance policies on a timely basis or at all. If we incur any loss not covered by our insurance policies, or the compensated amount is significantly less than our actual loss or is not timely paid, our business, financial condition and results of operations could be materially and adversely affected.

 

We have included that amount in the $15,750 which we anticipate that we will need to satisfy our financial obligations for the next 12 months.

If we are able to sell the maximum number of shares offered, we will experience a capital deficiency to pay such estimated expenses. There can be no assurances that we will be able to acquire capital from any other source to pay for these expenses. If we are unable to generate sufficient revenues to remain in compliance, it may be difficult for you to resell any shares you may purchase, if at all. These costs will, obviously, be expenses of our operations and, therefore, have a negative effect on our ability to pay our other costs and expenses and earn a profit.

Our reporting obligations pursuant to Section 15(d) of the Exchange Act may be suspended automatically if we have fewer than 300 shareholders of record on the first day of our fiscal year.

As long as our common stock is not registered pursuant to the Exchange Act, our obligations to file reports pursuant to Section 15(d) of the Exchange Act will be automatically suspended if, on the first day of any fiscal year (other than a fiscal year in which a registration statement pursuant to the Securities Act of 1933 has been declared effective), we have fewer than 300 shareholders of record. This suspension is automatic and does not require any filing with the SEC. In such event, we may cease providing periodic reports, and current or periodic information, including operational and financial information, may not be available with respect to our results of operations. Additionally, as a result, if the prices of our common stock are then quoted on the OTC Bulletin Board, those prices will cease to be so quoted, which would have a material adverse effect on our investors’ ability to sell shares of our common stock and our ability to attract new investors.

Risks Related To This Offering

We are conducting this offering without an underwriter and may be unable to sell any shares. Unless we are successful in selling the shares and receiving the proceeds from this offering, we may have to seek alternative financing to implement our business plan.

This offering is self-underwritten on a best-efforts basis. No broker-dealer has been or will be retained as an underwriter to sell the offered shares. There are no commitments to purchase any of the shares in this offering. We intend to sell those shares through our sole officer and director, Yu Cheng Yang, who will receive no commissions. He will offer the shares to friends, relatives, acquaintances and business associates; however, there is no guarantee that he will be able to sell any of those shares. Our selling efforts will not include any mass media methods, such as Internet or print media. Mr. Yang has no experience in selling securities to potential investors.  There can be no assurance that all, or any, of the shares offered will be sold. Funds from this offering will be deposited in our corporate bank account in our name. As a result, if we are sued for any reason and a judgment is rendered against us, investors’ subscriptions could be seized in a garnishment proceeding and investors could lose their investments. Investors do not have the right to withdraw invested funds. As this offering is a direct public offering and is being conducted without an underwriter, there is a probability that we may be unable to sell any of the offered shares, as we do not have the access and connections to the investors and markets that an underwriter usually possesses. If we are unable to sell all or any of the offered shares, we will not be able to raise the capital we need and may have difficulty with implementing our business plan.

We may not sell all of the shares offered and, in that event, we may not receive funds sufficient to conduct our operations or pay our offering expenses.

We may not sell all 10,000,000 shares offered by this prospectus. Additionally, there is no minimum number of shares we must sell before we can utilize the proceeds from the purchase of shares. If we do not sell all 10,000,000 shares within the offering period (270 days), we will close the offering and subscription funds will not be returned to subscribers. In the event we do not sell all of those 10,000,000 shares, the amount of funds we receive from the sale of those shares we do sell may be minimal and may not allow us to continue our operations or even pay the costs of this offering.

 

Investors in this offering will have a substantial risk of loss due to immediate dilution.

Yu Cheng Yang, our sole director and officer, acquired 30,000,000 shares of our common stock at a price of $.001 per share.  The remaining 24,122,997 shares of our outstanding stock were sold at a price of $.001 per share. Upon the sale of the common stock offered hereby, the investors in this offering will experience an immediate “dilution.” Therefore, the investors in this offering will have an increased portion of the risk of loss. Additional sales of the Company’s common stock in the future could result in further dilution. Please refer to the section titled “DILUTION” herein.

 

  There has been no independent valuation of our common stock, which means that our common stock may be worth less than the purchase price.

The per share purchase price of our common stock has been arbitrarily determined by us without independent valuation of that common stock. The prices per share in the recent sales of our common stock was $.001, and were not based on perceived market value, book value, or other established criteria and have no relationship the price per share in this offering. We did not obtain an independent appraisal opinion regarding the valuation of our common stock. Accordingly, our common stock may have a value significantly less than the offering price, and our common stock may never obtain a value equal to or greater than the offering price.

Risks Related to our Common Stock

We are an “emerging growth company,” and any decision on our part to comply with certain reduced disclosure requirements applicable to emerging growth companies could make our common stock less attractive to investors. When we lose that status, there will be an increase in the costs and demands placed upon management.

We are an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act enacted in April 2012, and, for as long as we continue to be an emerging growth company, we may choose to take advantage of exemptions from various reporting requirements applicable to other public companies, including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote regarding executive compensation, and stockholder approval of any golden parachute payments not previously approved. In addition, Section 107 of the JOBS Act also provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revise accounting standards.

An emerging growth company can, therefore, delay the adoption of certain accounting standards until those standards would otherwise apply to private companies.  We have elected to take advantage of the benefits of this extended transition period.  Our financial statements may, therefore, not be comparable to those of companies that comply with such new or revised accounting standards.  We could be an emerging growth company for up to five years, although, if the market value of our common stock that is held by non-affiliates exceeds $700 million during that five-year period or we issue more than $1 billion of non-convertible debt during a 3 year period, we would cease to be an “emerging growth company”. We cannot predict if investors will determine that our common stock is less desirable, if we choose to rely on these exemptions. If some investors determine that our common stock less desirable, as a result of any choices to reduce future disclosure, there may be a less active trading market for our common stock and our stock price may be more volatile.

When we lose emerging growth company status, we expect the costs and demands placed upon management to increase, as we would have to comply with additional disclosure and accounting requirements, particularly if our public float should exceed $75 million.

Currently, there is no public market for our common stock, and there can be no assurance that any public market will ever develop or that our common stock will be quoted for trading and, even if quoted, it will probably be subject to significant price fluctuations.  We anticipate our common stock may be quoted on the OTCBB, which may result in limited liquidity and the inability of our stockholders to maintain accurate price quotations of our common stock.

Prior to the date of this prospectus, there has not been any established trading market for our common stock, and there is currently no public market whatsoever for our common stock.  After the registration statement of which this prospectus is a part is declared effective we intend to retain a broker-dealer registered with the SEC and a member in good standing of FINRA to file an application with FINRA, so as to enable the quotation for the prices of our common stock on the OTCBB. The OTCBB is a regulated quotation service that displays real-time quotes, last sale prices and volume information in over-the-counter (OTC) securities. The OTCBB is not an issuer listing service, market or exchange. Although the OTCBB does not have any listing requirements per se, to be eligible for quotation on the OTCBB, issuers must remain current in their filings with the SEC or applicable regulatory authority. Market makers are not permitted to begin quotation of a security whose issuer does not meet this filing requirement. As of the date of this prospectus, there have been no discussions or understandings between us or anyone acting on our behalf with any market maker regarding participation in a future trading market for our securities. If no market is ever developed for our common stock, it will be difficult for you to sell any shares you purchase in this offering. In such a case, you may find that you are unable to achieve any benefit from your investment or liquidate your shares without considerable delay, if at all. In addition, if we fail to have our common stock quoted on a public trading market, your shares will not have a quantifiable value and it may be difficult, if not impossible, to ever sell your shares, resulting in an inability to realize any value from your investment.

 

There can be no assurance as to whether any market maker will file that application or if that application will be accepted by FINRA.  We are not permitted to file such application on our own behalf.  If that application is accepted, there can be no assurance as to whether any market for our common stock will develop or the prices at which our common stock will trade.  If that application is accepted, we cannot predict the extent to which investor interest in us will result in the development of an active, liquid trading market.  Active trading markets generally result in lower price volatility and more efficient execution of buy and sell orders for investors.

In addition, it is probable that our common stock will not be followed by any market analysts, and there may be few institutions acting as market makers for our common stock.  Either of these factors could adversely affect the liquidity and trading price of our common stock.  Until an orderly market develops in our common stock, if ever, the price at which it trades will probably fluctuate significantly.  No assurance can be given that an orderly or liquid market will develop for our common stock.  Because of the anticipated low price of our common stock, many brokerage firms may not be willing to effect transactions in our common stock.

 

If a market price for our common stock should develop, that market price for our common stock may be volatile and subject to significant fluctuations in response to factors including the following:

·

liquidity of the market for our shares of common stock;

·

actual or anticipated fluctuations in our operating results;

·

sales of substantial amounts of our common stock, or the perception that such sales might occur;

·

changes in financial estimates by securities research analysts;

·

changes in the economic performance or market valuations of other companies in our industry;

·

announcements by us or our competitors of acquisitions, strategic partnerships, joint ventures or capital commitments;

·

addition or departure of key personnel;

·

fluctuations of exchange rates between foreign currencies and the U.S. dollar;

·

our dividend policy; and

·

general economic or political conditions.

 

Our operating results may decline below the expectations of our investors.  In that event, the market price of our common stock, if any, would likely be materially adversely affected, and the value of our common stock may decline.  In addition, the securities market has, from time to time, experienced significant price and volume fluctuations that are not related to the operating performance of particular companies.  These market fluctuations may, also, materially and adversely affect the market price of our common stock, if any.

 

Volatility in our common share price may subject us to securities litigation.

 

The market for our common stock, if one develops, may be characterized by significant price volatility, and we expect that our share price may be more volatile than a seasoned issuer for the indefinite future.  In the past, plaintiffs have often initiated securities class action litigation against a company following periods of volatility in the market price of its securities.  We may, in the future, be the target of similar litigation. Securities litigation could result in substantial costs and liabilities and could divert our management's attention and resources.

Certain provisions of Nevada law provide for indemnification of our officers and directors at our expense and limit their liability, which may result in a major cost to us and damage the interests of our shareholders, because our resources may be expended for the benefit of our officers and/or directors.

Applicable Nevada law provides for the indemnification of our directors, officers, employees, and agents, under certain circumstances, for attorney’s fees and other expenses incurred by them in any litigation to which they become a party resulting from their association with us or activities on our behalf.  We will also pay the expenses of such litigation for any of our directors, officers, employees, or agents, upon such person’s promise to repay us, if it is ultimately determined that any such person shall not have been entitled to indemnification.  This indemnification policy could result in substantial expenditures by us, which we will be unable to recover.

We have been advised that, in the opinion of the SEC, indemnification for liabilities occurring pursuant to federal securities laws is against public policy as expressed in the Securities Act of 1933 and, therefore, unenforceable.  In the event that a claim for indemnification against these types of liabilities, other than the payment by us of expenses incurred or paid by a director, officer, or controlling person in the successful defense of any action, lawsuit, or proceeding, is asserted by a director, officer, or controlling person in connection with our securities being registered, we will (unless in the opinion of our counsel, the matter has been settled by controlling precedent) submit to a court of appropriate jurisdiction, the issue of whether such indemnification by us is against public policy as expressed in the Securities Act of 1933, and we will be governed by the final adjudication of such issue.  The legal process relating to this matter, if it were to occur, probably will be very costly and may result in us receiving negative publicity, either of which factors would probably materially reduce the market and price for our common stock, if such a market ever develops.

Any market that develops for our common stock will be subject to the penny stock restrictions, which will create a lack of liquidity and make trading difficult or impossible.

SEC Rule 15g-9 establishes the definition of a “penny stock,” for purposes relevant to us, as an equity security that has a market price of less than $5.00 per share or with an exercise price of less than $5.00 per share, subject to a limited number of exceptions.  It is probable that our common stock will be considered to be a penny stock for the immediately foreseeable future.  This classification severely and adversely affects the market liquidity for our common stock.  For any transaction involving a penny stock, unless exempt, the penny stock rules require that a broker-dealer approve a person’s account for transactions in penny stocks, and the broker-dealer receive from the investor a written agreement to the transaction setting forth the identity and quantity of the penny stock to be purchased.

To approve a person’s account for transactions in penny stocks, the broker-dealer must obtain financial information, investment experience and objectives of that person and make a reasonable determination that transactions in penny stocks are suitable for that person and that person has sufficient knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks.

The broker-dealer must, also, deliver, prior to any transaction in a penny stock, a disclosure schedule prepared by the SEC relating to the penny stock market, which, in highlight form, sets forth:

·

the basis on which the broker-dealer made the suitability determination, and

·

that the broker-dealer received a signed, written agreement from the investor prior to the transaction.

Disclosure, also, has to be made about the risks of investing in penny stock in both public offerings and in secondary trading and commissions payable to, both, the broker-dealer and the registered representative, current quotations for the securities, and the rights and remedies available to an investor in cases of fraud in penny stock transactions.  Finally, monthly statements must be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stocks.

Because of these regulations, broker-dealers may desire to not engage in the necessary paperwork and disclosures and encounter difficulties in their attempt to sell our common stock, which may affect the ability of the selling shareholders or other holders to sell our common stock in the secondary market and have the effect of reducing trading activity in the secondary market of our common stock.  These additional sales practice and disclosure requirements could impede the sale of our common stock, if and when our common stock becomes publicly traded.  In addition, the liquidity of our common stock may decrease, with a corresponding decrease in the price of our common stock.  Our common stock, in all probability, will be subject to such penny stock rules for the foreseeable future and our shareholders will, quite probably, have difficulty selling our common stock.

 

We intend to not pay dividends on our common stock.

We have not paid any dividends on our common stock, and we have no plans to pay dividends on our common stock in the foreseeable future.

We intend to retain earnings, if any, to provide funds for the operation of our business.  Therefore, there can be no assurance that holders of our common stock will receive any additional cash, stock or other dividends on their shares of our common stock until we have funds which our Board of Directors determines can be allocated to dividends.  Investors that require liquidity should also not invest in our common stock.   There is no established trading market for our common stock and should one develop, it will likely be volatile and subject to minimal trading volumes.

Because we can issue additional shares of common stock, purchasers of our common stock may experience dilution.

We are authorized to issue 75,000,000 shares of $.001 par value common stock.  At present, there are 54,122,997 shares of our common stock issued and outstanding.  After the offering, there will be a maximum of 64,122,997 shares of our common stock issued and outstanding.  Our Board of Directors has the authority to cause us to issue additional shares of common stock without consent of any of our stockholders.  We anticipate that we may be required to raise additional capital to finance our operations, and that capital may be raised by the sale of additional shares of our common stock.  Consequently, upon the sale of additional shares of our common stock, our stockholders will experience dilution in the ownership of our common stock.

One of the effects of the existence of unissued and unreserved common stock may be to enable our Board of Directors to issue shares of our common stock to persons friendly to current management, which issuance could render more difficult or discourage in attempt to obtain control of our Board of Directors by merger, tender offer, proxy contests, or otherwise, and thereby protect the continuity of our management and possibly deprive our stockholders of opportunities to sell their shares of our common stock at prices higher than prevailing market prices.

If a market develops for our common stock, sales of our common stock in reliance on Rule 144 may reduce prices in that market by a material amount.

All of the outstanding shares of our common stock are “restricted securities” within the meaning of Rule 144 under the Securities Act of 1933.  As restricted securities, those shares may be resold only pursuant to an effective registration statement or pursuant to the requirements of Rule 144 or other applicable exemptions from registration under that act and as required under applicable state securities laws.  Rule 144 provides in essence that an affiliate (i.e., an officer, director, or control person) who has held restricted securities for a prescribed period may, under certain conditions, sell every three months, in brokerage transactions, a number of shares that does not exceed 1.0% of the issuer’s outstanding common stock.  The alternative average weekly trading volume during the four calendar weeks prior to the sale is not available to our shareholders, as the OTCBB (if and when the prices of our common stock are quoted thereon) is not an “automated quotation system” and, accordingly, market based volume limitations are not available for securities quoted only on the OTCBB.

Pursuant to the provisions of Rule 144, there is no limit on the number of restricted securities that may be sold by a non-affiliate (i.e., a stockholder who has not been an officer, director or control person for at least 90 consecutive days before the date of the proposed sale) after the restricted securities have been held by the owner for a prescribed period.  A sale under Rule 144 or under any other exemption from the Securities Act of 1933, if available, or pursuant to registration of shares of our common stock held by our stockholders, may reduce the price of our common stock in any market that may develop.

Any trading market that may develop for our common stock may be restricted, because of state securities “Blue Sky” laws which prohibit trading absent compliance with individual state laws.

Transfers of our common stock may, also, be restricted under the securities laws promulgated by various states and foreign jurisdictions, commonly referred to as “Blue Sky” laws.  Absent compliance with such laws, our common stock may not be traded in such jurisdictions.  Because the shares of our common stock registered hereunder have not been registered for resale under the “Blue Sky” laws of any state, the holders of such shares and persons who desire to purchase such shares in any trading market that might develop in the future, should be aware that there may be significant state “Blue Sky” law restrictions upon the ability of investors to sell and purchasers to purchase such shares.  These restrictions prohibit the secondary trading our common stock.  We currently do not intend and may not be able to qualify securities for resale in those states which do not offer manual exemptions and require securities to be qualified before they can be resold by our shareholders.  Accordingly, investors should consider the secondary market for our securities to be limited.

 

Risks Relating to Doing Business Outside of the United States

Because our headquarters are located outside of the U.S. and the skin care products will be sold outside of the U.S., we are subject to the risks of doing business internationally, including periodic foreign economic downturns and political instability, which may adversely affect our sales and cost of doing business in Taiwan.

Foreign economic downturns may affect our results of operations in the future.  Additionally, other facts relating to the operation of our business outside of the U.S. may have a material adverse effect on our business, financial condition and results of operations, including:

·

international economic and political changes;

·

the imposition of governmental controls or changes in government regulations, including tax laws, regulations and treaties;

·

changes in, or impositions of, legislative or regulatory requirements on skin care businesses and companies;

·

compliance with U.S. and international laws involving international operations, including the Foreign

Corrupt Practices Act and export control laws;

·

difficulties in achieving headcount reductions due to unionized labor and works councils;

·

restrictions on transfers of funds and assets between jurisdictions; and

·

geo-political instability.

As we continue to operate our business globally, our success will depend in part, on our ability to anticipate and effectively manage these risks.  The impact of any one or more of these factors could materially adversely affect our business, financial condition and results of operations.

We face substantial political risks associated with doing business in Taiwan, particularly due to domestic political events and the tense relationship between the Republic of china and the People’s Republic of China that could negatively affect the value of your investment.

Our principal executive offices and substantially all of our assets are located in Taiwan.  In addition, substantially all of our revenues are derived from our operations in Taiwan.  Accordingly, our business, financial condition and results of operations and the market price of our common shares may be affected by changes in Republic of China governmental policies, taxation, inflation or interest rates and by social instability and diplomatic and social developments in or affecting Taiwan.

For example, in 2006 a mass movement formed calling for the resignation of the president of Taiwan over a series of alleged corruption scandals and staged dramatic protests.  In addition, Taiwan has a unique international political status.  Since 1949, Taiwan and mainland China have been separately governed.  The People’s Republic of China, or PRC, claims that it is the sole government tin China and that Taiwan is part of China.  Although significant economic and cultural relations have been established during recent years between the Republic of China and the PRC, relations have often been strained.  The PRC government has refused to renounce the use of military force to gain control over Taiwan.  Furthermore, the PRC government passed an Anti-Secession Law in March 2005, which authorizes non-peaceful means and other necessary measures should Taiwan move to gain independence from the PRC.  In February 2006, the president of Taiwan ceased activities in the country’s National Unification Council, a committee established to assist Taiwan in its efforts to reunite with the PRC.  Such cessation is commonly viewed as having a detrimental effect on relations between the two countries.  Past developments in relations between the Republic of China and the PRC have on occasion depressed the market prices of the securities of the companies in the Republic of China.  Relations between the Republic of China and the PRC and other factors affecting military, political or economic conditions in Taiwan could materially and adversely affect our financial condition and results of operations, as well as the market price and the liquidity of other securities.

Adverse changes in the political and economic policies of China could have a material and adverse effect on the overall economic growth of China, which could reduce the demand for the skin care products and materially and adversely affect our competitive position.

The Chinese economy differs from the economies of most developed countries in many respects, including the amount of government involvement, the level of development, the growth rate, the control of foreign exchange and the allocation of resources.  Additionally, the Chinese government exercises significant control over China’s economic growth through the allocation of resources, control of the incurrence and payment of foreign currency-denominated obligations, setting of monetary policy and provision of preferential treatment to particular industries or companies.  Changes in any of these policies, laws and regulations could adversely affect the overall economy in China or the skin care products industry, in which we operate, which could harm our business.  While the Chinese economy has grown significantly in the past 30 years, the growth has not been consistent.  Recently, the occurrence of certain events has caused a significant downturn in the Chinese economy, which has had negative effects on other economies throughout the world.

 

International operations expose us to currency exchange and repatriation risks and we cannot predict the effect of future exchange rate fluctuations on our business and operating results.

We have operations outside the United States, in Taiwan.  We will have currency fluctuation exposure resulting from sales in New Taiwan Dollars and purchases denominated in U.S. Dollars.  Significant changes in exchange rates between the New Taiwan Dollar in which we will sell the skin care products and the U.S. Dollar in which we will purchase the skin care products may adversely affect our results of operations and financial condition.

In addition, our international operations expose us to currency fluctuations, as we translate the financial statements of our foreign operations to the U.S. Dollar.  There can be no assurance that the effect of currency fluctuations will not be material in the future.

Because the Company’s headquarters are located outside of the United States, United States investors may experience difficulties in attempting to affect service of process and in enforcing a judgment pursuant to United States federal securities law.

While we are organized under the laws of the State of Nevada, our headquarters are located outside of the United States.  Consequently, it may be difficult for investors to affect service of process in the United States and enforce judgments obtained in United States courts.  Additionally, as all of our assets will be located in Taiwan, it may be difficult or impossible for United States investors to collect a judgment against us.  Any judgment obtained in the United States against us may not be enforceable in the United States.

Because our officers and directors are not residents of the United States it may be difficult for U.S. investors to enforce any liabilities against them.

If an event occurs that results in any liability of our officers and directors, shareholders will likely have difficulty in enforcing such liability because our sole officer and director resides outside of the United States.  Even if personal service is accomplished and a judgment is entered against a person, a shareholder would then have to locate assets of that person, and register the judgment in the foreign jurisdiction where his or her assets are located.  Accordingly, again, it may be difficult to enforce any liabilities against our officers and directors.