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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Form 10-K
(Mark One)
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the year ended December 31, 2016
or
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TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
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Crowd 4 Seeds, Inc. |
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(Exact name of registrant as specified in its charter) |
Nevada
(State or other jurisdiction of incorporation or organization)
333-202970
(Commission File Number)
30-0828224
(IRS Employer Identification No.)
Avenidida Doutor Mario Soares N. 320, Edificio Finance & IT Centre, 5 Andar A, Macau
(Address of principal executive offices)
+853 8294-2333
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class:
None
Name of each exchange on which registered:
None
Securities registered pursuant to Section 12(g) of the Act:
Title of each class:
None
Indicate by check mark if the registrant is a well-known seasoned issuer as defined in Rule 405 of the Securities Act. Yes ¨ No x
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ¨ No x
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ¨ No x
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check one):
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Large accelerated filer |
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Accelerated filer |
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Non-accelerated filer |
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(Do not check if a smaller reporting company) |
Smaller reporting company |
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Indicate by check mark whether the registrant is a shell company (as defined by Rule 12b-2 of the Act). Yes x No ¨
State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant's most recently completed second fiscal quarter.
Not available as shares have yet to begin trading.
As of March 31, 2017, there were 9,054,000 shares of common stock outstanding.
Documents Incorporated By Reference: None.
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FORWARD LOOKING STATEMENTS
There are statements in this annual report that are not historical facts. These "forward-looking statements" can be identified by use of terminology such as "believe," "hope," "may," "anticipate," "should," "intend," "plan," "will," "expect," "estimate," "project," "positioned," "strategy" and similar expressions. You should be aware that these forward-looking statements are subject to risks and uncertainties that are beyond our control. For a discussion of these risks, you should read this entire Registration Statement carefully, especially the risks discussed under "Risk Factors." Although management believes that the assumptions underlying the forward looking statements included in this Registration Statement are reasonable, they do not guarantee our future performance, and actual results could differ from those contemplated by these forward looking statements. The assumptions used for purposes of the forward-looking statements specified in the following information represent estimates of future events and are subject to uncertainty as to possible changes in economic, legislative, industry, and other circumstances. As a result, the identification and interpretation of data and other information and their use in developing and selecting assumptions from and among reasonable alternatives require the exercise of judgment. To the extent that the assumed events do not occur, the outcome may vary substantially from anticipated or projected results, and, accordingly, no opinion is expressed on the achievability of those forward-looking statements. In the light of these risks and uncertainties, there can be no assurance that the results and events contemplated by the forward-looking statements contained in this Registration Statement will in fact transpire. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of their dates. We do not undertake any obligation to update or revise any forward-looking statements.
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Overview
We are an emerging growth company as defined in Section 2(a)(19) of the Securities Act. We will continue to be an emerging growth company until: (i) the last day of our fiscal year during which we had total annual gross revenues of $1,000,000,000 or more; (ii) the last day of our fiscal year following the fifth anniversary of the date of the first sale of our common stock pursuant to an effective registration statement under the Securities Act; (iii) the date on which we have, during the previous 3-year period, issued more than $1,000,000,000 in non-convertible debt; or (iv) the date on which we are deemed to be a large accelerated filer, as defined in Section 12b-2 of the Exchange Act.
As an emerging growth company, we are exempt from:
Section 14A (a) and (b) of the Exchange Act, which requires companies to hold stockholder advisory votes on executive compensation and golden parachute compensation;
The requirement to provide in any registration statement periodic report or other report to be filed with the Securities and Exchange Commission, certain modified executive compensation disclosure under Item 402 of Regulation S-K or selected financial data under Item 301 of Regulation S-K for any period before the earliest audited period presented in our initial registration statement;
Compliance with new or revised accounting standards until those standards are applicable to private companies;
The requirement under Section 404(b) of the Sarbanes-Oxley Act of 2002 to provide auditor attestation of our internal controls and procedures; and
Any Public Company Accounting Oversight Board ("PCAOB") rules regarding mandatory audit firm rotation, or an expanded auditor report and any other PCAOB rules subsequently adopted, unless the Securities and Exchange Commission determines the new rules are necessary for protecting the public.
We have elected to use the extended transition period for complying with new or revised accounting standards under Section 102(b)(1) of the Jumpstart Our Business Startups Act.
Our company was incorporated in Nevada on April 11, 2014. Most of the activity through December 31, 2016 involved incorporation efforts and preparation for an Offering.
Prior to take over by new management in December 30, 2016, we are a development stage company and have limited financial resources. We have not established a source of equity or debt financing. Our financial statements include a note emphasizing the uncertainty of our ability to remain a going concern.
We initially planned to become an online platform for investments in Israeli start-up companies through equity-based crowd funding. This online platform would present start up companies in various fields. Potential investors will be able to click on any start up company they would like to know more about and get access to its marketing information and legal and financial disclosures.
We previously planned to match up Israeli start-ups looking to raise funds with potential investors from all over the world seeking to make investments in such start-ups. The goal is to help many start-up companies that could not or would not raise funds from Angels or Venture Capital funds get access to a large pool of retail investors looking for such investment opportunities. Such match up would open another important fundraising channel for start-up companies and allow retail investors to diversify their investment portfolio. We will not allow U.S. persons access to the materials presented by the start-ups offering their securities on our website, unless we first register as a broker-dealer with the SEC under Section 15(a) of the Securities Exchange Act of 1934. Anyone trying to gain access to the offering materials posted on our website will first need to fill out a short questionnaire which will include a question about the country of residence. Anyone answering U.S.A or any of its states will be prohibited from gaining access to the page showing the offering materials of the presenting companies.
Business Model
On December 30, 2016, new management took over the Company majority shares and plans to operate the Company under the new name of "Sheng Ying Entertainment Corp.". The Company’s new business plan is to engage in the service of sub-junkets for a junket in Cambodia. For sub-junkets introduction service performed, we will charge 0.05% of total bets played by players introduced by us to a junket in casino located in Cambodia.
On January 9, 2017, the Company filed a certificate of amendment (the "Amendment") to its Certificate of Incorporation with the Secretary of State of the State of Nevada in order to change its name to "Sheng Ying Entertainment Corp." in order to better reflect the direction and business of the Company. As of the filing date, the name change is still subject to the approval of Financial Industry Regulatory Authority. The Company has adopted a fiscal year end of December 31.
We have plans to establish a website which set forth general information for junket business of the Company in future.
Based on our current operating plan, we expect that we will be able to generate revenue that is sufficient to cover our expenses for the next twelve months. Our ability to maintain sufficient liquidity is dependent on our ability to raise additional capital.
Marketing & Growth Strategy
We have hire a Chief Operation Officer who has over 10 years of junket business in Phnom Penh, Cambodia. We believe with her experience in this area will direct the company to acquire a lot of VIP players to achieve company’s financial prospects in this burgeoning niche. With the existence of our Chief Operation Officer based in Cambodia, she is able to provide all kinds of support and services immediately in the casino where our VIP players play.
Player retention is one of the strategies to grow our future sub-junket business. The key elements of player retention are the creation of exciting opportunities to maintain player interest and increase play frequency. Similar to land-based casino's compensation programs, the tools used for this purpose include prizes, "free money," opportunities to play against famous (or infamous) players, and tournament qualifications.
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Market Overview
Junket business in Southeast Asia estimated will continue growth especially Macau government banned phone betting, as tightened regulations called for stricter accounting transparency. Macau’s gaming industry has seen revenue declines for nearly two years amid China’s slowing economy and anti-corruption campaign.
Competition
We believe emerging casino hubs in Southeast Asia have lower overheads than other region such as Macao and can promise higher incentives to wealthy gamblers. They also offer greater privacy, a key advantage for wealthy players.
Regulatory Environment
Regulations relating to casino gaming vary significantly in different jurisdictions. Although the Company can set pre-emptive measures, it is still currently unable to ensure that sub-junkets only receive deposits from gamers in jurisdictions in which we are legally entitled to provide services.
Intellectual Property
We have no patents or trademarks.
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Employees
As of December 31, 2016, the Company only has newly appointed CEO, CFO and COO without any other employees. The Company will consider to employ more staffs in future if the new business is growing in the future.
Litigation
We are not party to any pending, or to our knowledge, threatened litigation of any type.
We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information under this item.
ITEM 1B. UNRESOLVED STAFF COMMENTS
None.
None.
We are not party to any legal proceedings.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
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ITEM 5. MARKET FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS
(a) Market Information.
The Company's common stock will be trading in the OTC Market under the symbol "CWWD". Trading in our Company's common stock on the OTC Market has yet to commence as of the date of this annual report.
Description of Securities
The Company is authorized by its Certificate of Incorporation to issue an aggregate of 50,000,000 shares of capital stock, of which 45,000,000 are shares of common stock, par value $0.001 per share (the "Common Stock") and 5,000,000 are shares of preferred stock, par value $0.001 per share (the "Preferred Stock"). As of December 31, 2016, total 9,054,000 shares of Common Stock were issued and outstanding.
Preferred Stock
Our certificate of incorporation authorizes the issuance of 5,000,000 shares of preferred stock with designations, rights and preferences determined from time to time by our board of directors. No shares of preferred stock have been designated, issued or were outstanding as of December 31, 2016. Accordingly, our board of directors is empowered, without stockholder approval, to issue up to 5,000,000 shares of preferred stock with voting, liquidation, conversion, or other rights that could adversely affect the rights of the holders of the common stock. Although we have no present intention to issue any shares of preferred stock, there can be no assurance that we will not do so in the future.
Among other rights, our board of directors may determine, without further vote or action by our stockholders:
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the number of shares and the designation of the series; |
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whether to pay dividends on the series and, if so, the dividend rate, whether dividends will be cumulative and, if so, from which date or dates, and the relative rights of priority of payment of dividends on shares of the series; |
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whether the series will have voting rights in addition to the voting rights provided by law and, if so, the terms of the voting rights; |
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whether the series will be convertible into or exchangeable for shares of any other class or series of stock and, if so, the terms and conditions of conversion or exchange; |
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whether or not the shares of the series will be redeemable and, if so, the dates, terms and conditions of redemption and whether there will be a sinking fund for the redemption of that series and, if so, the terms and amount of the sinking fund; and |
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the rights of the shares of the series in the event of our voluntary or involuntary liquidation, dissolution or winding up and the relative rights or priority, if any, of payment of shares of the series. |
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We presently do not have plans to issue any shares of preferred stock. However, preferred stock could be used to dilute a potential hostile acquirer. Accordingly, any future issuance of preferred stock or any rights to purchase preferred shares may have the effect of making it more difficult for a third party to acquire control of us. This may delay, defer or prevent a change of control in our Company or an unsolicited acquisition proposal. The issuance of preferred stock also could decrease the amount of earnings attributable to, and assets available for distribution to, the holders of our common stock and could adversely affect the rights and powers, including voting rights, of the holders of our common stock.
Common Stock
Our certificate of incorporation authorizes the issuance of 45,000,000 shares of common stock. There are 9,054,000 shares of our common stock issued and outstanding at December 31, 2016. The holders of our common stock:
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have equal ratable rights to dividends from funds legally available for payment of dividends when, as and if declared by the board of directors; |
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are entitled to share ratably in all of the assets available for distribution to holders of common stock upon liquidation, dissolution or winding up of our affairs; |
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do not have preemptive, subscription or conversion rights, or redemption or access to any sinking fund; and |
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are entitled to one non-cumulative vote per share on all matters submitted to stockholders for a vote at any meeting of stockholders |
Authorized but Unissued Capital Stock
Nevada law does not require stockholder approval for any issuance of authorized shares. These additional shares may be used for a variety of corporate purposes, including future public offerings to raise additional capital or to facilitate corporate acquisitions.
One of the effects of the existence of unissued and unreserved common stock (and/or preferred stock) may be to enable our board of directors to issue shares to persons friendly to current management, which issuance could render more difficult or discourage an attempt to obtain control of our board by means of a merger, tender offer, proxy contest or otherwise, and thereby protect the continuity of our management and possibly deprive the stockholders of opportunities to sell their shares of our common stock at prices higher than prevailing market prices.
The description of certain matters relating to the securities of the Company is a summary and is qualified in its entirety by the provisions of the Company's Certificate of Incorporation and By-Laws.
(b) Holders
As of December 31, 2016, there were approximately 40 qualified holders of record of our common stock.
(c) Dividends.
The Registrant has not paid any cash dividends to date and does not anticipate or contemplate paying dividends in the foreseeable future. It is the present intention of management to utilize all available funds for the development of the Registrant's business.
(d) Securities Authorized for Issuance under Equity Compensation Plans .
None.
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(e) Recent Sale of Unregistered Securities
The Company's Board of Directors has the power to issue any or all of the authorized but unissued Common Stock without stockholder approval. The Company currently has no commitments to issue any shares of common stock.
ITEM 6. SELECTED FINANCIAL DATA
As a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 we are not required to provide the information under this item.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
This discussion summarizes the significant factors affecting the operating results, financial condition, liquidity and cash flows of the Company for the fiscal years ended December 31, 2016 and 2015. The discussion and analysis that follows should be read together with the section entitled "Forward Looking Statements" and our consolidated financial statements and the notes to the consolidated financial statements included elsewhere in this annual report on Form 10-K.
Except for historical information, the matters discussed in this section are forward-looking statements that involve risks and uncertainties and are based upon judgments concerning various factors that are beyond the Company's control. Consequently, and because forward-looking statements are inherently subject to risks and uncertainties, the actual results and outcomes may differ materially from the results and outcomes discussed in the forward-looking statements. You are urged to carefully review and consider the various disclosures made by us in this report.
Company Overview
After change in ownership on December 30, 2016, new management plans to operate the company under the new name of "Sheng Ying Entertainment Corp.". The Company’s new business plan is to engage in the service of sub-junkets for a junket in Cambodia. For sub-junkets introduction service performed, we will charge 0.05% of total bets played by players introduced by us to a junket in casino located in Cambodia.
On January 9, 2017, the Company filed a certificate of amendment (the "Amendment") to its Certificate of Incorporation with the Secretary of State of the State of Nevada in order to change its name to "Sheng Ying Entertainment Corp." in order to better reflect the direction and business of the Company. The filling was approved on January 10, 2017 and we have obtained the business license under the new company name on the same day. As of the filing date, the name change is still subject to the approval of Financial Industry Regulatory Authority. The Company has adopted a fiscal year end of December 31.
We have plans to establish a website which set forth general information for our new junket business of the Company in next future.
Based on our current operating plan, we expect that we will be able to generate revenue that is sufficient to cover our expenses for the next twelve months.
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Results of Operations
For the years ended December 31, 2016 and 2015
Selling, General and Administrative Expenses
Selling, general and administrative expenses for the period ending December 31, 2016 were $61,000 compared to $63,000 for the year ending December 31, 2015. The expenses were consisted primarily of contributed services from the former major shareholder and sole officer, legal, accounting and travel expenses.
Liquidity and Capital Resources
The following is a summary of the Company's cash flows provided by (used in) operating, investing, and financing activities for the year ended December 31, 2016 and for the year ending December 31, 2015:
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Year ended December 31,
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Year ended December 31,
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Operating Activities |
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(31,000 | ) |
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(28,000 | ) |
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Investing Activities |
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Financing Activities |
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30,130 |
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10,000 |
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Net Effect on Cash |
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(870 | ) |
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(18,000 | ) |
As of December 31, 2016, most of our resources and work have been devoted to planning our previous business and completing our registration statement, as our new sub-junket business has yet to commence as of December 31, 2016.
With the new business plan to involve in sub-junket service, we expect that we will be able to generate revenue that is sufficient to cover our expenses for the next twelve months.
We are a public company and as such we have incurred and will continue to incur significant expenses for legal, accounting and related services. As a public entity, subject to the reporting requirements of the Exchange Act of 1934, we incur ongoing expenses associated with professional fees for accounting, legal and a host of other expenses including annual reports and proxy statements, if required. We estimate that these costs will range up to $50,000 per year over the next few years and may be significantly higher if our business volume and transactional activity increases but should be lower during our first year of being public because our overall business volume (and financial transactions) will be lower, and we will not yet be subject to the requirements of Section 404 of the Sarbanes-Oxley Act of 2002 until we exceed $75 million in market capitalization (if ever). These obligations will certainly reduce our ability and resources to expand our business plan and activities. We hope to be able to use our status as a public company to increase our ability to use noncash means of settling outstanding obligations (i.e. issuance of restricted shares of our common stock) and compensate independent contractors who provide professional services to us, although there can be no assurances that we will be successful in any of these efforts. We will also reduce compensation levels paid to management (if we attract or retain outside personnel to perform this function) if there is insufficient cash generated from operations to satisfy these costs.
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We hope to be able to use our status as a public company to enable us to use non-cash means of settling obligations and compensate persons and/or firms providing services to us, although there can be no assurances that we will be successful in any of those efforts. However, these actions, if successful, will result in dilution of the ownership interests of existing shareholders, may further dilute common stock book value, and that dilution may be material. Such issuances may also serve to enhance existing management's ability to maintain control of the Company because the shares may be issued to parties or entities committed to supporting existing management. The Company may offer shares of its common stock to settle a portion of the professional fees incurred in connection with its registration statement. No negotiations have taken place with any professional and no assurances can be made as to the likelihood that any professional will accept shares in settlement of obligations due to them.
As of December 31, 2016, total liabilities dropped to $1,130 from $80,000 as of December 31, 2015, mainly is because new shareholder took over the Company and former major shareholder and sole officer took over all the net liabilities when he resigned. Hence there are minimal liabilities at December 31, 2016.
Recently Issued Accounting Pronouncements
Refer to the notes to the financial statements for a complete description of recent accounting standards which we have not yet been required to implement and may be applicable to our operation, as well as those significant accounting standards that have been adopted during the current year.
Critical Accounting Policies
The preparation of our financial statements in conformity with accounting principles generally accepted in the United States of America ("US GAAP") requires management to make estimates, judgments and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of expenses during the reporting period. On an ongoing basis, we evaluate our estimates which are based on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. The result of these evaluations forms the basis for making judgments about the carrying values of assets and liabilities and the reported amount of expenses that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions. The following accounting policies require significant management judgments and estimates.
We base our estimates on historical experience and various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. There can be no assurance that actual results will not differ from these estimates.
Going Concern
Our auditor has issued a "going concern" qualification as part of their opinion in the Audit Report dated March 31, 2017 for the fiscal year ended December 31, 2016.
Off-Balance Sheet Arrangements
We have no outstanding off-balance sheet guarantees, interest rate swap transactions or foreign currency contracts. We do not engage in trading activities involving non-exchange traded contracts.
Contractual Obligations
As a "smaller reporting company" as defined by Item 10 of Regulation S-K, the Company is not required to provide this information.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.
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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Crowd 4 Seeds, Inc.
December 31, 2016
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Board of Directors and Stockholders
Crowd 4 Seeds, Inc.
We have audited the accompanying balance sheets of Crowd 4 Seeds, Inc. (the “Company”) as of December 31, 2016 and 2015, and the related statements of operations, stockholders’ deficit, and cash flows for the years then ended. These financial statements are the responsibility of the entity’s management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform an audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Crowd 4 Seeds, Inc. as of December 31, 2016 and 2015, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company has suffered recurring losses and generated negative cash flows from operations that raises substantial doubt about its ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
/s/ MaloneBailey, LLP
www.malonebailey.com
Houston, Texas
March 31, 2017
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CROWD 4 SEEDS INC.
The accompanying notes are an integral part of the financial statements.
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CROWD 4 SEEDS, INC.
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Year ended December 31, |
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Year ended December 31, |
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2016 |
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2015 |
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Revenues |
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$ | - |
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$ | - |
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Cost of revenues |
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Gross profit |
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Selling, general and administrative expenses |
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61,000 |
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63,000 |
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Loss from operations |
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(61,000 | ) |
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(63,000 | ) |
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Other expenses, net |
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- |
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Loss before provision for income taxes |
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(61,000 | ) |
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(63,000 | ) |
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Provision for income taxes |
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Net loss |
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$ | (61,000 | ) |
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$ | (63,000 | ) |
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Loss per common share - basic and diluted: |
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Net loss per common share, basic and diluted |
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$ | (0.01 | ) |
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$ | (0.01 | ) |
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Weighted average common shares outstanding, basic and diluted |
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9,054,000 |
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9,054,000 |
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The accompanying notes are an integral part of the financial statements.
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CROWD 4 SEEDS INC.
STATEMENTS OF CHANGES IN SHAREHOLDERS' DEFICIT
FOR THE YEARS ENDED DECEMBER 31, 2016 and 2015
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Share Capital |
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Additional |
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Number of |
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paid-in |
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capital |
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deficit |
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Total |
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Balance at December 31, 2014 |
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9,054,000 |
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$ | 9,000 |
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$ | 39,000 |
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$ | (98,000 | ) |
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$ | (50,000 | ) |
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|
|
|
|
|
|
|
|
|
|
Changes during 2015: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contributed services |
|
|
- |
|
|
|
- |
|
|
|
39,000 |
|
|
|
- |
|
|
|
39,000 |
|
|
Net loss |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(63,000 | ) |
|
|
(63,000 | ) |
|
Balance at December 31, 2015 |
|
|
9,054,000 |
|
|
|
9,000 |
|
|
|
78,000 |
|
|
|
(161,000 | ) |
|
|
(74,000 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Changes during 2016: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Debt assumed by former major shareholder and sole officer |
|
|
- |
|
|
|
- |
|
|
|
107,000 |
|
|
|
- |
|
|
|
107,000 |
|
|
Contributed services |
|
|
|
|
|
|
|
|
|
|
28,000 |
|
|
|
|
|
|
|
28,000 |
|
|
Net loss |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(61,000 | ) |
|
|
(61,000 | ) |
|
Balance at December 31, 2016 |
|
|
9,054,000 |
|
|
$ | 9,000 |
|
|
$ | 213,000 |
|
|
$ | (222,000 | ) |
|
$ | - |
|
The accompanying notes are an integral part of the financial statements.
| 17 |
|
|
| Table of Contents |
CROWD 4 SEEDS, INC.
|
|
|
Year ended December 31, |
|
|
Year ended December 31, |
|
||
|
|
|
2016 |
|
|
2015 |
|
||
|
Cash flow from operating activities: |
|
|
|
|
|
|
||
|
Net loss |
|
$ | (61,000 | ) |
|
$ | (63,000 | ) |
|
Adjustments to reconcile net loss to net cash used in operating activities: |
|
|
|
|
|
|
|
|
|
Contributed services |
|
|
28,000 |
|
|
|
39,000 |
|
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
|
|
Prepaid expenses |
|
|
4,000 |
|
|
|
(4,000 | ) |
|
Accounts payable |
|
|
(2,000 | ) |
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
Net cash used in operating activities |
|
|
(31,000 | ) |
|
|
(28,000 | ) |
|
|
|
|
|
|
|
|
|
|
|
Cash flow from financing activities: |
|
|
|
|
|
|
|
|
|
Advances from related parties |
|
|
30,130 |
|
|
|
10,000 |
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by financing activities |
|
|
30,130 |
|
|
|
10,000 |
|
|
|
|
|
|
|
|
|
|
|
|
Net decrease in cash and cash equivalents |
|
|
(870 | ) |
|
|
(18,000 | ) |
|
Cash and cash equivalents at beginning of the year |
|
|
2,000 |
|
|
|
20,000 |
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents at the end of the year |
|
$ | 1,130 |
|
|
$ | 2,000 |
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental disclosure of cash flow information: |
|
|
|
|
|
|
|
|
|
Cash paid for interest |
|
$ | - |
|
|
$ | - |
|
|
Cash paid for income taxes |
|
$ | - |
|
|
$ | - |
|
|
|
|
|
|
|
|
|
|
|
|
Non-cash transactions |
|
|
|
|
|
|
|
|
|
Debt assumed by former major shareholder and sole officer |
|
$ | 107,000 |
|
|
$ | - |
|
The accompanying notes are an integral part of the financial statements.
| 18 |
|
|
| Table of Contents |
CROWD 4 SEEDS INC.
NOTE 1 – ORGANIZATION AND GOING CONCERN:
Crowd 4 Seeds, Inc. (the "Company") was formed on April 11, 2014 as a Nevada corporation.
During 2014 the Company issued 9,054,000 shares of its common stock, for a total consideration of $20,000. The Company has yet to start operational or research and development activities. The Company initially planned to operate in the field of crowd funding and to run an online platform for investments in Israeli startup companies. This online platform would present startup companies in various fields. The Company planned to match up Israeli startups looking to raise funds with potential investors from all over the world seeking to make investments in such startups. Potential investors will be able to have access to the marketing information and legal and financial disclosures of any startup company they would like to know more about. The crowd funding legislation in Israel was processed. The online service could be offered only following the final approval of the legislation.
On December 30, 2016, Tycoon Luck Global Limited acquired 65.72% of the equity interest of the Company from Itzhak Ostashinsky, the major shareholder and sole officer, at a consideration of $220,152 in cash and both parties agreed all the net liabilities of the Company as of the acquisition date are assumed by Itzhak Ostashinsky. On the same day, the new management team was appointed. The Company plans to commence the business in providing sub-junket services to main junkets based in Cambodia.
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. The Company has suffered recurring losses and generated negative cash flows from operations since inception. Due to these conditions, it raised substantial doubt about its ability to continue as a going concern. The financial statements do not include any adjustments that may result should the Company be unable to continue as a going concern.
Note 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The significant accounting policies followed in the preparation of the financial statements are as follows:
|
A. |
Basis of Presentation: |
The financial statements are prepared in accordance with accounting principles generally accepted ("GAAP") in the United States of America.
|
B. |
Use of Estimates in Preparation of Financial Statements: |
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of expenses during the reporting periods. Actual results could differ from those estimates.
| 19 |
|
|
| Table of Contents |
CROWD 4 SEEDS INC.
NOTES TO FINANCIAL STATEMENTS
|
C. |
Cash and Cash Equivalents: |
Cash and cash equivalents consist of demand deposits and cash on hand.
|
D. |
Income Taxes: |
Deferred taxes are determined utilizing the "asset and liability" method, whereby deferred tax asset and liability account balances are determined based on differences between financial reporting and the tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company provides a valuation allowance, when it's more likely than not that deferred tax assets will not be realized in the foreseeable future. Deferred tax liabilities and assets are classified as current or non-current based on the underlying asset or liability or if not directly related to and asset or liability based on the expected reversal dates of the specific temporary differences.
|
E. |
Fair value of financial instruments: |
The Company discloses fair value measurements for financial and non-financial assets and liabilities measured at fair value. Fair value is based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
The accounting standard establishes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three broad levels, which are described below:
Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs.
Level 2: Observable prices that are based on inputs not quoted on active markets, but corroborated by market data.
Level 3: Unobservable inputs are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs.
| 20 |
|
|
| Table of Contents |
CROWD 4 SEEDS INC.
NOTES TO FINANCIAL STATEMENTS
|
F. |
Recent Accounting Pronouncements: |
In February 2016, the FASB issued ASU 2016-02, “ Leases (Topic 842) ”. Among other things, in the amendments in ASU 2016-02, lessees will be required to recognize the following for all leases (with the exception of short-term leases) at the commencement date: A lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis; and A right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. Under the new guidance, lessor accounting is largely unchanged. Certain targeted improvements were made to align, where necessary, lessor accounting with the lessee accounting model and Topic 606, Revenue from Contracts with Customers. The amendments in this ASU are effective for public business entities for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early application is permitted for all public business entities and all nonpublic business entities upon issuance. Lessees (for capital and operating leases) and lessors (for sales-type, direct financing, and operating leases) must apply a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. The modified retrospective approach would not require any transition accounting for leases that expired before the earliest comparative period presented. Lessees and lessors may not apply a full retrospective transition approach. The Company is currently in the process of evaluating the impact of the adoption on its consolidated financial statements.
NOTE 3 – PROMISSORY NOTE FROM SHAREHOLDER:
As of December 31, 2015, the Company had promissory note balance of $23,000 payable to Itzhak Ostashinsky, the former major shareholder and sole officer. During the year ended December 31, 2016, another note of $29,000 was issued to the same person. On December 30, 2016, the former major shareholder and sole officer agreed to waive all the outstanding note payable of $52,000 owed to him. Hence there is no promissory note outstanding as of December 31, 2016.
NOTE 4 – COMMITMENTS AND CONTINGENCIES:
In May 2014, the Company engaged a legal counsel who is a family member of the former major shareholder and sole officer of the Company in order to receive legal services concerning the registration statement to be filed with the Securities and Exchange Commission ("SEC"). According to the agreement, the fees will be paid if and only upon receiving the first $50 thousand from external investors following the effectiveness of the registration statements. Since this expense was probable it was recorded as a provision amounting to $50,000 as of December 31, 2015.
However, the Tycoon Luck Global Limited has taken over the Company and the existing liabilities were assumed by the former major shareholder and sole officer.
For the year ended December 31, 2016, the family member of the former major shareholder and sole officer of the Company provided legal services for the Company for free.
| 21 |
|
|
| Table of Contents |
CROWD 4 SEEDS INC.
NOTES TO FINANCIAL STATEMENTS
NOTE 5 – LOSS PER COMMON SHARE:
The basic net loss per common share is calculated by dividing the Company's net loss available to common shareholders by the weighted average number of common shares during the year. The diluted net loss per common share is calculated by dividing the Company's net loss available to common shareholders by the diluted weighted average number of common shares outstanding during the year. The diluted weighted average number of common shares outstanding is the basic weighted number of common shares adjusted for any potentially dilutive debt or equity. Diluted net earnings (loss) per common share are the same as basic earnings (loss) per common share due to the lack of dilutive items in the Company.
|
|
|
Year ended December 31, |
|
|
Year ended December 31, |
|
||
|
|
|
2016 |
|
|
2015 |
|
||
|
1. Numerator : |
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
||
|
Net loss |
|
$ | (61,000 | ) |
|
$ | (63,000 | ) |
|
|
|
|
|
|
|
|
|
|
|
2. Denominator |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Denominator for basic and diluted net loss per common share - weighted average of common shares |
|
|
9,054,000 |
|
|
|
9,054,000 |
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted net loss per common share attributed to stockholders |
|
$ | (0.01 | ) |
|
$ | (0.01 | ) |
| 22 |
|
|
| Table of Contents |
CROWD 4 SEEDS INC.
NOTES TO FINANCIAL STATEMENTS
NOTE 6 – TAXES ON INCOME:
|
A. |
Deferred income taxes: |
Deferred taxes are determined by applying the provisions of enacted tax laws and rates for the jurisdictions in which the Company operates to the estimated future tax effects of the differences between the tax basis of assets and liabilities and their reported amounts in the Company's financial statements. A valuation allowance is established to reduce deferred tax assets if it is more likely than not that the related tax benefits will not be realized. Significant components of the Company's deferred tax assets are as follows:
|
|
|
Year ended December 31, |
|
|
Year ended December 31, |
|
||
|
|
|
2016 |
|
|
2015 |
|
||
|
|
|
|
|
|
|
|
||
|
Net operating loss carry forward |
|
$ | (161,000 | ) |
|
$ | (133,000 | ) |
|
|
|
|
|
|
|
|
|
|
|
Deferred tax asset before valuation allowance |
|
|
75,480 |
|
|
|
45,000 |
|
|
Valuation allowance |
|
|
(75,480 | ) |
|
|
(45,000 | ) |
|
Net deferred tax asset |
|
$ | - |
|
|
$ | - |
|
Management currently believes that since the Company has a history of losses it is more likely than not that the deferred tax regarding the loss carry forwards and other temporary differences will not be realized in the foreseeable future. The Company's net operating loss carry forward will begin to expire in the year 2035.
|
B. |
Uncertain tax position: |
The Company has recorded no liability for income taxes associated with unrecognized tax benefits at the date of adoption and has not recorded any liability associated with unrecognized tax benefits during 2016 and 2015. Accordingly, the Company has not recorded any interest or penalty in regard to any unrecognized benefit.
|
C. |
Theoretical tax: |
The main reconciling items between the statutory tax rate of the Company and the effective tax rate are the non-recognition of the benefits from accumulated net operating losses carryforward due to the uncertainty of the realization of such tax benefits.
| 23 |
|
|
| Table of Contents |
CROWD 4 SEEDS INC.
NOTES TO FINANCIAL STATEMENTS
NOTE 7 – TRANSACTION WITH RELATED PARTIES:
A. As of December 31, 2015, the Company had an outstanding note payable to the former major shareholder and sole officer (see Note 3). After change in ownership on December 30, 2016, all previous liabilities are assumed by the former major shareholder and sole officer.
B. For the year ended December 31, 2015 and period from January 1, 2016 to December 30, 2016, the Company leased its office space from its former major shareholder and sole officer at no charge.
C. For the year ended December 31, 2015 and 2016, the legal services of the Company are provided by a related party for $50,000 and $0, respectively. The related party is the son of former major shareholder and sole officer.
D. During the year ended December 31, 2016, the Company borrowed petty cash of MYR5,000 (appropriately $1,130) from Ms. Siew Heok ONG, the Chief Financial Officer, for working capital purposes. The amount due is due on demand without any interest.
E. During the year ended December 31, 2016, the Company incurred an expense in the amount of $28 thousand ($39 thousand in 2015) for the estimated value of the time devoted by the former major shareholder and sole officer to promote the business plan of the Company. The expense was recorded as a contribution to equity as no payment from the Company was required.
NOTE 8 - SUBSEQUENT EVENTS
On January 9, 2017, the Company filed with Secretary of State of Nevada to change its name to Sheng Ying Entertainment Corp. As of the filing date, the name change is still subject to the approval of Financial Industry Regulatory Authority.
The Company is in the process of acquiring Sheng Ying Investments Limited, a BVI company incorporated on January 5, 2017 and is wholly owned by Kok Chee LEE, the CEO for the purpose of commencing junket business, which is the current management direction of the Company. As of the filing date, the acquisition of Sheng Ying Investments Limited has not been completed yet.
| 24 |
|
|
| Table of Contents |
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
There are not and have not been any disagreements between the Company and its accountants on any matter of accounting principles, practices or financial statement disclosure.
ITEM 9A. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
We conducted an evaluation under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures. The term "disclosure controls and procedures", as defined in Rules 13a-15(e) and 15d-15(e) under the Securities and Exchange Act of 1934, as amended ("Exchange Act"), means controls and other procedures of a company that are designed to ensure that information required to be disclosed by the company in the reports it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC`s rules and forms. Disclosure controls and procedures also include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company's management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure.
Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded as of December 31, 2016, that our disclosure controls and procedures are not effective at a reasonable assurance level and are designed to provide reasonable assurance that the controls and procedures will meet their objectives due to the material weaknesses described below. However, it should be noted that the design of any system of controls is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions, regardless of how remote.
Management's Report on Internal Control Over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Our internal control over financial reporting is designed 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. The internal controls for the Company are provided by executive management's review and approval of all transactions. Our internal control over financial reporting also includes those policies and procedures that:
|
(1) |
pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets; |
|
(2) |
provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. GAAP, and that our receipts and expenditures are being made only in accordance with the authorization of our management; and |
|
(3) |
provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements. |
| 25 |
|
|
| Table of Contents |
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Management assessed the effectiveness of the Company's internal control over financial reporting as of December 31, 2016. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations ("COSO") of the Treadway Commission in Internal Control-Integrated Framework. Management's assessment included an evaluation of the design of our internal control over financial reporting and testing of the operational effectiveness of these controls.
Based on this assessment, management has concluded that as of December 31, 2016, our internal control over financial reporting was not effective to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles due to the existence of the following material weaknesses:
|
|
· |
Lack of segregation of duties |
|
|
· |
Lack of audit committee and independent directors |
|
|
|
|
|
|
· |
Lack of well established procedures to authorize and approve related party transactions |
Although we are unable to meet the standards under COSO because of the limited resources available to a company of our size, we are committed to improving our financial organization. As funds become available, we will undertake to: (1) create a position to segregate duties consistent with control objectives, (2) increase our personnel resources and technical accounting expertise within the accounting function (3) appoint one or more independent directors to our board of directors who shall be appointed to a Company audit committee resulting in a fully functioning audit committee who will undertake the oversight in the establishment and monitoring of required internal controls and procedures; and (4) prepare and implement sufficient written policies and checklists which will set forth procedures for accounting and financial reporting with respect to the requirements and application of US GAAP and SEC disclosure requirements.
We will continue to monitor and evaluate the effectiveness of our disclosure controls and procedures and our internal control over financial reporting on an ongoing basis and are committed to taking further action and implementing additional enhancements or improvements, as necessary and as funds allow.
This annual report does not include an attestation report of the Company's registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by the Company's registered public accounting firm pursuant to temporary rules of the SEC that permit the Company to provide only management's report in this annual report.
Changes in Internal Control over Financial Reporting
There were no changes in the Company's internal control over financial reporting that occurred during the last fiscal quarter that have materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting.
ITEM 9B. OTHER INFORMATION
None.
| 26 |
|
|
| Table of Contents |
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Directors and Executive Officers
The following table contains information as of December 31, 2016 as to each Director and Executive Officer of the Company:
|
Name |
|
Age |
|
Title |
|
DR, Kok Chee LEE |
|
60 |
|
Chief Executive Officer |
|
Ms Siew Heok ONG |
|
52 |
|
Chief Financial Officer |
|
Ms Sreyneang JIN |
|
29 |
|
Chief Operation Officer |
Dr. Kok Chee LEE, aged 60, is the CEO and executive director of the Company. He bring extensive public management experience, and was previously a Deputy Chief of a Police Center at Bayan Baru, Penang, Malaysia. He served more than 42 years in the Police Force of Penang, Malaysia until retirement on July 1st.2016. During the last 5 years he held senior managerial position in JPJKK branch ( security and community department) and Hal Ehwal Awam in Penang, overseeing 840 policemen. In 2014, Dr Lee was awarded the Bentera Pasukan Polis from the king of Malaysia at the Palace, in Kuala Lumpur for his contribution to the force and the nation. Dr Lee hold a doctorate of business Administration degree, and a Master of Business Administration from University Utara Malaysia, as well as a bachelor of Law (Honours) degree from University of Wolverhampton, United Kingdom.
Ms Siew Heok ONG, 52, has over 32 years of broad experience in public finance from the textile and mobile communication industries. For the past 6 years, she has devoted considerable time to volunteer works under the joint effort of the ruling party of Malaysia. In 2005, she was awarded the “pingat Jasa Masyarakat” ( award of social contribution) by the Governor of Penang for her numerous public services performed in Penang state including Counsellor of Drug Rehabilitative Centre and Deputy chairman for Federal Government Unity Association. Ms Ong is currently the treasury of Thean Hour Keong Temple.
Ms Sreyneang JIN, 29, has over 10 years of junket business in Phnon Penh, Cambodia. In the past 5 years she has been working with leading junkets in various VIP rooms of Nagaworld Hotel Entertainment Complex, Phnom Penh. Her broad experience in junket and gaming industry will help to focus the company’s financial prospects in this burgeoning niche.
Family Relationships.
None.
Involvement in Certain Legal Proceedings
No executive officer or director has been involved in the last ten years in any of the following:
|
· |
Any bankruptcy petition filed by or against any business or property of such person, or 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; |
|
· |
Any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offenses); |
|
· |
Being 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 or banking activities; |
|
· |
Being found by a court of competent jurisdiction (in a civil action), the SEC 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; |
| 27 |
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|
| Table of Contents |
|
· |
Being the subject of or a party to any judicial or administrative order, judgment, decree or finding, not subsequently reversed, suspended or vacated relating to an alleged violation of any federal or state securities or commodities law or regulation, or any law or regulation respecting financial institutions or insurance companies, including but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition order, or any law or regulation prohibiting mail, fraud, wire fraud or fraud in connection with any business entity; or |
|
· |
Being the subject of or a party to any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the Exchange Act, any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member. |
Board Committees and Audit Committee Financial Expert
We do not currently have a standing audit, nominating or compensation committee of the board of directors, or any committee performing similar functions. Our board of directors performs the functions of audit, nominating and compensation committees. As of the date of this annual report, no member of our board of directors qualifies as an "audit committee financial expert" as defined in Item 407(d)(5) of Regulation S-K promulgated under the Securities Act.
Director Nominations
As of December 31, 2016, we did not affect any material changes to the procedures by which our shareholders may recommend nominees to our board of directors. We have not established formal procedures by which security holders may recommend nominees to the Company's board of directors.
Code of Ethics
We have adopted a code of ethics that applies to our principal executive officers, principal financial officer, principal accounting officer or controller, or persons performing similar functions. A copy of our code of ethics may be obtained free of charge by contacting us at the address or telephone number listed on the cover page hereof.
ITEM 11. EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
|
Name & Principal Position |
|
Year |
|
Salary ($) |
|
|
Bonus ($) |
|
|
Stock Awards ($) |
|
|
Option Awards ($) |
|
|
Non-equity incentive plan compensation ($) |
|
|
Non-qualified deferred compensation earnings ($) |
|
|
All other compensation ($) |
|
|
Total ($) |
|
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Itzhak Ostashinsky Former CEO, CFO & Director |
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2016 |
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There is no formal employment arrangement with former major shareholder and sole officer Mr. Ostashinsky as of December 30, 2016. Mr. Ostashinsky's compensation has not been fixed or based on any percentage calculations. He made all decisions determining the amount and timing of his compensation and, for the immediate future, has elected not to receive any compensation which permits us to meet our financial obligations. Mr. Ostashinsky's compensation amount may be formalized if and when the Company completes this offering and obtains any future financing beyond the offering.
However, Mr. Ostashinsky resigned on December 30, 2016 and Company has appointed Mr. Kok Chee Lee as Chief Executive Officer, Miss Siew Heok Ong as Chief Financial Officer, and Miss Sreyneang Jin as Chief Operation Officer. There are no any salary commitments to these 3 officers until Company successfully set up its subsidiary and open banking account. The Company estimated that it will have salary commitment on officers’ salary in the second quarter of 2017.
Grants of Plan-Based Awards Table
None of our named executive officers received any grants of stock, option awards or other plan-based awards during the period ended December 31, 2016 except as stated above. The Company has no activity with respect to these awards.
Options Exercised and Stock Vested Table
None of our named executive officers exercised any stock options, and no restricted stock units, if any, held by our named executive officers vested during the period ended December 31, 2016. The Company has no activity with respect to these awards.
Outstanding Equity Awards at Fiscal Year-End Table
None of our named executive officers had any outstanding stock or option awards as of December 31, 2016 that would be compensatory to the officer. The Company has not issued any awards to its named executive officers. The Company and its Board of Directors may grant awards as it sees fit to its employees as well as key consultants.
Compensation of Directors
During our fiscal year ended December 31, 2016, we did not provide compensation to any of our directors for serving as our director. We currently have no formal plan for compensating our directors for their services in their capacity as directors, although we may elect to issue stock options to such persons from time to time. Directors are entitled to reimbursement for reasonable travel and other out-of-pocket expenses incurred in connection with attendance at meetings of our board of directors. Our board of directors may award special remuneration to any director undertaking any special services on our behalf other than services ordinarily required of a director.
The following table sets forth, as of March 31, 2017, certain information with regard to the record and beneficial ownership of the Company's common stock by (i) each person known to the Company to be the record or beneficial owner of 5% or more of the Company's common stock, (ii) each director of the Company, (iii) each of the named executive officers, and (iv) all executive officers and directors of the Company as a group:
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Name of Beneficial Owner |
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Number of Shares Owned (1) |
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Percentage of Outstanding Shares of Common
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Tycoon Luck Global Limited |
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5,950,000 |
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65.72 | % |
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Itzhak Ostashinsky |
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998,000 |
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11.02 | % |
_______________
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(1) |
Tycoon Luck Global Limited bought these shares from former major shareholder and sole officer Mr. Ostashinsky on December 30, 2016. |
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(2) |
Applicable percentage ownership is based on 9,054,000 shares of common stock outstanding as of March 31, 2017. |
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ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
Prior to taking over by the new management team on December 30, 2016, the Company’s only promoter is Mr. Ostashinsky, president, chief executive officer, and principal financial officer.
Our previous office and mailing address is 24 Tcharnihovsky St., Kfar Saba, Israel 44150, which was provided to the Company by Mr. Ostashinsky. Mr. Ostashinsky incurs no incremental costs as a result of us using the space. Therefore, he does not charge us for its use. There is no written lease agreement. However, the Company will lease a new office in Macao in first quarter of 2017 to promote our new business in sub-junket services.
The Company issued 8,250,000 shares of its common stock to its former major shareholder and sole officer, Mr. Ostashinsky, in consideration for a business plan.
The Company has an outstanding note payable provided by former major shareholder and sole officer and director which is unsecured and bears no interest. The note is payable upon demand. The outstanding balance under the note was $0 thousand and $23 thousand as of December 31, 2016 and 2015, respectively.
Previously the Company obtains legal services from a related party. The related party is the son of the former major shareholder and sole officer and provided legal advice to the Company. As of December 31, 2016 and 2015, the accounts payable to the related party amounted to $0 and $50 thousand, respectively.
Corporate Governance and Director Independence.
The Company has not:
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· |
Established its own definition for determining whether its directors and nominees for directors are "independent". We currently use NASDAQ's general definition for determining director independence, which states that "independent director" means a person other than an officer or employee of the company or its subsidiaries or any other individual having a relationship, that, in the opinion of the company's board of directors, would interfere with the exercise of independent judgment in carrying out the responsibilities of the director. |
Nor:
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Established any committee of the board of directors. |
Given the nature of the Company's business, its limited stockholder base and the current composition of management, the board of directors does not believe that the Company requires any corporate governance committees at this time.
As of the date hereof, the entire board serves as the Company's audit committee.
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ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
Independent Public Accountants
On February 8, 2016, we engaged MaloneBailey, LLP ("MB") as our new independent registered public accounting firm. The appointment of MB was approved by our Board of Directors. During the fiscal year ended December 31, 2016, we did not consult with MB on (i) the application of accounting principles to a specified transaction, either completed or proposed, or the type of audit opinion that may be rendered on the Company's financial statements, and MB did not provide either a written report or oral advice to the Company that was an important factor considered by the Company in reaching a decision as to any accounting, auditing, or financial reporting issue; or (ii) the subject of any disagreement, as defined in Item 304 (a)(1)(iv) of Regulation S-K and the related instructions, or a reportable event within the meaning set forth in Item 304(a)(1)(v) of Regulation S-K.
Audit Fees
The fees involved with the audit by MB of the financial statements for the year ended December 31, 2016 are $4,000. The audit fees were $4,000 for audit for the year ended December 31, 2015.
Tax Fees
During the year ended December 31, 2016, our principal accountant did not render services to us for tax compliance, tax advice or tax planning.
All Other Fees
During the year ended December 31, 2016, there were no fees billed for products and services provided by the principal accountant other than those set forth above.
Currently, we have no independent audit committee. Our full board of directors functions as our audit committee and is comprised of one director who is not considered to be "independent" in accordance with the requirements of Rule 10A-3 under the Exchange Act. Our audit committee's pre-approval policies and procedures described in paragraph (c)(7)(i) of Rule 2-01 of Regulation S-X were that the audit committee pre-approve all accounting related activities prior to the performance of any services by any accountant or auditor.
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ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
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(a) |
The following documents are filed as a part of this Report: |
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1. |
Financial Statements. The following financial statements of Crowd 4 Seeds, Inc. are included in Item 8: |
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Reports of Independent Registered Public Accounting Firms. |
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Balance Sheets as of December 31, 2016 and 2015. |
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Statements of Operations for the fiscal years ending December 31, 2016 and 2015 |
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Statements of Stockholders' Deficit for the fiscal years ending December 31, 2016 and 2015 |
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Statements of Cash Flows for the fiscal years ending December 31, 2016 and 2015 |
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Notes to Financial Statements. |
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2. |
Financial Statement Schedule(s): |
All schedules are omitted for the reason that the information is included in the financial statements or the notes thereto or that they are not required or are not applicable.
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3. |
Exhibits: |
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3.1 |
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Articles of Incorporation (1) |
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3.2 |
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By-Laws (1) |
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10.1 |
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Form of Note (1) |
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10.2 |
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Amendment to Form of Note* |
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101 |
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XBRL Interactive Data Files* |
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* Filed herewith.
(1) Incorporated herein by reference from the Company's Form S-1 filed with the Securities and Exchange Commission on March 25, 2015.
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In accordance with Section 13 or 15(d) of the Securities Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
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CROWD 4 SEEDS, INC. |
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Date: March 31, 2017 |
By: |
/s/ Kok Chee Lee |
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Kok Chee LEE |
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Chief Executive Officer |
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34 |
EXHIBIT 14.1
CODE OF ETHICS
FOR
CROWD 4 SEEDS, INC.
Introduction
Crowd 4 Seeds, Inc. (the " Company ") is committed to the highest standards of legal and ethical conduct. This Code of Ethics (the " Code ") sets forth the Company's policies with respect to the way we conduct ourselves individually and operate our business. The provisions of this Code are designed to deter wrongdoing and to promote honest and ethical conduct among our employees, officers and directors.
In the course of performing our various roles in the Company, each of us will encounter ethical questions in different forms and under a variety of circumstances. Moments of ethical uncertainty may arise in our dealings with fellow employees of the Company, with customers, or with other parties such as government entities or members of our community. In achieving the high ground of ethical behavior, compliance with governmental laws is not enough. Our employees should never be content with simply obeying the letter of the law, but must also strive to comport themselves in an honest and ethical manner. This Code provides clear rules to assist our employees, directors and officers in taking the proper actions when faced with an ethical dilemma.
The reputation of the Company is our greatest asset and its value relies on the character of its employees. In order to protect this asset, the Company will not tolerate unethical behavior by employees, officers or directors. Those who violate the standards in this Code will be subject to disciplinary action. If you are concerned about taking an action that may violate the Code or are aware of a violation by another employee, an officer or a director, follow the guidelines set forth in Sections 10 and 11 of this Code.
This Code applies equally to all employees, officers and directors of the Company. All references to employees contained in this Code should be understood as referring to officers and directors as well.
1. Compliance with Laws, Rules and Regulations .
Company policy requires that the Company, as well as all employees, officers and directors of the Company, comply fully with both the spirit and the letter of all laws, rules and regulations. Whenever an applicable law, rule or regulation is unclear or seems to conflict with either another law or any provision of this Code, all employees, officers and directors are urged to seek clarification from their supervisor, the appropriate compliance official or the Chief Executive Officer. See Section 11 for contact information. Beyond mere compliance with the law, we should always conduct our business with the highest standards of honesty and integrity – wherever we operate.
2. Conflicts of Interest .
Every employee has a primary business responsibility to the Company and must avoid conflicts of interest. A conflict of interest arises when an employee takes actions or enters into relationships that oppose the interests of the Company, harm the Company's reputation or interfere with the employee's performance or independent judgment when carrying out any actions on behalf of the Company. The Company strictly prohibits its employees from taking any action or entering into any relationship, personal or professional, that creates, or even appears to create, a conflict of interest.
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A conflict situation can arise when a director, officer or employee takes actions or has interests that may make it difficult to perform his or her work for the Company objectively and effectively. Conflicts of interests may also arise when a director, officer or employee, or a member of his or her family, receives an improper personal benefit as a result of his or her position with the Company. It may be a conflict of interest for a director, officer or employee to work simultaneously for a competitor, customer or supplier. The best policy is to avoid any direct or indirect business connection with our customers, suppliers or competitors, except on our behalf. Employees must be sensitive to potential conflicts of interest that may arise and use their best efforts to avoid the conflict.
In particular, except as provided below, no director, officer or employee shall:
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be a consultant to, or a director, officer or employee of, or otherwise operate an outside business that: |
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markets products or services in competition with our current or potential products and services; |
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supplies products or services to the Company; or |
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purchases products or services from the Company; |
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accept any personal loan or guarantee of obligations from the Company, except to the extent such arrangements have been approved by the Board of Directors or the Chief Executive Officer (as set forth below) and are legally permissible; or |
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conduct business on behalf of the Company with immediate family members, which include your spouse, children, parents, siblings and persons sharing your same home whether or not legal relatives, except to the extent such business has been approved by the Board of Directors or the Chief Executive Officer (as set forth below) and are legally permissible. |
Directors, officers and employees must notify the Chief Executive Officer of the existence of any actual or potential conflict of interest. With respect to officers or directors, the Board may make a determination that a particular transaction or relationship will not result in a conflict of interest covered by this policy. With respect to all other employees or agents, the Chief Executive Officer, acting alone, or the Board may make such a determination. Any waivers of this policy as to an officer or director may only be approved by the Board of Directors.
Any employee, officer or director who is aware of a transaction or relationship that could reasonably be expected to give rise to a conflict of interest in violation of this section must inform the appropriate personnel in accordance with the procedures set forth in Section 12 of this Code. If an employee has any questions regarding the Company's policy on conflicts of interest or needs assistance in avoiding a potential conflict of interest, he or she is urged to seek the advice of a supervisor or the Chief Executive Officer.
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3. Corporate Opportunities .
Employees, officers and directors are prohibited from taking for themselves personally opportunities that are discovered through the use of Company property, Company information or their position in the Company. Furthermore, employees may not use Company property, information or influence or their position in the Company for improper personal gain. Finally, employees have a duty to advance the Company's legitimate interests when the opportunity to do so arises. Consequently, employees are not permitted to compete with the Company.
4. Confidentiality .
Employees must maintain the confidentiality of confidential information entrusted to them by the Company or its customers or suppliers, except when disclosure is authorized by the Company or required by applicable laws or regulations. Confidential information includes proprietary information of the Company, as well as all non-public information that might be of use to competitors, or harmful to the Company or its customers, if disclosed. This confidentiality requirement is in addition to any other obligations imposed by the Company to keep information confidential.
5. Insider Trading .
Employees, officers and directors will frequently become aware of confidential non-public information concerning the Company and the parties with which the Company does business. The Company prohibits employees from using such confidential information for personal financial gain, such as for purposes of stock trading, or for any other purpose other than the conduct of our business. Employees must maintain the confidentiality of such information and may not make disclosures to third parties, including members of the employee's family. All non-public information about the Company should be treated as confidential information. To use non-public information for personal financial benefit or to "tip" others who may make stock trades on the basis of this information is not only unethical but also illegal. This policy also applies to trading in the securities of any other company, including our customers or suppliers, if employees have material, non-public information about that company which the employee obtained in the course of their employment by the Company. In addition to possible legal sanctions, any employee, officer or director found to be in violation of the Company's insider trading policy will face decisive disciplinary action. Employees are encouraged to contact the Company's Chief Executive Officer with any questions concerning this policy.
6. Protection and Proper Use of Company Assets .
All Company assets should be used for legitimate business purposes and all employees, officers and directors must make all reasonable efforts to protect the Company's assets and ensure their efficient use. Theft, carelessness, and waste have a direct impact on the Company's profitability and must therefore be avoided. The suspected occurrence of fraud or theft should immediately be reported to the appropriate person in accordance with the procedures set forth in Section 11 of this Code.
An employee's obligation to protect the Company's assets extends to the Company's proprietary information. Proprietary information includes intellectual property such as patents, trademarks, copyrights and trade secrets. An employee who uses or distributes such proprietary information without the Company's authorization will be subject to disciplinary measures as well as potential legal sanctions.
7. Fair Dealing .
Although the success of our Company depends on our ability to outperform our competitors, the Company is committed to achieving success by fair and ethical means. We seek to maintain a reputation for fair dealing among our competitors and the public alike. In light of this aim, the Company prohibits employees from engaging in any unethical or illegal business practices. An exhaustive list of unethical practices cannot be provided. Instead, the Company relies on the judgment of each individual employee to avoid such practices. Furthermore, each employee should endeavor to deal fairly with the Company's customers, suppliers, competitors and employees. No employee should take unfair advantage of anyone through manipulation, concealment, abuse of privileged information, misrepresentation of material facts, or any other unfair business practice.
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8. Disclosures .
It is Company policy to make full, fair, accurate, timely and understandable disclosure in compliance with all applicable laws, rules and regulations in all reports and documents that the Company files with, or submits to, the Securities and Exchange Commission and in all other public communications made by the Company. Employees shall endeavor in good faith to assist the Company in such efforts.
9. Waivers .
The Company expects all employees, officers and directors to comply with the provisions of this Code. Any waiver of this Code for executive officers, directors or employees may be made only by the Board of Directors or a Board committee and will be promptly disclosed to the public as required by law and stock exchange regulations.
10. Compliance Guidelines and Resources .
In some situations, our employees may not be certain how to proceed in compliance with this Code. This uncertainty may concern the ethical nature of the employee's own acts or the employee's duty to report the unethical acts of another. When faced with this uncertainty, the employee should carefully analyze the situation and make use of Company resources when determining the proper course of action. The Company also encourages employees to talk to their supervisors, or other personnel identified below, when in doubt about the best course of action.
1. Gather all the facts . Do not take any action that may violate the Code until you have gathered all the facts that are required to make a well-informed decision and, if necessary, you have consulted with your supervisor, or the Chief Executive Officer.
2. Is the action illegal or contrary to policy? If the action is illegal or contrary to the provision of this Code, you should not carry out the act. If you believe that the Code has been violated by an employee, an officer or a director, you must promptly report the violation in accordance with the procedures set forth in Section 11.
3. Discuss the problem with your supervisor . It is your supervisor's duty to assist employees in complying with this Code. Feel free to discuss a situation that raises ethical issues with your supervisor if you have any questions. You will suffer no retaliation for seeking such guidance.
4. Additional resources . The Chief Executive Officer is available to speak with you about problematic situations if you do not feel comfortable approaching your direct supervisor. If you prefer, you may request assistance in writing by sending a request to the Chief Executive Officer.
11. Reporting Procedures .
All employees have a duty to report any violations of this Code, as well as violations of any laws, rules, or regulations. The Company does not permit retaliation of any kind against employees for good faith reports of ethical violations.
If you believe that the Code has been violated by an employee you must promptly report the violation to your direct supervisor or the Chief Executive Officer. If a report is made to a supervisor, the supervisor must in turn report the violation to the Chief Executive Officer. All violations by an officer or director of the Company must be reported directly to the entire Board of Directors.
Reports may be made in person, by telephone or in writing by sending a description of the violation and the names of the parties involved to the appropriate personnel mentioned in the preceding paragraph.
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12. Disciplinary Action .
Employees, officers and directors of the Company will be held accountable for adherence to this Code. The penalty for a particular violation of this Code will be decided on a case-by-case basis and will depend on the nature and severity of the violation as well as the employee's history of non-compliance and cooperation in the disciplinary process. Significant penalties will be imposed for violations resulting from intentional or reckless behavior. Penalties may also be imposed when an employee fails to report a violation due to the employee's indifference, deliberate ignorance or reckless conduct. All violations of this Code will be treated seriously and will result in the prompt imposition of penalties which may include (1) an oral or written warning, (2) a reprimand, (3) suspension, (4) termination and/or (5) restitution.
13. No Rights Created .
This Code is a statement of certain fundamental principles, policies and procedures that govern the Company's officers, directors and employees in the conduct of the Company's business. It is not intended to and does not create any rights in any employee, supplier, competitor, shareholder or any other person or entity.
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5 |
EXHIBIT 31
CROWD 4 SEEDS, INC.
CERTIFICATIONS PURSUANT TO
RULE 13A-14(A) OR RULE 15D-14(A),
AS ADOPTED PURSUANT TO
RULE 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Kok Chee LEE, certify that:
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1. |
I have reviewed this Form 10-K of Crowd 4 Seeds, Inc.; |
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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; |
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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; |
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4. |
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
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(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; |
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(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; |
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(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 |
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(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 |
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5. |
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
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(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 |
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(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. |
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Dated: March 31, 2017 |
By: |
/s/ Kok Chee LEE |
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Kok Chee LEE |
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Chief Executive Officer |
EXHIBIT 32
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 906
OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Annual Report of Crowd 4 Seeds, Inc. (the "Company") on Form 10-K for the year ended December 31, 2016, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Itzhak Ostashinsky, President, Chief Executive Officer, and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that:
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(1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
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(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
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Date: March 31, 2017 |
By: |
/s/ Kok Chee LEE |
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Kok Chee LEE |
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Chief Executive Officer |