Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10

 

GENERAL FORM FOR REGISTRATION OF SECURITIES

Pursuant to Section 12(b) or (g) of the Securities Exchange Act of 1934

 

ENERGY MANAGEMENT INTERNATIONAL, INC.

(Exact Name of Registrant as Specified in its Charter)

 

Nevada   20-1415044
(State or Other Jurisdiction of   (I.R.S. Employer
Incorporation or Organization)   Identification No.)
     
Unit A, 13/F, Gee Luen Factory Building    
316-318 Kwun Tong Road    
Kowloon, Hong Kong    
(Address of Principal Executive Offices)   (Zip Code)

 

Registrant’s telephone number, including area code: +852 2621 3288

 

Securities registered pursuant to Section 12(b) of the Act:

 

(Title of Class)   (Name of exchange on which registered)
n/a   n/a

 

Securities registered pursuant to section 12(g) of the Act:

 

(Title of Class)

Common Stock, par value $0.001 per share

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in rule 12b-2 of the Exchange Act.

 

Large accelerated filer     Accelerated filer  
Non-accelerated filer     Smaller reporting company  
Emerging Growth Company          

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial standards provided pursuant to Section 13(a) of the Exchange Act  

  

 

 

     

 

 

FORM 10

ENERGY MANAGEMENT INTERNATIONAL, INC.

TABLE OF CONTENTS

 

    Page
Item 1. Business  1
Item 1A. Risk Factors  7
Item 2. Financial Information 12
Item 3. Properties 19
Item 4. Security Ownership of Certain Beneficial Owners and Management 20
Item 5. Directors and Executive Officers 21
Item 6. Executive Compensation 22
Item 7. Certain Relationships and Related Transactions, and Director Independence 25
Item 8. Legal Proceedings 26
Item 9. Market Price of and Dividends of the Registrant’s Common Equity and Related Stockholder Matters 26
Item 10. Recent Sales of Unregistered Securities 28
Item 11. Description of Registrant’s Securities to Be Registered 29
Item 12. Indemnification of Directors and Officers 31
Item 13. Financial Statements and Supplementary Data 32
Item 14. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 32
Item 15a. List of Financial Statements and Exhibits Part of Form 10 33
Item 15b. Exhibits of Financial Statements 33
Index to Financial Statements F-1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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SPECIAL CAUTIONARY NOTICE REGARDING FORWARD-LOOKING STATEMENTS

 

Certain matters discussed in this registration statement may constitute forward-looking statements for purposes of the Securities Act of 1933, as amended (the “Securities Act”) and the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from the future results, performance or achievements expressed or implied by such forward-looking statements. The words “anticipate,” “believe,” “estimate,” “may,” “expect” and similar expressions are generally intended to identify forward-looking statements. Our actual results may differ materially from the results anticipated in these forward-looking statements due to a variety of factors, including, without limitation, those discussed under the captions “Risk Factors,” and elsewhere in this registration statement. All written or oral forward-looking statements attributable to us are expressly qualified in their entirety by these cautionary statements. Such forward-looking statements include, but are not limited to, statements about our:

 

  expectations for increases or decreases in expenses;

 

  expectations for incurring capital expenditures to expand our products and services or our geographical reach;

 

  expectations for generating revenue or becoming profitable on a sustained basis;

 

  expectations or ability to enter into marketing and other partnership agreements;

 

  our ability to compete against other companies;

 

  our ability to attract and retain key personnel;

 

  estimates of the sufficiency of our existing cash and cash equivalents to finance our operating requirements;

 

  the volatility of our stock price;

 

  expected losses; and

 

  expectations for future capital requirements.

 

The forward-looking statements contained in this registration statement reflect our views and assumptions as of the effective date of this registration statement. Except as required by law, we assume no responsibility for updating any forward-looking statements. We qualify all of our forward-looking statements by these cautionary statements.

 

References in this registration statement to the “Company,” “ENMI,” “we,” “us” and “our” refer to Energy Management International, Inc., a Nevada company.

 

 

 

 

 

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Item 1: Business

 

OVERVIEW

 

We are engaged primarily in the sale and distribution of COVID-19 rapid antigen tester sets through our wholly owned subsidiary Ho Shun Yi Limited (“HSY”). We commenced operations in Hong Kong in October 2020 and sell our products primarily in Hong Kong. HSY was organized as a private limited liability company on July 9, 2018, in Hong Kong and is a wholly owned subsidiary of DH Investment Group Limited (“DHIG”). We acquired DHIG on July 26, 2021. Our corporate organization chart is below.

 

 

 

We reported a net income of $8,700 and $0 for the years ended March 31, 2021 and 2020, respectively. We had current assets of $74,360 and current liabilities of $65,670 as of March 31, 2021. As of March 31, 2020, our current assets and current liabilities were $0. We have prepared our financial statements for the years ended March 31, 2021 and 2020 assuming that we will continue as a going concern. Our continuation as a going concern is dependent upon improving our profitability and the continuing financial support from our stockholders. Our sources of capital in the past have included the sale of equity securities, which include common stock sold in private transactions and short-term and long-term debts.

 

We are organized under the laws of the State of Nevada as a holding company that conducts its business through a number of subsidiaries organized under the laws of foreign jurisdictions such as Hong Kong and the British Virgin Islands. This may have an adverse impact on the ability of U.S. investors to enforce a judgment obtained in U.S. Courts against these entities, or to effect service of process on the officers and directors managing the foreign subsidiaries.

 

 

 

 

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History

 

We were incorporated in the state of Nevada on July 9, 2004, under the name Amerivestors,, Inc.. On March 3, 2009, we changed our name to Gust Engineering & Speed Production, Inc. and on October 27, 2009, we changed our name to Energy Management International, Inc., our current name.

 

Since inception to 2018, the Company posted periodic reports on the OTCMarkets website under the alternative reporting standard with the 12/31/2010 Quarterly Report being the last report. Thereafter, the Company ceased reporting and failed to file its Annual list due July 31, 2019 with the Nevada Secretary of State. This resulted in the revocation of the Company’s corporate charter.

 

In November, 2020, Barbara McIntyre Bauman in her capacity as a stockholder of the Company applied for custodianship of the Company with the District Court sitting in Clark County, Nevada (the “Court”) to revive the Company. Ms. Bauman was ultimately appointed by the Court to serve as custodian of the Company on January 11, 2021. Ms. Bauman served as the custodian until April 19, 2021, when Ms. Bauman’s motion to terminate custodianship of the Company was granted by the Court. A copy of the court records relating to the application and termination of custodianship of the Company are attached as Exhibit 99.1 hereto.

 

In connection with serving as the custodian, Ms. Bauman was appointed to serve as the sole executive officer and director of the Company effective January 11, 2021. Ms. Bauman subsequently returned the Company to Good Standing Status with the Nevada Secretary of State and caused the Company to re-commence posting periodic reports on the OTC Markets website under the alternative reporting standard. On March 2, 2021, the Company issued to Ms. Bauman 2,000,000,000 shares of common stock for repayment of related party debt totaling $6,610. On February 22, 2021, the Company issued to Ms. Bauman 3,500,000 shares of Series A Preferred Stock, for repayment of the related party debt totaling $4,403. These debts were incurred in connection with reviving and maintaining the Company.

 

On May 13, 2021. Ms. Bauman sold 2,000,000,000 shares of the Company’s common stock and 3,500,000 shares of the Company’s Series A Preferred Stock to Sally Kin Yi LO and Daily Success Development Ltd. for aggregate consideration of Three Hundred Forty Thousand Dollars ($340,000). In connection with the acquisition, Ms. Bauman resigned from her positions as Chief Executive Officer and Chief Operating Officer and Sally Kin Yi LO was appointed to serve as our Chief Executive Officer, Chief Financial Officer, Secretary and director. It is our understanding that the purchasers are not U.S. Persons within the meaning of Regulations S. Accordingly, the Shares are being sold pursuant to the exemption provided by Section 4(a)(2) of the Securities Act of 1933, as amended, Regulation D and Regulation S promulgated thereunder.

 

Effective July 1, 2021, Daily Success Development Limited converted 520,000 shares of its Series A Preferred Stock into 1,040,000,000 shares of Common Stock. As a result, Daily Success Development Limited holds 2,340,000,000 Common Shares (56.30%) and 1,755,000 Series A Preferred Shares (56.30%).

 

Effective July 1, 2021, Sally Lo converted 280,000 shares of its Series A Preferred Stock into 560,000,000 shares of Common Stock. As a result, Sally Lo holds 1,260,000,000 Common Shares (30.31%) and 945,000 Series A Preferred Shares (30.29%).

 

Acquisition of DH Investment Group Limited (“DHIG”), Our Testing Business

 

On July 26, 2021, we acquired all of the issued and outstanding shares of DH Investment Group Limited, a limited liability company organized under the laws of the British Virgin Islands (“DHIG”), from its shareholders Sally Lo and Daily Success Development Limited in exchange for 100,000 shares of our Series B Preferred Stock. DHIG operates its COVID-19 antigen testing business through its wholly owned subsidiary Ho Shun Yi Limited, a limited liability company organized under the laws of Hong Kong. In connection with the acquisition, each of Sally Lo and Daily Success Development Limited received 35,000 and 65,000 shares of our Series B Convertible Preferred Stock, respectively. Each one (1) shares of the Series B Convertible Preferred Stock is convertible ten (10) shares of our Common Stock. The Company relied on the exemption from registration pursuant to Section 4(2) of, and Regulation D and/or Regulation S promulgated under the Act in selling the Company’s securities to the shareholders of DHIG.

 

Prior to the Share Exchange, the Company was considered as a shell company due to its nominal assets and limited operation. The transaction will be treated as a recapitalization of the Company.

 

 

 

 

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The Share Exchange between the Company and DHIC on July 26, 2021, is deemed a merger of entities under common control for which Miss Sally Kin Yi LO is the common director and shareholder of both the Company and DHIG. Under the guidance in ASC 805 for transactions between entities under common control, the assets, liabilities and results of operations, are recognized at their carrying amounts on the date of the Share Transfer, which required the retrospective combination of the Company and DHIG for all periods presented.

 

As a result of our acquisition of DHIG, we entered into the COVID-19 antigen testing business. We intend to make additional acquisitions in the same industry and hope to expand into other territories such as China. We also hope to make opportunistic acquisitions in other industries in the future, regardless of whether such industries relate to the COVID-19 antigen testing business.

 

On June 29, 2021, our Board of Directors authorized and approved the amendment and restatement of our Articles of Incorporation to: (i) change our name to DH Enchantment Inc.; and (ii) amend the powers, rights and designation of the Series A Convertible Preferred Stock; and (iii) effectuate a 5:1 reverse split, all of which are subject to final authorization by FINRA. The Board of Directors of the Company also approved the designation of 10,000,000 shares of Series B Convertible Preferred Stock which took effect immediately.

  

Our Business

 

We are engaged primarily in the sale and distribution of COVID-19 rapid antigen tester sets. We are one of the authorized commercial distributors of the INDICAID COVID-19 Rapid Antigen Test in the Hong Kong market. We commenced operations in Hong Kong in October 2020 and sell our tester sets primarily in Hong Kong. Our operating subsidiary, Ho Shun Yi Limited (“HSY”), is a wholly owned subsidiary of DH Investment Group Limited (“DHIG”).

 

The INDICAID COVID-19 Rapid Antigen Test is developed and manufactured in Hong Kong. We believe that our INDICAID product constitutes approximately 90% of the rapid antigen tests used in Hong Kong. The INDICAID product can provide a COVID-19 testing result in approximately 20 minutes. The INDICAID product does not replace the formal nucleic acid testing, but we believe our quick pre-screening product may provide officials with the information necessary to decrease the time of community closure, while lowering the risk of virus spread.

 

We are actively seeking partnerships with distributors in other countries to expand the INDICAID product into additional markets. Since the INDICAID product is considered a hygienic product, we believe that our product will be subject to much simpler import regulations. We also hope to make opportunistic acquisitions in other industries in the future, regardless of whether such industries relate to the COVID-19 antigen testing business.

 

Our sources of capital in the past have included the sale of equity securities, which include common stock sold in private transactions to our executive officers or existing shareholders, capital leases and short-term and long-term debts. We expect to finance future acquisitions through a combination of the foregoing. While we believe that existing shareholders and our officers and directors will continue to provide the additional cash to make acquisitions and to meet our obligations as they become due or that we will obtain external financing, there can be no assurance that we will be able to raise such additional capital resources on satisfactory terms. We believe that our current cash and other sources of liquidity discussed below are adequate to support operations for at least the next 12 months.

 

Product

 

Images of our product are shown below:

 

   

 

 

 

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Sales and Marketing.

 

Our main customer is major distributor of personal hygiene products into the market. The distributor handles all retail market channels, which minimize our sales and marketing costs. Similar model will be applied when expanding to other overseas markets.

 

Major Customers.

 

All of our major customers are located in Hong Kong. During the years ended March 31, 2021 and 2020, the following customer accounted for 10% or more of our total net revenues:

 

    Year ended March 31, 2021     March 31, 2021  
Customer   Revenues     Percentage
of revenues
    Accounts
receivable
 
Uni-Alliance Limited   $ 172,879       82%     $ 1,592  
                         

For the year ended March 31, 2020, there were no customers.

 

Generally, we are not a party to any long-term agreements with our customers. From time to time, we may enter into long term contracts with major customers and subcontract the performance of the performance of the contract to corresponding network partner according to the price and area.

 

Major Suppliers/Vendors.

 

For the year ended March 31, 2021 and 2020, the following vendors represented more than 10% of the Company’s cost of revenues.

 

Supplier name   Year ended March 31, 2021     March 31, 2021  
    Cost of revenues     Percentage
of cost of revenues
    Accounts
payable
 
Phase Scientific International Limited   $ 165,956       100%     $ 1,397  
                         

For the year ended March 31, 2020, there were no suppliers.

 

Seasonality.

 

Our business is highly dependent upon the COVID-19 pandemic in Hong Kong and China. In Hong Kong and China, we expect the needs for COVID-19 screening and testing will continue for at least two more years. More demands of pre-screening is expected when the China and Hong Kong borders are re-opened for travelers, while a more efficient screening test is required to prevent another community breakout and spread of the virus.

 

 

 

 

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Insurance.

 

We maintain certain insurance in accordance with customary industry practices in Hong Kong. Under Hong Kong law it is a requirement that all employers in the city must purchase Employee's Compensation Insurance to cover their liability in the event that their staff suffers an injury or illness during the normal course of their work. ENMI maintains Employee’s Compensation Insurance, vehicle insurance and third party risks insurance for its business purposes.

 

CORPORATE INFORMATION

 

Our principal executive and registered offices are located at Unit A, 13/F, Gee Luen Factory Building, 316-318 Kwun Tong Road, Kowloon, Hong Kong, telephone number +852 2621 3288.

 

INTELLECTUAL PROPERTY AND PATENTS

 

We expect to rely on, trade secrets, copyrights, know-how, trademarks, license agreements and contractual provisions to establish our intellectual property rights and protect our brand and services. These legal means, however, afford only limited protection and may not adequately protect our rights. Litigation may be necessary in the future to enforce our intellectual property rights, protect our trade secrets or determine the validity and scope of the proprietary rights of others. Litigation could result in substantial costs and diversion of resources and management attention.

  

In addition, the laws of Hong Kong and the PRC may not protect our brand and services and intellectual property to the same extent as U.S. laws, if at all. We may be unable to fully protect our intellectual property rights in these countries.

 

We intend to seek the widest possible protection for significant product and process developments in our major markets through a combination of trade secrets, trademarks, copyrights and patents, if applicable. We anticipate that the form of protection will vary depending upon the level of protection afforded by the particular jurisdiction. We expect that our revenue will be derived principally from our operations in Hong Kong and China where intellectual property protection may be limited and difficult to enforce. In such instances, we may seek protection of our intellectual property through measures taken to increase the confidentiality of our findings.

 

We intend to register trademarks as a means of protecting the brand names of our companies and products. We intend protect our trademarks against infringement and also seek to register design protection where appropriate.

 

We rely on trade secrets and unpatentable know-how that we seek to protect, in part, by confidentiality agreements. We expect that, where applicable, we will require our employees to execute confidentiality agreements upon the commencement of employment with us. We expect these agreements to provide that all confidential information developed or made known to the individual during the course of the individual's relationship with us is to be kept confidential and not disclosed to third parties except in specific limited circumstances. The agreements will also provide that all inventions conceived by the individual while rendering services to us shall be assigned to us as the exclusive property of our company. There can be no assurance, however, that all persons who we desire to sign such agreements will sign, or if they do, that these agreements will not be breached, that we would have adequate remedies for any breach, or that our trade secrets or unpatentable know-how will not otherwise become known or be independently developed by competitors.  

 

COMPETITION

 

Our INDICAID product has been endorsed and used by the Hong Kong government and is currently well established with user communities. As such our competition in the COVID-19 rapid antigen test market is currently limited. Our competitive landscape may be significantly altered if new testing technology is introduced into the market by third parties. We may face some prospective competitors when we expand to overseas markets, who have greater financial resources, broader product and service offerings, longer operating histories, larger customer base and greater brand recognition, or they are controlled or subsidized by foreign governments, which will enable them to raise capital and enter into strategic relationships more easily. We believe that we compete on the basis of a number of factors, including business model, operational capabilities, pricing and service quality.

 

 

 

 

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EMPLOYEES

 

We have the following full time employees located at Hong Kong as set forth below:

 

Executive officers     1  
Operation     1  
Administration Staff      
Total     2  

 

We are required to contribute to the pension fund for all eligible employees in Hong Kong between the ages of eighteen and sixty five. We are required to contribute a specified percentage of the participant’s income based on their ages and wage level. For the years ended March 31, 2021 and 2020, the pension contributions by us were $387 and $0, respectively. We have not experienced any significant labor disputes or any difficulties in recruiting staff for our operations.

 

GOVERNMENT AND INDUSTRY REGULATIONS

 

Our business is located in Hong Kong and is subject to the laws and regulations of Hong Kong governing businesses concerning, in particular labor, occupational safety and health, contracts, tort and intellectual property. Furthermore, we need to comply with the rules and regulations of Hong Kong governing the data usage and regular terms of service applicable to our potential customers or clients. As the information of our potential customers or clients is preserved in Hong Kong, we need to comply with the Hong Kong Personal Data (Privacy) Ordinance.

 

Hong Kong

 

The INDICAID COVID-19 Rapid Antigen Test product is endorsed by the Hong Kong government and is used by all government tests, but since the product is still consider new, accuracy of the product may still be challenged and may face future regulatory requirements.

 

The Employment Ordinance is the main piece of legislation governing conditions of employment in Hong Kong since 1968. It covers a comprehensive range of employment protection and benefits for employees, including Wage Protection, Rest Days, Holidays with Pay, Paid Annual Leave, Sickness Allowance, Maternity Protection, Statutory Paternity Leave, Severance Payment, Long Service Payment, Employment Protection, Termination of Employment Contract, Protection Against Anti-Union Discrimination. In addition, every employer must take out employees’ compensation insurance to protect the claims made by employees in respect of accidents occurred during the course of their employment.

 

An employer must also comply with all legal obligations under the Mandatory Provident Fund Schemes Ordinance, (CAP485). These include enrolling all qualifying employees in MPF schemes and making MPF contributions for them. Except for exempt persons, employer should enroll both full-time and part-time employees who are at least 18 but under 65 years of age in an MPF scheme within the first 60 days of employment. The 60-day employment rule does not apply to casual employees in the construction and catering industries. Pursuant to the said Ordinance, we are required to make MPF contributions for our Hong Kong employees once every contribution period (generally the wage period within 1 month). Employers and employees are each required to make regular mandatory contributions of 5% of the employee’s relevant income to an MPF scheme, subject to the minimum and maximum relevant income levels. For a monthly-paid employee, the minimum and maximum relevant income levels are $1,547 and $3,846, respectively.

 

 

 

 

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REPORTS TO SECURITY HOLDERS

 

Upon the effective date of this Registration Statement, we will become subject to the informational requirements of the Securities Exchange Act of 1934, as amended, and accordingly, will file current and periodic reports, proxy statements and other information with the Securities and Exchange Commission, or the Commission. Information that the Company previously publicly disclosed was made through the OTC Disclosure and News Service and are available on the OTC Markets Group’s website at www.otcmarkets.com. With respect to disclosures filed or furnished to the Commission, you may obtain copies of our prior and future reports from the Commission’s Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549, or on the SEC's website, at www.sec.gov. You may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. We currently do not have an internet website, but will also make available free of charge electronic copies of our filings upon request.

 

 

Item 1A. Risk Factors

 

The following information sets forth risk factors that could cause our actual results to differ materially from those contained in forward-looking statements we have made in this registration statement and those we may make from time to time. You should carefully consider the risks described below, in addition to the other information contained in this registration statement, before making an investment decision. Our business, financial condition or results of operations could be harmed by any of these risks. The risks and uncertainties described below are not the only ones we face. Additional risks not presently known to us or other factors not perceived by us to present significant risks to our business at this time also may impair our business operations.

 

Risks Related to Our Business and Industry

 

We are a single product company and our product, the INDICAID COVID-19 Rapid Antigen Test, is new and may be subject to challenge as new technologies and COVID-19 variants develop.

 

We are one of the authorized Hong Kong distributors of the INDICAID COVID-19 Rapid Antigen Test which is endorsed by the Hong Kong government and used by its agencies. The test, however, is relatively new, and given the rise of multiple COVID-19 variants, the accuracy of our product may be adversely affected and challenged. If new technologies or other testing products are developed which provide better accuracy and efficiency or lower costs, our market dominance and financial results may be materially and adversely affected.

 

Our plan to expand into additional markets may be affected by global government health policies.

 

Our overseas expansion plan is highly dependent upon the policies of regional governments regarding the need for quick pre-screening tests of COVID-19. If regional governments determine that the urgency for community test and detection of COVID-19 carriers has abated, the need for our product may correspondingly be reduced. As such our financial results may be adversely affected.

 

If we become directly subject to the recent scrutiny, criticism and negative publicity involving U.S.-listed Chinese companies, we may have to expend significant resources to investigate and resolve the matter which could harm our business operations, stock price and reputation and could result in a loss of your investment in our stock, especially if such matter cannot be addressed and resolved favorably.

 

Recently, U.S. public companies that have substantially all of their operations in Hong Kong and China have been the subject of intense scrutiny, criticism and negative publicity by investors, financial commentators and regulatory agencies, such as the SEC. Much of the scrutiny, criticism and negative publicity has centered around the effects of US-China governmental policies and political climate, financial and accounting irregularities and mistakes, a lack of effective internal controls over financial accounting, inadequate corporate governance policies or a lack of adherence thereto and, in many cases, allegations of fraud. As a result of the scrutiny, criticism and negative publicity, the publicly traded stock of many U.S. listed Chinese companies has sharply decreased in value and, in some cases, has become virtually worthless. Many of these companies are now subject to shareholder lawsuits and SEC enforcement actions, and are conducting internal and external investigations into the allegations. It is not clear what effect this sector-wide scrutiny, criticism and negative publicity will have on our Company, our business and our stock price. If we become the subject of any unfavorable allegations, whether such allegations are proven to be true or untrue, we will have to expend significant resources to investigate such allegations and/or defend our company. This situation will be costly and time consuming and distract our management from growing our company. If such allegations are not proven to be groundless, our company and business operations will be severely negatively affected and your investment in our stock could be rendered worthless.

 

 

 

 

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The Chinese government exerts substantial influence over the manner in which we must conduct our business activities.

 

The PRC government has exercised and continues to exercise substantial control over virtually every sector of the Chinese economy through regulation and state ownership. We expect the Hong Kong legal system to rapidly evolve in the near future and may become closer aligned with legal system in China. As such, the interpretations of many laws, regulations and rules may not always be uniform and the enforcement of these laws, regulations and rules may involve uncertainties for you and us. Our ability to operate in Hong Kong may be harmed by these changes in its laws and regulations, including those relating to taxation, import and export tariffs, healthcare regulations, environmental regulations, land use and property ownership rights, and other matters. Accordingly, government actions in the future, including any decision not to continue to support recent economic reforms and to return to a more centrally planned economy or regional or local variations in the implementation of economic policies, could have a significant effect on economic conditions in Hong Kong or particular regions thereof, and could require us to divest ourselves of any interest we then hold in Hong Kong properties or joint ventures. Any divesture or similar action could result in a material adverse effect on us and on your investment in us.

 

Investors may experience difficulties in effecting service of legal process, enforcing foreign judgments or bringing original actions in Hong Kong based upon U.S. laws, including the federal securities laws or other foreign laws against us or our management.

 

All of our current operations are conducted in Hong Kong. Moreover, most of our current directors and officers are nationals or residents of Hong Kong. All or a substantial portion of the assets of these persons are located outside the United States and in the Hong Kong. As a result, it may not be possible to effect service of process within the United States or elsewhere outside Hong Kong upon these persons. In addition, uncertainty exists as to whether the courts of Hong Kong would recognize or enforce judgments of U.S. courts obtained against us or such officers and/or directors predicated upon the civil liability provisions of the securities laws of the United States or any state thereof, or be competent to hear original actions brought in Hong Kong against us or such persons predicated upon the securities laws of the United States or any state thereof.

 

We are indebted to certain of our executive officers and directors in the approximate amount of US$63,887.

 

As of March 31, 2021, we are indebted to Sally Lo, our executive officers and directors, in an approximate amount of $63,887. We may not be able to generate sufficient cash flow to repay these loans. If we issue additional securities as repayment, our shareholders may experience significant dilution. Additionally, loan repayment before achievement of profitability may cause us to delay implementing our business plans to expand.

 

We are also subject to other risks and uncertainties that affect many other businesses, including:

 

  · increasing costs, the volatility of costs and funding requirements and other legal mandates for employee benefits, especially pension and healthcare benefits;
  · the increasing costs of compliance with federal, state and foreign governmental agency mandates (including the Foreign Corrupt Practices Act) and defending against inappropriate or unjustified enforcement or other actions by such agencies;
  · the impact of any international conflicts on the U.S. and global economies in general, the transportation industry or us in particular, and what effects these events will have on our costs or the demand for our services;
  · any impacts on our business resulting from new domestic or international government laws and regulation;
  · market acceptance of our new service and growth initiatives;
  · the impact of technology developments on our operations and on demand for our services;
  · governmental underinvestment in transportation infrastructure, which could increase our costs and adversely impact our service levels due to traffic congestion or sub-optimal routing of our vehicles;
  · widespread outbreak of an illness or any other communicable disease, or any other public health crisis; and
  · availability of financing on terms acceptable to our ability to maintain our current credit ratings, especially given the capital intensity of our operations.

 

 

 

 

 

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If we are unable to protect the confidentiality of our trade secrets, our business and competitive position would be harmed.

 

We may rely on trade secrets, including unpatented know-how, technology and other proprietary information, to maintain our competitive position. However, trade secrets are difficult to protect. We limit disclosure of such trade secrets where possible but we also seek to protect these trade secrets, in part, by entering into non-disclosure and confidentiality agreements with parties who do have access to them, such as our employees, contract manufacturers, consultants, advisors and other third parties. Despite these efforts, any of these parties may breach the agreements and may unintentionally or willfully disclose our proprietary information, including our trade secrets, and we may not be able to obtain adequate remedies for such breaches. Enforcing a claim that a party illegally disclosed or misappropriated a trade secret is difficult, expensive and time-consuming, and the outcome is unpredictable. In addition, some courts inside and outside the United States are less willing or unwilling to protect trade secrets. Moreover, if any of our trade secrets were to be lawfully obtained or independently developed by a competitor, we would have no right to prevent them, or those to whom they communicate it, from using that technology or information to compete with us. If any of our trade secrets were to be disclosed to or independently developed by a competitor, our competitive position would be harmed.

 

Risks Related to Our Finances and Capital Requirements

 

We will need additional funding and may be unable to raise capital when needed, which would force us to delay any business expansions or acquisitions.

 

Our business plan contemplates the expansion of our operations through organic means and through acquisitions or investments in additional complementary businesses, products and technologies. While we currently have no commitments or agreements relating to any of these types of transactions, we do not generate sufficient revenue from operations to finance expansion or acquisition needs. We expect to finance such future cash needs through public or private equity offerings, debt financings or corporate collaboration and licensing arrangements, as well as through interest income earned on cash and investment balances. We cannot be certain that additional funding will be available on acceptable terms, or at all. If adequate funds are not available, we may be required to delay, reduce the scope of or eliminate one or more of our development programs or our commercialization efforts.

 

Raising additional capital may cause dilution to our existing stockholders, restrict our operations or require us to relinquish proprietary rights.

 

Until such time, if ever, as we can generate substantial revenue, we expect to finance our cash needs through a combination of equity offerings, debt financings, grants and license and development agreements in connection with any collaborations. To the extent that we raise additional capital through the sale of equity or convertible debt securities, your ownership interest will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect your rights as a stockholder. Debt financing and preferred equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends.

 

If we raise additional funds through collaborations, strategic alliances or marketing, distribution or licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates or grant licenses on terms that may not be favorable to us. If we are unable to raise additional funds through equity or debt financings when needed, we may be required to delay, limit, reduce or terminate our product development or future commercialization efforts or grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves.

  

Risks Relating to Securities Markets and Investment in Our Stock

 

There is presently none and there may not ever be an active market for our Common Stock. There are restrictions on the transferability of these securities.

 

There currently is no market for our Common Stock and, except as otherwise described herein, we have no plans to file any registration statement or otherwise attempt to create a market for the shares. Even if an active market develops for the shares, Rule 144, which provides for an exemption from the registration requirements under the Securities Act under certain conditions, requires, among other conditions, a holding period prior to the resale (in limited amounts) of securities acquired in a non-public offering without having to satisfy the registration requirements under the Securities Act. There can be no assurance that we will fulfill any reporting requirements in the future under the Exchange Act or disseminate to the public any current financial or other information concerning us, as is required by Rule 144 as part of the conditions of its availability.

 

 

 

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Our common stock is subject to the "penny stock" rules of the sec and the trading market in our securities is limited, which makes transactions in our stock cumbersome and may reduce the value of an investment in our stock.

 

Under U.S. federal securities legislation, our common stock will constitute "penny stock". Penny stock is any equity security that has a market price of less than $5.00 per share, subject to certain exceptions. For any transaction involving a penny stock, unless exempt, the rules require that a broker or dealer approve a potential investor's account for transactions in penny stocks, and the broker or dealer receive from the investor a written agreement to the transaction, setting forth the identity and quantity of the penny stock to be purchased. In order to approve an investor's account for transactions in penny stocks, the broker or dealer must obtain financial information and investment experience objectives of the person, and make a reasonable determination that the transactions in penny stocks are suitable for that person and the person has sufficient knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks. The broker or dealer must also deliver, prior to any transaction in a penny stock, a disclosure schedule prepared by the Commission relating to the penny stock market, which, in highlight form sets forth the basis on which the broker or dealer made the suitability determination. Brokers may be less willing to execute transactions in securities subject to the "penny stock" rules. This may make it more difficult for investors to dispose of our common stock and cause a decline in the market value of our stock. Disclosure also has to be made about the risks of investing in penny stocks in both public offerings and in secondary trading and about the commissions payable to both the broker-dealer and the registered representative, current quotations for the securities and the rights and remedies available to an investor in cases of fraud in penny stock transactions. Finally, monthly statements have to be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stocks.

 

Our insiders beneficially own a significant portion of our stock, and accordingly, may have control over stockholder matters, our business and management.

 

As of the date of this prospectus, Sally Lo, our sole executive officer and director, and Daily Success Development Limited, our major stockholder, collectively beneficially own 3,600000,000 shares of our common stock, or approximately 86.61% of our issued and outstanding shares of common stock. In addition, Ms. Lo and Daily Success Development Limited also own approximately 86.54% of our issued and outstanding Series A Convertible Preferred Stock and 100% of our issued and outstanding Series B Convertible Preferred Stock.  As a result, our management team will have significant influence to:

 

·   Elect or defeat the election of our directors;

 

·   Amend or prevent amendment of our articles of incorporation or bylaws;

 

·   effect or prevent a merger, sale of assets or other corporate transaction; and

 

·   affect the outcome of any other matter submitted to the stockholders for vote.

 

Moreover, because of the significant ownership position held by our management team, new investors may not be able to effect a change in our business or management, and therefore, shareholders would have no recourse as a result of decisions made by management. In addition, sales of significant amounts of shares held by our management team, or the prospect of these sales, could adversely affect the market price of our common stock. Our management team’s stock ownership may discourage a potential acquirer from making a tender offer or otherwise attempting to obtain control of us, which in turn could reduce our stock price or prevent our stockholders from realizing a premium over our stock price. 

 

State securities laws may limit secondary trading, which may restrict the states in which and conditions under which you can sell the shares offered by this registration statement.

 

Secondary trading in common stock sold in this offering will not be possible in any state until the common stock is qualified for sale under the applicable securities laws of the state or there is confirmation that an exemption, such as listing in certain recognized securities manuals, is available for secondary trading in the state. If we fail to register or qualify, or to obtain or verify an exemption for the secondary trading of, the common stock in any particular state, the common stock could not be offered or sold to, or purchased by, a resident of that state. In the event that a significant number of states refuse to permit secondary trading in our common stock, the liquidity for the common stock could be significantly impacted thus causing you to realize a loss on your investment.

 

 

 

 

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The Company does not intend to seek registration or qualification of its shares of common stock the subject of this offering in any State or territory of the United States. Aside from a "secondary trading" exemption, other exemptions under state law and the laws of US territories may be available to purchasers of the shares of common stock sold in this offering,

 

Anti-takeover effects of certain provisions of Nevada state law hinder a potential takeover of our company. Though not now, in the future we may become subject to Nevada's control share law. A corporation is subject to Nevada's control share law if it has more than 200 stockholders, at least 100 of whom are stockholders of record and residents of Nevada, and it does business in Nevada or through an affiliated corporation. The law focuses on the acquisition of a "controlling interest" which means the ownership of outstanding voting shares sufficient, but for the control share law, to enable the acquiring person to exercise the following proportions of the voting power of the corporation in the election of directors:

 

(i) one-fifth or more but less than one-third, (ii) one-third or more but less than a majority, or (iii) a majority or more. The ability to exercise such voting power may be direct or indirect, as well as individual or in association with others.

  

The effect of the control share law is that the acquiring person, and those acting in association with it, obtains only such voting rights in the control shares as are conferred by a resolution of the stockholders of the corporation, approved at a special or annual meeting of stockholders. The control share law contemplates that voting rights will be considered only once by the other stockholders. Thus, there is no authority to strip voting rights from the control shares of an acquiring person once those rights have been approved. If the stockholders do not grant voting rights to the control shares acquired by an acquiring person, those shares do not become permanent non-voting shares. The acquiring person is free to sell its shares to others. If the buyers of those shares themselves do not acquire a controlling interest, their shares do not become governed by the control share law.

  

If control shares are accorded full voting rights and the acquiring person has acquired control shares with a majority or more of the voting power, any stockholder of record, other than an acquiring person, who has not voted in favor of approval of voting rights is entitled to demand fair value for such stockholder's shares. 

 

In addition to the control share law, Nevada has a business combination law which prohibits certain business combinations between Nevada corporations and "interested stockholders" for three years after the "interested stockholder" first becomes an "interested stockholder," unless the corporation's board of directors approves the combination in advance. For purposes of Nevada law, an "interested stockholder" is any person who is (i) the beneficial owner, directly or indirectly, of ten percent or more of the voting power of the outstanding voting shares of the corporation, or (ii) an affiliate or associate of the corporation and at any time within the three previous years was the beneficial owner, directly or indirectly, of ten percent or more of the voting power of the then outstanding shares of the corporation. The definition of the term "business combination" is sufficiently broad to cover virtually any kind of transaction that would allow a potential acquirer to use the corporation's assets to finance the acquisition or otherwise to benefit its own interests rather than the interests of the corporation and its other stockholders.

 

The effect of Nevada's business combination law is to potentially discourage parties interested in taking control of our company from doing so if it cannot obtain the approval of our board of directors.

 

Because we do not intend to pay any cash dividends on our common stock, our stockholders will not be able to receive a return on their shares unless they sell them. We intend to retain any future earnings to finance the development and expansion of our business. We do not anticipate paying any cash dividends on our common stock in the foreseeable future. Unless we pay dividends, our stockholders will not be able to receive a return on their shares unless they sell them. Stockholders may never be able to sell shares when desired. Before you invest in our securities, you should be aware that there are various risks. You should consider carefully these risk factors, together with all of the other information included in this annual report before you decide to purchase our securities. If any of the following risks and uncertainties develop into actual events, our business, financial condition or results of operations could be materially adversely affected.

 

 

 

 

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Our stock may be subject to substantial price and volume fluctuations due to a number of factors, many of which are beyond our control and may prevent our stockholders from reselling our Common Stock at a profit. The market prices for securities of logistics companies may be volatile and may fluctuate substantially due to many factors, including:

 

  · market conditions in the logistics sectors or the economy as a whole;

 

  · price and volume fluctuations in the overall stock market;

 

  · announcements of the introduction of new products and services by us or our competitors;

 

  · actual fluctuations in our quarterly operating results, and concerns by investors that such fluctuations may occur in the future;

 

  · deviations in our operating results from the estimates of securities analysts or other analyst comments;

 

  · additions or departures of key personnel;

 

  · legislation, including measures affecting e-commerce or infrastructure development; and

 

  · developments concerning current or future strategic collaborations

 

 

Item 2. Financial Information.

 

Management’s Discussion and Analysis of the Results of Operations

 

Forward-Looking Statements

 

Statements in the following discussion and throughout this registration statement that are not historical in nature are “forward-looking statements.” You can identify forward-looking statements by the use of words such as “expect,” “anticipate,” “estimate,” “may,” “will,” “should,” “intend,” “believe,” and similar expressions. Although we believe the expectations reflected in these forward-looking statements are reasonable, such statements are inherently subject to risk and we can give no assurances that our expectations will prove to be correct. Actual results could differ from those described in this registration statement because of numerous factors, many of which are beyond our control. These factors include, without limitation, those described under Item 1A “Risk Factors.” We undertake no obligation to update these forward-looking statements to reflect events or circumstances after the date of this registration statement or to reflect actual outcomes. Please see “Forward Looking Statements” at the beginning of this Form 10.

 

The following discussion of our financial condition and results of operations should be read in conjunction with our combined and consolidated financial statements and the related notes thereto and other financial information appearing elsewhere in this Form 10.

 

 

 

 

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Overview

 

We are at a development stage company and reported a net profit of $8,700 and $0 for the years ended March 31, 2021 and 2020, respectively. We had current assets of $74,360 and current liabilities of $65,670 as of March 31, 2021. As of March 31, 2020, our current assets and current liabilities were $0.

 

Results of Operations

 

Comparison of the fiscal years ended March 31, 2021 and March 31, 2020

  

The following table sets forth certain operational data for the years indicated:

 

    Fiscal Years Ended March 31,  
    2021     2020  
Revenues   $ 211,549     $  
Cost of revenue     (165,956 )      
Gross profit     45,593        
General and administrative expenses     (36,893 )      
Profit from operation     8,700        
Other expense, net            
Income tax expense            
Net profit     8,700        

  

Revenue. We generated revenues of $211,549 and $0 for the years ended March 31, 2021 and 2020. We commenced operations from November 2020.

 

During the twelve months ended March 31, 2021, and 2020, the following customers accounted for 10% or more of our total net revenues:

 

Customer name   Year ended March 31, 2021     March 31, 2021  
    Revenues     Percentage
of revenues
    Trade accounts
receivable
 
Uni-Alliance Limited   $ 172,879       82%     $ 1,592  
                         

For the year ended March 31, 2020, there were no customers.

 

Cost of Revenue. Cost of revenue for the years ended March 31, 2021 and 2020, was $165,956 and $0, respectively. We commenced operations from November 2020.

 

During the twelve months ended March 31, 2021, and 2020, the following suppliers accounted for 10% or more of our total net cost of revenue:

 

Supplier name   Year ended March 31, 2021     March 31, 2021  
    Cost of Revenues     Percentage
of cost of revenues
    Trade accounts
payable
 
Phase Scientific International Limited    $ 165,956       100%      $ 1,397  
                         

 

 

 

 

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For the year ended March 31, 2020, there were no suppliers.

 

Gross Profit. We achieved a gross profit of $45,593 and $0 for the years ended March 31, 2021 and 2020, respectively.

We commenced operations from November 2020.

 

  

General and Administrative Expenses (“G&A”). We incurred G&A expenses of $36,893 and $0 for the years ended March 31, 2021 and 2020, respectively. The increase in G&A is primarily attributable to the employment and other expenses.

 

Income Tax Expense. Our income tax expenses for the years ended March 31, 2021 and 2020 were $0.

 

Liquidity and Capital Resources

 

We have never paid dividends on our Common Stock. Our present policy is to apply cash to investments in product development, acquisitions or expansion; consequently, we do not expect to pay dividends on Common Stock in the foreseeable future.

 

    March 31, 2021     March 31, 2020  
Net cash generated from operating activities   $ 8,891     $  
Net cash (used in) investing activities            
Net cash generated from financing activities     63,887        

 

Net Cash Generated From Operating Activities.

 

For the year ended March 31, 2021, net cash generated from operating activities was $8,891, which consisted primarily of a net profit of $8,700, an increase in prepayments and other receivables of $1,592 and offset by an increase in accrued liabilities and other payables of $1,783.

 

For the year ended March 31, 2020, no net cash was provided by operating activities.

 

We expect to continue to rely on cash generated through financing from our existing shareholders and private placements of our securities, however, to finance our operations and future acquisitions.

  

Net Cash Used In Investing Activities.

 

For the year ended March 31, 2021, no net cash was provided by investing activities.

 

For the year ended March 31, 2020, no net cash was provided by investing activities.

 

Net Cash Used In Financing Activities.

 

For the year ended March 31, 2020, net cash generated from financing activities was $63,887 consisting of advances from a director.

 

 

 

 

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For the year ended March 31, 2020, no net cash was provided by financing activities.

 

Off-Balance Sheet Arrangements

 

We are not party to any off-balance sheet transactions. We have no guarantees or obligations other than those which arise out of normal business operations.

 

Contractual Obligations and Commercial Commitments

 

We had the following contractual obligations and commercial commitments as of March 31, 2021:

 

Contractual Obligations   Total     Less than 1
Year
    1-3 Years     3-5 Years     More than 5
Years
 
    $     $     $     $     $  
Amounts due to related parties   $ 63,887     $ 63,887     $     $     $  
Commercial commitments                              
Bank loan repayment                              
Total obligations   $ 63,887     $ 63,887     $     $     $  

 

 

Critical Accounting Policies and Estimates

 

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires our management to make assumptions, estimates and judgments that affect the amounts reported, including the notes thereto, and related disclosures of commitments and contingencies, if any. We have identified certain accounting policies that are significant to the preparation of our financial statements. These accounting policies are important for an understanding of our financial condition and results of operations. Critical accounting policies are those that are most important to the presentation of our financial condition and results of operations and require management's subjective or complex judgment, often as a result of the need to make estimates about the effect of matters that are inherently uncertain and may change in subsequent periods. Certain accounting estimates are particularly sensitive because of their significance to financial statements and because of the possibility that future events affecting the estimate may differ significantly from management's current judgments. We believe the following accounting policies are critical in the preparation of our financial statements.

 

l Use of estimates and assumptions

 

In preparing these combined and consolidated financial statements, management makes estimates and assumptions that affect the reported amounts of assets and liabilities in the balance sheet and revenues and expenses during the years reported. Actual results may differ from these estimates.

 

l Basis of consolidation

 

The combined and consolidated financial statements include the accounts of ENMI and its subsidiaries. All significant inter-company balances and transactions within the Company have been eliminated upon consolidation.

 

 

 

 

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l Cash and cash equivalents

 

Cash and cash equivalents are carried at cost and represent cash on hand, demand deposits placed with banks or other financial institutions and all highly liquid investments with an original maturity of three months or less as of the purchase date of such investments.

 

l Revenue recognition

 

The Company adopted Accounting Standards Update ("ASU") No. 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”) using the full retrospective transition method. The Company's adoption of ASU 2014-09 did not have a material impact on the amount and timing of revenue recognized in its financial statements.

 

Under ASU 2014-09, the Company recognizes revenue when control of the promised goods or services is transferred to customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services.

 

The Company applies the following five steps in order to determine the appropriate amount of revenue to be recognized as it fulfills its obligations under each of its agreements:

 

  · identify the contract with a customer;
  · identify the performance obligations in the contract;
  · determine the transaction price;
  · allocate the transaction price to performance obligations in the contract; and
  · recognize revenue as the performance obligation is satisfied.

 

l Cost of revenue

 

Cost of revenue consists primarily of the cost of goods sold, which are directly attributable to the sales of COVID-19 rapid tester products.

 

l Income taxes

 

The Company adopted the ASC 740 Income tax provisions of paragraph 740-10-25-13, which addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the combined and consolidated financial statements. Under paragraph 740-10-25-13, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the combined and consolidated financial statements from such a position should be measured based on the largest benefit that has a greater than fifty percent (50%) likelihood of being realized upon ultimate settlement. Paragraph 740-10-25-13 also provides guidance on de-recognition, classification, interest and penalties on income taxes, accounting in interim periods and requires increased disclosures. The Company had no material adjustments to its liabilities for unrecognized income tax benefits according to the provisions of paragraph 740-10-25-13.

 

The estimated future tax effects of temporary differences, if any, between the tax basis of assets and liabilities are reported in the accompanying balance sheets, as well as tax credit carry-backs and carry-forwards. The Company periodically reviews the recoverability of deferred tax assets recorded on its balance sheets and provides valuation allowances as management deems necessary.

 

 

 

 

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l Uncertain tax positions

 

The Company did not take any uncertain tax positions and had no adjustments to its income tax liabilities or benefits pursuant to the ASC 740 provisions of Section 740-10-25 for the years ended March 31, 2021 and 2020.

 

l Foreign currencies translation

 

Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transaction. Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency using the applicable exchange rates at the balance sheet dates. The resulting exchange differences are recorded in the combined and consolidated statement of operations.

 

The reporting currency of the Company is United States Dollar ("US$") and the accompanying combined and consolidated financial statements have been expressed in US$. In addition, the Company is operating in Hong Kong and maintains its books and record in its local currency, Hong Kong Dollars (“HKD”), which is its functional currency, being the primary currency of the economic environment in which their operations are conducted. In general, for consolidation purposes, assets and liabilities of its subsidiary whose functional currency is not US$ are translated into US$, in accordance with ASC Topic 830-30, “ Translation of Financial Statement”, using the exchange rate on the balance sheet date. Revenues and expenses are translated at average rates prevailing during the period. The gains and losses resulting from translation of financial statements of foreign subsidiary are recorded as a separate component of accumulated other comprehensive income within the statements of changes in stockholder’s equity.

 

Translation of amounts from HKD into US$ has been made at the following exchange rates for the years ended March 31, 2021 and 2020:

 

    March 31, 2021   March 31, 2020
Year-end HKD:US$ exchange rate   0.12862   0.12898
Annualized average HKD:US$ exchange rate   0.12888   0.12856

 

l Comprehensive income

 

ASC Topic 220, “Comprehensive Income”, establishes standards for reporting and display of comprehensive income, its components and accumulated balances. Comprehensive income as defined includes all changes in equity during a period from non-owner sources. Accumulated other comprehensive income, as presented in the accompanying combined and consolidated statements of changes in stockholders’ equity, consists of changes in unrealized gains and losses on translation of functional currencies to presentation currency. This comprehensive income is not included in the computation of income tax expense or benefit.

 

l Segment reporting

 

ASC Topic 280, “Segment Reporting” establishes standards for reporting information about operating segments on a basis consistent with the Company’s internal organization structure as well as information about geographical areas, business segments and major customers in combined and consolidated financial statements. For the years ended March 31, 2021 and 2020, the Company operates in one reportable operating segment in Hong Kong.

 

 

 

 

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l Retirement plan costs

 

Contributions to retirement plans (which are defined contribution plans) are charged to general and administrative expense in the accompanying statements of operation as the related employee service is provided.

 

l Related parties

 

The Company follows the ASC 850-10, Related Party for the identification of related parties and disclosure of related party transactions.

 

Pursuant to section 850-10-20 the related parties include a) affiliates of the Company; b) entities for which investments in their equity securities would be required, absent the election of the fair value option under the Fair Value Option Subsection of section 825–10–15, to be accounted for by the equity method by the investing entity; c) trusts for the benefit of employees, such as pension and Income-sharing trusts that are managed by or under the trusteeship of management; d) principal owners of the Company; e) management of the Company; f) other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests; and g) other parties that can significantly influence the management or operating policies of the transacting parties or that have an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests.

 

The combined and consolidated financial statements shall include disclosures of material related party transactions, other than compensation arrangements, expense allowances, and other similar items in the ordinary course of business. However, disclosure of transactions that are eliminated in the preparation of consolidated or combined financial statements is not required in those statements. The disclosures shall include: a) the nature of the relationship(s) involved; b) a description of the transactions, including transactions to which no amounts or nominal amounts were ascribed, for each of the periods for which income statements are presented, and such other information deemed necessary to an understanding of the effects of the transactions on the financial statements; c) the dollar amounts of transactions for each of the periods for which income statements are presented and the effects of any change in the method of establishing the terms from that used in the preceding period; and d) amount due from or to related parties as of the date of each balance sheet presented and, if not otherwise apparent, the terms and manner of settlement.

 

l Commitments and contingencies

 

The Company follows the ASC 450-20, Commitments to report accounting for contingencies. Certain conditions may exist as of the date the financial statements are issued, which may result in a loss to the Company but which will only be resolved when one or more future events occur or fail to occur. The Company assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or un-asserted claims that may result in such proceedings, the Company evaluates the perceived merits of any legal proceedings or un-asserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein.

 

If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s consolidated financial statements. If the assessment indicates that a potentially material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, and an estimate of the range of possible losses, if determinable and material, would be disclosed.

 

 

 

 

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Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed. Management does not believe, based upon information available at this time that these matters will have a material adverse effect on the Company’s financial position, results of operations or cash flows. However, there is no assurance that such matters will not materially and adversely affect the Company’s business, financial position, and results of operations or cash flows.

 

l Fair value of financial instruments

 

The Company follows paragraph 825-10-50-10 of the FASB Accounting Standards Codification for disclosures about fair value of its financial instruments and has adopted paragraph 820-10-35-37 of the FASB Accounting Standards Codification (“Paragraph 820-10-35-37”) to measure the fair value of its financial instruments. Paragraph 820-10-35-37 of the FASB Accounting Standards Codification establishes a framework for measuring fair value in generally accepted accounting principles (GAAP), and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, paragraph 820-10-35-37 of the FASB Accounting Standards Codification establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The three (3) levels of fair value hierarchy defined by paragraph 820-10-35-37 of the FASB Accounting Standards Codification are described below:

 

Level 1   Quoted market prices available in active markets for identical assets or liabilities as of the reporting date.
     
Level 2   Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date.
     
Level 3   Pricing inputs that are generally observable inputs and not corroborated by market data.

 

Financial assets are considered Level 3 when their fair values are determined using pricing models, discounted cash flow methodologies or similar techniques and at least one significant model assumption or input is unobservable.

 

The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. If the inputs used to measure the financial assets and liabilities fall within more than one level described above, the categorization is based on the lowest level input that is significant to the fair value measurement of the instrument.

 

Recently Issued Accounting Pronouncements

 

In January 2017, the Financial Accounting Standard Board (“FASB”) issued ASU 2017-04,  Intangibles - Goodwill and Other (Topic 350) : Simplifying the Accounting for Goodwill Impairment (“ASU 2017-04”). ASU 2017-04 removes Step 2 of the goodwill impairment test, which requires a hypothetical purchase price allocation. A goodwill impairment will now be the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. This standard, which will be effective for the Company beginning in the first quarter of fiscal year 2020, is required to be applied prospectively. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017, which resulted in no impact to the Company's Consolidated Financial Statements.

 

In June 2020, the FASB issued ASU 2020-07,  Improvements to Nonemployee Share-Based Payment Accounting (“ASU 2020-07”), which supersedes ASC 505-50 and expands the scope of ASC 718 to include all share-based payments arrangements related to the acquisition of goods and services from both employees and nonemployees. For public companies, the amendments are effective for annual reporting periods beginning after December 15, 2020, including interim periods within those annual periods. Early adoption is permitted, but no earlier than a company's adoption date of ASC 606. The Company does not believe that the adoption of ASU 2020-07 will have a material impact on the Company’s consolidated financial statements.

 

The Company has reviewed all recently issued, but not yet effective, accounting pronouncements and does not believe that the future adoption of any such pronouncements may be expected to cause a material impact on its financial condition or the results of its operations.

 

Item 3. Properties.

 

Our corporate and executive office is located at Unit A, 13/F, Gee Luen Factory Building, 316-318 Kwun Tong Road, Kowloon, Hong Kong, telephone number +852 2621 3288. The premises are provided free of charge by our sole executive officer, Sally Lo. We believe that our existing facilities are adequate to meet our current requirements.

 

 

 

 

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Item 4. Security Ownership of Certain Beneficial Owners and Management.

 

The following table sets forth certain information with respect to the beneficial ownership of our common stock, as of July 26, 2021, for: (i) each of our named executive officers; (ii) each of our directors; (iii) all of our current executive officers and directors as a group; and (iv) each person, or group of affiliated persons, known by us to be the beneficial owner of more than 5% of our outstanding shares of common stock.

 

Except as indicated in footnotes to this table, we believe that the stockholders named in this table will have sole voting and investment power with respect to all shares of common stock shown to be beneficially owned by them, based on information provided to us by such stockholders. Unless otherwise indicated, the address for each director and executive officer listed is: c/o Energy Management International, Inc., Unit A, 13/F, Gee Luen Factory Building, 316-318 Kwun Tong Road, Kowloon, Hong Kong.

 

    Common Stock Beneficially Owned  
Name and Address of Beneficial Owner   Number of Shares
and Nature of
Beneficial
Ownership
    Percentage of
Total Common
Equity (1)
 
Sally Kin Yi LO (2)     1,260,000,000       30.31%  
                 
All executive officers and directors as a Group (1 person)     1,260,000,000       30.31%  
                 
5% or Greater Stockholders:                
Daily Success Development Limited (3)     2,340,000,000       56.30%  

 

(1)   Applicable percentage ownership is based on 4,156,545,807 shares of common stock outstanding as of July 30, 2021, together with securities exercisable or convertible into shares of common stock within 60 days of July 30, 2021. Beneficial ownership is determined in accordance with the rules of the Securities and Exchange Commission and generally includes voting or investment power with respect to securities. Shares of common stock that a person has the right to acquire beneficial ownership of upon the exercise or conversion of options, convertible stock, warrants or other securities that are currently exercisable or convertible or that will become exercisable or convertible within 60 days of July 30, 2021, are deemed to be beneficially owned by the person holding such securities for the purpose of computing the number of shares beneficially owned and percentage of ownership of such person, but are not treated as outstanding for the purpose of computing the percentage ownership of any other person.
     
(2)   In addition to the common stock owned, Sally Kin Yi LO also owns 945,000 shares of Series A Preferred Stock, par value $0.002, constituting approximately 30.29% of the issued and outstanding shares of Series A Preferred Stock, and 35,000 shares of Series B Preferred Stock, par value $0.001, constituting 35% of the issued and outstanding shares of Series B Preferred Stock.
     
(3)   In addition to the common stock owned, Daily Success Development Limited also owns 1,755,000 shares of Series A Preferred Stock, par value $0.002, constituting approximately 56.25% of the issued and outstanding Series A Preferred Stock and 65,000 shares of Series B Preferred Stock, par value $0.001, constituting 65% of the issued and outstanding shares of Series B Preferred Stock.  Daily Success Development Limited is beneficially owned by Shing Lee.

 

 

 

 

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Item 5. Directors and Executive Officers.

 

The following table sets forth certain information about our directors and our executive officers.

 

Name    Age    Position 
         
Sally Kin Yi LO   52   Chief Executive Officer and Director

 

Executive Officers and Directors

 

Sally Kin Yi Lo, age 52, has served as our Chief Executive Officer, Chief Financial Officer, Secretary and Director since May 14, 2021. Ms. Lo has deep experience in the commercial real estate and textile management industries. She has served as a general manager of Ho Shun Yi Limited, an antigen testing company since 2020. From 1996 to 2015, she owned, operated and managed Golden Hill Properties Co. Ms. Lo received her post graduate diploma in Management Studies from The Robert Gordon University and her higher diploma in Textile and Clothing Studies from Hong Kong Polytechnic University. Ms. Lo brings to the Board her deep experience in commercial real estate and textiles.

 

Family Relationships

 

Ms. Lo is our sole director and officer. Accordingly, there is no family relationship between any director, executive officer or person nominated to become a director or executive officer.

 

Involvement in Certain Legal Proceedings

 

No executive officer or director is a party in a legal proceeding adverse to us or any of our subsidiaries or has a material interest adverse to us or any of our subsidiaries.

 

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;

 

 

 

 

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  · 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.

 

Composition of our Board of Directors

 

Our Bylaws provide that our board of directors must consist of between one (1) and five (5) directors, and such number of directors within this range may be determined from time to time by resolution of our board of directors or our stockholders. Currently, we have one (1) director. Our Bylaws may be amended, altered or repealed exclusively by our Board of Directors.

 

Our Bylaws also provide that our directors may be removed with or without cause by the affirmative vote of the holders of at least a majority of the shares then entitled to vote at an election of directors. An election of our directors by our stockholders will be determined by a plurality of the votes cast by the stockholders entitled to vote on the election.

 

Our current and future executive officers and significant employees serve at the discretion of our board of directors. Our board of directors may also choose to form certain committees, such as a compensation and an audit committee.

 

Item 6. Executive Compensation.

 

Compensation Philosophy and Objectives

 

Our executive compensation philosophy is to create a long-term direct relationship between pay and our performance. Our executive compensation program is designed to provide a balanced total compensation package over the executive’s career with us. The compensation program objectives are to attract, motivate and retain the qualified executives that help ensure our future success, to provide incentives for increasing our profits by awarding executives when corporate goals are achieved and to align the interests of executives and long-term stockholders. The compensation package of our named executive officers consists of two main elements:

 

  1. base salary for our executives that is competitive relative to the market, and that reflects individual performance, retention and other relevant considerations; and

 

  2. discretionary bonus awards payable in cash and tied to the satisfaction of corporate objectives.

 

 

 

 

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Process for Setting Executive Compensation

 

Until such time as we establish a Compensation Committee, our Board is responsible for developing and overseeing the implementation of our philosophy with respect to the compensation of executives and for monitoring the implementation and results of the compensation philosophy to ensure compensation remains competitive, creates proper incentives to enhance stockholder value and rewards superior performance. We expect to annually review and approve for each named executive officer, and particularly with regard to the Chief Executive Officer, all components of the executive’s compensation. We intend to consider individual and corporate performance measures and actual performance versus such measures to recommend such awards. Additionally, we expect to review and approve the base salary, equity-incentive awards (if any) and any other special or supplemental benefits of the named executive officers.

 

Currently, our sole executive officer serves as our sole director. At such time as when our Chief Executive Officer no longer serves as our sole director, we expect the Chief Executive Officer to periodically provide the Board with an evaluation of each named executive officer’s performance, based on the individual performance goals and objectives developed by the Chief Executive Officer at the beginning of the year, as well as other factors. The Board provides an evaluation for the Chief Executive Officer. These evaluations serve as the bases for bonus recommendations and changes in the compensation arrangements of our named executives.

 

Our Compensation Peer Group

 

We currently engage in informal market analysis in evaluating our executive compensation arrangements. As the Company and its businesses mature, we may retain compensation consultants that will assist us in developing a formal benchmark and selecting a compensation peer group of companies similar to us in size or business for the purpose of comparing executive compensation levels.

 

Program Components

 

Our executive compensation program consists of the following elements:

  

Base Salary

 

Our base salary structure is designed to encourage internal growth, attract and retain new talent, and reward strong leadership that will sustain our growth and profitability. The base salary for each named executive officer reflects our past and current operating profits, the named executive officer’s individual contribution to our success throughout his career, internal pay equity and informal market data regarding comparable positions within similarly situated companies. In determining and setting base salary, the Board considers all of these factors, though it does not assign specific weights to any factor. The Board generally reviews the base salary for each named executive officer on an annual basis. For each of our named executive officers, we review base salary data internally obtained by the Company for comparable executive positions in similarly situated companies to ensure that the base salary rate for each executive is competitive relative to the market.

 

Discretionary Bonus

 

The objectives of our bonus awards are to encourage and reward our employees, including the named executive officers, who contribute to and participate in our success by their ability, industry, leadership, loyalty or exceptional service and to recruit additional executives who will contribute to that success.

 

 

 

 

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Summary Compensation Table

 

The following summary compensation table sets forth the aggregate compensation we paid or accrued during the fiscal years ended March 31, 2021 and 2020 to (i) our Chief Executive Officer (principal executive officer), (ii) our Chief Financial Officer (principal financial officer), (iii) our three most highly compensated executive officers other than the principal executive officer and the principal financial officer who were serving as executive officers on March 31, 2021, whose total compensation was in excess of $100,000, and (iv) up to two additional individuals who would have been within the two-other-most-highly compensated but were not serving as executive officers on March 31, 2021.

 

SUMMARY COMPENSATION TABLE

 

Name and Principal Position   Year     Salary(1)     Bonus     Stock Awards     Option Awards     Non-Equity Incentive Plan Compensation     Change in Pension Value and Non-qualified Deferred Compensation Earnings     All Other Compensation     Total  
Sally Kin Yi LO, CEO, CFO, Secretary and Director(2)   2021
2020
   

$0

$0

   
   

   
   
   
   
   

$0

$0

 

 

________________________

(1)   Ms. Lo joined us as our Chief Executive Officer, Chief Financial Officer, Secretary and Director on May 14, 2021.  

 

Narrative disclosure to Summary Compensation Table

 

Ms. Lo receives no compensation in her capacity as the sole executive officer and director of the Company. As our business develops, we hope to enter into an employment arrangement with Ms. Lo in the future.

 

Equity Awards

 

There are no options, warrants or convertible securities outstanding. At no time during the last fiscal year with respect to any of our executive officers was there:

 

  · any outstanding option or other equity-based award repriced or otherwise materially modified (such as by extension of exercise periods, the change of vesting or forfeiture conditions, the change or elimination of applicable performance criteria, or the change of the bases upon which returns are determined);

 

  · any waiver or modification of any specified performance target, goal or condition to payout with respect to any amount included in non-stock incentive plan compensation or payouts;

 

  · any option or equity grant;

 

  · any non-equity incentive plan award made to a named executive officer;

 

 

 

 

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  · any nonqualified deferred compensation plans including nonqualified defined contribution plans; or

 

  · any payment for any item to be included under All Other Compensation in the Summary Compensation Table.

 

Director Compensation

 

None of our directors received any compensation for their service as a director for the year ended March 31, 2021.

 

Compensation Risk Management

 

Our Board of Directors and human resources staff conducted an assessment of potential risks that may arise from our compensation programs. Based on this assessment, we concluded that our policies and practices do not encourage excessive and unnecessary risk taking that would be reasonably likely to have material adverse effect on the Company. The assessment included our cash incentive programs, which awards non-executives with cash bonuses for punctuality. Our compensation programs are substantially identical among business units, corporate functions and global locations (with modifications to comply with local regulations as appropriate). The risk-mitigating factors considered in this assessment included:

 

  · the alignment of pay philosophy, peer group companies and compensation amounts relative to local competitive practices to support our business objectives; and

 

  · effective balance of cash, short- and long-term performance periods, caps on performance-based award schedules and financial metrics with individual factors and Board and management discretion.

 

Compensation Committee Interlocks and Insider Participation

 

We do not currently have a compensation committee and, for the year ended March 31, 2021, the compensation, if any, of our executive officers was recommended by our Chief Executive Officer and Chairman and such recommendations were approved by our board of directors. None of our executive officers currently serves as a member of the compensation committee or as a director with compensation duties of any entity that has executive officers serving on our board of directors. None of our executive officers has served in such capacity in the past 12 months.

 

 

Item 7. Certain Relationships and Related Transactions, and Director Independence.

 

The following is a summary of each transaction or series of similar transactions since the beginning of the fiscal years ended March 31, 2020, to which it was or is a party and that: (i) the amount involved exceeded or exceeds $120,000 or is greater than 1% of our total assets; and (ii) any of our directors or executive officers, any holder of 5% of our capital stock or any member of their immediate family had or will have a direct or indirect material interest.

 

As of March 31, 2021, the amount due to a related party represented temporary advances made by the Company’s director, Sally Kin Yi LO, which was unsecured, interest-free with no fixed repayment term. Imputed interest on this amount is considered insignificant.

 

During the years ended March 31, 2021 and 2020, the Company has been provided free office space by its director. The management determined that such cost is nominal and did not recognize the rent expense in its financial statements.

 

 

 

 

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Director Independence

 

Though not a listed company, we intend to adhere to the corporate governance standards adopted by NASDAQ. NASDAQ rules require our Board to make an affirmative determination as to the independence of each director. Consistent with these rules, our Board conducted its annual review of director independence. During the review, our Board considered relationships and transactions since incorporation between each director or any member of her immediate family, on the one hand, and us and our subsidiaries and affiliates, on the other hand. The purpose of this review was to determine whether any such relationships or transactions were inconsistent with a determination that the director is independent. Based on this review, our Board determined that none of the current members of our Board are independent directors under the criteria established by NASDAQ and by our Board.

 

Our board of directors has a chairman, Sally Kin Yi LO, who has authority, among other things, to call and preside over board meetings, to set meeting agendas and to determine materials to be distributed to the board of directors. Accordingly, the chairman has substantial ability to shape the work of the board of directors.

 

 

Item 8. Legal Proceedings.

 

We are not involved in any litigation that we believe could have a material adverse effect on our financial position or results of operations. There is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of our executive officers, threatened against or affecting our company or our officers or directors in their capacities as such.

 

 

Item 9. Market Price of and Dividends on the Registrant’s Common Equity and Related Stockholder Matters.

 

Market information

 

There is no established public trading market in our common stock, and a regular trading market may not develop, or if developed, may not be sustained. Our securities are quoted on the OTC Markets Pink under the symbol “ENMI”. As of July 28, 2021, the closing bid price was $0.136 per share.

 

    High     Low  
Fiscal 2022            
Quarter ended 6/30/2021   $ 0.12     $ 0.0064  
                 
Fiscal 2021                
Quarter ended 3/31/2021   $ 0.001     $ 0.0042  
Quarter ended 12/31/2020   $ 0.009     $ 0.0005  
Quarter ended 9/30/2020   $ 0.0018     $ 0.0006  
Quarter ended 6/30/2020   $ 0.0011     $ 0.00001  
                 
Fiscal 2020                
Quarter ended 3/31/2020   $ 0.00001     $ 0.00001  
Quarter ended 12/31/2019   $ 0.00001     $ 0.00001  
Quarter ended 9/30/2019   $ 0.00001     $ 0.00001  
Quarter ended 6/30/2019   $ 0.00001     $ 0.00001  

 

 

 

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Holders

 

As of July 30, 2021, there were 4,156,545,807 shares of Common Stock outstanding held by approximately 76 record holders.

 

Dividends

 

We have never paid dividends on any of our capital stock and currently intend to retain our future earnings, if any, to fund the development and growth of our business. We do not expect to pay any dividends on any of our capital stock in the foreseeable future.

 

Stock Not Registered Under the Securities Act; Rule 144 Eligibility

 

Our Common Stock has not been registered under the Securities Act. Accordingly, the shares of Common Stock issued and outstanding may not be resold absent registration under the Securities Act and applicable state securities laws or an available exemption thereunder.

 

Rule 144

 

Shares of our common stock that are restricted securities will be eligible for resale in compliance with Rule 144 (“Rule 144”) of the Securities Act, subject to the requirements described below. “Restricted Securities,” as defined under Rule 144, were issued and sold by us in reliance on exemptions from the registration requirements of the Securities Act. These shares may be sold in the public market only if registered or if they qualify for an exemption from registration, such as Rule 144. Below is a summary of the requirements for sales of our common stock pursuant to Rule 144, as in effect on the date of this Form 10, after the effectiveness of this Form 10.

 

Affiliates

 

Affiliates will be able to sell their shares under Rule 144 beginning 90 days after the effectiveness of this Form 10, subject to all other requirements of Rule 144. In general, under Rule 144, an affiliate would be entitled to sell within any three-month period a number of shares that does not exceed one percent of the number of shares of our common stock then outstanding. Sales under Rule 144 are also subject to manner of sale provisions and notice requirements and to the availability of current public information about us.

 

Persons who may be deemed to be our affiliates generally include individuals or entities that control, or are controlled by, or are under common control with, us and may include our directors and officers, as well as our significant stockholders.

 

Non-Affiliates

 

For a person who has not been deemed to have been one of our affiliates at any time during the 90 days preceding a sale, sales of our shares of common stock held longer than six months, but less than one year, will be subject only to the current public information requirement and can be sold under Rule 144 beginning 90 days after the effectiveness of this Form 10. A person who is not deemed to have been one of our affiliates at any time during the 90 days preceding a sale, and who has beneficially owned the shares proposed to be sold for at least one year, is entitled to sell the shares without complying with the manner of sale, public information, volume limitation or notice provisions of Rule 144 upon the effectiveness of this Form 10.

 

 

 

 

  27  

 

 

Item 10. Recent Sales of Unregistered Securities.

 

Custodianship

 

In November, 2020, Barbara McIntyre Bauman in her capacity as a stockholder of the Company applied for custodianship of the Company with the District Court sitting in Clark County, Nevada (the “Court”) to revive the Company. Ms. Bauman was ultimately appointed by the Court to serve as custodian of the Company on January 11, 2021. Ms. Bauman served as the custodian until April 19, 2021, when Ms. Bauman’s motion to terminate custodianship of the Company was granted by the Court. A copy of the court records relating to the application and termination of custodianship of the Company are attached as Exhibit 99.1 hereto.

 

In connection with serving as the custodian, Ms. Bauman was appointed to serve as the sole executive officer and director of the Company effective January 11, 2021. Ms. Bauman subsequently returned the Company to Good Standing Status with the Nevada Secretary of State and caused the Company to re-commence posting periodic reports on the OTCMarkets website under the alternative reporting standard. On March 2, 2021, the Company issued to Ms. Bauman 2,000,000,000 shares of common stock for repayment of related party debt totaling $6,610. On February 22, 2021, the Company issued to Ms. Bauman 3,500,000 shares of Series A Preferred Stock, for repayment of the related party debt totaling $4,403. These debts were incurred in connection with reviving and maintaining the Company.

 

On May 13, 2021. Ms. Bauman sold 2,000,000,000 shares of the Company’s common stock and 3,500,000 shares of the Company’s Series A Preferred Stock to Sally Kin Yi LO and Daily Success Development Ltd. for aggregate consideration of Three Hundred Forty Thousand Dollars ($340,000). In connection with the acquisition, Ms. Bauman resigned from her positions as Chief Executive Officer and Chief Operating Officer and Sally Kin Yi LO was appointed to serve as our Chief Executive Officer, Chief Financial Officer, Secretary and director. It is our understanding that the purchasers are not U.S. Persons within the meaning of Regulations S. Accordingly, the Shares are being sold pursuant to the exemption provided by Section 4(a)(2) of the Securities Act of 1933, as amended, Regulation D and Regulation S promulgated thereunder.

 

Effective July 1, 2021, Daily Success Development Limited converted 520,000 shares of its Series A Preferred Stock into 1,040,000,000 shares of Common Stock. As a result, Daily Success Development Limited holds 2,340,000,000 Common Shares (56.30%) and 1,755,000 Series A Preferred Shares (56.25%).

 

Effective July 1, 2021, Sally Lo converted 280,000 shares of its Series A Preferred Stock into 560,000,000 shares of Common Stock. As a result, Sally Lo holds 1,260,000,000 Common Shares (30.31%) and 945,000 Series A Preferred Shares (30.29%).

 

Acquisition of DH Investment Group Limited (“DHIG”), Our Testing Business

 

On July 26, 2021, we acquired all of the issued and outstanding shares of DH Investment Group Limited, a limited liability company organized under the laws of the British Virgin Islands (“DHIG”), from its shareholders Sally Lo and Daily Success Development Limited in exchange for 100,000 shares of our Series B Preferred Stock. DHIG operates its COVID-19 antigen testing business through its wholly owned subsidiary Ho Shun Yi Limited, a limited liability company organized under the laws of Hong Kong. In connection with the acquisition, each of Sally Lo and Daily Success Development Limited received 35,000 and 65,000 shares of our Series B Convertible Preferred Stock, respectively. Each one (1) shares of the Series B Convertible Preferred Stock is convertible ten (10) shares of our Common Stock. The Company relied on the exemption from registration pursuant to Section 4(2) of, and Regulation D and/or Regulation S promulgated under the Act in selling the Company’s securities to the shareholders of DHIG.

 

Prior to the Share Exchange, the Company was considered as a shell company due to its nominal assets and limited operation. The transaction will be treated as a recapitalization of the Company.

 

The Share Exchange between the Company and DHIC on July 26, 2021, is deemed a merger of entities under common control for which Miss Sally Kin Yi LO is the common director and shareholder of both the Company and DHIG. Under the guidance in ASC 805 for transactions between entities under common control, the assets, liabilities and results of operations, are recognized at their carrying amounts on the date of the Share Transfer, which required the retrospective combination of the Company and DHIG for all periods presented.

 

As a result of our acquisition of DHIG, we entered into the COVID-19 antigen testing business.

 

 

 

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Item 11. Description of Registrant’s Securities to be Registered.

 

The following description summarizes the material terms of our capital stock as of the date of this registration statement. Because it is only a summary, it does not contain all the information that may be important to you. For a complete description of our capital stock, you should refer to our Articles of Incorporation and our Bylaws, and to the provisions of applicable Nevada law.

 

On June 29, 2021, our Board of Directors authorized and approved the amendment and restatement of our Articles of Incorporation to: (i) change our name to DH Enchantment Inc.; and (ii) amend the powers, rights and designation of the Series A Convertible Preferred Stock as more fully set forth below; and (iii) effectuate a 5:1 reverse split, all of which are subject to final authorization by FINRA. Our Board of Directors also approved the designation of 10,000,000 shares of Series B Convertible Preferred Stock which took effect immediately.

 

Common Stock

 

On the date hereof, there were 4,156,545,807 shares of common stock issued and outstanding. We are authorized to issue up to 4,450,000,000 shares of our common stock, par value $0.001. Each share of common stock entitles the holder to one (1) vote on each matter submitted to a vote of our shareholders, including the election of Directors. There is no cumulative voting. Subject to preferences that may be applicable to any outstanding preferred stock, our Shareholders are entitled to receive ratably such dividends, if any, as may be declared from time to time by the Board of Directors. Shareholders have no preemptive, conversion or other subscription rights. There are no redemption or sinking fund provisions related to the common stock. In the event of liquidation, dissolution or winding up of the Company, our Shareholders are entitled to share ratably in all assets remaining after payment of liabilities, subject to prior distribution rights of preferred stock, if any, then outstanding.

 

Preferred Stock

 

We are authorized to issue up to 50,000,000 shares of preferred stock, par value $0.001, issuable in one or more series as may be determined by the Board. Preferred Stock may be issued from time to time in one or more series as determined by the Board of Directors in its sole discretion.

 

Our Board of Directors is authorized to determine or alter any or all of the rights, preferences, privileges and restrictions granted to or imposed upon any wholly unissued series of preferred stock and, within the limitations or restrictions stated in any resolution or resolutions of the Board of Directors originally fixing the number of shares constituting any series, to increase or decrease (but not below the number of shares of any such series then outstanding) the number of shares comprising any such series subsequent to the issue of shares of that series, to set the designation of any series, and to provide for rights and terms of redemption, conversion, dividends, voting rights, and liquidation preferences of the shares of any such series.

 

Series A Convertible Preferred Stock

 

The Board has designated a class of Preferred Stock as the “Series A Convertible Preferred Stock,” par value $0.002, with 5,000,000 authorized shares. Currently, holders of Series A Convertible Preferred Stock are: (i) entitled to receive dividends or other distributions as may be declared by the Board of Directors; (ii) entitled to vote on all matters submitted to a vote of the shareholders together with the Common Stock holders on an as converted basis; (iii) entitled to convert each one (1) share of Series A Convertible Preferred Stock into two thousand (2,000) shares of Common Stock.

 

On June 29, 2021, the Board of Directors of the Company authorized and approved the amendment and restatement of our Articles of Incorporation to amend the powers, rights and designation of the Series A Convertible Preferred Stock, among other things. After the amendment, holders of the Series A Convertible Preferred Stock will not be: (i) entitled to receive dividends or other distributions; (ii) vote on matters submitted to a vote of the stockholders; and (iii) able to convert the Series A Convertible Preferred Stock into common stock or any other securities of the corporation.

 

 

 

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Series B Convertible Preferred Stock

 

Effective June 29, 2021, the Board designated a class of Preferred Stock as the “Series B Convertible Preferred Stock,” par value $0.001, with 10,000,000 authorized shares. Each one share of Series B Convertible Preferred Stock converts into 10 shares of common stock of the Corporation at the election of the holder, subject to equitable adjustments. No fractional shares of common stock are issuable upon conversion of the Series B Convertible Preferred Stock, and fractional shares shall be rounded up to the nearest whole common stock.

 

Voting. Holders of Series B Convertible Preferred Stock vote on an “as converted” basis on matters submitted to holders of the common stock, or any class thereof, and shall vote together with common stock holders as a class.

 

Dividends. Holders of Series B Convertible Preferred Stock shall fully participate, on an as-converted basis, in any dividends declared and paid or distributions on Common Stock as if the Series B Preferred Stock were converted into shares of Common Stock as of the record date for such dividend or distribution. In addition, holders of Series B Convertible Preferred Stock are entitled to receive dividends, when and as declare by the Board, on each outstanding share of Series B Convertible Preferred Stock.

 

Liquidation. Holders of Series B Convertible Preferred Stock are entitled to receive, out of assets of the corporation available for distribution to shareholders of the Corporation or their assignees, and subject to the rights of any outstanding shares of senior stock and before any amount shall be distributed to the holders of junior stock, a liquidating distribution (the “Liquidation Distribution”) in an amount equal to the amount such Series B Holder would have been entitled to receive had such holder converted its shares of Series B Convertible Preferred Stock into shares of Common Stock at the conversion ratio effective immediately prior to such Liquidation. If, upon any Liquidation, the amount payable with respect to the Liquidation Distribution is not paid in full, the Series B Holders and any parity stock shall share equally and ratably in any distribution of the Corporation’s assets in proportion to the respective liquidation distributions to which they are entitled.

 

Amendment. The corporation may not amend the Certificate of Designations for the Series B Convertible Preferred Stock without the prior written consent of the holders of the Series B Convertible Preferred Stock holding a majority of the Series B Convertible Preferred Stock then issued and outstanding, in which vote each share of Series B Convertible Preferred Stock then issued and outstanding shall have one vote, voting separately as a single class, in person or by proxy, either in writing without a meeting or at an annual or a special meeting of such holders of Series B Convertible Preferred Stock.

 

Options

 

We have no options to purchase shares of our common stock or any other of our securities outstanding as of the date of this Prospectus.

 

Warrants

 

We have no warrants to purchase shares of our common stock or any other of our securities outstanding as of the date of this Prospectus.

   

Dividends

 

Dividends, if any, will be contingent upon our revenues and earnings, if any, capital requirements and financial conditions. The payment of dividends, if any, will be within the discretion of our board of directors. We intend to retain earnings, if any, for use in its business operations and accordingly, the board of directors does not anticipate declaring any dividends in the foreseeable future.

 

Transfer Agent and Registrar

 

Our transfer agent is Pacific Stock Transfer Company, Inc. located at 6725 Via Austi Pikeway, Suite 300, Las Vegas, Nevada 89119, telephone number is 702-361-3033.

 

 

  30  
 

 

Item 12. Indemnification of Directors and Officers.

 

Subsection 7 of Section 78.138 of the Nevada Revised Statutes (the "Nevada Law") provides that, subject to certain very limited statutory exceptions, a director or officer is not individually liable to the corporation or its stockholders or creditors for any damages as a result of any act or failure to act in his or her capacity as a director or officer, unless it is proven that the act or failure to act constituted a breach of his or her fiduciary duties as a director or officer and such breach of those duties involved intentional misconduct, fraud or a knowing violation of law. The statutory standard of liability established by Section 78.138 controls even if there is a provision in the corporation's articles of incorporation unless a provision in the Company's Articles of Incorporation provides for greater individual liability.

 

Subsection 1 of Section 78.7502 of the Nevada Law empowers a corporation to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation) by reason of the fact that he or she is or was a director, officer, employee or agent of the corporation or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise (any such person, a "Covered Person"), against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by the Covered Person in connection with such action, suit or proceeding if the Covered Person is not liable pursuant to Section 78.138 of the Nevada Law or the Covered Person acted in good faith and in a manner the Covered Person reasonably believed to be in or not opposed to the best interests of the corporation and, with respect to any criminal action or proceedings, had no reasonable cause to believe the Covered Person's conduct was unlawful.

 

Subsection 2 of Section 78.7502 of the Nevada Law empowers a corporation to indemnify any Covered Person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the corporation to procure a judgment in its favor by reason of the fact that such person acted in the capacity of a Covered Person against expenses, including amounts paid in settlement and attorneys' fees actually and reasonably incurred by the Covered Person in connection with the defense or settlement of such action or suit, if the Covered Person is not liable pursuant to Section 78.138 of the Nevada Law or the Covered Person acted in good faith and in a manner the Covered Person reasonably believed to be in or not opposed to the best interests of the Company. However, no indemnification may be made in respect of any claim, issue or matter as to which the Covered Person shall have been adjudged by a court of competent jurisdiction (after exhaustion of all appeals) to be liable to the corporation or for amounts paid in settlement to the corporation unless and only to the extent that the court in which such action or suit was brought or other court of competent jurisdiction determines upon application that in view of all the circumstances the Covered Person is fairly and reasonably entitled to indemnity for such expenses as the court deems proper.

  

Section 78.7502 of the Nevada Law further provides that to the extent a Covered Person has been successful on the merits or otherwise in the defense of any action, suit or proceeding referred to in Subsection 1 or 2, as described above, or in the defense of any claim, issue or matter therein, the corporation shall indemnify the Covered Person against expenses (including attorneys' fees) actually and reasonably incurred by the Covered Person in connection with the defense.

 

Subsection 1 of Section 78.751 of the Nevada Law provides that any discretionary indemnification pursuant to Section 78.7502 of the Nevada Law, unless ordered by a court or advanced pursuant to Subsection 2 of Section 78.751, may be made by a corporation only as authorized in the specific case upon a determination that indemnification of the Covered Person is proper in the circumstances. Such determination must be made (a) by the stockholders, (b) by the board of directors of the corporation by majority vote of a quorum consisting of directors who were not parties to the action, suit or proceeding, (c) if a majority vote of a quorum of such non-party directors so orders, by independent legal counsel in a written opinion, or (d) by independent legal counsel in a written opinion if a quorum of such non-party directors cannot be obtained.

 

 

 

 

 

  31  
 

 

Subsection 2 of Section 78.751 of the Nevada Law provides that a corporation's articles of incorporation or bylaws or an agreement made by the corporation may require the corporation to pay as incurred and in advance of the final disposition of a criminal or civil action, suit or proceeding, the expenses of officers and directors in defending such action, suit or proceeding upon receipt by the corporation of an undertaking by or on behalf of the officer or director to repay the amount if it is ultimately determined by a court of competent jurisdiction that he or she is not entitled to be indemnified by the corporation. Subsection 2 of Section 78.751 further provides that its provisions do not affect any rights to advancement of expenses to which corporate personnel other than officers and directors may be entitled under contract or otherwise by law.

 

Subsection 3 of Section 78.751 of the Nevada Law provides that indemnification pursuant to Section 78.7502 of the Nevada Law and advancement of expenses authorized in or ordered by a court pursuant to Section 78.751 does not exclude any other rights to which the Covered Person may be entitled under the articles of incorporation or any bylaw, agreement, vote of stockholders or disinterested directors or otherwise, for either an action in his or her official capacity or in another capacity while holding his or her office. However, indemnification, unless ordered by a court pursuant to Section 78.7502 or for the advancement of expenses under Subsection 2 of Section 78.751 of the Nevada Law, may not be made to or on behalf of any director or officer of the corporation if a final adjudication establishes that his or her acts or omissions involved intentional misconduct, fraud or a knowing violation of the law and were material to the cause of action. Additionally, the scope of such indemnification and advancement of expenses shall continue for a Covered Person who has ceased to be a director, officer, employee or agent of the corporation, and shall inure to the benefit of his or her heirs, exe

 

Section 78.752 of the Nevada Law empowers a corporation to purchase and maintain insurance or make other financial arrangements on behalf of a Covered Person for any liability asserted against such person and liabilities and expenses incurred by such person in his or her capacity as a Covered Person or arising out of such person's status as a Covered Person whether or not the corporation has the authority to indemnify such person against such liability and expenses.

 

Our Second Amended and Restated Articles of Incorporation provide that the liability of our directors and officers shall be eliminated or limited to the fullest extent permitted by Nevada Law. In addition, our Second Amended and Restated Articles of Incorporation and our Bylaws also provide that we will indemnify our directors and may indemnify our other officers and employees and other agents to the fullest extent permitted by law. Our Second Amended and Restated Articles of Incorporation and Bylaws provide that the expenses of directors and officers of the Company incurred in defending any action, suit or proceeding, whether civil, criminal, administrative or investigative, must be paid by the Company as they are incurred and in advance of the final disposition of the action, suit or proceeding, upon receipt of an undertaking by or on behalf of such director or officer to repay all amounts so advanced if it is ultimately determined by a court of competent jurisdiction that the director or officer is not entitled to be indemnified by the Company.

 

This limitation of liability does not apply to liabilities arising under the federal securities laws and does not affect the availability of equitable remedies such as injunctive relief or rescission.

 

 

Item 13. Financial Statements and Supplementary Data.

 

The information required by this item may be found beginning on page F-1 of this Form 10.

 

Item 14. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

 

None

 

 

 

 

 

 

 

 

  32  

 

 

Item 15. Financial Statements and Exhibits

 

(a)         Financial Statements.

 

The following financial statements are filed as part of this registration statement:

  

Financial Statements:
Balance Sheet as of March 31, 2021 and 2020
Statements of Operations for Years Ended March 31, 2021 and 2020
Statement of Cash Flows for the Years Ended March 31, 2021 and 2020
Statement of Stockholders’ Equity
Notes to Financial Statements

 

(b)         Exhibits.

 

Exhibit No.   Description
     
3.1   Articles of Incorporation*
3.2   Certificate of Designations of preferences and rights of Series B Convertible Preferred Stock*
3.3   Bylaws*
4.1   Specimen certificate evidencing shares of Common Stock***
4.2   Description of Securities**
10.1   Share Exchange Agreement dated July 26, 2021, by and among Energy Management International, Inc., DH Investment Group Limited, a British Virgin Island corporation, Sally Lo and Daily Success Development Ltd.*
21   Subsidiaries*
99.1   Custodianship Records*

 

* Filed herewith
** Incorporated by reference to Item 11 of this Registration Statement.
*** To be filed by amendment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  33  

 

 

INDEX TO FINANCIAL STATEMENTS

 

ENERGY MANAGEMENT INTERNATIONAL, INC.

 

INDEX TO COMBINED AND CONSOLIDATED FINANCIAL STATEMENTS

 

 

  Page
   
Report of Independent Registered Public Accounting Firm F-2
   
Combined and Consolidated Balance Sheets F-3
   
Combined and Consolidated Statements of Operations and Comprehensive Income F-4
   
Combined and Consolidated Statements of Changes in Stockholders’ Equity (Deficit) F-5
   
Combined and Consolidated Statements of Cash Flows F-6
   
Notes to Combined and Consolidated Financial Statements F-7 – F-17

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  F-1  

 

 

   

J&S ASSOCIATE (AF002380)

(Registered with PCAOB and MIA)

UNIT B222,SOLARIS DUTAMAS 1,

JALAN DUTAMAS 1,

50480, Kuala Lumpur, Malaysia.

 

Tel : 03-62053622

Fax : 03-62053623

Fax : jspartner348@gmail.com

 

 

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

The Board of Director and Stockholder of

ENERGY MANAGEMENT INTERNATIONAL, INC.

 

 

Opinion on the Financial Statements

 

We have audited the accompanying combined and consolidated balance sheets of Energy Management International, Inc. and its subsidiaries (the ‘Company’) as of March 31, 2021 and 2020, and the related combined and consolidated statements of operations and comprehensive income, stockholders’ equity (deficit), and cash flows for the years ended March 31, 2021 and 2020, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of March 31, 2021 and 2020, and the results of its operations and its cash flows for the years ended March 31, 2021 and 2020, in conformity with accounting principles generally accepted in the United States of America.

 

Basis for Opinion

 

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

 

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

 

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

 

 

/s/ J&S Associate

 

We have served as the Company’s auditor since 2021.

 

Kuala Lumpur, Malaysia

 

August 4, 2021

 

 

 

 

 

 

  F-2  

 

 

ENERGY MANAGEMENT INTERNATIONAL, INC.

COMBINED AND CONSOLIDATED BALANCE SHEETS

AS OF MARCH 31, 2021 AND 2020

(Currency expressed in United States Dollars (“US$”), except for number of shares)

 

 

    March 31,  
    2021     2020  
             
ASSETS                
Current asset:                
Cash and cash equivalents   $ 1,592     $  
Prepayment and other receivables     72,768        
                 
Total current assets     74,360        
                 
TOTAL ASSETS   $ 74,360     $  
                 
LIABILITIES AND STOCKHOLDERS’ EQUITY                
Current liabilities:                
Accrued liabilities and other payables   $ 1,783     $  
Amount due to a director     63,887        
                 
Total current liabilities     65,670        
                 
TOTAL LIABILITIES     65,670        
                 
Commitments and contingencies            
                 
STOCKHOLDERS’ EQUITY                
Convertible preferred shares; 50,000,000 shares authorized, and 45,000,000 shares undesignated as of March 31, 2021 and 2020, respectively                
Series A Preferred stock, $0.002 par value; 5,000,000 shares designated; 3,920,001 and 0 issued and outstanding, as of March 31, 2021 and 2020, respectively     7,840        
Series B Preferred stock, $0.001 par value; 10,000,000 shares to be designated; 100,000 shares to be issued     100       100  
Common stock, $0.001 par value; 4,450,000,000 shares authorized; 2,556,545,807 and 0 shares issued and outstanding as of March 31, 2021 and 2020, respectively     2,556,545        
Accumulated other comprehensive loss     (10 )      
Accumulated deficit     (2,555,785 )     (100 )
                 
Stockholders’ equity     8,690        
                 
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY   $ 74,360     $  

 

See accompanying notes to combined and consolidated financial statements.

 

 

 

  F-3  

 

 

ENERGY MANAGEMENT INTERNATIONAL, INC.

COMBINED AND CONSOLIDATED STATEMENTS OF OPERATIONS

AND COMPREHENSIVE INCOME

FOR THE YEARS ENDED MARCH 31, 2021 AND 2020

(Currency expressed in United States Dollars (“US$”))

 

 

    Years ended March 31,  
    2021     2020  
             
Revenue, net   $ 211,549     $  
                 
Cost of revenue     (165,956 )      
                 
Gross profit     45,593        
                 
Operating expenses:                
General and administrative expenses     (36,829 )      
Professional fee     (64 )      
                 
Total operating expenses     (36,893 )      
                 
INCOME BEFORE INCOME TAXES     8,700        
                 
Income tax expense            
                 
NET INCOME     8,700        
                 
Other comprehensive income:                
Foreign currency adjustment loss     (10 )      
                 
COMPREHENSIVE INCOME   $ 8,690     $  
                 
Net income per share – Basic and Diluted   $ 0.00     $  
                 
Weighted average common shares outstanding                
Basic     2,556,545,807        
Diluted     2,557,545,807        

 

See accompanying notes to combined and consolidated financial statements.

 

 

 

  F-4  

 

 

ENERGY MANAGEMENT INTERNATIONAL, INC.

COMBINED AND CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)

FOR THE YEARS ENDED MARCH 31, 2021 AND 2020

(Currency expressed in United States Dollars (“US$”), except for number of shares)

 

 

    Series A preferred stock     Series B Preferred stock to be issued     Common stock     Additional     Accumulated other     (Accumulated
losses)
    Total
stockholders’
 
   

No. of

shares

    Amount    

No. of

shares

    Amount    

No. of

shares

    Amount    

paid-in

capital

   

comprehensive

 income

   

retained

earnings

   

(deficit)

equity

 
                                                             
Balance as of April 1, 2019       $     100,000     $ 100         $     $     $     $ (100 )   $  
                                                                           
Net income for the year                                                      
                                                                           
Balance as of March 31, 2020       $     100,000     $ 100         $     $     $     $ (100 )   $  
                                                                           
Balance as of April 1, 2020       $     100,000     $ 100         $     $     $     $ (100 )   $  
                                                                           
Shares issued for acquisition of legal acquirer   3,920,001       7,840               2,556,545,807       2,556,545       14,792,744             (17,357,129 )      
Recapitalization of legal acquirer                                   (14,792,744 )           14,792,744        
Foreign currency translation adjustment                                         (10 )           (10 )
Net income for the year                                               8,700       8,700  
                                                                           
Balance as of March 31, 2021   3,920,001     $ 7,840     100,000     $ 100     2,556,545,807     $ 2,556,545     $     $ (10 )   $ (2,555,785 )   $ 8,690  

 

See accompanying notes to combined and consolidated financial statements.

 

 

 

 

 

 

  F-5  

 

 

ENERGY MANAGEMENT INTERNATIONAL, INC.

COMBINED AND CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED MARCH 31, 2021 AND 2020

(Currency expressed in United States Dollars (“US$”))

 

 

    Years ended March 31,  
    2021     2020  
             
Cash flows from operating activities:                
Net income   $ 8,700     $  
                 
Change in operating assets and liabilities:                
Prepayment and other receivables     (1,592 )      
Accrued liabilities and other payables     1,783        
 Net cash generated from operating activities     8,891        
                 
Cash flows from financing activities:                
Advance from a director     63,887        
 Net cash generated from financing activities     63,887        
                 
Foreign currency translation adjustment     (10 )      
                 
Net change in cash and cash equivalents     72,768        
                 
BEGINNING OF YEAR            
                 
END OF YEAR   $ 72,768     $  
                 
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:                
Cash paid for income taxes   $     $  
Cash paid for interest   $     $  

 

See accompanying notes to combined and consolidated financial statements.

 

 

 

 

 

 

  F-6  

 

 

ENERGY MANAGEMENT INTERNATIONAL, INC.

NOTES TO COMBINED AND CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED MARCH 31, 2021 AND 2020

(Currency expressed in United States Dollars (“US$”), except for number of shares)

 

 

1.       DESCRIPTION OF BUSINESS AND ORGANIZATION

 

Energy Management International, Inc. (the “Company”) was incorporated in the State of Nevada on July 9, 2004 under the name Amerivestors, Inc. On March 3, 2009, the Company changed its name to Gust Engineering & Speed Productions, Inc. and on October 27, 2009, the Company changed its name to Energy Management International, Inc., its current name.

 

Currently, the Company through its subsidiary, mainly the sale and distribution of COVID-19 rapid antigen tester set. This business commenced its operations in Hong Kong in October 2020.

 

On July 26, 2021, the Company consummated the Share Exchange Transaction (the “Share Exchange”) among DH Investment Group Limited (“DHIG”) and its shareholders. The Company acquired all of the issued and outstanding shares of DHIG from DHIG’s shareholders, in exchange for 100,000 shares of Series B preferred stock, at par value of $0.001. Upon completion of the Share Exchange, DHIG became a 100% owned subsidiary of the Company.

 

Prior to the Share Exchange, the Company was considered as a shell company due to its nominal assets and limited operation. The transaction will be treated as a recapitalization of the Company.

 

Upon the Share Exchange between the Company and DHIC on July 26, 2021, is a merger of entities under common control that Miss Sally Kin Yi LO is the common director and shareholder of both the Company and DHIG. Under the guidance in ASC 805 for transactions between entities under common control, the assets, liabilities and results of operations, are recognized at their carrying amounts on the date of the Share Exchange, which required retrospective combination of the Company and DHIG for all periods presented.

 

Description of subsidiaries

 

Name  

Place of incorporation

and kind of

legal entity

 

Principal activities

and place of operation

 

Particulars of registered/ paid up share

capital

 

Effective interest

held

                 
DH Investment Group Limited   British Virgin Islands   Investment holding   100 ordinary shares at par value of US$1   100%
                 
Ho Shun Yi Limited   Hong Kong   Sale and distribution of COVID-19 rapid antigen tester set   10,000 ordinary shares for HK$10,000   100%

 

The Company and its subsidiaries are hereinafter referred to as the “Company”.

 

 

 

 

  F-7  

 

 

ENERGY MANAGEMENT INTERNATIONAL, INC.

NOTES TO COMBINED AND CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED MARCH 31, 2021 AND 2020

(Currency expressed in United States Dollars (“US$”), except for number of shares)

 

 

2.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

The accompanying combined and consolidated financial statements reflect the application of certain significant accounting policies as described in this note and elsewhere in the accompanying combined and consolidated financial statements and notes.

 

l Basis of presentation

 

These accompanying combined and consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“US GAAP”).

 

l Use of estimates and assumptions

 

In preparing these combined and consolidated financial statements, management makes estimates and assumptions that affect the reported amounts of assets and liabilities in the balance sheet and revenues and expenses during the years reported. Actual results may differ from these estimates.

 

l Basis of consolidation

 

The combined and consolidated financial statements include the accounts of ENMI and its subsidiaries. All significant inter-company balances and transactions within the Company have been eliminated upon consolidation.

 

l Cash and cash equivalents

 

Cash and cash equivalents are carried at cost and represent cash on hand, demand deposits placed with banks or other financial institutions and all highly liquid investments with an original maturity of three months or less as of the purchase date of such investments.

 

l Revenue recognition

 

The Company adopted Accounting Standards Update ("ASU") No. 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”) using the full retrospective transition method. The Company's adoption of ASU 2014-09 did not have a material impact on the amount and timing of revenue recognized in its condensed combined and consolidated financial statements.

 

Under ASU 2014-09, the Company recognizes revenue when control of the promised goods or services is transferred to customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services.

 

 

 

 

  F-8  

 

 

ENERGY MANAGEMENT INTERNATIONAL, INC.

NOTES TO COMBINED AND CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED MARCH 31, 2021 AND 2020

(Currency expressed in United States Dollars (“US$”), except for number of shares)

 

 

The Company applies the following five steps in order to determine the appropriate amount of revenue to be recognized as it fulfills its obligations under each of its agreements:

 

  · identify the contract with a customer;
  · identify the performance obligations in the contract;
  · determine the transaction price;
  · allocate the transaction price to performance obligations in the contract; and
  · recognize revenue as the performance obligation is satisfied.

 

l Cost of revenue

 

Cost of revenue consists primarily of the cost of goods sold, which are directly attributable to the sales of COVID-19 rapid tester products.

 

l Income taxes

 

The Company adopted the ASC 740 Income tax provisions of paragraph 740-10-25-13, which addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the combined and consolidated financial statements. Under paragraph 740-10-25-13, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the combined and consolidated financial statements from such a position should be measured based on the largest benefit that has a greater than fifty percent (50%) likelihood of being realized upon ultimate settlement. Paragraph 740-10-25-13 also provides guidance on de-recognition, classification, interest and penalties on income taxes, accounting in interim periods and requires increased disclosures. The Company had no material adjustments to its liabilities for unrecognized income tax benefits according to the provisions of paragraph 740-10-25-13.

 

The estimated future tax effects of temporary differences, if any, between the tax basis of assets and liabilities are reported in the accompanying balance sheets, as well as tax credit carry-backs and carry-forwards. The Company periodically reviews the recoverability of deferred tax assets recorded on its balance sheets and provides valuation allowances as management deems necessary.

 

l Uncertain tax positions

 

The Company did not take any uncertain tax positions and had no adjustments to its income tax liabilities or benefits pursuant to the ASC 740 provisions of Section 740-10-25 for the years ended March 31, 2021 and 2020.

 

l Foreign currencies translation

 

Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transaction. Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency using the applicable exchange rates at the balance sheet dates. The resulting exchange differences are recorded in the combined and consolidated statement of operations.

 

 

 

 

  F-9  

 

 

ENERGY MANAGEMENT INTERNATIONAL, INC.

NOTES TO COMBINED AND CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED MARCH 31, 2021 AND 2020

(Currency expressed in United States Dollars (“US$”), except for number of shares)

 

 

The reporting currency of the Company is United States Dollar ("US$") and the accompanying combined and consolidated financial statements have been expressed in US$. In addition, the Company is operating in Hong Kong and maintains its books and records in its local currency, Hong Kong Dollars (“HKD”), which is its functional currency, being the primary currency of the economic environment in which their operations are conducted. In general, for consolidation purposes, assets and liabilities of its subsidiary whose functional currency is not US$ are translated into US$, in accordance with ASC Topic 830-30, “ Translation of Financial Statement”, using the exchange rate on the balance sheet date. Revenues and expenses are translated at average rates prevailing during the period. The gains and losses resulting from translation of financial statements of foreign subsidiary are recorded as a separate component of accumulated other comprehensive income within the statements of changes in stockholder’s equity.

 

Translation of amounts from HKD into US$ has been made at the following exchange rates for the years ended March 31, 2021 and 2020:

 

    March 31, 2021     March 31, 2020  
Year-end HKD:US$ exchange rate     0.12862       0.12898  
Annualized average HKD:US$ exchange rate     0.12888       0.12856  

 

l Comprehensive income

 

ASC Topic 220, “Comprehensive Income”, establishes standards for reporting and display of comprehensive income, its components and accumulated balances. Comprehensive income as defined includes all changes in equity during a period from non-owner sources. Accumulated other comprehensive income, as presented in the accompanying combined and consolidated statements of changes in stockholders’ equity, consists of changes in unrealized gains and losses on translation of functional currencies to presentation currency. This comprehensive income is not included in the computation of income tax expense or benefit.

 

l Segment reporting

 

ASC Topic 280, “Segment Reporting” establishes standards for reporting information about operating segments on a basis consistent with the Company’s internal organization structure as well as information about geographical areas, business segments and major customers in combined and consolidated financial statements. For the years ended March 31, 2021 and 2020, the Company operates in one reportable operating segment in Hong Kong.

 

l Retirement plan costs

 

Contributions to retirement plans (which are defined contribution plans) are charged to general and administrative expense in the accompanying statements of operation as the related employee service is provided.

 

l Related parties

 

The Company follows the ASC 850-10, Related Party for the identification of related parties and disclosure of related party transactions.

 

 

 

 

  F-10  

 

 

ENERGY MANAGEMENT INTERNATIONAL, INC.

NOTES TO COMBINED AND CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED MARCH 31, 2021 AND 2020

(Currency expressed in United States Dollars (“US$”), except for number of shares)

 

 

Pursuant to section 850-10-20 the related parties include a) affiliates of the Company; b) entities for which investments in their equity securities would be required, absent the election of the fair value option under the Fair Value Option Subsection of section 825–10–15, to be accounted for by the equity method by the investing entity; c) trusts for the benefit of employees, such as pension and Income-sharing trusts that are managed by or under the trusteeship of management; d) principal owners of the Company; e) management of the Company; f) other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests; and g) other parties that can significantly influence the management or operating policies of the transacting parties or that have an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests.

 

The combined and consolidated financial statements shall include disclosures of material related party transactions, other than compensation arrangements, expense allowances, and other similar items in the ordinary course of business. However, disclosure of transactions that are eliminated in the preparation of consolidated or combined financial statements is not required in those statements. The disclosures shall include: a) the nature of the relationship(s) involved; b) a description of the transactions, including transactions to which no amounts or nominal amounts were ascribed, for each of the periods for which income statements are presented, and such other information deemed necessary to an understanding of the effects of the transactions on the financial statements; c) the dollar amounts of transactions for each of the periods for which income statements are presented and the effects of any change in the method of establishing the terms from that used in the preceding period; and d) amount due from or to related parties as of the date of each balance sheet presented and, if not otherwise apparent, the terms and manner of settlement.

 

l Commitments and contingencies

 

The Company follows the ASC 450-20, Commitments to report accounting for contingencies. Certain conditions may exist as of the date the financial statements are issued, which may result in a loss to the Company but which will only be resolved when one or more future events occur or fail to occur. The Company assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or un-asserted claims that may result in such proceedings, the Company evaluates the perceived merits of any legal proceedings or un-asserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein.

 

If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s combined and consolidated financial statements. If the assessment indicates that a potentially material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, and an estimate of the range of possible losses, if determinable and material, would be disclosed.

 

Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed. Management does not believe, based upon information available at this time that these matters will have a material adverse effect on the Company’s financial position, results of operations or cash flows. However, there is no assurance that such matters will not materially and adversely affect the Company’s business, financial position, and results of operations or cash flows.

 

 

 

 

  F-11  

 

 

ENERGY MANAGEMENT INTERNATIONAL, INC.

NOTES TO COMBINED AND CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED MARCH 31, 2021 AND 2020

(Currency expressed in United States Dollars (“US$”), except for number of shares)

 

 

l Fair value of financial instruments

 

The Company follows paragraph 825-10-50-10 of the FASB Accounting Standards Codification for disclosures about fair value of its financial instruments and has adopted paragraph 820-10-35-37 of the FASB Accounting Standards Codification (“Paragraph 820-10-35-37”) to measure the fair value of its financial instruments. Paragraph 820-10-35-37 of the FASB Accounting Standards Codification establishes a framework for measuring fair value in generally accepted accounting principles (GAAP), and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, paragraph 820-10-35-37 of the FASB Accounting Standards Codification establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The three (3) levels of fair value hierarchy defined by paragraph 820-10-35-37 of the FASB Accounting Standards Codification are described below:

 

Level 1   Quoted market prices available in active markets for identical assets or liabilities as of the reporting date.
     
Level 2   Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date.
     
Level 3   Pricing inputs that are generally observable inputs and not corroborated by market data.

 

Financial assets are considered Level 3 when their fair values are determined using pricing models, discounted cash flow methodologies or similar techniques and at least one significant model assumption or input is unobservable.

 

The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. If the inputs used to measure the financial assets and liabilities fall within more than one level described above, the categorization is based on the lowest level input that is significant to the fair value measurement of the instrument.

 

The carrying amounts of the Company’s financial assets and liabilities, such as cash and cash equivalents, prepayment and other receivables, accrued liabilities and other payables and amount due to a director, approximate their fair values because of the short maturity of these instruments.

 

l Recent accounting pronouncements

 

In January 2017, the Financial Accounting Standard Board (“FASB”) issued ASU 2017-04,  Intangibles - Goodwill and Other (Topic 350) : Simplifying the Accounting for Goodwill Impairment (“ASU 2017-04”). ASU 2017-04 removes Step 2 of the goodwill impairment test, which requires a hypothetical purchase price allocation. A goodwill impairment will now be the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. This standard, which will be effective for the Company beginning in the first quarter of fiscal year 2020, is required to be applied prospectively. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017, which resulted in no impact to the Company's financial statements.

 

 

 

 

  F-12  

 

 

ENERGY MANAGEMENT INTERNATIONAL, INC.

NOTES TO COMBINED AND CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED MARCH 31, 2021 AND 2020

(Currency expressed in United States Dollars (“US$”), except for number of shares)

 

 

In June 2020, the FASB issued ASU 2020-07,  Improvements to Nonemployee Share-Based Payment Accounting (“ASU 2020-07”), which supersedes ASC 505-50 and expands the scope of ASC 718 to include all share-based payments arrangements related to the acquisition of goods and services from both employees and nonemployees. For public companies, the amendments are effective for annual reporting periods beginning after December 15, 2020, including interim periods within those annual periods. Early adoption is permitted, but no earlier than a company's adoption date of ASC 606. The Company does not believe that the adoption of ASU 2020-07 will have a material impact on the Company’s financial statements.

 

The Company has reviewed all recently issued, but not yet effective, accounting pronouncements and does not believe that the future adoption of any such pronouncements may be expected to cause a material impact on its financial condition or the results of its operations.

 

 

3.       AMOUNT DUE TO A RELATED PARTY

 

As of March 31, 2021, the amount due to a related party represented temporary advances made by the Company’s director, Sally Kin Yi LO, which was unsecured, interest-free with no fixed repayment term. Imputed interest on this amount is considered insignificant.

 

 

4.       STOCKHOLDERS’ EQUITY (DEFICIT)

 

Authorized shares

 

The Company is authorized to issue 50,000,000 shares of preferred stock, with a par value of $0.001. The Company has one class of Series A Preferred Stock designated with 5,000,000 shares authorized as Series A Preferred Stock, par value of $0.002 per share.

 

The Company is authorized to issue 4,450,000,000 shares of common stock, with a par value of $0.001.

 

Issued and outstanding shares

 

As of March 31, 2021 and 2020, 3,920,001 and 0 shares of Series A preferred stock were issued and outstanding, respectively.

 

As of March 31, 2021 and 2020, 2,556,545,807 and 0 shares of common stock were issued and outstanding, respectively.

 

On September 15, 2020, the Company issued 2,000,000,000 shares of its common stock to its former shareholder to settle the outstanding debts.

 

On February 22, 2021, the Company issued 3,500,000 shares of Series A preferred stock to its former shareholder to settle the outstanding debts.

 

On June 29, 2021, the Company authorized to execute and file with the Secretary of State of the Nevada the Articles of Amendment, (i) to amend the designation for Series A Preferred Stock; (ii) to designate 10,000,000 shares as Series B preferred stock. The Company also approved a 5:1 reverse split, subject to final authorization by FINRA.

 

 

 

 

  F-13  

 

 

ENERGY MANAGEMENT INTERNATIONAL, INC.

NOTES TO COMBINED AND CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED MARCH 31, 2021 AND 2020

(Currency expressed in United States Dollars (“US$”), except for number of shares)

 

 

On July 26, 2021, the Company consummated the Share Exchange Transaction among DH Investment Group Limited (“DHIG”) and its shareholders and issued 100,000 shares of Series B preferred stock in exchange for 100% equity interest of DHIG. Upon completion of the Share Exchange Transaction, DHIG became a 100% owned subsidiary of the Company.

 

 

5. INCOME TAX

 

The provision for income taxes consisted of the following:

 

      Years ended March 31,  
      2021       2020  
                 
Current tax   $     $  
Deferred tax            
                 
Income tax expense   $     $  

 

The effective tax rate in the years presented is the result of the mix of income earned in various tax jurisdictions that apply a broad range of income tax rate as mentioned below. The Company, however, mainly operates in Hong Kong.

 

United States of America

 

ENMI is registered in the State of Nevada and is subject to the tax laws of United States of America.

 

For the years ended March 31, 2021 and 2020, there were no operating income.

 

BVI

 

Under the current BVI law, the Company is not subject to tax on income.

 

 

 

 

  F-14  

 

 

ENERGY MANAGEMENT INTERNATIONAL, INC.

NOTES TO COMBINED AND CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED MARCH 31, 2021 AND 2020

(Currency expressed in United States Dollars (“US$”), except for number of shares)

 

 

Hong Kong

 

The Company’s subsidiary operating in Hong Kong is subject to Hong Kong Profits Tax at the two-tiered profits tax rates from 8.25% to 16.5% on the estimated assessable profits arising in Hong Kong during the current year, after deducting a tax concession for the tax year. The reconciliation of income tax rate to the effective income tax rate for the years ended March 31, 2021 and 2020 is as follows:

 

    Years ended March 31,  
    2021     2020  
             
Income before income taxes   $ 8,700     $  
Statutory income tax rate     16.5%       16.5%  
Income tax expense at statutory rate     1,435        
Tax effect of non-deductible items     213        
Tax effect of tax holiday     (1,648 )      
                 
Income tax expense   $     $  

 

 

6.       RELATED PARTY TRANSACTIONS

 

From time to time, the director of the Company advanced funds to the Company for working capital purpose. Those advances are unsecured, non-interest bearing and had no fixed terms of repayment. As of March 31, 2021, the balance due to a director was $63,887.

 

During the years ended March 31, 2021 and 2020, the Company has been provided free office space by its director. The management determined that such cost is nominal and did not recognize the rent expense in its financial statements.

 

Apart from the transactions and balances detailed elsewhere in these accompanying combined and consolidated financial statements, the Company has no other significant or material related party transactions during the years presented.

 

 

7.       CONCENTRATIONS OF RISK

 

The Company is exposed to the following concentrations of risk:

 

(a)       Major customers

 

For the year ended March 31, 2021, there was one single customer exceeding 10% of the Company’s revenue. This customer accounted for $172,879, representing 82% of the Company’s revenue with $1,592 accounts receivable at March 31, 2021.

 

 

 

 

  F-15  

 

 

ENERGY MANAGEMENT INTERNATIONAL, INC.

NOTES TO COMBINED AND CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED MARCH 31, 2021 AND 2020

(Currency expressed in United States Dollars (“US$”), except for number of shares)

 

 

For the year ended March 31, 2020, there were no customers.

 

All of the Company’s customers are located in Hong Kong.

 

(b)       Major vendor

 

For the year ended March 31, 2021, there was one vender with purchases totaling $165,956, representing 100% of purchases with $1,397 of accounts payable at March 31, 2021.

 

For the year ended March 31, 2020, there were no suppliers.

 

The Company’s vendor is located in Hong Kong.

 

(c)       Economic and political risk

 

The Company’s major operations are conducted in Hong Kong. Accordingly, the political, economic, and legal environments in Hong Kong, as well as the general state of Hong Kong’s economy may influence the Company’s business, financial condition, and results of operations.

 

(d)       Exchange rate risk

 

The Company cannot guarantee that the current exchange rate will remain steady; therefore there is a possibility that the Company could post the same amount of profit for two comparable periods and because of the fluctuating exchange rate actually post higher or lower profit depending on exchange rate of HKD converted to US$ on that date. The exchange rate could fluctuate depending on changes in political and economic environments without notice.

 

(e)       Risk from COVID-19 pandemic

 

The pandemic has resulted in quarantines, travel restrictions, and the temporary closure of stores and business facilities in Hong Kong in a limited period during 2020. Due to the nature of the Company’s business, the impact of the closure on the operational capabilities was not significant. The extent to which the COVID-19 outbreak impacts the Company’s results will depend on future developments that are highly uncertain and cannot be predicted, including new information that may emerge concerning the severity and mutation of the virus and the actions to contain its impact , that are beyond the Company’s control. There is no guarantee that the Company’s revenues will grow or remain at a similar level in the foreseeable period.

 

 

8.       COMMITMENTS AND CONTINGENCIES

 

As of March 31, 2021 and 2020, the Company has no material commitments or contingencies.

 

 

 

 

  F-16  

 

 

ENERGY MANAGEMENT INTERNATIONAL, INC.

NOTES TO COMBINED AND CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED MARCH 31, 2021 AND 2020

(Currency expressed in United States Dollars (“US$”), except for number of shares)

 

 

9.       SUBSEQUENT EVENTS

 

In accordance with ASC Topic 855, “Subsequent Events”, which establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before combined and consolidated financial statements are issued, the Company has evaluated all events or transactions that occurred after March 31, 2021, up through the date the Company issued the audited combined and consolidated financial statements. The Company had the following material recognizable subsequent events:

 

On June 29, 2021, the Company authorized and approved the amendment and restatement of our Articles of Incorporation to: (i) change our name to DH Enchantment Inc.; and (ii) amend the powers, rights and designation of the Series A Convertible Preferred Stock as more fully set forth below; and (iii) effectuate a 5:1 reverse split, all of which are subject to final authorization by FINRA. The Company also approved the designation of 10,000,000 shares of Series B Convertible Preferred Stock which took effect immediately.

 

After the amendment, holders of the Series A Convertible Preferred Stock will not be: (i) entitled to receive dividends or other distributions; (ii) vote on matters submitted to a vote of the stockholders; and (iii) able to convert the Series A Convertible Preferred Stock into common stock or any other securities of the corporation.

 

On July 26, 2021, the Company consummated the Share Exchange Transaction among DH Investment Group Limited (“DHIG”) and its shareholders (Sally Lo and Daily Success Development Ltd.) and issued 100,000 shares of Series B preferred stock in exchange for 100% equity interest of DHIG. Upon completion of the Share Exchange Transaction, DHIG became a 100% owned subsidiary of the Company. Sally Lo, our sole executive officer and director, received 35,000 shares of our Series B Convertible Preferred Stock, and Daily Success Development Ltd., our significant shareholder, received 65,000 shares of our Series B Convertible Preferred Stock.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  F-17  

 

 

SIGNATURES

 

Pursuant to the requirements of Section 12 of the Securities Exchange Act of 1934, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized.

 

  Energy Management International, Inc.
     
  By: /s/ Sally Kin Yi LO
    Sally Kin Yi LO
    Title: Chief Executive Officer
     
    August 4, 2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  34  

Exhibit 3.1

ROSS MILLER Sec r e t a ry o f State 204 North Carson Street , Ste 1 Carson City, Nevada 89701 - 4299 (775) 684 5708 Website : www . nvsos . gov C e rt i fica t e t o A c c o m pa n y Res t ate d Arti c l es or A mended an d R es t a t e d Arti c l es ( PU R SU A NT TO N R S) F i l e d i n t h e O ffi c e of Bu s i n es s N umb e r C 1 8 1 29 - 200 4 :;.;;?' S ec r e t a r y of S ta t e S t a t e O f N ev a da F i li n g N u mber 20 1 1 0 0 8 6 22 2 - 34 F i l e d O n 0 2 / 0 1 / 2 0 11 N u m b e r of P a g e s 7 U S E BL A C K IN K ONL Y · 0 0 NO T HIGHLIGH T ABO V E SPA C E I S FO R O FF I CE U S E O NLY This Form is 1 0 Accompany Restated Articles or Amended and Restated Articles of Inco r por a tion (Pursuant to NRS 78 . 403 , 82 . 371 , BS. 22 1 , 87A , 88.355 or 88A.250) {This form is also to be us e d to accompany Restated Articles or Amended and Restated Articles for Lim i t ed - Liabili ty Companies , Cert i ficates of Limi t ed Partnership , Limited - Liability Limited Partnerships and Business Trusts) 1. N ame of N ev ad a en ti ty as l as t r e c o r ded tn th i s offi ce ; ENERGY MAN A G E M!..: NT TN TF.R : \ ' AT IONA L , !" KC . 2. T h e a rti c l es a re bein g D R est a ted o r [Kl Amended and Restated ( ch eck o nl y o ne ). Pl e as e e nti t l e yo ur a ttac h e d a r t icl es "Restated" or "Amended and Restated," a cco r ding l y. 3. In d i cate wh a t c h a ng es hav e b ee n m ade by check i n g t he a ppro p r i a t e b ox; * D No a m e nd me n ts ; a rt ic l es arc r e s tated o n ly a n d a r e s i gned by ;:, n offic e r of t he corpora ti o n w ho h as b een aut h o r ize d to exec ut e t he ce rti ficate by reso l uti o n o f th e b o ard of di r ec t ors adop t ed on ce r1 1 fic a t e c orrec tl y s e t s fort h t he tex t of l h e art icl es or cer ti fic at e as amen ded t o t h e da l e o f t h e certifica t e . D Th e e n t i t y n am e h a s bee n am e n ded. D T he r eg i s ter ed age n t h as been ch a nged . (atta c h Cert i ficate of A cce pt a n ce fro m n ew reg i s t e r ed age n t) D T he p u rp o se o f the e n t it y h a s be en ame n d e d . IR] T h e aut ho r ize d shares h ave bee n a m ended. D T h e di r ecto r s, m anage r s or ge n e r a l p a rtne r s h ave b e en a m end e d. 0 I R S t ax l a n guag e h as bee n a dde d . 1K] Articl e s h c1 v e b een added . The A n i c l o s h , 1V e b e e n d e l et e d . 0 Othe r . T h e art i cles o r ce rt i fi cate h ave b ee n a m e n d e d a s f o ll o ws (p r ov id e a rti cle n u m be r s. i f avai l a bl e ) : • T h i s f orm i s to accompany R e state d A rt i c l es o r A m e n d ed and R esta ted Artic l e s w h i c h c o n t ain newly alt ere d o r ame nd ed articles. T he Restated Art i cles mus t conta i n all of l he req u i remen t s as s e t f o rt h 1n t h e sta t ut es fo r a mend in g or al ter i ng t h e art ic l e s f o r c ert i f i c ate s . IMPORTANT ; Fa i l u re lo in c lude any of t he a b ove informat i o n a n d sub m i t with t he prope r fee s ma y c a use th i s fi ling t o b e r e je c t ed . Thi s f o r m must b e a c r ; o r n p a 1Jie d b y ap p r o p r iat e f e e s . N e v m l " S e c r e t a ry of St a t e Hc s t ot e d A r t i c l es Re v is e d : 7 - 1 - 08

 
 

ARTICLES OF INCORPORATION OF ENERGY MANAGEMENT INTERNATIONAL, INC. Howard Dunn and Bradley R. Jones hereby certify that: A. Howard Dunn is the President and Bradley R. Jones is the Secretary of ENERGY MANAGEMENT INTERNA TION, rNC., a Nevada corporation. B. The Articles oflncorporation of this corporation are amended and restated in their entirety to read as follows and supersede and take the place of the existing Articles oflncorporation and all prior amendments thereto and restatements thereof: ARTICLE 1. COMPANY NAME 1.1 The name of the corporation shall be: ENERGY MANAGEMENT INTERNATIONAL, INC. ARTICLE 2. DURATION law. 2.1 The corporation shall continue in existence perpetually unless sooner dissolved according to ARTICLE 3. PRINCIPAL OFFICE AND RESIDENT AGE'NT 3.1 The principal office of the corporation is 2533 North Carson Street, Carson City, Nevada 89706. The name and address of it Resident Agent is Laughlin Associates, Inc., 2533 North Carson Street. Carson City, Nevada 89706. Either the principal office or the resident agent may be changed in the manner provided for by law. ARTICLE 4. PURPOSE 4.1 The purpose for which the corporation is organized is to engage in any lawful activity within or without the State ofNevada. 4.1 The corporation may nlso maintain offices at such other places within or without the State of Nevada as it may from time to time determine . Corporate business of evey kind and nature may be conducted, and meetings of directors and shareholders may be held outside the State of Nevada with the same i::ffcct as if in the: State of Nevada . Page I of6

 
 

Page 2 of6 ARTICLES. BORAD OF DIRECTORS 5 . 1 The Board of Directors of the corporation shall consist of such number of persons, not less than om:, as shall be determined in accordance with the bylaws from time to time, and consists of the following persons: W i l l i a m A . Petty Howard B. Dunn Bradle y R . Jones 2533 N CARSON STREET CARSON CITY, NV 89706 2533 N CARSON STREET CARSON CITY, NV 89706 2533 N CARSON STREET CARSON CITY, NV 89706 ARTlCLE 6. CAPITAL STOCK 1. Authorized Capital Stock . The authori.zed number of shares which this corporation shall have ilie authority to fr,sue four billion five - hundred million (4,500,000,000) shares, consisting of (a) four billion four - hundred fifty million (4,450,000,000) shares of common stock, S0.001 par value per share (the "Common Stock"), and (b) fifty million (50,000,000) shares of preferred stock. $0.001 par value per share (the "Preferred Stock''), issuable in one or more series as hereafter provided. A description of the classes of shares and a statement of the number of shares in each class and their relative rights, voting power, and preferences granted to and restrictions imposed upon the shares of each class are as follows; 2. Common Stock , Each share of Common Stock shall have, for all purposes one (1) vote per .share. Subject to the preferences applicab[e to the Preferred Stock outstanding at any time, the holders of shares of Common Stock shall be enti t led to receive such dividends and other distributions in cash, property or shares of stock of the corporation as may be declared thereon by the Board of Direct.ors from time to time out of assets or funds of the corporation legally available therefore. The holders of Common Stock issued and outstanding have and possess the right to receive notice of shareholder's meetings and to vote upon the election of directors or upon any other matter as to which approval of the outstanding share of Common Stock or approval of the common shareholders is required or requested. 3. Preferred Stock . The Shares of Preferred Stock of the Corporation consists of; (i) Any series designated in section 6.4 of these Articles oflncorporation and (ii) any other series that may be issued from time to time in one or mor:: series. The Board of Directors is authorized, by resolution adopted and filed in accordance with law, to provide for the i ssue of such series of shares of Preferred Stock . Each series of Preferred Stock: (a) may have such vot i ng powers, full or limited, or may be without voting powers; (b) may be subject to redempt i on at such time or times and at such prices as determine by the Board of Directors;

 
 

(c) may be entitled to receive dividends. (which may be cumulative or non - cumulative) at such rah:: or rates, on such conditions and al such times, and payable in preference to, or in such relation to, the dividends payable on My other class or classes or series of stock; (d) may have such rights upon the dissolution of, or upon any distribution of the assets of, the Corporation; (e) may be made convertible into, or exchangeable for, shares of any other class or classes or of any other series of the same or any other class or classes of stock of the corporation or such other corporation or other entity at such price or prices or at such rates of exchange and with such adjustments; (f) may be entitled to the benefit of a sinking fund to be applied lo the purchase or redemption of shares of such series in such amount or amounts; (g) may be entitled to the benefit of conditions and restrictions upon the creation of indebtedness of the corporation or any subsidiary, upon the issue of any additional shares (including additional shares of such series or of any other series) and upon the payment of dividends or the making of other distributions on, and the purchase, redemption or other acquisition by the corporation or any subsidiary of, any outstanding shares of the corporation; and (h) may have such other relative, participating, optional or other special rights, quali fi catio ns , limitations or restrictions thereof, in each case as shall be stated in said resolution or resolutions providing for the issue of such shares of Preferred Stock. Shares of Preferred Stock of any series that have been redeemed or repurchased by the corporation (whether through the operation of a sinking fund or otherwise) or that, if convertible or exchangeable, have been converted or exchanged in accordance with their terms shall be retired and have the status of authorized and unissued shares of Preferred Stock of the :.ame series and may be reissued a$ a part of the series of which they were originally a part or may, upon the filing of an appropriate certificate with the Secretary of State of the State of Nevada be reissued as part of a new series of shares of Preferred Stock to be created by resolution or resolutions of the Board of Directors or as part of any other series of shares of Preferred Stock, all subject to the conditions or restrictions on issuance set forth in the resolution or resolutions adopted by the Board of Directors providing for the issue of any series of shares of Preferred Stock. 6.4 Designated Preferred Stock . Page 3 of6 6.4.l DESIGNATION FOR SERIES A CONVERTIBEL PR£FERRED STOCK (Pursuant to Section 78.1955 of the Nevada Revised Statutes) (a) Dcsigoation of Amount. The shares of such series created hereby shall be designated as "Series A Convertible Preferred Stock" (herein also referred to as "Series A CPS") and the authorized number of shares constituting such series shall be 5,000,000 . The par value of the Series A Convertible Preferred Stock shall be S0.002 per share . (b) Dividends. The holders of the shares of Series A CPS shall be entitled, a!ong with the Common Stock, to receive such dividends and other distributions in cash, property or shares of stock of the Corporation as may be declared thereon by the Board of Directors from time to time out of assets or funds of the Corporation legally available therefore. (c) Vo ting . In addition to any voting rights provided for elsewhere herein, in the Articles of Incorporation, as amended, and By - laws, as amended, the following provisions shall apply with regard to voting by the holders of Series A Preferred Stock:

 
 

Page 4 of6 (I) In General. Each share of Series A CPS shall entitle the holder thereof to two thousand (2,000) votes per share on all matters submitted to a vote of the shareholders of the Corporat i on . (d) Conversioo. ln addition to any conversion rights provided for elsewhecc herein, in the Articles oflncorporation, as a.mended, and By - laws, as amended, the following provisions shall apply with regard to conYerting shares of Series A CPS to common shares by the holders of Series A CPS : (1) In General. Each share of Series A Convertible Preferred Stock shall entitle the holder, upon surrender to the company treasury, thereof to two thousand (2,000) shares of common stock with al! the common share holder rights and privileges . (e) Series A IssuaDct and Common Share Reserve . The Corporation, through actions of the Board of Directors or Officers shall, in accordance with a provisions of this paragraph ( e ), at all t i mes place and ho!d in reserve ; (l) The number of unissued authorized common shares required to satisfy the conversion of all outstandin . g and issued Series A CPS as a new common !ihare issuance; herein this number of required common shares, as defined, shall be the Minimum Common Share Reserve". (2) The Minimum Common Share Reserve shall be determined before and after any Series A CPS issuance or conversion of Series A CPS. The amount of available authorized common shares of Corporation Stock, excluding any currently reserved common shares, as detennined prior to the issuance of any new Series A CPS issuance, must be sufficient to meet any post Series A CPS issuance Minimum Common Share Reserve requirements . (3) lf the Minimum Common Share Reserve cannot be met, as determined prior to any Series A CPS issuance, than the Board of Directors shall withhold from (i) authorizing the issuance of or (ii) issuing any Series A CPS shares until the Minimum Common Share Reserve can be satisfied by placing in reserve that number as required of common shares of the Corporation Stock . (4) If at any time the amount of shares held in reserve for issuance against conversion by the Series A CPS shares is less than the Minimum Common Share Reserve, than it is lhe duty of the Board of Direc t ors, hereby authorized in perpetuity by the Corporation unt i l rescinded by a majority vote of the Series A CPS Shareholders, to take all i mmedi a te actions necessary to expedite the placement of, (i) newly authorized common shares, in combination with or (ii) repurchased common shares as retired, into the common shares reserve, until a Minimum Common Shares Reserve, as reciuired, is depos i ted or held in reserve. ARTICLE 7 . NO FURTHER ASSESSMENTS 7 . l The capital stock, after the amount of the subscrip t ion price detennine by the Board of Diiectors has been paid in money, property, or services, as the Directors shall determine, shall be subject to no further assessment to pay the debts of the corporation, and no stock issued as fully paid up shall ever be assessable or assessed, and these Articles of Incorporation shall not and cannot be amended, regardless of the vote therefore, so as to amend, mo<lify or rescind this Articl 7 .

 
 

ARTICLE 8. NO PREEMPTIVE RIGHTS 8 . 1 Exc : ept as otherwise set forth herein, none of the shares of the corporation shall carry with them any preemptive right to acquire additional or other shares of the corporation and no holder of any stock of the corporation shall be entitled, as of right, to purchase or subscribe for any part of any unissued sh . ares of stock of the corporation or for any additional shan : s of stock, of any class or series, which may at any time be issued, whether now or hereafter authorized, or for any rights, options, or warrants to purchase or receive shares of stock or for any bond!!, certificates of indebtedness, debentures, or other securities . ARTICLE 9. N O CUMMULA TIV E VOTING 9.l There shall be no cumulative voting of shares. ARTICL E 10. ELECTION NOT TO BE GOVERNED BY PROVISIONS OF NRS 78.411 TO 78.444 . 10 . 1 The corporation, pursuant to NRS 78 . 434 , hereby elects not to be governed by the provisions ofNRS 78 . 411 to 78 . 411 , inclusive . ARTICLE 11. JNDEMNIFIC A TYO N O F OFFICERS AN D DIRECTORS 1. The corporation shall indemnify its directors, officers, employee, fiduciaries and agents to the fullest extent pennitted under the Nevada Revised Statutes . 2. Every person who was or is a party or is tru - eatened to be made a party to or is involved in an)' action, suit or proceedings, whether civil, criminal . administrative or investigative, by reason of the fact that he or a person for whom he is the legal representative is or was a director or officer of the corporation or is or was serving at the request of the corporation as a director or officer of another corporation, or as its representative in a partnership, joint venture, trust or other enterprise, shall be indemnified and held hannles : s to the fullest extent legally pennissible under the law of the State of Nevada from time to time against all expenses, liability and loss (including attorney's fees, judgments, fines and amounts paid or to be paid in settlement) reasonably incurred or suffered by him in connection therewith . Such right ofindemnifiwition shall Page 5 of6 be a contract right that may be enforced in any manner desired by such person. Such right of indemnification shall not oe exclusive of any other right which such directors, officers or representatives may have or hereafter acquire and, without limiting the generalit)' of such statement, they shall be entitled to their respective rights of indemnification under any By - Law, agreement, vote of stockholders, provision of law or otherwise, as well as their rights under this Article . l l . 3 Without limiting the application of the foregoing, the Board of Directors may adopt By - Laws from time to time with respect to indemnification to provide at all times the fullest indemnification permitted by lhe law of the State of Nevada and may cause the corporation to purchase and maintain insurance on behalf of any person who is or was a director or officer of the corporation as a director of officer of another corporation, or as its representative in a partnership, joint venture, trust or other enterprise against any liability asserted against such person and incuned in any such capacity or arising out of such status, whether or not the corporation would have the power to indemnify such person . 11 .4 The private property of the Stockholders, Directors and Officers shall not be subject to the payment of corporate debts to any extent whatsoever.

 
 

11 . S No director, officer or 1 tw - eholder shall have any persona ! liability to the corporation or its stockhol fordamages for bre 11 ch of fiduciary duty u a director or officer, except that this provision does not eliminate nor limit in any way the liability ofa director or officer for . (a) Acts or omissions which invo l ve intentional mia.conduct. fraud or a knowing vioh1tion of law; or {b) The paym1mt of dividendi in violation of Nevada Revised Statutes (N.R.S,) 78 . 300. C. The foregoing Amended and Re.stated Articles of lnC<lrporation has been duly approved b;y the Board of Directors in accordance with Sections 7&.385, 78.390 and 78 . 403 of the Nevada Revised S tatu tes . D. The foregoing amendment and restatement of the Articles of Incorporation have been duly approved by 1he required written Conswt of holders in a ordancc with ction 78.390 of the Nevada Revised Statutes. The number of votes for a volins quOTWn wa, prcsei:it, and as detennined to be R._¾ of the ouutandiog common shares. The nwnber of shares voting in fa.vor of the Amended and Restated Articles of Incorporation was greater than 2.!_%. IN WJTIIIESS WHEREOF, we have hereunto set our hands this day of February 2011, hereby declaring and certifying that the facts stated hcreioabove are true. Page 6 of6

STATE OF NEVADA BARBARA K. CEGA VSKE Secretary of State KIMBERLEY PERONDI Deputy Secretary for Commercial Recordings OFFICE OF THE SECRETARY OF STATE Commer c ial R e cordings & Notary Divi s ion 202 N. Ca r so n S t reet Carso n C i ty, NV 8970 1 T ele ph o n e (775) 684 - 5708 F ax (77 5 ) 684 - 71 3 8 N o r t h la s Ve g a s C i t y H a ll 22 50 l a s Vegas Blvd N orth , Suit e 4 00 N o rt h l a s V e g a s , N V 8 9030 T e l e phon e ( 7 02 ) 4 86 - 2 88 0 Fa x ( 702 ) 4 86 - 2888 Frederick C Bauman 6440 Sky Pointe Dr Ste 140 - 149 Las Vegas, NV 89131, USA Work Order #: W2020110400615 Octo b er 19, 2020 Receipt Version: 1 Special Handling Instructions: Submitter ID : 349821 Charees Description Fee Description Filing Number Filing Dat e / Time Filing Status Qty Price Amoun1 Business Entity Copies Request Fees 20201023262 10/19 / 2020 10:00:00 AM Approved 1 $1 4 . 00 $14 . 00 Total $14.00 p ayments Type Description Payment Status Amoun1 Credit Card 6045132529166197903013 Success $14 . 00 Total $14.00 Frederick C Bauman 6440 Sky Pointe Dr Ste 140 - 149 Las Vegas, NV 89131 , USA

 

Exhibit 3.2

 

CERTIFICATE OF DESIGNATIONS OF PREFERENCES AND RIGHTS OF

SERIES B CONVERTIBLE PREFERRED STOCK

OF

ENERGY MANAGEMENT INTERNATIONAL, INC.

a Nevada corporation

 

The undersigned Chief Financial Officer of Energy Management International, Inc. (the “Corporation”), a corporation organized and existing under the laws of the State of Nevada, DOES HEREBY CERTIFY that pursuant to the authority contained in the Corporation’s Articles of Incorporation, and pursuant to Section 78.1955 of the Nevada Revised Statutes (the “NRS”), and in accordance with the provisions of the resolution creating a series of the class of the Corporation’s authorized Preferred Stock designated as Series B Convertible Preferred Stock, as follows:

 

FIRST: The Articles of Incorporation of the Corporation, as amended, authorize the issuance by the Corporation of 4,450,000,000 shares of common stock, par value of $0.001 per share (the “Common Stock”) and 50,000,000 shares of preferred stock, par value of $0.001 per share (the “Preferred Stock”), and, further, authorize the Board of Directors of the Corporation, by resolution or resolutions, at any time and from time to time, to divide and establish any or all of the unissued shares of Preferred Stock not then allocated to any series into one or more series and, without limiting the generality of the foregoing, to fix and determine the designation of each such share, the number of shares which shall constitute such series and certain preferences, limitations and relative rights of the shares of each series so established.

 

SECOND: By unanimous written consent of the Board of Directors of the Corporation dated June 29, 2021 the Board of Directors designated 10,000,000 shares of the Preferred Stock as Series B Preferred Stock, par value $0.001 per share (the “Series B Preferred Stock”), pursuant to a resolution providing that a series of preferred stock of the Corporation be and hereby is created, and that the designation and number of shares thereof and the voting and other powers, preferences and relative, participating, optional or other rights of the shares of such Series B Preferred Stock, and the qualifications, limitations and restrictions thereof, are as follows:

 

SERIES B PREFERRED STOCK

 

1.                Designation for Series B Convertible Preferred Stock. There is hereby designated a class of Preferred Stock of the Corporation as the Series B Preferred Stock, par value $0.001 per share of the Corporation (the “Series B Preferred Stock”). The number of shares, powers, terms, conditions, designations, preferences and privileges, relative, participating, optional and other special rights, and qualifications, limitations and restrictions, if any, of the Series B Preferred Stock shall be as set forth in this Certificate of Designations of Preferences and Rights of Series B Convertible Preferred Stock (the “Certificate”). For purposes hereon, a holder of shares of Series B Preferred Stock shall be referred to as a “Series B Holder.”

 

1.1.             Designation of Amount. The number of authorized shares of the Series B Preferred Stock is ten million (10,000,000) shares, par value $0.001.

 

1.2.             Vote. Other than as set forth in Section 1.8 and subject to adjustment as set forth herein, each share of Series B Preferred Stock shall vote on an “as converted” basis on any matter submitted to the holders of the Common Stock, or any class thereof, for a vote, and shall vote together with the Common Stock, or any class thereof, as applicable, on such matter for as long as the share of Series B Preferred Stock is issued and outstanding.

 

1.3.            Conversion. Each share of Series B Preferred Stock shall be convertible into ten (10) shares of Common Stock of the Corporation (the “Conversion Ratio”) at the election of the Series B Holder.

 

 

 

 

 

  1  
 

 

1.3.1.       Any Common Stock delivered as a result of conversion pursuant to this section shall be validly issued, fully paid and non- assessable, free and clear of any preemptive right, liens, claims, rights or encumbrances other than those arising under the law or the Bylaws of the Corporation. Immediately following the settlement of conversion, the rights of the holders of converted Series B Preferred Stock shall cease and the persons entitled to receive shares of Common Stock upon the conversion of shares of Series B Preferred Stock shall be treated for all purposes as having become the owners of such shares of Common Stock. Concurrently with such conversion, the converted shares of Series B Preferred Stock shall cease to be outstanding and shall be canceled, and such shares of Series B Preferred Stock shall be restored to authorized but unissued shares of Series B Preferred Stock.

 

1.3.2.        If, after the date of issuance of the Series B Preferred Stock (the “Original Issue Date”), the Corporation (i) makes a distribution on its Common Stock in cash, securities (including Common Stock) or other property or assets, (ii) subdivides or splits its outstanding Common Stock into a greater number of Common Stock, (iii) combines or reclassifies its Common Stock into a smaller number of Common Stock or (iv) issues by reclassification of its Common Stock any securities (including any reclassification in connection with a merger, consolidation or business combination in which the Corporation is the surviving person), then the Conversion Ratio in effect at the time of the record date for such distribution or of the effective date of such subdivision, split, combination, or reclassification shall be proportionately adjusted so that the conversion of the Series B Preferred Stock after such time shall entitle the holder to receive the aggregate number of Common Stock (or shares of any securities into which such shares of Common Stock would have been combined, consolidated, merged or reclassified pursuant to clauses (iii) and (iv) above) that such holder would have been entitled to receive if the Series B Preferred Stock had been converted into Common Stock immediately prior to such record date or effective date, as the case may be, and in the case of a merger, consolidation or business combination in which the Corporation is the surviving person, the Corporation shall provide effective provisions to ensure that the provisions in this Section relating to the Series B Preferred Stock shall not be abridged or amended and that the Series B Preferred Stock shall thereafter retain the same powers, preferences and relative participating, optional and other special rights, and the qualifications, limitations and restrictions thereon, that the Series B Preferred Stock had immediately prior to such transaction or event. An adjustment made pursuant to this Section 1.5.2 shall become effective immediately after the record date in the case of a distribution and shall become effective immediately after the effective date in the case of a subdivision, combination, reclassification (including any reclassification in connection with a merger, consolidation or business combination in which the Corporation is the surviving person) or split. Such adjustment shall be made successively whenever any event described above shall occur.

 

1.3.3.        No fractional Common Stock shall be issued upon the conversion of any Series B Preferred Stock. All Common Stock (including fractions thereof) issuable upon conversion of more than one share of Series B Preferred Stock by a holder thereof shall be aggregated for purposes of determining whether the conversion would result in the issuance of any fractional stock. If, after the aforementioned aggregation, the conversion would result in the issuance of a fraction of a Common Stock, the Corporation shall not issue a fractional Common Stock but shall round the fractional Common Stock to the nearest whole Common Stock (and a 0.5 of a share of Common Stock shall be rounded up to the next higher share of Common Stock).

 

1.4.             Dividends. Series B Holders shall fully participate, on an as-converted basis, in any dividends declared and paid or distributions on Common Stock as if the Series B Preferred Stock were converted into shares of Common Stock as of the record date for such dividend or distribution at the Conversion Ratio as such Conversion Ratio may be adjusted from time to time pursuant to the terms of Section 1.5.2 hereof. Series B Holders shall also be entitled to receive, when and as declared by the Board and declared by the Corporation, out of funds that are legally available therefor, such dividends as may be declared on each outstanding share of Series B Preferred Stock.

 

 

 

 

  2  
 

 

1.5.             Liquidation.

 

1.5.1.        In the event of a liquidation (complete or partial), dissolution or winding up of the affairs of the Corporation, whether voluntary or involuntary (a “Liquidation”), after payment or provision for payment of the debts and other liabilities of the Corporation, the Series B Holders shall be entitled to receive, in respect of any shares of Series B Preferred Stock held by them, out of assets of the Corporation available for distribution to shareholders of the Corporation or their assignees, and subject to the rights of any outstanding shares of Senior Stock and before any amount shall be distributed to the holders of Junior Stock, a liquidating distribution (the “Liquidation Distribution”) in an amount equal to the amount such Series B Holder would have been entitled to receive had such holder converted its shares of Series B Preferred Stock into shares of Common Stock at the Conversion Ratio effective immediately prior to such Liquidation. “Junior Stock” means any class or series of Capital Stock of the Corporation, the terms of which do not expressly provide that such class or series ranks senior to or on a parity with the Series B Preferred Stock with respect to dividend rights or rights upon a liquidation, winding-up or dissolution of the Corporation (collectively, together with any warrants, rights, calls or options exercisable for or convertible into such Capital Stock, the “Junior Stock”). “Senior Stock” means any class or series of Capital Stock of the Corporation, the terms of which expressly provide that such class or series ranks senior to the Series B Preferred Stock with respect to dividend rights or rights upon a liquidation, winding-up or dissolution of the Corporation (collectively, together with any warrants, rights, calls or options exercisable for or convertible into such Capital Stock, the “Senior Stock”). “Capital Stock” of any person means any and all shares, interests, participations or other equivalents however designated of corporate stock or other equity participations, including partnership interests, whether general or limited, of such person and any rights (other than debt securities convertible or exchangeable into an equity interest), warrants or options to acquire an equity interest in such person.

 

1.5.2.        If, upon any Liquidation, the amount payable with respect to the Liquidation Distribution is not paid in full, the Series B Holders and any Parity Stock shall share equally and ratably in any distribution of the Corporation’s assets in proportion to the respective liquidation distributions to which they are entitled. After the payment in cash or proceeds to the Series B Holders of the full amount of the Liquidation Distribution with respect to outstanding shares of Series B Preferred Stock, the Series B Holders shall have no right or claim, based on their ownership of shares of Series B Preferred Stock, to the remaining assets of the Corporation, if any. Whenever any such distribution shall be paid in property other than cash, the value of such distribution shall be the fair market value of such property as determined in the good faith reasonable discretion of the Board or liquidating trustee, as the case may be. “Parity Stock” refers to any class or series of Capital Stock of the Corporation, the terms of which provide that such class or series ranks on a parity with the Series B Preferred Stock with respect to dividend rights or rights upon a liquidation, winding-up or dissolution of the Corporation (collectively, together with any warrants, rights, calls or options exercisable for or convertible into such Capital Stock, the “Parity Stock”).

 

1.5.3.        In the event of any liquidation, dissolution or winding up of the Corporation, either voluntarily or involuntarily, a merger or consolidation of the Corporation wherein the Corporation is not the surviving entity, or a sale of all or substantially all of the assets of the Corporation, the Series B Preferred Stock shall not be entitled to receive any distribution of any of the assets or surplus funds of the Corporation.

 

1.6.             Amendment. The Corporation may not, and shall not, amend this Certificate of Designations without the prior written consent of Series B Holders holding a majority of the Series B Preferred Stock then issued and outstanding, in which vote each share of Series B Preferred Stock then issued and outstanding shall have one vote, voting separately as a single class, in person or by proxy, either in writing without a meeting or at an annual or a special meeting of such Series B Holders.

 

2.                   Miscellaneous.

 

 

 

 

  3  
 

 

2.1.             Legend. Any certificates representing the Series B Preferred Stock shall bear a restrictive legend in substantially the following form (and a stop transfer order may be placed against transfer of such stock certificates):

 

THE SECURITIES REPRESENTED BY THIS AGREEMENT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, NOR REGISTERED NOR QUALIFIED UNDER ANY STATE SECURITIES LAWS. SUCH SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, DELIVERED AFTER SALE, TRANSFERRED, PLEDGED, OR HYPOTHECATED UNLESS QUALIFIED AND REGISTERED UNDER APPLICABLE STATE AND FEDERAL SECURITIES LAWS OR UNLESS, IN THE OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY, SUCH QUALIFICATION AND REGISTRATION IS NOT REQUIRED. ANY TRANSFER OF THE SECURITIES REPRESENTED BY THIS CERTIFTCATE IS FURTHER SUBJECT TO OTHER RESTRICTIONS, TERMS AND CONDITIONS WHICH ARE SET FORTH HEREIN.

 

2.2.             Lost or Mutilated Series B Preferred Stock Certificate. If the certificate for the Series B Preferred Stock held by the holder thereof shall be mutilated, lost, stolen or destroyed, the Corporation shall execute and deliver, in exchange and substitution for and upon cancellation of a mutilated certificate, or in lieu of or in substitution for a lost, stolen or destroyed certificate, a new certificate for the share of Series B Preferred Stock so mutilated, lost, stolen or destroyed but only upon receipt of evidence of such loss, theft or destruction of such certificate, and of the ownership hereof, and indemnity, if requested, all reasonably satisfactory to the Corporation.

 

2.3.             Interpretation. If the Series B Holder shall commence an action or proceeding to enforce any provisions of this Certificate of Designations, then the prevailing party in such action or proceeding shall be reimbursed by the other party for its attorney’s fees and other costs and expenses incurred with the investigation, preparation and prosecution of such action or proceeding.

 

2.4.             Waiver. Any waiver by the Corporation or the Series B Holder of a breach of any provision of this Certificate shall not operate as or be construed to be a waiver of any other breach of such provision or of any breach of any other provision of this Certificate. The failure of the Corporation or the Series B Holder to insist upon strict adherence to any term of this Certificate on one or more occasions shall not be considered a waiver or deprive that party of the right thereafter to insist upon strict adherence to that term or any other term of this Certificate. Any waiver must be in writing.

 

2.5.             Severability. If any provision of this Certificate is invalid, illegal or unenforceable, the balance of this Certificate shall remain in effect, and if any provision is inapplicable to any person or circumstance, it shall nevertheless remain applicable to all other persons and circumstances. If it shall be found that any interest or other amount deemed interest due hereunder violates applicable laws governing usury, the applicable rate of interest due hereunder shall automatically be lowered to equal the maximum permitted rate of interest.

 

 

IN WITNESS WHEREOF, Energy Management International, Inc. has caused this Certificate to be signed by a duly authorized officer on this 29th day of June, 2021.

 

 

Energy Management International, Inc.

 

/s/ Sally Kin Yi LO

Name:  Sally Kin Yi LO

Title:    Chief Executive Officer

 

 

  4  

 

 

 

 

Exhibit 3.3

 

 

BYLAWS

 

OF

 

ENERGY MANAGEMENT INTERNATIONAL, INC.

(A Nevada Corporation)

 

 

ARTICLE I.

 

OFFICES

 

Section 1.01. Location of Offices. The corporation may maintain such offices within or without the State of Nevada as the Board of Directors may from time to time designate or require.

 

Section 1.02. Principal Office. The address of the principal office of the corporation shall be at the address of the registered office of the corporation as so designated in the office of the Secretary of State of the state of incorporation, or at such other address as the Board of Directors shall from time to time determine.

 

 

ARTICLE II.

 

MEETING OF SHAREHOLDERS

 

Section 2.01. Annual Meetings. The annual meeting of the shareholders shall be held on such date as the Board of Directors shall determine by resolution. If the election of directors shall not be held on the day thus designated for any annual meeting of the shareholders, or at any adjournment thereof, the Board of Directors shall cause the election to be held at a special meeting of the shareholders as soon thereafter as may be practical.

 

Section 2.02. Special Meetings. Special meetings of the stockholders may be held at the office of the corporation in the State of Nevada, or elsewhere, whenever called by the President, or by the Board of Directors, or by vote of, or by an instrument in writing signed by the holders of a majority of the issued and outstanding capital stock. Not less than ten (10) nor more than sixty (60) days written notice of such meeting, specifying the day, hour and place, when and where such meeting shall be convened, and the objects for calling the same, shall be mailed in the United States Post Office , or via express or overnight mail, addressed to each of the stockholders of record at the time of issuing the notice, and at his, her, or its address last known, as the same appears on the books of the corporation.

 

The written certificate of the officer or officers calling any special meeting setting forth the substance of the notice, and the time and place of the mailing of the same to the several stockholders , and the respective addresses to which the same were mailed , shall be prima facie evidence of the manner and fact of the calling and giving such notice.

 

All business to be lawfully transacted by the stockholders of the corporation may be transacted at any special meeting or at the adjournment thereof. Only such business, however, shall be acted upon at special meeting of the stockholders as shall have been referred to in the notice calling such meetings; but at any stockholders' meeting at which all of the outstanding capital stock of the corporation is represented, either in person or by proxy, any lawful business may be transacted, and such meeting shall be valid for all purposes.

 

 

 

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Section 2.03. Place of Meetings. The Board of Directors may designate any place, either within or without the state of in corporation , as the place of meeting for any annual or special meeting. A waiver of notice, signed by all shareholders entitled to vote at a meeting, may designate any place, either within or without the state of incorporation, as the place for the holding of such meeting. If no designation is made, the place of meeting shall be the registered office of the corporation in the state of incorporation.

 

Section 2.04. Notice of Meetings. Notification of the annual meeting shall state the purpose or purposes for which the meeting is called and the date, time, and the place, which may be within or without this state, where it is to be held. A copy of such notice shall be either delivered personally to, or shall be mailed with postage prepaid, to each stockholder of record entitled to vote at such meeting not less than ten (10) nor more than sixty (60) days before such meeting. If mailed, notice shall be directed to a stockholder at his address as it appears upon the records of the corporation. Upon such mailing of any such notice, the service thereof shall be complete and the time of the notice shall begin to run from the date upon such notice is deposited in the mail for transmission to said stockholder. Personal delivery of such notice to any officer of a corporation, association, or any member of a partnership, shall constitute delivery of such notice to such corporation, association, or any member of a partnership.

 

Section 2.05. Waiver of Notice. If all the stockholders of the corporation shall waive notice of the annual or special meeting, no notice of such meeting shall be required. Further, whenever all the stockholders shall meet in person or by proxy, such meeting shall be valid for all purposes without call or notice, and at such meeting any corporate action may be taken.

 

Section 2.06. Default Notice. If the address of any stockholder does not appear upon the books of the corporation, it will be sufficient to address any notice to said stockholder at the registered office of the corporation within the state of Nevada.

 

Section 2.07. Fixing Record Date. For the purpose of determining shareholders entitled to notice of or to vote at any annual meeting of shareholders or any adjournment thereof, or shareholders entitled to receive payment of any dividend or in order to make a determination of shareholders for any other proper purpose, the Board of Directors of the corporation may provide that the share transfer books shall be closed , for the purpose of determining shareholders entitled to notice of or to vote at such meeting, but not for a period exceeding sixty (60) days. If the share transfer books are closed for the purpose of determining shareholders entitled to notice of or to vote at such meeting, such books shall be closed for at least ten (10) days immediately preceding such meeting.

 

In lieu of closing the share transfer books, the Board of Directors may fix in advance a date as the record date for any such determination of shareholders, such date in any case to be not more than sixty (60) and, in case of a meeting of shareholders, not less than ten (10) days prior to the date on which the particular action requiring such determination of shareholders is to be taken. If the share transfer books are not closed and no record date is fixed for the determination of shareholders entitled to notice of or to vote at a meeting or to receive payment of a dividend, the date on which notice of the meeting is mailed or the date on which the resolution of the Board of Directors declaring such dividend is adopted, as the case may be, shall be the record date for such determination of shareholders. When a determination of shareholders entitled to vote at any meeting of shareholders has been made as provided in this Section, such determination shall apply to any adjournment thereof. Failure to comply with this Section shall not affect the validity of any action taken at a meeting of shareholders.

 

Section 2.08. Voting Lists. At each meeting of the stockholders, a full, true and complete list, in alphabetical order, of all the stockholders entitled to vote at such meeting, and indicating the number of shares held by each, certified by the Secretary of the corporation, shall be furnished, which list shall be prepared not less than ten (10) nor more than sixty (60) days before such meeting, and shall be open to the inspection of the stockholders, or their agents or proxies, at the place where such meeting is to be held, and not less than ten (10) nor more than sixty (60) days prior thereto. Only the persons in whose names shares of stock are registered on the books of the corporation for not less than ten (10) nor more than sixty (60) days preceding the date of such meeting, as evidenced by the list of stockholders so furnished, shall be entitled to vote at such meeting. Proxies and powers of attorney to vote must be filed with the secretary of the corporation before an election or a meeting of the stockholders, or they cannot be used at such election or meeting.

 

 

 

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Section 2.09. Voting Rights. At each meeting of the stockholders, every stockholder shall be entitled to vote in person or by his or her duly authorized proxy appointed by instrument in writing subscribed by such stockholder or by his or her duly authorized attorney. Each stockholder shall have one (1) vote for each share of stock standing registered in his or her or its name on the books of the corporation.

 

The votes for directors, and upon demand by any stockholder, the votes upon any question before the meeting, shall be by viva voce.

 

Section 2.10. Quorum. At all stockholders' meetings, the holders of a majority of the entire issued and outstanding capital stock of the corporation, shall constitute a quorum for all purposes of such meetings .

 

If holders of the amount of stock necessary to constitute a quorum shall fail to attend, in person or by proxy, at the time and place fixed by these Bylaws for any annual meeting, or fixed by a notice as above provided for a special meeting, a majority in interest of the stockholders present in person or by proxy may adjourn from time to time without notice other than by announcement at the meeting, until holders of the amount of stock requisite to constitute a quorum shall attend. At any such adjourned meeting at which a quorum shall be present, any business may be transacted which might have been transacted as originally called.

 

Section 2.11. Proxies. At each meeting of the shareholders, each shareholder entitled to vote shall be entitled to vote in person or by proxy; provided, however, that the right to vote by proxy shall exist only in case the instrument authorizing such proxy to act shall have been executed in writing by the registered holder or holders of such shares, as the case may be, as shown on the share transfer of the corporation or by his or her or her attorney thereunto duly authorized in writing. Such instrument authorizing a proxy to act shall be delivered at the beginning of such meeting to the secretary of the corporation or to such other officer or person who may, in the absence of the secretary, be acting as secretary of the meeting. In the event that any such instrument shall designate two or more persons to act as proxies, a majority of such persons present at the meeting, or if only one be present, that one shall (unless the instrument shall otherwise provide) have all of the powers conferred by the instrument on all persons so designated. Persons holding stock in a fiduciary capacity shall be entitled to vote the shares so held and the persons whose shares are pledged shall be entitled to vote, unless in the transfer by the pledge or on the books of the corporation he or she shall have expressly empowered the pledgee to vote thereon, in which case the pledgee, or his or her or her proxy, may represent such shares and vote thereon.

 

Section 2.12. Voting Procedures. At each meeting of the stockholders, the polls shall be opened and closed; the proxies and ballots issued, received, and be taken in charge of, for the purpose of the meeting, and all questions touching the qualifications of voters and the validity of proxies, and the acceptance or rejection of votes, shall be decided by two (2) inspectors. The presiding officer of the meeting shall appoint such inspectors at or prior to the meeting.

 

Section 2.13. Written Consent by Majority of Stockholders. In accordance with NRS 78.320(b)(2), any action which may be taken at any annual or special meeting of the stockholders may be taken without a meeting and without prior notice if consent thereto is signed by stockholders holding at least a majority of the voting power, except that if a different proportion of voting power is required for such an action at a meeting, then that proportion of written consent is required.

 

Section 2.14. Order of Business. At the stockholders' meetings, the regular order of business shall be as follows:

 

(a) Reading and approval of the Minutes of previous meeting or meetings;
(b) Reports of the Board of Directors, the President, Chief Financial Officer and Secretary of the corporation in the order named;

(c) Reports of Committees;
(d) Election of Directors;
(e) Unfinished business;
(f) New business;
(g) Adjournment .

 

 

 

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ARTICLE III.

 

DIRECTORS AND THEIR MEETINGS

 

Section 3.01. General Powers. The property, affairs, and business of the corporation shall be managed by its Board of Directors . The Board of Directors is vested with the complete and unrestrained authority in the management of all the affairs of the corporation, and is authorized to exercise for such purpose as the General Agent of the corporation, its entire corporate authority. The Board of Directors may exercise all the powers of the corporation whether derived from law or the Articles of In corporation, except such powers as are by statute, by the Articles of Incorporation or by these Bylaws, vested solely in the shareholders of the corporation.

 

Section 3.02. Number, Term, and Qualifications. The Board of Directors of the corporation shall consist of such number, not less than one (1) or more than five (5) persons or such number as shall be fixed from time to time by the Board of Directors. Each director shall hold office until the next annual meeting of shareholders of the corporation and until his or her successor shall have been duly elected and qualified . Directors need not be citizens of the United States or residents of the state of incorporation or shareholders of the corporation.

 

Section 3.03. Resignations. A director may resign at any time by delivering a written resignation to either the president, a vice president, the secretary, or assistant secretary, if any. The resignation shall become effective on its acceptance by the Board of Directors; provided that if the board has not acted thereon within ten days from the date presented, the resignation shall be deemed accepted.

 

Section 3.04. Removal. At a meeting expressly called for that purpose, one or more directors may be removed by a vote of a majority of the shares of outstanding stock of the corporation entitled to vote at an election of directors.

 

Section 3.05. Vacancies and Newly Created Directorship. All vacancies, including those caused by an increase in the number of directors, may be filled by a majority of the remaining directors, though less than a quorum, unless it is otherwise provided in the Articles of Incorporation .

 

Section 3.06. Regular Meetings. A regular meeting of the Board of Directors shall be held without other notice than this bylaw immediately following, and at the same place as, the annual meeting of shareholders. The Board of Directors may provide by resolution the time and place, either within or without the state of incorporation, for the holding of additional regular meetings without other notice than such resolution.

 

Section 3.07. Special Meetings. Special meetings of the Board of Directors may be held on the call of the Chairman of the Board, Chief Executive Officer, President, Vice President, Chief Financial Officer or Secretary on at least one ( 1) day notice by mail, facsimile, e-mail or telegraph to directors ' resident in the State of Nevada, and on at least three (3) days notice by mail, or three (3) days notice by mail, facsimile , e-mail or telegraph, to directors not resident in said state.

 

Any meeting of the Board, no matter where held, at which all of the members shall be present, even though without or of which notice shall have been waived by all absentees, provided a quorum shall be present, shall be valid for all purposes unless otherwise indicated in the notice calling the meeting or in the waiver of notice. Any and all business may be transacted by any meeting, either regular or special, of the Board of Directors.

 

Section 3.08. Location of Directors Meeting. Meetings of the directors may be held at the principal office of the corporation in the State of Nevada, or elsewhere, at such place or places as the Board of Directors may, from time to time, determine.

 

 

 

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Section 3.09. Meetings by Telephone Conference Call. The Board of Directors may provide, by resolution, for the holding of additional regular meetings, without notice other than such resolution. The Board of Directors may hold any such additional regular meetings by telephone conference or other means of electronic communication by which all directors can hear and speak to each of the other directors.

 

Section 3.10. Quorum. A majority of the Board of Directors in office shall constitute a quorum for the transaction of business, but if at any meeting of the Board there be less than a quorum present, a majority of those present may adjourn from time to time, until a quorum shall be present, and no notice of such adjournment shall be required. The Board of Directors may prescribe rules not in conflict with these Bylaws for the conduct of its business; provided , however, that in the fixing of salaries of the officers of the corporation, the unanimous action of all the directors shall be required.

 

Section 3.11. Manner of Acting. The act of a majority of the directors present at a meeting at which a quorum is present shall be the act of the Board of Directors, and the individual directors shall have no power as such.

 

Section 3.12. Written Consent to Action by Directors. In accordance with NRS 78 .315(2) , any action required or permitted to be taken at any annual or special meeting of board of directors, or of a committee thereof may be taken without a meeting, if before or after the action consent thereto is signed by all members of the board or the committee.

 

Section 3.13. Order of Business. The regular order of business at meetings of the Board of Directors shall be as follows:

 

(a) Reading and approval of the minutes of any previous meeting or meetings;
(b) Reports of officers and committeemen;
  (c) Election of officers;

(d) Unfinished business;
(e) New business;
(f) Adjournment.

 

Section 3.14. Report to and Action on behalf of the Stockholders. The Board of Directors shall make a report to the stockholders at annual meetings of the stockholders of the condition of the corporation, and shall furnish each of the stockholders with a true copy thereof upon request.

 

The Board of Directors, in its discretion, may submit any contract or act for approval or ratification at any annual meeting of the stockholders called for the purpose of considering any such contract or act, which, if approved, or ratified by the vote of the holders of a majority of the capital stock represented in person or by proxy at such meeting, provided that a lawful quorum of stockholders be there represented in person or by proxy, shall be valid and binding upon the corporation and upon all the stockholders thereof, as if it had been approved or ratified by every stockholder of the corporation.

 

Section 3.15. Formation of Executive Committee. The Board of Directors may, by resolution passed by a majority of the whole Board, designate an Executive Committee. This Committee shall consist of two (2) or more members besides the President, who by virtue of his or her office, shall be a member and the chairman thereof. The Committee shall in the interim between the meetings of the Board, exercise all powers of that body in accordance with the general policy of the corporation and under the direction of the Board of Directors. It shall also attend to and supervise all the financial operations of the corporation, and shall examine and audit all the corporation's accounts at the close of each fiscal year, and at such other times, as it may deem necessary. The Secretary shall be the Secretary of the Committee and shall attend its meetings, and its meetings shall be held on the call of the President. All members of the Committee must be given at least two (2) days notice of meetings either by mail, facsimile, e-mail or telegraph or by personal communication, either by telephone or otherwise. A majority of the members of the Committee shall keep due records of all meetings and actions of the Committee, and such records shall at all times be open to the inspection of any director.

 

 

 

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Section 3.16. Compensation. By resolution of the Board of Directors, the directors may be paid their expenses, if any, of attendance at each meeting of the Board of Directors, and may be paid a fixed sum for attendance at each meeting of the Board of Directors or a stated salary as director. No such payment shall preclude any director from serving the corporation in any other capacity and receiving compensation therefor.

 

Section 3.17. Presumption of Assent. A director of the corporation who is present at a meeting of the Board of Directors at which action on any corporate matter is taken shall be presumed to have assented to the action taken unless his or her or her dissent shall be entered in the minutes of the meeting, unless he or she shall file his or her or her written dissent to such action with the person acting as the secretary of the meeting before the adjournment thereof, or shall forward such dissent by registered or certified mail to the secretary of the corporation immediately after the adjournment of the meeting. Such right to dissent shall not apply to a director who voted in favor of such action.

 

 

ARTICLE IV.

 

OFFICERS AND THEIR DUTIES

 

Section 4.01. Number. The officers of the corporation shall be a president, one or more vice-presidents, as shall be determined by resolution of the Board of Directors, a secretary, a treasurer, and such other officers as may be appointed by the Board of Directors. The Board of Directors may elect, but shall not be required to elect, a chairman of the board and the Board of Directors may appoint a general manager.

 

Section 4.02. Election, Term of Office, and Qualifications. The officers shall be chosen by the Board of Directors annually at its annual meeting. In the event of failure to choose officers at an annual meeting of the Board of Directors, officers may be chosen at any regular or special meeting of the Board of Directors. Each such officer (whether chosen at an annual meeting of the Board of Directors to fill a vacancy or otherwise) shall hold his or her office until the next ensuing annual meeting of the Board of Directors and until his or her successor shall have been chosen and qualified, or until his or her death, or until his or her resignation or removal in the manner provided in these Bylaws. Any one person may hold any two or more of such offices, except that the president shall not also be the secretary. No person holding two or more offices shall act in or execute any instrument in the capacity of more than one office. The chairman of the board, if any, shall be and remain a director of the corporation during the term of his or her office . No other officer need be a director.

 

Section 4.03. Subordinate Officers. Etc. The Board of Directors may from time to time, by resolution, appoint such additional Vice Presidents and additional Assistant Secretaries, Assistant Chief Financial Officers and Transfer Agents as it may deem advisable; prescribe their duties, fix their compensation, and all such appointed officers shall be subject to removal at any time by the Board of Directors. All officers, agents and factors shall be chosen and appointed in such manner and shall hold their office for such terms as the Board of Directors may by resolution prescribe.

 

Section 4.04. Resignations. Any officer may resign at any time by delivering a written resignation to the Board of Directors, the president, or the secretary. Unless otherwise specified therein, such resignation shall take effect on delivery.

 

Section 4.05. Removal. Any officer may be removed from office at any special meeting of the Board of Directors called for that purpose or at a regular meeting, by vote of a majority of the directors, with or without cause. Any officer or agent appointed in accordance with the provisions of Section 4.03 hereof may also be removed , either with or without cause, by any officer on whom such power of removal shall have been conferred by the Board of Directors.

 

Section 4.06. Vacancies and Newly Created Offices. If any vacancy shall occur in any office by reason of death, resignation, removal, disqualification, or any other cause, or if a new office shall be created, then such vacancies or new created offices may be filled by the Board of Directors at any regular or special meeting.

 

 

 

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Section 4.07. The Chairman of the Board. The Chairman of the Board , if there be such an officer, shall have the following powers and duties:

 

(a)           He or she shall be the chief executive officer of the corporation and, subject to the direction of the board of directors, to have general charge of the business, affairs, and property of the corporation and general supervision over its officers, employees, and agents;

 

(b)            He or she shall preside at all stockholders' meetings or to designate a person to act in such capacity;

 

(c)            He or she shall to preside at all meetings of the board of directors; and

 

(d)            He or she shall be a member of the executive committee, if any.

 

Section 4.08. The President. The president shall have the following powers and duties:

 

(a)                He or she shall be the chief operating officer of the corporation and, subject to the direction of the Board of Directors and chief executive officer, to supervise the day-to-day operations of the corporation;

 

(b)               If no Chairman of the board has been chosen or if such officer is absent or disabled, he or she shall preside at meetings of the stockholders and board of directors;

 

(c)                He or she shall be a member of the executive committee, if any;

 

(d)               He or she shall be empowered to sign certificates representing shares of the corporation, the issuance of which shall have been authorized by the Board of Directors; and

 

(e)                He or she shall have all power and shall perform all duties normally incident to the office of a president of a corporation, and shall exercise such other powers and perform such other duties as from time to time may be assigned to him or her by the Board of Directors.

 

Section 4.09. The Vice Presidents. The Board of Directors may, from time to time, designate and elect one or more vice presidents, one of whom may be designated to serve as executive vice president. Each vice president shall have such powers and perform such duties as from time to time may be assigned to him or her by the Board of Directors or the president. At the request or in the absence or disability of the president, the executive vice president or, in the absence or disability of the executive vice president, the vice president designated by the Board of Directors or (in the absence of such designation by the Board of Directors) by the president, the senior vice president, may perform all the duties of the president, and when so acting, shall have all the powers of, and be subject to all the restrictions upon, the president.

 

Section 4.10. Treasurer / Chief Financial Officer. The Chief Financial Officer shall have the custody of all the funds and securities of the corporation. When necessary or proper, he or she shall endorse on behalf of the corporation for collection checks, notes, an other obligations; he or she shall jointly with such other officer as shall be designated by these Bylaws , sign all checks made by the corporation, and shall pay out and dispose of the same under the direction of the Board of Directors. The Chief Financial Officer shall sign with the President all bills of exchange and promissory notes of the corporation; he or she shall also have the care and custody of the stocks, bonds, certificates, vouchers, evidence of debts, securities, and such other property belonging to the corporation as the Board of Directors shall designate; he or she shall sign all papers required by law or by these By-laws or the Board of Directors to be signed by the Chief Financial Officer. Whenever required by the Board of Directors, the Chief Financial Officer shall render a statement of the corporation's cash account; he or she shall enter regularly in the books of the corporation to be kept by him or her for the purpose, full and accurate accounts of all moneys received and paid by him or her on account of the corporation. The Chief Financial Officer shall at all reasonable times exhibit the books of account to any Director of the corporation during business hours, and shall perform all acts incident to the position of Chief Financial Officer subject to the control of the Board of Directors.

 

 

 

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The Chief Financial Officer shall, if required by the Board of Directors, give bond to the corporation conditioned for the faithful performance of all his or her duties as Chief Financial Officer in such sum, and with such security as shall be approved by the Board of Directors, with the expense of such bond to be borne by the corporation.

 

Section 4.11. Salaries. The salaries and other compensation of the officers of the corporation shall be fixed from time to time by the Board of Directors, except that the Board of Directors may delegate to any person or group of persons the power to fix the salaries or other compensation of any subordinate officers or agents appointed in accordance with the provisions of Section 4.03 hereof. No officer shall be prevented from receiving any such salary or compensation by reason of the fact that he or she is also a director of the corporation.

 

Section 4.12. Surety Bonds. In case the Board of Directors shall so require, any officer or agent of the corporation shall execute to the corporation a bond in such sums and with such surety or sureties as the Board of Directors may direct, conditioned upon the faithful performance of his or her duties to the corporation, including responsibility for negligence and for the accounting of all property, monies, or securities of the corporation which may come into his or her hands.

 

 

ARTICLE V.

 

EXECUTIVE COMMITTEE AND OTHER COMMITTEES

 

Section 5.01. How Constituted. The Board of Directors may designate an executive committee and such other committees as the Board of Directors may deem appropriate, each of which committees shall consist of two or more directors. Members of the executive committee and of any such other committees shall be designated annually at the annual meeting of the Board of Directors; provided, however, that at any time the Board of Directors may abolish or reconstitute the executive committee or any other committee. Each member of the executive committee and of any other committee shall hold office until his or her successor shall have been designated or until his or her resignation or removal in the manner provided in these Bylaws.

 

Section 5.02. Powers. During the intervals between meetings of the Board of Directors, the executive committee shall have and may exercise all powers of the Board of Directors in the management of the business and affairs of the corporation, except for the power to fill vacancies in the Board of Directors or to amend these Bylaws, and except for such powers as by law may not be delegated by the Board of Directors to an executive committee.

 

Section 5.03. Proceedings. The executive committee, and such other committees as may be designated hereunder by the Board of Directors, may fix its own presiding and recording officer or officers, and may meet at such place or places , at such time or times and on such notice (or without notice) as it shall determine from time to time. It will keep a record of its proceedings and shall report such proceedings to the Board of Directors at the meeting of the Board of Directors next following.

 

Section 5.04. Quorum and Manner of Acting. At all meetings of the executive committee, and of such other committees as may be designated hereunder by the Board of Directors, the presence of members constituting a majority of the total authorized membership of the committee shall be necessary and sufficient to constitute a quorum for the transaction of business, and the act of a majority of the members present at any meeting at which a quorum is present shall be the act of such committee. The members of the executive committee, and of such other committees as may be designated hereunder by the Board of Directors, shall act only as a committee and the individual members thereof shall have no powers as such.

 

Section 5.05. Vacancies. If any vacancies shall occur in the executive committee or of any other committee designated by the Board of Directors hereunder, by reason of disqualification, death, resignation, removal, or otherwise, the remaining members shall, until the filling of such vacancy, constitute the then total authorized membership of the committee and, provided that two or more members are remaining, continue to act. Such vacancy may be filled at any meeting of the Board of Directors.

 

Section 5.06. Compensation. The Board of Directors may allow a fixed sum and expenses of attendance to any member of the executive committee, or of any other committee designated by it hereunder, who is not an active salaried employee of the corporation for attendance at each meeting of said committee.

 

 

 

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Section 5.07. Resignations. Any member of the executive committee, and of such other committees as may be designated hereunder by the Board of Directors, may resign at any time by delivering a written resignation to either the president, the secretary, or assistant secretary, or to the presiding officer of the committee of which he or she is a member, if any shall have been appointed and shall be in office. Unless otherwise specified herein, such resignation shall take effect on delivery.

 

Section 5.08. Removal. The Board of Directors may at any time remove any member of the executive committee or of any other committee designated by it hereunder either for or without cause.

 

 

ARTICLE VI.

 

EXECUTION OF INSTRUMENTS, BORROWING OF MONEY, AND DEPOSIT OF CORPORATE FUNDS

 

Section 6.0 1. Execution of Instruments. Subject to any limitation contained in the Articles of Incorporation or these Bylaws, the president or vice president, may, in the name and on behalf of the corporation, execute and deliver any contract or other instrument authorized in writing by the Board of Directors. The Board of Directors may, subject to any limitation contained in the Articles of Incorporation or in these Bylaws, authorize in writing any officer or agent to execute and delivery any contract or other instrument in the name and on behalf of the corporation; any such authorization may be general or confined to specific instances.

 

Section 6.02. Loans. No loans or advances shall be contracted on behalf of the corporation, no negotiable paper or other evidence of its obligation under any loan or advance shall be issued in its name, and no property of the corporation shall be mortgaged, pledged, hypothecated, transferred, or conveyed as security for the payment of any loan, advance, indebtedness, or liability of the corporation, unless and except as authorized by the Board of Directors. Any such authorization may be general or confined to specific instances.

 

Section 6.03. Deposits. All moneys of the corporation shall be deposited when and as received by the Chief Financial Officer in such bank or banks or other depository as may from time to time be designated by the Board of Directors, and such deposits shall be made in the name of the corporation.

 

Section 6.04. Checks, Drafts, Etc. No note, draft, acceptance, endorsement to other evidence of indebtedness shall be valid or against the corporation unless the same shall be signed by the President or a Vice President, and attested by the Secretary or an Assistant Secretary, or signed by the Chief Financial Officer or an Assistant Chief Financial Officer and countersigned by the President, Vice President, or Secretary, except that the Chief Financial Officer or an Assistant Chief Financial Officer, may, without countersignature, sign payroll checks and make endorsements for deposit to the credit of the corporation in all its duly authorized depositories. No check or order for money shall be signed in blank by more than one (1) officer of the corporation.

 

Section 6.05. Bonds and Debentures. Every bond or debenture issued by the corporation shall be evidenced by an appropriate instrument which shall be signed by the president or a vice president and by the secretary and sealed with the seal of the corporation. The seal may be a facsimile, engraved or printed. Where such bond or debenture is authenticated with the manual signature of an authorized officer of the corporation or other trustee designated by the indenture of trust or other agreement under which such security is issued, the signature of any of the corporation's officers named thereon may be a facsimile. In case any officer who signed, or whose facsimile signature has been used on any such bond or debenture, should cease to be an officer of the corporation for any reason before the same has been delivered by the corporation, such bond or debenture may nevertheless be adopted by the corporation and issued and delivered as through the person who signed it or whose facsimile signature has been used thereon had not ceased to be such officer. The corporation shall make no loan or advance of money to any stockholder or officer therein unless the Board of Directors shall otherwise authorize.

 

 

 

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Section 6.06. Sale, Transfer, Etc. of Securities. Sales, transfers, endorsements, and assignments of stocks, bonds, and other securities owned by or standing in the name of the corporation, and the execution and delivery on behalf of the corporation of any and all instruments in writing incident to any such sale, transfer, endorsement, or assignment, shall be effected by the president, or by any vice president, together with the secretary, or by any officer or agent thereunto authorized by the Board of Directors.

 

Section 6.07. Proxies. Proxies to vote with respect to shares of other corporations owned by or standing in the name of the corporation shall be executed and delivered on behalf of the corporation by the president or any vice president and the secretary or assistant secretary of the corporation, or by any officer or agent thereunder authorized by the Board of Directors .

 

Section 6.08. Mortgages and Liens. The directors shall have the power to authorize and cause to be executed, mortgages and liens without limit as to amount upon the property and franchise of this corporation, and pursuant to the affirmative vote , either in person or by proxy, of the holders of a majority of the capital stock issued and outstanding; the directors shall have authority to dispose in any manner of the whole property of this corporation.

 

 

ARTICLE VII.

 

CAPITAL STOCK

 

Section 7.01. Issuance. The capital stock of the corporation shall be issued in such manner and at such times and upon such conditions as shall be prescribed by the Board of Directors.

 

Section 7.02. Stock Certificates. Ownership of stock in the corporation shall be evidenced by certificates of stock in such forms as shall be prescribed by the Board of Directors, and shall be under the seal of the corporation and signed by the President or the Vice President and also by the Secretary or an Assistant Secretary. All certificates shall be consecutively numbered; the name of the person owing the shares represented thereby with the number of shares and the date of issue shall be entered on the corporation's books. No certificates shall be valid unless it is signed by the President or Vice President and by the Secretary or Assistant Secretary. All certificates surrendered to the corporation shall be canceled and no new certificate shall be issued until the former certificate for the same number of shares shall have been surrendered or canceled.

 

Section 7.03. Stock Transfer. No transfer of stock shall be valid as against the corporation except on surrender and cancellation of the certificate therefor , made either in person or under assignment; a new certificate shall be issued therefor. Whenever any transfer shall be expressed as made for collateral security and not absolutely , the same shall be so expressed in the entry of said transfer on the books of the corporation.

 

Section 7.04. Transfer Rules and Transfer Agent. The Board of Directors shall have the power and authority to make all such rules and regulations not inconsistent herewith as it may deem expedient concerning the issue, transfer and registration of certificates for shares of the capital stock of the corporation. The Board of Directors may appoint a transfer agent and a registrar of transfers and may require all stock certificates to near the signature of each transfer agent and such registrar of transfer.

 

Section 7.05. Stock Ledgers. The Stock Transfer Books shall be closed for all meetings of the stockholders for the period of ten (10) days prior to such meetings and shall be closed for the payment of dividends during such periods from time to time may be fixed by the Board of Directors, and during such periods no stock shall be transferable.

 

Section 7.06. Lost or Destroyed Certificates. The corporation may issue a new certificate for shares of the corporation in place of any certificate theretofore issued by it, alleged to have been lost or destroyed, and the Board of Directors may, in its discretion, require the owner of the lost or destroyed certificate or his or her legal representatives, to give the corporation a bond in such form and amount as the Board of Directors may direct, and with such surety or sureties as may be satisfactory to the board, to indemnify the corporation and its transfer agents and registrars, if any, against any claims that may be made against it or any such transfer agent or registrar on account of the issuance of such new certificate. A new certificate may be issued without requiring any bond when, in the judgment of the Board of Directors, it is proper to do so.

 

 

 

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Section 7.07. Closing of Transfer Books and Fixing of Record Date.

 

(a)            The Board of Directors shall have power to close the share books of the corporation for a period of not to exceed sixty (60) days preceding the date of any meeting of shareholders, or the date for payment of any dividend, or the date for the allotment of rights, or capital shares shall go into effect, or a date in connection with obtaining the consent of shareholders for any purpose.

 

(b)           In lieu of closing the share transfer books as aforesaid, the Board of Directors may fix in advance a date, not exceeding sixty (60) days preceding the date of any meeting of shareholders, or the date for the payment of any dividend, or the date for the allotment of rights, or the date when any change or conversion or exchange of capital shares shall go into effect, or a date in connection with obtaining any such consent, as a record date for the determination of the shareholders entitled to a notice of, and to vote at, any such meeting and any adjournment thereof, or entitled to receive payment of any such dividend, or to any such allotment of rights, or to exercise the rights in respect of any such change, conversion or exchange of capital stock, or to give such consent.

 

(c)            If the share transfer books shall be closed or a record date set for the purpose of determining shareholders entitled to notice of or to vote at a meeting of shareholders, such books shall be closed for, or such record date shall be, at least ten (10) days immediately preceding such meeting.

 

Section 7.08. No Limitation on Voting Rights; Limitation on Dissenter's Rights. To the extent permissible under the applicable law of any jurisdiction to which the corporation may become subject by reason of the conduct of business, the ownership of assets, the residence of shareholders, the location of offices or facilities, or any other item, the corporation elects not to be governed by the provisions of any statute that (i) limits, restricts, modified, suspends, terminates, or otherwise affects the rights of any shareholder to cast one vote for each share of common stock registered in the name of such shareholder on the books of the corporation, without regard to whether such shares were acquired directly from the corporation or from any other person and without regard to whether such shareholder has the power to exercise or direct the exercise of voting power over any specific fraction of the shares of common stock of the corporation issued and outstanding or (ii) grants to any shareholder the right to have his or her stock redeemed or purchased by the corporation or any other shareholder on the acquisition by any person or group of persons of shares of the corporation. In particular, to the extent permitted under the laws of the state of incorporation, the corporation elects not to be governed by any such provision, including the provisions of the Nevada Control Share Acquisitions Act, Sections 78.378 to 78.3793, inclusive, of the Nevada Revised Statutes, or any statute of similar effect or tenor.

 

Section 7.09. Dividends. The Board of Directors shall have the power to reserve over and above the capital stock paid in, such an amount, in its discretion, as it may deem advisable to fix as a reserve fund, and may, from time to time, declare dividends from the accumulated profits of the corporation in excess of the amounts so reserved, and pay the same to the stockholders of the corporation, and may also, if it deems the same advisable, declare stock dividends of the unissued capital stock.

 

 

ARTICLE VIII.

 

INDEMNIFICATION, INSURANCE, AND OFFICER AND DIRECTOR CONTRACTS

 

Section 8.01. Indemnification: Third Party Actions. The corporation shall have the power to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending, or completed action, or suit by or in the right of the corporation to procure a judgment in its favor by reason of the fact that he or she is or was a director, officer, employee, or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee, or agent of another corporation, partnership, joint venture, trust, or other enterprise, against expenses (including attorneys' fees) judgments, fines, and amounts paid in settlement actually and reasonably incurred by him or her in connection with any such action, suit or proceeding, if he or she acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his or her conduct was unlawful. The termination of any action, suit, or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which he or she reasonably believed to be in or not opposed to the best interests of the corporation, and with respect to any criminal action or proceeding, he or she had reasonable cause to believe that his or her conduct was unlawful.

 

 

 

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Section 8.02. Indemnification; Corporate Actions. The corporation shall have the power to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending, or completed action or suit by or in the right of the corporation to procure a judgment in its favor by reason of the fact that he or she is or was a director, officer, employee, or agent of the corporation , or is or was serving at the request of the corporation as a director, officer, employee, or agent of another corporation, partnership, joint venture, trust, or other enterprise, against expenses (including attorneys' fees) actually and reasonably incurred by him or her in connection with the defense or settlement of such action or suit, if he or she acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the corporation, except that no indemnification shall be made in respect of any claim, issue, or matter as to which such a person shall have been adjudged to be liable for negligence or misconduct in the performance of his or her duty to the corporation, unless and only to the extent that the court in which the action or suit was brought shall determine on application that, despite the adjudication of liability but in view of all circumstances of the case, the person is fairly and reasonably entitled to indemnity for such expenses as the court deems proper.

 

Section 8.03. Determination. To the extent that a director, officer, employee, or agent of the corporation has been successful on the merits or otherwise in defense of any action, suit, or proceeding referred to in Sections 8.01 and 8.02 hereof, or in defense of any claim, issue, or matter therein, he or she shall be indemnified against expenses (including attorneys' fees) actually and reasonably incurred by him or her in connection therewith. Any other indemnification under Sections 8.01 and 8.02 hereof, shall be made by the corporation upon a determination that indemnification of the officer, director, employee, or agent is proper in the circumstances because he or she has met the applicable standard of conduct set forth in Sections 8.01 and 8.02 hereof. Such determination shall be made either (i) by the Board of Directors by a majority vote of a quorum consisting of directors who were not parties to such action, suit, or proceeding; or (ii) by independent legal counsel on a written opinion; or (iii) by the shareholders by a majority vote of a quorum of shareholders at any meeting duly called for such purpose.

 

Section 8.04. General Indemnification. The indemnification provided by this Section shall not be deemed exclusive of any other indemnification granted under any provision of any statute, in the corporation's Articles of Incorporation, these Bylaws, agreement, vote of shareholders or disinterested directors, or otherwise, both as to action in his or her official capacity and as to action in another capacity while holding such office, and shall continue as to a person who has ceased to be a director, officer, employee, or agent, and shall inure to the benefit of the heirs and legal representatives of such a person.

 

Section 8.05. Advances. Expenses incurred in defending a civil or criminal action, suit, or proceeding as contemplated in this Section may be paid by the corporation in advance of the final disposition of such action, suit, or proceeding upon a majority vote of a quorum of the Board of Directors and upon receipt of an undertaking by or on behalf of the director, officers, employee, or agent to repay such amount or amounts unless if it is ultimately determined that he or she is to indemnified by the corporation as authorized by this Section.

 

Section 8.06. Scope of Indemnification. The indemnification authorized by this Section shall apply to all present and future directors, officers, employees, and agents of the corporation and shall continue as to such persons who ceases to be directors, officers, employees, or agents of the corporation, and shall inure to the benefit of the heirs, executors, and administrators of all such persons and shall be in addition to all other indemnification permitted by law.

 

Section 8.07. Insurance. The corporation may purchase and maintain insurance on behalf of any person who is or was a director, employee, or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee, or agent of another corporation, partnership, joint venture, trust, or other enterprise against any liability asserted against him or her and incurred by him or her in any such capacity, or arising out of his or her status as such, whether or not the corporation would have the power to indemnify him or her against any such liability and under the laws of the state of incorporation, as the same may hereafter be amended or modified.

 

 

ARTICLE IX.

 

MISCELLANEOUS

 

Section 9.01. Company Records. A copy of the Stock and Transfer Books, Articles of Incorporation and the Bylaws of the corporation shall be kept at its principal office of the corporation in the State of Nevada, and at such other places as may be prescribed by the Board of Directors.

 

 

 

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Section 9.02. Salaries. No director nor executive officer shall be entitled to any salary or compensation for any services performed for the corporation, unless such salary or compensation shall be fixed by resolution of the Board of Directors, adopted by the unanimous vote of all of the directors voting in favor thereof.

 

ARTICLE X.

 

AMENDMENT OF BYLAWS

 

Section 10.01. Amendment Procedures. Amendments and changes of these Bylaws may be made at any regular or special meeting of the Board of Directors by a majority vote of the Board of Directors, or may be made by a vote of, or a consent in writing signed by, the holders of a majority of the issued and outstanding capital stock.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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CERTIFICATE OF SECRETARY

 

The undersigned does hereby certify that he is the secretary of ENERGY MANAGEMENT INTERNATIONAL, INC., a corporation duly organized and existing under and by virtue of the laws of the State of Nevada; that the above and foregoing Bylaws of said corporation were duly adopted by the Board of Directors of the corporation and by the Shareholders of the corporation, and that the above and foregoing Bylaws are now in full force and effect.

 

 

 

Dated: January 21, 2010

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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Exhibit 10.1

 

SHARE EXCHANGE AGREEMENT

 

THIS SHARE EXCHANGE AGREEMENT (the “Agreement”) dated as of July 26, 2021, is entered into by and among Energy Management International, Inc., a Nevada corporation (“ENMI”), and DH Investment Group Limited, a British Virgin Island corporation (“DH Group”), and the shareholders of DH Group listed on Annex A to this Agreement (each, a “Shareholder” and, collectively, the “Shareholders”).

 

RECITALS

 

A. The Shareholders own the number of shares of capital stock of DH Group (the “Shares”) set forth opposite each Shareholder’s name on Annex A, which Shares collectively constitute all of the issued and outstanding shares of capital stock in DH Group

 

B. ENMI desires to purchase from the Shareholders, and the Shareholders desire to sell to ENMI, the Shares in exchange for shares of ENMI Series B Preferred Stock, all on the terms and subject to the conditions set forth in this Agreement (the “Exchange”).

 

D. As a result of the Exchange, ENMI will become the sole shareholder of DH Group.

 

E. Certain capitalized terms used in this Agreement are defined on Exhibit A hereto.

 

AGREEMENT

 

In consideration of the agreements, provisions and covenants set forth below, ENMI, DH Group and the Shareholders, hereby agree as follows:

 

ARTICLE I.

 

EXCHANGE OF SHARES

 

1.1 Agreement to Sell.

 

Upon the terms and subject to all of the conditions contained herein, each of the Shareholders hereby agrees to sell, assign, transfer and deliver to ENMI, and ENMI hereby agrees to purchase and accept from each of the Shareholders, on the Closing Date, the Shares.

 

1.2 Purchase Price.

 

As full consideration for the sale, assignment, transfer and delivery of the Shares by the Shareholders to ENMI, and upon the terms and subject to all of the conditions contained herein, ENMI shall issue to the Shareholders an aggregate of 100,000 shares of ENMI Series B Preferred stock (the “Acquisition Shares”) on a pro rata basis based upon their respective beneficial ownership interest in DH Group, as certified by the President of DH Group, at the Closing.

 

1.3 Mechanics of Exchange.

 

(a) At the Closing, each Shareholder shall be entitled to surrender the certificate or certificates that immediately prior to the Closing represented the DH Group Shares of Common Stock (the “Certificates”) to the exchange agent designated by ENMI in exchange for the Acquisition Shares.

 

 

 

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(b) Promptly after the Closing, ENMI or its designated exchange agent shall make available to each Shareholder a letter of transmittal and instructions for use in effecting the surrender of Certificates in exchange for the Acquisition Shares. Upon surrender of a Certificate to such exchange agent together with the letter of transmittal, duly executed, the Shareholder shall be entitled to receive in exchange therefore such number of Acquisition Shares as such Shareholder has the right to receive in respect of the Certificate so surrendered pursuant to the provisions of this Article I.

 

1.4 No Fractional Shares.

 

No fraction of a share of ENMI Series B Preferred Stock shall be issued in the Exchange. In lieu of fractional shares, the Shareholders upon surrender of their Certificates as set forth in Section 1.3 shall be issued that number of shares of Series B Preferred Stock resulting by rounding up to the nearest whole number of shares of Acquisition Shares that each such Shareholder shall receive as a result of the Exchange.

 

1.5 Closing.

 

The closing of the transactions contemplated by this Agreement (the “Closing”) shall take place at 9:00 a.m., Hong Kong Time, at the principal administrative offices of ENMI, or at a location mutually agreement upon by ENMI and DH Group, on or before July 31, 2021 (the “Closing Date”); provided, however, that if all of the other conditions set forth in articles VI and VII hereof are not satisfied or waived, unless this agreement has been terminated under Section 9 hereof, or at such date, the Closing Date shall be the business day following the day on which all such conditions have been satisfied or waived, or at such other date, time and place as ENMI, DH Group and the Shareholders shall agree.

 

ARTICLE II.

 

REPRESENTATIONS AND WARRANTIES OF DH GROUP

 

Except as set forth in the Disclosure Schedule, consisting of information about DH Group provided by DH Group to ENMI in connection with this Agreement (the “DH Group Disclosure Schedule”), each of DH Group and the Shareholders represents and warrants jointly and severally to ENMI as follows:

 

2.1 Organization and Qualification.

 

DH Group is duly incorporated, validly and in good standing existing under the laws of British Virgin Island, has all requisite authority and power (corporate and other), governmental licenses, authorizations, consents and approvals to carry on its business as presently conducted and as contemplated to be conducted, to own, hold and operate its properties and assets as now owned, held and operated by it, to enter into this Agreement, to carry out the provisions hereof except where the failure to be in good standing or to have such governmental licenses, authorizations, consents and approvals will not, in the aggregate, either (i) have a Material Adverse Effect on the business, assets or financial condition of DH Group, or (ii) impair the ability of DH Group to perform its material obligations under this Agreement. DH Group is duly qualified, licensed or domesticated as a foreign corporation in good standing in each jurisdiction wherein the nature of its activities or its properties owned or leased requires such qualification, licensing or domestication, except where the failure to be so qualified, licensed or domesticated will not have a Material Adverse Effect. Set forth as part of the DH Group Disclosure Schedule is a list of those jurisdictions in which each of DH Group presently conducts its business, owns, holds and operates its properties and assets.

 

2.2 Subsidiaries.

 

DH Group holds 100% of Ho Shun Yi Ltd., which is incorporated in Hong Kong.

 

Except as stated above, DH Group does not own directly or indirectly, any equity or other ownership interest in any corporation, partnership, joint venture or other entity or enterprise. DH Group does not have any direct or indirect interests of stock ownership or otherwise in any corporation, partnership, joint venture, firm, association or business enterprise, and is not party to any agreement to acquire such an interest.

 

 

 

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2.3 Articles of Incorporation and Bylaws.

 

The copies of the charter document and corporate governance document of DH Group (collectively, the “Organizational Documents”) that have been delivered to ENMI prior to the execution of this Agreement are true and complete and have not been amended or repealed. DH Group is not in violation or breach of any of the provisions of the Organizational Documents, except for such violations or breaches which, in the aggregate, will not have a Material Adverse Effect on DH Group.

 

2.4 Authorization and Validity of this Agreement.

 

This Agreement and each of the Transaction Agreements constitute the legal, valid and binding obligation of each person or entity who is a party thereto (other than ENMI), enforceable against each such person or entity in accordance with its terms, except as such enforcement is limited by general equitable principles, or by bankruptcy, insolvency and other similar laws affecting the enforcement of creditors rights generally. Each DH Group shareholder has all requisite legal capacity to execute and deliver this Agreement and the Transaction Agreements to which he or she is a party, and to perform its, his or her obligations hereunder and thereunder. The execution and delivery by each of DH Group and each of the Shareholders of this Agreement and the Transaction Agreements (to the extent either is a party thereto), and the consummation of the transactions contemplated herein and therein (the “Transactions”) have been authorized by all necessary corporate or other action on the part of DH Group and each of the Shareholders. This Agreement and the Transaction Agreements have been duly executed and delivered by the parties thereto (other than ENMI).

 

2.5 No Violation.

 

Neither the execution nor delivery of this Agreement or the Transaction Agreements, nor the consummation or performance of any of the Transactions by DH Group or the Shareholders will directly or indirectly:

 

(i) violate or conflict with any provision of the Organizational Documents of DH Group; (B) result in (with or without notice or lapse of time) a violation or breach of, or conflict with or constitute a default or result in the termination or in a right of termination or cancellation of, or accelerate the performance required by, or require notice under, any agreement, promissory note, lease, instrument or arrangement to which DH Group or any of its assets are bound or result in the creation of any Liens upon DH Group or any of its assets; (C) violate any order, writ, judgment, injunction, ruling, award or decree of any Governmental Body; (“Governmental Body”); (D) violate any statute, law or regulation of any jurisdiction as such statute, law or regulation that relates to the Shareholders or DH Group or any of the assets of DH Group; or (E) result in cancellation, modification, revocation or suspension of any permits, licenses, registrations, consents, approvals, authorizations or certificates issued or granted by any Governmental Body which are held by or granted to the Shareholders or DH Group or which are necessary for the conduct of DH Group’s business; or

 

(ii) to the knowledge of DH Group or any of the Shareholders, cause DH Group to become subject to, or to become liable for the payment of, any Tax (as hereinafter defined) or cause any of the assets owned by DH Group to be reassessed or revalued by any taxing authority or other Governmental Body.

 

None of DH Group or the Shareholders is or will be required to give any notice to or obtain any approval, consent, ratification, waiver or other authorization (a “Consent”) from any person or entity (including, without limitation, any Governmental Body) in connection with (i) the execution and delivery of this Agreement or any of the Transaction Agreements, or (ii) the consummation or performance of any of the Transactions.

 

 

 

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2.6 Capitalization and Related Matters.

 

(a) Capitalization. DH Group has issued and outstanding One Hundred shares of common stock. Except as set forth in the preceding sentence, no other class of capital stock or other security of DH Group is authorized, issued, reserved for issuance or outstanding. The Shareholders, as of the Closing Date, are the lawful, record and beneficial owners of the number of DH Group Shares of Common Stock set forth opposite each Seller’s name on Annex A attached hereto. The Shareholders have, as of the date hereof and as of the Closing Date, valid and marketable title to their respective Shares, free and clear of all Liens (including, without limitation, any claims of spouses under applicable community property laws) and are the lawful, record and beneficial owners of all of the Shares. Except as is issued to and held by the Shareholders or DH Group, no other class of capital stock or other security of DH Group, as applicable, is authorized, issued, reserved for issuance or outstanding. At the Closing, ENMI will be vested with good and marketable title to the Shares, free and clear of all Liens (including, without limitation, any claims of spouses under applicable community property laws). No legend or other reference to any purported Lien appears upon any certificate representing the Shares. Each of the Shares has been duly authorized and validly issued and is fully paid and nonassessable. None of the outstanding capital or other securities of DH Group was issued, redeemed or repurchased in violation of the Securities Act of 1933, as amended (the “Securities Act”), or any other securities or “blue sky” laws.

 

(b) No Redemption Requirements. There are no authorized or outstanding options, warrants, equity securities, calls, rights, commitments or agreements of any character by which DH Group or any of the Shareholders is obligated to issue, deliver or sell, or cause to be issued, delivered or sold, any shares of capital stock or other securities of DH Group There are no outstanding contractual obligations (contingent or otherwise) of DH Group to retire, repurchase, redeem or otherwise acquire any outstanding shares of capital stock of, or other ownership interests in, DH Group or to provide funds to or make any investment (in the form of a loan, capital contribution or otherwise) in any other entity.

 

2.7 Compliance with Laws and Other Instruments.

 

Except as would not have a Material Adverse Effect, the business and operations of DH Group has been and are being conducted in accordance with all applicable foreign, federal, provincial and local laws, rules and regulations and all applicable orders, injunctions, decrees, writs, judgments, determinations and awards of all courts and governmental agencies and instrumentalities. There are no permits, bonuses, registrations, consents, approvals, authorizations, certificates, or any waiver of the foregoing, which are required to be issued or granted by a Governmental Body for the conduct of the Business as presently conducted or the ownership of the assets of DH Group Except as would not have a Material Adverse Effect, DH Group is not, and has not received notice alleging that it is, in violation of, or (with or without notice or lapse of time or both) in default under, or in breach of, any term or provision of the Organizational Documents or of any indenture, loan or credit agreement, note, deed of trust, mortgage, security agreement or other material agreement, lease, license or other instrument, commitment, obligation or arrangement to which DH Group is a party or by which any of DH Group’s properties, assets or rights are bound or affected. To the knowledge of DH Group, no other party to any material contract, agreement, lease, license, commitment, instrument or other obligation to which DH Group is a party is (with or without notice or lapse of time or both) in default thereunder or in breach of any term thereof. DH Group is not subject to any obligation or restriction of any kind or character, nor is there, to the knowledge of DH Group, any event or circumstance relating to DH Group that materially and adversely affects in any way its business, properties, assets or prospects or that prohibits DH Group from entering into this Agreement and the Transaction Agreements or would prevent or make burdensome its performance of or compliance with all or any part of this Agreement, the Transaction Agreements or the consummation of the Transactions contemplated hereby or thereby.

 

2.8 Certain Proceedings.

 

There are no outstanding or pending preceding that has been commenced against or involving DH Group or any of its assets and, to the knowledge of DH Group and the Shareholders, no matters of the foregoing nature are contemplated or threatened. None of DH Group or the Shareholders have been charged with, and is not threatened with, or under any investigation with respect to, any allegation concerning any violation of any provision of any federal, provincial, local or foreign law, regulation, ordinance, order or administrative ruling, and is not in default with respect to any order, writ, injunction or decree of any Governmental Body.

 

 

 

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2.9 No Brokers or Finders.

 

None of DH Group, the Shareholders, or any officer, director, independent contractor, consultant, agent or employee of DH Group has agreed to pay, or has taken any action that will result in any person or entity becoming obligated to pay or entitled to receive, any investment banking, brokerage, finder’s or similar fee or commission in connection with this Agreement or the Transactions. DH Group and the Shareholders shall jointly and severally indemnify and hold ENMI harmless against any liability or expense arising out of, or in connection with, any such claim.

 

2.10 Title to and Condition of Properties.

 

DH Group has good, valid and marketable title to all of its properties and assets (whether real, personal or mixed, and whether tangible or intangible) reflected as owned in its books and records, free and clear of all Liens. DH Group owns or holds under valid leases or other rights to use all real property, plants, machinery, equipment and all assets necessary for the conduct of its business as presently conducted, except where the failure to own or hold such property, plants, machinery, equipment and assets would not have a Material Adverse Effect on DH Group No Person other than DH Group owns or has any right to the use or possession of the assets used in DH Group’s business. The material buildings, plants, machinery and equipment necessary for the conduct of the business of DH Group as presently conducted are structurally sound, are in good operating condition and repair and are adequate for the uses to which they are being put or would be put in the Ordinary Course of Business, in each case, taken as a whole, and none of such buildings, plants, machinery or equipment is in need of maintenance or repairs, except for ordinary, routine maintenance and repairs that are not material in nature or cost.

 

2.11 Absence of Undisclosed Liabilities.

 

DH Group has no debt, obligation or liability (whether accrued, absolute, contingent, liquidated or otherwise, whether asserted or unasserted, whether due or to become due, whether or not known to DH Group) arising out of any transaction entered into prior to the Closing Date or any act or omission prior to the Closing Date which individually or taken together would constitute a Material Adverse Effect on DH Group and have no debt, obligation or liability to each other or any of the Shareholders or their affiliates, except to the extent specifically set forth on or reserved against on the Balance Sheet of DH Group

 

The financial statements are consistent with the books and records of DH Group and fairly present in all material respects the financial condition, assets and liabilities of DH Group, as applicable, taken as a whole, as of the dates and periods indicated, and were prepared in accordance with GAAP (except as otherwise indicated therein or in the notes thereto).

 

2.12 Changes.

 

DH Group has not, since the date of its incorporation:

 

(a) Ordinary Course of Business. Conducted its business or entered into any transaction other than in the Ordinary Course of Business, except for this Agreement.

 

(b) Adverse Changes. Suffered or experienced any change in, or affecting, its condition (financial or otherwise), properties, assets, liabilities, business, operations, results of operations or prospects which would have a Material Adverse Effect;

 

(c) Loans. Made any loans or advances to any Person other than travel advances and reimbursement of expenses made to employees, officers and directors in the Ordinary Course of Business;

 

(d) Compensation and Bonuses. Made any payments of any bonuses or compensation other than regular salary payments, or increase in the salaries, or payment on any of its debts in the Ordinary Course of Business, to any of its shareholders, directors, officers, employees, independent contractors or consultants or entry into by it of any employment, severance, or similar contract with any director, officer, or employee, independent contractor or consultant; Adopted, or increased in the payments to or benefits under, any profit sharing, bonus, deferred compensation, savings, insurance, pension, retirement, or other employee benefit plan for or with any of its employees;

 

 

 

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(e) Liens. Created or permitted to exist any Lien on any of its properties or assets other than Permitted Liens;

 

(f) Capital Stock. Issued, sold, disposed of or encumbered, or authorized the issuance, sale, disposition or encumbrance of, or granted or issued any option to acquire any shares of its capital stock or any other of its securities or any Equity Security, or altered the term of any of its outstanding securities or made any change in its outstanding shares of capital stock or its capitalization, whether by reason of reclassification, recapitalization, stock split, combination, exchange or readjustment of shares, stock dividend or otherwise; changed its authorized or issued capital stock; granted any stock option or right to purchase shares of its capital stock; issued any security convertible into any of its capital stock; granted any registration rights with respect to shares of its capital stock; purchased, redeemed, retired, or otherwise acquired any shares of its capital stock; declared or paid any dividend or other distribution or payment in respect of shares of capital stock of any other entity;

 

(g) Dividends. Declared, set aside, made or paid any dividend or other distribution to any of its shareholders;

 

(h) Material Contracts. Terminated or modified any of its Material Contract except for termination upon expiration in accordance with the terms of such agreements, a description of which is included in the DH Group’s Disclosure Schedule;

 

(i) Claims. Released, waived or cancelled any claims or rights relating to or affecting DH Group in excess of $1,000 in the aggregate or instituted or settled any Proceeding involving in excess of $10,000 in the aggregate;

 

(j) Discharged Liabilities. Paid, discharged, cancelled, waived or satisfied any claim, obligation or liability in excess of $1,000 in the aggregate, except for liabilities incurred prior to the date of this Agreement in the Ordinary Course of Business;

 

(k) Indebtedness. Created, incurred, assumed or otherwise become liable for any Indebtedness or commit to any endeavor involving a commitment in excess of $1,000 in the aggregate, other than contractual obligations incurred in the Ordinary Course of Business;

 

(l) Guarantees. Guaranteed or endorsed in a material amount any obligation or net worth of any Person;

 

(m) Acquisitions. Acquired the capital stock or other securities or any ownership interest in, or substantially all of the assets of, any other Person;

 

(n) Accounting. Changed its method of accounting or the accounting principles or practices utilized in the preparation of its financial statements, other than as required by GAAP;

 

(o) Agreements. Entered into any agreement, or otherwise obligated itself, to do any of the foregoing.

 

2.13 Material Contracts.

 

DH Group has delivered to ENMI, prior to the date of this Agreement, true, correct and complete copies of each of its Material Contracts.

 

(a) No Defaults. The Material Contracts of DH Group are valid and binding agreements of DH Group, as applicable, and are in full force and effect and are enforceable in accordance with their terms. Except as would not have a Material Adverse Effect, DH Group is not in breach or default of any of its Material Contracts to which it is a party and, to the knowledge of DH Group, no other party to any of its Material Contracts is in breach or default thereof. Except as would not have a Material Adverse Effect, no event has occurred or circumstance has existed that (with or without notice or lapse of time) would (a) contravene, conflict with or result in a violation or breach of, or become a default or event of default under, any provision of any of its Material Contracts or (b) permit DH Group or any other Person the right to declare a default or exercise any remedy under, or to accelerate the maturity or performance of, or to cancel, terminate or modify any of its Material Contracts. DH Group has not received any notice and has no knowledge of any pending or threatened cancellation, revocation or termination of any of its Material Contracts to which it is a party, and there are no renegotiations of, or attempts to renegotiate.

 

 

 

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2.14 Tax Returns and Audits.

 

(a) Tax Returns. (a) All material Tax Returns required to be filed by or on behalf of DH Group have been timely filed and all such Tax Returns were (at the time they were filed) and are true, correct and complete in all material respects; (b) all Taxes of DH Group required to have been paid (whether or not reflected on any Tax Return) have been fully and timely paid, except those Taxes which are presently being contested in good faith or for which an adequate reserve for the payment of such Taxes has been established on DH Group’s balance sheet; (c) no waivers of statutes of limitation have been given or requested with respect to DH Group in connection with any Tax Returns covering DH Group or with respect to any Taxes payable by it; (d) no Governmental Body in a jurisdiction where DH Group does not file Tax Returns has made a claim, assertion or threat to DH Group that DH Group is or may be subject to taxation by such jurisdiction; (e) DH Group has duly and timely collected or withheld, paid over and reported to the appropriate Governmental Body all amounts required to be so collected or withheld for all periods under all applicable laws; (f) there are no Liens with respect to Taxes on the property or assets of DH Group other than Permitted Liens; (g) there are no Tax rulings, requests for rulings, or closing agreements relating to DH Group for any period (or portion of a period) that would affect any period after the date hereof; and (h) any adjustment of Taxes of DH Group made by a Governmental Body in any examination that DH Group is required to report to the appropriate provincial, local or foreign taxing authorities has been reported, and any additional Taxes due with respect thereto have been paid. No state of fact exists or has existed which would constitute ground for the assessment of any tax liability by any Governmental Body. All Tax Returns filed by DH Group are true, correct and complete.

 

(b) No Adjustments, Changes. Neither DH Group nor any other Person on behalf of DH Group (a) has executed or entered into a closing agreement pursuant to Section 7121 of the Code or any predecessor provision thereof or any similar provision of provincial, local or foreign law; or (b) has agreed to or is required to make any adjustments pursuant to Section 481(a) of the Code or any similar provision of provincial, local or foreign law.

 

(c) No Disputes. There is no pending audit, examination, investigation, dispute, proceeding or claim with respect to any Taxes of or Tax Return filed or required to be filed by DH Group, nor is any such claim or dispute pending or contemplated. DH Group has made available to ENMI true, correct and complete copies of all Tax Returns, examination reports and statements of deficiencies assessed or asserted against or agreed to by DH Group since June 8, 2021, and any and all correspondence with respect to the foregoing. DH Group does not have any outstanding closing agreement, ruling request, request for consent to change a method of accounting, subpoena or request for information to or from a Governmental Body in connection with any Tax matter.

 

(d) No Tax Allocation, Sharing. DH Group is not a party to any Tax allocation or sharing agreement. DH Group (a) has not been a member of a Tax Group filing a consolidated income Tax Return under Section 1501 of the Code (or any similar provision of provincial, local or foreign law), and (b) does not have any liability for Taxes for any Person under Treasury Regulations Section 1.1502-6 (or any similar provision of provincial, local or foreign law) as a transferee or successor, by contract or otherwise.

 

2.15 Material Assets.

 

The financial statements of DH Group reflect the material properties and assets (real and personal) owned or leased by them.

 

2.16 Insurance Coverage.

 

DH Group has no insurance or general liability policies maintained by DH Group on its properties and assets.

 

2.17 Litigation; Orders.

 

There is no Proceeding (whether federal, provincial, local or foreign) pending or, to the knowledge of DH Group, threatened or appealable against or affecting DH Group or any of its properties, assets, business or employees. To the knowledge of DH Group, there is no fact that might result in or form the basis for any such Proceeding. DH Group is not subject to any Orders and has not received any written opinion or memorandum or legal advice from their legal counsel to the effect that DH Group is exposed, from a legal standpoint, to any liability which would be material to its business. DH Group is not engaged in any legal action to recover monies due it or for damages sustained by any of them.

 

 

 

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2.18 Licenses.

 

Except as would not have a Material Adverse Effect, DH Group possesses from the appropriate Governmental Body all licenses, permits, authorizations, approvals, franchises and rights that are necessary for it to engage in its business as currently conducted and to permit it to own and use its properties and assets in the manner in which it currently owns and uses such properties and assets (collectively, “PERMITS”). Except as would not have a Material Adverse Effect, DH Group has not received any written notice from any Governmental Body or other Person that there is lacking any license, permit, authorization, approval, franchise or right necessary for DH Group to engage in its business as currently conducted and to permit DH Group to own and use its properties and assets in the manner in which it currently owns and uses such properties and assets. Except as would not have a Material Adverse Effect, the Permits are valid and in full force and effect. Except as would not have a Material Adverse Effect, no event has occurred or circumstance exists that may (with or without notice or lapse of time): (a) constitute or result, directly or indirectly, in a violation of or a failure to comply with any Permit; or (b) result, directly or indirectly, in the revocation, withdrawal, suspension, cancellation or termination of, or any modification to, any Permit. DH Group has not received any written notice from any Governmental Body or any other Person regarding: (a) any actual, alleged, possible or potential contravention of any Permit; or (b) any actual, proposed, possible or potential revocation, withdrawal, suspension, cancellation, termination of, or modification to, any Permit. All applications required to have been filed for the renewal of such Permits have been duly filed on a timely basis with the appropriate Persons, and all other filings required to have been made with respect to such Permits have been duly made on a timely basis with the appropriate Persons. All Permits are renewable by their terms or in the Ordinary Course of Business without the need to comply with any special qualification procedures or to pay any amounts other than routine fees or similar charges, all of which have, to the extent due, been duly paid.

 

2.19 Interested party Transactions.

 

No officer, director or shareholder of DH Group or any Affiliate, Related Person or “associate” (as such term is defined in Rule 405 of the Commission under the Securities Act) of any such Person, either directly or indirectly, (1) has an interest in any Person which (a) furnishes or sells services or products which are furnished or sold or are proposed to be furnished or sold by DH Group, or (b) purchases from or sells or furnishes to, or proposes to purchase from, sell to or furnish DH Group any goods or services; (2) has a beneficial interest in any contract or agreement to which DH Group is a party or by which it may be bound or affected; or (3) is a party to any material agreements, contracts or commitments in effect as of the date hereof with DH Group “Related Person” means: (i) with respect to a particular individual, the individual’s immediate family which shall include the individual’s spouse, parents, children, siblings, mothers and fathers-in-law, sons and daughters-in-law, and brothers and sisters-in-law; and (ii) with respect to a specified individual or entity, any entity or individual that, directly or indirectly, controls, is controlled by, or is under common control with such specified entity or individual.

 

2.20 Governmental Inquiries.

 

DH Group has made available to ENMI a copy of each material written inspection report, questionnaire, inquiry, demand or request for information received by DH Group from (and the response of DH Group thereto), and each material written statement, report or other document filed by DH Group with, any Governmental Body since June 8, 2021.  

 

2.21 Bank Accounts and Safe Deposit Boxes.

 

The DH Group Disclosure Schedule discloses the title and number of each bank or other deposit or financial account, and each lock box and safety deposit box used by DH Group, the financial institution at which that account or box is maintained and the names of the persons authorized to draw against the account or otherwise have access to the account or box, as the case may be.

 

2.22 Intellectual Property.

 

Any Intellectual Property DH Group uses in its business as presently conducted is owned by DH Group or properly licensed.

 

 

 

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2.23 Stock Option Plans; Employee Benefits.

 

(a) DH Group does not have any employee benefit plans or arrangements covering their present and former employees or providing benefits to such persons in respect of services provided to DH Group DH Group has no commitment, whether formal or informal and whether legally binding or not, to create any additional plan, arrangement or practice similar to the Approved Plans.

 

2.24 Employee Matters.

 

(a) No former or current employee of DH Group is a party to, or is otherwise bound by, any agreement or arrangement (including, without limitation, any confidentiality, non-competition or proprietary rights agreement) that in any way adversely affected, affects, or will affect (i) the performance of his, her or its duties to DH Group, or (ii) the ability of DH Group to conduct its business.

 

(b) DH Group has no employees, directors, officers, consultants, independent contractors, representatives or agents whose contract of employment or engagement cannot be terminated by three months’ notice. (c) DH Group is not required or obligated to pay, and since the date if its incorporation, have not paid any moneys to or for the benefit of, any director, officer, employee, consultant, independent contractor, representative or agent of DH Group (d) DH Group is in compliance with all applicable laws respecting employment and employment practices, terms and conditions or employment and wages and hours, and is not engaged in any unfair labor practice. There is no labor strike, dispute, shutdown or stoppage actually pending or, to the knowledge of DH Group or the Shareholders, threatened against or affecting DH Group

 

2.25 Environmental and Safety Matters.

 

Except as would not have a Material Adverse Effect:

 

(a) DH Group has at all times been and is in compliance with all Environmental Laws and Orders applicable to DH Group, as applicable.

 

(b) There are no Proceedings pending or, to the knowledge of DH Group, threatened against DH Group alleging the violation of any Environmental Law or Environmental Permit applicable to DH Group or alleging that DH Group is a potentially responsible party for any environmental site contamination. None of DH Group or the Shareholders are aware of, or has ever received notice of, any past, present or future events, conditions, circumstances, activities, practices, incidents, actions or plans which may interfere with or prevent continued compliance, or which may give rise to any common law or legal liability, or otherwise form the basis of any claim, action, suit, proceeding, hearing or investigation, based on or related to the manufacture, processing, distribution, use, treatment, storage, disposal, transport, or handling, or the emission, discharge, release or threatened release into the environment, of any pollutant, contaminant, or hazardous or toxic material or waste.

 

(c) Neither this Agreement nor the consummation of the transactions contemplated by this Agreement shall impose any obligations to notify or obtain the consent of any Governmental Body or third Persons under any Environmental Laws applicable to DH Group

 

2.26 Material Customers.

 

Since the date of its incorporation, none of the Material Customers (as hereinafter defined) of DH Group has notified any of DH Group or the Shareholders of their intent to terminate their business with DH Group business because of any dissatisfaction on the part of any such person or entity. The Transactions have not caused any of the Material Customers of DH Group to terminate or provide notice of their intent or threaten to terminate their business with DH Group or to notify DH Group or the Shareholders of their intent not to continue to do such business with DH Group after the Closing. As used herein, “Material Customers” means those customers from whom DH Group derives annual revenues in excess of US $5,000.

 

 

 

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2.27 Inventories.

 

All inventories of DH Group are of good, usable and merchantable quality in all material respects, and, except as set forth in the DH Group Disclosure Schedule, do not include a material amount of obsolete or discontinued items. Except as set forth in the DH Group Disclosure Schedule, (a) all such inventories are of such quality as to meet in all material respects the quality control standards of DH Group, (b) all such inventories are recorded on the books at the lower of cost or market value determined in accordance with GAAP, and (c) no write-down in inventory has been made or should have been made pursuant to GAAP during the past two years.

 

2.28 Money Laundering Laws.

 

The operations of DH Group are and have been conducted at all times in compliance with applicable financial record-keeping and reporting requirements of the money laundering statutes of all U.S. and non-U.S. jurisdictions, the rules and regulations thereunder and any related or similar rules, regulations or guidelines, issued, administered or enforced by any Governmental Body (collectively, the “Money Laundering Laws”) and no Proceeding involving DH Group with respect to the Money Laundering Laws is pending or, to the knowledge of DH Group, threatened.

 

2.29 Disclosure.

 

(a) Any information set forth in this Agreement, the DH Group Disclosure Schedule, or the Transaction Agreements shall be true, correct and complete in all material respects.

 

(b) No statement, representation or warranty of DH Group or the Shareholders in this Agreement (taken with the Schedules) or the Transaction Agreements or any exhibits or schedules thereto contain any untrue statement of a material fact or omits to state a material fact necessary to make the statements herein or therein, taken as a whole, in light of the circumstances in which they were made, not misleading.

 

(c) Except as set forth in the DH Group Disclosure Schedule, the Shareholders and DH Group have no knowledge of any fact that has specific application to DH Group (other than general economic or industry conditions) and that adversely affects the assets or the business, prospects, financial condition, or results of operations of DH Group.

 

(d) In the event of any inconsistency between the statements in the body of this Agreement and those in the Schedules (other than an exception expressly set forth as such in the Schedules with respect to a specifically identified representation or warranty), the statements in the Schedules shall control.

 

(e) The books of account, minute books and stock record books of DH Group, all of which have been made available to ENMI, are complete and accurate and have been maintained in accordance with sound business practices. Without limiting the generality of the foregoing, the minute books of DH Group contain complete and accurate records of all meetings held, and corporate action taken, by the shareholders, the boards of directors, and committees of the boards of directors of DH Group, as applicable, and no meeting of any such shareholders, board of directors, or committee has been held for which minutes have not been prepared and are not contained in such minute books.

 

2.30 Finders and Brokers.

 

(a) None of DH Group or the Shareholders or any Person acting on behalf of DH Group or the Shareholders has engaged any finder, broker, intermediary or any similar Person in connection with the Exchange.

 

(b) None of DH Group the Shareholders nor any Person acting on behalf of DH Group or the Shareholders has entered into a contract or other agreement that provides that a fee shall be paid to any Person or Entity if the Exchange is consummated.

 

 

 

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ARTICLE III.

 

REPRESENTATIONS AND WARRANTIES OF ENMI

 

ENMI hereby represents and warrants to the Shareholders as of the date hereof:

 

3.1 Organization; Good Standing.

 

ENMI is duly incorporated, validly and in good standing existing under the laws of Nevada, has all requisite authority and power (corporate and other), governmental licenses, authorizations, consents and approvals to carry on its business as presently conducted and as contemplated to be conducted, to own, hold and operate its properties and assets as now owned, held and operated by it, to enter into this Agreement, to carry out the provisions hereof except where the failure to be in good standing or to have such governmental licenses, authorizations, consents and approvals will not, in the aggregate, either (i) have a Material Adverse Effect on the business, assets or financial condition of ENMI, or (ii) impair the ability of ENMI to perform its material obligations under this Agreement. ENMI is duly qualified, licensed or domesticated as a foreign corporation in good standing in each jurisdiction wherein the nature of its activities or its properties owned or leased requires such qualification, licensing or domestication, except where the failure to be so qualified, licensed or domesticated will not have a Material Adverse Effect.

 

3.2 ENMI Series B Preferred Stock.

 

As of June 16, 2021, there were no ENMI’s Series B  Preferred Stock issued and outstanding. The Acquisition Shares, when issued in connection with this Agreement and the other Transactional Agreements, will be duly authorized, validly issued, fully paid and nonassessable. ENMI will take all reasonable efforts subsequent to the Closing to effect and amendment to its Articles of Incorporation, as amended, to effect an increase in its authorized shares of Series B Preferred Stock to issue and deliver to the Shareholders any portion of the Acquisition Shares not delivered at Closing to the Shareholders.

 

3.3 Authority; Binding Nature of Agreements.

 

(a) The execution, delivery and performance of this Agreement, the Transactional Agreements, and all other agreements and instruments contemplated to be executed and delivered by ENMI in connection herewith have been duly authorized by all necessary corporate action on the part of ENMI and its board of directors.

 

(b) This Agreement, the Transactional Agreements, and all other agreements and instruments contemplated to be executed and delivered by ENMI constitute the legal, valid and binding obligation of ENMI, enforceable against ENMI in accordance with their terms, except to the extent that enforceability may be limited by applicable bankruptcy, Exchange, insolvency, moratorium or other laws affecting the enforcement of creditors’ rights generally and by general principles of equity regardless of whether such enforceability is considered in a proceeding in law or equity.

 

(c) There is no pending Proceeding, and, to ENMI’s knowledge, no Person has threatened to commence any Proceeding that challenges, or that may have the effect of preventing, delaying, making illegal or otherwise interfering with, the Exchange or ENMI’s ability to comply with or perform its obligations and covenants under the Transactional Agreements, and, to the knowledge of ENMI, no event has occurred, and no claim, dispute or other condition or circumstance exists, that might directly or indirectly give rise to or serve as a basis for the commencement of any such Proceeding.

 

 

 

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3.4 Non-contravention; Consents.

 

The execution and delivery of this Agreement and the other Transactional Agreements, and the consummation of the Exchange, by ENMI will not, directly or indirectly (with or without notice or lapse of time):

 

(a) contravene, conflict with or result in a material violation of (i) ENMI’s Certificate of Incorporation or Bylaws, or (ii) any resolution adopted by ENMI Board or any committee thereof or the stockholders of ENMI;

 

(b) to the knowledge of ENMI, contravene, conflict with or result in a material violation of, or give any Governmental Body the right to challenge the Exchange or to exercise any remedy or obtain any relief under, any legal requirement or any Order to which ENMI or any material assets owned or used by it are subject;

 

(c) to the knowledge of ENMI, cause any material assets owned or used by ENMI to be reassessed or revalued by any taxing authority or other Governmental Body;

 

(d) to the knowledge of ENMI, contravene, conflict with or result in a material violation of any of the terms or requirements of, or give any Governmental Body the right to revoke, withdraw, suspend, cancel, terminate or modify, any Governmental Authorization that is held by ENMI or that otherwise relates to ENMI’s business or to any of the material assets owned or used by ENMI, where such contraventions, conflict, violation, revocation, withdrawal, suspension, cancellation, termination or modification would have a Material Adverse Effect on ENMI;

 

(e) contravene, conflict with or result in a material violation or material breach of, or material default under, any Contract to which ENMI is a party;

 

(f) give any Person the right to any payment by ENMI or give rise to any acceleration or change in the award, grant, vesting or determination of options, warrants, rights, severance payments or other contingent obligations of any nature whatsoever of ENMI in favor of any Person, in any such case as a result of the Exchange; or

 

(g) result in the imposition or creation of any material Lien upon or with respect to any material asset owned or used by ENMI.

 

Except for Consents, filings or notices required under the state and federal securities laws or any other laws or regulations or as otherwise contemplated in this Agreement and the other Transactional Agreements, ENMI will not be required to make any filing with or give any notice to, or obtain any Consent from, any Person in connection with the execution and delivery of this Agreement and the other Transactional Agreements or the consummation or performance of the Exchange.

 

3.5 Finders and Brokers.

 

(a) Neither ENMI nor any Person acting on behalf of ENMI has engaged any finder, broker, intermediary or any similar Person in connection with the Exchange.

 

(b) ENMI has not entered into a contract or other agreement that provides that a fee shall be paid to any Person or Entity if the Exchange is consummated.

 

3.6 Compliance with Applicable Law.

 

Results of operations or financial condition of ENMI, to ENMI’s knowledge ENMI holds all Governmental Authorizations necessary for the lawful conduct of its business under and pursuant to, and the business of ENMI is not being conducted in violation of, any Governmental Authorization applicable to ENMI.

 

 

 

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3.8 Complete Copies of Requested Reports.

 

ENMI has delivered or made available true and complete copies of each document that has been reasonably requested by DH Group or the Shareholders.

 

3.9 Full Disclosure.

 

(a) Neither this Agreement (including all Schedules and exhibits hereto) nor any of the Transactional Agreements contemplated to be executed and delivered by ENMI in connection with this Agreement contains any untrue statement of material fact; and none of such documents omits to state any material fact necessary to make any of the representations, warranties or other statements or information contained therein not misleading.

 

(b) All of the information set forth in the prospectus and all other information regarding ENMI and the business, condition, assets, liabilities, operations, financial performance, net income and prospects of either that has been furnished to DH Group or the Shareholders by or on behalf of ENMI or any of the ENMI’s Representatives, is accurate and complete in all material respects.

 

ARTICLE IV.

 

COVENANTS OF DH GROUP

 

4.1 Access and Investigation.

 

DH Group shall ensure that, at all times during the Pre-Closing Period:

 

(a) DH Group and their Representatives provide ENMI and its Representatives access, at reasonable times and with twenty-four (24) hours’ notice from ENMI to DH Group, to all of the premises and assets of DH Group, to all existing books, records, Tax Returns, work papers and other documents and information relating to DH Group, and to responsible officers and employees of DH Group, and DH Group and its Representatives provide ENMI and its Representatives with copies of such existing books, records, Tax Returns, work papers and other documents and information relating to DH Group as ENMI may request in good faith;

 

(b) Each of DH Group and its Representatives confer regularly with ENMI upon its request, concerning operational matters and otherwise report regularly (not less than semi-monthly and as ENMI may otherwise request) to ENMI and discuss with ENMI and its Representatives concerning the status of the business, condition, assets, liabilities, operations, and financial performance of DH Group, and promptly notify ENMI of any material change in the business, condition, assets, liabilities, operations, and financial performance of DH Group, or any event reasonably likely to lead to any such change.

 

4.2 Operation of the Business.

 

DH Group shall ensure that, during the Pre-Closing Period:

 

(a) It conducts its operations in the Ordinary Course of Business and in the same manner as such operations have been conducted prior to the date of this Agreement;

 

(b) It uses its commercially reasonable efforts to preserve intact its current business organization, keep available and not terminate the services of its current officers and employees and maintain its relations and goodwill with all suppliers, customers, landlords, creditors, licensors, licensees, employees and other Persons having business relationships with DH Group;

 

 

 

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(c) It does not declare, accrue, set aside or pay any dividend or make any other distribution in respect of any shares of its capital stock, and does not repurchase, redeem or otherwise reacquire any shares of its capital stock or other securities, except with respect to the repurchase of shares of DH Group Common Stock  upon termination of employees at the original purchase price pursuant to agreements existing at the date hereof;

 

(d) It does not sell or otherwise issue (or grant any warrants, options or other rights to purchase) any shares of capital stock or any other securities, except the issuance of DH Group Common Stock  pursuant to option grants to employees made under the Option Plan in the Ordinary Course of Business;

 

(e) It does not amend its charter document, corporate governance document or other Organizational Documents, and does not affect or become a party to any recapitalization, reclassification of shares, stock split, reverse stock split or similar transaction;

 

(f) It does not form any subsidiary or acquire any equity interest or other interest in any other Entity;

 

(g) It does not establish or adopt any Employee Benefit Plan, and does not pay any bonus or make any profit sharing or similar payment to, or increase the amount of the wages, salary, commissions, fringe benefits or other compensation or remuneration payable to, any of its directors, officers or employees;

 

(h) It does not change any of its methods of accounting or accounting practices in any respect;

 

(i) It does not make any Tax election;

 

(j) It does not commence or take any action or fail to take any action which would result in the commencement of any Proceeding;

 

(k) It does not (i) acquire, dispose of, transfer, lease, license, mortgage, pledge or encumber any fixed or other assets, other than in the Ordinary Course of Business; (ii) assume, guarantee, endorse for the obligations of any other person, other than in the Ordinary Course of Business; (iv) make any loans, advances or capital contributions to, or investments in, any other Person, other than in the Ordinary Course of Business; or (v) fail to maintain insurance consistent with past practices for its business and property;

 

(l) It pays all debts and Taxes, files all of its Tax Returns (as provided herein) and pays or performs all other obligations, when due;

 

(m) It does not enter into or amend any agreements pursuant to which any other Person is granted distribution, marketing or other rights of any type or scope with respect to any of its services, products or technology;

 

(n) It does not hire any new officer-level employee;

 

(o) It does not revalue any of its assets, including, without limitation, writing down the value of inventory or writing off notes or accounts receivable, except as required under GAAP and in the Ordinary Course of Business;

 

(p) Except as otherwise contemplated hereunder, it does not enter into any transaction or take any other action outside the Ordinary Course of Business; and

 

(q) It does not enter into any transaction or take any other action that likely would cause or constitute a Breach of any representation or warranty made by it in this Agreement.

 

 

 

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4.3 Filings and Consents; Cooperation.

 

DH Group shall ensure that:

 

(a) Each filing or notice required to be made or given (pursuant to any applicable Law, Order or contract, or otherwise) by DH Group or the Shareholders in connection with the execution and delivery of any of the Transactional Agreements, or in connection with the consummation or performance of the Exchange, is made or given as soon as possible after the date of this Agreement;

 

(b) Each Consent required to be obtained (pursuant to any applicable Law, Order or contract, or otherwise) by DH Group or the Shareholders in connection with the execution and delivery of any of the Transactional Agreements, or in connection with the consummation or performance of the Exchange, is obtained as soon as possible after the date of this Agreement and remains in full force and effect through the Closing Date;

 

(c) It promptly delivers to ENMI a copy of each filing made, each notice given and each Consent obtained by DH Group during the Pre-Closing Period; and

 

(d) During the Pre-Closing Period, it and its Representatives cooperate with ENMI and ENMI’s Representatives, and prepare and make available such documents and take such other actions as ENMI may request in good faith, in connection with any filing, notice or Consent that ENMI is required or elects to make, give or obtain.

 

4.4 Notification; Updates to Disclosure Schedules.

 

(a) During the Pre-Closing Period, DH Group shall promptly notify ENMI in writing of:

 

(i) the discovery by it of any event, condition, fact or circumstance that occurred or existed on or prior to the date of this Agreement which is contrary to any representation or warranty made by it in this Agreement or in any of the other Transactional Agreements, or that would upon the giving of notice or lapse of time, result in any of its representations and warranties set forth in this agreement to become untrue or otherwise cause any of the conditions of Closing set forth in Article VI or Article VII not to be satisfied;

 

(ii) any event, condition, fact or circumstance that occurs, arises or exists after the date of this Agreement (except as a result of actions taken pursuant to the express written consent of ENMI) and that is contrary to any representation or warranty made by it in this Agreement, or that would upon the giving of notice or lapse of time, result in any of its representations and warranties set forth in this agreement to become untrue or otherwise cause any of the conditions of Closing set forth in Article VI or Article VII not to be satisfied;

 

(b) If any event, condition, fact or circumstances that is required to be disclosed pursuant to Section 4.4(a) requires any material change in the DH Group Disclosure Schedule, or if any such event, condition, fact or circumstance would require such a change assuming the DH Group Disclosure Schedule were dated as of the date of the occurrence, existence or discovery of such event, condition, fact or circumstances, then DH Group, as applicable, shall promptly deliver to ENMI an update to the DH Group Disclosure Schedule specifying such change (a “Disclosure Schedule Update”).

 

(c) It will promptly update any relevant and material information provided to ENMI after the date hereof pursuant to the terms of this Agreement.

 

4.5 Commercially Reasonable Efforts.

 

During the Pre-Closing Period, DH Group shall use its commercially reasonable efforts to cause the conditions set forth in Article VI and Article VII to be satisfied on a timely basis and so that the Closing can take place on or before June 21, 2020, in accordance with Section 1.5, and shall not take any action or omit to take any action, the taking or omission of which would or could reasonably be expected to result in any of the representations and warranties of DH Group set forth in this Agreement becoming untrue, or in any of the conditions of Closing set forth in Article VI or Article VII not being satisfied.

 

 

 

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4.6 Confidentiality; Publicity.

 

DH Group shall ensure that:

 

(a) It and its Representatives keep strictly confidential the existence and terms of this Agreement prior to the issuance or dissemination of any mutually agreed upon press release or other disclosure of the Exchange; and

 

(b) neither it nor any of its Representatives issues or disseminates any press release or other publicity or otherwise makes any disclosure of any nature (to any of its suppliers, customers, landlords, creditors or employees or to any other Person) regarding any of the Exchange; except in each case to the extent that it is required by law to make any such disclosure regarding such transactions or as separately agreed by the parties; provided, however, that if it is required by law to make any such disclosure, DH Group advises ENMI, at least five business days before making such disclosure, of the nature and content of the intended disclosure.

 

ARTICLE V.

 

COVENANTS OF ENMI

 

5.1 Notification.

 

During the Pre-Closing Period, ENMI shall promptly notify DH Group in writing of:

 

(a) the discovery by ENMI of any event, condition, fact or circumstance that occurred or existed on or prior to the date of this Agreement which is contrary to any representation or warranty made by ENMI in this Agreement; and,

 

(b) any event, condition, fact or circumstance that occurs, arises or exists after the date of this Agreement (except as a result of actions taken pursuant to the written consent of DH Group) and that is contrary to any representation or warranty made by ENMI in this Agreement;

 

5.2 Filings and Consents; Cooperation.

 

ENMI shall ensure that:

 

(a) Each filing or notice required to be made or given (pursuant to any applicable Law, Order or contract, or otherwise) by ENMI in connection with the execution and delivery of any of the Transactional Agreements, or in connection with the consummation or performance of the Exchange, is made or given as soon as possible after the date of this Agreement;

 

(b) Each Consent required to be obtained (pursuant to any applicable Law, Order or contract, or otherwise) by ENMI in connection with the execution and delivery of any of the Transactional Agreements, or in connection with the consummation or performance of the Exchange, is obtained as soon as possible after the date of this Agreement and remains in full force and effect through the Closing Date;

 

(c) ENMI promptly delivers to DH Group and a copy of each filing made, each notice given and each Consent obtained by ENMI during the Pre-Closing Period; and

 

(d) During the Pre-Closing Period, ENMI and its Representatives cooperate with DH Group and their Representatives, and prepare and make available such documents and take such other actions as DH Group may request in good faith, in connection with any filing, notice or Consent that DH Group is required or elects to make, give or obtain.

 

 

 

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5.3 Commercially Reasonable Efforts.

 

During the Pre-Closing Period, ENMI shall use its commercially reasonable efforts to cause the conditions set forth in Article VI and Article VII to be satisfied on a timely basis and so that the Closing can take place on or before July 31, 2021, o r as soon thereafter as is reasonably practical, in accordance with Section 1.5, and shall not take any action or omit to take any action, the taking or omission of which would or could reasonably be expected to result in any of the representations and warranties or ENMI set forth in this Agreement becoming untrue or in any of the conditions of closing set forth in Article VI or Article VII not being satisfied.

 

5.4 Disclosure of Confidential Information.

 

(a) Each of ENMI and the Shareholders acknowledges and agrees that it may receive Confidential Information in connection with this Transaction including without limitation, the DH Group Disclosure Schedule and any information disclosed during the due diligence process, the public disclosure of which will harm the disclosing party’s business. The Receiving Party may use Confidential Information only in connection with the Transaction. The results of the due diligence review may not be used for any other purpose other than in connection with the Transaction. Except as expressly provided in this Agreement, the Receiving Party shall not disclose Confidential Information to anyone without the Disclosing Party’s prior written consent. The Receiving Party shall take all reasonable measures to avoid disclosure, dissemination or unauthorized use of Confidential Information, including, at a minimum, those measures it takes to protect its own confidential information of a similar nature. The Receiving Party shall not export any Confidential Information in any manner contrary to the export regulations of the governmental jurisdiction to which it is subject.

 

(b) The Receiving Party may disclose Confidential Information as required to comply with binding orders of governmental entities that have jurisdiction over it, provided that the Receiving Party (i) gives the Disclosing Party reasonable notice (to the extent permitted by law) to allow the Disclosing Party to seek a protective order or other appropriate remedy, (ii) discloses only such information as is required by the governmental entity, and (iii) uses commercially reasonable efforts to obtain confidential treatment for any Confidential Information so disclosed.

 

(c) All Confidential Information shall remain the exclusive property of the Disclosing Party. The Disclosing Party’s disclosure of Confidential Information shall not constitute an express or implied grant to the Receiving Party of any rights to or under the Disclosing Party’s patents, copyrights, trade secrets, trademarks or other intellectual property rights.

 

(d) The Receiving Party shall notify the Disclosing Party immediately upon discovery of any unauthorized use or disclosure of Confidential Information or any other breach of this Agreement by the Receiving Party. The Receiving Party shall cooperate with the Disclosing Party in every reasonable way to help the Disclosing Party regain possession of such Confidential Information and prevent its further unauthorized use.

 

(e) The Receiving Party shall return or destroy all tangible materials embodying Confidential Information (in any form and including, without limitation, all summaries, copies and excerpts of Confidential Information) promptly following the Disclosing Party’s written request; provided, however, that, subject to the provisions of this Agreement, the Receiving Party may retain one copy of such materials in the confidential, restricted access files of its legal department for use only in the event a dispute arises between the parties related to the Transaction and only in connection with that dispute. At the Disclosing Party’s option, the Receiving Party shall provide written certification of its compliance with this Section.

 

5.5 Indemnification.

 

(a) Each of DH Group and the Shareholders, jointly and severally, each shall defend, indemnify and hold harmless ENMI, and its respective employees, officers, directors, stockholders, controlling persons, affiliates, agents, successors and assigns (collectively, the “ENMI Indemnified Persons”), and shall reimburse the ENMI Indemnified Person, for, from and against any loss, liability, claim, damage, expense (including costs of investigation and defense and reasonable attorneys’ fees) or diminution of value, whether or not involving a third-party claim (collectively, “Damages”), directly or indirectly, relating to, resulting from or arising out of:

 

 

 

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(i) any untrue representations, misrepresentations or breach of warranty by or of DH Group or the Shareholders contained in or pursuant to this Agreement, and the DH Group Disclosure Schedule; (ii) any breach or nonfulfillment of any covenant, agreement or other obligation by or of DH Group or the Shareholders (only to the extent made or occurring prior to or at the Closing) contained in or pursuant to this Agreement, the Transaction Agreements executed by DH Group or any of the Shareholders in their individual capacity, the DH Group Disclosure Schedule, or any of the other agreements, documents, schedules or exhibits to be entered into by DH Group or any of the Shareholders in their individual capacity pursuant to or in connection with this Agreement;

 

(iii) all of Pre-Closing liabilities of DH Group or the Shareholders; and

 

(iv) any liability, claim, action or proceeding of any kind whatsoever, whether instituted or commenced prior to or after the Closing Date, which directly or indirectly relates to, arises or results from, or occurs in connection with facts or circumstances relating to the conduct of business of DH Group or the assets of DH Group, or events or circumstances existing on or prior to the Closing Date.

 

(b) ENMI shall defend, indemnify and hold harmless DH Group and its respective affiliates, agents, successors and assigns (collectively, the “DH Group Indemnified Persons”), and shall reimburse the DH Group Indemnified Persons, for, from and against any Damages, directly or indirectly, relating to, resulting from or arising out of:

 

(i) any untrue representation, misrepresentation or breach of warranty by or of ENMI contained in or pursuant to this Agreement;

 

(ii) any breach or nonfulfillment of any covenant, agreement or other obligations by or of ENMI contained in or pursuant to this Agreement, the Transaction Agreements or any other agreements, documents, schedules or exhibits to be entered into or delivered to pursuant to or in connection with this Agreement.

 

Notwithstanding anything to the contrary herein, ENMI’s indemnity obligations under this section shall not exceed $_____ in the aggregate.

 

(c) Promptly after receipt by an indemnified Party under Section 5.6 of this Agreement of notice of a claim against it (“Claim”), such indemnified Party shall, if a claim is to be made against an indemnifying Party under such Section, give notice to the indemnifying Party of such Claim, but the failure to so notify the indemnifying Party will not relieve the indemnifying Party of any liability that it may have to any indemnified Party, except to the extent that the indemnifying Party demonstrates that the defense of such action is prejudiced by the indemnified Party’s failure to give such notice.

 

(d) A claim for indemnification for any matter not involving a third-party claim may be asserted by notice to the Party from whom indemnification is sought.

 

ARTICLE VI.

 

CLOSING CONDITIONS OF ENMI

 

ENMI’s obligations to affect the Closing and consummate the Exchange are subject to the satisfaction of each of the following conditions:

 

6.1 Accuracy of Representations and Warranties.

 

The representations and warranties of DH Group and the Shareholders in this Agreement shall have been true and correct as of the date of this Agreement and shall be true and correct on and as of the Closing. DH Group and the Shareholders shall have performed all obligations in this Agreement required to be performed or observed by them on or prior to the Closing.

 

 

 

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6.2 Additional Conditions to Closing.

 

(a) All necessary approvals under federal and state securities laws and other authorizations relating to the issuance of the Acquisition Shares and the transfer of the Shares shall have been received.

 

(b) [Intentionally omitted.]j

 

(c) No preliminary or permanent injunction or other order by any federal, state or foreign court of competent jurisdiction which prohibits the consummation of the Exchange shall have been issued and remain in effect. No statute, rule, regulation, executive order, stay, decree, or judgment shall have been enacted, entered, issued, promulgated or enforced by any court or governmental authority which prohibits or restricts the consummation of the Exchange. All authorizations, consents, orders or approvals of, or declarations or filings with, and all expirations of waiting periods imposed by, any Governmental Body which are necessary for the consummation of the Exchange, other than those the failure to obtain which would not materially adversely affect the consummation of the Exchange or in the aggregate have a material adverse effect on ENMI and its subsidiaries, taken as a whole, shall have been filed, occurred or been obtained (all such permits, approvals, filings and consents and the lapse of all such waiting periods being referred to as the “Requisite Regulatory Approvals”) and all such Requisite Regulatory Approvals shall be in full force and effect.

 

(d) There shall not be any action taken, or any statute, rule, regulation or order enacted, entered, enforced or deemed applicable to the Exchange, by any Governmental Body which, in connection with the grant of a Requisite Regulatory Approval, imposes any material condition or material restriction upon ENMI or its subsidiaries or DH Group, including, without limitation, requirements relating to the disposition of assets, which in any such case would so materially adversely impact the economic or business benefits of the Exchange as to render inadvisable the consummation of the Exchange.

 

6.3 Performance of Agreements.

 

DH Group or the Shareholders, as the case may be, shall have executed and delivered each of the agreements, instruments and documents required to be executed and delivered, and performed all actions required to be performed by DH Group or any of the Shareholders, as the case may be, pursuant to this Agreement, except as ENMI has otherwise consented in writing.

 

6.4 Consents.

 

Each of the Consents identified or required to have been identified in the DH Group Disclosure Schedule shall have been obtained and shall be in full force and effect, other than those Consents, which have been expressly waived by ENMI.

 

6.5 No Material Adverse Change and Satisfactory Due Diligence.

 

There shall not have been any material adverse change in the business, condition, assets, liabilities, operations or financial performance of DH Group since the date of this Agreement as determined by ENMI in its discretion. ENMI shall be satisfied in all respects with the results of its due diligence review of DH Group

 

6.6 DH Group Closing Certificate.

 

In addition to the documents required to be received under this Agreement, ENMI shall also have received the following documents:

 

(a) copies of resolutions of DH Group, certified by a Secretary, Assistant Secretary or other appropriate officer of DH Group, authorizing the execution, delivery and performance of this Agreement and other Transactional Agreements;

 

 

 

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(b) good standing certificate of DH Group; and

 

(c) such other documents as ENMI may request in good faith for the purpose of (i) evidencing the accuracy of any representation or warranty made by DH Group, (ii) evidencing the compliance by DH Group, or the performance by DH Group of, any covenant or obligation set forth in this Agreement or any of the other Transactional Agreements, (iii) evidencing the satisfaction of any condition set forth in Article VII or this Article VI, or (iv) otherwise facilitating the consummation or performance of the Exchange.

 

6.7 Transactional Agreements.

 

Each Person (other than ENMI) shall have executed and delivered prior to or on the Closing Date all Transactional Agreements to which it is to be a party.

 

6.8 Resignation of Directors and Officers.

 

ENMI shall have received a written resignation from each of the directors and officers of DH Group effective as of the Closing.

 

6.9 Delivery of Stock Certificates, Minute Book and Corporate Seal.

 

The Shareholders shall have delivered to ENMI the stock books, stock ledgers, minute books and corporate seals of DH Group

 

ARTICLE VII.

 

CLOSING CONDITIONS OF THE SHAREHOLDERS

 

The Shareholders’ obligations to affect the Closing and consummate the Exchange are subject to the satisfaction of each of the following conditions:

 

7.1 Accuracy of Representations and Warranties.

 

The representations and warranties of ENMI in this Agreement shall have been true and correct as of the date of this Agreement and shall be true and correct on and as of the Closing and ENMI shall have performed all obligations in this Agreement required to be performed or observed by them on or prior to the Closing.

 

7.2 Additional Conditions to Closing.

 

(a) All necessary approvals under federal and state securities laws and other authorizations relating to the issuance and transfer of the Acquisition Shares by ENMI and the transfer of the Shares by DH Group shall have been received.

 

(b) No preliminary or permanent injunction or other order by any federal, state or foreign court of competent jurisdiction which prohibits the consummation of the Exchange shall have been issued and remain in effect. No statute, rule, regulation, executive order, stay, decree, or judgment shall have been enacted, entered, issued, promulgated or enforced by any court or governmental authority which prohibits or restricts the consummation of the Exchange. All Requisite Regulatory Approvals shall have been filed, occurred or been obtained and all such Requisite Regulatory Approvals shall be in full force and effect.

 

(c) There shall not be any action taken, or any statute, rule, regulation or order enacted, entered, enforced or deemed applicable to the Exchange, by any federal or state Governmental Body which, in connection with the grant of a Requisite Regulatory Approval, imposes any condition or restriction upon the Surviving Corporation or its subsidiaries (or, in the case of any disposition of assets required in connection with such Requisite Regulatory Approval, upon ENMI, its subsidiaries, DH Group or any of their subsidiaries), including, without limitation, requirements relating to the disposition of assets, which in any such case would so materially adversely impact the economic or business benefits of the Exchange as to render inadvisable the consummation of the Exchange.

 

 

 

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7.3 ENMI Closing Certificates.

 

The Shareholders shall have received the following documents:

 

(a) copies of resolutions of ENMI, certified by a Secretary, Assistant Secretary or other appropriate officer of ENMI, authorizing the execution, delivery and performance of the Transactional Agreements and the Exchange;

 

(b) good standing certificates for the State of Nevada; and

 

(c) such other documents as DH Group may request in good faith for the purpose of (i) evidencing the accuracy of any representation or warranty made by ENMI, (ii) evidencing the compliance by ENMI with, or the performance by ENMI of, any covenant or obligation set forth in this Agreement or any of the other Transactional Agreements, (iii) evidencing the satisfaction of any condition set forth in Article VI or this Article VII, or (iv) otherwise facilitating the consummation or performance of the Exchange.

 

7.4 No Material Adverse Change.

 

There shall not have been any material adverse change in ENMI’s business, condition, assets, liabilities, operations or financial performance since the date of this Agreement.

 

7.5 Performance of Agreements.

 

ENMI shall have executed and delivered each of the agreements, instruments and documents required to be executed and delivered, and performed all actions required by ENMI pursuant to this Agreement, except as DH Group and the Shareholders have otherwise consented in writing.

 

7.6 Consents.

 

Each of the Consents identified or required to have been identified in Section 3.4 shall have been obtained and shall be in full force and effect, other than those Consents the absence of which shall not have a material adverse effect on ENMI.

 

7.7 ENMI Stock.

 

On the Closing Date, shares of ENMI Common Stock shall be eligible for quotation on the OTC Markets.

 

ARTICLE VIII.

 

FURTHER ASSURANCES

 

Each of the parties hereto agrees that it will, from time to time after the date of the Agreement, execute and deliver such other certificates, documents and instruments and take such other action as may be reasonably requested by the other party to carry out the actions and transactions contemplated by this Agreement, including the closing conditions described in Articles VI and VII. DH Group and the Shareholders shall reasonably cooperate with ENMI in its obtaining of the books and records of DH Group, or in preparing any solicitation materials to be sent to the shareholders of ENMI in connection with the approval of the Exchange and the transactions contemplated by the Transactional Agreements.

 

 

 

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ARTICLE IX.

 

TERMINATION

 

9.1 Termination.

 

This Agreement may be terminated and the Exchange abandoned at any time prior to the Closing Date:

 

(a) by mutual written consent of ENMI, DH Group and the Shareholders;

 

(b) by ENMI if (i) there is a material Breach of any covenant or obligation of DH Group or the Shareholders; provided however, that if such Breach or Breaches are capable of being cured prior to the Closing Date, such Breach or Breaches shall not have been cured within 10 days of delivery of the written notice of such Breach, or (ii) ENMI reasonably determines that the timely satisfaction of any condition set forth in Article VI has become impossible or impractical (other than as a result of any failure on the part of ENMI to comply with or perform its covenants and obligations under this Agreement or any of the other Transactional Agreements);

 

(b) by DH Group if (i) there is a material Breach of any covenant or obligation of ENMI; provided, however, that if such Breach or Breaches are capable of being cured prior to the Closing Date, such Breach or Breaches shall not have been cured within 10 days of delivery of the written notice of such Breach, or (ii) DH Group reasonably determines that the timely satisfaction of any condition set forth in Article VII has become impossible or impractical (other than as a result of any failure on the part of DH Group or any Shareholder to comply with or perform any covenant or obligation set forth in this Agreement or any of the other Transactional Agreements);

 

(d) by ENMI if the Closing has not taken place on or before July 31, 2021,  (except if as a result of any failure on the part of ENMI to comply with or perform its covenants and obligations under this Agreement or in any other Transactional Agreement);

 

(e) by DH Group if the Closing has not taken place on or before July 31, 2021 (except if as a result of the failure on the part of DH Group or the Shareholders to comply with or perform any covenant or obligation set forth in this Agreement or in any other Transactional Agreement);

 

(f) by any of ENMI, on the one hand or DH Group, on the other hand, if any court of competent jurisdiction in the United States or other United States governmental body shall have issued an order, decree or ruling or taken any other action restraining, enjoining or otherwise prohibiting the Exchange and such order, decree, ruling or any other action shall have become final and non-appealable; provided, however, that the party seeking to terminate this Agreement pursuant to this clause (f) shall have used all commercially reasonable efforts to remove such order, decree or ruling; or

 

(g) The parties hereby agree and acknowledge that a breach of the provisions of Articles 4.1, 4.2, 4.3, 4.4 and 4.6 are, without limitation, material Breaches of this Agreement.

 

9.2 Termination Procedures.

 

If ENMI wishes to terminate this Agreement pursuant to Section 9.1, ENMI shall deliver to the Shareholders and DH Group a written notice stating that ENMI is terminating this Agreement and setting forth a brief description of the basis on which ENMI is terminating this Agreement. If DH Group wishes to terminate this Agreement pursuant to Section 9.1, DH Group shall deliver to ENMI a written notice stating that DH Group is terminating this Agreement and setting forth a brief description of the basis on which DH Group is terminating this Agreement.

 

 

 

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9.3 Effect of Termination.

 

In the event of termination of this Agreement as provided above, this Agreement shall forthwith have no further effect. Except for a termination resulting from a Breach by a party to this Agreement, there shall be no liability or obligation on the part of any party hereto. In the event of a breach, the remedies of the non-breaching party shall be to seek damages from the breaching party or to obtain an order for specific performance, in addition to or in lieu of other remedies provided herein. Upon request after termination, each party will redeliver or, at the option of the party receiving such request, destroy all reports, work papers and other material of any other party relating to the Exchange, whether obtained before or after the execution hereof, to the party furnishing same; provided, however, that DH Group and the Shareholders shall, in all events, remain bound by and continue to be subject to Section 4.6 and all parties shall in all events remain bound by and continue to be subject to Section 5.4 and 5.5.

 

Notwithstanding the above, both ENMI, on the one hand, and DH Group and the Shareholders, on the other hand, shall be entitled to announce the termination of this Agreement by means of a mutually acceptable press release.

 

ARTICLE X.

 

MISCELLANEOUS

 

10.1 Survival of Representations and Warranties.

 

All representations and warranties of DH Group and the Shareholders in this Agreement and the DH Group Disclosure Schedule shall survive shall survive indefinitely. The right to indemnification, reimbursement or other remedy based on such representations and warranties will not be affected by any investigation conducted by the parties.

 

10.2 Expenses.

 

Except as otherwise set forth herein, each of the parties to the Exchange shall bear its own expenses incurred in connection with the negotiation and consummation of the transactions contemplated by this Agreement.

 

10.3 Entire Agreement.

 

This Agreement and the other Transactional Agreements contain the entire agreement of the parties hereto, and supersede any prior written or oral agreements between them concerning the subject matter contained herein, or therein. There are no representations, agreements, arrangements or understandings, oral or written, between the parties to this Agreement, relating to the subject matter contained in this Agreement and the other Transaction Agreements, which are not fully expressed herein or therein. The schedules and each exhibit attached to this Agreement or delivered pursuant to this Agreement are incorporated herein by this reference and constitute a part of this Agreement.

 

10.4 Counterparts.

 

This Agreement may be executed in any number of counterparts, each of which shall be deemed an original but all of which shall constitute one and the same instrument.

 

10.5 Descriptive Headings.

 

The Article and Section headings in this Agreement are for convenience only and shall not affect the meanings or construction of any provision of this Agreement.

 

 

 

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10.6 Notices.

 

Any notices required or permitted to be given under this Agreement shall be in writing and shall be deemed sufficiently given on the earlier to occur of the date of personal delivery, the date of receipt or three (3) days after posting by overnight courier or registered or certified mail, postage prepaid, addressed as follows:

 

If to ENMI:

 

Unit A, 13/F, Gee Luen Factory Building, 316-318 Kwun Tong Road

Kowloon, Hong Kong

 

If to DH Group:

 

CCS Trustees Limited, Mandar House, 3/F, Johnson’s Ghut

Tortola, British Virgin Islands

 

If to the Shareholders:

 

c/o CCS Trustees Limited, Mandar House, 3/F, Johnson’s Ghut

Tortola, British Virgin Islands

 

To such address or addresses as a party shall have previously designated by notice to the sender given in accordance with this section.

 

10.7 Choice of Law.

 

This Agreement shall be construed in accordance with and governed by the laws of the State of Nevada without regard to choice of law principles. Each of the parties hereto consents to the jurisdiction of the courts of Hong Kong Special Administrative Region.

 

10.8 Binding Effect; Benefits.

 

This Agreement shall inure to the benefit of and be binding upon the parties and their respective successors and permitted assigns. Nothing in this Agreement, express or implied, is intended to confer on any Person other than the parties or their respective successors and permitted assigns, the Shareholders and other Persons expressly referred to herein, any rights, remedies, obligations or liabilities under or by reason of this Agreement.

 

10.9 Assignability.

 

Neither this Agreement nor any of the parties’ rights hereunder shall be assignable by any party without the prior written consent of the other parties and any attempted assignment without such consent shall be void.

 

10.10 Waiver and Amendment.

 

Any term or provision of this Agreement may be waived at any time by the party, which is entitled to the benefits thereof. The waiver by any party of a breach of any provision of this Agreement shall not operate or be construed as a waiver of any subsequent breach. The parties may, by mutual agreement in writing, amend this Agreement in any respect. DH Group and the Shareholders hereby acknowledge their intent that this Agreement includes as a party any holder of capital stock in DH Group at the time of Closing. ENMI, DH Group and the Shareholders therefore agree that this Agreement may be amended, without the further consent of any party to this Agreement, (i) to add as a new Shareholder any existing shareholder of DH Group and (ii) to modify Annex A to reflect the addition of such shareholder.

 

10.11 [Intentionally omitted.]

 

 

 

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10.12 Severability.

 

If any provision of this Agreement is held invalid or unenforceable by any court of competent jurisdiction, the other provisions of this Agreement will remain in full force and effect. Any provision of this Agreement held invalid or unenforceable only in part or degree will remain in full force and effect to the extent not held invalid or unenforceable.

 

10.13 Construction.

 

In executing this Agreement, the parties severally acknowledge and represent that each: (a) has fully and carefully read and considered this Agreement; (b) has or has had the opportunity to consult independent legal counsel regarding the legal effect and meaning of this document and all terms and conditions hereof; (c) has been afforded the opportunity to negotiate as to any and all terms hereof; and (d) is executing this Agreement voluntarily, free from any influence, coercion or duress of any kind. The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent, and no rule of strict construction will be applied against any party.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[signature page follows]

 

 

 

 

 

 

 

 

 

 

 

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IN WITNESS WHEREOF, this Agreement has been executed by the parties hereto as of the day and year first above written.

 

ENMI:

 

ENERGY MANAGEMENT INTERNATIONAL, INC.

 

 

 

 

By: /s/ Sally Kin Yi LO                                            

Name: Sally Kin Yi LO

Title: Executive Director

 

 

DH Group:

 

DH INVESTMENT GROUP LIMITED

 

 

 

By: /s/ Sally Kin Yi LO                                            

Name: Sally Kin Yi LO

Title: Director

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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DH GROUP SHAREHOLDER:

 

 

 

 

/s/ Sally Kin Yi LO                                            

Sally Kin Yi LO

 

Number of shares of DH Group to be selling: 35

 

Number of Series B Preferred Stock of ENMI to be receiving: 35,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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DH GROUP SHAREHOLDER:

 

 

 

 

/s/ Daily Success Development Ltd.              

Daily Success Development Ltd.

 

Number of shares of DH Group to be selling: 65

 

Number of Series B Preferred Stock of ENMI to be receiving: 65,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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EXHIBIT A

 

CERTAIN DEFINITIONS

 

For purposes of the Agreement (including this Exhibit A):

 

Agreement. “Agreement” shall mean the Share Exchange Agreement to which this Exhibit A is attached (including all Disclosure Schedules and all Exhibits), as it may be amended from time to time.

 

Approved Plans. “Approved Plans” shall mean a stock option or similar plan for the benefit of employees or others, which has been approved by the shareholders of DH Group

 

DH Group Shares of Common Stock. “DH Group Shares of Common Stock” shall mean the shares of common stock of DH Group

 

Breach. There shall be deemed to be a “Breach” of a representation, warranty, covenant, obligation or other provision if there is or has been any inaccuracy in or breach of, or any failure to comply with or perform, such representation, warranty, covenant, obligation or other provision.

 

Certificates. “Certificates” shall have the meaning specified in Section 1.3 of the Agreement.

 

ENMI. “ENMI” shall have the meaning specified in the first paragraph of the Agreement.

 

ENMI Common Stock. “ENMI Common Stock” shall mean the shares of common stock of ENMI.

 

Closing. “Closing” shall have the meaning specified in Section 1.5 of the Agreement.

 

Closing Date. “Closing Date” shall have the meaning specified in Section 1.5 of the Agreement.

 

Code. “Code” shall mean the Internal Revenue Code of 1986 or any successor law, and regulations issued by the IRS pursuant to the Internal Revenue Code or any successor law.

 

Confidential Information. “Confidential Information” shall mean all nonpublic information disclosed by one party or its agents (the “Disclosing Party”) to the other party or its agents (the “Receiving Party”) that is designated as confidential or that, given the nature of the information or the circumstances surrounding its disclosure, reasonably should be considered as confidential. Confidential Information includes, without limitation (i) nonpublic information relating to the Disclosing Party’s technology, customers, vendors, suppliers, business plans, intellectual property, promotional and marketing activities, finances, agreements, transactions, financial information and other business affairs, and (ii) third-party information that the Disclosing Party is obligated to keep confidential.

 

Confidential Information does not include any information that (i) is or becomes publicly available without breach of this Agreement, (ii) can be shown by documentation to have been known to the Receiving Party at the time of its receipt from the Disclosing Party, (iii) is received from a third party who, to the knowledge of the Receiving Party, did not acquire or disclose such information by a wrongful or tortious act, or (iv) can be shown by documentation to have been independently developed by the Receiving Party without reference to any Confidential Information.

 

Consent. “Consent” shall mean any approval, consent, ratification, permission, waiver or authorization (including any Governmental Authorization).

 

 

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Disclosure Schedule Update. “Disclosure Schedule Update” shall have the meaning specified in Section 4.4 of the Agreement.

 

DH Group Disclosure Schedule. “DH Group Disclosure Schedule” shall have the meaning specified in introduction to Article II of the Agreement.

 

Entity. “Entity” shall mean any corporation (including any nonprofit corporation), general partnership, limited partnership, limited liability partnership, joint venture, estate, trust, cooperative, foundation, society, political party, union, company (including any limited liability company or joint stock company), firm or other enterprise, association, organization or entity.

 

Environmental Laws. “Environmental Laws” shall mean any Law or other requirement relating to the protection of the environment, health, or safety from the release or disposal of hazardous materials.

 

Environmental Permit. “Environmental Permit” means all licenses, permits, authorizations, approvals, franchises and rights required under any applicable Environmental Law or Order.

 

Equity Securities. “Equity Security” shall mean any stock or similar security, including, without limitation, securities containing equity features and securities containing profit participation features, or any security convertible into or exchangeable for, with or without consideration, any stock or similar security, or any security carrying any warrant, right or option to subscribe to or purchase any shares of capital stock, or any such warrant or right.

 

Exchange Act. “Exchange Act” means the United States Securities Exchange Act of 1934, as amended.

 

GAAP. “GAAP” shall mean United States Generally Accepted Accounting Principles, applied on a consistent basis.

 

Governmental Authorization. “Governmental Authorization” shall mean any:

 

(a) permit, license, certificate, franchise, concession, approval, consent, ratification, permission, clearance, confirmation, endorsement, waiver, certification, designation, rating, registration, qualification or authorization that is issued, granted, given or otherwise made available by or under the authority of any Governmental Body or pursuant to any Law; or

 

(b) right under any contract with any Governmental Body.

 

Governmental Body. “Governmental Body” shall mean any:

 

(a) nation, principality, state, commonwealth, province, territory, county, municipality, district or other jurisdiction of any nature;

 

(b) federal, state, local, municipal, foreign or other government;

 

(c) governmental or quasi-governmental authority of any nature (including any governmental division, subdivision, department, agency, bureau, branch, office, commission, council, board, instrumentality, officer, official, representative, organization, unit, body or Entity and any court or other tribunal); or

 

(d) individual, Entity or body exercising, or entitled to exercise, any executive, legislative, judicial, administrative, regulatory, police, military or taxing authority or power of any nature, including any court, arbitrator, administrative agency or commissioner, or other governmental authority or instrumentality.

 

 

 

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Indebtedness. “Indebtedness” shall mean any obligation, contingent or otherwise. Any obligation secured by a Lien on, or payable out of the proceeds of, or production from, property of the relevant party will be deemed to be Indebtedness.

 

Intellectual Property. “Intellectual Property” means all industrial and intellectual property, including, without limitation, all U.S. and non-U.S. patents, patent applications, patent rights, trademarks, trademark applications, common law trademarks, Internet domain names, trade names, service marks, service mark applications, common law service marks, and the goodwill associated therewith, copyrights, in both published and unpublished works, whether registered or unregistered, copyright applications, franchises, licenses, know-how, trade secrets, technical data, designs, customer lists, confidential and proprietary information, processes and formulae, all computer software programs or applications, layouts, inventions, development tools and all documentation and media constituting, describing or relating to the above, including manuals, memoranda, and records, whether such intellectual property has been created, applied for or obtained anywhere throughout the world.

 

Knowledge. A corporation shall be deemed to have “knowledge” of a particular fact or matter only if a director or officer of such corporation has, had or should have had knowledge of such fact or matter.

 

Laws. “Laws” means, with respect to any Person, any U.S. or non-U.S. federal, national, state, provincial, local, municipal, international, multinational or other law (including common law), constitution, statute, code, ordinance, rule, regulation or treaty applicable to such Person.

 

Lien. “Lien” shall mean any mortgage, pledge, security interest, encumbrance, lien or charge, right of first refusal, encumbrance or other adverse claim or interest of any kind, including, without limitation, any conditional sale or other title retention agreement, any lease in the nature thereof and the filing of or agreement to give any financing statement under the Uniform Commercial Code of any jurisdiction and including any lien or charge arising by Law.

 

Material Adverse Effect. “Material Adverse Effect” means any change, effect or circumstance which, individually or in the aggregate, would reasonably be expected to (a) have a material adverse effect on the business, assets, financial condition or results of operations of the affected party, in each case taken as a whole or (b) materially impair the ability of the affected party to perform its obligations under this Agreement and the Transaction Agreements, excluding any change, effect or circumstance resulting from (i) the announcement, pendency or consummation of the transactions contemplated by this Agreement, (ii) changes in the United States securities markets generally, or (iii) changes in general economic, currency exchange rate, political or regulatory conditions in industries in which the affected party operates.

 

Material Contract. “Material Contract” means any and all agreements, contracts, arrangements, understandings, leases, commitments or otherwise, providing for potential payments by or to the company in excess of $1,000, and the amendments, supplements and modifications thereto.

 

Order. “Order” shall mean any award, decision, injunction, judgment, order, ruling, subpoena, or verdict entered, issued, made, or rendered by any Governmental Body.

 

Ordinary Course of Business. “Ordinary Course of Business” shall mean an action taken by DH Group if (i) such action is taken in normal operation, consistent with past practices, (ii) such action is not required to be authorized by the Shareholders, Board of Directors or any committee of the Board of the Directors or other governing body of DH Group and (iii) does not require any separate or special authorization or consent of any nature by any Governmental Body or third party.

 

Permitted Liens. “Permitted Liens” shall mean (a) Liens for Taxes not yet payable or in respect of which the validity thereof is being contested in good faith by appropriate proceedings and for the payment of which the relevant party has made adequate reserves; (b) Liens in respect of pledges or deposits under workmen’s compensation laws or similar legislation, carriers, warehousemen, mechanics, laborers and materialmen and similar Liens, if the obligations secured by such Liens are not then delinquent or are being contested in good faith by appropriate proceedings conducted and for the payment of which the relevant party has made adequate reserves; and (c) statutory Liens incidental to the conduct of the business of the relevant party which were not incurred in connection with the borrowing of money or the obtaining of advances or credits and that do not in the aggregate materially detract from the value of its property or materially impair the use thereof in the operation of its business.

 

 

 

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Person. “Person” shall mean any individual, Entity or Governmental Body.

 

Pre-Closing Period. “Pre-Closing Period” shall mean the period commencing as of the date of the Agreement and ending on the Closing Date.

 

Proceeding. “Proceeding” shall mean any action, suit, litigation, arbitration, proceeding (including any civil, criminal, administrative, investigative or appellate proceeding and any informal proceeding), prosecution, contest, hearing, inquiry, inquest, audit, examination or investigation, commenced, brought, conducted or heard by or before, or otherwise has involved, any Governmental Body or any arbitrator or arbitration panel.

 

Representatives. “Representatives” of a specified party shall mean officers, directors, employees, attorneys, accountants, advisors and representatives of such party, including, without limitation, all subsidiaries of such specified party, and all such Persons with respect to such subsidiaries. The Related Persons of DH Group shall be deemed to be “Representatives” of DH Group, as applicable.

 

SEC. “SEC” shall mean the United States Securities and Exchange Commission.

 

Securities Act. “Securities Act” shall mean the United States Securities Act of 1933, as amended.

 

Taxes. “Taxes” shall mean all foreign, federal, state or local taxes, charges, fees, levies, imposts, duties and other assessments, as applicable, including, but not limited to, any income, alternative minimum or add-on, estimated, gross income, gross receipts, sales, use, transfer, transactions, intangibles, ad valorem, value-added, franchise, registration, title, license, capital, paid-up capital, profits, withholding, payroll, employment, unemployment, excise, severance, stamp, occupation, premium, real property, recording, personal property, federal highway use, commercial rent, environmental (including, but not limited to, taxes under Section 59A of the Code) or windfall profit tax, custom, duty or other tax, governmental fee or other like assessment or charge of any kind whatsoever, together with any interest, penalties or additions to tax with respect to any of the foregoing; and “Tax” means any of the foregoing Taxes.

 

Tax Group. “Tax Group” shall mean any federal, state, local or foreign consolidated, affiliated, combined, unitary or other similar group of which DH Group is now or was formerly a member.

 

Tax Return. “Tax Return” shall mean any return, declaration, report, claim for refund or credit, information return, statement or other similar document filed with any Governmental Body with respect to Taxes, including any schedule or attachment thereto, and including any amendment thereof.

 

Transaction Agreements. “Transactional Agreements” shall mean this Agreement and any agreement or document to be executed pursuant to this Agreement.

 

 

 

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ANNEX A

 

 

Stockholder

Number of Shares of

Common Stock of DH Group

Held

Number of Shares of

Common Stock of DH Group

To Be Selling

Number of Shares of

Series B Preferred Stock

of ENMI To Be Issuing

Sally Kin Yi LO 35 35 35,000
Daily Success Development Ltd. 65 65 65,000
       
TOTAL 100 100 100,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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Exhibit 99.1

 

 

 

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Exhibit 21

 

Subsidiaries

 

Name  

Place of incorporation

and kind of

legal entity

 

Principal activities

and place of operation

 

Particulars of registered/ paid up share

capital

 

Effective interest

held

                 
DH Investment Group Limited   British Virgin Islands   Investment holding   100 ordinary shares at par value of US$1   100%
                 
Ho Shun Yi Limited   Hong Kong   Sale and distribution of COVID-19 rapid antigen tester set   10,000 ordinary shares for HK$10,000   100%