UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
☒ ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2018
☐ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from _____________ to ____________
Commission file number 333-218248
FORGE INNOVATION DEVELOPMENT CORP.
(Exact name of small business issuer as specified in its charter)
| Nevada | 81-4635390 | |
| (State or other jurisdiction of incorporation) |
(IRS Employer Identification No.) |
17800 Castleton Street, Suite 583, City of Industry, CA 91748
(Address of principal executive offices) (Zip Code)
(626)-986-4566
(Issuer’s telephone number)
(Former name, former address and former fiscal year, if changed since last report)
Securities registered under Section 12(b) of the Exchange Act: None.
Securities registered under Section 12(g) of the Exchange Act: None
Indicate by check mark if registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in the definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
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 accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
As of March 26, 2019, there were 45,621,868 shares of Common Stock, $0.0001 par value, outstanding.
Documents Incorporated By Reference. None
TABLE OF CONTENTS
i
CAUTIONARY NOTE ABOUT FORWARD-LOOKING STATEMENTS
The information contained in this Report includes some statements that are not purely historical and that are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and as such, may involve risks and uncertainties. These forward-looking statements relate to, among other things, expectations of the business environment in which we operate, perceived opportunities in the market and statements regarding our mission and vision. In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. You can generally identify forward-looking statements as statements containing the words “anticipates,” “believes,” “continue,” “could,” “estimates,” “expects,” “intends,” “may,” “might,” “plans,” “possible,” “potential,” “predicts,” “projects,” “seeks,” “should,” “will,” “would” and similar expressions, or the negatives of such terms, but the absence of these words does not mean that a statement is not forward-looking.
Forward-looking statements involve risks and uncertainties that could cause actual results or outcomes to differ materially from those expressed in the forward-looking statements. The forward-looking statements contained herein are based on various assumptions, many of which are based, in turn, upon further assumptions. Our expectations, beliefs and forward-looking statements are expressed in good faith on the basis of management’s views and assumptions as of the time the statements are made, but there can be no assurance that management’s expectations, beliefs or projections will result or be achieved or accomplished.
In addition to other factors and matters discussed elsewhere herein, the following are important factors that, in our view, could cause actual results to differ materially from those discussed in the forward-looking statements: technological advances, impact of competition, dependence on key personnel and the need to attract new management, effectiveness of cost and marketing efforts, acceptances of products, ability to expand markets and the availability of capital or other funding on terms satisfactory to us. We disclaim any obligation to update forward-looking statements to reflect events or circumstances after the date hereof.
For a discussion of the risks, uncertainties, and assumptions that could affect our future events, developments or results, you should carefully review the “Risk Factors” set forth under “Item 1. Description of Business” below. In light of these risks, uncertainties and assumptions, the future events, developments or results described by our forward-looking statements herein could turn to be materially different from those we discuss or imply.
ii
Item 1. Description of Business.
Background
Forge Innovation Development Corp., or the “Company”, was initially incorporated in the State of Nevada on January 15, 2016 under the name of You-Go enterprises, LLC (the “Company Predecessor”). On November 3, 2016, the Company filed an amendment to its Articles of Incorporation in the State of Nevada to change the Company’s name to Forge Innovation Development Corp. Our principle executive office is located at 17800 Castleton Street, Suite 583, City of Industry, CA 91748. Tel: 626-986-4566. The Company’s main business is focus on real estate development, land purchasing and selling and property management.
Overview
The Company’s primary objective is commercial and residential land development, including, to a lesser extent, the possible purchase and sale of real estate, targeting properties primarily in Southern California. We also intend to manage properties we own and properties owned by unaffiliated third parties. Our activities will include securing acquisition rights to properties, obtaining zoning and other entitlements for the properties, securing financing for purchase of the properties, improving the properties’ infrastructure and amenities and selling the properties to homeowner and commercial owners for restaurants, offices and small businesses. Our first property acquisition was 29 acres in the city of Desert Hot Springs in Southern California. Due to problems with permits and adjacent landowners, rather than get involved in protracted negotiations, the Company sold the property to an independent third party for a profit.
On August 1, 2017, the Company entered into a property management agreement with Bloomage Beverly Hills Investment Inc. Pursuant to the agreement, the Company provided property management services for Bloomage Beverly Hills Investment Inc. in exchange for the compensation of $3,000 per month. During the year ended December 31, 2018, the Company recognized service revenue in the amount of $36,000.
Business Strategy
The Company’s business strategy includes the following three main segments of the real estate business:
| 1. | We intend to acquire and develop land for residential and commercial development. |
| 2. | We also, to a lesser extent, intend to develop a diversified real estate portfolio by investing in residential real estate, including single-family housing, condos and town-homes and commercial properties, including strip-malls and small office buildings. |
| 3. | We intend to provide property management for our own properties and for properties owned by non-affiliated third parties. |
Property Development
The Company primary business is to acquire land and develop and sell fully constructed homes and commercial property such as stores, offices, private schools, etc., to non-affiliated third parties. Our first property acquisition was 29 acres of vacant land in the city of Desert Hot Springs in Southern California. Our original plan was to build various commercial buildings on the parcels, including stores and restaurants. However, due to problems with permits and adjacent landowners that would lead to lengthy negotiations and possibly additional costs, the Company sold the property in March 2017, to a non-affiliated third party for a profit.
Our principal activities are securing acquisition rights to properties, obtaining zoning and other entitlements for the properties, securing financing for the purchase of the properties, improving the properties’ infrastructure and amenities, and selling properties to third parties. Currently all of our property development activities are centered in the Southern California area.
Investing in Development Projects
The Company intends to invest a small portion of its funds and to utilize funds pooled from investors to directly invest in income-yielding properties. The Company will concentrate on investing in properties with long-term leases.
We rely on our management’s expertise in identifying residential and commercial real estate assets within our stated target objectives. Our Management makes investment decisions based on various factors, including, relative value, expected risk-adjusted returns, current and projected credit fundamentals, current and projected macroeconomic considerations, current and projected supply and demand, credit and market risk concentration limits, liquidity, cost of financing and financing availability, as well as maintaining our exemption from registration under the 1940 Act.
1
Our targeted asset classes and the principal investments we have made and expect to make in each are as follows:
| Asset Class | Principal Investments | |
| Residential Property | ● Single family attached, Single Family detached, multi-unit, condominiums, townhomes, etc. | |
| Partially completed real estate developments, residential, commercial, retail. | ● Acquisition and sale of vacant land | |
| REO Tape Transactions | ● Bulk or block acquisitions of single family detached residential units or homes. |
Our primary business strategy is to seek out and secure real estate properties that may have been formerly subjected to distressed financing terms as a consequence of recent economic factors. Our focus is on residential, single-family detached homes throughout Southern California made available individually or bulk transfer from various private parties or financial institutions seeking to liquidate non-performing assets.
Another business strategy is designed to generate a rate of return by acquiring distressed properties (individually or in bulk transaction(s)) for investment purposes and eventual resale. We believe there is a significant market opportunity to acquire discounted real estate assets or in some instances, to lend to or invest with real estate developers and property owners or otherwise participate in real estate related investments where non-traditional financing sources are not available. The current credit crisis and economic environment and the strict underwriting standards and length of time required by traditional sources including banking institutions are often prohibitive.
Property Management
In many cases we will manage our own properties and market our property management service to others. Property management involves most of the following duties
| ● | Establishes rental rate by surveying local rental rates; calculating overhead costs, depreciation, taxes, and profit goals. | |
| ● | Attracts tenants by advertising vacancies; obtaining referrals from current tenants; explaining advantages of location and services; showing units. | |
| ● | Contracts with tenants by negotiating leases; collecting security deposit. | |
| ● | Accomplishes financial objectives by collecting rents; paying bills; forecasting requirements; preparing an annual budget; scheduling expenditures; analyzing variances; initiating corrective action. | |
| ● | Maintains property by investigating and resolving tenant complaints; enforcing rules of occupancy; inspecting vacant units and completing repairs; planning renovations; contracting with landscaping and snow removal services. | |
| ● | Maintains building systems by contracting for maintenance services; supervising repairs. | |
| ● | Secures property by contracting with security patrol service; installing and maintaining security devices; establishing and enforcing precautionary policies and procedures; responding to emergencies. | |
| ● | Enforces occupancy policies and procedures by confronting violators. | |
| ● | Prepares reports by collecting, analyzing, and summarizing data and trends. |
We also intend to provide the following special services to our third part owners:
| ● | Legal Services |
| – | Eviction Coordination | |
| – | Personal Property Management | |
| – | Property Inspections |
| ● | Closing — Title Services |
| – | Title Closing Documents and Preparation | |
| – | Escrow and Closing Coordination | |
| – | HUD Reviews and Analysis |
2
| ● | Reports |
| – | Daily, Weekly or Monthly Reporting | |
| – | Custom Reports | |
| – | Performance Reports |
| ● | Accounting — Financial |
| – | Expenses Report and Management | |
| – | Expense Tracking | |
| – | Review and Process Reimbursements |
Sales and Marketing
We intend to market our properties through real estate brokers and agents coordinated by company marketing personnel. Our marketing efforts will target both international and local buyers and builders.
Competition
We believe there are only limited barriers to entry in our business. Current and future competitors may have more resources than we have. Our projects face competition generally from REITs, institutional pension plans and other public and private real estate companies and private real estate investors for the acquisition of properties and for raising capital. In transaction services, we face competition with other real estate firms in the acquisition and disposition of properties, and we also compete with other sponsors of real estate for investors to provide the capital to allow us to make these investments. We also compete against other real estate companies who may be chosen by a broker-dealer as an investment platform instead of us. In management services, we compete with other properties for viable investors for properties. We also believe that our broker dealers compete, or will compete, with institutions that provide or arrange for other types of financing through private or public offerings of equity or debt and from traditional bank financings.
Real estate development is a highly competitive business. We compete with numerous developers, builders and others for the acquisition of property. As we attempt to expand our operations we will certainly be competing with other business ranging from large multinational corporations to small startup business such as ourselves. Many of our competitors may have longer operating histories, better brand recognition and greater financial resources than we do. To successfully compete in our industry, we will need to:
| ● | Ensure that investments in our projects are affordable; | |
| ● | That we only invest in properties in well-priced locations; | |
| ● | That our investment strategy is simple to understand; and | |
| ● | That we provide outstanding customer service and rigid integrity in our business dealings. |
However, there can be no assurance that even if we do these things we will be able to compete effectively with the other companies in our industry. We believe we have the required management expertise in sourcing properties with good development potential and affordable price.
We are committed to work and communicate with our investors and sales consultants to identify their goals and needs which will make it easier to continually provide them with the best products and services.
Government Regulations
Real Property Development
Land development permits and approvals are required to develop real property. These permits and approvals will vary depending on the land that is being developed.
The commercial and residential real estate development industry is subject to substantial environmental, building, construction, zoning and real estate regulations that are imposed by various federal, state and local authorities. In developing a community, we must obtain the approval of numerous government agencies regarding such matters as permitted land uses, housing density, the installation of utility services (such as water, sewer, gas, electric, telephone and cable television) and the dedication of acreage for open space, parks, schools and other community purposes. Regulations affect commercial building and homebuilding by specifying, among other things, the type and quality of building materials that must be used, certain aspects of land use and building design and the manner in which homebuilders may conduct their sales, operations, and overall relationships with potential renters and buyers. Furthermore, changes in prevailing local circumstances or applicable laws may require additional approvals, or modifications of approvals previously obtained. These permits and approvals will vary depending on the land that is being developed.
Timing of the initiation and completion of development projects depends upon receipt of necessary authorizations and approvals. Because of the provisional nature of these approvals and the concerns of various environmental and public interest groups, the approval process can be delayed by withdrawals or modifications of preliminary approvals and by litigation and appeals challenging development rights. Our ability to develop projects could be delayed or prevented due to litigation challenging previously obtained governmental approvals. We also may be subject to periodic delays or may be precluded entirely from developing in certain communities due to building moratoriums or “slow-growth” or “no-growth” initiatives that could be implemented in the future. Such delays could adversely affect our ability to complete our projects, significantly increase the costs of doing so or drive potential customers to purchase competitors’ products.
3
Management Services
We and our brokers, salespersons and, in some instances, property managers are regulated by the states in which we do business. These regulations may include licensing procedures, prescribed professional responsibilities and anti-fraud provisions. Our activities are also subject to various local, state, national and international jurisdictions’ fair advertising, trade, housing and real estate settlement laws and regulations and are affected by laws and regulations relating to real estate and real estate finance and development.
Environmental Compliance
Federal, state and local laws and regulations impose environmental zoning restrictions, use controls, disclosure obligations and other restrictions that impact the management, development, use or sale of real estate. Such laws and regulations tend to discourage sales and leasing activities with respect to some properties. If transactions in which we are involved are delayed or abandoned as a result of these restrictions, our business could be adversely affected. In addition, a failure by us to disclose environmental concerns to potential investors or third-party buyers of the developed property may subject our company to liability and may adversely impact our business or cause us to incur costs for cleanup of hazardous substances or wastes or other environmental liabilities.
Various environmental laws and regulations also can impose liability for the costs of investigating or remediating hazardous or toxic substances at sites currently or formerly owned or operated by a party, or at off-site locations to which such party sent wastes for disposal. As a property manager, we could be held liable as an operator for any such contamination; even if the original activity was legal and we had no knowledge of, or did not cause, the release or contamination. Further, because liability under some of these laws is joint and several, we could be held responsible for more than our share, or even all, of the costs for such contaminated site if the other responsible parties are unable to pay. Similarly, we are generally obliged, under the debt financing arrangements on the properties owned by us, to provide an indemnity to the lenders for environmental liabilities and to remediate any environmental problems that might arise. Insurance for these matters may not always be available, or sufficient to cover our losses.
Employees
Currently the Company has two employees starting from March, 2018 including its President/CEO/Secretary who devotes approximately 100% of his time to the business of the Company.
Reports to Security Holders
The Company’s documents filed with the Securities and Exchange Commission may be inspected at the Commission’s principal office in Washington, D.C. Copies of all or any part of the registration statement may be obtained from the Public Reference Section of the Securities and Exchange Commission, 100 F Street N.E., Washington, D.C. 20549. Call the Commission at 1-800-SEC-0330 for further information on the operation of the public reference rooms. The Securities and Exchange Commission also maintains a web site at http://www.sec.gov that contains reports, proxy statements and information regarding registrants that file electronically with the Commission. All of the Company’s filings may be located under the CIK number 0001681282.
Not applicable to smaller reporting companies
Item 1B. Unresolved Staff Comments.
None
The Company owns no real estate. We currently maintain our corporate office at 17800 Castleton St., Suite 583, City of Industry, CA 91748 which we lease for four years, commencing on January 15, 2018, with monthly payment of $4,962 for the first year. We believe that this current office space is adequate for our current operations and future plan.
The Company presently is not a party to, nor is management aware of, any pending, legal proceedings.
Item 4. Mine Safety Disclosures.
None.
4
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.
Market Information
Market Information
There has only been limited trading for the Company’s Common Stock since it began trading on September 25, 2018. There is no assurance that an active trading market will ever develop or, if such a market does develop, that it will continue. The Securities and Exchange Commission has adopted Rule 15g-9 which establishes the definition of a “penny stock,” for purposes relevant to the Company, as any equity security that has a market price of less than $5.00 per share or with an exercise price of less than $5.00 per share, subject to certain exceptions. For any transaction involving a penny stock, unless exempt, the rules require: (i) that a broker or dealer approve a person’s account for transactions in penny stocks and (ii) 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 a person’s account for transactions in penny stocks, the broker or dealer must (i) obtain financial information and investment experience and objectives of the person and (ii) make a reasonable determination that the transactions in penny stocks are suitable for that person and that person has sufficient knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks. The broker 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, (i) sets forth the basis on which the broker or dealer made the suitability determination and (ii) that the broker or dealer received a signed, written agreement from the investor prior to the transaction. Disclosure also has to be made about the risks of investing in penny stocks in both public offerings and in secondary trading, and about 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.
Because of these regulations, broker-dealers may encounter difficulties in their attempt to buy or sell shares of our common stock, which may affect the ability of our shareholders to sell their shares in the secondary market and have the effect of reducing the level of trading activity in the secondary market. These additional sales practice and disclosure requirements could impede the sale of our common stock in the market place. In addition, the liquidity for our common stock may be decreased, with a corresponding decrease in the price of our common stock. Our shares are likely to be subject to such penny stock rules for the foreseeable future.
On August 31, 2018, our common stock was approved for quotation on the OTCQB Markets under the symbol “FGNV”. The OTC Markets is a regulated quotation service that displays real-time quotes, last-sale prices, and volume information in over-the-counter equity securities. The OTC Markets securities are traded by a community of market makers that enter quotes and trade reports. This market is limited in comparison to the national stock exchanges and any prices quoted may not be a reliable indication of the value of our common stock.
On March 25, 2019, the closing price of our common stock reported on the OTCQB Markets was $1.00 per share. The following table sets forth, for each of the quarterly periods indicated, the high and low sales prices of our common stock, as reported on the OTCQB.
| High Bid | Low Bid | |||||||
| Fiscal Year Ended December 31, 2018 | $ | 1.01 | $ | 0.21 | ||||
| September 25, through September 30, 2018 | $ | 1.01 | $ | 0.25 | ||||
| October 1 through December 31, 2018 | $ | 1.01 | $ | 0.21 | ||||
| Fiscal Year Ending 2019 | ||||||||
| January 1 through March 25, 2019 | $ | 1.00 | $ | 0.12 | ||||
Holders
There are approximately 50 holders of the Company’s Common Stock. This figure does not include holders of shares registered in “street name” or persons, partnerships, associates, corporations or other entities identified in security position listings maintained by depositories.
Dividends
We have not declared any cash dividends on our common stock since our inception and do not anticipate paying any dividends in the foreseeable future. We plan to retain future earnings, if any, for use in our business. Any decisions as to future payments of dividends will depend on our earnings and financial position and such other facts, as the Board of Directors deems relevant.
5
Securities Authorized under Equity Compensation Plans
We do not have any equity compensation plans.
Shares Available for Future Sale
All of the outstanding shares of common stock that are held by our present officers, directors, and affiliate stockholders, which amounts to approximately 82.07% of our issued and outstanding common stock, are “restricted securities” within the meaning of Rule 144 under the Securities Act of 1933, as amended. As restricted Shares, these shares may be resold only pursuant to an effective registration statement or under the requirements of Rule 144 or other applicable exemptions from registration under the Act and as required under applicable state securities laws. Rule 144 provides in essence that an affiliate who has held restricted securities for six months may, under certain conditions, sell every three months, in brokerage transactions, a number of shares that does not exceed the greater of 1.0% of a company’s outstanding common stock or the average weekly trading volume during the four calendar weeks prior to the sale. There is no limit on the amount of restricted securities that may be sold by a non-affiliate after the owner has held the restricted securities for a period of six months. A sale under Rule 144 or under any other exemption from the Act, if available, or pursuant to subsequent registration of shares of common stock of present stockholders, may have a depressive effect upon the price of the common stock in any market that may develop.
Repurchases of Equity Securities
None
Reports to Stockholders
We are currently subject to the information and reporting requirements of the Securities Exchange Act of 1934 and will continue to file periodic reports, and other information with the SEC. We intend to send annual reports to our stockholders containing audited financial statements.
Transfer Agent
West Coast Stock Transfer, Inc., located at 721 N. Vulcan Ave. Ste. 205, Encinitas, CA 92024 is the registrar and transfer agent for the Company’s common stock.
Recent Sales of Unregistered Securities
None
Repurchase of Equity Securities
None
Additional Information
We are a reporting issuer, subject to the Securities Exchange Act of 1934. Our Quarterly Reports, Annual Reports, and other filings can be obtained from the SEC’s Public Reference Room at 100 F Street, NE., Washington, DC 20549, on official business days during the hours of 10 a.m. to 3 p.m. You may also obtain information on the operation of the Public Reference Room by calling the Commission at 1-800-SEC-0330. The Commission maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the Commission at http://www.sec.gov.
Item 6. Selected financial Data.
Not required under Regulation S-K for “smaller reporting companies.”
6
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operation.
This Annual Report contains “forward-looking statements” that describe management’s beliefs and expectations about the future. We have identified forward-looking statements by using words such as “anticipate,” “believe,” “could,” “estimate,” “may,” “expect,” and “intend,” or words of similar import. Although we believe these expectations are reasonable, our operations involve a number of risks and uncertainties and actual results may be materially different than our expectations.
The following discussion of our financial condition and results of operations should be read in conjunction with our financial statements and the related notes, and other financial information included in this Form 10-K.
Our Management’s Discussion and Analysis contains not only statements that are historical facts, but also statements that are forward-looking. Forward-looking statements are, by their very nature, uncertain and risky. These risks and uncertainties include international, national, and local general economic and market conditions; our ability to sustain, manage, or forecast growth; our ability to successfully make and integrate acquisitions; new product development and introduction; existing government regulations and changes in, or the failure to comply with, government regulations; adverse publicity; competition; the loss of significant customers or suppliers; fluctuations and difficulty in forecasting operating results; change in business strategy or development plans; business disruptions; the ability to attract and retain qualified personnel; the ability to protect technology; the risk of foreign currency exchange rate; and other risks that might be detailed from time to time in our filings with the Securities and Exchange Commission.
Although the forward-looking statements in this Report reflect the good faith judgment of our management, such statements can only be based on facts and factors currently known by them. Consequently, and because forward-looking statements are inherently subject to risks and uncertainties, the actual results and outcomes may differ materially from the results and outcomes discussed in the forward-looking statements. You are urged to carefully review and consider the various disclosures made by us in this report as we attempt to advise interested parties of the risks and factors that may affect our business, financial condition, and results of operations and prospects.
Overview
The Company is a development stage company and was incorporated in the State of Nevada in January 2016. The Company’s primary objective is commercial and residential land development, including the purchase and sale of real estate, targeting properties primarily in Southern California. We also intend to manage properties we own and properties owned by unaffiliated third parties. Our activities will include securing acquisition rights to properties, obtaining zoning and other entitlements for the properties, securing financing for purchase of the properties, improving the properties’ infrastructure and amenities and selling the properties to homeowner and commercial owners for restaurants, offices and small businesses. Our first property acquisition was 29 acres in the city of Desert Hot Springs in Southern California. Due to problems with permits and adjacent landowners, rather than get involved in protracted negotiations, the Company sold the property to an independent third party for a profit.
Development Stage and Capital Resources
Since its inception, the Company has devoted substantially all of its efforts to business planning. Accordingly, the Company is considered to be in the development stage. In March 2017, the Company incurred its first sales activity by the sale of vacant property in Desert Springs, California. There is no assurance of future revenues.
There is no assurance that the Company’s activities will result in any operations or that any operations, if begun, will generate revenues. The Company will need additional capital, but there is no assurance that the Company will be able to obtain such capital on terms satisfactory to the Company. Accordingly, given the Company’s limited cash and cash equivalents on hand, the Company will be unable to implement its business plans and proposed operations unless it obtains additional financing or otherwise is able to generate revenues and profits. The Company may raise additional capital through sales of debt or equity, obtain loan financing or develop and consummate other alternative financial plans.
Results of Operation for the year ended December 31, 2018 and 2017
During the years ended December 31, 2018 and 2017, the Company generated revenue in the amount of $36,000 and $15,000, respectively. The decrease was due to the Company had a sale of real estate in the amount of 26,667 occurred in 2017, and no such transaction occurred in 2018. During the years ended December 31, 2018 and 2017, the Company incurred operating expenses of $365,523 and $323,791, respectively. The operating expenses for the years ended December 31, 2018 and 2017 mainly included consulting expenses in the amount of $122,099 and $265,250, respectively, and other professional and legal fees relating to complying with the Company’s SEC reporting obligations and consulting fees and rent expense of $243,424 and $58,541, respectively. For the years ended December 31, 2018 and 2017, our net loss was $326,053 and $304,141, respectively. The increase in net loss was mainly due to the increase in operating expense for the years ended December 31, 2018, compared to 2017.
7
Equity and Capital Resources
We have incurred losses since inception of our business in 2016 and, as of December 31, 2018, we had an accumulated deficit of $665,516. As of December 31, 2018, we had cash of $653,142 and a working capital of $761,269, compared to cash of $824,777 and a working capital of $698,110 at December 31, 2017. The increase in the working capital was primarily due to cash paid off operating expenses. We have sustained recurring losses; however, we believe we have sufficient working capital to cover our operation at least one year from the date of issuance of financial statements.
We expect our expenses will continue to increase during the foreseeable future as a result of increased operational expenses and the development of potential business opportunities. However, we do not anticipate that the Company will generate revenue sufficient to cover its planned operating expenses in the foreseeable future, and we are dependent on the proceeds from future debt or equity investments to sustain our operations and implement our business plan. If we are unable to raise sufficient capital, we will be required to delay or forego some portion of our business plan, which would have a material adversely effect on our anticipated results from operations and financial condition. There is no assurance that we will be able to obtain necessary amounts of additional capital or that our estimates of our capital requirements will prove to be accurate. As of the date of this Report we did not have any commitments from any source to provide such additional capital. Even if we are able to secure outside financing, it may not be available in the amounts or the times when we require. Furthermore, such financing would likely take the form of bank loans, private placement of debt or equity securities or some combination of these. The issuance of additional equity securities would dilute the stock ownership of current investors while incurring loans, leases or debt would increase our capital requirements and possible loss of valuable assets if such obligations were not repaid in accordance with their terms.
Off-Balance Sheet Arrangements
Under SEC regulations, we are required to disclose off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, such as changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors. An off-balance sheet arrangement means a transaction, agreement or contractual arrangement to which any entity that is not consolidated with us is a party, under which we have:
| ● | Any obligation under certain guarantee contracts, | |
| ● | Any retained or contingent interest in assets transferred to an unconsolidated entity or similar arrangement that serves as credit, liquidity or market risk support to that entity for such assets, | |
| ● | Any obligation under a contract that would be accounted for as a derivative instrument, except that it is both indexed to our stock and classified in shareholder equity in our statement of financial position, and | |
| ● | Any obligation arising out of a material variable interest held by us in an unconsolidated entity that provides financing, liquidity, market risk or credit risk support to us, or engages in leasing, hedging or research and development services with us. |
We do not have any off-balance sheet arrangements that we are required to disclose pursuant to these regulations. In the ordinary course of business, we enter into operating lease commitments, and other contractual obligations. These transactions are recognized in our financial statements in accordance with generally accepted accounting principles in the United States.
Critical Accounting Policies
The financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires making estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. The estimates are based on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis of making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.
The critical accounting policies are discussed in further detail in the notes to the audited consolidated financial statements appearing elsewhere in this prospectus. Management believes that the application of these policies on a consistent basis enables us to provide useful and reliable financial information about our operating results and financial condition.
Item 7A. Quantitative and Qualitative Disclosures about Market Risk
Not required under Regulation S-K for “smaller reporting companies.”
Item 8. Financial Statements and Supplementary Data
Our audited financial statements are set forth in this Annual Report beginning on page F-3.
8
FORGE INNOVATION DEVELOPMENT CORP.
INDEX TO FINANCIAL STATEMENTS
F-1
Report of Independent Registered Public Accounting Firm
To the Board of Directors and shareholders of Forge Innovation Development Corp.
Opinions on the Financial Statements and Internal Control over Financial Reporting
We have audited the accompanying balance sheets of Forge Innovation Development Corp. as of December 31, 2018 and 2017, and the related statements of operations, changes in stockholders’ equity and cash flows for each of the two years in the period ended December 31, 2018, 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 December 31, 2018 and 2017, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2018, in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinions
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We are a public accounting firm registered with the 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 audits 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/ Simon & Edward, LLP
Los Angeles, California
March 26, 2019
We have served as the Company’s auditor since 2016.
F-2
FORGE INNOVATION DEVELOPMENT CORP.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEETS
| December 31, | December 31, | |||||||
| 2018 | 2017 | |||||||
| ASSETS | ||||||||
| CURRENT ASSETS | ||||||||
| Cash | 653,142 | 824,777 | ||||||
| Note receivable | 110,000 | 200,000 | ||||||
| Account receivable | 3,000 | - | ||||||
| Total Current Assets | 766,142 | 1,024,777 | ||||||
| NONCURRENT ASSET | ||||||||
| Note receivable | - | 110,000 | ||||||
| Other assets | 18,238 | - | ||||||
| Property and equipment, net | 29,217 | - | ||||||
| Total Noncurrent Asset | 47,455 | 110,000 | ||||||
| TOTAL ASSETS | $ | 813,597 | $ | 1,134,777 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| CURRENT LIABILITIES: | ||||||||
| Accrued consulting expenses | - | 300,000 | ||||||
| Deferred profit | - | 26,667 | ||||||
| Other current liabilities | 4,873 | - | ||||||
| Total Current Liabilities | 4,873 | 326,667 | ||||||
| COMMITMENTS AND CONTINGENCIES | ||||||||
| STOCKHOLDERS’ EQUITY: | ||||||||
| Preferred stock ($.0001 par value, 50,000,000 shares authorized; no share issued and outstanding as of December 31, 2018 and 2017) | - | - | ||||||
| Common stock ($.0001 par value, 200,000,000 shares authorized, 45,621,868 and 57,621,868 shares issued and outstanding as of December 31, 2018 and 2017) | 4,562 | 5,762 | ||||||
| Additional Paid in Capital | 1,469,678 | 1,168,478 | ||||||
| Accumulated Deficit | (665,516 | ) | (366,130 | ) | ||||
| Total Stockholders’ Equity | 808,724 | 808,110 | ||||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 813,597 | $ | 1,134,777 | ||||
The accompanying notes are an integral part of these financial statements.
F-3
FORGE INNOVATION DEVELOPMENT CORP.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS
| For the year ended December 31, 2018 | For the year ended December 31, 2017 | |||||||
| Revenues: | ||||||||
| Revenue | $ | 36,000 | $ | - | ||||
| Revenue - related party | - | 15,000 | ||||||
| Total Revenues | 36,000 | 15,000 | ||||||
| Cost of Revenues: | ||||||||
| Cost of revenue | - | - | ||||||
| Total Cost of Revenues | - | - | ||||||
| Gross Profit | 36,000 | 15,000 | ||||||
| Operating Expenses | ||||||||
| Consulting Expenses | 122,099 | 265,250 | ||||||
| Other Selling, General and Administrative Expenses | 243,424 | 58,541 | ||||||
| Total Operating Expenses | 365,523 | 323,791 | ||||||
| Other income | ||||||||
| Interest income | 4,270 | 4,650 | ||||||
| Total Other Income | 4,270 | 4,650 | ||||||
| Net loss before tax | $ | (325,253 | ) | $ | (304,141 | ) | ||
| Income tax | 800 | - | ||||||
| Net loss | (326,053 | ) | (304,141 | ) | ||||
| Net loss per common share, basic and diluted | $ | (0.01 | ) | $ | (0.01 | ) | ||
| Weighted average number of common shares outstanding, basic and diluted | 51,786,703 | 57,653,758 | ||||||
The accompanying notes are an integral part of these financial statements.
F-4
FORGE INNOVATION DEVELOPMENT CORP.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY
| Common Shares | Common Stock Amount | Additional Paid-in Capital | Accumulated Deficit | Total | ||||||||||||||||
| Balances, December 31, 2016 | 56,471,378 | $ | 5,647 | $ | 938,495 | $ | (61,989 | ) | $ | 882,153 | ||||||||||
| Common stock issued for cash | 1,300,490 | 130 | 259,968 | 0 | 260,098 | |||||||||||||||
| Cancellation of common stock | (150,000 | ) | (15 | ) | (29,985 | ) | (30,000 | ) | ||||||||||||
| Net loss | - | - | - | (304,141 | ) | (304,141 | ) | |||||||||||||
| Balances, December 31, 2017 | 57,621,868 | $ | 5,762 | $ | 1,168,478 | $ | (366,130 | ) | $ | 808,110 | ||||||||||
| Implementation of ASU2014-09 (Note 2) | 26,667 | 26,667 | ||||||||||||||||||
| Common stock issued for service | 3,000,000 | 300 | 299,700 | 300,000 | ||||||||||||||||
| Cancellation of common stock | (15,000,000 | ) | (1,500 | ) | 1,500 | - | ||||||||||||||
| Net loss | (326,053 | ) | (326,053 | ) | ||||||||||||||||
| Balances, December 31, 2018 | 45,621,868 | $ | 4,562 | $ | 1,469,678 | $ | (665,516 | ) | $ | 808,724 | ||||||||||
The accompanying notes are an integral part of these financial statements
F-5
FORGE INNOVATION DEVELOPMENT CORP.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS
| For the year ended December 31, 2018 | For the year ended December 31, 2017 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||
| Net loss | $ | (326,053 | ) | $ | (304,141 | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Depreciation expense | 5,607 | - | ||||||
| Change in operating assets and liabilities: | ||||||||
| Rent deposit | (13,953 | ) | - | |||||
| Account receivable | (3,000 | ) | - | |||||
| Other assets | (4,285 | ) | - | |||||
| Accrued liability | 4,873 | - | ||||||
| Accrued consulting expenses | - | 243,750 | ||||||
| Net cash used in operating activities | (336,811 | ) | (60,391 | ) | ||||
| CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||
| Note receivable | 200,000 | - | ||||||
| Purchase of property and equipment | (34,824 | ) | - | |||||
| Net cash used in investing activities | 165,176 | - | ||||||
| CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||
| Proceeds from issuance of common stock | - | 260,098 | ||||||
| Cash return to shareholder for cancellation of common stock | - | (30,000 | ) | |||||
| Repayment to shareholder | - | (100 | ) | |||||
| Net cash provided by financing activities | - | 229,998 | ||||||
| Net Increase in Cash | (171,635 | ) | 169,607 | |||||
| Cash at beginning of period: | 824,777 | 655,170 | ||||||
| Cash at end of period: | $ | 653,142 | $ | 824,777 | ||||
| SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFOR | ||||||||
| Interest paid | $ | - | $ | - | ||||
| Income taxes paid | $ | 800 | $ | - | ||||
| SUPPLEMENTAL DISCLOSURES OF CASH FLOW FOR NON-CASH TRANSACTION: | ||||||||
| Common stock issued to settle with the accrued consulting expenses | $ | 300,000 | - | |||||
On March 17, 2017, the Company received a Promissory Note in the amount of $310,000 from sales of undeveloped land with the value of $283,333.
The accompanying notes are an integral part of these financial statements.
F-6
Forge Innovation Development Corp.
(A DEVELOPMENT STAGE COMPANY)
Notes to the financial statements
Note 1 - Organization and Description of Business
Forge Innovation Development Corp., or the “Company”, was initially incorporated in the State of Nevada on January 15, 2016 under the name of You-Go enterprises, LLC (the “Company Predecessor”). On November 3, 2016, the Company filed an amendment to its Articles of Incorporation in the State of Nevada to change the Company’s name to Forge Innovation Development Corp. Our current principle executive office is located at 17800 Castleton Street, Suite 583 City of Industry, CA 91748. Tel: 626-986-4566. The Company’s main business will be focus on real estate development, land purchasing and selling and property management. The Company’s common stock is currently traded on OTCQB under the symbol “FGNV”.
Development Stage Company
The Company is considered to be in the development stage as defined in Statement of Financial Accounting Standards (SFAS) ASC 915, “Development Stage Entities”. The Company has devoted substantially all of its efforts to establishing a new business and for which either of the following conditions exists: planned principal operations have not commenced; or the planned principal operations have commenced, but there has been no significant revenue there from. The Company’s first sales activity was in March 2017 by the sale of real estate in Desert Springs, California. There was revenue from real estate management services for the year ended December 31, 2018 but there is no assurance of any future revenues.
Note 2 - Summary of Significant Accounting Policies
Basis of Presentation
This summary of significant accounting policies is presented to assist in understanding the Company’s financial statements. These accounting policies conform to accounting principles generally accepted in the United States of America, and have been consistently applied in the preparation of the financial statements.
Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. In the opinion of management, all adjustments necessary in order to make the financial statements not misleading have been included. Actual results could differ from those estimates.
Cash
The Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. Cash at December 31, 2018 and 2017 were $653,142 and $824,777, representing cash deposited in bank.
Real Estate Investment
Real Estate Investment is recorded at cost. Cost represents the purchase price of the asset and other costs incurred to bring the asset into its existing use. All costs related to the improvement or replacement of real estate properties are capitalized. Additions, renovations and improvements that enhance and/or extend the useful life of a property are also capitalized. Expenditures for ordinary maintenance, repairs and improvements that do not materially prolong the normal useful life of an asset are charged to operations as incurred.
F-7
Income Taxes
The Company accounts for income taxes under ASC 740, “Income Taxes.” Under the asset and liability method of ASC 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period the enactment occurs. A valuation allowance is provided for certain deferred tax assets if it is more likely than not that the Company will not realize tax assets through future operations.
Basic Earnings (Loss) Per Share
The Company computes basic and diluted earnings per share amounts in accordance with ASC Topic 260, Earnings per Share. Basic earnings per share is computed by dividing net income (loss) available to common shareholders by the weighted average number of common shares outstanding during the reporting period. Diluted earnings per share reflects the potential dilution that could occur if stock options and other commitments to issue common stock were exercised or equity awards vest resulting in the issuance of common stock that could share in the earnings of the Company.
The Company does not have any potentially dilutive instruments as of December 31, 2018 and 2017 and, thus, anti-dilution issues are not applicable.
Fair Value of Financial Instruments
The Company’s balance sheet includes certain financial instruments. The carrying amounts of current assets and current liabilities approximate their fair value because of the relatively short period of time between the origination of these instruments and their expected realization.
ASC 820, Fair Value Measurements and Disclosures, defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy that distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described below:
| ● | Level 1 - | Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. |
| ● | Level 2 - | Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates); and inputs that are derived principally from or corroborated by observable market data by correlation or other means. |
| ● | Level 3 - | Inputs that are both significant to the fair value measurement and unobservable. |
Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of December 31, 2018 and 2017. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values due to the short-term nature of these instruments. These financial instruments include cash and cash equivalent.
Operating Leases
Leases where substantially all the rewards and risks of ownership of assets remain with the leasing company are accounted for as operating leases. Payments made under operating leases are charged to the statement of operations on a straight-line basis over the lease period.
Related Parties
The Company follows ASC 850, Related Party Disclosures, for the identification of related parties and disclosure of related party transactions.
F-8
Share-based Compensation
ASC 718, “Compensation - Stock Compensation”, prescribes accounting and reporting standards for all share-based payment transactions in which employee services are acquired. Transactions include incurring liabilities, or issuing or offering to issue shares, options, and other equity instruments such as employee stock ownership plans and stock appreciation rights. Share-based payments to employees, including grants of employee stock options, are recognized as compensation expense in the financial statements based on their fair values. That expense is recognized over the period during which an employee is required to provide services in exchange for the award, known as the requisite service period (usually the vesting period).
The Company accounts for stock-based compensation issued to non-employees and consultants in accordance with the provisions of ASC 505-50, “Equity - Based Payments to Non-Employees.” Measurement of share-based payment transactions with non-employees is based on the fair value of whichever is more reliably measurable: (a) the goods or services received; or (b) the equity instruments issued. The fair value of the share-based payment transaction is determined at the earlier of performance commitment date or performance completion date.
The company had no stock-based compensation plans as of December 31, 2018 and 2017.
Property and equipment
Property and equipment are carried at cost. Equipment are depreciated on a straight-line basis (after taking into account their respective estimated residual value) over 5 years, the estimated useful lives of the assets. The cost of repairs and maintenance is expensed as incurred; major replacements and improvements are capitalized. When assets are retired or disposed of, the cost and accumulated depreciation are removed from the accounts, and any resulting gains or losses are included in income in the year of disposition. The Company examines the possibility of decreases in the value of fixed assets when events or changes in circumstances reflect the fact that their recorded value may not be recoverable.
During the years ended December 31, 2018 and 2017, the depreciation expense were $5,607 and $nil, respectively.
Impairment of long-lived assets
Long-lived assets are tested for impairment in accordance with ASC 360-10-45 “Impairment or Disposal of Long-Lived Assets”. The Company periodically evaluates potential impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. If circumstances require a long-lived asset or asset group be tested for possible impairment, the Company first compares undiscounted cash flows expected to be generated by that asset or asset group to its carrying value. If the carrying value of the long-lived asset or asset group is not recoverable on an undiscounted cash flow basis, an impairment is recognized to the extent that the carrying value exceeds its fair value. Fair value is determined through various valuation techniques including discounted cash flow models, quoted market values and third-party independent appraisals, as considered necessary. No impairment of long-lived assets was recognized for the years ended December 31, 2018 and 2017.
Revenue Recognition
On January 1, 2018, the Company adopted ASU 2014-09, Revenue from Contracts with Customers, using the modified retrospective approach, which applies the new standard to contracts that are not completed as of the date of adoption. Under the new standard, revenue is recognized upon transfer of control of promised goods and services to customers in an amount that reflects the consideration the Company expects to receive in exchange for those goods and services. The Company concluded that the adoption of the new standard requires an adjustment to increase the opening balance of retained earnings in an amount of $ 26,667 since control of real estate was transferred and profit on a real estate sale should be recognized under the new standard.
Revenue streams that are scoped into ASU 2014-09 include:
Property management services: The Company deals directly with prospects and tenants for the owners of properties, which mainly includes marketing property, collecting rent, handling maintenance, repairing issues and responding to tenant complaints. The Company recognizes revenue as earned on a monthly basis and has concluded this is appropriate under the new standard.
Real estate sales: The Company accounts for the sale of real estate assets and any related gain recognition in accordance with the accounting guidance applicable to sales of real estate, which establishes standards for recognition of profit on all real estate sales transactions, other than retail land sales. The Company recognizes the sale, and associated gain or loss from the disposition, provided that the earnings process is complete, and the Company does not have significant continuing involvement. Subsequent to the adoption of the new standard, the Company may recognize a gain on a real estate disposition that previously did not qualify as a sale or for full profit recognition due to the timing of the transfer of control.
F-9
Recently Issued Accounting Pronouncements Not Yet Adopted
In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842)”. Under the new guidance, lessees will be required to recognize all leases (with the exception of short-term leases) at the commencement date including a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis; and a right-of-use (ROU) asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. Lessees may not apply a full retrospective transition approach. The standard will be effective for us beginning January 1, 2019, with early adoption permitted. We plan to adopt the standard effective January 1, 2019. We anticipate this standard will have a material impact on our balance sheets. However, we do not expect adoption will have a material impact on our income statements. While we are continuing to assess potential impacts of the standard, we currently expect the most significant impact will be the recognition of ROU assets and lease liabilities for operating leases.
Note 3 - Income Taxes
The Company has not recognized an income tax benefit for its operating losses generated based on uncertainties concerning its ability to generate taxable income in future periods. The tax benefit for the period presented is offset by a valuation allowance established against deferred tax assets arising from the net operating losses, the realization of which could not be considered more likely than not. In future periods, tax benefits and related deferred tax assets will be recognized when management considers realization of such amounts to be more likely than not. Due to the change in ownership provisions of the Tax Reform Act of 1986, net operating loss carryforwards for Federal income tax reporting purposes are subject to annual limitations. Should a change in ownership occur, net operating loss carryforwards may be limited as to use in future years.
As of December 31, 2018 and 2017, the Company has incurred a net loss of $326,053 and $304,141 which resulted in a net operating loss for income tax purposes. NOLs begin expiring in 2036. The deferred tax asset has been off-set by an equal valuation allowance.
December 31, 2018 | December 31, 2017 | |||||||
| Deferred tax asset: | ||||||||
| Net operating loss at statutory rates | $ | 189,699 | 76,887 | |||||
| Depreciation expense | (7,943 | ) | - | |||||
| Accrued consulting expense | - | (64,179 | ) | |||||
| Total deferred tax asset | 181,756 | 12,708 | ||||||
| Valuation allowance | (181,756 | ) | (12,708 | ) | ||||
| Net deferred tax asset | $ | - | - | |||||
The reconciliation of the effective income tax rate to the federal statutory rate is as follows:
December 31, 2018 | December 31, 2017 | |||||||
| Federal income tax rate | 21.0 | % | 21.0 | % | ||||
| Increase in valuation allowance | (21.0 | )% | (21.0 | )% | ||||
| Effective income tax rate | 0.0 | % | 0.0 | % | ||||
The Company has evaluated and concluded that there are no significant uncertain tax positions requiring recognition in its financial statements.
The Company may from time to time be assessed interest or penalties by major tax jurisdictions. In the event it receives an assessment for interest and/or penalties, it will be classified in the financial statements as tax expense.
F-10
Note 4 - Concentration of Risk
The Company maintains cash in one account within one local commercial bank located in Southern California. The standard insurance amount is $250,000 per depositors under the FDIC’s general deposit insurance rules. At December 31, 2018 and 2017, uninsured cash balances in any domestic U.S. financial institution were $415,490 and $572,937, respectively.
Note 5 - Related Party Transactions
On August 1, 2017, the Company entered into an agreement with Bloomage Beverly Hills Investment Inc., (“Bloomage”) whose secretary is an immediate family member of the Company’s CEO. Pursuant to the agreement, the Company provided property management services for Bloomage Beverly Hills Investment Inc. for the period from August 1, 2017 to December 31, 2017, in exchange for the compensation of $3,000 per month. On October 23, 2017, the immediate family member of the Company’s CEO resigned as the secretary of Bloomage. During the year ended December 31, 2018 and 2017, the Company recognized service revenue—related party in the amount of $nil and $15,000, respectively.
On February 1, 2017, the Company entered into a lease for office space (the “Office Lease”) with Glory Investment International Inc. (“Glory Investment”) whose CEO is an immediate family of the Company. Pursuant to the Office Lease, the Company subleased 200 square feet office from Glory Investment, and the monthly rent of $500 is due within first five business days of each month. The term of the Office Lease is renewable from year-to-year, and was terminated on March 31, 2018. We believe that the rent is at or below market for the space we are occupying. For the years ended December 31, 2018 and 2017, rent expense from our related party was $250 and $5,500.
Note 6 - Shareholder Equity
In January 2017, the Company issued 700,340 shares of its $0.0001 par value common stock at the price of $0.2 per share to four investors for $140,068 in cash.
In February 2017, the Company issued 600,150 shares of its $0.0001 par value common stock at the price of $0.2 per share to two investors for $120,030 in cash.
In November 2017, the Company cancelled 150,000 shares and returned $30,000 to a shareholder.
On May 1, 2018, the Company was quoted on OTC Market with trading symbol FGNV. According to the Consulting Agreement with Speedlight Consulting Services Inc. dated on November 05, 2016, the Company issued 3,000,000 shares to Speedlight Consulting Services Inc. on May 9, 2018 to settle with the accrued consulting expenses.
In order to meet the new OTCQB standards regarding the public float which became effective on May 20, 2018, the Registrant’s CEO and principal shareholder returned 15,000,000 shares of the Registrant’s common stock (the “Shares”) to the Registrant on June 29, 2018. One of the new standards was that every company trading on the OTCQB that has a market value of less than $2 million must have a freely traded “Public Float” of at least 10% of the company’s total issued and outstanding common stock. The Registrant does not have a market value of $2 million and prior to the return of the shares, its public float was approximately 8%. After the return of the Shares, the Registrant’s public float increased to approximately 10.5%.
The 15,000,000 shares were delivered to the Registrant’s Transfer Agent with instructions to remove them from issued and outstanding status and add them to the authorized but not issued status. The above action was completed on June 29, 2018.
Note 7 - Notes Receivable
On March 17, 2017, the Company entered into a Land Transaction Agreement with Steven Zhi Qin, a third party individual. Pursuant to the agreement, the Company sold the undeveloped land located in Desert Hot Spring with value of $283,333, to Steven Zhi Qin in exchange for a Promissory Note in the amount of $310,000. The Promissory Note is secured by a Deed of Trust to Chicago Title Company, a California corporation and an independent institution insuring the Company’s collection right, and is due on March 17, 2018, with interest at the rate of 2% per annum, payable in monthly installment of interest only, in the amount of $517. The Promissory Note also applies to Steven Zhi Qin’s personal property located at 1715 East Cortez Street, West Covina, CA 91791 as additional collateral, of which a lien will be recorded against said property. On March 6, 2018, the Company reached an agreement with Steven Zhi Qin, pursuant to which the Company agreed and approved the amendment of the Promissory Note to extend maturity date to March 17, 2019. Subsequently, the Company received payment of $100,000 and $100,000 on March 12 and October 31, 2018, respectively. On March 12, 2019, the Company reached another agreement with Steven Zhi Qin, pursuant to which the Company agreed and approved amendment of the Promissory Note to extend maturity date to June 30, 2019, and the remaining $110,000 will be due on June 30, 2019.
For the years ended 2018 and 2017, total interest income was $4,270 and $4,650, respectively.
F-11
Note 8 - Commitments and Contingencies
The Company follows ASC 450-20, Loss Contingencies, to report accounting for contingencies. Liabilities for loss contingencies arising from claims, assessments, litigation, fines and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated.
Operating lease
The Company has operating leases for its offices. Rental expenses for the years ended December 31, 2018 and 2017 were $59,958 and $5,500, respectively. At December 31, 2018, total future minimum annual lease payments under operating leases were as follows, by years:
| Twelve months ending December 31, 2019 | $ | 61,920 | ||
| Twelve months ending December 31, 2020 | 64,392 | |||
| Twelve months ending December 31, 2021 | 66,972 | |||
| Twelve months ending December 31, 2022 | - | |||
| Twelve months ending December 31, 2023 | - | |||
| Total | $ | 193,284 |
Note 9 - Subsequent Event
On March 12, 2019, the Company reached an agreement with Steven Zhi Qin, pursuant to which the Company agreed and approved amendment of the Promissory Note of land transaction to extend maturity date to June 30, 2019. and the remaining $110,000 will be due on June 30, 2019.
The Company has evaluated all other subsequent events through the date these financial statements were issued and determine that there were no other subsequent events or transactions that require recognition or disclosures in the financial statements.
F-12
Item 9. Changes In and Disagreements with Accountants on Accounting and Financial Disclosure.
Not Applicable.
Item 9A. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
Disclosure controls and procedures are designed with an objective of ensuring that information required to be disclosed in our periodic reports filed with the Securities and Exchange Commission, such as this Annual Report on Form 10-K, is recorded, processed, summarized and reported within the time periods specified by the Securities and Exchange Commission. Disclosure controls are also designed with an objective of ensuring that such information is accumulated and communicated to our management, including our chief executive officer, in order to allow timely consideration regarding required disclosures.
The evaluation of our disclosure controls by our principal executive officer included a review of the controls’ objectives and design, the operation of the controls, and the effect of the controls on the information presented in this Annual Report. Our management, including our Chief Executive Officer, does not expect that disclosure controls can or will prevent or detect all errors and all fraud, if any. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Also, projections of any evaluation of the disclosure controls and procedures to future periods are subject to the risk that the disclosure controls and procedures may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934 as of the end of the period covered by this report. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that there were significant deficiency in our internal controls over Financial reporting as of December 31, 2018 and they were therefore not as effective as they could be to ensure that information required to be disclosed by us in reports that we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms. The significant deficiency in our controls and procedure were lack of evidences for proper approval and review of disbursements. Management does not believe that any of these significant deficiencies materially affected the results and accuracy of its financial statements. However, in view of this discovery of such weaknesses, management has begun a review to improve them.
MANAGEMENT’S ANNUAL REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING.
Our management is responsible for establishing and maintaining adequate internal control over financial reporting for the company in accordance with as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Our internal control over financial reporting is designed to provide reasonable assurance regarding the (i) effectiveness and efficiency of operations, (ii) reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles, and (iii) compliance with applicable laws and regulations. Our internal controls framework is based on the criteria set forth in the Internal Control - Integrated Framework that was issued in 2013 by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Management’s assessment of the effectiveness of the small business issuer’s internal control over financial reporting is as of the year ended December 31, 2018. We believe that internal controls over financial reporting as set forth above shows some weaknesses and are not effective. We have identified certain weaknesses considering the nature and extent of our current operations and any risks or errors in financial reporting under current operations.
This annual report does not include an attestation report of the company’s registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the Company’s registered public accounting firm pursuant to rules of the SEC that permit the Company to provide only management’s report in this annual report.
Subsequent to the end of the period covered by this report, and in light of the weakness described above, management is in the process of designing and implementing improvements in its internal control over financial reporting and we currently plan tom hire an independent third party consultant to assist in identifying and determining the appropriate accounting procedures and controls to implement.
Not applicable.
9
Item 10. Directors, Executive Officers and Corporate Governance.
The following table sets forth the names and ages of the current directors and executive officers of the Company, the principal offices and positions with the Company held by each person and the date such person became a director or executive officer of the Company. The executive officers of the Company are elected annually by the Board of Directors. The directors serve one-year terms until their successors are elected. The executive officers serve terms of one year or until their death, resignation or removal by the Board of Directors. Ms. Xiaowei Guo is the blood sister of our CEO, Patrick Liang’s mother.
The following table sets forth information regarding the members of the Company’s board of directors and its executive officers:
| Name | Age | Position | Year Commenced | |||||||
| Patrick Liang | 35 | President, CEO, CFO and Director | 2016 | |||||||
| Xiaowei Guo | 60 | Director | 2016 | |||||||
Directors serve until the next annual meeting and until their successors are elected and qualified. Officers are appointed to serve for one year until the meeting of the board of directors following the annual meeting of stockholders and until their successors have been elected and qualified.
Patrick Liang – President, CEO, CFO and Director since April 2016. Mr. Liang has transitioned over to the Company from Finisar Corp., from May 2015 until April 2016, where Mr. Liang was in charge of MES (Manufacturing Executive System), Operation Support and Head Industry Engineer. Mr. Liang’s responsibilities were supporting the company’s MES system, which included but were not limited to: Forecasting the company’s capacity, calculate the yield rate and HPU, UPU system in order to optimize the performance of production assembly; Using Camstar’s Insite system to trace and track the production in order to monitor the assembly line’s real time assembly performance and understanding the detail assembly issue such as bottle neck, yield rate low on specific processing step, production in assembly flow’s traceability and so on. Mr. Liang also has extensive experience in Parts Coordinator Supervision and worked in the Yami Seiki USA, from February 2014 until March 2015 as raw materials coordinator supervisor to which his duties included, but were not limited to: Regulating parts to provide precise information to the technician who use the parts to install or repair the CNC (Computer Numerical Controls) machine. Mr. Liang received a BS Degree in Mathematics/Math and Physical Sciences from the University of California Riverside and in 2008 a BA Degree in English and Business from the Shanghai Foreign Language University; Mr. Liang skills include familiarity with Industry’s MES system as well as Industry Engineering; Strong leadership and management capabilities; Fluent in English and Chinese (Both Mandarin and Cantonese) and expert capability with Microsoft Word, Microsoft Excel, Microsoft Power Point and Adobe Photoshop. As a founder of the Company, Mr. Liang is most familiar with the business plan and the future mission of the Company. His vision, together with his strong analytical academic background, we believe, makes him an excellent choice to be the CEO and a director of the Company.
Xiaowei Guo – Ms. Guo has over 20 years of high-tech industry experiences in developing wafer level/device level test methodology, manual/semi-Auto testing system build-up, measurement calibration, data automation process, summary analysis template and DOE result report. She also has more than 10 years of research experience in optoelectronic device and systems, as well as broad experience in advanced image processing algorithm development, pattern/feature recognition and classification, variety of filtering methods, wavelet, 3-D image reconstruction from projections, statistic applications. From November 2000 to the present, she has been employed as Senior Engineering Manager in Wafer Fab Testing at JDS Uniphase Corp/Lumentum in San Jose, California. Ms. Guo is familiar with various analytical techniques and instruments, automated fiber-optic assembly and packaging system. Ms. Guo holds a Ph.D degree in Physics with specialty in biomedical image processing and analysis from State University of New York at Albany, and a BS degree in applied physics from Lanzhou University, China. Ms. Guo’s maturity, management experience and strong academic background, has led the Board of Directors to reach the conclusion that she should serve as a Director of the Company.
Term of office
All officers and directors listed above will remain in office until the next annual meeting of our stockholders, and until their successors have been duly elected and qualified or until removed from office in accordance with our bylaws. There are no agreements with respect to the election of Directors. We have not compensated our Directors for service on our Board of Directors, any committee thereof, or reimbursed for expenses incurred for attendance at meetings of our Board of Directors and/or any committee of our Board of Directors. Officers are appointed annually by our Board of Directors and each Executive Officer serves at the discretion of our Board of Directors. We do not have any standing committees. Our Board of Directors may in the future determine to pay Directors’ fees and reimburse Directors for expenses related to their activities.
None of our Officers and/or Directors have filed any bankruptcy petition, been convicted of or been the subject of any criminal proceedings or the subject of any order, judgment or decree involving the violation of any state or federal securities laws within the past five (5) years.
Director Independence
The Board consists of two members, none of whom meet the independence requirements of the Nasdaq Stock Market as currently in effect.
10
Committees and Terms
The Board of Directors (the “Board”) has not established any committees. The Company will notify its shareholders for an annual shareholder meeting and that they may present proposals for inclusion in the Company’s proxy statement to be mailed in connection with any such annual meeting; such proposals must be received by the Company at least 90 days prior to the meeting. No other specific policy has been adopted in regard to the inclusion of shareholder nominations to the Board of Directors.
Code of Ethics
To date, we have not adopted a Code of Ethics applicable to our principal executive officer and principal financial officer because the Company has no meaningful operations. The Company does not believe that a formal written code of ethics is necessary at this time. We expect that the Company will adopt a code of ethics if and when the Company successfully completes a business combination that results in the acquisition of an on-going business and thereby commences operations.
Item 11. Executive Compensation
Executive Compensation
The Summary Compensation Table shows certain compensation information for services rendered in all capacities for the fiscal years ended December 31, 2018 and 2017. Other than as set forth herein, no executive officer’s salary and bonus exceeded $100,000 in any of the applicable years. The following information includes the dollar value of base salaries, bonus awards, the number of stock options granted and certain other compensation, if any, whether paid or deferred.
Summary Compensation Table
| Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock Awards ($) | Option Awards ($) | Non-equity incentive plan compensation ($) | Non-qualified deferred compensation earnings ($) | All other compensation ($) | Total ($) | |||||||||||||||||||||||||
| Patrick Liang | 2018 | 40,000 | — | — | — | — | — | 5,000 | 45,000 | |||||||||||||||||||||||||
| President, Chief Executive Officer | 2017 | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||
| Xiaowei Guo | 2018 | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||
| Director | 2017 | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||
Employment Agreements
The Company has not entered into employment agreements with any of its employees or officers as of December 31, 2018. Currently we have no written employment agreements with any of our executive officers.
Stock Option Plan
We do not have a stock option plan and we have not issued any warrants, options or other rights to acquire our securities. However, we may adopt an incentive and non-statutory stock option plan in the future.
Employee Pension, Profit Sharing or other Retirement Plans
We do not have a defined benefit, pension plan, profit sharing or other retirement plan, although we may adopt one or more of such plans in the future.
11
Item 12. Security Ownership of Certain Beneficial Owners and Management and related Stockholder Matters
The following table sets forth, as of March 26, 2019, the number of shares of our common stock owned of record and beneficially by all directors, executive officers, nominees for director and persons who beneficially own more than 5% of the outstanding shares of our common stock:
| Name and Address of Beneficial Owner (3) | Position | Amount of Shares Beneficial Owned | Percent
of class (1) | |||||||
| Patrick Liang | President, CEO, CFO and Director | 37,434,843 | (2) | 82.05 | % | |||||
| Xiaowei Guo | Director | 8,000 | (4) | * | ||||||
| Speedlight Consulting Services Inc. | 3,000,000 | 6.58 | % | |||||||
| Officers and Directors as a Group (2) | 37,442,843 | 82.05 | % | |||||||
| * | Less than 1% |
| (1) | Based upon 45,621,868 shares outstanding as of December 31, 2018. |
| (2) | Includes 10,000 shares owned by Fangyuan Wang, Mr. Liang’s wife. |
| (3) | The addresses of the officers and directors of the Company is 17800 Castleton Street, Suite 583, City of industry, CA 91748. |
| (4) | Includes 2,000 shares owned by Ms. Guo’s husband and 2,000 shares owned by her daughter. |
Item 13. Certain Relationships and Related Transactions
On March 2, 2016, our CEO helped the Company open a bank account and deposit $100 into the bank account on behalf of the Company. As of December 31, 2016, the balance of due to shareholder of $100 was non-secured, non-interest bearing and due on demand.
On June 24, 2016, the Company entered into Membership Unit Purchase Agreement with Patrick Siyu Liang, the Company’s CEO, pursuant to which the Company issued 2,833,333 units to Patrick at the price of $0.1 per unit in exchange for Patrick’s real estate property, an undeveloped land, valued at $283,333. The land located at the city of Desert Hot Springs, County of Riverside, State of California was gifted by CEO’s mother, and the CEO’s mother received the land from her own company, Prime Investment International, Inc., as a distribution. Based on the nature of the transaction, the real estate property was recorded at costs $283,333 which is the price that Prime Investment International, Inc. originally acquired.
On August 1, 2017, the Company entered into an agreement with Bloomage Beverly Hills Investment Inc., (“Bloomage”) whose secretary is an immediate family member of the Company’s CEO. Pursuant to the agreement, the Company provided property management services for Bloomage Beverly Hills Investment Inc. for the period from August 1, 2017 to December 31, 2017, in exchange for the compensation of $3,000 per month. On October 23, 2017, the immediate family member of the Company’s CEO resigned as the secretary of Bloomage. During the year ended December 31, 2018 and 2017, the Company recognized service revenue—related party in the amount of $nil and $15,000, respectively.
On February 1, 2017, the Company entered into a lease for office space (the “Office Lease”) with Glory Investment International Inc. (“Glory Investment”) whose CEO is an immediate family of the Company. Pursuant to the Office Lease, the Company subleased 200 square feet office from Glory Investment, and the monthly rent of $500 is due within first five business days of each month. The term of the Office Lease is renewable from year-to-year, and was terminated on March 31, 2018. We believe that the rent is at or below market for the space we are occupying. For the years ended December 31, 2018 and 2017, rent expense was $250 and $5,500.
Item 14. Principal Accountant Fees and Services.
During 2018 and 2017, Simon & Edward, LLP, the Company’s independent auditors have billed for their services as set forth below. In addition, fees and services related to the audit of the financial statements of the Company for the period ended December 31, 2018, as contained in this Report, are estimated and included for the fiscal year ended December 31, 2018.
| Year ended December 31, | ||||||||
| 2018 | 2017 | |||||||
| Audit Fees | $ | 10,000 | $ | 11,000 | ||||
| Audit-Related Fees | $ | -0- | $ | -0- | ||||
| Tax Fees | $ | 700 | $ | 700 | ||||
| All Other Fees | $ | -0- | $ | -0- | ||||
Pre-Approval Policy
Our Board as a whole pre-approves all services provided by Simon & Edward, LLP. For any non-audit or non-audit related services, the Board must conclude that such services are compatible with the independence as our auditors.
12
Item 15. Exhibits; Financial Statement Schedules.
| 101.INS** | XBRL Instance Document | |
| 101.SCH** | XBRL Taxonomy Extension Schema Document | |
| 101.CAL** | XBRL Taxonomy Extension Calculation Linkbase Document | |
| 101.DEF** | XBRL Taxonomy Extension Definition Linkbase Document | |
| 101.LAB** | XBRL Taxonomy Extension Label Linkbase Document | |
| 101.PRE** | XBRL Taxonomy Extension Presentation Linkbase Document |
| * | Incorporated by reference to the Company’s Registration Statement on Form S-1 as filed with the SEC on May 26, 2017. |
| ** | Filed herewith |
13
In accordance with the Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized on the 26th day of March, 2019.
| FORGE INNOVATION DEVELOPMENT CORP. | ||
| By: | /s/ Patrick Liang | |
| Patrick
Liang, President (Principal Executive Officer) | ||
In accordance with the requirements of the Securities and Exchange Act of 1934, this report has been signed by the following persons on behalf of the Registrant and in the capacities indicated and on the dates stated.
| /s/ Patrick Liang | Dated: March 26, 2019 |
| Patrick Liang | |
| President
(Principal Executive Officer), CFO, Sec. and Director |
|
| /s/ Xiaowei Guo | Dated: March 26, 2019 |
| Xiaowei Guo | |
| Director |
14
| 101.INS** | XBRL Instance Document | |
| 101.SCH** | XBRL Taxonomy Extension Schema Document | |
| 101.CAL** | XBRL Taxonomy Extension Calculation Linkbase Document | |
| 101.DEF** | XBRL Taxonomy Extension Definition Linkbase Document | |
| 101.LAB** | XBRL Taxonomy Extension Label Linkbase Document | |
| 101.PRE** | XBRL Taxonomy Extension Presentation Linkbase Document |
| * | Incorporated by reference to the Company’s Registration Statement on Form S-1 as filed with the SEC on May 26, 2017. |
| ** | Filed herewith |
15