ITEM 1.
BUSINESS.
Business
China Insure Holdings, Inc. (F/K/A Europa Acquisition III, Inc.) (“we , ” “us , ” “our , ” the "Company" or the "Registrant") was incorporated in the State of Nevada on June 30, 2010. On January 6, 2011, we changed our name to “China inSure Holdings, Inc.” to better reflect our current business. Since inception, which was June 30, 2010, the Company has been engaged in organizational efforts and obtaining initial financing. The Company was formed as a vehicle to pursue a business combination and has made no efforts to identify a possible business combination. As a result, the Company has not conducted negotiations or entered into a letter of intent concerning any target business. The business purpose of the Company is to seek the acquisition of or merger with, an existing company. The Company selected June 30 as its fiscal year end.
Plan of Operation
We were organized as a vehicle to investigate and, if such investigation warrants, acquire a target company or business seeking the perceived advantages of being a publicly held corporation. Our principal business objective for the next 12 months and beyond such time will be to achieve long-term growth potential through a combination with a business rather than immediate, short-term earnings. We will not restrict our potential candidate target companies to any specific business, industry or geographical location and, thus, may acquire any type of business.
We do not currently engage in any business activities that provide cash flow. The costs of investigating and analyzing business combinations for the next 12 months and beyond such time will be paid with money in our treasury or with additional amounts, as necessary, to be loaned to or invested in us by our stockholders, management or other investors.
During the next 12 months we anticipate incurring costs related to filing of Exchange Act reports. We believe we will be able to meet these costs through use of funds in our treasury and additional amounts, as necessary, to be loaned by or invested in us by our stockholders, management or other investors.
We are in the development stage and have negative working capital, negative stockholders’ equity and have not earned any revenues from operations to date. These conditions raise substantial doubt about our ability to continue as a going concern. We are currently devoting our efforts to locating merger candidates. Our ability to continue as a going concern is dependent upon our ability to develop additional sources of capital, locate and complete a merger with another company, and ultimately, achieve profitable operations.
We may consider a business which has recently commenced operations, is a developing company in need of additional funds for expansion into new products or markets, is seeking to develop a new product or service, or is an established business which may be experiencing financial or operating difficulties and is in need of additional capital. In the alternative, a business combination may involve the acquisition of, or merger with, a company which does not need substantial additional capital, but which desires to establish a public trading market for its shares, while avoiding, among other things, the time delays, significant expense, and loss of voting control which may occur in a public offering.
Our officers and directors have not had any preliminary contact or discussions with any representative of any other entity regarding a business combination with us. Any target business that is selected may be a financially unstable company or an entity in its early stages of development or growth, including entities without established records of sales or earnings. In that event, we will be subject to numerous risks inherent in the business and operations of financially unstable and early stage or potential emerging growth companies. In addition, we may effect a business combination with an entity in an industry characterized by a high level of risk, and, although our management will endeavor to evaluate the risks inherent in a particular target business, there can be no assurance that we will properly ascertain or assess all significant risks.
Our management anticipates that it will likely be able to effect only one business combination, due primarily to our limited financing and the dilution of interest for present and prospective stockholders, which is likely to occur as a result of our management’s plan to offer a controlling interest to a target business in order to achieve a tax-free reorganization. This lack of diversification should be considered a substantial risk in investing in us, because it will not permit us to offset potential losses from one venture against gains from another.
We anticipate that the selection of a business combination will be complex and extremely risky. Because of general economic conditions, rapid technological advances being made in some industries and shortages of available capital, our management believes that there are numerous firms seeking even the limited additional capital which we will have and/or the perceived benefits of becoming a publicly traded corporation. Such perceived benefits of becoming a publicly traded corporation include, among other things, facilitating or improving the terms on which additional equity financing may be obtained, providing liquidity for the principals of and investors in a business, creating a means for providing incentive stock options or similar benefits to key employees, and offering greater flexibility in structuring acquisitions, joint ventures and the like through the issuance of stock. Potentially available business combinations may occur in many different industries and at various stages of development, all of which will make the task of comparative investigation and analysis of such business opportunities extremely difficult and complex.
ITEM 1A.
ITEM 1A.
RISK FACTORS.
Smaller reporting companies are not required to provide the information required by this item.
ITEM 1B.
ITEM 1B.
UNRESOLVED STAFF COMMENTS.
Not applicable.
ITEM 2.
ITEM 2.
PROPERTIES.
Our principal executive office is located at 17th Floor, Fuhua Mansion, Building D, 8 Chaoyangmen Beidajie, Chaoyangmen District, Beijing China. Our telephone number is (718) 255 4700.
ITEM 3.
ITEM 3.
LEGAL PROCEEDINGS.
We are currently not a party to any material legal or administrative proceedings and are not aware of any pending legal or administrative proceedings against us. We may from time to time become a party to various legal or administrative proceedings arising in the ordinary course of our business.
ITEM 4.
ITEM 4.
(REMOVED AND RESERVED).
PART II
ITEM 5.
ITEM 5.
MARKET FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.
Market Information
Our common stock is not quoted on any national exchange or over-the-counter quotation system. No public market currently exists for shares of our Common Stock and there can be no assurance that an active market will develop.
Holders of Capital Stock
As of September 28, 2011 we have 1 holders.of our common stock.
Dividends
To date, we have not declared or paid any dividends on our common stock. We currently do not anticipate paying any cash dividends in the foreseeable future on our common stock. Although we intend to retain our earnings, if any, to finance the exploration and growth of our business, our Board of Directors has the discretion to declare and pay dividends in the future.
Payment of dividends in the future will depend upon our earnings, capital requirements, and any other factors that our Board of Directors deems relevant.
Equity Compensation Plan Information
We do not have any equity compensation plans and therefore no equity awards were issued or are outstanding as of the fiscal year end of 2011.
Recent Sales of Unregistered Securities
On June 30, 2010, the Company issued 100,000 shares of common stock to its founders having a fair value of $1,000 ($0.01/share) in exchange for services provided. Such securities were not registered under the Securities Act. The issuance of these securities was exempt from registration under the safe harbor provided by Section 4(2) of the Securities Act.
ITEM 6.
ITEM 6.
SELECTED FINANCIAL DATA.
Smaller reporting companies are not required to provide the information required by this item.
ITEM 7.
ITEM 7.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS.
The following plan of operation provides information which management believes is relevant to an assessment and understanding of our results of operations and financial condition. The discussion should be read along with our financial statements and notes thereto. This section includes a number of forward-looking statements that reflect our current views with respect to future events and financial performance. Forward-looking statements are often identified by words like believe, expect, estimate, anticipate, intend, project and similar expressions, or words which, by their nature, refer to future events. You should not place undue certainty on these forward-looking statements. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from our predictions.
Overview
We were organized as a vehicle to investigate and, if such investigation warrants, acquire a target company or business seeking the perceived advantages of being a publicly held corporation. Our principal business objective for the next 12 months and beyond such time will be to achieve long-term growth potential through a combination with a business rather than immediate, short-term earnings. We will not restrict our potential candidate target companies to any specific business, industry or geographical location and, thus, may acquire any type of business.
We are a development stage company with very limited operating history and we have not generated any revenue since inception. We have generated no independent financial history and have not previously demonstrated that we will be able to expand our business.
We do not currently engage in any business activities that provide cash flow. The costs of investigating and analyzing business combinations for the next 12 months and beyond such time will be paid with money in our treasury or with additional amounts, as necessary, to be loaned to or invested in us by our stockholders, management or other investors.
During the next 12 months we anticipate incurring costs related to filing of Exchange Act reports. We believe we will be able to meet these costs through use of funds in our treasury and additional amounts, as necessary, to be loaned by or invested in us by our stockholders, management or other investors.
Results of Operations
We did not have any operating income from inception through June 30, 2011. For the year ended June 30, 2011, we recognized a net loss of $17,318 and for the period from inception through June 30, 2011, we recognized a net loss of $19,568.
For the Fiscal Year Ended June 30, 2011
For the fiscal year ended June 30, 2011, we did not generate any revenue. Total operating expenses for this period is $17,318, which results in a net loss of $17,318. Total operating expenses for this period were comprised of professional fees of $13,315 and general and administrative expenses of $4,003.
For The Period From Inception Through June 30, 2011
For the period from inception through June 30, 2011, we did not generate any revenue. Total operating expenses for this period is $19,568, which results in a net loss of $19,568. Total operating expenses for this period were comprised of professional fees of $14,565 and general and administrative expenses of $5,003.
Liquidity and Capital Resources
As of June 30, 2011, we had no cash or other capital resource at hand and we will need additional capital to continue operations for the next twelve months. We intend to rely upon the issuance of common stock and loans from shareholders to fund administrative expenses pending acquisition of an operating company. However, our shareholders are under no obligation to provide such funding.
Management anticipates seeking out a target company through solicitation. Such solicitation may include newspaper or magazine advertisements, mailings and other distributions to law firms, accounting firms, investment bankers, financial advisors and similar persons, the use of one or more World Wide Web sites and similar methods. No estimate can be made as to the number of persons who will be contacted or solicited. Management may engage in such solicitation directly or may employ one or more other entities to conduct or assist in such solicitation. Management and its affiliates will pay referral fees to consultants and others who refer target businesses for mergers into public companies in which management and its affiliates have an interest. Payments are made if a business combination occurs, and may consist of cash or a portion of the stock in the Company retained by management and its affiliates, or both.
As reflected in the accompanying financial statements, the Company has a net loss of $19,568 from inception and a working capital and stockholders’ deficiency of $9,071 at June 30, 2011. This raises substantial doubt about its ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company's ability to raise additional capital and implement its business plan. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.
Management believes that actions presently being taken to obtain additional funding and implement its strategic plans provide the opportunity for the Company to continue as a going concern
Off-Balance Sheet Arrangements
We have no off-balance sheet arrangements.
Critical Accounting Policies
We have identified the policies outlined below as critical to our business operations and an understanding of our results of operations. The list is not intended to be a comprehensive list of all of our accounting policies. In many cases, the accounting treatment of a particular transaction is specifically dictated by accounting principles generally accepted in the United States, with no need for management's judgment in their application.
Use of Estimates
In preparing financial statements in conformity with generally accepted accounting principles, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and revenues and expenses during the reported period. Actual results could differ from those estimates.
Loss Per Share
Basic and diluted net loss per common share is computed based upon the weighted average common shares outstanding as defined by FASB Accounting Standards Codification Topic 260, “Earnings Per Share.” As of June 30, 2011 and 2010, there were no common share equivalents outstanding.
Income Taxes
The Company accounts for income taxes under FASB Codification Topic 740-10-25 (“ASC 740-10-25”). Under ASC 740-10-25, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement 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. Under ASC 740-10-25, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.
Fair Value of Financial Instruments
The carrying amount reported in the balance sheet for accounts payable and loan payable related party approximate fair value based on the short-term maturity of these instruments.
ITEM 7A.
ITEM 7A.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
Smaller reporting companies are not required to provide the information required by this item.
ITEM 8.
ITEM 8.
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
CHINA inSURE HOLDINGS, INC.
(f/k/a EUROPA ACQUISITION III, INC.)
(A DEVELOPMENT STAGE COMPANY)
CONTENTS
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors of:
China Insure Holdings, Inc. f/k/a Europa Acquisition III, Inc. (A Development Stage Company)
We have audited the accompanying balance sheets of China Insure Holdings, Inc. f/k/a Europa Acquisition III, Inc. (a development stage company) (the “Company”) as of June 30, 2011 and 2010 and the related statements of operations, changes in stockholders’ deficiency and cash flows for the year ended June 30, 2011, for the period from June 30, 2010 (Inception) to June 30, 2010 and the period June 30, 2010 (Inception) to June 30, 2011. 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 audit.
We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly in all material respects, the financial position of China Insure Holdings, Inc. (a development stage company) as of June 30, 2011 and 2010 and the results of its operations and its cash flows for the year ended June 30, 2011, the period from June 30, 2010 (Inception) to June 30, 2010 and the period June 30, 2010 (Inception) to June 30, 2011 in conformity with accounting principles generally accepted in the United States of America.
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 5 to the financial statements, the Company is in the development stage with limited operations, a net loss of $19,568 from inception and a working capital and stockholders' deficiency of $9,071 as of June 30, 2011 and used $15,698 cash in operations from inception. These factors raise substantial doubt about the Company's ability to continue as a going concern. Management's plans concerning these matters are also described in Note 5. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
WEBB & COMPANY, P.A.
Certified Public Accountants
Boynton Beach, Florida
September 28, 2011
1500 Gateway Boulevard, Suite 202 i Boynton Beach, FL 33426
Telephone: (561) 752-1721 i Fax: (561) 734-8562
www.cpawebb.com
See accompanying notes to financial statements
See accompanying notes to financial statements
See accompanying notes to financial statements
See accompanying notes to financial statements
CHINA inSURE HOLDINGS, INC.
(f/k/aEUROPA ACQUISITION III, INC.)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
AS OF JUNE 30, 2011
NOTE 1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ORGANIZATION
(A) Organization
China Insure Holdings, Inc. (F/K/A Europa Acquisition III, Inc.) (a development stage company) (the "Company") was incorporated under the laws of the State of Nevada on June 30, 2010. The Company was organized to provide business services and financing to emerging growth entities.
The Company was formed to engage in any lawful corporate undertaking, including, but not limited to, selected mergers and acquisitions. It has been in the developmental stage since inception and has no operations to date. It will attempt to locate and negotiate with a business entity for the combination of that target company with us. The combination will normally take the form of a merger, stock- for-stock exchange or stock-for-assets exchange. In most instances, the target company will wish to structure the business combination to be within the definition of a tax-free reorganization under Section 351 or Section 368 of the Internal Revenue Code of 1986, as amended. No assurances can be given that it will be successful in locating or negotiating with any target company.
Activities during the development stage include developing the business plan and raising capital.
Effective January 13, 2011, the Company filed with the State of Nevada Certificate of Amendment of Certificate of Incorporation changing our name from Europa Acquisition III, Inc., to China inSure Holdings, Inc (See note 3(B)).
(B) Use of Estimates
In preparing financial statements in conformity with generally accepted accounting principles, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and revenues and expenses during the reported period. Actual results could differ from those estimates.
(C) Cash and Cash Equivalents
The Company considers all highly liquid temporary cash investments with an original maturity of three months or less to be cash equivalents. At June 30, 2011 and June 30, 2010, the Company had no cash equivalents.
CHINA inSURE HOLDINGS, INC.
(f/k/aEUROPA ACQUISITION III, INC.)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
AS OF JUNE 30, 2011
(D) Loss Per Share
Basic and diluted net loss per common share is computed based upon the weighted average common shares outstanding as defined by FASB Accounting Standards Codification Topic 260, “Earnings Per Share.” As of June 30, 2011 and 2010, there were no common share equivalents outstanding.
(E) Income Taxes
The Company accounts for income taxes under FASB Codification Topic 740-10-25 (“ASC 740-10-25”). Under ASC 740-10-25, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement 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. Under ASC 740-10-25, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.
As of June 30 2011, the Company has a net operating loss carryforward of approximately $18,068 available to offset future taxable income through 2031. The increase in the valuation allowance at June 30, 2011 was $5,718.
As of June 30 2010, the Company has a net operating loss carryforward of approximately $1,250 available to offset future taxable income through 2030. The increase in the valuation allowance at June 30, 2010 was $425.
(F) Business Segments
The Company operates in one segment and therefore segment information is not presented.
CHINA inSURE HOLDINGS, INC.
(f/k/aEUROPA ACQUISITION III, INC.)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
AS OF JUNE 30, 2011
(G) Revenue Recognition
The Company will recognize revenue on arrangements in accordance with FASB ASC No. 605, “Revenue Recognition”. In all cases, revenue is recognized only when the price is fixed and determinable, persuasive evidence of an arrangement exists, the service is performed and collectability of the resulting receivable is reasonably assured.
(H)Fair Value of Financial Instruments
The carrying amount reported in the balance sheet for accounts payable and loan payable related party approximate fair value based on the short-term maturity of these instruments.
NOTE 2
STOCKHOLDER LOAN
During the year ended June 30, 2011 and June 30, 2010, the principal stockholder loaned the Company $6,701 and none, respectively, to pay expenses (See Note 4). The note is due on demand and is non-interest bearing.
NOTE 3
STOCKHOLDERS’ DEFICIENCY
(A) Stock Issued for Services
On June 30, 2010, the Company issued 100,000 shares of common stock to its founders having a fair value of $1,000 ($0.01/share) in exchange for services provided (See Note 4).
(B) Amendment to Articles of Incorporation
On January 13, 2011, the Company amended its Articles of Incorporation to change its name to China inSure Holdings Inc.
(C) Cash contributed on Company’s behalf
As of June 30, 2011, the principal stockholder forgave loans of $2,112 and this was recorded by the Company as contributed capital (See Note 4).
(D) Expenses paid on Company’s’ behalf
During the year ended June 30, 2011, the principal stockholder paid $6,885 of accounts payable on the Company’s behalf, $6,885 of which was recorded as an in kind contribution of capital (See Note 4).
(E) In-Kind Contribution
For the year ended June 30, 2011, a shareholder of the Company contributed services having a fair value of $500 (See Note 4).
NOTE 4
RELATED PARTY TRANSACTION
On June 30, 2010, the Company issued 100,000 shares of common stock to its founders having a fair value of $1000 ($0.01/share) in exchange for services provided (See Note 3(A)).
During the year ended June 30, 2011, Europa Capital (a related party) paid $2,112 in legal expenses and filing fees on behalf of the Company. These amounts are recorded as a related party loan payable. The amounts are unsecured, non interest bearing and due on demand. As of June 30, 2011, the principal stockholder forgave loans of $2,112 and this was recorded by the Company as contributed capital (See note 3(C)).
During the year ended June 30, 2011, the principal stockholder paid $6,885 of accounts payable on the Company’s behalf, which was recorded as an in kind contribution of capital (See Note 3(D)).
During the year ended June 30, 2011, the principal stockholder loaned the Company $6,701 to pay expenses (See Note 2). The amount is due on demand and the note is non-interest bearing.
For the year ended June 30, 2011, a shareholder of the Company contributed services having a fair value of $500 (See Note 3(E)).
NOTE 5
GOING CONCERN
As reflected in the accompanying financial statements, the Company is in the development stage with limited operations. The Company has a net loss of $19,568 from inception and a working capital and stockholders’ deficiency of $9,071 at June 30, 2011 and used $15,698 cash in operations from inception. This raises substantial doubt about its ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company’s ability to raise additional capital and implement its business plan. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. Management intends to provide the Company with additional loans as needed and is seeking a merger target to implement its strategic plans. Management feels these actions provide the opportunity for the Company to continue as a going concern.
ITEM 9.
ITEM 9.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
None.
ITEM 9A.
ITEM 9A.
CONTROLS AND PROCEDURES.
Disclosure Controls and Procedures
Pursuant to Rule 13a-15(b) under the Exchange Act, as of June 30, 2011, the end of the period covered by this report, our management concluded its evaluation of the effectiveness of the design and operation of our disclosure controls and procedures. As of the evaluation date, our President, Chief Executive Officer and Chief Financial and Accounting Officer concluded that there is a material weakness in internal control due to the fact that we do not have accounting personnel with sufficient knowledge, experience and training in U.S. GAAP standards, and therefore disclosure controls and procedures are not effective in providing reasonable assurance that information required to be disclosed in our reports under the Exchange Act is recorded, processed, summarized and reported within the time periods prescribed by SEC rules and regulations, and that such information is accumulated and communicated to our management to allow timely decisions regarding required disclosure.
Management's Annual Report on Internal Control Over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Our internal control system was designed to, in general, provide reasonable assurance to our management and Board of Directors regarding the preparation and fair presentation of published financial statements, but because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.
Our management assessed the effectiveness of our internal control over financial reporting as of June 30, 2011. The framework used by management in making that assessment was the criteria set forth in the document entitled “Internal Control - Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on that assessment, our management has determined that as of June 30, 2011, our internal control over financial reporting was not effective.
A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis. In its assessment of the effectiveness of internal control over financial reporting as of June 30, 2011, the Company determined that there were control deficiencies that constituted material weaknesses, as described below.
We do not have accounting personnel with sufficient knowledge, experience and training in U.S. GAAP standards. This could result in us being unable to fully identify and resolve certain accounting and disclosure issues that could lead to a failure to maintain effective controls over preparation, review, and approval of certain significant account reconciliation from Chinese GAAP to U.S. GAAP.
Changes in Internal Control over Financial Reporting
No change in our internal control over financial reporting occurred during the fourth fiscal quarter of the year ended June 30, 2011 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
ITEM 9B.
ITEM 9B.
OTHER INFORMATION.
None.
PART III
ITEM 10.
ITEM 10.
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.
Our sole executive officer and director is as follows:
Set forth below is a brief description of the background and business experience of our executive officers and directors for the past five years.
Hua Zhang, President, CEO and Director
Hua Zhang has over 20 years of experience in business development, marketing, and distribution. Mr. Zhang has been the founder and chairman of Fore (Beijing) Insurance Broker Co., Ltd. since 2010. Fore (Beijing) Insurance Broker Co., Ltd. is primarily focused on providing insurance and other financial services to China’s emerging middle class population. Between 2006 and 2010, Mr. Zhang was the chairman of Wuhan Fengxin Agricultural Technology Development Co., Ltd. Between 1994 and 2006, Mr. Zhang was the chairman of Wuhan Guarana Health Products Group Co., Ltd. Mr. Zhang received his college degree from Hubei Economic Management University.
We believe that Mr. Hua Zhang is qualified to serve on our Board of Directors because he brings a broad base of knowledge and experience in business management.
Term of Office
Our sole director is appointed for a one-year term to hold office until the next annual general meeting of our shareholders or until removed from office in accordance with our bylaws. Our sole officer is appointed by our board of directors and hold office until removed by the board of directors. There are no agreements or understandings between Mr. Hua Zhang and any other person pursuant to which Mr. Hua Zhang was selected as a director or executive officer.
Family Relationships
Because Mr. Hua Zhang serves as our sole executive officer and director, there are no other family relationships among any of our officers or directors.
Involvement in Legal Proceedings
To our knowledge, there have been no material legal proceedings that would require disclosure under the federal securities laws that are material to an evaluation of the ability of our director or executive officer.
Board Committees
We have not formed an Audit Committee, Compensation Committee or Nominating and Corporate Governance Committee as of the filing of this Annual Report. Our Board of Directors performs the principal functions of an Audit Committee. We currently do not have an audit committee financial expert on our Board of Directors. We believe that an audit committee financial expert is not required because the cost of hiring an audit committee financial expert to act as one of our directors and to be a member of an Audit Committee outweighs the benefits of having an audit committee financial expert at this time.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Exchange Act requires our directors, officers and persons who beneficially own more than 10% of a registered class of our equity securities, to file reports of ownership and changes in ownership with the SEC and are required to furnish us with copies of these reports. Based solely on our review of the reports filed with the SEC, we believe that all persons subject to Section 16(a) of the Exchange Act timely filed all required reports in 2011.
Code of Ethics
We have not adopted a Code of Ethics that is applicable to our Chief Executive Officer and chief financial and principal accounting officer. We are in the process of formulating a code of ethics and intend to adopt one in the future.
ITEM 11.
ITEM 11.
EXECUTIVE COMPENSATION.
Summary Compensation Table
The following summary compensation table sets forth all compensation awarded to, earned by, or paid to, Mr. Hua Zhang during the years ended June 30, 2011 and 2010 as our only named executive officer:
(1)
Mr. Peter Reichard, was appointed as our former president and Director since inception, and later resigned from such position on January 6, 2011 in connection with the stock purchase effective on the same day. Mr. Reichard's’s resignation is not a result of any disagreement with the Company on any matters relating to the Company’s operations, policies or practices.
Narrative Disclosure to Summary Compensation Table
For the year ended June 30, 2011 and 2010, Mr. Hua Zhang received no annual compensation .
Outstanding Equity Awards at Fiscal Year-End Table
We do not have any equity compensation plans and therefore no equity awards were issued or are outstanding as of the fiscal year end of June 30, 2011.
Compensation of Directors
Mr. Hua Zhang is not compensated for his service as a director.
ITEM 12.
ITEM 12.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.
The following table shows the number of our securities beneficially owned by our named executive officers, our director, our executive officers and directors as a group, and each person known to us to own more than 5% of our outstanding shares of common stock as of September 28, 2011. Except as otherwise indicated, all shares are owned directly and the shareholders possess sole voting and investment power with respect to the shares listed below. As of September 28, 2011, 100,000 shares of our common stock were issued and outstanding. Unless otherwise stated, the business address of the person listed below is c/o 17th Floor, Fuhua Mansion, Building D8 Chaoyangmen, Beidajie, Chaoyangmen District, Beijing China.
ITEM 13.
ITEM 13.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.
Transactions with Related Persons
Since the beginning of fiscal 2011, there has not been any past or currently proposed transaction, in which we were or are to be a participant and the amount involved exceeded or exceeds $120,000 and in which any related person had or will have a direct or indirect material interest.
Director Independence
We do not have any independent directors. Because our common stock is not currently listed on a national securities exchange, we have used the definition of “independence” of The NASDAQ Stock Market to make this determination. NASDAQ Listing Rule 5605(a)(2) provides that an “independent director” is a person other than an officer or employee of the company or any other individual having a relationship which, in the opinion of the Company’s Board of Directors, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. The NASDAQ listing rules provide that a director cannot be considered independent if:
●
the director is, or at any time during the past three years was, an employee of the company;
●
the director or a family member of the director accepted any compensation from the company in excess of $120,000 during any period of 12 consecutive months within the three years preceding the independence determination (subject to certain exclusions, including, among other things, compensation for board or board committee service);
●
a family member of the director is, or at any time during the past three years was, an executive officer of the company;
●
the director or a family member of the director is a partner in, controlling stockholder of, or an executive officer of an entity to which the company made, or from which the company received, payments in the current or any of the past three fiscal years that exceed 5% of the recipient’s consolidated gross revenue for that year or $200,000, whichever is greater (subject to certain exclusions);
●
the director or a family member of the director is employed as an executive officer of an entity where, at any time during the past three years, any of the executive officers of the company served on the compensation committee of such other entity; or
●
the director or a family member of the director is a current partner of the company’s outside auditor, or at any time during the past three years was a partner or employee of the company’s outside auditor, and who worked on the company’s audit.
ITEM 14.
ITEM 14.
PRINCIPAL ACCOUNTING FEES AND SERVICES.
Audit Fees
For the Company’s fiscal years ended June 30, 2011 and June 30, 2010, we were billed approximately $9,200 and $2,000, respectively, for professional services rendered for the audit and reviews of our financial statements.
Audit Related Fees
The Company did not incur any audit related fees, other than the fees discussed in Audit Fees, above, for services related to our audit for the fiscal years ended June 30, 2011 and June 30, 2010.
Tax Fees
For the Company’s fiscal years ended June 30, 2011 and June 30, 2010, we were not billed for professional services rendered for tax compliance, tax advice, and tax planning.
All Other Fees
The Company did not incur any other fees related to services rendered by our principal accountant for the fiscal years ended June 30, 2011 and June 30, 2010.
Pre-Approval of Services
We did not incur any other fees related to services rendered by our independent registered public accounting firm for the fiscal years ended June 30, 2011 and 2010.
The SEC requires that before our independent registered public accounting firm is engaged by us to render any auditing or permitted non-audit related service, the engagement be either: (i) approved by our Audit Committee or (ii) entered into pursuant to pre-approval policies and procedures established by the Audit Committee, provided that the policies and procedures are detailed as to the particular service, the Audit Committee is informed of each service, and such policies and procedures do not include delegation of the Audit Committee’s responsibilities to management.
We do not have an Audit Committee. Our Board of Directors pre-approves all services provided by our independent registered public accounting firm. All of the above services and fees during 2011 and 2010 were pre-approved by our Board of Directors.
PART IV
ITEM 15.
ITEM 15.
EXHIBITS, FINANCIAL STATEMENT SCHEDULES.
(a) Documents filed as part of this Annual Report.
1.
Report of Independent Registered Public Accounting Firm
Balance Sheets as of June 30, 2011 and June 30, 2010
Statements of Operations for the year ended June 30, 2011 and the one day period ended June 30, 2010
Statements of Changes in Stockholders’ Deficiency for the year ended June 30, 2011 and the one day period ended June 30, 2010
Statements of Cash Flows for the year ended June 30, 2011 and the one day period ended June 30, 2010
Notes to Financial Statements
2.
Financial Statement Schedules
3.
Exhibits required to be filed by Item 601 of Regulation S-K
Please see the “Exhibit Index,” which is incorporated herein by reference, following the signature page for a list of our exhibits.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
Signature
Title
Date
/s/ Hua Zhang
President and Chief Executive Officer, Chief Financial and Accounting Officer
September 29, 2011
Hua Zhang
(Duly Authorized Officer, Principal Executive Officer and Principal Financial Officer)
Pursuant to the requirements of the Securities Exchange Act of 1934 this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
Signature
Title
Date
/s/ Hua Zhang
President, Chief Executive Officer,
September 29, 2011
Hua Zhang
Sole Director
Exhibit Number
Description
(1)
Incorporated by reference to the Registration Statement on Form 10 filed on July 20, 2010, as amended.
(2)
Incorporated by reference to the Current Report on Form 8-K filed on January 27, 2011, as amended.
*
Filed herewith
+
Furnished herewith