Attached files
| file | filename |
|---|---|
| EX-31 - CERTIFICATION - CHINA EDUCATION INTERNATIONAL, INC. | ex31.htm |
| EX-32 - CERTIFICATION - CHINA EDUCATION INTERNATIONAL, INC. | ex32.htm |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-K
[X] Annual Report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the period ended: June 30, 2010.
[ ] Transition Report pursuant to 13 or 15(d) of the Securities
Exchange Ac of 1934
For the transition period from to
Commission File Number: 333-137437
USChina Channel, Inc.
__________________________________________________
(Exact name of Small Business Issuer as specified in its charter)
Nevada 20-4854568
-------------------------------- ----------------------------------
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
665 Ellsworth Avenue, Connecticut 06511
(Address of principal executive offices) (Postal or Zip Code)
Issuer's telephone number, including area code: 203-844-0809
Securities registered pursuant to Section 12(b) of the
Exchange Act: None
Securities registered pursuant to Section 12(g) of the Exchange Act:
Common Stock, par value $.001 per share
Check whether the Issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes [x] No [ ]
Check if there is disclosure of delinquent filers in response to Item 405 of Regulation S-B is not contained in this form, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [ ]
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See
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the definitions of “large accelerated filer", " accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer [ ] Accelerated filer [ ]
Non-accelerated filer [ ](Do not Small reporting company [x]
check if smaller reporting company)
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes [ ] No[x]
The issuer's revenues for the its most recent fiscal year: $0
The number of shares outstanding of the issuer's Common Stock, $.001 par value, as of October 8, 2010 was 1,265,456 shares.
Documents Incorporated By Reference: See Part IV Item 15.
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TABLE OF CONTENTS
TO ANNUAL REPORT ON FORM 10-K
FOR YEAR ENDED JUNE 30, 2010
Page
PART I
Item 1. Description of Business -------------------------------- 4
Item 1A. Risk Factors ------------------------------------------- 5
Item 1B. Unresolved Staff Comments ------------------------------ 7
Item 2. Description of Property -------------------------------- 7
Item 3. Legal Proceedings ------------------------------------ 7
Item 4. Reserved ------------------------------------------------ 7
PART II
Item 5. Market for Registrant’s Common Equity and
related Stockholder Matters --------------------------- 8
Item 6. Selected Financial Data --------------------------------- 8
Item 7. Management’s Discussion and Analysis or Plan
of Operation ---------------------------- 8
Item 7A. Quantitative and Qualitative Disclosures About
Market Risk ---------------------------------- 9
Item 8. Financial Statements ---------------------------- 10
Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosures -------------------23
Item 9A. Controls and Procedures ----------------------------- 23
PART III
Item 10. Directors, Executive Officers of the Registrant -------- 24
Item 11. Executive Compensation -------------------------------- 25
Item 12. Security Ownership of Certain Beneficial
Ownership Management ----------------------------------25
Item 13. Certain Relationships and Related Transactions -------- 26
Item 14. Principal Accountant Fees and Services ----------------- 26
Part IV
Item 15. Exhibits ---------------------------------------------- 27
Signatures ------------------------------------------------------ 27
(REMAINDER OF PAGE INTENTIONALLY LEFT BLANK)
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FORWARD-LOOKING STATEMENTS
Subject to Section 21 E, of the exchange Act, this Annual Report on Form 10-K contains forward-looking statements. The forward-looking statements are based on our current goals, plans, expectations, assumptions, estimates and predictions regarding the Company.
When used in this Annual Report, the words "plan", "believes," "continues," "expects," "anticipates," "estimates," "intends", "should," "would," "could," or "may," and similar expressions are intended to identify forward looking statements.
Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, events or growths to be materially different from any future results, events or growths expressed or implied in this Annual Report.
PART I
Item 1: Description of Business:
USChina Channel Incorporation ("the Company") was incorporated in the State of Nevada on April 26, 2006. The Company's website address is at:
www.uschinachannel.net
The Company is in the development stage and has not yet commenced operations or generated any revenue. Although the Company raised small amount of capital in August 2007, the auditor is concerned that the Company may not have the ability to continue its business if the Company doesn't generate revenue and profits in operation.
It remains the Company’s intention to furnish following business services:
a. Preparing SEC filings for Chinese companies, as well as US "shell"
companies that are willing to conduct merger transactions.
b. Making text format conversion, and Edgar electronic filing for Forms
10-Q,10-K,14C,S-1, S-3, 8-K, Form 3's, 4's and 5's and other SEC forms.
c. Agency services for exhibits, including FREE demonstrations,
d. Making budget plans.
e. Document preparation for shareholder meetings.
f. Arranging displays and exhibit or display booths.
g. Agency services for conferences or road shows to prepare documents to
assist executives with company presentations.
h. Patent broker services, including patent filings.
The target market will be small to medium size private companies in the
People's Republic of China, which wish to become publicly listed through either an IPO (Initial Public Offering) or a "reverse" merger with a public "shell" company. Our target market further includes Chinese companies that are already publicly listed in the US, Canada, or Europe, who wish to hire our Company to provide our services such as filings, road shows, trade shows, conferences, and other business services, of which they presently lack.
However, there is intense competition existing in the Chinese business
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service area, especially in the massive financial market. There are many lawyers who perform SEC filing work. Many professionals are now bi-lingual, understanding both English and Chinese, and there are many full service companies that are replacing the "one individual" item service Company. Our Company does not provide legal advice, nor does it perform investment advisor services. This may limit the number of customers the Company can acquire.
At the present time, the Company does not have any paid employees. Mr. Chien, and Mr. Li, the Company's two officers, currently serves without compensation except Mr. Li being paid 2500 restricted shares in 2009.
To invest in our company has very high risk. Please see “Risk Factors” in following Item 1A, and Item 7, Management’s Discussion and Analysis or Plan of Operation.
Item 1A. Risk Factors
An investment in our common stock involves a high degree of risk. You should carefully consider the following risk factors and information provided in this annual report and other filings. If any of the following risks actually occur, our business, financial condition, or results of operations could be materially and adversely affected.
Risks Relating To Our Business
We have no operating history and our operating results are unpredictable.
We have no operations. However, we have experienced a loss since inception due to expenses associated with becoming a public entity and start-up. We established the Company as a Nevada corporation in April of 2006. Shortly thereafter, we applied to the SEC to become an EDGAR filer, and we granted such status on June 28, 2006. Although we believe that we are capable of generating revenue from our intended business, our management does not have much experience in filing SEC documents, since we are in business for a short period. We have not realized any revenue yet, and we do not have any customers to date. We are in the developmental stage, but there is no certainty that our business will ultimately prove successful.
We will incur increased costs as a result of being a public company.
Conducting our business as a public company has caused us to incur significant accounting and other expenses that we did not have as a private company. In addition, the Sarbanes-Oxley Act, as well as certain rules implemented by the SEC, require changes in corporate governance practices of public companies. These new rules and regulations will increase our legal, accounting and financial compliance costs and will require additional staff time.
Our auditors have raised substantial doubt about our ability to continue as a going concern.
Because we do not have sufficient working capital necessary to pursue our business objectives, our auditors have expressed their opinion that we may fail in the future if we do not generate revenue and get profits soon. This opinion must be disclosed to all potential investors and other sources of capital, which may adversely affect our ability to raise capital. Shareholders and creditors' confidence may be very low in evaluating our Company. If we are successful in acquiring a loan or a line of credit, we may be charged a much higher interest rate because of our financial condition.
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We do not yet have any substantial assets, and we only raised small funds in past finance offering.
After our SB2 being effective on May 10, 2007, we raised capital about $68,050 before August 21, 2007. On May 14, 2008 we issued 24,356 shares to Officer Andrew Chien to offset his free of interests loan of $12,178. From inception till June 30, 2010, we got total financing of over $ 80,000 with accumulated operating deficit of over $137,000, among which approximately $47,000 were cash loss. Although we raised some capital, which still is a small amount as a public company, we only have assets in cash of about $33,700 on June 30, 2010.
Our Officer, Mr. Chien, has limited financial capability, and has to run another outside business. He may be unable to devote his enough time to the Company, if another business fails.
Mr. Chien, our President, is also responsible for the operations of another company, USChina Channel LLC, which has similar clientele but some different services than USChina Channel Inc. In May 2008, Andrew Chien applied himself as an independent SEC file agency. The activities of the LLC may constantly occupy his time, which may result in interruptions or delays in our customer service for our Company. Also the profitability of LLC greatly affected his financial capability to perform his services for the Company without compensation. The failure of his business in LLC may cause him to cease the operation of our Company.
We are subject to the many risks of doing business in China.
Any slow down in the economy of China could reduce the demand for our services. Our business, financial condition, results of operations and prospects are affected significantly by economic, political, legal developments, or the changes in the regulations and rules of the financial industry in China.
We are subject to the risk of SEC regulation change.
Our potential customers are interested in "reverse mergers" with a US, or Canadian "shell" Company. Any future SEC regulation changes that affect "reverse mergers" and "back door registrations" will greatly influence our potential number of customers.
We have no business insurance .
We have no business insurance to basically cover losses resulting from business interruptions, theft, or unanticipated legal expenses. For example, in our website, we previously published some article to make statements that some Chinese company had noncompliance with the federal securities laws. Such statements purely based on our opinions, not based on findings by a court or regulatory body. Such statements may cause some parties to seek legal remedies against us, which may yield the unanticipated legal expenses to hurt our business substantially.
If we grant employee share options or other share-based compensation in the future, our net income per share could be negatively affected.
If we are forced to pay employees or business cooperators with stock, or stock options for services already performed, we may substantially reduce the worth of each share.
Foreign currency exchange policy in China could adversely affect our profitability.
In China, it is not free for any business or person to exchange Chinese currency (RMB) into US dollars. Some payments to us may be in RMB. We would need assistance to change RMB into dollars, which could incur fees. This may
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reduce our profits. The fluctuations of the foreign currency exchange rate may also affect our revenues and operating proceeds.
Our sole director controls our Company.
Our sole director, Mr. Chien currently owns over 84% of the outstanding common stock. He will be the only individual in a position to elect directors, and members of the Audit Committee. The minority shareholders will not have any control over the Company.
We are dependent upon our officer Mr. Chien to develop our business.
We have no employees and are solely dependent upon our officer, Mr. Chien, to create and maintain our business. We do not carry a "key person" life insurance policy on Mr. Chien. The loss of Mr. Chien could have a material adverse affect on our Company. However, Mr. Chien has stated that he has no intention of leaving the Company.
Risks Related to Our Securities
We must comply with penny stock regulations, which could effect the liquidity and price of our stock.
Our common stock was traded in the OTCBB as a “penny stock”, which generally is the equity security with a price of less than $5.00. The SEC has adopted rules that regulate broker-dealer practices in connection with transactions in "penny stocks." These rules may have the effect of reducing the level of trading activity in the secondary market for our stock. The investors may find it more difficult to sell the shares.
We do not anticipate paying any cash dividends in the foreseeable future.
We do not plan to pay any cash dividends in the foreseeable future. Any return on your investment would derive from an increase in the price of our stock, which may or may not occur.
Sales of the common stock offered at par value may cause the market price for the common stock to decrease.
A total of 1,060,000 shares of common stock were sold at par value, which is substantially less than the offering price of the shares being offered to investors in August 2007's offering. If these shares were planned to sell in the future, the sales may cause the market price of the common stock to decrease. However, all of the shares of common stock are restricted securities as defined under Rule 144 of the Securities Act; meaning the stock may be eligible for sale after a period of six months, subject to timing, limits of sale quantity, and sale restrictions.
Item 1B. Unresolved Staff Comments
None.
Item 2. Description of Property:
The Company does not own or lease offices or property of any kind. Mr. Chien supplies the Company with office space and office equipment on rent-free.
Item 3. Legal Proceedings:
None.
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Item 4. Reserved
PART II
Item 5. Market for Registrant’s Common Equity and related Stockholder Matters.
a. Market Information.
Our common stock, par value $0.001, is listed on the Over-The-Counter Bulletin Board ("OTCBB") under the symbol "USCC". The trade price range was between $2.00 and $0.75 per share.
b. Holders
As of September 30, 2010, we had approximately 45 registered stockholders of our common stock on record. This number includes shares held by brokerage clearing houses, depositories or otherwise in unregistered form.
c. Dividends.
The company distributed 122,500 shares, with total costs of $123, of USChina Taiwan to its shareholders of the recorded date of March 9, 2010. The distribution ratio is 1 for 10. That means one share of USChina Taiwan Inc common stock will issue to the owner of 10 shares of USChina Channel Inc. For every shareholder or per brokerage account, the minimum dividends are 100 shares regardless of how many shares he (she, or the brokerage account) owns.
d. Securities Authorized for Issuance under Equity Compensation
The company's Secretary Mr. Li was paid 2500 restricted shares as his compensation, and Andrew Chien, CEO, determines the payment under certain circumstance consideration. Future equity compensation for officers may or may not happen, since there is no equity compensation plan for officers.
e. Recent Sales of Unregistered Securities
In November 2009, the company issued 42,500 restricted shares for outside services.
.
Item 6. Selected Financial Data
Financial Highlights
_($)_____________________________________________________________________
Fiscal Year Ended June 30, 2010 2009
Revenue 0 0
Income (Loss) from Operation (99,425) (16,866)
Net Income (Loss) (99,081) (16,197)
Cash & Cash Equivalents 33,771 42,852
Liabilities 0 0
Shareholder Equities 33,771 42,852
_________________________________________________________________________
Item 7. Management’s Discussion and Analysis or Plan of Operation:
After our SB2 being effective on May 10, 2007, we raised capital about $68,050 before August 21, 2007. On May 14, 2008 we issued 24,356 shares to Officer Andrew Chien to offset his free of interests loan of $12,178. From inception till June 30, 2010, we got total cash financing of over $ 80,000 with
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approximately $47,000 operating cash loss among accumulated operating deficit of over $137,000. Although we had raised some capital, which still is a small amount as a public company, Mr. Chien would need to perform the majority of the work without compensation before we generate decent revenue. We anticipate that we will have sufficient capital to cover our expenses for the next twelve months under current operation.
Since we are in the initial stages of developing our business, there is no assurance that there will be sufficient demand for our services to allow us to operate profitably. Our auditors have determined that we do not currently have sufficient working capital necessary to be successful. As a result, our auditors have raised substantial doubt about our ability to continue. On June 30, 2010, the cash balance on hand for the Company was about $33,700.
After the financial crisis, the service area for USA public and China operated companies has a lot of change. China has become the world's largest IPO Market in the first nine month of 2010, and the quick development of Chinese stock market makes USA market relative less attractive to Chinese operated companies. Although the accumulated number of Chinese operated companies listed in USA has over 500. The new listing Chinese companies for OTCBB has greatly reduced in past twelve months. Most companies are interested in immediately financing, and want to list in NASDAQ, and they are reluctant to pay high front costs for USA public listing. On the other hand, some companies, whose stock traded in OTCBB for a couple of years without any financing yet, complained about the high auditing fee and other maintenance costs of the keeping public in USA. Some is willing to withdraw as OTCBB quoting in order to reduce the overhead costs.
In order to meet the challenge, we are in the explore of new services such as
(1) to serve more in financing, and try to contact more venture capitals for potential customers;
(2) to expand SEC file services such as Edgar html format and XBRL format services for those already USA public companies. As XBRL format filing for financial statements is dominant after June 2011, to serve issuers for XBRL format at lower costs will become an additional opportunities for us to engage in new customers;
(3) to pay more attention to the companies quoted in the pink sheet.
Although, USChina Channel hasn't generated any revenue, the company feels more potential ahead. Andrew Chien, in his personal business USChina Channel LLC, represented some public companies to do SEC filings currently. As these services become stable, long term, and generating certain amount of revenue, they will become our company's business due to the market agreement between our company and USChina Channel LLC dated October 3, 2006. Even though, there is no guarantee that the Company would be able to complete any of the objectives and attain profitability in the foreseeable future.
We also may change our business strategy. One consideration is to raise capital and then look for a high growth operating company in China or a develop stage company in USA to do reverse merger, which may increase our shareholder value quickly.
On November 17, 2009, our company entered a letter of intent (LOI) with Shandong FangXing Technology Development Co., Ltd.("FangXing"), Shandong, China for the reverse merger purpose.
In December 2009, Andrew Chien visited China and met with major managers of FangXing. So far, FangXing hasn't submitted its auditing financial statements.
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Due to the term of LOI, the merger intention with FangXing expired in March 2010. We will continue to do the best to find a proper candidate to consider the reverse merger while we continue to operate our own business. Even we would find the merger partner, the operation of USChina will separate into an independent entity.
On March 5, 2010, Andrew Chien, our CEO, with Ching-Sang Hong, a financial consultant in Taiwan, signed "Business Operating Agreement"
("Agreement"), which specified that 1. Ching-Sang Hong will join USChina Channel to operate USChina Taiwan Inc for launching the financial consulting service business in Taiwan. 2. USChina Taiwan Inc will separate from USChina Channel Inc as an independent company, in which Ching-Sang Hong will take 90% of the outstanding shares, and the shareholders of USChina Channel Inc will take 10% of the outstanding shares as special dividends, which will be paid by USChina Channel; and the distribution of these shares will follow the rules of Article V. Section 2 of By-Laws of USChina Channel, which gave every shareholder rejection right in distributing USChina Taiwan's shares; 3. Ching-sang Hong will personally bear all costs of separating USChina Taiwan Inc from the parent company. USChina Channel capital representatives approved this agreement unanimously except abstaining, on March 14, 2010. Then Andrew Chien, as a SEC file agency for USChina Taiwan filed Form S-1, which was effective on September 24, 2010.
Results of Operations for the Fiscal Year Ended June 30, 2010
We did not earn any revenues and incurred operating expenses in the amount of $99,081 for the year ended June 30, 2009, compared with operating expenses in the amount of $16,197 for the year ended June 30, 2009. The expenses were mainly used to the preparation of the unsuccessful reverse merger and paying the expenses of entering and maintaining our company as a public entity.
We have not attained profitable operations and are dependent upon existing financing to complete our proposed business plan. For these reasons, there is substantial doubt that we will be able to continue as a going concern.
Off-Balance Sheet Arrangements:
None.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
Interest Rates:
Our exposure to market risk for changes in interest rates relates primarily to our short-term investments; thus, fluctuations in interest rates would not have a material impact on the fair value of these securities. At June 30, 2010, we had approximately $33,700 in cash and cash equivalents.
Exchange Rates:
From 2001 until June 2005, the exchange rate of the RMB yuan to the U.S. dollar ranged within a narrow band of $0.12080 to 0.12083 to 1 RMB yuan. Beginning in July 2005, the Chinese government has permitted the value of the yuan to float within a broader range against the dollar and as a result the yuan has slowly risen against the dollar, and traded approximately $0.14925 to 1 RMB yuan recently. The downtrend of US dollar increased the affordability of the potential Chinese clients for paying various services in USA, and reduced their benefits if they got the financing amount in the US dollars.
Inflation:
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We believe that inflation has not had a material effect on our operations to date.
Item 8. Financial Statements
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and
Stockholders of USChina Channel Inc.
We have audited the accompanying balance sheets of USChina Channel Inc. (A Development Stage Company) as of June 30, 2010 and 2009, and the related statements of operations, stockholders' equity and cash flows for each of the years of the two-year period ended June 30, 2010. 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. The company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of USChina Channel Inc. (A Development Stage Company) as of June 30, 2010 and 2009, and the results of its operations and its cash flows for each of the years in the two-year period ended June 30, 2010 in conformity with accounting principles generally accepted in the United States of America.
The accompanying financial statements have been prepared assuming that USChina Channel Inc. (A Development Stage Company) will continue as a going concern. As discussed in Note 3 to the financial statements, USChina Channel Inc. (A Development Stage Company) has minimal operations, which raises substantial doubt about its ability to continue as a going concern. Management's plans regarding those matters also are described in Note 3. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
/s/Kenne Ruan, CPA, P.C.
Woodbridge, CT
October 7, 2010
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USChina Channel INC.
Consolidated Balance Sheets
As of June 30, 2010 and 2009
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| 6/30/2010 |
| 6/30/2009 |
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Cash |
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| $ 33,771 |
| $ 42,852 |
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Total Current Asset |
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| $ 33,771 |
| $ 42,852 | |
Investment |
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Property |
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Intangible Assets |
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Total Assets |
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| $ 33,771 |
| $ 42,852 |
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Liability and Shareholders equity |
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Current Liability |
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Accounts payable |
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Loan from Officer |
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| $ - | |
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Total Liabilities |
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| $ - | |
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Shareholders' Equity |
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Common shares w/ par value $ 0.001 |
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1,265,456 & 1,220,456 o/s respectively |
| $ 1,265 |
| $ 1,220 | |||
Additional paid-in capital |
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| $ 170,023 |
| $ 80,068 | |
Deficit accumulated in development stage |
| $ (137,517) |
| $ (38,436) | |||
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Total Shareholders' Equity |
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| $ 33,771 |
| $ 42,852 | ||
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Total Liabilities and Shareholders' Equity |
| $ 33,771 |
| $ 42,852 | |||
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USChina Channel INC.
Consolidated Statements of Operations
For Years Ended June 30, 2010 and 2009
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| Year |
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| ended on |
| ended on |
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| 6/30/2010 |
| 6/30/2009 |
Revenue |
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| $ - |
| $ - |
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Gross Profits |
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| $ - |
| $ - |
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Selling expenses |
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| $ - |
| $ - |
General and administration expenses |
| $ 99,425 |
| $ 16,866 | ||
Research and development costs |
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Income (loss) from Operation |
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| $ (99,425) |
| $ (16,866) | |
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Other income (expenses) |
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| $ - |
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Interests income (expenses) |
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| $ 344 |
| $ 669 | |
Income tax |
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| $ - |
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Net income (loss) |
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| $ (99,081) |
| $ (16,197) |
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Eaning Per Share |
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Basic & Diluted |
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| $ (0.08) |
| $ (0.01) |
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Weighted Average Number of Common Shares: |
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Basic & Diluted |
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| 1,250,301 |
| 1,220,556 |
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USChina Channel INC.
Consolidated Statement of Stockholders' Equity
| Common |
| Paid-in |
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| Shares | Par | Capital | Profits | Total | |
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| (Loss) |
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Balance, June 30, 2008 | 1,220,556 | $ 1,220 | $ 80,068 | $ (22,239) | $ 59,049 | |
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Net Profits (Loss) |
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| $ (16,197) |
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Balance, June 30, 2009 | 1,220,556 | $ 1,220 | $ 80,068 | $ (38,436) | $ 42,852 | |
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Net Profits (Loss) |
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Shares returned |
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for cancelled service | -100 |
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Shares Issued for Services | 42,500 | $ 42 | $ 84,958 |
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Stock-based Compensation | 2,500 | $ 3 | $ 4,997 |
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Net Profits (Loss) |
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| $ (99,081) |
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Balance, June 30, 2010 | 1265456 | $ 1,265 | $ 170,023 | $(137,517) | $ 33,771 | |
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USChina Channel INC.
Consolidated Statements of Cash Flows
For Years Ended June 30, 2010 and 2009
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| Year |
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| ended on |
| ended on |
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| 6/30/2009 |
| 6/30/2009 |
Cash Flow from operating activities |
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Net Income (Loss) |
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| $ (99,082) |
| $ (16,197) | |
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Net cash provided by operating activity |
| $ (99,082) |
| $ (16,197) | ||
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Adjustments to reconcile net income (loss) to |
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Costs of common stocks issued for consultant services | $ 85,000 |
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Common stocks to be issued for compensation of officer | $ 5,000 |
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|
| $ - |
| $ - |
Net cash provided by operating activities | $ (9,082) |
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Cash flows from investing activities |
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Cash flows from financing activities |
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Proceeds from sale of common stock |
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Loan from Officer |
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Loan payment to Officer |
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Net cash provided by financing activities |
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Net Increase(decrease) in Cash |
| $ (9,082) |
| $ (16,197) | ||
Cash, beginning at the period |
| $ 42,852 |
| $ 59,049 | ||
Cash, end at the period |
|
| $ 33,770 |
| $ 42,852 | |
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Supplemental Cash Flow Information: |
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Interests (paid ) received: |
| $ 344 |
| $ 669 | ||
Income Tax (paid ) received: |
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15
USChina Channel Inc.
NOTES TO FINANCIAL STATEMENTS
June 30, 2010
1. ORGANIZATIONS AND DESCRIPTION OF BUSINESS
USChina Channel Inc was incorporated in Nevada on April 26, 2006, under the laws of the State of Nevada, for the purpose of providing management services to the small or median sized private companies in the People's Republic of China that want to look for business partners, or agencies, or financing resources, or to become public listing through IPO or reverse merger in the United States, Canada or Europe.
The Company is in the development stage with minimal operations.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Accounting
The accompanying audited financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for annual financial information, and with the rules and regulations of SEC to Form 10-K and Article 8 of Regulation S-X.
The Company has elected a June 30 year-end.
Development Stage Company
The Company is a development stage company as defined by section 915-10-20 of the FASB Accounting Standards Codification. The Company has recognized no revenue since inception, and is still devoting substantially all of its efforts on establishing the business and its planned principal operations have not commenced. All losses accumulated since inception, have been considered as part of the Company’s development stage activities.
Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) 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. Actual results could differ from those estimates.
Cash Equivalents
The Company considers all highly liquid investments with maturity of three months or less when purchased to be cash equivalents.
Fair Value of Financial Instruments
The Company follows paragraph 825-10-50-10 of the FASB Accounting Standards Codification for disclosures about fair value of its financial instruments and
16
paragraph 820-10-35-37 of the FASB Accounting Standards Codification (“Paragraph 820-10-35-37”) to measure the fair value of its financial instruments. Paragraph 820-10-35-37 establishes a framework for measuring fair value in accounting principles generally accepted in the United States of America (U.S. GAAP), and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, Paragraph 820-10-35-37 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The three levels of fair value hierarchy defined by Paragraph 820-10-35-37 are described below:
·
Level 1 Quoted market prices available in active markets for identical assets or liabilities as of the reporting date.
·
Level 2 Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date.
·
Level 3 Pricing inputs that are generally unobservable inputs and not corroborated by market data.
The Company does not have any assets or liabilities measured at fair value on a recurring or a non-recurring basis, consequently, the Company did not have any fair value adjustments for financial assets and liabilities measured at fair value at June 30, 2010, nor gains or losses are reported in the statement of operations that are attributable to the change in unrealized gains or losses relating to those assets and liabilities still held at the reporting date for the fiscal year ended June 30, 2010.
Revenue Recognition
The Company will apply paragraph 605-10-S99-1 of the FASB Accounting Standards Codification for revenue recognition. The Company will recognize revenue when it is realized or realizable and earned. The Company will consider revenue realized or realizable and earned when all of the following criteria are met: (i) persuasive evidence of an arrangement exists, (ii) the product has been shipped or the services have been rendered to the customer, (iii) the sales price is fixed or determinable, and (iv) collectability is reasonably assured.
Income Taxes
The Company will account for income taxes under Section 740-10-30 of the FASB Accounting Standards Codification. Deferred income tax assets and liabilities are determined based upon differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized. 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 the statements of operations in the period that includes the enactment date.
The Company adopted section 740-10-25 of the FASB Accounting Standards Codification (“Section 740-10-25”). Section 740-10-25 addresses the
17
determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under Section 740-10-25, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than fifty percent (50%) likelihood of being realized upon ultimate settlement. Section 740-10-25 also provides guidance on de-recognition, classification, interest and penalties on income taxes, accounting in interim periods and requires increased disclosures. The Company had no material adjustments to its liabilities for unrecognized income tax benefits according to the provisions of Section 740-10-25.
Net Loss Per Common Share
Net loss per common share is computed pursuant to section 260-10-45 of the FASB Accounting Standards Codification. Basic net loss per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period. Diluted net loss per share is computed by dividing net loss by the weighted average number of shares of common stock and potentially outstanding shares of common stock during each period. There were no potentially dilutive shares outstanding as of June 30, 2010.
Recently Issued Accounting Standards
In June 2003, the Securities and Exchange Commission (“SEC”) adopted final rules under Section 404 of the Sarbanes-Oxley Act of 2002, as amended by SEC Release No. 33-8934 on June 26, 2008. Commencing with the Company’s Annual Report for the fiscal year ending June 30, 2011, the Company is required to include a report of management on the Company’s internal control over financial reporting. The internal control report must include a statement of management’s responsibility for establishing and maintaining adequate internal control over financial reporting for the Company; of management’s assessment of the effectiveness of the Company’s internal control over financial reporting as of year-end; of the framework used by management to evaluate the effectiveness of the Company’s internal control over financial reporting; and that the Company’s independent accounting firm has issued an attestation report on management’s assessment of the Company’s internal control over financial reporting, which report is also required to be filed as part of the Annual Report on Form 10-K.
In June 2009, the FASB approved the “FASB Accounting Standards Codification” (the “Codification”) as the single source of authoritative nongovernmental U.S. GAAP to be launched on July 1, 2009. The Codification does not change current U.S. GAAP, but is intended to simplify user access to all authoritative U.S. GAAP by providing all the authoritative literature related to a particular topic in one place. All existing accounting standard documents will be superseded and all other accounting literature not included in the Codification will be considered non-authoritative. The Codification is effective for interim and annual periods ending after September 15, 2009. The adoption did not have a material impact on the Company’s financial position, results of operations or cash flows.
In August 2009, the FASB issued the FASB Accounting Standards Update No. 2009-04, Accounting for Redeemable Equity Instruments - Amendment to Section 480-10-S99, which represents an update to section 480-10-S99, distinguishing
18
liabilities from equity, per EITF Topic D-98, Classification and Measurement of Redeemable Securities. The Company does not expect the adoption of this update to have a material impact on its consolidated financial position, results of operations or cash flows.
In August 2009, the FASB issued the FASB Accounting Standards Update No. 2009-05, Fair Value Measurement and Disclosures Topic 820 – Measuring Liabilities at Fair Value, which provides amendments to subtopic 820-10, Fair Value Measurements and Disclosures – Overall, for the fair value measurement of liabilities. This Update provides clarification that in circumstances in which a quoted price in an active market for the identical liability is not available, a reporting entity is required to measure fair value using one or more of the following techniques: 1. A valuation technique that uses: a. The quoted price of the identical liability when traded as an asset b. Quoted prices for similar liabilities or similar liabilities when traded as assets. 2. Another valuation technique that is consistent with the principles of topic 820; two examples would be an income approach, such as a present value technique, or a market approach, such as a technique that is based on the amount at the measurement date that the reporting entity would pay to transfer the identical liability or would receive to enter into the identical liability. The amendments in this Update also clarify that when estimating the fair value of a liability, a reporting entity is not required to include a separate input or adjustment to other inputs relating to the existence of a restriction that prevents the transfer of the liability. The amendments in this Update also clarify that both a quoted price in an active market for the identical liability when traded as an asset in an active market when no adjustments to the quoted price of the asset are required are Level 1 fair value measurements. The Company does not expect the adoption of this update to have a material impact on its consolidated financial position, results of operations or cash flows.
In September 2009, the FASB issued the FASB Accounting Standards Update No. 2009-08, Earnings Per Share – Amendments to Section 260-10-S99, which represents technical corrections to topic 260-10-S99, Earnings per share, based on EITF Topic D-53, Computation of Earnings Per Share for a Period that includes a Redemption or an Induced Conversion of a Portion of a Class of Preferred Stock and EITF Topic D-42, The Effect of the Calculation of Earnings per Share for the Redemption or Induced Conversion of Preferred Stock. The Company does not expect the adoption of this update to have a material impact on its consolidated financial position, results of operations or cash flows.
In September 2009, the FASB issued the FASB Accounting Standards Update No. 2009-12, Fair Value Measurements and Disclosures Topic 820 – Investment in Certain Entities That Calculate Net Assets Value Per Share (or Its Equivalent), which provides amendments to Subtopic 820-10, Fair Value Measurements and Disclosures-Overall, for the fair value measurement of investments in certain entities that calculate net asset value per share (or its equivalent). The amendments in this Update permit, as a practical expedient, a reporting entity to measure the fair value of an investment that is within the scope of the amendments in this Update on the basis of the net asset value per share of the investment (or its equivalent) if the net asset value of the investment (or its equivalent) is calculated in a manner consistent with the measurement principles of Topic 946 as of the reporting entity’s measurement date, including measurement of all or substantially all of the underlying investments of the investee in accordance with Topic 820. The amendments in this Update also require disclosures by major category of investment about the attributes
19
of investments within the scope of the amendments in this Update, such as the nature of any restrictions on the investor’s ability to redeem its investments at the measurement date, any unfunded commitments (for example, a contractual commitment by the investor to invest a specified amount of additional capital at a future date to fund investments that will be make by the investee), and the investment strategies of the investees. The major category of investment is required to be determined on the basis of the nature and risks of the investment in a manner consistent with the guidance for major security types in U.S. GAAP on investments in debt and equity securities in paragraph 320-10-50-1B. The disclosures are required for all investments within the scope of the amendments in this Update regardless of whether the fair value of the investment is measured using the practical expedient. The Company does not expect the adoption to have a material impact on its consolidated financial position, results of operations or cash flows.
In January 2010, the FASB issued the FASB Accounting Standards Update No. 2010-01 Equity Topic 505 – Accounting for Distributions to Shareholders with Components of Stock and Cash, which clarify that the stock portion of a distribution to shareholders that allows them to elect to receive cash or stock with a potential limitation on the total amount of cash that all shareholders can elect to receive in the aggregate is considered a share issuance that is reflected in EPS prospectively and is not a stock dividend for purposes of applying Topics 505 and 260 (Equity and Earnings Per Share (“EPS”)). Those distributions should be accounted for and included in EPS calculations in accordance with paragraphs 480-10-25-14 and 260-10-45-45 through 45-47 of the FASB Accounting Standards codification. The amendments in this Update also provide a technical correction to the Accounting Standards Codification. The correction moves guidance that was previously included in the Overview and Background Section to the definition of a stock dividend in the Master Glossary. That guidance indicates that a stock dividend takes nothing from the property of the corporation and adds nothing to the interests of the stockholders. It also indicates that the proportional interest of each shareholder remains the same, and is a key factor to consider in determining whether a distribution is a stock dividend.
In January 2010, the FASB issued the FASB Accounting Standards Update No. 2010-02 Consolidation Topic 810 – Accounting and Reporting for Decreases in Ownership of a Subsidiary – a Scope Clarification, which provides amendments to Subtopic 810-10 and related guidance within U.S. GAAP to clarify that the scope of the decrease in ownership provisions of the Subtopic and related guidance applies to the following:
·
A subsidiary or group of assets that is a business or nonprofit activity
·
A subsidiary that is a business or nonprofit activity that is transferred to an equity method investee or joint venture
·
An exchange of a group of assets that constitutes a business or nonprofit activity for a noncontrolling interest in an entity (including an equity method investee or joint venture).
The amendments in this Update also clarify that the decrease in ownership guidance in Subtopic 810-10 does not apply to the following transactions even if they involve businesses:
20
·
Sales of in substance real estate. Entities should apply the sale of real estate guidance in Subtopics 360-20 (Property, Plant, and Equipment) and 976-605 (Retail/Land) to such transactions.
·
Conveyances of oil and gas mineral rights. Entities should apply the mineral property conveyance and related transactions guidance in Subtopic 932-360 (Oil and Gas-Property, Plant, and Equipment) to such transactions.
If a decrease in ownership occurs in a subsidiary that is not a business or nonprofit activity, an entity first needs to consider whether the substance of the transaction causing the decrease in ownership is addressed in other U.S. GAAP, such as transfers of financial assets, revenue recognition, exchanges of nonmonetary assets, sales of in substance real estate, or conveyances of oil and gas mineral rights, and apply that guidance as applicable. If no other guidance exists, an entity should apply the guidance in Subtopic 810-10.
Management does not believe that any other recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect on the accompanying consolidated financial statements.
3. GOING CONCERN
For the fiscal year ended June 30, 2010, the company has operation loss $99,081 and cash outflow of $9,082. From inception till June 30, 2010, the Company has accumulated operating deficit of $137,517, and cash outflow over $45,000, and total cash financing of over $ 80,000. There is no guarantee that the Company will be able to generate revenue to get the positive cash flow at the foreseeable future. The continuous operating loss and necessary higher costs to keep public listing would still raise the doubt about the Company's ability to continue as a going concern. The Company will try to raise capital again. However, there is no guarantee that it will be successful.
4. WARRANTS AND OPTIONS
There are no warrants or options outstanding to acquire any additional shares of common stocks.
5. RELATED PARTY TRANSACTIONS
The Company neither owns nor leases any real or personal property. Mr. Andrew Chien has provided the office and furniture without any charges.
6. INCOME TAXES
As of June 30, 2010
Deferred tax assets:
Net operating tax carry forwards $ 137,517
Other 0
Valuation allowance 137,517
Net deferred tax assets $ (0)
Realization of deferred tax assets is dependent upon sufficient future taxable income during the period that deductible temporary differences and carry-forwards are expected to be available to reduce taxable income. As the
21
achievement of required future taxable income is uncertain, the Company recorded a valuation allowance.
7. NET OPERATING LOSSES
As of June 30, 2010, the Company has a net operating loss carryforward of $ 137,517 including $ 99,081 generated in this year. Net operating loss carryforward expires twenty years from the date the loss was incurred.
8. STOCK TRANSACTIONS
Transactions, other than employees' stock issuance, are in accordance with paragraph 8 of SFAS 123. Thus issuances shall be accounted for based on the fair value of the consideration received. Transactions with employees' stock issuance are in accordance with paragraphs (16-44) of SFAS 123. These issuances shall be accounted for based on the fair value of the consideration received or the fair value of the equity instruments issued, or whichever is more readily determinable.
On November 2, 2009, the Company issued 42,500 restricted shares to pay outside consultants' services, and 2,500 shares to Kin Yuet Li, Secretary of the Company, for subsidized his services. These shares were valued at $2 per share.
9. STOCKHOLDERS' EQUITY
The stockholders' equity section of the Company contains the following classes of capital stock as of June 30, 2010:
Common stock, $0.001 par value: 75,000,000 shares authorized; 1,265,456 shares outstanding and 239,544 shares of the treasure stock issued on this date of filing.
Class A of Preferred stock, $0.001 par value: 10,000,000 shares authorized; no any share issued and outstanding on this date of filing.
Class B of Preferred stock, $0.001 par value: 50,000,000 shares authorized; no any share issued and outstanding on this date of filing.
10. Non Cash Dividends Distribution and Federal Income Tax Consequence for Dividend Distribution
On March 9, 2010, the Company exercised its purchase promise to purchase 1,225,000 shares of common stock of its subsidiary USChina Taiwan for $1,225, among them, $1,102.5 is paid for Ching-Sang Hong for his purchasing shares of 1,102,500 (Mr. Hong returned the money back to the company on the same day), and $122.5 for purchasing shares of 122,500, which being distributed to its shareholders with record day of March 9, 2010, as non-cash dividends. On March 15, 2010, USChina Taiwan separated from our company as an independent company.
These shares should be considered as a capital asset within the meaning of Section 1221 of the Internal Revenue Code of 1986, as amended. We expect that a U.S. holder receiving our shares in the distribution will be treated as receiving a taxable distribution to the extent of the fair market value of shares received on the distribution date. That distribution would be treated as taxable dividend income to the extent of such holder’s share of USChina Channel Inc’s current and accumulated earnings and profits (as determined for federal
22
income tax purposes), if any. However, USChina Channel does not have any current or accumulated earnings and profits. To the extent the amount of the distribution exceeds such holder’s share of USChina Channel current and accumulated earnings and profits, if any, the distribution would be treated first as a tax-free return of capital to the extent of the U.S. Holder’s adjusted tax basis in its shares of USChina Channel common stock (thus reducing such adjusted tax basis) with any remaining amounts being treated as capital gain from the sale of USChina Channel shares. Tax considerations under state, local and foreign laws, or federal laws other than those pertaining to the income tax, are not addressed here.
Every shareholder of USChina Channel should discuss with its tax advisors to finally consider the federal income tax or other tax consequence of the dividend distribution.
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosures
None.
Item 9A. Controls and Procedures
Evaluation of Disclosure Controls:
We evaluated the effectiveness of our disclosure controls and procedures as of the end of the 2010 fiscal year. This evaluation was conducted with the participation of our chief executive officers and our principal accounting officers.
Disclosure controls are controls and other procedures that are designed
to ensure that information that we are required to disclose in the reports we file pursuant to the Securities Exchange Act of 1934 is recorded, processed, summarized and reported, within the time periods specified in the Commission's rules and forms.
Evaluation of Internal Control Over Financial Reporting:
The management of the Company also is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. A company's internal control over financial reporting is defined as a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Our internal control over financial reporting includes those policies and procedures that (a) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company; (b) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the issuer are being made only with proper authorizations; and (c) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company's assets that could have a material effect on the financial statements.
Management, including the Chief Executive Officer and Chief Financial Officer, does not expect that the Company's disclosure controls and internal controls will prevent all errors and all frauds. Because of its inherent limitations, a
23
system of internal control over financial reporting can provide only reasonable, not absolute, assurance that the objectives of the control system are met and may not prevent or detect misstatements. Further, over time control may become inadequate because of changes in conditions or the degree of compliance with the policies or procedures may deteriorate.
Conclusions:
Based upon their evaluation of our controls, the chief executive officer and principal accounting officer have concluded that, subject to the limitations noted above, the disclosure controls are effective providing reasonable assurance that material information relating to us is made known to management on a timely basis during the period when our reports are being prepared. There were no changes in our internal controls that occurred during the fiscal year covered by this report that have materially affected, or are reasonably likely to materially affect our internal controls.
PART III
Item 10. Directors, Executive Officers, Promoters And Control Persons
All directors of our Company hold office until the next annual meeting of the shareholders, or until their successors have been elected. The officers of our Company are appointed by our board of directors and hold office until their death, resignation or removal from office. As of date of the report, our directors and executive officers are listed below.
Name Age Term Served as Position with the
Director/Officer Company
Andrew Chien 65
April, 2006 President,
Treasurer, CFO,
Director,
Principal Accountant
Kin Yuet Li September, 2008 Secretary
Andrew Chien is the founder of our Company. He also owns USChina Channel LLC, which was established in January 2006. Since 1998, Andrew Chien has been a self-employed, stock market, day-trader and investor. He has engaged in SEC file agency since June 2006.
Mr. Chien was born in China and received his Bachelor of Science degree at The Jiangsu Institute of Technology, Zhengjiang, Jiangsu, China in 1968. He was gainfully employed for eighteen years in China until he came to the United States in 1986. In 1988, he received his Masters degree of Mathematics at the University of Rhode Island. In 1999, he became a US citizen. Mr. Chien's extensive education and professional experience in the both U.S. and in China make him a valuable asset to conduct business for the Company, as he can instinctively understand and negotiate the cultural differences between Chinese individuals and US. Mr. Chien is not an officer or director of any other reporting company.
Kin Yuet Li joined the Company in September 2008 as Secretary. Mr. Li is employed by Queens High School for The Sciences at York College, Jamaica, NY 11451 as Science
24
Laboratory Specialist. He got his Master in Computer & Information Science at the University of New Haven, in August 2000.
On August 17, 2007, Charlene Yu resigned as a Director of our company due to her personnel issues. The Board of Directors has accepted her resignation. Charlene Yu voted on the Board of Directors since inception of the Company. She was not an officer of this company.
Code of Ethics
In April 2006, the Company adopted the Code of Ethics pursuant to Item 406 of Regulation S-K, of which all our officers and employees are bound by. The Code of ethics is intended to promote honest and ethical conduct, full and accurate reporting, and compliance with the law. A copy of the Code of Ethics is included as Exhibit 14 to this registration statement. The full text of the Code of Ethics also posted in the Company's website:
www.uschinachannel.net
A printed copy of the Code of Ethics may be obtained free of charge by writing to the Corporate Secretary at: USChina Channel, INC., 665 Ellsworth Avenue, New Haven, CT 06511.
Item 11. Executive Compensation
To date, we have no employees other than Mr. Chien and Mr. Li. No officer has yet been paid any compensation except Mr. Li being paid 2500 restricted shares in November 2009. We currently have no formal employment agreements or other contractual arrangements with our Officers, Member of Audit Committee, Directors, or anyone else regarding the commitment of time or the payment of salaries or other remuneration.
Mr. Chien will be compensated in the form of a service fee or charge paid from revenues generated by the Company's customers. The amount of his service charge is based upon: (1) primary responsibilities, (2) financial performance of the Company, (3) expected future financial performance of the Company and (4) any other factors that are determined by the board of directors. The commencement of such compensation to Mr. Chien will also be determined at the discretion of our board of directors. The primary consideration when determining the timing of payments to Mr. Chien, if any, will be the financial condition of the Company. Specifically, we anticipate the board to authorize payment only when the Company realizes positive cash flow in any quarterly fiscal period. Mr. Chien's service charge will not exceed $150,000 in any fiscal year.
At this time, we do not anticipate awarding stock options to anyone.
Item 12. Security Ownership of Certain Beneficial Ownership Management
We have set forth in the following table information which is relative to our common stock beneficially owned on June 30, 2010 for:
(1) each shareholder we know to be the beneficial owner of 5% or more
of our outstanding common stock;
(2) each of our executive officers and directors; and
(3) all executive officers and directors as a group.
25
As of June 30, 2010, there were 1,265,456 shares of our Common Stock
issued and outstanding.
Name and Address of Amount of Percent of Class
Beneficial Owner Beneficial Owner Before Offering
Andrew Chien
665 Ellsworth Avenue 1,024,356 81 %
New Haven, CT 06511
Kin Yuet Li
Jackson Height, NY 11375 4,000 0.3 %
Total: 1,028,356 81 %
Item 13. Certain Relationships and Related Transactions
None of our directors or officers, nor any individual who beneficially owns, directly or indirectly, shares carrying more than 10% of the voting rights attached to all of our outstanding shares, nor any relative or spouse of any of the foregoing persons has any material interest, direct or indirect, in any transaction since our incorporation or in any presently proposed transaction which, in either action, has or will materially affect us.
Our only officers, Mr. Chien is the owner of another company: USChina Channel LLC. Although USChina Channel LLC may help the Company to attract new customers, it also may distract Mr. Chien's time. The Company has not formulated a plan for the resolution of such conflicts.
Before the Company got financing in August 2007, the Company was completely dependent upon loans from Mr. Chien to fully fund the operation, due to a financial agreement between Mr. Chien and the Company, dated October 3, 2006.
On May 14, 2008 the Company issued 24,356 shares to Officer Andrew Chien to offset total his free of interests loan of $12,178.
The Company neither owns nor leases any real or personal property. Mr. Chien has provided office and furniture without any charges.
Item 14. Principal Accountant Fees and Services.
Audit Fees:
The fees billed by Kenne Ruan, CPA, P.C. for professional services rendered for auditing the Company’s annual financial statements for the fiscal year ended June 2010 were $1,500.
The fees billed by Kenne Ruan, CPA, P.C. for professional services rendered for auditing the Company’s annual financial statements for the fiscal year ended June 2009 were $1,500.
Audit related fees:
None
26
Tax Fees:
None
All Other Fees:
None
Pre-Approval Policies and Procedures:
All of the auditing and permissible non-auditing services were approved in advance by the Board of Directors in accordance with its procedure. An estimate for the service to be performed should be submitted to our Board of Directors by the accountants before they were engaged to perform particular services.
PART IV
Item 15. Exhibits.
Exhibit Filed ___References In______
No Description_______________________ herewith_ Form Exhibit Filing Date
3.1 Articles of Incorporation SB2 3.1 09/19/06
3.2 Bylaws, as Amendment 8K 3.01 11/29/07
10.1 Issuance of shares exchanging for debt
& Remaining treasury stock retired 8K 06/27/08
31 Section 302 Certification
of CEO & CFO X
32 Section 906 Certification
of CEO & CFO X
Signature:
Pursuant to the requirements of the Securities Exchange Act of 1934, Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
USChina Channel Inc
Dated: October 8, 2010 By: /s/ Andrew Chien
------------------------
Andrew Chien, CEO, CFO
In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
Name Title Date
/s/Andrew Chien CEO & CFO October 8, 2010
Andrew Chien
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