Attached files
| file | filename |
|---|---|
| EXCEL - IDEA: XBRL DOCUMENT - Lans Holdings, Inc. | Financial_Report.xls |
| EX-31.1 - EXHIBIT 31.1 - Lans Holdings, Inc. | ex31_1.htm |
| EX-32.1 - EXHIBIT 32.1 - Lans Holdings, Inc. | ex32_1.htm |
| EX-31.2 - EXHIBIT 31.2 - Lans Holdings, Inc. | ex31_2.htm |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K/A
Amendment No. 1
| [X] | ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
| For the fiscal year ended November 30, 2014 | |
| [ ] | TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT |
| For the transition period from _________ to ________ | |
| Commission file number: 333-148385 |
| Lans Holdings, Inc. | |
| (Exact
name of registrant as specified in its charter) | |
| Nevada | TBA |
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
13 The Concourse, London, UK |
NW9 5AX |
| (Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number: 1442-78-0188 |
|
Securities registered under Section 12(b) of the Exchange Act: | |
| Title of each class | Name of each exchange on which registered |
| none | not applicable |
Securities registered under Section 12(g) of the Exchange Act: | |
Title of each class None | |
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes [ ] No [X]
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes [X] No [ ]
Indicate by checkmark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [ ] No [X]
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). [] Yes [X] No
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. Yes [X] No [ ]
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer [ ] Accelerated filer [ ] Non-accelerated filer [ ] Smaller reporting company [X]
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes [ ] No [X]
State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant’s most recently completed second fiscal quarter. Not available
Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date. 133,300,000 shares as of March 17, 2015.
Explanatory Note
This Amendment No.1 to the Annual Report on Form 10-K/A (the “Amendment”) amends the Annual Report on Form 10-K of Lans Holdings, Inc. (the “Company”) for the year ended November 30, 2014 (the “Original Filing”), that was originally filed with the U.S. Securities and Exchange Commission on March 30, 2015. The Amendment is being filed to include the corrections on the sign off date of the independent auditor’s report and to revise certain financial statements and footnote disclosures.
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PART I
Recent Developments
On November 21, 2014, we executed a license agreement (the “License Agreement”) with PayFlex Systems and Trevor Allen (together, “PayFlex”) for an exclusive worldwide license to use all of PayFlex’s codes, patent and intellectual rights, contracts, permits and licenses in a payment processor business.
The License Agreement granted us the rights to, among other things, a unique platform to allow the seller of products online to enter a few pieces of information to allow them to generate a unique piece of code that will make a buy button to be placed on a seller’s website. The buy button will automatically process payments and keep track of the inventory of the seller’s products.
We are required to compensate PayFlex $150,000 in cash for the license and contribute $200,000 for our own working capital needs within 90 days of closing the License Agreement.
We are also required to issue a number of shares of our common stock necessary to give 55% of the total issued and outstanding shares of our company to PayFlex or its nominees. In addition, we would be required to issue a number of shares of our common stock necessary to give 70% of the total issued and outstanding shares of our company to PayFlex or its nominees on the anniversary of the Licensing Agreement in which our audited filed financial statements for gross annual revenues attributable to the business exceeds (US) $5,000,000.
The license is for twenty years unless terminated earlier as provided for in the License Agreement.
On November 21, 2014, we entered into an Agreement of Conveyance, Transfer and Assignment of Assets and Assumption of Obligations (the “Conveyance Agreement”) with our directors, Eng Kok Yap and Tan Sin Siong. Pursuant to the Agreement, we transferred all assets and business operations associated with hexagon fishing nets to Eng Kok Yap and Tan Sin Siong. In exchange, Eng Kok Yap and Tan Sin Siong agreed to cancel 73,315,000 shares in our company and assume and cancel all liabilities relating to our former business, including officer loans amounting to $100,814, less $25,000 which the Company agreed to pay Mr. Yap in the form of a promissory note. Mr. Yap will retain 1,085,000 shares of common stock in our company.
Since we signed the License Agreement, we have been looking for ways to obtain financing. So far, we have not been able to raise any money. If we are unable to find and secure a suitable means of financing, we may not be able to pay our obligations under the License Agreement and we could go out of business.
Our Business
We have acquired an exclusive license from PayFlex, a Hong Kong company. As a result of the License Agreement, we are now a development stage company seeking to commence a new payment processor business.
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Phase 1
We have acquired a license to a software payment platform. It is an Internet, online system. The platform allows merchants to advertise and sell goods on our online store. The platform also allows merchants to process payments so that they can cash in sales of their goods at our online store.
Traditionally, for an online merchant to sell over the Internet, they need the following:
| • | A registered company |
| • | A bank account set up in person at a branch |
| • | A website |
| • | An online shopping cart |
| • | Software and programming to communicate the payment information from the shopping cart to the payment platform |
| • | A database to store the transaction information |
| • | Another database to store the shipping and product information |
| • | An email system to email the buyer the confirmation of the purchase |
Using our platform, we are able to simplify the online purchase process for merchants. We do this by offering the alternative easy steps:
| • | Register an account on PayFlexsystems.com |
| • | Host products on PayFlexsystems.com |
| • | Allow customers to buy directly at PayFlexsystems.com |
We handle the payment and will send the proceeds back to the seller with the click of a button. We believe that our platform streamlines the selling process for online merchants that are not interesting in the programming necessary to set up ecommerce on their websites. These merchants often lack the technical expertise, financial resources and time to adequately address the evolving payments landscape and are faced with a complex array of products and services offered by a large number of disparate providers. We intend to target these merchants and offer our services.
Our platform is expected to allow anyone (company or individual) to sell a product on our online store with price and quantity indicators. All we do is post the product and it shows up on our page with a buy button. Behind the scenes we will communicate with the complicated banking gateway to authorize the credit card information. We will store the transaction records and the buyer information and will email the buyer the receipt of purchase. We will then notify the merchant of the transactions.
In addition to payment processing, we intend to set up a platform to showcase seller goods, much like amazon.com or a dedicated ebay.com seller page. Currently, we have an online store where merchants can offer goods, the necessary hardware to run the online store and the programming and databases to compliment the entire system. We lack the necessary capital to fund development of some coding and additional hardware, like servers to handle anticipated traffic. Although we have the platform, we will also need to connect to a banking gateway. Additionally, we need to set up a bank account to handle all of the client transactions. We will be able to start selling merchant products once the bank account is set up.
Our revenue model is to take a flat rate fee and then a commission based on a percentage of each transaction. We are targeting new online retail merchants who care less about the fees and more about simplicity. As such, our selling point will focus on ease of use and no hassle processing.
Phase 2
Once established, our platform will allow merchants to sell their products on our website using our payment platform. In the future, we expect to have the capability to offer merchants the ability to have their own website and showcase their own products with a buy button. The buy button will process the payment through PayFlex.com.
The merchants will be provided with the payment button for their own website, and we will handle the rest. The merchants will log on to PayFlex.com to get all the transaction details.
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Phase 3
We know that we may not be able to convert all current online merchants to use our payment system. Many payment systems try to take market share by cutting commissions and transaction fees. We do not intend to compete with them; rather, we will work with them. We wants to introduce a loyalty points processor. Big companies offer digital air miles, bonus points, etc. We want to make a simple, easy to use rewards tracking system for our merchants.
Small retail shops want to offer rewards, but they do not know how to offer them. Stamp cards are an inferior method – they get lost, and the analytics are lost. We want to make a simple tracking system for merchants to manually update their customer points. We believe this is advantageous for the following reasons:
| • | They keep track of the frequency of buyers and habits |
| • | They can offer them their rightfully deserved reward |
| • | They can email the buyer and tell them if they are reaching their reward goal. |
We intend to offer this service as a monthly subscription. It does not interfere with the merchant’s current payment system method because it is not a money transaction. We intend to offer this service as an add-on bonus to enhance customer satisfaction.
Use of Proceeds
We intend to raise $200,000 in the next 90 days. There is no assurance, however, that we will be able to raise this money or even a portion of it. If we are unable to raise capital, we will be unable to implement our business plan and we could fail. If we are able to raise the necessary capital, we intend to use the money as follows:
| • | Complete phase 1 of our business plan |
| • | Buy servers |
| • | Buy more programming to offer more services |
| • | Improve our website |
| • | Make the workflow nice and easy |
| • | Marketing |
| • | Set up banking connection with certified payment Gateways |
| • | Commence Phase 2 – enabling merchants to sell on their own site |
| • | Add all new coding required |
| • | Purchase additional hardware |
| • | Additional coding, hardware and marketing required for Phase 3 |
Competition
The payment processing industry is highly competitive. The level of competition has increased in recent years as other providers of payment processing services have established a sizable market share in the small and medium sized merchant segment. Our primary competitors for these merchants in these markets include financial institutions and their affiliates and well-established payment processing companies that target merchants directly and through third parties, including Bank of America Merchant Services, Chase Paymentech, Elavon, Inc. (a subsidiary of U.S. Bancorp), First Data Corporation, Heartland Payment Systems, Inc., Vantiv, Inc., Global Payments, Inc. and Wells Fargo. Competing with financial institutions is challenging because they often bundle merchant acquiring services with other banking products. Our growth will depend on the continued growth of electronic payments and our ability to increase our market share through successful competitive efforts to gain new merchants.
In addition, many financial institutions, subsidiaries of financial institutions or well-established payment processing companies that we compete with have substantially greater capital, technological, management and marketing resources than we have. These factors may allow our competitors to offer better pricing terms to merchants, which could result in a loss of our potential merchants. This competition may effectively limit the prices we can charge our merchants and require us to control costs aggressively in order to maintain acceptable profit margins. Additionally, our future competitors may develop or offer services that have price or other advantages over the services we provide.
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Government Regulation
We operate in an increasingly complex legal and regulatory environment. Our business and the products and services that we offer are subject to a variety of federal, state and local laws and regulations and the rules and standards of the payment networks that we utilize to provide our electronic payment services, as more fully described below.
Dodd-Frank Act
The Dodd-Frank Act and the related rules and regulations have resulted in significant changes to the regulation of the financial services industry. Changes impacting the electronic payments industry include providing merchants with the ability to set minimum dollar amounts for the acceptance of credit cards and to offer discounts or incentives to entice consumers to pay with cash, checks, debit cards or credit cards, as the merchant prefers. New rules also contain certain prohibitions on payment network exclusivity and merchant routing restrictions. Additionally, the Durbin Amendment to the Dodd-Frank Act provides that the interchange fees that certain issuers charge merchants for debit transactions will be regulated by the Federal Reserve and must be “reasonable and proportional” to the cost incurred by the issuer in authorizing, clearing and settling the transactions. Rules released by the Federal Reserve in July 2011 to implement the Durbin Amendment mandate a cap on debit transaction interchange fees for issuers with assets of $10 billion or greater.
The Dodd-Frank Act also created the Consumer Financial Protection Bureau (the “CFPB”), which has assumed responsibility for most federal consumer protection laws, and the Financial Stability Oversight Council, which has the authority to determine whether any non-bank financial company, such as us, should be supervised by the Board of Governors of the Federal Reserve System because it is systemically important to the U.S. financial system. Any new rules or regulations implemented by the CFPB or the Financial Stability Oversight Council or in connection with Dodd-Frank Act that are applicable to us, or any changes that are adverse to us resulting from litigation brought by third parties challenging such rules and regulations, could increase our cost of doing business or limit permissible activities.
Privacy and Information Security Regulations
We provide services that may be subject to privacy laws and regulations of a variety of jurisdictions. Relevant federal privacy laws include the Gramm-Leach-Bliley Act of 1999, which applies directly to a broad range of financial institutions and indirectly, or in some instances directly, to companies that provide services to financial institutions. These laws and regulations restrict the collection, processing, storage, use and disclosure of personal information, require notice to individuals of privacy practices and provide individuals with certain rights to prevent the use and disclosure of protected information. These laws also impose requirements for safeguarding and proper destruction of personal information through the issuance of data security standards or guidelines. Our business may also be subject to the Fair Credit Reporting Act, which regulates the use and reporting of consumer credit information and also imposes disclosure requirements on entities who take adverse action based on information obtained from credit reporting agencies. In addition, there are state laws restricting the ability to collect and utilize certain types of information such as Social Security and driver’s license numbers. Certain state laws impose similar privacy obligations as well as obligations to provide notification of security breaches of computer databases that contain personal information to affected individuals, state officers and consumer reporting agencies and businesses and governmental agencies that own data.
Anti-Money Laundering and Counter-Terrorism Regulation
Our business is subject to U.S. federal anti-money laundering laws and regulations, including the Bank Secrecy Act of 1970, as amended by the USA PATRIOT Act of 2001, which we refer to collectively as the “BSA.” The BSA, among other things, requires money services businesses to develop and implement risk-based anti-money laundering programs, report large cash transactions and suspicious activity and maintain transaction records. We are also subject to certain economic and trade sanctions programs that are administered by the Treasury Department’s Office of Foreign Assets Control, or OFAC, that prohibit or restrict transactions to or from or dealings with specified countries, their governments and, in certain circumstances, their nationals, narcotics traffickers and terrorists or terrorist organizations. Similar anti-money laundering, counter terrorist financing and proceeds of crime laws apply to movements of currency and payments through electronic transactions and to dealings with persons specified on lists maintained by organizations similar to OFAC in several other countries and which may impose specific data retention obligations or prohibitions on intermediaries in the payment process. We have developed and continue to enhance compliance programs and policies to monitor and address related legal and regulatory requirements and developments.
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Unfair or Deceptive Acts or Practices
We and many of our merchants are subject to Section 5 of the Federal Trade Commission Act prohibiting unfair or deceptive acts or practices, or UDAP. In addition, the UDAP and other laws, rules and or regulations, including the Telemarketing Sales Act, may directly impact the activities of certain of our merchants, and in some cases may subject us, as the merchant’s payment processor or provider of certain services, to investigations, fees, fines and disgorgement of funds if we are deemed to have aided and abetted or otherwise provided the means and instrumentalities to facilitate the illegal or improper activities of the merchant through our services. Various federal and state regulatory enforcement agencies including the Federal Trade Commission and the states attorneys general have authority to take action against non-banks that engage in UDAP or violate other laws, rules and regulations and to the extent we are processing payments or providing services for a merchant that may be in violation of laws, rules and regulations, we may be subject to enforcement actions and as a result may incur losses and liabilities that may impact our business.
Other Regulation
We are subject to U.S. federal and state unclaimed or abandoned property (escheat) laws which require us to turn over to certain government authorities the property of others we hold that has been unclaimed for a specified period of time such as account balances that are due to a distribution partner or merchant following discontinuation of its relationship with us. The Housing Assistance Tax Act of 2008 requires certain merchant acquiring entities and third-party settlement organizations to provide information returns for each calendar year with respect to payments made in settlement of electronic payment transactions and third-party payment network transactions occurring in that calendar year. Reportable transactions are also subject to backup withholding requirements.
Payment Network Rules and Standards
Payment networks establish their own rules and standards that allocate responsibilities among the payment networks and their participants. These rules and standards, including the PCI DSS, govern a variety of areas including how consumers and merchants may use their cards, data security and allocation of liability for certain acts or omissions including liability in the event of a data breach. The payment networks may change these rules and standards from time to time as they may determine in their sole discretion and with or without advance notice to their participants. These changes may be made for any number of reasons, including as a result of changes in the regulatory environment, to maintain or attract new participants, or to serve the strategic initiatives of the networks and may impose additional costs and expenses on or be disadvantageous to certain participants. Participants are subject to audit by the payment networks to ensure compliance with applicable rules and standards. The networks may fine and penalize and/or suspend the registration of participants for certain acts or omissions or the failure of the participants to comply with applicable rules and standards.
An example of a recent standard is EMV, which is mandated by Visa, MasterCard, American Express and Discover to be supported by payment processors by April 2013 and by merchants by October 2015. This mandate sets new requirements and technical standards, including requiring IPOS systems to be capable of accepting the more secure “chip” cards that utilize the EMV standard and setting new rules for data handling and security. Processors and merchants that do not comply with the mandate or do not use systems that are EMV compliant risk fines and liability for fraud-related losses.
To provide our electronic payments services, we must be registered either indirectly or directly as service providers with the payment networks that we utilize. Because we are not a bank, we are not eligible for membership in certain payment networks, including Visa and MasterCard, and are therefore unable to directly access these networks. The operating regulations of certain payment networks, including Visa and MasterCard, require us to be sponsored by a member bank as a service provider. We are not registered with any payment networks. In due course we plan to set up the necessary sponsorships with our banking connections. Any agreement with our bank sponsors give them substantial discretion in approving certain aspects of our business practices including our solicitation, application and qualification procedures for merchants and the terms of our agreements with merchants.
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Employees
We have appointed Trevor Allen, a key member to our board due to his technical background and expertise. We also have Eng Kok Yap as a member of our board. In addition, we plan on assembling a board of directors and a team of advisors whom are industry leaders in the payment processor field and that can market and sell our services to achieve commercialization in the industry.
Our operations office is located at 13 The Concourse, London, UK NW9 5AX. This property is provided to us free of charge by our officer and director, Trevor Allen. If we are able to locate financing, we plan to move to more suitable office space.
We are not a party to any pending legal proceeding. We are not aware of any pending legal proceeding to which any of our officers, directors, or any beneficial holders of 5% or more of our voting securities are adverse to us or have a material interest adverse to us.
Item 4. Mine Safety Disclosures
Not applicable.
PART II
Item 5. Market for Registrant’s Common Equity and Related Stockholder Matters and Issuer Purchases of Equity Securities
Market Information
Our common stock is quoted under the symbol “LAHO” on the OTCBB operated by the Financial Industry
Regulatory Authority, Inc. (“FINRA”) and the OTCQB operated by OTC Markets Group, Inc. Few market makers continue to participate in the OTCBB system because of high fees charged by FINRA. Consequently, market makers that once quoted our shares on the OTCBB system may no longer be posting a quotation for our shares. The criteria for listing on either the OTCBB or OTCQB are similar and include that we remain current in our SEC reporting. Our reporting is presently current and, since inception, we have filed our SEC reports on time.
We do not have an active trading market for our securities. There is no assurance that a regular trading market will develop, or if developed, that it will be sustained. Therefore, a shareholder may be unable to resell his securities in our company.
The following tables set forth the range of high and low prices for our common stock for the each of the periods indicated as reported by the OTCQB. These quotations reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not necessarily represent actual transactions.
| Fiscal Year Ending November 30, 2014 | ||||
| Quarter Ended | High $ | Low $ | ||
| November 30, 2014 | .40 | .15 | ||
| August 31, 2014 | .015 | .015 | ||
| May 31, 2014 | N/A | N/A | ||
| February 28, 2014 | N/A | N/A | ||
| Fiscal Year Ending November 30, 2013 | ||||
| Quarter Ended | High $ | Low $ | ||
| November 30, 2013 | N/A | N/A | ||
| August 31, 2013 | N/A | N/A | ||
| May 31, 2013 | N/A | N/A | ||
| February 28, 2013 | N/A | N/A | ||
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Penny Stock
The SEC has adopted rules that regulate broker-dealer practices in connection with transactions in penny stocks. Penny stocks are generally equity securities with a market price of less than $5.00, other than securities registered on certain national securities exchanges or quoted on the NASDAQ system, provided that current price and volume information with respect to transactions in such securities is provided by the exchange or system. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock, to deliver a standardized risk disclosure document prepared by the SEC, that: (a) contains a description of the nature and level of risk in the market for penny stocks in both public offerings and secondary trading; (b) contains a description of the broker's or dealer's duties to the customer and of the rights and remedies available to the customer with respect to a violation of such duties or other requirements of the securities laws; (c) contains a brief, clear, narrative description of a dealer market, including bid and ask prices for penny stocks and the significance of the spread between the bid and ask price; (d) contains a toll-free telephone number for inquiries on disciplinary actions; (e) defines significant terms in the disclosure document or in the conduct of trading in penny stocks; and (f) contains such other information and is in such form, including language, type size and format, as the SEC shall require by rule or regulation.
The broker-dealer also must provide, prior to effecting any transaction in a penny stock, the customer with (a) bid and offer quotations for the penny stock; (b) the compensation of the broker-dealer and its salesperson in the transaction; (c) the number of shares to which such bid and ask prices apply, or other comparable information relating to the depth and liquidity of the market for such stock; and (d) a monthly account statement showing the market value of each penny stock held in the customer's account.
In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from those rules, the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser's written acknowledgment of the receipt of a risk disclosure statement, a written agreement as to transactions involving penny stocks, and a signed and dated copy of a written suitability statement.
These disclosure requirements may have the effect of reducing the trading activity for our common stock. Therefore, stockholders may have difficulty selling our securities.
Holders of Our Common Stock
As of November 30, 2014, we had eight (8) shareholders of record with others held in street name.
Dividends
There are no restrictions in our articles of incorporation or bylaws that prevent us from declaring dividends. The Nevada Revised Statutes, however, do prohibit us from declaring dividends where after giving effect to the distribution of the dividend:
1. we would not be able to pay our debts as they become due in the usual course of business, or;
2. our total assets would be less than the sum of our total liabilities plus the amount that would be needed to satisfy the rights of shareholders who have preferential rights superior to those receiving the distribution.
We have not declared any dividends and we do not plan to declare any dividends in the foreseeable future.
Securities Authorized for Issuance under Equity Compensation Plans
We do not have any equity compensation plans.
Item 6. Selected Financial Data
A smaller reporting company is not required to provide the information required by this Item.
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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Forward-Looking Statements
Certain statements, other than purely historical information, including estimates, projections, statements relating to our business plans, objectives, and expected operating results, and the assumptions upon which those statements are based, are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements generally are identified by the words “believes,” “project,” “expects,” “anticipates,” “estimates,” “intends,” “strategy,” “plan,” “may,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions. We intend such forward-looking statements to be covered by the safe-harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, and are including this statement for purposes of complying with those safe-harbor provisions. Forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties which may cause actual results to differ materially from the forward-looking statements. Our ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Factors which could have a material adverse affect on our operations and future prospects on a consolidated basis include, but are not limited to: changes in economic conditions, legislative/regulatory changes, availability of capital, interest rates, competition, and generally accepted accounting principles. These risks and uncertainties should also be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. We undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise. Further information concerning our business, including additional factors that could materially affect our financial results, is included herein and in our other filings with the SEC.
Results of operations for the year ended November 30, 2014 and 2013
We have not earned any revenues since our inception on November 13, 2007. We do not anticipate earning revenues until such time that we have fully developed and are able to market our payment processor business.
We incurred operating expenses in the amount of $175,615 for the year ended November 30, 2014, as compared with $17,543 for the year ended November 30, 2013. The increase was attributable to the impairment of our license for $150,000. We anticipate our operating expenses will increase as we undertake our plan of operations. The increase will be attributable to undertaking development of our payment processor business and the professional fees associating with being a reporting company under the Securities Exchange Act of 1934.
We incurred a net loss in the amount of $175,615 for the year ended November 30, 2014, as compared with $17,543 for the year ended November 30, 2013. Our losses for each period are attributable to operating expenses together with a lack of any revenues.
Liquidity and Capital Resources
As of November 30, 2014, we had no current assets. Our total current liabilities as of November 30, 2014 were $182,892. As a result, we have a working capital deficit of $182,892 as of November 30, 2014.
Operating activities used $23,444 in cash for the year ended November 30, 2014. Our net loss of $175,615 offset by non-cash impairment expense of $150,000 for this period was the main component of our negative operating cash flow. We primarily relied on related party advances to fund our operations during the year ended November 30, 2014.
The success of our business plan beyond the next 12 months is contingent upon us obtaining additional financing. We intend to fund operations through debt and/or equity financing arrangements, which may be insufficient to fund our capital expenditures, working capital, or other cash requirements. We do not have any formal commitments or arrangements for the sales of stock or the advancement or loan of funds at this time. There can be no assurance that such additional financing will be available to us on acceptable terms, or at all.
Off Balance Sheet Arrangements
As of November 30, 2014, there were no off balance sheet arrangements.
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Going Concern
We have negative working capital and have not yet received revenues from sales of products. These factors have caused our accountants to express substantial doubt about our ability to continue as a going concern. The financial statements do not include any adjustment that might be necessary if we are unable to continue as a going concern.
Our ability to continue as a going concern is dependent on our generating cash from the sale of our common stock and/or obtaining debt financing and attaining future profitable operations. Management’s plans include selling our equity securities and obtaining debt financing to fund our capital requirement and ongoing operations; however, there can be no assurance we will be successful in these efforts.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
A smaller reporting company is not required to provide the information required by this Item.
Item 8. Financial Statements and Supplementary Data
Index to Financial Statements Required by Article 8 of Regulation S-X:
Audited Financial Statements:
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors of
Lans Holdings, Inc.
London, United Kingdom
We have audited the accompanying balance sheet of Lans Holdings, Inc. (the “Company”) as of November 30, 2014 and the related statements of operations, stockholders’ deficit and cash flows for the year then ended. The Company’s management is responsible for these financial statements. Our responsibility is to express an opinion on these financial statements based on our audit. The financial statements of the Company as of and for the year ended November 30, 2013 were audited by other auditors; whose report dated January 28, 2014 expresses an unqualified opinion on those financial statements and also included an explanatory paragraph about the Company’s ability to continue as a going concern.
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 audit provides a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Lans Holdings, Inc. as of November 30, 2014, and the results of its operations and its cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America.
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company has suffered recurring losses from operations and has a net capital deficiency that raise substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
/s/ GBH CPAs, PC
GBH CPAs, PC
www.gbhcpas.com
Houston, Texas
March 31, 2015
| F-1 |
Silberstein Ungar, PLLC CPAs and Business Advisors
Phone (248) 203-0080
Fax (248) 281-0940
30600 Telegraph Road, Suite 2175
Bingham Farms, MI 48025-4586
www.sucpas.com
Report of Independent Registered Public Accounting Firm
To the Board of Directors of
Lans Holdings, Inc.
Kuala Lumpur, Malaysia
We have audited the accompanying balance sheet of Lans Holdings, Inc. (the “Company”) as of November 30, 2013 and the related statements of operations, stockholders’ deficit, and cash flows for the year then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Lans Holdings, Inc. as of November 30, 2013 the results of its operations and its cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America.
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company has limited working capital, has not yet received revenue from sales of products or services, and has incurred losses from operations. These factors raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans with regard to these matters are described in Note 1. The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty.
/s/ Silberstein Ungar, PLLC
Bingham Farms, Michigan
January 28, 2014
| F-2 |
BALANCE SHEETS
AS OF NOVEMBER 30, 2014 AND 2013
| 2014 | 2013 | ||||||
| ASSETS | |||||||
| Current Assets | |||||||
| Prepaid expenses | $ | — | $ | 500 | |||
| Total Current Assets | — | 500 | |||||
| TOTAL ASSETS | $ | — | $ | 500 | |||
| LIABILITIES AND STOCKHOLDERS’ DEFICIT | |||||||
| Current Liabilities | |||||||
| Accounts payable and accrued expenses | $ | 7,892 | $ | 6,221 | |||
| Short-term loan payable to related party | 25,000 | — | |||||
| Due to related party | 150,000 | 77,370 | |||||
| Total Liabilities | 182,892 | 83,591 | |||||
| Stockholders’ Deficit | |||||||
| Preferred stock, 100,000,000 shares authorized, $0.001 par value; no shares issued and outstanding | — | — | |||||
| Common stock, 500,000,000 shares authorized, $0.001 par value; 133,300,000 shares issued and outstanding | 133,300 | 133,300 | |||||
| Additional paid-in capital | 75,814 | — | |||||
| Accumulated deficit | (392,006 | ) | (216,391 | ) | |||
| Total Stockholders’ Deficit | (182,892 | ) | (83,091 | ) | |||
| TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT | $ | — | $ | 500 | |||
(See accompanying notes to financial statements)
| F-3 |
STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED NOVEMBER 30, 2014 AND 2013
| 2014 | 2013 | ||||||
| REVENUES | $ | — | $ | — | |||
| OPERATING EXPENSES | |||||||
| General and administrative | $ | 25,615 | $ | 17,543 | |||
| Impairment of license acquired from related party | 150,000 | — | |||||
| TOTAL OPERATING EXPENSES | 175,615 | 17,543 | |||||
| NET LOSS | $ | (175,615 | ) | $ | (17,543 | ) | |
| LOSS PER COMMON SHARE: BASIC AND DILUTED | $ | (0.00 | ) | $ | (0.00 | ) | |
| WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING: BASIC AND DILUTED | 133,300,000 | 133,300,000 |
(See accompanying notes to financial statements)
| F-4 |
STATEMENTS OF STOCKHOLDERS’ DEFICIT
FOR THE YEARS ENDED NOVEMBER 30, 2014 AND 2013
| Common stock | Additional paid-in | Accumulated | |||||||||||||||||
| Shares | Amount | capital | deficit | Total | |||||||||||||||
| Balance, November 30, 2012 | 133,300,000 | $ | 133,300 | $ | — | $ | (198,848 | ) | $ | (65,548 | ) | ||||||||
| Net loss for the year | — | — | — | (17,543 | ) | (17,543 | ) | ||||||||||||
| Balance, November 30, 2013 | 133,300,000 | 133,300 | — | (216,391 | ) | (83,091 | ) | ||||||||||||
| Forgiveness of debt by related party | — | — | 75,814 | — | 75,814 | ||||||||||||||
| Net loss for the year | — | — | — | (175,615 | ) | (175,615 | ) | ||||||||||||
| Balance, November 30, 2014 | 133,300,000 | $ | 133,300 | $ | 75,814 | $ | (392,006 | ) | $ | (182,892 | ) | ||||||||
(See accompanying notes to financial statements)
| F-5 |
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED NOVEMBER 30, 2014 AND 2013
| 2014 | 2013 | ||||||
| CASH FLOWS FROM OPERATING ACTIVITIES | |||||||
| Net loss | $ | (175,615 | ) | $ | (17,543 | ) | |
| Adjustments to reconcile net loss to net cash used in operating activities: | |||||||
| Impairment of license acquired from related party | 150,000 | — | |||||
| Change in operating assets and liabilities: | |||||||
| Prepaid expenses | 500 | (500 | ) | ||||
| Accounts payable and accrued expenses | 1,671 | (6,340 | ) | ||||
| Net Cash Used In Operating Activities | (23,444 | ) | (24,383 | ) | |||
| CASH FLOWS FROM FINANCING ACTIVITIES | |||||||
| Advances from related party | 23,444 | 24,383 | |||||
| Net Cash Provided by Financing Activities | 23,444 | 24,383 | |||||
| Net Increase in cash and cash equivalents | — | — | |||||
| Cash, beginning of year | — | — | |||||
| Cash, end of year | $ | — | $ | — | |||
| SUPPLEMENTARY CASH FLOW INFORMATION: | |||||||
| Interest paid | $ | — | $ | — | |||
| Income taxes paid | $ | — | $ | — | |||
| NON-CASH INVESTING AND FINANCING ACTIVITIES | |||||||
| Payable incurred from purchase of license | $ | 150,000 | $ | — | |||
| Short term debt to related party from due to related parties | $ | 25,000 | $ | — | |||
| Forgiveness of debt from related parties | $ | 75,814 | $ | — | |||
(See accompanying notes to financial statements)
| F-6 |
NOTES TO THE FINANCIAL STATEMENTS
NOTE 1 – NATURE OF BUSINESS
Nature of Business
Lans Holdings, Inc. (the “Company”) was incorporated in Nevada on November 13, 2007. In 2014, The Company acquired a license to a software payment platform which allows merchants to advertise and sell goods and process payments so that they can cash in sales of their goods at the Company’s online store.
The Company has incurred losses since inception, has negative working capital, and has not yet generated revenues from sales of products or services. These factors create substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include any adjustment that might be necessary if the Company is unable to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company generating cash from the sale of its common stock and/or obtaining debt financing and attaining future profitable operations. Management’s plans include selling its equity securities and obtaining debt financing to fund its capital requirement and ongoing operations; however, there can be no assurance the Company will be successful in these efforts.
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
These financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States and are expressed in US dollars. The Company’s fiscal year end is November 30. The Company has analyzed its operations subsequent to November 30, 2014 to the date these financial statements were issued, and has determined that it does not have any material subsequent events to disclose in these financial statements.
Use of Estimates
The preparation of financial statements in conformity with United States generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company regularly evaluates estimates and assumptions related to intangible assets and deferred income tax asset valuation allowances. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.
Financial Instruments
The Company’s financial instruments consist of cash, accounts payable and accrued expenses, loans payable and an amount due to an officer. The carrying amount of these financial instruments approximates fair value due either to length of maturity or interest rates that approximate prevailing market rates unless otherwise disclosed in these financial statements.
Cash and Cash Equivalents
The Company considers all highly liquid instruments with maturity of three months or less be cash equivalents. At November 30, 2014 and 2013, the Company had $0 of cash.
Intangible Assets
Software, licenses and other rights have been capitalized in accordance with ASC 350-40 “Intangibles – Goodwill and Other – Internal-Use Software.” Amortization is calculated on a straight line basis over its estimated useful life of 20 years.
If the total of the expected undiscounted future cash flows is less than the carrying amount of the asset, a loss is recognized for the excess of the carrying value over the fair value of the asset.
| F-7 |
LANS HOLDINGS, INC.
NOTES TO THE FINANCIAL STATEMENTS
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Income Taxes
The Company utilizes the liability method of accounting for income taxes. Under the liability method deferred tax assets and liabilities are determined based on the differences between financial reporting basis and the tax basis of the assets and liabilities and are measured using enacted tax rates and laws that will be in effect, when the differences are expected to reverse. An allowance against deferred tax assets is recognized, when it is more likely than not, that such tax benefits will not be realized.
Any deferred tax asset is considered immaterial and has been fully offset by a valuation allowance because at this time Company believes that it is more likely than not that the future tax benefit will not be realized as the Company has no current operations.
Revenue Recognition
The Company will recognize revenue when products are fully delivered or services have been provided and collection is reasonably assured.
(Loss) Per Common Share
Basic EPS is computed by dividing net income (loss) available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing Diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential shares if their effect is anti-dilutive. As of November 30, 2014 and 2013, the Company has no potentially dilutive securities outstanding.
Recent Accounting Pronouncements
The Company has implemented all new accounting pronouncements that are in effect and that may impact its financial statements and does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.
The Company has limited operations and is considered to be in the development stage. During the year ended April 30, 2014, the Company has elected to early adopt Accounting Standards Update No. 2014-10, Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements. The adoption of this Update allows the Company to remove the inception-to-date information and all references to development stage.
NOTE 3 – INTANGIBLE ASSET
On November 21, 2014, the Company entered into a license agreement (the “License Agreement”) with PayFlex Systems (“Payflex”). The President of PayFlex is also, the Company’s Chief Executive Officer. Pursuant to the License Agreement, the Company obtained an exclusive worldwide license to use all of PayFlex’s payment processor codes, patent and intellectual rights, contracts, permits and licenses. The license is for twenty years unless terminated earlier as provided for in the License Agreement.
In exchange for the license, the Company is required to pay PayFlex $150,000 in cash for the license and raise $200,000 for its own working capital needs within 90 days of closing the License Agreement. The Company is also required to issue a number of shares of the Company’s common stock necessary to give 55% of the total issued and outstanding shares of the Company to PayFlex or its nominees within 90 days of closing the License Agreement.
In addition, the Company would be required to issue a number of shares of the Company’s common stock necessary to give 70% of the total issued and outstanding shares of the Company to PayFlex or its nominees on the anniversary of the License Agreement in which the Company’s audited filed financial statements for gross annual revenues attributable to the business exceeds $5,000,000.
The Company has not made the required cash and share payments. The cash requirement of $150,000 was recorded by the company as expense and payable to related party. The Company has not raised the $200,000 required by the License Agreement.
The Company evaluated this transaction by reviewing the ownership percentages of the new shareholders as of the acquisition date and SAB Topic 5G. The Company is determined to be both the legal acquirer and the accounting acquirer of these assets. Since the new shareholders simultaneously obtained the control of the Company, with an overall ownership percentage of approximately 55%, the assets acquired from PayFlex were recorded at the cash requirement of $150,000.
At November 30, 2014, due to the Company’s uncertain future revenues generated by the license, the Company performed impairment tests as prescribed by ASC 350. As a result, the Company recorded an impairment charge totaling $150,000.
NOTE 4 – ACCOUNTS PAYABLE AND ACCRUED EXPENSES
Accounts payable and accrued expenses of $7,892 and $6,221 at November 30, 2014 and 2013, respectively, consist of amounts owed to the Company’s outside legal counsel, transfer agent and independent auditor for services rendered.
| F-8 |
LANS HOLDINGS, INC.
NOTES TO THE FINANCIAL STATEMENTS
NOTE 5 – LOAN PAYABLE TO RELATED PARTY
On November 24, 2014, the Company issued a $25,000 promissory note to a director of the Company pursuant to the Agreement of Conveyance, Transfer and Assignment of Obligations described in Note 6. The promissory note is unsecured, non-interest bearing and due within six months of the date of issuance.
NOTE 6 – DUE TO RELATED PARTY
The amount due of $77,370 at November 30, 2013, consisted of amounts owed to an officer and shareholder of the Company for amounts advanced to pay for professional services provided by the Company’s outside independent auditors, attorneys and stock transfer agent for services rendered. The amounts were unsecured, due upon demand, and non-interest bearing.
On November 21, 2014, the Company entered into an Agreement of Conveyance, Transfer and Assignment of Assets and Assumption of Obligations with directors of the Company. Pursuant to the agreement, the Company transferred all assets and business operations associated with hexagon fishing nets to the directors of the Company. In exchange, the directors of the Company agreed to cancel 73,315,000 shares in the Company and assume and cancel all liabilities relating to the Company’s former business, including officer loans amounting to $100,814. A director of the Company will retain 1,085,000 shares of common stock in the Company. In consideration for the cancellation of amounts due to officer and the return of the shares, the Company issued a $25,000 promissory note to the director of the Company. Refer to Note 5. As a result, of the forgiveness of the loans and cancellation of stock, the Company recognized $75,814 as a contribution to capital. The 73,315,000 shares have not yet been cancelled. The directors are assembling the paperwork necessary to submit to the Company’s transfer agent to cancel the shares.
On November 21, 2014, the Company entered into a License Agreement with the Chief Executive Officer of the Company (Note 3). At November 30, 2014, the Company is indebted to the Chief Executive Officer of the Company for $150,000 related to the License Agreement. The amount is unsecured, non-interest bearing and due by February 19, 2015. As of the date of the financial statements the amount has not been paid and the Company is asking for a 90 day extension.
NOTE 7 – CAPITAL STOCK
The authorized capital of the Company is 500,000,000 common shares with a par value of $ 0.001 per share and 100,000,000 preferred shares with a par value of $0.001 per share.
On June 9, 2014, the Company’s board of directors and a majority of the shareholders of the Company approved an amendment to the Articles of Incorporation for the purpose of increasing the total authorized capital shares from 100,000,000 to 600,000,000 shares, with 500,000,000 shares of common stock, par value $0.001, and 100,000,000 shares of preferred stock, par value $0.001.
Concurrently with the increase in authorized stock described above, the Company’s board of directors approved a forward split of sixty-two to one in which each shareholder of the Company will be issued sixty-two common shares in exchange for each one common share of their currently issued common stock.
All share and per share data in these financial statements and footnotes has been retrospectively adjusted to account for this stock split.
NOTE 8 – COMMITMENTS
The Company neither owns nor leases any real or personal property. An officer of the Company has provided office services without charge. There is no obligation for the officer to continue this arrangement. Such costs are immaterial to the financial statements and accordingly are not reflected herein. The officers and directors of the Company are involved in other business activities and most likely will become involved in other business activities in the future.
On November 19, 2014, the Company entered into an investor relations services agreement. Pursuant to the agreement, the Company will pay $2,500 a month for investor relations services for a term of one year.
The Company entered into the agreement described in Note 3 with the Chief Executive Officer of the Company. Pursuant to the agreement, the Company is required to pay $150,000 in cash for the license and issue a number of shares of the Company’s common stock necessary to give 55% of the total issued and outstanding shares of the Company to PayFlex or its nominees. In addition, the Company would be required to issue a number of shares of the Company’s common stock necessary to give 70% of the total issued and outstanding shares of the Company to PayFlex or its nominees on the anniversary of the Licensing Agreement in which the Company’s audited filed financial statements for gross annual revenues attributable to the business exceeds $5,000,000. The President of PayFlex is also the Company’s Chief Executive Officer.
The Company is also required to contribute $200,000 for its own working capital needs within 90 days of closing the License Agreement.
| F-9 |
LANS HOLDINGS, INC.
NOTES TO THE FINANCIAL STATEMENTS
NOTE 9 – INCOME TAXES
For the year ended November 30, 2014 and 2013, the Company had incurred net losses and, therefore, has no tax liability. The net deferred tax asset generated by the loss carry-forward has been fully reserved. The cumulative net operating loss carry-forward is approximately $151,706 at November 30, 2014, and will begin expiring in the year 2027.
The cumulative tax effect at the expected rate of 34% of significant items comprising our net deferred tax amount is as follows as of November 30, 2014 and 2013:
| 2014 | 2013 | ||||||
| Deferred tax asset attributable to: | |||||||
| Net operating loss carryforwards | $ | 51,580 | $ | 42,872 | |||
| Less: valuation allowance | (51,580 | ) | (42,872 | ) | |||
| Net deferred tax asset | $ | — | $ | — | |||
Due to the change in ownership provisions of the Tax Reform Act of 1986, net operating loss carry forwards of approximately $151,706 for federal income tax reporting purposes are subject to annual limitations. The net operating loss carryforwards expire from 2027 to 2034. Internal Revenue Section 382 restricts the ability to use these carryforwards whenever an ownership change, as defined, occurs. The Company may have incurred such an ownership change in November 2014. If an ownership change is deemed pursuant to Internal Revenue Section 382, use of net operating losses will be restricted .
NOTE 10 – SUBSEQUENT EVENTS
The Company has analyzed its operations subsequent to November 30, 2014 to the date these financial statements were issued, and has determined that it does not have any material subsequent events to disclose in these financial statements.
| F-10 |
Item 9. Changes In and Disagreements with Accountants on Accounting and Financial Disclosure
On August 4, 2014, Silberstein Ungar, PLLC notified us that its principals joined the accounting firm of KLJ & Associates, LLP. As a result of the transaction, on August 4, 2014, Silberstein Ungar, PLLC resigned as our independent registered public accounting firm and we engaged KLJ & Associates, LLP as our independent registered public accounting firm.
On February 20, 2015, KLJ & Associates, LLP resigned as our independent registered public accounting firm. On March 6, 2015, we engaged GBC CPAs, PC as our independent registered public accounting firm.
Aside from this, no events occurred requiring disclosure under Item 304 of Regulation S-K during the fiscal year ended November 30, 2014 or as of the date of this Annual Report.
Item 9A. Controls and Procedures
Disclosure Controls and Procedures
As required by paragraph (b) of Rules 13a-15 or 15d-15 under the Exchange Act, our principal executive officer and principal financial officer evaluated our company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act) as of the end of the period covered by this annual report on Form 10-K. Based on this evaluation, our sole chief executive officer and principal financial officer concluded that as of November 30, 2014, these disclosure controls and procedures were not effective to ensure that the information required to be disclosed by our company in reports it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities Exchange Commission and include controls and procedures designed to ensure that such information is accumulated and communicated to our company’s management, including our company’s principal executive officer and principal financial officer, to allow timely decisions regarding required disclosure.
The conclusion that our disclosure controls and procedures were not effective was due to the presence of material weaknesses in internal control over financial reporting as identified below under the heading “Management’s Report on Internal Control Over Financial Reporting.” Management anticipates that such disclosure controls and procedures will not be effective until the material weaknesses are remediated. Our company intends to remediate the material weaknesses as set out below.
Management’s Report on Internal Control Over Financial Reporting
Our company’s management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) for our company. Our company’s internal control over financial reporting is designed to provide reasonable assurance, not absolute assurance, regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles in the United States of America. Internal control over financial reporting includes those policies and procedures that: (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our company’s assets; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles in the United States of America, and that our company’s receipts and expenditures are being made only in accordance with authorizations of our management and directors; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. In addition, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions and that the degree of compliance with the policies or procedures may deteriorate.
Our Management, including our principal executive officer and principal financial officer, conducted an evaluation of the design and operation of our internal control over financial reporting as of November 30, 2014 based on the criteria set forth in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. This evaluation included review of the documentation of controls, evaluation of the design effectiveness of controls, testing of the operating effectiveness of controls and a conclusion on this evaluation. Based on this evaluation, our management concluded our internal control over financial reporting was not effective as at November 30, 2014 due to the following material weaknesses which are indicative of many small companies with small staff: (i) inadequate segregation of duties and effective risk assessment; and (ii) insufficient written policies and procedures for accounting and financial reporting with respect to the requirements and application of both United States generally accepted accounting principles and Securities and Exchange Commission guidelines. Management anticipates that such disclosure controls and procedures will not be effective until the material weaknesses are remediated.
| 12 |
Our company plans to take steps to enhance and improve the design of our internal controls over financial reporting. During the period covered by this annual report on Form 10-K, we have not been able to remediate the material weaknesses identified above. To remediate such weaknesses, we plan to implement the following changes during our fiscal year ending November 30, 2015, subject to obtaining additional financing: (i) appoint additional qualified personnel to address inadequate segregation of duties and ineffective risk management; and (ii) adopt sufficient written policies and procedures for accounting and financial reporting. The remediation efforts set out above are largely dependent upon our company securing additional financing to cover the costs of implementing the changes required. If we are unsuccessful in securing such funds, remediation efforts may be adversely effected in a material manner.
This annual report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our registered public accounting firm pursuant to an exemption for non-accelerated filers set forth in Section 989G of the Dodd-Frank Wall Street Reform and Consumer Protection Act.
Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues, if any, within our company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake.
Changes in Internal Control Over Financial Reporting.
There were no changes in the Company’s internal control over financial reporting during the quarter ended November 30, 2014 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
None
| 13 |
PART III
Item 10. Directors, Executive Officers and Corporate Governance
Our executive officers and directors and their respective ages as of November 30, 2014 are as follows:
| Name | Age | Position Held with the Company |
Trevor Allen 13 The Concourse London, UK NW9 5AX |
48 | President, Chief Executive Officer, Principal Executive Officer, Chief Financial Officer, Principal Financial Officer, Principal Accounting Officer and Director |
Eng Kok Yap 13 The Concourse London, UK NW9 5AX |
34 | Director |
Tan Sin Siong 13 The Concourse London, UK NW9 5AX |
41 | Director |
Set forth below is a brief description of the background and business experience of our sole executive officer and director.
Trevor Allen is our President, Chief Executive Officer, Principal Executive Officer, Chief Financial Officer, Principal Financial Officer, Principal Accounting Officer and Director. For the past five years Mr. Allen has been the owner of Gordons, a bakery deli in North London. He also is a partner in Star Lounge night Club in Harrow, NW London and has owned Payflex intellectual property since February of 2014.
Eng Kok Yap is our Director. He has worked as an Engineer for Psyon Engineering Corporation since 2000.
Tan Sin Siong is our Director. Mr. Yap obtained his Bachelor’s Degree in Engineering from Warwick University in England in 1999. Tan Sin Siong obtained a Bachelor’s Degree from Excel Institute in Kuala Lumpur, Malaysia in 1997. Since 2002, Tan Sin Siong has worked as a manager for Siemens Incorporated.
Term of Office
Our directors are 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 officers are appointed by our board of directors and hold office until removed by the board.
Significant Employees
We do not currently have any significant employees aside from Trevor Allen.
Involvement in Certain Legal Proceedings
To the best of our knowledge, during the past ten years, none of the following occurred with respect to our present or former director, executive officer, or employee: (1) any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time; (2) any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offenses); (3) being subject to any order, judgment or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his or her involvement in any type of business, securities or banking activities; and (4) being found by a court of competent jurisdiction (in a civil action), the SEC or the Commodities Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended or vacated.
| 14 |
Committees of the Board
Our company currently does not have nominating, compensation or audit committees or committees performing similar functions nor does our company have a written nominating, compensation or audit committee charter. Our directors believe that it is not necessary to have such committees, at this time, because the functions of such committees can be adequately performed by the board of directors.
Our company does not have any defined policy or procedural requirements for shareholders to submit recommendations or nominations for directors. The board of directors believes that, given the stage of our development, a specific nominating policy would be premature and of little assistance until our business operations develop to a more advanced level. Our company does not currently have any specific or minimum criteria for the election of nominees to the board of directors and we do not have any specific process or procedure for evaluating such nominees. The board of directors will assess all candidates, whether submitted by management or shareholders, and make recommendations for election or appointment.
A shareholder who wishes to communicate with our board of directors may do so by directing a written request addressed to our Chief Executive Officer, Trevor Allen, at the address appearing on the first page of this annual report.
Code of Ethics
As of November 30, 2014, we had not adopted a Code of Ethics for Financial Executives, which would include our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions.
Item 11. Executive Compensation
Summary Compensation Table
The table below summarizes all compensation awarded to, earned by, or paid to both to our officers and to our directors for all services rendered in all capacities to us for our fiscal years ended November 30, 2014 and 2013.
| SUMMARY COMPENSATION TABLE | ||||||||
Name and principal position |
Year | Salary ($) |
Bonus ($) |
Option Awards ($) |
Non-Equity Incentive Plan Compensation ($) |
Nonqualified Deferred Compensation Earnings ($) |
All Other Compensation ($) |
Total ($) |
| Trevor Allen President, Chief Executive Officer, Principal Executive Officer, Chief Financial Officer, Principal Financial Officer, Principal Accounting Officer and Director | 2014 2013
|
0 n/a
|
0 n/a
|
0 n/a
|
0 n/a
|
0 n/a
|
0 n/a
|
0 n/a
|
Eng Kok Yap Former President, Chief Executive Officer, Principal Executive Officer, Chief Financial Officer, Principal Financial Officer, Principal Accounting Officer |
2014 2013 |
0 0 |
0 0 |
0 0 |
0 0 |
0 0 |
0 0 |
0 0 |
Narrative Disclosure to the Summary Compensation Table
We have not entered into any employment agreement or consulting agreement with our executive officers. We have agreed to pay a salary of $2,000 per month to Trevor Allen, our officer and director.
There are no arrangements or plans in which we provide pension, retirement or similar benefits for executive officers.
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Outstanding Equity Awards at Fiscal Year-End
The table below summarizes all unexercised options, stock that has not vested, and equity incentive plan awards for each named executive officer as of November 30, 2014.
| OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END | |||||||||
| OPTION AWARDS | STOCK AWARDS | ||||||||
Name |
Number of Securities Underlying Unexercised Options (#) Exercisable |
Number of Securities Underlying Unexercised Options (#) Unexercisable |
Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) |
Option Exercise Price ($) |
Option Expiration Date |
Number of Shares or Units of Stock That Have Not Vested (#) |
Market Value of Shares or Units of Stock That Have Not Vested ($) |
Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) |
Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested (#) |
Trevor Allen |
- | - | - | - | - | - | - | - | - |
| Eng Kok Yap | - | - | - | - | - | - | - | - | - |
Stock Option Grants
We have not granted any stock options to the executive officers or directors since our inception.
Director Compensation
We do not pay any compensation to our directors at this time. However, we reserve the right to compensate our directors in the future with cash, stock, options, or some combination of the above.
We have not reimbursed our directors for expenses incurred in connection with attending board meetings nor have we paid any directors fees or other cash compensation for services rendered as a director in the year ended November 30, 2014.
Stock Option Plans
We did not have a stock option plan as of November 30, 2014.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
The following table sets forth, as of February 13, 2015, certain information as to shares of our common stock owned by (i) each person known by us to beneficially own more than 5% of our outstanding common stock, (ii) each of our directors, and (iii) all of our executive officers and directors as a group:
| Name and Address of Beneficial Owners of Common Stock | Title of Class | Amount and Nature of Beneficial Ownership 1 | % of Common Stock 2 |
Eng Kok Yap 13 The Concourse, London, UK NW9 5AX |
Common Stock |
1,085,000 | 0.8% |
Tan Sin Siong 13 The Concourse, London, UK NW9 5AX |
Common Stock | 0 | |
Trevor Allen 13 The Concourse, London, UK NW9 5AX |
Common Stock | 28,315,000 | 21.24% |
| DIRECTORS AND OFFICERS – TOTAL | 29,400,000 | 22.05% | |
| 5% SHAREHOLDERS | |||
Soundmax Ltd. 1/F Block D, 6 Tam Kung Rd, To Kwa Wan, Kowloon, HK |
Common Stock | 45,000,000 | 33.75% |
| 1. | As used in this table, "beneficial ownership" means the sole or shared power to vote, or to direct the voting of, a security, or the sole or shared investment power with respect to a security (i.e., the power to dispose of, or to direct the disposition of, a security). In addition, for purposes of this table, a person is deemed, as of any date, to have "beneficial ownership" of any security that such person has the right to acquire within 60 days after such date. |
| 2. | The percentage shown is based on denominator of 133,300,000 shares of common stock issued and outstanding for the company as of February 13, 2015. |
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Item 13. Certain Relationships and Related Transactions, and Director Independence
Except as follows, none of our directors or executive officers, nor any proposed nominee for election as a director, nor any person who beneficially owns, directly or indirectly, shares carrying more than 5% of the voting rights attached to all of our outstanding shares, nor any members of the immediate family (including spouse, parents, children, siblings, and in-laws) of any of the foregoing persons has any material interest, direct or indirect, in any transaction over the last two years or in any presently proposed transaction which, in either case, has or will materially affect us.
We owed $77,370 at November 30, 2013 to Eng Kok Yap for advanced to pay for professional services provided by our outside independent auditors, attorneys and stock transfer agent for services rendered. The amounts are unsecured, due upon demand, and non-interest bearing.
On November 21, 2014, we entered into an Agreement of Conveyance, Transfer and Assignment of Assets and Assumption of Obligations with Eng Kok Yap and Tan Sin Siong. Pursuant to the agreement, we transferred all assets and business operations associated with hexagon fishing nets to Messrs. Yap and Siong. In exchange, they agreed to cancel 73,315,000 shares of our common stock and assume and cancel all liabilities relating to our former business, including officer loans amounting to $100,814. Mr. Yap will retain 1,085,000 shares of our common stock. In consideration for the cancellation of amounts due to Messrs. Yap and Siong and the return of the shares, we issued a $25,000 promissory note to Mr. Yap. As a result, of the forgiveness of the loans and cancellation of stock, we recognized $75,814 as a contribution to capital.
On November 21, 2014, we entered into a License Agreement with PayFlex Systems and Trevor Allen, our CEO and director. Pursuant to the License Agreement, we obtained an exclusive worldwide license to use all of PayFlex’s payment processor codes, patent and intellectual rights, contracts, permits and licenses. The license is for twenty years unless terminated earlier as provided for in the License Agreement.
In exchange for the license, we are required to pay PayFlex $150,000 in cash for the license and contribute $200,000 for our own working capital needs within 90 days of closing the License Agreement. We are also required to issue a number of shares of our common stock necessary to give 55% of the total issued and outstanding shares of our Company to PayFlex or its nominees within 90 days of closing the License Agreement.
In addition, we would be required to issue a number of shares of our common stock necessary to give 70% of the total issued and outstanding shares to PayFlex or its nominees on the anniversary of the License Agreement in which our audited filed financial statements for gross annual revenues attributable to the business exceeds $5,000,000.
At November 30, 2014, we have not made the required cash and share payments and, therefore, the cash requirement of $150,000 was recorded as payable to related party.
At November 30, 2014, we are indebted to Mr. Allen for $150,000 related to the License Agreement. The amount is unsecured, non-interest bearing and due by February 19, 2015.
Item 14. Principal Accounting Fees and Services
Below is the table of Audit Fees (amounts in US$) billed by our auditor in connection with the audit of the Company’s annual financial statements for the years ended:
| Financial
Statements for the Year Ended November 30 |
Audit Services | Audit Related Fees | Tax Fees | Other Fees |
| 2014 | $9,000 | - | - | - |
| 2013 | $9,000 | - | - | - |
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PART IV
Item 15. Exhibits, Financial Statements Schedules
| (a) | Financial Statements and Schedules |
The following financial statements and schedules listed below are included in this Form 10-K.
Financial Statements (See Item 8)
| (b) | Exhibits |
| Exhibit Number | Description |
| 3.1 | Articles of Incorporation, as amended (1) |
| 3.2 | Amendment to Articles of Incorporation(2) |
| 3.3 | Certificate of Change(2) |
| 3.4 | Bylaws, as amended (1) |
| 10.1 | License Agreement, dated November 21, 2014(3) |
| 10.2 | Agreement of Conveyance, Transfer and Assignment of Assets and Assumption of Obligations, dated November 21, 2014(3) |
| 31.1 | Certification of Chief Executive Officer pursuant to Securities Exchange Act Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
| 31.2 | Certification of Chief Financial Officer pursuant to Securities Exchange Act Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
| 32.1 | Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
| 1 | Incorporated by reference to the Registration Statement on Form SB-2 filed on December 28, 2007. |
| 2 | Incorporated by reference to the Form 8-K filed on June 30, 2014. |
| 3 | Incorporated by reference to the Form 8-K filed on November 25, 2014. |
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Lans Holdings, Inc.
| By: | /s/ Trevor Allen |
Trevor Allen President, Chief Executive Officer, Principal Executive Officer, Chief Financial Officer, Principal Financial Officer, Principal Accounting Officer and Director | |
| April 2, 2015 |
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.
| By: | /s/ Trevor Allen |
Trevor Allen President, Chief Executive Officer, Principal Executive Officer, Chief Financial Officer, Principal Financial Officer, Principal Accounting Officer and Director | |
| April 2, 2015 |
| By: | /s/ Eng Kok Yap |
Eng Kok Yap Director | |
| April 2, 2015 |
| By: | /s/ Tan Sin Siong |
Tan Sin Siong Director | |
| April 2, 2015 |
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