UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-1/A
AMENDMENT NO. 1
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
XYI Group, Inc.
(Exact name of registrant as specified in its charter)
NEVADA
(State or other jurisdiction of incorporation or organization)
3281
(Primary Standard Industrial Classification Code Number)
47-2514932
(I.R.S. Employer Identification Number)
Unit 5, 4/F Energy Plaza, No. 92 Granville Road, Tsim Sha Tsui East, Kowloon, Hong Kong Tel: (852) 8137 7718 Fax: (852) 8137 7736
(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)
Vcorp Services, LLC 1645 Village Center Circle, Suite 170 Las Vegas, NV 89134 Tel. 845.425.0077
(Name, address, including zip code, and telephone number, including area code, of agent of service)
As soon as possible after the effective date of this Registration Statement
(Approximate date of commencement of proposed sale to the public)

 

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933 check the following box:   ☒

 

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.   ☐

 

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.   ☐

 

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.   ☐

 

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 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 check if a smaller reporting company)	Smaller reporting company	☒.

 

 

CALCULATION OF REGISTRATION FEE

 

Title of Each Class Of Securities To Be Registered		Amount To Be Registered		Proposed Maximum Offering Price Per Share 1				Proposed Maximum Aggregate Offering Price 1				Amount of Registration Fee
Common stock, $ .0001 par value per share		200,000 shares		$	1.68			$	336,000			$	39.04

 

¹ Estimated solely for purposed of calculating the registration fee under Rule 457(a) and (o) of the Securities Act. This registration statement shall also cover any additional shares of common stock which become issuable by reason of any stock split, stock dividend, anti-dilution provisions or similar transaction effected without the receipt of consideration which results in an increase in the number of the outstanding shares of common stock of the registrant.

  

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING, PURSUANT TO SECTION 8(a), MAY DETERMINE.

 

 

 

The information contained in this preliminary prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

 

SUBJECT TO COMPLETION

PRELIMINARY PROSPECTUS DATED                   , 2015

 

Up to 200,000 SHARES

COMMON STOCK

XYI Group, Inc.

 

XYI Group, Inc. (“XYI Group” or the “Company”) is offering for sale a maximum of 200,000 shares of its common stock at a fixed price of $1.68 per share. There is no minimum number of shares that must be sold by us for the offering to close, and we will retain the proceeds from the sale of any of the offered shares that are sold. The offering is being conducted on a self-underwritten, best efforts basis, which means our president and chief executive officer, Mr. Wong Heng Wah (“Mr. Wong”) will attempt to sell the shares. This prospectus will permit us, through our president and chief executive officer to sell the shares directly to the public, with no commission or other remuneration payable to him for any shares he may sell. Mr. Wong will sell the shares and intends to offer them to friends, family members and business acquaintances. In offering the securities on our behalf, he will rely on the safe harbor from broker-dealer registration set out in Rule 3a4-1 under the Securities and Exchange Act of 1934. The intended methods of communication include, without limitation, telephone and personal contact. For more information, see the section of this prospectus entitled "Plan of Distribution".

 

The proceeds from the sale of the shares in this offering will be payable to the Company. All subscribed funds will be held in a separate Company account pending the completion of the offering of which there is no minimum number of shares that must be sold. The offering will be completed within 90 days from the effective date of this prospectus, unless extended by our board of directors for an additional 90 days. All subscription agreements and checks for payment of shares are irrevocable (except as to any jurisdiction that requires a statutory cooling-off period or rescission right). For more information, see the section of this prospectus entitled "Plan of Distribution".

 

The Company is a development stage company with no financial resources or known source of equity or debt financing, and our independent registered auditors included an explanatory paragraph in their opinion on our financial statements as of and for the period ended January 31, 2015 that states that Company losses from operations raise substantial doubt about our ability to continue as a going concern. Because this offering is self-underwritten and there is no minimum amount of shares that must be sold, the Company may lose money from this offering if the proposed proceeds of this offering are substantially less than the estimated costs of this offering. There is currently no public or established market for our shares. Consequently, our shareholders will not be able to sell their shares in any organized market place and may be limited to selling their shares privately. Accordingly, an investment in our Company is an illiquid investment.

 

The Company qualifies as an “emerging growth company” as defined in the Jumpstart Our Business Startups Act which became law in April 2012 and will be subject to reduced public company reporting requirements. See “Jumpstart Our Business Startups Act” contained herein.

 

The Company is a “shell company” as defined by Rule 405 of Regulation C promulgated under the Securities Act. Please refer to “Risk Factors” on Page 2.

 

Since there is no minimum amount of shares that must be sold by the Company, we may receive no proceeds or very minimal proceeds from the offering and potential investors may end up holding shares in a company that has not received enough proceeds from the offering to begin operations and has no market for its shares.

 

		Number of Shares				Gross proceeds Amount				Underwriting Discounts & Commissions				Net Proceeds to the Company
10% of shares are sold			20,000				33,600			$	0.00				33,600
50% of shares are sold			100,000				168,000			$	0.00				168,000
75% of shares are sold			150,000				252,000			$	0.00				252,000
Maximum Offering			200,000			$	336,000			$	0.00			$	336,000

 

This prospectus is not an offer to sell these securities, and it is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

 

  

INVESTING IN OUR SECURITIES INVOLVES A HIGH DEGREE OF RISK. YOU SHOULD PURCHASE OUR SECURITIES ONLY IF YOU CAN AFFORD A COMPLETE LOSS OF YOUR INVESTMENT. SEE "RISK FACTORS" BEGINNING AT PAGE 2.

 

We are selling the shares without an underwriter and may not be able to sell all or any of the shares offered herein.

 

NEITHER THE U.S. SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE OR OTHER SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE ADEQUACY OR ACCURACY OF THIS PROSPECTUS.  ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

 

THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED.  WE MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE.  THIS PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES, AND IT IS NOT SOLICITING AN OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.

 

The date of this prospectus is ________, 2015.

 

The following table of contents has been designed to help you find important information contained in this prospectus. We encourage you to read the entire prospectus. 

 

TABLE OF CONTENTS

 

		Page
SUMMARY FINANCIAL DATA		1
RISK FACTORS		2
USE OF PROCEEDS		12
THE OFFERING		12
DETERMINATION OF OFFERING PRICE		14
DILUTION		14
DIVIDEND POLICY		15
MARKET FOR SECURITIES		15
MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION		17
BUSINESS		20
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS		25
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS		29
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS		29
DESCRIPTION OF CAPITAL STOCK		30
PLAN OF DISTRIBUTION		35
EXPERTS		40
WHERE YOU CAN FIND MORE INFORMATION		40
FINANCIAL STATEMENT		41
EXHIBIT INDEX		II-2
UNDERTAKING		II-3

 

 

 

 

 

 

  

 

 

RISK FACTORS

 

You should carefully consider the risks described below together with all of the other information included in this Registration Statement. Some of these risks relate principally to our business and the industry in which we operate or to the securities markets generally and ownership of our securities specifically. You should be aware that there are various risks to an investment in our common stock. You should carefully consider these risk factors, together with all of the other information included in this prospectus, before you decide to invest in shares of our common stock.

 

If any of the following risks were to actually occur, then our business, financial condition, results of operations and/or prospects could be harmed and materially adversely affected. In that case, the trading price of our Common Stock, if and when a market for our Common Stock develops, could decline, and an investor in our securities may lose all or part of their investment.

 

Risks Related to the Business

 

1. XYI Group has virtually no financial resources. Our independent registered auditors’ report includes a qualification stating that there is substantial doubt about our ability to continue as a going concern.

 

XYI Group is a development stage company and has virtually no financial resources. We had a cash balance of $18,296 as of January 31, 2015. We have working capital of $13,496 and a stockholders’ equity of $13,496 as of January 31, 2015. Our independent registered auditors included an explanatory paragraph in their opinion on our financial statements as of and for the period ended January 31, 2015, that states that Company losses from operations raise substantial doubt about its ability to continue as a going concern. We may seek additional financing beyond the amounts that may be received from this offering. The financing sought may be in the form of equity or debt financing from various sources as yet unidentified. Until we have completed our offering most if not all of our efforts will be spent in our registration and development of our web portal. No assurances can be given that we will generate sufficient revenue or obtain the necessary financing to continue as a going concern. Even if we do raise sufficient capital and generate revenues to support our operating expenses, there can be no assurance that the revenue will be sufficient to enable us to develop our business to a level where it will generate substantial profits and cash flows from operations, or provide a return on investment. In addition, if we raise additional funds through the issuance of equity or convertible debt securities, the percentage ownership of our stockholders could be significantly diluted, the newly-issued securities may have rights, preferences or privileges senior to those of existing stockholders and the trading price of our Common Stock could be adversely affected. Further, if we obtain additional debt financing, a substantial portion of our operating cash flow may be dedicated to the payment of principal and interest on such indebtedness, and the terms of the debt securities issued could impose significant restrictions on our operations. If we are unable to continue as a going concern, you may lose your entire investment.

 

Our current resources and source of funds, which primarily consist of friends and family debt and equity investments from unaffiliated third parties, are limited and speculative in nature. At this time we are unable to rely on such funds to maintain business operations functioning for the next twelve months as there is a chance these funds may become unavailable or will be unavailable when needed. We do not have a formal agreement with our president and chief executive officer Mr. Wong to fund the Company’s working capital needs. No assurances can be given that we will be able to receive funds from Mr. Wong or others to continue our operations beyond a month-to-month basis. Our ability to continue as a going concern depends completely on Mr. Wong and our ability to raise additional funds.

 

2. XYI Group is not currently profitable and may not ever become profitable.

 

We have generated minor revenues from selling our souvenir product products, however, the sales are uncertain and there are no assurance that there will be any future sales, and that any potential future sales will occur or bring in revenue .Our expenses will be accrued and deferred until sufficient financing is obtained from sales of our products and from loans from Mr. Wong and other potential lenders. Our current legal counsel has no active agreements to provide us services and will only be utilized on a need be basis. Any fees incurred by the Company retaining services of counsel will be paid upfront by the Company. Additionally, we expect to incur losses and negative operating cash flows for the foreseeable future, and we may not achieve profitability. We expect to incur substantial losses for the foreseeable future and may never become profitable. As a result, we will need to generate significant revenues in order to achieve and maintain profitability. We may not be able to generate these revenues or achieve profitability in the future. Our failure to achieve or maintain profitability could negatively impact the value of our business.

 

3. XYI Group is and will continue to be completely dependent on the services of our president and chief executive officer, Mr. Wong, the loss of whose services may cause our business operations to cease, and we will need to engage and retain qualified employees and consultants to further implement our strategy.

 

XYI Group’s operations and business strategy are completely dependent upon the knowledge and business connections of Mr. Wong our president and chief executive officer. He is under no contractual obligation to remain employed by us. If he should choose to leave us for any reason or if he becomes ill and is unable to work for an extended period of time before we have hired additional personnel, our operations will likely fail. Even if we are able to find additional personnel, it is uncertain whether we could find someone who could develop our business along the lines described in this prospectus. We believe that XYI Group’s operations will not be able to continue without the services of Mr. Wong or an appropriate replacement(s).

 

 

We currently do not have key-man life insurance on the life of Mr. Wong. We have not yet procured such insurance, and there is no guarantee that we will be able to obtain such insurance in the future. Accordingly, it is important that we are able to attract, motivate and retain highly qualified and talented personnel and independent contractors, and there is no guarantee that we will be able to do so. Mr. Wong is also presently employed outside of the Company and can only devote at least 20 hours per week to the Company. These additional outside commitments may impair Mr. Wong’s ability to operate the Company on a successful level.

 

4. Because we have only recently commenced business operations, we face a high risk of business failure which would result in the loss of your investment.

 

We are a development stage company formed recently to carry out the activities described in this prospectus and thus have only a limited operating history upon which an evaluation of its prospectus can be made. XYI Group, Inc. was incorporated under the laws of the State of Nevada on December 5, 2014. Since inception, all of our efforts to date have related to developing our business plan and beginning business activities. We have limited business operations. Thus, there is no internal or industry-based historical financial data upon which to estimate our planned operating expenses. We expect that our results of operations may also fluctuate significantly in the future as a result of a variety of market factors including, among others, the entry of new competitors offering a similar business; the availability of motivated and qualified personnel; specific economic conditions in the Company’s business; and general economic conditions. Accordingly, our future sales and operating results are difficult to forecast. As of the date of this prospectus, we have earned no significant revenue. Failure to generate revenue will cause us to go out of business, which could result in the complete loss of your investment.

 

The likelihood of the success of the Company must be considered in light of the expenses, complications and delays frequently encountered in connection with the establishment and expansion of new businesses and the competitive environment in which the Company will operate. There can be no assurance that even if the company earns future revenues from sales of the Company’s products and services, that such revenues will be significant enough or that we will be able to sell its products and services at a profit, if at all. Future revenues and/or profits, if any, will depend on many various factors, including, but not limited to both initial and continued market acceptance of the Company’s products and services and the successful implementation of its planned growth strategy.

  

The Company has commenced internally developing our website and product. However, we may not be able to acquire or internally develop additional products in the future because of a lack of available funds or financing to do so. In order for us to develop or acquire additional products, we may need to secure the necessary financing, beyond just the proceeds of this offering. We will need additional funds to be able to market the Company’s products. If we are unable to obtain adequate funding or financing, the Company faces ultimate strong likelihood of business failure. There are no assurances that we will be able to raise any funds or establish any financing program for the Company’s growth.

 

5. We currently do not and may not ever have the resources or ability to implement and manage the Company’s growth strategy.

 

The Company’s planned business operations may never occur because the business plan may never be implemented because of lack of funds to do so. If the Company’s business plan and growth strategy are implemented, of which no assurances can be given, a significant strain on the Company’s management, operating systems and/or financial resources will be imposed. Failure by the Company’s management to manage this growth, if it occurs, or unexpected difficulties encountered during growth, could have a material adverse impact on the Company’s results of operations or financial condition.

 

The Company’s ability to operate profitable product lines (if we are able to establish any product or product lines at all) will depend upon a number of factors, including (i) identifying distribution channels, (ii) generating sufficient funds from our then existing operations or obtaining third-party financing or additional capital to develop new product lines, (iii) the Company’s management team and its financial and accounting controls and (iv) staffing, training and retaining of skilled personnel, if any at all. Certain of these factors will be beyond the Company’s control and may be adversely affected by the economy or actions taken by competing companies. Moreover, potential products that may meet the Company’s product focus and other criteria for developing new products or services, if we are able to develop or acquire at all, are believed to be limited. There can be no assurance that the Company will be able to execute and manage a growth strategy effectively or at all.

 

  

6. Our reliance on referrals from outside contacts to develop business may not be effective.

 

The Company initially will rely on our president and chief executive officer, Mr. Wong, for a majority of its leads. The inability to garner sales leads or referrals would harm the Company’s operations and could potentially result in a loss of your investment.

 

7. We face competition from competing Souvenir Companies and will need to ensure that our products can successfully compete with our competition.

 

The souvenir industry is cluttered with a large number of competing companies and in order to attract future clients to our souvenirs we will need to ensure that they are as appealing, or ideally more appealing, than the products offered by our competition. Our souvenirs must reach the high standards of today’s consumers and to that end we will need to ensure that our products are of quality design and craftsmanship and are appropriately tailored to our future clients’ needs. This is particularly true of corporate entities who may use our products for branding purposes. We must ensure that our products are professional and portray their businesses in a positive light or we may not be able to successfully compete with our competitors.

 

8. There are significant potential conflicts of interest.

 

Our personnel will be required to commit substantial time to our affairs and, accordingly, these individual(s) (particularly our president and chief executive officer) may have conflicts of interest in allocating management time among various business activities. In the course of other business activities, certain key personnel (particularly our president and chief executive officer) may become aware of business opportunities which may be appropriate for presentation to us, as well as other entities with which they are affiliated. As such, there may be conflicts of interest in determining to which entity a particular business opportunity should be presented. We cannot provide assurances that our efforts to eliminate the potential impact of conflicts of interest will be effective. These conflicts of interest could have a negative impact on the Company’s operations and on any investment in the Company.

 

9. Our President Mr. Wong Heng Wah has a lack of experience in certain areas that may potentially negatively impact out business operations.

 

Mr. Wong Heng Wah has no experience with accounting or preparing financial statements, and thus he will need to either become familiar with these practices in a timely manner, or alternatively find an experienced individual to prepare this information for the company. Mr. Wong Heng Wah additionally has no experience running a public company, operating web portals, selling souvenirs or conducting securities offerings. His lack of experience in each, and all, of these regards could negatively impact our operations if his lack of experience prevents us from achieving profitability in our anticipated timeframe.

 

10. Following the effective date of our Registration Statement, of which this prospectus is a part, we will be subject to the periodic reporting requirements of Section 15(d) of the Exchange Act that will require us to incur audit fees and legal fees in connection with the preparation of such reports. These additional costs could reduce or eliminate our ability to earn a profit.

 

Following the effective date of our registration statement of which this prospectus is a part, we will be required to file periodic reports with the SEC pursuant to the Exchange Act and the rules and regulations promulgated thereunder. In order to comply with these requirements, our independent registered public accounting firm will have to review our financial statements on a quarterly basis and audit our financial statements on an annual basis. Moreover, our legal counsel will have to review and assist in the preparation of such reports. The costs charged by these professionals for such services cannot be accurately predicted at this time because factors such as the number and type of transactions that we engage in and the complexity of our reports cannot be determined at this time and will have a major effect on the amount of time to be spent by our auditors and attorneys. However, the incurrence of such costs will obviously be an expense to our operations and thus have a negative effect on our ability to meet our overhead requirements and earn a profit. We may be exposed to potential risks resulting from any new requirements under Section 404 of the Sarbanes-Oxley Act of 2002. If we do not submit the periodic reports in a timely manner after the registration statement becomes effective, we will have the risk of being delinquent in our filings and therefore, our investors may not have current information of the Company to make informed investment decision about the purchase or sale of our Company’s securities. If we cannot provide reliable financial reports or prevent fraud, our business and operating results could be harmed, investors could lose confidence in our reported financial information, and the trading price of our common stock, if a market ever develops, could drop significantly.

 

 

11. Our internal controls may be inadequate, which could cause our financial reporting to be unreliable and lead to misinformation being disseminated to the public.

 

Our management is responsible for establishing and maintaining adequate internal control over our financial reporting. As defined in Exchange Act Rule 13a-15(f), internal control over financial reporting is a process designed by, or under the supervision of, the principal executive and principal financial officer and effected by the board of directors, management and other personnel, 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 and includes those policies and procedures that:

 

	●	pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company;
	●	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 Company are being made only in accordance with authorizations of management and/or directors of the Company; and
	●	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.

 

Our internal controls may be inadequate or ineffective, which could cause our financial reporting to be unreliable and lead to misinformation being disseminated to the public. Investors relying upon this misinformation may make an uninformed investment decision. If we cannot provide reliable financial reports, our business and operating results could be harmed, investors could lose confidence in our reported financial information, and the trading price of our common stock, if a market ever develops, could drop significantly and result in a loss of some or all of your investment.

 

12. The costs of being a public company could result in us being unable to continue as a going concern.

 

As a public company, we will have to comply with numerous financial reporting and legal requirements, including those pertaining to audits, quarterly reporting and internal controls. Such costs can be substantial and we must generate enough revenue or raise money from offerings of securities or loans in order to meet these costs and our SEC filing requirements. If our revenues are insufficient, and/or we cannot satisfy many of these costs through the issuance of our shares, we may be unable to satisfy these costs through the normal course of business which would result in our being unable to continue as a going concern.

 

13. Having only one director limits our ability to establish effective independent corporate governance procedures and increases the control of our president and chief executive officer.

 

We have only one director who also serves as our president and chief executive officer. Accordingly, we cannot establish board committees comprised of independent members to oversee functions like compensation or audit issues. In addition, Mr. Wong the chairman (who is also our president, and chief executive officer), has all of the voting power over all actions taken by the board of directors of the Company, which gives him complete control over all corporate matters and decisions.

 

Until we have a larger board of directors that would include some independent members, if ever, there will be limited oversight of our president and chief executive officer’s decisions and activities and little ability for minority shareholders to challenge or reverse those activities and decisions, even if they are not in the best interests of minority shareholders.

 

Risks Related to Our Common Stock

 

14. The Company is conducting this Offering by our Officers and Directors without the benefit of an underwriter who would have assisted to confirm the accuracy of the disclosure in our prospectus and without the benefit of an underwriter the Company may not be able to sell all or any of the shares offered herein.

 

The Company is responsible for the accuracy of the disclosure in this prospectus. The Company is conducting a self-underwritten offering on a “best efforts” basis, which means no underwriter has been engaged in any due diligence activities to assist to confirm the accuracy of the disclosure in the prospectus or to provide input as to the offering price. The common shares are being offered on our behalf by Mr. Wong, our president and chief executive officer, on a best-effort basis. No broker-dealer has been retained as an underwriter and no broker-dealer is under any obligation to purchase any common shares. There are no firm commitments to purchase any of the shares in this offering. Consequently, there is no guarantee that the Company, through its president and chief executive officer, is capable of selling all, or any, of the common shares offered hereby. The sale of only a small number of shares increases the likelihood of no market ever developing for our shares.

 

 

15. Since there is no minimum for our offering, if only a few persons purchase shares they will lose their money without us being even able to develop a market for our shares.

 

Since there is no minimum with respect to the number of shares to be sold directly by the Company in its offering, if only a few shares are sold, we will be unable to even attempt to create a public market of any kind for our shares. In such an event, it is highly likely that the entire investment of shareowners would be lost. We cannot make any assurances that even if all of the shares are purchased, we could have the same result. We cannot assure you that there will be a market in the future for our common stock. which may have a negative effect on the market price of our common stock. You may not be able to sell your shares at their purchase price or at any price at all. Accordingly, you may have difficulty reselling any shares you purchase from pursuant to this Offering.

 

16. The offering price of our common stock has been determined arbitrarily.

 

The offering price has been arbitrarily determined by the Company and bears no relationship to assets, earnings, or any other valuation criteria. No assurance can be given that the shares offered hereby will have a market value or that they may be sold at this, or at any price. The price of our common stock in this offering has not been determined by any independent financial evaluation, market mechanism or by our auditors, and is therefore, to a large extent, arbitrary. Our audit firm has not reviewed management's valuation and, therefore, expresses no opinion as to the fairness of the offering price as determined by our management. As a result, the price of the common stock in this offering may not reflect the value perceived by the market. There can be no assurance that the shares offered hereby are worth the price for which they are offered and investors may, therefore, lose a portion or all of their investment.

 

17. Shareholders may be diluted significantly through our efforts to obtain financing and satisfy obligations through issuance of additional shares of our common stock.

 

At this time, we have no committed source of financing. Wherever possible, our board of directors will attempt to use non-cash consideration to satisfy obligations. In many instances, we believe that the non-cash consideration will consist of restricted shares of our common stock. We currently have 600,000,000 authorized shares of Common Stock, Our board of directors has authority, without action or vote of the shareholders, to issue all or part of the authorized shares with the exception of those shares that will be issued as part of this Offering. Our management could, without the consent of the existing shareholders, issue substantially more shares and even the remainder of the authorized shares, causing a large dilution in the equity position of current shareholders. Additionally, large share issuances would generally have a negative impact on our share price. It is possible that, due to additional share issuance, you could lose a substantial amount, or all, of your investment. In addition, if a trading market develops for our common stock, we may attempt to raise capital by selling shares of our common stock, possibly at a discount to market. These actions will result in dilution of the ownership interests of existing shareholders, further dilute common stock book value, and that dilution may be material.

 

18. The interests of shareholders may be hurt because we can issue shares of our common stock to individuals or entities that support existing management with such issuances serving to enhance existing management’s ability to maintain control of our company.

 

Our board of directors has authority, without action or vote of the shareholders, to issue all or part of the authorized but unissued common shares. Such issuances may be issued to parties or entities committed to supporting existing management and the interests of existing management which may not be the same as the interests of other shareholders. Our ability to issue shares without shareholder approval serves to enhance existing management’s ability to maintain control of our company and serves to decrease the control that investing shareholders have in the Company.

 

 

19. Currently, there is no established public market for our securities, and there can be no assurances that any established public market will ever develop or that our common stock will be quoted for trading and, even if quoted, it is likely to be subject to significant price fluctuations.

 

Prior to the date of this prospectus, there has not been any established trading market for our common stock, and there is currently no established public market whatsoever for our securities. We have not found a market maker. There can be no assurance that we will find a market maker willing to file an application with FINRA on our behalf and if we do that the market maker’s application will be accepted by FINRA nor can we estimate as to the time period that the application will require. We are not permitted to file such application on our own behalf. If the application is accepted, there can be no assurances as to whether

 

	(i)	any market for our shares will develop;
	(ii)	the prices at which our common stock will trade; or
	(iii)	the extent to which investor interest in us will lead to the development of an active, liquid trading market. Active trading markets generally result in lower price volatility and more efficient execution of buy and sell orders for investors.

 

If we become able to have our shares of common stock quoted on the OTCQB, we will then try, through a broker-dealer and its clearing firm, to become eligible with the Depository Trust Company ("DTC") to permit our shares to trade electronically. There are no assurances that our shares will ever become DTC-eligible or, if they do, how long this would take. If our common stock does become listed and a market for the stock develops, the actual price of our shares will be determined by prevailing market prices at the time of the sale.

 

We cannot assure you that there will be a market in the future for our common stock. The trading of securities on the OTCQB is often sporadic and investors may have difficulty buying and selling our shares or obtaining market quotations for them, which may have a negative effect on the market price of our common stock. You may not be able to sell your shares at their purchase price or at any price at all. Accordingly, you may have difficulty reselling any shares you purchase from the selling security holders.

 

In addition, our common stock is unlikely to be followed by any market analysts, and there may be few institutions acting as market makers for our common stock. Either of these factors could adversely affect the liquidity and trading price of our common stock. Until our common stock is fully distributed and an orderly market develops in our common stock, if ever, the price at which it trades is likely to fluctuate significantly. Prices for our common stock will be determined in the marketplace and may be influenced by many factors, including the depth and liquidity of the market for shares of our common stock, developments affecting our business, including the impact of the factors referred to elsewhere in these Risk Factors, investor perception of the Company and general economic and market conditions. No assurances can be given that an orderly or liquid market will ever develop for the shares of our common stock.

 

 

Because of the anticipated low price of the securities being registered, many brokerage firms may not be willing to effect transactions in these securities. Purchasers of our securities should be aware that any market that develops in our stock will be subject to the penny stock restrictions. See “Plan of Distribution” and Risk Factor #21 below.

 

20. We are a shell company which could affect liquidity in our Common Stock.

 

Pursuant to Rule 405 of Regulation C promulgated under the Securities Act of 1933, as amended (the “Securities Act”), a “shell company” is defined as a company that has (i) no or nominal operations and (ii) either no or nominal assets, assets consisting solely of cash and cash equivalents, or assets consisting of any amount of cash and cash equivalents and nominal other assets (“Shell Company”). The Company is in development stage and has limited operations. Our assets currently are consisting of only cash. As such, we are a “Shell Company” pursuant to Rule 405. As a Shell Company, there will be (i) additional restrictions on the resale of restricted shares, (ii) additional disclosure required on an acquisition and increased cost related to disclosure and reporting compliance, and (iii) prohibited to use Form S-8.

 

Shareholders of a Shell Company may not rely on the safe harbor created by Rule 144 of the Securities Act until (i) such company has ceased to be a “Shell Company” for a period of at least 12 months since the date on which the current “Form 10 information” of such company, reflecting its status as a non-Shell Company, is filed with the SEC, (ii) such company is subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act, and (iii) such company has filed all reports and other materials to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months. With respect to the disclosure requirements, the “Form 10 information” should include the disclosure required by Form 10 to register such securities to be sold in reliance of Rule 144 under the Exchange Act. Therefore, any restricted securities we sell in the future or issue to consultants or employees in consideration for services rendered or for any other purpose may have no liquidity until and unless such securities are to be resold pursuant to an effective prospectus, or until the Company and the selling stockholder are in compliance with the requirements of Rule 144 of the Securities Act. As a result, it may be more difficult for us to raise funds to support our operations through the sale of debt or equity securities unless we agree to register such securities, which could cause us to expend additional time and cash resources. Further, it may be more difficult for us to compensate our employees and consultants with our securities instead of cash.

 

21. Any market that develops in shares of our common stock will be subject to the penny stock regulations and restrictions pertaining to low priced stocks that will create a lack of liquidity and make trading difficult or impossible.

 

In the event that our shares are traded, and our stock trades below $5.00 per share, our stock would be known as a “penny stock”, which is subject to various regulations involving disclosures to be given to you prior to the purchase of any penny stock. The U.S. Securities and Exchange Commission (the “SEC”) has adopted regulations which generally define a “penny stock” to be any equity security that has a market price of less than $5.00 per share, subject to certain exceptions. Depending on market fluctuations, our common stock could be considered to be a “penny stock”. A penny stock is subject to rules that impose additional sales practice requirements on broker/dealers who sell these securities to persons other than established Members and accredited investors. For transactions covered by these rules, the broker/dealer must make a special suitability determination for the purchase of these securities. In addition, he must receive the purchaser’s written consent to the transaction prior to the purchase. He must also provide certain written disclosures to the purchaser. Consequently, the “penny stock” rules may restrict the ability of broker/dealers to sell our securities, and may negatively affect the ability of holders of shares of our common stock to resell them. These disclosures require you to acknowledge that you understand the risks associated with buying penny stocks and that you can absorb the loss of your entire investment. Penny stocks are low priced securities that do not have a very high trading volume. Consequently, the price of the stock is often volatile and you may not be able to buy or sell the stock when you want to. 

 

22. The market for penny stocks has experienced numerous frauds and abuses that could adversely impact investors in our stock.

 

Company management believes that the market for penny stocks has suffered from patterns of fraud and abuse. Such patterns include:

 

	●	Control of the market for the security by one or a few broker-dealers that are often related to the promoter or issuer;
	●	Manipulation of prices through prearranged matching of purchases and sales and false and misleading press releases;
	●	"Boiler room" practices involving high pressure sales tactics and unrealistic price projections by sales persons;
	●	Excessive and undisclosed bid-ask differentials and markups by selling broker-dealers; and
	●	Wholesale dumping of the same securities by promoters and broker-dealers after prices have been manipulated to a desired level, along with the inevitable collapse of those prices with consequent investor losses.

 

23. Any trading market that may develop may be restricted by virtue of state securities “Blue Sky” laws that prohibit trading absent compliance with individual state laws. These restrictions may make it difficult or impossible to sell shares in those states.

 

There is currently no established public market for our common stock, and there can be no assurance that any established public market will develop in the foreseeable future. Transfer of our common stock may also be restricted under the securities or securities regulations laws promulgated by various states and foreign jurisdictions, commonly referred to as “Blue Sky” laws. Absent compliance with such individual state laws, our common stock may not be traded in such jurisdictions. Because the securities registered hereunder have not been registered for resale under the blue sky laws of any state, the holders of such shares and persons who desire to purchase them in any trading market that might develop in the future, should be aware that there may be significant state blue sky law restrictions upon the ability of investors to sell the securities and of purchasers to purchase the securities. These restrictions prohibit the secondary trading of our common stock. We currently do not intend to and may not be able to qualify securities for resale in at least 17 states which do not offer manual exemptions (but may not to offer one to us since we are a shell company and may still be a shell company at the time of application) and require shares to be qualified before they can be resold by our shareholders. Accordingly, investors should consider the secondary market for our securities to be a limited one. See also “Plan of Distribution-State Securities-Blue Sky Laws.”

 

 

24. Our board of directors (consisting of one person, our president and chief executive officer) has the authority, without stockholder approval, to issue preferred stock with terms that may not be beneficial to common stock holders and with the ability to affect adversely stockholder voting power .

 

Our articles of incorporation allow us to issue shares of preferred stock without any vote or further action by our stockholders. Our board of directors has the authority to fix and determine the relative rights and preferences of preferred stock. Our board of directors also has the authority to issue preferred stock without further stockholder approval, including large blocks of preferred stock. As a result, our board of directors could authorize the issuance of a series of preferred stock that would grant to holders the preferred right to our assets upon liquidation, the right to receive dividend payments before dividends are distributed to the holders of common stock and the right to the redemption of the shares, together with a premium, prior to the redemption of our common stock. This may adversely affect holders of our common stock and their relative rights and preferences as well as ability to participate in Company decisions.

 

25. The ability of our founder, president, and chief executive officer to control our business may limit or eliminate minority shareholders’ ability to influence corporate affairs.

 

Upon the completion of this offering, our founder, president and chief executive officer, Mr. Wong will beneficially own an aggregate of 99.2% of our outstanding common stock assuming the sale of all shares being registered. Because of his beneficial stock ownership, our founder and president, and chief executive officer will be in a position to continue to elect our board of directors, decide all matters requiring stockholder approval and determine our policies. The interests of our founder and president, and chief executive officer may differ from the interests of other shareholders with respect to the issuance of shares, business transactions with or sales to other companies, selection of officers and directors and other business decisions. The minority shareholders would have no way of overriding decisions made by our president and chief executive officer. This level of control may also have an adverse impact on the market value of our shares because our president and chief executive officer may institute or undertake transactions, policies or programs that may result in losses, may not take any steps to increase our visibility in the financial community and / or may sell sufficient numbers of shares to significantly decrease our price per share.

 

26. All of our presently issued and outstanding common shares are restricted under Rule 144 of the Securities Act, as amended. When the restriction on any or all of these shares is lifted, and the shares are sold in the open market, the price of our common stock could be adversely affected.

 

All of the presently outstanding shares of common stock (100,706,000 shares) are "restricted securities" as defined under Rule 144 promulgated under the Securities Act and may only be sold pursuant to an effective registration statement or an exemption from registration, if available. Rule 144 provides in essence that a person who is not an affiliate and has held restricted securities for a prescribed period of at least six (6) months if purchased from a reporting issuer or twelve (12) months (as is the case herein) if purchased from a non-reporting Company, may, under certain conditions, sell all or any of his shares without volume limitation, in brokerage transactions. Affiliates, however, may not sell shares in excess of 1% of the Company’s outstanding common stock every three months. As a result of revisions to Rule 144 which became effective on February 15, 2008, there is no limit on the amount of restricted securities that may be sold by a non-affiliate (i.e., a stockholder who has not been an officer, director or control person for at least 90 consecutive days) after the restricted securities have been held by the owner for the aforementioned prescribed period of time. A sale under Rule 144 or under any other exemption from the Act, if available, or pursuant to registration of shares of common stock of present stockholders, may have a depressive effect upon the price of the common stock in any market that may develop.

 

27. We do not anticipate paying dividends in the foreseeable future so there will be less ways in which you can make a gain on any investment in the Company.

 

We have never paid cash dividends on our common stock. We do not expect to pay cash dividends on our common stock at any time in the foreseeable future. The future payment of dividends directly depends upon our future earnings, financial requirements and other factors that our board of directors will consider. Also, because we do not intend to pay dividends, any gain on your investment will need to result from an appreciation in the price of our common stock. There will therefore be fewer ways in which you are able to make a gain on your investment.

 

28. Because we are not subject to compliance with rules requiring the adoption of certain corporate governance measures, our stockholders have limited protection against interested director transactions, conflicts of interest and similar matters.

 

The Sarbanes-Oxley Act of 2002, as well as rule changes proposed and enacted by the SEC, the New York and American Stock Exchanges and the Nasdaq Stock Market, as a result of Sarbanes-Oxley, require the implementation of various measures relating to corporate governance. These measures are designed to enhance the integrity of corporate management and the securities markets and apply to securities that are listed on those exchanges or the Nasdaq Stock Market. Because we are not presently required to comply with many of the corporate governance provisions and because we chose to avoid incurring the substantial additional costs associated with such compliance any sooner than legally required, we have not yet adopted these measures.

 

 

Because none of our directors (currently one person) are independent directors, we do not currently have independent audit or compensation committees. As a result, these directors have the ability, among other things, to determine their own level of compensation. Until we comply with such corporate governance measures, regardless of whether such compliance is required, the absence of such standards of corporate governance may leave our stockholders without protections against interested director transactions, conflicts of interest, if any, and similar matters and investors may be reluctant to provide us with funds necessary to expand our operations.

 

We intend to comply with all corporate governance measures relating to director independence as and when required. However, we may find it very difficult or be unable to attract and retain qualified officers, directors and members of board committees required to provide for our effective management as a result of Sarbanes-Oxley Act of 2002. The enactment of the Sarbanes-Oxley Act of 2002 has resulted in a series of rules and regulations by the SEC that increase responsibilities and liabilities of directors and executive officers. The perceived increased personal risk associated with these recent changes may make it more costly or deter qualified individuals from accepting these roles.

 

29. You may have limited access to information regarding our business because our obligations to file periodic reports with the SEC could be automatically suspended under certain circumstances.

 

As of the effective date of our registration statement of which this prospectus is a part, we will become subject to certain informational requirements of the Exchange Act, as amended and we will be required to file periodic reports (i.e., annual, quarterly and material events) with the SEC which will be immediately available to the public for inspection and copying. In the event during the year that our registration statement becomes effective, these reporting obligations may be automatically suspended under Section 15(d) of the Exchange Act if we have less than 300 shareholders and do not file a registration statement on Form 8-A. If this occurs after the year in which our registration statement becomes effective, we will no longer be obligated to file such periodic reports with the SEC and access to our business information would then be even more restricted. After this registration statement on Form S-1 becomes effective, we may be required to deliver periodic reports to security holders as proscribed by the Exchange Act, as amended.  However, we will not be required to furnish proxy statements to security holders and our directors, officers and principal beneficial owners will not be required to report their beneficial ownership of securities to the SEC pursuant to Section 16 of the Exchange Act until we have both 500 or more security holders and greater than $10 million in assets. This means that access to information regarding our business and operations will be limited.

 

30. We are an emerging growth company within the meaning of the Securities Act, and as a consequence of taking advantage of certain exemptions from reporting requirements that are available to emerging growth companies; our financial statements may not be comparable to companies that comply with public company effective dates and this may make out common stock less attractive to investors.

 

We are an “emerging growth company,” as defined in the JOBS Act, and we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies” including not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. We cannot predict if investors will find our common stock less attractive because we may rely on these exemptions. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our stock price may be more volatile.

 

In addition, Section 107 of the JOBS Act also provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. An “emerging growth company” can therefore delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We are choosing to follow the extended transition period, and as a result, we will delay adoption of certain new or revised accounting standards on the relevant dates on which adoption of such standards is required for non-emerging growth companies. Since we have chosen to take advantage of the extended transition period for complying with new or revised accounting standards applicable to public companies to delay adoption of such standards until such standards are made applicable to private companies. Accordingly, our financial statements may not be comparable to the financial statements of public companies that comply with such new or revised accounting standards.

 

31. You may receive no proceeds or very minimal proceeds from the offering.

 

Since there is no minimum amount of shares that must be sold by the company, you may receive no proceeds or very minimal proceeds from the offering and potential investors may end up holding shares in a company that:

 

●

Has not received enough proceeds from the offering to begin operations; and

●

Has no market for its shares.

 

32. Investing in our Company is highly speculative and could result in the entire loss of your investment.

 

Purchasing the offered shares is highly speculative and involves significant risk. The offered shares should not be purchased by any person who cannot afford to lose their entire investment. Our business objectives are also speculative, and it is possible that we would be unable to accomplish them. Our shareholders may be unable to realize a substantial or any return on their purchase of the offered shares and may lose their entire investment. For this reason, each prospective purchaser of the offered shares should read this prospectus and all of its exhibits carefully and consult with their attorney, business and/or investment advisor.

 

 

33. If our Company is dissolved, it is unlikely that there will be sufficient assets remaining to distribute to our shareholders.

 

In the event of the dissolution of our Company, the proceeds realized from the liquidation of our assets, if any, will be used primarily to pay the claims of our creditors, if any, before there can be any distribution to the shareholders. In that case, the ability of purchasers of the offered shares to recover all or any portion of the purchase price for the offered shares will depend on the amount of funds realized and the claims to be satisfied there from.

 

34. Our business is subject to the risks of international operations.

 

Substantially all of our business operations are conducted in East Asia. Accordingly, our results of operations, financial condition and prospects are subject to a significant degree to economic, political and legal developments in the Asian countries we intend to develop business. Following the closing of our initial public offering, we will derive a significant portion of our revenue and earnings from the operation in Hong Kong, our principal business place and also in Malaysia and other East Asian countries. Operating in multiple foreign countries involves substantial risk. For example, our business activities subject us to a number of laws and regulations, such as anti-corruption laws, tax laws, foreign exchange controls and cash repatriation restrictions, data privacy and security requirements, labor laws, intellectual property laws, privacy laws, and anti-competition regulations. As we expand into additional countries, the complexity inherent in complying with these laws and regulations increases, making compliance more difficult and costly and driving up the costs of doing business in foreign jurisdictions. Any failure to comply with foreign laws and regulations could subject us to fines and penalties make it more difficult or impossible to do business in that country and harm our reputation.

 

Operating in foreign countries also subjects us to risk from currency fluctuations. Our primary exposure to movements in foreign currency exchange rates relates to non-U.S. dollar denominated sales and operating expenses. The weakening of foreign currencies relative to the U.S. dollar adversely affects the U.S. dollar value of our foreign currency-denominated sales and earnings. This could either reduce the U.S. dollar value of our prices or, if we raise prices in the local currency, it could reduce the overall demand for our offerings. Either could adversely affect our revenue. Conversely, a rise in the price of local currencies relative to the U.S. dollar could adversely impact our profitability because it would increase our costs denominated in those currencies, thus adversely affecting gross margins.

 

35. We may be exposed to liabilities under the Foreign Corrupt Practices Act, and any determination that we violated the Foreign Corrupt Practices Act could have a material adverse effect on our business.

 

We are subject to the Foreign Corrupt Practice Act, or FCPA, and other laws that prohibit improper payments or offers of payments to foreign governments and their officials and political parties by U.S. persons and issuers as defined by the statute for the purpose of obtaining or retaining business. We will have operations, agreements with third parties and make sales in East Asia, which may experience corruption. Our proposed activities in Asia create the risk of unauthorized payments or offers of payments by one of the employees, consultants, or sales agents of our Company, because these parties are not always subject to our control. It will be our policy to implement safeguards to discourage these practices by our employees. Also, our existing safeguards and any future improvements may prove to be less than effective, and the employees, consultants, or sales agents of our Company may engage in conduct for which we might be held responsible. Violations of the FCPA may result in severe criminal or civil sanctions, and we may be subject to other liabilities, which could negatively affect our business, operating results and financial condition. In addition, the government may seek to hold our Company liable for successor liability FCPA violations committed by companies in which we invest or that we acquire.

 

36. You may have difficulty enforcing a judgment against us.

 

We are a Nevada corporation and most of our assets are and will be located outside of the United States. Almost all of our operations will be conducted in Hong Kong. In addition, our officers and directors are nationals and residents of a country other than the United States. All of their assets are located outside the United States. As a result, it may be difficult for you to effect service of process within the United States upon them. It may also be difficult for you to enforce in U.S. courts judgments on the civil liability provisions of the U.S. federal securities laws against us and our officer and director, since he is not a resident in the United States. In addition, there is uncertainty as to whether the courts of Hong Kong or other Asian countries would recognize or enforce judgments of U.S. courts.

 

For all of the foregoing reasons and others set forth herein, an investment in our securities in any market that may develop in the future involves a high degree of risk.

 

 

USE OF PROCEEDS

 

XYI Group will apply the proceeds from the offering to pay for the offering, related costs to the offering, and for business operations for the next twelve months. Below are the use of proceeds pertaining to the sale of 100%, 75%, 50%, and 25% of the shares of our common stock offered herein.

 

If 200,000 shares (100%) are sold: 

Next 12 months

Planned Actions	Estimated Cost to Complete
Development of E Commerce website and mobile app	$100,000.00
Third party manufacturing fees	$41,000.00
Hire more employees	$80,000.00
Marketing and Advertising	$20,000.00
Rent for Showroom	$40,000.00
SEC Registration fee	$39.04
NASD filing fee	$100.00
Accounting fees and expenses	$5,000.00
Legal fees and expenses (relating to the preparation of our registration statement from inception to effective date and related documents)	$40,000.00
Transfer agent fees	$2,500.00
Blue Sky fees and expenses	$5,000.00
Miscellaneous expenses relating to the offering	$2,360.96
TOTAL	$336,000

 

If 150,000 shares (75%) are sold: 

Next 12 months

Planned Actions	Estimated Cost to Complete
Development of E Commerce website and mobile app	$60,000.00
Third party manufacturing fees	$26,000.00
Hire more employees	$44,000.00
Marketing and Advertising	$7,000.00
Rent for Showroom	$60,000.00
SEC Registration fee	$39.04
NASD filing fee	$100.00
Accounting fees and expenses	$5,000.00
Legal fees and expenses (relating to the preparation of our registration statement from inception to effective date and related documents)	$40,000.00
Transfer agent fees	$2,500.00
Blue Sky fees and expenses	$5,000.00
Miscellaneous expenses relating to the offering	$2,360.96
TOTAL	$252,000

 

If 100,000 shares (50%) are sold: 

Next 12 months

Planned Actions	Estimated Cost to Complete
Development of E Commerce website and mobile app	$40,000.00
Third party manufacturing fees	$18,000.00
Hire more employees	$30,000.00
Marketing and Advertising	$5,000.00
Rent for Showroom	$20,000.00
SEC Registration fee	$39.04
NASD filing fee	$100.00
Accounting fees and expenses	$5,000.00
Legal fees and expenses (relating to the preparation of our registration statement from inception to effective date and related documents)	$40,000.00
Transfer agent fees	$2,500.00
Blue Sky fees and expenses	$5,000.00
Miscellaneous expenses relating to the offering	$2,360.96
TOTAL	$168,000

 

If 50,000 shares (25%) are sold: 

Next 12 months

Planned Actions	Estimated Cost to Complete
Development of E Commerce website and mobile app	$20,000.00
Third party manufacturing fees	$9,000.00
SEC Registration fee	$39.04
NASD filing fee	$100.00
Accounting fees and expenses	$5,000.00
Legal fees and expenses (relating to the preparation of our registration statement from inception to effective date and related documents)	$40,000.00
Transfer agent fees	$2,500.00
Blue Sky fees and expenses	$5,000.00
Miscellaneous expenses relating to the offering	$2,360.96
TOTAL	$84,000

The above figures represent only estimated costs for the next 12 months.

 

THE OFFERING

 

We will also incur on-going continuous costs to meet the reporting requirements of a public company. These costs may very well exceed our current or anticipated revenues, significantly. However, the Company believes that the risks are worth taking because management believes, based on its own observations which are not based on any formal studies, that potential future vendors, consultants and manufacturers will have a higher regard in providing services for a public company than a small, privately-held start-up company. Management’s belief is based solely on the advice and informal consultation with various business and legal professionals who are known to us and have public company experience. These discussions have led us to believe that being a public company may afford the business (management and its shareholders) with a higher degree of recognition than would be typically attained as a small private (or non-public) company and may increase its ability and/or options to obtain financing for its growth. In addition, by being a public company we believe increases the visibility of our future opportunities to raise funds or to pay vendors by issuing restricted common stock rather than cash. We cannot predict the likelihood that our observations and conclusions about the benefits of being a public company will prove accurate or beneficial to us.

 

 

We are offering for sale a maximum of 200,000 shares of common stock at a fixed price of $1.68 per share. There is no minimum number of shares that must be sold by us for the offering to close, and we will retain the proceeds from the sale of any of the offered shares that are sold. The offering is being conducted on a self-underwritten, best efforts basis, which means our president, and chief executive officer, Mr. Wong, will attempt to sell the shares. This prospectus will permit our president and chief executive officer to sell the shares directly to the public, with no commission or other remuneration payable to him for any shares that he may sell. Mr. Wong will sell the shares and intends to offer them to friends, family members and business acquaintances. In offering the securities on our behalf, Mr. Wong will rely primarily on the safe harbour from broker-dealer registration set out in Rule 3a4-1 under the Securities and Exchange Act of 1934. The intended methods of communication include, without limitation, telephone and personal contacts.

 

As discussed above in connection with XYI Group’s selling efforts in the offering, Mr. Wong will not register as a broker-dealer pursuant to Section 15 of the Exchange Act, as amended, but rather will rely upon the “safe harbor” provisions of Rule 3a4-1, promulgated under the Exchange Act, as amended. Generally speaking, Rule 3a4-1 provides an exemption from the broker-dealer registration requirements of the Exchange Act for persons associated with an issuer that participate in an offering of the issuer’s securities. Mr. Wong Heng Wah is not subject to any statutory disqualification, as that term is defined in Section 3(a)(39) of the Exchange Act. Mr. Wong will not be compensated in connection with his participation in the offering by the payment of commissions or other remuneration based either directly or indirectly on transactions in our securities. Mr. Wong is not, nor has he been within the past 12 months, a broker or dealer, and he is not, nor has he been within the past 12 months, an associated person of a broker or dealer. At the end of the offering, Mr. Wong will continue to primarily perform duties for the Company or on its behalf otherwise than in connection with transactions in securities. Mr. Wong will not participate in selling an offering of securities for any issuer more than once every 12 months other than in reliance on Exchange Act Rule 3a4-1(a)(4)(i) or (iii).

 

The proceeds from the sale of the shares in this offering will be made payable to the Company. All subscription agreements and checks are irrevocable and should be delivered to the Company at the address provided on the Subscription Agreement.

 

We will receive all proceeds from the sale of up to 200,000 shares being offered. No proceeds will be received by any other entity other than the Company. The price per share is fixed at $1.68 for the duration of this offering.

 

All subscribed funds will be held in a separate Company account pending the completion of the offering. The offering will be completed 90 days from the effective date of this prospectus (or such earlier date when all 200,000 shares are sold), unless extended by our board of directors for an additional 90 days. There is no minimum number of shares that must be sold in this offering. All subscription agreements and checks for payment of shares are irrevocable (except as to any jurisdictions that require a statutory cooling-off period or rescission right).

 

The Company will deliver stock certificates attributable to shares of common stock purchased directly by the purchasers as soon as practicable after closing of the offering.

 

We have the right to accept or reject subscriptions in whole or in part, for any reason or for no reason. All monies from rejected subscriptions will be returned immediately by us to the subscriber, without interest or deductions. Subscriptions for securities will be accepted or rejected within 48 hours after we receive them.

 

The offering may terminate on the earlier of:

 

	i.	the date when the sale of all 200,000 shares is completed, or
	ii.	90 days from the effective date of this document or any extension thereto.

 

The offering price of the common stock has been determined arbitrarily and bears no relationship to any objective criterion of value. The price does not bear any relationship to our assets, book value or net worth.

 

The purchase of the common stock in this offering involves a high degree of risk. The common stock offered in this prospectus is for investment purposes only, and currently no market for our common stock exists. We intend to see a market maker to file a Rule 15c2-11 application with FINRA in order to apply for the quotation of our common stock on the over-the-counter markets. Such efforts may not be successful, and our shares may never be quoted and owners of our common stock may not have a market in which to sell their shares. Also, no estimate may be given as to the time that this application process may require.

 

  

If we are able to have our shares of common stock quoted on the over-the-counter markets, we will then try, through a broker-dealer, to become eligible with the DTC to permit our shares to be traded electronically. If an issuer is not “DTC-eligible,” its shares cannot be electronically transferred between brokerage accounts, which, based on the realities of the marketplace as it exists today, means that shares of an issuer will not be able to be traded (technically the shares can be traded manually between accounts, but this may take days and is not a realistic option for issuers relying on broker-dealers for stock transactions). What this boils down to is that while DTC-eligibility is not a requirement to trade over-the-counter. It is however a necessity to efficiently process trades if a company’s stock is going to trade with any volume. There are no assurances that our shares will ever become DTC-eligible or, if they do, how long it may take.

 

Since there is no minimum amount of shares that must be sold by the company, we may receive no proceeds or very minimal proceeds from the offering and potential investors may end up holding shares in a company that has not received enough proceeds from the offering to begin operations and has no market for its shares.

 

Please refer to the sections of this prospectus entitled "Risk Factors" and "Dilution" before making an investment in the common stock of the Company.

 

DETERMINATION OF OFFERING PRICE

 

The offering price of the common stock has been arbitrarily determined and bears no relationship to any objective criterion of value. The price does not bear any relationship to our assets, book value, any historical earnings or net worth. In determining the offering price, management considered such factors as the prospects, if any, for similar companies, anticipated results of operations, present financial resources and the likelihood of acceptance of this offering. No valuation or appraisal has been prepared for our business. We cannot assure you that a public market for our securities will develop or continue or that the securities will ever trade at a price higher than the offering price.

 

DILUTION

 

“Dilution” represents the difference between the offering price of the shares of common stock hereby being offered and the net book value per share of common stock immediately after completion of this offering. "Net book value" is the amount that results from subtracting total liabilities from total assets. In this offering, the level of dilution is increased as a result of the relatively low net book value of our issued and outstanding common stock and because the proceeds of the offering are substantially less than our estimated costs. Assuming all of the shares of common stock offered herein are sold, the purchasers in this offering may lose the entire value of their shares purchased in that each purchased share may have a negative net book value if raise less proceeds than the cost of during the offering. Net book value of existing shareholders’ shares will also decrease if the costs exceed the proceeds received from this offering.

 

The following table illustrates the dilution to the purchasers of the common stock in this offering (as of January 31, 2015):

 

		Assuming the sale of:
		100,000 shares				200,000 shares
Offering Price Per Share		$	1.68			$	1.68
Book Value Per Share Before the Offering		$	0.0001			$	0.0001
Book Value Per Share After the Offering		$	0.0018			$	0.0026
Net Increase to Original Shareholders		$	0.0017			$	0.0025
Decrease in Investment to New Shareholders		$	(1.6783	)		$	(1.6767	)
Dilution to New Shareholders (%)			99.9	%			99.8	%

 

The following table summarizes the number and percentage of shares purchased the amount and percentage of consideration paid and the average price per Share paid by our existing stockholders and by new investors in this offering:

 

		Price Per Share				Number of Shares Held				Percentage of Ownership				Consideration Paid
200,000 shares sold
Existing shareholders		$	0.0001				100,706,000				99.8	%		$	17,060
Investors in this offering		$	1.68				200,000				0.2	%		$	336,000
100,000 shares sold
Existing shareholders		$	0.0001				100,706,000				99.9	%		$	17,060
Investors in this offering		$	1.68				100,000				0.1	%		$	168,000

 

 

DIVIDEND POLICY

 

We have never paid cash or any other form of dividend on our common stock, and we do not anticipate paying cash dividends in the foreseeable future. Moreover, any future credit facilities might contain restrictions on our ability to declare and pay dividends on our common stock. We plan to retain all earnings, if any, for the foreseeable future for use in the operation of our business and to fund the pursuit of future growth. Future dividends, if any, will depend on, among other things, our results of operations, capital requirements and on such other factors as our board of directors, in its discretion, may consider relevant.

 

MARKET FOR SECURITIES

 

There is no established public market for our common stock, and a public market may never develop. We will seek a market maker to file an application with FINRA so as to be able to quote the shares of our common stock on the over-the-counter markets commencing upon the effectiveness of our registration statement of which this prospectus is a part and the subsequent closing of this offering. There can be no assurance as to whether such market maker’s application will be accepted by FINRA nor can we estimate the time period that will be required for the application process. Even if our common stock were quoted in a market, there may never be substantial activity in such market. If there is substantial activity, such activity may not be maintained, and no prediction can be made as to what prices may prevail in such market.

 

If we become able to have our shares of common stock quoted on the over-the-counter markets, we will then try, through a broker-dealer, to become eligible with the DTC to permit our shares to be traded electronically. If an issuer is not “DTC-eligible,” its shares cannot be electronically transferred between brokerage accounts, which, based on the realities of the marketplace as it exists today, means that shares of an issuer will not be able to be traded (technically the shares can be traded manually between accounts, but this may take days and is not a realistic option for issuers relying on broker-dealers for stock transactions). What this boils down to is that while DTC-eligibility is not a requirement to trade on the over-the-counter markets, it is however a necessity to efficiently process trades on the over-the-counter markets if a company’s stock is going to trade with any volume. There are no assurances that our shares will ever become DTC-eligible or, if they do, how long it may take.

 

We do not have common stock or equity subject to outstanding options or warrants to purchase or securities convertible into our common stock or equity. Also, 99.2% of our outstanding common stock are held by Mr. Wong, our founder, president and chief executive officer (99,900,000), In general, under Rule 144, a holder of restricted common shares who is an affiliate at the time of the sale or any time during the three months preceding the sale can resell shares, subject to the restrictions described below.

 

If we become a public reporting company under the Exchange Act for at least 90 days immediately before the sale, then at least six months must have elapsed since those shares were acquired from us or an affiliate, and we must remain current in our filings for an additional period of six months; in all other cases, at least one year must have elapsed since the shares were acquired from us or an affiliate.

 

The number of shares sold by such person within any three-month period cannot exceed the greater of:

 

	●	1% of the total number of our common shares then outstanding; or
	●	The average weekly trading volume of our common shares during the four calendar weeks preceding the date on which notice on Form 144 with respect to the sale is filed with the SEC (or, if Form 144 is not required to be filed, then four calendar weeks preceding the date the selling broker receives the sell order) (This condition is not currently available to the Company because its securities do not trade on a recognized exchange).

 

Conditions relating to the manner of sale, notice requirements (filing of Form 144 with the SEC) and the availability of public information about us must also be satisfied.

 

 

All of the presently outstanding shares of our common stock are "restricted securities" as defined under Rule 144 promulgated under the Securities Act and may only be sold pursuant to an effective registration statement or an exemption from registration, if available. The SEC has adopted final rules amending Rule 144 which have become effective on February 15, 2008. Pursuant to the new Rule 144, one year must elapse from the time a “shell company,” as defined in Rule 405 of the Securities Act and Rule 12b-2 of the Exchange Act, ceases to be a “shell company” and files a Form 8-K addressing Item 5.06 with such information as may be required in a Form 10 Registration Statement with the SEC, before a restricted shareholder can resell their holdings in reliance on Rule 144. The Form 10 information or disclosure is equivalent to the information that a company would be required to file if it were registering a class of securities on Form 10 under the Exchange Act. Under amended Rule 144, restricted or unrestricted securities that were initially issued by a reporting or non-reporting shell company or a company that was at any time previously a reporting or non-reporting shell company, can only be resold in reliance on Rule 144 if the following conditions are met:

 

1) the issuer of the securities that was formerly a reporting or non-reporting shell company has ceased to be a shell company;

 

2) the issuer of the securities is subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act;

 

3) the issuer of the securities has filed all reports and material required to be filed under Section 13 or 15(d) of the Exchange Act, as applicable, during the preceding twelve months (or shorter period that the Issuer was required to file such reports and materials), other than Form 8-K reports; and

 

4) at least one year has elapsed from the time the issuer filed the current Form 10 type information with the SEC reflecting its status as an entity that is not a shell company.

 

At the present time, we are classified as a “shell company” under Rule 405 of the Securities Act Rule 12b-2 of the Exchange Act. Shareholders of the Company’s restricted securities may not rely on the safe harbor created by Rule 144 until such time that the foregoing conditions are met.

 

Current Public Information

 

In general, for sales by affiliates and non-affiliates, the satisfaction of the current public information requirement depends on whether we are a public reporting company under the Exchange Act:

 

	●	If we have been a public reporting company for at least 90 days immediately before the sale, then the current public information requirement is satisfied if we have filed all periodic reports (other than Form 8-K) required to be filed under the Exchange Act during the 12 months immediately before the sale (or such shorter period as we have been required to file those reports).
	●	If we have not been a public reporting company for at least 90 days immediately before the sale, then the requirement is satisfied if specified types of basic information about us (including our business, management and our financial condition and results of operations) are publicly available.

 

However, no assurance can be given as to:

 

	●	the likelihood of a market for our common shares developing,
	●	the liquidity of any such market,
	●	the ability of the shareholders to sell the shares, or
	●	the prices that shareholders may obtain for any of the shares.

 

No prediction can be made as to the effect, if any, that future sales of shares or the availability of shares for future sale will have on the market price prevailing from time to time. Sales of substantial amounts of our common shares, or the perception that such sales could occur, may adversely affect prevailing market prices of the common shares.

 

 

MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

 

This section of the registration statement includes a number of forward-looking statements that reflect our current views with respect to future events and financial performance. Forward-looking statements are often identified by words like believe, expect, estimate, anticipate, intend, project and similar expressions, or words which, by their nature, refer to future events. You should not place undue certainty on these forward-looking statements. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from our predictions.

 

Plan of Operation

 

Our plan is to commence business operations so as to be able to earn sufficient revenues to expand and raise additional capital to grow our business. We may not be able to finish the development of any products in the future because of a lack of available funds or financing to do so. In the early stages of our operations, we will continue to keep costs to a minimum. The costs to develop our business plan as currently outlined may be in excess of $250,000. To the extent the development is more costly and our current funds to undertake the business plan are insufficient, we will need to obtain additional funding. If we are unable to obtain adequate funding or financing, the Company faces the ultimate likelihood of business failure. There are no assurances that we will be able to raise any funds or establish any financing program for the Company’s growth.

  

The following outlines the steps or stages that we plan to follow and necessary funding for each stage. Within each stage we have outlined the metrics or performance that we must accomplish as we move forward with our business plan. There are risks related to development include steps and processes related to development of the product and branding of the product , development and integration of web services and payment gateways. This should enable the Company to continue as a going concern as long as we are able to seek additional financing on acceptable terms.

 

Stage One (Months 1 – 3) (80,000 est. costs)

 

Website development

	●	outline the scope of work and framework to initiate the development of website
	●	setup development and production servers and define database architecture and Application Program Interface (API)
	●	setup coding platform and coding of our software based upon the initial scope of work and development framework
	●	finish building our Company web site to provide our identity and service offering to promote our software development and integration service
	●	create relationships with existing software development companies, software integration firms, application developers, and internet connectivity providers to establish reseller and JV opportunities which we in turn offer to potential customers. These relationships will be forged via researching the providers of the aforementioned services, reaching out to them about their services, and then hopefully coming to an arrangement for them to provide their services.

 

Branding of souvenir product

	●	set up a showroom in Hong Kong,  we will  rent a small place but strategic area in Hong Kong so we could show our souvenir product to potential customer.
	●	Set up a products design team for the product development and design and also assist on the website development on the online artwork and design system which offer to potential customer to personalize their intended design on the souvenir products. We plan to employ 1-2 staff members depending on the funds available to us, the expected cost is the recruitment cost training cost and initial set up in term of equipment and software system.

 

Stage Two (Months 3 – 5) ($60,000 est. costs)

 

	●	begin website and mobile app development based on scope of work and framework defined in stage one.
	●	initiate testing the place order function to improve and refine components of our system to uphold quality and application usability
	●	Analyze the website for integration capabilities with other 3rd party software application Promote and introduce our souvenir products via exhibition booth in International Overseas Chinese Trade Fair.
	●	Set up a marketing team to approach the target customers (corporations, associations, charities, colleges and individuals), we plan to employee 1-2 staff depend on the fund available to us. The expected cost is the recruitment cost ,training cost and online advertisement cost.

 

 

Stage Three (Months 6 – 8) ($60,000 est. costs)

 

	●	research and refine our target market of potential customers by using geographic, demographic, and business needs analysis of specific industries
	●	finalize application development and software integration components (in order to link together our future software applications) of our software and commence alpha testing with select target customers and partners
	●	refine and improve the software based on simple feedback, bugs, fixes, and needs of our alpha testing group
	●	Submit app to app store(s) and online marketplaces for testing and to build awareness

 

Stage Four (Month 9 - 12) ($50,000 est. costs)

 

	●	release website to the marketplace in a controlled marketing campaign to specific target market as a beta release
	●	refine and release new versions of software based upon feedback and bug fixes, as well as meet the needs of specific industry sectors
	●	increase sales and marketing oriented activities to gain new sales for the Company’s souvenir products as well as the services/products of our reseller/JV partners

 

As mentioned above the time-line estimate (stages) are predicated upon the Company obtaining the necessary financing either through our offering or additional equity or debt financing. If we are not able to obtain the necessary levels of financing as determined by the above stages, we will not be able to meet or achieve any of the time-line objectives. In that case the Company will be forced to proceed on a piecemeal basis using primarily the services of our president and chief executive officer and limited use of outside contractors when and if limited funds are obtained. Our president and chief executive officer devotes in excess of twenty (20) hours a week to our continued business efforts. There is no realistic way to predict the timing or completion in that scenario.

 

The Company’s management has, through relationships and strategic partnerships, begun work on some of the intended souvenir products for the Internet and/or Intranet applications we believe will be desired in the marketplace. Our founder and president has primarily provided these services through the date of this prospectus. Mr. Wong has successfully recruited Mr. Lim Seow Hoe and Mr. Gabriel Ng to add them onto our staff as Chief Operating Officer and Chief Technologiy Officer on May 1, 2015 in addition to his efforts regarding the preliminary planning of future products. Our business plan requires further completion of these tasks which will require the hiring of employees and/or outside contractors. Most if not all of these actions will be predicated on the Company obtaining the necessary financing to accomplish these steps. If financing is not available on terms reasonable to the Company and its shareholders, then the progression steps of this business plan will not occur as planned and may never occur.

 

We currently have no additional sources of financing and no commitments for financing. There are no assurances that we will obtain sufficient financing or the necessary resources to enter into contractual agreements with outside developers or sales/marketing firms. If we do not receive any funding or financing, our business is likely to be maintained with limited operations for at least the next 12 months because our president and chief executive officer will continue providing his professional services without current compensation. We do not currently have a formal agreement in place with our president and chief executive officer covering this period; however, our president and chief executive officer’s current plan is to do substantially all administrative and planning work as well as basic programming and marketing work on his own without cash compensation while he seeks other sources of funding for the Company.

 

As a corporate policy, we will not incur any cash obligations that we cannot satisfy with known resources, of which there are currently none except as described in “Liquidity” below and/or elsewhere in this prospectus. We believe that the perception that many people have of a public company make it more likely that they will accept restricted securities from a public company as consideration for indebtedness to them than they would from a private company. We have not performed any studies of this matter. Our conclusion is based on our own observations. However, there can be no assurances that we will be successful in any of those efforts even if we become a public entity. Additionally, the issuance of restricted shares will dilute the percentage of ownership interest of our stockholders.

 

Results of Operations

 

Revenue

 

From inception through January 31, 2015, we have made sales resulting in $6,556 in revenues. The revenue we have generated is from the private sales of our pyramid sounvenir. Although we are developing more products, at this time we currently have two physical souvenirs that we offer for sale, the necklace and the pyramid. The pyramid is available in multiple sizes, small, medium, and large. The cost of sales varies on the size of the product, however at this time the cost of sales is $1,880.

 

Development, General and Administrative Expenses

 

Development, general and administrative expenses were $8,240 for December 5, 2014 to January 31, 2015.  The expenses consisted primarily of development and professional fees. The expenses consisted primarily of development cost in registering trade mark and website domain amounting to $2,317, professional fees for accounting service of $1,800  and audit fee of $3,000

 

 

Net loss

 

Net loss for the years ended January 31, 2015 was $3,564. The loss was primarily attributable to the general and administrative expenses exceeding our income.

 

Liquidity

 

We will pay all costs relating to this offering estimated at $55,000. This amount will be paid as and when necessary and required or otherwise accrued on the books and records of XYI Group until we are able to pay the full amount due either from revenues or loans from a related or unrelated third party. Absent sufficient revenues to pay these amounts within six months from the date of this prospectus, we will seek financial assistance from our shareholders or a third party who may agree to loan us the funds to cover the balance of outstanding professional and related fees relating to our prospectus to the extent that such liabilities cannot be extended or satisfied in other ways and our professionals insist upon payment. If and when loaned, the loans will be evidenced by a noninterest-bearing unsecured corporate note to be treated as a loan until repaid, if and when XYI Group has the financial resources to do so. No formal written arrangement exists with respect to anyone’s commitment to loan funds for this purpose.

 

Most of our resources and work have been devoted to planning our business, web site development, mobile application development, implementing systems and controls, and completing our registration statement. When those procedures are done, which we believe will occur over the next few months, we will primarily work on our intended service offerings as well further internal development of software for which we have developed our initial framework of and completed some coding of this software. We believe that the work needed to initiate and complete our software development, attract developers, and initiate our marketing plans, including the development of a saleable product suite, will be approximately $250,000 if outside contractors and experts are used. If we are able to secure funding to outsource these procedures, of which there are no assurances, we can commence the launch of our intended services and souvenir products to the public. If we are only able to use internal resources only (primarily consisting of the services of our president and chief executive officer), the process will take much longer and our initial launch may be limited to a much smaller target market. If we are unable to raise any funds, the development costs would have to be provided by our president and chief executive officer to the extent that he is capable and willing to provide such funds. Our goal would be to have souvenir product available, services available, multiple sales channels and a comprehensive corporate website up and running within one year, but there is no way of estimating what the likelihood of achieving that goal would be.

 

Private capital, if sought, we believe will be sought from former business associates of our president and chief executive officer or through private investors referred to us by those same business associates. To date, we have sold 100,706,000 shares of our common stock for $17,060 through a private placement. 

 

If a market for our shares ever develops, of which there can be no assurance, we may use restricted shares of our common stock to compensate employees/consultants and independent contractors wherever possible. We cannot predict the likelihood or source of raising capital or funds that may be needed to complete the development of our business plan and its stages as outlined above.

 

We have embarked upon an effort to become a public company and, by doing so, have incurred and will continue to incur additional significant expenses for legal, accounting and related services. Once we become a public entity, subject to the reporting requirements of the Exchange Act of 1934, we will incur ongoing expenses associated with professional fees for accounting, legal and a host of other expenses including annual reports and proxy statements, if required. We estimate that these costs will be at least $50,000 per year over the next few years and may be significantly higher if our business volume and transactional activity increases but should be lower during our first year of being public because our overall business volume (and financial transactions) will be lower, and we will not yet be subject to the requirements of Section 404 of the Sarbanes-Oxley Act of 2002 until we exceed $75 million in market capitalization (if ever). These obligations will certainly reduce our ability and resources to expand our business plan and activities. We hope to be able to use our status as a public company to increase our ability to use noncash means of settling outstanding obligations (i.e. issuance of restricted shares of our common stock) and compensate independent contractors who provide professional services to us, although there can be no assurances that we will be successful in any of these efforts. We will also reduce compensation levels paid to management (if we attract or retain outside personnel to perform this function) if there is insufficient cash generated from operations to satisfy these costs.

 

There are no current plans to seek private investment. We do not have any current plans to raise funds through the sale of securities except as set forth herein. We hope to be able to use our status as a public company to enable us to use non-cash means of settling obligations and compensate persons and/or firms providing services to us, although there can be no assurances that we will be successful in any of those efforts. However, these actions, if successful, will result in dilution of the ownership interests of existing shareholders, may further dilute common stock book value, and that dilution may be material. Such issuances may also serve to enhance existing management’s ability to maintain control of XYI Group because the shares may be issued to parties or entities committed to supporting existing management. XYI Group may offer shares of its common stock to settle a portion of the professional fees incurred in connection with its registration statement. No negotiations have taken place with any professional and no assurances can be made as to the likelihood that any professional will accept shares in settlement of obligations due them.

 

As of January 31, 2015, we owed $4,800 in connection with organizational costs, professional services related to this offering, business and framework development costs incurred. We have not entered into any formal agreements, written or oral, with any vendors or other providers for payment of services or expenses and to our as “needed basis” software development firm as further described below. There are no other significant liabilities at January 31, 2015.

 

 

Recently Issued 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.

 

Critical Accounting Policies

 

The preparation of financial statements and related notes requires us to make judgments, estimates, and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosure of contingent assets and liabilities.

 

An accounting policy is considered to be critical if it requires an accounting estimate to be made based on assumptions about matters that are highly uncertain at the time the estimate is made, and if different estimates that reasonably could have been used, or changes in the accounting estimates that are reasonably likely to occur periodically, could materially impact the financial statements.

 

Financial Reporting Release No. 60 requires all companies to include a discussion of critical accounting policies or methods used in the preparation of financial statements. There are no critical policies or decisions that rely on judgments that are based on assumptions about matters that are highly uncertain at the time the estimate is made. Note 2   to the financial statements, included elsewhere in this prospectus, includes a summary of the significant accounting policies and methods used in the preparation of our financial statements.

 

Seasonality

 

We have not noted a significant seasonal impact in our business (or businesses like ours) although having just commenced operations it is too early to tell.

 

Off-Balance Sheet Arrangements

 

We have no off-balance sheet arrangements, as defined in Item 303(a)(4)(ii) of Regulation S-K, obligations under any guarantee contracts or contingent obligations. We also have no other commitments, other than the costs of being a public company that will increase our operating costs or cash requirements in the future.

 

BUSINESS

 

The Company

 

XYI Group, Inc., a Nevada corporation, (“XYI Group” “Company” “we,” “us,” or “our”) was incorporated on December 5, 2014. Most of the activity through January 31, 2015 is engaged in trading of the souvenir products.

 

The following diagram sets forth the structure of the Company as of the date of this Report:

 

 

 

 

We are seeking to engage in the sale and marketing of custom and personalized souvenir products such as miniature sculptures, corporate logos and other symbols and desired by our potential customers. We plan to develop an online marketing platform to promote the sale of these products to corporations, associations, charities, colleges and individuals. We plan for our online platform to function to market our products, as well as for ordering and payment.

 

Our plan is to offer our customers the ability to either order a pre-made souvenir product from a catalogue available online or to upload their own design. We are currently reviewing proposals from manufacturers who would directly receive the orders from our online platform and manufacture the items to the customer’s specifications and/or provide customization to existing items in the form of engraving or inscriptions. We also intend to allow customers to select and inscribe their own packaging for each souvenir product to be delivered in. Each customer’s data will be maintained by us and will be accessible to each customer online. We intend to have each product delivered directly from the manufacturer upon completion to the customer.

 

We believe we can market products to corporations and organizations to use to distribute or sell to members or employees or clients to reinforce their banding or reward positive performance.

 

If we are successful and begin to generate substantial profits , we plan to supplement our online platform by giving users the ability to submit their own product designs through our website or a mobile application, and have our online community of users rate the designs. We plan to have manufactured for sale the highest rated designs, marketing them first to our community of users and then to others.

 

Subject to the availability of sufficient capital, we plan to also build a showroom in Hong Kong and Malaysia for all of our products. We do not plan to ever be a manufacturer, but sole a designer, seller, marketer and distributor of souvenir products.

 

The souvenir pyramid and necklace which were sold by our wholly owned subsidiary’s wholly owned subsidiary, were produced and distributed to us by Qingdao Jiu Ding Jin Accessories Limited and Qingdao Long Dingxin Neng Liang Accessories Limited. Both of the aforementioned entities are located in China. There are no agreements with these distributors to produce or deliver more products to us in the future although we may enlist their services again.

 

Marketing & Growth Strategy

 

We plan to obtain customers and users of our online platform initially through online social media. Initially, we will focus on Hong Kong and Malaysia. These counties have approximately 27 million social media users.

 

Through social media, we plan to provide introductions to and knowledge of our products targeted at different demographics such as members of organizations or different age groups. We plan to allow our platform users to upload any design for our members to rate. We plan to reward those members who provide a rating with a coupon for product purchases and to have produced the best design and provide a cash award to the designer.

 

  

We are currently in the process of application of trade mark registration in Hong Kong for our first products – a souvenir pyramid and necklace. Depending on the availability of sufficient capital, we plan to employ a design team to create new products on a regular basis. We believe that acquiring trademarks for our products will allow us to offer products that our competition will be unable to fully replicate, and thus will help us become competitive with existing souvenir providers once we begin our operations. At this time we plan to pursue trademarks for our future products, although at this point in time these products have not yet been developed or conceptualized.

 

Competition

 

There is significant competition from numerous companies in the souvenir space, and most of our competitors are better capitalized and well established in the market. Below are two of these competitors:

 

1. Alpha Plus ( Singapore based company)

(website: http://www.alphaplus.com.sg)

Alpha Plus is a Singapore based souvenir product retailer established in 1984. They are a provider of Sports and Recognition Awards. Their product offerings focus on metal, crystal awards, coins and the similar products.

 

2. One Ten Souvenir Sdn Bhd (Malaysia based company)

(http://www.onetensouvenirs.com.my/our.services.html)

One Ten is a Malaysia based company, established in 1994, the online website is mainly for showing the products and does not have e-commence capabilities. This company is a sourcing company for the souvenir product in South East Asia.

 

The industry in which XYI Group, Inc. competes is highly competitive. Many companies offer similar souvenir products. We may be at a substantial disadvantage to our competitors who have more capital than we do to carry out operations and marketing efforts. We hope to be competitive by offering products that are high quality and tailor-made to our customers’ specifications, as opposed to the more generic souvenir products offered by our competition.

 

Our Plan

 

Our plan is to commence business operations so as to be able to earn sufficient revenues to expand and raise additional capital to grow our business. We may not be able to finish the development of any products in the future because of a lack of available funds or financing to do so. In the early stages of our operations, we will continue to keep costs to a minimum. The costs to develop our business plan as currently outlined may be in excess of $250,000. To the extent the development is more costly and our current funds to undertake the business plan are insufficient, we will need to obtain additional funding. If we are unable to obtain adequate funding or financing, the Company faces the ultimate likelihood of business failure. There are no assurances that we will be able to raise any funds or establish any financing program for the Company’s growth.

  

The following outlines the steps or stages that we plan to follow and necessary funding for each stage. Within each stage we have outlined the metrics or performance that we must accomplish as we move forward with our business plan. There are risks related to development including steps and processes related to development of the product and branding of the product, development and integration of web services and payment gateways. This should enable the Company to continue as a going concern as long as we are able to seek additional financing on acceptable terms.

 

Stage One (Months 1 – 3) (80,000 est. costs)

 

Website development

	●	outline the scope of work and framework to initiate the development of  website
	●	setup development and production servers and define database architecture and Application Program Interface (API)
	●	setup coding platform and coding of our software based upon the initial scope of work and development framework
	●	finish building our Company web site to provide our identity and service offering to promote our software development and integration service
	●	create relationships with existing software development companies, software integration firms, application developers, and internet connectivity providers to establish reseller and JV opportunities which we in turn offer to potential customers. These relationships will be forged via researching the providers of the aforementioned services, reaching out to them about their services, and then hopefully coming to an arrangement for them to provide their services.

  

Branding of souvenir products

	●	set up a showroom in Hong Kong,  we will  rent a small place but strategic area in Hong Kong so we could show our souvenir product to potential customer.
	●	Set up a products design team for the product development and design and also assist on the website development on the online artwork and design system which offer to potential customer to personalize their intended design on the souvenir products. We plan to employ 1-2 staff members depending on the funds available to us, the expected cost is the recruitment cost training cost and initial set up in term of equipment and software system.

  

Stage Two (Months 3 – 5) ($60,000 est. costs)

 

	●	begin website and mobile app development based on scope of work and framework defined in stage one.
	●	initiate testing the place order function to improve and refine components of our system to uphold quality and application usability
	●	analyze the website for integration capabilities with other 3rd party software application Promote and introduce our souvenir products via exhibition booth in International Overseas Chinese Trade Fair .
	●	Set up a marketing team to approach the target customers (corporations, associations, charities, colleges and individuals), we plan to employee 1-2 staff depend on the fund available to us. The expected cost is the recruitment cost ,training cost and online advertisement cost.

 

 

Stage Three (Months 6 – 8) ($60,000 est. costs)

 

	●	research and refine our target market of potential customers by using geographic, demographic, and business needs analysis of specific industries
	●	finalize application development and software integration components (in order to link together our future software applications) of our software and commence alpha testing with select target customers and partners
	●	refine and improve the software based on simple feedback, bugs, fixes, and needs of our alpha testing group
	●	Submit app to app store(s) and online marketplaces for testing and to build awareness

 

Stage Four (Month 9 - 12) ($50,000 est. costs)

 

	●	release website to the marketplace in a controlled marketing campaign to specific target market as a beta release
	●	refine and release new versions of software based upon feedback and bug fixes, as well as meet the needs of specific industry sectors
	●	increase sales and marketing oriented activities to gain new sales for the Company’s souvenir products and software integration services, as well as the services/products of our reseller/JV partners

 

As mentioned above the time-line estimate (stages) are predicated upon the Company obtaining the necessary financing either through our offering or additional equity or debt financing. If we are not able to obtain the necessary levels of financing as determined by the above stages, we will not be able to meet or achieve any of the time-line objectives. In that case the Company will be forced to proceed on a piecemeal basis using primarily the services of our president and chief executive officer and limited use of outside contractors when and if limited funds are obtained. Our president and chief executive officer devotes in excess of twenty (20) hours a week to our continued business efforts. There is no realistic way to predict the timing or completion in that scenario.

 

The Company’s management has, through relationships and strategic partnerships, begun work on some of the intended souvenir products for the Internet and/or Intranet applications we believe will be desired in the marketplace. Our founder and president has primarily provided these services through the date of this prospectus. Mr. Wong has successfully recruited Mr. Lim Seow Hoe and Mr. Gabriel Ng to add them onto our staff as Chief Operating Officer and Chief Technologiy Officer on May 1, 2015 in addition to his efforts regarding the preliminary planning of future products. Our business plan requires further completion of these tasks which will require the hiring of employees and/or outside contractors. Most if not all of these actions will be predicated on the Company obtaining the necessary financing to accomplish these steps. If financing is not available on terms reasonable to the Company and its shareholders, then the progression steps of this business plan will not occur as planned and may never occur.

 

We currently have no additional sources of financing and no commitments for financing. There are no assurances that we will obtain sufficient financing or the necessary resources to enter into contractual agreements with outside developers or sales/marketing firms. If we do not receive any funding or financing, our business is likely to be maintained with limited operations for at least the next 12 months because our president and chief executive officer will continue providing his professional services without current compensation. We do not currently have a formal agreement in place with our president and chief executive officer covering this period; however, our president and chief executive officer’s current plan is to do substantially all administrative and planning work as well as basic programming and marketing work on his own without cash compensation while he seeks other sources of funding for the Company.

  

 

Intellectual Property

 

We are currently in the process of application of trade mark registration in Hong Kong for our first products – a souvenir pyramid and necklace.

 

Government Regulation and Industry Standards

 

We intend to carry out our business in Hong Kong and Malaysia .The following regulations are the applicable to us:

 

In Hong Kong, XYI Group will have to apply for a business registration with the Inland Revenue Department of Hong Kong. Our website is maintained through the server in Hong Kong. Therefore, the data usage policy and regular terms of service by our potential customers have to comply with the rules and regulations of Hong Kong SAR. As the information of our potential customers is preserved in Hong Kong, we will need to comply with the Hong Kong Personal Data (Privacy) Ordinance (Cap 486).

 

As of the date of this Registration Statement, the Company has applied for business registration with the Inland Revenue Department of Hong Kong and received approval.

 

 

 

Employees

 

As of January 24, 2014, we had one employee, our president, and chief executive officer, Mr. Wong. He plans to devote at least twenty (20) hours a week to us and may increase the number of hours as necessary. He is allowed to devote this time to our Company as he is not limited or restricted from being involved with us by his current employer.  He is under no contractual agreement with the Company. However, our president, and chief executive officer’s current plan is to provide all administrative and planning work as well as perform the basic coding for software and initial marketing efforts on his own without any cash compensation while he seeks other sources of funding for the Company and its business plan.

Mr. Wong will be compensated through common stock in the Company for his services until the Company is profitable. It is his belief that these actions are in the best interest of the Company and its prospective investors who may invest in this offering. Beyond Mr. Wong’s services, we have currently been working with an independent software development firm, which has been utilized on an “as needed” basis, and we may in the future use other independent contractors and consultants to assist in many aspects of our business on an “as needed” or per project basis pending adequate financial resources being available or their ability to defer payment for their services.

 

There is no written employment contract or agreement in place with our president and chief executive officer.

 

Property

 

Our principal business address is Unit 5, 4/F Energy Plaza, No. 92 Granville Road, Tsim Sha Tsui East, Kowloon which Mr Wong has entered into a personal lease agreement to acquire and charges the company a rental fee of USD 387 and Room 2201 22 Floor, Malaysia Building, 50 Gloucester Road, Wan Chai, Hong Kong mainly as as registered office address .

 

Litigation

 

We are not party to any pending, or to our knowledge, threatened litigation of any type.

 

DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS

 

Our management consists of:

 

Name		Age		Title
Wong Heng Wah		34		President, Chief Executive Officer, Chief Financial Officer, President, Secretary and Treasurer and Chairman
Lee Chong Kuang		41		Director
Lim Seow Hoe		47		Chief Operating Officer
Ng Woi Siong		34		Chief Technology Officer

 

Set forth below is a brief description of the background and business experience of our executive officers and directors for the past five years.

 

Wong Heng Wah

 

Mr. Wong Heng Wah is a 34 year old Malaysian and serves as our Chief Executive Officer, Chief Financial Officer, President, Secretary and Treasurer.

 

In August 2004, Mr. Wong graduated with an Advanced Diploma in Information Technology from Informatics College in Malaysia. He also has a certificate in Investment Linked Life Insurance from the Malaysian Insurance Institute. Mr. Wong participated in Reseller Technical Training in January 2002 and Professional Development Training focused on Human Numerical Analysis in June 2011.

 

After his graduation in 2004, he started to work as an independent IT consultant (self- employed) to advise clients in developing their operation system such as customer relation Management system based on their available resources. He also participate advising and assisting in the setup of the demand chain management system of companies such as MBI International Sdn Bhd (website : http://www.mbiv2u.com/mobile/company.html).

 

Mr. Wong has over 12 years of experience in helping brands achieve their ambitions by focused thinking around the customer, then delivering developments through consumer experience, product enhancement and innovative marketing, content and creative messaging. Mr. Wong has worked at Great Eastern Life Assurance (Malaysia) Berhad as an insurance consultant on a freelance basis from January 2002 through 2012. Before this, he was an IT supporter in PC Langkawi Sdn Bhd in January 2000. His IT skills include, but are not limited to virtual private networking, enterprise resource management software like Agress, hardware and software configuration and implementation, as well as specific applications like Adobe, QuickBooks and the MS Office suite.

 

Since 2012 he has been engaged in selling souvenir products. Currently, he is the Chairman of an International Entrepreneur Educational Association (IEEA) and a NGO (Non- Government Organization) established in Malaysia to provide information, knowledge and training to Young Entrepreneurs on the domestic and International business environment.

 

From 2012 to present Mr. Wong has acted in the capacity as a freelance IT consultant, providing IT assistance, troubleshooting, and other related services to customers throughout Asia. We believe Mr. Wong to be qualified to act on our board of directors due to his experience working with clients, solving customer related issues, and also furthering business related operations. Furthermore we believe Mr. Wong will be beneficial to us from a technology standpoint in relation to the development of our website.

Mr. Wong’s schedule currently allows him to devote at least twenty (20) hours a week on the operations of our company and that amount of time may increase as necessary to facilitate the growth of the Company.

 

 

Lee Chong Kuang

 

Mr. Lee, age 41, has more than 18 years of experience in auditing services and has been serving as our director since December 5, 2014. Mr. Lee also served as the Company’s CEO and President during the period from December 5, 2014 through January 24, 2015. He started his professional career with Siva Tan & Co., a Chartered Accountant firm in Malaysia from 1995 to 1997. From 1997 to 200 he worked at K. Y. Ho & Co, Chartered Accountants.

 

As a qualified member of the ACCA and Malaysia Institute of Accountants, Mr. Lee earned his professional qualification from the Hong Kong Institute of Certified Public Accountants. Mr. Lee established the Cross Border Business Association (CBBA), a NGO (Non-Government Organization) established under Hong Kong Society Act, to provide information and professional advice in Cross Border Business for its investment members.

 

Mr. Lee is currently a director of Asia UBS Global Limited, a Hong Kong company, which he founded in 2003. He is also President, Chief Executive Officer and Director of XYI Group, Inc., a Nevada public company. He serves as Director, Chief Financial Officer and Treasurer of Odenza Corp. since February 4, 2013. He has also served as the President, Chief Executive Officer and a Director of Greenpro Capital Corp. (formerly known as Greenpro Inc.)  since July 19 2013.

 

Mr. Lee’s role is mainly overseas the financial reporting of the Company to ensure the compliance of GAAP and SEC rules and regulation and will not involve business operations and strategies of the company, therefore, Mr. Lee will devote his time, as necessary, on a quarterly basis to review the financial reporting of the Company.

 

Lim Seow Hoe

 

Mr. Lim has over 20 years of experience in business development, marketing, supply chain management and is a system trainer in manufacturing and trading. He graduated with a Bachelor’s Degree in Engineering from a Malaysia University in July 1992. He has served as Engineering and Sales Manager in Greatronics Technology (M) Sdn Bhd, a Cable Assembly & Wire Harness Manufacturing company in Malaysia from 1993 to 1998.

 

In 2000 he joined Litton Winchester Rectconn (M) Sdn Bhd, then Winchester Electronics Group, a global leader in the design and manufacture of connectors, cable assemblies, wire harnesses and custom interconnect solutions. He served as the marketing and business development manager. He left the Group in 2006.

 

Since August 2006 until Present, Mr. Lim has served as Market and Business Development Manager for the subsidiary of   D’nonce Group, a public listed technology company in Malaysia Stock Exchange. In addition, he also serves as the Division S Governor for Toastmasters International for East Asia.

His schedule currently allows himself to spend up to Ten (10) hours a week on the operations of our Company. He has indicated that he is willing to delegate more of his time as our business grows and his services are needed.

 

Ng Woi Siong

 

Mr. Ng Woi Siong is a graduate of Campbell University with a Bachelors of Computer Science in Software Engineering. Mr Ng started his career with Fuji Xerox Asia Pacific Private Limited as a Junior System Engineer. From 2003 to 2005, he served as a Software programmer in Google Asia Pacific Pte Limited (Singapore). He then joined MGSC Sdn Bhd, an IT Solution firm as a Senior Software Programmer. 

 

Mr. Ng is currently a Director of website development and e-marketing firm Vapps Solution Sdn. Bhd. which he founded in 2010.

His schedule currently allows him to spend up to Ten (10) hours a week on the operations of our company. He has indicated that he is willing to delegate more of his time as our business grows and his services are needed.

 

Possible Potential Conflicts

 

The over-the-counter markets on which we plan to have our shares of common stock quoted do not currently have any director independence requirements.

 

No member of management will be required by us to work on a full time basis. Accordingly, certain conflicts of interest may arise between us and our officer(s) and director(s) in that they may have other business interests in the future to which they devote their attention, and they may be expected to continue to do so although management time must also be devoted to our business. As a result, conflicts of interest may arise that can be resolved only through their exercise of such judgment as is consistent with each officer's understanding of his/her fiduciary duties to us.

 

Currently, we have three officers and two directors , and will seek to add additional officer(s) and/or director(s) as and when the proper personnel are located and terms of employment are mutually negotiated and agreed, and we have sufficient capital resources and cash flow to make such offers.

 

At this time we also have 48 shareholders who hold shares in our common stock.

 

Besides the positions with the Company, Mr. Lee currently serves as the Chief Financial Officer, Treasurer and director of Odenza, a shell Company, of which he owns 35,000 shares of common stock. He is also President, Chief Executive Officer, Director of Greenpro, Inc., a Nevada shell company. His positions at other companies may affect their commitments to the Company as they cannot devote their full time and attention to develop the business of the Company and accordingly, they may encounter a conflict of interest in allocating their time between our operations and those of other businesses.

 

We cannot provide assurances that our efforts to eliminate the potential impact of conflicts of interest will be effective.

 

 

Code of Business Conduct and Ethics

 

In December 2014, we adopted a Code of Ethics and Business Conduct which is applicable to our future employees and which also includes a Code of Ethics for our founder, president, chief executive officer, and principal financial officers and any persons performing similar functions. A code of ethics is a written standard designed to deter wrongdoing and to promote:

 

	●	honest and ethical conduct,
	●	full, fair, accurate, timely and understandable disclosure in regulatory filings and public statements,
	●	compliance with applicable laws, rules and regulations,
	●	the prompt reporting violation of the code, and
	●	accountability for adherence to the code.

 

A copy of our Code of Business Conduct and Ethics has been filed with the Securities and Exchange Commission as Exhibit 14.1 to our Registration Statement of which this prospectus is a part.

 

Board of Directors

 

All directors will hold office until the completion of their term of office, which is not longer than one year, or until their successors have been elected. Our current directors’ term of office expires on December 31, 2015. All officers are appointed annually by the board of directors subject to existing employment agreements (of which there are currently none) and will serve at the discretion of the board. Currently, directors receive no compensation for their role as directors but may receive compensation for their role as officers.

 

As long as we have no additional directors besides our founder, president, chief executive officer, and Chairman, all votes on issues are resolved in favor of the Chairman’s vote.

 

Involvement in Certain Legal Proceedings

 

During the past ten years, No present director, executive officer or person nominated to become a director or an executive officer of XYI Group involve in the following:

 

1.

had a petition under the federal bankruptcy laws or any state insolvency law filed by or against, or a receiver, fiscal agent or similar officer appointed by a court for the business or property of such person, or any partnership in which he was a general partner at or within two years before the time of such filing, or any corporation or business association of which he was an executive officer at or within two years before the time of such filing;

 

2.

was convicted in a criminal proceeding or subject to a pending criminal proceeding (excluding traffic violations and other minor offenses);

 

3.

was subject to any order, judgment or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining his from or otherwise limiting his involvement in any of the following activities:

 

	i.	acting as a futures commission merchant, introducing broker, commodity trading advisor commodity pool operator, floor broker, leverage transaction merchant, any other person regulated by the Commodity Futures Trading Commission, or an associated person of any of the foregoing, or as an investment adviser, underwriter, broker or dealer in securities, or as an affiliated person, director or employee of any investment company, bank, savings and loan association or insurance company, or engaging in or continuing any conduct or practice in connection with such activity;
	ii.	engaging in any type of business practice; or
	iii.	engaging in any activity in connection with the purchase or sale of any security or commodity or in connection with any violation of federal or state securities laws or federal commodities laws; or

 

4.

was the subject of any order, judgment or decree, not subsequently reversed, suspended or vacated, of an federal or state authority barring, suspending or otherwise limiting for more than 60 days the right of such person to engage in any activity described in paragraph (3) (i), above, or to be associated with persons engaged in any such activity; or

 

5.

was found by a court of competent jurisdiction (in a civil action), the Securities and Exchange Commission or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and for which the judgment has not been reversed, suspended or vacated.

 

 

Committees of the Board of Directors

 

Concurrent with having sufficient members and resources, the XYI Group board of directors will establish an audit committee and a compensation committee. We believe that we will need a minimum of five directors to have effective committee system. The audit committee will review the results and scope of the audit and other services provided by the independent auditors and review and evaluate the system of internal controls. The compensation committee will manage any stock option plan we may establish and review and recommend compensation arrangements for the officers. No final determination has yet been made as to the memberships of these committees or when we will have sufficient members to establish committees. See “Executive Compensation” hereinafter.

 

All directors will be reimbursed by XYI Group for any expenses incurred in attending directors' meetings provided that XYI Group has the resources to pay these fees. XYI Group will consider applying for officers and directors liability insurance at such time when it has the resources to do so.

 

Summary Executive Compensation Table

 

The following table shows, for the period from December 5, 2014 (inception) to January 31, 2015, compensation awarded to or paid to, or earned by, our Chief Executive Officer (the “Named Executive Officer”).

 

SUMMARY COMPENSATION TABLE

Name and principal position (a)		Year (b)				Salary ($) (c)				Bonus ($) (d)				Stock Awards ($) (e)				Option Awards ($) (f)				Non-Equity Incentive Plan Compensation ($) (g)				Nonqualified Deferred Compensation Earnings ($) (h)				All Other Compensation ($) (i)				Total ($) (j)
1 Wong Heng Wah President, CEO and Director			2015				-				-				-				-				-				-				-				-
2 Lee Chong Kuang Former President and CEO			2015				-				-				-				-				-				-				-				-
3 Lim Seow Hoe Chief Operating Officer			2015				-				-				-				-				-				-				-				-
4 Ng Woi Siong Chief Technology Officer			2015				-				-				-				-				-				-				-				-

 

There are no formal employment arrangement with Mr. Wong Heng Wah at this time. His compensation has not been fixed or based on any percentage calculations. He will make all decisions determining the amount and timing of his compensation and, for the immediate future, has elected not to receive any compensation which permits us to meet our financial obligations. His compensation amount may be formalized if and when the Company completes this offering and obtains any future financing beyond the offering.

 

¹ Mr. Wong Heng Wah received 99,900,000 shares of common stock of the Company as founder shares for consideration of $9,900.

² Lee Chong Kuang served as the Company’s CEO and President since the Company’s inception on December 5, 2014 through January 24, 2015.

³ Lim Seow Hoe has served as the Company’s Chief Operating Officer since May 1, 2015.

⁴ Ng Woi Siong has served as the Company’s Chief Technology Officer since May 1, 2015.

 

Director Compensation

 

The table below summarizes all compensation awarded to, earned by, or paid to our directors for all services rendered in all capacities to us for the period from December 5, 2014 (inception) to January 31, 2015.

 

SUMMARY COMPENSATION TABLE
Name and principal position (a)			Year (b)				Salary ($) (c)				Bonus ($) (d)				Stock Awards ($) (e)				Option Awards ($) (f)				Non-Equity Incentive Plan Compensation ($) (g)				Nonqualified Deferred Compensation Earnings ($) (h)				All Other Compensation ($) (i)				Total ($) (j)
Wong Heng Wah Chairman			2015				-				-				-				-				-				-				-				-
Lee Chong Kuang Director			2015				-				-				-				-				-				-				-				-

 

 

Grants of Plan-Based Awards Table

 

None of our named executive officers received any grants of stock, option awards or other plan-based awards during the period ended January 31, 2015 except as stated above. The Company has no activity with respect to these awards.

 

Options Exercised and Stock Vested Table

 

None of our named executive officers exercised any stock options, and no restricted stock units, if any, held by our named executive officers vested during the period ended January 31, 2015. The Company has no activity with respect to these awards.

 

Outstanding Equity Awards at Fiscal Year-End Table

 

None of our named executive officers had any outstanding stock or option awards as of January 31, 2015 that would be compensatory to the officer. The Company has not issued any awards to its named executive officers. The Company and its Board of Directors may grant awards as it sees fit to its employees as well as key consultants.

 

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS

 

As of January 31, 2015, we had 100,706,000 shares of common stock outstanding which are held by 48 shareholders. The chart below sets forth the ownership, or claimed ownership, of certain individuals and entities. This chart discloses those persons known by the board of directors to have, or claim to have, beneficial ownership of more than 5% of the outstanding shares of our common stock as of January 31, 2015; of all directors and executive officers of XYI Group; and of our directors and officers as a group.

 

		Percent of Common Stock Owned
Name		Number of Shares (1)				Prior to Offering (1)				Assuming 100,000 Shares Are Sold (1)				Assuming Maximum Offering is Sold (2)
Wong Heng Wah			99,900,000				99.20	%			99.10	%			99.20	%
Lee Chong Kuang			100,000				0.10	%			0.10	%			0.10	%
All officers and directors(2) as a group (one person)			100,000,000				99.30	%			99.20	%			99.30	%

 

(1)	The percentage of common stock owned is calculated using the sum of (A) the number of shares of common stock owned and (B) the number of warrants and options of the Beneficial Owner that are exercisable within 60 days, as the numerator, and the sum of (Y) the total number of shares of common stock outstanding (and the number of warrants and options of the Beneficial Owner that are exercisable within 60 days, as the denominator.
(2)	Based on 100,706,000 shares outstanding as of the date of this registration statement.

 

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

 

Mr. Wong, our president, and chief executive officer, and principal financial officer assisted to establish our Company. In addition, Mr. Lee Chong Kuang, our director, established the Company and oversaw the management of the Company since its inception.  

 

Based on the foregoing, each of Mr. Wong Heng Wah and Mr. Lee Chong Kuang is a promoter as such term is defined in Rule 405 of Regulation C promulgated under the Securities Act.

 

 Our office and mailing address is Room 2201 22 Floor Malaysia Building, 50 Gloucester Road Wan Chai Hong Kong. The space is provided to us by Mr. Lee Chong Kuang. He incurs no incremental costs as a result of our using the space. Therefore, he does not charge us for its use. There is no written lease agreement.

 

On January 2, 2015, the Company issued 99,900,000 shares of its common stock to Mr. Wong Heng Wah, its president, chief executive officer and chief financial officer, as founder’s shares for consideration of $9,900.

 

 

DESCRIPTION OF CAPITAL STOCK

 

Introduction

 

We were incorporated under the laws of the State of Nevada on December 5, 2014. XYI Group is authorized to issue 600,000,000 shares of common stock and 200,000,000 shares of preferred stock.

 

Preferred Stock

 

Our certificate of incorporation authorizes the issuance of 200,000,000 shares of preferred stock with designations, rights and preferences determined from time to time by our board of directors. No shares of preferred stock have been designated, issued or were outstanding as of January 31, 2015. Accordingly, our board of directors is empowered, without stockholder approval, to issue up to 200,000,000 shares of preferred stock with voting, liquidation, conversion, or other rights that could adversely affect the rights of the holders of the common stock. Although we have no present intention to issue any shares of preferred stock, there can be no assurance that we will not do so in the future.

 

Among other rights, our board of directors may determine, without further vote or action by our stockholders:

 

	●	the number of shares and the designation of the series;
	●	whether to pay dividends on the series and, if so, the dividend rate, whether dividends will be cumulative and, if so, from which date or dates, and the relative rights of priority of payment of dividends on shares of the series;
	●	whether the series will have voting rights in addition to the voting rights provided by law and, if so, the terms of the voting rights;
	●	whether the series will be convertible into or exchangeable for shares of any other class or series of stock and, if so, the terms and conditions of conversion or exchange;
	●	whether or not the shares of the series will be redeemable and, if so, the dates, terms and conditions of redemption and whether there will be a sinking fund for the redemption of that series and, if so, the terms and amount of the sinking fund; and
	●	the rights of the shares of the series in the event of our voluntary or involuntary liquidation, dissolution or winding up and the relative rights or priority, if any, of payment of shares of the series.

 

We presently do not have plans to issue any shares of preferred stock. However, preferred stock could be used to dilute a potential hostile acquirer. Accordingly, any future issuance of preferred stock or any rights to purchase preferred shares may have the effect of making it more difficult for a third party to acquire control of us. This may delay, defer or prevent a change of control in our Company or an unsolicited acquisition proposal. The issuance of preferred stock also could decrease the amount of earnings attributable to, and assets available for distribution to, the holders of our common stock and could adversely affect the rights and powers, including voting rights, of the holders of our common stock.

 

 

Common Stock

 

Our certificate of incorporation authorizes the issuance of 600,000,000 shares of common stock. There are 100,706,000 shares of our common stock issued and outstanding at January 31, 2015 that is held by 48 shareholders. The holders of our common stock:

 

	●	have equal ratable rights to dividends from funds legally available for payment of dividends when, as and if declared by the board of directors;
	●	are entitled to share ratably in all of the assets available for distribution to holders of common stock upon liquidation, dissolution or winding up of our affairs;
	●	do not have pre-emptive, subscription or conversion rights, or redemption or access to any sinking fund; and
	●	are entitled to one non-cumulative vote per share on all matters submitted to stockholders for a vote at any meeting of stockholders

  

See also Plan of Distribution regarding negative implications of being classified as a “Penny Stock.”

 

Authorized but Un-issued Capital Stock

 

Nevada law does not require stockholder approval for any issuance of authorized shares. These additional shares may be used for a variety of corporate purposes, including future public offerings to raise additional capital or to facilitate corporate acquisitions.

 

One of the effects of the existence of un-issued and unreserved common stock (and/or preferred stock) may be to enable our board of directors to issue shares to persons friendly to current management, which issuance could render more difficult or discourage an attempt to obtain control of our board by means of a merger, tender offer, proxy contest or otherwise, and thereby protect the continuity of our management and possibly deprive the stockholders of opportunities to sell their shares of our common stock at prices higher than prevailing market prices.

 

Shareholder Matters

 

As an issuer of "penny stock" the protection provided by the federal securities laws relating to forward looking statements does not apply to us if our shares are considered to be penny stocks which they currently are and probably will be for the foreseeable future. Although the federal securities law provide a safe harbor for forward-looking statements made by a public company that files reports under the federal securities laws, this safe harbor is not available to issuers of penny stocks. As a result, we will not have the benefit of this safe harbor protection in the event of any claim that the material provided by us, including this prospectus, contained a material misstatement of fact or was misleading in any material respect because of our failure to include any statements necessary to make the statements not misleading.

 

As a Nevada corporation, we are subject to the Nevada Revised Statutes ("NRS" or "Nevada law"). Certain provisions of Nevada law described below create rights that might be deemed material to our shareholders. Other provisions might delay or make more difficult acquisitions of our stock or changes in our control or might also have the effect of preventing changes in our management or might make it more difficult to accomplish transactions that some of our shareholders may believe to be in their best interests.

 

Directors' Duties. Section 78.138 of the Nevada law allows our directors and officers, in exercising their powers to further our interests, to consider the interests of our employees, suppliers, creditors and customers. They can also consider the economy of the state and the nation, the interests of the community and of society and our long-term and short-term interests and shareholders, including the possibility that these interests may be best served by our continued independence. Our directors may resist a change or potential change in control if they, by a majority vote of a quorum, determine that the change or potential change is opposed to or not in our best interest. Our board of directors may consider these interests or have reasonable grounds to believe that, within a reasonable time, any debt which might be created as a result of the change in control would cause our assets to be less than our liabilities, render us insolvent, or cause us to file for bankruptcy protection

 

 

Dissenters' Rights. Among the rights granted under Nevada law which might be considered material is the right for shareholders to dissent from certain corporate actions and obtain payment for their shares (see Nevada Revised Statutes ("NRS") 92A.380-390). This right is subject to exceptions, summarized below, and arises in the event of mergers or plans of exchange. This right normally applies if shareholder approval of the corporate action is required either by Nevada law or by the terms of the articles of incorporation.

 

A shareholder does not have the right to dissent with respect to any plan of merger or exchange, if the shares held by the shareholder are part of a class of shares which are:

 

	●	listed on a national securities exchange,
	●	included in the national market system by the Financial Industry Regulatory Authority (“FINRA”), or
	●	held of record by not less than 2,000 holders.

 

This exception notwithstanding, a shareholder will still have a right of dissent if it is provided for in the articles of incorporation or if the shareholders are required under the plan of merger or exchange to accept anything but cash or owner's interests, or a combination of the two, in the surviving or acquiring entity, or in any other entity falling in any of the three categories described above in this paragraph.

 

Inspection Rights. Nevada law also specifies that shareholders are to have the right to inspect company records (see NRS 78.105). This right extends to any person who has been a shareholder of record for at least six months immediately preceding his demand. It also extends to any person holding, or authorized in writing by the holders of, at least 5% of outstanding shares. Shareholders having this right are to be granted inspection rights upon five days' written notice. The records covered by this right include official copies of:

 

i.

the articles of incorporation, and all amendments thereto,

 

ii.

bylaws and all amendments thereto; and

 

iii.

a stock ledger or a duplicate stock ledger, revised annually, containing the names, alphabetically arranged, of all persons who are stockholders of the corporation, showing their places of residence, if known, and the number of shares held by them, respectively.

 

In lieu of the stock ledger or duplicate stock ledger, Nevada law provides that the corporation may keep a statement setting out the name of the custodian of the stock ledger or duplicate stock ledger, and the present and complete post office address, including street and number, if any, where the stock ledger or duplicate stock ledger specified in this section is kept.

 

Control Share Acquisitions. Sections 78.378 to 78.3793 of Nevada law contain provisions that may prevent any person acquiring a controlling interest in a Nevada-registered company from exercising voting rights. To the extent that these rights support the voting power of minority shareholders, these rights may also be deemed material. These provisions will be applicable to us as soon as we have 200 shareholders of record with at least 100 of these having addresses in Nevada as reflected on our stock ledger. While we do not yet have the required number of shareholders in Nevada or elsewhere, it is possible that at some future point we will reach these numbers and, accordingly, these provisions will become applicable. We do not intend to notify shareholders when we have reached the number of shareholders specified under these provisions of Nevada law. Shareholders can learn this information pursuant to the inspection rights described above and can see the approximate number of our shareholders by checking under Item 5 of our annual reports on Form 10-K. This form is filed with the Securities and Exchange Commission within 90 days after the close of each fiscal year hereafter. You can view these and our other filings at www.sec.gov in the "EDGAR" database.

 

 

Under NRS Sections 78.378 to 78.3793, an acquiring person who acquires a controlling interest in company shares may not exercise voting rights on any of these shares unless these voting rights are granted by a majority vote of our disinterested shareholders at a special shareholders' meeting held upon the request and at the expense of the acquiring person. If the acquiring person's shares are accorded full voting rights and the acquiring person acquires control shares with a majority or more of all the voting power, any shareholder, other than the acquiring person, who does not vote for authorizing voting rights for the control shares, is entitled to demand payment for the fair value of their shares, and we must comply with the demand. An "acquiring person" means any person who, individually or acting with others, acquires or offers to acquire, directly or indirectly, a controlling interest in our shares. "Controlling interest" means the ownership of our outstanding voting shares sufficient to enable the acquiring person, individually or acting with others, directly or indirectly, to exercise one-fifth or more but less than one-third, one-third or more but less than a majority, or a majority or more of the voting power of our shares in the election of our directors. Voting rights must be given by a majority of our disinterested shareholders as each threshold is reached or exceeded. "Control shares" means the company's outstanding voting shares that an acquiring person acquires or offers to acquire in an acquisition or within 90 days immediately preceding the date when the acquiring person becomes an acquiring person.

 

These Nevada statutes do not apply if a company's articles of incorporation or bylaws in effect on the tenth day following the acquisition of a controlling interest by an acquiring person provide that these provisions do not apply.

 

According to NRS 78.378, the provisions referred to above will not restrict our directors from taking action to protect the interests of our Company and its shareholders, including without limitation, adopting or executing plans, arrangements or instruments that deny rights, privileges, power or authority to a holder of a specified number of shares or percentage of share ownership or voting power. Likewise, these provisions do not prevent directors or shareholders from including stricter requirements in our articles of incorporation or bylaws relating to the acquisition of a controlling interest in the Company.

 

Our articles of incorporation and bylaws do not exclude us from the restrictions imposed by NRS 78.378 to 78.3793, nor do they impose any more stringent requirements.

 

Certain Business Combinations. Sections 78.411 to 78.444 of the Nevada law may restrict our ability to engage in a wide variety of transactions with an "interested shareholder." As was discussed above in connection with NRS 78.378 to 78.3793, these provisions could be considered material to our shareholders, particularly to minority shareholders. They might also have the effect of delaying or making more difficult acquisitions of our stock or changes in our control. These sections of NRS are applicable to any Nevada company with 200 or more stockholders of record and that has a class of securities registered under Section 12 of the 1934 Securities Exchange Act, unless the company's articles of incorporation provide otherwise. By this registration statement, we are not registering our common stock under Section 12(g) of the Exchange Act. Accordingly, upon the effectiveness of this registration statement on Form S-1 we not will be subject to these statutes.

 

These provisions of Nevada law prohibit us from engaging in any "combination" with an interested stockholder for three years after the interested stockholder acquired the shares that cause him/her to become an interested shareholder, unless he had prior approval of our board of directors. The term "combination" is described in NRS 78.416 and includes, among other things, mergers, sales or purchases of assets, and issuances or reclassifications of securities. If the combination did not have prior approval, the interested shareholder may proceed after the three-year period only if the shareholder receives approval from a majority of our disinterested shares or the offer meets the requirements for fairness that are specified in NRS 78.441-42. For the above provisions, "resident domestic corporation" means a Nevada corporation that has 200 or more shareholders. An "interested stockholder" is defined in NSR 78.423 as someone who is either:

 

	●	the beneficial owner, directly or indirectly, of 10% or more of the voting power of our outstanding voting shares; or
	●	our affiliate or associate and who within three years immediately before the date in question, was the beneficial owner, directly or indirectly, of 10% or more of the voting power of our outstanding shares at that time.

 

 

Amendments to Bylaws - Our articles of incorporation provide that the power to adopt, alter, amend, or repeal our bylaws is vested exclusively with the board of directors. In exercising this discretion, our board of directors could conceivably alter our bylaws in ways that would affect the rights of our shareholders and the ability of any shareholder or group to effect a change in our control; however, the board would not have the right to do so in a way that would violate law or the applicable terms of our articles of incorporation.

 

Transfer Agent

 

The transfer agent for our common stock is VStock Transfer, LLC, 18 Lafayette Place, Woodmere, New York 11598. Telephone Number: 212-828-8436.  

 

JUMPSTART OUR BUSINESS STARTUPS ACT

 

In April, 2012, the Jumpstart Our Business Startups Act (“JOBS Act”) was enacted into law. The JOBS Act provides, among other things:

 

	●	Exemptions for emerging growth companies from certain financial disclosure and governance requirements for up to five years and provides a new form of financing to small companies;
	●	Amendments to certain provisions of the federal securities laws to simplify the sale of securities and increase the threshold number of record holders required to trigger the reporting requirements of the Securities Exchange Act of 1934;
	●	Relaxation of the general solicitation and general advertising prohibition for Rule 506 offerings;
	●	Adoption of a new exemption for public offerings of securities in amounts not exceeding $50 million; and
	●	Exemption from registration by a non-reporting company of offers and sales of securities of up to $1,000,000 that comply with rules to be adopted by the SEC pursuant to Section 4(6) of the Securities Act and exemption of such sales from state law registration, documentation or offering requirements.

 

In general, under the JOBS Act a company is an emerging growth company if its initial public offering (“IPO”) of common equity securities was affected after December 8, 2011 and the company had less than $1 billion of total annual gross revenues during its last completed fiscal year. A company will no longer qualify as an emerging growth company after the earliest of

 

	(i)	the completion of the fiscal year in which the company has total annual gross revenues of $1 billion or more,
	(ii)	the completion of the fiscal year of the fifth anniversary of the Company’s IPO;
	(iii)	the company’s issuance of more than $1 billion in nonconvertible debt in the prior three-year period, or
	(iv)	the company becoming a “larger accelerated filer” as defined under the Securities Exchange Act of 1934.

 

The JOBS Act provides additional new guidelines and exemptions for non-reporting companies and for non-public offerings. Those exemptions that impact the Company are discussed below.

 

Financial Disclosure.

 

The financial disclosure in a registration statement filed by an emerging growth company pursuant to the Securities Act of 1933 will differ from registration statements filed by other companies as follows:

 

	(i)	audited financial statements required for only two fiscal years;
	(ii)	selected financial data required for only the fiscal years that were audited;
	(iii)	executive compensation only needs to be presented in the limited format now required for smaller reporting companies. (A smaller reporting company is one with a public float of less than $75 million as of the last day of its most recently completed second fiscal quarter).

 

However, the requirements for financial disclosure provided by Regulation S-K promulgated by the Rules and Regulations of the SEC already provide certain of these exemptions for smaller reporting companies. The Company is a smaller reporting company. Currently a smaller reporting company is not required to file as part of its registration statement selected financial data and only needs audited financial statements for its two most current fiscal years and no tabular disclosure of contractual obligations.

 

 

The JOBS Act also exempts the Company’s independent registered public accounting firm from complying with any rules adopted by the Public Company Accounting Oversight Board (“PCAOB”) after the date of the JOBS Act’s enactment, except as otherwise required by SEC rule.

 

The JOBS Act also exempts an emerging growth company from any requirement adopted by the PCAOB for mandatory rotation of the Company’s accounting firm or for a supplemental auditor report about the audit.

 

Internal Control Attestation.

 

The JOBS Act also provides an exemption from the requirement of the Company’s independent registered public accounting firm to file a report on the Company’s internal control over financial reporting, although management of the Company is still required to file its report on the adequacy of the Company’s internal control over financial reporting.

 

Section 102(a) of the JOBS Act exempts emerging growth companies from the requirements in §14A(e) of the Securities Exchange Act of 1934 for companies with a class of securities registered under the 1934 Act to hold shareholder votes for executive compensation and golden parachutes.

 

Other Items of the JOBS Act.

 

The JOBS Act also provides that an emerging growth company can communicate with potential investors that are qualified institutional buyers or institutions that are accredited to determine interest in a contemplated offering either prior to or after the date of filing the respective registration statement. The Act also permits research reports by a broker or dealer about an emerging growth company regardless if such report provides sufficient information for an investment decision. In addition the JOBS Act precludes the SEC and FINRA from adopting certain restrictive rules or regulations regarding brokers, dealers and potential investors, communications with management and distribution of a research reports on the emerging growth company IPO.

 

Section 106 of the JOBS Act permits emerging growth companies to submit 1933 Act registration statements on a confidential basis provided that the registration statement and all amendments are publicly filed at least 21 days before the issuer conducts any road show. This is intended to allow the emerging growth company to explore the IPO option without disclosing to the market the fact that it is seeking to go public or disclosing the information contained in its registration statement until the company is ready to conduct a road show.

 

Election to Opt Out of Transition Period.

 

Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a 1933 Act registration statement declared effective or do not have a class of securities registered under the 1934 Act) are required to comply with the new or revised financial accounting standard.

 

The JOBS Act provides a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such an election to opt out is irrevocable. The Company has elected not to opt out of the transition period.

 

The Company is electing to not opt out of JOBS Act extended accounting transition period.

 

PLAN OF DISTRIBUTION

 

There is no public market for our common stock. Our common stock is currently held by one shareholder. Therefore, the current and potential market for our common stock is limited and the liquidity of our shares may be severely limited. At this time no market maker has agreed to file an application with FINRA to quote our shares. Even if a market maker agrees to file such an application with FINRA there can be no assurance as to whether such market maker’s application will be accepted by FINRA nor can we estimate the time period that will be required for the application process. In the absence of quotation or listing, no market is available for investors in our common stock to sell their shares. We cannot provide any assurance that a meaningful trading market will ever develop or that our common stock will ever be quoted or listed for trading.

 

If the shares of our common stock ever become tradable, the trading price of our common stock could be subject to wide fluctuations in response to various events or factors, many of which are beyond our control. As a result, investors may be unable to sell their shares at or greater than the price at which they are being offered.

 

This offering will be conducted on a best-efforts basis utilizing the efforts of the President and Chief Executive Officer of the Company, Mr. Wong . Potential investors include, but are not limited to, family, friends and acquaintances of Mr. Wong. The intended methods of communication include, without limitation, telephone calls and personal contact. In his endeavors to sell this offering, he will not use any mass advertising methods such as the internet or print media.

 

Funds received in connection with the sale of our securities will be transmitted immediately into an escrow account. There can be no assurance that all, or any, of the shares will be sold.

 

 

Mr. Wong Heng Wah will not receive commissions for any sales originated on our behalf. We believe that he is exempt from registration as a broker under the provisions of Rule 3a4-1 promulgated under the Exchange Act. In particular, Mr. Wong:

 

1.

Is not subject to a statutory disqualification, as that term is defined in Section 3(a)39 of the Act, at the time of his participation;

 

	a.	Is not to be compensated in connection with his participation by the payment of commissions or other remuneration based either directly or indirectly on transactions in securities;
	b.	Is not an associated person of a broker or dealer; and
	c.	Meets the conditions of the following:

 

	i.	Primarily performs, or is intended primarily to perform at the end of the offering, substantial duties for or on behalf of the issuer otherwise than in connection with transactions in securities;
	ii.	Was not a broker or dealer, or associated persons of a broker or dealer, within the preceding 12 months; and

 

iii.

Did not participate in selling an offering of securities for any issuer more than once every 12 months other than in reliance on paragraphs within this section, except that for securities issued pursuant to Rule 415 under the Securities Act of 1933, the 12 months shall begin with the last sale of any security included within a Rule 415 registration.

 

No officers or directors of the Company may purchase any securities in this offering.

 

There can be no assurance that all, or any, of the shares will be sold. As of this date, we have not entered into any agreements or arrangements for the sale of the shares with any broker/dealer or sales agent. However, if we were to enter into such arrangements, we will file a post-effective amendment to disclose those arrangements because any broker/dealer participating in the offering would be acting as an underwriter and would have to be so named herein. In order to comply with the applicable securities laws of certain states, the securities may not be offered or sold unless they have been registered or qualified for sale in such states or an exemption from such registration or qualification requirement is available and with which we have complied. The purchasers in this offering and in any subsequent trading market must be residents of such states where the shares have been registered or qualified for sale or an exemption from such registration or qualification requirement is available. As of this date, we have not identified the specific states where the offering will be sold.

 

The proceeds from the sale of the shares in this offering will be payable to the Company, and will be deposited in a noninterest-bearing bank account until the subscription agreements are accepted by the Company. Failure to do so will result in checks being returned to the investor who submitted the check. No interest will be paid to any shareholder or the Company. All subscription agreements and checks are irrevocable (except as to any states that require a statutory cooling-off period or rescission right). All subscription funds will be held in the Escrow Account pending acceptance of the subscriptions by XYI Group, and funds will be released to XYI Group as received, until the maximum offering has been subscribed.

 

Investors can purchase common stock in this offering by completing a Subscription Agreement, a copy of which is filed as Exhibit 10.1 to the registration statement of which this prospectus is a part, and sending it together with payment in full. All payments must be made in U.S. currency either by personal check, bank draft, or cashier check. There is no minimum subscription requirement. All subscription agreements and checks are irrevocable (except as to any states that require a statutory cooling-off period or rescission right). The Company expressly reserves the right to either accept or reject any subscription. Any subscription rejected will be returned to the subscriber within five business days of the rejection date. Furthermore, once a subscription agreement is accepted, it will be executed without reconfirmation to or from the subscriber. Once we accept a subscription, the subscriber cannot withdraw it.

 

Any purchasers of our securities should be aware that any market that develops in our common stock will be subject to “penny stock” restrictions.

 

We will pay all expenses incident to the registration, offering and sale of the shares other than commissions or discounts of underwriters, broker-dealers or agents.

 

Any purchasers of our securities should be aware that any market that develops in our stock will be subject to the penny stock restrictions.

 

The trading of our securities, if any, will be in the over-the-counter markets (once and if and when quoting thereon has occurred). As a result, an investor may find it difficult to dispose of, or to obtain accurate quotations as to the price of, our securities.

 

 

Over-the-Counter Market Considerations

 

Over-the-counter securities are not listed and traded on the floor of an organized national or regional stock exchange. Instead, over-the-counter securities transactions are conducted through a telephone and computer network connecting dealers in stocks. Over-the-counter stocks are traditionally smaller companies that do not meet the financial and other listing requirements of a regional or national stock exchange.

 

To be quoted on the over-the-counter markets, a market maker must file an application on our behalf in order to make a market for our common stock. We are not permitted to file such application on our own behalf. At this time no market maker has agreed to file an application with FINRA to quote our shares. Even if a market maker agrees to file such an application with FINRA there can be no assurance as to whether such market maker’s application will be accepted by FINRA nor can we estimate the time period that will be required for the application process.

 

Unlike a stock exchange, there are no listing requirements for the over-the-counter markets.

 

Although we anticipate that quotation on the over-the-counter markets will increase liquidity for our stock, investors may have difficulty in getting orders filled because trading activity on the over-the-counter markets in general is not conducted as efficiently and effectively as with exchange listed securities. As a result, investors’ orders may be filled at a price much different than expected when an order is placed.

 

Investors must contact a broker-dealer to trade over-the-counter securities. Investors do not have direct access to trade on the over-the-counter markets.

 

 

Section 15(g) of the Exchange Act

 

Our shares will be covered by Section 15(g) of the Exchange Act, and Rules 15g-1 through 15g-6 promulgated thereunder. They impose additional sales practice requirements on broker-dealers who sell our securities to persons other than established customers and accredited investors (generally institutions with assets in excess of $5,000,000 or individuals with net worth in excess of $1,000,000 excluding revenue or annual income exceeding $200,000 or $300,000 jointly with their spouses).

 

Rule 15g-1 exempts a number of specific transactions from the scope of the penny stock rules (but is not applicable to us).

 

Rule 15g-2 declares unlawful broker-dealer transactions in penny stocks unless the broker-dealer has first provided to the customer a standardized disclosure document.

 

Rule 15g-3 provides that it is unlawful for a broker-dealer to engage in a penny stock transaction unless the broker-dealer first discloses and subsequently confirms to the customer current quotation prices or similar market information concerning the penny stock in question.

 

Rule 15g-4 prohibits broker-dealers from completing penny stock transactions for a customer unless the broker-dealer first discloses to the customer the amount of compensation or other remuneration received as a result of the penny stock transaction.

 

Rule 15g-5 requires that a broker-dealer executing a penny stock transaction, other than one exempt under Rule 15g-1, disclose to its customer, at the time of or prior to the transaction, information about the sales persons compensation.

 

Rule 15g-6 requires broker-dealers selling penny stocks to provide their customers with monthly account statements.

 

Rule 3a51-1 of the Exchange Act establishes the definition of a "penny stock," for purposes relevant to us, as any equity security that has a minimum bid price of less than $5.00 per share or with an exercise price of less than $5.00 per share, subject to a limited number of exceptions. It is likely that our shares will be considered to be penny stocks for the immediately foreseeable future. For any transaction involving a penny stock, unless exempt, the penny stock rules require that a broker or dealer approve a person's account for transactions in penny stocks and the broker or dealer receive from the investor a written agreement to the transaction setting forth the identity and quantity of the penny stock to be purchased.

 

In order to approve a person's account for transactions in penny stocks, the broker or dealer must obtain financial information and investment experience and objectives of the person and make a reasonable determination that the transactions in penny stocks are suitable for that person and that that person has sufficient knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks.

 

The broker or dealer must also deliver, prior to any transaction in a penny stock, a disclosure schedule prepared by the SEC relating to the penny stock market, which, in highlight form, sets forth:

 

	●	the basis on which the broker or dealer made the suitability determination, and
	●	that the broker or dealer received a signed, written agreement from the investor prior to the transaction

 

Disclosure also has to be made about the risks of investing in penny stock in both public offerings and in secondary trading and commissions payable to both the broker-dealer and the registered representative, current quotations for the securities and the rights and remedies available to an investor in cases of fraud in penny stock transactions. Additionally, monthly statements have to be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stocks.

 

 

Many brokers have decided not to trade penny stocks because of the requirements of the penny stock rules and, as a result, the number of broker-dealers willing to act as market makers in such securities is limited. If the Company remains subject to the penny stock rules for any significant period, which is likely, it could have an adverse effect on the market, if any, for the Company’s securities. If the Company’s securities are subject to the penny stock rules, investors will find it difficult to dispose of the Company’s securities.

 

State Securities – Blue Sky Laws

 

There is no established public market for our common stock, and there can be no assurance that any market will develop in the foreseeable future. Transfer of our common stock may also be restricted under the securities or securities regulations laws promulgated by various states and foreign jurisdictions, commonly referred to as "Blue Sky" laws. Absent compliance with such individual state laws, our common stock may not be traded in such jurisdictions. Because the securities registered hereunder have not been registered for resale under the blue sky laws of any state, the holders of such shares and persons who desire to purchase them in any trading market that might develop in the future, should be aware that there may be significant state blue-sky law restrictions upon the ability of investors to sell the securities and of purchasers to purchase the securities. Accordingly, investors may not be able to liquidate their investments and should be prepared to hold the common stock for an indefinite period of time.

 

We will consider applying for listing in Mergent, Inc., a leading provider of business and financial information on publicly listed companies, which, once published, will provide XYI Group with “manual” exemptions in approximately 33 states as indicated in CCH Blue Sky Law Desk Reference at Section 6301 entitled “Standard Manuals Exemptions.” However, we may not be accepted for listing in Mergent or similar services designed to obtain manual exemptions if we are considered to be a "shell company" at the time of application.

 

Thirty-three states have what is commonly referred to as a "manual exemption" for secondary trading of securities such as those to be resold by selling stockholders under this registration statement. In these states, so long as we obtain and maintain a listing in Mergent, Inc. or Standard and Poor's Corporate Manual, secondary trading of our common stock can occur without any filing, review or approval by state regulatory authorities in these states. These states are: Alaska, Arizona, Arkansas, Colorado, Connecticut, District of Columbia, Florida, Hawaii, Idaho, Indiana, Iowa, Kansas, Maine, Maryland, Massachusetts, Michigan, Mississippi, Missouri, Nebraska, New Jersey, New Mexico, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Rhode Island, South Carolina, Texas, Utah, Washington, West Virginia and Wyoming. We cannot secure this listing, and thus this qualification, until after our registration statement is declared effective. Once we secure this listing (assuming that being a development stage and shell company is not a bar to such listing), secondary trading can occur in these states without further action.

 

Upon effectiveness of this Prospectus, the Company intends to consider (but may not) becoming a “reporting issuer” under Section 12(g) of the Exchange Act, as amended, by way of filing a Form 8-A with the SEC. A Form 8-A is a “short form” of registration whereby information about the Company will be incorporated by reference to the Registration Statement on Form S-1, of which this prospectus is a part. Upon filing of the Form 8-A, if done, the Company’s shares of common stock will become “covered securities,” or “federally covered securities” as described in some states’ laws, which means that unless you are an “underwriter” or “dealer,” you will have a “secondary trading” exemption under the laws of most states (and the District of Columbia, Guam, the Virgin Islands and Puerto Rico) to resell the shares of common stock you purchase in this offering. However, four states do impose filing requirements on the Company: Michigan, New Hampshire, Texas and Vermont. The Company may, at its own cost, make the required notice filings in Michigan, New Hampshire, Texas and Vermont immediately after filing its Form 8-A with the SEC.

 

We currently do not intend to and may not be able to qualify securities for resale in other states which require shares to be qualified before they can be resold by our shareholders.

 

Limitations Imposed by Regulation M

 

Under applicable rules and regulations under the Exchange Act, any person engaged in the distribution of the shares may not simultaneously engage in market making activities with respect to our common stock for a period of two business days prior to the commencement of such distribution.

 

 

EXPERTS

 

Unless otherwise disclosed herein, no expert or counsel named in this Prospectus as having prepared or certified any part thereof or having given an opinion upon the validity of the securities being registered or upon other legal matters in connection with the registration or offering of our common stock was employed on a contingency basis or had or is to receive, in connection with the offering, a substantial interest, directly or indirectly, in us. Additionally, unless otherwise disclosed herein, no such expert or counsel was connected with us as a promoter, managing or principal underwriter, voting trustee, director, officer or employee.

 

The validity of the shares of common stock offered hereby will be passed upon for us by Adam Tracy Esq. of 800 W. 5TH Avenue Suite 201A Naperville, Illinois 60563 

 

The financial statements of the Company as of January 31, 2015 and for the period December 5, 2014 (inception) to January 31, 2015 included in this prospectus have been audited by independent registered public accountants and have been so included in reliance upon the report of WELD ASIA ASSOCIATES a professional corporation given on the authority of such firm as experts in accounting and auditing.

 

WHERE YOU CAN FIND MORE INFORMATION

 

We have filed with the Securities and Exchange Commission a registration statement on Form S-1, including exhibits, schedules and amendments, under the Securities Act with respect to the shares of common stock to be sold in this offering. This prospectus does not contain all the information included in the registration statement. For further information about us and the shares of our common stock to be sold in this offering, please refer to our registration statement.

 

As of the effective date of our registration statement of which this prospectus is a part, we will become subject to certain informational requirements of the Exchange Act, as amended and we will be required to file periodic reports (i.e., annual, quarterly and material events) with the SEC which will be immediately available to the public for inspection and copying. In the event during the year that our registration statement becomes effective, these reporting obligations may be automatically suspended under Section 15(d) of the Exchange Act if we have less than 300 shareholders and do not file a registration statement on Form 8-A (of which we have no current plans to file). If this occurs after the year in which our registration statement becomes effective, we will no longer be obligated to file such periodic reports with the SEC and access to our business information would then be even more restricted. After this registration statement on Form S-1 becomes effective, we may be required to deliver periodic reports to security holders as proscribed by the Exchange Act, as amended. However, we will not be required to furnish proxy statements to security holders and our directors, officers and principal beneficial owners will not be required to report their beneficial ownership of securities to the SEC pursuant to Section 16 of the Exchange Act until we have both 500 or more security holders and greater than $10 million in assets. This means that access to information regarding our business and operations will be limited.

 

You may read and copy any document we file at the SEC's public reference room at 100 F Street, N. E., Washington, D.C. 20549. You should call the SEC at 1-800-SEC-0330 for further information on the public reference rooms. Our SEC filings will also be available to the public at the SEC's web site at "http:/www.sec.gov."

 

You should rely only on the information contained in this prospectus. No finder, dealer, sales person or other person has been authorized to give any information or to make any representation in connection with this offering other than those contained in this prospectus and, if given or made, such information or representation must not be relied upon as having been authorized by XYI Group. This prospectus does not constitute an offer to sell or a solicitation of an offer to buy any of the securities offered hereby by anyone in any jurisdiction in which such offer or solicitation is not authorized or in which the person making such offer or solicitation is not qualified to do so or to any person to whom it is unlawful to make such offer or solicitation.

 

 

XYI Group, Inc.

(a Development Stage Company)

 

INDEX TO FINANCIAL STATEMENTS

 

Contents
	Page
Report of Independent Registered Public Accounting Firm	F-1
Consolidated Balance Sheet at January 31, 2015	F-2
Consolidated Statement of Operations for the Period December 5, 2014 (inception) to January 31, 2015	F-3
Consolidated Statement of Stockholders’ Equity for the Period December 5, 2014 (inception) to January 31, 2015	F-4
Consolidated Statement of Cash Flows for the Period December 5, 2014 (inception) to January 31, 2015	F-5
Notes to the Financial Statements	F-6 - F-9

 

 

	WELD ASIA ASSOCIATES (A PCAOB Registered Firm)
	13-8, The Boulevard Office, Mid Valley City, Lingkaran Syed Putra, 59200 Kuala Lumpur, Malaysia Tel : (603) 2284 5126 Fax : 2284 7126 E: info@weldasia.com W: www.weldasia.com

 

Report of Independent Registered Public Accounting Firm

 

To the Board of Directors and Stockholders

XYI Group, Inc.

 

We have audited the accompanying consolidated balance sheet of XYI Group, Inc. (A Development Stage “Company”) as of January 31, 2015 and the related statement of operations, changes in stockholders’ equity and cash flows for the period from December 5, 2014 (inception) to January 31, 2015. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit.

 

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statements presentation. We believe that our audit provides a reasonable basis for our opinion.

 

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of XYI Group, Inc. as of January 31, 2015, and the result of its operations and its cash flows for the period from December 5, 2014 (inception) to January 31, 2015 in conformity with U.S. generally accepted accounting principles.

 

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 3 to the financial statements, the Company has generated a limited revenues and losses since inception. These conditions, among others, raise substantial doubt about the Company’s ability to continue as a going concern. Management's plans concerning these matters are also described in Note 3, which includes achieving profitable operations and raising additional funds through financing. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

 

/s/ Weld Asia Associates

 

WELD ASIA ASSOCIATES

Date: February 16, 2015

Kuala Lumpur, Malaysia

 

 

XYI Group, Inc.

(a Development Stage Company)

Consolidated Balance Sheet

January 31, 2015

 

ASSETS
CURRENT ASSETS:
Bank		$	18,296
TOTAL ASSETS		$	18,296
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accrued expenses		$	4,800
TOTAL LIABILITIES			4,800
STOCKHOLDERS’ EQUITY:
Preferred stock, $.0001 par value; 200,000,000 shares authorized; none issued or outstanding			-
Common stock, $.0001 par value; 600,000,000 shares authorized; 100,706,000 shares issued and outstanding			10,071
Additional paid in capital			6,989
Deficit accumulated during development stage			(3,564	)
TOTAL STOCKHOLDERS’ EQUITY			13,496
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY		$	18,296

 

See notes to the financial statements.

 

 

XYI Group, Inc.

(a Development Stage Company)

Consolidated Statement of Operations

For the Period December 5, 2014 (inception) through January 31, 2015

 

Revenue		$	6,556
Less: cost of sales		$	(1,880	)
Gross profit		$	4,676
Less: expenses
Selling, general and administration		$	(8,240	)
Operating loss		$	(3,564	)
Interest expense		$	-
Net loss		$	(3,564	)
Basic and diluted loss per share		$	(0.00	)
Weighted average common shares outstanding - basic and diluted			51,037,790

 

See notes to the financial statements.

 

 

XYI Group, Inc.

(a Development Stage Company)

Consolidated Statement of Changes in Stockholders’ Equity

For the Period December 5, 2014 (inception) through January 31, 2015

 

		Common Stock				Common Stock Amount				Additional paid in capital				Accumulated Deficit				Total
Balance - December 5, 2014 (date of inception)			-			$	-			$	-			$	-			$	-
Shares issued on January 2, 2015			99,900,000				9,990				-				-				9,990
Shares issued for founder’s shares			100,000				10				-				-				10
Shares issued in private placement completed on January 22, 2015			706,000				71				6,989				-				7,060
Net loss			-				-				-				(3,564	)			(3,564	)
Balance - January 31, 2015			100,706,000			$	10,071			$	6,989			$	(3,564	)		$	13,496

 

See notes to the financial statements.

 

 

XYI Group, Inc.

(a Development Stage Company)

Consolidated Statement of Cash Flows

For the Period December 5, 2014 (inception) through January 31, 2015

 

 

CASH FLOW FROM OPERATING ACTIVITIES:
Net loss		$	(3,564	)
Accrued expenses, increase in			4,800
Accrued interest expense			-
Net Cash Used in Operating Activities			1,236
CASH FLOW FROM INVESTING ACTIVITIES
Net Cash Used in Investing Activities			—
CASH FLOW FROM FINANCING ACTIVITIES
Issuance of common stock for cash			17,060
Net Cash Provided by Financing Activities			17,060
CHANGE IN CASH			18,296
CASH AT BEGINNING OF PERIOD			-
CASH AT END OF PERIOD		$	18,296

 

See notes to the financial statements.

 

 

XYI Group, Inc.

(a Development Stage Company)

Notes to the Financial Statements

January 31, 2015

 

NOTE 1 – ORGANIZATION

 

XYI Group, Inc. (the Company) was incorporated under the laws of the State of Nevada on December 5, 2014. The initial common stock shares subscription by the subscriber, Mr. Lee Chong Kuang is for 100,000 shares at the price of $0.0001 per share. On January 2, 2015, the Company has issued 99,900,000 shares of its common stock to Wong Heng Wah for capital injection of $9,990 for the Company’s additional working capital purpose.

 

On January 22, 2015, the Company completed a private placement where it issued 706,000 shares of its common stock to accredited investors for $7,060.

 

The following are the organization structure of XYI Group, Inc.:

 

 

The Company has not generated revenues from its planned principal operations and is considered a development stage company as that term is defined by Financial Accounting Standard Board ("FASB") Accounting Standards Codification ("ASC") 915, Development Stage Entities.

 

The Company will acquire and/or develop and market software and services that will significantly enhance the performance and functionality of the Internet services used by small to medium sized businesses. The Company’s products and services will use proprietary technology that will enable users to work collaboratively to obtain substantial improvements in performance, reliability and usability.

 

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

a. Basis of Accounting

 

The Company’s financial statements are prepared using the accrual method of accounting. The Company has elected a January 31, fiscal year-end.

 

b. Cash Equivalents

 

For purposes of the balance sheet and statement of cash flows, the Company considers all highly liquid instruments with maturity of three months or less at the time of issuance to be cash equivalents.

 

 

c. Stock-based Compensation

 

The Company follows ASC 718-10, Stock Compensation, which addresses the accounting for transactions in which an entity exchanges its equity instruments for goods or services, with a primary focus on transactions in which an entity obtains employee services in share-based payment transactions. ASC 718-10 requires measurement of the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award (with limited exceptions). Incremental compensation costs arising from subsequent modifications of awards after the grant date must be recognized. The Company has not adopted a stock option plan and has not granted any stock options.

 

d. Use of Estimates and Assumptions

 

 Preparation of the financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates. The Company has adopted the provisions of ASC 260.

 

e. Loss per Share

 

The basic loss per share is calculated by dividing the Company’s net loss available to common shareholders by the weighted average number of common shares during the period. The diluted loss per share is calculated by dividing the Company’s net loss available to common shareholders by the diluted weighted average number of shares outstanding during the period. The diluted weighted average number of shares outstanding is the basic weighted number of shares adjusted for any potentially dilutive debt or equity. Diluted earnings (loss) per share are the same as basic earnings (loss) per share due to the lack of dilutive items in the Company.

 

f. Fair Value Measurements and Disclosures

 

ASC Topic 820 defines fair value, establishes a framework for measuring fair value, establishes a three-level valuation hierarchy for disclosure of fair value measurement and enhances disclosure requirements for fair value measurements. The valuation hierarchy is based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date. The three levels are defined as follows:

 

Level 1 - Inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.

 

Level 2 - Inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.

 

Level 3 - Inputs to the valuation methodology are unobservable and significant to the fair value measurement.

 

The Company’s adoption of fair value measurements and disclosures did not have a material impact on the financial statements and financial statement disclosures

 

g. Income Taxes

 

The Company utilizes the asset and liability method to measure and record deferred income tax assets and liabilities. Deferred tax assets and liabilities reflect the future income tax effects of temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and are measured using enacted tax rates that apply to taxable income in the years which those temporary differences are expected to be recovered or settled. Deferred tax assets are reduced by a valuation allowance when in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. At this time, the Company has not set up an allowance for deferred taxes as there is no company history to indicate the usage of deferred tax assets and liabilities.

 

No provision was made for Federal or State income taxes.

 

h. Advertising

 

Advertising will be expensed in the period in which it is incurred. There have been no advertising expenses for the reporting period presented.

 

 

j. Recently Issued Accounting Pronouncements

 

The Company reviewed all recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force), the AICPA, and the SEC and they did not or are not believed by management to have a material impact on the Company's present or future financial statements.

 

NOTE 3 – GOING CONCERN

 

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As reflected in the accompanying financial statements, and a deficit accumulated during the development stage of $3,564 at January 31, 2015. As of January 31, 2015, the Company had generated limited revenue and incurred losses and had no committed sources of capital or financing.

 

While the Company is attempting to generate revenues from selling of souvenir products, the Company’s cash position may not be significant enough to support the Company’s daily operations. Management believes that the actions presently being taken to further implement its business plan and generate additional products and revenues provide the opportunity for the Company to continue as a going concern. While the Company believes in the viability of its strategy to realize revenues and in its ability to raise additional funds, there can be no assurances to that effect. The Company’s ability to continue as a going concern is dependent upon its ability to achieve profitable operations or obtain adequate financing.

 

The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

 

 

NOTE 4 – SHARE CAPITAL

 

The Company is authorized to issue 600,000,000 shares of common stock and 200,000,000 shares of preferred stock. The initial common stock shares subscription by the subscriber, Mr. Lee Chong Kuang is for 100,000 shares at the price of $0.0001 per share. On January 2, 2015, the Company issued 99,900,000 shares of its common stock to Wong Heng Wah for $9,990 for the Company’s working capital purpose.

 

On January 22, 2015, the Company completed a private placement where it issued 706,000 shares of its common stock to accredited investors for $7,060.

 

At January 31, 2015, there are 100,706,000 shares of common stock issued and outstanding.

 

NOTE 5 – INCOME TAXES

 

As of January 31, 2015, the Company had net operating loss carry forwards of $3,564 that may be available to reduce future years’ taxable income until year 2033.

 

 

		As of January 31, 2015
Deferred tax assets:
Net operating tax loss carry forwards		$	960
Other			-
Gross deferred tax assets			960
Valuation allowance			(960	)
Net deferred tax assets		$	-

 

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 achievement of required future taxable income is uncertain, the Company recorded a 100% valuation allowance due to the management determined that it is more likely than not that the U.S. federal and state deferred tax assets as of January 31, 2015 will not be realized.

 

Reconciliation between the provision for income taxes based on subsidiary Hong Kong rates as the income arised from the Hong Kong subsidiary and the expected tax benefit using the Hong Kong corporate rate of 16.5% for 2015 is as follows:

 

		2015
Income tax benefit at statutory rate			16.50	%
Increase in valuation allowance			(16.50	%)
Income tax expense			—

 

NOTE 6 – SUBSEQUENT EVENTS

 

The Company has evaluated all events that occur after the balance sheet date through the date when the financial statements were issued to determine if they must be reported. The Management of the Company determined that there were no reportable subsequent event(s) to be disclosed.

 

  

	Page
Condensed Consolidated Balance Sheets as of April 30, 2015 and January 31, 2015	F-11
Condensed Consolidated Statements of Operations for the Three Months Ended April 30, 2015 and for the Period From December 5, 2014 (Inception) Through January 31, 2015	F-12
Condensed Consolidated Statements of Cash Flows for the Three Months Ended April 30, 2015 and for the Period From December 5, 2014 (Inception) Through January 31, 2015	F-13
Condensed Consolidated Statements of Changes in Stockholders’ Equity for the Three Months Ended April 30, 2015 and for the Period From December 5, 2014 (Inception) Through January 31, 2015	F-14
Notes to Condensed Consolidated Financial Statements	F-15 – F-23

 

 

 

		As of April 30, 2015				As of January 31, 2015
		(Unaudited)				(Audited)
ASSETS
CURRENT ASSETS
Accounts receivable		$	15,843			$	-
Deposits			800				-
Cash and cash equivalents			21,761				18,296
Total Current Assets			38,403				18,296
TOTAL ASSETS		$	38,403			$	18,296
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES
Accounts payable		$	12,034			$	-
Amount due to a director			4,413				-
Accrued expenses			6,600				4,800
Income tax payable			23				-
Total Current Liabilities			23,070				4,800
TOTAL LIABILITIES		$	23,070			$	4,800
STOCKHOLDERS’ EQUITY
Preferred stock, $0.0001 par value; 200,000,000 shares authorized;
No share issued and outstanding			-				-
Common stock, $0.0001 par value; 600,000,000 shares authorized;
100,706,000 shares issued and outstanding, as of
April 30, 2015 and January 31, 2015			10,071				10,071
Additional paid-in capital			6,989				6,989
Accumulated deficit			(1,727	)			(3,564)
TOTAL STOCKHOLDERS’ EQUITY			15,333				13,496
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY		$	38,403			$	18,296

  

 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

 

 

						Three Months Ended April 30, 2015				From December 5, 2014 (Inception) through January 31, 2015
						(Unaudited)				(Audited)
REVENUE						$	19,976			$	6,556
COST OF REVENUE							12,034				1,880
GROSS PROFIT							7,942				4,676
GENERAL AND ADMINISTRATIVE EXPENSES							6,082				8,240
INCOME (LOSS) BEFORE INCOME TAX							1,860				(3,564)
INCOME TAX EXPENSE							(23)				-
NET INCOME (LOSS)							1,837				(3,564	)
Net income (loss) per share - Basic and diluted						$	(0.00	)		$	(0.00	)
Weighted average number of common shares outstanding -Basic and diluted							100,706,000				51,037,790

 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

 

  

	COMMON STOCK				ADDITIONAL PAID-IN CAPITAL		ACCUMULATED DEFICIT		TOTAL
	Number of shares		Amount
Balance as of December 5, 2014 (date of inception)	-	$	-	$	-	$	-	$	-
Shares issued for founder’s shares	100,000		10		-		-		10
Shares issued on January 2, 2015 for working capital	99,900,000		9,990		-		-		9,990
Shares issued in private placement completed on January 22, 2015	706,000		71		6,989		-		7,060
Net loss	-		-		-		(3,564)		(3,564)
Balance as of January 31, 2015 (audited)	100,706,000	$	10,071	$	6,989	$	(3,564)	$	13,496
Net income	-		-		-		1,837		1,837
Balance as of April 30, 2015 (unaudited)	100,706,000	$	10,071	$	6,989	$	(1,727)	$	15,333

 

 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

  

 

						Three Months Ended April 30, 2015				From December 5, 2014 (Inception) through January 31, 2015
						(Unaudited)				(Audited)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)						$	1,837			$	(3,564		)
Adjustments to reconcile net income(loss) to net cash provided by operating activities:
Changes in operating assets and liabilities:
Accounts receivable							(15,842)				-
Deposits							(800)				-
Accounts payable							12,034				-
Amount due to a director							4,413				-
Accrued expenses							1,800				4,800
Income tax							23				-
Net cash provided by operating activities							3,465				1,236
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of common stock for working capital							-				17,060
Net cash provided by financing activities							-				17,060
Net increase in cash and cash equivalents							3,465				18,296
Cash and cash equivalents, beginning of period							18,296				-
CASH AND CASH EQUIVALENTS, END OF PERIOD						$	21,761			$	18,296
SUPPLEMENTAL CASH FLOWS INFORMATION
Income taxes paid						$	-			$	-
Interest paid						$	-			$	-

 

 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

 

 

 

XYI Group, Inc.

(a Development Stage Company)

Notes to the Financial Statements

 

NOTE 1 –   BASIS OF PRESENTATION

 

The accompanying unaudited condensed consolidated financial statements have been prepared by management in accordance with both accounting principles generally accepted in the United States (“GAAP”), and the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Certain information and note disclosures normally included in audited financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to those rules and regulations, although the Company believes that the disclosures made are adequate to make the information not misleading.

 

In the opinion of management, the consolidated balance sheet as of January 31, 2015 which has been derived from audited financial statements and these unaudited condensed consolidated financial statements reflect all normal and recurring adjustments considered necessary to state fairly the results for the periods presented. The results for the period ended April 30, 2015 are not necessarily indicative of the results to be expected for the entire fiscal year ending January 31, 2016 or for any future period.

 

These unaudited condensed consolidated financial statements and notes thereto should be read in conjunction with the Management’s Discussion and the audited financial statements and notes thereto included in the Form S-1 filed to the Security and Exchange Commission of the United States on February 27, 2015.

 

 

NOTE 2 – DESCRIPTION OF BUSINESS AND ORGANIZATION

 

XYI Group, Inc. (the “Company”) was incorporated under the laws of the state of Nevada on December 5, 2014. The initial common stock of 100,000 shares is subscribed to Mr. Lee Chong Kuang, the founder of the Company, at par value of $0.0001 per share. On January 2, 2015, the Company has issued 99,900,000 shares of its common stock to Mr. Wong HengWah, the Chief Executive Officer of the Company, for capital injection of $9,990 for the Company’s additional working capital purpose.

 

On January 22, 2015, the Company completed a private placement and issued 706,000 shares of its common stock to accredited investors of $7,060.

 

As of April 30, 2015, the Company has a wholly owned subsidiary namely XYI Holding Limited, which incorporated in the Republic of Seychelles. XYI Holding is an investment holding company with 100% equity interest in XYI Group Limited, a company incorporated and domiciled in Hong Kong.

 

The Company, through its subsidiaries, mainly engages in trading souvenir products. As the online marketing is under development progress, the Company has not carried out its online trading business during the reporting period.

 

 

NOTE 3–GOING CONCERN UNCERTAINTIES

 

The accompanying unaudited condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As of April 30, 2015, the Company suffered an accumulated deficit of $1,727 and the Company had generated limited revenue and had no committed sources of capital or financing for the reporting period.

 

 

 

While the Company is attempting to generate revenues from selling of souvenir products, the Company’s cash position may not be significant enough to support the Company’s daily operations. Management believes that the actions presently being taken to further implement its business plan and generate additional products and revenues provide the opportunity for the Company to continue as a going concern. While the Company believes in the viability of its strategy to realize revenues and in its ability to raise additional funds, there can be no assurances to that effect. The Company’s ability to continue as a going concern is dependent upon its ability to achieve profitable operations or obtain adequate financing.

 

The unaudited condensed consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

 

 

NOTE 4 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Basis of presentation and consolidation

 

The accompanyingunaudited condensed consolidated financial statements are prepared in accordance with generally accepted accounting principles in the United States of America (“US GAAP”). The consolidated financial statements include the accounts of the Company and its subsidiaries, XYI Holding Limited and XYI Group Limited. All inter-company accounts and transactions have been eliminated in consolidation.

 

The Company has adopted its fiscal year end to be January 31.

Use of estimates

 

Management uses estimates and assumptions in preparing these financial statements in accordance with US GAAP. Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities in the balance sheet, and the reported revenue and expenses during the periods reported. Actual results may differ from these estimates.

 

Revenue recognition

 

In accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 605, “Revenue Recognition” , the Company recognizes revenue from sales of goods when the following four revenue criteria are met: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred; (3) selling price is fixed or determinable; and (4) collectability is reasonably assured.

 

Revenue from trading of souvenir products is recognized upon shipment to the customer when title and risk of loss are transferred and there are no continuing obligations to the customer. Title and the risks and rewards of ownership transfer to the customer at varying points, which is determined based on shipping terms. Revenue is recorded net of sales discounts, returns, allowances, and other adjustments that are based upon management’s best estimates and historical experience and are provided for in the same period as the related revenues are recorded. Based on limited operating history, management estimates that there was no sales return for the periods reported.

 

Cost of revenue

 

Cost of revenue includes cost of souvenir products for re-sale to the customers.

 

 

Cash and cash equivalents

 

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

 

Accounts receivable

 

Accounts receivable are recorded at the invoiced amount and do not bear interest. Management reviews the adequacy of the allowance for doubtful accounts on an ongoing basis, using historical collection trends and aging of receivables. Management also periodically evaluates individual customer’s financial condition, credit history and the current economic conditions to make adjustments in the allowance when it is considered necessary. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. The Company does not have any off-balance-sheet credit exposure related to its customers. For the three months ended April 30, 2015, no allowance for doubtful accounts was provided.

 

Income taxes

 

Income taxes are determined in accordance with the provisions of ASC Topic 740, “Income Taxes” (“ASC Topic 740”). Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted income tax rates expected to apply to taxable income in the periods in which those temporary differences are expected to be recovered or settled. Any effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

 

ASC 740 prescribes a comprehensive model for how companies should recognize, measure, present, and disclose in their financial statements uncertain tax positions taken or expected to be taken on a tax return. Under ASC 740, tax positions must initially be recognized in the financial statements when it is more likely than not the position will be sustained upon examination by the tax authorities. Such tax positions must initially and subsequently be measured as the largest amount of tax benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the tax authority assuming full knowledge of the position and relevant facts.

 

The Company conducts major businesses in Hong Kong and is subject to tax in this jurisdiction. As a result of its business activities, the Company will file tax returns that are subject to examination by the foreign tax authority.

 

Net income (loss) per share

 

The Company calculates net income (loss) per share in accordance with ASC Topic 260, “Earnings per Share.” Basic income (loss) per share is computed by dividing the net income (loss) by the weighted-average number of common shares outstanding during the period. Diluted income (loss) per share is computed similar to basic income (loss) per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common stock equivalents had been issued and if the additional common shares were dilutive.

  

Foreign currencies translation

 

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

 

The reporting currency of the Company is United States Dollars (“US$”) and the accompanying financial statements have been expressed in US$. In addition, the Company’s subsidiary in Hong Kong maintains its books and record in its local currency, Hong Kong Dollars (“HK$”), which is functional currency as being the primary currency of the economic environment in which the entity operates.

 

In general, for consolidation purposes, assets and liabilities of its subsidiaries whose functional currency is not US$ are translated into US$, in accordance with ASC Topic 830-30, “Translation of Financial Statement”, using the exchange rate on the balance sheet date. Revenues and expenses are translated at average rates prevailing during the period. The gains and losses resulting from translation of financial statements of foreign subsidiary are recorded as a separate component of accumulated other comprehensive income within the statement of stockholders’ equity. The gains and losses are recorded as a separate component of accumulated other comprehensive income within the statement of stockholders’ equity.

 

Translation of amounts from HK$ into US$1 has been made at the following exchange rates for the respective periods:

 

		As of and for the period ended		As of and for the period ended
		April 30, 2015		January 31, 2015
Period-end / average HK$ : US$1 exchange rate		7.75		7.75

 

Related parties

 

Parties, which can be a corporation or individual, are considered to be related if the Company has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions. Companies are also considered to be related if they are subject to common control or common significant influence.

 

Fair value of financial instruments:

 

The carrying value of the Company's financial instruments: cash and cash equivalents, subscription receivable, notes receivable, accounts payable and loans from related parties approximate at their fair values because of the short-term nature of these financial instruments.

 

 

 

The Company also follows the guidance of the ASC Topic 820-10, “Fair Value Measurements and Disclosures” ("ASC 820-10"), with respect to financial assets and liabilities that are measured at fair value. ASC 820-10 establishes a three-tier fair value hierarchy that prioritizes the inputs used in measuring fair value as follows:

 

Level 1: Observable inputs such as quoted prices in active markets;

 

Level 2: Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; And

 

Level 3: Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.

 

Segment reporting

 

ASC Topic 280, “Segment Reporting” establishes standards for reporting information about operating segments on a basis consistent with the Company’s internal organization structure as well as information about geographical areas, business segments and major customers in financial statements. For the three months ended April 30, 2015, the Company operates in one reportable operating segment in Hong Kong and Malaysia.

 

Recent accounting pronouncements

 

FASB issues various Accounting Standards Updates relating to the treatment and recording of certain accounting transactions.  On June 10, 2014, the Financial Accounting Standards Board issued Accounting Standards Update (ASU) No. 2014-10, Development Stage Entities (Topic 915) - Elimination of Certain Financial Reporting Requirements, Including an Amendment to Variable Interest Entities Guidance in Topic 810, Consolidation, which eliminates the concept of a development stage entity (DSE) entirely from current accounting guidance.  The Company has elected adoption of this standard, which eliminates the designation of DSEs and the requirement to disclose results of operations and cash flows since inception.

 

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

  

NOTE 5 – AMOUNT DUE TO A DIRECTOR

 

As of April 30, 2015, the amount of $4,412 is due to a director of the Company, Mr. Wong HengWah. The amount is unsecured, interest-free and repayable on demand.

 

 NOTE 6 – STOCKHOLDERS’ EQUITY

Preferred stock includes 200,000,000 shares authorized at a par value of $0.0001, of which none are issued or outstanding.

 

Common stock includes 600,000,000 shares authorized at a par value of $0.0001, of which 100,706,000 have been issued for the amount of $10,071 in January 2015.

 

As of April 30, 2015, there are 100,706,000 shares of common stock issued and outstanding.

 

 

NOTE 7 – RELATED PARTY TRANSACTIONS

 

For the three months ended April 30, 2015, rent expense of $3,613 is payable to the director of the Company for the lease of office in Hong Kong and Malaysia, in which the lease agreements are currently entered by Mr. Wong HengWah for the Company’s use.

 

All of these related party transactions are generally transacted in an arm-length basis at the current market value in the normal course of business.

 

 

NOTE 8–INCOME TAXES

 

For the three months ended April 30, 2015 and the period from December 5, 2014 (inception) to January 31, 2015, the local (United States) and foreign components of income (loss) before income taxes were comprised of the following:

 

				From December 5, 2014
		Three months ended		(inception) through
		April 30, 2015		January 31, 2015
		(Unaudited)		(Audited)
Tax jurisdictions from:
-    Local		(2,187)		(4,800)
-    Foreign, representing
Seychelles		(89)		(1,109)
Hong Kong		4,136		2,345
Income (loss) before income tax		1,860		(3,564)

 

The provision for income taxes consisted of the following:

 

				From December 5, 2014
		Three months ended		(inception) through
		April 30, 2015		January 31, 2015
		(Unaudited)		(Audited)
Current:
-    Local		-		-
-    Foreign (Hong Kong)		23		-
Deferred:
-    Local		-		-
-    Foreign		-		-
Income tax expense		23		-

 

 

The effective tax rate in the periods presented is the result of the mix of income earned in various tax jurisdictions that apply a broad range of income tax rates. The Company has subsidiaries that operate in various countries: United States, Seychelles and Hong Kong that are subject to taxes in the jurisdictions in which they operate, as follows:

 

 

United States of America

 

The Company is registered in the State of Nevada and is subject to the tax laws of the United States of America. As of April 30, 2015, the operations in the United States of America incurred $6,987 of cumulative net operating losses which can be carried forward to offset future taxable income. The net operating loss carryforwards begin to expire in 2033, if unutilized. The Company has provided for a full valuation allowance of $1,397 against the deferred tax assets on the expected future tax benefits from the net operating loss carryforwards as the management believes it is more likely than not that these assets will not be realized in the future.

 

Republic of Seychelles

 

XYI Holding Limited is registered in the Republic of Seychelles and issubject to the tax laws of the Republic of Seychelles. For the three months ended April 30, 2015 and for the period from December 5, 2014 (inception) toJanuary 31, 2015, XYI Holding Limited incurred a loss of $89 and $1,109, respectively.

 

Hong Kong

 

The Company generated its income from its subsidiary, XYI Group Limited which operates in Hong Kong for the three months ended April 30, 2015 and for the period from December 5, 2014 (inception) toJanuary 31, 2015, which is subject to Hong Kong Profits Tax at the statutory income tax rate of 16.5% on assessable income, net of any offshore income. A reconciliation of income tax rate to the effective income tax rate for the three months ended April 30, 2015 and for the period from December 5, 2014 (inception) to January 31, 2015 is as follows:

 

				From December 5, 2014
		Three months ended		(inception) through
		April 30, 2015		January 31, 2015
		(Unaudited)		(Audited)
Income before income tax	$	4,136	$	2,345
Statutory income tax rate		16.5%		16.5%
Income tax expense at the statutory rate		682		387
Non-taxable income		(659)		(387)
Income tax expense		23		-

 

The following table sets forth the significant components of the aggregate deferred tax assets of the Company as of April 30, 2015 and January 31, 2015:

 

		April 30, 2015			January 31, 2015
			(unaudited)			(audited)
Deferred tax assets:
Net operating loss carryforwards
– Local		$	1,397		$	960
– Hong Kong			-			-
			1,397			960
Less: valuation allowance			(1,397)			(960)
Deferred tax assets		$	-		$	-

 

 

Management believes that it is more likely than not that the deferred tax assets will not be fully realizable in the future. Accordingly, the Company provided for a full valuation allowance against its deferred tax assets of $1,397 as of April 30, 2015. During the three months ended April 30, 2015, the valuation allowance increased by $437, primarily relating to net operating loss carryforwards from the local tax regime.

  

NOTE – 9   CONCENTRATIONS OF RISK

 

The Company is exposed to the following concentrations of risk:

 

(a)

Major customers

 

For the three months ended April 30, 2015, the customers who accounted for 10% or more of the Company’s revenues and its outstanding receivable balance at period-end are presented as follows:

		Three months ended April 30, 2015			April 30, 2015
			Percentage of		Accounts
		Revenue	Revenue		receivable, trade
Customer A	$	9,444	47%		9,444
Customer B		6,398	32%		6,398
Customer C		4,134	21%		-
	$	19,976	100%		15,842

 

For the period from December 5, 2014 (inception) to January 31, 2015, there was a single customer located in Hong Kong who accounted for 100% of the Company’s revenues with no accounts receivable balance at year-end.

 

For the three months ended April 30, 2015, customers located in Hong Kong and Malaysia accounted for 21% and 79% of the Company’s revenues, respectively..

 

(b)

Major vendors

 

For the three months ended April 30, 2015, the vendors who accounted for 10% or more of the Company’s purchases and its outstanding payable balance at period-end are presented as follows:

		Three months ended April 30, 2015			April 30, 2015
			Percentage of		Accounts
		Purchases	Purchases		payable, trade
Vendor A	$	9,498	79%		9,498
Vendor B		2,536	21%		2,536
	$	12,034	100%		12,034

 

For the period from December 5, 2014 (inception) to January 31, 2015, there was a single vendor who accounted for 100% of the Company’s purchase with no accounts payable balance at year-end.

 

All vendors are located in the PRC.

  

 

 

(c)

Credit risk

 

Financial instruments that are potentially subject to credit risk consist principally of accounts receivable. The Company believes the concentration of credit risk in its accounts receivable is substantially mitigated by its ongoing credit evaluation process and relatively short collection terms. The Company does not generally require collateral from customers. Credit is extended based on evaluation of a customer's financial condition. The Company evaluates the need for an allowance for doubtful accounts based upon factors surrounding the credit risk of specific customers, historical trends and other information.

 

(d)

Exchange rate risk

 

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

 

(e)

Economic and political risk

 

The Company’s operations in Malaysia are subject to various political, economic, and other risks and uncertainties inherent in Malaysia. Among other risks, the Company’s operations are subject to the risks of restrictions on transfer of funds; export duties, quotas, and embargoes; domestic and international customs and tariffs; changing taxation policies; foreign exchange restrictions; and political conditions and governmental regulations in Malaysia.

  

NOTE – 10   COMMITMENTS AND CONTINGENCIES

 

During the period ended April 30, 2015, Mr. Wong HengWah,the director of the Company, entered an agreement with the Company to lease office premises in Hong Kong and Malaysia on a monthly basis, for the operations of the Company. The aggregate rent expense for the three months ended April 30, 2015 and the period from December 5, 2014 (inception) to January 31, 2015 is $3,613 and $0, respectively.

 

As of April 30, 2015, the Company has no commitments and contingencies.

  

NOTE – 11   SUBSEQUENT EVENT

 

The Company evaluated subsequent events through the date the financial statements were issued and filed with this Amendment No. 1 to Form S-1.  There were no subsequent events that required recognition or disclosure.

 

 

 

 

This prospectus is part of a registration statement we filed with the SEC. You should rely only on the information or representations provided in this prospectus. We have authorized no one to provide you with different information. We are not making an offer of these securities in any state where the offer is not permitted. You should not assume that the information in this prospectus is accurate as of any date other than the date on the front of the document.

 

No one (including any salesman or broker) is authorized to provide oral or written information about this offering that is not included in this prospectus.

 

The information contained in this prospectus is correct only as of the date set forth on the cover page, regardless of the time of the delivery of this prospectus.

 

Until , 2015 (90 days after the commencement of the offering), all dealers that effect transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealers' obligation to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.

 

200,000 Shares

XYI Group, Inc.

Common Stock

 

PROSPECTUS

 

____________ ,2015

 

 

Part II

 

INFORMATION NOT REQUIRED IN PROSPECTUS

 

ITEM 13 OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

 

The Registrant is bearing all expenses in connection with this registration statement other than sales commissions, underwriting discounts and underwriter's expense allowances designated as such. Estimated expenses payable by the Registrant in connection with the registration and distribution of the Common Stock registered hereby are as follows:

 

SEC Registration fee		$	39.04
NASD filing fee			100.00
*Accounting fees and expenses			5,000.00
*Legal fees and expenses			40,000.00
*Transfer agent fees			2,500.00
*Blue Sky fees and expenses			5,000.00
*Miscellaneous expenses			2,360.96
Total		$	55,000.00

 

*Indicates expenses that have been estimated for filing purposes.

 

ITEM 14 INDEMNIFICATION OF DIRECTORS AND OFFICERS

 

Our current articles of incorporation and by-laws do not have any provision relating to the indemnification of our officers or directors.

 

 

ITEM 15 RECENT SALES OF UNREGISTERED SECURITIES

 

During the three years preceding the filing of this Form S-1, Registrant has issued securities without registration under the Securities Act on the terms and circumstances described in the following paragraphs.

 

The initial issuance of common stock to Lee Chong Kuang, our director, was for 100,000 shares at the price of $ 0.0001 per share on December 5, 2014. On January 2, 2015, the Company has issued 99,900,000 shares of its common stock to Wong Heng Wah for capital injection of $9,990 for the Company’s working capital purpose.

 

On January 22, 2015, the Company completed a private placement where it issued 706,000 shares of its common stock to accredited investors for $7,060.

 

The foregoing issuances of securities were affected in reliance upon the exemption from registration provided by Regulation S promulgated under the Securities Act of 1933, as amended.

 

Notwithstanding being accredited all security holders were provided with a final pre-filing copy of the Company’s Registration Statement and acknowledged having read and reviewed same and having no further questions with respect to their respective investments.

 

ITEM 16 EXHIBITS

 

Exhibit No.		Document Description
3.1		Articles of Incorporation
3.2		By-Laws
5.1		Opinion of Counsel
10.1		Subscription Agreement
14.1		Code of Ethics
23.1		Consent of WELD ASIA ASSOCIATES
99.1		Sample Stock Certificate Specimen

 

Exhibits are not part of the prospectus and will not be distributed with the prospectus.

 

 

ITEM 17 UNDERTAKINGS

 

a.

The undersigned registrant hereby undertakes:

 

1.

To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:

 

	i.	To include any prospectus required by section 10(a)(3) of the Securities Act of 1933;
	ii.	To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20% change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement.
	iii.	To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement;

 

2.

That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

 

3.

To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

 

4.

That, for the purpose of determining liability under the Securities Act of 1933 to any purchaser:

 

i.

If the registrant is subject to Rule 430C, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use.

 

 

5.

That, for the purpose of determining liability of the registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities: The undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:

 

	i)	Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424;
	ii)	Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant;
	iii)	The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and
	iv)	Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser.

 

b.

Request for Acceleration of Effective Date or Filing of Registration Statement Becoming Effective Upon Filing.

 

Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.

 

Each of the undersigned officer and directors of the Company hereby undertakes that, he will not offer, sell, contract to sell, assign, transfer, or otherwise dispose of, or enter into any transaction which is designed to, or might reasonably be expected to, result in the disposition of (whether by actual disposition or effective economic disposition due to cash settlement or otherwise), directly or indirectly any of the shares of the Company he owns as of the date herein or any securities the Company may issue to him which would result in the Company being sold as a shell company until the date that is at least three years following the date of this registration statement.

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of Tsim Sha Tsui East, Hong Kong on August 3, 2015.

 

XYI Group, Inc.

 

By:	/s/ Wong Heng Wah
Name:	Wong Heng Wah
President, CEO, Principal Executive Officer, Treasurer and Chairman

 

Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed below by the following persons in the capacities and on the date indicated.

 

Signature(s)		Title(s)		Date
/s/ Wong Heng Wah				August 3, 2015
By: Wong Heng Wah		President, CEO, Principal Executive Officer, Treasurer, Chairman, Principal Financial Officer and Principal Accounting Officer
/s/ Lee Chong Kuang
By: Lee Chong Kuang		Director		August 3, 2015
/s/ Lim Seow Hoe				August 3, 2015
By: Lim Seow Hoe		Chief Operating Officer
/s/ Ng Woi Siong				August 3, 2015
By: Ng Woi Siong		Chief Technology Officer

 

 

 

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