Attached files
| file | filename |
|---|---|
| EX-32.2 - CERTIFICATION - MAKINGORG, INC. | cqcq_ex322.htm |
| EX-32.1 - CERTIFICATION - MAKINGORG, INC. | cqcq_ex321.htm |
| EX-31.1 - CERTIFICATION - MAKINGORG, INC. | cqcq_ex311.htm |
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2016
Commission file number: 000-55260
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MAKINGORG, INC. |
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(Exact name of Company as specified in its charter) |
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Nevada |
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39-2079723 |
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(State of incorporation) |
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(I.R.S. Employer Identification No.) |
17800 Castleton St #386, City of industry, CA 91748
(Address of principal executive offices)
(213) 805-5799
(Company’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Exchange Act:
None
Securities registered pursuant to Section 12(g) of the Exchange Act:
Common Stock, $0.001 par value
Indicate by check mark if the Company is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ¨ No x
Indicate by check mark if the Company is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ¨ No x
Indicate by check mark whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the Company was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨
Indicate by check mark whether the Company has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Company was required to submit and post such files). Yes ¨ No x
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of Company’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ¨
Indicate by check mark whether the Company 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):
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Large accelerated filer |
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Accelerated filer |
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Non-accelerated filer |
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Smaller reporting company |
x |
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(Do not check if a smaller reporting company) |
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Indicate by check mark whether the Company is a shell company (as defined in Rule 12b-2 of the Act). Yes x No ¨
The aggregate market value of voting stock held by non-affiliates of the Company as of the last business day of the Company’s most recently complete second fiscal quarter was $2,502,133 (computed by reference to the bid price of a share of the Company’s common stock on that date as reported).
As of April 14, 2017, 35,430,000 shares of the issuer’s common stock were issued and outstanding.
Documents Incorporated By Reference: None
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As used in this Annual Report on Form 10-K (this “Report”), references to the “Company,” the “Company,” “we,” “our” or “us” refer to MakingORG, Inc., unless the context otherwise indicates.
Forward-Looking Statements
Certain statements contained in this report, including statements regarding our business, financial condition, our intent, belief or current expectations, primarily with respect to the future operating performance of the Company and other statements contained herein regarding matters that are not historical facts, are "forward-looking" statements. You can identify forward-looking statements by those that are not historical in nature, particularly those that use terminology such as “may,” “will,” “should,” “expects,” “anticipates,” “contemplates,” “estimates,” “believes,” “plans,” “projected,” “predicts,” “potential,” or “continue” or the negative of these similar terms. Future filings with the Securities and Exchange Commission, future press releases and future oral or written statements made by us or with our approval, which are not statements of historical fact, may contain forward-looking statements. Because such statements include risks and uncertainties, actual results may differ materially from those expressed or implied by such forward-looking statements.
All forward-looking statements speak only as of the date on which they are made. We undertake no obligation to update such statements to reflect events that occur or circumstances that exist after the date on which they are made, except as required by federal securities and any other applicable law.
Overview
The Company was incorporated in the State of Nevada on August 10, 2012 to be in the power sports business.
On July 29, 2014, Vladimir Nedrygaylo, the principal shareholder of Drimex Inc. consummated the transactions contemplated by the Stock Purchase Agreement dated as of June 24, 2014 which provided for the sale of 5,000,000 shares of common stock (not adjusted for the forward split described below) of the Company (the “Shares”) to Juanzi Cui. The consideration paid for the Shares, which represented 84.7% of the issued and outstanding share capital of the Company on a fully-diluted basis, was $325,000. The source of the cash consideration for the Shares was the personal funds of Mrs. Cui. In connection with the transaction, Mr. Nedrygaylo released the Company from all debts owed to him.
Mrs. Cui became the Company’s sole officer and director.
On August 22, 2014, the Company amended and restated Articles of Incorporation, changed the name of the Company from “Drimex, Inc.” to “MakingORG, Inc.” and increased the amount of authorized shares of common stock from 75,000,000 to 150,000,000, with a par value of $0.001 per share.
Effective August 22, 2014, the Company effected a 6 for 1 forward split on its common stock outstanding in the form of a dividend, under which each stockholder of record on that date received 5 additional shares of the Corporation's $0.001 par value common stock for every 1 share owned. All share and per share amounts presented in this Annual Report and the financial statements and notes thereto have been adjusted for the stock split.
On October 20, 2016, the Company filed documents registering their intention to transact interstate business in the state of California.
On November 29, 2016, the Company incorporated HK Feng Wang Group Limited.
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Juanzi Cui, who took control of the Company as described above, intended that the Company open a line of health food stores or stores-in-stores within the Asian communities in the United States. Given our limited resources and the fact that we have never generated any revenues from the sale of our products, we are no longer focused on operating a business and have abandoned our initial business plan. Although our sole officer and director intends to have the Company open a line of health food stores or stores-in-stores within the Asian communities in the United States, we might just identify and negotiate with another company for the business combination or merger of that entity with and into our company. We would seek, investigate and, if such investigation warrants, acquire an interest in one or more business opportunities presented to it by persons or firms who or which desire to seek the perceived advantages of a publicly held corporation. At this time, we have no plan, proposal, agreement, understanding or arrangement to acquire or merge with any specific business or company, and the Company has not identified any specific business or company for investigation and evaluation. No member of management or promoter of the Company has had any material discussions with any other company with respect to any acquisition of that company.
We will not restrict our search for another target company to any specific business, industry or geographical location, and the Company may participate in a business venture of virtually any kind or nature. We are subject to the reporting required by the Securities Act of 1933, as amended (the “Securities Act”), we also qualify as a “shell company,” because we have no or nominal assets (other than cash) and no or nominal operations. Many states have enacted statutes, rules and regulations limiting the sale of securities of “blank check” companies in their respective jurisdictions. Management does not intend to undertake any efforts to cause a market to develop in our securities, either debt or equity, until we have successfully concluded a business combination. We intend to comply with the periodic reporting requirements of the Exchange Act for so long as we are subject to those requirements.
A business combination with a target company normally will involve the transfer to the target company of the majority of the issued and outstanding common stock of the Company, and the substitution by the target company of its own management and board of directors. No assurances can be given that we will be able to enter into a business combination, or, if we do enter into such a business combination, no assurances can be given as to the terms of a business combination, or as to the nature of the target company.
Competition
The Company is an insignificant participant among firms which engage in business combinations with development stage enterprises. There are many established management and financial consulting companies and venture capital firms which have significantly greater financial and personnel resources, technical expertise and experience than the Company. In view of the Company's limited financial resources and management availability, the Company will continue to be at a significant competitive disadvantage vis-a-vis the Company's competitors.
Regulation and Taxation
The Investment Company Act of 1940 defines an "investment company" as an issuer which is or holds itself out as being engaged primarily in the business of investing, reinvesting or trading of securities. While the Company does not intend to engage in such activities, the Company could become subject to regulation under the Investment Company Act of 1940 in the event the Company obtains or continues to hold a minority interest in a number of development stage enterprises. The Company could be expected to incur significant registration and compliance costs if required to register under the Investment Company Act of 1940. Accordingly, management will continue to review the Company's activities from time to time with a view toward reducing the likelihood the Company could be classified as an "investment company."
The Company intends to structure a merger or acquisition in such manner as to minimize Federal and state tax consequences to the Company and to any target company.
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Employees
We currently have no full-time employees. All functions including development, strategy, negotiations and administration are currently being provided by Mrs. Cui, our sole executive officer and director, on a voluntary basis.
Smaller reporting companies are not required to provide the information required by this Item 1A.
Item 1B. Unresolved Staff Comments
None
The Company has operating leases for its office. Rental expenses for the years ended December 31, 2016 and 2015 were $3,000 and nil, respectively. At December 31, 2016, total future minimum annual lease payments under operating lease was as follows, by years:
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Twelve months ending December 31, 2017 |
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$ | 9,000 |
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Thereafter |
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- |
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Total |
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$ | 9,000 |
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There are no pending legal proceedings to which the Company is a party or in which any director, officer or affiliate of the Company, any owner of record or beneficially of more than 5% of any class of voting securities of the Company, or security holder is a party adverse to the Company or has a material interest adverse to the Company. The Company’s property is not the subject of any pending legal proceedings.
Item 4. Mine Safety Disclosures
Not applicable.
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Market Information
On April 8, 2014, we became listed on the OTCQB under the symbol "DRIM". As of August 25, 2014, the trading symbol of the Company became "CQCQ". The Company is now quoted on the OTC Pink Sheets. The high and low sales prices as reported on the OTC Markets as of the end of each quarter commencing on January 1, 2015 through December 31, 2016 was $4.18. The quotations reflect inter-dealer prices, without retail mark-up, mark-down or commission, and may not represent actual transactions.
The last reported sales price of our common stock on the OTC Markets on March 24, 2016, was $4.18.
Dividend Policy
We have not declared or paid dividends on our common stock since our formation, and we do not anticipate paying dividends in the foreseeable future. Declaration or payment of dividends, if any, in the future, will be at the discretion of our Board of Directors and will depend on our then current financial condition, results of operations, capital requirements and other factors deemed relevant by the board of directors. There are no contractual restrictions on our ability to declare or pay dividends.
Holders
As of April 17, 2016, there were 35,430,000 shares of common stock issued and outstanding, which were held by 261 stockholders of record.
Equity Compensation Plans
We do not have any equity compensation plans.
Recent Sales of Unregistered Securities; Use of Proceeds from Registered Securities
On September 1, 2016, the Company entered into a Convertible Note Agreement in the principal amount of $200,000 with an unrelated party. The note bears interest at 12% per annum and the holder is able to convert all unpaid interest and principal into common shares at $3.50 per share. The note matures on September 1, 2018. The Company recognized a discount on the note of $38,857 at the agreement date. The interest expense was due every six months commencing of March 1, 2017 until the principal amount of this convertible note was paid in full.
The Company recognized interest expense related to the debt discount of $14,476 for the year ended December 31, 2016. The unamortized debt discount at December 31, 2016 is $32,381.
Purchases of Equity Securities by the Small Business Issuer and Affiliated Purchasers
None.
Item 6. Selected Financial Data.
Smaller reporting companies are not required to provide the information required by this Item 6.
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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Management’s Discussion and Analysis of Financial Condition and Results of Operations.
The following discussion should be read in conjunction with the Company’s financial statements, which are included elsewhere in this Form 10-K.
Overview
We are a shell company. Juanzi Cui, who took control of the Company as described above, intends that the Company open a line of health food stores or stores-in-stores within the Asian communities in the United States. The Company is continuing to review the viability of opening a line of health food stores as the relevant people and capital necessary to move forward are currently not available. Alternatively, we might identify and negotiate with a business target for the merger of that entity with and into the Company.
On October 20, 2016, the Company filed documents registering their intention to transact interstate business in the state of California. On November 29, 2016, the Company incorporated HK Feng Wang Group Limited.
Plan of Operation
Given our limited resources and the fact that we have never generated any revenues from the sale of our products, we are no longer focused on operating a business and have abandoned our initial business plan. Although our sole officer and director intends to have the Company open a line of health food stores or stores-in-stores within the Asian communities in the United States, we might just identify and negotiate with another company for the business combination or merger of that entity with and into our company. We would seek, investigate and, if such investigation warrants, acquire an interest in one or more business opportunities presented to it by persons or firms who or which desire to seek the perceived advantages of a publicly held corporation. At this time, we have no plan, proposal, agreement, understanding or arrangement to acquire or merge with any specific business or company, and the Company has not identified any specific business or company for investigation and evaluation. No member of management or promoter of the Company has had any material discussions with any other company with respect to any acquisition of that company.
We will not restrict our search for another target company to any specific business, industry or geographical location, and the Company may participate in a business venture of virtually any kind or nature. The discussion of the proposed plan of operation under this caption and throughout this Annual Report is purposefully general and is not meant to be restrictive of the Company's virtually unlimited discretion to search for and enter into potential business opportunities.
Sources of Opportunities
The Company anticipates that business opportunities for possible acquisition will be referred by various sources, including its officers and directors, professional advisers, securities broker-dealers, venture capitalists, members of the financial community, and others who may present unsolicited proposals.
The Company will seek a potential business opportunity from all known sources, but will rely principally on personal contacts of its officer and director and consultants as well as indirect associations between them and other business and professional people. It is not presently anticipated that the Company will engage professional firms specializing in business acquisitions or reorganizations.
The officer and director of the Company is currently employed in other positions and will devote only a portion of her time (not more than three hours per week) to the business affairs of the Company, until such time as either (a) she is ready to open a line of health food stores or stores-in-stores within the Asian communities or (b) an acquisition has been determined to be highly favorable, at which time she is expected to spend full time in investigating and closing any acquisition. In addition, in the face of competing demands for her time, the officers and directors may grant priority to their full-time positions rather than to the Company.
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Evaluation of Opportunities
The analysis of new business opportunities will be undertaken by or under the supervision of the officer and director of the Company. Management intends to concentrate on identifying prospective business opportunities which may be brought to its attention through present associations with management. In analyzing prospective business opportunities, management will consider such matters as the available technical, financial and managerial resources; working capital and other financial requirements; history of operation, if any; prospects for the future; present and expected competition; the quality and experience of management services which may be available and the depth of that management; the potential for further research, development or exploration; specific risk factors not now foreseeable but which then may be anticipated to impact the proposed activities of the Company; the potential for growth or expansion; the potential for profit; the perceived public recognition or acceptance of products, services or trades; name identification; and other relevant factors. The officer and director of the Company will meet personally with management and key personnel of the firm sponsoring the business opportunity as part of her investigation. To the extent possible, the Company intends to utilize written reports and personal investigation to evaluate the above factors. The Company will not acquire or merge with any company for which audited financial statements cannot be obtained.
It may be anticipated that any opportunity in which the Company participates will present certain risks. Many of these risks cannot be adequately identified prior to selection of the specific opportunity, and the Company's stockholders must, therefore, depend on the ability of management to identify and evaluate such risk. In the case of some of the opportunities available to the Company, it may be anticipated that the promoters thereof have been unable to develop a going concern or that such business is in its development stage in that it has not generated significant revenues from its principal business activities prior to the Company's anticipation. There is a risk, even after the Company's participation in the activity and the related expenditure of the Company's funds that the combined enterprises will still be unable to become a going concern or advance beyond the development stage. Many of the opportunities may involve new and untested products, processes, or market strategies which may not succeed. Such risks will be assumed by the Company and, therefore, its stockholders.
The Company will not restrict its search for any specific kind of business, but may acquire a venture which is in its preliminary or development stage, which is already in operation, or in essentially any stage of its corporate life. It is currently impossible to predict the status of any business in which the Company may become engaged, in that such business may need additional capital, may merely desire to have its shares publicly traded, or may seek other perceived advantages which the Company may offer.
Acquisition of Opportunities
In implementing a structure for a particular business acquisition, the Company may become a party to a merger, consolidation, reorganization, joint venture, franchise or licensing agreement with another corporation or entity. It may also purchase stock or assets of an existing business. On the consummation of a transaction, it is possible that the present management and shareholders of the Company will not be in control of the Company. In addition, the Company's officer and director may, as part of the terms of the acquisition transaction, resign and be replaced by new officers and directors without a vote of the Company's stockholders.
It is anticipated that any securities issued in any such reorganization would be issued in reliance on exemptions from registration under applicable Federal and state securities laws. In some circumstances, however, as a negotiated element of this transaction, the Company may agree to register such securities either at the time the transaction is consummated, under certain conditions, or at specified time thereafter. The issuance of substantial additional securities and their potential sale into any trading market which may develop in the Company's common stock may have a depressive effect on such market. While the actual terms of a transaction to which the Company may be a party cannot be predicted, it may be expected that the parties to the business transaction will find it desirable to avoid the creation of a taxable event and thereby structure the acquisition in a so called "tax free" reorganization under Sections 368(a)(1) or 351 of the Internal Revenue Code of 1986, as amended (the "Code"). In order to obtain tax free treatment under the Code, it may be necessary for the owners of the acquired business to own 80% or more of the voting stock of the surviving entity. In such event, the shareholders of the Company, including investors in this offering, would retain less than 20% of the issued and outstanding shares of the surviving entity, which could result in significant dilution in the equity of such shareholders.
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As part of the Company's investigation, the officer and director of the Company will meet personally with management and key personnel, may visit and inspect material facilities, obtain independent analysis or verification of certain information provided, check references of management and key personnel, and take other reasonable investigative measures, to the extent of the Company's limited financial resources and management expertise.
The manner in which each Company participates in an opportunity will depend on the nature of the opportunity, the respective needs and desires of the Company and other parties, the management of the opportunity, and the relative negotiating strength of the Company and such other management.
With respect to any mergers or acquisitions, negotiations with target company management will be expected to focus on the percentage of the Company which target company shareholders would acquire in exchange for their stockholdings in the target company. Depending upon, among other things, the target company's assets and liabilities, the Company's stockholders will in all likelihood hold a lesser percentage ownership interest in the Company following any merger or acquisition. The percentage ownership may be subject to significant reduction in the event the Company acquires a target company with substantial assets. Any merger or acquisition effected by the Company can be expected to have a significant dilutive effect on the percentage of shares held by the Company's then stockholders.
The Company will not have sufficient funds (unless it is able to raise funds in a private placement) to undertake any significant development, marketing and manufacturing of any products which may be acquired.
Accordingly, following the acquisition of any such product, the Company will, in all likelihood, be required to either seek debt or equity financing or obtain funding from third parties, in exchange for which the Company would probably be required to give up a substantial portion of its interest in any acquired product. There is no assurance that the Company will be able either to obtain additional financing or interest third parties in providing funding for the further development, marketing and manufacturing of any products acquired.
It is anticipated that the investigation of specific business opportunities and the negotiation, drafting and execution of relevant agreements, disclosure documents and other instruments will require substantial management time and attention and substantial costs for accountants, attorneys and others. If a decision is made not to participate in a specific business opportunity the costs therefore incurred in the related investigation would not be recoverable.
Furthermore, even if an agreement is reached for the participation in a specific business opportunity, the failure to consummate that transaction may result in a loss to the Company of the related costs incurred.
Management believes that the Company may be able to benefit from the use of "leverage" in the acquisition of a business opportunity. Leveraging a transaction involves the acquisition of a business through incurring significant indebtedness for a large percentage of the purchase price for that business.
Through a leveraged transaction, the Company would be required to use less of its available funds for acquiring the business opportunity and, therefore, could commit those funds to the operations of the business opportunity, to acquisition of other business opportunities or to other activities. The borrowing involved in a leveraged transaction would ordinarily be secured by the assets of the business opportunity to be acquired. If the business opportunity acquired is not able to generate sufficient revenues to make payments on the debt incurred by the Company to acquire that business opportunity, the lender would be able to exercise the remedies provided by law or by contract. These leveraging techniques, while reducing the amount of funds that the Company must commit to acquiring a business opportunity, may correspondingly increase the risk of loss to the Company. No assurance can be given as to the terms or the availability of financing for any acquisition by the Company. During periods when interest rates are relatively high, the benefits of leveraging are not as great as during periods of lower interest rates because the investment in the business opportunity held on a leveraged basis will only be profitable if it generates sufficient revenues to cover the related debt and other costs of the financing. Lenders from which the Company may obtain funds for purposes of a leveraged buy-out may impose restrictions on the future borrowing, distribution, and operating policies of the Company. It is not possible at this time to predict the restrictions, if any, which lenders may impose or the impact thereof on the Company.
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Critical Accounting Policies and Estimates
For revenue from product sales, the Company will recognize revenue in accordance with Staff Accounting Bulletin No. 104, “Revenue Recognition” (SAB No. 104), which superseded Staff Accounting Bulletin No. 101, “Revenue Recognition in Financial Statements” (SAB No. 101). SAB No. 104 requires that four basic criteria must be met before revenue can be recognized: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred; (3) the selling price is fixed and determinable; and (4) collectability is reasonably assured. Determination of criteria (3) and (4) are based on management’s judgment regarding the fixed nature of the selling prices of the products delivered and the collectability of those amounts. Provisions for discounts and rebates to customers, estimated returns and allowance, and other adjustments will be provided for in the same period the related sales are recorded.
The preparation of financial statements in conformity with generally accepted accounting principles in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities at the date of the financial statements, and the reported amount of revenues and expenses during the reported period. Actual results could differ from those estimates.
Results of Operations
For the years ended December 31, 2016 and December 31, 2015
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Years Ended December 31, |
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2016 |
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2015 |
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Change |
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Percent |
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Revenue |
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$ | - |
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$ | - |
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$ | - |
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- | % |
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Operating expenses: |
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General and administrative |
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12,048 |
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644 |
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11,404 |
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1771 | % |
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Professional fees |
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39,184 |
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27,209 |
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11,975 |
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44 | % |
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Income from operations |
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51,232 |
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27,853 |
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23,379 |
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84 | % |
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Other income (expenses): |
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Interest expense |
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(14,476 | ) |
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- |
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(14,476 | ) |
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- | % |
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Total other income (expenses) |
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(14,476 | ) |
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- |
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(14,476 | ) |
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- | % |
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Loss before income taxes |
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(65,708 | ) |
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(27,853 | ) |
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(37,855 | ) |
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136 | % |
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Income tax expense |
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- |
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- |
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- |
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- | % |
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Net income |
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$ | (65,708 | ) |
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$ | (27,853 | ) |
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$ | (37,855 | ) |
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136 | % |
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Revenues
The Company did not generate any revenues during the years ended December 31, 2016 and December 31, 2015.
Total operating expenses
During the year ended December 31, 2016, total operating expenses were $51,232, which consisted of professional fees of $39,184, marketing and product exam fees of $8,189, rent expenses of $3,000, telephone expenses of $466 and bank service fees of $393. During the year ended December 31, 2015, total operating expenses were $27,853, which consisted of professional fees of $27,209, business licenses and permits of $89 and miscellaneous fees of $555. Total operating expenses increased $23,379, or 84%, primarily as a result of the $11,975 increase in professional fees and the $8,189 increase in marketing and product exam fees in the year ended December 31, 2016 from year ended December 31, 2015.
Total other income (expense)
During the year ended December 31, 2016 and 2015, the Company had interest expense of $14,476 and nil, respectively.
Net loss
During the year ended December 31, 2016, the Company had a net loss of $65,708, as compared with a net loss of $27,853 for the year ended December 31, 2015.
Liquidity and Capital Resources
As of December 31, 2016, the Company had cash and cash equivalents and total assets of $165,481 and $177,631, respectively. We have total liabilities of $250,273, of which $167,619 is due to convertible note payable and $74,579 is due to our sole officer and director as an unsecured, non-interest bearing demand loan. As of December 31, 2016, and 2015, the Company had working capital amount of $94,977 and $(45,791), respectively.
Other than an oral agreement with Mrs. Cui to fund the expenses of the Company, we currently have no agreements, arrangements or understandings with any person to obtain funds through bank loans, lines of credit or any other sources. Since the Company has no such arrangements or plans currently in effect, its inability to raise funds for the above purposes will have a severe negative impact on its ability to remain a viable company.
Cash Flows from Operating Activities
For the year ended December 31, 2016, net cash flows used in operating activities was $70,789 resulting from a net loss of $65,708, an increase in prepaid expenses and other current assets of $12,150, a increase in accrued liabilities of $593, and amortization of debt discount of $6,476. For the year ended December 31, 2015, net cash flows used in operating activities was $20,722 resulting from a net loss of $27,853, offset by an increase in accrued liabilities of $7,131.
Cash Flows from Financing Activities
We have financed our operations primarily from the issuance of a convertible promissory note and advances from the Company’s sole officer and director. For the year ended December 31, 2016, we had cash flows provided by the issuance of a convertible promissory note of $200,000 and advances from the Company’s sole officer and director of $36,270. For the year ended December 31, 2015, advances from the Company’s sole officer and director provided $20,722.
Cash Flows from Non-Cash Financing Activities
For the year ended December 31, 2016, non-cash financing activities included $38,857 related to beneficial conversion feature recognized.
Going Concern Consideration
The Company is a shell company has no operations. The Company had no revenues and incurred a net loss of $65,708 for the year ended December 31, 2016 and a net loss of $27,853 for the year ended December 31, 2015. In addition, the Company had an accumulated deficit of $135,664 at December 31, 2016. These factors raise substantial doubt about the Company’s ability to continue as a going concern. The Company’s ability to continue as a going concern is dependent on its ability to raise additional capital. The Company’s financial statements do not include any adjustments relating to the recoverability and classification of reported asset amounts or the amount and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.
| 11 |
| Table of Contents |
Operating Lease
The Company has operating leases for its office. Rental expenses for the years ended December 31, 2016 and 2015 were $3,000 and nil, respectively. At December 31, 2016, total future minimum annual lease payments under operating lease was as follows, by years:
|
Twelve months ending December 31, 2017 |
|
$ | 9,000 |
|
|
Thereafter |
|
|
- |
|
|
Total |
|
$ | 9,000 |
|
Off-Balance Sheet Arrangements
We have no off-balance sheet arrangements.
Critical Accounting Policies and Estimates
For revenue from product sales, the Company will recognize revenue in accordance with Staff Accounting Bulletin No. 104, “Revenue Recognition” (SAB No. 104), which superseded Staff Accounting Bulletin No. 101, “Revenue Recognition in Financial Statements” (SAB No. 101). SAB No. 104 requires that four basic criteria must be met before revenue can be recognized: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred; (3) the selling price is fixed and determinable; and (4) collectability is reasonably assured. Determination of criteria (3) and (4) are based on management’s judgment regarding the fixed nature of the selling prices of the products delivered and the collectability of those amounts. Provisions for discounts and rebates to customers, estimated returns and allowance, and other adjustments will be provided for in the same period the related sales are recorded.
The preparation of financial statements in conformity with generally accepted accounting principles in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities at the date of the financial statements, and the reported amount of revenues and expenses during the reported period. Actual results could differ from those estimates.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk.
Smaller reporting companies are not required to provide the information required by this item.
| 12 |
| Table of Contents |
Report of Independent Registered Public Accounting Firm
To the Board of Directors and Stockholders
MakingORG, Inc.
We have audited the accompanying balance sheet of MakingORG, Inc. (the “Company”) as of December 31, 2016 and the related statements of operations, changes in stockholders’ deficit and cash flows for the year then ended. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company at December 31, 2016 and the results of its operations and its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America.
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As described in Note 3 to the financial statements, the Company has suffered recurring losses from operations and negative operating cash flows which raise substantial doubt about its ability to continue as a going concern. Management's plans regarding those matters also are described in Note 3. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
/s/ Simon & Edward, LLP
Los Angeles, California
April 17, 2017
| F-1 |
| Table of Contents |
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors
MakingORG, Inc.
Los Angeles, CA
We have audited the accompanying balance sheet of MakingORG, Inc. (the “Company”) as of December 31, 2015 and the related statement of operations, changes in stockholders' deficit, and cash flows for the year then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audit.
We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the accompanying financial statements of the Company present fairly, in all material respects, its consolidated financial position as of December 31, 2015, and the results of its operations and its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States.
/s/ MaloneBailey, LLP
MaloneBailey, LLP
Houston, Texas
March 25, 2016
| F-2 |
| Table of Contents |
|
MakingORG, Inc. | ||||||||
|
(formerly DRIMEX INC.) | ||||||||
|
BALANCE SHEETS | ||||||||
|
|
|
|
|
| ||||
|
|
|
December 31, 2016 |
|
|
December 31, 2015 |
| ||
|
ASSETS | ||||||||
|
Current Assets |
|
|
|
|
|
| ||
|
Cash and cash equivalents |
|
$ | 165,481 |
|
|
$ | - |
|
|
Prepaid expenses and other current assets |
|
|
12,150 |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
Total Assets |
|
$ | 177,631 |
|
|
$ | - |
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ DEFICIT | ||||||||
|
Current Liabilities |
|
|
|
|
|
|
|
|
|
Accounts payable and accrued liabilities |
|
$ | 8,075 |
|
|
$ | 7,482 |
|
|
Due to related party |
|
|
74,579 |
|
|
|
38,309 |
|
|
Total Current Liabilities |
|
|
82,654 |
|
|
|
45,791 |
|
|
|
|
|
|
|
|
|
|
|
|
Long Term Liabilities |
|
|
|
|
|
|
|
|
|
Convertible note payable net of discount $32,381 |
|
|
167,619 |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL LIABILITIES |
|
|
250,273 |
|
|
|
45,791 |
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders’ Deficit |
|
|
|
|
|
|
|
|
|
Preferred stock, par value $0.001; 50,000,000 shares authorized, |
|
|
|
|
|
|
|
|
|
zero shares issued and outstanding |
|
|
- |
|
|
|
- |
|
|
Common stock, par value $0.001; 150,000,000 shares authorized, |
|
|
|
|
|
|
|
|
|
35,430,000 shares issued and outstanding |
|
|
35,430 |
|
|
|
35,430 |
|
|
Additional paid-in capital |
|
|
27,592 |
|
|
|
(11,265 | ) |
|
Accumulated deficit |
|
|
(135,664 | ) |
|
|
(69,956 | ) |
|
Total Stockholders’ Deficit |
|
|
(72,642 | ) |
|
|
(45,791 | ) |
|
|
|
|
|
|
|
|
|
|
|
Total Liabilities and Stockholders’ Deficit |
|
$ | 177,631 |
|
|
$ | - |
|
See accompanying notes to financial statements.
| F-3 |
| Table of Contents |
|
MakingORG, Inc. | ||||||||
|
(formerly DRIMEX INC.) | ||||||||
|
STATEMENTS OF OPERATIONS | ||||||||
|
|
|
|
|
| ||||
|
|
|
For the years ended December 31, |
| |||||
|
|
|
2016 |
|
|
2015 |
| ||
|
|
|
|
|
|
|
| ||
|
REVENUES |
|
$ | - |
|
|
$ | - |
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING EXPENSES |
|
|
|
|
|
|
|
|
|
General and administrative |
|
|
12,048 |
|
|
|
644 |
|
|
Professional fees |
|
|
39,184 |
|
|
|
27,209 |
|
|
TOTAL OPERATING EXPENSES |
|
|
51,232 |
|
|
|
27,853 |
|
|
|
|
|
|
|
|
|
|
|
|
OTHER INCOME (EXPENSE) |
|
|
|
|
|
|
|
|
|
Interest expense |
|
|
(14,476 | ) |
|
|
- |
|
|
TOTAL OTHER INCOME (EXPENSE) |
|
|
(14,476 | ) |
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
LOSS BEFORE INCOME TAX |
|
|
(65,708 | ) |
|
|
(27,853 | ) |
|
|
|
|
|
|
|
|
|
|
|
Income tax provision |
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
NET LOSS |
|
$ | (65,708 | ) |
|
$ | (27,853 | ) |
|
|
|
|
|
|
|
|
|
|
|
NET LOSS PER COMMON SHARE: BASIC AND DILUTED |
|
$ | (0.00 | ) |
|
$ | (0.00 | ) |
|
|
|
|
|
|
|
|
|
|
|
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING: BASIC AND DILUTED |
|
|
35,430,000 |
|
|
|
35,430,000 |
|
See accompanying notes to financial statements.
| F-4 |
| Table of Contents |
|
MakingORG, Inc. | ||||||||||||||||||||
|
(formerly DRIMEX INC.) | ||||||||||||||||||||
|
STATEMENTS OF STOCKHOLDERS’ DEFICIT | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
|
|
|
|
|
|
|
|
Additional |
|
|
|
|
|
Total |
| |||||
|
|
|
Common Stock |
|
|
Paid-in |
|
|
Accumulated |
|
|
Stockholders’ |
| ||||||||
|
|
|
Shares |
|
|
Amount |
|
|
Capital |
|
|
Deficit |
|
|
Deficit |
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, December 31, 2014 |
|
|
35,430,000 |
|
|
|
35,430 |
|
|
|
(11,265 | ) |
|
|
(42,103 | ) |
|
|
(17,938 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(27,853 | ) |
|
|
(27,853 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, December 31, 2015 |
|
|
35,430,000 |
|
|
$ | 35,430 |
|
|
$ | (11,265 | ) |
|
$ | (69,956 | ) |
|
$ | (45,791 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(65,708 | ) |
|
|
(65,708 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of promissory note |
|
|
- |
|
|
|
- |
|
|
|
38,857 |
|
|
|
- |
|
|
|
38,857 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, December 31, 2016 |
|
|
35,430,000 |
|
|
$ | 35,430 |
|
|
$ | 27,592 |
|
|
$ | (135,664 | ) |
|
$ | (72,642 | ) |
See accompanying notes to financial statements.
| F-5 |
| Table of Contents |
|
MakingORG, Inc. | ||||||||
|
(formerly DRIMEX INC.) | ||||||||
|
STATEMENTS OF CASH FLOWS | ||||||||
|
|
|
|
|
| ||||
|
|
|
For the years ended December 31, |
| |||||
|
|
|
2016 |
|
|
2015 |
| ||
|
|
|
|
|
|
|
| ||
|
CASH FLOWS FROM OPERATING ACTIVITIES |
|
|
|
|
|
| ||
|
Net loss |
|
$ | (65,708 | ) |
|
$ | (27,853 | ) |
|
Adjustments to reconcile net loss to net cash used in operating activities: |
|
|
|
|
|
|
|
|
|
Amortization of debt discount |
|
|
6,476 |
|
|
|
- |
|
|
Changes in assets and liabilities: |
|
|
|
|
|
|
|
|
|
Prepaid expenses and other current assets |
|
|
(12,150 | ) |
|
|
- |
|
|
Accounts payable and accrued liabilities |
|
|
593 |
|
|
|
7,131 |
|
|
CASH FLOWS USED IN OPERATING ACTIVITIES |
|
|
(70,789 | ) |
|
|
(20,722 | ) |
|
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM FINANCING ACTIVITIES |
|
|
|
|
|
|
|
|
|
Proceeds for convertible note |
|
|
200,000 |
|
|
|
- |
|
|
Loan from related party |
|
|
36,270 |
|
|
|
20,722 |
|
|
CASH FLOWS PROVIDED BY FINANCING ACTIVITIES |
|
|
236,270 |
|
|
|
20,722 |
|
|
|
|
|
|
|
|
|
|
|
|
NET INCREASE IN CASH AND CASH EQUIVALENTS |
|
|
165,481 |
|
|
|
- |
|
|
Cash and cash equivalents, beginning of period |
|
|
- |
|
|
|
- |
|
|
Cash and cash equivalents, end of period |
|
$ | 165,481 |
|
|
$ | - |
|
|
|
|
|
|
|
|
|
|
|
|
SUPPLEMENTAL CASH FLOW INFORMATION: |
|
|
|
|
|
|
|
|
|
Interest paid |
|
$ | - |
|
|
$ | - |
|
|
Income taxes paid |
|
$ | - |
|
|
$ | - |
|
|
|
|
|
|
|
|
|
|
|
|
NON-CASH FINANCING ACTIVITIES: |
|
|
|
|
|
|
|
|
|
Beneficial conversion feature recognition |
|
$ | (38,857 | ) |
|
$ | - |
|
See accompanying notes to financial statements.
| F-6 |
| Table of Contents |
MakingORG, Inc.
NOTES TO THE FINANCIAL STATEMENTS
December 31, 2016
NOTE 1 – ORGANIZATION AND NATURE OF BUSINESS
MakingORG, Inc. was incorporated under the laws of the State of Nevada on August 10, 2012. The Company now intends to open a line of health food stores or stores-in-stores within the Asian communities in the United States. The trading symbol of the Company is "CQCQ" and the fiscal year end is December 31.
On October 20, 2016, the Company filed documents registering their intention to transact interstate business in the state of California. On November 29, 2016, the Company incorporated HK Feng Wang Group Limited.
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America and are presented in US dollars.
Accounting Basis
The Company uses the accrual basis of accounting and has adopted a December 31 fiscal year end.
Use of Estimates
The preparation of the financial statements in conformity with accounting principles generally accepted in the U.S requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the financial statement date, and reported amounts of revenue and expenses during the reporting period. Significant estimates are used in valuing the fair value of common stock issued for services, among others. Actual results could differ from these estimates.
Cash and Cash Equivalents
The Company considers all highly liquid investments with the original maturities of three months or less to be cash equivalents. The Company had $165,481 and nil cash and cash equivalents as at December 31, 2016 and 2015.
Prepaid Expenses and Other Current Assets
Prepaid expenses and other current assets include primarily prepaid consulting fee, deposit for product processing fee and security deposit for rent. As of December 31, 2016, and 2015, prepaid expenses and other current assets was $12,150 and nil, respectively.
Revenue Recognition
The Company recognizes revenue when (1) delivery of product has occurred or services have been rendered, (2) there is persuasive evidence of a sale arrangement, (3) selling prices are fixed or determinable, and (4) collectability from the customer is reasonably assured.
| F-7 |
| Table of Contents |
Income Taxes
Income taxes are computed using the asset and liability method. Under the asset and liability method, deferred income tax assets and liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities and are measured using the currently enacted tax rates and laws. A valuation allowance is provided for the amount of deferred tax assets that, based on available evidence, are not expected to be realized.
Basic Income (Loss) Per Share
Basic income (loss) per share is calculated by dividing the Company’s net loss applicable to common shareholders by the weighted average number of common shares during the period. Diluted earnings per share is calculated by dividing the Company’s net income available to common shareholders by the diluted weighted average number of shares outstanding during the year. The diluted weighted average number of shares outstanding is the basic weighted number of shares adjusted for any potentially dilutive debt or equity. There are no such common stock equivalents outstanding as at December 31, 2016 and 2015.
Related Parties
The Company follows ASC 850, "Related Party Disclosures," for the identification of related parties and disclosure of related party transactions.
Fair Value of Financial Instruments
Fair value is defined as the price that would be received upon sale of an asset or paid upon transfer of a liability in an orderly transaction between market participants at the measurement date and in the principal or most advantageous market for that asset or liability. The fair value should be calculated based on assumptions that market participants would use in pricing the asset or liability, not on assumptions specific to the entity. In addition, the fair value of liabilities should include consideration of non-performance risk including the Company’s own credit risk.
In addition to defining fair value, the standard expands the disclosure requirements around fair value and establishes a fair value hierarchy for valuation inputs. The hierarchy prioritizes the inputs into three levels based on the extent to which inputs used in measuring fair value are observable in the market. Each fair value measurement is reported in one of the three levels which are determined by the lowest level input that is significant to the fair value measurement in its entirety. These levels are:
Level 1 – inputs are based upon unadjusted quoted prices for identical instruments traded in active markets.
Level 2 – inputs are based upon significant observable inputs other than quoted prices included in Level 1, such as quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
Level 3 – inputs are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques that include option pricing models, discounted cash flow models, and similar techniques.
As of December 31, 2016, the balances reported for cash and cash equivalents, accrued expenses and due to related party approximate their fair value because of their short maturities. Notes payable are recorded at agreed values.
Recently Issued Accounting Pronouncements
Management has considered all recent accounting pronouncements issued since the last audit of the Company’s financial statements. The Company’s management believes that these recent pronouncements will not have a material effect on the Company’s financial statements.
| F-8 |
| Table of Contents |
NOTE 3 – GOING CONCERN
The accompanying financial statements have been prepared in conformity with generally accepted accounting principle, which contemplate continuation of the Company as a going concern. The Company currently has an accumulated deficit, and has not completed its efforts to establish a stabilized source of revenues sufficient to cover operating costs over an extended period of time. These financial statements do not include adjustments relating to the recoverability and classification of reported asset amounts or the amount and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.
Management anticipates that the Company will be dependent, for the near future, on additional investment capital to fund operating expenses The Company intends to position itself so that it may be able to raise additional funds through the capital markets. In light of management’s efforts, there are no assurances that the Company will be successful in this or any of its endeavors or become financially viable and continue as a going concern.
NOTE 4 – DUE TO RELATED PARTY
During the years ended December 31, 2016 and 2015, the Company's sole officer advanced to the Company an amount of $36,270 and $20,722, respectively, by the way of loan. The officer paid expenses directly on behalf of the Company. As at December 31, 2016 and 2015, the Company was obligated to the officer, for an unsecured, non-interest bearing demand loan with a balance of $74,579 and $38,309, respectively.
NOTE 5 – CONVERTIBLE NOTE PAYABLE
On September 1, 2016, the Company entered into a Convertible Note Agreement in the principal amount of $200,000 with an unrelated party. The note bears interest at 12% per annum and the holder is able to convert all unpaid interest and principal into common shares at $3.50 per share. The note matures on September 1, 2018. The Company recognized a discount on the note of $38,857 at the agreement date. The interest expense was due every six months commencing of March 1, 2017 until the principal amount of this convertible note was paid in full.
The Company recognized interest expense related to the debt discount of $14,476 for the year ended December 31, 2016. The unamortized debt discount at December 31, 2016 is $32,381.
NOTE 6 – EQUITY
Preferred Stock
On August 22, 2014, the Company amended and restated Articles of Incorporation and authorized 50,000,000 preferred shares with a par value of $0.001 per share.
There were no preferred shares issued and outstanding as at December 31, 2016 and December 31, 2015.
Common Stock
The Company has 150,000,000, $0.001 par value shares of common stock authorized.
On August 22, 2014, the Company amended and restated Articles of Incorporation and increased the amount of authorized shares of common stock from 75,000,000 to 150,000,000, with a par value of $0.001 per share.
Effective August 22, 2014, the Company effected a 6 for 1 forward split on its common stock outstanding in the form of a dividend, under which each stockholder of record on that date received 5 additional shares of the Corporation's $0.001 par value common stock for every 1 share owned.
The Company’s balance sheets, statements of operations, and all share and per shares amounts herein, were retroactively adjusted to give effect to the 6 for 1 forward split.
As at December 31, 2016 and 2015, the Company has 35,430,000 shares issued and outstanding.
| F-9 |
| Table of Contents |
NOTE 7 – COMMITMENTS
Operating Lease
The Company has operating leases for its office. Rental expenses for the years ended December 31, 2016 and 2015 were $3,000 and nil, respectively. At December 31, 2016, total future minimum annual lease payments under operating lease was as follows, by years:
|
Twelve months ending December 31, 2017 |
|
$ | 9,000 |
|
|
Thereafter |
|
|
- |
|
|
Total |
|
$ | 9,000 |
|
NOTE 8 – INCOME TAXES
The Company provides for income taxes under ASC 740, "Income Taxes. ASC 740 requires the use of an asset and liability approach in accounting for income taxes. Deferred tax assets and liabilities are recorded based on the differences between the financial statement and tax basis of assets and liabilities and the tax rates in effect when these differences are expected to reverse. It also requires the reduction of deferred tax assets by a valuation allowance if, based on the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized.
The Company is subject to taxation in the United States and certain state jurisdictions.
The provision for income taxes differs from the amounts which would be provided by applying the statutory federal income tax rate of 34% to the net loss before provision for income taxes for the following reasons:
|
|
|
For the Years Ended |
| |||||
|
|
|
December 31, |
| |||||
|
|
|
2016 |
|
|
2015 |
| ||
|
Tax benefit at statutory rates |
|
$ | 22,341 |
|
|
$ | 9,470 |
|
|
Change in valuation allowance |
|
|
(22,341 | ) |
|
|
(9,470 | ) |
|
Net provision for income taxes |
|
$ | - |
|
|
$ | - |
|
Net deferred tax assets consist of the following components as of:
|
|
|
December 31, |
| |||||
|
|
|
2016 |
|
|
2015 |
| ||
|
Deferred tax asset: |
|
|
|
|
|
| ||
|
Net operating loss carry forwards |
|
$ | 46,126 |
|
|
$ | 23,785 |
|
|
Valuation allowance |
|
|
(46,126 | ) |
|
|
(23,785 | ) |
|
Net deferred tax asset |
|
$ | - |
|
|
$ | - |
|
Due to the change in ownership provisions of the Income Tax laws of United States of America, net operating loss carry forwards of approximately $135,700, which expire commencing in fiscal 2032, for federal income tax reporting purposes are subject to annual limitations. When a change in ownership occurs, net operating loss carry forwards may be limited as to use in future years.
NOTE 9 – SUBSEQUENT EVENT
The Company has evaluated all other subsequent events through the date the financial statements were issued, and determine that there were no other subsequent events or transactions that require recognition or disclosures in the financial statements.
| F-10 |
| Table of Contents |
Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.
On October 17, 2016, MakingORG, Inc. formally informed MaloneBailey, LLP ("MaloneBailey") that it was terminating MaloneBailey as it’s independent registered public accounting firm. On October 17, 2016, the Company retained Simon & Edward, LLP (“Simon & Edward”) as its principal independent accountants. The decision to terminate the services of MaloneBailey and retain Simon & Edward as the principal independent accountants was approved by the Company’s Board of Directors.
The Termination of MaloneBailey
MaloneBailey was the independent registered public accounting firm for the Company from August 10, 2012 (inception) until October 17, 2016. None of MaloneBailey's reports on the Company’s financial statements for the years ended December 31, 2015 and December 31, 2014 (a) contained an adverse opinion or disclaimer of opinion, or (b) was modified as to uncertainty, audit scope, or accounting principles other than as provided below, or (c) contained any disagreements on any matters of accounting principles or practices, financial statement disclosure, or auditing scope or procedures, which disagreements, if not resolved to the satisfaction of MaloneBailey, would have caused it to make reference to the subject matter of the disagreements in connection with its reports. None of the reportable events set forth in Item 304(a)(1)(iv) of Regulation S-K occurred during the period in which MaloneBailey served as the Company’s principal independent accountants.
During our two most recent fiscal years and the subsequent interim period preceding the termination of MaloneBailey we had no disagreements with the firm on any matter of accounting principles or practices, financial statement disclosure, or auditing scope of procedure which disagreement if not resolved to the satisfaction of MaloneBailey would have caused it to make reference to the subject matter of the disagreement in connection with its report.
However, the auditors’ report of MaloneBailey dated March 25, 2017, included in our financial statements for the years ended December 31, 2015 and 2014, included in this Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”), contained an explanatory paragraph which noted that there was substantial doubt as to our ability to continue as a going concern. The auditors’ report of MaloneBailey dated March 9, 2015, included in our financial statements for the years ended December 31, 2014 and December 31, 2013, included in the Annual Report on Form 10-K filed with the SEC on March 12, 2014, contained an explanatory paragraph which noted that there was substantial doubt as to our ability to continue as a going concern.
Item 9A. Controls and Procedures
EVALUATION OF DISCLOSURE CONTROLS
Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, the Company conducted an evaluation of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) and Rule 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), as of December 31, 2016. Based on this evaluation, our principal executive officer and principal financial officer has concluded that, because of the material weaknesses in our internal control over financial reporting due to lack of segregation of duties discussed below, the Company's disclosure controls and procedures were not effective to ensure that information required to be disclosed by the Company in the reports filed or submitted under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the Securities and Exchange Commission's rules and forms and that the Company's disclosure and controls are designed to ensure that information required to be disclosed by the Company in the reports that we file or submit under the Exchange Act is accumulated and communicated to management, including our principal executive officer and principal financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Notwithstanding the material weaknesses discussed below, our principal executive officer and principal financial officer has concluded that the consolidated financial statements included in this Form 10-K present fairly, in all material respects, our financial position, results of operations and cash flows for the periods presented in conformity with accounting principles generally accepted in the United States.
| 13 |
| Table of Contents |
Management's Report on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over our financial reporting. Internal control over financial reporting is a process to provide reasonable assurance regarding the reliability of our financial reporting for external purposes in accordance with generally accepted accounting principles. Internal control over financial reporting includes policies and procedures that: (i) pertain to maintaining records that in reasonable detail accurately and fairly reflect our transactions; (ii) provide reasonable assurance that transactions are recorded as necessary for preparation of our financial statements and that receipts and expenditures of company assets are made in accordance with management authorization; and (iii) provide reasonable assurance that unauthorized acquisition, use or disposition of company assets that could have a material effect on our financial statements would be prevented or detected on a timely basis. Because of its inherent limitations, internal control over financial reporting is not intended to provide absolute assurance that a misstatement of our financial statements would be prevented or detected.
Our management evaluated the effectiveness of our internal control over financial reporting as of December 31, 2016 based on the framework in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company's annual or interim financial statements will not be prevented or detected on a timely basis. Based on management's assessment, including consideration of the control deficiencies discussed below, management has concluded that the Company's internal control over financial reporting was not effective as of December 31, 2016 due to the fact that there was a material weakness in its internal control over financial reporting. Specifically, through the investigation discussed above, management identified a lack of segregation of duties as well as errors in financial statement presentation and disclosure.
Lack of Segregation of Duties
Management is aware that there is a lack of segregation of duties at the Company due to the lack of employees dealing with general administrative and financial matters. However, at this time management has decided that considering the abilities of the employees now involved and the control procedures in place, the risks associated with such lack of segregation are low and the potential benefits of hiring employees to clearly segregate duties do not justify the substantial expenses associated with such increases. Management will periodically reevaluate this situation.
In order to mitigate the foregoing material weakness, we have engaged an outside accounting consultant with significant experience in the preparation of financial statements in conformity with U.S. GAAP to assist us in the preparation of our financial statements to ensure that these financial statements are prepared in conformity to U.S. GAAP. Management believes that this will lessen the possibility that a material misstatement of our annual or interim financial statements will be prevented or detected on a timely basis, and we will continue to monitor the effectiveness of this action and make any changes that our management deems appropriate.
This annual report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by the Company's registered public accounting firm pursuant to the exemption provided to issuers that are not "large accelerated filers" nor "accelerated filers" under the Dodd-Frank Wall Street Reform and Consumer Protection Act.
Changes in Internal Control Over Financial Reporting
There have been no changes in our internal control over financial reporting that occurred during our last fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
None.
| 14 |
| Table of Contents |
Item 10. Directors, Executive Officers and Corporate Governance.
Directors and Executive Officers
Set forth below are the names, ages and present principal occupations or employment, and material occupations, positions, offices or employments for the past five years of our current director and executive officer.
|
Name |
|
Age |
Position | |
|
|
|
| ||
|
Juanzi Cui |
|
47 |
|
President, Chief Executive Officer, Chief Financial Officer and Secretary and as a director |
Juanzi Cui, age 47, has been the President of the Chongqing Municipal Health Management Association since March of 2014. Since 2011 she has been the Chairman of the Chongqing Huang Xin Technology Limited Liability Corporation. Since 2007 she has been the Vice President and Secretary General of Dietitians Association of Chongqing. Since 2006 she is the Chief Executive Officer and President of the Chongqing City Ziman Nutrition and Health Vocational Training School.
The director of the Company serves for a term of one year or until the successor is elected at the Company's annual stockholders’ meeting and is qualified, subject to removal by the Company's stockholders. The officer serves, at the pleasure of the board of directors, for a term of one year and until the successor is elected at the annual meeting of the board of directors.
There are no familial relationships among any of our officers or directors. None of our directors or officers is a director in any other reporting companies. None of our directors or officers has been affiliated with any company that has filed for bankruptcy within the last ten years. The Company is not aware of any proceedings to which any of the Company’s officers or directors, or any associate of any such officer or director, is a party adverse to the Company or has a material interest adverse to the Company.
Code of Ethics; Financial Expert
Because of the small size and limited resources of the Company, we do not currently have a Code of Ethics applicable to our principal executive, financial and accounting officers. We do not have a “financial expert” on the board or an audit committee or nominating committee.
Potential Conflicts of Interest
Since we do not have an audit or compensation committee comprised of independent directors, the functions that would have been performed by such committees are performed by our directors. Thus, there is a potential conflict of interest in that our directors and officers have the authority to determine issues concerning management compensation and audit issues that may affect management decisions. We are not aware of any other conflicts of interest with any of our executives or directors.
| 15 |
| Table of Contents |
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 requires executive officers and directors of the Company and persons who own more than 10% of a registered class of the Company's equity securities to file reports of ownership and changes in their ownership with the Securities and Exchange Commission, and forward copies of such filings to the Company. Our sole executive officer and director complied with the Section 16(a) filing requirements since she acquired control of the Company.
Involvement in Certain Legal Proceedings
There are no legal proceedings that have occurred within the past ten years concerning our directors, or control persons which involved a criminal conviction, a criminal proceeding, an administrative or civil proceeding limiting one's participation in the securities or banking industries, or a finding of securities or commodities law violations.
Item 11. Executive Compensation.
Summary Compensation
Since our incorporation in August 2012, we have not paid any compensation to our directors or executive officers in consideration for their services rendered to our Company in their capacity as such. We have no employment agreements with any of our directors or executive officers. We have no pension, health, annuity, bonus, insurance, stock options, profit sharing or similar benefit plans
Since our incorporation, no stock options or stock appreciation rights were granted to any of our directors or executive officers. We have no equity incentive plans.
Outstanding Equity Awards
Since our incorporation, none of our directors or executive officers has held unexercised options, stock that had not vested, or equity incentive plan awards.
Compensation of Directors
Since our incorporation in August 2012, no compensation has been paid to any of our directors in consideration for their services rendered in their capacity as directors. No arrangements are presently in place regarding compensation to directors for their services as directors.
The following table lists, as of April 14, 2017, the number of shares of common stock of our Company that are beneficially owned by (i) each person or entity known to our Company to be the beneficial owner of more than 5% of the outstanding common stock; (ii) each executive officer and director of our Company; and (iii) all executive officers and directors as a group. Information relating to beneficial ownership of common stock by our principal shareholders and management is based upon information furnished by each person using “beneficial ownership” concepts under the rules of the Securities and Exchange Commission. Under these rules, a person is deemed to be a beneficial owner of a security if that person has or shares voting power, which includes the power to vote or direct the voting of the security, or investment power, which includes the power to vote or direct the voting of the security. The person is also deemed to be a beneficial owner of any security of which that person has a right to acquire beneficial ownership within 60 days. Under the Securities and Exchange Commission rules, more than one person may be deemed to be a beneficial owner of the same securities, and a person may be deemed to be a beneficial owner of securities as to which he or she may not have any pecuniary beneficial interest. Except as noted below, each person has sole voting and investment power.
| 16 |
| Table of Contents |
The percentages below are calculated based on 35,430,000 shares of our common stock issued and outstanding as of April __, 2017. We do not have any outstanding options, warrants or other securities exercisable for or convertible into shares of our common stock. Unless otherwise indicated, the address of each person listed is c/o MakingORG, Inc., 5042 Wilshire Blvd., #3018, Los Angeles, CA 90036.
|
Name of Beneficial Owner |
|
Amount and Nature of Beneficial Ownership |
|
|
Percent of Class |
| ||
|
|
|
|
|
|
|
| ||
|
Juanzi Cui |
|
|
25,421,468 |
|
|
|
71.75 | % |
|
|
|
|
|
|
|
|
|
|
|
Directors and officers as a group (1 person) |
|
|
25,421,468 |
|
|
|
71.75 | % |
Item 13. Certain Relationships and Related Transactions, and Director Independence.
During the year ended December 31, 2016, the Company's sole officer advanced to the Company an amount of $36,270 by the way of loan. As of December 31, 2016, and 2015, the Company was obligated to the officer, for an unsecured, non-interest bearing demand loan with a balance of $74,579 and $38,309, respectively.
Director Independence
We are not subject to listing requirements of any national securities exchange or national securities association and, as a result, we are not at this time required to have our board comprised of a majority of “independent directors.”
Item 14. Principal Accounting Fees and Services.
Our principal independent accountant is Simon & Edward, LLP. Our principal independent account was MaloneBailey, LLP for the year ended December 31, 2015. Their pre-approved fees billed to the Company are set forth below:
|
|
|
Fiscal Year Ended December 31, 2016 |
|
|
Fiscal Year Ended December 31, 2015 |
| ||
|
Audit Fees - Simon Edward, LLP |
|
$ | 10,500 |
|
|
$ | 9,000 |
|
|
Audit Fees - MaloneBailey, LLP |
|
$ |
3,500 |
|
|
$ |
- |
|
|
Audit Related Fees |
|
$ | 0 |
|
|
$ | 0 |
|
|
Tax Fees |
|
$ | 0 |
|
|
$ | 0 |
|
|
All Other Fees |
|
$ | 0 |
|
|
$ | 0 |
|
As of December 31, 2016, the Company did not have a formal documented pre-approval policy for the fees of the principal accountant. The Company does not have an audit committee. The percentage of hours expended on the principal accountant's engagement to audit our financial statements for the most recent fiscal year that were attributed to work performed by persons other than the principal accountant's full-time, permanent employees was 0%.
| 17 |
| Table of Contents |
Item 15. Exhibits. Financial Statement Schedules.
Exhibits
|
Exhibit No. |
|
Description |
|
|
| |
|
3.1 |
|
Amended and Restated Articles of Incorporation of MakingORG, Inc. (1) |
|
3.2 |
|
Bylaws (2) |
|
10.1 |
|
Service Contract with Anchor Freight Services, Inc. (2) |
|
99 |
|
Subscription Agreement (2) |
|
|
||
|
|
__________
* Filed herewith
(1) Incorporated by reference to the corresponding exhibit to the Company’s Current Report on Form 8-K filed on August 22, 2014
(2) Incorporated by reference to the corresponding exhibit to the Company’s registration statement on Form S-1 on filed on February 8, 2013
| 18 |
| Table of Contents |
Purusant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
|
|
MAKINGORG, INC. |
| |
|
|
| ||
|
Dated: April 17, 2017 |
By: |
/s/ Juanzi Cui |
|
|
|
Name: |
Juanzi Cui |
|
|
|
Title: |
President, Chief Executive Officer, Chief Financial Officer and Secretary and Director (Principal Executive, Financial and Accounting Officer) |
|
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Company and in the capacities and on the dates indicated.
|
|
| ||
|
Dated: April 17, 2017 |
By: |
/s/ Juanzi Cui |
|
|
|
Name: |
Juanzi Cui |
|
|
|
Title: |
President, Chief Executive Officer, Chief Financial Officer and Secretary and as a director (Principal Executive, Financial and Accounting Officer) |
|
|
19 |