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EX-32.2 - CERTIFICATION - VGRAB COMMUNICATIONS INC.vgrbf_ex322.htm
EX-32.1 - CERTIFICATION - VGRAB COMMUNICATIONS INC.vgrbf_ex321.htm
EX-31.2 - CERTIFICATION - VGRAB COMMUNICATIONS INC.vgrbf_ex312.htm
EX-31.1 - CERTIFICATION - VGRAB COMMUNICATIONS INC.vgrbf_ex311.htm
EX-21.1 - LIST OF SUBSIDIARIES - VGRAB COMMUNICATIONS INC.vgrbf_ex211.htm
EX-10.18 - LOAN AGREEMENT - VGRAB COMMUNICATIONS INC.vgrbf_ex1018.htm
EX-10.17 - LOAN AGREEMENT - VGRAB COMMUNICATIONS INC.vgrbf_ex1017.htm
EX-10.16 - LOAN AGREEMENT - VGRAB COMMUNICATIONS INC.vgrbf_ex1016.htm
EX-10.15 - LOAN AGREEMENT - VGRAB COMMUNICATIONS INC.vgrbf_ex1015.htm
EX-10.14 - LOAN AGREEMENT - VGRAB COMMUNICATIONS INC.vgrbf_ex1014.htm


UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

  

FORM 10-K

 

(Mark One)

[X]

ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


For the Fiscal Year Ended October 31, 2017


[  ]

TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


For the transition period from ___________________ to ____________________


Commission File Number 000-54800


VGRAB COMMUNICATIONS INC.

(Exact name of registrant as specified in its charter)


British Columbia, Canada

99-0364150

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)


820-1130 West Pender St., Vancouver, BC V6E 4A4

(Address of principal executive offices)


Registrant’s telephone number, including area code: (604) 648-0510


Securities registered pursuant to Section 12(b) of the Act:


Title of each class

Name of each exchange on

which each is registered

N/A

N/A


Securities registered pursuant to Section 12(g) of the Act:  Common Stock, without par value


Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.  Yes [  ] No [X]


Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.  Yes [  ] No [X]


Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports); and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [  ]


Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 229.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes [X] No [  ].






Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  [  ]


Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

 

Large accelerated filer [  ]

 

Accelerated filer                   [  ]

Non-accelerated filer   [  ]

 

Smaller reporting company [X]

(Do not check if a smaller reporting company)

Emerging growth company  [  ]


If an emerging growth company, indicate by check mark whether the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of Exchange Act. [  ]


Indicate by check mark whether the issuer is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [  ] No [X]


State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant’s most recently completed second fiscal quarter: $1,069,078 based on a price of $0.11, which was the last price at which our common equity was last sold as of April 28, 2017.


Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date.  The number of shares of the registrant’s common stock, without par value, outstanding as of February 9, 2018, was 35,013,838.































 

TABLE OF CONTENTS




Part I

1

Item 1: Business

1

Item 1A: Risk Factors

4

Item 1B: Unresolved Staff Comments

9

Item 2: Properties

9

Item 3: Legal Proceedings

9

Item 4: Mine Safety Disclosures

9

Part II

10

Item 5: Market For Registrant’s Common Equity, Related Stockholder Matters And Issuer Purchases Of Equity Securities

10

Item 6: Selected Financial Data.

10

Item 7: Management’s Discussion And Analysis Of Financial Condition And Results Of Operations

11

Item 7A: Quantitative And Qualitative Disclosures About Market Risk

15

Item 8: Financial Statements And Supplementary Data

15

Item 9: Changes In And Disagreements With Accountants On Accounting And Financial Disclosure

16

Item 9A: Controls And Procedures

16

Item 9B: Other Information

17

Part III

18

Item 10: Directors, Executive Officers And Corporate Governance

18

Item 12: Security Ownership Of Certain Beneficial Owners And Management

21

Item 13: Certain Relationships And Related Transactions, And Director Independence

22

Item 14: Principal Accounting Fees And Services

23

Part IV

25

Item 15: Exhibits

25

Signatures

27










i




PART I


NOTE ABOUT FORWARD-LOOKING STATEMENTS

 

This Annual Report on Form 10-K contains “forward-looking statements”.  These forward-looking statements are based on our current expectations, assumptions, estimates and projections about our business and our industry.  Words such as “believe,” “anticipate,” “expect,” “intend,” “plan,” “may,” and other similar expressions identify forward-looking statements.  In addition, any statements that refer to expectations, projections or other characterizations of future events or circumstances are forward-looking statements.  These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those reflected in the forward-looking statements.  Factors that might cause such a difference include, but are not limited to, those discussed in the sections of this annual report titled “Risk Factors”, “Business” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations”, as well as the following:


·

general economic conditions, because they may affect our ability to raise money;

·

our ability to raise enough money to continue our operations;

·

changes in regulatory requirements that adversely affect our business; and

·

other uncertainties, all of which are difficult to predict and many of which are beyond our control.


You are cautioned not to place undue reliance on these forward-looking statements, which relate only to events as of the date on which the statements are made.  Except as required by applicable securities laws, we undertake no obligation to publicly revise these forward-looking statements to reflect events or circumstances that arise after the date of this annual report.  You should refer to and carefully review the information in future documents we file with the Securities and Exchange Commission.


ITEM 1: BUSINESS


General


We were incorporated on August 4, 2010, under the laws of the State of Nevada under the name “SOS Link Corporation”.  On April 15, 2011, we changed our place of incorporation from the State of Nevada to the Province of British Columbia, Canada and concurrently changed our name to Venza Gold Corp.  The change from Nevada to British Columbia was approved by our shareholders on April 14, 2011.  On January 6, 2014, we changed our name to CoreComm Solutions Inc. and on February 11, 2015, we changed our name to Vgrab Communications Inc. to reflect our current business.


On February 10, 2015, we completed an acquisition of the Vgrab software application (the “Vgrab Application”) pursuant to the terms of a software purchase agreement dated January 8, 2015 (the “Software Purchase Agreement”) between us and Hampshire Capital Limited (“Hampshire”). The Vgrab Application is a free mobile voucher application developed for smartphones using the Android and Apple iOS operating systems and allows users to redeem vouchers on their smartphones at a number of retailers and merchants.


On June 24, 2015, we formed a subsidiary, Vgrab International Ltd., (the “Subsidiary”, or “Vgrab International”) under the Labuan Companies Act 1990 in Federal Territory of Labuan, Malaysia. The main focus of the Subsidiary is to continue development of the Vgrab Application and continue its market penetration in Southeast Asia.  


Change in Management


On August 14, 2017, the board of directors of the Company appointed Mr. Ong, See-Ming and Ms. Chen Weijie as directors. In addition, the board of directors appointed Ms. Chen Weijie its Chief Operating Officer.


Mr. Ong, See-Ming was born in Singapore but spent his formative years in the U.K. After going to school in London and graduating from Oxford University with a degree in Oriental Studies, Mr. Ong started his banking career in the City of London. Initially, he worked as a portfolio manager, but later relocated back to Singapore and specialized in wealth management. Mr. Ong has held senior positions with Standard Chartered, Barclays and Societe Generale. He now travels extensively throughout South East Asia providing corporate advisory services to start up businesses and holds personal stakes in some of these companies.



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Ms. Chen Weijie graduated from Huazhong University of Science & Technology with Master’s Degree in Software and Domain Engineering. Ms. Chen started her career in 2002 as a founder of Weijie Co. Ltd and Nuode Co. Ltd, companies specializing in marketing services. At the same time, Ms. Chen founded Tang Shan International Plastics Co. Ltd, a manufacturing company producing plastic films for greenhouse purposes. In 2011 Ms. Chen joined Hampshire Automotive Sdn Bhd, one of the subsidiaries of Hampshire Avenue Sdn Bhd, a major shareholder of Vgrab Communications Inc., as its Managing Director of Research and Development.


On December 5, 2017, the board of directors of the Company appointed Mr. Liong Fook Weng as director, Chief Financial Officer, Secretary and Treasurer of the Company. Mr. Liong replaced Ms. Chen Weijie, who resigned as director and Chief Operating Officer of the Company on December 5, 2017, and Mr. Jacek P. Skurtys, who resigned from his executive positions on December 5, 2017.


Mr. Liong Fook Weng, age 46, was born in Malaysia and received his master’s degree in Business Administration from the University of Durham, the United Kingdom, he also has his business certificate in hospitality from Michigan State University, USA. Since 1991, Mr. Liong has held many senior management positions in several publicly listed and privately owned companies within the manufacturing, and ecommerce industries. He has more than 20 years experience in managing the companies and contributing to their expansion plans through streamlining their financial strategies or corporate restructuring.


To fill the vacancy resulting from Mr. Skurtys’s resignation the Company appointed Mr. Lim, Hun Beng, as its Chief Executive Officer and President.


Mr. Skurtys continues to serve on the Company’s board of directors.


Business of Vgrab Communications


Our business involves the development of mobile applications for merchant and consumer use.  We have two different types of mobile applications, an application designed for consumers (the “Vgrab Application”) and an application designed for merchants (the “Vgrab Merchant Application”). We also have an online platform that we are developing to sell online goods (the “Vmore Platform”), and are working on addition of a new video service portal, Vmore Video, which will focus on filming and supplying HD and 360-degree short videos with an emphasis on sports and extreme sports. In addition, we provide marketing services to merchants including advertising on our website and in our newsletters.  


The Vgrab Application: The Vgrab Application is a free mobile voucher application developed for smartphones using the Android and Apple iOS operating systems and allows users to redeem vouchers on their smartphones at a number of retailers and merchants.  Users that download the app and sign up for a free Vgrab account will be provided with vouchers for discounts and other promotions on certain products and services.  Vgrab’s users will have access to an array of exclusive products and/or services that will be available for purchase using accumulated Vgrab “points” and/or through various e-commerce payment methods. The available products will be tailored - statistically - to a user’s buying preferences both in proposed variety and value range.


The Vgrab Merchant Application: The Vgrab Merchant Application is a user-friendly mobile application for merchants who wish to advertise their products and services. We provide a platform which enables them to dynamically create and publish their vouchers for products/services all in one single merchant application. The use of vouchers will allow merchants to gain more publicity through distribution of free vouchers to users of Vgrab Application.


The Vmore Platform: The Vmore Platform is an online shopping website in Malaysia. The website is designed to allow merchants to sell their goods to website visitors. Visitors who sign up for a paid membership will have access to an exclusive selection of goods and services. The platform itself, among other technologies, will incorporate geo-targeted advertising and user data statistical analysis, which will enable us to provide our customers with highly personalized content.  





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The Vmore Video: Vmore Video is currently in an early development stage. It is being designed as an online video streaming service where viewers from all around the world will be able to upload, search for and view short sports and extreme sports videos in high definition as well as using the latest trend of 360-degree video. With the ever-growing need for social media, Vmore Video will utilize many of the popular social media sites to showcase its business and services, and to drive further traffic to Vgrab’s online platform. As additional service, Vmore Video will provide professional editorial services by its newly assembled production team tasked with reviewing uploaded clips and editing the content to improve their quality and content with latest trends as they emerge in today’s fast pace world of technology.


Our applications and the platform will be able to connect both consumer and business in a seamless way bringing significant value and exclusivity. By improving Vgrab technology we will be able to filter information about consumer and merchant browsing behavior. This will allow our customers to create and save electronic shopping lists including available to them vouchers without a need to print or cut coupons. In addition, our cloud sharing technology will be able to deliver to our customers and merchants various information packages.


Our primary markets for our products are currently located in Asia, focusing mainly on Malaysia.


During January 2018, our new management team led by Mr. Lim Hun Beng, the Company’s President and Chief Executive Officer, together with Mr. Liong Fook Weng, the Company’s Chief Financial Officer, conducted an overall review of the Company’s strategic plans with a view to complement and enhance the current and new business plans and goals.


The management decided that the Company will retain its current core business strategies which comprise Vgrab and Vmore marketing and advertising platforms; in addition, the new management team sees an opportunity to add several additional business units which will allow expanding the current business platforms, directly or through strategic partnerships, to new markets. Some of the markets that the Company is considering are healthy lifestyles and ecommerce, as well as geographical expansion to South East Asia and China.  The development of the new business strategies will begin in the second quarter of our Fiscal 2018.


Our Strategy


Our main strategy is the continued development, improvement, innovation and marketing of our Vgrab mobile applications, software and online merchant platforms (collectively, “Vgrab Products”). Once development is finished and refined, we will focus on making Vgrab a destination for consumers to find deals on goods and services, as well as interact with each other. Key elements of our strategy include, but are not limited to:


(1)

enhancing consumer and merchant experience;

(2)

marketing our Vgrab Products;

(3)

global expansion; and

(4)

becoming the first place consumers look for deals on goods and services.


Our expenditures for the next fiscal year will primarily be associated with the continuous development and testing of our Vgrab Applications and their various elements and functionalities, as well as development and enhancement of the Vmore Platform along with integration of the Vmore Video service. For some specific or highly specialized components, including but not limited to statistical analysis, data protection, software development and web utilization, we may have to seek a top end professional assistance from a third parties both in Malaysia and in the US.


Additional funding will be required in order to start strategic expansion of the current business platforms in accordance with the new strategic plan and the goals introduced by our new Management team.


Distribution


We will distribute our vouchers to customers primarily through four channels: our mobile platform, our website, email and social media. Our mobile platform consists of mobile apps which we currently offer on iOS and Android devices.  We will also provide a website via our Vmore Platform which is available on the world wide web.




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Competition


The online marketing and voucher industry is a competitive industry. We do not have a strong position in Asia or in Malaysia. We also compete with traditional marketing providers and traditional brick and mortar retailers. Our competitors include companies that have substantially greater financial resources, staff and facilities than us. Our failure to obtain and maintain a competitive position within the market could have a materially adverse effect on our business, financial condition and results of operations.


Government Regulations


We are subject to a number of foreign and domestic laws and regulations that affect companies conducting business on the Internet. Additionally, these laws and regulations may be interpreted differently across domestic and foreign jurisdictions. As a company in a new industry, we are exposed to certain risks that many of these laws may change and are subject to uncertain interpretations. These laws and regulations may involve intellectual property, product liability and consumer protection, distribution, competition, online payment and point of sale services, employee, merchant and customer privacy and data security, taxes or other areas.


Patents and Trademarks


Our Vgrab name has been trade marked under the registration certificate no 2014002852. The registration gives us non-exclusive right to use a letter “V”. The trademark is valid until March 14, 2024.


Dependence on Major Customers


We do not have major customers.

 

Research and Development


During the fiscal year ended October 31, 2017, we incurred $180,000 (2016 - $150,000) on development of Vgrab application, software and online merchant platforms.  


Number of Total Employees and Number of Full Time Employees


We currently have no employees other than our executive officers.


ITEM 1A: RISK FACTORS


IN ADDITION TO THE FACTORS DISCUSSED ELSEWHERE IN THIS ANNUAL REPORT, THE FOLLOWING RISKS AND UNCERTAINTIES COULD MATERIALLY ADVERSELY AFFECT OUR BUSINESS, FINANCIAL CONDITION AND RESULTS OF OPERATIONS.  ADDITIONAL RISKS AND UNCERTAINTIES NOT PRESENTLY KNOWN TO US OR THAT WE CURRENTLY DEEM IMMATERIAL ALSO MAY IMPAIR OUR BUSINESS OPERATIONS AND FINANCIAL CONDITION.


We lack an operating history and have losses which we expect to continue into the future. As a result, we may have to suspend or cease our operations and if we do not obtain sufficient financing, our business will fail.


We were incorporated on August 4, 2010, however as of the date of the filing of this Annual Report on Form 10-K we were not successful in achieving profitability through our operations.


Our ability to achieve and maintain profitability and positive cash flow from our operations is dependent upon: (i) our ability to obtain and retain customers, (ii) attract and retain merchants who wish to offer deals through our Vgrab Application, (iii) react to challenges from existing and new competitors; and (iv) increase the awareness of our brand domestically and internationally.





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In order to continue our operations we will be required to raise additional capital through financing, which would be subject to a number of factors, including market fluctuations, customer confidence, and general economic condition.  These factors may make the timing, amount, terms or conditions of additional financing unavailable to us.  Since our inception, we have used our common shares to raise money for our operations. We have not attained profitable operations and are dependent upon obtaining financing to pursue our plan of operation.


Because we are a development stage company, our business has a high risk of failure.


We are a development stage company that has incurred net losses since inception, we have not attained profitable operations and we are dependent upon obtaining adequate financing to carry out our business activities.  The success of our business operations will depend upon our ability to obtain further financing to complete our planned development and marketing programs and to attain profitable operations. Development stage companies encounter difficulties in generating revenue from services that are provided based on the applications installed on smart phones, and the risk of failure of these companies is high.  If we are not able to complete a successful development and marketing programs and attain sustainable profitable operations, then our business will fail.


We have determined there is substantial doubt about our ability to continue as a going concern; as a result we could have difficulty finding additional financing.


Our interim consolidated financial statements have been prepared assuming that we will continue as a going concern. We have not generated any revenue from our main operations since inception and have accumulated losses. Our ability to continue our operations depends on our ability to complete equity or debt financings or generate profitable operations. Such financings may not be available or may not be available on reasonable terms. Our financial statements do not include any adjustments that could result from the outcome of this uncertainty.

 

Because our largest shareholder, Hampshire Avenue SDN. BHD. (“Hampshire Avenue”) controls over 66% of our outstanding common stock, investors may find that corporate decisions influenced by Hampshire are inconsistent with the best interests of other stockholders.


Hampshire Capital Limited controls 57% of the issued and outstanding shares of our common stock and Hampshire Infotech Sdn. controls 9% of the issued and outstanding shares of our common stock. Hampshire Avenue is a parent company of Hampshire and Hampshire Infotech and, accordingly, beneficially controls 66% or our common stock (for greater clarity, Hampshire Avenue and its subsidiaries are referred to in this Form 10-K as “Hampshire Group”). In accordance with our Articles of Incorporation and Bylaws, Hampshire Group is able to control who is elected to our board of directors and thus could act, or could have the power to act, as our management.


The interests of Hampshire Group may not be, at all times, the same as those of other shareholders. Hampshire Group has the ability to significantly influence the outcome of most corporate actions requiring shareholder approval, including the merger of our company with or into another company, the sale of all or substantially all of our assets and amendments to our Articles of Incorporation. This concentration of ownership with Hampshire Group may also have the effect of delaying, deferring or preventing a change in control of Vgrab which may be disadvantageous to minority shareholders.


We face intense competition.

 

Our business is evolving and intensely competitive, and is subject to changing technology, shifting user needs, and frequent introductions of new products and services.


We expect competition in e-commerce generally, and group buying in particular, to continue to increase. Our current and potential competitors range from large and established companies to emerging start-ups. Established companies have longer operating histories and more established relationships with customers and users, and they can use their experience and resources against us in a variety of competitive ways, including acquisitions, investing aggressively in research and development, and competing aggressively for advertisers and websites.


If our competitors are more successful than we are in developing compelling products or in attracting and retaining users, advertisers, and content providers, our potential for generating revenues and growth rates could decline.




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Our success is dependent upon our ability to provide a superior mobile experience for our customers and merchants.


In order to continue to grow our mobile transactions, it is critical that our application works well with a range of mobile technologies, systems, networks and standards. Our business may be adversely affected if our customers choose not to access our offerings on their mobile devices, or use mobile devices that do not offer access to our mobile applications. Similarly, our business may suffer if our merchants choose not to advertise through our application.


We may be subject to claims that we violated intellectual property rights of others, which claims are extremely costly to defend and could require us to pay significant damages and limit our ability to operate.


Companies in the Internet and technology industries, and other patent and trademark holders seeking to profit from royalties in connection with grants of licenses, own large numbers of patents, copyrights, trademarks and trade secrets and frequently enter into litigation based on allegations of infringement or other violations of intellectual property rights.  We acquired the Vgrab Application from an original developer, however, there may be intellectual property rights held by others, including patents, copyrighted works and/or trademarks, which cover significant aspects of our technology. Any intellectual property claim against us, regardless of merit, could be time consuming and expensive to settle or litigate and could divert management’s attention and other resources. These claims also could subject us to significant liability for damages and could result in our having to stop using technology or content found to be in violation of another party’s rights. We might be required or may opt to seek a license for rights to intellectual property held by others, which may not be available on commercially reasonable terms, or at all. Even if a license is available, we could be required to pay significant royalties, which would increase our operating expenses. We may also be required to develop alternative non-infringing technology, or content, which could require significant effort and expense and make us less competitive in the relevant market. Any of these results could harm our business and financial performance.


We have a limited number of products.


We are reliant on the marketing and sale of our Vgrab Applications and Vmore Platform.  If these products do not achieve sufficient market acceptance, it will be difficult for us to achieve consistent profitability.


If our software is defective, it will adversely affect our business.


Our Vgrab Application may contain undetected errors, defects or bugs. Although we have not suffered significant harm from any errors, defects or bugs to date, we may discover significant errors, defects or bugs in the future that we may not be able to correct or correct in a timely manner.


It is possible that errors, defects or bugs will be found in our existing or future software products and related services with the possible results of delays in, or loss of market acceptance of, our products and services, diversion of our resources, injury to our reputation, increased service and warranty expenses and payment of damages.


We have limited brand awareness and there is no assurance that we will be able to achieve brand awareness.


We have achieved limited brand awareness with respect to our Vgrab Applications.  There is no assurance that we will be able to achieve brand awareness.  In addition, we must develop a successful market for our products in order to complete sales. If we are not able to develop successful markets for our products, then such failure will have a material adverse effect on our business, financial condition and operating results.


We sometimes hold a significant portion of our cash in United States dollars, which could weaken our purchasing power in other currencies and limit our ability to conduct our development programs.


Currency fluctuations could affect the costs of our operations and affect our operating results and cash flows.  The appreciation of Canadian dollar against the U.S. dollar can increase the costs of our operations.




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If we are unable to hire and retain key personnel, we may not be able to implement our business plan and our business will fail.


Our success will largely depend on our ability to hire highly qualified personnel with experience in marketing, programming, data architecture and design. These individuals may be in high demand and we may not be able to attract the staff we need. In addition, we may not be able to afford the high salaries and fees demanded by qualified personnel, or may lose such employees after they are hired. Currently, we have not hired any key personnel. Our failure to hire key personnel when needed could have a significant negative effect on our business.


The JOBS Act allows us to postpone the date by which we must comply with certain laws and regulations and reduces the amount of information provided in reports filed with the SEC. We cannot be certain if the reduced disclosure requirements applicable to “emerging growth companies” may make our common stock less attractive to investors.


We are and we will remain an "emerging growth company" until the earliest of (i) the last day of the fiscal year during which our total annual revenues equal or exceed $1 billion (subject to adjustment for inflation), (ii) the last day of the fiscal year following the fifth anniversary of our initial public offering, (iii) the date on which we have, during the previous three-year period, issued more than $1 billion in non-convertible debt securities, or (iv) the date on which we are deemed a "large accelerated filer" (with at least $700 million in public float) under the Exchange Act. For so long as we remain an "emerging growth company" as defined in the JOBS Act, we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not "emerging growth companies" as described in further detail in the risk factors below. There may be a situation where investors may find our common stock less attractive because we rely on some or all of these exemptions. If some investors find our common stock less attractive as a result, we may experience decreased trading market for our common stock making our stock price more volatile. Since we avail ourselves of certain exemptions from various reporting requirements, our reduced disclosure may make it more difficult for investors and securities analysts to evaluate us and may result in less investor confidence.


Our election not to opt out of JOBS Act extended accounting transition period may not make its financial statements easily comparable to other companies.

 

Pursuant to the JOBS Act, as an “emerging growth company”, we can elect to opt out of the extended transition period for any new or revised accounting standards that may be issued by the Public Company Accounting Oversight Board (PCAOB) or the SEC. We have elected not to opt out of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, our company, as an “emerging growth company”, can adopt the standard for the private company. This may make comparison of our financial statements with any other public company which is not either an “emerging growth company” nor an “emerging growth company” which has opted out of using the extended transition period difficult or impossible, as possible different or revised standards may be used.


The JOBS Act also allows our company to postpone the date by which we must comply with certain laws and regulations intended to protect investors and to reduce the amount of information provided in reports filed with the SEC.

 

The JOBS Act is intended to reduce the regulatory burden on “emerging growth companies”. We meet the definition of an “emerging growth company” and so long as we qualify as an “emerging growth company,” we will, among other things:

 

·

be exempt from the provisions of Section 404(b) of the Sarbanes-Oxley Act requiring that its independent registered public accounting firm provide an attestation report on the effectiveness of its internal control over financial reporting;


·

be exempt from the "say on pay” provisions (requiring a non-binding shareholder vote to approve compensation of certain executive officers) and the "say on golden parachute” provisions (requiring a non-binding shareholder vote to approve golden parachute arrangements for certain executive officers in connection with mergers and certain other business combinations) of The Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) and certain disclosure requirements of the Dodd-Frank Act relating to compensation of Chief Executive Officers;



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·

be permitted to omit the detailed compensation discussion and analysis from proxy statements and reports filed under the Exchange Act, as amended and instead provide a reduced level of disclosure concerning executive compensation; and


·

be exempt from any rules that may be adopted by the PCAOB requiring mandatory audit firm rotation or a supplement to the auditors report on the financial statements.

 

We have been implementing all of the reduced regulatory and reporting requirements that are available to the Company under the JOBS Act. We have elected not to opt out of the extension of time to comply with new or revised financial accounting standards available under Section 102(b)(1) of the JOBS Act. Among other things, this means that our independent registered public accounting firm is not required to provide an attestation report on the effectiveness of our internal control over financial reporting so long as we qualify as an “emerging growth company”, which may increase the risk that weaknesses or deficiencies in the internal control over financial reporting go undetected. Likewise, so long as we qualify as an “emerging growth company”, we may elect not to provide certain information, including certain financial information and certain information regarding compensation of executive officers, which would otherwise have been required to be provided in filings with the SEC, which may make it more difficult for investors and securities analysts to evaluate us. As a result, investor confidence in our company and the market price of our common stock may be adversely affected.

 

Notwithstanding the above, we are also currently a “smaller reporting company”, meaning that we are not an investment company, an asset-backed issuer, or a majority-owned subsidiary of a parent company that is not a smaller reporting company and have a public float of less than $75 million and annual revenues of less than $50 million during the most recently completed fiscal year. In the event that we are still considered a “smaller reporting company”, at such time we cease being an “emerging growth company”, the disclosure we will be required to provide in our SEC filings will increase, but will still be less than it would be if we were not considered either an “emerging growth company” or a “smaller reporting company”.  Specifically, similar to “emerging growth companies”, “smaller reporting companies” are able to provide simplified executive compensation disclosures in their filings; are exempt from the provisions of Section 404(b) of the Sarbanes-Oxley Act requiring that independent registered public accounting firms provide an attestation report on the effectiveness of internal control over financial reporting; are not required to conduct say-on-pay and frequency votes until annual meetings occurring on or after January 21, 2013; and have certain other decreased disclosure obligations in their SEC filings, including, among other things, only being required to provide two years of audited financial statements in annual reports.  Decreased disclosures in our SEC filings due to our status as an “emerging growth company” or “smaller reporting company” may make it harder for investors to analyze the Company’s results of operations and financial prospects.


Because majority of our directors are not independent they can make and control corporate decisions that may be disadvantageous to other common shareholders.


Our shares of common stock are listed on OTC Markets inter-dealer quotation system, which does not have director independence requirements. For the purpose of determining director independence, we have adopted the independence requirements of Canadian National Instrument 52-110 - Audit Committees (“NI 52-110”) as we are an OTC reporting issuer in the province of British Columbia. NI 52-110 recommends that the Board of Directors of a public company be constituted with a majority of individuals who qualify as “independent” directors. An “independent” director is a director who has no direct or indirect material relationship with us. A material relationship is a relationship, which could, in the view of the Board of Directors, reasonably interfere with the exercise of a director’s independent judgment. Only one of our current directors, Mr. Ong, See-Ming can be considered independent.  Lim Hun Beng is not an independent director because of his controlling position with Hampshire Avenue, our majority shareholder. Jacek (Jack) Skurtys is not an independent director because of his former position as CEO, CFO and President of the Company. Mr. Liong Fook Weng is not an independent director because of his current position as CFO and Secretary of the Company.


We do not expect to declare or pay dividends in the foreseeable future.


We have never paid cash dividends on our common stock and have no plans to do so in the foreseeable future. We intend to retain any earnings to develop, carry on, and expand our business.




-8-



“Penny stock” rules may make buying or selling our common stock difficult, and severely limit its marketability and liquidity.


Because our securities are considered a penny stock, shareholders will be more limited in their ability to sell their shares. The SEC has adopted rules that regulate broker-dealer practices in connection with transactions in penny stocks. Penny stocks are generally equity securities with a price of less than $5.00, other than securities registered on certain national securities exchanges or quoted on the Nasdaq system, provided that current price and volume information with respect to transactions in such securities is provided by the exchange or quotation system. Because our securities constitute “penny stocks” within the meaning of the rules, the rules apply to us and to our securities. The rules may further affect the ability of owners of shares to sell our securities in any market that might develop for them. As long as the trading price of our common shares is less than $5.00 per share, the common shares will be subject to Rule 15g-9 under the Exchange Act. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock, to deliver a standardized risk disclosure document prepared by the SEC, that:


1.

contains a description of the nature and level of risk in the market for penny stocks in both public offerings and secondary trading;

2.

contains a description of the broker’s or dealer’s duties to the customer and of the rights and remedies available to the customer with respect to a violation to such duties or other requirements of securities laws;

3.

contains a brief, clear, narrative description of a dealer market, including bid and ask prices for penny stocks and the significance of the spread between the bid and ask price;

4.

contains a toll-free telephone number for inquiries on disciplinary actions;

5.

defines significant terms in the disclosure document or in the conduct of trading in penny stocks; and

6.

contains such other information and is in such form, including language, type, size and format, as the SEC shall require by rule or regulation.


The broker-dealer also must provide, prior to effecting any transaction in a penny stock, the customer with: (a) bid and offer quotations for the penny stock; (b) the compensation of the broker-dealer and its salesperson in the transaction; (c) the number of shares to which such bid and ask prices apply, or other comparable information relating to the depth and liquidity of the market for such shares; and (d) a monthly account statements showing the market value of each penny stock held in the customer’s account. In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from those rules; the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written acknowledgment of the receipt of a risk disclosure statement, a written agreement to transactions involving penny stocks, and a signed and dated copy of a written suitably statement. These disclosure requirements may have the effect of reducing the trading activity in the secondary market for our shares.


ITEM 1B: UNRESOLVED STAFF COMMENTS


None.


ITEM 2: PROPERTIES


We currently do not own any real property.  Our executive office is located at 820-1130 Pender Street West, Vancouver, British Columbia, V6E 4A4, and consists of approximately 25 square feet, which are provided to us free of charge.


Our Subsidiary’s executive office is located at Kensington Gardens, No U1317, Lot 7616, Jalan Jumidar Buyong, 87000 Labuan, Malaysia.


ITEM 3: LEGAL PROCEEDINGS


We are not a party to any pending legal proceedings and, to the best of our knowledge, none of our claims or assets are the subject of any pending legal proceedings.


ITEM 4: MINE SAFETY DISCLOSURES


Not applicable.



-9-




PART II


ITEM 5: MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES


Market Information.


Our common stock commenced trading on OTC Markets inter-dealer quotation system under the symbol VZAGF on March 8, 2013. On January 8, 2014, we changed our name to CoreComm Solutions Inc. and our stock symbol changed to COCMF; on February 11, 2015, we changed our name to Vgrab Communications Inc. and our stock symbol changed to VGRBF effective February 13, 2015.


The table below gives the high and low bid information for each fiscal quarter for the last two fiscal years. The bid information was obtained from OTC Markets Group Inc. and reflects inter-dealer prices, without retail mark-up, mark-down or commission, and may not represent actual transactions.


Table 1: High and low bids

 

High

Low

Fiscal quarters ended:

 

 

October 31, 2017

$0.148

$0.03

July 31, 2017

$0.12

$0.05

April 30, 2017

$0.14

$0.05

January 31, 2017

$0.05

$0.025

October 31, 2016

$0.14

$0.04

July 31, 2016

$0.14

$0.05

April 30, 2016

$0.17

$0.07

January 31, 2016

$0.16

$0.09


Holders


As of February 9, 2018, we had 38 shareholders of record according to a shareholders’ list provided by our transfer agent. This number does not include an indeterminate number of shareholders whose shares are held by brokers in street name. Our transfer agent is Empire Stock Transfer with an address at 1859 Whitney Mesa Dr. Henderson, Nevada, 89014 and their phone number is 702-818-5898.


Dividend Policy


We have never declared, nor paid, any dividend since our incorporation and do not foresee paying any dividends in the near future since all available funds will be used to develop and market our business.  Any future payment of dividends will depend on our financing requirements and financial condition and other factors which the board of directors, in its sole discretion, may consider appropriate.


Under the Business Corporations Act, we are prohibited from declaring or paying dividends if there are reasonable grounds for believing that we are insolvent or the payment of dividends would render us insolvent.

 

Recent Sales of Unregistered Securities


Not applicable


ITEM 6: SELECTED FINANCIAL DATA.

 

Not applicable.





-10-




ITEM 7: MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS


Summary of financial condition

 

Table 2: Comparison of financial condition

  

October 31, 2017

 

October 31, 2016

Working capital deficit

$

(392,986)

 

$

(116,076)

Current assets

$

19,988

 

$

42,196

Total liabilities

$

412,974

 

$

158,272

Common stock and additional paid in capital

$

5,421,470

 

$

5,421,470

Deficit

$

(5,865,739)

 

$

(5,575,872)

Accumulated other comprehensive income

$

51,283

 

$

38,326


Results of operations

 

YEARS ENDED OCTOBER 31, 2017 AND 2016

 

Our operating results for the years ended October 31, 2017 and 2016 and the changes in our operating results between them are summarized in the table 3 below.


Table 3: Summary

 

Year ended

October 31,

 

Percentage

increase /

 

2017

2016

 

(decrease)

Operating expenses

$

(273,695)

$

(268,610)

 

2%

Finder’s fee

 

-

 

(80,000)

 

(100)%

Foreign exchange

 

(15,922)

 

5,999

 

(365)%

Gain on debt conversion

 

-

 

20,611

 

(100)%

Interest

 

(250)

 

(241)

 

4%

Net loss

 

(289,867)

 

(322,241)

 

(10)%

Translation to reporting currency

 

12,957

 

(8,121)

 

260%

Comprehensive loss

$

(276,910)

$

(330,362)

 

(16)%


Revenue


During the years ended October 31, 2017 and 2016 we did not have any revenue generating operations.  We are presently in the early development stage of our operations, with our main business goal being software application development, marketing and distribution. We can provide no assurances that we will be able to generate enough cash flow from our operations to support our ongoing operations.


Operating Expenses


Our operating expenses for the years ended October 31, 2017 and 2016 consisted of the following:


Table 4: Changes in operating expenses

 

Year ended

October 31,

 

Percentage

increase /

 

2017

2016

 

(decrease)

Operating expenses:

 

 

 

 

Accounting

$

16,734

$

17,805

 

(6)%

General and administrative expenses

 

47,677

 

74,928

 

(36)%

Professional fees

 

8,013

 

9,899

 

(19)%

Regulatory and filing

 

21,271

 

15,978

 

33%

Research and development

 

180,000

 

150,000

 

20%

 

$

(273,695)

$

(268,610)

 

2%




-11-



Our operating expenses increased by $5,085, or 2%, from $268,610 for the year ended October 31, 2016 to $273,695 for the year ended October 31, 2017. The most significant change in our operating expenses was associated with increased research and development costs of $30,000 (from $150,000 during the year ended October 31, 2016 to $180,000 during the year ended October 31, 2017), followed by increase in regulatory and filing fees of $5,293 or 33% (from $15,978 in our Fiscal 2016 to $21,271 we incurred in our Fiscal 2017). These increases were in part offset by decreased general and administrative fees of $47,677 (2016 - $74,928), accounting fees of $16,734 (2016 - $17,805), and professional fees of $8,013 ($2016 - $9,899).


Other Items


During the year ended October 31, 2016, we recorded $80,000, being a fair value of 500,000 common shares we issued to a company controlled by Mr. Ralph Biggar our shareholder, and former director and officer.


On July 11, 2016, we reached an agreement to convert $49,467 we owed to a third party into 412,226 restricted common shares of the Company at a deemed price of $0.12 per share. At the time of the conversion, the fair market value of our common shares was $0.07 per share, which resulted in a gain of $20,611 on conversion of debt.


During the year ended October 31, 2017, we recorded $15,922 in realized foreign exchange losses associated with the fluctuation in foreign exchange between the US and Canadian currencies. In our Fiscal 2016, we recorded $5,999 in realized foreign exchange gains associated with the fluctuation in foreign exchange between the US and Canadian currencies.


During the year ended October 31, 2017, we recorded $250 in interest associated with our liabilities under the notes payable we issued to our major shareholder. During the comparative year ended October 31, 2016, we recorded $241 in interest associated with our liabilities under the notes payable we issued to our major shareholder.


Translation to Reporting Currency


Changes in translation to reporting currency result from a difference between our functional currency, being the Canadian dollar, and reporting currency, being the United States dollar, and are caused by fluctuation in foreign exchange between the two currencies as well as different accounting treatments between various financial instruments.


Liquidity


GOING CONCERN


The audited consolidated financial statements included in this Annual Report have been prepared on a going concern basis, which implies that we will continue to realize our assets and discharge our liabilities in the normal course of business. We have not generated any revenues from operations since inception, have never paid any dividends and are unlikely to pay dividends or generate significant earnings in the immediate or foreseeable future. Our continuation as a going concern depends upon the continued financial support of our shareholders and management, our ability to obtain necessary debt or equity financing to continue operations, and the attainment of profitable operations. Based upon our current plans, we expect to incur operating losses in future periods. At October 31, 2017, we had a working capital deficit of $392,986 and accumulated losses of $5,865,739 since inception. These factors raise substantial doubt about our ability to continue as a going concern. We cannot assure you that we will be able to generate significant revenues in the future. The consolidated financial statements included with this Annual Report on Form 10-K do not give effect to any adjustments that would be necessary should we be unable to continue as a going concern. Therefore, we may be required to realize our assets and discharge our liabilities in other than the normal course of business and at amounts different from those reflected in our financial statements.







-12-



INTERNAL AND EXTERNAL SOURCES OF LIQUIDITY


Table 5: Working Capital

 

 

At October 31, 2017

 

At October 31, 2017

Current assets

 

$

19,988

 

$

42,196

Current liabilities

 

 

(412,974)

 

 

(158,272)

Working capital deficit

 

$

(392,986)

 

$

(116,076)


During the year ended October 31, 2017, our working capital deficit increased by $276,910, from $116,076 at October 31, 2016 to $392,986 at October 31, 2017. The increase in working capital deficit was primarily related to the increase in accounts payable for software development costs as well as amounts due to related parties.


Table 6: Cash Flows

 

At October 31, 2017

 

At October 31, 2016

Net cash used in operating activities

$

(57,581)

 

$

(87,983)

Net cash provided by financing activities

 

35,841

 

 

126,527

Effect of exchange rate changes on cash

 

572

 

 

(5,240)

Net increase (decrease) in cash

$

(21,168)

 

$

33,304


Net cash used in operating activities. During the year ended October 31, 2017, we used $57,581 to support our operating activities. This cash was used to cover our cash operating expenses of $273,228. This use of cash was offset by decreases in GST recoverable and prepaid expenses of $791 and $404, respectively, and by increases in accounts payable and accrued liabilities of $213,724, and amounts due to related parties of $728.


During the year ended October 31, 2016, we used $87,983 to support our operating activities. This cash was used to cover our cash operating expenses of $234,111, to increase our GST recoverable and prepaid expenses by $621 and $1,888, respectively, and to reduce our accounts payable and accrued liabilities by $1,363. These uses of cash were offset by increased amounts due to related parties of $150,000.


Non-cash operating activities. During the year ended October 31, 2017, we recorded $16,389 in foreign exchange fluctuation between the US and Canadian currencies.


During the year ended October 31, 2016, we issued 500,000 shares of our common stock to a consultant for introducing us to Hampshire Capital Limited, the Vendor of the Vgrab Application. The fair value of these shares was determined to be $80,000 and was recorded as finder’s fees. During the same period we issued 300,000 shares of our common stock to our director as part of his resignation package. The shares were valued at $28,500 and were recorded as non-cash consulting fees. In addition, we recorded $20,611 gain on conversion of debt to an arms length party, when we settled $49,467 with 412,226 shares of our common stock with a fair market value of $28,856.


Net cash provided by financing activities. During the year ended October 31, 2017, we received $35,841 as proceeds from the loan agreements with Hampshire Avenue SDN BHD, a parent company of Hampshire Group. The loans bear interest at 4% per annum, are unsecured and payable on demand.


During the year ended October 31, 2016, we received $26,527 as proceeds from the loan agreements with Hampshire Avenue SDN BHD, a parent company of Hampshire Group. The loans bore interest at 4% per annum, were unsecured and payable on demand. These loans were converted to shares of our common stock as part of the debt settlement agreement with Hampshire Infotech Sdn. During the same period we received $100,000 in exchange for a non-interest bearing note payable to an unrelated party.


Capital Resources


Our ability to continue the development and marketing of the Vgrab Applications and Vmore Platform is subject to our ability to obtain the necessary funding.  We expect to raise funds through sales of our debt or equity securities. We have no committed sources of capital.  If we are unable to raise funds as and when we need them, we may be required to curtail, or even to cease, our operations.




-13-



As of October 31, 2017, we had cash on hand of $15,887 and working capital deficit of $392,986, which raises substantial doubt about our continuation as a going concern. We plan to mitigate our losses in future years by controlling our operating expenses and actively seeking new distribution channels for our Vgrab Applications. We cannot provide assurance that we will be successful in generating additional capital to support our development. The financial statements do not include any adjustments that might result from the outcome of these uncertainties.


Contingencies and Commitments

 

We had no contingencies at October 31, 2017.  


Off-Balance Sheet Arrangements

 

We have no off-balance sheet arrangements and no non-consolidated, special-purpose entities.

 

Critical Accounting Policies


The preparation of financial statements in conformity with United States generally accepted accounting principles requires our management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Our management routinely makes judgments and estimates about the effects of matters that are inherently uncertain.  


The JOBS Act contains provisions that, among other things, reduce certain reporting requirements for qualifying public companies.  As an “emerging growth company,” we may, under Section 7(a)(2)(B) of the Securities Act, delay adoption of new or revised accounting standards applicable to public companies until such standards would otherwise apply to private companies. We may take advantage of this extended transition period until the first to occur of the date that we (i) are no longer an "emerging growth company" or (ii) affirmatively and irrevocably opt out of this extended transition period. We have elected to take advantage of the benefits of this extended transition period. Our consolidated financial statements may therefore not be comparable to those of companies that comply with such new or revised accounting standards. Until the date that we are no longer an "emerging growth company," affirmatively and irrevocably opt out of the exemption provided by Securities Act Section 7(a)(2)(B), or upon issuance of a new or revised accounting standard that applies to our financial statements and that has a different effective date for public and private companies, we will disclose the date on which adoption is required for non-emerging growth companies and the date on which we will adopt the recently issued accounting standard.


Our significant accounting policies are disclosed in the notes to the audited consolidated financial statements for the year ended October 31, 2017 The following accounting policies have been determined by our management to be the most important to the portrayal of our financial condition and results of operation:


Principles of Consolidation


The Company’s audited consolidated financial statements include the accounts of the Company and the Subsidiary. On consolidation, the Company eliminates all intercompany balances and transactions.


Internal-Use Software


The Company incurs costs related to the development of its Vgrab Applications and Vgrab.com website. Costs incurred in the planning and evaluation stage of internally-developed software and website, as well as development costs where economic benefit cannot be readily determined, are expensed as incurred. Costs incurred and accumulated during the development stage, where economic benefit of the software can be readily determined, are capitalized and included as part of Intangible assets on the balance sheets. Additional improvements to the web site and applications following the initial development stage are expensed as incurred. Capitalized internally-developed software and website development costs will be amortized over their expected economic life using the straight-line method.





-14-



Foreign Currency Translation and Transaction


The Company’s functional currency is the Canadian dollar and reporting currency is the United States dollar. The Company translates assets and liabilities to US dollars using year-end exchange rates, and translates revenues and expenses using average exchange rates during the period. Gains and losses arising on translation to the reporting currency are included in the other comprehensive income.


The Subsidiary’s functional and reporting currency is the United States dollar.


Foreign exchange gains and losses on the settlement of foreign currency transactions are included in foreign exchange expense. Except for translations of intercompany balances, all translations of monetary balances to the functional currency at the year end exchange rate are included in foreign exchange expense. The translations of intercompany balances to the functional currency at the year end exchange rate are included in accumulated other comprehensive income or loss.  


Fair Value of Financial Instruments


Our financial instruments include cash, accounts payable and accrual as well as amounts due to related parties. We believe the fair value of these financial instruments approximate their carrying values due to their short-term nature.


Concentration of Credit Risk


Financial instruments that potentially subject us to significant concentrations of credit risk consist principally of cash and trade accounts receivable.


At October 31, 2017, we had $15,887 in cash on deposit with a large chartered Canadian bank, of which $15,145 was insured.  As part of our cash management process, we perform periodic evaluations of the relative credit standing of this financial institution.  We have not experienced any losses in cash balances and do not believe we are exposed to any significant credit risk on our cash.


ITEM 7A: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 

Not Applicable.


ITEM 8: FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

 

Index to Financial Statements

 

Page No.

 

 

Report of Independent Registered Public Accounting Firm

F-1

Consolidated Balance Sheets as of October 31, 2017 and 2016

F-2

Consolidated Statements of Operations for the years ended October 31, 2017 and 2016

F-3

Consolidated Statement of Stockholders’ Deficit as of October 31, 2017 and 2016

F-4

Consolidated Statements of Cash Flows for the years ended October 31, 2017 and 2016

F-5

Notes to the Consolidated Financial Statements

F-6











-15-




[vgrbf10k1.jpg]



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM


To the Stockholders and Board of Directors of VGrab Communications Inc.


We have audited the accompanying consolidated balance sheets of VGrab Communications Inc. (the “Company”) as at October 31, 2017 and 2016 and the related consolidated statements of operations, stockholders’ deficit and cash flows for the years then ended. These consolidated 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 audits.


We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform an audit to obtain reasonable assurance whether the consolidated 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 consolidated financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.


In our opinion, based on our audits, these consolidated financial statements present fairly, in all material respects, the financial position of the Company as at October 31, 2017 and 2016 and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.


The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the consolidated financial statements, the Company has incurred losses in developing its business, and further losses are anticipated. The Company requires additional funds to meet its obligations and the costs of its operations. These factors raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in this regard are described in Note 1. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.


/s/ DMCL LLP


DALE MATHESON CARR-HILTON LABONTE LLP

CHARTERED PROFESSIONAL ACCOUNTANTS


Vancouver, Canada

February 12, 2018



An independent firm associated with

Moore Stephens International Limited

MOORE STEPHENS



F-1




VGRAB COMMUNICATIONS INC.

CONSOLIDATED BALANCE SHEETS

(EXPRESSED IN US DOLLARS)



 

October 31, 2017

 

October 31, 2016

 

 

 

 

ASSETS

 

 

 

 

 

 

 

Current assets

 

 

 

  Cash

$

15,887

 

$

37,055

  GST recoverable

 

798

 

 

1,559

  Prepaids

 

3,303

 

 

3,582

Total assets

$

19,988

 

$

42,196

 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' DEFICIT

 

 

 

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

  Accounts payable

$

265,251

 

$

49,621

  Accrued liabilities

 

10,239

 

 

8,615

  Due to related parties

 

37,484

 

 

36

  Loan payable

 

100,000

 

 

100,000

Total liabilities

 

412,974

 

 

158,272

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders' deficit

 

 

 

 

 

  Common stock, no par value, unlimited number authorized,

    35,013,838 issued and outstanding at

    October 31, 2017 and 2016

 

5,298,377

 

 

5,298,377

  Additional paid in capital

 

123,093

 

 

123,093

  Accumulated other comprehensive income

 

51,283

 

 

38,326

  Deficit

 

(5,865,739)

 

 

(5,575,872)

Total stockholders' deficit

 

(392,986)

 

 

(116,076)

Total liabilities and stockholders' deficit

$

19,988

 

$

42,196

















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



F-2



VGRAB COMMUNICATIONS INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(EXPRESSED IN US DOLLARS)



 

Years Ended October 31,

 

2017

2016

 

 

 

 

Operating expenses

 

 

 

   Accounting

$

16,734

 

$

17,805

   General and administrative expenses

 

47,677

 

 

74,928

   Professional fees

 

8,013

 

 

9,899

   Regulatory and filing

 

21,271

 

 

15,978

   Research and development

 

180,000

 

 

150,000

 

 

(273,695)

 

 

(268,610)

Other items

 

 

 

 

 

   Finder's fee

 

-

 

 

(80,000)

   Foreign exchange

 

(15,922)

 

 

5,999

   Gain on debt conversion

 

-

 

 

20,611

   Interest

 

(250)

 

 

(241)

Net loss

 

(289,867)

 

 

(322,241)

 

 

 

 

 

 

   Translation to reporting currency

 

12,957

 

 

(8,121)

Comprehensive loss

$

(276,910)

 

$

(330,362)

 

 

 

 

 

 

Loss per share - basic and diluted

$

(0.01)

 

$

(0.01)

 

 

 

 

 

 

Weighted average number of shares outstanding:

 

35,013,838

 

 

32,319,137

























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



F-3



VGRAB COMMUNICATIONS INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT

(EXPRESSED IN US DOLLARS)



 

 

 

 

 

Accumulated

 

 

 

 

 

 

Additional

Other

 

 

 

 

Share Capital

Paid-in

Comprehensive

 

 

 

 

Shares

Amount

Capital

Income

Deficit

Total

 

 

 

 

 

 

 

 

Balance at October 31, 2015

30,806,661

$

4,951,375

$

(26,180)

$

46,447

$

(5,253,631)

$

(281,989)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common stock issued as finders' fee

500,000

 

80,000

 

-

 

-

 

-

 

80,000

 

Common stock issued for debt

3,407,177

 

238,502

 

149,273

 

-

 

-

 

387,775

 

Common stock issued for services

300,000

 

28,500

 

-

 

-

 

-

 

28,500

 

Translation to reporting currency

-

 

-

 

-

 

(8,121)

 

-

 

(8,121)

 

Net loss

-

 

-

 

-

 

-

 

(322,241)

 

(322,241)

Balance at October 31, 2016

35,013,838

 

5,298,377

 

123,093

 

38,326

 

(5,575,872)

 

(116,076)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Translation to reporting currency

-

 

-

 

-

 

12,957

 

-

 

12,957

 

Net loss

-

 

-

 

-

 

-

 

(289,867)

 

(289,867)

Balance at October 31, 2017

35,013,838

$

5,298,377

$

123,093

$

51,283

$

(5,865,739)

$

(392,986)
































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



F-4



VGRAB COMMUNICATIONS INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(EXPRESSED IN US DOLLARS)



 

Years Ended October 31,

 

2017

2016

 

 

 

 

Cash flow used in in operating activities

 

 

 

Net loss

$

(289,867)

 

$

(322,241)

 

 

 

 

 

 

  Accrued interest

 

250

 

 

241

  Consulting fees, non-cash

 

-

 

 

28,500

  Finder's fees, non-cash

 

-

 

 

80,000

  Gain on debt conversion

 

-

 

 

(20,611)

  Foreign exchange

 

16,389

 

 

-

 

 

 

 

 

 

Changes in operating assets and liabilities

 

 

 

 

 

  GST recoverable

 

791

 

 

(621)

  Prepaids

 

404

 

 

(1,888)

  Accounts payable

 

213,724

 

 

(1,363)

  Due to related parties

 

728

 

 

150,000

Net cash used in operating activities

 

(57,581)

 

 

(87,983)

 

 

 

 

 

 

Cash flows provided by financing activities

 

 

 

 

 

  Loans payable to related party

 

35,841

 

 

26,527

  Loans payable

 

-

 

 

100,000

Net cash provided by financing activities

 

35,841

 

 

126,527

 

 

 

 

 

 

Effect of exchange rate changes on cash

 

572

 

 

(5,240)

 

 

 

 

 

 

Net increase (decrease) in cash

 

(21,168)

 

 

33,304

 

 

 

 

 

 

Cash, beginning

 

37,055

 

 

3,751

 

 

 

 

 

 

Cash, ending

$

15,887

 

$

37,055

Supplemental cash flow information:

 

 

 

 

 

  Interest paid

$

-

 

$

-

  Income taxes paid

$

-

 

$

-

 

 

 

 

 

 

Non-cash financing activity:

 

 

 

 

 

  Shares issued for debt

$

-

 

$

387,775







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



F-5



VGRAB COMMUNICATIONS INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

OCTOBER 31, 2017



NOTE 1 - ORGANIZATION AND BASIS OF PRESENTATION


Nature of Operations

On January 8, 2015, the Company entered into a software purchase agreement with Hampshire Capital Limited (the “Vendor”) to acquire the Vgrab Software Application (“Vgrab Application”). Vgrab Application is developed for use with smartphones using the Android and Apple iOS operating systems allowing users to redeem vouchers on their smartphones at a number of retailers and merchants. On February 10, 2015, the Company completed the acquisition of Vgrab Application. As a result of the transaction, the Company changed its principal business focus from the acquisition and exploration of mineral resources to the software development and changed its name to Vgrab Communications Inc. on February 11, 2015.


On June 24, 2015, the Company formed a subsidiary, Vgrab International Ltd., (“Subsidiary”) under the Labuan Companies Act 1990 in Federal Territory of Labuan, Malaysia.


The Company’s consolidated financial statements are prepared on a going concern basis in accordance with US generally accepted accounting principles (“GAAP”) which contemplate the realization of assets and discharge of liabilities and commitments in the normal course of business. The Company has not generated operating revenues to date, and has accumulated losses of $5,865,739 since inception.  The Company has funded its operations through the issuance of capital stock and debt.  Management plans to raise additional funds through equity and/or debt financings.  There is no certainty that further funding will be available as needed.  These factors raise substantial doubt about the ability of the Company to continue operating as a going concern.  The Company’s ability to continue its operations as a going concern, realize the carrying value of its assets, and discharge its liabilities in the normal course of business is dependent upon its ability to raise new capital sufficient to fund its commitments and ongoing losses, and ultimately on generating profitable operations.


NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES


Basis of Presentation

These consolidated financial statements and related notes are presented in accordance with US GAAP, and are presented in United States dollars.


Use of Estimates

The preparation of consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect certain of the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the year. The Company regularly evaluates estimates and assumptions. The Company bases its estimates and assumptions on current facts, historical experience and various other factors it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. Significant areas of estimate include the carrying value of the intangible assets and deferred income tax obligations. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.


Reclassifications

Certain prior period amounts in the accompanying audited consolidated financial statements have been reclassified to conform to the current period’s presentation. These reclassifications had no effect on the results of operations or financial position for any period presented.


Principles of Consolidation

The audited consolidated financial statements include the accounts of the Company and its Subsidiary. On consolidation, all intercompany balances and transactions are eliminated.




F-6



Internal-Use Software

The Company incurs costs related to the development of its Vgrab Applications, Vmore Platform and Vgrab.com website. Costs incurred in the planning and evaluation stage of internally-developed software and website, as well as development costs where economic benefit cannot be readily determined, are expensed as incurred. Costs incurred and accumulated during the development stage, where economic benefit of the software can be readily determined, are capitalized and included as part of Intangible assets on the balance sheets. Additional improvements to the web site following the initial development stage are expensed as incurred. Capitalized internally-developed software and website development costs are amortized over their expected economic life using the straight-line method.


Fair Value of Financial Instruments

The Company’s financial instruments consist of cash, accounts payable and accrued liabilities as well as amounts due to related parties and loans payable. The carrying value of these financial instruments approximates their fair value based on their short-term nature. The Company is not exposed to significant interest, exchange or credit risk arising from these financial instruments.


The fair value hierarchy under US GAAP is based on the following three levels of inputs, of which the first two are considered observable and the last unobservable:


Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities;


Level 2: Observable inputs other than Level I, quoted prices for similar assets or liabilities in active prices whose inputs are observable or whose significant value drivers are observable; and;

 

Level 3: Assets and liabilities whose significant value drivers are unobservable by little or no market activity and that are significant to the fair value of the assets or liabilities.


Certain assets and liabilities are measured at fair value on a nonrecurring basis; that is, the instruments are not measured at fair value on an ongoing basis but are subject to fair value adjustments only in certain circumstances (for example, when there is evidence of impairment).  There were no assets or liabilities measured at fair value on a nonrecurring basis during the periods ended October 31, 2017 and 2016.


Foreign Currency Translation and Transaction

The Company’s functional currency is the Canadian dollar and reporting currency is the United States dollar. The Company translates assets and liabilities to US dollars using year-end exchange rates, and translates revenues and expenses using average exchange rates during the period. Gains and losses arising on translation to the reporting currency are included in the other comprehensive income.


The Subsidiary’s functional and reporting currency is the United States dollar.


Foreign exchange gains and losses on the settlement of foreign currency transactions are included in foreign exchange expense. Except for translations of intercompany balances, all translations of monetary balances to the functional currency at the year end exchange rate are included in foreign exchange expense. The translations of intercompany balances to the functional currency at the year end exchange rate are included in accumulated other comprehensive income or loss.  


The Company has not, to the date of these consolidated financial statements, entered into derivative instruments to offset the impact of foreign currency fluctuations.


Income Taxes

Income taxes are determined using the liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using the enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.  The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes that date of enactment.  In addition, a valuation allowance is established to reduce any deferred tax asset for which it is determined that it is more likely than not that some portion of the deferred tax asset will not be realized.




F-7



The Company accounts for uncertainty in income taxes by applying a two-step method. First, it evaluates whether a tax position has met a more likely than not recognition threshold, and second, it measures that tax position to determine the amount of benefit, if any, to be recognized in the financial statements. The application of this method did not have a material effect on the Company's consolidated financial statements.


Loss per Share

The Company presents both basic and diluted loss per share (“LPS”) on the face of the consolidated statements of operations. Basic LPS is computed by dividing net loss available to common shareholders by the weighted average number of shares outstanding during the year. Diluted LPS gives effect to all dilutive potential common shares outstanding during the period including convertible debt, stock options, and warrants, using the treasury stock method. Diluted LPS excludes all dilutive potential shares if their effect is anti-dilutive.


NOTE 3 - RELATED PARTY TRANSACTIONS


The following amounts were due to related parties as at:


 

October 31,

2017

 

October 31,

2016

 

 

 

 

Due to a major shareholder for payments made on behalf of the Company (a)

$

728

 

$

--

Note payable to a major shareholder (b)

 

36,719

 

 

--

Due to a former director (a)

 

37

 

 

36

Total due to related parties

$

37,484

 

$

36

(a) Amounts are unsecured, due on demand and bear no interest.

(b) Amount is unsecured, due on demand and bears interest at 4%.


During the year ended October 31, 2017, the Company recorded $250 (2016 - $241) in interest expense associated with its liabilities under the notes payable issued to the major shareholder.


During the year ended October 31, 2016, the Company received $14,027 (CAD$21,000) and $12,500 in exchange for the notes payable to Hampshire Avenue SDN BHD, a parent company of Hampshire Capital Limited and Hampshire Infotech. The loans bore interest at 4% per annum, were unsecured and payable on demand.


On July 11, 2016, the Company reached an agreement with Hampshire Infotech to convert $358,919 owed to Hampshire Group of companies into 2,994,951 restricted common shares of the Company at a deemed price of $0.12 per share. At the time of the conversion, the fair market value of the Company’s common shares was $0.07 per share. The conversion resulted in a gain of $149,273 which was credited to Additional Paid in Capital (“APIC”).


NOTE 4 - COMMON STOCK


During the year ended October 31, 2017, the Company did not have any transactions that would have resulted in issuance of its common stock.


Share issuances during the year ended October 31, 2016

On November 24, 2015, the Company issued 500,000 shares of its common stock to Rain Communications Inc., a corporation controlled by a shareholder of the Company. The shares had a fair market value of $80,000 on issue date and were issued as finder’s fee for introducing the Company to Hampshire Capital Limited.


During the year ended October 31, 2016, the board of directors of the Company approved conversion of certain debts into shares of the Company’s common stock as follows:


Name

Amount of

Indebtedness

Shares of the Common Stock

Issued upon Conversion

Hampshire Infotech Sdn

$

358,919

2,994,951

CY Lim

 

49,467

412,226

Total

$

408,386

3,407,177




F-8



At the time of the conversion, the fair market value of the Company’s common shares was $0.07 per share, which resulted in a gain of $169,884.  $149,273 of the gain was credit to APIC as certain of the debt was owed to a major shareholder and $20,611 was recognized as other income on the statement of operations.


On July 19, 2016, the Company issued 300,000 shares of the Company’s common stock at $0.095 per share as fully paid and non-assessable to its former director. The full value of the shares, being $28,500, was recorded as part of consulting fees on the statement of operations.


NOTE 5 - INCOME TAXES


The Company has established a valuation allowance against its federal and state deferred tax assets due to the uncertainty surrounding the realization of such assets as evidenced by the cumulative losses from operations through October 31, 2017. Management periodically evaluates the recoverability of the deferred tax assets. At such time as it is determined that it is more likely than not that deferred assets are realizable, the valuation allowance will be reduced accordingly and recorded as a tax benefit.


A reconciliation of income taxes at statutory rates is as follows:


 

Year ended October 31,

 

2017

2016

Loss before income taxes

$

(289,867)

$

(322,241)

Statutory tax rate

 

26%

 

26%

Expected recovery of income taxes

 

(75,000)

 

(84,000)

Non-deductible expenses

 

3,000

 

--

Share issue costs

 

(4,000)

 

--

Effect of foreign exchange

 

346,000

 

--

Adjustment to prior year provision to statutory tax returns

 

942,000

 

--

Change in valuation allowance

 

(1,212,000)

 

84,000

 

$

--

$

--


The Company’s tax-effected deferred income tax assets and liabilities are estimated as follows:


 

Year ended October 31,

 

2017

 

2016

Share issuance costs

$

13,000

$

--

Non-capital losses carried forward

 

228,000

 

1,453,000

Mineral properties

 

4,000

 

4,000

Less: Valuation allowance

 

(245,000)

 

(1,457,000)

 

$

--

$

--


The Company has non-capital losses carried forward of approximately $875,000 which will expire from 2031 to 2037.



NOTE 6 - SUBSEQUENT EVENTS


Subsequent to October 31, 2017, the Company received $16,282 (CAD$20,605) and $10,000 under loan agreements with its major shareholder. The loans bear interest at 4% per annum compounded monthly are unsecured, non-convertible and payable on demand.








F-9




ITEM 9: CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

 

Not applicable.


ITEM 9A: CONTROLS AND PROCEDURES

 

Disclosure Controls and Procedures


We carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and our Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this Annual Report.  The evaluation was undertaken in consultation with our accounting personnel.  Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, due to limited segregation of duties, our disclosure controls and procedures are not effective to ensure that information required to be disclosed by us in the reports that we file or submit 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.


Report on Internal Control over Financial Reporting


Our Chief Executive Officer and Chief Financial Officer are responsible for establishing and maintaining internal control over financial reporting.  Internal control over financial reporting is defined in Rule 13a-15(f) and 15d-15(f) promulgated under the Exchange Act as a process designed by, or under the supervision of, our principal executive and principal financial officers and effected by our 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 our assets;


·

provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of management and our directors; and


·

provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.


Because of its inherent limitations, our internal control over financial reporting may not prevent or detect misstatements.  Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

 

Our Chief Executive Officer and Chief Financial Officer assessed the effectiveness of our internal control over financial reporting as of October 31, 2017.  In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control—Integrated Framework. Based on the assessment, our Chief Executive Officer and Chief Financial Officer determined that, as of October 31, 2017, our internal control over financial reporting was not effective due to limited segregation of duties.

 

Changes in Internal Control over Financial Reporting


There have been no changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15 (f) under the Exchange Act) during the fourth quarter of the last fiscal year that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.




-16-




ITEM 9B: OTHER INFORMATION


None.






















































-17-




PART III


ITEM 10: DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

 

Table 7 contains certain information regarding our directors, executive officers and key personnel.

 

Table 7: Directors and officers

Name

Age

Position

Lim Hun Beng

60

Director, Chief Executive Officer, and President

Liong Fook Weng

46

Director, Chief Financial Officer Secretary and Treasurer

Ong, See-Ming

59

Director

Jacek P. Skurtys

59

Director, Former Chief Executive Officer, Chief Financial Officer and President


Set forth below is a brief description of the background and business experience of our executive officers and directors:


Mr. Lim Hun Beng started his career in his early twenties. His main focus throughout the years has been strategic business and property development in the Asia, more specifically, Malaysia and China. In 1992, Mr. Lim set up a joint-venture company with the local government of the city of Zhuhai, China to develop a 3.6 km2 property, which includes Formula One standard race circuit, a 36-hole golf course, and a mix of residential and commercial buildings. In 2006, Mr. Lim founded Hampshire Group, the Company actively involved in green energy, environmentally-friendly property development and agriculture. In 2010 Mr. Lim took over Linear Group, a Malaysian corporation specializing in manufacturing and operating industrial HVAC projects.


Mr. Jacek P. Skurtys has over 25 years of experience managing various telecommunication and media businesses. Since March 2012, Mr. Skurtys has been the Chief Strategy Officer of the Hampshire Group.  Mr. Skurtys is also an executive director of Linear Corporation Behard, which is an HVAC equipment provider.  Previously, Mr. Skurtys served as Chief Operating Officer and Vice-President of Proyektor LLC from 2006 to 2011. Mr. Jacek P. Skurtys holds MA Degree at Warsaw University, School of International Affairs and received Cambridge Proficiency Certificate in 1986.


Mr. Liong Fook Weng was born in Malaysia and received his master’s degree in Business Administration from the University of Durham, the United Kingdom, he also has his business certificate in hospitality from Michigan State University, USA. Since 1991, Mr. Liong has held many senior management positions in several publicly listed and privately owned companies within the manufacturing, and ecommerce industries. He has more than 20 years experience in managing the companies and contributing to their expansion plans through streamlining their financial strategies or corporate restructuring.


Mr. Ong, See-Ming was born in Singapore but spent his formative years in the U.K. After going to school in London and graduating from Oxford University with a degree in Oriental Studies, Mr. Ong started his banking career in the City of London. Initially, he worked as a portfolio manager, but later relocated back to Singapore and specialized in wealth management. Mr. Ong has held senior positions with Standard Chartered, Barclays and Societe Generale. He now travels extensively throughout South East Asia providing corporate advisory services to start up businesses and holds personal stakes in some of these companies.


Term of Office


Our directors are elected to hold office until the next annual meeting of the shareholders and until their respective successors have been elected and qualified. Our executive officers are appointed by our board of directors and hold office until removed by our board of directors or until their successors are appointed.


Family Relationships


There are no family relationships between our executive officers and directors.




-18-



Other Significant Employees


Other than our executive officers, we do not currently have any significant employees.


Legal Proceedings


During the past ten years none of our directors or executive officers was involved in any legal proceedings described in subparagraph (f) of Item 401 of Regulation S-K.


Section 16(a) Beneficial Ownership Reporting Compliance


Section 16(a) of the Exchange Act and the rules thereunder require our officers and directors, and persons who own more than 10% of our common stock, to file reports of ownership and changes in ownership with the Securities and Exchange Commission and to furnish us with copies.  To our knowledge, based solely upon review of the copies of such reports received or written representations from the reporting persons, the following persons have, during the fiscal year ended October 31, 2017, failed to file, on a timely basis, the reports required by Section 16(a) of the Exchange Act:


·

Mr. Lim, a member of our Board of Directors was appointed as our director on July 19, 2016.  Mr. Lim filed his Form 3 reflecting his status as a director of Vgrab Communications Inc. on March 14, 2017.


·

Mr. Lim, is a beneficial owner of shares held by Hampshire Infotech Sdn.  Hampshire Infotech Sdn. And Mr. Lim were late filing Form 4 reflecting the issuance of 2,994,951 common shares of the Company on conversion of $358,919 owed to Hampshire Infotech Sdn.  


·

Mr. Ong, a member of our Board of Directors was appointed as our director on August 14, 2017.  Mr. Lim has not filed his Form 3 reflecting his status as a director of Vgrab Communications Inc.


·

Ms. Chen, a former member of our Board of Directors was appointed as our director on August 14, 2017.  Ms. Chen filed her Form 3 reflecting her status as a director of Vgrab Communications Inc on September 6, 2017.


Corporate Governance


Our board of directors does not have a compensation committee or a nominating committee.  We believe this is appropriate, given the small size of our company and the stage of our development.  We have not adopted any procedures by which our security holders may recommend nominees to our board of directors and that has not changed during the last fiscal year.


Our audit committee consists of Liong Fook Weng, the Company’s CFO and a director, and Mr. Lim Hun Beng, the Company’s CEO, presidents and a director. None of the members of the Company’s Board of Directors qualify as an “audit committee financial expert”, as defined by Item 407 of Regulation S-K promulgated under the Securities Act and the Exchange Act. We are dependent on financial advice from external financial consulting firm, which we believe is appropriate, given the small size of our company and the stage of our development.


Code of Ethics


We adopted a Code of Ethics applicable to our officers and directors which is a “code of ethics” as defined by applicable rules of the SEC.  If we make any amendments to our Code of Ethics other than technical, administrative, or other non-substantive amendments, or grant any waivers, including implicit waivers, from a provision of our Code of Ethics to our officers or directors, we will disclose the nature of the amendment or waiver, its effective date and to whom it applies in a current report on Form 8-K filed with the SEC.






-19-




ITEM 11: EXECUTIVE COMPENSATION


Table 8 summarizes all compensation for the 2017 and 2016 fiscal years received by our Chief Executive Officer, our two most highly compensated executive officers who earned more than $100,000 and up to two additional individuals for whom disclosure would have been provided but for the fact that the individual was not serving as an executive officer at the end of the last completed fiscal year (collectively, the “Named Executive Officers”).


Table 8: Summary Compensation Table

Name & Principal

Position

Year

Salary

($)

Bonus

($)

Stock

Awards

($)

Option

Awards

($)

Non-Equity

Incentive

Plan

Compen-

sation

($)

Nonqualified

Deferred

Compen-

sation

Earnings

($)

All Other

Compen-

sation

($)

Total

($)

Lim, Hun Beng(1)

2017

$0

$0

$0

$0

$0

$0

$0

$0

CEO, CFO,

President and Director

2016

$0

$0

$0

$0

$0

$0

$0

$0

Jacek P. Skurtys(2)

2017

$0

$0

$0

$0

$0

$0

$0

$0

Director, Former CEO,

CFO, and President

2016

$0

$0

$0

$0

$0

$0

$0

$0

Ramsom Koay(3)

2017

$0

$0

$0

$0

$0

$0

$0

$0

Former Vice President

of Marketing

2016

$0

$0

$0

$0

$0

$0

$0

$0

Nelson Da Silva(4)

2017

$0

$0

$0

$0

$0

$0

$0

$0

Former Director, CEO,

CFO and President

2016

$0

$0

$28,500

$0

$0

$0

$0

$28,500

Chen Weijie(5)

2017

$0

$0

$0

$0

$0

$0

$0

$0

Former Director, COO

2016

$0

$0

$0

$0

$0

$0

$0

$0


Notes:

1.

Mr. Lim was appointed as a member of our Board of Directors on July 19, 2016 and President and CEO on December 5, 2017.

2.

Mr. Skurtys was appointed as a member of our Board of Directors, President, CEO and CFO on February 10, 2015. Mr. Skurtys resigned from his positions as President, CEO and CFO on December 5, 2017.

3.

Mr. Koay was appointed as our Vice President of Marketing on October 26, 2015. Mr. Koay resigned from his position as VP of Marketing on December 5, 2017.

4.

Mr. Da Silva was appointed as a member of our Board of Directors, President, CEO and CFO on May 21, 2014. Mr. Da Silva resigned as our President, CEO and CFO on February 10, 2015, and as director on July 19, 2016.  During the year ended October 31, 2016, as a consideration for the past services, we issued to Mr. Da Silva 300,000 shares of our common stock at $0.095 per share as fully paid and non-assessable.

5.

Ms. Chen was appointed as our Chief Operating Officer and Director on August 14, 2017. Ms. Chen resigned from her position as COO and a director on December 5, 2017.


We have not entered into any employment and/or consulting agreements with our executive officers and / or directors.


Outstanding Equity Awards at Fiscal Year End


As at October 31, 2017, we did not have any outstanding equity awards.


We have no plans that provide for the payment of retirement benefits, or benefits that will be paid primarily following retirement, including but not limited to tax-qualified defined benefit plans, supplemental executive retirement plans, tax-qualified defined contribution plans and nonqualified defined contribution plans.


We do not have a compensation committee.




-20-



DIRECTOR COMPENSATION


During the year ended October 31, 2017 Mr. Ong, See-Ming served as an independent director of the Company. We did not pay Mr. Ong any compensation for serving on our board of directors. Compensation paid to directors who were also named executive officers during our October 31, 2017 fiscal year is set out in the table above.


ITEM 12: SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

 

Table 9 presents, as of January 26, 2018, information regarding the beneficial ownership of our common stock with respect to each of our executive officers, each of our directors, each person known by us to own beneficially more than 5% of the common stock, and all of our directors and executive officers as a group.  Beneficial ownership is determined under the rules of the Securities and Exchange Commission and generally includes voting or investment power over securities.  Each individual or entity named has sole investment and voting power with respect to the shares of common stock indicated as beneficially owned by them, subject to community property laws, where applicable, except where otherwise noted.

 

Table 9: Security ownership

Title of Class

Name and Address of Beneficial Owner

Amount and Nature of

Beneficial Ownership

Percentage of

Common Shares(1)

Security Ownership, Directors and Officers

 

 

 

 

Common Shares

LIM HUN BENG

22,994,951(2)

65.67%

 

21 Denai Endau 3, Seri Tanjonk Tokong

Indirect

 

 

10470 Georgetown, Penang, Malaysia

 

 

 

 

 

 

Common Shares

JACEK P. SKURTYS

Nil

Nil

 

156 Jalan Utama,

n/a

 

 

10450 Georgetown Malaysia

 

 

 

 

 

 

Common Shares

LIONG, FOOK WENG

Nil

Nil

 

No 5, Jalan 2M, Anggun 2,

n/a

 

 

Rawang 48000, Selangor D.E, Malaysia

 

 

 

 

 

 

Common Shares

ONG, SEE-MING

150,000

0.42%

 

144 Holland Road

Direct

 

 

#07-146 Holland Court, Singapore 278576

 

 

 

 

 

 

Common Shares

All Officers and Directors as a Group

23,144,951

66.10%

 

 

 

 

Security Ownership, 5% Shareholders

Common Shares

HAMPSHIRE CAPITAL LTD.

20,000,000(2)

57.12%

 

Kensington Gardens, No. U1317. Lot 7616

Direct

 

 

Jalan Jumidar Buyong,

87000, Labuan F.T. Malaysia

 

 

 

 

 

 

Common Shares

HAMPSHIRE INFOTECH SDN

2,994,951(2)

8.55%

 

Kensington Gardens, No. U1317. Lot 7616

Direct

 

 

Jalan Jumidar Buyong,

 

 

 

87000, Labuan F.T. Malaysia

 

 

 

 

 

 

Common Shares

HAMPSHIRE AVENUE SDN. BHD.

22,994,951(2)

65.67%

 

Kensington Gardens, No. U1317. Lot 7616

Indirect

 

 

Jalan Jumidar Buyong,

 

 

 

87000, Labuan F.T. Malaysia

 

 

 

 

 

 

Common Shares

LIM HUN BENG

22,994,951(2)

65.67%

 

21 Denai Endau 3, Seri Tanjonk Tokong

Indirect

 

 

10470 Georgetown, Penang, Malaysia

 

 




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Note:

1.

Under Rule 13d-3, a beneficial owner of a security includes any person who, directly or indirectly, through any contract, arrangement, understanding, relationship, or otherwise has or shares: (i) voting power, which includes the power to vote, or to direct the voting of shares; and (ii) investment power, which includes the power to dispose or direct the disposition of shares. Certain shares may be deemed to be beneficially owned by more than one person (if, for example, persons share the power to vote or the power to dispose of the shares). In addition, shares are deemed to be beneficially owned by a person if the person has the right to acquire the shares (for example, upon exercise of an option) within 60 days of the date as of which the information is provided. In computing the percentage ownership of any person, the amount of shares outstanding is deemed to include the amount of shares beneficially owned by such person (and only such person) by reason of these acquisition rights. As a result, the percentage of outstanding shares of any person as shown in this table does not necessarily reflect the person’s actual ownership or voting power with respect to the number of our shares actually outstanding on January 29, 2018.  As of January 29, 2018, there were 35,013,838 common shares issued and outstanding.


2.

Hampshire Capital Ltd (“Hampshire”) is the direct beneficial owner of 20,000,000 shares of our common stock. Hampshire Infotech Sdn (“Hampshire Infotech”) is the direct beneficial owner of 2,994,951 shares of our common stock. Hampshire Avenue Sdn. Bhd (“Hampshire Avenue”) is the parent company of Hampshire and Hampshire Infotech, and Mr. Lim, as the executive officer and director of Hampshire Avenue, are the indirect beneficial owners of our securities held directly by Hampshire and Hampshire Infotech, with shared voting and dispositive power over those securities.  


Changes in Control


We are not aware of any arrangements that may result in a change in control.


ITEM 13: CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

 

Director Independence


Our common shares are quoted on the OTC Markets inter-dealer quotation system, which does not have director independence requirements.  For the purpose of determining director independence, we have adopted the independence requirements of Canadian National Instrument 52-110 - Audit Committees (“NI 52-110”) as we are an OTC reporting issuer in the province of British Columbia. NI 52-110 recommends that the Board of Directors of a public company be constituted with a majority of individuals who qualify as “independent” directors. An “independent” director is a director who has no direct or indirect material relationship with us. A material relationship is a relationship, which could, in the view of the Board of Directors, reasonably interfere with the exercise of a director’s independent judgment. Mr. Ong, See-Ming qualifies as independent director. Jack P. Skurtys is not an independent director because of his prior position as CEO, CFO and President. Lim Hun Beng is not an independent director as he beneficially holds 65.67% of our common stock. Mr. Lim is also our CEO and President. Mr. Liong Fook Weng is not an independent director because of his position as CFO, Secretary and Treasurer.


As a result of our limited operating history and minimal resources, our management believes that it will have difficulty in attracting additional independent directors.  In addition, we would likely be required to obtain directors and officers insurance coverage in order to attract and retain additional independent directors.  Our management believes that the costs associated with maintaining such insurance are prohibitive at this time.


Transactions with Related Parties


Except as disclosed below, none of the following parties has, during our last two fiscal years, had any material interest, direct or indirect, in any transaction with us or in any presently proposed transaction that has or will materially affect us, in which the Company is a participant and the amount involved exceeds the lesser of $120,000 or 1% of the average of the Company’s total assets for the last two completed fiscal years:

 

(i)

Any of our directors or officers;

(ii)

Any person proposed as a nominee for election as a director;




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(iii)

Any person who beneficially owns, directly or indirectly, shares carrying more than 10% of the voting rights attached to our outstanding common shares;

(iv)

Any of our promoters; and

(v)

Any relative or spouse of any of the foregoing persons who has the same house as such person.


Nelson Da Silva


During the past two fiscal years and up to the date of the filing of this Annual Report on Form 10-K, we have entered into the following related party transactions with Nelson Da Silva, our former director, CEO, CFO and President:


·

During the year ended October 31, 2016, as a consideration for the past services, we issued to Mr. Da Silva 300,000 shares of our common stock at $0.095 per share as fully paid and non-assessable.  

 

Hampshire Infotech SDN BHD


During the past two fiscal years and up to the date of the filing of this Annual Report on Form 10-K, we have entered into the following related party transactions with Hampshire Infotech SDN BHD, our direct shareholder controlled by Mr. Lim, which is also a member of the Hampshire Group:


·

During the fiscal year ended October 31, 2016, we paid $150,000 to Hampshire Infotech, for software development costs and consulting fees in accordance with the service agreement dated July 12, 2015, between our Subsidiary and Hampshire Infotech SDN BHD.

·

On July 11, 2016, we reached an agreement with Hampshire Infotech to convert $358,919 owed to Hampshire Group into 2,994,951 restricted common shares of our common stock at a deemed price of $0.12 per share. At the time of the conversion, the fair market value of the Company’s common shares was $0.07 per share. The conversion resulted in a gain of $149,273 which was credited to Additional Paid in Capital.


Hampshire Avenue SDN BHD


During the past two fiscal years and up to the date of the filing of this Annual Report on Form 10-K, we have entered into the following related party transactions with Hampshire Avenue SDN BHD, a parent company of Hampshire Infotech, our direct shareholder, controlled by Mr. Lim:


·

During the year ended October 31, 2017, we received $15,841 (CAD$21,220) and $20,000 as proceeds from the loan agreements with Hampshire Avenue SDN BHD. The loans bear interest at 4% per annum, are unsecured and payable on demand.


·

During the year ended October 31, 2016, we received $14,027 (CAD$21,000) and $12,500 as proceeds from the loan agreements with Hampshire Avenue SDN BHD. The loans bore interest at 4% per annum, were unsecured and payable on demand. These loans were converted to shares of our common stock as part of the debt settlement agreement with Hampshire Infotech Sdn.


ITEM 14: PRINCIPAL ACCOUNTING FEES AND SERVICES


(1) Audit Fees and Related Fees

 

The aggregate fees billed and accrued for each of the last two fiscal years for professional services rendered by our principal accountant for the audit of our annual consolidated financial statements and for the review of our financial statements or for services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for those fiscal years were:


2017 - $28,261 - Dale Matheson Carr-Hilton Labonte LLP

2016 - $13,674 - Dale Matheson Carr-Hilton Labonte LLP





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(2) Audit-Related Fees


The aggregate fees billed in each of the last two fiscal years for assurance and related services by the principal accountants that are reasonably related to the performance of the audit or review of our financial statements and are not reported in the preceding paragraph:

 

2017 - $0 - Dale Matheson Carr-Hilton Labonte LLP

2016 - $0 - Dale Matheson Carr-Hilton Labonte LLP

 

(3) Tax Fees

 

The aggregate fees billed in each of the last two fiscal years for professional services rendered by the principal accountant for tax compliance, tax advice, and tax planning was:

 

2017 - $3,824 - Dale Matheson Carr-Hilton Labonte LLP

2016 - $0 - Dale Matheson Carr-Hilton Labonte LLP


(4) All Other Fees

 

The aggregate fees billed in each of the last two fiscal years for the products and services provided by the principal accountant, other than the services reported in paragraphs (1), (2) and (3) was:

 

2017 - $0 - Dale Matheson Carr-Hilton Labonte LLP

2016 - $0 - Dale Matheson Carr-Hilton Labonte LLP


Our board of directors pre-approves all audit and permissible non-audit services provided by the independent auditors.  These services may include audit services, audit-related services, tax services and other services.




























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PART IV


ITEM 15: EXHIBITS


The following table sets out the exhibits either filed herewith or incorporated by reference.


Exhibit

Description

3.1

Notice of Articles.(6)

3.2

Articles.(1)

3.3

Certificate of Continuation.(2)

3.4

Certificate of Change of Name dated January 6, 2014.(6)

3.5

Certificate of Change of Name dated February 11, 2015.(8)

10.2

Property Purchase Agreement dated April 11, 2012 between the Company and Gerald Diakow.(1)

10.4

Software Purchase Agreement between the Company and Hampshire Capital Limited. dated January 8, 2015.(7)

10.5

Service Agreement between Vgrab International Ltd. and Hampshire Infotech SDN BHD dated July 12, 2015.(9)

10.6

Loan Agreement between Vgrab Communications Inc. and Hampshire Avenue SDN BHD dated January 19, 2016. (9)

10.7

Loan Agreement between Vgrab Communications Inc. and Hampshire Avenue SDN BHD dated February 4, 2016.(9)

10.8

Loan Agreement between Vgrab Communications Inc. and Hampshire Avenue SDN BHD dated February 5, 2016.(10)

10.9

Loan Agreement between Vgrab Communications Inc. and Hampshire Avenue SDN BHD dated April 12, 2016.(10)

10.10

Release Agreement between Nelson Da Silva and Vgrab Communications Inc. dated July 19, 2016.(11)

10.11

Debt Settlement Agreement between Hampshire Infotech SDN. and Vgrab Communications Inc. dated July 11, 2016.(12)

10.12

Debt Settlement Agreement between Lim Chin Yang and Vgrab Communications Inc. dated July 11, 2016.(12)

10.13

Loan Agreement between BSmart Technology Limited and Vgrab Communications Inc. dated July 12, 2016.(13)

10.14

Loan Agreement between Vgrab Communications Inc. and Hampshire Avenue SDN BHD dated July 25, 2017.

10.15

Loan Agreement between Vgrab Communications Inc. and Hampshire Avenue SDN BHD dated August 8, 2017.

10.16

Loan Agreement between Vgrab Communications Inc. and Hampshire Avenue SDN BHD dated September 15, 2017.

10.17

Loan Agreement between Vgrab Communications Inc. and Hampshire Avenue SDN BHD dated October 6, 2017.

10.18

Loan Agreement between Vgrab Communications Inc. and Hampshire Avenue SDN BHD dated December 13, 2017.

16.1

Code of Ethics.(3)

21.1

List of Subsidiaries.

31.1

Certification of CEO pursuant to Rule 13a-14(a) and 15d-14(a).

31.2

Certification of CFO pursuant to Rule 13a-14(a) and 15d-14(a).

32.1

Certification of CEO pursuant to Section 1350 of Title 18 of the United States Code.

32.2

Certification of CFO pursuant to Section 1350 of Title 18 of the United States Code.

99.1

Audit Committee Charter(3)

101

The following consolidated financial statements from the registrant’s Annual Report on Form 10-K for the fiscal year ended October 31, 2017, formatted in XBRL:

(i)

Consolidated Balance Sheets;

(ii)

Consolidated Statements of Operations;

(iii)

Consolidated Statement of Stockholders’ Deficit;

(iv)

Consolidated Statements of Cash Flows;

(v)

Notes to the Consolidated Financial Statements.




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Notes:

(1)

Filed with the SEC as an exhibit to our Registration Statement on Form S-1 filed on June 12, 2012.

(2)

Filed with the SEC as an exhibit to our Registration Statement on Form S-1/A2 filed on August 23, 2012.

(3)

Filed with the SEC as an exhibit to our Annual Report on Form 10-K filed on January 28, 2013.

(4)

Filed with the SEC as an exhibit to our Quarterly Report on Form 10-Q filed on March 8, 2013.

(5)

Filed with the SEC as an exhibit to our Current Report on Form 8-K filed on December 4, 2013.

(6)

Filed with the SEC as an exhibit to our Current Report on Form 8-K filed on January 9, 2014.

(7)

Filed with the SEC as an exhibit to our Current Report on Form 8-K filed on January 14, 2015.

(8)

Filed with the SEC as an exhibit to our Current Report on Form 8-K filed on February 17, 2015.

(9)

Filed with the SEC as an exhibit to our Annual Report on Form 10-K filed on February 9, 2016.

(10)

Filed with the SEC as an exhibit to our Quarterly Report on Form 10-Q filed on September 14, 2016.

(11)

Filed with the SEC as an exhibit to our Current Report on Form 8-K filed on July 15, 2016.

(12)

Filed with the SEC as an exhibit to our Current Report on Form 8-K filed on July 22, 2016.

(13)

Filed with the SEC as an exhibit to our Quarterly Report on Form 10-Q filed on September14, 2016.













































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SIGNATURES

 

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

Dated: February 13, 2018


 

VGRAB COMMUNICATIONS INC.

 

 

 

 

 

 

By:

/s/ Lim Hun Beng

 

 

 

Lim Hun Beng

Chief Executive Officer and President

 


Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated


Signature

 

Title

 

Date

 

 

 

 

 

/s/ Lim Hun Beng

Lim Hun Beng

 

Chief Executive Officer, (Principal Executive Officer), President and Member of the Board of Directors

 

February 13, 2018

 

 

 

 

 

/s/ Liong Fook Weng

Liong Fook Weng

 

Chief Financial Officer, (Principal Accounting Officer), and Member of the Board of Directors

 

February 13, 2018

 

 

 

 

 

/s/ Jacek (Jack) P. Skurtys

Jacek (Jack) P. Skurtys

 

Member of the Board of Directors

 

February 13, 2018

 

 

 

 

 

/s/ Ong, See-Ming

Ong, See-Ming

 

Member of the Board of Directors

 

February 13, 2018



























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