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EX-32.1 - Anvia Holdings Corpex32-1.htm
EX-31.2 - Anvia Holdings Corpex31-2.htm
EX-31.1 - Anvia Holdings Corpex31-1.htm

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-K

 

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

 

For the fiscal year ended December 31, 2019

 

[  ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT

 

For the transition period from _____________ to ____________

 

Commission file number 000-55673

 

ANVIA HOLDINGS CORPORATION

(Exact name of small business issuer as specified in its charter)

 

Delaware   81-3416105
(State or other jurisdiction of incorporation)   (IRS Employer Identification No.)

 

100 Challenger Road, Suite 830

Ridgefield Park, NJ 07660

(Address of principal executive offices) (Zip Code)

 

(323)-713-3244

(Issuer’s telephone number)

 

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 [  ] No [X]

 

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

 

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in the 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 shell Company (as defined in Rule 12b-2 of the Exchange Act). Yes [  ] No [X]

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, non-accelerated filer or a small. See definition 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]
      Emerging Growth Company [X]

 

If an emerging growth Company, indicate by check mark if 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 the Exchange Act. [  ]

 

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

 

Title of each class   Trading Symbol(s)   Name of each exchange on which registered
N/A   N/A   N/A

 

The aggregate market value of common stock held by non-affiliates of the registrant, computed by reference to the closing price of the registrant’s common stock on The OTCQB Market on June 27, 2019 ( the last day of the trading), as of the last business day of the registrant’s most recently completed second fiscal quarter was approximately $ 23,350,608.50.

 

As of June 10, 2020, there were 42,738,674 shares of Common Stock, $0.0001 par value, outstanding.

 

Documents Incorporated by Reference. None

 

 

 

   
 

 

TABLE OF CONTENTS

 

    Page
     
CAUTIONARY NOTE ABOUT FORWARD-LOOKING STATEMENTS  
PART I    
Item 1. Description of Business 4
Item 1A. Risk Factors 19
Item 1B. Unresolved Staff Comments 19
Item 2. Properties 19
Item 3. Legal Proceedings 20
Item 4. Mine Safety Disclosures 20
     
PART II    
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 21
Item 6. Selected Financial Data 25
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 25
Item 7A. Quantitative and Qualitative Disclosures about Market Risk 32
Item 8. Financial Statements and Supplementary Data 32
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 34
Item 9A (T). Controls and Procedures 34
Item 9B. Other Information 35
     
PART III    
Item 10. Directors, Executive Officers and Corporate Governance 35
Item 11. Executive Compensation 37
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 38
Item 13. Certain Relationships and Related Transactions 40
Item 14. Principal Accountant Fees and Services 41
     
PART IV    
Item 15. Exhibits; Financial Statement Schedules 42
SIGNATURES 44

 

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CAUTIONARY NOTE ABOUT FORWARD-LOOKING STATEMENTS

 

The information contained in this Report includes some statements that are not purely historical and that are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and as such, may involve risks and uncertainties. These forward-looking statements relate to, among other things, expectations of the business environment in which we operate, perceived opportunities in the market and statements regarding our mission and vision. In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. You can generally identify forward-looking statements as statements containing the words “anticipates,” “believes,” “continue,” “could,” “estimates,” “expects,” “intends,” “may,” “might,” “plans,” “possible,” “potential,” “predicts,” “projects,” “seeks,” “should,” “will,” “would” and similar expressions, or the negatives of such terms, but the absence of these words does not mean that a statement is not forward-looking.

 

Forward-looking statements involve risks and uncertainties that could cause actual results or outcomes to differ materially from those expressed in the forward-looking statements. The forward-looking statements contained herein are based on various assumptions, many of which are based, in turn, upon further assumptions. Our expectations, beliefs and forward-looking statements are expressed in good faith on the basis of management’s views and assumptions as of the time the statements are made, but there can be no assurance that management’s expectations, beliefs or projections will result or be achieved or accomplished.

 

In addition to other factors and matters discussed elsewhere herein, the following are important factors that, in our view, could cause actual results to differ materially from those discussed in the forward-looking statements: technological advances, impact of competition, dependence on key personnel and the need to attract new management, effectiveness of cost and marketing efforts, acceptances of products, ability to expand markets and the availability of capital or other funding on terms satisfactory to us. We disclaim any obligation to update forward-looking statements to reflect events or circumstances after the date hereof.

 

For a discussion of the risks, uncertainties, and assumptions that could affect our future events, developments or results, you should carefully review the “Risk Factors” set forth under “Item 1. Description of Business” below. In light of these risks, uncertainties and assumptions, the future events, developments or results described by our forward-looking statements herein could turn to be materially different from those we discuss or imply.

 

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PART I

 

Item 1. Description of Business.

 

Background

 

The Company, formerly known as Dove Street Acquisition Corporation, was incorporated in Delaware on July 22, 2016. The Company filed a registration statement on Form 10 with the Securities and Exchange Commission on August 9, 2016 and became a public reporting Company. In January 2017, Dove Street Acquisition Corporation changed its name to Anvia Holdings Corporation. On January 10, 2017, the Company effected a change of control with the resignation of the then officers and directors, redemption of 19,500,000 shares of the 20,000,000 outstanding shares of its common stock, the appointment of new officers and directors and the issuance of 5,000,000 shares of common stock, pro rata, to the new shareholders of the Company.

 

The Company has an authorized capitalization of 100,000,000 shares of common stock and 20,000,000 shares of preferred stock, of which 1,000 shares have been designated Series A Preferred Stock. The Company has a fiscal year end of December 31. As of the date of this registration statement, there are 42,850,405 shares of common stock of the Company issued and outstanding and 1000 shares of Series A Preferred Stock issued and outstanding.

 

The Company commenced operations in June 2017 and during the financial years 2018 and 2019 it has completed respectively 11 and 7 acquisitions in Australia, Malaysia, Philippines. The company now owns several proprietary software, mobile applications, learning and educational tools to help consumers and businesses improve and grow, education services, accounting & corporate advisory, financial planning, data center service. The Company`s state mission is to make potential growth accessible and sustainable.

 

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Products/Services

 

Anvia offers the following products and services designed to make personal and business growth accessible and sustainable. They are as follow:

 

1. Personal improvement:

 

Anvia offers on demand coaching platforms. Anvia has a growing network of professional and certified coaches globally with at least 5 years of coaching experiences who are ready to deliver their service to the target consumers. As of today, we have established 3 coaching on demand platforms namely:

 

Platform   Description   Website
Egnatium Life   Life Coaching platform aimed at consumers from age 17-25 years old to enable design and implementation of life plan.   www.egnatiumlife.com
         
Egnatium Entrepreneurs   Business Coaching platform aimed at want to be entrepreneurs from age 25-45 years old to establish a new business or grow an existing one.   www.egnatiumentrepreneurs.com
         
Egnatium Learning   Executive Coaching platform designed to help senior executives of various organizations to deal with various business issues and excel at their work.   www.egnatiumlearning.com

 

2. Education Services

 

Anvia have successfully acquired Xamerg Pty Ltd trading as The Eagle Academy, Global Institute of Vocational Education Pty Ltd, Pacific Rainbow English Academy in order to achieve its objective of providing a holistic education services to the target market. Of the hundreds of qualifications available in the Australian framework, the Company will specialize in providing 40 different qualifications that provides certifications I, II, III, IV, Diploma and Advanced Diploma in Business, leadership and management, English Language, Automotive, Management, Healthcare, Hairdressing, Fitness, as well as Sport and Recreation to mention a few. With that specialization in these areas, we believe that it will make Anvia stand out as a market leader in these niche qualifications. The Company is currently is looking for new acquisition targets in order to consolidate education portfolio in Australia and other markets we operate. The following is a detailed list of the qualifications offered by each asset

 

The Eagle Academy

 

Since its inception in 2003, The Eagle Academy has been the academy of choice for Australian and International students looking for a complete sport, fitness & recreation academy. The Eagle Academy aims to provide a high quality of teaching and coaching, in high quality surroundings, at a reasonable price, to give the students a distinct advantage over its competitors.

 

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The Eagle Academy provides qualifications and courses as below:

 

  i. English Courses
    a. General English (Beginner – Advanced)
    b. IELTS Preparation Course
    c. English for Academic Purposes (with IELTS Prep)
       
  ii. Fitness Courses
    a. Certificate III in Fitness
    b. Certificate IV in Fitness
       
  iii. Business Courses
    a. Certificate I in Business
    b. Certificate II in Business
    c. Certificate III in Business
    d. Certificate IV in Business
    e. Diploma in Business
    f. Advance Diploma in Business
    g. Advance Diploma of Leadership & Management
       
  iv. Sports & Recreation Courses
    a. Certificate I in Sports & Recreation
    b. Certificate II in Sports & Recreation
    c. Certificate III in Sports & Recreation
    d. Certificate IV in Outdoor Recreation
    e. Diploma of Sport Development

 

Global Institute of Vocational Education Pty Ltd:

 

Global Institute of Vocational Education Pty Ltd, located in Melbourne, Australia, is a Registered Training Organization (RTO) under Australian Qualification Framework (AQF) by Australian Skills Quality Authority (ASQA). The current scope includes Diploma of Business, Safety Training. Global Institute is in the process of applying to add to qualification scope, all the relevant qualifications within construction sector.

 

Pacific Rainbow English Academy Inc:

 

The Company offers students the opportunities of gaining fluency in English in the Philippines. The mission is to ensure that students being fully immersed in English speaking environment. The academy offers the general English courses for beginners up to advance level course. All courses are 200 hours over 10 weeks, but students can enroll and begin anytime.

 

The courses are:

 

  v. General English Beginners
  vi. General English Elementary
  vii. General English Pre-Intermediate
  viii. General English Intermediate
  ix. General English Upper-Intermediate
  x. General English Advance

 

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XSEED Pty Ltd

 

The company is an Australian company incorporated under the Australian Securities & Investment Commission and is a Registered Training Organization (RTO No. 21402) approved by the Australian Skills Quality Authority (“ASQA”).

 

The company is involved in the provision of vocational education training (“VET”) and offers courses that are for the Automotive and Hairdressing industries. Automotive courses are delivered under the registered business name Next Gear while hairdressing training courses are delivered under the registered business name Hair Assembly.

 

The Company holds a funding contract with the Victoria Government pursuant to the Skills First Program which is valid until 31 December 2019 and had approximately 521 students course commencements for the year 2018 and currently has 536 active students and a further 34 students in the process of registering / enrolling. The Business’ Head Office is located in the Melbourne Central Business District and employs 21 employees & contractors.

 

3. Professional Services

 

Anvia offers a number of professional services to small and medium companies by packaging consulting, coaching, learning and technology in a single package to offer customers a peace of mind. Some of the key parts of professional services includes:

 

A. Accounting & Corporate Advisory

 

During November 2018 and 2019, Anvia acquired Jamiesons Accounting Pty Ltd and Accounting Business Solutions Pty Ltd, both Australian chartered accounting firms established since 2002 and 2008 respectively. The Companies provide a range of financial services to consumers and businesses across Australia and have numerous International clients who operate in Australia. As public practices registered under the Chartered Accountants in Australia and New Zealand, the Companies serves more than 1500 individuals, small and medium companies, trusts and superannuation funds. Services offered include accounting, auditing, bookkeeping, Company formation, structuring and business planning, tax consulting, tax filing, corporate advisory services and financial planning services. Anvia also bought 60% of Acquire Insurance Group Pty Ltd, an Australian general insurance brokerage firm.

 

B. Financial Planning

 

During 2019 Anvia acquired Myplanner Professional Services Pty Ltd and My Managed Portfolio Pty Ltd.

 

Myplanner was established in 2009 and operates an Australian Financial Services Licence supporting more than 100 licensed financial advisers and accountants.

 

Myplanner provides all the services to integrated advisory practices to assist business owner financial advisers to provide objective advice to their clients, help them Grow their businesses, improve their efficiency, have a strong culture of Compliance, and assisting them with their own succession and exit strategy. In 2018 financial year closing 30 June, the company generated AUD $25 Million (approximately USD $18 Million).

 

My Managed Portfolio (MMP) is a scalable, cost effective and efficient platform for managing investments for both clients and advisers alike. MMP is a Managed Account Service for direct equities, managed funds, exchange traded funds, term deposits, property and other selected investments on a discretionary basis via a Managed Account Service. The current Funds Under Advice (FUA) within the group is AUD $155 million.

 

C. Digital Content Development

 

During 2018 Anvia acquired three corporate learning companies namely Egnatium Learning, Sage Interactive and Workstar Technologies. All these companies specialize in designing, implementing and measuring blended learning for corporate market in Australia and South East Asia markets. We offer a comprehensive range of adult learning, content development and digital platform delivery solutions.

 

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The solutions we offer are based on real world situations and improve employee engagement, drive organizational change, enhance sales and product skills, improve Customer Service, and re-skill employees.

 

Anvia developed a unique set of learning solutions and technologies to work seamlessly with our Clients LMS, or independently to deliver the learning on their mobile, tablet, desktop, via email, a Facebook feed, or face-to-face.

 

4. Software

 

During 2017, 2018 and 2019 Anvia has developed and acquired a number of software and mobile applications used by consumers and businesses on a subscription basis. As of today, we have developed and commercialized the following software:

 

1. Human Resource Information System

 

Anvia HR Information System enables Client to serve their own employees by allowing HR activities and process to occur digitally, therefore freeing our Client’s time for more important and productive tasks. There are a number of solutions offered within the HR Information system. Some of these includes Solution in Payroll, HR and Compliance. HRIS allows clients to integrate all of the data points in single platform, enables clients to create more meaningful reports and analysis.

 

2. Learning Management System

 

The automation of the entire Learning Management process is the key to optimize organizational resources. Anvia offers holistic approach and highly interactive experiential learning to professionals and students. Anvia has strong team of Instructional Designers, Developers and Technical support to help Clients create and immersive learning experience that will engage and transform how people learn.

 

3. Strategy Management System

 

Anvia provides Clients with total visibility of how the business strategies are performing. With integrated balance scorecard tools, it allows Clients to constantly diagnose their business health from multiples perspectives and ensure the business is sustainable over times.

 

4. Competency Management System

 

Competency software enable the automation of competency assessment, allowing Clients to invest time interviewing and assessing only those candidates who meet the minimum competency levels. This system is able to reduce the hiring mistakes by eliminating or reducing the mismatch between skills required by the Organization and those available within the employee.

 

5. Appraisal Management System

 

Anvia effective Performance Management software help Client to create accurate, personalized employee reviews which align the employee’s goals and business goals. The system is capable to measure and track the employee’s performance against set target and regularly rating performance through summaries and reviews. The system has pre-build competencies and KPI library that allows clients to assemble the KPIs and competencies for the organization or they can import their existing KPIs and competencies.

 

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6. Customer Loyalty Mobile Application

 

This customizable loyalty management system targets small and medium businesses who currently have a loyalty system using cards system or looking to establish one. The system allows brand to design, implement and launch loyalty mobile applications in Android and or IOS in days with the need to have coding and skills.

 

5. Data Center Services

 

In 2019 Anvia acquired Host Group of Companies Pty Ltd is an Australian company incorporated under the Australian Securities & Investment Commission. Since 1999, it operates a data center at the Brisbane Technology Park that offers cloud, dedicated, co-location and hosting services.

 

Host Networks also operates an Australian autonomous network comprised of a fully diverse, multi-homed, dual stack, redundant transit service spanning the eastern coast of Australia. This network further expands Anvia’s communications capabilities and enhances its education, e-learning, and professional services operations.

 

Marketing

 

In order to become competitive in the personal and business improvement space, the Company has taken steps to establish and number of digital marketing channels namely:

 

  1. Websites. This is an effective marketing and branding tool for customers, employees and investors as well as the public educations. The Company has completed its website and updates it regularly. The following are some important websites that the Company has:

 

  1. www.anviaholdings.com
  2. www.egnatium.com
  3. www.egnatiumlearning.com
  4. www.egnatiumentrepreneurs.com
  5. www.egnatiumlife.com
  6. www.thefranchiseculture.com
  7. www.thefranchisevillage.com
  8. www.eagleacademy.com.au
  9. www.workstar.com.au
  10. www.jamiesons.net.au
  11. www.hostnetworks.com.au
  12. www.nextgear.edu.au
  13. www.hairassembly.edu.au
  14. www.myplanner.com.au
  15. www.xseed.edu.au
  16. www.acquireinsurance.com.au

 

  2. Social media channels The Company has set up major social media channels such as Facebook, LinkedIn and twitter for each brand. The Company has established YouTube channels for some of the brands. These social media channels are linked and integrated with the websites.
     
  3. Digital and analog advertising. Upon completion of the infrastructure and product mix the Company shall make the required adverting investment in both digital and analog advertising.

 

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Intellectual Property

 

The Company through its subsidiaries has acquired and developed a number of intellectual properties in form of trademarks. The table below provides the list of current trademarks, classes, countries registered and expiry date for each trademark.

 

Anvia Holdings Corporation / Trademarks
Registration No.   Status   Trademark   Classes and goods and services   Renewal due
1108742   Registered   Workstar   Class 9   12-Apr-26
    Australia       Class 35    
            Class 41    
1131150       Metime   Class 9   22-Aug-26
    Registered       Class 35    
    Australia       Class 41    
1822892  

Registered

Australia

  Egnatium   Class 9   1-Feb-27
                 
1700000       Egnatium   Class 35    
            Class 41   18-Jun-25
            Class 42    
J002017005749  

Registered

Indonasia

  Egnatium   Class 35    
J002017005745       Egnatium   Class 41   6-Feb-27
J002017005747       Egnatium   Class 42    
2017000843  

Registered

Malaysia

  Egnatium   Class 41    
2017000842       Egnatium   Class 42   6-Feb-27
2017000844       Egnatium   Class 35    
1437005409  

Registered

Saudi

Arabi

  Egnatium   Class 35    
1437005410       Egnatium   Class 41   23-Aug-25
1437005411       Egnatium   Class 42    

 

Industry Overview

 

Given the acquisitions throughout 2018 and 2019 the Company has diversified and operates in a number of services that span across software, education, data center services, professional services, personal improvement, management consulting services.

 

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Personal Improvement Industry

 

The total U.S. self-improvement market was worth $9.9 billion in 2016, constituting growth of just 4.3% since 2011. Growth was mainly hurt by weak performance in infomercials and commercial diet programs. We should see better 5.6% average yearly gains from 2016 to 2022, when the overall market value should increase to $13.2 billion.

 

Traditionally, the Baby Boomers have been the main consumers of self-improvement services. While they remain an important group, the tide is shifting. Millennials are the future for this market, but there are few young experts with the experience to serve them.

 

To cater to the younger audience, the Internet is playing a larger role in the self-improvement market. More content (such as MP3 downloads, e-books, webinars, online courses, “academies”, “universities” and “masterminds”, etc.) is being delivered online, while self-help apps are starting to take off.

 

Management Consulting Industry

 

 

Management consultants provide advice and assistance to organizations on strategic and organizational planning; financial planning and budgeting; marketing objectives and policies; human resource policies, practices and planning; production scheduling; and control planning. Over the five years to 2017, demand for management consulting services has increased, as stronger corporate profitability has increased global aggregate private investment. Furthermore, the emergence of China, India and other growing economies has opened new doors for consultants. Over the next five years, the industry is expected to continue expanding, but at a slower pace. Business in the United States will continue to grow, but sluggish corporate profit growth may slow overall industry growth. Meanwhile emerging economies are expected to hire consultants to strategize amid slowing growth conditions.

 

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Industry Products

 

  Business strategy and planning consulting services
  Operations and supply chain management consulting services
  Financial management consulting services
  Marketing management consulting services
  Human resources management consulting services
  Other management consulting services

 

Industry Activities

 

  Providing actuarial, benefit and compensation consulting services
  Providing administrative and general management consulting services
  Providing marketing consulting services
  Providing process, physical distribution and logistics consulting services
  Providing change management and strategy development consulting services
  Performing statistical analysis

 

Technical and Vocational Education and Training in Australia

 

 

Current Performance: Federal and state governments have introduced funding structures based on student demand which encouraged many private training organizations to enter this industry. Industry revenue is expected to grow by an annualized 1.3% over the five years through 2016-17, to $8.8 billion. Profitability has grown significantly over the past five years, responding changes in government funding and student demand, and aggressive advertising by industry providers. Increasing funding has incentivized existing firms to expand, which caused an upswing in establishment numbers over the past five years.

 

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Market Trends: Despite the largest state governments significantly cutting funding to public VET providers, recurrent government funding to the industry has increased over the past five years. This increase is mainly attributable to federal efforts to pursue VET reform. The Federal Government, in partnership with state governments, has reiterated its promise to remedy the skills shortage in Australia. As part of the National Partnership Agreement on Skills Reform, the Federal Government has allocated the states and territories $1.8 billion over the five years through 2016-17, on top of $7.0 billion in base funding. This funding was offered on the condition that these governments meet several targets, such as reducing upfront costs for students and increasing private investment through loans for diplomas. The number of students accessing VET FEE-HELP rose from about from 55,000 in 2012 to more than 272,000 in 2015. VET FEE-HELP loans increased from $26.0 million in 2012 to more than $2.9 billion in 2015.

 

Private Providers: Policy changes have caused the industry to become demand-driven. These changes, along with the readily available student loans under the VET FEE-HELP scheme, have led to a significant increase in the number of private vocational education providers. Several private VET providers have pursued initial public offerings over the past five years. New Zealand based VET education Company listed on the ASX in May 2014, while Ashley Services Group and Australian Careers Network (ACN) began trading in August and December of that year, respectively.

 

Market Outlook: The Australian dollar is expected to appreciate over the next five years, potentially reducing revenue from international students. The industry is forecast to grow at an annualized 0.5% over the next five years, to reach $9.1 billion.

 

 

Competition

 

In Australia, technical and further education or TAFE system is largely state based, which means that each state has developed individual vocational education and training systems. The Federal Government is encouraging reform to develop a competitive and responsive national system. While the states coordinate their own TAFE systems and are a dominant influence in the industry, they are not major players. The following section outlines the two largest TAFE systems and the institutions.

 

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TAFE NSW

 

In New South Wales, TAFE institutes are under the control of TAFE NSW. TAFE NSW incorporates 10 institutes, which are classified in this report as 10 separate enterprises, which operate 130 campuses throughout the state. The three biggest institutes are the Western Sydney Institute, Sydney Institute and South Western Sydney Institute. TAFE NSW enrolls more than 550,000 students. TAFE NSW increased its tuition fees by an average of 9.5% in 2013 and by a further 5.7% in 2014, in response to funding cuts from the NSW Government. Combined, TAFE NSW generated $1.9 billion in revenue in 2014-15, with 71.0%

 

Victorian Vocational Education and Training System

 

The Victorian style of management is more decentralized than its counterparts in other states, with no umbrella organization. The state’s VET sector consists of 18 public TAFE institutions and more than 1,300 private providers. In Victoria, four universities also offer TAFE-level courses: RMIT University, Victoria University of Technology and Swinburne University in Melbourne, and Federation University in Ballarat, VIC.

 

Government regulations

 

Certain aspects of our business activities are regulated by different government regulations in different countries we operate. The following is a summary of government regulations by country:

 

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Australia

 

Organisation   State /Territory   Website  

Eagle

Academy

  GIVE
Australia Skills & Quality Authority (ASQA)   Federal   www.asqa.gov.au   Yes   Yes
                 
Education Directorate   ACT   www.det.act.gov.au   N/A   N/A
                 
Department of Industry – Training Services   NSW   www.training.nsw.gov.au   N/A   N/A
                 
Department of Education and Training   NT   www.education.nt.gov.au   N/A   N/A
                 
Department of Employment, Small Business and Training   QLD   www.desbt.qld.gov.au/training   Yes   N/A
                 
Department of Industry and Skills   SA   www.skills.sa.gov.au   N/A   N/A
                 
Skills Tasmania   TAS   www.skills.tas.gov.au   N/A   N/A
                 
Department of Education & Training   VIC   www.education.vic.gov.au   N/A   Yes
                 
Victorian Registration and Qualifications Authority   VIC   www.vrqa.vic.gov.au   N/A   N/A
                 
Department of Education   WA   www.education.wa.edu.au   N/A   N/A
                 
Training Accreditation Council   WA   www.tac.wa.gov.au   N/A   N/A

 

ASQA is the regulatory body for RTOs in the Australian Capital Territory, New South Wales, the Northern Territory, Queensland, South Australia and Tasmania.

 

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ASQA also regulates providers in Victoria and/or Western Australia that:

 

  offer courses in any of the following states (including by offering courses online): the Australian Capital Territory, New South Wales, the Northern Territory, Queensland, South Australia and Tasmania, or
  offer courses to overseas students studying in Australia on student visas.

 

Philippines

 

The Technical Education and Skills Development Authority (TESDA) serves as the Philippines’ Technical Vocational and Education training authority. As a government agency, TESDA is tasked to both manage and supervise the Philippines’ Technical Education and Skills Development.

 

TESDA is mandated to:

 

1. Integrate, coordinate and monitor skills development programs;

2. Restructure efforts to promote and develop middle-level manpower;

3. Approve skills standards and tests;

4. Develop an accreditation system for institutions involved in middle-level manpower development;

5. Fund programs and projects for technical education and skills development; and

6. Assist trainers training programs.

 

At the same time, TESDA is expected to:

 

1. Devolve training functions to local governments;

2. Reform the apprenticeship program;

3. Involve industry/employers in skills training;

4. Formulate a skills development plan;

5. Develop and administer training incentives;

6. Organize skills competitions; and

7. Manage skills development funds.

 

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Major Industry Players

 

Below are the largest players in this industry ranked by market share:

 

Navitas Limited

 

Estimated market share: 5.0%

 

Navitas is an ASX-listed Company with numerous subsidiaries operating across the Education and Training division. Company operates three divisions: the professional and English programs division, university programs division and SAE. The Company has expanded rapidly overseas over the past five years, providing courses in the United Kingdom, Canada, the United States, Asia, the Middle East and Europe. In 2014-15, the Company generated 64.0% of its revenue in Australia In 2014-15, these divisions generated revenue of $185.5 million and $224.0 million, respectively

 

Australian Careers Network Ltd

 

Estimated market share: Less than 1.0%

 

Australian Careers Network Ltd (ACN) is a publicly listed Company that entered the Technical and Vocational Education and Training industry by acquiring Phoenix Institute of Australia Pty Ltd in January 2015. ACN has grown rapidly since listing on the ASX through acquisitions, access to the VET FEE-HELP funding model and expanding its student base. The Company generated revenue of $85.2 million in 2014-15, up 377.5% on the previous year. During the same year, it posted a profit margin of 29.7%. As at June 2015, the Company had 10 RTOs in more than 40 locations across Victoria, Queensland and New South Wales. Currently, the Company is under investigation for major fraudulent activities. Police raided the ACN’s offices in April 2016. This could open a large market opportunity for new entrants.

 

ANVIA Employees

 

As of December 31, 2019, we had approximately 84 employees across Australia, Malaysia & Philippine.

 

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Subsidiaries

 

The Company owns 100% of the following subsidiaries as of April 30, 2019:

 

Anvia (Australia) Pty Ltd, an Australian corporation

Xamerg Pty Ltd, an Australian corporation

Workstar Technologies Pty Ltd an Australian corporation

Doubleline Capital Sdn Bhd, a Malaysian corporation

Blue Pacific English Academy Inc., a Philippine corporation.

Egnitus Australia Pty Ltd

Egnitus Holdings Pty Ltd

Xseed Pty Ltd

Host Group of Companies Pty Ltd

My Managed Portfolio Pty Ltd

My Planner Professional Services Pty Ltd

Anvia Malaysia Sdn Bhd

Egnitus International (L) Ltd

Egnitus (M) Sdn Bhd

Sage Interactive Sdn Bhd

 

The Company also owns 51% of Jamiesons Accounting Pty Ltd and Accounting Business Solutions Pty Ltd. In addition, it owns 60% of Acquire Insurance Brokers Pty Ltd. All those are Australian companies.

 

Emerging Growth Company

 

Anvia Holdings Corporation qualifies as an “emerging growth Company” as defined in the Jumpstart Our Business Startups Act which became law in April 2012. The definition of an “emerging growth Company” is a Company with an initial public offering of common equity securities which occurred after December 8, 2011 and has less than $1 billion of total annual gross revenues during last completed fiscal year. The disclosure regarding the Company and The Jumpstart Our Business Startups Act is incorporated herein by reference from the Form 10-12G filed on August 9, 2016.

 

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Item 1A. Risk Factors.

 

We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information under this item.

 

Item 1B. Unresolved Staff Comments.

 

None

 

Item 2. Properties.

 

Office and Retail Space

 

The principal executive offices of Anvia Holdings Corporation is in 100 Challenger Road, Suite 830, Ridgefield Park, NJ 07660, and pays an annual fee of $2,499.

 

Anvia Holdings Corporation through its acquisition now have 13 offices of which 11 are located in Australia, 1 in Malaysia and 1 in Philippine.

 

Australia Offices

 

Workstar Technologies Pty Ltd and its subsidiary Workstar Tech (Aus) Pty Ltd are located at Level 1, 235-239 Commonwealth Street, Surry Hills 2010 NSW, Australia. An annual rent of AUD 143,000 is paid Pursuant to the lease contract with Spira Pty Ltd.

 

Jamiesons Accounting Pty Ltd is located in Queensland at 92 Ashmore Road, Bundall Queensland, 4217 Australia. An annual rent of AUD 108,000 is paid on 2019 pursuant to the lease contract with Ashprop Pty Ltd Atf The Ashprop Unit Trust.

 

Xseed Pty. Ltd is located at Ground Floor Level 1,218-220 Albert Road, South Melbourne VIC 3305, Australia. An annual rent of AUD 208,785 is paid on 2019 pursuant to the lease contract with Western Institute of Technology.

 

Host Group of Companies Pty. Ltd. Is located at Unit 1 53 Brandl Street Eight Mile Plains QLD 4113. An annual rent of AUD 240,979 is paid on 2019 pursuant to the lease contract with Prima Security Ltd.

 

Myplanner Professional Services Pty. Ltd. Is located at Level 3, 26 Marine Parade Southport QLD 4215, Australia. An annual rent of AUD 79,725 is paid on 2019 pursuant to the lease contract with Paulyn Investments Pty Ltd.

 

Acquire Insurance Brokers Pty. Ltd. Is located at Suite 36/2, 8th Avenue, Palm Beach QLD 4221, Australia. The annual rent is AUD 44,400 pursuant to the lease contract with Grimsley Reid Pty Ltd. Date of commerce of this campus is on 1 July 2019.

 

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Xamerg Pty Ltd also known as Eagle Academy have 5 campuses, which all located in Queensland.

 

  a) Coolangatta Campus is located in Queensland at Suites 6.3, Suites 10-12, Pacific Arcade, 70 Grifith Street, Coolangatta, QLD 4225, Australia. An annual rent of AUD37,467.42 were paid in 2019 pursuant to the lease contract with Robert A Hancock and Loris V Hancock as Trustees for The Hancock Family Superannuation Fund.
  b) Fortitude Valley Campus is located at 1A & 1D/ 360 St Paul`s Terrace, Fortitude Valley Q 4006, Australia. An annual rent of AUD91,500 were paid in 2019 pursuant to the lease contract with N&G Holding Company Pty Ltd
  c) Southport Campus is located at 56 Nerang Street, Southport, QLD 4215, Australia. An annual rent of AUD270,640 were paid in 2019 pursuant to the lease contract with Life Settlements Funds Pty Ltd
  d) Carina Campus is located at 56 Zahel Street, Carina, QLD 4152 Australia. An annual rent of AUD42,000 were paid in 2019 pursuant to the lease contract with Camp Hill Carina Wealfare Asociation Trading as Clem Jones Center.
 

e)

 

Spring Hill Brisbane Campus is located at GA1, Part of Level Ground Floor, 62 Astor Terrace, Spring Hill, Brisbane QLD 4000, Australia. The annual rent is AUD. The annual rent is of AUD 262,650. Date of commerce of this campus is on 31 August 2019.

 

Blue Pacific English Academy Inc is located at Escano Beach Piapi, Dumaguete City, 3th floor of Plaza Escano Center Building A, Philippine. An annual rent of Pesos 480,000 is paid on 2019 pursuant to the lease contract with Adelin Knitter.

 

Malaysia Office

 

Egnitus (M) Sdn Bhd is located in Kuala Lumpur, the Capital City of Malaysia. The office is in city center at Suites 34.02, level 34, Menara Citibank, 165 Jalan Ampang, 50450 Kuala Lampur. An annual rent of MYR231,686 were paid in 2019 pursuant to the lease contract with Inverfin Sdn Bhd.

 

Item 3. Legal Proceedings

 

On October 3, 2019, a lawsuit was filed by Auctus Fund, LLC (the “Plaintiff”) against the Company for non-payment of a Promissory Note entered into between the Plaintiff and the Company on March 15, 2019, in the amount of $250,000 plus interest and penalties. The lawsuit was filed in the United States District Court, District of Massachusetts, Case 1:19-cv-12055-ADB. The Company intends to vigorously defend this action. The lawsuit is in its preliminary stages and as of this date there has been no discovery initiated.

 

On October 3, 2019, a lawsuit was filed by Labrys Fund, LLC (the “Plaintiff”) against the Company for non-payment of a Promissory Note entered into between the Plaintiff and the Company on June 4, 2019, alleges damages of $2,070,000 plus attorney’s fees and costs. The lawsuit was filed in the United States District Court, District of Massachusetts, Case 1:19-cv-12477-PBS. The Company defended this action and paid it on May 29, 2020 based on the Settlement Agreement and Release from the District Court of Massachusetts. This agreement decided that Anvia Holdings Corporation should pay just the amount of $ 350,000.

 

The Plaintiff and Releasees acknowledge and agree that by executing this Settlement Agreement and Release, it is releasing and forever discharging the Plaintiff and Releasees from all claims, demands, actions, suits, debts, causes of action, rights, damages, costs, expenses and compensation, arising out of the above captioned action including but in no way limited to those claims which were or could have been asserted in the civil action.

 

Item 4. Mine Safety Disclosures.

 

Not Applicable.

 

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PART II

 

Item 5. Market for Registrant’s Common Equity Related Stockholder Matters and Issuer Purchases of Equity Securities.

 

Market Information

 

Market Information

 

The trading in the Company’s Common Stock began on February 2, 2018. The Securities and Exchange Commission has adopted Rule 15g-9 which establishes the definition of a “penny stock,” for purposes relevant to the Company, as any equity security that has a market price of less than $5.00 per share or with an exercise price of less than $5.00 per share, subject to certain exceptions. For any transaction involving a penny stock, unless exempt, the rules require: (i) that a broker or dealer approve a person’s account for transactions in penny stocks and (ii) the broker or dealer receive from the investor a written agreement to the transaction, setting forth the identity and quantity of the penny stock to be purchased. In order to approve a person’s account for transactions in penny stocks, the broker or dealer must (i) obtain financial information and investment experience and objectives of the person and (ii) make a reasonable determination that the transactions in penny stocks are suitable for that person and that person has sufficient knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks. The broker or dealer must also deliver, prior to any transaction in a penny stock, a disclosure schedule prepared by the Commission relating to the penny stock market, which, in highlight form, (i) sets forth the basis on which the broker or dealer made the suitability determination and (ii) that the broker or dealer received a signed, written agreement from the investor prior to the transaction. Disclosure also has to be made about the risks of investing in penny stocks in both public offerings and in secondary trading, and about commissions payable to both the broker-dealer and the registered representative, current quotations for the securities and the rights and remedies available to an investor in cases of fraud in penny stock transactions. Finally, monthly statements have to be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stocks.

 

Because of these regulations, broker-dealers may encounter difficulties in their attempt to buy or sell shares of our common stock, which may affect the ability of our shareholders to sell their shares in the secondary market and have the effect of reducing the level of trading activity in the secondary market. These additional sales practice and disclosure requirements could impede the sale of our common stock in the marketplace. In addition, the liquidity for our common stock may be decreased, with a corresponding decrease in the price of our common stock. Our shares are likely to be subject to such penny stock rules for the foreseeable future.

 

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On February 2, 2018, our common stock was approved for quotation on the OTC Markets under the symbol “ANVV”. The OTC Markets is a regulated quotation service that displays real-time quotes, last-sale prices, and volume information in over-the-counter equity securities. The OTC Markets securities are traded by a community of market makers that enter quotes and trade reports. This market is limited in comparison to the national stock exchanges and any prices quoted may not be a reliable indication of the value of our common stock.

 

The following table sets forth, for each of the quarterly periods indicated, the high and low sales prices of our common stock, as reported on the OTCQB.

 

Year 2018  High Price   Low Price 
         
Quarter Ended March 31, 2018  $1.15   $0.70 
Quarter Ended June 30, 2018   1.50    1.10 
Quarter Ended September 30, 2018   1.70    0.51 
Quarter Ended December 31, 2018   1.51    0.51 

 

Year 2019  High Price   Low Price 
         
Quarter Ended March 31, 2019  $3.13   $2.67 
Quarter Ended June 27, 2019  $1.94    1.62 

 

On June 27, 2019, the SEC suspended trading in the Company’s common stock. Although the suspension was lifted on July 12, 2019, the Company’s common stock has still not traded since that date. The company is currently working with a broker/dealer and FINRA to have its common stock commence trading in the near future.

 

Holders

 

There are approximately 157 active holders of the Company’s Common Stock. This figure does not include holders of shares registered in “street name” or persons, partnerships, associates, corporations, or other entities identified in security position listings maintained by depositories.

 

Dividends

 

We have not declared any cash dividends on our common stock since our inception and do not anticipate paying any dividends in the foreseeable future. We plan to retain future earnings, if any, for use in our business. Any decisions as to future payments of dividends will depend on our earnings and financial position and such other facts, as the Board of Directors deems relevant.

 

Securities Authorized under Equity Compensation Plans

 

The Company has 3,000,000 shares of common stock authorized under its 2019 Equity Incentive Plan.

 

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Shares Available for Future Sale

 

Approximately 92.3 % of all outstanding shares of our common stock are “restricted securities,” as that term is defined under Rule 144 promulgated under the Securities Act, because they were issued in a private transaction not involving a public offering. Accordingly, none of the outstanding shares of our common stock may be resold, transferred, pledged as collateral or otherwise disposed of unless such transaction is registered under the Securities Act or an exemption from registration is available. In connection with any transfer of shares of our common stock other than pursuant to an effective registration statement under the Securities Act, the Company may require the holder to provide to the Company an opinion of counsel to the effect that such transfer does not require registration of such transferred shares under the Securities Act.

 

Rule 144 is not available for the resale of securities initially issued by companies that are, or previously were, shell companies, like us, unless the following conditions are met:

 

the issuer of the securities that was formerly a shell Company has ceased to be a shell Company;
   
the issuer of the securities is subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act;
   
the issuer of the securities has filed all Exchange Act reports and material required to be filed, as applicable, during the preceding 12 months (or such shorter period that the issuer was required to file such reports and materials), other than Current Reports on Form 8-K; and
   
at least one year has elapsed from the time that the issuer filed current comprehensive disclosure with the SEC reflecting its status as an entity that is not a shell Company.

 

On June 22, 2017, the Company notified the SEC by through the filing of a Form 8-K that is was no longer a “shell” corporation. In view of this, any time after June 22, 2018, and assuming the Company has been current in its required filings pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934, and all other requirements set forth above are met, shareholders may utilize Rule 144 for the sale of their shares.

 

Reports to Security Holders

 

In August 2016, the Company (as Dove Street Acquisition Corporation) filed a Form 10-12G general registration of securities pursuant to the Securities Exchange Act of 1934 and is a reporting Company pursuant such Act and files with the Securities and Exchange Commission quarterly and annual reports and management shareholding information. The Company intends to deliver a copy of its annual report to its security holders and will voluntarily send a copy of the annual report, including audited financial statements, to any registered shareholder who requests the same.

 

The Company’s documents filed with the Securities and Exchange Commission may be inspected at the Commission’s principal office in Washington, D.C. Copies of all or any part of the registration statement may be obtained from the Public Reference Section of the Securities and Exchange Commission, 100 F Street N.E., Washington, D.C. 20549. Call the Commission at 1-800-SEC-0330 for further information on the operation of the public reference rooms. The Securities and Exchange Commission also maintains a web site at http://www.sec.gov that contains reports, proxy statements and information regarding registrants that file electronically with the Commission. All of the Company’s filings may be located under the CIK number 0001681282.

 

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Transfer Agent

 

VStock Transfer, LLC, located at 18 Lafayette Place, New York 11598 is the registrar and transfer agent for the Company’s common stock.

 

Recent Sales of Unregistered Securities

 

All sales of unregistered securities between October 1, 2019 and the date of this Report were previously reported on the Company’s form 8-K’s filed with the SEC

 

Repurchases of Equity Securities

 

None

 

Additional Information

 

None

 

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Item 6. Selected Financial Data.

 

Not required under Regulation S-K for “smaller reporting companies.”

 

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operation.

 

The following discussion and analysis is based on, and should be read in conjunction with, the audited condensed consolidated financial statements and the notes thereto included elsewhere in this Form 10-K. This Annual Report on Form 10-K contains “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. These statements are often identified by the use of words such as “may,” “will,” “expect,” “believe,” “anticipate,” “intend,” “could,” “estimate,” or “continue,” and similar expressions or variations. Such forward-looking statements are subject to risks, uncertainties and other factors that could cause actual results and the timing of certain events to differ materially from future results expressed or implied by such forward-looking statements. The forward-looking statements in this Annual Report on Form 10-K represent our views as of the date of this Annual Report on Form 10-K. We anticipate that subsequent events and developments will cause our views to change. However, while we may elect to update these forward-looking statements at some point in the future, we have no current intention of doing so except to the extent required by applicable law. You should, therefore, not rely on these forward-looking statements as representing our views as of any date subsequent to the date of this Report on Form 10-K.

 

Results of Operations for the Years Ended December 31, 2019 and 2018

 

We are a smaller reporting Company as defined by Rule 12b-2 and incorporated in the State of Delaware on July 22, 2016. As of the periods from inception through the date of this yearly report, we generated small amount revenues and incurred expenses and operating losses, as part of our development stage activities. We recorded a net loss of $3,356,216 for the twelve months ended December 31, 2019, net cash flows used by operating activities was $7,510,880, working capital deficit of $9,433,896 and an accumulated deficit of $6,278,093 at December 31, 2019.

 

We anticipate that we will need substantial working capital over the next 12 months to continue as a going concern and to expand our operations to distribute, sell and market products and solutions. Our independent auditors have expressed substantial doubt as to the ability of the Company to continue as a going concern. We intend to make an equity offering of our common stock for the acquisition and operation expenses. If we cannot raise the required cash, we will issue additional shares of our common stock in lieu of cash.

 

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Our Current Business

 

The Company has commenced operations since June 2017 and during the financial year 2018 it has completed 11 acquisitions in Australia, Malaysia, Philippines and the United States. During year 2019 has completed 7 acquisitions in Australia. Based on the product development during 2017, 2018 and 2019 as well as the acquisitions by the Company now owns several proprietary software, mobile applications, learning and educational tools to help consumers and businesses improve and grow, education services, accounting & corporate advisory, financial planning, data center service.

 

The Company has a stated mission to make potential growth accessible and sustainable.

 

On January 2, 2018, we entered into a stock-for-stock acquisition agreement (the “Acquisition Agreement”) with Anvia (Australia) Pty Ltd, an entity organized under the laws of Australia. On May 10, 2018, we issued to the sole owner of Anvia Australia 5,000 shares of our common stock, valued at the fair market value of $0.60 per share for a consideration of $3,000, in exchange for all of the issued and outstanding stock of Anvia Australia to complete the share exchange and restructuring of entities under common control. We have casted prior period financial statements to reflect the conveyance of Anvia Australia to the Company as if the restructuring had occurred as of the earliest date of the consolidated financial statements. Anvia Australia was an entity solely owned by Lindita Kasa, spouse of Ali Kasa, CEO and director of our Company prior to the acquisition. As a wholly owned subsidiary, Anvia Australia shall operate Anvia market and Anvia recruiters’ sites and business units in Australia and global markets.

 

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Anvia Market is an ecommerce platform where construction tradesmen can purchase safety wears and tools of their choice. Given the fact that there are 1.5 million licensed tradesmen and Australian high adoption of online shopping, Anvia market is expected to contribute to revenue growth of our Company.

 

Anvia Recruiters is placement services specializes in training and placing qualified tradesmen within construction industry in Australia. Recruitment services accounted for 100% of Anvia Holdings Corporation. With the Anvia recruited online platform in place and dedicated employees to manage the platform we forecast that Anvia recruiters will continue to be the key revenue source for our Company in 2018.

 

On June 11, 2018, Anvia Australia, completed its acquisition all of the issued and outstanding shares of Global Institute of Vocational Education Pty Ltd from its former shareholder, an unrelated party to the Company, for a cash purchase price of $62,375 (AUD 81,900 Australian Dollars).

 

On October 10, 2018, Anvia Holdings Corporation (the “Company”) filed a Current Report on Form 8-K (the “Original Form 8-K”) reporting, among other things, that on October 9, 2018, the Company completed its acquisition of Egnitus Inc., a Nevada corporation (“Egnitus”). The Shareholder agree to transfer to Acquirer at the Closing (defined below) 19,768,800 shares of common stock of Target, being all of the issued and outstanding common stock of Target, in exchange for an aggregate of 19,768,800 pre-split shares of voting common stock of Acquirer.

 

In October 23, 2018, Anvia Holdings Corporation entered into an acquisition agreement to acquire 100% of Entrepreneur Culture Inc Sdn. Bhd. shares for consideration of $60,074 and 65,455 shares of Anvia Holdings Corporation common stock.

 

In November 29, 2018, Anvia Holdings Corporation (the “Company”), through its wholly owned subsidiary, Anvia (Australia) Pty Ltd acquired 100% of shares issued and outstanding common shares from the shareholders of Xamerg Pty Ltd for consideration of $1,204,807.84.

 

In November 30, 2018, Anvia Holdings Corporation (the “Company”), through its wholly owned subsidiary, Anvia (Australia) Pty Ltd acquired 51% of the shares issued and outstanding common shares from shareholders of Jamiesons Accounting Pty Ltd for consideration of $696,129

 

In December 10, 2018, Anvia Holdings Corporation acquired 100% of shares issued and outstanding common shares from shareholders of Doubleline Capital Sdn. Bhd. in exchange with 52,300 shares of Anvia Holdings Corporation common stock.

 

In December 28, 2018, Anvia Holdings Corporation acquired 100% of shares issued and outstanding common shares from shareholders of Blue Pacific English Academy Inc. for consideration of $18,593.78

 

In December 28, 2018, Anvia Holdings Corporation (the “Company”), through its wholly owned subsidiary, Doubleline Capital Sdn. Bhd. acquired 100% of shares issued and outstanding common shares from shareholders of All Crescent Sdn. Bhd. for consideration of $100,000 and 200,000 shares of Doubleline Capital Sdn. Bhd. common stock.

 

In December 31, 2018, Anvia Holdings Corporation (the “Company”), through its wholly owned subsidiary, Anvia (Australia) Pty Ltd acquired 100% of shares issued and outstanding common shares from shareholders of Workstar Technologies Pty Ltd for consideration of $211,380.

 

In May 4, 2019, Anvia Holdings Corporation (the “Company”), through its wholly owned subsidiary, Anvia (Australia) Pty Ltd acquired 100% of shares issued and outstanding common shares from shareholders of Xseed Pty Ltd for consideration of $ 500,000.

 

In May 14, 2019, Anvia Holdings Corporation (the “Company”), through its wholly owned subsidiary, Anvia (Australia) Pty Ltd acquired 100% of shares issued and outstanding common shares from shareholders of Host Group of Companies Pty Ltd for consideration of USD 2,988,000 or AUD 4,300,000. where AUD 800,000 shall be paid in cash, and AUD 3,500,000 shall be paid in shares of Anvia Holdings.

 

In June 12, 2019, Anvia Holdings Corporation (the “Company”), through its wholly owned subsidiary, Anvia (Australia) Pty Ltd acquired acquire 95% of the issued and outstanding shares of Myplanner Professional Services Pty. Ltd. (“Myplanner”) and 100% of My Managed Portfolio Pty. Ltd. (“MMP”). The Company acquired both Myplanner and MMP for a combined purchase price of USD$3.1 million by following means:

 

Acquired Companies  Interests
acquired
   Consideration
in Cash
($)
   Consideration
in Shares
($)
   Total consideration
($)
 
Myplanner   95%   1,554,286    651,963    2,206,249 
MMP   100%   624,450    261,934    886,384 
Total        2,178,736    913,897    3,092,633 

 

In June 10, 2019, Anvia Holdings Corporation (the “Company”), through its wholly owned subsidiary, Anvia (Australia) Pty Ltd acquired 51% of shares issued and outstanding common shares from shareholders of Accounting Business Solutions Pty Ltd (“ABS”), for consideration of USD 106,641 in exchange for 39,063 shares of the Company’s common stock of Anvia Holdings.

 

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In June 10, 2019, Anvia Holdings Corporation (the “Company”), through its wholly owned subsidiary, Anvia (Australia) Pty Ltd acquired 100% of shares issued and outstanding common shares from shareholders of VocTrain Pty Ltd for consideration of USD$196,000 in cash and the balance of approximately USD$364,000, in common stock of the Company Anvia Holdings. Anvia (Australia) Pty Ltd has reversed this acquisition on 1 October 2019.

 

In June 25, 2019, Anvia Holdings Corporation (the “Company”), through its wholly owned subsidiary, Anvia (Australia) Pty Ltd acquired 60% of shares issued and outstanding common shares from shareholders of Acquire Insurance Brokers Pty Ltd for consideration of USD $1,029,864 of which USD$75,000 was paid in cash at the closing and USD$954,864 is paid in the common stock of the Company Anvia Holdings.

 

Results of Operations

 

Our results of operations for the three months and twelve months periods ended December 31, 2019 included the operations of the Company, Anvia Holdings Corporation; Anvia Australia, Global Institute of Vocational Education operations, Egnitus INC. January 1 – May 2019 as this company is dissolved on 28 May 2019, Entrepreneur Culture Inc Sdn. Bhd from January 1 – August 2019 as this company is sold on 31 August 2019; Xamerg Pty Ltd, Jamiesons Accounting Pty Ltd; Doubleline Capital Sdn. Bhd; Blue Pacific English Academy Inc..; Workstar Technologies Pty Ltd; Xseed Pty Ltd from the date of its acquisition May 4, 2019; Host Group of Companies Pty Ltd from the date of its acquisition May 14, 2019; Myplanner Professional Services Pty. Ltd. from the date of its acquisition June 12, 2019; My Managed Portfolio Pty. Ltd from the date of its acquisition June 12, 2019; Accounting Business Solutions Pty Ltd (“ABS”) from the date of its acquisition June 10, 2019; Acquire Insurance Brokers Pty Ltd from the date of its acquisition June 25, 2019;

 

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Revenues for the twelve months period ended December 31, 2019 and 2018 were $ 14,245,425 and $ 690,680, respectively, earned by providing several proprietary software, mobile applications, learning and educational tools to help consumers and businesses improve and grow, education services, accounting & corporate advisory, financial planning, data center service. Cost of revenue for providing several proprietary software, mobile applications, learning and educational tools to help consumers and businesses improve and grow, education services, accounting & corporate advisory, financial planning, data center service to customers were $ 8,807,072 and $ 80,370 for the twelve months ended December 31, 2019 and 2018, respectively.

 

Operating expenses for the twelve months ended December 31, 2019 and 2018 were $ 10,637,558 and $1,357,024, respectively. Operating expenses for the twelve months ended December 31, 2019 primarily consisted of consulting and business advisory services of $ 156,000, audit fees $191,270, investor relations fees of $147,354 and other general and administrative expenses of $10,159,500.

 

Operating expenses for the twelve months ended December 31, 2018 primarily consisted of consulting and business advisory services of $ 80,527, audit fees $61,415 travel, meals and lodging expense of $ 30,979, investor relations fees of $65,385, registration fees and permits of $16,253 and other general and administrative expenses of $1,102,465.

 

Other operating expenses for the twelve months ended December 31, 2019 and 2018 were $10,463,088 and (551,561) respectively. Other operating expenses consist of change in the fair value of the embedded conversion option liability for the derivative notes that parent company has received during the fiscal years 2019 and 2018 which consists in a profit for the year 2019 and an expense for the year 2018.

 

Finance cost for the twelve months ended December 31, 2019 were $9,365,806. Finance cost consisted interest expense recorded on notes for EMA of $ 10,684.93, for FirstFire of $ 25,000, for Labrys $ 125,873.44, for Power Up $ 41,860.46, for TFK $ 5,822.47, for GHS $ 955.98, for Rayont INC of $ 2,711, for Auctus Fund of $ 17,813.38 and for Crown Bridge of $ 4,701.37

 

(i) on amortization of embedded conversion option liability for EMA of $ 167,500, for Auctus Fund of $ 2,103,624.35, for Crown Bridge of $ 925,594.71, for FirstFire of $ 1,262,174.61, for Power Up of $ 135,523.18, for TFK of $ 290,552.26, for Labrys of $3,826,666.31

 

(ii) amortization of debt discount for OID of Crown Bridge $11,000, amortization of debt discount for OID of EMA $18,611.11, amortization of debt discount for FirstFire of $ 15,000, amortization of debt discount for OID of Labrys of $ 249,333.33, amortization of debt discount for OID of TFK of $ 12,500.

 

(iii)Other finance cost in the amount of $ 36,560 related the derivative notes and interest on the trade loan in the amount of $ 59,177.44

 

Finance cost for the twelve months ended December 31, 2018 were $1,277,417. Finance cost consisted interest expense recorded on note for EMA of $ 3,781, (i) on amortization of embedded conversion option liability of $ 922,517,

 

(ii) on GHS Note of $1,832, and (iv) on Labrys Fund Note of $24,859, amortization of debt discount for OID of LABRYS 40,667, amortization of debt discount for OID of EMA 6,389. amortization of debt discount for EMA of $ 277,373

 

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As a result of above, we recorded a net loss of $ 3,356,216 for the twelve months ended December 31, 2019 as compared to the net loss of $ 2,563,510 for the same comparable periods in 2018, respectively.

 

Liquidity and Capital Resources

 

Cash and cash equivalents were $612,298 at December 31, 2019 as compared to $248,253 at December 31, 2018. As shown in the accompanying consolidated financial statements, we recorded a net loss of $ 3,356,216 for the twelve months ended December 31, 2019. Our working capital deficit at December 31, 2019 was $ 9,433,896, net cash generated from operating activities was $7,510,880, and accumulated deficit was $6,278,093. These factors and our ability to raise additional capital to accomplish our objectives, raises doubt about our ability to continue as a going concern. We expect our expenses will continue to increase during the foreseeable future as a result of increased operations and the development of our current business operations. We anticipate generating only minimal revenues over the next twelve months. Consequently, we are dependent on the proceeds from future debt or equity investments to sustain our operations and implement our business plan. If we are unable to raise sufficient capital, we will be required to delay or forego some portion of our business plan, which would have a material adverse effect on our anticipated results from operations and financial condition. There is no assurance that we will be able to obtain necessary amounts of capital or that our estimates of our capital requirements will prove to be accurate.

 

We presently do not have any significant credit available, bank financing or other external sources of liquidity. Due to our operating losses, our operations have not been a source of liquidity. We will need to acquire other profitable entities or obtain additional capital in order to expand operations and become profitable. In order to obtain capital, we may need to sell additional shares of our common stock or borrow funds from private lenders. There can be no assurance that we will be successful in obtaining additional funding.

 

To the extent that we raise additional capital through the sale of equity or convertible debt securities, the issuance of such securities may result in dilution to existing stockholders. If additional funds are raised through the issuance of debt securities, these securities may have rights, preferences and privileges senior to holders of common stock and the terms of such debt could impose restrictions on our operations. Regardless of whether our cash assets prove to be inadequate to meet our operational needs, we may seek to compensate providers of services by issuance of stock in lieu of cash, which may also result in dilution to existing shareholders. Even if we are able to raise the funds required, it is possible that we could incur unexpected costs and expenses, fail to collect significant amounts owed to us, or experience unexpected cash requirements that would force us to seek alternative financing.

 

30

 


No assurance can be given that sources of financing will be available to us and/or that demand for our equity/debt instruments will be sufficient to meet our capital needs, or that financing will be available on terms favorable to us. If funding is insufficient at any time in the future, we may not be able to take advantage of business opportunities or respond to competitive pressures or may be required to reduce the scope of our planned service development and marketing efforts, any of which could have a negative impact on our business and operating results. In addition, insufficient funding may have a material adverse effect on our financial condition, which could require us to:

 

  Curtail our operations significantly, or
     
  Seek arrangements with strategic partners or other parties that may require us to relinquish significant rights to technology platform and correlated services, or
     
  Explore other strategic alternatives including a merger or sale of our Company.

 

Operating Activities

 

Net cash generated from operating activities for the twelve months ended December 31, 2019 was $7,510,880 which resulted primarily from net loss of $3,356,216, depreciation of plant and equipment of $638,435, amortization of intangible assets $167,766, amortization of right of use assets of $375,226, impairment of goodwill $2,418,064, gain on the disposal of subsidiaries $ 260,695, gain on acquisition of subsidiaries $400,059, changes in fair value of embedded conversion option liability $10,463,088, goodwill adjustments $137,957 and net change in operating assets and liabilities such as decrease in trade and other receivables of $ 140,831 and increase in trade and other payables $3,484,032 and decrease in operating lease liabilities of $111,471.

 

Net cash used in operating activities for the twelve months ended December 31, 2018 was $2,787,949 which resulted primarily from net loss of $2,563,510, depreciation of plant and equipment of $117,595, amortization of intangible assets 1,459, and net change in operating assets and liabilities such as decrease in trade and other receivables of $ 480,441 and increase in trade and other payables $136,948.

 

Investing Activities

 

Net cash used in investing activities for the twelve months ended December 31, 2019 was $8,923,474 primarily due to the acquisition of subsidiaries, net of cash and cash equivalents acquired of $7,466,264, acquisition of other investments of 361,951, acquisition of the intangible assets $378,406 and acquisition of property, plant and equipment $716,853.

 

Net cash used in investing activities for the twelve months ended December 31, 2018 was $1,000,365 primarily due to the acquisition of subsidiaries, net of cash and cash equivalents acquired of $998,365 and acquisition of other investments of 2,000.

 

Financing Activities

 

Net cash provided by financing activities for the twelve months ended December 31, 2019 was $16,798,399 primarily due to cash received from Issuance of share capital of $5,711,092, redemption of embedded conversion option liability of $10,325,803, redemption of convertible notes payable, net of debt discount of $97,880, repayment of hire purchase of $125, 619, drawdowns of loan and borrowings ( net of repayment) of $ 1,157,530 and repayment to directors of $172,527.

 

Net cash provided by financing activities for the twelve months ended December 31, 2018 was $4,025,462 primarily due to cash received from Issuance of share capital of $1,391,955, proceeds from embedded conversion option liability of $2,412,285 and proceeds from convertible notes payable, net of debt discount of $221,222

 

We recorded $0 in cash and a decrease in cash of $319 due to the effect of foreign exchange rate changes on cash for the twelve months ended December 31, 2019 and 2018, respectively.

 

As a result of the above activities, we experienced a net increase in cash of $ 364,045 and $ 236,829 for the twelve months ended December 31, 2019 and December 31, 2018, respectively.

 

Although the Company was able to obtain short term loans, there is no assurance that the Company will continue to be able to raise capital at favorable terms, and the ability to continue as a going concern is still dependent on its success in obtaining additional financing from investors or from sale of our common shares.

 

31

 

 

Critical Accounting Policies and Significant Judgments and Estimates

 

Our management’s discussion and analysis of our financial condition and results of operations is based on our financial statements which we have prepared in accordance with U.S. generally accepted accounting principles. In preparing our financial statements, we are required to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. We have identified the following accounting policies that we believe require application of management’s most subjective judgments, often requiring the need to make estimates about the effect of matters that are inherently uncertain and may change in subsequent periods. Our actual results could differ from these estimates and such differences could be material.

 

Our significant accounting policies are described in more details in Note 2 of our annual financial statements included in our Annual Report on Form 10-K filed with the SEC on April 3, 2019.

 

Off-Balance Sheet Arrangements

 

We have not engaged in any off-balance sheet arrangements as defined in Item 303(c) of the SEC’s Regulation S-B. We did not have any relationships with unconsolidated organizations or financial partnerships, such as structured finance or special-purpose entities that would have been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes.

 

Item 7A. Quantitative and Qualitative Disclosures About Market Risks.

 

We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information under this item.

 

Item 8. Financial Statements and Supplementary Data

 

Our audited financial statements are set forth in this Annual Report beginning on page F-1.

 

32

 

 

FINANCIAL STATEMENTS AND EXHIBITS

 

INDEX TO FINANCIAL STATEMENTS

 

Report of Independent Registered Public Accounting Firm F-1
   
Consolidated Balance Sheets as of December 31, 2019 and 2018 F-2
   
Consolidated Statements of Operations for Years Ended December 31, 2019 and 2018 F-3
   
Consolidated Statement of Cash Flows for the Years Ended December 31, 2019 and 2018 F-4
   
Consolidated Statement of Stockholders’ Equity as of December 31, 2019 and 2018 F-5
   
Notes to Consolidated Financial Statements F-6 to F-22

 

33

 

 

A picture containing drawing



Description automatically generated

 

 

TOTAL ASIA ASSOCIATES PLT (AF002128 & LLP0016837-LCA)

A Firm registered with US PCAOB and Malaysian MIA

Block C-3-1, Megan Avenue 1, 189, Off Jalan Tun Razak,

50400, Kuala Lumpur.

Tel: (603) 2733 9989

 

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

To the Shareholders and Board of Directors of Anvia Holdings Corporation.

100 Challenger Road, Suite 830

Ridgefield Park, NJ 07660

 

Opinion on the Financial Statements

 

We have audited the accompanying consolidated balance sheets of Anvia Holdings Corporation and its subsidiaries (“the Company”) as of December 31, 2019 and 2018, and the related consolidated statements of operations and comprehensive loss, stockholders’ equity, and cash flows for the year ended December 31, 2019 and 2018, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2019 and 2018, and the results of its operations and its cash flows for each of two years in the year ended December 31, 2019 and 2018, in conformity with accounting principles generally accepted in the United States of America.

 

Basis for Opinion

 

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

 

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting 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.

  

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall consolidated financial statements presentation. We believe that our audit provides a reasonable basis for our opinion.

 

The financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company’s income from operations and no operation raise substantial doubt about its ability to continue as a going concern. Management’s plans regarding those matters also are described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

/s/ Total Asia Associates PLT

 
TOTAL ASIA ASSOCIATES PLT  

 

We have served as the Company’s auditor since 2018.

 

Kuala Lumpur, Malaysia  

   

Date: July 2, 2020

 

 F-1 
   

 

ANVIA HOLDINGS CORPORATION

CONSOLIDATED BALANCE SHEETS

(Amount expressed in United States Dollars (“US$”), except for number of shares)

 

   As of December 31, 
   2019   2018 
ASSETS          
Current assets:          
Cash and bank balances  $612,298   $248,253 
Trade receivables   609,641    547,846 
Other receivables and deposits   506,214    1,399,023 
Amount owing by directors   1,087      
Tax recoverable   76,966    - 
           
Total current assets   1,806,206    2,195,122 
           
Non-current assets:          
Plant and equipment, net   563,467    485,050 
Right-of-use   8,638,730    - 
Intangible assets   218,166    7,526 
Other investments   522,304    160,354 
Goodwill   8,973,500    3,199,274 
           
Total non-current asset   18,916,167    3,852,204 
TOTAL ASSETS  $20,722,373   $6,047,326 
           
LIABILITIES AND STOCKHOLDERS’ EQUITY          
Current liabilities:          
Trade payables  $1,649,212   $2,872,177 
Other payables and accrued liabilities   4,708,721    764,055 
Embedded conversion option liability   2,275,000    2,412,285 
Convertible notes payable, net of debt discount   123,342    221,222 
Amount owing to directors   613,270    785,797 
Deferred income   178,958    - 
Loan and borrowings   1,269,147    - 
Hire purchase   21,469    - 
Operating lease liabilities   327,754    - 
Income tax payable   73,229    5,448 
           
Total current liabilities   11,240,102    7,060,985 
           
Non-current liabilities          
Loan and borrowings   206,036    - 
Hire purchase   96,025    - 
Operating lease liabilities   8,574,731    - 
           
Total non-current liabilities   8,876,792    - 
           
TOTAL LIABILITIES  $20,116,894   $7,060,985 
           
Stockholders’ equity:          
Common stock, $0.0001 par value, 100,000,000 shares authorized; 42,850,405 and 41,004,994 shares issued and outstanding at December 31, 2019 and December 31, 2018, respectively  $4,285   $4,101 
Discount on common stock   (500)   (500)
Additional paid up share capital   8,366,007    1,956,402 
Common stock subscriptions receivable   (698,698)     
Accumulated losses   (6,278,093)   (2,848,437)
Other comprehensive loss   (780,670)   (127,020)
Total equity attributable to owners of the Company   612,331    (1,015,454)
Non-controlling interests   (6,852)   1,795 
           
Total stockholders’ equity  $605,479   $(1,013,659)
           
TOTAL LIABILITIES AND STOCKHOLDERS EQUITY  $20,722,373   $6,047,326 

 

See accompanying notes to financial statements

 

 F-2 
   

 

ANVIA HOLDINGS CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

(Amount expressed in United States Dollars (“US$”), except for number of shares)

 

   Years ended December 31 
   2019   2018 
         
Revenues, net  $14,245,425   $690,680 
           
Cost of revenues   (8,807,072)   (80,370)
           
Gross profit   5,438,353    610,310 
           
Other income   211,611    12,182 
Gain on acquisition of subsidiaries   400,059    - 
Gain on disposal of subsidiaries   260,695    - 
General and administrative expenses   (10,637,558)   (1,357,024)
Other operating income/(expenses)   10,463,088    (551,561)
           
Gain/(Loss) from operations   6,136,248    (1,286,093)
           
Finance cost   (9,365,806)   (1,277,417)
           
Loss before tax   (3,229,558)   (2,563,510)
           
Income taxes expenses   (126,658)   - 
           
NET LOSS  $(3,356,216)  $(2,563,510)
           
Net loss(profit) attributable to non-controlling interests   (30,032)   16,009 
           
NET LOSS ATTRIBUTABLE TO THE COMPANY   (3,386,248)   (2,547,501)
           
Other comprehensive loss:          
- Foreign currency translation gain (loss)   (162,590)   (15,920)
- Fair value gain on other investment   (492,000)   - 
           
COMPREHENSIVE LOSS  $(4,040,838)  $(2,563,421)
           
Other comprehensive loss attributable to non-controlling interests   940    564 
           
TOTAL COMPREHENSIVE LOSS ATTRIBUTABLE TO THE COMPANY  $(4,039,898)  $(2,562,857)

 

See accompanying notes to financial statements

 

 F-3 
   

 

ANVIA HOLDINGS CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Amount expressed in United States Dollars (“US$))

 

   Years ended December 31 
   2019   2018 
Cash flows from operating activities:          
Net loss  $(3,356,216)  $(2,563,510)
           
Adjustments to reconcile net loss to net cash used in operating activities:          
Depreciation of plant and equipment   638,435    117,595 
Amortization of intangible assets   167,766    1,459 
Amortization of right of use assets   375,226      
Impairment of goodwill   2,418,064    - 
Gain on disposal of subsidiaries   (260,695)   - 
Negative goodwill   (400,059)   - 
Changes in fair value of embedded conversion option liability   (10,463,088)     
Goodwill adjustments   137,957    - 
Operating loss before working capital changes   (10,742,610)   (2,444,456)
           
Changes in operating assets and liabilities:          
Trade and other receivables   (140,831)   (480,441)
Trade and other payables   3,484,032    136,948 
Operating lease liabilities   (111,471)   - 
Cash (used in)generated from operating activities   (7,510,880)   (2,787,949)
           
Cash flows from investing activities:          
Purchase of plant and equipment and intangible assets   -    - 
Acquisition of subsidiaries, net of cash and cash equivalents acquired   (7,466,264)   (998,365)
Acquisition of other investments   (361,951)   (2,000)
Acquisition of intangible assets   (378,406)   - 
Acquisition of property, plant and equipment   (716,853)   - 
Net cash used in investing activities   (8,923,474)   (1,000,365)
           
Cash flows from financing activities:          
Issuance of share capital   5,711,092    1,391,955 
(Redemption of)/Proceeds from issuance of :          
-Embedded conversion option liability   10,325,803    2,412,285 
-Convertible notes payable, net of debt discount   (97,880)   221,222 
Repayment of hire purchase   (125,619)   - 
Drawdowns of loan and borrowings, net of repayment   1,157,530    - 
Repayment to Directors   (172,527)   - 
Net cash generated from financing activities   16,798,399    4,025,462 
           
Foreign currency translation adjustment   -    (319)
           
NET CHANGE IN CASH AND CASH EQUIVALENTS   364,045    236,829 
           
CASH AND CASH EQUIVALENTS, BEGINNING OF FINANCIAL YEAR   248,253    11,424 
           
CASH AND CASH EQUIVALENTS, END OF FINANCIAL YEAR  $612,298    248,253 

 

   Years ended December 31 
   2019   2018 
CASH AND CASH EQUIVALENTS INFORMATION:          
Cash at bank  $612,298   $248,253 
Cash and cash equivalents, end of financial year   612,298    248,253 

 

See accompanying notes to financial statements.

 

 F-4 
   

 

ANVIA HOLDINGS CORPORATION

 

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

 

(Amount expressed in United States Dollars (“US$))

 

   Common Stock   Additional Paid-in   Discount on Common   Common Stock Subscriptions   Other Comprehensive   Accumulated   Owners of the Company       Total 
   Number   Par Value   Capital   Stock   Receivable   Income (loss)   Deficit   Total   NCI   Equity 
                                         
Balance as of December 31, 2017   19,003,367    1,901    566,647    (500)   -    (111,664)   (300,936)   155,448    185    155,633 
Share swap during the year   22,001,627    2,200    14,279,058    -    (1,030,000)   -    -    13,251,258         13,251,258 
Reverse acquisition             (11,859,303)   -    -    -    -    (11,859,303)        (11,859,303)
Acquisition of subsidiaries                                      -    18,183    18,183 
Net loss   -    -    -    -    -         (2,547,501)   (2,547,501)   (16,009)   (2,563,510)
Accumulated other comprehensive loss   -    -    -    -    -    (15,356)        (15,356)   (564)   (15,920)
                                                   
Balance - December 31, 2018   41,004,994    4,101    2,986,402    (500)   (1,030,000)   (127,020)   (2,848,437)   (1,015,454)   1,795    (1,013,659)
                                                   
Balance as at 1 January 2019   41,004,994    4,101    2,986,402    (500)   (1,030,000)   (127,020)   (2,848,437)   (1,015,454)   1,795    (1,013,659)
Share swap during the year   1,845,411    184    6,029,770         331,302              6,361,256         6,361,256 
Restructured and striked off of subsi             (650,165)                  991    (649,174)        (649,174)
Acqiusition of subsidiary                                      -    (37,739)   (37,739)
Net loss                                 (3,386,248)   (3,386,248)   30,032    (3,356,216)
Distribution of profits                                 (44,399)   (44,399)        (44,399)
Accumulated other comprehensive loss                            (653,650)        (653,650)   (940)   (654,590)
                                       -         - 
                                       -         - 
Balance as at 31 December 2019   42,850,405    4,285    8,366,007    (500)   (698,698)   (780,670)   (6,278,093)   612,331    (6,852)   605,479 

 

See accompanying notes to financial statements.

 

 F-5 
   

 

ANVIA HOLDINGS CORPORATION

 

NOTES TO CONSOLIDATED FINANCIAL STATEMENT

 

(Amount expressed in United States Dollars (“US$”), except for number of shares)

 

1. ORGANIZATION AND BUSINESS BACKGROUND

 

Anvia Holdings Corporation (formerly Dove Street Acquisition Corporation) was incorporated on July 22, 2016 under the laws of the state of Delaware. The Company is engaged in the development and commercialization of web-based technology, the “Anvia Loyalty” and “Anvia Learning” mobile applications, and other intellectual property (collectively the “Anvia Technology”), as evidenced by the introduction of the Anvia Technology into the stream of commerce, and the Company’s commercial relationships with third parties.

 

On January 10, 2017, the Company effected a change of control by cancelling an aggregate of 19,500,000 shares of common stock of existing shareholders, issuing 5,000,000 shares of common stock to its sole officer and director; electing new officer and director and accepting the resignations of its then existing officers and directors. In connection with the change of control, the sole shareholder of the Company and its board of directors unanimously approved the change of the Company’s name from Dove Street Acquisition Corporation to Anvia Holdings Corporation.

 

The principal office address is located at 100 Challenger Road, Suite 830, Ridgefield Park, NJ 07660

 

The corporate structure is depicted below:

 

 

 

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Basis of presentation

 

These accompanying financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“US GAAP”).

 

 F-6 
   

 

Going concern

 

The Company’s consolidated financial statements are prepared using generally accepted accounting principles in the United States of America applicable to a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has generated minimal revenue and has sustained operating losses since inception to date and allow it to continue as a going concern. The continuation of the Company as a going concern is dependent upon the ability of the Company to obtain necessary financing to continue operations, and the attainment of profitable operations. The Company incurred a net loss of $3,356,216 for the year ended December 31, 2019, incurred a net current liability of $9,433,896 and an accumulated loss of $6,233,697 as of December 31, 2019. These factors, among others, raise a substantial doubt regarding the Company’s ability to continue as a going concern. If the Company is unable to obtain adequate capital, it could be forced to cease operations. The accompanying consolidated financial statements do not include any adjustments to reflect the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

 

Use of estimates

 

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company regularly evaluates estimates and assumptions related to the valuation of accounts receivable, accounts payable, accrued liabilities, payable to related party, valuation of beneficial conversion features in convertible debt, valuation of derivatives, and deferred income tax asset valuation allowances. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.

 

Cash and cash equivalents

 

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

 

Plant and equipment

 

Plant and equipment are stated at cost less accumulated depreciation and accumulated impairment losses, if any. Depreciation is calculated on the straight-line basis to write off the cost over the following expected useful lives of the assets concerned. The principal annual rates used are as follows:

 

Categories  Principal Annual Rates/Expected Useful Life 
Computer and software   20%
Furniture and fittings   20%
Building   [N/A] 
Renovation   20%
Motor vehicle   20%

 

Fully depreciated plant and equipment are retained in the financial statements until they are no longer in use.

 

 F-7 
   

 

Intangible assets

 

Intangible assets are stated at cost less accumulated amortization. Intangible assets represented the registration costs of trademarks, which are amortized on a straight-line basis over a useful life of five years.

 

The Company follows ASC Topic 350 in accounting for intangible assets, which requires impairment losses to be recorded when indicators of impairment are present and the undiscounted cash flows estimated to be generated by the assets are less than the assets’ carrying amounts. There was no impairment losses recorded on intangible assets for the year ended December 31, 2019.

 

Deferred income

 

Deferred income refers to fees received in advance for services which have not yet been performed. Deferred income is classified on the consolidated balance sheet as current liability.

 

Revenue recognition

 

The Company provides vocational training, consulting services for assets and education for construction tradesman that need qualifications for roofing, plumbing, home renovation, electrical and carpentry. The Company’s training packages vary in price according to the different types of vocational training and education programs purchased by the customers. The Company recognizes revenue upon the completion of the vocational training courses and education programs offered to its customers. The Company recognizes as revenue any deposits previously received, as they are non-refundable upon commencement of the vocational training courses.

 

The Company’s revenue recognition policy is based on the revenue recognition criteria established in accordance with Accounting Standards Codification (ASC) 605. The criteria and how the Company satisfies each element are as follows: (1) persuasive evidence of an arrangement – the Company and the customer enters into a signed contract; (2) delivery has occurred – as noted above, upon the commencement of the training course, the deposit is non-refundable per the terms of the signed contract and upon completion of the course, the Company has provided all services to be delivered to the customer under the contract; (3) the price is fixed and determinable – the signed contract indicates a fixed dollar amount for the training for the courses enrolled by the customer; (4) collectability is reasonable assured – the Company receives as payment a deposit and the balance of the training upon the completion of the training course.

 

Comprehensive income

 

ASC Topic 220, “Comprehensive Income” establishes standards for reporting and display of comprehensive income, its components and accumulated balances. Comprehensive income as defined includes all changes in equity during a period from non-owner sources. Accumulated other comprehensive income, as presented in the accompanying statements of stockholders’ equity consists of changes in unrealized gains and losses on foreign currency translation and cumulative net change in the fair value of available-for-sale investments held at the balance sheet date. This comprehensive income is not included in the computation of income tax expense or benefit.

 

 F-8 
   

 

Income tax expense

 

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

 

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

 

The Company conducts major businesses in Malaysia and is subject to tax in their own jurisdictions. As a result of its business activities, the Company will file separate tax returns that are subject to examination by the foreign tax authorities.

 

Foreign currencies translation

 

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

 

The functional currency of the Company is the United States Dollars (“US$”) and the accompanying financial statements have been expressed in US$. In addition, the Company maintains its books and record in a local currency, Malaysian Ringgit (“MYR” or “RM”) and Australian Dollars (“AUD”), which is functional currency as being the primary currency of the economic environment in which the entity operates.

 

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

 

Translation of amounts from the local currency of the Company into US$1 has been made at the following exchange rates for the respective years:

 

    As of and for the year ended December 31,  
    2019     2018  
Year-end US$1 : MYR exchange rate     4.0918       4.1300  
Yearly average US$1 : MYR exchange rate     4.1416       4.0307  
                 
Year-end AUD : US$1 exchange rate     0.7030       0.7046  
Yearly average AUD : US$1 exchange rate     0.6952       0.7482  
                 
Year-end US$1 : Philippine Pesos exchange rate     50.6107       52.5000  
Yearly average US$1 : Philippine Pesos exchange rate     51.7675       N/A  

 

 F-9 
   

 

Related parties

 

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

 

Fair value of financial instruments

 

The carrying value of the Company’s financial instruments: cash and cash equivalents, trade receivable, deposits and other receivables, amount due to related parties and other payables approximate at their fair values because of the short-term nature of these financial instruments.

 

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

 

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

 

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

 

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

 

As of December 31, 2019, and 2018, the Company did not have any nonfinancial assets and liabilities that are recognized or disclosed at fair value in the financial statements, at least annually, on a recurring basis, nor did the Company have any assets or liabilities measured at fair value on a non-recurring basis.

 

Earnings (Loss) per share

 

The Company computes net earnings (loss) per share in accordance with ASC 260, “Earnings per Share”. ASC 260 requires presentation of both basic and diluted net earnings per share (“EPS”) on the face of the income statement. Basic EPS is computed by dividing earnings (loss) available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible note and preferred stock using the if-converted method. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential shares if their effect is anti-dilutive.

 

 F-10 
   

 

Recent accounting pronouncements

 

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

 

In May 2014, the FASB issued Accounting Standards Update No. 2014-09, “Revenue from Contracts with Customers” (“ASU 2014-09”). ASU 2014-09 supersedes the revenue recognition requirements in “Revenue Recognition (Topic 605)”, and requires entities to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. ASU 2014-09 is effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. Early adoption is not permitted. In August 2015, the FASB issued an Accounting Standards Update to defer by one year the effective dates of its new revenue recognition standard until annual reporting periods beginning after December 15, 2017 (2018 for calendar-year public entities) and interim periods therein. This adoption will not have a material impact on our financial statements.

 

In June 2014, the FASB issued ASU 2014-15, “Presentation of Financial Statements-Going concern (Subtopic 205-40) which provides guidance to an organization’s management, with principles and definitions that are intended to reduce diversity in the timing and content of disclosures that are commonly provided by organizations today in the financial statement footnotes. This guidance in ASU 2014-15 is effective for annual periods ending after December 15, 2016, and interim periods within annual periods beginning after December 15, 2016. Early application is permitted for annual or interim reporting periods for which the financial statements have not previously been issued. This adoption will not have a material impact on our financial statements.

 

In February 2015, the FASB issued ASU 2015-02 “Consolidation (Topic 810): Amendments to the Consolidation Analysis.” ASU 2015-02 changes the analysis that a reporting entity must perform to determine whether it should consolidate certain types of legal entities. It is effective for annual reporting periods, and interim periods within those years, beginning after December 15, 2015. Early adoption is permitted, including adoption in an interim period. This adoption will not have a material impact on our financial statements.

 

In July 2015, the FASB issued ASU 2015-11, Inventory, which requires an entity to measure inventory within the scope at the lower of cost and net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. The effective date for the standard is for fiscal years beginning after December 15, 2016. Early adoption is permitted. We will recognize our inventories at cost or net realizable value, whichever lower.

 

In February 2016, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No. 2016-02, Leases (Topic 842). Under the new guidance, lessees will be required recognize the following for all leases (with the exception of short-term leases) at the commencement date: 1) A lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis; and 2) A right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. The new lease guidance simplified the accounting for sale and leaseback transactions primarily because lessees must recognize lease assets and lease liabilities. Lessees will no longer be provided with a source of off-balance sheet financing. The amendments in this ASU are effective for fiscal years beginning after December 15, 2019, including interim periods within those years. The Company is evaluating this ASU and has not determined the effect of this standard on its ongoing financial reporting.

 

In January 2017, the FASB issued Accounting Standards Update No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business (ASU 2017-01), which revises the definition of a business and provides new guidance in evaluating when a set of transferred assets and activities is a business. We will adopt the new standard effective January 1, 2018, on a prospective basis and do not expect the standard to have a material impact on our consolidated financial statements.

 

 F-11 
   

 

3. OTHER RECEIVABLES AND DEPOSITS

 

    As at December 31,  
    2019     2018  
             
Other receivables   $ 449,872     $ 1,399,023  
Amount owing by related parties     56,342       -  
    $ 506,214     $ 1,399,023  

 

The amount owing by related parties is unsecured, interest-free with no fixed repayment term.

 

4. AMOUNT OWING BY DIRECTORS

 

The amount owing by directors is unsecured, interest-free with no fixed repayment term.

 

5. PLANT AND EQUIPMENT, NET

 

Plant and equipment consisted of the following:

 

   As of December 31, 
   2019   2018 
         
Computer and software  $1,275,594   $1,166,812 
Furniture and fittings   689,150    263,978 
Building   294,064    269,232 
Renovation   1,540    16,834 
Motor vehicles   198,484    25,122 
    2,458,832    1,741,978 
(Less): Accumulated depreciation   (1,895,365)   (1,256,928)
Property, plant and equipment, net  $563,467   $485,050 

 

Depreciation expense for the year ended December 31, 2019 and 2018 were $638,435 and $$117,595 respectively.

 

6. INTANGIBLE ASSETS, NET

 

Intangible assets consisted of the following:

 

    As of December 31,  
    2019     2018  
             
Trade mark   $ 74,285     $ 13,082  
Software     317,203       -  
      391,488       13,082  
                 
(Less): Accumulated amortisation     (173,322 )     (5,556 )
                 
Intangible assets, net   $ 218,166     $ 7,526  

 

Amortization expense for the year ended December 31, 2019 and 2018 were $167,766 and $1,459, respectively.

 

 F-12 
   

 

7. OTHER INVESTMENTS

 

    As at December 31,  
    2019     2018  
             
Other investments, at cost   $ 522,304     $ 1,325,553  
Impairment     -       (1,165,199 )
    $ 522,304     $ 160,354  

 

8. OTHER PAYABLES AND ACCRUED LIABILITIES

 

    As at December 31,  
    2019     2018  
             
Amount owing to related parties   $ 2,744,750     $ 70,244  
Accrued other expenses     1,963,971       693,811  
    $ 4,708,721     $ 764,055  

 

The amount owing by related parties is unsecured, interest-free with no fixed repayment term.

 

9. CONVERTIBLE NOTES PAYABLES, NET OF DEBT DISCOUNT

 

On June 5, 2018, the Company entered into an Equity Financing Agreement and Registration Rights Agreement with GHS Investments, LLC (the “GHS”) pursuant to which GHS has agreed to purchase up to $10,000,000 in shares of Company common stock. The obligations of GHS to purchase the shares of Company common stock are subject to the conditions set forth in the Equity Financing Agreement, including, without limitation, the condition that a registration statement on Form S-1 registering the shares of Company common stock to be sold to GHS be filed with the Securities and Exchange Commission and become effective. The Registration Rights Agreement provides that the Company shall use commercially reasonable efforts to file the registration statement within 30 days after the date of the Registration Rights Agreement and have the registration statement become effective within 90 days after it is filed. The purchase price of the shares of Company common stock will be equal to 80% of the market price (as determined in the Equity Financing Agreement) calculated at the time of purchase. In connection with the Equity Financing Agreement, the Company executed a convertible promissory note in the principal amount of $40,000 (the “GHS Note”) as payment of the commitment fee for the Equity Financing Agreement. The GHS Note bears interest at the rate of 8% and must be repaid on or before March 5, 2019. For the three months ended March 31, 2019, the Company has accrued and recorded an interest expense of $ 955.99 on the GHS Note. The commitment fee in the principal amount of $ 40,000 is paid from the company according the date in the agreement.

 

On June 21, 2018, the Company executed a $333,000 Convertible Promissory Note (the “Note”) with Labrys Fund, an unrelated party (the “Lender”), bearing an interest rate of 12%, unsecured, and due on December 21, 2018 (the “Maturity Date”). This note in paid on time from the Company. The total consideration received against the Note was $303,000, with the Note bearing $30,000 Original Issue Discount (the “OID”) and $3,000 for legal expenses. Any interest payable is in addition to the OID, and that OID (or prorated OID, if applicable) remained payable regardless of time and manner of payment by the Company. The Maturity Date was December 21, 2018 the date upon which the principal sum of this promissory note, as well as any unpaid interest and other fees, have been due and paid on December 18, 2019.

 

For both the three months and twelve months ended December 31, 2018, the Company has recognized interest expense of 30,000 related to the amortization of the OID, interest expense of $ 17,915.18 on the Note and $321,073 related to the amortization of the beneficial conversion feature discount as it related to this Note.

 

On November 15, 2018, the Company executed a $250,000 Convertible Promissory Note (the “Note”) with EMA Fund, an unrelated party (the “Lender”), bearing an interest rate of 12%, unsecured, and due on May 15, 2019 (the “Maturity Date”). The total consideration received against the Note was $222,500, with the Note bearing $25,000 Original Issue Discount (the “OID”) and $2,500 for legal expenses. Any interest payable is in addition to the OID, and that OID (or prorated OID, if applicable) remains payable regardless of time and manner of payment by the Company. The Maturity Date is the date upon which the principal sum of this promissory note, as well as any unpaid interest and other fees, shall be due and payable. The Note may be prepaid at any time before May 15, 2019 without any prepayment penalties. This note is paid on May 10, 2019. Any amount of principal or interest on this Note which is not paid when due, shall bear interest at the rate of the lesser of (i) twenty-four percent (24%) per annum or (ii) the maximum amount allowed by law from the due date thereof until the same is paid (the “Default Interest”). Interest shall commence accruing on the date that the Note is fully paid and shall be computed on the basis of a 365-day year and the actual number of days elapsed.

 

 F-13 
   

 

The Lender has the right in its sole and absolute discretion, from time to time, and at any time on or following the 180th calendar day after the date Note and ending on the later of (i) the Maturity Date and (ii) the date of payment of the Default Interest, each in respect of the remaining principal amount of this Note to convert all or part of the outstanding and unpaid principal amount of this Note into fully paid and non-assessable shares of Common Stock of the Company as per the Conversion formula: Number of shares receivable upon conversion equals the dollar conversion amount divided by the Conversion Price. The Conversion Price is the lesser of 60% of the lowest trade price for the last 25 days prior to the issuance of the Note or 60% of the lowest market price over the 25 days prior to conversion. Total debt outstanding at March 31, 2019 pursuant to the convertible note payable resulted in potential conversion of debt into 565,321 common shares of common stock. The Note contains certain representations, warranties, covenants and events of default, and increases in the conversion discount and amount of the principal and interest rates under the Note in the event of such defaults.

 

In connection with the issuance of the Note, the Company recorded a debt discount related to the OID in the amount of $25,000 which will be amortized to interest expense over the term of the loan. In accordance with ASC 815, the conversion feature meets the definition of a derivative and therefore requires bifurcation and is accounted for as a derivative liability. For the six months June 30, 2019, the Company has recognized interest expense of $ 18,611.11 related to the amortization of the OID, interest expense of $ 10,684.93 on the Note and $ 167,500.00 related to the amortization of the embedded conversion option liabilities discount as it related to this Note.

 

Under the provisions of ASC 815-40, convertible instruments issued by the Company qualify for derivative treatment due to the variable conversion formula. The embedded conversion features of the Note is bifurcated and recorded as a liability which is revalued at fair value each reporting date. If the fair value of the embedded conversion feature exceeds the face value of the related debt, net of other discounts, the excess is recorded as a change in fair value on the issuance date. Embedded conversion features are valued at their fair value, rather than by the intrinsic value method. The Company calculated the estimated fair values of the liabilities for embedded conversion feature at November 15, 2018, December 31, 2018 and June 30, 2019 with the Black-Scholes option pricing model using the closing price of the Company’s common stock at each respective date and the ranges for volatility, expected term and risk-free interest indicated above. As a result, the Company recorded a change in the fair value of the liabilities for embedded conversion option derivative instruments for the three months and six months respectively ended June 30, 2019 of $1,527,954.22 and $ 658,390.08, which are included in other incomes.

 

Additionally, in connection with the Note, the Company also issued 31,250 shares of common stock of the Company to the holder as a commitment fee for this note on November 15, 2018. The commitment shares fair value was calculated as $31,250 being the fair value of common stock on the date of issuance (Note 9) and recorded as restricted stock receivable in the accompanying consolidated financial statements at December 31, 2018.

 

The Maturity Date was May 15, 2019 the date upon which the principal sum of this promissory note, as well as any unpaid interest and other fees, have been due and paid on May 10, 2019.

 

On November 29, 2018, the Company executed a $660,000 Convertible Promissory Note (the “Note”) with LABRYS Fund, an unrelated party (the “Lender”), bearing an interest rate of 12%, unsecured, and due on May 29, 2019 (the “Maturity Date”). The total consideration received against the Note was $600,000, with the Note bearing $60,000 Original Issue Discount (the “OID”) and $6,000 for legal expenses. Any interest payable is in addition to the OID, and that OID (or prorated OID, if applicable) remains payable regardless of time and manner of payment by the Company. The Maturity Date is the date upon which the principal sum of this promissory note, as well as any unpaid interest and other fees, shall be due and payable. The Note may be prepaid at any time before May 29, 2019 without any prepayment penalties. Any amount of principal or interest on this Note which is not paid when due, shall bear interest at the rate of the lesser of (i) twenty-four percent (24%) per annum or (ii) the maximum amount allowed by law from the due date thereof until the same is paid (the “Default Interest”). Interest shall commence accruing on the date that the Note is fully paid and shall be computed on the basis of a 365-day year and the actual number of days elapsed.

 

The Lender has the right in its sole and absolute discretion, from time to time, and at any time on or following the 180th calendar day after the date Note and ending on the later of (i) the Maturity Date and (ii) the date of payment of the Default Interest, each in respect of the remaining principal amount of this Note to convert all or part of the outstanding and unpaid principal amount of this Note into fully paid and non-assessable shares of Common Stock of the Company as per the Conversion formula: Number of shares receivable upon conversion equals the dollar conversion amount divided by the Conversion Price. The Conversion Price is the lesser of 60% of the lowest trade price for the last 25 days prior to the issuance of the Note or 60% of the lowest market price over the 25 days prior to conversion. Total debt outstanding at March 31, 2019 pursuant to the convertible note payable resulted in potential conversion of debt into 1,483,523 common shares of common stock. The Note contains certain representations, warranties, covenants and events of default, and increases in the conversion discount and amount of the principal and interest rates under the Note in the event of such defaults.

 

In connection with the issuance of the Note, the Company recorded a debt discount related to the OID in the amount of $60,000 which will be amortized to interest expense over the term of the loan. In accordance with ASC 815, the conversion feature meets the definition of a derivative and therefore requires bifurcation and is accounted for as a derivative liability. For the six months ended June 30, 2019, the Company has recognized interest expense of $ 49,333.00 related to the amortization of the OID, interest expense of $ 30,161.11 on the Note and $ 493,333.00 related to the amortization of the beneficial conversion feature discount as it related to this Note.

 

Under the provisions of ASC 815-40, convertible instruments issued by the Company qualify for derivative treatment due to the variable conversion formula. The embedded conversion features of the Note is bifurcated and recorded as a liability which is revalued at fair value each reporting date. If the fair value of the embedded conversion feature exceeds the face value of the related debt, net of other discounts, the excess is recorded as a change in fair value on the issuance date. Embedded conversion features are valued at their fair value, rather than by the intrinsic value method. The Company calculated the estimated fair values of the liabilities for embedded conversion feature at November 29, 2018, December 31, 2018, March 31, 2019 and June 30, 2019 with the Black-Scholes option pricing model using the closing price of the Company’s common stock at each respective date and the ranges for volatility, expected term and risk-free interest indicated above. As a result, the Company recorded a change in the fair value of the liabilities for embedded conversion option derivative instruments for the three months and six months respectively ended June 30, 2019 of $ 4,046,703.94 and $(-778,068.14), which are included in other income and other expenses.

 

 F-14 
   

 

Additionally, in connection with the Note, the Company also issued 1,000,000 shares of common stock of the Company to the holder as a security deposit, provided however, the shares are returned to the Company’s treasury as the Note is fully repaid and satisfied prior to the Maturity Date. The refundable shares fair value was calculated as $1,030,000.00 being the fair value of common stock on the date of issuance (Note 9) and recorded as restricted stock receivable in the accompanying consolidated financial statements at December 31, 2018.

 

The Company also issued 120,000 shares of common stock of the Company to the holder as a commitment fee for this note. The commitment shares fair value was calculated as $123,600 being the fair value of common stock on the date of issuance (Note 9) and recorded as restricted stock receivable in the accompanying consolidated financial statements at December 31, 2018.

 

The Maturity Date was May 29, 2019 the date upon which the principal sum of this promissory note, as well as any unpaid interest and other fees, have been due and paid on May 24, 2019.

 

On January 15, 2019, the Company executed a $110,000 Convertible Promissory Note (the “Note”) with TFK Investments, an unrelated party (the “Lender”), bearing an interest rate of 12%, unsecured, and due on July 15, 2019 (the “Maturity Date”). The total consideration received against the Note was $97,500, with the Note bearing $12,500 Original Issue Discount (the “OID”). Any interest payable is in addition to the OID, and that OID (or prorated OID, if applicable) remains payable regardless of time and manner of payment by the Company. The Maturity Date is the date upon which the principal sum of this promissory note, as well as any unpaid interest and other fees, shall be due and payable. The Note may be prepaid at any time before July 15, 2019 without any prepayment penalties. Any amount of principal or interest on this Note which is not paid when due, shall bear interest at the rate of the lesser of (i) twenty-four percent (24%) per annum or (ii) the maximum amount allowed by law from the due date thereof until the same is paid (the “Default Interest”). Interest shall commence accruing on the date that the Note is fully paid and shall be computed on the basis of a 365-day year and the actual number of days elapsed.

 

The Lender has the right in its sole and absolute discretion, from time to time, and at any time on or following the 180th calendar day after the date Note and ending on the later of (i) the Maturity Date and (ii) the date of payment of the Default Interest, each in respect of the remaining principal amount of this Note to convert all or part of the outstanding and unpaid principal amount of this Note into fully paid and non-assessable shares of Common Stock of the Company as per the Conversion formula: Number of shares receivable upon conversion equals the dollar conversion amount divided by the Conversion Price. The Conversion Price is the lesser of 60% of the lowest trade price for the last 25 days prior to the issuance of the Note or 60% of the lowest market price over the 25 days prior to conversion. Total debt outstanding at March 31, 2019 pursuant to the convertible note payable resulted in potential conversion of debt into 243,810 common shares of common stock. The Note contains certain representations, warranties, covenants and events of default, and increases in the conversion discount and amount of the principal and interest rates under the Note in the event of such defaults.

 

In connection with the issuance of the Note, the Company recorded a debt discount related to the OID in the amount of $12,500 which will be amortized to interest expense over the term of the loan. In accordance with ASC 815, the conversion feature meets the definition of a derivative and therefore requires bifurcation and is accounted for as a derivative liability. For the six months June 30, 2019, the Company has recognized interest expense of $ 12,500 related to the amortization of the OID, interest expense of $ 5,822.44 on the Note and $ 290,552.26 related to the amortization of the embedded conversion option liabilities discount as it related to this Note.

 

Under the provisions of ASC 815-40, convertible instruments issued by the Company qualify for derivative treatment due to the variable conversion formula. The embedded conversion features of the Note are bifurcated and recorded as a liability which is revalued at fair value each reporting date. If the fair value of the embedded conversion feature exceeds the face value of the related debt, net of other discounts, the excess is recorded as a change in fair value on the issuance date. Embedded conversion features are valued at their fair value, rather than by the intrinsic value method. The Company calculated the estimated fair values of the liabilities for embedded conversion feature at June 30, 2019 with the Black-Scholes option pricing model using the closing price of the Company’s common stock at each respective date and the ranges for volatility, expected term and risk-free interest indicated above. As a result, the Company recorded a change in the fair value of the liabilities for embedded conversion option derivative instruments for the three months and six months ended June 30, 2019 respectively of $ 686,523.85 and $ 290,552.26, which are included in other incomes.

 

Additionally, in connection with the Note, the Company also issued 20,000 shares of common stock of the Company to the holder as a commitment fee for this note on January 15, 2019. The commitment shares fair value was calculated as $18,800 being the fair value of common stock on the date of issuance (Note 9) and recorded as restricted stock receivable in the accompanying consolidated financial statements at March 31, 2018.

 

In connection with the Note, the Company also issued 100,000 shares of common stock of the Company to the holder as a security deposit, provided however, the shares must be returned to the Company’s treasury as the Note is fully repaid and satisfied prior to the Maturity Date. The refundable shares fair value was calculated as $94,000.00 being the fair value of common stock on the date of issuance (Note 9) and recorded as restricted stock receivable in the accompanying consolidated financial statements at March 31,2019.

 

The Maturity Date was July 15, 2019 the date upon which the principal sum of this promissory note, as well as any unpaid interest and other fees, have been due and paid on June 28, 2019.

 

 F-15 
   

 

On February 19, 2019, the Company executed a $103,000 Convertible Promissory Note (the “Note”) with Power UP, an unrelated party (the “Lender”), bearing an interest rate of 8%, unsecured, and due on August 19, 2019 (the “Maturity Date”). The total consideration received against the Note was $103,000 and no OID. The Maturity Date is the date upon which the principal sum of this promissory note, as well as any unpaid interest and other fees, shall be due and payable. The Note may be prepaid at any time before August 19, 2019 without any prepayment penalties. Any amount of principal or interest on this Note which is not paid when due, shall bear interest at the rate of the lesser of (i) twenty-four percent (24%) per annum or (ii) the maximum amount allowed by law from the due date thereof until the same is paid (the “Default Interest”). Interest shall commence accruing on the date that the Note is fully paid and shall be computed on the basis of a 365-day year and the actual number of days elapsed.

 

The Lender has the right in its sole and absolute discretion, from time to time, and at any time on or following the 180th calendar day after the date Note and ending on the later of (i) the Maturity Date and (ii) the date of payment of the Default Interest, each in respect of the remaining principal amount of this Note to convert all or part of the outstanding and unpaid principal amount of this Note into fully paid and non-assessable shares of Common Stock of the Company as per the Conversion formula: Number of shares receivable upon conversion equals the dollar conversion amount divided by the Conversion Price. The Conversion Price is the lesser of 65% of the lowest trade price for the last 25 days prior to the issuance of the Note or 65% of the lowest market price over the 25 days prior to conversion. Total debt outstanding at March 31, 2019 pursuant to the convertible note payable resulted in potential conversion of debt into 207,598 common shares of common stock. The Note contains certain representations, warranties, covenants and events of default, and increases in the conversion discount and amount of the principal and interest rates under the Note in the event of such defaults.

 

In connection with the issuance of the Note, the Company has not recorded any debt discount related to the OID as it is not applicable for this note. In accordance with ASC 815, the conversion feature meets the definition of a derivative and therefore requires bifurcation and is accounted for as a derivative liability.

 

For the six months June 30, 2019, the Company has recognized, interest expense of $ 28,639.64.46 on the Note and $ 135,523.18 related to the amortization of the embedded conversion option liabilities discount as it related to this Note.

 

Under the provisions of ASC 815-40, convertible instruments issued by the Company qualify for derivative treatment due to the variable conversion formula. The embedded conversion features of the Note is bifurcated and recorded as a liability which is revalued at fair value each reporting date. If the fair value of the embedded conversion feature exceeds the face value of the related debt, net of other discounts, the excess is recorded as a change in fair value on the issuance date. Embedded conversion features are valued at their fair value, rather than by the intrinsic value method. The Company calculated the estimated fair values of the liabilities for embedded conversion feature at June 30, 2019 with the Black-Scholes option pricing model using the closing price of the Company’s common stock at each respective date and the ranges for volatility, expected term and risk-free interest indicated above. As a result, the Company recorded a change in the fair value of the liabilities for embedded conversion option derivative instruments for the three months and six months ended June 30, 2019 respectively of $ 591,888.19 and $ 135,523.18, which are included in other incomes.

 

The Maturity Date was August 19, 2019 the date upon which the principal sum of this promissory note, as well as any unpaid interest and other fees, have been due and paid on June 28, 2019.

 

On March 15, 2019, the Company executed a $150,000 Convertible Promissory Note (the “Note”) with First Fire, an unrelated party (the “Lender”), bearing an interest rate of 12%, unsecured, and due on September 15, 2019 (the “Maturity Date”). The total consideration received against the Note was $121,440, with the Note bearing $15,000 Original Issue Discount (the “OID”) and $13,560 legal & finance cost. Any interest payable is in addition to the OID, and that OID (or prorated OID, if applicable) remains payable regardless of time and manner of payment by the Company. The Maturity Date is the date upon which the principal sum of this promissory note, as well as any unpaid interest and other fees, shall be due and payable. The Note may be prepaid at any time before September 15, 2019 without any prepayment penalties. Any amount of principal or interest on this Note which is not paid when due, shall bear interest at the rate of the lesser of (i) twenty-four percent (24%) per annum or (ii) the maximum amount allowed by law from the due date thereof until the same is paid (the “Default Interest”). Interest shall commence accruing on the date that the Note is fully paid and shall be computed on the basis of a 365-day year and the actual number of days elapsed.

 

The Lender has the right in its sole and absolute discretion, from time to time, and at any time on or following the 180th calendar day after the date Note and ending on the later of (i) the Maturity Date and (ii) the date of payment of the Default Interest, each in respect of the remaining principal amount of this Note to convert all or part of the outstanding and unpaid principal amount of this Note into fully paid and non-assessable shares of Common Stock of the Company as per the Conversion formula: Number of shares receivable upon conversion equals the dollar conversion amount divided by the Conversion Price. The Conversion Price is the lesser of 60% of the lowest trade price for the last 25 days prior to the issuance of the Note or 60% of the lowest market price over the 25 days prior to conversion. Total debt outstanding at September 30, 2019 pursuant to the convertible note payable resulted in potential conversion of debt into 166,667 common shares of common stock. The Note contains certain representations, warranties, covenants and events of default, and increases in the conversion discount and amount of the principal and interest rates under the Note in the event of such defaults.

 

In connection with the issuance of the Note, the Company recorded a debt discount related to the OID in the amount of $15,000 which will be amortized to interest expense over the term of the loan. In accordance with ASC 815, the conversion feature meets the definition of a derivative and therefore requires bifurcation and is accounted for as a derivative liability. The Company recognized a debt discount related to the bifurcated embedded conversion option derivative liability in the amount of $ $ 452,315.07 using the Black-Scholes pricing model, which will be amortized to interest expense over the term of the Note, using effective interest method. The key valuation assumptions used consist, in part, of the price of the Company’s common stock of $3.48 at issuance date, a risk-free interest rate of 2.49%, expected annualized volatility of the Company’s stock of 352.45%.

 

 F-16 
   

 

For the nine months September 30, 2019, the Company has recognized interest expense of $ 15,000 related to the amortization of the OID, interest expense of $ 25,000 on the Note and $ 1,262,174.61related to the amortization of the embedded conversion option liabilities discount as it related to this Note.

 

Under the provisions of ASC 815-40, convertible instruments issued by the Company qualify for derivative treatment due to the variable conversion formula. The embedded conversion features of the Note is bifurcated and recorded as a liability which is revalued at fair value each reporting date. If the fair value of the embedded conversion feature exceeds the face value of the related debt, net of other discounts, the excess is recorded as a change in fair value on the issuance date. Embedded conversion features are valued at their fair value, rather than by the intrinsic value method. The Company calculated the estimated fair values of the liabilities for embedded conversion feature at September 30, 2019 with the Black-Scholes option pricing model using the closing price of the Company’s common stock at each respective date and the ranges for volatility, expected term and risk-free interest indicated above.

 

As a result, the Company recorded a change in the fair value of the liabilities for embedded conversion option derivative instruments for the three months and nine months ended September 30, 2019 respectively of $ 452,315 and $ 1,262,174. 54 which are included in other incomes.

 

Additionally, in connection with the Note, the Company also issued 19,480 shares of common stock of the Company to the holder as a commitment fee for this note on March 15, 2019. The commitment shares fair value was calculated as $52,401.2 being the fair value of common stock on the date of issuance (Note 9) and recorded as restricted stock receivable in the accompanying consolidated financial statements at September 30, 2019.

 

In connection with the Note, the Company also issued 97,402 shares of common stock of the Company to the holder as a security deposit, provided however, the shares must be returned to the Company’s treasury if the Note is fully repaid and satisfied prior to the Maturity Date. The refundable shares fair value was calculated as $262,011.38 being the fair value of common stock on the date of issuance (Note 9) and recorded as restricted stock receivable in the accompanying consolidated financial statements at September 30 ,2019.

 

This note is paid partially during the month of July and August 2019 in the amount of $100,000. As of today December 30, 2019, the outstanding note due to be paid is $ 50,000 plus the respective interest.

 

On March 15, 2019, the Company executed a $110,000 Convertible Promissory Note (the “Note”) with Crown Bridge, an unrelated party (the “Lender”), bearing an interest rate of 12%, unsecured, and due on September 15, 2019 (the “Maturity Date”). The total consideration received against the Note was $96,500, with the Note bearing $11,000 Original Issue Discount (the “OID”) and $2,500 legal cost. Any interest payable is in addition to the OID, and that OID (or prorated OID, if applicable) remains payable regardless of time and manner of payment by the Company. The Maturity Date is the date upon which the principal sum of this promissory note, as well as any unpaid interest and other fees, shall be due and payable. The Note may be prepaid at any time before September 15, 2019 without any prepayment penalties. Any amount of principal or interest on this Note which is not paid when due, shall bear interest at the rate of the lesser of (i) twenty-four percent (24%) per annum or (ii) the maximum amount allowed by law from the due date thereof until the same is paid (the “Default Interest”). Interest shall commence accruing on the date that the Note is fully paid and shall be computed on the basis of a 365-day year and the actual number of days elapsed.

 

The Lender has the right in its sole and absolute discretion, from time to time, and at any time on or following the 180th calendar day after the date Note and ending on the later of (i) the Maturity Date and (ii) the date of payment of the Default Interest, each in respect of the remaining principal amount of this Note to convert all or part of the outstanding and unpaid principal amount of this Note into fully paid and non-assessable shares of Common Stock of the Company as per the Conversion formula: Number of shares receivable upon conversion equals the dollar conversion amount divided by the Conversion Price. The Conversion Price is the lesser of 60% of the lowest trade price for the last 25 days prior to the issuance of the Note or 60% of the lowest market price over the 25 days prior to conversion. Total debt outstanding at July 23, 2019 pursuant to the convertible note payable resulted in potential conversion of debt into 191,169 common shares of common stock. The Note contains certain representations, warranties, covenants and events of default, and increases in the conversion discount and amount of the principal and interest rates under the Note in the event of such defaults.

 

In connection with the issuance of the Note, the Company recorded a debt discount related to the OID in the amount of $11,000 which will be amortized to interest expense over the term of the loan. In accordance with ASC 815, the conversion feature meets the definition of a derivative and therefore requires bifurcation and is accounted for as a derivative liability.

 

The Company recognized a debt discount related to the bifurcated embedded conversion option derivative liability in the amount of $331,697.72 using the Black-Scholes pricing model, which will be amortized to interest expense over the term of the Note, using effective interest method. The key valuation assumptions used consist, in part, of the price of the Company’s common stock of $3.48 at issuance date, a risk-free interest rate of 2.49%, expected annualized volatility of the Company’s stock of 352.45%.

 

For the nine months September 30, 2019, the Company has recognized interest expense of $ 11,000 related to the amortization of the OID, interest expense of $ 4,701.37 on the Note and $ 925,594.71 related to the amortization of the embedded conversion option liabilities discount as it related to this Note.

 

Under the provisions of ASC 815-40, convertible instruments issued by the Company qualify for derivative treatment due to the variable conversion formula. The embedded conversion features of the Note is bifurcated and recorded as a liability which is revalued at fair value each reporting date. If the fair value of the embedded conversion feature exceeds the face value of the related debt, net of other discounts, the excess is recorded as a change in fair value on the issuance date. Embedded conversion features are valued at their fair value, rather than by the intrinsic value method. The Company calculated the estimated fair values of the liabilities for embedded conversion feature at July 23, 2019 with the Black-Scholes option pricing model using the closing price of the Company’s common stock at each respective date and the ranges for volatility, expected term and risk-free interest indicated above.

 

 F-17 
   

 

As a result, the Company recorded a change in the fair value of the liabilities for embedded conversion option derivative instruments for the three months and nine months ended September 30, 2019 respectively of $ 331,697.72 and $ 925,594.71 which are included in other incomes.

 

Additionally, in connection with the Note, the Company also issued 20,000 shares of common stock of the Company to the holder as a commitment fee for this note on March 15, 2019. The commitment shares fair value was calculated as $53,800 being the fair value of common stock on the date of issuance (Note 9) and recorded as restricted stock receivable in the accompanying consolidated financial statements at September 30, 2019.

 

In connection with the Note, the Company also issued 100,000 shares of common stock of the Company to the holder as a security deposit, provided however, the shares must be returned to the Company’s treasury if the Note is fully repaid and satisfied prior to the Maturity Date. The refundable shares fair value was calculated as $269,000 being the fair value of common stock on the date of issuance (Note 9) and recorded as restricted stock receivable in the accompanying consolidated financial statements at September 30, 2019 but those shares are returned back to the company on November 11, 2019 so the transactions is cancelled in this date.

 

This note is paid totally on July 23, 2019.

 

On March 15, 2019, the Company executed a $250,000 Convertible Promissory Note (the “Note”) with Auctus Fund, an unrelated party (the “Lender”), bearing an interest rate of 12%, unsecured, and due on September 15, 2019 (the “Maturity Date”). The total consideration received against the Note was $222,250.00, with $27,750 legal & finance cost. The Maturity Date is the date upon which the principal sum of this promissory note, as well as any unpaid interest and other fees, shall be due and payable. The Note may be prepaid at any time before September 15, 2019 without any prepayment penalties. Any amount of principal or interest on this Note which is not paid when due, shall bear interest at the rate of the lesser of (i) twenty-four percent (24%) per annum or (ii) the maximum amount allowed by law from the due date thereof until the same is paid (the “Default Interest”). Interest shall commence accruing on the date that the Note is fully paid and shall be computed on the basis of a 365-day year and the actual number of days elapsed.

 

The Lender has the right in its sole and absolute discretion, from time to time, and at any time on or following the 180th calendar day after the date Note and ending on the later of (i) the Maturity Date and (ii) the date of payment of the Default Interest, each in respect of the remaining principal amount of this Note to convert all or part of the outstanding and unpaid principal amount of this Note into fully paid and non-assessable shares of Common Stock of the Company as per the Conversion formula: Number of shares receivable upon conversion equals the dollar conversion amount divided by the Conversion Price. The Conversion Price is the lesser of 60% of the lowest trade price for the last 25 days prior to the issuance of the Note or 60% of the lowest market price over the 25 days prior to conversion. Total debt outstanding at September 30, 2019 pursuant to the convertible note payable resulted in potential conversion of debt into 255,060 common shares of common stock. The Note contains certain representations, warranties, covenants and events of default, and increases in the conversion discount and amount of the principal and interest rates under the Note in the event of such defaults.

 

In connection with the issuance of the Note, the Company has not recorded a debt discount related to the OID as it is not applicable. In accordance with ASC 815, the conversion feature meets the definition of a derivative and therefore requires bifurcation and is accounted for as a derivative liability. The Company recognized a debt discount related to the bifurcated embedded conversion option derivative liability in the amount of $ $ 753,858.45 using the Black-Scholes pricing model, which will be amortized to interest expense over the term of the Note, using effective interest method. The key valuation assumptions used consist, in part, of the price of the Company’s common stock of $3.48 at issuance date, a risk-free interest rate of 2.49%, expected annualized volatility of the Company’s stock of 352.45%. For the nine months September 30, 2019, the Company has recognized interest expense of $ 17,813.38 on the Note and $ 2,103,624.35 related to the amortization of the embedded conversion option liabilities discount as it related to this Note.

 

Under the provisions of ASC 815-40, convertible instruments issued by the Company qualify for derivative treatment due to the variable conversion formula. The embedded conversion features of the Note is bifurcated and recorded as a liability which is revalued at fair value each reporting date. If the fair value of the embedded conversion feature exceeds the face value of the related debt, net of other discounts, the excess is recorded as a change in fair value on the issuance date. Embedded conversion features are valued at their fair value, rather than by the intrinsic value method. The Company calculated the estimated fair values of the liabilities for embedded conversion feature at September 30, 2019 with the Black-Scholes option pricing model using the closing price of the Company’s common stock at each respective date and the ranges for volatility, expected term and risk-free interest indicated above.

 

As a result, the Company recorded a change in the fair value of the liabilities for embedded conversion option derivative instruments for the three months and nine months ended September 30, 2019 respectively of $ 753,858.45 and $ 2,103,624.35 which are included in other incomes.

 

Additionally, in connection with the Note, the Company also issued 32,467 shares of common stock of the Company to the holder as a commitment fee for this note on March 15, 2019. The commitment shares fair value was calculated as $87,336.23 being the fair value of common stock on the date of issuance (Note 9) and recorded as restricted stock receivable in the accompanying consolidated financial statements at September 30, 2019.

 

In connection with the Note, the Company also issued 162,337 shares of common stock of the Company to the holder as a security deposit, provided however, the shares must be returned to the Company’s treasury if the Note is fully repaid and satisfied prior to the Maturity Date. The refundable shares fair value was calculated as $436,686.53 being the fair value of common stock on the date of issuance (Note 9) and recorded as restricted stock receivable in the accompanying consolidated financial statements at September 30,2019.

 

This note is not paid yet, and it is due.

 

 F-18 
   

 

On June 3, 2019, the Company executed a $128,000 Convertible Promissory Note (the “Note”) with Power UP, an unrelated party (the “Lender”), bearing an interest rate of 8%, unsecured, and due on December 4, 2019 (the “Maturity Date”). The total consideration received against the Note was $128,000 and no OID. The Maturity Date is the date upon which the principal sum of this promissory note, as well as any unpaid interest and other fees, shall be due and payable. The Note may be prepaid at any time before December 4, 2019 without any prepayment penalties. Any amount of principal or interest on this Note which is not paid when due, shall bear interest at the rate of the lesser of (i) twenty-four percent (24%) per annum or (ii) the maximum amount allowed by law from the due date thereof until the same is paid (the “Default Interest”). Interest shall commence accruing on the date that the Note is fully paid and shall be computed on the basis of a 365-day year and the actual number of days elapsed.

 

The Lender has the right in its sole and absolute discretion, from time to time, and at any time on or following the 180th calendar day after the date Note and ending on the later of (i) the Maturity Date and (ii) the date of payment of the Default Interest, each in respect of the remaining principal amount of this Note to convert all or part of the outstanding and unpaid principal amount of this Note into fully paid and non-assessable shares of Common Stock of the Company as per the Conversion formula: Number of shares receivable upon conversion equals the dollar conversion amount divided by the Conversion Price. The Conversion Price is the lesser of 65% of the lowest trade price for the last 25 days prior to the issuance of the Note or 65% of the lowest market price over the 25 days prior to conversion. Total debt outstanding at June 30, 2019 pursuant to the convertible note payable resulted in potential conversion of debt into 197,570 common shares of common stock. The Note contains certain representations, warranties, covenants and events of default, and increases in the conversion discount and amount of the principal and interest rates under the Note in the event of such defaults.

 

In connection with the issuance of the Note, the Company has not recorded any debt discount related to the OID as it is not applicable for this note. In accordance with ASC 815, the conversion feature meets the definition of a derivative and therefore requires bifurcation and is accounted for as a derivative liability.

 

For the six months June 30, 2019, the Company has recognized, interest expense of $ 13,220.82 on the Note which is compound of of $ 420.82 and of $ 12, 800.00.00 respectively interest expenses till at June 27, 2019 with 8% interest rate and interest expenses for Prepayment on June 27, 2019 with 10 % interest rate on the total the “Note “received.

 

Under the provisions of ASC 815-40, convertible instruments issued by the Company qualify for derivative treatment due to the variable conversion formula. The embedded conversion features of the Note is bifurcated and recorded as a liability which is revalued at fair value each reporting date. If the fair value of the embedded conversion feature exceeds the face value of the related debt, net of other discounts, the excess is recorded as a change in fair value on the issuance date. Embedded conversion features are valued at their fair value, rather than by the intrinsic value method. The Company has not calculated the estimated fair values of the liabilities for embedded conversion feature at June 30, 2019 with the Black-Scholes option pricing model as the note is paid enter June 30, 2019.

 

The Maturity Date was December 4, 2019 the date upon which the principal sum of this promissory note, as well as any unpaid interest and other fees, have been due and paid on June 28, 2019.

 

On June 4, 2019, the Company executed a $2,000,000 Convertible Promissory Note (the “Note”) with LABRYS Fund, an unrelated party (the “Lender”), bearing an interest rate of 10%, unsecured, and due on December 4, 2019 (the “Maturity Date”). The total consideration received against the Note was $1,787,500, with the Note bearing $200,000 Original Issue Discount (the “OID”) and $12,500 for legal expenses. Any interest payable is in addition to the OID, and that OID (or prorated OID, if applicable) remains payable regardless of time and manner of payment by the Company. The Maturity Date is the date upon which the principal sum of this promissory note, as well as any unpaid interest and other fees, shall be due and payable. The Note may be prepaid at any time before December 4, 2019 without any prepayment penalties. Any amount of principal or interest on this Note which is not paid when due, shall bear interest at the rate of the lesser of (i) twenty-four percent (24%) per annum or (ii) the maximum amount allowed by law from the due date thereof until the same is paid (the “Default Interest”). Interest shall commence accruing on the date that the Note is fully paid and shall be computed on the basis of a 365-day year and the actual number of days elapsed.

 

 F-19 
   

 

The Lender has the right in its sole and absolute discretion, from time to time, and at any time on or following the 180th calendar day after the date Note and ending on the later of (i) the Maturity Date and (ii) the date of payment of the Default Interest, each in respect of the remaining principal amount of this Note to convert all or part of the outstanding and unpaid principal amount of this Note into fully paid and non-assessable shares of Common Stock of the Company as per the Conversion formula: Number of shares receivable upon conversion equals the dollar conversion amount divided by the Conversion Price. The Conversion Price is the lesser of 60% of the lowest trade price for the last 25 days prior to the issuance of the Note or 60% of the lowest market price over the 25 days prior to conversion. Total debt outstanding at December 31, 2019 pursuant to the convertible note payable resulted in potential conversion of debt into 1,995,917 common shares of common stock. The Note contains certain representations, warranties, covenants and events of default, and increases in the conversion discount and amount of the principal and interest rates under the Note in the event of such defaults.

 

In connection with the issuance of the Note, the Company recorded a debt discount related to the OID in the amount of $200,000 which will be amortized to interest expense over the term of the loan. In accordance with ASC 815, the conversion feature meets the definition of a derivative and therefore requires bifurcation and is accounted for as a derivative liability. The Company recognized a debt discount related to the bifurcated embedded conversion option derivative liability in the amount of $ $ 5,865,296.47 using the Black-Scholes pricing model, which will be amortized to interest expense over the term of the Note, using effective interest method. The key valuation assumptions used consist, in part, of the price of the Company’s common stock of $1.08 at issuance date, a risk-free interest rate of 2.210 %, expected annualized volatility of the Company’s stock of 6151.60 %.

 

For the twelve months ended December 31, 2019, the Company has recognized interest expense of $ 200,000 related to the amortization of the OID, interest expense of $ 95,712.33 on the Note and $ 3,333,332.98 related to the amortization of the beneficial conversion feature discount as it related to this Note.

 

Under the provisions of ASC 815-40, convertible instruments issued by the Company qualify for derivative treatment due to the variable conversion formula. The embedded conversion features of the Note is bifurcated and recorded as a liability which is revalued at fair value each reporting date. If the fair value of the embedded conversion feature exceeds the face value of the related debt, net of other discounts, the excess is recorded as a change in fair value on the issuance date. Embedded conversion features are valued at their fair value, rather than by the intrinsic value method. The Company calculated the estimated fair values of the liabilities for embedded conversion feature at June 11, 2019 and December 31, 2019 with the Black-Scholes option pricing model using the closing price of the Company’s common stock at each respective date and the ranges for volatility, expected term and risk-free interest indicated above. As a result, the Company recorded a change in the fair value of the liabilities for embedded conversion option derivative instruments for the three months and twelve months respectively ended December 31, 2019 the profit of $ 3,397,260.27 and the profit of $5,087,228.67 which are included in other incomes and other expenses.

 

Additionally, in connection with the Note, the Company also issued 111,731 shares of common stock of the Company to the holder as a commitment fee for this note. The commitment shares fair value was calculated as $120,669.48 being the fair value of common stock on the date of issuance (Note 9) and recorded as restricted stock receivable in the accompanying consolidated financial statements at December 31, 2019.

 

This note is paid on May 29, 2020 in the amount of $350,000 to Labrys Fund, the Plaintiff pursuant to a Settlement Agreement and Release between the Plaintiff and the Company and approved by the District Court of Massachusetts.

 

10. AMOUNT OWING TO DIRECTORS

 

The amount owing to directors is unsecured, interest-free with no fixed repayment term. 

 

 F-20 
   

 

11. LOAN AND BORROWINGS

 

The term loan of the Group is secured by certain fixed assets of the Group with interest bearing.

 

   As at December 31, 
   2019   2018 
Secured: -  $    $  
Term loan   1,475,183    - 
    1,475,183    - 
           
Analyzed as:  $    $  
Current portion   1,269,147    - 
Non-current portion   206,036    - 
    1,475,183    - 

 

12. HIRE PURCHASE

 

The Company purchased motor vehicles under hire purchase agreements with monthly principal and interest payable. The obligation under the hire purchase are as follows: 

 

   As at December 31, 
   2019   2018 
Present value of hire purchase liabilities:  $    $  
Not later than one year   21,469    - 
Later than one year but not later than two years   96,025    - 
    117,494    - 
           
Analyzed as:  $    $  
Current portion   21,469    - 
Non-current portion   96,025    - 
    117,494    - 

 

13. RIGHT-OF-USE ASSET AND OPERATING LEASE LIABILITIES

 

The Company officially adopted ASC 842 for the period on and after January 1, 2019 as permitted by ASU 2016-02. ASC 842 originally required all entities to use a “modified retrospective” transition approach that is intended to maximize comparability and be less complex than a full retrospective approach. On July 30, 2018, the FASB issued ASU 2018-11 to provide entities with relief from the costs of implementing certain aspects of the new leasing standard, ASU 2016-02 of which permits entities may elect not to recast the comparative periods presented when transitioning to ASC 842. As permitted by ASU 2018-11, the Company elect not to recast comparative periods, thusly.

 

As of Jan 1, 2019, the Company recognized approximately US$9,013,956, lease liability as well as right-of-use asset for all leases (with the exception of short-term leases) at the commencement date. Lease liabilities are measured at present value of the sum of remaining rental payments as of January 1, 2019, with discounted rate of 6.75%, base lending rate, as a reference for discount rate.

A single lease cost is recognized over the lease term on a generally straight-line basis. All cash payments of operating lease cost are classified within operating activities in the statement of cash flows.

 

The initial recognition of operating lease right and lease liability as follow:

 

Gross lease payable  $16,026,145 
Less: imputed interest   (7,012,189)
Initial recognition as of January 1, 2019  $9,013,956 

 

As of December 31, 2019, operating lease right of use asset as follow:

 

Initial recognition as of January 1, 2019  $9,013,956 
Accumulated amortization   (375,226)
Balance as of December 31, 2019  $8,638,730 

 

As of December 31, 2019, operating lease liability as follow:

 

Initial recognition as of January 1, 2019  $9,013,956 
Less: gross repayment   (541,110)
Add: Imputed interest   429,639 
Balance as of December 31, 2019  $8,902,485 
Less: lease liability current portion   (327,754)
Lease liability non-current portion   8,574,731 

 

For the year ended December 31, 2019, the amortization of the operating lease right of use asset are $375,226. As the Company adopt ASC 842 on January 1, 2019, the Company did not incur nor accrued any amortization of operating lease right for the year ended December 31, 2018.

 

 F-21 
   

 

Maturities of operating lease obligation as follow:

 

Year ending    
December 31, 2020  $255,682 
December 31, 2021   273,441 
December 31, 2022   311,101 
December 31, 2023   331,380 
December 31, 2024   340,698 
December 31, 2025 and onwards   7,390,183 
Total  $8,902,485 

 

Other information:

 

Lease expenses were $796,581 for the year ended December 31, 2019, respectively. As the Company adopt ASC 842 on and after January 1, 2019, the Company did not incur nor accrued any lease expenses for the year ended December 31, 2018.

 

   Nine months ended December 31, 
   2019   2018 
         
Cash paid for amounts included in the measurement of lease liabilities:          
Operating cash flow from operating lease  $111,471   $- 
Right-of-use assets obtained in exchange for operating lease liabilities   8,638,730    - 
Remaining lease term for operating lease (years)   20    - 
Weighted average discount rate for operating lease   6.75%   - 

 

14. INCOME TAX

 

Provision for income taxes consisted of the following:

 

    As of December 31,  
    2019     2018  
             
Current:                
Local   $ -     $ -  
Foreign    

130,536

      -  
                 
Deferred tax                
Local   $ -     $ -  
Foreign     (3,878 )     -  
      126,658       -  

 

Effective tax rates of the foreign jurisdiction which the foreign subsidiaries operate are as follows:

 

   Tax rate %
United states  21%
Australia  27.5%-30%
Malaysia  24%
Philippine  30%

 

15. FOREIGN CURRENCY EXCHANGE RATE

 

The Company cannot guarantee that the current exchange rate will remain stable, therefore there is a possibility that the Company could post the same amount of income for two comparable periods and because of the fluctuating exchange rate post higher or lower income depending on exchange rate converted into US$ at the end of the financial year. The exchange rate could fluctuate depending on changes in political and economic environments without notice.

 

16. SIGNIFICANT EVENTS

 

Significant events occurred during the period are as follows:

 

-On 31 August 2019, Entrepreneur Culture Incorporated Sdn Bhd was resold to the former owner and Egnitus Inc. was dissolved by the Company.
 -On October 1, 2019 Anvia (Australia) Pty Ltd reversed the acquisition of VocTrain Pty Ltd due to the fact that it was not paid on time. The shares issued to the former shareholders of the VocTrain Pty Ltd are cancelled.

 

17. SUBSEQUENT EVENTS

 

In accordance with ASC Topic 855, “Subsequent Events”, which establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued, the Company has evaluated all events or transactions that occurred after December 31, 2019 up through the date June 10, 2020 was the Company presented these audited consolidated financial statements. The subsequent events are as follows:

 

-During the period, the Company paid on May 29, 2020, $350,000 to Labrys Fund, the Plaintiff pursuant to a Settlement Agreement and Release between the Plaintiff and the Company and approved by the District Court of Massachusetts.
 -On June 4, 2020, shares issued to LABRYS as commitment fees are cancelled subsequent to the loan is repaid. The number of shares that are cancelled were 111,731 units.

 

 F-22 
   

 

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

 

None.

 

Item 9A. Controls and Procedures.

 

Evaluation of Disclosure Controls and Procedures

 

Disclosure controls and procedures are designed with an objective of ensuring that information required to be disclosed in our periodic reports filed with the Securities and Exchange Commission, such as this Annual Report on Form 10-K, is recorded, processed, summarized and reported within the time periods specified by the Securities and Exchange Commission. Disclosure controls are also designed with an objective of ensuring that such information is accumulated and communicated to our management, including our chief executive officer, to allow timely consideration regarding required disclosures.

 

The evaluation of our disclosure controls by our principal executive officer included a review of the controls’ objectives and design, the operation of the controls, and the effect of the controls on the information presented in this Annual Report. Our management, including our chief executive officer, does not expect that disclosure controls can or will prevent or detect all errors and all fraud, if any. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Also, projections of any evaluation of the disclosure controls and procedures to future periods are subject to the risk that the disclosure controls and procedures may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

 

As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Principal Financial Officer, of the effectiveness of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934 as of the end of the period covered by this report. Based on that evaluation, our Principal Executive Officer and Principal Financial Officer have concluded that there were weaknesses in our internal controls over Financial reporting as of December 31, 2018 and they were therefore not effective to ensure that information required to be disclosed by us in reports that we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms. The weaknesses in our controls and procedure were lack of formal documents such as invoices and consulting agreements and lack of evidence for proper approval and review of disbursements. Management does not believe that any of these weaknesses materially affected the results and accuracy of its financial statements. However, in view of this discovery of such weaknesses, management has begun a review to improve them.

 

34

 

 

MANAGEMENT’S ANNUAL REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING.

 

Management’s assessment of the effectiveness of the small business issuer’s internal control over financial reporting is as of the year ended December 31, 2019. We believe that internal controls over financial reporting as set forth above shows some weaknesses and are not effective. We have identified certain weaknesses considering the nature and extent of our current operations and any risks or errors in financial reporting under current operations.

 

Subsequent to the end of the period covered by this report, and in light of the weakness described above, management is in the process of designing and implementing improvements in its internal control over financial reporting and we currently plan to hire an independent third-party consultant to assist in identifying and determining the appropriate accounting procedures and controls to implement.

 

Item 9B. Other Information.

 

None.

 

PART III

 

Item 10. Directors, Executive Officers and Corporate Governance.

 

The following table sets forth the names and ages of the current directors and executive officers of the Company, the principal offices and positions with the Company held by each person and the date such person became a director or executive officer of the Company. The executive officers of the Company are elected annually by the Board of Directors. The directors serve one-year terms until their successors are elected. The executive officers serve terms of one year or until their death, resignation or removal by the Board of Directors. There are no family relationships among any of the officers and directors.

 

Name   Age   Position

Ali Kasa

James Kennett

 

43

63

 

President, Chief Executive Officer, Director

Chief Operating Officer

Dhurata Toli   44   Financial Controller, Secretary

 

The Company is authorized to have at least one director but no more than five. Each of the Company’s director’s serves for a term of one year or until a successor is elected and qualified.

 

Ali Kasa

 

Ali Kasa serves as President, Chief Financial Officer and sole director of the Company. Prior to assuming control over Anvia, Mr. Kasa was the CEO of Egnitus Holdings Pty Ltd providing business growth solutions to businesses with offices in Australia, Malaysia, Saudi Arabia, the UK and Albania. Mr. Kasa has years of practical experience in starting, managing and exiting businesses and has sold over 26 new ventures. Mr. Kasa served as a consultant to several large international corporations in the areas of workforce planning, business modeling and strategic planning. In 2001, Mr. Kasa received an honorary LLB from International Islamic University Malaya and in 2004, Mr. Kasa received a Master’s degree in Comparative Laws from International Islamic University Malaya. In 2013, Mr. Kasa received his Master’s degree in Business Administration from Asiac University.

 

Mr. James Kennett

 

James Kennett has over forty years of entrepreneurial experience in founding and successfully developing businesses in the telecommunications and security industries. He is regarded as a pioneer in the Low Earth Orbit space and Internet of Things (IoT) industries. He has over twenty-five years of international market development and regulatory experience and was Federal Vice President of the Australian Small Business Association. He has served on the Boards of the Queensland University of Technology Business Advisory Committee, and their Centre for Satellite Navigation. He also served on the Board of the Griffith University Centre for Microwave Studies and has founded and Chaired community service programs for youth leadership training.

 

35

 

 

Dhurata Toli

 

Dhurata Toli serves as the Financial Controller and Secretary of Anvia since July 2017 and oversees all aspects of the Company’s accounting functions including planning, executing, controlling and reporting all financial matters. From June 2016 to June 2017, Ms. Toli worked as Group Support Services Manager of Egnitus Albania. From December 2014 to May 2016, Ms. Toli worked at Trans Adriatic Pipeline as a financial consultant. From August 2011 to November 2014, Ms. Toli worked as Operational Director with the General Directorate of Local Taxes and Fees, with the Municipality of Tirana in Albania. From October 2009 to July 2011, Ms. Toli worked at BKT Bank as Branch Manager. Ms. Toli earned her Masters’ of Science degree in banking from University of New York, Tirana, in collaboration with the Institute Universitaire Kurt Bosch in Switzerland, and Master’s degree in Finance and Accounting from Tirana University.

 

Term of Office

 

All officers and directors listed above will remain in office until the next annual meeting of our stockholders, and until their successors have been duly elected and qualified or until removed from office in accordance with our bylaws. There are no agreements with respect to the election of Directors. We have not compensated our Directors for service on our Board of Directors, any committee thereof, or reimbursed for expenses incurred for attendance at meetings of our Board of Directors and/or any committee of our Board of Directors. Officers are appointed annually by our Board of Directors and each Executive Officer serves at the discretion of our Board of Directors. We do not have any standing committees. Our Board of Directors may in the future determine to pay Directors’ fees and reimburse Directors for expenses related to their activities.

 

None of our Officers and/or Directors have filed any bankruptcy petition, been convicted of or been the subject of any criminal proceedings or the subject of any order, judgment or decree involving the violation of any state or federal securities laws within the past five (5) years.

 

Director Independence

 

Pursuant to Rule 4200 of The NASDAQ Stock Market one of the definitions of an independent director is a person other than an executive officer or employee of a Company. Based on this definition, the Company has no independent directors. The Company’s board of directors has reviewed the materiality of any relationship that each of the directors has with the Company, either directly or indirectly.

 

 

Committees and Terms

 

The Board of Directors (the “Board”) has not established any committees. The Company will notify its shareholders for an annual shareholder meeting and that they may present proposals for inclusion in the Company’s proxy statement to be mailed in connection with any such annual meeting; such proposals must be received by the Company at least 90 days prior to the meeting. No other specific policy has been adopted in regard to the inclusion of shareholder nominations to the Board of Directors.

 

36

 

 

Code of Ethics

 

The Company does not have a code of ethics for our principal executive or principal financial officers, due to our size and current stage of development. The Company’s management intends to promote honest and ethical conduct, full and fair disclosure in our reports to the SEC, and compliance with applicable governmental laws and regulations.

 

Item 11. Executive Compensation

 

The Company has not entered into any employment agreements with any of its officers. It intends to pay annual salaries to such officers and will pay an annual stipend to its directors when the Board determines, in its sole discretion, that cash flow is sufficient to make such payments in light of other cash needs of the Company.

 

Although not presently offered, the Company anticipates that its officers and directors will be provided with a group health, vision and dental insurance program. In addition, the Company plans to offer 401(k) matching funds as a retirement benefit, paid vacation days and paid holidays.

 

The Company does not have a compensation committee. Given the nature of the Company’s business, its limited stockholder base and the current management composition, the board of directors does not believe that the Company requires a compensation committee at this time.

 

The following table summarizes all compensation recorded by us in 2019, 2018 and 2017 for our principal executive officer, each other executive officer serving as such whose annual compensation exceeded $100,000, and up to one additional individual for whom disclosure would have been made in this table but for the fact that the individual was not serving as an executive officer of our Company at December 31, 2019.

 

Summary Compensation Table

 

The following table presents information concerning the compensation awarded to, earned by, or paid to the named executive officers for services rendered for the three years ended December 31, 2019.

 

Name and Principal Position  Year Ended
December 31,
   Salary
($)
   Bonus
($)
   Stock Awards ($)   Option Awards ($)   Non-Equity Incentive
Plan Compensation ($)
   Nonqualified Deferred Compensation ($)   All Other Compensation ($)   Total
($)
 
                                     
Ali Kasa   2019    0    0    0    0    0    0    0    0 
President, CEO, Director   2018    0    0    0    0    0    0    0    0 
Ali Kasa   2017    0    0    0    0    0    0    0    0 
                                              
James Kennett, C)O, Director   2019    0    0    0    0    0    0    92,796    92,796 
                                              
Dhurata Toli   2019    0    0    0    0    0    0    30,000    30,000 
    2018                                  30,000    30,000 
Financial Controller, Secretary   2017    0    0    0    0    0    0    15,025    15,025 

 

37

 

 

Employment Agreements

 

The Company has not entered into any employment agreements with any officers or key personnel. The Company has no oral agreements or understandings with any officer or employee regarding base salary or other compensation.

 

Item 12. Security Ownership of Certain Beneficial Owners and Management and related Stockholder Matters

 

The following table sets forth information as of the date of this report regarding the beneficial ownership of the Company’s Common Stock by each of its executive officers and directors, individually and as a group and by each person who beneficially owns in excess of five percent of the common stock after giving effect to any exercise of warrants or options held by that person.

 

Name and Position  Shares Owned   Percent of Class (1)   Voting Percentage (4) 
Ali Kasa, (2)
President, Chief Executive Officer, Director
   15,891,214    37.085%   51%
                
James Kennett, COO, Director   100,000    0.2%     
                
Dhurata Toli, Financial Controller, Secretary   200,000    0.4%   0.4%
                

Yasser Elsayed Aly Ahmed Elezaby (3)

> 5% Shareholder

   3,406,458    7.95%   7.95%
                

Bridgestone Investments Private Limited

   4,000,000    9.335%   9.335%
> 5% Shareholder               
                
CEDE & CO   3,284,294    7.665%   7.665%
> 5% Shareholder               
                
All Officers and directors as a Group (3 persons)   16,191,21    37.085%   51%

 

* Less than 1%

 

  (1) Based on 42,850,405 shares of Common Stock outstanding.
     
  (2) Consists of 5,000,000 shares issued on change of control.
     
  (3) The address of Yasser Elsayed Aly Ahmed Elezaby is 162 Century Dr, Syracuse NY 13209.
     
  (4) Based on aggregate voting shares, including Common Stock shares and Series A Preferred Stock shares that are presently issued and outstanding.

 

38

 

 

The following table sets forth information as of the date of this report regarding the beneficial ownership of the Company’s Series A Preferred Stock by each of its executive officers and directors, individually and as a group and by each person who beneficially owns in excess of five percent of the class of stock after giving effect to any exercise of warrants or options held by that person.

 

Name and Position  Shares Owned   Percent of Class (1)    Voting Percentage (4) 
Ali Kasa, (2)
President, Chief Executive Officer, Director
   600    60 %   43.29 
                 
James Kennett, COO, Director   -    -    - 
                 
Dhurata Toli (2)   -    -     - 
Financial Controller                
                 
Waleed Badurik*, (3)   400    40 %   33.09 
                 
All Officers and directors as a Group (3 persons)   600    60 %   43.29 

 

* Resigned from the Board on October 20, 2017

 

(1) Based on 1,000 shares of Series A Preferred Stock outstanding, which, voting together as a class, have the right to vote 51% of the Company’s voting shares on any and all shareholder matters (the “Majority Voting Rights”). Additionally, the Company shall not, without the consent of the sixty-percent (60%) of the holders of the Series A Preferred Stock, voting as a separate class, alter or change the provisions of the Certificate of Incorporation so as to adversely affect the voting powers, preferences or special rights of the Series A Preferred Stock. However, the Company may, by any means authorized by law and without any vote of the holders of shares of Series A Preferred Stock, make technical, corrective, administrative or similar changes to such Certificate of Designations that do not, individually or in the aggregate, adversely affect the rights or preferences of the holders of shares of Series A Preferred Stock. Other than the Majority Voting Rights, the Series A Preferred Stock does not have any other dividend, liquidation, conversion, or redemption rights, whatsoever
   
(2) The address of the officers and director of the Company is located at 100 Challenger Road, Suite 830, Ridgefield Park, NJ 07660
   
(3) The address of Mr. Badurik is 366 Nursery Road, Holland Park, 4121 Queensland, Australia.